1 March 2023
SCOTLAND’S ECONOMY GROWS SLIGHTLY TO AVOID RECESSION
The chief statistician has revealed that output grew by 0.1% in real terms between October and December. Prior to this small growth Scotland was at risk of slipping into recession, defined as two consecutive quarters of falling output, after the economy contracted by 0.2% between July and September.
Acting Treasury Secretary John Swinney said the figures showed the “resilience” of the country’s economy. Although gross domestic product (GDP) grew by 0.1 per cent in the last quarter, it remains 0.3 per cent below pre-pandemic levels.
5 March 2023
NEW BREXIT TRADE RULES COULD TAKE MORE THAN TWO YEARS TO BE FULLY IN PLACE
Government sources have confirmed that the new Brexit trading arrangements included in Rishi Sunak’s revised Northern Ireland protocol could take more than two years to be fully implemented.
Northern Ireland businesses say they expect HMRC and other government departments to launch a massive education campaign across the country to help them implement the deal announced in Windsor last Monday if it is approved by Parliament.
However, because legislation is needed for the Windsor framework to come into force, the first of the new measures could take months to become operational.
A government source said that ratifying the new agreement would “intentionally give industry time to prepare. Essentially, it is a staggered phase-in over this year and in 2024.”
12 March 2023
JAPAN’S GOVERNMENT ANNOUNCED FRIDAY THAT IT PLANS TO RESTRICT EXPORTS OF 23 TYPES OF SEMICONDUCTOR MANUFACTURING EQUIPMENT, ALIGNING ITS TECHNOLOGY TRADE CONTROLS WITH THE US PUSH TO CURB CHINA’S ABILITY TO MAKE ADVANCED CHIPS.
In a press release, the Ministry of Commerce and Industry announced that it will impose export controls on six categories of equipment used in chip manufacturing, such as cleaning, deposition, lithography and etching equipment. It did not specify China as the target of these measures, saying that equipment manufacturers will have to apply for export permits for all regions.
“We are fulfilling our responsibility as a technological nation to contribute to international peace and stability”, the ministry said, adding that it aimed to prevent advanced technology from being used for military purposes.
The export restrictions, which will take effect in July, are likely to affect equipment manufactured by a dozen Japanese companies, including Nikon, Tokyo Electron, Screen Holdings and Advantest.
19 March 2023
RUSSIA UNBLOCKS GRAIN EXPORT FOR ANOTHER 60 DAYS
Russia will allow Ukrainian grain exports from the Black Sea for another 60 days, warning that any further extension will depend on the lifting of Western sanctions.
The United Nations and Turkey announced the extension of the deal on Saturday, but did not specify for how long. Ukraine said it had been extended for 120 days. But Russia’s cooperation is needed and Moscow only agreed to renew the pact for 60 days.
“The Black Sea Grain Initiative, together with the Memorandum of Understanding on the promotion of Russian food products and fertilisers on world markets, are essential for global food security, especially for developing countries”, UN spokesman Stephane Dujarric said.
On Friday, Russian ambassador to the UN Vassily Nebenzia said the EU, the US and the UK now have “two months to exempt the entire chain of operations accompanying the Russian agricultural sector from their sanctions”, if they want the Ukrainian Black Sea grain deal to continue.
21 March 2023
RUSSIA TO BECOME INDIA’S SEVENTH LARGEST TRADING PARTNER BY 2023
India and Russia are long-standing partners. The growing relations between the two countries have an impact on India’s foreign policy. Since the signing of the ‘Declaration on India-Russia Strategic Partnership’ in October 2000, ties have taken on a qualitatively new character, with increased levels of cooperation in almost all areas of the bilateral relationship. The two countries have maintained cooperation in areas such as politics, security, defence, trade and economics, science and technology, culture and people-to-people ties.
Since the dissolution of the Soviet Union, India and Russia have maintained close relations, thanks in part to Indo-Soviet cooperation during the Cold War. But how does the war affect relations between New Delhi and Moscow? All have argued that the war is likely to weaken this bond in the long run, although some scenarios could mitigate this effect.
India’s trade relations with Russia have intensified this year. According to the Indian Ministry of Commerce and Industry, the country’s bilateral trade with Russia increased to a record $18.2 billion between April and August 2022. This was mainly due to increased imports of petroleum and fertiliser. Imports accounted for $17,236.29 million of the entire India-Russia bilateral trade of $18,229.03 million during the five months, while exports to Russia were only $992.73 million.
During June, July and August 2022, Russian imports increased by more than 500 per cent year-on-year. Petroleum and other fuels, such as mineral fuels, mineral oils and their distillation products, bituminous substances and mineral waxes, accounted for 84 per cent of India’s total imports from Moscow between April and August 2022, or $14,476.52 million. Fertilisers and fuels accounted for 91 per cent of all Russian imports during the year.
22 March 2023
RUSSIA ABANDONS THE DOLLAR AND ADOPTS THE YUAN FOR TRADE WITH LATIN AMERICA, ASIA AND AFRICA
At a new bilateral meeting on 21 March 2023 between China and Russia, President Vladimir Putin announced that Russia had agreed to begin using the Chinese yuan instead of the US dollar for trade with Asia, Africa and Latin America. This move represents a de-dollarisation both to remove itself from possible OFAC sanctions, strengthening the Chinese Yuan on the international stage, and hurting the US.
Putin mentioned how currently two-thirds of trade between Russia and China is conducted exclusively with the yuan and the Russian rouble. In addition, Putin intends to eliminate the so-called petrodollar (the use of the dollar for global oil trade) and replace it with the Petro yuan, a real geopolitical struggle against one of the pillars of the dollar’s and thus the US’s success. For its part, China stands to gain enormously by giving its national currency more value, utility and position in international economic relations.
24 March 2023
RUSSIA MAY EXTEND FERTILISER EXPORT LIMITS UNTIL NOVEMBER
Russia may extend restrictions on fertiliser exports for six months, until November, to help support the domestic market, Agriculture Minister Dmitry Patrushev said on Friday.
Moscow introduced temporary quotas on some of its fertiliser exports at the end of 2021 to secure domestic supplies, but has continuously extended them since then. The current restrictions expire at the end of May.
“Together with the Trade Ministry and the Federal Antimonopoly Service we are working to extend the existing set of measures on fertilisers for another six months, up to and including November,” Patrushev said.
Russia is one of the world’s leading producers of potash, phosphate and nitrogen fertilisers, products that are of the highest importance in global food production.
30 March 2023
TURKEY APPROVES FINLAND’S FORMAL NATO MEMBERSHIP
Turkey’s parliament on Thursday unanimously approved Finland’s formal accession to NATO, a historic step for the traditionally non-aligned Nordic country that shares an 830-mile border with Russia.
The vote follows a months-long saga in which Turkey demanded certain concessions from Finland and neighbouring Sweden, which applied for NATO membership in May 2022 following Russia’s invasion of Ukraine. NATO membership requires the unanimous approval of all member states. Ankara’s vote late on Thursday was Finland’s last hurdle in the accession process.
Turkey and Hungary remained the last obstacles to the Nordic countries’ accession to the 74-year-old Alliance. Ankara has not yet approved Sweden’s application for membership, while Hungary – whose prime minister, Viktor Orban, maintains friendly relations with Russian leader Vladimir Putin – has approved Finland’s membership but not Sweden’s.
Turkey joined NATO in 1952 and has the alliance’s second-largest military after the United States.
31 March 2023
CHINESE DEMAND FOR STEEL IS SET TO FALL. THIS COULD REDUCE ORE PRICES BY ALMOST 30%
Iron ore prices could fall by as much as 28% by the end of 2023 as China’s steel demand and production are set to decline, experts predict.
Morgan Stanley analysts say iron ore prices will fall and cite moderating production in the world’s top steel producer, China, as well as the country’s shift towards steel scrap.
Our forecast for the second half of 2013 is $90 per tonne”, say commodity strategist Marius van Straaten and his team in a report published on 20 March.
This is 28 per cent lower than the current $126 per tonne for benchmark iron ore at 62 per cent grade.
Iron ore is mainly used to make steel, an important material in construction and engineering projects, and both Asian countries are on track to consume more.
The Commonwealth Bank of Australia also predicted a fall in iron ore prices, expecting them to settle at $100 a tonne in the fourth quarter of this year “as China’s steel demand declines in the second half of the year,” the bank’s analysts said last week.
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Madrid, 31 March de 2023
International Trade and Sanctions Department
