Archive for the ‘tariffs’ Category

Trade Barriers Could Threaten Global Economy

March 18, 2009

At least 17 of the 20 major nations that vowed at a November summit to avoid protectionist steps that could spark a global trade war have violated that promise, with countries from Russia to the United States to China enacting measures aimed at limiting the flow of imported goods, according to a World Bank report unveiled yesterday. 

By Anthony Faiola
Washington Post Staff Writer

The report underscores a “worrying” trend toward protectionism as countries rush to shield their ailing domestic industries during the global economic crisis. It comes one day after Mexico vowed to slap new restrictions on 90 U.S. products. That action is being taken in retaliation against Washington for canceling a program that allowed Mexican truck drivers the right to transport goods across the United States, illustrating the tit-for-tat responses that experts fear could grow in coming months.

The report comes ahead of an April 2 summit in London in which the heads of state from those 20 industrialized and developing economies will seek to shape a coordinated response to the economic crisis. Their inability to keep their November promises is another indication of how difficult it will be to implement any agreement reached next month on a global scale.

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Obama: Mexico Tests His Free Trade Talk

March 17, 2009

A long-simmering trade dispute boiled over into sanctions on Monday after Mexico said it would raise tariffs on $2.4bn of US exports in retaliation for ending a pilot programme to allow Mexican trucks on American roads.

By Alan Beattie in Washington
and Adam Thomson in Mexico City
Financial Times
The announcement marks one of the first big tests for trade policy under President Barack Obama, who has sought to tread a fine line between assuaging his domestic constituencies and upholding the US’s international obligations.

Mexico said it would increase tariffs on 90 industrial and agricultural goods, likely to include politically sensitive farm products, after Congress last week killed a pilot programme allowing a limited number of Mexican trucks on American highways. Mexico obtained a judicial ruling in 2001 under the North American Free Trade Agreement (Nafta) allowing it to impose such sanctions, but has held off since the US introduced the pilot scheme.

The sanctions, which Mexican officials say are set to be imposed later this week, will be one of the largest acts of retaliation against US exports. US goods exports to Mexico totalled $151.5bn last year. On Monday, Gerardo Ruíz Mateos, Mexico’s economy minister, said: “We believe that the action taken by the US is wrong, protectionist and in clear violation of Nafta.”

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Obama’s Wimpy Response:

Obama Can’t Ignore Mexico, Latin America:

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Obama: Troop move to Mexican border under consideration

To Trade Sceptic Barack Obama: World Wants To Know is U.S. For Free Trade?

December 22, 2008

The question whether the Obama presidency could deliver the coup de grâce to the sickly Doha trade round may seem like a mere footnote to the unfolding economic drama. Doha’s few ardent supporters concede that the direct boost from a global trade accord would be modest – peanuts compared with the hundreds of billions of fiscal stimulus being pumped into the stalling global economy. The cancellation this month of a ministerial meeting at the World Trade Organisation was all but shrugged off by Pascal Lamy, the WTO director-general. Even in the last chance saloon, he said, there were more drinks available at the bar.

By Rosemary Righter
Times of  London

Yet this was not quite the nonevent that Mr Lamy made out. Doha is not a footnote. It is the canary in a fast-flooding mine. The meeting had been ordered up at their November summit by leaders of the G20, countries that between them account for 80 per cent of world trade, with trumpeted instructions to secure the framework of a deal by the year’s end – before the presidency of George W. Bush, a convinced free trader, gives way to that of the trade sceptic Barack Obama. It did not take place for one reason: these same governments had failed to give trade ministers new marching orders.

The G20’s Doha pledge was a test of international will to keep markets open. Governments failed that test, and are failing others, too. The G20 also undertook not to impose or raise any new barriers to trade or investment for the next 12 months.

Days later, Russia raised import duties on imported cars and announced a general review of all its trade agreements and India increased tariffs on steel. China, cunningly, had already slipped in new export tax rebates on more than 3,700 products – covering roughly 28 per cent its exports – under a “China World Top Brand” programme that on Friday the United States took to the WTO. This was not innocent trade promotion, the US plausibly complains, but a massive export subsidy that gives Chinese manufacturers an unfair advantage over exporters in countries whose cash-strapped governments cannot afford to forgo big hunks of tax revenue. But China could well retort that the US bailout for Detroit is equally discriminatory, as is Nicolas Sarkozy’s “investment fund” to keep France “a country where we continue to build cars, boats, trains and planes”.

The trouble with favours offered to some industries is that they encourage demands from others. With trade volumes expected by the World Bank to shrink next year ….

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Russia Riots: Largest Anti-Government Demonstrations in Years

December 21, 2008

Riot police have beaten and detained dozens of people who gathered for a holiday celebration in Russia‘s largest Pacific port.

The incident in Vladivostok comes one day after hundreds rallied to protest a government decision to increase car import tariffs.

Police detains participants of a protest against the authorities' ... 
Police detains participants of a protest against the authorities’ plans to raise tariffs on imported used Japanese cars in central part of the Pacific port of Vladivostok, about 6,400 km (4,000 miles) east of Moscow, Sunday, Dec. 21, 2008. Some 500 motorists rallied in Russia’s far east Saturday to protest the government’s decision to raise car import tariffs, and thousands others are expected to stage similar demonstrations across Russia Sunday.  Photo: AP

By LIYA KHABAROVA, Associated Press Writer

Riot police clubbed, kicked and detained dozens in the Pacific port of Vladivostok on Sunday in a harsh crackdown on a protest that was one of dozens across Russia by people outraged over an increase in car import tariffs.

With unemployment spiking, prices rising and the ruble sliding, the protests over a seemingly mundane tariff appear to be broadening into a wide expression of public discontent — and beginning to present a genuine challenge to the Kremlin.

“The Russian people have started to open their eyes to what’s happening in this country,” said Andrei Ivanov, a 30-year-old manager who joined about 200 people at a rally in Moscow. “The current regime is not acting on behalf of the welfare of the people, but against the welfare of the people.”

The government announced the tariffs on imported automobiles earlier this month to bolster flagging domestic car production and try to head off layoffs or labor unrest among the country’s more than 1.5 million car industry workers.

But imported used cars are highly popular among Russians, particularly throughout the Far East, where private cars imported from nearby Japan vastly outnumber vehicles built in Russia. Protests against the tariffs, which are scheduled to go into effect next month, have been most vehement in Russia’s largest Pacific port — Vladivostok.

Hundreds rallied in the city Saturday for the second weekend in a row, and demonstrators hoped to rally again Sunday. But authorities refused to authorize the demonstration and hundreds of riot police blocked off the city square where it was planned.

Soon after, several hundred people gathered on Vladivostok’s main square — not the planned site of the demonstration. Waiting riot police ordered them to disperse, saying the gathering was illegal. The group refused and began singing and dancing around a traditional Russian New Year’s tree on the square.

Police — some shipped in from Moscow, 9,300 kilometers (5,750 miles) to the west — began hauling men and women into waiting vans as people chanted “Fascists!” and “Shame! Shame!”

An Associated Press reporter saw police beat several people with truncheons, throw them to the ground and kick them. Several parents were detained as their children watched.

“Riot police encircled the group … even those just passing by, and they started taking people away without any sort of comment,” said Olga Nikolaevna, a 62-year-old retiree who witnessed the incident.

An AP reporter saw at least 10 journalists detained by police, who demanded that several journalists turn over videotapes and photo memory chips. Police wrecked a Japanese TV crew’s video camera, and some journalists were beaten and kicked, including an AP photographer.

Vladimir Litvinov, who heads a local rights group, said police behaved “like beasts” and had no right to break up the gathering, since it wasn’t overtly political.

“We support a civilized resolution to all the problems but when they send Moscow riot police to break up a gathering in our city, and they start breaking arms and legs and heads…,” he told AP. “People are very, very angry. It’s hard to predict what might happen now.”

Regional police officials said they were forbidden from saying how many people had been arrested. Protest organizers and witnesses counted more than 100.

Protests over the car tariffs, which take effect next month, were held in more than a dozen cities, with motorists driving in long columns with flags waving. National TV channels, which are state-controlled, ignored the demonstrations.

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Police on Sunday thwarted a second attempt to hold protests.

Later, riot police broke up a gathering of around 500 people who were singing and dancing around a decorated holiday tree on a central square. Dozens of men and women, including some journalists, were arrested, some beaten with truncheons.

More rallies are set for Sunday in what are expected to be the largest anti-government demonstrations in years.

Associated Press

WTO Sides With U.S., Rejects China Appeal Against Auto Parts Ruling

December 15, 2008

The World Trade Organization has rejected an appeal by China against a ruling that favored the United States in a dispute over car parts, the European Union and Canada.

The WTO appeals panel recommended in a ruling released Monday that China be asked to bring its import tariffs for foreign auto parts into compliance with international trade rules.

Associated Press

Volkswagen cars are seen at a dealership in Shanghai December ... 
Volkswagen cars are seen at a dealership in Shanghai December 14, 2008. REUTERS/Aly Song (CHINA)

U.S. and European trade officials welcomed the decision.

“Especially in light of the current problems faced by the U.S. auto industry, I expect China to comply promptly with its WTO obligations by removing an unlawful and unfair trade barrier that is harming U.S. workers and manufacturers,” said U.S. Trade Representative Susan Schwab.

Her European counterpart, EU Trade Commissioner Catherine Ashton, said, “China should now put an end to the discrimination and ensure a level playing field in its automotive sector.”

Officials at China’s mission to the WTO could not immediately be reached for comment.

Beijing had appealed the original ruling made in July, arguing that the taxes were needed to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars. It was the first time China lost a case before the world trade body.

Under the import rules, cars made in China must contain at least 40 percent Chinese-made parts or they are taxed at the rate of imported finished cars.

The U.S., the 27-nation EU and Canada argued that the tariffs made it cheaper for car parts companies to shift production to China, costing Americans, Canadians and Europeans their jobs.

China now has a “reasonable period of time” to make legislative changes, after which a separate WTO panel has to determine whether Beijing has come into compliance or is still breaking the rules, in which case sanctions can be imposed.

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