Export based economy of Japan has been devastated recently by the global economic crisis. The Japan’s exports dropped by 50 percent triggering a 5.4 percent plunge in its GDP due to falling demand for its merchandise from the US and the EU, its major trade partners.

During the meet, Iran invited Japan to set up branches of their banks in Iran, and apprised of the opportunities in fields such as, marine transportation system, oil projects, and construction of marine structures. Another major area of investment brought to the notice by Iran was national railway network project including construction of railroads for express trains and other related projects.

Currently, Japan is the third largest importer of Iran’s industrial and mining products, and about 22 percent of its total oil output is exported to Japan. The two-way trade between both countries is about $20bn in 2008.

With renewed ties, Iran is expecting to triple the trade volume in the coming years through increased economic participation by Japan. Iran’s non-oil exports to Japan include carpets, pistachios and dry fruits.

After concluding the Tokyo visit, Nahavandian informed he had assurances by several Japanese authorities including Japan’s MP, Kotaro Tamura that a Japanese delegation would soon visit the country to review the trade possibilities in Iran. Tamura is one of the strong supporters in fostering better ties with Iran that extend to all spheres of bilateral co-operation. Iran’s anti-American stance and Japan’s US ally status often vexed the relations between both countries for the past several decades.

Toboc Trade News

A free trade deal with ASEAN member states has strategic importance to India since the country exports 12 percent to these states and imports 10 percent. The FTA is expected to increase the trade from the current $40bn to $50bn by next year.

Indian officials said that there were plans to even sign the India-South Korea Comprehensive Economic Partnership Agreement (CEPA) along with the ASEAN FTA. The South Korean representatives are expected to attend the upcoming summit to engage in talks with the ASEAN members as well as concluding the formalities on CEPA with India.

Both trade deals require Indian cabinet approval, and would be the first such approval by the United Progressive Alliance after returning to power consecutively for the second time. The FTA had earlier missed the April date due to parliamentary elections in India.

The talks between India and ASEAN were stalled several times as the association insisted on cuts in tariff twice a year. But in the recent talks, India was able to convince the ASEAN members on duty cuts once in twelve months, and the same will be reviewed every January. As per the deal, duty to be cut for the highly sensitive products including tea, coffee, pepper, crude and refined palm oil is between 30 and 45 percent by Dec 31, 2019.

Toboc Trade News

The US action comes after the EU re-introduced its export subsidy program in early this year. Many industry observers felt these moves would only trigger more protectionist measures from countries those are affected by this action. Though these declared subsidies are within the WTO limits there would be political pressure within the affected countries to retaliate and prompt them to reverse their decision.

Trade Minister Simon Crean and Agriculture Minister Tony Burke of Australia in a joint statement said that they would try to garner support from other countries to pressurize the US to reverse its decision at the Cairns Group Ministerial meeting in Bali in early next month. The Cairns Group is a coalition of 19 agricultural exporting nations which account for over 25 percent of the global agricultural exports that aims to liberalise trade in the respective sector.

New Zealand Trade Minister Tim Groser said dairy farmers the world over were under pressure, but the US move was a short-sighted response while the international dairy market had recently been showing signs of stabilising. New Zealand is the largest dairy merchandise export earner and second largest meat export earner with nearly 24 and 12 percent share respectively in total goods exported. The price advantage enjoyed by New Zealand dairy products will get diluted in the global market with the re-introduction of US handout to its dairy exports.

Nonetheless, the president of the Australian National Farmers’ Federation (NFF) David Crombie warned the US handout would only shore up domestic jobs in the short-term but undermines the possibilities of faster global economic recovery. Similarly, Fonterra, the world’s largest dairy exporter echoed the sentiments of the NFF, contending that the US decision had the potential to damage a world dairy market which remained fragile.

Toboc Trade News

A large portion of animal imports to the UAE come from the European countries including the UK, Portugal and Austria. There are several cases reported in the last one year from countries such as – Germany, Italy, Norway, Greece, Spain, Israel, Sweden, the Czech Republic, Denmark, Algeria and Austria.

Blue-tongue virus is non-transmittable to humans and non-contagious among animals. The disease is characterised by changes to the mucous membranes of the tongue and nose, and certain types of midges are vectors of this animal disease. The ruminants including camels, cattle and sheep are chiefly susceptible to the virus.

According to new regulation, every animal arriving from blue-tongue affected countries will be individually inspected. Prior to the directive, only a random sample of about 10 per cent of each shipment had undergone inspection.

Besides, the animals should not be stung by the midges for a period not less than 28 days from the date of shipping. Regarding import of sperm, embryos and ova, the donating animals should be immunised against stings of midges for a period not less than 60 days before and during the process of collecting the sperm, ova and embryos.

However, OIE is surprised by the timing of the UAE’s move to clamp restrictions to animal imports particularly because these strains have been reported for more than a decade in Europe and the Mediterranean. Glaieul Mamaghani, deputy director of communications at the OIE asserted that the virus could not be transmitted to humans. The UAE ministry said that the effective date for the new regulation would be made known in a few days’ time.

Toboc Trade News

The new FTA is expected to largely benefit the Canadian producers and exporters as the duties of all Canadian non-agricultural merchandise exports are eliminated thus making it more competitive in those markets. Tariffs will also be removed or reduced on selected Canadian agricultural exports such as durum wheat, frozen french fries, beer and crude canola oil.

Now Canada will have access to state of the art technologies and other knowhow from the sophisticated EFTA markets at lower costs that includes the importation of machinery and scientific and precision instruments. Besides, the new deal is likely to attract other European countries as well in reaching similar trade ties and thereby increase the visibility of the Canadian business entities over there.

The EFTA was the seventh-largest export destination of Canada last year. The two-way trade between both parties reached $13.2bn in 2008 with Canada exporting goods worth $4.2bn. In 2007, the two-way trade was valued at about $12.9bn with the Canadian exports and imports reaching at about $5.2bn and about $7.7bn respectively.

According to the deal, there will be significant cuts in tariffs of merchandise from both sides, but Canada’s tariffs on sensitive shipbuilding products will stay. They have decided to waive these tariffs in phases over a period of 15 years with regard to the sensitivity of each product.

Toboc Trade News

Turkey has also imposed similar duties on Indian goods during the same period. Indian governmental agencies involved in the exercise of getting the tariff rolled back appeared confident as Egypt’s decision was likely to prompt Turkey to follow the same steps to avoid any confrontation with India in this regard.

Ever since Egypt and Turkey imposed these additional duties, India had taken up the cause to both governments to have a relook at the issue and warned that they would challenge this at the WTO. The imposition of such tariffs is in direct violation to the WTO rules unless it proved that the imports are causing serious damage to its domestic industry.

Egypt’s move is likely to act as a disincentive to other countries that are planning to slap such duties on Indian goods. However, The Confederation of Indian Textile Industry (CITI) said the tariff roll back would have only marginal impact on the exports since the global economy had not recovered yet.

The tariff imposed by Egypt in January on Indian goods was for a period of one year which included half a dollar on every kilogramme of cotton textile, and every kilogramme of processed sugar attracted $1. India is the largest exporter of cotton yarn to Egypt and the exports stood at about $115mn in 2007-08 fiscal. The two-way overall trade during the same period between both countries was about $3.5bn.

Indian exports have recorded a negative growth for the past five months, and the country is leaving no stone unturned to get them back on track. According to the Ministry of Commerce of India the talks are progressing to get a similar decision from the Turkish government.

Toboc Trade News

But today international trade is at the cross roads, beset with varied issues, including climate change, ever rising prices of essential commodities and energy, etc. And for all the ills emanated from globalization, World Trade Organization (WTO) is pilloried by most critics, as usual without providing viable solution. WTO was persistently blamed for its failure to make suitable changes to the needs of the times. WTO policies delved deep into politically sensitive domestic regulations and delayed the process of striking an early inevitable solution. It has had to withstand the pressures of different internal government differences, protectionism and even, anti-market NGO’s. The initial carrots offered by developed nations, during the early stages of globalization, turned out to be a steroid treatment for rabbit economies which transformed themselves into predators, which gradually devoured the lion share of the market pie. In the process WTO was left high and dry, clueless about its road ahead.

Before losing its core competency, WTO should wake up to the challenges of 21st century to live up to the expectations of its very existence. It has to accept that lopsided trade agreements have no place in the world today since every country can afford and has the intelligence to rope in expert international negotiators for favorable trade agreements. If it could provide ample scope for domestic products and services, to equally succeed in the world business arena, the organization will be able to fulfill its goal.

Preferential Trade Agreements (PTA) or any such are still designed for developed economies, flouting the laws of level playing field. Such deals should address the needs in a partner-specific manner and there by should facilitate the interests of both parties evenly. The pacts signed in a hurry, in future, may have to spend years in courts for implementation, due to domestically ever changing political scenario and other unexpected issues. Accords with complex and discriminatory regulations cannot expedite the process of implementation in present circumstances. Besides, red tapism and high gestational business costs also could be prevented, if proper care is given while signing deals. Businesses engaged in global supply chain, need simple, transparent and non-discriminatory models to derive the best out of tailored pacts.

At this juncture, WTO is with grievous limitations, if repair measures are not made quickly, perhaps it will lose its relevance. Most of the developing countries of Asia and South America have already latched on to the unilateral liberalization programs. China, the unilateral engine of free trade has started this way back in 1990 before joining WTO. Other East and South Asian nations are engaged in replicating China model to supersede the international institution to gain larger clout, and for doing more business. It is high time for a trade policy to be less of a foreign policy, and it should be solely the one which is attached within the framework of domestic economic needs. Therefore, the global trade body must give utmost care to address these needs in subsequent rounds of negotiations to avoid unnecessary stalemate.

Toboc Trade News