WTO in Geneva predicts slower exports in 2012
Source: WTO, Geneva, April 2012
GENEVA, SWITZERLAND – The high Swiss franc went higher against the dollar Wednesday 11 April, as it “appreciated against 11 of 16 major peers”, Bloomberg reported late 11 April, noting that “strengthened against the dollar after the country sold bonds amid demand for its assets as a refuge from the euro region’s debt crisis.”
Thursday the exchange rate was $1.09/CHF1, with the dollar up from a January low of $1.04, but down from late January.
Roche Pharmaceuticals says it is being hurt by the strong franc, with sales dipping 1 percent in the first quarter of the year, but up 2 percent if the franc is taken out of the calculation. The company hinted it might raise its hostile bid for US drug company Illumina if the latter enters negotiations.
Swatch Group, riding on the continuing wave of success of the Swiss watch industry despite the high franc, announced 12 April that it is buying supplier Simon Et Membrez SA in Delémont, a family business founded in 1975 that now has 250 employees. In addition, Swatch Group is acquiring a related 60 percent holding in Termiboîtes SA (case polishing) in Courtemaîche, with 50 employees.
“Simon Et Membrez SA is a seamless fit alongside the existing Swatch Group production companies and logically complements Comadur, Ruedin and Lascor, the companies active in the production of watch casings within the Swatch Group,’ says Swatch. Simon Et Membrez SA manufactures high quality watch cases for the top price segment out of precious materials such as gold, titanium, platinum, palladium and premium-quality steels. Swatch Group has a long-standing business relationship with Simon Et Membrez SA for a number of its watch brands (Breguet, Blancpain). Simon Et Membrez SA will continue to supply third parties.”
Shock waves from sovereign debt crisis will ripple through trade world in 2012
In other business news Thursday the World Trade Organization in Geneva says growth in exports will continue to slow down in 2012, mainly as the result of a series of shocks such as Europe’s sovereign debt crisis. “World trade expanded in 2011 by 5.0 percent, a sharp deceleration from the 2010 rebound of 13.8 percent, and growth will slow further still to 3.7 percent in 2012, WTO economists project,” the organization says.
ZURICH, SWITZERLAND – The KOF, the economic research institute at the University of Zurich has upgraded its forecast for the Swiss economy in 2012, noting that the 0.8 percent rise hides a stronger upward swing towards the end of the year.
The group notes in a press release: “Private consumption will make the biggest contribution to growth. Exports will come out weaker due to the effects of the strong franc and stagnation in Europe. The labour market looks robust, unemployment figures will remain at 3.2 percent, a very low level by international standards.”
The outlook for exports is more negative than figures released Thursday by the federal statistical office imply. “The outlook for the export economy is mixed,” reports the KOF.
“The companies involved–foremost in the tourism industry–have to live with a strong currency that will squeeze margins.
Tourism (–1.4%) and other service exports (–0.7%) will shrink again this year. Growth in exported goods (1.5%) will be lower than last year (6.2%). The overall result is a growth in exports of 0.8%.“Imports will grow faster, 3.7%, whereby the trade balance with the GDP will be negative in 2012. Stronger growth in exports (4.7%) is also expected for the next year in the wake of the upswing, but the rate will still lag behind imports (7.9%).”
Swiss economy, 2012 forecast, source: KOF economic research institute in Zurich
CS bank bosses find pay deals down
Credit Suisse is cutting the pay packages of senior managers, with chief executive Brady Dougan receiving CHF5.8 million, less than half of what he earned the previous year. Overall, compensation packages at the bank are down from CHF14.6 million in 2010 to CHF13.2m in 2011, with the bank saying in February that it was cutting its bonus pool by 41 percent after seeing profits fall 62 percent last year. The Group issued its annual report 23 March.
Time flies when trade is growing rapidly; Indian Trade Minister Arnand Sharna at Baselworld 2011
BERN, SWITZERLAND – Trade between India and Switzerland, currently negotiating a bilateral free trade treaty, has grown at a “fulgerant” rate in the past 20 years, the Swiss Customs Office says. Exports from Switzerland to India grew by 18 percent in the first nine months of 2011 and have now crossed the threshold of CHF3 billion.
Swiss exports grew seven-fold from 1990 to 2010, from CHF378 million to nearly CHF2.6 billion. Imports from India grew during the same period from CHF251m to CHF901m. Trade with India has thus grown dramatically, but India remains Switzerland’s seventh trading partner, well behind China, with Swiss exports of CHF7.1b and Japan, with CHF6.43.
Chemicals account for main exports as well as imports: mainly pharmaceuticals for Swiss exports, with basic chemical products and finished ones sharing the imports from India about equally. Other Swiss exports: machines, particularly precision instruments, and electronics plus watches.
GENEVA, SWITZERLAND – Robert Zoellick, head of the World Bank, blamed US President Barack Obama for what he called the failure of the US to take a leadership role in seeing that the Doha Round of trade negotiations succeeds.
Zoellick, in a prepared speech Monday 18 July, said “I won’t sugarcoat it. Negotiators from key countries – developed and developing – let themselves fold into defensive crouches. Tactical ploys overwhelmed strategic vision and leadership,” the World Bank’s notes on his speech say. “‘Some want to Declare Doha Dead. Instead, I urge the WTO members to get bolder: Double-Down on Doha. And do so by Thinking Ahead, and Thinking Big.’”
Zoellick was formerly a trade negotiator under President George W Bush, who helped launch the Doha Round in 2001. His strong remarks on the US leadership failure were picked up by international media but were heavily covered by US media, with varying slants: Chicago Tribune/Qatar Living (Reuters), Fox, Guardian, Voice of America, Washington Post
GENEVA, SWITZERLAND – Australia’s minister for agriculture, Joe Ludwig, has suspended shipments of live cattle to 11 abattoirs in Indonesia after disturbing film footage surfaced showing severe mistreatment of the animals. He has also opened an investigation into the supply chain, from shipment to slaughter and demanded an immediate end to the use of Indonesia is Australia’s biggest market for shipping live animals.
Austrlia’s public reaction was swift, reports the Sydney Morning Herald, with web sites for two animal protection agencies crashing due to an overload of traffic, and 35,000 signatures gathered in just five hours for a total ban on the trade. Indonesia is Australia’s largest market for live cattle shipments. The value of the trade, according to the Jakarta Globe, is A$320 million ($342 million).
Indonesia’ vice-minister of agriculture, Bayu Krisnamurthi, asked “Please respond to the video proportionally”, reminding Australians that the two countries are not at the same level of development. He “stopped short of calling for the immediate punishment of any abattoirs found guilty of mistreatment of cattle, reportedly saying the first step would be to provide them with guidance”, reports the Australian newspaper.
Links to other sites: ABC Australia programme on cattle shipments (alert: disturbing graphic images), BBC, Jakarta Globe, Sydney Morning Herald
Japan’s trade with and financial aid for Africa are likely to fall, in the wake of the massive earthquake in early March, a new report from Standard Bank in South Africa says. It notes that bilateral trade between Africa and Japan in 2010 totalled $24 billion, up 30 percent from 2009.
South Africa is most likely to be hit by a drop in trade, but Nigeria could also be affected. Sudan and Tanzania may see aid cutbacks as the Japanese economy struggles to get back on track.
Links to other sites: allAfrica, Standard Bank full report
Swiss tourism in 2010: not gloomy despite the high franc (a room with a dark but not gloomy view: hotel window in canton Valais, overlooking full moon, Alps and castle tower)
Bern, Switzerland (GenevaLunch) – Trade figures for Switzerland released 22 February show continuing solid growth in exports in January despite the strong franc at the start of the year, and a relatively strong performance by the tourism industry overall in 2010.
Exports grew 4.4 percent in January compared to December, which had month-on-month growth of 4.3 percent. Pharmaceutical prices fell under strong price pressure, but this was offset by the watch and machinery demand.
The trade surplus for January was CHF2.0 million, with exports of (rounded figures) CHF15.2m and imports of CHF13.3m.
Tourism final figures for 2010 show increases except for European visitors
According to final 2010 figures published 22 February by the Federal Statistical Office, the number of overnight stays registered in the Swiss hotel industry in 2010 was 36.2 million, a rise of 1.7 percent, or 619,000 overnight stays more than in 2009. Swiss demand was up 2.2 percent and that of foreign visitors 1.4 percent. “Overnight stays by visitors from the European continent (excluding Switzerland) showed a decrease of 2 percent”, according to the FSO press release, likely reflecting the rise of the Swiss franc against the euro.
Overnight stays were spread unequally, with Basel, Geneva and Zurich all having hotels closer to capacity, at more than 60 percent, than other parts of the country, while Neuchatel was under 30 percent.
Slide became clear in December
The year-end tourism figures are optimistic, but they hide a slide in overnight stays in December: down 3.3 percent compared to December 2009, with foreigners’ overnight stays down 7.4 percent. Germany, one of Switzerland’s key countries for tourism, sent 8.7 percent, less than Belgium (-39 percent) and Italy (-17 percent) in percentage terms, but the largest drop in absolute terms, with 36,000 fewer German overnight stays. UK tourist numbers fell by 13,000 in December, possibly linked to the weak pound.
Despite the relatively weak dollar, US visitors increased by 3,000 in December. And China showed the largest absolute increase, with 3,500 more visitors.
Bern to give tourism industry financial boost
The ruling Swiss Federal Council 16 February announced a series of measures to help industries that are most hurt by a strong franc, including tourism. The governmen is increasing tourism promotion budgets for 2011 and 2012 by CHF12 million to offset the continuing strength of the Swiss franc, citing the lag time between a higher currency and its impact on the number of visitors.
Links to other sites: Swiss Federal Customs office (Fre), Reuters
S Korea and US will have joint sea missions
Late Tuesday North Korea announced that it is severing all communication and relations with the South, and South Korea said that it is cutting trade and it will not allow ships from the North to pass through its waters.
South Korea and the US will carry out military exercises at sea together as part of their response to the South’s claims that North Korea torpedoed one of its submarines 26 March. Forty-six sailors died in the incident.
US Secretary of State Hillary Clinton came out with a firm statement Monday backing South Korea and demanding that the North stop its “belligerant behaviour.” For the first time in several years the South Korean government intervened to support its currency, which fell sharply as fears grew over escalating tensions between the two Koreas.
Five days of meetings between North Korean leader Kim Jong Il and Hu Jintao Chinese president in Beijing have resulted in an agreement to strengthen their commercial ties and work more closely to foster security in the region, the Chinese government announced Friday 7 May. Official Chinese statements have the North’s leader reconfirming his commitment to denuclearization, but South Korean media were unhappy that official remarks made no mention of discussions over a boat that the South suspects the North of sinking.
US President Barack Obama and Chinese President Hu Jintao, meeting on the fringes of the Security Summit organized in Washington DC by the White House, discussed the appreciation of the Chinese currency, the yuan, with Hu saying China intends to pursue a “path of reforming its currency exchange rate formation mechanism based on its own economic and social development needs.” The US has been pushing for greater appreciation of the yuan, and Hu’s remarks appear to imply this will happen, but he also said that the US should not count on the yuan’s appreciation to solve unemployment problems or to balance trade between the two countries, reports Xinhua, the government news agency.
Bern, Switzerland (GenevaLunch) – Swiss exports were up 3.3 percent in nominal terms (-0.6 in real terms) in February, to CHF13.9 billion, and for the first time since 2008 they rose for most business sectors. Imports slipped and trade for the first two months of 2010 shows opposite trends, with exports up 1.3 percent but imports down by 2.4 percent. The balance of trade at the end of February was positive, at CHF1.3 billion.
Chinese imports for January rose by 86 percent compared to the same month a year earlier, and exports rose by 21 percent, the second month showing an increase after a year’s stalemate. The overall trade increase of more than 44 percents comes as some figures are showing China to be the world’s largest exporter. The Chinese impact on the world economic rebound “may reinforce overseas calls for China to allow a stronger currency,” reports Bloomberg.
Update 16 December Geneva, Switzerland (GenevaLunch) – Bananas have come close to being the fruit that broke the Doha Round’s back, but they could in the end save the talks, says the International Centre for Trade and Sustainable Development (ICTSD). The European Union (EU) and Latin American exporters initialed an agreement Tuesday 15 December at the World Trade Organization (WTO) in Geneva. It will settle their dispute over the banana trade and tariffs, which has been running for more than 10 years.
“An agreement on bananas is widely viewed as a critical condition for a conclusion to the stalled WTO Doha Round of trade negotiations,” says the Geneva-based ICTSD. The organization provides the international trade system with input on sustainable development aspects of trade.
A study published Tuesday by the ICTSD shows that “a new deal on European Union banana import tariffs will be a boon to Latin American exporters but would trigger a drop in exports of the fruit from African, Caribbean and Pacific (ACP) countries. But the blow to ACP banana exporters may be cushioned by the aid money that the EU has promised in conjunction with the deal.”
Zurich, Switzerland (GenevaLunch) – Economiesuisse has revised upwards its forecast for the Swiss economy for 2010. In June 2009 the umbrella organization for Swiss business had predicted a 2.9 percent drop in Swiss GDP (gross domestic product) for 2009 with a further drop of 0.8 percent in 2010. The group published revised figures Monday 23 November, saying it expects to see growth of 0.7 percent next year, and export growth of 3.8 percent after a year that has proved very difficult for some exporters.
Background: Economiesuisse lowers growth forecast, unemployment to climb, GenevaLunch, 15 June 2009
Title: Global Challenges at the Intersection of Trade, Energy and the Environment — Graduate Institute and WTO
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Statues of "peace" and "justice" flank the entrance to the WTO, Geneva: artist Luc Jaggi sculpted them in 1925
Geneva, Switzerland (GenevaLunch) - China reacted with disappointment Thursday 13 August to the report issued by the World Trade Organization (WTO) in Geneva on its publications and audiovisual materials dispute with the US. The WTO ruled that China must open its market more to the import of US films, DVDs, books and music downloads to respect commitments made when it joined the WTO in 2001.
China’s state prosecutor in Shanghai has formally charged four employees of Rio Tinto, an Australian mining giant, with illegally obtaining commercial secrets, a lesser charge than the “theft of state secrets” originally under consideration. The four, Australian Stern Hu and three Chinese employees, were arrested in early July and accused of spying. The prosecutor’s office said that “a fair verdict” would be handed down, which is interpreted to mean that the case will go to trial. The case has complicated relations between China and Australia, where two-way trade was worth $53 billion in 2008. Chinese-born Hu and his team were accused of illegally obtaining China’s negotiating position ahead of crucial iron ore price talks. NYT, Reuters, Xinhua
Bern, Switzerland (GenevaLunch) – Swiss exports will be given the same treatment as EU member countries’ goods when they enter the European Union, the government announced 24 June. The agreement goes into effect 1 July 2009.
Canada’s provincial premiers are backing Prime Minister Stephen Harper in his efforts to find a way for Canadian companies to fight what is seen as growing protectionism in the US. The “Buy America” campaign from south of the border is excluding Canadian businesses, the political leaders worry, in particular making it difficult for Canadian companies to bid on contracts with US cities and states receiving money from stimulus funding.The group may push for a deal with the US that ensures bidding is open to outsiders. The Globe and Mail, Canada
The bill has not yet been signed, but US President Barack Obama is giving his support to a government funding package that earmarks a significant change in relations between the US and Cuba. The bill will ease restrictions on travel and trade, allowing Cuban-Americans to spend longer than two weeks at a time on the island and to visit once a year rather than every three years. (Ed. note: stories in US media do not make it clear if the bill will ease travel restrictions for other Americans.) Sky News
Patricia Francis, Richard Newfarmer
Ndioro Ndiaye
Geneva, Switzerland (GenevaLunch) – The figures are starting to roll in and they are clear: women are being hit hardest by the economic global crisis and the way it affects them will define the longterm impact of the crisis.
Montreux, Switzerland (GenevaLunch) – “Currently, we can actually prove that by buying from Africa, buying from the developing world, you’re having less of an impact on the environment than by buying local,” Patricia Francis told the 10th World Export Development Forum Wednesday, Francis, executive director of the International Trade Centre in Geneva, argues that the plethora of terms used to talk about sustainability issues is confusing consumers. [video interview]
