Canada Creates Special Envoy for EU Trade Deal
American Shipper - August 29, 2016
The creation of a new envoy for the Canada-EU Comprehensive Economic and Trade Agreement (CETA) reflects the high priority the country places on signing the deal, despite recent opposition. The Canadian government has created a new envoy position in an attempt to finalize and implement a free trade agreement with the European Union, according to a statement from International Trade Minister Chrystia Freeland.
Pierre Pettigrew, who has served both as minister of trade and foreign affairs, will be Canada's new envoy for the Comprehensive Economic and Trade Agreement (CETA) with the EU for a term of one year, effective immediately. He will engage with a range of provinces and territories in both regions, as well as senior business and government leaders from EU member states. The creation of a special envoy for CETA reflects the high priority the country places on signing and implementing the deal, despite recent opposition, said Freeland.
"Mr. Pettigrew's deep understanding of Europe, trade and business will be instrumental in getting CETA signed this year and ratified in 2017," she said. "He brings with him a lifetime of international experience and a profound dedication to public service. From the day we were sworn in, our government has worked tirelessly to support CETA ratification in Europe. "Trade means more growth, and more growth means more jobs for our middle class," added Freeland. "Our progressive approach to trade got this deal back on track after it was stalled. Since then, the Prime Minister and ministers across government have joined me in actively engaging key European leaders on the value of this agreement."
"The Canada-European Union agreement sets a new global standard for trade deals and positions Canada as a trail-blazing country defining new international norms," said Pettigrew. "CETA will generate economic opportunities and I am eager to help move this deal forward for Canada." Freehand told Bloomberg news service this is the "final lap" for CETA, which was signed in 2014 by Canada's previous government but has yet to be ratified in the European Parliament and EU Council, and she is "cautiously optimistic" the deal will be finalized despite rising protectionist sentiment.
"The finish line is in view, but there are still some steep hills for us to climb," she said in a recent interview. "This is a really important agreement for Canada but it's been a hard agreement to get. "This is probably the most protectionist time in the transatlantic region since the Second World War," said Freeland. "The political parties in Europe whose support we need to get CETA across the finish line are the parties of the center-left, the social democrats. The parties of the center-right have supported CETA all along, but the center-left has not."
Freeland is scheduled to travel next week with Prime Minister Justin Trudeau to the Group of 20 summit in China, where she said the two will schedule bilateral meetings to push for CETA ratification. As reported previously by American Shipper, protectionist sentiments from both sides of the aisle in the upcoming United States presidential election and a lack of proper discourse around the sweeping 12-nation Trans-Pacific Partnership threatens to derail that agreement as well.
US Secretary of Commerce Pritzker to Participate in US-India Strategic and Commercial Dialogue
US Department of Commerce - August 24, 2016
In January 2015, President Obama and Prime Minister Modi elevated the existing US-India Strategic Dialogue to the Strategic and Commercial Dialogue to reflect the growing significance of the US-India economic relationship. This is the first time the S&CD will be held in India. US Secretary of Commerce Penny Pritzker will travel to New Delhi, India, August 29-31 for the second US-India Strategic and Commercial Dialogue (S&CD) and the US-India CEO Forum. Secretary Pritzker will co-chair the S&CD with US Secretary of State John Kerry, Indian Minister of External Affairs Sushma Swaraj, and India Minister of Commerce and Industry Nirmala Sitharaman.
Secretary Pritzker will also co-chair the second US-India CEO Forum alongside Jeff Zients, the Director of the National Economic Council and Assistant to the President for Economic Policy. The US-India CEO Forum brings together CEOs and government representatives from both countries to discuss opportunities for increasing bilateral trade and investment. During this event, the CEOs will communicate their joint recommendations to the US and Indian governments.
While in New Delhi, Secretary Pritzker will also meet with Indian entrepreneurs and participate in an event celebrating US-India cooperation on travel and tourism. In June 2016, President Obama and Prime Minister Modi announced that the United States and India will be Travel and Tourism Partner Countries in 2017.
Hanjin Shipping Has Filed for Receivership After Creditors End Support
Wall Street Journal - August 30, 2016
Creditors of one of the world's major shipping companies, South Korea?s Hanjin Shipping Co., said they would no longer give it financial support, pushing the company close to bankruptcy. A Hanjin spokesman said the company's board of directors will convene Wednesday to decide on its future course, including whether to file for court receivership. Hanjin, the world's ninth-largest container shipping company by capacity, would become the biggest company in the industry to go under if it fails to recover.
Shipping companies world-wide have been hit by years of slumping demand, particularly from China, as trade flows have slowed. Some companies have been forced to sell vessels at a discount, while a handful of smaller operators have already gone bankrupt. Hanjin and its domestic rival, Hyundai Merchant Marine Co., handle the bulk of Korea's exports and have been unprofitable for several years, amassing debts in a global shipping market awash in excess capacity and plummeting prices.
South Korea's ocean carriers have also been pressured by growing consolidation in the shipping business, where global operators are adding bigger ships and forming vessel-sharing alliances to reduce operating costs. Hanjin, a unit of the conglomerate that controls Korean Air Lines Co., has been under a creditor-led debt revamp program since May. The Seoul-based company said last week it would raise a total of 500 billion won ($446 million) through asset sales and financial aid from Korean Air. But the creditors said Hanjin would need at least one trillion won in short-term liquidity to pay back maturing debt and cover arrears in payment to chartered ship-owners as well as funding for operations.
The South Korean government has called for companies that are struggling under mounting debt to restructure, but it is also concerned about major job losses. In June, South Korea's financial authorities announced plans to create an 11 trillion won fund to recapitalize state-run banks so they can absorb bad debts from ailing shipping and shipbuilding firms. But the government also said Hanjin, which employs around 4,800 people, would be placed under receivership if it fails to extend maturing debt and win lower charter rates with foreign ship-owners.
Hanjin had debt of 6.6 trillion won ($5.9 billion) and a debt-to-equity ratio of nearly 850% at the end of last year.
State-run Korea Development Bank, Hanjin's main creditor, and other local lenders on Tuesday rejected Hanjin's latest funding plans, sending the company's shares down as much as 29% to record lows before trading was halted. The creditors said in a statement Hanjin's self-rescue packages fell short of their demands. "A creditor-led restructuring will end now. The company will have to find its own way to survive," said an official at Korea Development Bank. Financial Services Commission Chairman Yim Jong-yong reiterated Tuesday that the government isn't considering merging Hanjin and Hyundai, a suggestion made by the vice chairman of Korea Ship-owners Association.
BWR: Hanjin's Impact on Various Trades
BY American Shipper, September 02, 2016
Source: Blue Water Reporting
Hanjin currently deploys 518,251 TEUs on the North Asia to Central Asia trade with 71 vessels. The carrier operates 45 vessels on the Asia to North America trade, most notably within the CKYHE Alliance, and deploys 329,139 TEUs. On the Asia to Europe trade, Hanjin deploys just 117,828 TEUs and nine vessels. Overall, with just these three trades, Hanjin operates 125 vessels and deploys almost 1 million TEUs.
Spot freight rates soar in wake of Hanjin insolvency
The Shanghai Containerized Freight Index jumped 27.9 percent since last week to a reading of 763.06, reflecting Hanjin's decision to file for receivership, leaving various ships stranded and some carriers refusing to tender cargo to the South Korean liner carrier or receive its cargo, at least temporarily. Of the four major trades, rates increased most sharply to the United States. For cargo bound from Shanghai to the US West Coast, rates surged 51 percent since last week, from $1,153 per 40"container (FEU) to $1,746 per FEU. For containers bound from Shanghai to the US East Coast rates jumped 45 percent, from $1,684 per FEU to $2,441 per FEU. From Shanghai to North Europe, rates rose 37 percent, from $695 per 20" container (TEU) to $949 per TEU.
15.6 Million Reasons to Support TPP ? Particularly on Labor Day
US Coalition for TPP ? September 1, 2016
It?s almost Labor Day, a time when we pay tribute to America?s workforce. Of the 41 million American jobs that currently depend on trade, 15.6 million are supported by trade with Trans-Pacific Partnership (TPP) countries. Approval of the TPP by Congress will support further growth of US exports with the 11 TPP countries, creating more high-paying jobs for US workers.
UPS CEO sees 'Sense of Urgency' over TPP as China Pursues RCEP
UPS CEO David Abney stressed the importance of TPP as not only a strategic economic issue for the US, but as a geopolitical must for the US to maintain legitimacy in the Asia-Pacific. Abney said, "If [RCEP] goes through, that would be China setting the rules for trade in that part of the world. We believe that this year would be the best chance to get TPP approved. I'm not going to say it's the only chance, but we think it's the best chance."
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