INTERNATIONAL

 

Nov 10 -  16 , 2003

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


PUSH FOR FREE TRADE IN AMERICAS

Emergency talks are set to start in Washington to get plans for the world's largest free trade area back on track. The free trade deal is supposed to come into effect in 2005 and a framework was meant to be in place by the end of this year, but has not been agreed so far. Brazil and the United States are chairing the talks, but are at odds over the ground rules for a deal. Time is running short, with a major summit on the free trade area due to be held in Miami in a week's time. But to make the summit a success, there is still a lot of groundwork to be done.

 

 

 

The Brazilian Foreign Minister, Celso Amorim, has cut short a trip to Africa at the request of US Trade Representative, Robert Zoellick. Brazil and the United States are presiding over the talks on a future Free Trade Agreement of the Americas, which would stretch from Alaska to Patagonia. If things go to plan, the framework of a deal will be agreed at the ministerial summit to be held in Miami in a week's time. But obstacles have arisen making the prospect look less and less likely.

Celso Amorim and Robert Zoellick are meeting this weekend to discuss some of the problems they need to resolve if the talks in Miami are to bear fruit. The two men have not met since the collapse of the World Trade Organisation talks in Cancun in September. The US has blamed developing countries led by Brazil for their failure. And Washington doesn't want the same to happen during the Miami talks later this month. Brazil has been at the forefront of a wave of opposition within South America to a deal on the US's terms.

CASPIAN SEA PACT AGREED

The five countries bordering the Caspian Sea have agreed a framework treaty in Iran aimed at halting further damage to the sea's fragile environment. The United Nations-sponsored deal involving Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan seeks to reduce the amount of sewage and industrial waste pumped into the sea. It also ends nearly 10 years of quarrelling over its oil and gas reserves.

In New York, UN Secretary-General Kofi Annan hailed the signing as "a significant step forward for the region". "By signing this important new treaty the Caspian states are demonstrating their firm commitment to saving the beautiful and resource-rich Caspian Sea," Iranian Vice President Masoumeh Ebtekar said. Toxic waste dumping, oil leaks, agricultural run-off, and over-fishing of the caviar-producing sturgeon fish, have all contributed to the Caspian's serious ecological decline. The sea is soon set to be one end of a pipeline which will transport Central Asian oil to Europe.

The World Bank has approved loans of just over $300m to help the ongoing construction of the pipeline which will run from an oil field off the coast of Azerbaijan, through Georgia, to the Turkish Mediterranean port of Ceyhan. It is said to be the longest of its kind in the world. Engineers have carried out nearly 40% of the work, and the first crude oil is expected to flow in 2005. The World Bank has said possible risks of the pipeline to the environment have been addressed.

PUTIN TO END EU VISIT IN FRANCE

Putin is due to meet France's Jacques Chirac in Paris after the Rome EU-Russia summit. He will visit along with his Foreign Minister, Igor Ivanov, who is also due to have talks with his French counterpart, Dominique de Villepin. Human rights activists may hold a protest outside the meeting over Mr Chirac's stance on abuses in Russia. But Mr Putin, who visited France earlier this year, is expected to receive a warm welcome from Mr Chirac.

That visit was back in February in the run-up to the war in Iraq, when Russia signed up to the coalition of the unwilling, standing firm with France and Germany in opposition to America over the war. Even as Moscow and Paris seek to mend fences with Washington, it seems Mr Chirac remains determined to build on this current alliance with Mr Putin, aiming to intensify their partnership.High on the agenda will be ever-closer trade ties.

EUROZONE RATE KEPT ON HOLD

The European Central Bank has decided to keep its key interest rate on hold at 2%. Meeting for the first time since the appointment of the bank's new president Jean-Claude Trichet, its monthly meeting determined that no monetary policy tightening was yet needed in the 12 countries that share the euro. The decision was universally expected by analysts, despite sluggish economic growth across the eurozone. Speaking at a press conference after the announcement, Mr Trichet said: "At the present moment we judge that the (current) interest rate is appropriate.

BANK RAISES UK RATES TO 3.75%

The Bank of England has raised interest rates to 3.75% the first rise in almost four years. The move was widely expected and follows concerns that consumer debt and house prices were rising to dangerously high levels. Raising rates will put a heavier burden on borrowers, with the average mortgage of 60,000 set to rise by about 9 a month.

And manufacturers are concerned that increasing the cost of borrowing will stifle their attempts to recover from tough times. But it is good news for savers, who can expect to see marginally better returns on their cash savings. The previous rate of 3.5% was the lowest for 48 years. The rise is unlikely to have any immediate effect on house prices, but an upward trend would slow them down, the Royal Institution of Chartered Surveyors said.

EU SLAPS $200M TARIFF ON US IMPORTS

The EU has said US imports are to face duties of $200m (120m) from March 2004. The European Commission decided to impose the duties in retaliation against US tax breaks for exporters, which have been criticised by the World Trade Organisation. Initially, the tariffs will be applied at a rate of 5% on up to $4bn of goods. Trade Commissioner Pascal Lamy said: "The Commission hopes to pass a very clear message to the United States that their continued failure to implement three years after the expiry of the original WTO deadline is unacceptable." The World Trade Organisation (WTO) gave the EU the right to impose 100% tariffs on more than $4bn of US exports after ruling that the US tax breaks were illegal.

GREENSPAN: 'MORE US JOBS SOON'

US Federal Reserve chairman Alan Greenspan said employment is likely to grow, bringing an end to the jobless recovery. His remarks coincided with data showing new unemployment claims dropped to pre-recession levels. New unemployment claims for the week to 1 November were down 43,000 to 348,000, a level last seen in early 2001, Labor Department statistics showed.Investors showed their confidence in the US economy by pushing stock markets higher on November 6, sending the Nasdaq technology stocks index to its highest close since 17 January 2002 at 1,976.37, up just under 1%.

 

 

AIRBUS HIT BY PROFITS SLUMP

European aerospace giant EADS has reported a sharp fall in core profits, hit by slower Airbus deliveries and weakness in its space business. The EADS group posted a third-quarter net loss of 58m euros (40m, $66.3m) compared with a loss of 68m euros a year ago.

'DIRTY MONEY' FORCE RAPS BURMA

An international task force has demanded that sanctions be imposed against Burma, saying it has failed to cooperate in the war on money laundering. The Financial Action Task Force (FATF) called for measures that would press the country's financial institutions to identify their clients.Banks would also have to report any suspicions of illegal activity.

The demand came as an FATF deadline for Burma to clean up its act and develop new laws to prevent money laundering passed. The FATF said: "Burma has failed to establish a framework to engage in effective international cooperation in the fight against money laundering.

DVD SALES LIFT NEWS CORP

Profits at Rupert Murdoch's News Corporation have surged ahead thanks to strong sales of DVDs at its film unit. The media conglomerate reported a net profit of $422m (253m) for the first quarter, up from $162m in the same period last year.

EU TARGETS INSURANCE EQUALITY

Plans to end discrimination in insurance premiums between men and women have been unveiled by the European Commission. The proposals would mean an end to the practice where statistical differences between the sexes are applied to insurance rates. The move has sparked uproar in the European insurance industry, but the Commission has insisted it is merely an extension of existing sex discrimination laws currently applied only to the workplace.

ANTI-VIRUS FIGHT GETS CASH BOOST

A $5m reward fund has been set up by Microsoft to help track down people who unleash damaging computer viruses. The first rewards on offer will give payments of $250,000 to anyone with information about the creators of the MSBlast or Sobig viruses.

SALES BOOST LIFTS CISCO PROFITS

Profits at Cisco Systems, the world's largest maker of equipment that directs Internet traffic, have been bolstered by a pick-up in business spending on technology. The firm reported a profit of $1.1bn during the three months to 25 October, up from $618m in the same period last year.

AUSTRALIA RAISES INTEREST RATES

The Australian central bank has put up interest rates in an effort to curb runaway consumer borrowing. The move is the first in a major economy in months, and could prove the start of a round of hikes worldwide. The Reserve Bank of Australia said it had put up the cost of loans by a quarter of a percentage point to 5%, because it feared that households were taking on too much debt.

PROFITS RISE AT TOYOTA

Japanese car giant Toyota has seen profits rise 23% as sales between July and September climbed. The company, the most profitable carmaker in the world, announced net profits for the six months to September of 524.46bn yen ($4.8bn; 2.8bn), with operating profit a key measure of ongoing health up 12%.

SOLID SHARES GOOD NEWS FOR KOIZUMI

Solid gains for Japanese stocks on Tuesday could prove good news for Prime Minister Junichiro Koizumi as he faces a general election this weekend. Pollsters are predicting that Mr Koizumi's Liberal Democratic Party in power for all but a handful of years in the past half-century could face a tough challenge from the Democratic Party of Japan in Sunday's poll. But much rides on perceptions of whether Japan's flagging economy is finally turning the corner.

And after fresh data indicated that the rapid third quarter growth of 7.2% in the US could be an understatement, record manufacturing figures in Japan sent key stocks soaring. Manufacturing activity accelerated faster in October than for two years, a survey said, and shares such as motor giant Toyota, with earnings due out later this week, leapt.

EU TO HIT BACK IN US STEEL ROW

The European Union (EU) has said it will press ahead with plans to retaliate against US tariffs on steel imports if the World Trade Organisation (WTO) rules in its favour. EU trade commissioner Pascal Lamy said punitive tariffs on a range of US imports could be in place by the middle of next month in the event of a favourable ruling. "If the US does not move, retaliation is a racing certainty in mid-December," he said.

The WTO is due to deliver its verdict on an appeal against its original ruling that the US steel tariffs breach international trade rules. President George W. Bush's government imposed tariffs of up to 30% on steel imports in January last year in an effort to protect domestic producers from tough foreign competition.

N KOREA ECONOMY 'FACES COLLAPSE'

The powerful international credit ratings agency Standard & Poor's (S&P) has warned that it is simply a matter of time before the economy of communist North Korea disintegrates. "The economic model of North Korea is not sustainable," said the chairman of S&P's sovereign ratings committee, John Chambers. S&P, which monitors the financial stability of governments and big companies, also said the cost to neighbouring South Korea of dealing with the emergency when it does occur would be massive.