states involved agreed to a proposal announced by the
US and Brazilian delegations earlier in the week which allows countries to
opt in or out of certain clauses. The FTAA will cover 800 million people
with an output of $14 trillion a year.
"We still have a lot of substantial issues to
discuss and they are not easy," said Brazilian Foreign Minister Celso
Amorim. "But what we decided was to pursue a course that will make it
possible, creates the conditions to come to an agreement. It doesn't
guarantee an agreement, but it creates the condition for an
agreement." Brazil and the US drew up their "menu" approach
to the FTAA as a way of overcoming their deep disagreements on how
comprehensive the accord should be. This went against what many of the
other countries meeting in Miami wanted — that is, an all-embracing deal
dropping tariffs and trade barriers across the twin continents.
EU MULLS WORLD TRADE COMPROMISE
The European Union (EU) may offer concessions in an
effort to kick-start world trade negotiations. EU trade chief Pascal Lamy
said the bloc might drop its insistence that the talks cover cross-border
investment, competition, trade facilitation, and government
procurement.Developing country resistance to including these issues
contributed to the failure of world trade talks at Cancun in September. Mr
Lamy called for greater compromise.
"My sense is that there are areas where we should
show flexibility," he said during a visit to World Trade Organisation
headquarters in Geneva. "I am looking at options like this in order
to address the concerns in certain developing countries." At Cancun,
developing nations refused to discuss the four issues raised by the EU —
dubbed the Singapore issues — unless the West agreed to reduce
agricultural subsidies. Mr Lamy said he hoped any concessions by the EU
would be matched by greater flexibility among other WTO members. "The
balance (between give and take) has to be kept," he said. But he
stressed that the EU was committed to "re-igniting" world trade
Any relaxation of the EU's negotiation stance would
have to be backed by all 15 EU governments as well as the European
Parliament. The current round of world trade talks is due to conclude in
January 2005. All 146 WTO members are due to meet on 15 December to decide
how to re-start negotiations after the setback at Cancun. The meeting is
likely to be overshadowed by simmering trade tensions between the
organisation's most powerful members. The EU, China and Japan are united
in their condemnation of US tariffs on steel imports, which were declared
illegal in a final WTO ruling last week.
DOLLAR FALLS TO ALL-TIME LOW
The US dollar has fallen to an all-time low against the
euro, amid fears over trade wars and reluctance by foreigners to finance
the US trade deficit. At its lowest point on Nov 19, one euro bought
$1.1978. The dollar also neared a new three-year low against the yen, with
one dollar worth just 107.94 yen. The dollar's fall against most leading
currencies — including the pound — started when data showed a huge
slump in foreign money coming into the US.
CHINA RETALIATES TO US IMPORT CAP
China may raise tariffs on certain US imports, in
retaliation to America's planned import cap on Chinese textiles. China's
trade minister Ma Xiuhong made the announcement in an interview with the
official Chinese news agency. It is the first sign that the row could turn
into a full-blown trade war, although no details have yet been given about
which US products will be hit. China said it may introduce measures if the
US does not agree with a WTO judgement to remove its steel tariffs. Before
its tariffs announcement, the Chinese Government summoned the US
ambassador in Beijing to officially complain against America's plans.
GREENSPAN WARNING ON PROTECTIONISM
US Federal Reserve chairman Alan Greenspan has called
for action to combat "creeping protectionism" in the United
States and other parts of the world. Speaking at a financial conference in
Washington Mr Greenspan said it was imperative for the growing threat to
be "thwarted and reversed." The United States is involved in
high profile trade battles with the European Union and other countries
over steel tariffs that have been ruled unfair by the World Trade
Washington has also embarked on a dispute with China
over textile imports, and the Commerce Department has said it plans to set
quotas limiting growth in Chinese textile imports. China's commerce
minister Ma Xiuhong has said they will retaliate by raising tariffs on
some American imports.
UN URGES $3BN FOR WORLD'S NEEDY
The United Nations is to urge wealthy nations to donate
$3bn next year to save 45 million lives in crisis areas. UN Secretary
General Kofi Annan is due to launch the UN Humanitarian Appeal 2004. The
appeal aims to provide basic needs to the hungry and sick, and to protect
the displaced, especially children, women and the elderly. The campaign
— on behalf of aid agencies worldwide — will mostly cover African
crises. It excludes Iraq.
UK AND TURKEY PLEDGE UNITED FIGHT
Turkey and the UK have pledged not to bow to terror
following the blasts on the UK consulate and a British bank in Istanbul
that killed at least 27 on Nov 20. Turkish Foreign Minister Abdullah Gul
said the attacks would strengthen the global fight against terrorism.
Addressing a joint news conference, his UK counterpart, Jack Straw,
expressed his government's support for Turkey. Mr Gul confirmed that
several arrests had been made but said it was too early to give further
LEADERS UNITE TO CONDEMN TERROR
Tony Blair and George Bush have spoken of their joint
determination to defeat terrorism after bomb attacks in Turkey last week.
The UK prime minister said the blasts showed "the evil these
terrorists pose to innocent people everywhere". The perpetrators had
"utter contempt" for innocent lives, said the US president at a
news conference held to mark his state visit to Britain.Both men vowed to
stay the course in Iraq, with Mr Blair saying they would not "flinch
or concede one inch".
TURKISH STOCKS DIVE AFTER BLASTS
Turkish shares fell heavily after the bomb attacks in
Istanbul on Nov 20, one of which hit the offices of HSBC bank in the heart
of the city's financial district. The Istanbul Stock Exchange suspended
trading after the main index dropped more than 7%. The lira was lower when
banks resumed trading and stocks fell across Europe. One Istanbul trader,
who asked not to be named, said: "There were panic sales on the stock
market after news of the blast came." Major European stock markets
were 1-2% lower in the hours immediately following the blasts. But after
US markets opened only modestly lower, London, Paris and Frankfurt
recovered slightly to be about 0.5% down.
CONGRESS BACKS NEW FUNDS REGIME
US legislators have approved a draft law aimed at
stamping out irregular trading in the mutual funds industry. The House of
Representatives voted in favour of the bill by 418 to 2. The measure
explicitly bans trading practices which have benefited Wall Street
insiders at the expense of ordinary investors. It is designed to protect
millions of Americans who place their long-term savings in mutual funds.
Representative Richard Baker, the Louisiana Republican who proposed the
bill, said it would ensure that "all the rules will be applied
equitably to all investors." Under the bill, investors would be
barred from late trading in mutual fund shares, where professional
investors buy stocks after hours in the expectation that overnight
developments will boost their price.
EMI IN BID FOR TIME WARNER MUSIC
EMI has made a firm offer for its rival Time Warner
Music, while unveiling that its own profits have fallen. EMI refused to
give details of its bid — rumoured to be $1.6bn — but chairman Eric
Nicoli said talks with Time Warner were "at an advanced stage".
The group revealed adjusted pre-tax profits that were down 6.6% to £39.4m
in the six months to September.
BROADBAND COULD BE A £22BN BOOST
Increased use of broadband Internet connections could
boost the UK economy by £22bn, according to a new report. The study
estimates that by 2015 broadband should have boosted Britain's
productivity by 2.5%. This is the equivalent of each person working an
extra hour a week.But the report, carried out by the Centre for Economics
and Business Research, says the £22bn figure will only be possible if
there is more competition in the industry.
BOE VOTED FOR RISE IN RATES
Just one of the Bank of England's rate setting
committee voted against a rise in interest rates earlier this month.
Minutes of the meeting showed most members believed an increase was needed
to rein in inflation. The only dissenting vote came from Marian Bell, who
wanted to keep borrowing costs on hold.
SA DEAL CREATES NEW MINING FORCE
A three-way merger is set to create South Africa's
largest black-controlled mining company. African Rainbow Minerals,
Anglovaal and Harmony have agreed to pool resources, putting Patrice
Motsepe, a leading black entrepreneur, in charge. The deal marks a step
towards meeting ambitious government targets for the transfer of mining
assets to groups disadvantaged by apartheid rule.
TOUGH NEW REGIME FOR MUTUAL FUNDS
The US markets watchdog has unveiled new safeguards
aimed at eliminating abuses in the mutual funds industry. Securities and
Exchange Commission chief William Donaldson told Congress he would improve
scrutiny of the funds, which handle billions in household savings.
He said the SEC may ban after-hours trading in mutual
fund shares, a practice which has hit small investors.
CHINA DAM SHARES' SPARKLING DEBUT
Shares in the company behind China's huge Three Gorges
Dam project have risen 45% on the first day of trading. China's largest
IPO has raised $1.2bn for Yangtze Electric Power after the offer was 70
times oversubscribed. The $25bn dam project will eventually generate 10%
of China's electricity. The controversial project will also displace one
million people and flood millions of acres of farmland.
ASIAN ECONOMIES OVERCOME SARS
It is a year since the first recorded case of the
pneumonia-like illness, SARS, in southern China. It was several months
before the world took notice as the virus spread internationally. The
outbreak had a significant economic impact, especially in East Asia, with
some economists warning that it could tip the world into recession.
UK INFLATION SHOWS SURPRISE FALL
The UK inflation rate recorded a surprise dip in
October, official figures have shown. The underlying rate, which excludes
mortgage interest payments, dropped to 2.7%, down 0.1% on the previous
month. The main reason for the fall was a slower rise in house prices than
a year ago.
EU CALLS TIME ON GERMAN BUDGET
The EU plans to get tough with Germany over its huge
budget deficit. Under the rules of the EU's Stability Pact, eurozone
countries are not supposed to run budget deficits above 3% of GDP (gross
domestic product). The EC wants Germany to cut its deficit by 0.8% next
year and bring it down to 3% by 2005, after 4 years in violation. Germany
says that with its economy slowing, it needs more time to comply. And
Germany's finance minister Hans Eichel has rejected the threat of
sanctions if it cannot reach a compromise deal.
S KOREAN ECONOMY SET FOR GROWTH
The IMF has said that the South Korean economy will
grow by 4.75% next year. The projected economic recovery comes after
several years of slow growth. The IMF said that rising global growth will
boost Korea's exports to the USA.