INTERNATIONAL

 

Aug 08 - 14, 2005

 

1.INTERNATIONAL

2. PAKISTAN

 

BUSH SIGNS LATIN FREE TRADE PACT

US President George W Bush has signed into law a controversial free trade pact with six Central American nations.
The Central American Free Trade Agreement (Cafta) was approved in the House of Representatives by just two votes in the face of strong opposition.
Signing the pact, Mr Bush said it would be good for the US and "advance peace and prosperity" throughout the region.
It was opposed by Democrats and some Republicans because of fears it could put US jobs and industries at risk.

 

 

The agreement brings together the US and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

The US Senate voted in favour of it in June, but opposition in the House of Representatives was only narrowly overcome after intense lobbying by Bush officials.

US textile and sugar industries and trade unions had argued heavy job losses in the US could result because of competition from countries where workers' rights are poorly protected.

Mr Bush argued the measure would help bolster economic growth and strengthen young democracies in Central America.

"The bill I'm about to sign is good for America," he said at the White House signing ceremony.

"The small nations of Cafta are making big and brave commitments and Cafta is a signal that the United States will stand with them and support them."

He also argued the deal would help curb illegal immigration into the US because Central Americans would have better opportunities to provide for their families without leaving their countries.

The agreement will eventually eliminate tariffs currently imposed on US sales in Central America, open up the market for US goods and services and make investment easier.

SAUDI KING FAHD BURRIED

King Fahd of Saudi Arabia, who died on Monday last, was buried after a funeral service in the Saudi capital Riyadh.

The Saudi royal family and Muslim leaders from around the world gathered at Riyadh's grand mosque where the funeral prayers were said.

King Fahd's body arrived at the mosque by ambulance, draped in a brown robe.

After the prayers, the body was carried to a cemetery for burial in an unmarked grave, in keeping with Wahhabism, the kingdom's strict version of Islam.

Security was beefed up across the capital where foreign dignitaries had gathered to pay their respects.

Among those paying tribute to the king, who had ruled since 1982, were Palestinian leader Mahmoud Abbas, Egypt's President Hosni Mubarak, French President Jacques Chirac and Jordan's King Abdullah.

In the past two years, Saudi Arabia has suffered terror attacks carried out by Islamist militants allied to al-Qaeda leader Osama Bin Laden and security was massively increased for the funeral with thousands of troops and police deployed throughout the capital.

Roads leading to the Imam Turki bin Abdullah Mosque, where the funeral took place, were closed and police with sniffer dogs and x-ray equipment checked vehicles.

The king had been frail since suffering a stroke in 1995 and had delegated his powers to Crown Prince Abdullah.

An official ceremony confirming Abdullah as king is due to be held on Wednesday.

SAUDIS VOW LOYALTY TO NEW MONARCH

Hundreds of Islamic clerics, tribal chiefs and prominent figures in Saudi Arabia have been pledging allegiance to their new monarch, King Abdullah.

The grand mufti was among the first to file past the king in the investiture ceremony at a Riyadh palace.

In a televised speech afterwards, King Abdullah promised he would work for justice and serve his people.

Western leaders, including Britain's Tony Blair and US Vice-President Dick Cheney, also paid their respects.

The ceremony came a day after the funeral of King Fahd.

Everyone taking part in the formal investiture - an Islamic tradition known as "bayaa" - had to shake the hand of the new king and swear an oath of allegiance to him.

 

 

EU DEFEAT IN BANANA EXPORT BATTLE

A new European Union tariff on imported bananas has been declared illegal by the World Trade Organization (WTO).

The WTO backed a claim brought by Latin American countries, who argued the EU tariff would have a "devastating effect" on their economies and exports.

Under a EU system set for launch in January 2006, imports faced a tariff of 230 euros ($280.30; 158.50) a tonne.

The new tariff had aimed to safeguard exports from countries in the African, Caribbean and Pacific (ACP) group.

Most were former colonies, and for years their banana crop had received preferential treatment.

Currently, Latin American exports to the EU are limited, with the duty per tonne set at 75 euros for the first 2.7 million tonnes of exports, rising after that to 680 euros per tonne.

Under the new regime, ACP producers would have continued to export bananas duty-free.

GULF ARAB STATES TO INVEST $360BN ABROAD

Gulf Arab governments and private investors are likely to buy over $360 billion of foreign assets in 2005 and 2006, financed by record oil revenues, according to a report by the Institute of International Finance (IIF). The figure is more than the region's total foreign asset purchases for the previous five years, said the report, seen on Thursday. The IIF estimates the six Gulf Arab states bought $240 billion of foreign assets between 2000 and 2004.

The (Gulf Arab region) is in the midst of a period of exceptional economic performance, said Charles Dallara, managing director of the IIF, a US-based association of financial institutions. Gulf states Kuwait, Qatar, Saudi Arabia and the United Arab Emirates are OPEC members, while the remaining two - Oman and Bahrain - are non-OPEC oil and gas producers.

The IIF said economists had to use current account data to estimate the region's foreign assets because only Bahrain - the smallest Gulf state - publishes those figures. Its foreign assets stood at $90.2 billion at the end of 2003. No data on the destination of this capital is available, said the IIF. "We estimate that the bulk is held in diversified portfolios of foreign holdings, with US dollar denominated assets accounting for the largest share.

BD TEA PRICES

The average price of Bangladesh teas rose more than one per cent to 77.53 taka ($1.19) per kg on higher overseas demand at the weekly auction on Tuesday last. "Nearly 1.42 million kg were sold at average price of 77.53 taka per kg, up 1.12 taka from the last sale," said National Brokers Limited.

Some 100 kg of Red Dust realized the highest price of 128 taka per kg followed by another 50 kg of Pekoe Dust selling at 123 taka. Other grades sold at between 61 and 112 taka.

BA PROFITS

British Airways (BA) saw earnings rise 36% in the first quarter as first and business class passenger numbers rose.

The airline said operating profit for the three months to July was 176m ($313.1m), compared to 129m last year.

BANK CUTS INTEREST RATE TO 4.5%

UK interest rates have been cut to 4.5% by the Bank of England's Monetary Policy Committee (MPC).

The MPC's decision at its 100th meeting had been widely expected. UK rates had been held at 4.75% since August 2004.

Experts had predicted the move in the face of concerns about slowing UK growth and consumer spending, and manufacturing moving into recession.

Business leaders said the Bank had made "the right decision" amid mounting evidence of a UK slowdown.

GILLETTE SHARPENS UP ITS PROFITS

Razor giant Gillette is attributing a 17% rise in quarterly profit to the success of new products.

The US firm, which also makes Duracell batteries and Braun electric shavers, saw its net profit increase to $498m (280m) in the three months to 30 June.

HSBC BUYS US CREDIT CARD BUSINESS

UK banking giant HSBC has agreed to buy American credit card firm Metris for $1.59bn (893m).

HSBC's subsidiary HSBC Finance is already the sixth-largest US issuer of Mastercard and Visa cards, while Metris is the 11th biggest.

It is the third recent purchase of a large US credit card firm.

In June, Bank of America agreed to buy MBNA for $35bn, and Washington Mutual agreed to buy Providian Financial for $6.45bn, as the industry consolidates.

EU TO RELAX CHINESE SWEATER QUOTA

European import quotas on Chinese sweaters are to be temporarily relaxed to help shops fill shelves this winter.

Brussels has agreed to raise the import limit during the rest of the year despite initial opposition to the concession from some member states.

France and Italy were among nations calling for tough application of quotas on Chinese textiles but faced concerns from retailers about supply shortages.

About 20 million jumpers are awaiting clearance to be sold in the EU.

These were shipped before a temporary ban on imports was imposed last month and have since been stranded in transit.

The EU has been odds with China over its surging textile exports.

The two sides reached agreement in June over tighter import controls until 2008.

However, Brussels restricted quotas last month after China exceeded its limit of 69 million export items up until the end of the year.

ETHICAL SAVINGS BREAK 10BN MARK

The amount of money put into UK ethical savings and investments has broken through the 10bn barrier for the first time, a study has said.

Co-operative Financial Services (CFS) said the level of ethical investment rose 18% to 10.6bn during 2004.

A total of 5.5bn had been put into 'socially responsible' funds, the study said, and 5.1bn deposited in ethical banks and credit unions.

CFS added the pace of such investment had accelerated in recent years.

EUROZONE RATES KEPT ON HOLD AT 2%

Interest rates in the 12 eurozone countries have been held at 2% by the European Central Bank (ECB).

The widely expected decision came less than an hour after the Bank of England cut UK rates by 0.25% to 4.5%, its first reduction in more than a year.

Although the eurozone is suffering low growth - with many of its largest economies faltering - the ECB has been mindful of keeping inflation in check.

It has kept rates unchanged at 2% for more than two years.

UNILEVER PROFITS

Consumer good giant Unilever has described trading in western Europe as "difficult" as it reported a fall in second-quarter profits.

Profits in the three months to June fell 20% to 1.12bn euros (774m; $1.4bn) from 1.4bn euros a year ago.

IMF CUTS EUROZONE GROWTH FORECAST

Estimates for growth in the 12-nation eurozone have been revised down by the International Monetary Fund (IMF).

The IMF cut its forecasts for growth to 1.3% for this year from 1.6%, and to 1.9% in 2006 from 2.3%.

However, the IMF said the European Central Bank (ECB) had been right to keep interest rates at 2% rather than cut them to boost flagging economies.

MINING GROUP

Mining group Anglo American has posted a rise in profits, saying that further industrial-nation growth and steady Chinese demand would fuel more rises.

Headline profits before one-offs rose 43% to $1.8bn (1bn) in the six months to June from $1.25bn the year before.

US MANUFACTURING PICKS UP SPEED

US manufacturing growth expanded at a faster rate than expected in July, figures from the Institute for Supply Management (ISM) revealed.

The ISM's index rose to 56.6 from 53.8 in June - higher than forecasts of a 54.5 gain.

A figure above 50 indicates expansion in the sector - which has held above 50 since February 2003.

The data follows a series of strong economic reports, and means US interest rates are likely to keep rising.

JAPAN SLAPS TRADE SANCTIONS ON US

Japan has hit back against the US in a spat over a controversial anti-dumping trade law and said it plans to raise import tariffs by 15% on 15 products.

The trigger for the move has been the US's Byrd Amendment, a law that hands out the money collected in anti-dumping levies to the industries most affected.

Japan, along with other nations, challenged the law and the World Trade Organisation (WTO) declared it illegal.

The European Union and Canada already have imposed retaliatory sanctions.

Despite the WTO ruling and assurances from the US that it would phase out the amendment, it is still operating and earlier this year millions of dollars were distributed to US firms.

FACTORY GLOOM SPURS RATE CUT CALL

The UK's tepid manufacturing sector contracted for the fourth straight month during July, with predictions the weakness is set to continue.

The news added to speculation that the Bank of England will cut interest rates as a means of stimulating the sector.

The Chartered Institute of Purchasing and Supply (CIPS) said its purchasing manager index (PMI) fell to 49.2 from 49.6 in June.

A reading below 50 indicates contraction within the sector.

The fall in UK PMI contrasted with that of the 12-nation eurozone, which rose to 50.8 in July.