Archives for May 2019

Fifty-two of the African Union’s (AU) 55 member states have signed the deal, which is expected to boost regional and international trade. It will be the largest free trade agreement by population that the world has seen since the 1995 creation of the World Trade Organization.

“This is a historic milestone!” the AU’s commissioner for trade and industry Albert Muchanga proclaimed on Twitter.

“We celebrate the triumph of bold, pragmatic and continent-wide commitment to economic integration,” he tweeted.

The agreement’s operational phase will be launched on July 7 at an AU summit in Niger, and there are still some issues to be resolved.

Chinese ambassador to the African Union Liu Yuxi welcomed the agreement, saying it will help forge closer economic and trade ties with China.

“It is a milestone in Africa which has in recent years been upholding the banner of unity and promoting economic integration,” Liu said, adding that the sides are expected to “build closer economic and trade ties by developing the free trade area and promoting the Belt and Road cooperation.”

Also on rt.com China’s new Silk Road to link Africa’s huge market to the rest of the world – official

Lifting trade barriers across Africa should “increase the value of intra-African trade by between 15 percent (or $50 billion) and 25 percent (or $70 billion),” by 2040, wrote Vera Songwe, executive secretary of the United Nations Economic Commission for Africa (UNECA) in a January 2019 essay.

Currently, only 16 percent of trade by African nations is with continental neighbors. The new deal is expected to cut duties on 90 percent of goods.

Some critics, however, say that poor infrastructure and a lack of diversity between the continent’s economies could throw up barriers to the hoped-for integration.

AfCFTA has been a flagship project of the African Union’s “Agenda 2063” development vision for five years. The AfCFTA proposal was approved in 2012 and the members started working on a draft in 2015. In March 2018, the leaders of 44 African countries endorsed the agreement in Rwanda. AfCFTA participants are reportedly weighing the possibility of using a common currency.

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Article source: https://www.rt.com/business/460649-africa-free-trade-zone/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The financial channel, which was announced by Germany, France and the UK in January, is aimed to enable “legitimate trade” with Iran in the wake of US sanctions against the Islamic Republic.

“If this mechanism starts working … We are ready to impose sanctions on any activity subject to restrictions,” Hook said during a telephone briefing.

The US representative voiced doubts that Tehran would be able to build a “mirror mechanism” to ensure transactions from its side. Washington doesn’t see any demand from businesses for incorporation into such a mechanism, Hook noted.

Bloomberg had reported earlier that the US Treasury Department’s undersecretary for terrorism and financial intelligence, Sigal Mandelker, sent a letter on May 7 warning that INSTEX and anyone associated with it could be barred from the US financial system, if it goes into effect.

Also on rt.com EU countries move to evade US’ Iran sanctions by setting up payment channel for ‘humanitarian’ trade

Sources told the media that European envoys had earlier downplayed the significance of the payment mechanism, in discussions they’d held with the White House. Washington, however, has decided that the three largest EU powers (France, Germany and the UK) were far more serious about it than they had originally said.

Hook says U.S. doesn’t see any corporate demand for INSTEX and that it would sanction any sanctionable behavior,

— Golnaz Esfandiari (@GEsfandiari) May 30, 2019

The US has been warning businesses, government officials and staff working to set up the mechanism about the consequences they face if they continued to do business in Iran, the sources said.

The EU countries had been considering the idea of a special payment channel with Iran since last year, after the US’ dramatic withdrawal from the landmark nuclear deal, signed by Tehran and six world powers in 2015. Washington then reintroduced its sanctions against Iran, ignoring its partners’ advice.

Also on rt.com Switzerland Iran developing payment channel to bypass US sanctions

The new mechanism aimed to preserve the 2015 Iranian deal, also known as the Joint Comprehensive Plan of Action (JCPOA), by continuing trade with the Islamic Republic, and it is “conditioned upon Iran’s full implementation of its nuclear-related commitments.”

Some experts, however, said the mechanism was useless and won’t change anything for European companies, who cannot feel confident that they could work in Iran without being subject to US sanctions.

READ MORE: Tired of waiting: Iran slams Europe for ‘lagging behind’ in launching trade mechanism

At the initial stage, INSTEX would have facilitated trade between the companies of the three EU nations and Iran by bypassing the SWIFT international payments system and focussing on high-priority “humanitarian goods,” such as food and medical supplies.

Tehran has recently criticized Europe for “lagging behind” in launching the trade mechanism. The country’s foreign minister, Mohammed Javad Zarif, said that Europeans have “no excuse” for delaying the launch of the mechanism any further and that Iran would not simply “continue to wait for them.”

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Article source: https://www.rt.com/business/460648-us-sanctions-eu-iran-instex/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China boosted the imports as a goodwill gesture when the leaders of the two countries agreed to halt the tariff row late last year. Back then the move provided some relief to a significant part of Trump’s voter base, the American farmers, who are struggling to find buyers for their massive harvest. The renewed Chinese ban can hit them hard, given that soybean futures have recently slumped.

Also on rt.com Russia to replace US soybean exports to China amid escalating trade war

The Chinese state-owned grain buyers don’t expect that the order to continue the purchases will come any time soon, according to Bloomberg. However, Beijing is not going to cancel previous orders for American soybeans. Earlier, it pledged to buy around 10 million tons and is reportedly yet to take delivery of about 7 million tons.

Embargo on? Rare earth stocks soar after China warns of possible US export ban

RT has reached out to China’s food processing company Cofco and China Grain Reserves Corporation, Sinograin, to comment on the matter, but has not received their response so far.

China’s move can further drive US grain prices down. Soybean and corn futures plummeted to the lowest price in more than 40 years at the beginning of May, even before Trump raised tariffs on another $200 billion in Chinese goods from 10 percent to 25 percent and threatened to expand the trade war to all Chinese imports. Since then, crop prices have been slightly recovering.

Trump had earlier stressed that US farmers, who are struggling to keep afloat amid the trade spat, will get government support. Last week, the White House rolled out a $16 billion aid program for this purpose.

The reported halt of soybean purchases comes shortly after the expiration of the two-week period, when products already in transit did not face the new hikes. It was expected that the two sides could make a deal during that period and avoid further tit-for-tat tariff increase, but the bitter conflict has only deepened.

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Article source: https://www.rt.com/business/460645-china-us-soybean-purchases/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“By preventing American companies from doing business with Huawei, the government will directly harm more than 1,200 US companies. This will affect tens of thousands of American jobs,” Song Liuping said, as cited by media at a press conference in Shenzhen on Wednesday.

Moreover, some three billion customers in over 170 countries will be affected by Washington’s blacklisting of one of the world’s largest smartphone makers, the official stressed.

Also on rt.com Huawei files motion to declare US ban ‘unconstitutional’

Earlier this month, US President Donald Trump issued an order clearing the way to bar US firms from supplying Huawei with parts or technology, citing concerns over espionage against the US. Huawei has repeatedly rebuffed the claims. The US Commerce Department was quick to add the Chinese firm to its “entity list,” effectively implementing Trump’s intention, and now American companies must seek special permission to trade with Huawei.

Huawei’s top legal officer said that by “using the strength of an entire nation” to go after one private firm, the US “sets a dangerous precedent” as many others could face similar bans.

“Today it’s telecoms and Huawei. Tomorrow it could be your industry, your company, your consumers,” he warned.

Also on rt.com ‘Stupid economics’: Attack on Huawei tells world to avoid doing business with US – Prof. Wolff

Earlier professor emeritus of economics at the University of Massachusetts, Richard Wolff, told RT that the US crusade against Huawei should make many companies think twice before doing business with the US.

To comply with Trump’s order, some companies, such as Google, Intel, and Qualcomm, started cutting their ties with the Chinese tech company. However, others – SD Association, Wi-Fi Alliance and Bluetooth SIG – have ignored the ban and restored Huawei’s membership.

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Article source: https://www.rt.com/business/460628-huawei-ban-harms-us-companies/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“China has all along opposed unilateral sanctions and so-called long arm jurisdiction,” a spokesperson for the Foreign Ministry told the South China Morning Post on Wednesday. Beijing’s response follows an earlier warning from Washington to Hong Kong that it could face penalties if it allowed the Pacific Bravo vessel to port and receive services in the city, as it would circumvent US sanctions on Iranian oil exports.

Also on rt.com South Korea switches to Russian crude to replace banned Iranian supplies

The ministry reiterated that it saw nothing wrong with “normal” Iranian oil sales with other nations and called on Washington to respect the deals.

The normal energy dealings between Iran and the international community, including China, that is within the framework of international laws, are reasonable, lawful, and should be respected and protected.

Beijing’s call to the US follows earlier comments from Hong Kong’s Commerce and Economic Development Bureau. The Bureau maintained that the city had “strictly” adhered to UN Security Council sanctions, noting that US sanctions on Iranian crude were “outside the scope” of those implemented by Hong Kong.

Also on rt.com India stops purchases of Iranian oil as US waivers expire – envoy

Hong Kong’s Marine Department also maintained that is had “no information” which indicated the Pacific Bravo vessel, which is owned by China’s Bank of Kulun, would enter or pass Hong Kong’s waters. Ship-tracking data indicated that the vessel was last off the coast of Sri Lanka and is expected to arrive in Indonesia on Monday.

The latest war of words between Beijing and Washington comes at a time of growing antagonism between the US and rivals to its east. In addition to the growing trade war with Beijing, the Trump administration has continued its drive to choke off Iran’s oil exports by refusing to extend waivers to large importing nations such as China, South Korea and India. Since May 2, customers who continue to import Iranian crude risk the wrath of US sanctions.

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Article source: https://www.rt.com/business/460627-china-us-warning-oil-iran/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The sale of the so-called ‘Panda’ bonds or yuan-denominated debt issued by a non-Chinese entity took place Wednesday and Thursday.

Portugal’s Finance Minister Mario Centeno told CNBC that the issuance is a “positive step in managing Portugal’s external debt in the medium term.” He said the sale will allow Portugal to expand its investor base.

Also on rt.com Game changer: China’s yuan bonds to reshape global capital markets

Placing ‘Panda’ bonds is an opportunity that Lisbon could not miss, according to the head of Portugal’s debt agency IGCP, Cristina Casalinho. She said earlier: “Today we crucially depend on the investor base we have and what we know is that investors that, for example, buy German debt do not invest in higher risk debt.”

She went on, saying that “It is important especially if we take a long-term perspective… China has been diagnosed as one of the countries with the highest savings in the world, and that it could be… a big operator or a big intervener in financial markets.”

Also on rt.com China emerges as key player in green bonds market

Portugal which went through an international bailout between 2011 and 2014 has one of the highest levels of Chinese investments among European countries. It has reportedly been studying the issuance of ‘Panda’ bonds since 2017, but work on that accelerated after Chinese President Xi Jinping’s visit last December.

Poland became the first European country to issue government bonds on the Chinese market in 2016. Hungary followed the move two years later.

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Article source: https://www.rt.com/business/460623-portugal-bonds-china-debt/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Belgrade will increase its gold reserves from 20 to 30 tons by the end of this year, according to Serbian media company Vecernje Novosti. It said the country plans to boost its holding to 50 tons by the end of 2020 as a safety measure. Statistics from the National Bank of Serbia show foreign exchange reserves are currently worth €11 billion.

The decision to beef up bullion reserves was reportedly made following this month’s meeting of Serbian President Aleksandar Vučić with an IMF delegation. The fund’s representatives told the president they’d approve of Belgrade’s gold-buying if it fits into Serbia’s strategy of increasing foreign exchange reserves.

Also on rt.com Russia boosting gold reserves at a time of impending US dollar crisis – Peter Schiff

Last Wednesday the Central Bank of the Philippines announced that a law has been passed exempting gold sales by small-scale miners to the bank from excise duties and income taxes. The move was explained as a way to boost the country’s foreign exchange reserves and to prevent smuggling.

According to Reuters, small miners have found a way to circumvent taxes introduced back in 2011 by selling gold on the black market. The law entitles them to sell all produced gold to the country’s central bank at world market prices. The Philippines’ gold reserves remained unchanged at roughly 198 tons in both the first quarter of 2019 and the fourth quarter of 2018. Gold accounted for nearly ten percent of the country’s gross international reserves of $83.96 billion at the end of April.

Countries across the globe have been stockpiling bullion in an attempt to diversify their foreign reserves away from the US dollar.

According to the World Gold Council (WGC) data, overall net buying by central banks has reached its highest level, in terms of first quarter net purchases, since 2013. Purchases surged by 68 percent year-on-year to 145.5 tons, the data showed.

Also on rt.com Global gold fever: India follows Russia China by boosting bullion reserves

The global trend was led by Russia and China. Earlier this month, WGC reported that net purchase of gold by Russia’s Central Bank was the highest in the first quarter of 2019. The country purchased 55.3 tons, bringing its gold reserves to 2,168.3 tons and in the process becoming the world’s largest buyer of the precious metal.

At the same time, Moscow dramatically reduced its US Treasury holdings as part of the country’s de-dollarization plans. The world’s sixth-biggest gold holder, China, has acquired 33 tons of gold in the first quarter of this year.

India has followed the lead, purchasing 8.2 tons of the yellow metal so far this year. In 2018, the Reserve Bank of India reportedly bought 42.3 tons of gold. The regulator currently holds 608.7 tons of the yellow metal that accounts for about seven percent of the country’s foreign exchange reserves.

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Article source: https://www.rt.com/business/460611-nations-boosting-gold-reserves/?utm_source=rss&utm_medium=rss&utm_campaign=RSS