Updated Reactions to the Situation in Hong Kong

hongkong1Los Angeles, CA – The following statements were released earlier today on the developing situation in Hong Kong:

From the White House:

“The United States supports universal suffrage in Hong Kong in accordance with the ‘Basic Law’ and we support the aspirations of the Hong Kong people.

“We believe that an open society with the highest possible degree of autonomy and governed by the rule of law is essential for Hong Kong’s stability and prosperity.

“Indeed, this is what has made Hong Kong such a successful and truly global city to this point.

“We’ve consistently made our position known to Beijing and we’ll continue to do so. We believe that the basic legitimacy of the Chief Executive in Hong Kong will be greatly enhanced if the Basic Law’s ultimate aim of selection of the Chief Executive by universal suffrage is fulfilled.

“We also believe that the legitimacy of the Chief Executive will be enhanced if the election provides the people of Hong Kong a genuine choice of candidates that are representative of the people’s and the voters’ will.”

From the US Consulate General in Hong Kong:

“The United States strongly supports Hong Kong’s well-established traditions and Basic Law protections of internationally recognized fundamental freedoms, such as freedom of peaceful assembly, freedom of expression, and freedom of the press.

“We do not take sides in the discussion of Hong Kong’s political development, nor do we support any particular individuals or groups involved in it.

“Hong Kong’s stability and prosperity have long benefited from a vigorous dialogue among its citizens and a firmly established tradition of the peaceful and orderly expression of differing views.

“In accordance with this tradition, we encourage all sides to refrain from actions that would further escalate tensions, to exercise restraint, and to express views on the SAR’s political future in a peaceful manner.”

From the American Chamber of Commerce (AMCHAM) in Hong Kong:

“The American Chamber of Commerce in Hong Kong The AmCham Hong Kong office is staffed today, but our noontime event will be rescheduled because transportation to Central and immediate surrounding areas is limited by police restrictions on road and MTR use.

“The Chamber urges all parties in the current situation to avoid violence and to vigorously pursue constructive discussions in an environment that embraces the principles of the rule of law and transparency for which Hong Kong is justly so well known.

“The Chamber urges a de-escalation of the current tensions, and it encourages a return to the usual stability on the streets and of business operations while the leaders and participants in all sides in the demonstrations work toward a resolution of their disputes.”

As of the posting of this story, the US Embassy in Beijing has not issued a statement on the situation in the Hong Kong Special Administrative Region.

From the Hong Kong Trade Development Council (HKTDC) in Hong Kong:

“We are monitoring the situation closely, and cannot say much more than that at this point in time.

“Our own HKTDC promotional activities and events will continue as planned, and we are confident that Hong Kong’s firm foundation of free trade and its resilient economy will maintain the territory’s position as a prime regional and international business hub.”

As of the posting of this story, the US Embassy has not issued a statement commenting on the situation in the Hong Kong Special Administrative Region.

09/30/2014

‘Significant Progress’ Seen in Recent TPP Talks

singaporeWashington, DC – The recent negotiations between the 12 Pacific Rim nations crafting the Trans-Pacific Partnership (TPP) trade agreement “made significant progress” on proposed rules for state-owned enterprises despite differences over tariffs remaining one of the obstacles to a final deal.

Spanning ten days in Hanoi, the talks “spent successive rounds trying to narrow the gaps,” said US delegation leader, Barbara Weisel, US Trade Representative for Southeast Asia and the Pacific.

The TPP would create a free-trade zone from Australia to Peru with $28 trillion in economic output, or 39 percent of the global total. The deal is seen as a major component of the White House’s effort to bolster boost US exports.

The pact, would be the biggest trade deal in US history. The TPP “goes beyond typical trade agreements that focus on reducing tariffs, and highlights issues such as stricter safeguards for patents and copyrights and leveling the playing field for companies that compete with government-backed businesses,” said Weisel.

Responding to the status of the TPP talks, US Chamber of Commerce Executive Vice President and Head of International Affairs Myron Brilliant said, “Now is the time to seize upon the extensive economic benefits that the TPP offers every participating country.”

All parties to the negotiations, he said following a recent USCOC event, “must show the political courage required to make the hard decisions needed to conclude the TPP negotiations soon, as this will not get any easier with time.”

Commenting on what he called the “importance of crafting a high-standard, comprehensive trade agreement,” Brilliant said, “If Japan, the United States, or any negotiating partner cannot meet the high standards of the TPP on market access or rules, then the overall ambition of the agreement will be lowered to the detriment of every nation’s interests. We should all guard against that outcome.”

The proposed TPP’s geopolitical importance, he concluded, “is unmistakable. While we must not subordinate commercial priorities to foreign policy goals, the TPP’s geostrategic importance should strengthen our resolve to achieve an ambitious, comprehensive agreement.”

The countries covered by the trade pact are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the US.

China, which has been excluded from the TPP, is separately moving on trade talks with countries such as South Korea, Japan and Australia.

09/30/2014

 

Adobe to Close Its China Research & Development Center

Adobe_Download_AssistantMountain View, CA – Adobe Systems has said it will shutter its research and development center in China because of what the US software giant says are the country’s “increasingly unfavorable” business conditions.

 

The Beijing facility opened its doors on October 2008 with more than 300 people involved in developing software products specifically designed for the Chinese market.

The process of closing down the center will reportedly continue through the end of the year.

 

Lay-offs have already started with about 300 people likely to face job cuts. Some 30 employees, the company said, will be relocated to the company’s headquarters in Northern California or to branch offices in India.

 

“We are committed to China as a long-term market, and will continue our sales presence nationally as always,” the company said in a statement released to the press.

 

The move, it said, “will not affect Adobe’s overall level of investment in R&D and is not an indication of financial performance in China or worldwide.”

 

Adobe did say it would, however, maintain its Chinese sales offices in Shanghai, Beijing, Guangzhou, Shenzhen, Hong Kong.

 

The Silicon Valley-based company is just one of several US-based high-tech firms that have come under increasing scrutiny by the Chinese government over allegedly illegal business practices.

 

Microsoft and Qualcomm are currently being probed, while Adobe recently had its office in Beijing raided by Chinese officials as part of an “anti-monopoly investigation” aimed at its ‘Office’ suite of programs and ‘Windows’ operating system, which is used on the vast majority of computers in China.

 

The head of the government agency investigating Microsoft for what it calls “monopoly actions” said last month that the probe includes the way the US giant distributes its media player and browser.

 

Speculation by industry analysts draws a connecting line between the investigations by Beijing and the US government’s indictment earlier this year of five members of a Chinese military unit for allegedly hacking into the computer systems of several major US companies to steal trade secrets – a charge the Chinese government vehemently denies.

 

09/29/2014

Denim Jeans Makers Hit with ‘Section 337′ Investigation

denim-shopping-jeans-2-medium-newWashington, DC – Seventeen of the apparel world’s largest denim jeans manufacturers are being targeted with a ‘Section 337′ investigation on charges of patent infringement by the US International Trade Commission (ITC).

The investigation stems from a complaint filed by RevoLaze Inc., a laser technology firm headquartered in Westlake, Ohio, charging that the manufacturers violated US patent law by illegally utilizing the company’s proprietary laser scribing technology.

“From the beginning we were confident that there was overwhelming evidence to support the investigation. We’re pleased with the ITC’s decision to move forward,” said a spokesman for the law firm representing RevoLaze.

The denim jean companies named include ‘big name’ manufacturers in the US, Canada, Sweden, and Italy such as Levi Strauss & Co.; Abercrombie & Fitch; American Eagle Outfitters; H&M Hennes & Mauritz AB; Roberto Cavalli S.p.Ali.; Buffalo International; The Gap Inc.; Guess? Inc.; Fashion Box S.p.A.; and Eddie Bauer LLC.

The next step calls for the ITC’s Chief Administrative Law Judge will assign the case to one of the agency’s administrative law judges (ALJ), who will schedule and hold an evidentiary hearing. The ALJ will then make an initial determination as to whether there is a violation of section 337 with that initial determination subject to review by the Commission.

The ITC “will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation.”

Remedial orders in Section 337 cases “are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the US Trade Representative within that 60-day period,” the UITC said.

09/26/2014

Trade Group Urges DOE to Speed LNG Export Applications

LNG-tanksLos Angeles, CA – Despite its recent approval of a pair of major liquified natural gas (LNG) export operations, the US Department of Energy (DOE) needs to speed-up the process of green-lighting a number of other proposed LNG projects, says the American Petroleum Institute (API).

Charging that “dozens of other permits still face lengthy delays,” the trade group is urging the White House “to accelerate this process and work with leaders in Congress who have shown they are ready to strengthen America’s position as an energy superpower,” according to the industry group.

Both Sempra Energy’s Cameron LNG project in Louisiana and the Carib Energy LLC project in Florida were cleared for LNG exports to countries like those in the European Union that don’t have a free-trade agreement with the US.

The Federal Energy Regulatory Commission granted the $10 billion Cameron project a construction license in June after it was issued a conditional export permit by the Energy Department earlier in the year. Its Louisiana facility will be able to export up to 1.7 billion cubic feet of natural gas a day for up to 20 years.

The Carib Energy project was approved under a new process that allows the DOE to issue decisions on applications only after federal environmental reviews are completed.

An environmental review was waived for Carib Energy, a subsidiary of the Crowley Maritime Corp, because the exports would be coming from an existing natural gas liquefaction facility that’s already undergone the necessary assessments.

Carib’s operation would move up to 0.04 billion cubic feet a day of gas in ISO-certified LNG shipping containers to countries in the Caribbean and Central and South America.

09/25/2014

WTO Downgrades Trade Growth Forecasts

uk-exports-headerGeneva, Switzerland – The World Trade Organization has reduced its forecast for world trade growth in 2014 to 3.1 percent, a significant drop from the 4.6 percent it made in April.

In addition, it also cut its estimate for 2015 to 4.0 percent from its previous 5.3 percent forecast.

The downgrade “comes in response to weaker-than-expected GDP growth and muted import demand in the first half of 2014, particularly in natural resource exporting regions such as South and Central America,” the global trade group said.

Beyond the specific downward revisions, it said, “risks to the forecast remain predominantly on the downside, as global growth remains uneven and as geopolitical tensions and risks have risen,” while “international institutions have significantly revised their GDP forecasts after disappointing economic growth in the first half of the year,” said WTO Director-General Roberto Azevêdo.

When the last forecast was released in April 2014, conditions for stronger trade growth seemed to be falling into place after a two year slump that saw world merchandise trade grow just 2.2 percent on average during 2012–13, with leading indicators at the time pointing to an upturn in developed economies and Europe in particular.

“Although growth has strengthened somewhat in 2014, it has remained unsteady,” the WTO said with output in the US during the first quarter of this year falling by –2.1 percent, annualized rates and in the second quarter in Germany by –0.6 percent, “sapping global import demand.”

China’s GDP growth also slowed from 7.7 percent in 2013 to 6.1 percent in the first quarter of this year before rebounding in the second. The slow first quarter contributed to weak exports in trading partners.

“As a result of these and other factors, global trade stagnated in the first half of 2014, as the gradual recovery of import demand in developed countries was offset by declines in developing countries,” the WTO said.

Growth in trade and output “is expected to be somewhat stronger in the second half of 2014 as governments and central banks may provide policy support to boost growth, and as idiosyncratic factors such as harsh weather conditions in the US and a sales tax rise in Japan weighted on trade in the first half of this year begin to fade.”

However, the WTO said, “several risk factors on the horizon have the potential to produce worse economic outcomes.”

For example, it said, tensions between the European Union and the US on the one hand and the Russian Federation on the other over Ukraine have already resulted in trade sanctions on certain agricultural commodities, and the number of products affected could widen if the crisis persists.

At the same time, the continuing conflict in the Middle East “is also stoking uncertainty, and could lead to a spike in oil prices if the security of oil supplies is threatened.”

This is the moment, he said, “to remind ourselves that trade can play a positive role here. Cutting trade costs and broadening trade opportunities can be a key ingredient to reversing this trend,” said the WTO’s Azevêdo.

09/24/2014

Exporters to Russia Face Increased Payment Risks

russiaLos Angeles, CA -Russia is currently experiencing a slowdown in economic growth, and the situation is most likely to deteriorate further as a result of the newly imposed sanctions, according to a new country analysis report issued by The Atradius Group, the Netherlands-based global risk management firm.

Atradius is observing an impact across all sectors in the form of decreasing domestic demand, a weaker ruble exchange rate, a rise in inflation, limited access to external financing and international capital outflow.

Exporters to Russia “could experience an increase in payment delays and defaults with some sectors expected to be more affected than others,” the report said.

Russian sanctions on imports of food and agricultural products “will hit the food sector, in particular the fish, meat and dairy subsectors, with a negative impact on the whole value chain, while sectors dependent on consumer demand, such as the consumer durables and consumer electronics sectors are also expected to see further slowdown,” it said.

In addition, the report said, US and EU sanctions on financing are expected to put a toll on Russian businesses dependent on financing.

The oil and gas industry “is still performing well thanks to high commodity prices, but businesses in other strategic sectors such as metals and mining are suffering, and may not be able to refinance their large debts. While the Russian government is ready to provide financial support, its reserves, though ample, are limited.”

Some sectors, however, such as the pharmaceuticals sector, “are expected to be less impacted and local agricultural production could even benefit from restrictions on food imports,” the report said.

“In case of price controls, however, business profits may be hit with higher costs that cannot be transferred to consumers in such cases,” the report concluded.

09/23/2014

 

 

AMCHAM Blasts China’s ‘Opaque’ Investment Rules

MINOLTA DIGITAL CAMERALos Angeles, CA – A major US trade promotion group is asserting that Beijing is targeting foreign companies “with opaque laws and rules that contribute to a deteriorating environment for investment.”

According to the American Chamber of Commerce in China (ACCC), 60 percent of those US-based businesses that responded to a recent survey said they feel foreign businesses “are less welcome in the country than before” – up from the 41 percent of respondents in a previous survey conducted in late 2013.

In addition, the group said, 49 percent stated that foreign companies are being “singled out” in the Chinese government’s ongoing pricing and anti-corruption campaign, which, many of those surveyed said, is “politically motivated and threatens to exacerbate a decline in foreign direct investment in the world’s second-largest economy.”

ACCC members say they have “growing perceptions that multinational companies are under selective and subjective enforcement by Chinese government agencies,” according to ACCC Chairman Greg Gilligan.

The country’s laws and rules, he said, “lack transparency and are at times only vaguely related to the particular case.”

Dozens of foreign companies “are being targeted in probes, with regulators opening an anti-monopoly investigation into Microsoft Corp. in July and state media accusing Apple Inc. of using its iPhone to steal state secrets, said Gilligan, who serves as Vice President and Managing Director for PGA Tour China.

In an interview with the state-run China Daily newspaper, Xu Kunlin, the head of China’s National Development and Reform Commission’s anti-monopoly bureau, called the charges that the country is specifically targeting foreign companies “groundless and baseless.”

Xu’s reactions were echoed by a spokesman for the Foreign Ministry in Beijing, who said that China’s anti-monopoly measures “are transparent, fair and done in accordance with the law.”

China, the spokesman said, “will as always welcome foreign companies and enterprises to develop cooperation in all fields and build a good market economy. At the same time, we request foreign companies observe Chinese laws while in China.”

American Chamber members have “concerns that rules are shifting again for foreign companies in China in ways that are highly opaque and difficult for local managers to anticipate or adapt to,” according to the ACCC’s Gilligan.

The group’s members, he said, “strive hard for full compliance and need support and greater clarity to achieve that goal.”

The ACCC’s membership representatives from more than 1,000 US-based companies of all sizes including Microsoft, Johnson & Johnson, Dell, Oshkosh, Qualcomm, and Mead Johnson.

09/22/2014

 

Ports Face ‘Big Ships, Big Challenges': White Paper

POLB5Long Beach, CA – The deployment of the latest generation of mega-containerships “presents physical, financial and operational challenges that must be met by port authorities across the country” according to the Port of Long Beach’s Acting Deputy Executive Director, Dr. Noel Hacegaba.

Even for ports that will not see the mega vessels call at their ports any time soon, the arrival of the larger ships is creating a cascading effect in which the ships being replaced by mega vessels are being deployed in the smaller trade lanes,” says Hacegaba in a new white paper, “Big Ships, Big Challenges.”

The average size of container ships, he says, has grown considerably in recent years and the trend is likely to continue for years to come.

“Although 18,000 TEU [20-foot equivalent unit] vessels are the largest in service currently, ships that carry more than 10,000 TEUs are still considered large and have limited options with regards to trade lanes and to ports that can accommodate them,” he writes.

Hacegaba said the industry is turning to the larger ships because they reduce operating costs for shipping operators, and they help meet regulatory requirements to decrease in potentially harmful emissions.

According to the white paper, ports around the country are spending $46 billion in capital improvements, including $4.5 billion invested at the Port of Long Beach. Shipping companies “are ordering larger ships to meet demand, while cutting the operational costs they would otherwise incur by sending cargo on multiple trips.”

As a result, ports of all sizes “are struggling to ready themselves to handle the larger vessels.”

Hacegaba states that regardless of a port’s size, they face a demand to handle a larger class of vessels. In the coming years it is projected that smaller vessels will be put out of services to make way for larger ones. But the largest ships will go to the biggest ports, while today’s larger ships will switch to smaller ports.

For the vessel operators, “the major investments in larger ships is straining their resources. So ocean carrier alliances and consolidations are also being forged as a result,” he says.

While this is not new to the maritime industry, Hacegaba points out that they are “providing financial uncertainty for port authorities.”

The newly aligned or consolidated vessel operators may move to different ports, while a smaller port may spend millions on fixing its infrastructure, and then lose a major tenant. In addition, smaller ports that don’t upgrade infrastructure because of their struggle for funding may face losing business as small-sized fleets are phased out.

The maritime industry “is ever evolving as technologies improve,” he concludes, with port authorities “playing a primary role” in educating both the industry and the public in potential changes.

“Ports must be built to handle larger ships and be prepared when shipping alliances do not go in their favor. As the maritime industry and how goods are moved change, so must ports if they are to be ready to handle the next generation of larger ships.”

0919/2014

All-Out Ban Urged on Russian Seafood Imports

alaskacrabLos Angeles, CA – A number of companies from Alaska’s $6 billion seafood industry are voicing their support for a ban on Russian seafood imports to the US, while urging Moscow to rescind its August ban on US food imports.

Such a move, they say, “would not only further squeeze Russia’s faltering economy as Russia threatens European stability, but would support America’s sustainable, high-quality fisheries.”

Companies calling for the action reportedly include some of the largest seafood producers in the Pacific Northwest including Alaska General Seafoods, Alyeska Seafoods, Icicle Seafoods, North Pacific Seafoods, Ocean Beauty Seafoods, Peter Pan Seafoods, Trident Seafoods, Westward Seafoods, and UniSea Inc., all based in Washington state, as well as the entire membership of the Alaska Bering Sea Crabbers Association.

The proposed US ban, the group says, would remain in effect “until Russia rescinds its ban on US imports, and would include mechanisms to prohibit all seafood imports of Russian origin, including Russian-caught seafood that is transferred through other countries such as China before reaching the US.”

Hundreds of millions of dollars of Russian seafood imports are sold in the US every year, with much of the imported Russian fish coming through China.

The Alaska seafood industry is seeking support from the state’s Congressional delegation for the ban, as well as from the Office of the US Trade Representative, while also seeking diplomatic efforts to immediately end Russia’s ban on US seafood products.

Russia has been a major market for US seafood products such as salmon roe, hake, Alaskan pollock, and others, while the US has been an important market for Russian products including crab, Russian pollock, salmon, and caviar.

According to the US Department of Commerce, sales of food and agricultural products to Russia amounted to $1.3 billion in the first five months of this year with more than $86.5 million of that was from US seafood, including shrimp, hake, sole and sardines. The majority of that — $46.4 million — was salmon roe, used for Russian red caviar.

“We did not start this fight, and we hope the Russians will call off their embargo,” said Terry Shaff, president & CEO of Washington-headquartered seafood producer UniSea Inc.

But, he said, “a US ban will signal to President Putin that America will not sit idly by while Russia disregards international law and tries to coerce the world into ignoring its transgressions through retaliatory actions,”

09/19/2014