This news item is brought to you by the Centre for Regions, Trade, and Geopolitics, providing a balanced overview of recent global trade updates.
Top International Trade Stories:
- Ukraine Initiates ‘Humanitarian Corridor’ for Grain Exports Amid Challenges Ukraine has announced the establishment of a “humanitarian corridor” in the Black Sea to facilitate the release of cargo ships that had been stranded in Ukrainian ports following the dissolution of the Black Sea Grain Initiative. However, doubts remain about the feasibility of this solution, according to reports from experts in the shipping and insurance sectors, as reported by Reuters.
The recent withdrawal of Russia from the Black Sea grain agreement and their subsequent blockade on Ukraine have disrupted the export of over 32 million tons of corn, wheat, and other grains, as reported in our previous monthly trade update.
While Ukraine has initiated the registration of ships intending to use this humanitarian lane, there have been reports of Russian warships firing warning shots at cargo vessels in the area.
One source in the insurance industry expressed concerns, stating, “Insurers and their backing banks will have to agree to the humanitarian corridor, and they may express reservations regarding the associated risks.”
- Services Trade Outpaces Merchandise Trade Amid Export Restrictions, Reports WTO Two recent reports from the World Trade Organization (WTO) indicate that services trade is experiencing more positive growth compared to merchandise trade, which has been hampered by export restrictions on food and fertilizers.
The WTO’s Trade Monitoring Report covering the period from October 16, 2022, to May 15, 2023, highlights a significant decline in merchandise trade during the fourth quarter of 2022 and its continued below-average performance in the first quarter of 2023. The report also notes a notable increase in export restrictions since 2020, with 63 such regulations in place on food, feed, and fertilizers. While there were 182 rules aimed at facilitating trade, the report emphasizes that import restrictions remained prevalent, affecting 9.2% of global imports by the end of 2022.
However, services trade showed robust growth of 15% last year, surpassing the 2.7% increase in merchandise trade, as reported in the WTO’s World Trade Statistical Review 2023. The combined trade in goods and services reached $31 trillion, marking a 13% increase over the previous year.
Commercial services, particularly travel and computer services, experienced significant growth, with travel surging by 91% compared to pandemic-affected 2020 levels. Additionally, the Trade Monitoring Report notes the introduction of 74 trade services measures during the October-May period, primarily designed to facilitate trade.
Green trade is also prospering, with WTO members introducing numerous economic support measures to promote renewable energy and environmental sustainability.
- Brief Highlights from Around the World
- Lengthy delays for commercial ships transiting the Panama Canal due to a severe regional drought, highlighting climate change’s impact on global trade.
- China’s exports and imports experienced substantial declines of 14.5% and 12.4%, respectively, in July, attributed to weak global demand.
- The White House restricts US investment in three Chinese tech sectors to prevent support for sensitive military and intelligence technologies.
- India imposes sudden import restrictions on laptops and tablets to promote domestic manufacturing.
- Japan and Qatar enhance trade and investment ties, focusing on areas of mutual interest.
- Disagreements between Japan and the US over whaling provisions strain their trade agreement.
- AI may aid exporters by streamlining information access, reducing disparities among WTO members.
- Switzerland and Singapore deepen collaboration on fintech, with Swiss FDI in Singapore doubling over five years.
- Additional Trade Insights
- Record temperatures drive up food prices, impacting products like soybeans, olive oil, and rice.
- Climate-focused foreign direct investment (FDI) is crucial for supporting climate adaptation and mitigation efforts in developing countries.
- The US government’s long-term credit rating faces a downgrade by a leading rating agency, potentially affecting its borrowing capacity and investment attractiveness.
Stay informed with the latest developments in international trade through our monthly updates.
Stay current with supply chain report news at The Supply Chain Report. For international trade tools, see ADAMftd.com.
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