clipping â negociações internacionais
11.05.2018
CLIPPING INTERNACIONAL NEGINT Brasília, 11 de maio de 2018
Índice I. OMC _______________________________________________ 2 China important tourist market for Mideast, world: UNWTO chief __________ 2 WTO sets up panel to resolve India-US renewables case; hearing soon______ 3 WTO challenge against EU poultry restrictions risks “exposing Brazil’s weaknesses” ___________________________________________________ 5 II. NEGOCIAÇÕES REGIONAIS E BILATERAIS _________________ 5 S. African cabinet approves continental free trade agreement _____________ 5 Trump’s Trade Moves Put U.S. Carmakers in a Jam at Home and Abroad ____ 6 III. OUTROS ___________________________________________ 10 Por menor producción regional, Brasil sale de compras fuera del Mercosur __ 10 Brazil's BRF loses $32 mln in Q1, misses consensus ____________________ 11
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I. OMC China important tourist market for Mideast, world: UNWTO chief Xinhua (China) Secretary General of the UN World Tourism Organization (UNWTO), Zurab Pololikashvili, said Thursday that China is one of the most important tourist markets not only for the Middle East, but for the whole world. His remarks came in an exclusive interview with Xinhua on the sidelines of the 44th meeting of the UNWTO Commission for the Middle East and UNWTO Regional Conference, which wrapped up Thursday in Egypt's Sharm el-Sheikh city, with the theme of "Human Capital Development in Tourism: New Perspectives." "I think we need more connectivity with China, more promotion in China and I'm sure Egypt will attract more Chinese tourists," Pololikashvili told Xinhua. The UN official said there are a lot of opportunities to increase the number of Chinese tourists to Egypt and the Middle East, adding that UNWTO and the governments in the region have to identify the needs of Chinese tourists and to facilitate their visit. Pololikashvili noted Egypt has many attractions such as the pyramids, Alexandria, Luxor, Sharm el-Sheikh and Hurghada, which could attract thousands of tourists, not only from China, but from many other countries. He revealed that UNWTO and a number of tourism ministers from the Middle East discussed at the meetings ways to boost tourism sector and to attract more tourists to the region. "Getting more tourists is the main challenge and main goal for us," he said. Pololikashvili said that tourism is vital for Egypt and the region, adding that UNWTO is expecting a notable increase in the number of tourists in the region in the upcoming three or four years because "world economy is growing very fast." The number of tourists who visited the Middle East region mounted to 85 million in 2017.
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"We are very glad to see that the number of tourists is increasing and we hope this will continue," he said. Egyptian tourism sector, a major source of national income and foreign currency, has witnessed recession over the past seven years. In Egypt, the number of tourists declined from 14.7 million in 2010 to about 8 million in 2017 due to political instability and relevant security challenges. Tourism in Egypt was dealt a heavy blow following the Russian airplane crash in North Sinai in October 2015, after which several countries, including Britain and Russia, suspended their flights to Egypt. However, experts expect a boom in the business after Russia and Egypt resumed direct flights between the two countries. "Our goal is to attract 10 million tourists this year, but together with government, we hope we could double this number soon," he said. According to official statistics, Egypt's tourism revenues jumped 123.5 percent year-onyear to 7.6 billion U.S. dollars in 2017. However, these figures remain below the benchmark in 2010 when tourists visiting Egypt brought in around 12.5 billion dollars in revenue. The WTO secretary-general revealed that his organization appreciates that the Egyptian President Abdel-Fattah al-Sisi is personally committed to the tourism sector and is supporting tourism development in the country.
WTO sets up panel to resolve India-US renewables case; hearing soon Business Standard (Índia)
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The World Trade Organisation (WTO) has set up a panel to resolve the dispute raised by India against the US with regard to the policies of eight American states in the renewable energy sector. India had alleged that the domestic content requirement norms imposed by these eight US states are inconsistent with global trade rules. As both the countries failed to resolve the issue in the bilateral consultation process, India had sought formation of dispute resolution panel. "The dispute settlement body of WTO has agreed to establish a panel. It will soon start the hearing, a government official said. On September 9, 2016, India had requested consultation with the US under the dispute settlement system of WTO regarding alleged domestic content requirements and subsidies provided by these states in the renewable energy sector. Under the norms of domestic content requirements, it is mandatory upon domestic companies to source a portion of input from local markets' products. India had alleged that the measures of those American states are inconsistent with WTO's Agreement on Trade-Related Investment Measures and the Agreement on Subsidies and Countervailing Measures. They are inconsistent because they provide less favourable treatment to imported products vis-a-vis domestic products, and because the subsidies are contingent on the use of domestic over imported goods, India had stated in its application to WTO. The eight states are Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota. The request for consultation is the first step under the Dispute Settlement System of WTO. Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel.
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Issues are cropping up in renewable energy area as the sector holds huge investment potential for businesses. With India focusing on this segment, companies in developed countries want to tap this market.
WTO challenge against EU poultry restrictions risks “exposing Brazil’s weaknesses” Informa PLC (Londres) The president of one of Brazil’s largest farming unions has warned the country’s government not to pursue a World Trade Organization (WTO) challenge against EU restrictions on poultry imports from the Latin American country.
II. NEGOCIAÇÕES REGIONAIS E BILATERAIS S. African cabinet approves continental free trade agreement Xinhua (China) The South African cabinet has approved the Tripartite Free Trade Area (TFTA) agreement that establishes the common market for Eastern and Southern Africa, East African Community and Southern African Development Community, a cabinet spokesperson said on Thursday. Now the agreement is going to Parliament for ratification, Phumla Williams said after a cabinet meeting in Cape Town. The TFTA is a key Africa-led project that marks a decisive step to overcome the continent's colonial heritage of small fragmented markets, Williams said.
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This will be achieved by promoting intra-African investments and attracting more foreign investment into the free trade area, she said. As a result of regional integration efforts and stable economies, there has been strong growth in intra-African investments, said Williams. The TFTA will boost intra-Africa trade in accordance with the aspirations of the AU's Agenda 2063 As part of Africa's integration approach, the envisaged AFTA is designed to combine market integration with industrial and infrastructure development to address Africa's productive capacity and supply side constraints, promote the diversification of Africa's export base from dependence on raw materials to value-added products, as well as alleviate the chronic infrastructure deficit in the continent. Besides offering an opportunity to create larger economies of scale, a bigger market and improve the prospects of the African continent to attract investment, the TFTA will provide new export opportunities for South African products and services in West Africa and North Africa. The South African government has repeatedly stated that it is committed to a coordinated strategy to boost intra-Africa trade and to build an integrated market in Africa that will see a market of over 1 billion people with a GDP of approximately 2.6 trillion U.S. dollars.
Trump’s Trade Moves Put U.S. Carmakers in a Jam at Home and Abroad The New York Times (Estados Unidos) President Trump frequently talks about reviving the American auto industry, but his approach to trade policy may backfire on the country’s carmakers. Mr. Trump’s efforts to renegotiate the North American Free Trade Agreement, to impose tariffs on imported aluminum and steel and to reduce America’s trade deficit with China
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could limit the reach of companies that produce cars in the United States and depend on access to growing markets outside the country. On Friday, the chief executives of the biggest automakers plan to meet with the president at the White House. The gathering comes at a critical moment, as Trump administration officials race to finalize a Nafta rewrite in the next few weeks and prepare to meet again next week with Chinese leaders in hopes of forestalling a potential trade war. The auto industry is among the sectors most vulnerable to trade disruptions because its business model is increasingly global, in terms of both production and sales. One in five cars made in the United States is now exported, and one in four vehicles sold in America were produced in factories run by foreign-owned companies. General Motors sold nearly 1 million vehicles in China in the first quarter of the year — more than it sold in North America in the same period. In the last two decades, United States automakers have set up plants in Canada, China and Mexico, and they routinely import car parts from other countries. Mexico has added hundreds of thousands of auto-making jobs since Nafta’s enactment in 1994, while the United States has lost hundreds of thousands. Labor groups and administration officials are hopeful that the trade moves will change incentives to encourage domestic and foreign-owned carmakers to manufacture more of their vehicles in the United States. But industry representatives warn that proposals now being championed by the Trump administration could have the opposite effect, raising the prices of American-made cars and trucks, reducing vehicle sales and potentially choking off access to China, the world’s fastest-growing market for automobiles. “There are so many fronts open that introduce risk into the autos’ business, and the suppliers’ business, that I don’t know how you do any business planning at all right now,” said Kristin Dziczek, vice president for industry, labor and economics at the Center for Automotive Research in Michigan. “They’re playing with big money and big risk and big companies that employ a lot of people.” The biggest risk may relate to the rewriting of Nafta, a drawn-out process beset by disagreements between Canada, Mexico and the United States, and punctuated by Mr. Trump’s repeated threat to withdraw from the deal if it is not revised in America’s favor.
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Those threats have spooked automakers, whose fortunes are closely tied to the ways the accord has allowed them to reduce the cost of production and parts. Negotiators have moved closer to agreement, but there are still big disagreements — particularly over the issue of auto manufacturing — that could scuttle the deal entirely or delay it so long that the Republican-controlled Congress is denied the opportunity to approve the revisions quickly. One of the biggest sticking points relates to the portion of a car that must be made in North America to qualify for Nafta’s zero tariffs. American automakers support high levels of North American production, but they do not want onerous requirements that prevent them from using products from Mexico or countries like China and Japan. Automakers have warned that the administration’s demands would be expensive to comply with, and could push them to move some production out of North America altogether. Administration officials initially demanded that 85 percent of a car’s content come from North America, but they have dropped the requirement to 75 percent in the latest round of talks, which are going on this week. That is still above the current threshold of 62.5 percent and beyond the 70 percent level that Mexico is demanding. Administration officials also want at least 40 percent of every vehicle to be manufactured by workers earning at least $16 an hour, a potential blow to Mexico, where wages are lower, that could benefit workers in the United States if it discouraged carmakers from shifting jobs to Mexico. Ms. Dziczek and her colleagues at the automotive research center said that the proposed Nafta rule changes could subject 25 to 87 percent of vehicles sold in the United States to new tariffs, raising the price of those vehicles by $470 to $2,200 each. A report by the center warns that such increases would reduce annual auto sales in the United States by 60,000 to 150,000. Manufacturing trade groups have warned about the risks of the administration’s approach, but auto executives have stayed quiet publicly on trade issues, in part to avoid antagonizing officials in any of the countries that they depend on for sales. “There is a lot of risk” for automakers in the current trade environment, said John Bozzella, a former Chrysler executive and the president and chief executive of the Association of Global Automakers, a Washington trade group for foreign-owned 8
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carmakers including Toyota and Nissan. “In all of these, you see the potential in raising production costs on vehicles built in the United States. And not just vehicles for trade.” The tariffs on steel (25 percent) and aluminum (10 percent) are also a looming threat to the automakers’ profitability, given that American companies rely on products from countries like Japan and China that are not exempt from the levies. The Trump administration has temporarily exempted the European Union, Canada and Mexico from the tariffs until June 1, and officials have said they will only make the exemptions permanent if the affected countries voluntarily lower the amount of metals they export to the United States. In 2017, the Ford Mustang, assembled in the United States, got 52 percent of its parts from the United States and Canada, according to statistics from the National Highway Traffic Safety Administration. The Dodge Charger, assembled in Canada, got nearly a quarter of its parts from Mexico, including the engines in some of its models, although the 3.6 liter version is made in the United States. The Honda Accord, which is assembled in the United States, includes 70 percent American and Canadian content, and 15 percent from Japan. Asked about Mr. Trump’s tariffs on an earnings call, Ford Motor’s president and chief executive, James P. Hackett, said he had told world leaders that “what we crave as business people are certainty and equilibrium.” “So trade can thrive in a world where that’s not in question,” he continued. “And so we have, like everyone, we’re dealing with the sudden news, and I think we’ve done a great job internally of dealing with that.” But, he added, “We’re not going to be victims in this kind of thing.” The trade showdown with China could pose an even greater risk to automakers, but it could also offer possibilities if resolved carefully. Car companies have long chafed under the rules they must heed to produce vehicles in China, including requirements that they enter into joint partnerships with Chinese companies. They have long urged China to reduce its 25 percent tariffs on imported vehicles, which President Xi Jinping promised to do in a speech last month. Automakers would love to see Mr. Trump and his negotiating team win more concessions from the Chinese on those issues. Many of them also fear the opposite case: that in an 9
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escalating trade war, China could limit market access for foreign-owned automakers, choking off a key source of growth.
III. OUTROS Por menor producción regional, Brasil sale de compras fuera del Mercosur Revista Chacra (Argentina) Debido a la escasez de la producción brasileña y la volatilidad cambiaria de la Argentina, que está haciendo que los productores locales de trigo retengan producción y pospongan ventas, los molinos de Brasil ya evalúan adquirir el cereal fuera del Mercosur, incluyendo a países como Estados Unidos y Rusia. Así lo consignó la agencia Reuters, según afirmó el Presidente de la Asociación Brasileña de la Industria del Trigo (Abitrigo), Rubens Barbosa. La Argentina es generalmente el principal abastecedor de las necesidades de importación de trigo de Brasil, y la última campaña los volúmenes mostraron signos de crecimiento. Pero ante la crisis financiera local y la retención de producción, desde el país vecino ya analizan otros escenarios. "La Argentina está viviendo esa dificultad cambiaria, con la devaluación del peso e inflación desde enero. Eso afectó los negocios. Aquellos que producen retuvieron el trigo para obtener más recursos. Ese fue un problema coyuntural que complicó la situación aquí", sostuvo Barbosa. Según Reuters, el mayor interés de compras de Brasil fuera de Argentina respaldaría los precios en el mercado internacional, que alcanzaron un pico de casi tres años a principios de mayo en Chicago. En base a los cálculos difundidos, la Argentina tendría sólo 3,5 millones de toneladas para ofrecer a Brasil este año, mientras que el país vecino ya importó 1,5 millones de toneladas entre enero y marzo, según datos oficiales. Con ese panorama, el volumen disponible sería suficiente para atender cerca del 50% de las necesidades de importación de Brasil, cuyas compras externas fueron estimadas el jueves por el Gobierno en 6,5 millones de toneladas.
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Barbosa comentó además que la producción en otros países de la región, como Paraguay y Uruguay tampoco será suficiente para atender la demanda, por lo que se deberá buscar trigo de otros orígenes que pagan un arancel del 10% que no se cobra dentro del bloque Mercosur. "La alternativa es importar trigo de otras partes, como de Estados Unidos o Rusia", comentó. También agregó que ya se contactó con el Ministerio de Agricultura para pedirle al Gobierno la implantación de una cuota permanente de importación sin arancel desde orígenes externos al Mercosur de 750.000 toneladas al año.
Brazil's BRF loses $32 mln in Q1, misses consensus Reuters (Reino Unido) Brazilian food company BRF SA on Thursday reported its second consecutive quarterly loss as the firm reels from a food safety scandal that prompted trade bans and led it to reduce production capacity at five plants. BRF said it lost 114 million reais ($32 million) last quarter, missing a consensus estimate for net income of 14.99 million reais. BRF, Brazil’s largest chicken processor, also missed a consensus estimate for earnings before interest, tax, depreciation and amortization, a gauge of operating profit, which came in at 783 million reais, some 7 percent below forecast. BRF results have been adversely affected by an ongoing food safety probe in Brazil implicating companies and government health inspectors accused of colluding to evade safety and quality checks. BRF said it had incurred additional charges of 12.8 million reais last quarter to defend itself from the claims, which prompted the Agriculture Ministry to immediately suspend exports from three of its plants. The company started an internal investigation in connection with the allegations while maintaining its products are fit for human consumption.
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Last quarter, BRF said sales volumes increased by 6 percent driven by domestic market demand. This helped offset a fall in overseas sales volumes, which were impacted by trade restrictions imposed by Russia and Europe. Still, net revenues fell 5 percent from the same quarter a year ago, to 8.2 billion reais. On April 19, the European Union banned imports of Brazilian meat products, mostly poultry, in a move that affected 20 plants that had been authorized to export to the bloc, 12 of which are operated by BRF. The company said it has not been formally notified of the bloc’s decision and will try to reverse it. It is unclear whether BRF will be capable of directing any exceeding production capacity resulting from the bans to alternative markets, at similar prices. The company said average selling prices for some products in some markets fell as a result of the trade bans, a direct result of the food safety probes that started in March 2017. BRF’s top shareholders last month overhauled the board, a move designed to kick off a turnaround after two years of net losses partially due to mismanagement of feed inventory and fallout from the scandal. “The next quarters will be extremely challenging,” Chief Executive Lorival Nogueira Luz said in a statement accompanying results.
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CLIPPING INTERNACIONAL NEGINT Brasília, 11 de maio de 2018
Índice I. OMC _______________________________________________ 2 China important tourist market for Mideast, world: UNWTO chief __________ 2 WTO sets up panel to resolve India-US renewables case; hearing soon______ 3 WTO challenge against EU poultry restrictions risks “exposing Brazil’s weaknesses” ___________________________________________________ 5 II. NEGOCIAÇÕES REGIONAIS E BILATERAIS _________________ 5 S. African cabinet approves continental free trade agreement _____________ 5 Trump’s Trade Moves Put U.S. Carmakers in a Jam at Home and Abroad ____ 6 III. OUTROS ___________________________________________ 10 Por menor producción regional, Brasil sale de compras fuera del Mercosur __ 10 Brazil's BRF loses $32 mln in Q1, misses consensus ____________________ 11
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I. OMC China important tourist market for Mideast, world: UNWTO chief Xinhua (China) Secretary General of the UN World Tourism Organization (UNWTO), Zurab Pololikashvili, said Thursday that China is one of the most important tourist markets not only for the Middle East, but for the whole world. His remarks came in an exclusive interview with Xinhua on the sidelines of the 44th meeting of the UNWTO Commission for the Middle East and UNWTO Regional Conference, which wrapped up Thursday in Egypt's Sharm el-Sheikh city, with the theme of "Human Capital Development in Tourism: New Perspectives." "I think we need more connectivity with China, more promotion in China and I'm sure Egypt will attract more Chinese tourists," Pololikashvili told Xinhua. The UN official said there are a lot of opportunities to increase the number of Chinese tourists to Egypt and the Middle East, adding that UNWTO and the governments in the region have to identify the needs of Chinese tourists and to facilitate their visit. Pololikashvili noted Egypt has many attractions such as the pyramids, Alexandria, Luxor, Sharm el-Sheikh and Hurghada, which could attract thousands of tourists, not only from China, but from many other countries. He revealed that UNWTO and a number of tourism ministers from the Middle East discussed at the meetings ways to boost tourism sector and to attract more tourists to the region. "Getting more tourists is the main challenge and main goal for us," he said. Pololikashvili said that tourism is vital for Egypt and the region, adding that UNWTO is expecting a notable increase in the number of tourists in the region in the upcoming three or four years because "world economy is growing very fast." The number of tourists who visited the Middle East region mounted to 85 million in 2017.
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"We are very glad to see that the number of tourists is increasing and we hope this will continue," he said. Egyptian tourism sector, a major source of national income and foreign currency, has witnessed recession over the past seven years. In Egypt, the number of tourists declined from 14.7 million in 2010 to about 8 million in 2017 due to political instability and relevant security challenges. Tourism in Egypt was dealt a heavy blow following the Russian airplane crash in North Sinai in October 2015, after which several countries, including Britain and Russia, suspended their flights to Egypt. However, experts expect a boom in the business after Russia and Egypt resumed direct flights between the two countries. "Our goal is to attract 10 million tourists this year, but together with government, we hope we could double this number soon," he said. According to official statistics, Egypt's tourism revenues jumped 123.5 percent year-onyear to 7.6 billion U.S. dollars in 2017. However, these figures remain below the benchmark in 2010 when tourists visiting Egypt brought in around 12.5 billion dollars in revenue. The WTO secretary-general revealed that his organization appreciates that the Egyptian President Abdel-Fattah al-Sisi is personally committed to the tourism sector and is supporting tourism development in the country.
WTO sets up panel to resolve India-US renewables case; hearing soon Business Standard (Índia)
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The World Trade Organisation (WTO) has set up a panel to resolve the dispute raised by India against the US with regard to the policies of eight American states in the renewable energy sector. India had alleged that the domestic content requirement norms imposed by these eight US states are inconsistent with global trade rules. As both the countries failed to resolve the issue in the bilateral consultation process, India had sought formation of dispute resolution panel. "The dispute settlement body of WTO has agreed to establish a panel. It will soon start the hearing, a government official said. On September 9, 2016, India had requested consultation with the US under the dispute settlement system of WTO regarding alleged domestic content requirements and subsidies provided by these states in the renewable energy sector. Under the norms of domestic content requirements, it is mandatory upon domestic companies to source a portion of input from local markets' products. India had alleged that the measures of those American states are inconsistent with WTO's Agreement on Trade-Related Investment Measures and the Agreement on Subsidies and Countervailing Measures. They are inconsistent because they provide less favourable treatment to imported products vis-a-vis domestic products, and because the subsidies are contingent on the use of domestic over imported goods, India had stated in its application to WTO. The eight states are Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota. The request for consultation is the first step under the Dispute Settlement System of WTO. Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel.
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Issues are cropping up in renewable energy area as the sector holds huge investment potential for businesses. With India focusing on this segment, companies in developed countries want to tap this market.
WTO challenge against EU poultry restrictions risks “exposing Brazil’s weaknesses” Informa PLC (Londres) The president of one of Brazil’s largest farming unions has warned the country’s government not to pursue a World Trade Organization (WTO) challenge against EU restrictions on poultry imports from the Latin American country.
II. NEGOCIAÇÕES REGIONAIS E BILATERAIS S. African cabinet approves continental free trade agreement Xinhua (China) The South African cabinet has approved the Tripartite Free Trade Area (TFTA) agreement that establishes the common market for Eastern and Southern Africa, East African Community and Southern African Development Community, a cabinet spokesperson said on Thursday. Now the agreement is going to Parliament for ratification, Phumla Williams said after a cabinet meeting in Cape Town. The TFTA is a key Africa-led project that marks a decisive step to overcome the continent's colonial heritage of small fragmented markets, Williams said.
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This will be achieved by promoting intra-African investments and attracting more foreign investment into the free trade area, she said. As a result of regional integration efforts and stable economies, there has been strong growth in intra-African investments, said Williams. The TFTA will boost intra-Africa trade in accordance with the aspirations of the AU's Agenda 2063 As part of Africa's integration approach, the envisaged AFTA is designed to combine market integration with industrial and infrastructure development to address Africa's productive capacity and supply side constraints, promote the diversification of Africa's export base from dependence on raw materials to value-added products, as well as alleviate the chronic infrastructure deficit in the continent. Besides offering an opportunity to create larger economies of scale, a bigger market and improve the prospects of the African continent to attract investment, the TFTA will provide new export opportunities for South African products and services in West Africa and North Africa. The South African government has repeatedly stated that it is committed to a coordinated strategy to boost intra-Africa trade and to build an integrated market in Africa that will see a market of over 1 billion people with a GDP of approximately 2.6 trillion U.S. dollars.
Trump’s Trade Moves Put U.S. Carmakers in a Jam at Home and Abroad The New York Times (Estados Unidos) President Trump frequently talks about reviving the American auto industry, but his approach to trade policy may backfire on the country’s carmakers. Mr. Trump’s efforts to renegotiate the North American Free Trade Agreement, to impose tariffs on imported aluminum and steel and to reduce America’s trade deficit with China
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could limit the reach of companies that produce cars in the United States and depend on access to growing markets outside the country. On Friday, the chief executives of the biggest automakers plan to meet with the president at the White House. The gathering comes at a critical moment, as Trump administration officials race to finalize a Nafta rewrite in the next few weeks and prepare to meet again next week with Chinese leaders in hopes of forestalling a potential trade war. The auto industry is among the sectors most vulnerable to trade disruptions because its business model is increasingly global, in terms of both production and sales. One in five cars made in the United States is now exported, and one in four vehicles sold in America were produced in factories run by foreign-owned companies. General Motors sold nearly 1 million vehicles in China in the first quarter of the year — more than it sold in North America in the same period. In the last two decades, United States automakers have set up plants in Canada, China and Mexico, and they routinely import car parts from other countries. Mexico has added hundreds of thousands of auto-making jobs since Nafta’s enactment in 1994, while the United States has lost hundreds of thousands. Labor groups and administration officials are hopeful that the trade moves will change incentives to encourage domestic and foreign-owned carmakers to manufacture more of their vehicles in the United States. But industry representatives warn that proposals now being championed by the Trump administration could have the opposite effect, raising the prices of American-made cars and trucks, reducing vehicle sales and potentially choking off access to China, the world’s fastest-growing market for automobiles. “There are so many fronts open that introduce risk into the autos’ business, and the suppliers’ business, that I don’t know how you do any business planning at all right now,” said Kristin Dziczek, vice president for industry, labor and economics at the Center for Automotive Research in Michigan. “They’re playing with big money and big risk and big companies that employ a lot of people.” The biggest risk may relate to the rewriting of Nafta, a drawn-out process beset by disagreements between Canada, Mexico and the United States, and punctuated by Mr. Trump’s repeated threat to withdraw from the deal if it is not revised in America’s favor.
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Those threats have spooked automakers, whose fortunes are closely tied to the ways the accord has allowed them to reduce the cost of production and parts. Negotiators have moved closer to agreement, but there are still big disagreements — particularly over the issue of auto manufacturing — that could scuttle the deal entirely or delay it so long that the Republican-controlled Congress is denied the opportunity to approve the revisions quickly. One of the biggest sticking points relates to the portion of a car that must be made in North America to qualify for Nafta’s zero tariffs. American automakers support high levels of North American production, but they do not want onerous requirements that prevent them from using products from Mexico or countries like China and Japan. Automakers have warned that the administration’s demands would be expensive to comply with, and could push them to move some production out of North America altogether. Administration officials initially demanded that 85 percent of a car’s content come from North America, but they have dropped the requirement to 75 percent in the latest round of talks, which are going on this week. That is still above the current threshold of 62.5 percent and beyond the 70 percent level that Mexico is demanding. Administration officials also want at least 40 percent of every vehicle to be manufactured by workers earning at least $16 an hour, a potential blow to Mexico, where wages are lower, that could benefit workers in the United States if it discouraged carmakers from shifting jobs to Mexico. Ms. Dziczek and her colleagues at the automotive research center said that the proposed Nafta rule changes could subject 25 to 87 percent of vehicles sold in the United States to new tariffs, raising the price of those vehicles by $470 to $2,200 each. A report by the center warns that such increases would reduce annual auto sales in the United States by 60,000 to 150,000. Manufacturing trade groups have warned about the risks of the administration’s approach, but auto executives have stayed quiet publicly on trade issues, in part to avoid antagonizing officials in any of the countries that they depend on for sales. “There is a lot of risk” for automakers in the current trade environment, said John Bozzella, a former Chrysler executive and the president and chief executive of the Association of Global Automakers, a Washington trade group for foreign-owned 8
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carmakers including Toyota and Nissan. “In all of these, you see the potential in raising production costs on vehicles built in the United States. And not just vehicles for trade.” The tariffs on steel (25 percent) and aluminum (10 percent) are also a looming threat to the automakers’ profitability, given that American companies rely on products from countries like Japan and China that are not exempt from the levies. The Trump administration has temporarily exempted the European Union, Canada and Mexico from the tariffs until June 1, and officials have said they will only make the exemptions permanent if the affected countries voluntarily lower the amount of metals they export to the United States. In 2017, the Ford Mustang, assembled in the United States, got 52 percent of its parts from the United States and Canada, according to statistics from the National Highway Traffic Safety Administration. The Dodge Charger, assembled in Canada, got nearly a quarter of its parts from Mexico, including the engines in some of its models, although the 3.6 liter version is made in the United States. The Honda Accord, which is assembled in the United States, includes 70 percent American and Canadian content, and 15 percent from Japan. Asked about Mr. Trump’s tariffs on an earnings call, Ford Motor’s president and chief executive, James P. Hackett, said he had told world leaders that “what we crave as business people are certainty and equilibrium.” “So trade can thrive in a world where that’s not in question,” he continued. “And so we have, like everyone, we’re dealing with the sudden news, and I think we’ve done a great job internally of dealing with that.” But, he added, “We’re not going to be victims in this kind of thing.” The trade showdown with China could pose an even greater risk to automakers, but it could also offer possibilities if resolved carefully. Car companies have long chafed under the rules they must heed to produce vehicles in China, including requirements that they enter into joint partnerships with Chinese companies. They have long urged China to reduce its 25 percent tariffs on imported vehicles, which President Xi Jinping promised to do in a speech last month. Automakers would love to see Mr. Trump and his negotiating team win more concessions from the Chinese on those issues. Many of them also fear the opposite case: that in an 9
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escalating trade war, China could limit market access for foreign-owned automakers, choking off a key source of growth.
III. OUTROS Por menor producción regional, Brasil sale de compras fuera del Mercosur Revista Chacra (Argentina) Debido a la escasez de la producción brasileña y la volatilidad cambiaria de la Argentina, que está haciendo que los productores locales de trigo retengan producción y pospongan ventas, los molinos de Brasil ya evalúan adquirir el cereal fuera del Mercosur, incluyendo a países como Estados Unidos y Rusia. Así lo consignó la agencia Reuters, según afirmó el Presidente de la Asociación Brasileña de la Industria del Trigo (Abitrigo), Rubens Barbosa. La Argentina es generalmente el principal abastecedor de las necesidades de importación de trigo de Brasil, y la última campaña los volúmenes mostraron signos de crecimiento. Pero ante la crisis financiera local y la retención de producción, desde el país vecino ya analizan otros escenarios. "La Argentina está viviendo esa dificultad cambiaria, con la devaluación del peso e inflación desde enero. Eso afectó los negocios. Aquellos que producen retuvieron el trigo para obtener más recursos. Ese fue un problema coyuntural que complicó la situación aquí", sostuvo Barbosa. Según Reuters, el mayor interés de compras de Brasil fuera de Argentina respaldaría los precios en el mercado internacional, que alcanzaron un pico de casi tres años a principios de mayo en Chicago. En base a los cálculos difundidos, la Argentina tendría sólo 3,5 millones de toneladas para ofrecer a Brasil este año, mientras que el país vecino ya importó 1,5 millones de toneladas entre enero y marzo, según datos oficiales. Con ese panorama, el volumen disponible sería suficiente para atender cerca del 50% de las necesidades de importación de Brasil, cuyas compras externas fueron estimadas el jueves por el Gobierno en 6,5 millones de toneladas.
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Barbosa comentó además que la producción en otros países de la región, como Paraguay y Uruguay tampoco será suficiente para atender la demanda, por lo que se deberá buscar trigo de otros orígenes que pagan un arancel del 10% que no se cobra dentro del bloque Mercosur. "La alternativa es importar trigo de otras partes, como de Estados Unidos o Rusia", comentó. También agregó que ya se contactó con el Ministerio de Agricultura para pedirle al Gobierno la implantación de una cuota permanente de importación sin arancel desde orígenes externos al Mercosur de 750.000 toneladas al año.
Brazil's BRF loses $32 mln in Q1, misses consensus Reuters (Reino Unido) Brazilian food company BRF SA on Thursday reported its second consecutive quarterly loss as the firm reels from a food safety scandal that prompted trade bans and led it to reduce production capacity at five plants. BRF said it lost 114 million reais ($32 million) last quarter, missing a consensus estimate for net income of 14.99 million reais. BRF, Brazil’s largest chicken processor, also missed a consensus estimate for earnings before interest, tax, depreciation and amortization, a gauge of operating profit, which came in at 783 million reais, some 7 percent below forecast. BRF results have been adversely affected by an ongoing food safety probe in Brazil implicating companies and government health inspectors accused of colluding to evade safety and quality checks. BRF said it had incurred additional charges of 12.8 million reais last quarter to defend itself from the claims, which prompted the Agriculture Ministry to immediately suspend exports from three of its plants. The company started an internal investigation in connection with the allegations while maintaining its products are fit for human consumption.
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Last quarter, BRF said sales volumes increased by 6 percent driven by domestic market demand. This helped offset a fall in overseas sales volumes, which were impacted by trade restrictions imposed by Russia and Europe. Still, net revenues fell 5 percent from the same quarter a year ago, to 8.2 billion reais. On April 19, the European Union banned imports of Brazilian meat products, mostly poultry, in a move that affected 20 plants that had been authorized to export to the bloc, 12 of which are operated by BRF. The company said it has not been formally notified of the bloc’s decision and will try to reverse it. It is unclear whether BRF will be capable of directing any exceeding production capacity resulting from the bans to alternative markets, at similar prices. The company said average selling prices for some products in some markets fell as a result of the trade bans, a direct result of the food safety probes that started in March 2017. BRF’s top shareholders last month overhauled the board, a move designed to kick off a turnaround after two years of net losses partially due to mismanagement of feed inventory and fallout from the scandal. “The next quarters will be extremely challenging,” Chief Executive Lorival Nogueira Luz said in a statement accompanying results.
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