India and Uzbekistan on Tuesday agreed to work towards early conclusion of the Feasibility Study to be jointly conducted by the two sides to begin negotiations for a Preferential Trade Agreement. This was agreed when Abdulaziz Kamilov, Uzbekistan Foreign Minister met his Indian counterpart here. External Affairs Minister S Jaishankar reiterated the need for early operationalization of $ 200 million of Line of Credit extended by India to Uzbekistan for which Uzbek side is in the process of finalizing necessary details of the identified projects. Kamilov reiterated the invitation extended by President of Uzbekistan to Prime Minister to visit Uzbekistan. Foreign Minister Kamilov briefed EAM on Uzbekistan’s efforts to liberalize its economy, create business friendly conditions and attract foreign investment including that from Indian companies. The Ministers agreed to strengthen cooperation in the fields of defence, counter-terrorism and security, information and communication technology, development partnership and promote cultural exchanges. Jaishankar and Kamilov evaluated the initiative of the India-Central Asia Dialogue at the level of Foreign Ministers with the participation of Afghanistan which was held in Samarkand, Uzbekistan in January 2019. The next Dialogue will be held in India in 2020. Kamilov stated that he looks forward to participating in it. Cooperation in the multilateral fora including the United Nations and the Shanghai Cooperation Organization (SCO) was also discussed. Kamilov extended an invitation to External Affairs Minister to visit Uzbekistan. Dates of the visit will be decided in due course. During his visit, Kamilov will give an address at the Raisina Dialogue and is expected to call on the Prime Minister Narendra Modi on 15 January.
Source: Economic Times
The decelerating growth for the last few quarters, particularly less than expected growth rate of 4.5% in the second quarter, has raised concerns for policymakers, scholars and also the general public. The question is, “has the growth rate bottomed out?” The answer is unlikely positive though there could be a positive base eect from this quarter onwards. Most of the core industries are still on a downtrend and therefore it is unlikely that the growth recovery would be sharp in the next couple of quarters. Yes, there are a series of steps taken by the finance minister since August 2019 such as credit support, lowering of corporate tax rates, support to MSME, exports sector and real estate to revive the economy. Are these steps enough? It is too early to say as these measures have been taken recently and there is a lag between implementation and turnaround time. Even if that be the case, we need to do much more given the extent of slow down across sectors for a quick recovery. The core problem today is the lack of aggregate demand. Private final consumption expenditure and private investment are falling and export is not growing. Nothing much can be done to exports directly through the budget immediately and investment will not revive unless consumption demand recovers. saturation and postponement of consumption by the middle class are mainly responsible for lack of consumption. The forthcoming budget should focus on reviving aggregate demand, particularly consumption and investment, for quick turn around of the economy. The most important component of the aggregate demand is private final consumption expenditure which is 57% of the GDP. Therefore, the priority of the government in the forthcoming budget should be to put the money directly in the hands of people. Enhanced fiscal support for well-directed social programmes like MGNREGA will provide employment and income to poor households whose marginal propensity to consume is high. Similarly, higher budgetary support for rural infrastructure projects with a short gestation period and monitored quick implementation will turn around the demand from rural India. The middle class is the engine of private consumption. All major sectors like automobiles, FMCG, real estate etc, are down. It is time for the government to relook at lowering direct tax rates. The budget may revise the existing income tax slabs to new one such as no taxes up to Rs 5 lakh, 10% for Rs 5 lakh to Rs 10 lakh, 20% for Rs 10 lakh to Rs 20 lakh and 25% for above Rs 20 lakh income per annum. The peak rate of income tax of 25% will be on par with corporate tax rates. Apart from the eorts to put more money in the hands of the households, the budget should try to give credit to the non-banking financial companies (NBFCs). A lot of leading sectors are aected due to lack of credit from NBFCs in the recent quarters. It is time to support NBFCs for well-targeted credit support for consumer sectors. Higher allocation to boost consumption demand and also a public investment in infrastructure will mean missing fiscal deficit target (3.3% of GDP) by 0.5 to 0.75% of GDP. It has its macroeconomic implications including missing the fiscal policy framework recommended by Finance Commission Chairman N K Singh by few more additional years. However, the revival of growth in short-run is more important. In any case, lower growth would lead to shortfall of revenues as has been the case for the last few months and therefore fiscal deficit will go up. Its time for countercyclical fiscal policy.
Recovery in demand
The government also needs to change its strategy and fiscal allocation for quick recovery in demand. For example, the government can shi its attention from mega highway projects to smaller core sector activities that have a quicker turnaround time. in the construction sector. Therefore, one more booster dose (in the form of credit support and fiscal incentives) for the construction sector will help revive four core sectors - cement, iron, steel and electricity. The performance of the MSME sector is crucial for employment, income and demand. Therefore, more support to the MSME sector and more resources for rural employment would be useful. It is time for day-to-day monitoring and implementation of steps taken by the government for MSME since august 2019. Debt ratio is very high in the private sector, particularly in the corporate sector. On top of that, the corporate sector is badly aected by the liquidity crunch. The government can inject more liquidity (re-capitalisation) to the banking sector and also ensure quick disbursement of payments due to the private sector so that liquidity improves in the economy. Not much can be done to exports directly through budget but urgently addressing trade facilitation (trade procedures, institutions and logistics) issues will reduce trade and transaction cost and thereby improve exports competitiveness. Small steps such as easing examination, certification, testing etc will reduce duelling or dwelling time considerably. Export development funds for helping MSME exporters and ensuring the availability of working capital to MSMEs in the exports sector will certainly help. Reinstating the Merchandise Exports from India Scheme (MEIS) and increasing MEIS benefit to 4% from 2% in the forthcoming trade policy will help boost exports. The government can explore steps like single-window clearance for all exporter refunds and disbursals, and implementation of e-wallet kind of system to address liquidity concerns of exporters. There can be also a special package to labour incentive sectors to create employment and demand. For example, the textile is a big industry and it has huge export potential. Therefore, budgetary provision for the New Textile Policy for a fully integrated, globally competitive manufacturing and exporting hub is a good idea. Countries like Bangladesh and Vietnam are doing well in these labourintensive sectors. Overall, all eorts should be made to boost aggregate demand –consumption, investment and exports.
Source: Deccan Herald
The latest World Development Report of the World Bank focuses on global value chains (GVCs), which have become vital for production and trade. Items once designed, manufactured and sold within one country are now designed, made and marketed in several countries, with each country specialising in one or two aspects. Specialisation has greatly raised productivity, while the transport and communications revolutions have slashed the cost of shipping and coordination. This has facilitated the rise of GVCs. The main reason why India negotiated for seven years to enter the Regional Comprehensive Economic Partnership (RCEP) - covering 15 countries with half the world’s population was to attract the GVCs that had spearheaded economic growth in many Asian countries, like Bangladesh and Vietnam, but largely bypassed India.
Not the Best of ReCEPtion
Ultimately, India backed out of RCEP because of opposition from several domestic lobbies fearing competition from Chinese manufactures and agricultural products from New Zealand and Australia. The right policy is to join RCEP after tough bargaining on entry conditions, and then use membership rules to strengthen the case for economic reforms that would otherwise be checkmated by domestic lobbies. The WDR shows that GVCs can greatly raise productivity, benefiting both the investor and investee countries. GVCs create more and better jobs, accelerate economic growth and reduce poverty. Good outcomes depend on supporting economic policies such as open markets, investor-friendly regimes, predictable and stable taxes and rules, and high-quality infrastructure. GVCs will locate in countries with logistics and procedures that ensure fast turnaround of goods and services. Alas, India’s logistics costs are double that of Bangladesh and triple that of China. This explains India’s limited GVC participation. The WDR says that one day’s delay hits competitiveness as much as a tariff of over 1%. India must reform its import and export procedures, including goods and services tax (GST) rules, ensuring quick paperwork and trade clearances. It must focus on trade facilitation, and invest in world-class ports, rail transport, air cargo and electricity. Land acquisition difficulties and inflexible labour laws hinder GVCs. Legal and tax disputes must be settled quickly, instead of meandering through the courts for decades. India has improved its ‘ease of doing business’ ranking in Modi’s first term, but has a long way to go. India’s ratio of trade in goods and services to GDP peaked at 56% in 2011, and fell to 43% in 2017. (It must be lower today.) This share remains higher than in the US or Europe. China and most other countries have followed a similar downhill pattern. Yet, trade, and the GVCs that spur it, remain extremely important. The WDR says the share of GVCs in world trade rose rapidly in the 1990s and 2000s to 52% by 2008, but then slipped to 37%. This was caused by three factors: protectionism, Chinese self-sufficiency and automation. US President Donald Trump has gone protectionist in his ‘Make America Great Again’ scheme. This has created uncertainties inhibiting global investment, trade and GDP. Brexit is another straw in the wind. China used to be the greatest GVC player. But, in recent years, it has started making more components at home instead of importing them, lessening chains. The other dampening factor has been automation, which ends the third-world advantage of cheap labour, and enables production to shift to rich consumers. All countries, including India, will need to move up the value chain to remain competitive.
Missed the Bus, But on Time
The greatest leaps in productivity, says the WDR, take place when poor countries shift from agriculture to simple manufactures that can be exported en masse. India has missed the bus on this shift, and that has cost it dearly. The next shift is from simple to skill-intensive goods and services. Here, India has done well. It has leapfrogged over the simple manufacturing phase to sophisticated areas like computer software, pharmaceuticals and autos. It is part of GVCs in all three. All forms of globalisation, including GVCs, create losers as well as winners. In principle, taxing the winners should compensate for the losses of the losers, by providing retraining and safety nets. In practice, taxing the winners has proved difficult. Countries have competed to slash tax rates and offer subsidies to attract global firms, so some winners are subsidised rather than taxed. Besides, GVCs offer an opportunity to shift the main profits from sales to intellectual property rights (IPR) that are held by subsidiaries in low-tax havens like Ireland or Luxembourg. The WDR says that to take GVCs further, international cooperation is needed to create common standards that lower non-tariff barriers, and to coordinate tax rates, infrastructure and regulations. Acritical area is the taxation of companies with massive sales but very low tax payments in many countries. The Organisation for Economic Cooperation and Development (OECD) has negotiated a draft agreement on taxing the revenue rather than only the profits of such companies. But France’s attempt to take this further has attracted criticism, and possible sanctions from Trump, who does not want the profits of US companies to be diverted to France. Tax cooperation is essential but politically difficult.
Source: Economic Times
Other than manufacturing, food processing, textiles, and tourism sectors are shown as the key sectors to tap for growth. While India’s manufacturing growth has remained under pressure in the current fiscal year, RBI Governor Shaktikanta Das said India should strive and become a part of the global manufacturing value chain to boost growth in today’s era. He said that India had been fairly insulated from the global value chain in the past which also protected India at the time of global slowdown, but it cannot be a justification for remaining permanently away from it for far too long. “For a major economy such as ours, which is increasingly making its global presence felt, it is necessary to play a significant part in the global value chain. I am sure that the policymakers in the government will give due attention to this aspect,” said RBI Governor Shaktikanta Das. There are a number of steps that have been taken in this direction in recent months and years, however, more steps are necessary, he added. January bulletin of the RBI shows growth prospects in a few other sectors as well. Other than manufacturing, food processing, textiles, and tourism sectors are shown as the key sectors to tap for growth. Meanwhile, as India has yet not come out of the prolonged slowdown, many companies are not availing their working capital limits to the full, which has kept the investments away from the markets. It points to some slowdown in the economic activity and on the other hand, it could also imply that they have an adequate surplus with them which is being used to meet their working capital requirements, said the RBI report. It also indicated that a certain amount of capital available in the system needs to feed into the investment cycle to keep the momentum up. Shaktikanta Das also said the markets were somewhat surprised by RBI’s action a little ahead of time, in terms of reduction in policy rate as early as in February 2019, when the RBI anticipated that momentum for a slowdown is building up. The RBI further cut the interest rates four times in a row after February 2019. However, the central bank surprised the markets by maintaining the status quo in the policy rates in its MPC meet in December.
Source: Financial Express
India’s shift in trade strategy is evident from its decision to opt out of RCEP and the increasing engagement with the US and EU. A day after Prime Minister Narendra Modi dramatically announced India’s exit from the China-led Regional Comprehensive Economic Partnership (RCEP) deal at the Bangkok summit on 4 November, trade minister Piyush Goyal addressed a packed house of journalists in the National Media Centre, reflecting on the lessons learnt from the prolonged trade negotiations where India was always a reluctant participant. Goyal said India should never finalize a trade agreement in a hurry, citing the examples of the 2009 and 2011 pacts with Japan, South Korea, Malaysia and with Asean countries. “Trade discussions and negotiations should allow enough time and enough considerations so that they are done carefully keeping the best interest of our people and our national interest in mind," he added. While countries like Japan are still trying to woo India back to the RCEP fold, India has now signalled a shift in strategy when it comes to signing free trade agreements. It is now showing readiness to renew negotiations on the long-pending free trade agreement (FTA) with the European Union as well as with Britain after the impending Brexit deal is signed. India is currently negotiating a limited trade package with the US after which both sides may sit down for a comprehensive FTA negotiation. “I have started talking to EU on a very informal basis. Barely a few days ago, their trade commissioner has been appointed and over the next few months, we will start a dialogue with the EU. Hopefully, Brexit should be done by January. We already have some preliminary exchange of dialogue with Great Britain. I hope to take that forward on a fast-track basis. With the US, we had several rounds of engagement; we are ensuring that even the first leg of our trade deal with them is for the benefit of both countries equitably. I can assure all of you going forward none of these FTAs will be settled in a hurry or will be settled to the disadvantage of Indian industry and Indian exporters," Goyal said last month. The shift in strategy is deliberate. “While we realize that India needs to integrate more with Asean economies to be part of the regional value chain, that strategy has inherent weaknesses. India and Asean often compete on the same products at the global stage due to the labour-intensive nature of their export basket. On the other hand, with the US, EU and Britain, we will have many complementarities," a commerce ministry official said on condition of anonymity. Negotiations for the proposed India-EU FTA started in 2007 but talks were suspended in 2013 due to differences. Both sides explored restarting negotiations after the Bharatiya Janata Party-led government assumed power in May 2014, but uncertainties over Brexit and inflexibility on both sides have prevented a formal resumption. Though both sides may resume talks once Brexit formalities are over, it may not be a cakewalk. EU has always been particular about including non-trade issues such as labour and environmental standards in the FTA, which India has been opposed to. Similarly, the US may seek stringent intellectual property rights and higher product standards which a developing country like India may find difficult to match. The unexpectedly long time that the limited trade package under negotiation between the two countries is taking is proof of the tougher road ahead for a full-fledged FTA between India and the US. However, FTAs with EU and the US have their inherent advantages for Indian exporters. India has lost preferential market access to both economic regions, which has adversely impacted India’s labour-intensive textile exports. In June, 2019, the US also withdrew duty-free benefits to India’s exports, further denting India’s competitiveness in certain product lines. But signing new FTAs is the least of India’s problems. Most of India’s existing FTAs are poorly negotiated and remain under-utilized. For example, in Indonesia, the average tariff for India in non-agricultural goods was 5.5% in 2012, while that for China, it was 2.1%, as a result of the China-Asean FTA. This could be because India has been a reluctant globalizer and prefers to sign defensive trade deals that do not hurt domestic industry much, even though it means little additional market access in the partner country. While India’s global trade competitiveness has been hampered by high logistics costs, the reluctance of Indian businesses to look beyond the shores has often led to complacency in updating their technological and product standards. “A nation-wide, cross-sectoral campaign to increase awareness about existing FTAs and the ways in which specific provisions of FTAs can be leveraged by MSMEs would be critical. Greater information dissemination about compliance issues are all important for companies to truly be able to take advantage of FTAs," industry lobby CII said in its export strategy report unveiled last month.
Source: Live Mint
The economic slowdown has adversely impacted employment generation in the country as nearly 16 lakh less jobs are projected to be created in FY20 compared to 89.7 lakh fresh jobs in FY19, a report said. According to the SBI research report- Ecowrap, there is a decline in remittances in a few states like Assam and Rajasthan, reflecting downsizing of contractual labourers. "In FY19, India had created 89.7 lakh new payrolls as per the EPFO data. In FY20, as per current projected this number could be at least 15.8 lakh lower," the report said. The EPFO data primarily covers low paid jobs as the salary is capped at Rs 15,000 per month. As per the calculation done by the report, during April-October 2019, the actual net new payroll was 43.1 lakh which annualised comes out to be 73.9 lakh for FY20. The EPFO data does not cover government jobs, state government jobs and private jobs as such data have moved to National Pension Scheme (NPS), beginning 2004. "Interestingly, even in the NPS category, state and central government are supposed to create close to 39,000 jobs less in FY20 as per current trends," the report said. It said a sample of data on remittances by migrant labourers to selected states in the last one year showed that there is a decline in remittances in states like Assam, Bihar, Rajasthan, Odisha and UP. "The delay in resolution of cases under bankruptcy proceedings may have prompted companies to downsize their contractual labourers," it said. Over the years, migration has been an important livelihood option for both the poor and the non-poor in the country. As a result of unequal growth, people from agriculturally and industrially less-developed states migrate to more developed states in search of job opportunities - for example from Uttar Pradesh, Bihar, the southern part of Madhya Pradesh, Odisha, and Rajasthan to states like Punjab, Gujarat, and Maharashtra. For a large number of migrants, New Delhi is a much-favoured destination due to the abundance of job opportunities, the report said. "These migrants have been making significant financial contributions to their families in their places of origin," it said. The report further said in the last five years, the overall productivity growth has remained relatively stagnant between 9.4 per cent to 9.9 per cent. This slow growth in productivity manifests in low wage growth, it said. The report also cautioned the policymakers of such slower productivity growth as it could encourage over-borrowing by corporations and households, which can create a big risk to economies and fiscal systems.
Source: Economic Times
The government had in 2018 formed an inter-ministerial committee to formulate a policy document on jobs and the VV Giri National Labour Institute was supposed to submit a draft to the labour ministry. The government is likely to come out with a fresh national employment policy (NEP) amid concerns over the high unemployment rate in the country. This was proposed by the labour and employment ministry at a Council of Ministers’ meeting on January 4, held to frame five-year sectoral vision plans by the National Democratic Alliance (NDA) government. The labour ministry has decided to frame the NEP from scratch, a top government official said. An NEP in India has been in the works for over a decade; the first such policy was circulated for inter-ministerial consultation in ..
Source: Business Standard
The government should step up expenditure to spur consumption and improve ease of doing business to rev up the economy, new FICCI president Sangita Reddy said on Tuesday. Reddy, who is the joint managing director of Apollo Hospitals, also said that the government needed to focus on “clusters,” besides undertaking labour reforms, to boost manufacturing in the country. “To spur consumption, we need to put money into the system. Our recommendation to the government is to infuse Rs 1.5-2 lakh crore at the very minimum into the economy,” Reddy told ET in an interview, while adding that the fund infusion — which must be used to boost demand in rural economy - can be backed by a time-bound disinvestment plan of about Rs 3 lakh crore, which will expand fiscal deficit only temporarily. India’s economy is forecast to grow 5% this fiscal, its slowest pace in eleven years, according to the first official advance estimates released last week. The government must address unsold inventory in real estate and transfer overdue payments to corporates. Front loading of transfers and subventions, including via the PM Kisan project, could provide a “kicker effect” to the economy at a time when all indices show a fall in discretionary spending in rural areas, Reddy said. To boost demand in the real estate sector and reduce inventory of unsold houses, Reddy suggested that the government should provide a front end reduction in interest rates for housing loans in the first two years.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1026.03 |
USD/Ton |
0% |
1/15/2020 |
|
VSF |
1376.74 |
USD/Ton |
0% |
1/15/2020 |
|
ASF |
2028.88 |
USD/Ton |
0% |
1/15/2020 |
|
Polyester POY |
1039.08 |
USD/Ton |
-0.14% |
1/15/2020 |
|
Nylon FDY |
2231.77 |
USD/Ton |
0% |
1/15/2020 |
|
40D Spandex |
4159.20 |
USD/Ton |
0% |
1/15/2020 |
|
Nylon POY |
5434.50 |
USD/Ton |
0% |
1/15/2020 |
|
Acrylic Top 3D |
1297.03 |
USD/Ton |
0% |
1/15/2020 |
|
Polyester FDY |
2050.62 |
USD/Ton |
0% |
1/15/2020 |
|
Nylon DTY |
2217.28 |
USD/Ton |
0% |
1/15/2020 |
|
Viscose Long Filament |
1195.59 |
USD/Ton |
0% |
1/15/2020 |
|
Polyester DTY |
2463.64 |
USD/Ton |
0% |
1/15/2020 |
|
30S Spun Rayon Yarn |
2021.63 |
USD/Ton |
0% |
1/15/2020 |
|
32S Polyester Yarn |
1644.84 |
USD/Ton |
-0.44% |
1/15/2020 |
|
45S T/C Yarn |
2434.66 |
USD/Ton |
0% |
1/15/2020 |
|
40S Rayon Yarn |
2188.29 |
USD/Ton |
0% |
1/15/2020 |
|
T/R Yarn 65/35 32S |
1956.42 |
USD/Ton |
0% |
1/15/2020 |
|
45S Polyester Yarn |
1797.01 |
USD/Ton |
0% |
1/15/2020 |
|
T/C Yarn 65/35 32S |
2231.77 |
USD/Ton |
0% |
1/15/2020 |
|
10S Denim Fabric |
1.28 |
USD/Meter |
0% |
1/15/2020 |
|
32S Twill Fabric |
0.70 |
USD/Meter |
0% |
1/15/2020 |
|
40S Combed Poplin |
0.98 |
USD/Meter |
0% |
1/15/2020 |
|
30S Rayon Fabric |
0.54 |
USD/Meter |
0% |
1/15/2020 |
|
45S T/C Fabric |
0.68 |
USD/Meter |
0% |
1/15/2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14492 USD dtd. 15/01/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Global fashion-technology platform Zilingo has collaborated with the Garment Manufacturers Association in Cambodia (GMAC) and the Cambodia Garment Training Institute (CGTI) to bring a new form of digitisation to Cambodia’s garment factories. Zilingo, an India based firm provides global fashion-technology production software and technology. Leading solutions that allow factories to maintain their position as major players in the fashion industry. Zilingo’s presence in Cambodia is to introduce proprietary production software which will help Cambodia’s garment factories increase efficiency and reduce defects. The software allows factories to use real-time production data to produce actionable performance reports that will help factories improve efficiency and productivity. The software is stated to increase a factory’s production efficiency by 10 to 12 percent, by giving management real-time access to data on a smartphone, laptop or tablet, said Sosakol Yin, business development manager of Zilingo. “We are excited that the GMAC has provided us with a platform and opportunity to showcase our solutions and engage with Cambodian businesses and key stakeholders to share how Zilingo can help them increase their production efficiency by automating operations on the factory floor,” said Yin. He said that the software will assist in removing pen and paper from the production line as the software automatically records production data and generates actionable reports. Yin added that it also allows for quality control and production staff to identify garment defects abd other faults. “If customers want our system, we can sell to them for $50 a month per garment line, but they will have to buy the equipment to connect with the software such as monitor screens and tablets. We can also provide this as whole package, but the factory will pay us $70 a month,” Yin added. The GMAC operations manager Ly Tek Heng, said that the GMAC has invited Zilingo to share its new technology system in garment, shoe and bag factories. He said that when the GMAC’s 600 members use this technology, it will help with competitiveness and productivity. “We do not have the detail on how many percent benefits will be added from this technology as it is new and we have to use the system first. However, this system has been used by India, Sri Lanka, Indonesia, Vietnam and Bangladesh,” Mr Ly said. He is optimistic that when companies use this technology for at least two years, they will get to a breakeven point and cover the initial cost of the technology investment. He added that if one factory has 10 production lines, they will pay about $500 per month. “It is a good start,” he added. Zilingo has enjoyed strong ties with the GMAC and was invited by Kaing Monika, the GMAC’s deputy secretary general, to show how to harness the technology to bring factories in Cambodia onboard the digital revolution and maintain their position as major players in the fashion industry. “In the Industry 4.0 era, we are observing the progressive pace of automation and digitisation across our factories. Automated machines are increasingly being used in most factory processes, including designing, pattern making, cutting, printing, embroidery, sewing and quality control,” said Kaing. He stressed that digitisation is essential across the garment industry. Cambodia must respond to this challenge at a faster pace to transform the workplace and workforce. The introduction of the software is part of Zilingo’s plans to launch in Cambodia as a key market, with a vision to empower fashion businesses with unprecedented access to a transparent supply chain solution.
Source: Khmer Times
The governments called on the World Trade Organization to beef up existing regulations, which they said in a statement are "insufficient to tackle market and trade distorting subsidization. Washington, Tokyo and Brussels on Tuesday joined forces in calling for stronger global rules against government subsidies that distort trade, a practice China has long been accused of exploiting. The governments called on the World Trade Organization to beef up existing regulations, which they said in a statement are "insufficient to tackle market and trade distorting subsidisation." But they refrained from naming China directly. US Trade Representative Robert Lighthizer met Tuesday with Japan's Economy, Trade and Industry Minister Kajiyama Hiroshi, and European Trade Commissioner Phil Hogan, and also discussed the need to prevent forced technology transfers -- an issue at the heart of the US-China trade conflict. "These unfair practices are inconsistent with an international trading system based on market principles" and undermine "growth and development," the statement said. The latest statement came after many months of trilateral meetings, a rare display of multilateral cooperation by the administration of President Donald Trump, who has launched multi-front trade wars and crippled the WTO's dispute settlement function. The three sides called on the WTO to ban govenment support that is unlimited, or that is given to insolvent or ailing enterprises with no "credible restructuring plan," companies that cannot get long-term financing or investment on their own, or for debt forgiveness. They also called for a ban on subsidies for industries that are over capacity. This is another issue behind long-standing complaints against China in industries like steel and aluminum, where the markets have been flooded with supply, driving down prices and pushing some firms out of business. The officials also want to make it easier for WTO members to file complaints against other harmful subsidies, including those supporting uncompetitive firms. Such subsidies can create massive manufacturing capacity "without private commercial participation" or lower domestic input prices in comparison to the prices of the same goods when they are export bound, the statement said.
Source: Business Standard
“It is expected that during next two months Pakistani exporters will receive big export orders of home textile products," Vice President of SITE Association of Industry, Farhan Ashrafi said. Briefing media after returning from the International HEIMTEXTIL-2020, exhibition held in Frankfurt, Germany, he said that new buyers in particular and other participants in the international expo have shown keen interest in Pakistani products and held meetings with Pakistani manufacturers to exchange views on important business matters. He declared HEIMTEXTIL-2020 more successful and effective and said that Pakistani stands this year attracted attention of more foreign buyers. Farhan Ashrafi said that those who participated in the exhibition have asked fellow businessmen to participate in the next year's show positively. The exhibition provided opportunity to exchange views and hold B2B meetings with new and existing customers. Farhan Ashrafi added that by participating in exhibitions like HEIMTEXTIL-2020, exports from Pakistan can be increased. There is need to organise and participate in such fruitful exhibitions.
Source: Business Recorder
Vietnam has been unable to gain export growth to all Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) member countries, the Ministry of Industry and Trade has said. A year since the CPTPP came into effect, Vietnam had seen strong growth in exports to some CPTPP member countries, but not all. Last year, export value surged by 28.2 per cent year-on-year to $3.86 billion to Canada, 26.8 per cent to $2.84 billion to Mexico, 20.5 per cent to $1 billion to Chile and 40 per cent to $350 million to Peru. Vietnam had a slight increase at 1.1 per cent in export value to Singapore and faced export value reduction to some other CPTPP countries, such as Australia (down 12 per cent to $3.5 billion) and Malaysia (down three per cent to $3.3 billion). Vietnam Chamber of Commerce and Industry (VCCI) chairman Vu Tien Loc said the first impact of the CPTPP for Vietnam was to accelerate reform in institutions, meeting requirements of the global economy and trade. However, in a VCCI survey of 8,600 local enterprises, up to 70 per cent of them had little knowledge of the CPTPP. This survey has also pointed out that 84 per cent of the enterprises lacked information about the commitments in the free trade agreement. Meanwhile, textile, footwear, fisheries and wooden products were considered commodities that would have a lot of opportunities to boost exports thanks to tariff rules in the agreement, but it hasn’t turned out that way. Vietnam National Textile and Garment Group director-general Le Tien Truong said the textile and garment industry has not taken full advantages from the CPTPP to increase exports because of issues meeting rules of origin in the agreement. This agreement requires certification on local origin from yarn onward to enjoy preferential tariffs, while the domestic textile and garment industry annually imports about 99 per cent of cotton and 80 per cent of fabric for its production, he said. Last year, the textile and garment industry spent $13.3 billion on fabric imports, up four per cent year-on-year, $2.4 billion on yarn imports and $2.6 billion on cotton imports, Import-Export Department data shows. The industry achieved a total export value of $39 billion last year, lower than expected. Vietnam Textile and Apparel Association chairman Vu Duc Giang admitted that importing input materials has made local producers struggle to take advantage of free trade agreements like the CPTPP. Giang was quoted by the Dau tu (Investment) newspaper as saying that the biggest challenge for the textile industry was input materials, because it still has to import materials for annual production. The industry needs the government’s help to build industrial clusters on production of materials for the textile and garment industry, he said.
Source: Phnom Penh Post
Indonesia’s manufacturing industry remains expansive, though at a smaller rate despite concerns over deindustrialization, the latest report shows. Cement, food and fertilizer industries lead industry gains as textile, paper, vehicle and machinery manufacturers contract. Bank Indonesia’s (BI) Prompt Manufacturing Index shows that the manufacturing sector’s performance remained expansive at 51.5 percent in the fourth quarter last year, compared to 52.04 percent in the previous quarter. A reading of above 50 percent indicates expansion and below that illustrates contraction. The highest expansion occurred in the cement and nonmetal mining industry subsector with 57.43 percent, followed by food, beverage and tobacco (52.47 percent), fertilizer, chemicals and rubber-based goods (51.48 percent). Meanwhile, sectors that border between expansion and contraction are iron and steel basic metals (50.53 percent), as well as wood products and other forestry products (50.36 percent). Contractions, meanwhile, were seen in the October-December period of 2019 for these sectors: textile, leather goods and footwear at 49.71 percent, paper and printed products (49.01 percent) and transportation, equipment and machinery (47.14 percent). Institute for Development of Economics and Finance (Indef) program director Esther Sri Astuti said the flood of imports in several industries was one of the main causes of the slowdown in the manufacturing sector’s business activities. “The upstream textile and steel industries, for example, have been experiencing an influx of cheaper imports in the past four years,” she told The Jakarta Post on Monday, adding that the imports made garments and construction material producers reluctant to use local products. The government is preparing three omnibus laws and deregulation measures and plans to streamline investment business licenses to jack up investment and revive Indonesia’s manufacturing industry. The largest contributors to Indonesia’s GDP, manufacturers have been struggling to maintain their performance. Statistics Indonesia (BPS) data shows that the industry’s contribution to GDP declined to 19.6 percent in the January to November 2019 period, compared to 30 percent during its prime in the 2000s. The omnibus laws may not necessarily be the final solution for all deindustrialization problems in Indonesia, Esther said. “In my opinion, the condition of Indonesia's manufacturing industry next year will not change as long as there is no significant policy change,” she added. In fact, the omnibus laws may well attract investors who do not want to participate in a transfer of knowledge or who may harm the environment, as the government is also planning to abolish the Environmental Impact Analysis (Amdal), Esther said. She suggested that the government create supply and demand for Indonesia's manufacturing industry and that local products at least be able to fill the domestic market. “The government must also maintain low production costs since local products cannot compete due to the high costs of doing business, such as the cost of energy,” she said, adding that the guarantee a sustainable legal certainty in the country was also important. Industry Minister Agus Gumiwang Kartasasmita said the PMI slowdown was an inseparable and inevitable cause of global and national economic conditions. “However, the PMI has actually rebounded to a higher level in the past months, so there is hope,” he told the press on Monday on the sidelines of an event that kicked off 2020 budget disbursement. BI predicted that in the first quarter of this year, the PMI would rise to 52.73 percent, higher than 52.65 percent in the same period last year. It further projected that PMI expansion will occur in almost all subsectors, with the highest in cement and nonmetallic goods (56.85 percent), followed by the timber and other forest products (53.79 percent), as well as food, beverage and tobacco products (53.03 percent). During the event, Agus revealed that the ministry’s 2020 budget had been slashed by 18 percent to Rp. 2.95 trillion (US$215 million) from Rp. 3.5 trillion last year. “I used to think that this budget was adequate if our job was to only produce regulations,” Agus said. “But we have projects that involve the development of small industries and establishing industrial estates, so I believe the budget should be increased.” Last year, the ministry allocated Rp 540 billion to developing small industries and Rp 1.7 trillion to vocational training programs throughout the country, among other programs. Agus also said the ministry planned to realize 42 percent of its budget by the first half of this year and to increase its overall budget realization from the 92 percent reached in 2019.
Source: The Jakarta Post
