Connect with us

Emerging Markets

Chinese purchases of US exports fall far behind trade deal pledge

Published

on


China has purchased less than three-fifths of the US goods projected under the “phase one” trade deal that paused a tariff dispute between the two countries a year ago, posing another challenge for the administration of Joe Biden in its relations with Beijing.

Under the terms of the deal, China agreed to buy $200bn of US goods and services more than it did in 2017, before the start of the trade dispute, over a two-year period to the end of 2021.

Trade analysts have been measuring Beijing’s progress towards that goal, and the latest Chinese import data suggest they are falling far behind.

According to analysis from the Peterson Institute for International Economics, based on data to the end of last month, Beijing had purchased just 58 per cent of the US exports expected under its projections.

China’s imports of US products covered by the trade deal’s purchase commitments amounted to $100bn by the end of December, compared with a prorated target of $173.1bn, the institute said.

Trade Secrets

Trade Secrets is the FT’s must-read daily briefing on the changing face of international trade and globalisation.

Sign up here to understand which countries, companies and technologies are shaping the new global economy.

The shortfall presents a challenge to the Biden administration as it decides how much of the Trump administration’s policy on China to keep in place, including whether to preserve US tariffs on billions of dollars of Chinese imports.

Chad Bown, a fellow at the Peterson Institute, said the deal was “always a political agreement”, and that the Biden team should “de-emphasise the purchase commitments”.

“You want to reward behaviour, and not necessarily encourage the Chinese state to make all of these purchases at the same time as you’re trying to say — ‘no, become more market-oriented’,” Mr Bown said.

Speaking to the Financial Times last week, Robert Lighthizer, outgoing US trade representative, said that with respect to analysing China’s fulfilment of its purchasing commitments, it was “quite unfair of people to act like Covid didn’t happen”.

Mr Lighthizer, who as Donald Trump’s top trade official oversaw US trade negotiations with Chinese officials, said the phase one deal was comprised of more than purchasing commitments. He argued that there were “an awful lot of changes” that China had made to intellectual property protections; new and clear rules that Beijing cannot force the transfer of technology from US companies to Chinese companies; and some opening up of the country’s financial services.

Bar chart of $bn showing China's purchases of US goods fall short of 'phase one' deal targets

The agreement set out targets for broad sectors, which could be satisfied with purchases of products from aircraft to medical equipment and soyabeans to seafood and services such as tourism or cloud computing.

On purchasing commitments during 2020, some sectoral exports fared better than others. China come closest to fulfilling its agricultural purchases, and did most poorly on energy purchasing commitments. 

China has bought $23.5bn of the agricultural products covered by the deal, compared to an expected first-year figure of $36.6bn.

Chinese imports of US energy products covered by the deal were just $9.8bn, however, against an implied target of $25.3bn for the year. The collapse in oil and other energy prices during the pandemic made the deal’s dollar target all but impossible to hit.

The low oil price has, however, led to a surge in crude import volumes in recent months as China stockpiled supply while prices were depressed.

Its crude imports from the US averaged about 1m barrels a day from May to September, around three times the same period last year, according to US government data — but analysts question whether China will keep up this pace of buying as prices recover.

The first phase of the trade deal did not address some of the biggest sources of tension between the two countries, including commercial cybertheft in China and Beijing’s use of industrial subsidies.

Phase two talks never occurred under the Trump administration, however, as the US-China relationship soured further.

Mr Biden has said he would aim to work with Europe to further pressure Beijing on trade issues, ending the Trump administration’s strategy of negotiating alone, and his incoming officials have so far indicated that they consider it a key priority.

In her maiden speech earlier this month, Katherine Tai, incoming United States Trade Representative, said that “stiffening competition from a growing and ambitious China” would be one of the top issues in her trade brief. Janet Yellen, incoming Treasury secretary, also told Congress this week that the administration would look to swiftly deal with any economic misbehaviour from China.

 



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Emerging Markets

Brazil virus variant found to evade natural immunity

Published

on

By


The P.1 Covid-19 variant that originated in Brazil and has spread to more than 25 countries is around twice as transmissible as some other strains and is more likely to evade the natural immunity people usually develop from prior infection, according to a new international study.

The research, conducted by a UK-Brazilian team of researchers from institutions including Oxford university, Imperial College London, the University of São Paulo, found that the P.1 variant was between 1.4 and 2.2 times more transmissible than other variants circulating in Brazil. 

It was also “able to evade 25-61 per cent of protective immunity elicited by previous infection” with any earlier variant, the researchers found, in a sign that current vaccines could also be less effective against it.

International concern about the P.1 variant has escalated recently, with more than 25 countries detecting the variant, including Belgium, Sweden and the UK, which has identified six cases.

The scientists are expected to release a paper describing the research on Tuesday. Dr Nuno Faria, the lead author, did not immediately respond to a request for comment. The study has not yet been peer reviewed.

The researchers have dated the emergence of the P.1 variant to November 6, 2020, around one month before cases began to surge for a second time in the Brazilian city of Manaus. They found that the proportion of cases classified as P.1 in Manaus increased from zero to 87 per cent in the space of 7 weeks. 

The paper concluded: “Our results further show that natural immunity waning alone is unlikely to explain the observed dynamics in Manaus, with support for P.1 possessing altered epidemiological characteristics.”

“Studies to evaluate real-world vaccine efficacy in response to P.1 are urgently needed,” it added.

The researchers also found that infections were 10 to 80 per cent more likely to result in death in Manaus after the emergence of P.1. However, the authors cautioned that it was not possible to determine whether this meant the variant was more lethal or whether it was a result of increased strain on the city’s healthcare system, or a combination of both. 

The P.1 variant has over 17 mutations, which alter its genetic sequence from the virus originally identified in Wuhan, including 3 key changes to the spike protein that it uses to enter human cells.

Researchers in Brazil have been using genetic sequencing technology developed by Oxford Nanopore in the UK to identify and track the variant. The technology was first used in Brazil during the Zika outbreak in 2015.

Dr Leila Luheshi, director of applied and clinical markets at Oxford Nanopore, told the Financial Times that while the B.1.1.7 variant in the UK has similar properties of high transmissibility to P.1 — it is thought to be around 1.5 times as transmissible as variants that preceded it — there was no evidence to date that it evaded past natural immunity in the same way. Studies so far have also shown that current vaccines retain their efficacy against B.1.1.7.

Luheshi said that the concern with P.1 is that “because it has these mutations around the spike . . . the hypothesis is that the vaccine will be less effective.” But she added that there is not yet definitive evidence to support this theory. 



Source link

Continue Reading

Emerging Markets

Coronavirus latest: Production glitches to delay Johnson & Johnson vaccine distribution

Published

on

By



Coronavirus latest: Production glitches to delay Johnson & Johnson vaccine distribution



Source link

Continue Reading

Emerging Markets

Norsk Hydro blamed for birth defects in Amazon forest pollution case

Published

on

By


Maria do Socorro explains in graphic detail the spate of ailments affecting newborns in her remote community in the Amazon: her grandson died after being born with his intestines outside his body, while others were missing organs or had undeveloped bones.

For the 56-year-old community leader, there is little doubt about the cause of these illnesses. She said the rainforest town had for years suffered from toxic waste pollution from the local operations of Norwegian aluminium producer Norsk Hydro.

Long a simmering environmental scandal in Brazil, the allegations were brought on to the international stage this month when Socorro’s community sued the Norwegian giant in a Dutch court, seeking damages for claims that “the incorrect disposal of toxic waste” from operations in the area had caused a variety of health ailments, polluted the rainforest and destroyed economic opportunities.

“We cannot have future generations because the children are born and then die. Whole families are contaminated,” said Socorro from the Barcarena township in the northern state of Pará.

The case — filed just days before the UK’s top court ruled that Royal Dutch Shell could face legal action in London brought by thousands of Nigerian villagers over alleged pollution — is the latest international trial pitting large, resource-hungry companies against impoverished rural communities.

It also comes amid mounting pressure on companies to abide by strict environmental standards, a push being spearheaded visibly by Scandinavian investors.

One of the allegations in the lawsuit is that the pollution has caused birth defects © Alessandro Falco/Bloomberg

“If business can be global, why can’t justice? These companies have businesses everywhere, but then when they do something wrong they want to smother the possibility of people getting compensation,” said Pedro Martins, partner at law firm PGMBM, which is representing 40,000 alleged victims bringing the suit against Norsk Hydro.

“International corporations have different standards for how they do business in the northern and southern hemispheres as if life in the southern hemisphere does not have the same value.”

Through local entities, Norsk Hydro runs three facilities — a bauxite mine, a refinery and a smelter — in Pará, a vast Amazonian state that is a flashpoint for illegal deforestation, gold mining and land-grabbing.

The company said it would respond to the request before the court in the Netherlands, where its subsidiaries controlling the local entities at issue are headquartered. It denied that in 2018 pollutants from its facilities spilled over during heavy rains and polluted nearby rivers and earth. The company declined to comment further.

A source close to the company said, however, that it did “not see the [health] effects that have been claimed. The actual impact is hard to see and there aren’t any studies showing that.”

Map of Brazil

A combination of poor sanitary conditions and the tropical climate could be behind many of the health issues, he added: “There are a lot of feelings and not so many things relating to actual facts.”

Locals say bauxite, lead and aluminium pollution have turned the region’s rivers red. A study from the Evandro Chagas Institute, a Brazilian public health body, found in 2018 that the region’s waters were so polluted with industrial waste from the Norsk Hydro facilities that they “cannot be used for recreation, fishing, or human consumption”.

Like many Amazonian communities, much of the Barcarena township depends heavily on fishing and farming for survival, work that they now say is impossible.

“I invite these Norwegians to come and bathe in our waters. I challenge them. They have good water there in Norway. Our wealth just goes there,” said Socorro, who heads Cainquiama, a group representing mainly indigenous people and quilombolas — the descendants of runaway slaves.

Nearly all of the claimants in the suit have complained about chronic pain, hair loss and skin conditions. The suit also contains claims in relation to birth defects, such as those that have affected Socorro’s grandson, who was born with gastroschisis — a hole in the abdominal wall.

A pipe belonging to alumina refinery Alnorte, which is owned by Norsk Hydro, in Barcarena © Ricardo Moraes/Reuters

“Studies around the world have shown the effects [of toxic metals] on pregnant women, foetuses and children at birth,” said Marcelo de Oliveira Lima, a public health researcher at the Chagas institute. “But our studies so far did not go deep enough to show the [connection]. Other studies are still being done.”

The case is a sensitive one for Norwegian investors and the government, which owns a 34 per cent stake in Norsk Hydro. Oslo has long attempted to hold Brasília to account for the environmental destruction of the Amazon, even publishing its own data on deforestation in the world’s largest rainforest.

“There seem to be quite some dispute about the facts in this case and in particular about the actual harm of the spill to local environment and whether the company is somehow to blame by neglecting important safety measures,” said Jeanett Bergan, head of responsible investments at the KLP pension fund, Norway’s largest pension provider.

“We know Norsk Hydro as a responsible corporate actor when doing businesses abroad. I do not think [this case] will damage the credibility of Norwegian actors.”

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here 

Martins, the lawyer leading the group action, said they brought the case in the Netherlands because of the inertia of the Brazilian court system. He believes the case can reach a verdict in 18 or 24 months.

Brazil is no stranger to environmental disasters. This month, miner Vale agreed to a $7bn settlement with authorities over a dam breach in 2019 in the Brumadinho township that killed hundreds of people and polluted vast tracts of lands with industrial sludge.

BHP was sued in a British court over a dam failure in Brazil’s Mariana township in 2015 that left 19 dead. The case was thrown out because parallel proceedings were taking place in Brazil.

“The Hydro case draws attention for having caused significant environmental damage,” said Luiz Eduardo Rielli, director of sustainability consultancy Novi. “After three years, what I care most about is: What lessons have been learned? How can we ensure that new damages do not occur?”

Additional reporting by Richard Milne in Oslo and Carolina Pulice in São Paulo



Source link

Continue Reading

Trending