Indo-US FTA will be a Reality if Agriculture is excluded

FICCI president Harsh Pati Singhania while concluding his week-long trip to the US stated that instead of waiting for long, it was in the interest of both the countries to move forward with an Indo-US FTA excluding agriculture. FICCI, the Federation of Indian Chambers of Commerce and Industry represents over 1500 corporates and over 500 chambers of commerce and business associations of India.

During Singhania’s visit along with a bi-partisan delegation of parliamentarians he pointed out that North America Free Trade Agreement (NAFTA) among the US, Canada and Mexico was signed without agriculture because Canada objected to the inclusion of it. He expressed confidence in letting the Indo-US FTA to happen soon particularly on the basis of concordance shown by the US lawmakers and several US government officials to have it without agriculture for the time being.

India is looking forward to the next month visit of the US Secretary of State, Hillary Clinton in ironing out differences on all outstanding issues with the US, which saw last July the collapse of Doha Round talks. The Doha Development Round broke down after India, China and Brazil objected to the US farm subsidies that would inundate their markets with imports of farm and industrial goods. Thawing of Indo-US trade ties on agricultural issues is key to the success of forthcoming Doha Round talks in Geneva later this year.

Manmohan Singh’s second term sans Left Front has seen some major changes including the Left’s consensual candidate, Kamal Nath being replaced by Anand Sharma as Commerce and Industry Minister of India despite the former doing a fairly good job during his term. Last month, Sharma on the sidelines of Cairns Group’s, a coalition of agricultural exporting nations summit, while he met his US counterpart Ron Kirk has jointly agreed to take forward the multilateral negotiations and review the Indo-US bilateral ties.

However, the Indian business houses as well as the government is well aware of the fact the delayed Monsoon which is likely to play havoc to the country’s agricultural trade will thereby prevent them from engaging in any trade talks on agri-based issues for the time being. FICCI president’s words must be seen as an indicator that India is ready to conclude FTA with the US in consensual goods, and could include other items only in , the course of time.

Toboc Trade News

B2Bs Permeate Through Powerhouses of International Trade

Until Business to Business (B2B) portals came into existence there was not any viable tool to connect the internet and international trade. That was a time when internet penetrated into all the areas except international trade. During that time, in the absence of B2Bs a trader to go beyond one’s domestic trade was very expensive, therefore one retracted from the idea of making the cross over to international trade. Initially, traders imagined that the B2Bs are solely for international sellers or exporters, but as the B2Bs unveiled innovative features; they attracted all and sundry, including importers, transporters, brokers and service providers.

It is hard to find an exact definition for a B2B portal since it provides solution for advertising, finds valuable information to do business, allows businesses to interact with one another, provides database of international traders, etc. Since B2Bs are with multiple functions, it enables every trader irrespective of size or region to do business in a cost effective manner. Majority of the leading B2Bs provide free membership where one can post information about one’s company, which could be visible to members of that particular portal around the globe. The premium membership of these portals helps the trader to increase the visibility of one’s company and to use various other features included to enhance business.

As a matter of fact, the very concept of B2B is to encourage and empower small and medium businesses to conquer the areas they were not able to traverse hitherto. Besides, it helps to do so without investing a lot of money and time. Interestingly, even multi-national companies which have the global reach with offices or/and factories also begun to utilize the services of these portals extensively. In North America and Europe, B2Bs are the most sought after international trading tool for doing business regardless of size. In emerging economies like China and India, the idea of doing business using B2Bs is gradually catching up and most of the leading B2Bs are providing services that suit these economies. The interest shown by large business houses have boosted the morale of the B2Bs to bring out innovative features along with greater business opportunities.

Since every country has laid emphasis on hundred percent internet connectivity, any trader can do business from anywhere in the world through B2Bs. Prior to B2Bs, the small time traders were imprisoned to their markets since their presence was vital to their businesses. Unfortunately, even for leisure, these traders have to wait for off season or a lean patch. However, B2Bs empowered the small and medium enterprises to do business with consummate ease. The low cost and speed of doing business with anybody in the world has silently brought out a cultural revolution of sorts to the traders from different countries.

B2Bs have done, what any amount of advertisements could not do, by giving an opportunity to the traders to further be aware of products or/and services which could be suitable to their businesses. B2C (Business to Consumer) portals too were able to do the same but they were confined to regions and not able to do justice to far away places cost effectively. Nevertheless, B2Bs provided services cost effectively by overcoming international trade barriers and through economies of scale.

Courtesy Toboc

World’s Largest Solar Project to Transform Energy Domain

Guenter Gloser, deputy foreign minister of Germany in an interview to Reuters said the world’s largest solar project, the German-led consortium Desertec would create win-win environment for both Africa and Europe particularly to the Mediterranean Union states. The $554bn project is expected to transmit power from the Northern African Sahara region to Europe but will also fulfil the energy needs of the producing nations including Morocco, Algeria and Egypt.

The European initiative has to be envisaged of its strong ambition to counter climate change goals such as, the reduction of CO2 emissions not only for Europe but also for other parts of the world. The new initiative is expected to provide 15 percent of the energy needs of Europe in a decade from the time it starts producing energy, and is likely to act as an alternative energy option to the Russian supplies which currently top the European needs.

The new concept of generating and transmitting of solar power called Desertec was developed by a network of scientists and politicians of the Trans-Mediterranean Renewable Energy Cooperation (TREC). The founding meeting of the Desertec Industrial Initiative (DII) will be held on July 13, 2009 by invitation from Munich Re and the Desertec Foundation. The major objective of DII would be to provide clean, safe and cost effective energy to the global needs.

Gloser stated the Desertec solar energy plants could produce 20 giga watts of concentrated solar power (CSP), equivalent to that of 20 large conventional power plants once it was fully operational. The Desertec project would be employing a technology that uses mirrors to harness the sun’s rays to produce steam and drive turbines to produce electricity rather than an array of high-tech photovoltaic cells. The Desertec Foundation claims that in just 6 hours, deserts receive more energy from the sun than humankind consumes within a year.

According to German reinsurer Munich Re which is heading the Desertec consortium, the project involves about 20 firms including Siemens, Deutsche Bank, and energy companies like RWE and E.ON. The project would be largely funded through private investments, and the complete details on the companies and their stakes would be available only after the upcoming meeting.

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Namibian Meet to Check Conflict/Blood Diamond Trade

A three-day meet by the Kimberley Process member states is in progress since Tuesday to review and fix illegal trade practices involved in the diamond mining and trade globally. The Kimberley Process Certification Scheme (KPCS) is a rough diamond certification created by more than 75 diamond producing nations to arrest and prevent the trade in conflict/blood diamonds that led to the death and displacement of millions of people across the globe notably from African countries.

The illegally mined diamonds get its name conflict/blood diamonds after the rebel or government forces employed inhuman methods by enslaving the common population to mine these precious gems. The KPCS is currently chaired by Namibia, and was established in 2003 which also serves as a deterrent to blood diamonds getting into global market.

As per KPCS norms, the rough diamonds must be sealed in tamper-resistant containers and required to have forgery-resistant, conflict-free certificates with unique serial numbers each time they cross an international border. But the Namibian Deputy Minister of Mines, Bernhard Esau during his opening speech in the meet admitted that fake Kimberley Process certificates were a growing concern and had to find ways to stop them.

Taking into account several blatant violations on human rights and illegal trade practices in countries including Zimbabwe, Lebanon, Guinea, Ivory Coast, Brazil and Venezuela despite KPCS being in effect, a coalition of civil society groups stated that KPCS was failing to achieve its primary goal. Similarly, Global Witness which exposes the corrupt exploitation of natural resources and international trade systems said “The clock is running out on Kimberley Process credibility”.

In October last year, Zimbabwe government forcefully took charge of the Marange fields, the high diamond yielding region on the pretext of widespread illegal mining. As a result, the World Federation of Diamond Bourses in April banned the sale of diamonds from the Marange fields. Yet illegal trade of blood diamond from Zimbabwe is still rampant.

On the other hand, Venezuela despite agreeing in 2008 that it would suspend its diamond trade until new control systems could be established, a civil society investigative visit to Venezuela in May this year found that diamonds are still being mined and smuggled into the global legitimate market with complete impunity. With such glaring examples at hand, KPCS had to put in place some tough measures to curb blood/conflict diamonds being traded in any market.

Toboc Trade News

Up to $1.5 trillion to be siphoned from Global Stimulus

Kroll Global Fraud Report warned that if preventive measures were not taken, a portion of the global economic stimulus package would end up in the hands of fraudsters waiting in wings. The report has come out with a four-pronged formula for governments to tackle this likely scenario of corruption including transparency in the whole process and regulators to be equipped with budgets that enable them to root out corruption.

Kroll is the world’s leading risk consulting company which provides a broad range of investigative, intelligence, financial, security and technology services to help clients reduce risks, solve problems and capitalize on opportunities. The firm in its report has drawn data from Transparency International, the global coalition against corruption to corroborate its findings on global stimulus fund distribution process.

Transparency International has reported that the economic crises had given rise to a new wave of corruption through the current stimulus program. The corruption can raise procurement contract costs by at least 10 percent in a stable economy – an equivalent of $500bn in corrupt gains – but in emergency situations these costs could rise up to as high as 30 percent of the overall cost of the $5 trillion contract. The report comes hot on heels to FBI director Robert Mueller’s call to brace for potential crime wave involving fraud and corruption related to bank bailout money and the economic stimulus package.

Richard Abbey, MD in Kroll’s Financial Investigations practice stated all crimes needed motive, means and opportunity and in the current economic environment, it provided all the three. He further added that the huge pledged sum by governments across the world had lured fraudsters to grab the life-time opportunity to make easy money.

Blake Coppotelli, senior managing director in Kroll’s Business Intelligence and Investigations suggested that the governmental agencies which oversee the distribution of these funds should enforce robust anti-corruption policies or look for independent experts to supplement their efforts. He further clarified by saying that the nature of the projects – large sums of investment coupled with complex procurement processes have created a perfect setting for fraudsters to cash in on.

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