Indian Commerce Ministry Releases New Foreign Trade Policy

India’s new Foreign Trade Policy (FTP) which released today has provided incentives to labour-intensive sectors such as textiles, handicrafts, leather and gems and jewellery. The policymakers had to shift their focus on these sectors particularly due to lower demand, the direct fallout of the global slowdown which in turn triggered huge job losses.

Last month, Anand Sharma, Union Minister of Commerce & Industry of India had said the slide in overseas sales had resulted in companies cutting 500,000 jobs in 10 industries. Since past four months, India’s exports are declining at an average of 30 percent.

The new policy has simplified exim documentation procedures to avoid red tape and attract new entrants. The affected industries are provided with tax cuts and lower interest rates. The government has decided to continue the DEPB scheme up to December 2010, and enhanced insurance coverage and exposure for exports through ECGC Schemes till 31st March 2010.

Sharma while presenting the FTP said “we would like to encourage production and export of ‘green products’ through measures such as phased manufacturing program for green vehicles, zero duty EPCG Scheme and incentives for exports”.

According to the Indian commerce ministry, the measures like tax exemption and cheaper credit rates to the needful industries are a stitch in time program but the larger plan would be to expand and diversify to new markets. The decline in demand for Indian merchandise from the North American and Western European markets that account for almost 50 percent of Indian exports has forced India to call for increasing presence in Latin America, Africa, Oceania and CIS countries.

India’s trade deficit was $10bn per month last year but past three months have seen that falling to half of last year’s average. India’s exports grew from about $64bn in 2004-05 to around $169bn last fiscal at an average growth rate of 25 percent, the third fastest after Russia and China during the same period.

The new FTP will serve as the trade roadmap for the next five years to the exim entities of India. The Ministerial Meeting of the WTO G-20 plus countries that will be held in India during the first week of next month will witness Indian negotiations centred on the new FTP. Sharma said that India was committed to conclude the Doha Round talks, however, indicated that India would remain conscious of the interests of the millions of country’s farmers and also that of country’s small and medium enterprises.

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New Mexico Gov Calls the Trade Mission to Cuba Productive

New Mexico Governor Bill Richardson after meeting up with the top political and trade representatives of Cuba to promote agri-business has stated the exchanges among them were ‘very positive’. Richardson in an interview told that he had discussions with Ricardo Alarcon, the leader of the National Assembly, Pedro Alvarez, the president of the Chamber of Commerce and Igor Montero, president of Alimport, the Cuban government agency responsible for agricultural commerce.

Richardson who began his tour to Cuba this Monday on his own expenditure due to his state’s budgetary status would be heading back to New Mexico on Friday. Alarie Ray Garcia, spokesperson for the governor informed the press that the rest of the official delegation’s expenses would be met by the state even though the governor funded his own trip.

The nine-member delegation from the southwestern state of the US included the secretaries of the Department of Agriculture Miley Gonzalez, Cultural Affairs Stuart Ashman, the Administration and Finance, Katherine Miller, and Gilbert Gallegos, deputy chief of staff of the governor besides Richardson. Albeit the mission is to promote agricultural trade between both states, there is great optimism among the pro US-Cuba lobby that Richardson would be achieving a coup of sorts in welding closer ties with both countries.

In 1996, Richardson was instrumental in the release of three political prisoners after holding extensive negotiations with the former president of Cuba, Fidel Castro. He is a known advocate of reviewing the 50-year-old trade sanctions imposed by the US on Cuba. Speculation is rife that the governor who is supposed to be close to the US president Obama could be there in Cuba with a ‘dual purpose’ of exploring possibilities beyond selling just some agricultural produce.

In 2001, the US removed trade embargo on food and medicines, and since then Cuba has imported $4.4bn worth of basic essentials from the US. Almost 80 percent of the food needs of about 11.5mn people of Cuba are met through imports, and a large portion of it comes from the neighbouring US.

New Mexico is among the 10 top producers of cheese and pecans in the US, and is the nation’s top producer of pepper. The trip is largely aimed at selling its agricultural produce including wheat, beans, potatoes and apples, and also beef in the Cuban markets.

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Serbia Cements Ties with China – Tadic Concludes Tour

Serbian President Boris Tadic’s trip to China which began on last Wednesday has culminated in the signing of a strategic partnership deal between both countries. During his visit he discussed political and bilateral trade interest with the Chinese President Hu Jintao, Premier Wen Jiabao and China’s top legislator Wu Bangguo.

Hu admitted the closer ties with Serbia was of paramount importance, and progressed well regardless of unpleasant developments across the globe. The talks between the two have also covered the contentious Taiwan and Kosovo issues. Both reaffirmed their respect for the sovereignty and territorial integrity of each other’s nation.

At a business forum organized by the China Council for the Promotion of International Trade (CCPIT), Tadic said he was looking at improving high-level political links to help find ways to increase investment in his country. Earlier, Hu had recommended a four-point agenda to forge better ties with Serbia which included constant high level exchanges, co-operation in the field of trade and commerce, holding of socio-cultural activities and multilateral cooperation in international fora.

China-Serbia trade was valued at $125mn in the first five months of this year, down 33.1 percent year on year amid the global economic downturn. However, China-Serbia trade volume surged from $9mn in 1994 to $460mn last year, said Dong Songgen, vice chairman of the CCPIT.

The Serbian delegation which also included Economy Minister Mladan Dinkic and Foreign Minister Vuk Jeremic felt the tour was very successful. The trade co-operation with China is expected to give further boost to the Serbian economy as it already enjoys FTAs with the EU, Russia, Belarus, Turkey and the eight countries of South Eastern Europe (SEE), giving Serbia access to a free trade market covering 800mn people.

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UN Program Helps Haiti to Combat Food Shortage

According to the UN press release, a scheme intended to improve food security of Haiti and thereby lower food prices has come to fruition with considerable increase in the income of the country’s farmers. At the Haitian government’s request, the UN Food and Agriculture Organization (FAO) had executed a $10.2mn plan to distribute and multiply quality seeds to the farmers with financing from the International Fund for Agriculture (IFAD).

The FAO estimates showed the superior quality bean seeds from Guatemala, procured and distributed to the hapless farmers of Haiti have produced good results. The seeds worth $300,000 distributed during the winter planting season of 2008 were able to produce a yield of $5mn in bean crops.

The FAO Haiti Representative, Ari Toubo Ibrahim expressed that they were extremely encouraged by the results of this program which in turn had increased the food available to poor people of Haiti. He also added that the weather too played a favourable role to reach this ambitious goal.

It should be recalled that the country’s capital, Port-au-Prince had witnessed riots sparked off by the skyrocketing of food prices last year. Last August and September’s four successive and devastating hurricanes had caused loss of seeds owing to either being washed away or consumed by the poor hungry farmers of Haiti.

The success of the scheme has encouraged the world body to extend the project to the upcoming winter season also, particularly aimed at maintaining the momentum. Almost 250,000 smallholder and landless farmers have or will receive adapted quality seeds through the program, which will also provide basic tools and advice or training via written material and radio broadcasts on best cultivation techniques. The project will facilitate the Farmers to procure bean, maize, sorghum, vegetable and rice seeds; besides, banana saplings and sweet potato and cassava cuttings.

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Malaysia-EU Timber Trade Deal by Year End

The European Union (EU) and Malaysia are planning to conclude the bilateral Voluntary Partnership Agreement (VPA) to promote trade of the legitimately produced and harvested Malaysian timber by end of this year after four years of protracted negotiations. The pact is designed with safeguards to redefine the perception of the sustainability and legality of timber or timber products imported to the EU from Malaysia.

As to keep a tab on the illegally logged timber, the European Commission (EC) has taken the initiative to develop its own Forest Law Enforcement, Government and Trade (FLEGT) action plan. The FLEGT program will essentially ensure the EU member states that the Malaysian timber and timber products were sourced legally and support progress towards sustainable forest management.

Ambassador and Head of Delegation of the European Commission (EC) in Malaysia Vincent Piket said a breakthrough in outstanding bilateral issues would help to finalize the VPA by 2009 end. If concluded, the deal will make Malaysia the first country in Asia to have such an agreement with the EU.

The timber certification by FLEGT is expected to boost demand for the Malaysian timber and related products in the EU as the lumber or its products could enter the region without proving further legality or sustainability prerequisites. The legality requirement is ‘diagonally’ applied to timber and timber products such as furniture also. That means if a piece is produced in one country with wood sourced from another country the legality trace will have to go back to the source country.

A year ago, the VPA talks were rocked by a timber scam that implicated a Malaysian state agency in a timber trade scandal involving illegal imports of Indonesian logs that was later re-exported as Malaysian timber to other countries, including China, Taiwan and Japan. The accord with a FLEGT seal on Malaysian timber or its products is expected to open up a lawful path for the Malaysian timber and related products to the EU, and thereby, hope to enhance the value of the same in the international market.

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