Africa must launch tough economic reforms, says Clinton

African nations must stop seeking handouts and begin tough structural reforms, particularly in the area of trade, if they truly want to improve their economies, US Secretary of State Hillary Clinton said on Monday.

“Most of the work that needs to be done needs to be done in Africa,” Clinton told a forum about US diplomacy on the continent.

“If you look at trade between African countries, it is abysmally minimalistic,” Clinton said. “African countries don’t trade with themselves. They have barriers and tariffs and customs problems that stand in the way of developing their own economies.”

Clinton’s sharp comments came in response to a question about broadening the African Growth and Opportunity Act (AGOA), a measure passed by Congress in 2000 which gives favourable access to US markets to dozens of African countries.

While many African governments hope the benefits can be made permanent, Clinton signalled that Washington is going to look for signs that African countries are serious about improving their own domestic economic policies.

“The United States will do our part, but African countries have to start doing their part and making the changes that will grow the economies in the sub-Saharan region,” she said.

“It means doing things that are going to run afoul of special interests and government bureaucrats and businesses that already have a lock on a market,” Clinton added.

“They’d rather have the biggest piece of a small pie than a smaller piece of a big pie. So if you are going to have that mentality, it is really hard to utilise the incredible tool that AGOA is.”

Both Clinton and US President Barack Obama have used trips to Africa to stress good governance, saying local leadership is as important as foreign help in the drive to eradicate war, corruption, and disease in Africa.

Although big improvements under AGOA have been made, overall US trade with sub-Saharan African countries remains small, accounting for just slightly more than 1 percent of total US exports and about 3 percent of total US imports in 2008.

US imports from sub-Saharan Africa grew about 28 percent in 2008 to US$86 billion, although higher oil prices accounted for a large chunk of that increase.

Sounding almost exasperated, Clinton indicated that Africa’s arguments for the redress of economic imbalances left by colonialism were beginning to wear a little thin – at least in Washington.

“For goodness sakes, this is the 21st century. We’ve got to get over what happened 50, 100, 200 years ago and let’s make money for everybody. That’s the best way to try to create some new energy and some new growth in Africa,” she said.

Andrew Quinn (Reuters, Washington)

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

Bernanke Says U.S., Asia Should Reduce Distortions

Federal Reserve Chairman Ben S. Bernanke called on the U.S. to save more by cutting the federal deficit and said Asian nations should promote domestic consumption to avert a return of trade distortions that preceded the financial crisis.

“The United States must increase its national saving rate,” Bernanke said today at a San Francisco Fed conference on Asia and the global financial crisis. “The most effective way to accomplish this goal is by establishing a sustainablefiscal trajectory, anchored by a clear commitment to substantially reduce federal deficits over time.”

Group of 20 leaders pledged last month to cooperate in shifting the global economy to “sustainable and balanced growth” and, with the help of theInternational Monetary Fund, to monitor each country’s patterns of demand and supply, credit, debt and increases in reserves. Bernanke called for policies to rebalance growth with higher private and government saving in the U.S. and less reliance in Asia on exports.

“It’s important, and I think policy makers recognize we need, to develop a fiscal exit strategy which will involve a trajectory toward sustainability,” Bernanke said in response to an audience question at the Santa Barbara, California, conference. “That’s critically important in order to maintain confidence in our economy and confidence in our currency.”

Record Deficit

China’s current-account surplus fell from about 10 percent of gross domestic product in the first half of 2008 to about 6.5 percent of GDP in the first half of this year, Bernanke noted. The U.S. continues to rely on foreign investors to finance a record deficit funded in part by foreign-exchange earned through exports to the U.S.

International investors owned $3.45 trillion of Treasuries in August, up from $3.08 trillion in December. China was the biggest foreign holder of U.S. government debt with $797.1 billion. It owned $727.4 billion in December, according to Treasury data released Oct. 16.

Within the G-20 nations, “there is an understanding that relying on export-led growth has been part of the problem,” said Alan Ruskin, head of currency strategy at RBS Securities Inc. in Stamford, Connecticut. Global policy makers will have to find common ground, and that “is a lot about where the Chinese own interests lie.”

“There is definitely a strong case to be made for the appreciation of the Chinese yuan starting again,” he said.

The Fed chairman presented a chart that showed several countries most open to trade suffered the worst declines in growth relative to normal trend rates.

‘Economic Shocks’

“Tighter integration with the global economy naturally increases vulnerability to global economic shocks,” he said. It also promotes stronger economic growth, and “protectionism and the erecting of barriers to capital flows should thus be strongly resisted,” Bernanke said.

Bernanke didn’t discuss the U.S. economy or the near-term path of U.S. interest rate policy in text of his remarks. The Federal Open Market Committee next meets Nov. 3-4.

U.S. stocks rose, extending an advance in equities from Shanghai to London, while Treasuries were mixed. The Standard & Poor’s 500 Index rose 1 percent to 1,098.97 at 3:08 p.m. in New York. Yields on U.S. two-year notes rose 2 basis points to 0.967 percent, while yields on the 10-year note fell 2 basis points to 3.39 percent. A basis point is 0.01 percentage point.

Raise Interest Rates

Central bankers around the world are also discussing and acting on strategies to raise interest rates. Australia increased rates this month, the first G-20 nation to do so since the crisis intensified a year ago. The Australian and New Zealand currencies rose today versus the U.S. dollar on signs of economic strength and in anticipation of more rate increases.

Separately, the New York Fed said today it is working with market participants to refine a reverse repurchase agreement tool to help drain the record amount of cash it has added to the financial system. The district bank said the work is a matter of “prudent advance planning” and “no inference should be drawn about the timing of monetary-policy tightening.”

China’s yuan forwards rose to a 14-month high on speculation the economy’s recovery from a slump will prompt policy makers to let currency appreciation resume. The exchange rate has been kept at about 6.83 per dollar since July 2008, following a 21 percent gain in the previous three years, as the government favored a stable currency to help exporters weather a global recession.

Data due Oct. 22 will show China’s economy expanded 9 percent in the third quarter, the fastest pace since September 2008, according to the median estimate of economists surveyed by Bloomberg.

‘Distort the Mix’

“Trade surpluses achieved through policies that artificially enhance incentives for domestic saving and the production of export goods distort the mix of domestic industries and the allocation of resources, resulting in an economy that is less able to meet the needs of its own citizens in the longer term,” Bernanke said.

Bernanke said American consumption fueled by high savings rates abroad played a role in the financial crisis.

“A lot of capital flowed” into countries such as the U.S., “which would not be a problem if we had invested and managed that money appropriately,” Bernanke said in response to an audience question. “But evidently, we were not able to do that.”

‘Overwhelmed’ Risk Management

Bernanke said both private and regulatory risk-management mechanisms “were overwhelmed.”

The FOMC reiterated its pledge last month to keep the benchmark lending rate near zero “for an extended period” to boost a weak recovery that has yet to create jobs. The unemployment rate rose to 9.8 percent last month, the highest level since 1983. The economy will grow at a 2.4 percent annual pace in the final three months of the year, according to a Bloomberg News survey of economists. The unemployment rate will hit 10 percent in December, the forecasters said.

Bernanke in today’s speech didn’t engage in the debate among his colleagues on the FOMC over the pace or timing of a change in monetary policy. Fed Governor Kevin Warsh said Sept. 25 interest rates may need to rise “with greater force” than usual, while New York Fed President William Dudley said Oct. 5 the recovery’s pace “is not likely to be robust” and inflation risks are “on the downside.”

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

US - South Africa Round Table Johannesburg, August 19th - 21st 2009

United States – Southern Africa

Round Table with the Government and Key Business Leaders

≈ 19 - 21 August 2009 – Johannesburg, South Africa ≈

With Presidents Obama and Zuma charting a new era of cooperation between the United States and sub-Saharan Africa, business and government leaders from South and Southern Africa welcome counterparts from the U.S. to an informal dialogue in which CEOs, policymakers and opinion leaders will explore mutually-beneficial links in business, philanthropy, education and corporate responsibility.

Senior representatives of the South African Government and local business leaders will engage in open and off-the-record discussions commercial opportunities in South and Southern Africa. This advanced, interactive forum will facilitate business connections, and enable the participants to gain new perspectives.

Topics to be discussed include: the global financial crisis and its impact on the region; investment in infrastructure; energy; healthcare; financial markets; food processing; homeland security and defence cooperation. Early acceptances include Michael Spicer - CEO, Business Leadership South Africa, Saki Macozoma - Deputy Chairman, Standard Bank, Popo Molefe – Chairman, PetroSA & CEO, Lereko Investments and Chris Hart, Chief Economist, Investment Solutions.

Wednesday, August 19th program begins with presentations by leading experts and business people from the U.S. and South Africa. Following a networking luncheon, there will be one-on-one meetings with appropriate selected individuals and companies.

Invited South African companies include: Eskom, Sasol, Medi-Clinic, Discovery, Netcare, Educor, Barclays-Absa, Firstrand, Development Bank of Southern Africa, Industrial Development Corporation, Transnet, MTN, COEGA, Telkom, Dimension Data and others.

AllWorld Network, Chaired by Professor Michael Porter, Harvard University Business School and Endeavor, South Africa will announce the launch of the South Africa Fast Growth 100, identifying and advancing the next generation of company builders and entrepreneurs. AllWorld co-Founders Deidre M. Coyle Jr, Anne Habiby and Malik Fal, Endeavor, presenting.

Thursday, August 20th is reserved exclusively for business-to-business meetings which will be arranged in advance.

Thursday, August 20th Evening Reception to honor MEMBERS OF THE UNITED STATES CONGRESS

Remarks by:

U.S. Congressman Bobby L. Rush, Chair Subcommittee on Commerce, Trade and Consumer Protection of Energy and Commerce Committee and Co-chair of The African Partnership for Economic Growth (APEG) Caucus - - a new Congressional initiative to expand and deepen trade and investment links between the U.S. and sub-Saharan Africa.

Friday, August 21st is reserved for meetings and a luncheon with the Congressional Delegation and Trade and Business Representatives from:

Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.

Attendance at this event is by invitation only, consisting of a pre-selected group of regional and international industry leaders. Should you be interested in participating, please contact: David Altman Tel: +1 212.904.0248 davidaltman@usexportcouncil.com

Co-organized and Sponsored by:

Omega Investment Research

US Export Council

Business Council for International Understanding

KRL International LLC

Mark Clack Senior Advisor, KRL International LLC Tel 202.223.1101 mark@krlinternational.com

Johnny Brown Senior Advisor US Export Council

Travel Packages including flights and accommodation are available. Upon confirmation of your attendance, kindly contact Daniel Bloch at Omega Investment Research on +27 (0)21 689 7881 or email: danielb@omegainvest.co.za

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

U.S. - Africa Trade Relations: Creating a Platform for Economic Growth

Subcommittee on commerce, trade, and consumer protection

and

Committee on Foreign affairs

Subcommittee on africa and global health

Notice of Joint Subcommittee Hearing

The Subcommittee on Commerce, Trade, and Consumer Protection and the Subcommittee on Africa and Global Health will hold a joint hearing on “U.S. - Africa Trade Relations: Creating a Platform for Economic Growth” on Wednesday June 24, 2009, at 2:00 p.m. in 2322 Rayburn House Office Building.

There will be a bipartisan briefing for staff of Members on the Subcommittees on Tuesday, June 23, 2009, at 2:00 p.m. in room 2218 Rayburn House Office Building. A Democratic staff briefing will be held immediately following the bipartisan briefing in the same room.

For more information, please contact Angelle Kwemo with the Committee staff at 6-2424.

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

Don't Close The Door On Free Trade

In the midst of the financial crisis, another threat is nipping at the global economy's heels: the re-emergence of protectionism.

Both the World Trade Organization (WTO) Director-General Pascal Lamy and the outgoing European Union Trade Commissioner Peter Mandelson are among those warning that the economic troubles could breed protectionism, which would curtail economic growth when we need it most.

These admonitions come on the heels of the breakdown of the Doha round of trade talks and after much public rancor over pacts including the U.S.-Colombia Free Trade Agreement.

Nothing would be worse for the global economy than responding to the current crisis by closing the doors of opportunity that free trade unlocks. Free trade fuels momentous, positive change. According to the WTO, cutting trade barriers in agriculture, manufacturing and services by one-third would boost the world economy by $613 billion--that's equivalent to adding an economy the size of Canada's to the global marketplace. Free trade raises income--just look no further than the clear emergence of China and India's middle class for proof. In the U.S., exports have created 12 million jobs.

Beyond the economic benefits, free trade, if pursued with a long-term, fair and sustainable approach, can also build bridges among people and nations. At a time when the world seems constantly on edge, global trade presents a unique opportunity to help us overcome some of our differences and problems, whatever they may be.

One of the many lessons today's turmoil offers is that a company's success should be viewed in decades, not quarters. Having a long-term vision and the commitment to stick with it--fine-tuning as needed--sustains a company through downturns and propels steady growth.

Investing for the long haul was UPS's (nyse: UPS - news - people ) approach to building its international operations, which began in earnest 20 years ago this month. Our decision to "go global" was met initially with some internal skepticism, in part because our leaders knew it was going to be a very expensive and labor-intensive proposition.

They also recognized that it represented a big departure from our core competency as a domestic delivery service, but ultimately our executives did not waver from their vision of building an international company. As the Berlin Wall fell and China began to open its doors, they saw the emergence of a global economy. They knew that if UPS didn't adapt and become global itself, it would become irrelevant.

Today, the once-questioned decision to go global is helping to insulate UPS against the U.S. economic downturn. In part that's because many of our customers are experiencing tremendous growth even in these difficult times, because they're growing global businesses.

When U.S. companies grow internationally, they learn that long-term relationships are imperative to doing business around the world. Following the demise of some of Wall Street's most trusted names, I believe that business relationships are going to take on even more importance. For multinational companies, hiring locally wherever they operate is a key part of forging these relationships.

When UPS first set up operations around the world, we made the mistake of sending in large groups of U.S. expatriates to run the business. But we soon realized that we would not succeed without local knowledge and relationships. UPS's philosophy of developing "home-grown" talent and promotion from within has helped us establish a sustainable and community-conscious business model, while providing us a deep bench of talent that understands the local culture, language and business values.

That, in turn, has earned UPS the trust of the communities we serve. For example, 99% of our 5,500 employees in China are Chinese nationals. That played a big role in China's selection of UPS as the official logistics and express delivery sponsor of the Beijing Olympics.

While much of the world's trade growth has come as a result of shipping lower-cost goods from emerging markets to mature ones, higher fuel costs are shifting this pattern. Businesses in the European Union and the U.S. are finding it more cost effective to source their products from nearby locations in Eastern Europe or Mexico, respectively, forming a new trend called near-sourcing. This is helping companies better distribute risk, which is an important part of financial growth and stability. And it's also providing new opportunities. For example, in Mexico, the best-paying jobs now are export-related.

Sectors that export 60% or more of their production pay Mexican workers wages that are 39% higher than the rest of the economy, and maquiladora plants typically pay 3.5 times the Mexican minimum wage. These new economic opportunities can serve as a catalyst for educational development, positive political and regulatory reforms and social stability--all of which benefit us collectively.

The root cause of Wall Street's recent problems, and ultimately those of the world's financial institutions, won't be solved by global trade. But the ripple effect of those problems--which have been felt by virtually everyone on the planet--can be mitigated by ensuring the free flow of goods, information and funds around the world. Protectionism is a misnomer, as trade barriers don't protect.

The world is already so integrated economically that the greatest force impacting the greatest number of lives is business. How we react to our current challenges will be critical to our future. Let us keep the doors open.

The author, Dan Brutto is the President of UPS International.

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

Oppenheimer: On Obama and Trade Pacts

Perhaps the most important question raised in the last presidential debate was the one that got the least media attention - whether a Barack Obama presidency would lead to U.S. protectionism, trade wars and a global depression.

 

Was that a fair accusation by Republican candidate John McCain?

The issue came up about halfway through the debate when McCain - noting that Obama ''has never been south of the border'' - attacked him for not supporting the U.S. free trade agreement with Colombia and for wanting to renegotiate the North American Free Trade Agreement. 

''I don't think there's any doubt that Sen. Obama wants to restrict trade, and he wants to raise taxes,'' McCain said. ''And the last president of the United States that tried that was Herbert Hoover, and we went from a deep recession into a depression.'' 

Obama responded that ''I believe in free trade,'' but he added that not every free trade deal is a good one. He said he opposes the Colombian deal because of human rights concerns over killings of union leaders in that country, and that he opposed NAFTA because he objected to its lack of proper labor and environmental clauses. But, on the other hand, he said, ''I supported the Peruvian Free Trade Agreement, which was a well-structured agreement.''  McCain supporters say Obama is pandering to U.S. labor unions, which are campaigning actively for him and competition. Obama's current ads claiming that McCain's tax policies ''shift jobs overseas'' paint the Democrat's true feelings, Republicans say. 

And they note that Obama's claim that he ''supported'' the Peruvian free trade deal is misleading because Obama did not actually cast a vote for it. Obama aides say their candidate missed the vote because he was attending an Iowa debate that day, but that Obama publicly endorsed the deal at the time.

If Obama is a closet protectionist, as the McCain camp claims, that would entail huge risks for the global economy. 

The Great Depression of the 1930s was sparked by a 1929 stock market collapse, but really turned into a global depression after the United States passed the Smoot-Hawley Tariff Act on June 17, 1930, which raised U.S. customs duties for imports by up to 50 percent. 

The tariff increases were aimed at helping domestic companies and generating jobs at home. Instead, other countries responded in kind, international trade plummeted by 33 percent over the next three years, U.S. exports collapsed and U.S. unemployment rose at record levels. 

The lesson is clear: Adopting protectionist measures in a recession is playing with fire, McCain supporters (and many Obama fans, too) say. 

My Opinion: I don't think Obama is a protectionist. When I interviewed him, he almost jumped from his seat when I asked him if he's anti-free trade. Like Bill Clinton before him, he would most likely switch to a more pro-free trade stance once in office. 

What worries me is whether Obama would have the guts to go against the growing protectionist mood in the country at a time when America needs to open new export markets more than ever. A new Zogby poll shows that 59 percent of Americans support either revising or withdrawing from NAFTA. 

And I wonder whether Obama would spend his political capital trying to persuade a Democratic-controlled Congress to support free trade. 

Pollsters forecast that the Democrats will retain control of both chambers of Congress and may win a filibuster-proof majority in the Senate. Twenty-three of the 35 Senate seats up for grabs are held by mostly pro-free trade Republicans, and some may be replaced by trade-skeptic Democrats, they say. 

Granted, a landslide victory by Obama on Nov. 4 would give him enough political clout to sway Congress in the right direction. But an Obama win by a small margin with a more protectionist Congress and amid a growing isolationist sentiment would be a different story. 

I have to confess that I like Obama on most issues. But on this one, I would like him to show more statesmanship. If the next president doesn't enthusiastically embrace free trade, the United States will be under growing domestic pressures to close its market to foreign goods, hurting the world economy - and itself. 

Andres Oppenheimer
The Miami Herald

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

South Africa - Trade Deficit Shrinks in August

JOHANNESBURG (Reuters) - South Africa's monthly trade deficit shrunk to 5.12 billion rand in August, largely due to a big fall in oil imports, official data showed on Tuesday.

The South African Revenue Service said the monthly shortfall narrowed from July's 9-month record high 14.3 billion rand.

Compared with the previous month, exports fell by 1.43 percent to 60.4 billion rand, while imports decreased by 13.34 percent to 65.51 billion rand, largely due to a 37 percent decline in imports of minerals products, which include oil.

Economists polled by Reuters last week had forecast a deficit of 4.7 billion rand.

Analysts said while the gap had narrowed, it remained relatively large and would keep pressure on the country's ailing current account.

"It's another fairly large trade deficit and it would seem that the trade deficit for 2008 will be at least as big as last year's deficit ... we can still expect a huge current account deficit, between 7 and 8 percent, probably closer to 8 percent," Citadel economist Salomi Odendaal said.

Sustained gains in the rand between 2002 and 2005 eroded the value of South Africa's exports and attracted relatively cheap imports, widening the trade and current account gaps.

A weaker rand this year may help to boost exports, but a massive government infrastructure spending programme is expected to keep imports high, and the deficit on the current account large.

The shortfall on the current account eased to 7.3 percent of GDP in the second quarter from 8.9 percent in the first three months of the year. The deficit was at a 36-year high of 7.3 percent for 2007 as a whole.

The rand was steady at 8.2750 against the dollar after the data was released, about 0.8 percent firmer for the session, but still about 17 percent softer against the greenback so far in 2008.

SARS said the cumulative trade deficit for the first 8 months of the year was 54.4 billion rand compared to 50.8 billion rand during the same period last year.

#####

THE US EXPORT COUNCIL PROVIDES ASSISTANCE TO US FIRMS SEEKING ACCESS TO INTERNATIONAL MARKETS, EXPORTS, JOINT VENTURES AND CAPITAL. VISIT US AT WWW.USEXPORTCOUNCIL.COM

Trade imbalance creates shipping container shortage

Out of the box

Trade imbalance creates shipping container shortage

by Jaime Guillet

Major U.S. ports, such as Long Beach, Calif., are not being affected by a shipping container imbalance, but the Port of New Orleans, which is trying to grow its container business, is starting to feel the ripple effect. (Photo courtesy Port of Long Beach)

ADVERTISEMENT

The hasty growth of exports from the United States coupled with the softening of foreign imports has shepherded a new trend in the maritime shipping world — a relative container famine.

The U.S. dollar’s decline in late 2007 and 2008 led to American exports rapidly increasing as other countries began gobbling up our cheaper goods. Foreign imports slackened as U.S. consumers halted spending.

This disparity resulted in an apparent shortage of the 20- and 40-foot steel cargo containers used for shipping on ocean vessels and rail lines.

At first glance, the dearth of containers resembles an overall global scarcity, but the real problem is containers are ending up in the wrong place at the right time, said Anne Kappel, vice president of the World Shipping Council, the national trade association of worldwide shippers.

“We have a trade imbalance right now,” Kappel said. “A slight shortage of containers is not necessarily a new phenomenon, but combined with new issues ... the difference makes everything tighter.”

While the problem hasn’t significantly affected container business at the Port of New Orleans, it is feeling the rippling effect.

The vast majority of imports entering the United States are finished consumer goods, such as tennis shoes and pencils, which manufacturers ship in containers. By contrast, the preponderance of North American exports is raw, unfinished goods such as lumber, grain and paper products.

A decade or two ago, most raw materials were shipped in break-bulk or not in containers. Today, they increasingly are being shipped in containers overseas.

When containers arrive in ports such as Houston and Long Beach, Calif., terminal operators unload them at the dock. The containers either go directly back on the ships to eventually return to their points of origin or sit as “empties” at distribution centers.

Exporters challenged

The container shortfall is primarily affecting U.S. growers, producers or manufacturers that want to export their goods out of the country but are not located where imported containers arrive, most often in highly populated urban areas.

“It’s less about how many (containers there are worldwide) and more about the flow for the U.S.,” Kappel said. “Physically there are boxes ... but there is still a significant imbalance — almost 2-to-1 imports to exports.”

The disparity can be seen even when looking at 2007 trade figures from the U.S. Maritime Administration. In 2007, the country received about 12 million containers via trade compared with the 6.8 million containers leaving the country.

“The change in U.S. trade patterns, an increase in export volumes coupled with slowing growth in some import corridors, has altered the historical patterns of equipment flows and balances,” said Bill Woodhour, North America sales manager for the Maersk shipping company.

Woodhour said while the U.S. remains import dominant overall, decreases in imports in some of its ports and the surge in exports have created the container imbalance.

“Overall, there is a sufficient supply of equipment in the U.S. to cover the export demand,” he said. “However, as a result of the changing equipment flows, there are some areas that require us to work closely with our customers to develop solutions to match the cargo with the equipment.”

Shifting services

Big-boy carriers such as Mediterranean Shipping Co. and Maersk Inc. that typically own their containers have adjusted to the tightened container demand by conducting “better forecasting and allocation of containers by carriers,” and requiring their customers to make reservations in advance, Kappel said.

Shippers’ customers, on the other hand, have started making multiple bookings with more than one carrier, which creates problems, she said.

“The manufacturer or exporter is trying to hedge their bets,” Kappel said. “It’s bad practice that’s been going on for a while.”

There are indications this trend of container shortages will alleviate as economies worldwide recoil following recent traumas to the U.S. investment markets.

Boston-based Global Insight, a consulting company that provides analysis of market conditions of more than 200 countries, recently projected U.S. container imports this year will decline 8.2 percent, a slightly more pessimistic forecast than Global’s previous projection of a 7.1 percent decline.

The revision is based mostly “on a deteriorating outlook for imports through the Gulf ports,” the company said in a statement.

On the positive side, Global increased its 2008 U.S. export growth forecast from 17.7 percent to 22.6 percent.

What does this trend mean for U.S. ports?

For major container ports such as the Port of Long Beach, where overall cargo figures are actually down, not too much, said spokesman Art Wong, adding that containers are going back on the ships or “too many boxes are sitting idle” at the port.

But at the Port of New Orleans, which is trying to expand its container business, it has had a slightly negative impact by requiring some U.S. exporters to consider carriers that do not serve New Orleans — all for availability of containers, said Robert Landry, the port’s marketing director.

“If you can’t get equipment, it’s a problem requiring some exporters to wait on available containers or forwarding it to another port,” Landry said.•

New Orleans City Business

http://www.neworleanscitybusiness.com/viewStory.cfm?recID=31774

World Trade and The Financial Crisis

GENEVA (Reuters) - Trade flows are likely to slow this year as consumers worried about the financial crisis cut back spending and a cyclical downturn bites into exports and imports, economists said.

But the crisis itself has so far had only a moderate impact on trade.

Exports and imports have been slowing markedly since the second quarter after growing strongly in the first, said Michael Finger, senior economist at the World Trade Organization (WTO).

"What we know already from the first seven-eight months is it's not a catastrophe, it's weakening. I don't see any panic or huge changes, it's relatively gradual," he told Reuters.

Trade would of course be vulnerable to a prolonged seizing-up of the banking system as commerce is financed by credit.

The picture is not quite as favorable as at first sight, because export and import figures earlier this year were inflated by record fuel prices.

In addition, business confidence has fallen to a three-year low in Germany, Europe's biggest economy which is powered by exports, and has also tumbled in the second biggest economy, France.

The head of shipping firm Excel Maritime Carriers Ltd (EXM.N: Quote,Profile, Research, Stock Buzz) warned last week that banks were no longer lending to fund trade, and cargoes were being left stranded on docks even though the demand for goods is there. 

For the complete story go to:

http://www.reuters.com/article/ousiv/idUSTRE48R12S20080928?pageNumber=1&virtualBrandChannel=10338

By Jonathan Lynn @ Reuters

THE US EXPORT COUNCIL PROVIDES ASSISTANCE TO US FIRMS SEEKING ACCESS TO INTERNATIONAL MARKETS, EXPORTS, JOINT VENTURES AND CAPITAL. VISIT US AT:  WWW.USEXPORTCOUNCIL.COM