US AND CHINA EMERGE FROM TRADE TALKS STILL AT ODDS
The United States and China entered July’s Comprehensive Economic Dialogue with wildly diverging agendas and goals. The US wanted to achieve some concrete progress on reducing its trade deficit with China, while China sought to emerge from the talks with a framework for further talks and some sort of common working agenda. Neither side achieved its goals and ended the meeting after canceling a planned joint press event.
In his opening remarks, US Secretary of Commerce Wilbur Ross said China’s $347 billion trade surplus with the US was not the product of market forces and that the bilateral trading relationship needed to change. Chinese officials pointed out their country recently agreed to accept shipments of US beef and liquefied natural gas. China Daily included a comment from Chinese Vice Premier Wang Yang, who headed his country’s delegation, that suggested talks got heated: “Dialogue cannot immediately address all differences, but confrontation will immediately damage the interests of both.”
CYBER ATTACK TERRORIZES FEDEX TNT UNIT
At the end of the third week of July, customers of FedEx’s TNT Express, a delivery service in Europe, Africa and the Middle East, were still experiencing widespread service and invoicing delays, and manual processes were being used to facilitate a significant portion of TNT operations and customer service functions. This is because of the cyber-attack known as Petya, which FedEx announced on June 28 had significantly affected the worldwide operations of TNT, which FedEx acquired in May 2016. The information technology virus spread through a tax software product in Ukraine, where TNT operates and uses the software that, once compromised, allowed the virus to infiltrate TNT systems and encrypt its data.
While no data breach or data loss to third parties was “known to have occurred,” and the systems and data of all other FedEx companies were unaffected by the attack, the company conceded “it is reasonably possible that TNT will be unable to fully restore all of the affected systems and recover all of the critical business data that was encrypted by the virus.” The attack has cost the company revenue “due to decreased volumes at TNT and incremental costs associated with the implementation of contingency plans and the remediation of affected systems,” FedEx said.
PARTNERS WELLS FARGO AND YES BANK BOOST LENDING
YES BANK, India’s fourth largest private sector bank, recently teamed up with Wells Fargo Bank, the Overseas Private Investment Corp. (OPIC) and the US government’s Development Finance Institution to increase lending to small and medium enterprises (SME) in India. Under the agreement, OPIC will provide $75 million in financing and up to $75 million in syndicated financing jointly arranged by Wells Fargo and OPIC to YES BANK. Specifically, $50 million of the financing will be used to expand support to women-owned businesses, while another $50 million will be used for financing SME businesses in low-income states.
“This significant co-financing agreement comes on the back of successful execution of two similar facilities by YES BANK over the past two years,” says YES BANK CEO Rana Kapoor. “This agreement with OPIC further strengthens YES BANK’s ability to fund and support the unique needs of SMEs and the entrepreneurial ecosystem; thereby boosting the developmental agenda in low-income states of India.” Added Dev Jagadesan, OPIC’s acting CEO: “OPIC, YES BANK and Wells Fargo have a strong history of partnering to support lending to small businesses and I look forward to continuing this partnership to foster economic growth in India by alleviating the financial challenges SMEs commonly face.”
AND NOW FOR THE GREATEST GLOBAL TRADE STORY … EVER!
According to our resident craft brew vacuum, the following is the greatest story ever to grace Global Trade. It relates to the Maine Brewers’ Guild (MBG), a collection of more than 70 craft beer makers, continuing its growth trajectory by testing the international market in Iceland. This new relationship was inaugurated with the June 2 arrival in Reykjavik of the Maine Beer Box, a 40-foot refrigerated shipping container outfitted with 78 taps and a self-contained CO2 system.
Ladies and germinators, if our resident craft brew vacuum had a Maine Beer Box, he’d never leave the house—and not only because his shipping container of a stomach would no longer fit through any open doors. As for the MBG’s largest-ever collaborative export initiative by American brewers: “This is not a move of desperation,” swears Executive Director Sean Sullivan. “The truth is, most of our brewers can hardly make enough beer to meet local demand for their products. We’ve launched this initiative to build brand recognition for Maine craft beers abroad in a way that will ensure our brewers are well-prepared for what this industry will look like in 3 to 5 years.” It was not just a matter of dumping off a beer box in Iceland; there were legal, insurance, and tax hurdles to overcome. “A couple of years ago, we recognized the potential for the craft beer industry to serve as a sector with substantial opportunity to grow trade relationships between Maine and North Atlantic communities, and we connected members of Maine’s beer community with trade mission delegates from Reykjavik,” explained Charlie Bacall of Verrill Dana, a Portland, Maine, law firm that has been integral in the process. “We’ve enjoyed leveraging our expertise in beer and trade law to partner with Maine brewers as they explore this new avenue for growth.” We’ll drink to that.
Counterfeit Trade on the Rise