Global trade continues to grow, according to October’s three-months forecast from the DHL Global Trade Barometer (GTB). The index for global trade now stands at 63 points, which is a decline of four points on the previous quarter’s forecast, indicating an overall slightly slower pace of growth. In the GTB methodology, an index value above 50 indicates positive growth, while values below 50 indicate contraction.
The overall slight reduction is largely driven by lower growth rates of air trade. The respective index value declined by eight points to 62. In contrast, the growth rate for global ocean trade merely decreased by one point to 63 points. Regarding the GTB’s seven constituent countries, this quarter sees a mixed picture with a threefold differentiation: India as the only country with simultaneously increasing and very high prospects for trade growth, the UK with an unchanged outlook, and all other countries with slightly diminishing prospects.
Despite intensifying global trade disputes, mainly between China and the U.S., these countries remain in growth mode, however, at a slower pace. American growth prospects slowed down by five points to 63, while the Chinese trade outlook decreased by four points to 59. Most other constituent countries witnessed decelerating trade dynamics, too: South Korea–still one of the previous forecast’s strongest growth drivers–saw its outlook reduced by five points to 69. Likewise, Germany’s trade growth forecast was reduced by six points to 58. The outlook for Japan went down by three points to 64.
UN REPORT: TRADE WAR THREATENS OUTLOOK FOR GLOBAL SHIPPING
The outbreak of trade wars and increased inward-looking policies threaten the prospects for seaborne trade, projected Mukhisa Kituyi, secretary general of the United Nations Conference on Trade and Development at October’s Global Maritime Forum’s Annual Summit in Hong Kong.
Kituyi’s warning while launching the 2018 edition of the UNCTAD Review of Maritime Transport came against a background of an improved balance between demand and supply that has lifted shipping rates to boost earnings and profits. Freight-rate levels improved significantly in 2017 except in the tanker market, supported by stronger global demand, more manageable fleet capacity growth and overall healthier market conditions.
Seaborne trade expanded by a healthy four percent in 2017, the fastest growth in five years, and UNCTAD forecasts similar growth this year, subject to Kituyi’s warning over trade and tariff wars: “Escalating protectionism and tit-for-tat tariff battles will potentially disrupt the global trading system which underpins demand for maritime transport.”
MYANMAR AT BOTTOM OF GLOBAL INDEX ON ILLICIT TRADE
The Transnational Alliance to Combat Illicit Trade (TRACIT) in October called for Myanmar to urgently step up efforts to fight illicit trade. Myanmar’s structural difficulties to effectively address illicit trade is evidenced in its very low score in the 2018 Global Illicit Trade Environment Index.
The index was produced by the Economist Intelligence Unit (EIU) and evaluates 84 countries on the extent they enable or prevent illicit trade. Myanmar ranks 82nd out of 84 countries evaluated, with an overall score of 23.0 (out of 100).
“This means that—apart from Iraq and Libya—Myanmar shows the poorest structural defense against illicit trade,” said TRACIT Director-General Jeffrey Hardy. “It also means we have a lot of work to do here, especially in the areas of illegal logging and mining, wildlife and human trafficking, spirits, beer and cigarette smuggling, and counterfeiting of all types of consumer goods.”
“We’re trying to solve illicit trade in all possible ways,” reported U Ko Lay, director of the Myanmar Ministry of Commerce. “But we need law and order first and that will pave the way for legal trade.”
COMMERCE UNDER SECRETARY SIGNS INDUSTRY COLLABORATION AGREEMENTS
Under Secretary of Commerce for International Trade Gilbert Kaplan met in Singapore with officials from the U.S. Chamber of Commerce, Singapore Business Federation (SBF) and Singapore Manufacturing Federation (SMF) in September to update and expand the Department of Commerce’s framework for U.S.-Singapore commercial collaboration.
The discussions were part of a broader trip that Kaplan led to India, Vietnam and Singapore to advance the U.S. government’s new Indo-Pacific Initiative by helping American companies navigate market challenges and by enhancing trade promotion efforts.
In his remarks, Kaplan emphasized that “our partnership with Singapore has been a great representation of the mutually beneficial outcomes we hope to accomplish throughout the broader Indo-Pacific region, especially with all of the gains we have seen since the United States and Singapore signed our bilateral free trade agreement 15 years ago. This includes the Commerce Department’s work with Singapore’s business organizations, who have been great friends and partners of the U.S. government and U.S. business community over the years.”
GPA APPROVES $92 MILLION RAIL EXPANSION
During a September meeting of the Georgia Ports Authority (GPA) board of directors in Atlanta, $92 million was approved for the Mason Mega Rail Terminal, a project that will double the Port of Savannah’s annual rail capacity to 1 million containers and deliver the largest on-terminal rail facility in North America by 2020.
“It is no accident the GPA is constructing rail capacity as the demand for rail is growing,” said GPA Board Chairman Jimmy Allgood. “As part of our strategic planning two years ago, our team identified the growing role intermodal cargo would play in GPA’s long-term success and put into place this plan for expansion.”
The GPA also announced it had moved 375,833 TEUs in August, an eight-percent increase over August 2017, while handling 86,200 intermodal TEUs represented a 33 percent jump.
PORT MANATEE, CARVER MARITIME INK LONG-TERM TERMINAL PACT
Port Manatee and Carver Maritime LLC in August entered a long-term marine terminal operating agreement for a 10-acre aggregate offloading facility at the Florida Gulf Coast port.
The Manatee County Port Authority-approved agreement lasts for as many as 20 years (including options) and ensures property lease payments totaling $1.8 million for the initial five-year term, in addition to wharfage payments for annual cargo throughputs.
“We, along with our customers, are excited about this opportunity, and very much look forward to a long and fruitful relationship with Port Manatee, as well as its tenants,” said Carver Laraway, president of Altamont, New York-based parent firm Carver Companies. “The projected growth of Central Florida and the business-friendly environment of Manatee County make us eager to call it home.”