► Handled with tact, FTAs can do what WTO can’t

China and New Zealand signed a free trade agreement (FTA) covering trade in goods and services as well as investment, making it the first FTA reached by China with a developed country. During his visit to China last week, Kevin Rudd, Australian Prime Minister, said that Australia and China would reopen their FTA negotiations soon. After the 10th round of FTA negotiations between China and Australia ended in October last year, the two sides had not started the 11th round which was originally scheduled in the first half of 2008.  (Bilaterals.Org)

► A closer look at global economic shocks 

The outlook of the global economy has evidently shifted from uncertainty towards vulnerability, which is making the front-page news; and was hotly debated at the Davos meeting of political and business leaders. The annual World Economic Forum, in Davos, Switzerland, aims to explore the vulnerability of the global economy in 2008 from the perspective of both developed and developing nations. Will the US economy continue going downhill? If so, to what extent will it affect the global economy? In so far as the influence of the US economy on the world goes, one expression says it best: If the US sneezes, the global economy will catch cold.  (English People’s Daily,  China)

► Financial tsunami and food scarcity

The world is getting a foretaste of an economic avalanche of massive proportions, the like of which has never been witnessed in recorded history. The present turbulence is just a forewarning of a mighty tsunami that is going to engulf the entire globe, and there is little the economic planners and money managers can do to avert the disaster that is irrevocably going to strike every corner of the world. Spearheaded by oil, gold, food and commodities' price surges, US recession, and falling value of US dollars as well as all currencies tied to the USD, the shock waves building up are already fanning runaway inflation.  (Business Recorder,  Pakistan)

► Nath stresses flexibility for successful GSTP talks

India today said developing countries need to show flexibility to iron out differences and conclude the ongoing negotiations under Global System of Trade Preferences, which aims to promote South-South trade.  "GSTP as an agreement among developing countries is an important instrument to promote South-South trade. On the present stalemate I would suggest that we all need to show some flexibility to accommodate the concerns of other participating states," an official release here quoted Commerce and Industry Minister Kamal Nath as saying.  The developing countries have not been able to achieve consensus on issues such as market access and value addition.  (Economic Times,  India)

► G-8: India holds consultations with outreach countries

India and four other "outreach countries" on Monday held consultations to formulate their stand on key issues pertaining to economic, trade and climate change ahead of the G-8 meeting in Japan in July.  Foreign Secretary Shivshankar Menon attended a preparatory meeting in this regard here.  Besides India, top officials from host China, Brazil, Mexico and South Africa participated in the meeting, a multilateral consultation on economic and trade issues and climate change, among others, that the major developing nations plan to take up at the G-8 meeting to be held at Japan's northern island of Hokkaido Tayako.  (Economic Times,  India)

► Helping the poor? Provide safety ropes, not nets

We were at an international conference on poverty alleviation held in an East Asian country. The conference had been attended by experts and practitioners from all throughout the globe. The discussion centred on how to help the poor to cross the poverty line in a sustainable manner. “Poor people should be helped to start their own micro businesses to earn an income that would be sufficient to meet their basic requirements. Then, they would cross the poverty line. But, after the support is withdrawn, if their income falls back to the previous level, then, there is no sustainability.  (Sunday Times,  Sri Lanka)

► Pakistan and Sri Lanka to expand the scope of free trade agreement

Following the successful talks between President Mahinda Rajapaksa and Pakistani President Pervez Mushrraff in China the bilateral trade between the two South Asia countries will be greatly expanded, Pakistani officials said. The two presidents met with their respective Foreign and Trade Ministers in high level talk on the sidelines of Boao Forum in the Southernmost Chinese city of Hainan last week. After the People’s Republic of China Sri Lanka is the second country with which Pakistan has signed a Free Trade Agreement.  (Bilaterals.Org)

► India bridges gap with ASEAN on trade pact

Having resolved differences with all Asean members but Indonesia, India hopes to achieve a breakthrough on the market-opening trade pact with the south-east Asian trading bloc by August. “The India-Asean agreement is likely to be concluded by August. We have no problems with nine of the Asean countries. It is only with Indonesia that some issues remain unresolved,” a commerce ministry official said. Indonesia has not come up with a response matching India’s offer in the much-delayed Comprehensive Economic Cooperation Agreement. “Once we resolve the differences, we (will) have a deal,” he said.  (Economic Times,  India)

► Indo-Arab trade flourishes as economies grow

The growth in both the Arab and Indian economies has driven a huge interest in cross-border investments with Foreign Institutional investors (FIIs) and private equity players from Arab countries actively looking at investing in India under various industry segments and equity markets.  Similarly, Indian companies are also gearing up to explore opportunities in the Arab world be it infrastructure, education or food retailing, according to a knowledge paper released by KPMG during an investment projects conclave, organized by FICCI and Indo-Arab Economic Forum.  According to Richard Rekhy, Chief Operating Officer, KPMG India.  (Economic Times,  India)

► Indo-Swiss bilateral trade may grow by 10 pc

Ambassador of Switzerland to India Dominique Dreyer on Tuesday said that the bilateral trade between India and Switzerland might grow by 10 per cent in the current financial year, even as swiss companies are quite keen on expanding their presence in banking, pharmaceuticals and biotechnology sectors of India. "This year we are hoping the bilateral trade between India and Switzerland may grow by 10 per cent in this year," Dreyer told media persons here today. He was here to participate in an interactive session on 'INDO-SWISS Bilateral Trade Relations'.  (Economic Times,  India)

► Pakistan, China discuss Transit Trade Agreement, expand scope of FTA

Pakistan and China have made substantial progress towards entering a Transit Trade Agreement, expanding the scope of Free Trade Agreement, besides identifying new areas of cooperation to further strengthen their multi-faceted ties. The President who is on a six-day visit to China to hold wide-ranging talks with its leaders made significant headway on a host of issues during the several rounds of talks with the Chinese leaders including President Hu Jintao and Premier Wen Jiabao. President Pervez Musharraf who arrived here in China’s capital after attending the annual Boao Forum for Asia and holding talks with President Hu Jintao at Sanya.  (Bilaterals.Org)

► 'Pakistan can increase its exports to India through Sri Lanka'

Pakistan has good opportunity to increase its export to India through Sri Lanka by exploiting the Free Trade Agreement (FTA) between Sri Lanka and India, said Consul General of Sri Lanka, V.S. Sidath Kumar here on Monday.Addressing members of Karachi Chamber of Commerce and Industry's (KCCI) sub committee on diplomatic affairs, he said that FTA between India and Sri Lanka includes 2004 items.  (Business Recorder,  Pakistan)

► 'India's direct trade volume with Pakistan amounts to $2 billion'

Major reforms in infrastructure, education, business climate and efficiency in public sector expenditure in India have been instrumental to a great extent, in raising potential output growth. This was the crux of special lecture on "Economic Reforms and India's economic performance" by Dr Rajiv Kumar, Director and Chief Executive, Indian Council for Research on International Economic Relations (ICRIER) at a local hotel here on Wednesday. The trade volume with Pakistan directly amounts to 2 billion dollar but via other routes such as Dubai.  (Business Recorder,  Pakistan)

► Chile moots FTA, India apprehensive

Chile on Tuesday offered a platform for India to access Latin American markets but New Delhi appeared not forthcoming on a bilateral Free Trade Agreement (FTA). "Chile can be a platform for India in Latin America as we have all the necessary required infrastructure — roads, ports, buildings, telecommunication — for operating business into the entire Latin America," Chilean President Michelle Bachelet she said after hosting a ceremonial welcome to President Pratibha Patil at the imposing La Moneda palace.  (Bilaterals.Org)

► India needs to catch up economically with China but gap growing 

India needs to catch up economically with China but the gap now is growing rather than shrinking, Indian Finance Minister P Chidambaram said in an interview published today. "We want to catch up with China but that requires greater political consensus on the needed (economic) reforms," he told the Wall Street Journal.  India is governed by an unruly minority Congress party-led coalition propped up in parliament by communist parties which strongly oppose liberalisation that economists say would boost growth.  China's one-party government can be quicker in spurring growth, Chidambaram said, adding "the distance between India and China is in fact increasing, not reducing because China's growth rate is faster."   (The Financial Express,  Bangladesh)

► Bhutan may no longer be 'dumping ground' for inferior goods 

With Bhutanese markets being allegedly flooded with spurious products from India, the Himalayan country will soon adopt a bill to maintain quality products and services at economic rates. The department of trade has come up with a draft copy of the consumer protection bill that should provide some kind of recourse to Bhutanese consumers, the state media reported. The bill will soon be presented for adoption when the new parliament session is convened. "The bill is an adaptation of best practices worldwide and it has UN guidelines of consumer protection.  (Economic Times,  India)

► Bangladesh: Plugging import loopholes                                                                                                            

A section of unscrupulous importers do very often indulge in under- or over-invoicing either to evade tax or transfer funds abroad. Though there is no authentic estimate of the amount involved in such malpractices, revenue evaded through under-invoicing or funds transferred abroad through over-invoicing is thought to be sizeable. In the eighties and the early part of the nineties, the rate of under-invoicing by the importers was very high mainly because of higher rate of duty. But such malpractice has been on the decline because of a sizeable cut in import tariffs under the ongoing trade deregulation process. Moreover, by the courtesy of the information technology, it has become really easy for the agencies concerned to detect any wrongdoing by importers concealing facts or concocting information.  (The Financial Express,  Bangladesh)     

► Lankan Economy – Up, down or flat?                                                                                                     

In recent weeks, the debate over the state of the economy has been growing and in certain cases turned into a personal battle between sections of the Central Bank and some economists. The pros and cons of money printing, inflation and food prices have been discussed at unprecedented levels. While economists generally have different schools of thought and in most cases no two economists will think alike, in this case inflation hitting the 20 percent and over level has seen many economists taking a common stand. On the money printing issue, the main debates have been between economist Harsha de Silva and the Central Bank while an economics teacher from the Colombo University, Sirimal Abeyratne seems to agree with both points of view based on different economic theory.  (Sunday Times,  Sri Lanka)                                                             

 ►  Air South Asia eyes the Maldives’ market

Air South Asia (formally Holiday Air), while awaiting a launch date for the airline by the government in order to do the ground work for the Air Operating Certificate (AOC), is looking at Maldives to start operations there. “We are waiting Ministry of Aviation approval for an operational start date," Arjun Ruzaik, CEO Air South Asia told The Sunday Times FT. Parakrama Dissanayake, Director General CAA said the CAA has recommended to the Ministry for Air South Asia to be given approval to start work on the AOC. "We gave them the greenlight or provisional approval to start work to establish the airline in December, 2005.  (Sunday Times,  Sri Lanka)

► Delay in TAPI project doubled its cost: ADB

The Asian Development Bank (ADB) has warned that the delay in the materialisation of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline has escalated the cost of the project from $3.3 billion to $7 billion, well-placed source told Daily Times on Wednesday. The country director of Asian Development Bank, Peter L Feden, during the two-day meeting of steering committee on TAPI that started on Wednesday, warned all stake holders of the TAPI gas pipeline project that further delay in the implementation of the project would cause further escalation in the cost of the project.  (Daily Times,  Pakistan)

► Era of cheap food over: ADB     

The era of cheap food is over, an Asian Development Bank (ADB) official said today. Rajat Nag, the ADB's managing director general, said a variety of factors have contributed to soaring food prices which, even if they ease, will not return to the lower levels which the world became used to. "We just have to accept the era of cheap food is over," Nag told the Foreign Correspondents' Association. The ADB last week said soaring food prices have hampered Asia's fight against poverty and some countries may need foreign aid to feed their hungry millions.  (The Financial Express,  Bangladesh)

► Bangladesh faces biggest impact on BoP due to soaring food bill: IMF 

Bangladesh economy would slow down to 5.0-5.5 per cent this fiscal as a huge food import bill coupled with slide in export saw the country facing the 'biggest' impact on its balance of payment, the IMF said Tuesday. The International Monetary Fund (IMF) said the twin disasters of floods and cyclone has damaged some 3.7 per cent of the country's GDP, exacerbating already slowing growth and increasing food prices. The staff estimates that "without additional balance of payments supports, international reserves would be depleted below three months of import coverage by end June 2008."  (The Financial Express,  Bangladesh)