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GENEVA: A report by the World Trade Organization says the 2013 Bali Trade Facilitation Agreement (TFA) has the potential to reduce trade costs by 14.3 percent and increase global exports from US$750 billion to US$3.6 trillion, depending on the speed and extent of implementation.

The Trade Facilitation Agreement contains provisions for expediting the movement, release and clearance of goods, including goods in transit.

The report estimates the TFA could add up to 2.7 percent a year to world export growth and more than half a percent a year to world GDP growth over the next 15 years.

WTO TFAThe WTO modeling suggests developing countries' exports could increase by US$1.9 trillion (making up more than 53 percent of global trade expansion) and the TFA has the potential to add 0.9 percent annually to economic growth in developing countries.

The report estimates that if the TFA is fully implemented, developing countries will be able to diversify and increase the number of new export products by 20 per cent, enter new markets and sell a wider array of products.

The 2015 World Trade Report is the first detailed study of the TFA and its multilateral framework for reducing trade costs.

To date 51 WTO members have ratified the TFA. They include Pakistan, the former Yugoslav Republic of Macedonia, Hong Kong China, Singapore, the U.S., Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, and the European Union (on behalf of its 28 member states).

In a related move the UK is contributing £500,000 to help developing and least-developed countries implement the TFA. This is part of a broader £180 million commitment Britain has made to support trade facilitation in these countries, through bilateral, regional and multilateral programmes.

Julian Braithwaite, ambassador to the WTO commented: "The UK is a major 'Aid for Trade' donor, contributing over £1 billion a year to help developing and least-developed countries to trade regionally and internationally. Our support will contribute to improving coordination and coherence among the various agencies and programs helping WTO members implement the TFA."

SEATLLE, WA: U.S. Transportation secretary Anthony Foxx wants to solve America's infrastructure problems with the publication of a draft 'National Freight Strategic Plan'.

According to the Bureau of Transportation Statistics, freight shipments in September 2015 reached an all-time high and were 30.4 percent above the low of April 2009 at the beginning of the Great Recession.

"With an increasingly competitive and complex global marketplace and a deteriorating transportation infrastructure that is unfortunately showing the effects of age and underinvestment, the need for us to have a national freight plan could not be more urgent," said Foxx.

drone deliveryFoxx has also announced a task force to recommend by November 20 a registration process for drones (Unmanned Aircraft Systems). The group will comprise representatives from the manned and unmanned aviation industries, the federal government and other stakeholders.

"Registering unmanned aircraft will help build a culture of accountability and responsibility, especially with new users who have no experience operating in the U.S. aviation system," Foxx said. "It will help protect public safety in the air and on the ground."

With Wal-Mart planning to introduce delivery by drone, the next 30 years with see the population of the U.S. grow by 70 million people, and freight traffic increase 42 percent by 2040.

To cope with this expansion, the Foxx freight plan wants the 'Grow America' Act to provide US$18 billion over six years through two dedicated, multimodal freight grant programs.

Other proposals include identifying major trade gateways and multimodal national freight networks to help planners and private sector stakeholders; and the facilitation of multijurisdictional and multimodal collaboration with port authorities, private sector stakeholders and agencies in Canada and Mexico.

Foxx also wants the Department of Transport (DoT) to develop and deploy more advanced freight data resources and promote the measurement and analysis of transit times for different commodities "from a multimodal, origin-to-destination perspective".

The DoT will also support the adoption of new technologies including autonomous vehicles to allow safer and more reliable freight transportation and provide support for the next generation freight workforce as part of president Obama's 'Ladders of Opportunity' initiative.

WASHINGTON DC: President Obama says 81 companies have now signed the American Business Act on Climate Pledge, a commitment to reduce emissions, increase low-carbon investments and deploy more clean energy.

The group, which doesn't include Exxon-Mobil or Chevron but does include General Motors, Google, Microsoft, Wal-Mart and Berkshire Hathaway, employs over nine million people, represents more than US$3 trillion in annual revenue, and has a combined market capitalization of over US$5 trillion.

global warmingIn July this year, UPS joined with 12 other companies to launch the Obama initiative that has since been criticized by Congressional Republicans as damaging to U.S. competitiveness.

Together with the 80 other companies, the US$58 billion logistics provider obviously doesn't agree: "UPS understands that the scope of tomorrow's sustainability challenges requires us to adapt and innovate if we are to deliver more goods for our customers while increasing the efficiency of the transportation fleet," said Rhonda Clark, head of Sustainability and vice president, Environmental Affairs who added: "Once individuals as well as businesses understand the value proposition, sustainability will become a way of life."

The American Business Act commits the signatories to reduce emissions by 50 percent; reduce water usage by 80 percent; achieve zero waste-to-landfill; purchase 100 percent renewable energy; and pursue zero net deforestation in supply chains.

If fully implemented, Obama's climate action plan would reduce carbon pollution by nearly six billion tons through 2030, an amount equivalent to removing all cars from U.S. roads for four years, while his clean power initiative would reduce energy sector emissions 32 percent by 2030.

To date, 150 countries representing more than 85 percent of global carbon emissions have reported post-2020 climate policies to the U.N. including the U.S., China, the European Union and India.

However a report released simultaneously by 18 major civil society groups says many of these countries have adopted a "bottom-up" pledge approach which, they claim, will not keep temperatures below 2°C, much less 1.5°C, above pre-industrial levels: "Even if all countries meet their [proposed] commitments, the world is likely to warm by a devastating 3°C or more, with a significant likelihood of tipping the global climate system into catastrophic runaway warming," it warns.

The group, which includes WWF International, Oxfam and the International Trade Union Confederation declared: "Countries urgently need to implement bold and visionary plans for a just transition to low-carbon economies.

"Plans must cut across all sectors of society, and support workers and communities dependent on sectors that will need to change in order to decarbonize. Such action must include phasing out dirty energy - with developed countries doing so furthest and fastest - and redirecting finance to renewable energy," they added.

European Commssion flagsBRUSSELS: The European Commission (EC) is to invest almost €16 billion in research and innovation in the next two years in a bid to stimulate job growth. The program will include €670 million to develop Sustainability via the circular economy.

Speaking in Scotland in early October, the Commission's director of Green Economy Kęsţutis Sadauskas said the long-awaited 'Circular Economy Package' will be released on December 02. 

Additional EC research funding by 2017 will include €1 billion to support the modernization of Europe's manufacturing sector; €100 million for technologies and standards for automatic driving; €740 million for research and innovation activities in nearly 2,000 SMEs; the 'Internet of Things' will get a further €139 million; and €232 million will be allocated for Smart and Sustainable Cities to better integrate environmental, transport, energy and digital networks.

In light of the current migrant crisis, the Commission has assigned €8 million for research on the security of EU's external borders to help identify and prevent human trafficking and smuggling; €27 million for the new technologies to help prevent crime and terrorism and €15 million for research into the origin and impact of migration flows in Europe.

Carlos Moedas, commissioner for Research, Science and Innovation said: "Research and innovation are the engines of Europe's progress and vital to addressing today's new pressing challenges like immigration, climate change, clean energy and healthy societies. Over the next two years, €16 billion will support Europe's top scientific efforts, making the difference to citizens' lives."

The Commission says €77 billion over seven years is being invested in partnerships with the pharmaceutical, aerospace, car and electronics industries in support of future growth and high-skilled job creation.

NEW YORK: A new report on the economic effect of climate change says up to US$68.7 billion of existing coastal property across 11 Southeast U.S. states plus Texas will be below sea level by 2050 – with US$23 billion worth in Florida alone.

Rising sea levels will also damage critical infrastructure, including water supply, energy, and transportation systems says a latest study from the Risky Business project – underwritten by several former U.S. Treasury secretaries and ex-New York mayor Michael Bloomberg.

The Risky Business report 'Come Heat and High Water' warns this region—already one of the hottest and most weather- vulnerable of the country—is facing the economic equivalent of terminal heat stroke.

charlotte-airportLead author Fiona Kinniburgh says Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina (Charlotte airport, right), South Carolina, Tennessee and Virginia, as well as Texas to the west, have experienced a major manufacturing boom.

In 2013, manufacturing contributed US$2.1 trillion to the U.S. economy - more than 12 percent of GDP - and accounted for 88 percent of all U.S. exports, a 51 percent increase from declines during the last recession. So this region's economic vitality makes it one of the most productive parts of the United States according to Kinniburgh.

However with summer temperatures forecast to average 90 Fahrenheit by the end of the century, the report predicts the Southeastern U.S. and Texas will experience "significant drops in agricultural yield and labor productivity", along with increased sea level rise, higher energy demand, and rising mortality rates.

Meanwhile, residents and businesses will be affected by higher heat-related mortality, increased electricity demand, rising energy costs and declines in labor productivity – all factors threatening the manufacturing base that is driving the regional economy.

And in some cities, such as Miami and New Orleans, sea level rise will put significant amounts of existing coastal property at risk notes Kinniburgh.

"Risky Business is waving a warning flag over the now healthy economies of America's Southeastern states," added Amy Davidsen, US executive director of The Climate Group. "Extreme weather events worsened by runaway climate change will seriously impact local businesses, not only because their energy demand will skyrocket but also because agricultural yield and labor productivity will be at much greater risk of decline."

LONDON: With profound implications for the global shipping industry, governor of the Bank of England Mark Carney has acknowledged that restricting the rise in global temperatures to two degrees above pre-industrial levels would require up to 33 percent of the world's proven reserves of oil and gas to remain unused.

The subsequent permanent loss of income to bulk carrier operators would also mean "potentially huge" exposure to UK investors as 19 percent of FTSE 100 companies are in natural resource and extraction sectors, and a further 11 percent are in power utilities, chemicals, construction and industrial goods sectors.

Currently, the two investment tiers account for a third of equity and fixed income assets.

"Our societies face a series of profound environmental and social challenges. The combination of the weight of scientific evidence and the dynamics of the financial system suggest that, in the fullness of time, climate change will threaten financial resilience and longer-term prosperity," said Carney, adding that while there is still time to act "the window of opportunity is finite and shrinking".

sustainability is everybodys businessSpeaking to a group of insurance underwriters, Carney pointed out that many of the [climate] changes since the 1950s are without precedent: "Research tells us with a high degree of confidence that in the Northern Hemisphere the last 30 years have been the warmest since Anglo-Saxon times; indeed, eight of the ten warmest years on record in the UK have occurred since 2002; atmospheric concentrations of greenhouse gases are at levels not seen in 800,000 years; and the rate of sea level rise is quicker now than at any time over the last two millennia."

Inflation-adjusted insurance losses from climate change have increased from US$10 billion a year in the 1980s to around US$50bn over the past decade. Lloyd's of London estimates that the 20cm rise in sea level at the tip of Manhattan since the 1950s increased insured losses from Superstorm Sandy by 30 percent in New York alone.

The UK insurance sector manages almost £2 trillion in assets to match liabilities that often span decades. Carney explained that while a specific flood or storm might not directly affect a company's bond value, policy action to promote the transition towards a low-carbon economy could spark a fundamental reassessment.

"Financing the de-carbonization of our economy is a major opportunity for insurers as long-term investors. It implies a sweeping reallocation of resources and a technological revolution, with investment in long-term infrastructure assets at roughly quadruple the present rate. For this to happen, 'green' finance cannot conceivably remain a niche interest over the medium term," he added.

Echoing Carney's comments Bank of America, Citi, JPMorgan Chase, Morgan Stanley, Wells Fargo and Goldman Sachs said in a joint statement that they want governments to reach a strong global climate agreement in December in order to migrate to a low-carbon economy.

"Policy frameworks that recognize the costs of carbon are among many important instruments needed to provide greater market certainty, accelerate investment, drive innovation in low carbon energy, and create jobs," said the banks.

"Over the next 15 years, an estimated US$90 trillion will need to be invested in urban infrastructure and energy. The right policy frameworks can help unlock the incremental public and private capital needed to ensure this infrastructure is sustainable and resilient," they declared.

Carney added that with better information, insurers and investors could indeed "build a virtuous circle of better understanding of tomorrow's risks, better pricing for investors, better decisions by policymakers, and a smoother transition to a lower-carbon economy".

DOHA: The Qatar government has announced plans to build a massive 6.3 square kilometer logistics and industrial park in southern Qatar.

Prime Minister Sheikh Abdullah bin Nasser bin Khalifa Al-Thani said the project is aimed at making the country a regional hub for investment and logistics, reducing reliance on hydrocarbon income, and encouraging private sector commercial involvement.

The development will provide over 1,500 plots of land in South Wakra, Birkat Al Awamer and Aba Saleel - areas close to Hamad Port, the Mesaieed Industrial City and the country's Orbital Highway.

Logistics park QatarSheikh Abdullah said his government is committed to the development and diversification of the Qatari economy via major private and public sector projects. He added that the country's southern region would lead the strategy and "change the map of investments in the State of Qatar".

According to the country's official news agency, the logistics park will include refrigerated facilities for frozen and dry stores; showrooms, shops, commercial offices and labor camps; workshops for the maintenance and storage of cars; assembly and processing workshops for light industry; service centers and warehousing.

Minister of Economy and Commerce Sheikh Ahmed bin Jassim bin Mohammed Al Thani explained that small investors were at the heart of the new enterprise and have been allocated nearly two-thirds of the total land available.

The government has not announced a completion date for the project.

In related news, Qatar Airways Cargo will operate a Boeing-converted 747-400 freighter from August 01 for two months prior to the acquisition in October of a B747-400F with a nose-loading door.

Airline cargo head Ulrich Ogiermann commented: "Qatar Airways Cargo is experiencing increased worldwide demand for quality charter services as well as growing local demand with significant infrastructure projects under way in Qatar that require outsized cargo capacity. The addition of the B747 freighter will also provide greater flexibility to our global network by supplementing our existing scheduled services as and when required."

WASHINGTON, DC: The U.S. Postal Services (USPS) and Cainiao, Alibaba's logistics affiliate, are to develop enhanced shipping solutions for merchandise ordered by U.S. consumers on Alibaba's international online shopping platforms.

The move follows similar agreements with Singapore Post and Spanish Post.

In addition to helping provide more efficient shipping channels into the U.S. for Chinese merchants and manufacturers selling on Alibaba's AliExpress global-shopping website, the USPS will also work with Cainiao to expand its worldwide shipping capabilities, especially in South America.

A report by Accenture and AliResearch, Alibaba's research arm, expects the global B2C cross-border e-commerce market to grow from US$230 billion last year to US$1 trillion by 2020.

USPS internationalCainiao vice president Wan Lin called the agreement with the USPS "a key part of Alibaba's globalization strategy and our vision to enable consumers around the world to enjoy the convenience and benefits of e-commerce."

Cainiao and the USPS said they are aiming to make it easier and more efficient for Chinese companies to sell and deliver goods directly to the homes of U.S. consumers by improving the way goods purchased from China are processed and handled during international shipping.

Commenting on the U.S. and China economies Alibaba executive chairman Jack Ma said: "In the U.S. when [the] economy is slowing down it means people don't have money to spend," he said. "You guys know how to spend tomorrow's money or future money or other people's money.

"China's been poor for so many years, we put our money in the bank" – adding that debt-free Chinese consumers still have spending power: "The consumption is still going up healthily and aggressively," Ma explained, noting online spending remains strong. "We have to build up this kind of behavior and make people spend money," he declared. "This is something government is not good at."

Ma said that China's economic transition is creating a better environment for start-ups and private companies like Alibaba while an anti-corruption drive is improving the rule of law in the country. "We see traditional businesses going down but the new economy is growing tremendously."

He noted that while government policy can be effective in stimulating exports and investment, "consumption is not done by government, it's done by entrepreneurship and the market economy. So we have a great opportunity. Now it's our turn, not the government's turn," he declared.

WASHINGTON, DC: According to the World Bank, companies and individuals connected to former Tunisian president Zine El Abidine Ben Ali avoided paying US$1.2 billion in import duties between 2002 and 2009.

Ben Ali (right) fled to Saudi Arabia with family members and a reported US$50 million in gold after a bloodless coup in 2011.

In March this year, Tunisia applied to join the Geneva prosecutor's money-laundering case against HSBC's Swiss unit in a bid to recover a reported US$161 million from Ben Ali and his relatives.

The new World Bank study on Tunisian trade practices identifies tariff gaps by comparing data on exports from its trade partners with the value of imports reported by the country's Customs authority.

ben-ali-tunisiaThe declared value of imports by Ben Ali-connected firms was found to be 18 percent higher than average firms, with declared quantities of imports 21 percent higher, but reported unit prices were found to be on average 4.8 percent lower.

For imported goods subject to high tariffs, the reported prices were even lower at 8.1 percent. The bank says this type of underreporting allowed regime-connected companies and individuals to evade US$217 million in taxes in 2009 alone.

According to the report, "Tunisian Customs authorities are considered among the most corrupted of all government institutions by Tunisian citizens and companies. [And] while the Tunisian Customs code is consistent with best practices defined by the World Customs Organization, its implementation is discretionary."

Eileen Murray, World Bank country manager for Tunisia, said the avoidance of import duties by business associates of Ben Ali undermined competition and allowed wealthier, politically connected elites to amass greater profits by paying lower import duties.

"The fiscal losses we calculated are based strictly on the underreporting of prices, and do not factor in other forms of tax fraud such as underreporting the quantity of imports, or the bypassing of Customs entirely through smuggling," said Bob Rijkers, World Bank economist and lead author of the report.

Despite a 16.2 percent drop in tariff evasion since 2011 on products associated with the former regime, there has been a 5.7 percent rise in tariff evasion in other products: "The revolution has led to a decline in price underreporting by previously connected firms, but this has been coupled with a rise in tariff evasion among ordinary firms and an increase in informal trade," added Rijkers.

With help from the World Bank, Murray said Tunisia's finance ministry now wants to simplify import reporting procedures in a bid to boost exports and reduce opportunities for fraud.

lucentisALEXANDRIA, VA: The U.S. Department of Justice has fined two Canadian sellers a total of US$95 million for a multi-year conspiracy to smuggle and distribute misbranded prescription pharmaceuticals into the U.S.

SB Medical Inc. and TC Medical Group based in Toronto, Canada and St. Michael, Barbados, were fined US$45 million and required to forfeit another US$30 million for smuggling orthopedic injections, rheumatology infusions, cosmetic devices, optomology products and oncology drugs using break-bulk and drop shipping.

Between 2011 and 2014, the two companies received over $33 million from selling misbranded prescription pharmaceuticals to U.S. doctors and clinics. In May this year they pleaded guilty to sourcing non-FDA approved drugs including Lucentis, Mabthera, Botox, Dysport, Euflexxa, Remicade, Restylane, Synvisc, Prolia, Orencia, Orthovisc from India, Turkey, France and Italy.

To smuggle the drugs across the U.S. border from Canada, large shipments were broken down into multiple small consignments and then sent via the U.S. Postal Service to drop shipper addresses in Maryland, New Jersey and Florida under different false names over several days with false Customs declarations.

On arrival the shippers stored the drugs in the basements of their homes and after removing all the original labeling, re-shipped the products to doctors and clinics throughout the country with a U.S-based return address.

MUMBAI: India's finance minister Jayant Sinha says the government's proposed goods and services tax (GST), expected to come into force next year, will improve the country's logistics industry by removing long lines of trucks at state borders.

India's Crisil Research calculates that companies can expect the logistics costs of non-bulk inter-state commerce to drop by 20 percent once borders checkpoints are removed.

India GSTThe advisory and rating organization thinks the savings will come from the complete phasing out of the country's Central Sales Tax (CST) - currently paid on the inter-state movement of goods - the consolidation of warehouse space, and the faster transit of goods, since local taxes will be replaced by GST.

To get states to support the replacement of CST with GST, the government has proposed allowing them to levy an additional tax of one percent on goods in lieu of CST for two years. Crisil says this will have the effect of reducing the benefits of GST and delay the dismantling of the checkpoints.

Crisil estimates up to a quarter of the total transit time for a delivery is spent at check-posts and city entry points which add to the cost of transporting goods and forces companies to maintain buffer inventories in local markets.

Prasad Koparkar, a senior director of Crisil Research said: "Manufacturers of non-bulk goods spend about 5-8.0 percent of sales on logistics. GST will save warehousing costs of 1.0-1.5 percent of sales in three to four years. Eliminating check-post delays will yield additional savings of 0.4-0.8 percent, thus taking overall savings to 1.5-2.0 percent of sales.

"But this will be gradual and back-ended as companies will have to realign supply chains while ensuring minimum business disruption. For example, pharmaceutical companies will have to consider their network of carrying & forwarding agents, the need to store products at controlled temperature, and timely delivery to retailers when taking decisions," he added.

India's federal government sees GST as a key to creating a common market throughout the country by replacing indirect taxes levied by state governments that currently include excise duty, service tax, VAT and sales tax.

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