Tuesday, September 30, 2008

September 22, 2008 Shipping Digest Online

U.S. exports of manufactured goods in July were up 22 percent over July 2007, bringing the total for the first seven months of the year to $669 billion, a 16 percent increase over the same period last year, according to Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.

Manufactured imports rose 8 percent in July and are up 7 percent for the year. The $933 billion import tab resulted in a $264 billion deficit, 15 percent lower than in the first seven months of 2007.

The surplus with U.S. partners in the North American Free Trade Agreement and other free-trade partners totaled $8.1 billion in the first seven months of the year, for an annual rate of $14 billion, Vargo said.

“Many people have been led to believe we have a terrible trade position with our FTA partners and are unaware that our manufactured goods trade with them is in surplus,” Vargo said. “And that’s a shame, because if they knew, they would join the NAM in asking Congress to pass the remaining FTAs so we could have our exports increase even more. The lesson is clear – free-trade agreements are the solution, not the problem.”

Monday, September 29, 2008

Costa Rica seeks more time – again – on CAFTA
By Gillian Gillers Tico Times Staff ggillers@ticotimes.net

For the second time, Costa Rica is seeking to extend its deadline for entering the Central American Free-Trade Agreement with the United States (CAFTA).

Vice President Laura Chinchilla met with Peter Brennan, the chargé d'affaires at the U.S. Embassy, on Friday to request more time to enter the pact, according to the daily La Nación.
Chinchilla said the country would miss its Oct. 1 deadline after the Supreme Court on Thursday struck down an intellectual property law designed to put Costa Rica in compliance with CAFTA.
“We are convinced – and this is the message that we want to give Costa Ricans – that we will still be able to enter CAFTA,” Chinchilla said at an Thursday night. She then turned to a soccer metaphor: “In the last few minutes of the game, we have been dealt a yellow card. We don't think it's a red card.”

The Constitutional Chamber of the Supreme Court (Sala IV) found that lawmakers had failed to consult indigenous groups when debating the bill, as required under a 1989 United Nations convention. Lawmakers must now fix their error and pass the bill again.

The proposal was the last of 13 bills required for Costa Rica to enter CAFTA, which was ratified in a national referendum last October. After lawmakers missed a Feb. 29 deadline for passing the bills, Costa Rica's trading partners granted the country a seven-month extension.
Chinchilla said the administration will decide how much more time to request once the Sala IV releases its full ruling. The other CAFTA signers – the United States, Guatemala, El Salvador, Honduras, Nicaragua and the Dominican Republic – have all entered the treaty.

Tuesday, September 09, 2008

Latin America on Target to set more records

We, at Dixie Cullen, have seen a large increase in the volumne of equipment and material coming through our warehouse facility for export packing bound for Latin America.


Rapid economic growth spurs demands for U.S. importsSoaring energy and food prices, the worst housing slump since the Great Depression, a credit crisis, job cuts: It all may be enough to tip the U.S. into recession this year, if we aren’t already there. But the “flu” in the world’s biggest economy is causing little more than the sniffles in Latin America, where growth remains strong and a weak dollar is driving trade between the U.S. and South America.

With Latin American banks having little or no exposure to the U.S. credit crunch, and with the region’s strong domestic currencies, a China-driven commodities boom, high foreign investment levels and fiscal discipline, trade is robust — despite soaring oil prices, rising freight costs and Latin America’s congested ports.

“We haven’t seen impact from the U.S. slowdown,” said Alvaro Espinosa, general manager at the Port of San Antonio, Chile, which sends 16 percent of its exports to the U.S. and where U.S. imports represent 25 percent of all imports. “In the first five months of this year, we’ve seen a 15 percent increase in container shipments, so at least at the first reading, there is no talk of a U.S. recession here.”

Such optimism may be dampened in the coming months if the relentless increases in oil prices continue and as U.S. manufacturing activity falls. Consumer spending is weakening now that the fiscal stimulus checks have mostly been spent.

Overall U.S.-South American trade is nevertheless growing at historic levels, with Chile and Peru benefiting from free-trade deals. U.S. exports to Central and South America reached a record $107.5 billion in 2007, and imports hit a record $134.8 billion, according to the U.S. Census Bureau. Those records will probably be smashed this year. U.S. exports in the first six months of the year totaled $66.8 billion, while imports totaled $80 billion.

Despite the slowing U.S. economy and world oil prices, exports to Central and South America in June were a record $12.9 billion, compared with $8.7 billion in June 2007. Imports totaled $15.7 billion, compared with $10.7 billion in June of last year.

Brazil is enjoying a boom time as its middle class swells and the country enjoys an unprecedented stretch of economic growth coupled with low inflation and a strong currency. Foreign investment doubled to $35 billion last year, the economy grew 5.4 percent, and trade with the U.S. totaled $50 billion. The economy is set to grow 4.5 percent this year.

“The stronger buying power of Latin American currencies, particularly the Brazilian real, and the abundance of petro-dollars in Venezuela have generated a significant increase in export liftings compared to a year ago,” said Frank Larkin, senior vice president at Hamburg Sud North America, the U.S. subsidiary of the German shipping line Hamburg Sud.

Soaring economic growth in Argentina, Peru and Venezuela is also spurring demand for U.S. imports in those countries.

Despite the bitter anti-U.S. rhetoric of President Hugo Chavez, Venezuela is increasingly dependent on U.S. imports and, as the government nationalizes large chunks of the economy, its exports beyond oil are few.

“The downside of that shift is the need to continually reposition empty boxes,” Larkin said. “On the export side, the Venezuelan container market, for example, is virtually all inbound, and those boxes, once emptied, must then be repositioned to match up with export opportunities in other markets.”

Changes to customs laws in Brazil and Colombia this year also have made life difficult for shippers. Both countries now require cargo heading for their ports to be documented 48 hours prior to the vessel’s first Brazilian port call. Failure to do so can mean cargo confiscation or denial of berthing.

“These new mandates are very rigid and unfortunately conflict with the realities of modern just-in-time shipping,” Larkin said. “If manifest information is submitted to (Brazil’s) Siscomex Carga and then changes or additions need to be made, fines of $3,000 per incident can be imposed and cargo delivery can be further delayed.”

Such measures have increased costs for shippers having to rehandle and work export documents, Larkin said.