Issue 74 | June 17, 2016
CMA CGM forms container terminal venture with PSA in Singapore
 
The world's biggest container terminal operator, PSA International Pte., just announced that it will form a venture with CMA CGM S.A. to operate four berths in Singapore to help drive more cargo traffic. The announcement comes after the French company's offer last December to buy Singapore's biggest container shipping line, Neptune Orient Lines Ltd., for 2.5 billion, and set up their Southeast Asian headquarters in Singapore.  Singapore is already building a new port in the eastern city of the country to increase its trade capacity and attract a growing number of large ships in the Asia-Europe trade lane. Singapore, the world's second-busiest container port, handled 12.5 million 20-foot boxes in the first five months of this year and the venture will help increase cargo volumes through Singapore. Read more.
 
Beyond trade concerns, Brexit poses questions over data rules 
 
If Britain votes to discontinue their European Union (EU) membership, travel and trade across the English Channel may become more difficult and there are also concerns that a Brexit might disrupt the sensitive data traffic that is an integral part of international businesses. Experts are already concerned about costly changes, in regards to changing storage sites for customer data, re-routing flows or rewriting documentation.  Brussels already forbids companies working within the EU to store the personal data of EU citizens on servers outside the bloc in any country other than 11 non-EU states.  Even American companies like Google and Facebook have not been able to outrun the European privacy law because they are not European companies. Read more.
 
Now Google backs everyone's favorite trade pact: The TTP 
 
Google has come out in favor of the controversial Trans-Pacific Partnership (TPP) trade agreement.  The web giant's general counsel Kent Walker noted that, "The TPP requires the 12 participating countries to allow cross-border transfers of information and prohibits them from requiring local storage of data. These provisions will support the Internet's open architecture and make it more difficult for TPP countries to block Internet sites." Both U.S. presidential candidates, Donald Trump and Hillary Clinton, have openly opposed the TTP agreement citing that it threatens jobs and wages in the United States.  Supporters argue that the TTP offers "balanced" copyright protections, the inability for governments to demand user access to encryption keys and a prohibition of customs duties on digital products. Read more.
 
ITC takes a new approach to TTP analysis 
 
Former U.S. International Trade Commission (ITC) chairman Daniel Pearson discusses the ITC's choice of using the dynamic computable general equilibrium (CGE) model to analyze TPP. This approach integrates different segments of the economy and provides a "mathematically sound" means to estimate future economic trends with the implementation of TPP. Rather than with the CGE model, Pearson's concerns lie with its critics. Pearson explains how it is unreasonable to expect that the ITC's predictions will completely align, and expresses his concern for the backlash from critics who do not fully understand the dynamic CGE model. Economic projections can never be perfect, but these models are sound in reasonably predicting what they can. The ITC's predictions should be properly communicated to the public, which could increase support of trade.  Read more.
 
Merkel says China market status resolvable
 
When China joined the World Trade Organization (WTO) in 2001, it accepted a non-market economy status until the end of 2016. Now China claims that the WTO promised to grant China market economy status at the end of this time period-a claim that many EU members protest. In response to persisting anger with China for undercutting foreign industries and protecting its own markets from foreign exports, German chancellor Angela Merkel stressed the need for China to level the playing field. Because European countries have presented themselves as open investment markets, China must reciprocate. China's premier, Li Keqiang, assured that the Chinese government is taking steps to allow foreign companies greater access to its domestic markets. If China follows through with its promises of transparency, disgruntled EU members may be swayed to grant China market economy status.  Read more
 
American drivers are fueling a wave of deals for ethanol makers
 
Ethanol makers are on the hunt for business deals due to the record demand for the biofuel, which has been caused by rising gasoline consumption in the United States. The producers are using the extra cash to improve production efficiency now that ethanol prices have rebounded and revenues are rising. Rather than building their own plants for big bucks, corporations are choosing to exchange ethanol mills and plants. For example, last Monday, Green Plains Inc. agreed to buy two plants from Spain's Abengoa SA, and two mills from the European company separately at nearly $350 million.  If the Green Plains deal goes through, it would replace Valero Energy Corp. as the third-biggest U.S. ethanol producer. These deals are allowing the ethanol industry to move away from a fragmented conglomerate of companies towards an efficient and cost-effective market.  Read more.
 
The Role of Mobile Devices in the Global Economy, August 17
 
Join the Council to hear from Jeffrey Cleveland, principal and chief economist of Payden & Rygel and his associate Siddarth Saravat as they provide an overview of the impact mobile technology will have in the global economy.
 Register Here.
Compiled by Global Interns Cassie Herminston-Boyd and Mohini Narasimham.

For more information, contact Jasmin Sakai-Gonzalez, 213.580.7569.