Issue 12 | December 2, 2011

Thank you for reading our Trade Intelligence Briefs in 2011. The next issue will be released in January 2012.

South Korea ratifies U.S.-Korea Free Trade Agreement
The Korean parliament passed the U.S.-Korea Free Trade Agreement (KORUS FTA)  with a vote of 151-7, despite a tear gas bomb protest by a member of the minority Democratic Labor Party. The agreement— the U.S.’s biggest trade agreement since the North American Free Trade Agreement (NAFTA) of 1994  — is expected to add $10-$12 billion to the annual U.S. GDP and around $10 billion to annual merchandise exports to Korea.

Organisation for Economic Co-Operation and Development (OECD) warns of Europe recession
The OECD has predicted that the eurozone would shrink by 1 percent in the fourth quarter of this year, and 0.4 percent in the first quarter of 2012. It also revised its numbers for global growth from 3.8 percent down to 3.4 percent, and warned that a negative event such as a default by Italy or Spain could trigger a global contraction. The OECD also predicted a slowdown in growth of trade from 6.7 percent this year to 4.8 percent in 2012.

Central banks take joint action to ease debt crisis
This week the United States Federal Reserve, along with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank announced a plan to ease strains on the international economy by increasing the availability of dollars outside the United States. As a result, stocks rose significantly, with the S&P 500 up by 3.4 percent by midday Wednesday.

China cuts bank reserve ratio from record high
China announced that it would reduce the bank reserve limit on Chinese banks in order to spur greater lending. The reserve limit will move from 21.5 percent to 21 percent on Dec. 5. Previously, China had been increasing the reserve rate in order to combat rising prices. Analysts note that this marks a decisive change in Chinese policy.

New cold-storage unit at LAX will boost trade in refrigerated goods
Apollo Freight and its parent company Mercury Air Group  opened a new 15,663 square-foot cold-storage unit this week. The unit, located down the street from the Los Angeles International Airport, is expected to boost trade in perishable goods such as flowers, fruits, and vegetables by 100 tons daily. This would amount to a $90 million increase annually.