Demand for iPhones see Taiwan export orders take off in October

HONG KONG — For a single product, the iPhone plays a leading role in Taiwan’s export orders, helping push the key economic indicator of the country to a record $44.9 billion in October on demand for the smartphone and other consumer electronics.

The 13.4 percent year-over-year gain in Oct. orders for exports was the ninth straight month of growth, the island nation’s economic affairs ministry announced. Export orders from the U.S. hit a record $12.43 billion in Oct., rising 17.4 percent year-over-year while those received from Europe were up just shy of 30 percent to a record $9.52 billion.

Mainland China and Hong Kong, Taiwan’s other major overseas markets, saw orders rising 3 percent year-over-year to $9.98 billion, although it was a 4 percent drop on Sept. orders.

Taiwan’s orders for mobile devices rose 21 percent compared to the same month last year because of solid sales in mobile phones. Although the ministry did not identify any brands, most of the world’s iPhones are manufactured by Hon Hai Precision Instruments, parent of Foxconn, and Pegatron Corp., both Taiwan companies.

Hon Hai is the world’s largest consumer electronic maker and assembles products for many leading brands through its China factories. The Zhengzhou factory assembles two-thirds of all iPhones produced.

Apple is notoriously tight-lipped about its products but last month claimed to have sold 39.3 million iPhones in the three months ending September 27, up 16 percent from the same period a year earlier. Even though the products are assembled in China, the orders are received through the Taiwan factories on the island, and semiconductors used in the product are sourced from local manufacturers such as Taiwan Semiconductor Manufacturing Co., the world’s largest maker of the chips.

In fact, TSMC reported a revenue growth of 56 percent in Oct. compared to the same month last year, with year-to-date revenues up 23 percent over 2013.

Evidence of the growing consumer electronics business can be seen in semiconductor sales that are 72 percent connected to air freight volume, investment firm BB&T said a recent report. The Semiconductor Industry Association (SIA) said worldwide sales of semiconductors reached $87 billion during the third quarter, an increase of 5.7 percent over the previous quarter and a jump of 8 percent compared to the third quarter of 2013.

Third quarter sales outperformed the latest World Semiconductor Trade Statistics (WSTS) industry forecast.

Falan Yinug, SIA director, industry statistics and economic policy said that while the news of quarterly sales growth was not unexpected — the World Semiconductor Trade Statistics (WSTS) program had forecast quarter-over-quarter sales growth of 4.4. percent — the 5.7 percent growth rate was comfortably higher than the WSTS forecast. Also, in terms of year-over-year quarterly sales growth, the third quarter results were soundly ahead of last year’s with year-over year quarterly growth of 8 percent.

“As in previous quarters in 2014, third quarter sales growth was uniformly strong across geographical and product segments. Third quarter sales in the Americas (9.8 percent), Europe (0.9 percent), Japan (2.2 percent), and Asia Pacific (5.9 percent) grew quarter-over-quarter,” the director said in a blog filing.

“Through the first three quarters of 2014, global semiconductor sales have continuously grown to reach record levels. At this point in 2014, it is hard to envision final 2014 sales not being the highest annually on record.”

The close correlation to air freight volumes saw the amount of cargo carried increasing strongly since mid-year, and the demand is expected to extend the peak season well into Dec.

Cargo terminals have also been enjoying a purple patch. Sino-German joint venture Pudong Air Cargo Terminals Ltd. (PACTL) has been breaking monthly throughput records and in Oct. the terminal handled 153,000 tons of air freight, the most ever and a year-over-year growth of 17.1 percent.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.

http://www.joc.com/international-trade-news/demand-iphones-see-taiwan-export-orders-take-october_20141121.html

FTA with South Korea starts next year

The bilateral free trade agreement between China and South Korea will be effective in thesecond half of 2015, even as steps are underway to fast-track the proposed China-South Korea-Japan FTA, a top government official said on Monday.

According to Wang Shouwen, the assistant minister of commerce, most of the negotiations on the China-South Korea FTA have been completed and efforts are being made to iron out the technical glitches. “We expect the process to be completed by the end of this year,” he said.

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“China and South Korea have effectively reached a free trade agreement that would remove or sharply reduce trade and investment barriers between two nations,” said Wang.

About 17 areas were involved in the negotiations between the two sides and have been detailed in 22 chapters,including trade remedies, customs clearance, investment transparency, communications and intellectual propertyrights.

China and South Korea launched the FTA negotiations on May 2, 2012. The 14th round of talks was held earlier this month in Beijing.

Wang attributed the speedy progress to the direct talks between President Xi Jinping and South Korean President Park Geun-hye in July. The two leaders had agreed to make efforts to conclude the negotiations within this year.

China is South Korea’s biggest trading partner, largest export destination and import source,and the largest destination of overseas investment. South Korea is China’s third-largest trading partner.

Trade between the two countries reached $274 billion in 2013, a 7 percent year-on-year increase and equaling South Korea’s trade volume with the United States and Japan combined.

Sun Yuanjiang, deputy director-general of the department of international trade and economic affairs at the Ministry of Commerce, said the China-South Korea FTA will provide the modality as well as the driving force for progress toward a China-Japan-South Korea FTA and a Regional Comprehensive Economic Partnership.

The three countries are holding negotiations on a trilateral FTA. They are also negotiators for the Regional Comprehensive Economic Partnership that covers 16 economies in Asia.

“Economic integration in East Asia has been facing strains in recent years and a bilateral FTA will help advance trade and investment ties under the Regional Comprehensive Economic Partnership framework,” said Sun.

Though many manufacturers and trading firms from Taiwan have expressed concerns about the proposed FTA and its likely impact on their trade with the Chinese mainland, the assistant minister said the Chinese mainland will continue negotiations on agendas of the Economic Cooperation Framework Agreement with Taiwan to further deepen cross-Straits economic ties.

 

http://www.chinadaily.com.cn/business/2014-11/18/content_18931628.htm

China and Australia to sign free trade deal

China and Australia will sign a free trade deal on Monday that will open up markets worth billions of dollars to Australian exporters.

The deal, which Chinese President Xi Jinping is due to sign in Canberra during a state visit toAustralia, is more wide-ranging than many industries had anticipated, thanks to a last- minutebreakthrough by Trade Minister Andrew Robb, the Sydney Morning Herald reported.

The agreement will give Australian dairy farmers tariff-free access within four years to China’senormously lucrative infant formula market, minus any of the “safeguard” caps that currentlyrestrict competitors from New Zealand, the newspaper said, citing sources.

Winemakers, currently selling more than A$200 million worth of goods to China each yeardespite tariffs between 14 and 30 per cent, will also see tariffs eliminated over four years, itreported.

Tariffs on horticultural products, seafood and other goods accounting for 93 percent of Australian exports by value will also be reduced to zero by 2019, according to the newspaper.Tariffs recently imposed on Australian coal will be removed over two years.

Xi is in Canberra on Monday after attending the G20 leaders’ summit at the weekend inBrisbane. His visit is also scheduled to include stops in Sydney and Tasmanian state capital Hobart.

http://www.chinadaily.com.cn/business/2014-11/17/content_18925422.htm

AISIN SEIKI CO. LTD. AGREES TO PLEAD GUILTY TO CUSTOMER ALLOCATION ON AUTOMOBILE PARTS INSTALLED IN U.S. CARS

Company Agrees to Pay $35.8 Million Criminal Fine

WASHINGTON — Aisin Seiki Co. Ltd., an automotive parts manufacturer based in Kariya, Japan, has agreed to plead guilty and to pay a $35.8 million criminal fine for its role in a conspiracy to allocate customers of variable valve timing (VVT) devices sold to automobile manufacturers in the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the Southern District of Indiana in Indianapolis, Aisin conspired to allocate customers of VVT devices sold to various automobile manufacturers, including General Motors Company, Nissan Motor Company Ltd., Volvo Car Corporation and BMW AG, in the United States and elsewhere.  In addition to the criminal fine, Aisin has agreed to cooperate in the department’s ongoing investigation.  The plea agreement is subject to court approval.

“Today’s charge continues the Antitrust Division’s ongoing campaign to hold automobile part suppliers accountable for their illegal collusive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”

The department said that Aisin and its co-conspirators held meetings and conversations to discuss and agree upon the customers to whom each would sell VVT devices, and the bids and price quotations each would submit for VVT devices.  Aisin’s involvement in the conspiracy lasted from as early as September 2000 until at least February 2010.

VVT devices are installed in automobile engines and regulate the timing, extent, and duration of the opening of the engine’s intake and exhaust valves, thereby increasing fuel economy and engine performance.

Including Aisin, 31 companies and 46 individuals have been charged in the Justice Department’s ongoing investigation into the automotive parts industry.  All 31 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $2.4 billion in criminal fines.  Of the 46 individuals, 26 have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.

Aisin is charged with allocating customers in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Indianapolis Field Office and Bloomington Resident Agency, with the assistance of the FBI headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Indianapolis Field Office at 317-595-4000, or the FBI’s Bloomington Resident Agency at 812-332-9275.

http://www.justice.gov/atr/public/press_releases/2014/309854.htm

Esco Corp. Pays $2.1 Million to Settle Sanctions Violations

Esco Corp., a manufacturer of products for mining, oil and construction companies, agreed to pay about $2.1 million to settle allegations that it violated U.S. sanctions on Cuba.

The Portland, Ore.-based company bought nickel briquettes made or derived from Cuban-origin nickel between November 2007 and June 2011, the U.S. Treasury Department said in a penalty notice issued Thursday. The total value of the transactions violating U.S. sanctions were $6.2 million, Treasury said, noting its Office of Foreign Assets Control determined the company voluntarily self-disclosed the violations.

Esco “caused significant harm” to the U.S. sanctions program on Cuba by conducting large-volume and high-value transactions in products made from Cuban-origin nickel, “which were ultimately sourced” from people on the U.S. blacklist, the notice said.

“Esco proactively contacted OFAC immediately upon learning that one of our suppliers had used Cuban-origin nickel,” said Rob Cornilles, vice president of investor, government relations and communications, in an emailed statement. “Right away, we stopped purchasing from this distributor, halted production at the site where the nickel was in use and removed all inventory containing Cuban material.”

Cuba has the fifth-largest nickel reserves in the world, and is the 10th largest nickel producer, accounting for about 2.7% of the world’s output of the metal in 2013, according to the U.S. Geological Survey.

Nickel is widely used in stainless steel, giving the alloy strength, corrosion resistance and reducing warping that can occur under elevated heat and pressure. Nickel-alloy steel is widely used in industrial applications such as mining and oil and gas equipment, as well as car exhausts.

 

http://blogs.wsj.com/riskandcompliance/2014/11/13/esco-corp-pays-2-1-million-to-settle-sanctions-violations/

Tougher Chinese wastepaper rules pull down US exports

Tougher Chinese regulations on imported wastepaper shipments helped drive down U.S. containerized exports in September. Total U.S. containerized exports in September shrank 3.3 percent from August to 929,023 20-foot containers, the lowest volumes since June 2011, according to preliminary data from PIERS, the data division of the JOC Group. September’s exports were 10 percent lower year-over-year, contributing to a 1.1. percent decline in U.S. containerized export volume in the first nine months of the year compared to the same period in 2013.

 

Shipments to countries in Northeast Asia, which include China, saw the largest decline in containerized goods from the U.S. in September, with volumes dropping 10 percent year-over-year to 387,571 TEUs. Containerized exports of animal feed to northeast Asia fell 16 percent year-over-year to 81,134 TEUs, largely because of China’s blocking of the shipment of U.S. dried distillers grains.

Chinese importers of U.S. wastepaper are expecting even stricter guidelines in early 2015, as a proposal circulated in August by the Ministry of Environmental Protection signals a greater emphasis on environmental protection. Under the proposal, the MEP would cancel automatic import licensing in 2014, according to Chinapaper.net, an information provider for the paper trade.

The existing restrictions contributed to U.S. containerized exports to China in September falling  15 percent year-over-year to 210,995 TEUs. Containerized exports to India from the U.S. posted the largest country-by-country growth in September, jumping 33 percent year-over-year to 32,122 TEUs.

Wastepaper exports from the U.S. to both southeast Asia and the Indian Subcontinent were up by about 30 percent, tho the two regions combined to bring in 20,788 TEUs in September, less than a quarter of northeast Asia’s total.

Exports of containerized auto parts grew the most of any U.S. commodity, jumping 18 percent or 3,660 TEUs to 24,438 TEUs in September.

PIERS data will be continue to be revised, and numbers are subject to change.

http://www.joc.com/international-trade-news/trade-data/united-states-trade-data/tougher-chinese-wastepaper-rules-pull-down-us-containerized-exports_20141112.html

US, Brazil to study potential trade agreement

The Brazil-U.S. Business Council, which is affiliated with the U.S. Chamber of Commerce, has signed a cooperation agreement with the Brazilian National Confederation of Industry to conduct studies on a potential trade agreement and report back to both governments on the results.

The BUSBC-led delegation brought more than 50 business leaders from 31 U.S. companies to Brazil for meetings with government officials and policymakers in the energy, defense and technology sectors, according to the U.S. Chamber of Commerce. Throughout the trip, the delegation focused on its top policy priorities, including beginning a dialogue regarding possible agreements on trade.

“Brazil is currently the United States’ ninth-largest goods trading partner, but there is room to grow that relationship,” said Jodi Bond, vice president for the Americas at the U.S. Chamber and signatory of the cooperation agreement on behalf of the council, in a statement. “This joint effort by the private sectors of both countries will shed light on exactly where the opportunities and challenges lie within the framework of a mutually beneficial agreement.”

Containerized exports from the U.S. to Brazil totaled 322,318 TEUs in 2013, compared with 288,065 TEUs in 2012 and 242,085 TEUs in pre-recession 2007, according to PIERS, the data division of JOC Group. The top containerized export commodities in the lane are plastic products, auto parts, wood pulp, synthetic resins and paper.

In the opposite direction, containerized imports from Brazil to the U.S. totaled 295,958 TEUs in 2013, up from 292,694 TEUs in 2012 but down from 423,764 TEUs in 2007, PIERS reported. The top containerized import commodities are logs and lumber, granite, paper, coffee and auto parts.

The trip to Brazil was also the first opportunity for many members of the U.S. business community to observe Brazil’s changing political landscape following the recent re-election of Brazilian President Dilma Rousseff of the Workers Party in late October, the U.S. Chamber of Commerce said.

Many port terminal operators, shippers and shipowners preferred her opponent, Aécio Neves of the right-of-center Social Democracy Party, who they considered to be more market-friendly, while Roussef endeared herself to dockworkers, shipbuilding interests and operators of Brazilian-flag vessels with support for unions and for an initiative that would require 40 percent to 80 percent local content for all Brazilian-built ships.

However, former Wall Street banker Henrique Meirelles is a frontrunner to be Brazil’s next finance minister, which would mark a major shift toward business-friendly policies in Rousseff’s second term, Reuters reported. The issue of who Rousseff will name to replace the resigning finance minister has been the subject of heated public debate, according to The Wall Street Journal.

http://www.joc.com/international-trade-news/us-brazil-study-potential-trade-agreement_20141112.html

Lawsuit aims to block CSX effort to double-stack trains through Washington DC

WASHINGTON — A group opposing the reconstruction of a CSX Transportation tunnel in a Washington D.C. terminal that would allow the railroad to double-stack containers has filed a lawsuit challenging a federal decision to let the project proceed.

The Committee of 100 on the Federal City today filed a lawsuit in the district court in D.C. challenging the Federal Highway Administration’s approval last week of the reconstruction of the 110-year-old, 4,000-foot tunnel. The nonprofit — dedicated to preserving the city’s historic character and livability — also filed a motion for a preliminary injunction to prevent the project going forward until a new environmental impact study is completed.

Opponents of the project want CSX to guarantee that it won’t move oil loads through the tunnel — a promise the railroad won’t give, though, as it says only a handful of oil shipment went through the tunnel last year. As a common carrier, the railroad can be called to ship hazardous chemicals through the tunnel, but CSX told JOC.com in July that there is no market for oil shipments via that line.

The FHA’s issuance of a record of decision following the completion of an environmental impact study is “unlawful, premature and problematic,” C100 Vice President Monte Edwards said in a statement.

“The record of decision fails to address the severe safety and security impacts the proposed project will have on the immediate community and on Capitol Hill, the constraint on the expansion of passenger and commuter rail service in the District, and the pre-approval by (the District Department of Transportation) of the project before any environmental review had been conducted,” Edwards said.

He cautioned against rushing the project, particularly because the environmental impact study found that the tunnel has “decades” of useful service left. Opponents on the tunnel construction have been emboldened by how local pushback against a planned Baltimore terminal spurred the state of Maryland to withdraw funding for the terminal.

Extensive public oversight, review and comments have helped shaped CSX’s approach to the reconstruction project, which has been greenlit by federal and District of Columbia authorities, CSX spokesman Rob Doolittle said in an email today. The planned $200 million project will give CSX better economies of scale by allowing the railroad to double-stack containers and reduce congestion through double-tracking in the Virginia Avenue tunnel.

The project is key to the railroad’s effort to complete the second phase of an ambitious initiative to better connect mid-Atlantic ports and the Midwest. The tunnel’s rebuilding and expansion is one of 15 projects CSX aims to complete by the end of the 2015, bringing an end to its roughly $850 million public-private partnerships, known as the National Gateway.

Through a revised construction project aimed at reducing the impact on the neighborhood, the project is expected to take 30 to 42 months. The plan also includes measures to reduce the construction impact on nearby residences and businesses, including dust, noise and vibration monitoring and control plans; limited construction hours; and maintenance-of-traffic plans that ensure continued pedestrian access and vehicle mobility for all essential services throughout the process, CSX said.

“CSX believes the project should move forward promptly,” Doolittle said.

http://www.joc.com/rail-intermodal/class-i-railroads/csx-transportation/lawsuit-aims-block-csx-effort-double-stack-trains-through-washington-dc_20141112.html

NON-ORIENTED ELECTRICAL STEEL FROM CHINA, GERMANY, JAPAN, KOREA, SWEDEN, AND TAIWAN INJURES U.S. INDUSTRY, SAYS USITC

The United States International Trade Commission (USITC) today determined that a U.S. industry is materially injured by reason of imports of non-oriented electrical steel (NOES) from China, Germany, Japan, Korea, Sweden, and Taiwan that the U.S. Department of Commerce has determined are sold in the United States at less than fair value and are subsidized by the governments of China and Taiwan. The Commission made negative critical circumstances findings with respect to NOES from China, Germany, Japan, and Sweden.

Vice Chairman Dean A. Pinkert and Commissioners Irving A. Williamson, David S. Johanson, and Rhonda K. Schmidtlein voted in the affirmative. Chairman Meredith M. Broadbent voted in the negative. Commissioner F. Scott Kieff did not participate in these investigations.

As a result of the USITC’s affirmative determinations, the U.S. Department of Commerce will issue countervailing duty orders on imports of this product from China and Taiwan and antidumping duty orders on imports of this product from China, Germany, Japan, Korea, Sweden, and Taiwan.

The Commission’s public report Non-Oriented Electrical Steel from China, Germany, Japan, Korea, Sweden, and Taiwan (Investigation Nos. 701-TA-506 and 508 and 731-TA-1238-1243 (Final), USITC Publication 4502, November 2014) will contain the views of the Commissioners and information developed during the investigations.

The report will be available after December 9, 2014. After that date, it may be accessed on the USITC website at: http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.

 

http://www.usitc.gov/press_room/news_release/2014/er1106mm1.htm

First International Aviation Court of Arbitration Initiated in Shanghai Free Trade Zone

On August 28, 2014, the China Air Transport Association (“CATA”), the International Air Transport Association (“IATA”), and the Shanghai International Arbitration Center (“SHIAC”) signed a cooperation agreement on international aviation arbitration in Shanghai. They announced that the Shanghai International Aviation Court of Arbitration (“SHIACA”) was officially established.

After the Court of Arbitration of the Shanghai Free Trade Zone was initiated, SHIACA was regarded as another marvelous innovation by SHIAC and the world’s first arbitration agency specialized in aviation disputes. It means that international aviation arbitration system is officially established in Shanghai, which provides great convenience and advantages to domestic and foreign enterprises in the resolution of global disputes.