Can export bans be challenged at the WTO?
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RussiaÂs ban on grain exports as a heat wave parches crops in the worldÂs third biggest wheat exporter has raised questions whether such export curbs break World Trade Organization rules. Russia is not a member of the WTO, and it remains to be seen how its new grain policy will affect its 17-year-old bid to join. But other grain exporters, such as Ukraine, which is also considering export curbs, are part of the global trade referee.
WTO rules are quite clear that members cannot interfere with imports and exports in a way that disrupts trade or discriminates against other members. But in practice most WTO rules aim to stop countries blocking imports  shutting out competitorÂs goods to give their own domestic producers an unfair advantage.
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Saudi Arabia and other members of the oil cartel OPEC (not all of whom are members of the WTO) routinely control the production and hence export of oil to defend target prices, but have not faced challenges at the WTO.
What can be challenged are restrictions on exports designed to hurt competitors. The United States, European Union and Mexico are currently suing China at the WTO over BeijingÂs export duties and other restraints on raw materials. They argue that these make the raw materials more expensive for foreign competitors, putting them at a disadvantage to Chinese processors.
The fact is that many WTO rules have an opt-out for national security, whether that is defence, censorship to protect public morals, special treatment of banks to protect the financial system, or food security.
Article XI of the core treaty of the WTO, the General Agreement on Tariffs and Trade, says that apart from duties, taxes and similar charges, you cannot impose any bans or restrictions on imports or exports such as quotas or import or export licences.
But it goes on to say:
ÂThe provisions of paragraph 1 of this Article shall not extend to the following:
(a) Export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party; Â
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While the right of a country to protect its own food supply is unchallenged, many economists argue that export bans or other restrictions can make a global food shortage worse.
That was certainly the case in the 2008 food crisis when food prices rose to record levels, triggering shortages and riots from Bangladesh to Haiti. There are fears that rising grain prices now could stoke unrest again.
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A proposal in early 2008 by Japan and Switzerland to tighten rules on export restrictions in the light of rising prices drew little support from developing countries.
Even inside the countries that use them, export restrictions can be unpopular and have perverse effects. Export taxes on grains imposed by the Argentine government prompted a rebellion by Argentine farmers in 2008 and have made it unprofitable for small farmers to grow corn and wheat, shrinking harvests of those crops.
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Now the World Bank has called on countries to avoid policies that could precipitate a crisis â such as a food export ban. As the problem wonât be resolved at the WTO, it seems likely that the question of some kind of global âarchitectureâ for food and agriculture will come up at next monthâs United Nations conference on the Millenium Development Goals, or at the next G20 summit in Seoul.
PHOTO CREDIT: Russian grain harvest , WTO protest , Haiti demonstration , Argentine protest
Icahn reports 9.8 percent stake in Navistar
Navistar shares rose more than 5 percent to $40.75 in aftermarket trading on Thursday. It closed up 0.3 percent at $38.68 on the New York Stock Exchange earlier on the day, valuing the company at about $2.8 billion.Icahn has also discussed the possibility of adding his nominees to Navistar’s board of directors, but no agreement has been made on the matter, the filing showed.
UPDATE 1-New Hampshire mulls Republican primary in December
By Jason McLureLITTLETON, N.H., Oct 12 (Reuters) - New Hampshire is
considering moving up its Republican primary to as early as
Dec. 6 as states vie for more influence in picking the party’s
nominee for the 2012 presidential election, a senior state
official said on Wednesday.New Hampshire jealously guards its traditional position of
holding the first primary and the second contest overall in the
presidential nominating race, behind the Iowa caucuses. But
other states have moved forward their contests, threatening New
Hampshire’s status.Secretary of State William Gardner, New Hampshire’s top
election official, criticized Nevada Republicans for
rescheduling their caucus for Jan. 14 — a move that was
prompted by Florida advancing its primary.”It’s really up to Nevada,” Gardner said in a statement.
“If Nevada does not accept a date of Tuesday, Jan. 17 or later
for its caucus, it leaves New Hampshire no choice but to
consider December of this year.”Iowa has tentatively set its caucus for Jan. 3. Gardner
said state law meant that New Hampshire’s primary could be held
no later than Jan. 7, a Saturday rather than the usual
Tuesday.”A Jan. 14 Nevada caucus would squeeze us into a date that
wedges us by just a few days between two major caucus states,”
Gardner said, referring to Iowa and Nevada.Instead, he said Dec. 13 and Dec. 6 were “realistic
options, and we have logistics in place to make either date
happen if needed,” Gardner said.MOVE COULD BENEFIT IOWAA move to December would likely draw criticism that the
selection process is beginning too early and not giving voters
adequate time to assess the candidates. It could benefit Iowa,
however, as it would give the state four weeks after the New
Hampshire primary to host presidential hopefuls.Dante Scala, a political scientist at the University of New
Hampshire, said a compressed schedule would favor Mitt Romney,
the Republican front-runner, as it would give other candidates
less time to introduce themselves to voters.But Gardner said an early vote would do no damage.”Candidates have been campaigning here, and elsewhere, for
months, and it is about time we begin the next stage of the
presidential nominating process,” he said.In the process of choosing the presidential nominees
fielded by the two major U.S. political parties, candidates
compete in primary elections or other contests in the states to
win delegates who ultimately pick the nominees in party
conventions.New Hampshire’s primary had historically been held on the
second Tuesday in March, the state’s traditional “town meeting”
day. In 2008, it was held on Jan 8, five days after Iowa, as
other states moved their votes forward.There will be no Democratic primaries because President
Barack Obama is unopposed for the party’s nomination.The Republican nominee is due to face Obama in the Nov. 6,
2012, general election.
Swiss rich shell out more on luxury lifestyles
“The cost of luxury living increased despite the continuing strength of the Swiss Franc against leading currencies, which cut the price of many high-end goods for consumers,” Stonehage said in a news release.”The currency-linked price reductions of imported goods were counteracted by steep rises in living costs in Switzerland, particularly in terms of the rental market.”The Stonehage report looked at Switzerland’s ultra-wealthy, families with disposable assets of more than $10 million. A recent report from Boston Consulting found 9.9 percent of Swiss households had over $1 million in disposable assets, the highest proportion in Europe and second in the world behind Singapore.The SALLI is based on a basket of some 50 goods and services and includes items such as school tuition fees, property rental in Zurich and Geneva, ski holidays, fine wine and cigars.If currencies had stayed flat, SALLI would have shown luxury goods and services inflation at 5.3 percent, Stonehage said.In the period, the franc rose 10 percent against the euro and 21 percent against the dollar, pushing down the cost of imported luxury items such as cars and cigars.Travel costs fell 5.6 percent, while spending on luxury consumables fell 4.7 percent as prices for luxury holidays and imported cigars and champagne plunged in Swiss franc terms.But those falls were canceled out by rises in rental costs in Zurich and Geneva of 12 percent and 4 percent, respectively.”It’s true there is a shortage of top quality accommodation in Switzerland, but we didn’t anticipate price rises would be on that scale,” said Mark McMullen, Executive Director of Stonehage’s Geneva branch.Also buoying spending was an 8 percent jump in art prices, which helped push spending on “investments of passion” like luxury cars and jewelry to a 1.1 percent year-on-year rise.Sales at luxury goods groups such as Richemont and LVMH have held up well this year as newly wealthy families in emerging markets have stepped in as buyers, taking up the slack from recession-hit developed markets.However, shares in these groups began to flag in the third quarter as concerns grew about the sustainability of growth in China, the world’s fastest-growing luxury goods market.
