By Phillip Yu

After seven years of negotiations, Australia and Japan have settled on the major points of a bi-lateral trade agreement. Japanese tariffs on beef, fruit, vegetables, seafood, sugar, and wine will be lowered while Australian tariffs on electronics and cars will decline. 

Experts believe that this agreement will bring strong mutual benefits, citing the parties’ respective comparative advantages. This agreement marks the first time that Japan has ever negotiated a comprehensive economic partnership agreement with a major economy. 

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April 08, 2014

By Abraham Shanedling

 

The World Bank has indicated that Russia’s economy could drop by 1.8 percent if the standoff in Ukraine continues and the resulting U.S. and European sanctions stay in place or intensify.

 

Although Russian leaders in the Kremlin have downplayed the impact of the sanctions, economists say that investors have pulled about $70 billion from Russia’s economy since the crisis began. Prices for food and imported items have already risen, and some Russians are reportedly having problems tapping into funds at banks designated by U.S. and European sanctions.

 

Russia’s already weak economy plus the threat of more sanctions even prompted Standard an Poor’s rating agency to change its rating of the situation from “stable” to “negative.”

Voice of America has more on the story.

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April 01, 2014

By Aliza Kempner

Your favorite snack or morning smoothie’s staple ingredient may be in danger. 

The global supply of bananas, the world’s most valuable fruit (with export figures hitting 16.5 million tons in 2012) is facing two major troubles in its cultivation. In several countries, the Cavendish, the most popular commercial variety of bananas, has been damaged by Black Sigatoka, a disease that causes blackened leaves and has shown resistance to fungicide. Moreover, a strain of Panama disease called Foc Tropical Race 4 that attacks the Cavendish may soon hit Central and South America, which produce four-fifths of banana exports. 

The Economist explores the banana industry’s historical response to similar complications, and sheds light on the race to find a banana that is both resistant to the two diseases and commercially viable. 

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March 11, 2014

By Julie Inglese

Palm oil mill by Marufish, on Flickr

While high demand for palm oil in Africa and Southeast Asia is widely known for being a large environmental concern, Voice of America (VOA) reports that there also is an underlying human rights issue that is being neglected. 

VOA spoke with Norman Jiwan, the executive director of Transformation for Justice Indonesia and the co-editor of a new report on the issue. Jiwan told VOA that the expansion of the palm oil industry in Indonesia "has created serious land conflict because of the land grabbing" from indigenous peoples without consent. This in turn is threatening the food supply of some communities.

The same issues have emerged in Africa and advocates are working with palm oil companies in hopes of settling land disputes.

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November 18, 2013

By Joe Vladeck

Who knew the aluminum market was so bizarre and fascinating? For years global financial and commodities powerhouses have been engaged in "a merry-go-round of metal," stockpiling aluminum and shuffling the metal between warehouses with no real intention of actually, you know, selling it. 

The practice served several functions, ranging from understandable to opportunistic. During the financial crisis, when liquidity was tough to come by, parties looking to raise working-capital used unprocessed aluminum and other metals as collateral. In that respect, the metal trades helped grease the rails of the global financial system when it was struggling for momentum. More recently, finance firms such as Goldman Sachs discovered huge windfall profits in artificially extending the storage time before aluminum is turned into beer cans or foil. Goldman Sachs, for example, often shuttled aluminum from one Detroit-area warehouse to another for 16 months before selling it. 

This latter practice was unmasked by a fascinating New York Times expose in July. In response, the London Metal Exchange (LME), the world's most important metal marketplace, recently revised its aluminum policies: the allowable "wait time" for stored aluminum has been reduced to 50 days, and LME has instituted a series of incentives to keep the aluminum flowing, so to speak. 

Reuters and The Wall Street Journal have the story on the LME's new policies. 

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November 13, 2013