"TPP light" takes off, with China (and the US) on the sidelines

Up Front

阅读更多关于此新闻的文章,请点击链接: “TPP之光”开始了,中国(和美国美国)在旁观望

This afternoon in Santiago, Chile, eleven countries signed the Trans Pacific Partnership (TPP)  — a free trade agreement (FTA) opening increased trade in a market of 498 million people, with a combined GDP of over $10 trillion. It will go into effect 60 days after six countries ratify the deal, and is expected to do so early next year.

Left for dead by the Trump administration that pulled out of it a year ago, the TPP was brought back to life during a marathon year of negotiation by the remaining countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The revised deal suspends 20 clauses — on biologics, digital copyright, and 11 of which focused on intellectual property — that were insisted on by the US. It has innovative clauses addressing State-Owned Enterprises, SMEs, corruption, as well as issues like biodiversity and climate change.

The TPP is a triumph of diplomacy in undiplomatic times, and a fitting capstone to Chilean President Michele Bachelet’s second term, which is up on Saturday. As Chilean chief negotiator Felipe Lopeandía put it, TPP "returns confidence to the efficiency of regionalism and domestic initiatives in important agreements.”

While the TPP is a heartening sign of the power of working together in an era of increasing go-it-alone politics, it is no panacea. Countries like Malaysia (65%) are only slowly eliminating tariffs and have up to 20 years to do so. And there is still a slim chance that the fractious politics around TPP in Japan (which is protective of its domestic agriculture market) could stymie ratification there. There are several countries that do not want to ratify first, and want Japan to take the lead — failure in Tokyo could bring the whole process to a halt.

In the context of Asia's growing economic relationship with Latin America, the 900-pound gorilla in the room is China. The TPP with the US was an 800 million person, $30 trillion behemoth that had been described (from the political left and right) as being "a mark of America’s strategic commitment to the region in the face of a rising China.” Leaders like Australia’s Malcolm Turnbull have gone to lengths to distance the TPP from implying any stance by the member countries against China, but China’s growing role cannot be denied.

Is this “TPP light" still an economic threat to China? It shouldn’t be. But with China feeling its oats on the global stage but facing an economic transition at home, TPP could be perceived as such.

Large swaths of Latin America are embracing free trade, and an FTA with China is the brass ring many are reaching for. Having made greater inroads than expected into Latin America and other regions, China is encouraging the idea. But how will it react to a launched TPP while negotiations of the Regional Comprehensive Economic Partnership (RCEP) — China’s FTA counter-balance to TPP — has dragged on, and excludes any countries in the Americas. Reconciling China — or sadly the US, these days — with free trade might be harder than expected.

But the TPP is a success, and there is no bigger indication than its popularity. Colombia — wanting to join its Pacific Alliance colleagues — has been knocking at the door for a while now. And South Korea announced today that it is going to evaluate this year whether to join the revived TPP. So while the US may have spurned it, TPP remains the club to join.

Top Stories

拉丁美洲成科技巨头新战场 新一轮投资圈地运动开始 — Lieyunwang
Global tech firms and investors are reshaping Latin America’s startup environment  — Tech Crunch
Chinese Investors Bet on Latin America for Next Tech Gold Rush — Bloomberg
Chinese Startups See Latin America as a Land of Opportunity — Fortune
Startups chinas miran hacia América Latina — El Tiempo
Startup and tech investment are rapidly sprouting in Latin America, attracting some of Silicon Valley and Asia’s biggest investors to the region. Chinese investment in Latin American jumped to $1 billion since the start of 2017 — driven by the Didi acquisition of 99 — from $30 million in 2015. has almost doubled since 2013, adding 25 new investors this past year alone, and venture capital investment reached $1b at the start of 2017. Companies like Tian Ge Interactive Holdings Ltd., China Mobile, Ofo and Mobike are leading the charge.

La Positiva Seguros acordó la venta de 51% de sus acciones a Fidelidade — Gestión
La Positiva vende el 51% de sus acciones a aseguradora portuguesa Fidelidade — La Republica
Portuguese insurance company Fidelidade is set to buy 51% of Peru’s La Positiva. Plot twist: Fidelidade’s largest owner is Chinese investment firm Fosun, which is making its third major acquisition in Latin America in two years.

GIC in 5.5b Mexican peso JV to develop and operate rental apartment buildings in Mexico — The Straits Times
Singaporean wealth fund GIC and CCLA, a real estate partnership between the CIM and Compass groups, have entered a $387.8m joint venture to develop and operate for-rent homes in Mexico City. ”CCLA believes that the growth of the middle-class and the cultural shift in favour of city-living is rapidly transforming the residential demand in urban centres," said Manuel Balbontin, founding partner of Compass Group.

Trump pone aranceles al acero y aluminio (medida contra China que golpea la Argentina) — Ámbito
Ataque fiscal de Trump contra China põe em risco mais de R$ 8 bi em exportações brasileiras — BBC
Brazil threatens 'action' to protect interests after Trump tariff move — CNBC
Mexico to retaliate if US slaps tariff on its steel — source — Financial Times
Golpe a la industria argentina: Donald Trump anunció que impondrá aranceles al acero — Clarin
China grumbles at Trump’s tariff move, but Europe takes aim at Harleys and bourbon — Washington Post
Acero Argentino concerned about steel tariffs — AMM
Mexico, Brazil and Argentina express concerns about US tariff on steel — Platts
Guerra comercial de Donald Trump tendría impacto en el Perú — La República
El cobro de tarifas al acero de otros países afectarán a México — Expansion
China ganará con las tarifas al acero: Guajardo — El Economista
Ya la pagarás, ya la pagarás — Excelsior
US President Donald Trump takes aim at China and hits… Brazil. At the other end of the charm spectrum, President Trump announced a plan to impose a 25% tax on imported steel and a 10% tax on imported aluminum. While aimed at China, both Brazil and Mexico are bigger exporters of steel products to the US, and have said they will have to retaliate; Argentina and Peru are also bracing for impact. Mexican Secretary of the Economy, Ildefonso Guajardo, points that the tariffs won’t impact Chinese exports of steel:

“If (the Americans) exclude us, the only thing that’ll happen is we’ll buy more Chinese steel, the opposite of what President Trump wants."

王毅引古文谈中国和拉美合作:志合者,不以山海为远 — Huanqiu
Ministro de Exteriores dice cooperación entre China y América Latina y Caribe no se dirige contra nadie — Xinhua
China-LAC cooperation does not target anyone: FM — Xinhua
China pledges wider market access, especially for financial sector — Reuters
On the other end of the diplomatic spectrum, Chinese Minister of Foreign Affairs Wang Yi is on a charm offensive, playing up China’s moves to open its market. In an editorial he writes: “We will get more in line with international economic and trade rules, significantly widen market access, open the services sector, especially the financial sector, wider, and create a more appealing investment environment.” On the sidelines of the “two sessions” annual session of the National People's Congress, he was even more bullish on China-LAC relations, noting that: “nothing, not even mountains and oceans, can separate people with shared goals and vision."("志合者,不以山海为远”) But he gives us the quote of the week with his comment that:

"China will not move anyone's ‘cheese.’"


中国石油收购巴西TT Work公司30%股权 — People.cn
China's CNPC says to buy 30-pct stake in Brazilian fuel distributor — Zawya
China's CNPC has agreed to buy a 30% stake in TT Work , Brazil’s fourth largest oil products distributor. No financial details were disclosed.

China Mobike busca revolucionar transporte vía bicicletas y alista expansión — Diario Financiero
China’s Mobike launches in Santiago, Chile, for its second dockless bicycle sharing program in Latin America. To get everyone comfortable, it will provide free rides for residents of  La Reina and Las Condes to try out the bikes.

逾百中国企业参展巴拿马国际奥义博览会 巴总统“捧场” — China News
Chinese presenters crushed it at the 36th Panama International Trade Fair.

Caribbean must dynamically engage with China — Jamaica Observer
JAMPRO’s Nicholas Sutherland writes that Caribbean countries need to encourage Chinese investment in the region, not to risk losing opportunities to larger and resource-richer neighboring countries.

中国需求旺盛 古巴雪茄畅销 — Deutsche Welle
A Chinese language summary of last week’s news about China driving the sale of Cuban cigars.

La china Shineray lanzó sus autos de trabajo en la Argentina: todos los detalles — TN
There are now eight Chinese auto brands in the Argentine market. Shineray has launched its line of work vehicles and trucks. The vehicles are being imported by Ralitor, who already imports vehicles from BAIC, DFM, Foton, and JMC.

La marca china JAC Motors llega a la Argentina de la mano de la familia Macri — TN Autos
JAC Motors llega a a la Argentina — CORSA
JAC Motors, otra marca china importada por Grupo Socma, desembarcó en la Argentina —AutosiPro
Soon there will be nine! China’s JAC Motors will be arriving in Argentina later this year, bringing in six models, through Astrak S.A., a company managed by the family of President Mauricio Macri.

Dos automóviles nuevos llegarán a Colombia por cuenta de la industria china — HSB Noticias
And it’s not just Argentina. Auto distributor Inchape has partnered with China’s BAIC to deliver two new models to Colombia, spearheading the Chinese firm’s entry to the country.

With debts complicating sale, China Fishery bankruptcy trustee seeks USD 624 million compromise — Seafood Source
The China Fisheries saga continues. Following postponement of China Fishery’s Peruvian assets purchase due to intercompany claims from a subsidiary, the company’s court-appointed trustee William J. Brandt is now “seeking to consolidate a web of debts into one claim valued at $624m.” The netting process has been approved by the court, and the sale should ensue.  

APL suma tres nuevos servicios entre Asia y Latinoamérica — Mundo Marítimo
APL, one of the world’s leading ocean carriers, is starting three new service routes (Cóndor Express, Falcón Express, and Caracara Express) between Asia and Latin America, specifically with Mexico, Central America, and the continent’s west coast.

China no necesita acuerdos para agigantar su huella comercial en América del Norte — El País
China is really NAFTA’s fourth signatory, says Enrique Dussel Peters, already the US’ main trading partners, and coming in second with Mexico and Canada. For every $10 of Mexico’s surplus with the US, $5 go to China — the reality is that, despite this, all 3 countries would still benefit with more regulated bilateral commercial agreements with the Asian tiger.

Empresas de Chile, Rusia y China interesadas en subasta petrolera de Ecuador — El Economista Americas
Energy companies from Chile, Russia, and China are among the interested party in the next bidding rounds for land in Ecuador, said Carlos Perez, Ecuadorian Minister of Hydrocarbons. Out of 40 firms,  stands out Chile’s GeoPark and Chinese CCDC Petroleum and Hilong Group.

EEUU busca reforzar lazos con Latinoamérica ante acercamiento chino — HispanTV
Speaking at Florida International University (FIU), Nikki Haley, US ambassador to the UN, said the USA will seek to put emphasis on its relations with the region in the face of China’s growth. 

Agricultores do Brasil podem tirar vantagens de tensão entre China e EUA — Extra Globo
Tensão entre EUA e China pode beneficiar venda de grãos do Brasil — Exame
Disputa comercial China x EUA pode ampliar espaço e preços para soja do Brasil — Noticias Agrícolas
Brazil should jump into the ring and take advantage of China-US tension, says Carlos Fávaro, vice-governor of the Brazilian state of Mato Grosso. Due to Brazil’s potency as a foodstuff exporter, it should take action in establishing bilateral commercial relations with other countries; talks with Mexico are already underway. Under the limelight is Brazil’s soybeans exports, which already count for half of China’s soybeans imports, as they may gain comparative advantage if China and the US enter a trade war.

Así quiere China dominar el mundo — El Pais
É assim que a China quer dominar o mundo — El Pais
Spain’s El País features a long-read on Xi Jinping and China’s renewed, powerful role in the international system, in particular as it seeks to fill the vacuum left by the US without portraying itself as having imperialist objectives.

Argentina exporta más de 160 mil toneladas de productos orgánicos — Infobae
Organic production is soaring in Argentina, solidifying its comparative advantage, reaching 160k tons in 2017.

El litio bajo fuego cruzado: Quiénes son los cuatro jugadores globales que se disputarán el liderazgo del mercado — Economía y Negocios
Chile, China, Argentina, or Australia: Who is going to surface as the world’s “white gold” winner? Maybe no one. Following on our discussion last month, Morgan Stanley predicts the price of lithium will fall 45% by 2021 due to expected oversupply created by chilean SQM and Albemarle — neither have said they will be halting their projects, and Albemarle’s president, Luke Kisam, has defended his figures saying lithium demand is expect to almost quadruple by 2025. As of now, Chile is strategic about it, Argentina has ongoing projects, China is its largest importer and Australia its largest producer.

Relaciones económicas entre China y América Latina — El Nuevo Diario
A nice graphic overview of China-Latam relations.

relacines econ entre china y la.jpg

Setor de frango do Brasil se defende contra denúncia na China — Exame
Exportadoras de frango brasileiras se defendem em investigação de dumping na China — Globo
Brazilian chicken firms fight China's dumping claim — Reuters
Following on investigation from last year into whether Brazil was selling some broiler chickens to China at below market prices, the Brazilian Animal Protein Association (ABPA) made its formal case this week. Brazil exports $761m in chickens a year to China.

Kingship invests in Chile — Fruitnet
Chinese importer Kingship signed a strategic cooperation agreement with Valle Central and Agrícola el Peñasco, in which the Shenzhen-based company will make a “sizable investment,”  including the purchase state-of-the-art Unitec packing lines.

2017 China Fresh Fruit Import and Export Statistics Released — Produce Report
Read all about it. Latin America exporters were the source of a quarter of China’s fresh fruit consumption last year. Chile lost the top spot it had taken from Thailand — imports of Chilean fruit to China fell to $1b (18% of total) from $1.18b (24% of total) in 2016.

China fruit imports.png

El Parlamento panameño ratifica tres convenios entre Panamá y China — El Economista América
Panama ratifies deals inked with China — BNamericas
Panama's congress has ratified three agreements that President Varela closed on his state visit last year. The agreements allow for the establishment of a flight to China, allowing Air China to begin its flights via Houston, expected later this month; easier sea transportation for Panamanian-flagged ships in Chinese ports; and for the building of a Chinese Embassy.

Presidente de Costa Rica ve en acuerdos Panamá-China oportunidad para Centroamérica — Xinhua
Panama’s healthy relationship with China is an opportunity for Central America, said Costa Rican President Luis Guillermo Solis at Expocomer in Panama: “whether it is in the diplomatic and commercial, or just commercial, this can be an opportunity for further integration and mutual benefit”.

Histórico acuerdo entre China y la Argentina para resguardar la propiedad intelectual y evitar la piratería industrial — Infobae
China and Argentina have inked an intellectual property agreement, intended to protect patents and ensure the quality of traded goods: “it establishes the need for patent protection as a key element to foment technological innovation and increase economic development,” says Argentine ambassador Diego Guelar.

Imbert slams PP for $1.4B claim — TT Newsday
Trinidad’s finance minister Colm Imbert slammed the previous (opposition) government for cancelling the Altruint aluminum complex project deal with China Machinery Engineering Corporation (CMEC), who is now suing the country for $201m.

Argentina: Administración Federal de Ingresos Públicos inició el mes con nuevos cambios —  Segundo Enfoque
Argentina’s Administración Federal de Ingresos Públicos (AFIP), responsible for setting duty on imports and exports, has a new executive director: Leandro Cuccioli, who knows China, having work there for BP on wind power ventures.

Empresas chinas como opción para el sistema eléctrico — El Nuevo Dia
In an op-ed, Cecilia Joy Pérez points out Puerto Rico government’s failure to consider any Chinese companies in their task to rehabilitate the island with electricity. She praises Chinese companies for being adaptable to complex environments and their commitment to renewable energy, and, while not perfect, should definitely be included as part of rigorous evaluation to bring light back to Puerto Rico.

Especialistas chinos recorren áreas naturales en Perú para replicar en su país modelo de protección — La República
Specialists from China’s State Forestry Ministry (SFA) visited ongoing projects by Peru’s National Service for State Protected Natural Areas (SERNANP), in charge of managing over 70 natural reserves, to gather information on Peru’s conservation strategies.

“El sector empresarial no tiene iniciativa", la queja del embajador en China — El Intrasigente
An interview with Argentine ambassador in China, Diego Guelar, in which he worries about the country’s deficit with China due to a lack of more diverse products to sell, as China exports higher valued technological products while Argentina centers on raw materials. He also laments fruitless efforts to show China Argentina’s comparative advantage over different products.

Conoce los costos y rendimientos de los vehículos 100% eléctricos en el Perú — Andina
Electric vehicles, motorbikes, and bicycles, are well into the Peruvian market — all coming from China: “They are practical, don’t contaminate, and don’t need much upkeep,” said Alembert Ávalos, commercial director of importer Ecoride.

Perú se consolida como segundo proveedor mundial de paltaperu.com
Exportación de paltas generó 580 millones de dólares — El Economista America
Peru’s agricultural export increased 3%, generating $580m, and  became the 2nd biggest exporter of avocado in the world, surely benefitting from this avo-toast craze. China, Chile, US, Holland, Spain, and the UK are its biggest importers.  

China y Brasil, principal destino de los envíos de granos en 2017 — Telam
Estados Unidos y China dominan el mercado agroexportador argentino — La Politica Online
China is importing 87% of Argentina’s soybean exports.

¿Por qué Colombia no fabrica sus propios celulares? — Espectador
Julián Orozco, product manager for Colombian cellular company Kalley, argues the need for increased tech manufacturing activity in Latin America as to allow regional companies to compete with cheaper labour In China — those tech investors seem to be in luck.

Xiaomi prepara otro evento en México, ¿más smartphones chinos en camino? — Xataka
Chinese electronics company Xiaomi keeps Mexico in the dark after inviting its tech industry to a mysterious press event on March 13, rumored to be for another product release, following the introduction of the Redmi Norte 5A Prime in late January.

Customs delay snags ferry journey in China — T&T Guardian
We spoke too soon on this one, as the wayward Galleon's Passage ferry has incurred customs delays on its way to Hong Kong to eventually arrive in Trinidad and Tobago.

ESPECIAL: El apetito chino beneficia a sectores exportadores de América Latina — Xinhua
Feature: Chinese appetite benefits Latin American export-related sectors — Xinhua
Trade access crucial ahead of challenging year for Australia — Global Meat News
China’s growing middle class and globalized appetite is fueling Latin America’s agroindustry, having created 1.3m new jobs in 2017. With so many countries and so many different products one may wonder the extent of this growth, but as Daniel Castiglioni, CEO of Uruguay’s Casti Beef, points out: “the market is big enough for everyone.”

Afianzan promoción comercial entre NL y provincia china — El Economista
The Mexican State of Nuevo Léon will open an office of representation in Hangzhou, China, to encourage bilateral relations and especially promote the Hofusan Industrial Park in Salinas Victoria.

Managing Sludge Mountains: What Beijing Can Learn From Brazil — New Security Beat
Researchers at the China Environment Forum posit that Brazil’s sludge-to-energy plants may serve as a blueprint for rapidly expanding cities, such as Beijing, on how to set up sustainable and effective water treatment projects. China’s water-stressed environment would particularly benefit from such projects and now may be a good time to start due to current regulatory and financial momentum.

Arremetida china en América Latina: ¿en qué países y sectores está invirtiendo más? — El Observador
El Observador’s long-read on China-LAC relations highlights Brazil, Peru, and Argentina have received the most Chinese FDI from 2001-2016, and the region’s power to become China’s main source of raw materials, an increasingly scarce group of commodities.


Japón dona apoyo para reconstrucción de escuela en Chiapas — Yucatan
Japan’s government has just donated $78k for the reconstruction of a federal primary school in Miraflores, Mexico, as part of their agreement following the earthquake in September 2017.

Los superalimentos latinoamericanos invaden Tokio — Ultima Hora
“Superalimentos" latino-americanos invadem feira alimentar no Japão — Agencia Brasil
Latin American superfoods showed at Tokyo's gastronomic fair Foodex 2018. Popular exports include chia, quinoa, and a ‘super coffee’ from Peru; chia and sesame from Argentina; and of course, Brazil’s trendy amazonian fruit, açaí.

Japón excluye al agro nacional — Portafolio
Portafolio’s columnist laments Japan’s exclusion of high-interest agricultural, meat, and fish products from its bilateral trade agreement with Colombia, and hopes for renegotiation before ratification.


Shinhan Bank opens first branch in Mexico — Korea JoongAng Daily
Shinhan Bank opened its first branch in Mexico on Wednesday, following approval from Banxico in December. Shinhan is the first Korean bank to operate in Mexico. It plans to begin by focusing on offering financial services to Korean residents and companies, and then expand into corporate and retail services for Mexican clients by 2022.

Exportadores preocupados ya que Guatemala no se sumó al TLC con Corea del Sur — El Economista
The Guatemalan Exporters Association (AGEXPORT) laments having left “in our neighbors’ hands the opportunities” gained from the South Korea-Central America FTA — which Guatemala opted out of — but the association has expressed there is still time to join if the government moves fast enough.

Presentan ventajas de ZEE Lázaro Cárdenas — El Economista
The recently formed Special Economic Zone of Lázaro Cárdenas - La Unión (ZEE) in Mexico, encompassing the country’s most important port, is taking the show on the road. Michoacán Secretary of the Economy Jesús Melgoza Velásquez met with Kim Sang-Il, the new Korean Ambassador in Mexico, about the advantages of investing in the ZEE.

Ecuador shrimp farms eye growth, South Korean market in 2018 — Undercurrent News
Ecuador’s shrimp is now the nation’s most exported commodity after oil, and it’s looking to go further — after getting into the Brazilian market last year, Ecuador now seeks to increase direct exports to China and achieve an FTA with South Korea. While there’s an expected 9% growth for 2018, executive president of Ecuador’s National Aquaculture Chamber, José Antonio Camposano points those figures might be exceeded.

Northeast Asia arbitrage for Colombian coal reopens: sources — Hellenic Shipping News
Platts data show delivery of Colombian thermal coal to Northeast Asia is now even more favourable than to its usual, closer, Atlantic Basin markets, which has experienced sharp declines. Amongst the Asian countries with most demand for the Colombian commodity are South Korea and Japan, but China has increased its imports.


India blocked WTO ministerial declaration agreement in December: US — India Times
Despite Argentina’s diplomatic efforts, the World Trade Organization (WTO) 11th Ministerial Conference in Argentina on December 2017 failed to sign a declaration reaffirming the principles and objectives of the WTO.

ASEAN & Oceania-LAC   

Australia: Sweeping changes set for asparagus, pomegranate imports — Fresh Fruit Portal
TPP integration won’t be without its hitches. Australian authorities are cracking down on asparagus from Mexico and Peru after consistently finding pest amongst the produce; all that means is Australia may enforce mandatory treatment for these goods before they leave their home countries.

Growing trade and investment with Brazil — trademinister.gov.au
Australia’s trade minister, Steven Ciobo, will visit Brazil, its most important Latin American partner, for the first time in four years in order to promote furthering bilateral relations.

Global firm expands Latin American offering — Australasian Lawyer
DLA Piper Global Law Firm, Australian Bazzi Lawyers, and Chile’s Noguera, Larraín & Dulanto, have announced a merger resulting in a 60-lawyer firm in Chile known as DLA Piper BAD NLD.

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