'Restoration of landmark gate to take up to 3 years'

'Restoration of landmark gate to take up to 3 years'

Restoring the Sungnyemun, the 610-year-old national treasure which was destroyed by an overnight fire, is expected to take up to three years and cost about 20 billion won, an official at the Cultural Heritage Administration estimated.

The landmark gate, standing in the heart of Seoul, was reduced to ugly twisted beams and ashes. The gate, better known as Namdaemun, was designated as National Treasure No. 1 in 1962.

Police have yet to determine the cause, but suspect an arson attack because of witnesses' statements and two cigarette lighters found inside the structure. No one was injured in the blaze.

"Though we have yet to discover the exact scale of the devastation, the restoration work will take two to three years," said Kim Sang-gu, a senior official at the CHA. "In 2006, we drew a real-size blueprint of the Sungnyemun as part of our efforts to establish anti-fire systems for major wooden cultural relics, so we can technically restore the archetype of the gate."

President-elect Lee Myung-bak visited the scene of the inferno yesterday, and expressed deep sadness over the collapse of the national treasure.

"(Namdaemun) was a symbolic cultural heritage of our nation; its devastation aches the hearts of the citizens," said the grim-faced Lee.



The fire broke out at around 8:50 p.m. on Sunday somewhere between the first and second levels of the landmark gate. At about 2 a.m. yesterday, the two-tiered wooden structure collapsed.

Police and firefighters are criticized for having failed to promptly respond; they apparently feared that the ancient gate could be damaged by anti-fire efforts.

According to a taxi driver, an eyewitness, the gate was set ablaze about two minutes after a man presumably in his 50s climbed up the stairs to the wooden part of it.

The government held an emergency meeting yesterday, presided over by Prime Minister Han Duck-soo.

During the meeting, it was decided to set up a task force to coordinate the efforts of all parties concerned in ascertaining the exact cause of the fire and restoring the landmark. Administration members spoke of the need to check and strengthen safety measures to protect all the national treasures.

The presidential transition committee also called on investigating authorities and relevant agencies to get to the bottom of the case and take proper measures to deal with it.

"I feel sorry to our descendents for failing to protect the gate. The incoming government needs to check related policies and systems regarding the management of such cultural gems," said Lee Kyung-sook, the committee chairwoman.

Police yesterday launched a full-scale investigation into the fire. However, they have yet to determine the exact cause of the fire, and are leaving open all possibilities.

"We questioned three witnesses, but some parts of their accounts clashed with one another. We also analyzed images from four closed-circuit televisions installed around the gate, but failed to secure the scenes of a suspect moving up the Sungnyemun," said Kim Young-su, head of the Namdaemun Police Station which is handling the case.

He added, "The exact spot and cause of the fire will be verified after the results of the forensic investigation come out."

Police are also looking into whether there was any negligence by those in charge of maintaining the gate. They questioned security guards and supervising personnel.

Experts say that the fire was likely caused by an arsonist, as the flames were first seen from the second floor of the wooden structure where there were no electrical illumination devices. Also, some firefighters found two cigarette lighters at the scene.

By law, anyone who sets fire to a nationally designated cultural relic could face a jail sentence exceeding three years.

Lawmakers criticized authorities for failing to timely and systematically react to the incident to salvage the landmark gate.

"(Authorities) were quite at a loss while I was watching the gate engulfed in flames for five hours. I was wondering whether any national system, in general, functions properly," said Sohn Hak-kyu, the new chief of the United New Democratic Party.

"Since this was presumably an arson fire and people seem to blame the fire department's misjudgment in putting out the fire, we need to thoroughly verify the cause and draw up measures to prevent the repeat of such incident," said Kang Jae-sup, chief of the Grand National Party.

A palpable sense of frustration prevailed among citizens in Seoul regarding the devastated landmark.

"Opening Namdaemun to the general public, the authorities had only six fire extinguishers, which shows how neglectful they were in managing our precious relics. At around 11 p.m. on Sunday, the overall shape of the gate remained pretty intact, but their late response to the fire and the failure to coordinate the efforts of all parties engaged in extinguishing the fire reduced the gate to rubble," said Kim Jae-min, an office worker in Seoul.

"Watching the scene of our best landmark on fire, I felt like one of my close friends was burning alive. Rather than passing the buck, we need to check anti-fire plans once again to prevent another precious treasure from disappearing again," said Shim Gyu-in, a college student in Seoul.

By Song Sang-ho

(sshluck@heraldm.com)






2008.02.12

Ins and outs of transferring cash out of Korea

[Daniel Costello on Finance] Ins and outs of transferring cash out of Korea
The Korea Herald



Ten years ago the best way to get a large sum repatriated from Korea was to bring a trusted Korean friend along to the bank to conduct the transfer in his or her name.
The documentation in a currency transfer protects you from the risk of dual taxation and ensures the legality of your transaction tomorrow when your host country's bank might wonder about its origin. The sight of a Korean bank teller marking totals in your passport can be disconcerting, yet it is to your benefit. It is added proof that your remittance was made and registered legally.

Monthly wire transfers of legally earned and saved income appear a wise method of remittance. By regularly sending money home you minimize your vulnerability to wild currency swings. You would also minimize your exposure to a, hypothetically speaking, steadily sinking won.

This is the same concept as making monthly payments on outstanding accounts owing and is also the same argument made for monthly investment plans. Lump sum transfers are tax free in your home nation only if they represent earned income alone.

Moreover, a lump sum is taxable if it represents the redeemed earned equity on such investments as stocks, bonds or mutual funds.

Perhaps the purchase of gold as a hard asset might have made sense five to six years ago when its value was easily a third of what it has become today. Yet, future gold values predicted to increase to $1,000 could cause some to buy the high risk-low return (possible ten percent increase) asset.

A small scale seller will always have a hard time getting a good price on the sale of gold, however. Your purchase price will also be higher than the market prices with added handling, forging and service fees.

As a tangible asset, gold does not perform well when compared to liquid cash or currency, but may be useful in some nations as collateral on local loans.

Avoid the temptation to smuggle undeclared income or currency in excess of $10,000 through international customs as it is completely illegal. The same could be said for carrying travellers' checks in excess of $10,000 dollars or trying to mail gold bullion home.

Usually couriers will not insure gold products, and if lost and undeclared, this remains high risk, and again, is completely illegal.

Avoiding exchange risk fluctuations can be extremely difficult but many local banks offer foreign currency accounts which might be a better overall risk for lump sum savings held in country.

At the same time, currency fluctuations can also at times work in your favor. So a dual split, 50 percent of saved income in a local foreign currency account and a 50 percent monthly remittance at current exchange rates might make the most sense in minimizing currency exchange risks and still making large lump sum transfers.


To contact Daniel, visit his website at crossculturalreviews.blogspot.com -- Ed.




2008.02.11

Globalisation Splits Rich and Poor

Globalisation Splits Rich and Poor
(BBC News – Steve Schifferes)

There is considerable unease about the pace of globalisation around the world, according to a new BBC global poll.

Half of all people polled across 34 countries say that the pace of globalisation is too fast, while 35% say globalisation is going too slowly.

But concern about globalisation is strongest among the world's richest countries, where it is closely correlated with a belief that the fruits of economic growth have been unfairly shared.

In many of the world's poorest countries, however, where large majorities say that the benefits and burdens of economic development have not been shared fairly, people are more likely to say that globalisation is proceeding too slowly.

"People in some developing countries want to accelerate globalisation and appear to believe that this will help break down some of the inequities in their country," said Steven Kull of the University of Maryland's Program on International Policy Attitudes, a co-sponsor of the poll.

Among the countries where this correlation is strongest are the Philippines, Indonesia, Brazil, Kenya and Mexico.

Overall, 64% of the global public believes that the economic benefits of growth have been shared unfairly, with majorities favouring this view in 27 out of 34 countries.

China exception

One exception to the pattern is China, which has experienced extraordinary economic growth of over 10% annually during the last decade.

In surveys conducted only in urban areas, most Chinese say that economic growth has been fairly distributed even though economists say the gap between rural and urban areas has widened sharply. But the Chinese public is strongly concerned about the pace of globalisation, which is dramatically transforming the physical and social landscape of cities like Shanghai.

So it appears that for some emerging market countries, concern about globalisation centres around social dislocation rather than its economic costs.

The same pattern may apply in India in cities like Bangalore, although polling was not completed there in time to be included in this survey.

Western unease

The survey, which was conducted before the recent sharp falls in world share markets, also shows considerable unease about deteriorating economic conditions, especially in rich countries.

Only 22% of US citizens said economic conditions were getting better in their country, with 78% saying they were getting worse. Citizens in France, Italy and Japan are equally pessimistic, with only 22% of French people and 33% of Japanese saying conditions were getting better.

In contrast, there was economic optimism in China, Russia, Canada, Australia, and the UAE, all countries which are benefitting from increased economic growth, partly as the result of rising commodity prices for oil and minerals.

Protectionist pressures

It is also striking that among rich countries, concern about globalisation is strongest among Western European countries such as France, Spain, and Italy who favour a social model of development.

It is slightly weaker in "Anglo-Saxon" economies such as the US and the UK, where growth is actually slowing faster and inequality has been rising more sharply.

"There is real public concern about the direction of the economy, but it's not only about a downturn. It also has to do with how fairly the benefits and burdens are shared, and the pace of globalisation," said Doug Miller, director of Globescan, the polling company that conducted the survey on behalf of the BBC.

With growing protectionist rhetoric among Democrats ahead of a presidential election in the US, the poll suggests that restarting the stalled world trade talks – and overcoming the growing scepticism about the benefits of free trade in industrial countries – could be an uphill task.

Globescan interviewed 34,528 people in Argentina, Australia, Brazil, Canada, Chile, China, Costa Rica, Egypt, El Salvador, France, Ghana, Germany, Great Britain, Guatemala, Honduras, India, Indonesia, Israel, Italy, Japan, Kenya, Lebanon, Mexico, Nicaragua, Nigeria, Panama, the Philippines, Portugal, Russia, South Korea, Spain, Turkey, UAE, and the United States. Interviews were conducted face-to-face or by telephone between 31 October 2007 and 25 January 2008, before recent falls in world share prices. In 16 of the 34 countries, the sample was limited to major urban areas. The margin of error per country ranges from +/- 2.4% to 4.4%.

Read in full at http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/07_02_08worldservicepoll.pdf

Canadian Pavilion at CommunicAsia / BroadcastAsia 2008 in Singapore

Canadian Pavilion at CommunicAsia / BroadcastAsia 2008 in Singapore, June 17-20
(Canada-Asia News – Industry Canada)

A Canadian pavilion has been organized at CommunicAsia and BroadcastAsia to be held June 17-20 at Singapore Expo. CommunicAsia, the region’s premier information and communications technology event, will showcase the full spread of convergent technologies and applications from industry leaders intended to enhance enterprises’ mobility and users’ lifestyles. Held in conjunction, BroadcastAsia, a digital multimedia technology event, offers industry professionals, decision makers, vendors and buyers a one-stop business environment to network, build alliances and source, purchase and leverage on industry information.

For more information on the event visit: http://www.communicasia.com. For information on the Canadian pavilion contact Michael Cleary at Industry Canada at 613-991-4903 or cleary.michael@ic.gc.ca.

Canada’s “Missing” Trade with Asia – Study

Canada’s “Missing” Trade with Asia – Study
(Conference Board of Canada – Danielle Goldfarb, Louis Theriault )

Conventional trade data and analyses fail to adequately capture globalized production. This report uses a new measure of trade to provide a broader picture of Canada’s trade with Asia.

Document highlights:

International trade data – the basis for public and policy discussions on trade – are misleading and fail to capture the richness of globalized production. Goods and services are increasingly made with inputs from different countries. Services are increasingly traded. And Canada increasingly buys and sells both goods and services through foreign affiliates. Conventional analyses by contrast focus on final goods exports, ignoring or undercounting these other activities. Canada’s “Missing Trade” with Asia creates a broader measure of trade that takes better account of these activities.

The report estimates what Canada’s trade with Asia looks like after correcting for underreported trade, foreign affiliate sales, and the increasing importance of services trade. With this “missing” trade included, Canada has a much more sizeable economic relationship with Asia than official data show.

But the trends are discouraging: Canada underperforms by even more than official data suggest, particularly for services sales to Asia.

Download the 44-page report at http://www.conferenceboard.ca/documents.asp?rnext=2431 .

Canadian Embassy in Japan Hosts Nanotech Seminar

Canadian Embassy in Japan Hosts Nanotech Seminar
(Canada-Asia News – Kagaku Kogyo)

In conjunction with the Nanotech 2008 international conference in Tokyo, the Canadian Embassy in Tokyo will conduct a Canada-Japan Nanotechnology Partnering Seminar on February 12. After Canadian and Japanese speakers present their countries’ nanotech industries, representatives of Canadian companies and research institutes will propose cooperative projects to their Japanese counterparts.

Asian Exporters Urged to Cooperate Over Product Piracy

Asian Exporters Urged to Cooperate Over Product Piracy
(AFP)

Asian exporting countries, mainly China, should provide enough information about their exports to help in the fight against counterfeiting, the head of the World Customs Organisation (WCO) said Tuesday.

WCO secretary general Michel Danet said a transit hub like the Gulf emirate of Dubai could not curb the transiting of counterfeits if exporting countries did not cooperate.

"The problem for the emirate is making sure that all this trade is moving while still respecting international laws," he told AFP on the sidelines of a conference on combating counterfeiting and piracy held in Dubai.

"If Dubai cannot rely on the cooperation of Asian countries and (mainly) China when there are 11 million containers (being handled annually in the emirate), not everything can be checked," he said.

He said the WCO and its partners, who took part in the fourth global congress to combat counterfeiting that ended Tuesday, want to see cooperation between exporting and importing countries, including the transiting hubs.

In Dubai "they are trying to manage the problem. They have put in place the needed legislation and the teams ... but they don't have information about what is arriving from China," for example, he said.

The city state Jebel Ali Free Zone is home to the largest man-made port in the world that handle the biggest container ships. Dubai ports handled some 8.92 million TEU (twenty-foot equivalent units) in 2006.

David Benjamin, co-chair of Business Action to Stop Counterfeiting and Piracy, urged conference participants to call for "shutting down piracy in free trade zones" worldwide, among other measures to fight counterfeiting.

Danet told a press conference earlier that Arab countries are cooperating to fight global counterfeiting, adding that the WCO has established cooperation with the Arab League and the Gulf Cooperation Council.

"The GCC countries have understood what is at stake and they ... don't want to be contaminated by illicit goods," he said.

"Counterfeiting today kills people," Danet said, pointing out that medicines are also being counterfeited.

Canadian Pavilion at Seoul Food & Hotel 2008

Canadian Pavilion at Seoul Food & Hotel 2008
(Canada-Asia News – Canadian Embassy, Seoul)

A Canadian pavilion is being organized at Seoul Food & Hotel taking place May 14-17, 2008 at the Korea International Exhibition Centre.

SFH 2008 will be the single integrated food exhibition in South Korea specifically for international food and beverage suppliers with 450 exhibitors from 30 countries as well as 430 local companies. It will provide an opportunity for Canadian food and beverage exporters and traders to showcase their products to the Asian food and beverage market. Participants will include food importers, distributors, processors, wholesalers, retailers, food service managers and chefs.

In advance to the show, the Canadian Embassy in Seoul will provide supportive services such as market prospects and key contacts. A reception will also be organized during the show period to bring together Canadian exhibitors and key contacts in the South Korean agri-food industry.

EU Opens New Probe into Below-Cost Chinese, Korean and Taiwanese Steel Imports

EU Opens New Probe into Below-Cost Chinese, Korean and Taiwanese Steel Imports
(International Herald Tribune – Associated Press)

The European Union started a new probe Friday into whether China, South Korea and Taiwan are illegally selling steel below-cost and hurting European steelmakers. The investigation adds to one the EU launched in December into Chinese steel imports.

Steel producers such as ArcelorMittal SA and ThyssenKrupp AG complain that stainless steel cold-rolled flat products used for building and engineering products are flooding the European market.

Surging imports of steel – up by 3,300 percent over the last five years – have pushed prices down by a quarter, according to the European Confederation of Iron and Steel Industries, or Eurofer. They have asked for a 40 percent surcharge on these imports, alleging Chinese output is "out of control."

The European Commission will now investigate cold-rolled flat stainless steel imports from the three Asian nations to Europe during 2007. It is already looking into imports of hot-dipped metallic coated iron or steel flat-rolled products from China.

Under global trade rules, the EU has the right to impose extra charges on imports if it gathers evidence that these countries are illegally selling below cost.

Europe does not recognize Chinese companies as operating in normal market conditions because the economy is still largely state-controlled and the government subsidizes rent and energy bills. It will check steel making costs in Mexico instead to compare them to European rivals.

The soonest there would be any hint of trade sanctions from the new probe would be November, when officials can make a recommendation for temporary antidumping duties and EU governments can decide to take action.

European trade statistics bear out steelmakers' complaints. EU steel imports from China and South Korea during the first 11 months of last year almost doubled from the same period in 2006. China provided around a third of the EU's steel imports, far ahead of any other supplier. The EU economy grew strongly over the period, calling for more steel to make cars and construct buildings.

Eurofer's members include the world's largest steel maker, ArcelorMittal, which complained in August of cheap Chinese imports threatening the European market by holding down prices. The group also represents Britain's Corus Group PLC and German steel makers ThyssenKrupp AG and Salzgitter AG. All of Eurofer's member companies employ 372,000 people in Europe, turning out 200 million metric tons of steel a year and making a combined turnover of €138.5 billion (US$206 billion).

Europe is now China's largest trading partner and it is importing more and more – the trade gap widened by a quarter in the first 10 months of 2007.

EU officials have warned of a protectionist backlash if China does not do more to open up to European exports. They have asked Beijing to change a system that keeps its currency cheap, giving Chinese exporters an unfair price advantage and adding to the country's surpluses.

Hong Kong, Japan Reach Open-Skies Agreement

Hong Kong, Japan Reach Open-Skies Agreement
(Cargonews Asia)

Hong Kong and Japan have reached an open-skies agreement to liberalize air services, enabling unlimited air passenger and cargo services between Hong Kong and cities in Japan.

Currently there are 154 passenger flights and 59 freighter services operating between Hong Kong and Japanese cities including Tokyo, Osaka, Nagoya, Fukuoka, Sapporo, Sendai and Okinawa each week.

The arrangement will enable unlimited air passenger and cargo services to all of these cities, excluding Tokyo, and flights between Hong Kong and Kagoshima and Okayama can also be launched.

The two major Hong Kong airlines – Cathay Pacific and Dragonair – welcomed the new arrangement, but only Hong Kong Express announced that it would be applying for the right to fly to Nagoya, Kagoshima and Okayama. The airline had previously announced that it would be flying to Okinawa starting from April.

Food Quarantine System Overloaded – Japan

Food Quarantine System Overloaded – Japan
(Daily Yomiuri Online - Koji Takishita et al.)

Only 10% of imports tested due to staffing shortages, technical difficulties

[Japanese] Consumers' concerns over the safety of food produced in China have once again been fueled by the latest food-poisoning case involving frozen gyoza imported from that country.

But the incident has also exposed the physical and technical limits of quarantine inspections of imported foods and, as experts have pointed out, drawbacks in importers' safety control systems.

An official of the Health, Labor and Welfare Ministry's Yokohama Quarantine Station, one of the largest quarantine facilities in the country, pointed out one of the problems of inspecting processed foods.

"It's difficult in the first place, and manpower is limited," the official said. "If we're required to inspect more items, it'll become difficult to examine vegetables and other perishables in the way we're doing now."

According to the ministry, quarantine officials check for the existence of intestinal bacteria and additives in processed foods, but not agrochemical residues. But they focus most of their attention on perishables, such as vegetables, meat and marine products, which they rigorously check for any violations against standards set for individual items based on a "positive list."

The current quarantine system was introduced in 2006 and prohibits the distribution of foods that contain agricultural and veterinary chemicals above a certain level.

As for the major reasons why no such tests are conducted on processed foods, the ministry said:
-- Because the amount of individual ingredients in processed foods is so small, there is little chance of detecting chemical residues.
-- Combinations of a multitude of ingredients complicate inspection procedures.
-- As ingredients are washed and heated when being processed, the amount of any chemical residues remaining in the food should be low.

There also is the question of the volumes involved.

To import foods from other countries, importers are required to submit to one of the nation's 31 quarantine stations and branches documents detailing information about the products, such as lists of ingredients, production methods and additives.

After this paper screening, only some imported products are actually tested for hazardous substances due to limited manpower, according to the ministry. The ministry said less than 10 percent of imported food was tested.

Of more than 1.84 million shipments reported to quarantine stations in fiscal 2006, only 203,000, or about 11 percent, were actually tested. This figure includes tests of products imported by firms that have made violations in the past.

The number of quarantine officials is increasing each year, with the current figure standing at about 330.

Nevertheless, even if the quarantine system is upgraded in the future, the ministry is hesitant about testing for agrochemical residues in processed foods. A senior official of the ministry's Food Safety Department said it would be more practical to enhance measures taken by importers to check safety. …

Read the complete article at http://www.yomiuri.co.jp/dy/national/20080202TDY03304.htm

U.S. Testing Rules Upset Korean Exporters

U.S. Testing Rules Upset Korean Exporters
(Korea Times – Cho Jin-seo)

Korean companies spend about 900 billion won ($950 million) every year in additional costs in conducting quality and safety tests to meet U.S. industrial standards, according to a government study.

The KSO (Korean Standards Association) reported Sunday that it received 1,069 complaints from firms, laboratories and institutions last year about unreasonable and arbitrary industrial standards of the United States.

The United States is the largest export market of South Korea, and goods exported to the country are often required to meet the standards and guidelines set up by private associations or interest groups of its industries, rather than official guidelines of international organizations such as the ISO (International Organization for Standardization).

In the case of the American Association of Textile Chemists and Colorists, the agency required that some tests to check for shrinkage of clothes be conducted using U.S.-made detergent. The report insisted that the price of standard U.S. detergent is 100 won per gram, which is 20 times more expensive than Korean detergent. So Korean firms are spending 10 billion won in buying the U.S. detergent to conduct 1 million fabric tests every year, it estimated.

“In the past, the government did not care about U.S. industrial standard issues, because it thought this was a market issue that should be dealt with by companies,'' said a KSO spokesman.

Many countries take advantage of local industrial standards as a non-tariff barrier to protect local industries from foreign goods and services. Moreover, many U.S industrial standards are considered as de facto global standards because of the size of the country's market and its influence on the global economy.

In another example, in testing the tensile strength of some plastic materials, the American Society for Testing and Materials enforces firms to use a specially designed metal mold and a cutter, the report said. It takes about 30 million won to make a mold and another 20 million won for cutters for the test of one product, and some 30 companies and agencies in Korea are conducting the test as many as 50 times a year. The total cost of the plastic testing is 46 billion won, it insisted.

The Korean Standards Association, which is under the wing of the Ministry of Commerce, Industry and Energy, has been operating a Web site, http://www.defacto.or.kr, to receive complaints from firms and institutions,

Of the total of 1,069 complaints, 504 cases involved U.S. agencies requesting the use of specific U.S.-made testing equipment and materials in quality and safety experiments. This was followed by 179 instances of long, drawn-out tests. Other complaints that were voiced included lack of consideration for South Korean environmental conditions and climate, and generally poor or outdated technology used in tests.

The standards agency said it found at least 10 testing standards that were arbitrary or ineffective.

Maritime Executive Tilden Predicts Cargo Diversion to Mexico, Canada

Maritime Executive Tilden Predicts Cargo Diversion to Mexico, Canada
(American Shipper – Eric Kulisch)

U.S. ports’ inability to expand infrastructure to keep up with growing trade volumes means more cargo from Asia will shift to Mexican and Canadian ports of entry rather than the U.S. West Coast, said Douglas Tilden, chief executive of Ports America.

The marine terminal executive blamed the lack of a national freight transportation policy and environmental constraints for limiting port investment for many years.

"I can sit down with the transportation minister of a country like Mexico and get the big picture about their plans. I'd have to wade through 20 different agencies in Washington to get the same information," he said in a lecture at the California Maritime Academy in Vallejo.

The Mexican government by comparison is embarking on a five-year, $250 billion infrastructure program that includes development of a new container port at Punta Colonet that would transport cargo by rail to the United States. Last year Canada opened the Port of Prince Rupert on the Pacific Coast dedicated to intermodal service to the U.S. Midwest.

Container volumes at West Coast ports are expected to triple by 2035, and Tilden said the United States is falling behind the curve.

At the twin ports of Los Angeles and Long Beach, "there hasn’t been a single application for new terminal capacity approved … for the last five years, and under the best of circumstances we might see two smaller facilities within the next five to seven years. The plain fact is that America needs to add the equivalent of a new port the size of New York and New Jersey every year for the next 12 years to meet growth demand,” Tilden said, according to a press release from the California Maritime Academy.

"Overall, I think we've lost the political will to build new port capacity and the rail and highway infrastructure which must go with it. Local politicians complain they see little of the economic benefits of a port locally but field all the complaints about the congestion and pollution they generate," he said.

Tilden recently took over expanded responsibilities managing the entire Ports America Group after last year's acquisition of Marine Terminal Corp. by a subsidiary of insurance giant AIG. AIG Highstar Capital has merged MTC and P&O Ports North America, which it previously acquired from Dubai Ports World, under the Ports America brand. It also owns vehicle processor AMPORTS. The combined company has 95 terminal operations in 49 ports with total annual revenue of $1.6 billion.

Tilden also blamed what he called "environmental Balkanization" for complicating marine transportation. "There are so many conflicting local, state and regional environmental regulations that it is hard for companies to make rational use of their assets. We want to be good stewards, but we face a welter of different local and regional regulations just on what fuels we can use for operations … propane, liquid natural gas or bio-diesel. When a change in rail rates or some other market factor suddenly shifts cargo volumes from one port to another, we often can't move our equipment assets because they don't meet the standards of the new location," he said.

Tilden said East Coast ports will not take up much of the slack, making Mexican and Canadian greenfield ports even more attractive. "The pending expansion of the Panama Canal will primarily benefit bulk cargoes like Brazilian soybeans bound for Asia. But for merchandise shipments, the extra fuel costs and tolls of a canal transit don't make economic sense. Merchandise will continue to flow to the West Coast."

However, several East Coast ports last year experienced continued volume growth led by the extraordinary 20.6 increase by the Port of Savannah compared to West Coast ports where volumes remained flat or slightly declined. Shippers have been diverting more cargo to East and Gulf costs ports and developing import distribution centers there during the past two years to add shipping flexibility. That trend is expected to continue, according to logistics experts.

The current economic downturn in the United States provides only a temporary reprieve from cargo congestion, Tilden said.

"Although volumes are currently flat, our analysis shows that when we come out of a recession, we get a pretty rapid upturn … sometimes as much as 15 percent in one year. If that happens in the next few years, it would create chaos under present conditions. We just couldn’t handle it.”

How Low Can Oil Prices Go?

How Low Can Oil Prices Go?
(Stephen Poloz, Export Development Canada)

Oil prices have broken below the psychologically-important $90 level, leading speculators who have bet heavily on $100-plus oil to consider bailing out of the market. For real consumers, in contrast, this is good news – and the question is, how much better can it get?

There is a wide dispersion of views on the future. Just a year ago many thought oil prices were headed below $50, while today some believe they are headed above $100. A non-economist might wonder what changed during the past 12 months to account for such shifts. Certainly, the arguments that are made to support forecasts are not new – rapid growth in Asia, political risk in the Middle East, a perception that conventional sources of oil are drying up, and the like.

Consider the connection between economic growth and oil demand, which is not as tight as one might expect. The world economy grew by nearly 5% in 2007, but the demand for oil rose by only 1%. Fact is, since 1975 the world has nearly doubled its ratio of GDP to oil consumption. This is partly due to switches to other energy sources. But even if we use a broader measure of energy use, taking all sources into account, the world has seen a 50% improvement in the last 30 years. For the U.S., overall energy efficiency has doubled, while for China it has almost quadrupled!

Of course, a big part of the downshift in oil use over the past 30 years happened in the early 1980s, after the oil price shocks of the late 1970s. In the U.S. there was a 60% increase in the fuel efficiency of vehicles between 1975 and 1982. Consumers switched from large cars to mid-size cars, and to a lesser extent to small cars. Large cars fell from around 30% of sales to 18% during 1975-80. But then oil prices eased, and the pressure to conserve eased as well. By 2007, 35% of the vehicles sold in America were large. Vehicle weights have moved back up to 1970s levels, horsepower is up and truck sales as a share of the total are up significantly. Nevertheless, anecdotal evidence suggests that consumers are once again shifting toward fuel efficiency.

Such consumer shifts can have a big impact on the demand for oil, but they take time, especially now that the importance of the U.S. to this equation is lower. Back in 1975, the U.S. had 40% of the world’s cars, and now that number is around 20%. China and India only account for 3-4% of the world’s vehicle population. They are rising fast, but at least those cars are small.

Oil production analysis only complicates the forecast. Old fields see declining yields, but new technologies permit increased recovery. New discoveries from deep offshore exploration have added considerably to long-term capacity. The IEA estimates that non-OPEC suppliers alone will manage to raise production by about 1 million barrels per day in 2008 – enough to satisfy the global increase in demand, according to our forecast. And Saudi Arabia is boosting output, too.

The bottom line? There are a lot of unknowns buried in every oil price forecast. But it looks like production capacity is rising faster than demand, consumers are adjusting to high prices, and speculation and leverage have played a big role in the latest run-up. This makes the risks for 2008 look decidedly asymmetric – oil prices are likely to trend lower, at least for now.

Gas-Exporting Nations Mull OPEC-Style Cartel

Gas-Exporting Nations Mull OPEC-Style Cartel
(The Times)

The world’s leading gas-producing nations will meet in Moscow in June to discuss the creation of an OPEC-style cartel.

Speaking at the World Economic Forum in Davos yesterday, Abdullah al-Attiyah, Qatar’s Energy Minister, said that at least 14 countries would attend the meeting of the Gas Exporting Countries Forum (GECF), an informal club whose members control more than 70 per cent of world gas reserves and 42 per cent of production.

Mr al-Attiyah said that the organisation, which was formed in 2001, had appointed experts to study the feasibility of forming a cartel on the lines of OPEC and a report on the findings would be produced at the meeting in Russia.

The prospect of a cartel for gas gained weight in 2006 when Europe’s two biggest suppliers, Gazprom, of Russia, and Sonatrach, of Algeria, signed a partnership deal. Their relationship has since cooled, although President Putin said last year that a gas OPEC was “an interesting idea”. Nevertheless, the concept has alarmed Western importer countries that rely heavily on gas for heating and electricity.

With the dwindling of reserves from the North Sea, the UK, for example, is importing more and more gas. Before 2004 it was self-sufficient, but this year up to 25 per cent of its overall supplies will be imported and that is expected to reach 75 per cent by 2015.

There is currently no co-ordination of prices in the global gas market. Prices for long-term supply contracts are agreed directly between producers and consumers.

However, Richard Savage, head of energy research at Mirabaud, the financial services group, said that the creation of such a cartel could backfire for producers. “It would be hugely worrying for consumers and a big incentive for them to look at alternative energy technologies,’’ he said.

Korea Suffers Soybean Shortage

Korea Suffers Soybean Shortage
(Chosun Ilbo, Korea)

Korea is feeling the pain of the global grain crisis. For some time, small tofu makers have been having trouble operating their factories due to rising soybean prices. Now some are letting their factories idle because they can't get soybeans at all, no matter how much they are willing to pay.

Large businesses have yet to have problems purchasing soybeans, but they are also complaining about rising costs. Consumers haven't been exempted from the pain, either – the market price of soybeans has almost doubled that of last year.

The Korea Agro-Fisheries Trade Corp. failed to import a planned 21,000 tons of soybeans late last year. A Chinese exporter broke a contract with the corporation last August to sell soybeans for US$495 a ton even though it had to pay a penalty. The trade corporation had to place an order for soybeans at $630 a ton with another trader.

Although it has not drawn as much attention as wheat, corn and rice, soybeans are at the center of the recent "agflation", or agricultural products inflation. The trading price of soybeans at the Chicago Board of Trade has been rising steadily, from $5.25 a bushel (27.2 kg) in October 2006 to $7.35 in January 2007 to $12.64 this month. This has caused the import price per ton paid by the Korea Agro-Fisheries Trade Corp. to increase from $330 in 2006 to $378 in 2007 to $690 currently. A supply shortage is part of the problem.

The biggest reason for the rising prices of agricultural products is soaring demand in China and India. Their economies have grown rapidly, causing demand to grow, while yields have fallen due to serious weather conditions. Another reason is that farmers have started to replace soybean crops with other grains as high oil and fertilizer prices have increased production costs, and alternative energy sources made of grains like ethanol and bio-fuel have become more popular.

Speculation funds are flying into the grain market. Yoo In-taek, a manager at Pulmuone, which runs a soybean farm in China, said, "Even China is importing soybeans from the U.S. because growing demand has lowered the soybean supply. As a result, the Chinese government announced that it will impose grain taxes to control exports of soybeans to other countries." Korea needs to come up with long-term measures to secure grain without difficulties, he added.

China, EU Expanding Anti-Piracy Efforts

China, EU Expanding Anti-Piracy Efforts
(Business Week)

Europe and China will create a network to share information among their ports as they fight product counterfeiting that poses a growing threat to public safety, a European Union official said Monday.

European and Chinese officials are working on a plan to fight the trade in fake medications, toys, food and auto parts, said Laszlo Kovacs, the European Commission member in charge of customs.

"It is clear that counterfeiting is a serious threat to the safety, the health and even the life of our citizens," Kovacs said after meeting with Chinese customs officials.

The plan will include an "intelligence network" linking Chinese and European ports, Kovacs said. He declined to give details of the network or other expected elements of the plan.

China is the biggest source of counterfeit goods seized at European ports, Kovacs said. Recent data suggest China's share of seized goods is falling, but it was too early to know whether the total amount in European markets was falling, he said.

The two sides also discussed expanding a two-year-old pilot program that tracks cargo between a port in southern China and two in Europe in hopes of improving security, Kovacs said.

He said the European Union plans to station an anti-counterfeiting official in Beijing to work full-time with Chinese authorities.

China is a leading source of illegally copied goods ranging from music and movies to sporting goods and medicines. Industry groups say the scale of offenses appears to be growing despite stepped up Chinese penalties and repeated crackdowns.

China to Build 97 New Airports by 2020

China to Build 97 New Airports by 2020
(Cargonews Asia)

China plans to build 97 new airports by 2020, a move that will cater to soaring air travel demand and alleviate the strain on existing aviation infrastructure.

China's General Administration of Civil Aviation said the USS$89 billion undertaking over the next 12 years will bring the total number of civilian airports in China to 244, up from 147 in 2006.

It announced the plan in a statement on its website but did not specify if the airports are domestic or international.

The new airports will be built in five main regions of the country – north, east, south-central, south-western and north-western.

When the expansion is complete, it would mean that 82 percent of China's population – expected to hit 1.45 billion people by 2020 – would be living within 100km – or a 90-minute drive – of an airport. Currently, about 60 percent of the country's 1.3 billion people live within this range.

The General Administration predicts freight traffic will rise by 14 percent annually.

Canada Pursues Ambitious Gateway Strategy

Canada Pursues Ambitious Gateway Strategy
(Hoover’s)

As global maritime commerce steadily grows, major trading nations have been paying special attention to expanding existing gateways or establishing strategic new transportation facilities on coasts and inland locations.

Canada is no exception, staking a great deal on the fact that, thanks to the Great Circle route, its west and east coast ports are the geographically closest in North America to both Asia and Europe.

This advantage could translate into an unprecedented opportunity to become the gateway of choice into and out of the continent as goods flow in ever-increasing volumes between Asian and North American supply chains.

“Canada's geographic position is, in fact, ideal all round,” notes the Conference Board of Canada think-tank in a recent report. “We are closest not only to U.S. consumer markets, but also to its other major trading partners.”

For example, Vancouver is more than a full day's sailing time closer to Shanghai than Los Angeles/Long Beach. Transit times are also shorter between Halifax/Montreal and Antwerp than U.S. east coast ports.

In light of the huge pressure of Asian trade on U.S. ports, can Canadian ports offer effective alternatives? The challenges are many not the least being the forging of a united, co-ordinated gateway strategy involving both industry and governments in such a vast country with strong regional rivalries.

Since coming to power in early 2006, the minority Conservative government of Prime Minister Stephen Harper has been allocating large sums for mainly port infrastructure projects.

First to benefit was the Asia-Pacific Gateway and Corridor Initiative, which committed C$591m ($592m) for investment in British Columbia, including C$30m in the new container terminal launched last autumn at Prince Rupert. A further C$233.5m has been promised for enhancing the flow of international trade through the west coast through road, rail and other improvements.

In addition, the 2007 budget committed C$2.1bn for more infrastructure investments for undertakings such as the newly-conceived Quebec-Ontario Continental Gateway and Trade Corridor and the Atlantic Gateway, built around the four maritime provinces of Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador.

Shipping Federation of Canada president Michael Broad considers that the federal government is doing things right by integrating gateway and infrastructure initiatives.

“We support this approach,” he told Lloyd's List. “Rather than just pouring money into a problem, they are trying to ensure there is proper planning being done. Just as the transportation system is integrated, so should the planning and spending.

“The requirements for the west coast are more easily defined with the surge of traffic from Asia. In eastern Canada, border crossings with the U.S. have been identified as problem areas…. And all the requirements of the Atlantic Gateway have yet to be fully documented and finalised.”

Bob Ballantyne, president of the Canadian Industrial Transportation Association, the largest shipper body, whose members account for an annual freight bill of C$6b, commends the federal government for seeking gateway opportunities as capacity constraints build up.

On the other hand, Chamber of Shipping of British Columbia president Rick Bryant advocates more government action to ensure that port land and corridors are reserved to support future growth. He feels that collective action is also essential to bring Canada's Asia Pacific Gateway to another level.

“All the parties in the supply chain must move from optimising their operations to system-wide optimisation,” Capt Bryant stresses. “Ocean carriers, terminals and land carriers need to work more closely on co-ordinating cargo and conveyance planning and scheduling. A commitment is needed for realistic contingency plans for winter rail disruptions due to avalanches and washouts.”

For its part, the Conference Board asserts that 'soft issues' may be even more critical to Canada's long-term competitiveness than physical infrastructure spending. As well as US border congestion, it singles out the urgent need to alleviate a looming truck driver shortage in the tens of thousands, and a soaring gap in transportation management skills.

The board further says Canada must rapidly move away from the existing fully self-financing port models to level the playing field with US ports in particular. (In this connection, there has been progress through proposed regulatory amendments expected soon to receive parliamentary approval.)
Meanwhile, in the gateway race, the west coast has assumed the lead. The most visible component has been the formal amalgamation since January 1, 2008 of the ports of Vancouver, Fraser River and North Fraser into the Vancouver Fraser Port Authority. The merged entity has brought together three ports accounting for 130m tonnes of cargo. The integration will allow for better land-use planning and more efficient operations to compete with U.S. Pacific Northwest rivals.

Last year saw Vancouver's container traffic exceed 2.3m teu, surpassing the performances of Seattle and Tacoma. With Asia-Pacific box volume forecast to triple over the next 15-20 years, the British Columbia provincial government wants its west coast ports to boost their market share from today's 10% to 17% (9m teu) by 2020. Current plans provide for substantial capacity expansions at Vancouver and Prince Rupert.

Another sign of momentum is the offensive by the federal foreign affairs and international trade departments in promoting the use of the Canadian Pacific gateway to such large importers as Wal-Mart, Costco and Target as their entry point to North America.

In eastern Canada, in partnership with private industry, the federal, Quebec, and Ontario governments signed a Memorandum of Understanding last July to develop an Ontario-Quebec Continental Gateway and Trade Corridor.
Within two years, an advisory committee is to recommend ways of optimising the linkages between air, marine, road and rail to meet future demand and to target initiatives with big trade potential. The two central Canadian provinces represent approximately 60% of Canada's exports and GDP.

Drafting a masterplan will be a particularly complex task, but there is an impressive blue ribbon, private sector advisory committee led by Logistec president and chief executive Madeleine Paquin, Robert Transport president Claude Robert, and Ford Canada president William Osborne.

Arguably still more challenging will be the development of a cohesive gateway strategy in Atlantic Canada.

In this regard Nova Scotia MP Peter Mackay, the federal minister responsible for the Atlantic Canada Opportunities Agency, and ministers from the four Atlantic provinces in mid-October signed a MoU to transform the region into a key hub for international trade.

Under the accord, officials from Transport Canada, the Atlantic Canada Opportunities Agency and the Atlantic provinces will spend two years reviewing a number of gateway issues, including potential impacts on the transportation system and partnerships with private enterprises.

At the MoU signing, Newfoundland and Labrador's Innovation, Trade and Rural Development Minister Terry Taylor said that the advocates of the Atlantic Gateway face a greater challenge than those of the Pacific Gateway, which consists of only one jurisdiction.

“Dealing with four Atlantic provinces is something like herding cats on the best of days,” he said, in a remark that was clearly only part jest.

More seriously, while acknowledging that Halifax was the most logical place to bolster container traffic, Mr Taylor said it should not end there. “We must also bear in mind that building capacity in Atlantic Canada is important outside the Port of Halifax.”

Objectively speaking, the outlook in Atlantic Canada seems more dominated by competing interests than a common vision.

Striving to break out of a stagnant period and to recover from the loss of several large customers amidst global carrier restructuring, Halifax is operating at half container capacity and pushing hard to market itself in China and India to encourage shippers to send cargo to North America via the Suez Canal as an alternative to U.S. west coast ports.

At Nova Scotia's Strait of Canso, a private group is proceeding with plans for a C$300m deepwater terminal on the basis of forecasts that North America's East Coast will experience a dramatic increase in container traffic from Asia via the Suez and Panama canals.

The Port of Saint John, whose main business is bulk cargoes, is trying to carve out its own future by recently taking initial steps, with the City of Saint John, to form a Southern New Brunswick Gateway.

Then there is the small Port of Sydney in Cape Breton, which is now seriously looking at building a container terminal.

In short, it is quite a crowded landscape, with seemingly different agendas pleading the case for the Atlantic Gateway.

Korea Dismisses McGuinty's Threat

Korea Dismisses McGuinty's Threat
(Embassy)

A Korean diplomat isn't worried about Ontario's tariff threat on Korean auto imports, which would violate WTO rules – unless it's done in a cunning way

A South Korean envoy has dismissed Ontario Premier Dalton McGuinty's threat to impose surcharges on South Korean automobile imports as "political remarks," while trade experts say there are other ways the province can throw up barriers to trade that wouldn't necessarily violate international trade rules.

Mr. McGuinty said last week he is willing to "explore all options" to protect Ontario's auto industry from the effects of a proposed free trade agreement with South Korea.

At the root of Mr. McGuinty's discontent is an epic trade imbalance in autos. In 2006, South Korea exported 114,000 vehicles to Canada, while Canada exported a fewer than 100 to the Asian nation.

Soon-taik Hwang, an official at the South Korean embassy in Ottawa, said this trade imbalance is not because of willfully-imposed barriers to trade. "The fact is that there are no barriers that stop Koreans from purchasing foreign made cars that offer good quality and performance and value," he said last week.

Mr. Hwang said he doesn't think Mr. McGuinty will impose any surcharges, and that the premier's comments were "political remarks." If anything, he added, tariffs should be imposed by the federal government, not provincial ones.

There is widespread concern amongst automakers and industry experts that a free trade pact with South Korea would put the already lagging North American producers at a further disadvantage by lowering tariffs without ensuring South Korean non-tariff barriers are removed. They also say tens of thousands of high-value jobs will be lost.

South Korea has argued that such barriers do not exist and, rather, that Koreans do not buy North American-made cars because they are not designed for that market. The Canadian government has called on the industry to identify the non-tariff barriers that concern them, while saying only a few dozen jobs will be lost.

Auto industry experts agreed that Mr. McGuinty's comments are likely intended, more than anything, to pressure the federal government to protect the auto sector.

Debra Steger, a University of Ottawa professor and expert on international trade law, said Mr. McGuinty's threat to impose tariffs on Korean autos would be "blatantly discriminatory." She said such a move would quickly be struck down in World Trade Organization arbitration.

The imposition of such tariffs would violate national treatment rules, Ms. Steger said, which require countries not to discriminate against imported products as compared to domestic products, as well as the Most Favoured Nation clause, which doesn't allow discrimination against imports from different countries.

"Those two principles," she said, "are the fundamental principles of the WTO, the [North American Free Trade Agreement] and all trade agreements."

A spokesman for International Trade Minister David Emerson told Embassy that discriminatory measures would be "counter-productive."

"The premier's comments are not going to help the economy or the hard working people in the manufacturing sector–including those who work in the automobile industry," spokesman Francois Jubinville said, though he acknowledged there is some work that needs to be done to increase market access in Korea. "Our government is doing what it takes to level the playing field for the auto industry and deliver a good deal for Canadians in these negotiations," he said.

Auto industry officials and trade union leaders say South Korea imposes special surcharges and restrictions on cars based on everything from engine size, safety standards, and even down to the size of the bracket that holds the license plate on the car. They also say significant barriers exist on the retail front as land use and zoning regulations make it hard to establish dealerships.

However, Ms. Steger said the province imposing non-tariff barriers of its own was one way that might help protect the Ontario market without prompting arbitration at the WTO. She said nowadays, clever governments prefer targeted product standards instead of blunt instruments like surcharges. Any number of standards could be applied, such as regulations governing emissions.

"You could do it in a more subtle way that doesn't appear at first glance to be targeted at Korea," she said. "Something a little more subtle, a little less black and white."

Jim Stanford, an economist with the Canadian Auto Workers Union, said he thinks Mr. McGuinty's comments show the premier is considering giving the Koreans a taste of their own medicine. "He's talking about the Ontario government using the same tools the Koreans have used," he said. "I think that point was missed last week."

"If the surcharge was related to regulatory or safety issues, it would be entirely within the provincial government's jurisdiction," he added.