Turkey Ready to Boost Trade Volume with Pakistan, Minister Aydin

Turkish State Minister Mehmet Aydin on Wednesday expressed Turkey's readiness to boost trade volume with Pakistan.
"Turkey is ready to do its best to raise actual trade volume," Aydin said speaking at a meeting with Pakistani Trade Minister Makhdoom Mohammad Amin.
Aydin is currently in Pakistan to attend Turkey-Pakistan Joint Economic Council meeting.
Aydin is expected to meet Pakistani President Asif Ali Zardari, and Pakistani ministers of Privatization and Public Works.
Investments related to energy, transportation, civil aviation, dam construction and irrigation are among the main topics that would be discussed during Aydin's talks in Pakistan.

Turkey to Form Country Desks for Foreign Trade

Turkish State Minister Zafer Caglayan announced Wednesday that Turkey would form country desks for foreign trade.
Caglayan told reporters upon his arrival in Egypt where he will be attending the 13th International Business Forum that the Foreign Trade Undersecreteriat was working on a new system.
He said the new system featuring country desks and experts would be announced with a press conference on October 26.
Caglayan said the rules of global trade and competition changed and global volume of exports contracted while number of players trying to get a share from exports increased.
"We can not remain indifferent to the changes in foreign trade. Therefore we are forming country desks for foreign trade and appointing country experts," said Caglayan.
Caglayan said the special desks for 14 new target countries, 25 priority countries, and countries like China --which did not receive due attention in the past-- would be formed.
Commenting on the functioning modality of the new system Caglayan said, "China imports USD 1.5 billion of goods from Turkey while it exports USD 15.5 billion of goods to Turkey. This is because we failed to develop the necessary strategies, and portrayed China as a monster country to be feared. In the new system we will determine the goods China imports, where it imports these from and analyse why we can't export these goods, and what we need to do in order to succeed."

University study highlights greater carbon footprint of container shipping

A study comparing the environmental impact of the two main methods of shipping fresh produce reveals that container ships produce 27 per cent higher emissions of greenhouse gasses than specialised reefer ships.

The research, carried out by the Agribusiness and Economics Research Unit (AERU) of Lincoln University in Christchurch, New Zealand, set out to assess more fully the shipping emissions generated in fresh produce supply chains – which has received less attention in previous studies.

Using the kiwifruit industry as an example, the study focused on shipping emissions and measured greenhouse gasses (GHGs) on outward and return journeys, while accounting for different shipping routes, ship utilisation, and the volume and weight of cargo.

When the emissions of port activities, refrigerant losses and transport of fruit from orchard to port are included, the 27 per cent greater GHGs produced by container shipping increases to 36 per cent higher than by specialised reefer shipping.

Walter Wildöer, chairman of the 360 Quality shipping association, said: “This report clearly demonstrates that shipping fruit in specialised reefer vessels creates a significantly smaller carbon footprint than shipping in with container lines.

“A specialised reefer service picks up its perishable cargo and heads directly for its destination port, with limited port calls only scheduled en route to add further cargo. A container ship, meanwhile, makes far longer round trips, with frequent stops. It is the same difference as between a taxi, which picks up from origin A and drops at destination B; and a bus, which takes an indirect route and stops many times. However, as this report shows the carbon footprint of the taxi per unit is also demonstrably smaller than that of the bus.”

The Lincoln University report supports the theory that reefer shipping is more efficient in transporting perishable cargoes. A report on the shipping industry by independent shipping advisor Drewry shows that the international specialised reefer industry has a capacity of 304.5 million cubic feet and transported 43.55 per cent of perishables last year, while container shipping took 56.45 per cent of perishables but has an overall refrigerated capacity of 1,997 million cubic feet.

“As shown by the Drewry report, the reefer industry is using its resources much more efficiently, taking 43.55 per cent of perishable cargo using 13.2 per cent of the shipping industry’s capacity, compared with the 56.45 per cent taken by container shipping lines, but with 86.8 per cent capacity,” says Wildöer.

“The findings of the Lincoln University report have implications for anyone involved in the fresh produce business wanting to ensure their environmental impact is as small as is possible. This includes exporters, importers and retailers - as well as end consumers, who are becoming increasingly hungry for information on the environmental impact of their purchases.”

Contact:
Dominic Weaver
RED Communications Ltd
Tel: +44 1480 465953
dominic@redcomm.co.uk
www.redcomm.co.uk

Canada's trade deficit in line with global reset

WASHINGTON -- Say goodbye to Canada's status as a net exporter to the world - at least for now.

But don't fret too much. It may not be entirely a bad thing.

Unwinding the distortions and excesses of the past decade is all part of the natural - perhaps even healthy - recovery process for the ailing global economy.

At the epicentre of this massive shift in global trade flows is Canada's main trading partner, the United States, which for too long has consumed too much and produced too little.

Now that's changing. Aided by a falling greenback, the massive U.S. trade deficit is shrinking fast. Americans are saving more, spending less, and the country's exporters are regaining their competitive footing in world markets.

The U.S. trade deficit shrank for a second successive month in August to $30.7-billion (U.S.) - less than half the record $64.9-billion gap reached last year, the U.S. Commerce Department reported yesterday.

We may not like it, but Canada is playing its part to put the global economy back on a more sustainable path. The Canadian trade deficit widened to $2-billion (Canadian) in August from $1.3-billion in July.

And excluding the energy sector, the gap is even larger.

After years of trade surpluses, Canada is now facing at least a few years of deficits, said BMO Nesbitt Burns economist Douglas Porter.

"Canadian firms will find it very tough to compete with the United States," Mr. Porter said. "One way or another, we have to get the U.S. trade deficit down and what that means is that Americans have to produce more, and possibly consume less. And unfortunately that means we are going to produce a bit less and consume a bit more."

It's a dynamic that exporters like John Hayward, president of industrial pump maker Hayward Gordon Ltd. of Halton Hills, Ont., find all too familiar. He's nervously watching the Canadian dollar's ascent as he vies against a U.S. rival for a multimillion-dollar contract with a gold miner in Chile that is priced in U.S. dollars.

The Canadian dollar, now flirting with 96 cents (U.S.), is already up 4 per cent since he bid on the contract, and Mr. Hayward says the customer recently asked him to freeze his price for another 30 days.

"We said, no. We had to float it," meaning the customer would have to pick up any additional cost related to a higher dollar, Mr. Hayward explained, acknowledging that the decision could cost him the much-needed business.

Even winning the contract comes with risk. Deliveries wouldn't start until 2011, leaving the company dangerously exposed to any further rise in the loonie.

"It's the speed that currency fluctuates that's tough to manage for a lot of companies like us that have long sales cycles," he said. "I've got to get on a huge currency management program if we get a contract like that. It's tough to manage over a month, let alone a year."

Mr. Hayward said the company is doing two things to cope with the new reality. It's invested in more efficient machinery. And second, he's begun shifting some production to U.S. suppliers, in part to get around Buy American rules on government contracts.

"Companies in Canada should be thinking of getting more of their cost base in U.S. dollars," he said. "I've had to shift some production to U.S. suppliers, and I'd be wanting to keep it that way."

Canada's swelling trade deficit is a reflection of the fact that the Canadian economy is emerging from the recession in relatively good shape. Its banks are healthy and consumer credit is growing again.

And, unlike the U.S., the job market has stabilized.

Canadian consumption is holding up pretty well, driving demand for all the things that Canadians routinely import - from cars and electronics, to machinery and equipment.

"For now, recovery north of the border will remain a two-speed affair, with domestic sectors like housing and consumers leading, while the still-beleaguered trade sector restrains gross domestic product growth," CIBC World Markets economist Peter Buchanan said in a research note.

And with the loonie at its highest level in a year - near 96 cents (U.S.) - Canadians are finding those imported items cheaper to buy.

Toronto-Dominion Bank economist Grant Bishop said the "silver lining" of the widening trade deficit is that Canadian companies can take advantage of the high dollar to boost "imports of productivity-enhancing" machinery and equipment.

Imports of machinery and equipment - in volume, though not price - are up 50 per cent so far in July and August compared with the entire second quarter.

***

By the numbers

CANADA

Deficit: $2-billion

Exports: $29.2-billion,

down 5.1 per cent v. July

Energy, flat

Industrial goods and materials,

down 3.3 per cent

Machinery and equipment,

down 10.4 per cent

Automotive products, down 5.5 per cent

Imports: $31.2-billion, down 2.8 per cent

Energy, down 9.8 per cent

Industrial goods and materials, down 3.4 per cent

Machinery and equipment, down 4.9 per cent

Automotive products, up 3.8 per cent

UNITED STATES

Deficit: $30.7-billion (U.S.)

Exports: $128.2-billion, up 0.2 per cent v. July

Automobiles, up 7.3 per cent

Civilian aircraft, down 40.3 per cent

Telecommunications equipment, up 2.7 per cent

Food, up 1.2 per cent

Imports: $158.9-billion,

down 0.6 per cent

Automobiles, up 8.6 per cent

Civilian aircraft, down 59.3 per cent

Consumer goods, down 2 per cent

Capital goods, down 0.2 per cent

Figures as of August, 2009

"Barrie McKenna"

Mad cow fear: Japan suspends beef from US plant

Japan has suspended beef shipments from an American meat-packing plant after finding cattle parts banned under an agreement to prevent the spread of mad cow disease, the agriculture ministry said Saturday.

Japanese quarantine inspectors found bovine spinal columns in one of 732 boxes sent by Tyson Fresh Meats, Inc., which arrived in Japan last month, the Ministry of Agriculture, Forestry and Fisheries said in a statement. The box contained 35 pounds (16 kilograms) of chilled short loin with spinal bones.

The suspension only affects Tyson's factory in Nebraska, one of 46 meat-packing plants approved to export beef to Japan.

The Japanese ministry also asked the U.S. Department of Agriculture to investigate how the box containing the banned parts ended up in Japan.

Japan banned all U.S. beef imports in 2003 after the first case of mad cow disease was discovered in the United States. Japan resumed buying American beef in 2006 after a bilateral trade agreement setting new safety standards.

Mad cow disease, formally known as bovine spongiform encephalopathy, is a degenerative nerve disease in cattle. In humans, eating meat products contaminated with the illness is linked to variant Creutzfeldt-Jakob disease, a rare and fatal malady.

Under the bilateral trade agreement, U.S. exporters must remove spinal columns, brain tissue and other parts considered linked to the mad cow disease. U.S. beef shipments to Japan must also come only from cattle age 20 months or younger, which are believed to pose less of a risk.

Washington has repeatedly criticized Japan for its tough import restrictions, which authorities say have no scientific basis.

U.S. officials have urged Japan to allow imports of beef from cattle aged up to 30 months, a widely used safety standard elsewhere.

Mauritius denies being tax haven, invites investors

9 Oct 2009, 0412 hrs IST, Sunil Kumar, ET Bureau

MAURITIUS: Largely seen as a tax haven by Indians, there is more to Mauritius. At least that is what the country wants to be seen as. Dispelling the notion that it is a tax haven, being used by companies to circumvent Indian tax laws, Mauritius vice prime minister and finance minister Ramakrishna Sithanen said: “It is a wrong perception, a myth that India has about us. We do not figure in the list of tax havens of the OECD. We have transparent legislation and strong regulatory framework. We are also open to exchange information with authorities of other countries on money laundering and abuse of jurisdiction. But we have not received a single request from India on these counts.”

Speaking on the sidelines of an international seminar to promote Mauritius as a destination for private equity investment, Mr Sithanen strongly supported the Double Taxation Avoidance Treaty (DTAA) it has with India, and said that it is not a one-off treaty between the two countries but that both the countries have such treaties with many other countries.

“It is unfair to single us out and any unilateral move to change the terms of the treaty would be in violation of international laws. In fact, the proposed direct tax code of India which proposes treaty over-writing is also a unilateral move and against international laws,” he said.

The minister also pointed out that the country is taking further steps to enhance its reputation of a clean and compliant jurisdiction. These include securing more information relating to beneficiary owner, business plan and filing of financial summaries.

Detailing the steps, Milan J N Meetarbhan, chief executive of Financial Services Commission, the country’s financial regulator said: “We have now formulated what we call the ‘ultimate purpose test’. We encourage companies to have some substance here, say to have board meeting here. We insist on statutory segregation of assets and liabilities.” He added: “We don’t want just global businesses structured out of Mauritius but businesses to create job and wealth for our people.”

Mr Sithanen insisted that Mauritius is a country of real people and real economy, not just shell companies or conduit companies. “It is in our interest that we play a fair and transparent game, and we have taken all efforts to score good on that count,” he said.

It is in this context that the country held three international conferences, Mauritius as a destination for private equity investment, as global internet data centre and as a BPO centre, during September 28 to October 3 to position itself as a safe, cost competitive and knowledge-intensive platform for the conduct of global business.

Once founded on sugar and later diversified into textiles, tourism and offshore banking, the country is eyeing further diversification to strengthen its economy. “Economic diversification has been at the centre of our growth strategies. Our effort is to make our economy an eight-legged table, not just four, so that even if one is under strain, we continue to be stable. We plan to grow in ICT/BPO, seafood export, energy industry and many others,” said Mr Sithanen.


(The visit to this event was organised by the Mauritian government)

SE Asia, NE to explore trade potential

8 Oct 2009, 2220 hrs IST, Bikash Singh, ET Bureau

GUWAHATI: In a move to explore trade potential between the North East and Southeast Asia, diplomats from eight Southeast Asian countries are

expected to participate in a business summit here in the fourth week of October.

The summit will be organised by the North East Trade Promotion & Development Council (NETPDC) on the sidelines of Third Asom International Trade Fair. The trade exposition starts on October 14.

The fair is being sponsored DoNER. Eight ambassadors and first secretaries from Thailand, Myanmar, Cambodia, Nepal, Bhutan, Malaysia, Indonesia, Bangladesh and China are expected to participate in the summit. In this regard, deputy prime minister of Thailand Korbsak Sabhavasu had a meeting with minister for development of northeastern region (DoNER) and mines BK Handique in New Delhi on Wednesday.

Early completion of the trilateral highway between Moreh (India) and Maesot (Thailand) though Bagan (Myanmar) was discussed. The first phase of construction started in 2004 at a cost of $700 million. The 1,360-km-long highway project was envisaged to link the three countries. In the meeting, promotion of the Buddhist tourist circuit in the North East, was discussed. It was also agreed that eco-tourism would be a priority.

The Thai government has a capacity building programme under which Northeastern states could be involved. Mr Handique had said that youth exchange programmes could open new cooperation avenues. A cultural group from Thailand can also participate in the Hornbill Festival of Nagaland. Efforts are on to bring a cultural troupe from Myanmar for the Hornbill Festival.

A series of high-level business summits has been held with Thailand for promotion of trade and investment in the North East. It has resulted in some MoUs and investments. Both sides agreed that the focus should be to consolidate and carry forward the interactions in the identified areas of infrastructure like roads, inland waterways, tourism, agro and food processing and energy (mini hydel projects).

WB Electronics earns supply contract with Boeing

8th October 2009

WB Electronics, a private company from Ożarów near Warsaw, will supply military technology to Boeing.

The technological company, with revenues of zł.40 million in 2009, is already one of the largest exporters of Polish arms.

Its main products include intercoms for digital communication for armed vehicles, pilotless flying reconnaissance robots and electronic systems for guiding artillery.

"The cooperation contracts which we have just signed with Boeing open the doors to joint study and integration of communication and reconnasance systems between allies on, among others, the Afghan mission," said Piotr Wojciechowski, president of WB Electronics.

In 2009, the firm sold its technology to American Harris, but its products were also purchased by Hungarians and Slovaks. The firm also stands a chance of winning a contract with the Indian army.

Source: Rzeczpospolita

Asian countries step in to support dollar

By Kevin Brown in Singapore

Published: October 8 2009 15:09 | Last updated: October 8 2009 15:09

Asian central banks intervened heavily in the currency markets on Thursday to slow the slide of the US dollar amid growing concern about the potential impact on the region’s export driven economies.

Traders said most of the Asian central banks had been buying US dollars, with the Bank of Korea among the most active following a round of intervention by Seoul earlier in the week.

Other central banks identified by traders as significant buyers of US dollars included Thailand, Malaysia, Taiwan and Singapore, which is a frequent market participant because of its managed currency regime.

In Hong Kong, the Chinese territory’s central bank said it had injected HK$8.525bn into the financial system to prevent the currency from rising beyond its fixed trading band against the US dollar.

The central bank intervention appeared to have been triggered by a fresh wave of dollar selling by investor concerns about weak consumer credit figures in the US. Upward pressure on Asian currencies increased as Australia released strong employment growth numbers only two days after becoming the first G20 central bank to raise interest rates since the beginning of the global financial crisis.

The dollar came under fresh pressure across the board on Thursday. The euro rose 0.4 per cent to $1.4745 against the US currency, while the yen rose 0.2 per cent to Y88.47. Against a basket of traded currencies the dollar fell 0.6 per cent to 76.008, close to the lowest level of the year.

However, traders said the central bank intervention appeared to be aimed at controlling the pace at which the US dollar declines rather than an attempt to stop Asian currencies appreciating.

“I don’t think this is just notional, but I don’t think they are massively intervening either,” said Adam Gilmour, a Citigroup managing director who is co-head of the bank’s Asia Pacific foreign exchange and derivatives businesses.

“Ithink they are just trying to slow down the movement. I don’t get the impression that anybody is trying to draw a line in the sand.”

Ashiok Chawla, India’s finance secretary, said that New Delhi would not intervene to weaken the rupee ”as long as the movement is not volatile and takes place based on fundamentals within a sort of range and moves two-ways.”

There was confusion about the intentions of the Bank of Japan, which appeared not to have entered the market, although the yen strengthened to Y88.22 to the dollar in Tokyo, from Y88.61 in New York on Wednesday.

In Taiwan, analysts and traders said there were clear signs that the central bank had intervened to keep the island’s currency below the psychological barrier of 32 Taiwan dollars to the US dollar. The Taiwan currency closed in Taipei at T$32.137.

In Bangkok the Thai central bank confirmed that it had intervened to soften the rise of the baht, which has appreciated 4.5 per cent so far this year to hit a 14-month high of Bt33.29 to the dollar on Thursday.

“Some days its strength is beyond economic fundamentals,” Suchada Kirakul, an assistant governor at the Bank of Thailand, told reporters. “The baht is strong and we are still taking care of it.”

In was unclear whether the Indonesian central bank had intervened in response to pressure from prominent local business people for action to prevent the rupaih from rising too far too fast .

Copyright The Financial Times Limited 2009

Gold at new highs, world equities gain

Gold hit another record high on Wednesday as the dollar slipped and global stocks rose for the third day running, erasing their losses in October.

Investors continued their scramble for yield, lifting the Australian dollar to 14-month highs on the prospects for higher interest rates after Tuesday's tightening.

Gold trimmed some gains early but then rose as high as $1,048.20 an ounce, easily eclipsing Tuesday's $1,043.45 record.

The metal has been driven higher in part by concerns that the dollar is losing favor, including potentially as the currency for settling oil trades.

Despite the headline figure, however, gold remains far below its inflation-adjust record from the 1980s. Investor Jim Rogers, one of the biggest bulls during this decade's commodities rally, said he would stay clear of buying gold for now, although he predicted prices will continue to go up over the long term."Gold has hit a new high and I don't like to buy something at record prices unless there are extremely strong fundamental reasons," he said.

World equities as measured by MSCI, in the meantime, added another 0.4 percent and have now wiped out sharp losses sustained in the first two days of October. They stand 26 percent higher for the year.

The pan-European FTSEurofirst 300 index was up 0.1 percent after the index gained more than 2 percent on Tuesday.

Earlier on Wednesday, Japan's Nikkei average closed 1.1 percent higher.

The dollar slightly weaker against a basket of major currencies while higher-yielding currencies such as the Australian dollar were in favor.

"With the view that the low interest rate policy in the US will likely be around for a while, an abundant supply of dollars is flowing into higher-yielding currencies such as the Australian dollar and emerging market currencies," said Kazuyuki Kato, treasury department manager at Mizuho Trust & Banking.

The greenback came under pressure on Tuesday after a report of foreign exchange diversification by oil-producing countries. Some of the countries later denied such a move. The euro was flat at $1.4722.

Yields on euro zone government bonds were slightly lower with the 10-year yield at 3.152 percent.

08 October 2009, Thursday REUTERS LONDON

World Bank and IMF adapt to world in transition

The grand poobahs of finance practiced their secret handshakes in İstanbul this week, nervous whether they could adapt to the new rituals being forced on them by an economic crisis and shifting balance of power among the top global economies.

Demonstrators protested against what they perceive to be the destructive lending policies of the International Monetary Fund (IMF) and World Bank, while economists and policy analysts wondered about the changing global financial landscape and the need for collaboration among the masters of old money and new.

Meanwhile the so-called Bretton Woods institutions, the World Bank and all its affiliated organizations, had ordinary business to attend to, the most urgent being accommodating powerful emerging markets like China, India, Brazil and yes, Turkey, into the new world order.

World Bank President Robert Zoellick said that he met with the bank's Development Committee and discussed ways to change with the times. “The agenda included ensuring that developing countries will get a bigger say in how the institution is run,” he said. “This meeting committed to reaching an agreement by the World Bank spring meetings next year on shifting at least 3 percentage points of voting power to developing countries. That would give them 47 percent in total, at least. It also supported moving towards an equitable voting power to developing countries over time.”

Zoellick said the agenda also included making sure that the World Bank Group has enough resources, creating a new facility to rapidly disburse grants and no-interest loans to the world's 79 poorest countries and putting into effect the G-20's call for a $20 billion food security facility. The latter was really a call on the G-8 to fulfill the pledges made in July to invest $20 billion in agricultural development and food aid over the coming three years.

Serving both rich and poor

Jim O'Neill, chief economist at Goldman Sachs, worried that the IMF might miss an historic opportunity to position itself to be a key player in preventing future crises. “The IMF has been given loads of opportunities here and needs to seize the moment,” O'Neill said in a Bloomberg interview. “I'm not convinced they will. [Dominique] Strauss-Kahn [the IMF director] is doing a good job, but they should be bolder. They are still beholden to those who own them.”

Yet one might ask the investment banker: who is not beholden to those who own them or employ them? Dominique Strauss-Kahn, managing director of the IMF, is like the factory manager whose corporate owner is being taken over by a leveraged buyout firm. He's not sure who to listen to anymore. Is the US Treasury secretary more important than the president of China? But Strauss-Kahn has his heart in the right place, thinking of the world's poorest people. Answering a reporter's question Tuesday on economic recovery, he noted that whereas “a couple of points of purchasing power, a couple of points of unemployment” would be minor in developed countries, they would be entirely different in low-income countries, “where it goes to a question of life and death and starvation.” Indeed, it is almost intellectually impossible to conceive of people that poor while living the gravy train life. Your bank is paying 1,200 euros for your hotel room, 700 euros a day for your car and driver and you think the room rate did include that nice breakfast buffet. And the bacon was really crispy. One banker stayed on the Asian side to save money; he found a hotel charging only 320 euros a night, no breakfast and the price did not include VAT. Obviously the Dutchman was not a master of the universe, and he felt like a second-class citizen at the annual meetings, balancing the money he had to spend on taxis versus the theoretical value of his time. Moral hazard There is a disconnect between saying you want to help the world's poor people, billions of them, and spending a few thousand euros a day talking about it. Of course 1,000 euros here or there is nothing in the larger scheme of things. Bundesbank President Axel Weber had his eye on the big picture when he remarked on the moral hazard inherent in the half a trillion dollars thrown at the IMF last spring, when the G-8 agreed to triple the Fund's capital base, up to $750 billion. The real moral hazard lies in forgetting the huge gap in incomes between the world's richest and poorest. And the poor, they're not all in Bangladesh or Africa. The Washington Post last week reported that more than one in four children in America's capital were living in poverty in 2008, according to new census data. But those Washington, D.C., kids are better off than their counterparts in Malawi, for example, where many children die in infancy or at birth. The UN Development Program on Monday released its human development index for 2009, a survey that aims to get beyond mere dollar measures and account for other quality of life factors, such as life expectancy and access to health care. The headlines on the report said life is better in Norway than in Niger, which is hardly news, but since we're dealing with bankers let's follow the money again. The index showed that Liechtenstein has the richest people, with per-capita income of $85,382, while people were poorest in the Democratic Republic of Congo, where average income per person was $298 per year, or about 200 euros. This means that the banker who paid 1,200 euros for a hotel room burned up the average annual income of six Congolese each night. Strauss-Kahn said that “some countries will recover earlier, some it will take more time, but in each case it will at least take from now on eight to 10 months before unemployment will decrease. … The problems we're going to face in the coming year may be much more important, much more difficult to solve in low-income countries and some emerging countries than in advanced economies.”

08 October 2009, Thursday

MICHAEL KUSER İSTANBUL

Serbia, Turkey sign free trade agreement

Serbian Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic and Turkish Minister for Foreign Trade Zafer Caglayan today signed a free trade agreement between the two countries, which will be implemented from January 1, 2010.

A statement issued by the Ministry of Economy says that the agreement will be implemented in accordance with an asymmetric trade liberalisation model which will be of advantage to Serbia. The agreement was signed at the annual economic summit in Istanbul.

Dinkic said that the free trade agreement with Turkey is a great opportunity for Serbian exporters who will be able to export goods free of customs duty from January next year to a country with a population of 75 million, while the liberalisation for Serbia will consist of three phases, taking until 2015.

During the talks with the Turkish side we focused on protecting our agriculture, textile and metallurgical sectors, while Serbia got the opportunity to immediately export all kinds of industrial products without paying customs duty, explained Dinkic.

Caglayan and Dinkic said that the implementation of the Free Trade Agreement will create conditions for a considerable increase of the overall volume of their trade, particularly the Serbian exports, as well as help to boost Turkish investment in the Serbian economy.

At the Economic Summit in Istanbul, which this year gathered representatives from 138 countries, Dinkic had the honour to be the first to present the economic potential of his country, right after the hosts’ welcoming address. He talked about ways to increase international trade with the aim of mitigating the global economic crisis.

At the meeting with members of the DEIK association, gathering representatives from around 600 Turkish companies, Dinkic spoke about Serbia’s investment possibilities. The meeting was organised by the Turkish Chamber of Commerce, adds the statement.

Types of Risk

There are two basic types of risk:
Systematic Risk - A risk that influences a large number of assets. An example is political events. It is virtually impossible to protect yourself against this type of risk.

Unsystematic Risk - Sometimes referred to as "specific risk". It's risk that affects a very small number of assets. An example is news that affects a specific stock such as a sudden strike by employees. Diversification is the only way to protect yourself from unsystematic risk. (We will discuss diversification later in this tutorial).

Now that we've determined the fundamental types of risk lets look at more specific types of risk, particularly when we talk about stocks and bonds:

Credit or Default Risk - This is the risk that a company or individual will be unable to pay the contractual interest or principal on its debt obligations. This type of risk is of particular concern to investors who hold bond's within their portfolio. Government bonds, especially those issued by the Federal government, have the least amount of default risk and least amount of returns while corporate bonds tend to have the highest amount of default risk but also the higher interest rates. Bonds with lower chances of default are considered to be Investment grade,?and bonds with higher chances are considered to be junk bonds. Bond rating services, such as Moody's, allows investors to determine which bonds are investment-grade, and which bonds are Dunk?

Country Risk ?This refers to the risk that a country won't be able to honor its financial commitments. When a country defaults it can harm the performance of all other financial instruments in that country as well as other countries it has relations with. Country risk applies to stocks, bonds, mutual funds, options and futures that are issued within a particular country. This type of risk is most often seen in emerging markets or countries that have a severe deficit.

Foreign Exchange Risk ?When investing in foreign countries you must consider the fact that currency exchange rates can change the price of the asset as well. Foreign exchange risk applies to all financial instruments that are in a currency other than your domestic currency. As an example, if you are a resident of America and invest in some Canadian stock in Canadian dollars, even if the share value appreciates, you may lose money if the Canadian dollar depreciates in relation to the American dollar.

Interest Rate Risk - A rise in interest rates during the term of your debt securities hurts the performance of stocks and bonds.

Political Risk - This represents the financial risk that a country's government will suddenly change its policies. This is a major reason that second and third world countries lack foreign investment.

Market Risk - This is the most familiar of all risks. It's the day to day fluctuations in a stocks price. Also referred to as volatility. Market risk applies mainly to stocks and options. As a whole, stocks tend to perform well during a bull market and poorly during a bear market olatility is not so much a cause but an effect of certain market forces. Volatility is a measure of risk because it refers to the behavior, or emperament,?of your investment rather than the reason for this behavior. Because market movement is the reason why people can make money from stocks, volatility is essential for returns, and the more unstable the investment the more chance it can go dramatically either way.

Inflation Risk - Because the cost of living increases each year (call inflation), some years a little, some years a lot, you need to get some return on your investments equal to or above the inflation rate, or your savings and investments will lose ground. For example, if you keep your money in a savings account or a certificate of deposit that is earning 6% and the inflation rate is 4%, your real return is only 2%. If it is earning less than the inflation rate, you are really losing money. You may have reasons to do this in the short run, but in the long run, it is not a good idea.
As you can see, there are several types of risk that a smart investor should consider and pay careful attention to. Deciding your potential return while respecting risk is the age old decision that investors must make.

How Much Risk Are You Willing To Take?
Besides a broad understanding of risk, ask yourself what your risk tolerance is. To be a good investor, not only must you know where you stand financially, it's also crucial to understand your own investment psychology.

To find out your risk tolerance level, think of your past experiences, especially those related to your work and finances. (Some people drive very fast but can't make financial decisions.) If you had changed your job without thinking whether the return prospect would be worthwhile, your risk tolerance should be quite high. But if you're the type who checks the price of item in at least 3 or 4 shops before buying one, you're quite careful with your money.

Knowing your risk tolerance is critical for choosing suitable investment options and making investment decisions. If you're inclined toward a high- risk-high- reward stake, keep reminding yourself and draw a clear loss-limit. This doesn't imply giving up your appetite for risk since risk takers may have different views from others.

If you're a conservative investor and take quite a long time to make a decision, the plus side of this is that you won't invest rashly. On the other hand, your may miss out on a good investment proposition. Your risk tolerance is a thing that you must find out for yourself. And perhaps you may allow yourself to be a little more adventurous. But set a limit to it. (It usually happens that neither the risk taker nor the risk averse has set his loss limit, hence he has problems in trying to control his investment decisions and investment options.)

Whatever your attitude to risk, the decision and consequence is yours and yours only. And the proof of it will be your return and time targets. There are many good things in life. Don't let investment anxiety cause you ulcers or sleeplessness!

Source from: http://www.moneysitter.com/Investing/investing3b.htm

How To Make Contact With Firms

Global trading can’t function effectively without channels which help businesses to make contact with firms from another nation. Prior to Internet era, trading firms could only depend on trade directories for leads.

Global trading can’t function effectively without channels which help businesses to make contact with firms from another nation. Prior to Internet era, trading firms could only depend on trade directories for leads. However, with the advent of Internet, this has become the thing of past. Nowadays, traders can easily make contact with people halfway across the globe just by sending an e mail. For sure, technology plays a vital role in channelizing export import trade.

There are numerous methods by which you can make contact with other firms on internet. The first step of contact is generally from export import portals. These sites are also usually known as trade leads portals. In a way, they are similar to our hard copy business directories because they provide a similar function. You will be able to register your company information in an export import directory, and encourage others to contact you. You may also commence contact by emailing other firms in the same directory.

Your first point of contact with your prospective customer is of vital importance. Like it or not, there is such a thing as Internet manners. These are unwritten social rules on the World Wide Web. Follow these rules, and you will stand a much better chance of attaining your objectives.

Prior to making a contact, take time out to find out more about the company you are contacting. Confirm that they have what you are searching for. Or else, it would just be a waste of everybody's valuable time. Read the firm descriptions cautiously, and if feasible visit their business websites. This will assist you sketch your first email.

In your first electronic mail, always attempt to be as proficient as you can. That means plan a formal email. Try to keep away from emails that sound too welcoming. The client on the other part is not familiar with you that well yet. When the relationship is more grown-up, there is abundance of chances to write super welcoming emails. For beginner, just stick to professional emails. Talk in terms of business value which your company can provide them. Bring out your unique selling points (USP).

State your purpose very clearly in the beginning of your email. Initiate with something like, "I see that you offer ABC items. I would like to find out more about this aspect." If you can capture the notice of the reader in the first few lines, half your task is accomplished.

Remain reverent throughout the rest of the email. Introduce yourself, and let the other party know that you are serious in doing business with them. If you are selling something, let them be familiar with how you can assist them. If you are buying, then ask them how they can assist you in sourcing.
In the world of trading, faith is very significant. So you should do a lot to promote a trusting relationship. If you say you are going to do amazing, keep your promises. Otherwise, whoever is on the other side will find it difficult to trust you.

Without faith, trading is approximately impossible. After all, the firms may be on the other part of the world. So something does go mistaken (and things do go off beam in real life), it is very hard to correct the troubles.

How To Start Your Business (Import and Export)

If you're thinking about starting an import-export business, be aware that there is a lot of preparation involved. The import-export business is a potentially lucrative business. Its success depends on your ability to properly set up the business keeping within the trade guidelines of your country and the countries that you plan to import or export goods for profit. Read on to learn how to start an import and export business.

1. Contact the consulates or embassies in the foreign countries where you will be importing and exporting goods. These offices provide you with industry directories, manufacturer lists and much more to help your business thrive.

2. Communicate regularly with your country's consulate to prepare for importing your goods from other countries.

3. Obtain a registration number from the taxation department in your country.

4. Ask about the licensing requirements of operating an import-export business in your country. Many countries do not require a license to operate an import-export business unless you are planning to import or export products recognized as "high-risk" like liquor, certain food items or pharmaceuticals. It is a good idea to stick with low-risk items when establishing your business in the beginning so that you will not have to deal with quotas or restrictions.

5. Make sure that there are no embargoes, or trade barriers, set up against any of the countries that you plan to import or export goods. First contact your own government to find out if there are any embargoes in place for the countries you are considering. Then contact the consulate/embassy to see if there are restrictions against goods from your country.

6. Check with your bank about getting a Letter of Credit for trading internationally. This will significantly reduce your risk when trading because banks will make sure the goods are delivered before any money is ever exchanged.

Just a few words: there is far more to import/export than the poster has outlined and the risks are substantial. The risks can be mitigated but be wary and do your homework. Most of all: ask professionals for advise. And ask more than one professional. Compare answers. Ask for explanations of discrepancies. I cannot emphasize this enough. You'd be shocked how much free advice you can get from professionals. Their motivation is to get your business if you start up.

Nothing is black and white:
Example: a bank does not ensure that you get your goods. They withold "control documents" until payment is issued. The control documents can be circumvented. Of course this would be fraud but I have personally seen this happen more than once. The result is a lawsuit and no merchandise.
The winner will be the attorneys on both sides.

Be wary of hidden/unforeseen costs:
Letters of credit carry substantial costs, not just in fees, but in non-use of funds.
There are usually fees assessed in addition to duties, in the US add 1/3% to the duty to cover these fees. In Canada there is a 7% GST tax in addition to the duty however it is refundable.
In the US inspection fees can run as high as $ 1000 for a 40' container.

The list goes on. I am not trying to be discouraging here but one must do their homework (due diligence) prior to the goods landing at the destination port.