28.09.2018

CLIPPING INTERNACIONAL NEGINT Brasília, 28 de setembro de 2018

Índice I. OMC _______________________________________________ 2 WTO cuts global trade outlook to 3.7% in 2019 as trade tensions escalate ___ 2 Europe to tell G20 rising trade tensions can seriously hit global growth _____ 3 II. NEGOCIAÇÕES REGIONAIS E BILATERAIS _________________ 5 Mexican ambassador says Canada can still join trade pact after deadline expires ______________________________________________________________ 5 III. OUTROS ____________________________________________ 6 Benech dijo que la UE ha cedido "muy poco" en acuerdo con Mercosur ______ 6 Aberdeen, HSBC See Brazil Uncertainty Lasting Past the Election __________ 7 Brazil elections: A tight and turbulent race ____________________________ 8

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I. OMC WTO cuts global trade outlook to 3.7% in 2019 as trade tensions escalate Economic Times (Índia) Escalating trade tensions and tighter credit market conditions in important markets would moderate the growth of global merchandise trade to 3.7% in 2019 from 3.9% in 2018, the World Trade Organization (WTO) had said. “Trade volume growth should slow to 3.7% in 2019 as global GDP growth dips to 2.9%,” the multilateral trade body said. The new forecast for 2018 is below the WTO's April 12 estimate of 4.4% but falls within the 3.1-5.5% growth range indicated at that time. Trade growth in 2018 is now most likely to fall within a range from 3.4-4.4%, it said. As per the WTO, North America had the fastest export growth and Asia had the strongest import growth in the first half of 2018 while resource-based economies still struggled. While rising trade tensions pose the biggest risk to the forecast, monetary policy tightening and associated financial volatility could also destabilize trade and output. As per the organisation, monetary policy tightening in developed economies has also contributed to volatility in exchange rates and may continue to do so in the coming months. “Developing and emerging economies could experience capital outflows and financial contagion as developed countries raise interest rates, with negative consequences for trade,” it said. It noted that trade-related indicators have shown a loss of momentum, including global export orders and economic policy uncertainty.

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Europe to tell G20 rising trade tensions can seriously hit global growth Reuters (Reino Unido) European Union countries will tell the world’s financial leaders next month that rising trade tensions can have a “serious adverse” effect on global growth and that they should reject protectionism and commit to solving disputes through the WTO. Finance ministers and central bank governors of the world’s 20 biggest economies are to meet Oct. 11-12 on the Indonesian island of Bali, and a trade war between the United States and China and tensions with Europe will top the agenda. “We are concerned about the risk of escalating trade tensions, which can have a serious adverse impact for strong, inclusive, sustainable and balanced global growth and investment,” EU finance ministers said in a document prepared for the meeting that is to be formally approved on Oct 2. “The G20 should reconfirm its commitment to promote market openness, the fight against all forms of protectionism, including all unfair trade practices, an enhanced rule-based multilateralism and a level playing field for trade in goods and services, investment and intellectual property rights,” the document, seen by Reuters, said. The United States and China imposed fresh tariffs on each other’s goods on Monday, showing no signs of backing down from an increasingly bitter trade dispute that is expected to hit global economic growth. The U.S. tariffs covered $200 billion worth of Chinese goods. China retaliated with tariffs on $60 billion worth of U.S. products. The United States has also imposed tariffs on steel and aluminum imports from the EU and threatened duties on European car imports. Those are on hold as long as EU and U.S. trade representatives are in talks on a broader trade deal that would reduce the U.S trade deficit with Europe. EU officials say they fully agree with the U.S. that China uses unfair trading practices and steals intellectual property but disagree on how to bring Beijing into line.

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The EU believes it would be better to address China concerns through the World Trade Organisation rather than a trade war, but the administration of U.S. President Donald Trump says the WTO is not up to the job. European Union trade officials will travel to Beijing shortly before the G20 meeting for talks with their Chinese counterparts on reforms of the WTO. The WTO has been under increasing pressure to reform since Trump blocked the reappointment of WTO judges and imposed its tariffs on China and other countries. China is widely seen as the principal target of Trump’s ire, so getting it to acquiesce to tougher WTO rules on subsidies, state-owned firms and preferential treatment could be key to achieving the “shape-up” of the WTO that Trump has demanded. “Enhanced international cooperation is needed, and thus the EU calls on G20 members to support the modernization of the WTO, working together with other WTO members to fill the gaps in the multilateral rulebook, and the swift development of a new set of guidelines for publicly supported export finance by the International Working Group on Export Credits,” the EU document said.

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II. NEGOCIAÇÕES REGIONAIS E BILATERAIS Mexican ambassador says Canada can still join trade pact after deadline expires The Guardian (Reino Unido) Mexico will continue to support bringing Canada into its trade agreement with the United States even if its North American neighbours fail to reach an accord by the U.S. deadline of this weekend, its ambassador says. The U.S. and Mexico are poised to present the text of their bilateral trade deal today. The U.S. Congress is pushing Canada to join the pact by a deadline of Sunday to allow Mexico's current government to sign the deal before it leaves office on Dec. 1. "We want the agreement to be trilateral," said ambassador Dionisio Perez Jacome after giving a speech at the Global Business Forum in Banff, Alta., on Thursday. "Hopefully Canada can be included already in the text. If not, then the process gets more complicated but it's also possible to come in sometimes, some days after." He said the new left-leaning Mexican government under Andres Manuel Lopez Obrador supports the bilateral deal with the U.S. and favours an open market-based economy. Earlier, David MacNaughton, Canadian ambassador to the U.S., said he doesn't think Canada should sign a deal it doesn't agree with in order to meet the deadline. He said a number of issues remain to be ironed out before a renegotiated NAFTA can be adopted, pointing out the need for a "robust dispute resolution mechanism" is highlighted by the recent imposition by the U.S. of tariffs against Canada for security reasons. "We're not going to be rushed into doing a bad deal," he said. In a presentation, Perez Jacome praised the "deep and excellent relations" between Canada and Mexico, pointing out that trade has grown nine-fold in the past 25 years.

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III. OUTROS Benech dijo que la UE ha cedido "muy poco" en acuerdo con Mercosur El País (Espanha) El Mercosur y la Unión Europea negocian desde 1999 un amplio acuerdo de asociación, incluido el tratado de libre comercio, aunque las negociaciones estuvieron completamente bloqueadas entre 2004 y 2010 y solo se retomaron en 2016. El ministro de Ganadería, Agricultura y Pesca, Enzo Benech, afirmó este jueves a Efe que las negociaciones entre el Mercosur y la Unión Europea (UE) están "muy enlentecidas" y consideró que los europeos han cedido "muy poco", mientras que el bloque latinoamericano sí lo ha hecho. "Es entendible que cada país defienda sus intereses. Pero negociación quiere decir que cada una de las partes cede algo. Sentimos que la UE ha cedido muy poco y nosotros sí lo hemos hecho", remarcó Benech, durante una visita al Vivero Nacional Dr. Alejandro Gallinal, en Toledo, en el departamento de Canelones, por la Semana Europea de Diplomacia Climática. Para el titular del Ministerio de Ganadería, Agricultura y Pesca (MGAP), las negociaciones están con "muchas dificultades", aunque el Mercosur -y especialmente Uruguay- ha "flexibilizado las condiciones". Asimismo, Benech reconoció que hay algunos puntos que son "muy difíciles", por ejemplo, aquellos relacionados a las denominaciones geográficas, que han sido un escollo a lo largo de las negociaciones. Sin embargo, el embajador alemán, Ingo von Voss, -quien también participó en la visita al vivero junto a otros embajadores europeos en Uruguay y al primer consejero de la Unión Europea en el país- señaló a Efe que habrá un tratado entre el Mercosur y la Unión Europea. "Ese es nuestro interés alemán. Vamos a seguir para finalizar con éxito y tener un tratado. Por lo que sé, la UE ofreció más de una salida para poder continuar con las negociaciones", afirmó y agregó que hay "muchos puntos técnicos" que también tienen "importancia política".

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Por su parte, el embajador de Italia en Uruguay, Gianni Piccato, sostuvo que es optimista en que las negociaciones llegarán a buen puerto. "El único problema es el cronograma y los tiempos. Tenemos que apresurarnos para hacer bien las cosas", apuntó. El Mercosur y la Unión Europea negocian desde 1999 un amplio acuerdo de asociación, incluido el tratado de libre comercio, aunque las negociaciones estuvieron completamente bloqueadas entre 2004 y 2010 y solo se retomaron en 2016.

Aberdeen, HSBC See Brazil Uncertainty Lasting Past the Election Bloomberg Times (Estados Unidos) The outcome of Brazil’s election may clear up absolutely nothing, at least for markets. Aberdeen Asset Management Plc and HSBC Global Asset Management Inc. are neutral on Brazilian assets ahead of the October presidential vote as lingering uncertainties regarding both the political and fiscal outlooks hinder a more constructive view. "The election itself isn’t the end of the story," said Peter Taylor, head of Brazilian equities at Aberdeen Asset Management Plc. The willingness and ability of both front-runner candidates -- Jair Bolsonaro and Fernando Haddad -- to move forward with fiscal reforms is "a gray area." The uncertainty has HSBC recommending caution also. "In terms of economic policies, things aren’t quite as cut and dry as the headlines would suggest," said Olga Yangol, portfolio manager at HSBC Global Asset Management Inc. "The main challenge for Brazil is still on the fiscal side, specifically continued increases in primary expenditures due to rising pension benefits," Yangol said. "Whoever wins will need to confront this reality and demonstrate willingness and ability to tackle the issue." A Hard Task

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Tackling the country’s social security system issues has been a difficult task for leaders, as the prospect has been hugely unpopular among Brazilians. Recently, pension-reform legislation was proposed by Michel Temer’s administration and was welcomed by investors, but the bill ended up being ditched amid political opposition. Aviva Investors, based in London, is among those looking to take advantage of risk premiums to be found in the currency and local rate curves resulting from the uncertainty. "We will be looking to take advantage of those opportunities when we feel we are well compensated for that political risk," Liam Spillane, head of emerging market debt at Aviva, said in an email. "Whilst we are happy that some of the recent rhetoric from the main candidates has been more comforting, it remains challenging to determine clear paths for Brazilian assets from here."

Brazil elections: A tight and turbulent race Aljazeera (Catar) In less than two weeks, Brazilian voters will head to the polls choose a new president. It's been a turbulent contest so far, packed with drama, including an assassination attempt on Jair Bolsonaro, the far-right frontrunner who continues to lead opinion polls while recovering in hospital. Former Sao Paulo mayor Fernando Haddad of the leftist Workers' Party is second, having taken over from ex-President Luiz Inacio "Lula" da Silva, who is serving a 12-year sentence on corruption charges and was barred by the electoral court from running earlier this month. Given that support for Bolsonaro has steadily grown in opinion polls all year and that Haddad has risen rapidly since he took over Lula's candidacy, barring an unforeseen circumstance, it's seen as almost certain that these two will make the second round runoff, scheduled for October 28.

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According to opinion polls released Wednesday by Ibope, Bolsonaro leads with 27 percent of voting intention, while Haddad has 21 percent and candidates Ciro Gomes and centreright Geraldo Alckmin trail with 12 percent and 8 percent respectively. If neither candidate gets more than 50 percent during the first round on October 7, the vote will proceed to a second-round runoff. Ibope showed that Haddad would narrowly beat Bolsonaro in the runoff but, for most analysts, the race is still far too close to call. "It will come down to a dispute of rejection: who can reduce their rejection the most or increase that of their opponent," said Ricardo Ribeiro, a political analyst with Sao Paulobased MGM Consultancy. 'Festival of negative propaganda' Bolsonaro has the highest rejection levels of any candidate according to polls, but Ribeiro said that Haddad's would likely rise, given Brazil's current polarised political atmosphere which is replete with deep anti-Workers' Party and leftist sentiment. "It will be a festival of negative propaganda from both sides," Ribeiro said of the second round, where both candidates are given equal free television advertisement time. TV time is designated according to party presence in the lower house and, until now, Bolsonaro gets mere seconds of free TV time each day, due to his small coalition in Congress, while the Haddad gets several minutes worth because the Workers' Party has 61 congressmen. While equal TV time could help level the playing field for Bolsonaro, the Workers' Party has an established history of producing slick, hard-hitting campaign ads. Since he was stabbed, Bolsonaro has been unable to campaign or take part in televised debates, the most recent of which took place Wednesday night. During the debate, Haddad focused on the golden years of the Workers' Party, during which tens of millions were lifted from poverty. Under his watch as education minister, places for lower-income students were greatly expanded.

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Opponents

attacked

the

legacy,

blaming

the

party's

corruption

scandals

and

macroeconomic mismanagement for Brazil's deep recession, with its rising poverty and high unemployment. On Saturday, thousands are expected to march against Bolsonaro under the banner #EleNao! or "not him". The protests are organised by women in response to his history of fiercely misogynistic remarks. Rival demonstrations in support of Bolsonaro are to be held on Sunday in Sao Paulo. For Ribeiro, the political analyst, when it comes to the runoff, most Brazilian elections are won on a candidate's ability to moderate their discourse and appeal to the centre. "This is something that Bolsonaro's team doesn't manage to do so well," he said.

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