Aurelia Butler

The governor of Texas faces growing calls to abandon a vehicle inspection programme that has led to blockades and long queues at Mexico border crossings, threatening billions of dollars in trade at a time when supply chains are already strained.Mexican truck drivers have blockaded major crossings since Monday in protest against the additional security checks, which were announced by Governor Greg Abbott in a two-paragraph letter last week. Crossing times for commercial freight were slowed to 10, 20 or even 30 hours in some cases, Mexican industry bodies said.The dispute has imperilled billions of dollars worth of goods moving between the two countries. In total, more than $440bn in trade flows through Texas-Mexico border crossings in the US state each year, according to the Texas Center for Border Economic and Enterprise Development at the Texas A&M International University. The commercial disruption comes amid a broader dispute over immigration between Abbott, a Republican, and the Democratic Biden administration.Abbott said additional inspections were aimed at stopping migrant smuggling and drug trafficking across the border, as well as to increase vehicle safety. He also framed them as a response to the US President Joe Biden’s decision to end pandemic-related migrant expulsions. “This is going to dramatically slow traffic from Mexico into Texas. It is a byproduct of cartels crossing the border,” Abbott said in a news conference last week.Texas’ Department of Public Safety said that within five days of Abbott’s order it had inspected 3,443 commercial vehicles and put 807 of them out of service for safety violations.Trade traffic at four key ports of entry has been reduced to about one-third of the typical level, costing both countries income and competitiveness, Mexico’s foreign ministry said on Tuesday, adding that it rejected the measures.US Customs and Border Protection on Tuesday called Texas’ new measures “unnecessary” and said protests in Mexico had stopped all commercial traffic at the Pharr International Bridge. Northbound cargo traffic was also interrupted at Ysleta and New Mexico’s Santa Teresa crossing, it said.The increased safety inspections, which add hours to commercial vehicle crossings into the US state, are adding further disruptions to supply chains in industries from agriculture to autos at a time of stress because of the pandemic.“The execution of this order has wreaked havoc up and down our supply chain,” the Texas International Produce Association said in a letter this week. “This is destroying our business and the reputation of Texas.” Several Mexican industry groups said the checks had caused hours-long delays in crossing in some cases, with drivers often having to wait without food, water or bathrooms.

Mexico’s National Freight Transport Chamber on Tuesday called on Abbott to end the inspections to avoid a “collapse in international cross-border trade”, estimating that the delays at the Pharr bridge were costing $8mn a day.Mexico’s National Agricultural Council said drivers would previously take about four hours to go through all the necessary border checks in Texas. Since the new measures came in to effect, that has risen to as much as 30 hours in some cases. The measures are designed to focus the federal government’s attention on immigration issues, said Raymond Robertson, director of the Mosbacher Institute for Trade, Economics and Public Policy at Texas A&M University. Even many conservatives in the state’s business community were pushing back against them, he added.“There’s already been a lot of conservative people who are life-long Republicans who are really uncomfortable with what’s going on and I think they’re going to put pressure on the governor,” he said. More

Russia made a payment due on April 4 on two sovereign bonds in roubles rather than the dollars it was mandated to pay under the terms of the instruments. Credit Default Swaps (CDS) are a way of insuring the buyer against exposure to specific risks, in this case Russia defaulting on its sovereign debt.The process starts with a market participant, usually an investor who has bought such protection, asking the CDDC to decide whether a potential failure to pay event has happened.The committee has accepted the request and has scheduled a meeting for Wednesday at 11 am GMT, according to its website.Investment bank JPMorgan (NYSE:JPM) said in a note on Monday that there were currently $3.43 billion of net notional Russia CDS to be settled, including $2.48 billion from single name and the remainder from CDS indexes. More

LOS ANGELES (Reuters) – The Port of Los Angeles, the nation’s busiest, on Tuesday reported record first-quarter volume as anxiety builds ahead of the July 1 expiration of the labor contract covering some 22,000 West Coast dock workers.The Port of Los Angeles handles about 40% of U.S. container cargo and is home to more union workers than any of the 29 Pacific Coast ports.An impasse in the West Coast talks threatens to undo progress at the Port of Los Angeles. Despite a continued flood of imports, workers there are whittling down pandemic-fueled cargo pileups that contributed to inventory shortages, helped drive up consumer prices, and turned the surrounding bay into a parking lot.The National Retail Federation (NRF) and other groups that depend on West Coast ports like Los Angeles are pressuring the dockworkers’ union and employers to quickly hammer out an agreement to avoid further injury to the world’s battered supply chains.The International Longshore and Warehouse Union (ILWU), which represents West Coast dockworkers, and the Pacific Maritime Association (PMA), representing employers, are scheduled to kick off talks on May 12 in San Francisco. Such labor talks are historically fraught. The last round of negotiations in 2014-2015 resulted in an eight-day work stoppage that sapped an estimated $8 billion from the Southern California economy. Service did not recover for roughly nine months.On Tuesday, Los Angeles port Executive Director Gene Seroka said increased staffing helped slash vessel backups by speeding up cargo movement – even as first-quarter volumes climbed 3.5% to an all-time high of 2.68 million 20-foot equivalent units (TEU). Meanwhile, bottlenecks are building at Asian ports as outbreaks of a highly contagious Omicron variant disrupt the free flow of trade and threaten to unleash a new wave of global supply chain shocks.”We’re still facing a global supply chain crisis … we certainly hope (the West Coast labor negotiation) doesn’t further complicate that ongoing crisis,” Jonathan Gold, vice president supply chain and customs policy at NRF, told Reuters. More

(Reuters) – Countries around the world are working to diversify their supply chains and reduce their dependence on China, which is “probably good for everyone,” World Bank President David Malpass said on Tuesday.Malpass said cross-border trade would remain important to the global economy, and China – already the world’s second largest economy and likely to become the largest – had a big role to play as both a consumer and producer of goods.But, speaking at an event in Warsaw, he said China also needed to be part of a value system shared by other countries in the global trading system, and added, “I don’t know that that will happen.”Asked about whether China was headed for a crisis due to severe COVID-19 lockdowns and debt problems in its property sector, Malpass said: “They’re having setbacks, major setbacks in various areas, and the forecasts for growth have been brought down.”But he said the World Bank continues to work well with China, which is a major shareholder and a borrower whose use of the lender’s financing is shrinking. The bank is also working closely with China to encourage more transparency its lending to developing countries, Malpass said.”So I guess the way I think of it is that the world needs to interact with China, recognizing that it’s important in the world and growing in importance,” Malpass said.He also said he did not believe the world faced a new “Bretton Woods moment,” a reference to the 1944 conference that revamped the international financial architecture and created the World Bank and the International Monetary Fund amid the ruins of World War Two.That system, with the U.S. dollar at its core, “works pretty well,” he added.”My view is we’re not at that point now at all. There’s not a sense of the world being lost,” Malpass said. “There’s this sense actually of unity of a great deal of the world in one endeavor, which is to end the war in Ukraine.” More

BUENOS AIRES (Reuters) – Argentina’s central bank directors will meet on Wednesday to discuss a possible interest rate hike, a source with the bank told Reuters on Tuesday, as the South American country battles annual inflation expected to have topped 6% in March.A central bank spokesman confirmed Wednesday’s meeting, a day earlier than usual due to a national holiday on Thursday.”March inflation readjusts reality and therefore a potential rate hike will be analyzed,” said the source, a central bank adviser with direct knowledge of the discussions.”There is an implicit consensus that it should be raised, what is not known is the convenient range so as not to harm the running of the economy.”A recent Reuters poll of traders and analysts estimated the bank would raise the benchmark rate by 150 basis points in April to 46%, in what would be the fourth hike in 2022. Authorities around Latin America are battling inflation.That represents a 57.1% effective annual rate, analysts say, which is still below forecasts for inflation in 2022 that is predicted to hit near 60% by the end of the year.March inflation, to be revealed on Wednesday, will exceed 6%, Economy Minister Martín Guzmán said on Monday, the fastest monthly price rise since at least 2018.”If there is any news about a new rate, it will not be released until after the government itself reports March inflation,” the central bank source told Reuters.Argentina has pledged to shift towards real positive interest rates as part of a recently finalized $44 billion debt deal with the International Monetary Fund (IMF).The central bank raised the benchmark 28-day Leliq rate to 40% in January, 42.5% in February and 44.5% in March. More