Economy

Today’s top storiesTurkish president Recep Tayyip Erdoğan tied Ankara’s approval of Sweden’s Nato bid to his country’s efforts to enter the EU, in a fresh blow to Stockholm’s attempt to join the military alliance.The EU said a new transatlantic data-sharing agreement would come into force today, providing assurance to companies over the transfer of personal information between Europe and the US.Thames Water, the troubled UK water utility, fell short of its £1bn funding goal, getting agreement from its investors for £750mn of new equity. It also warned that it would need a further £2.5bn from investors by 2030.For up-to-the-minute news updates, visit our live blogGood evening.New data showing China on the edge of deflation has fuelled calls for a stronger stimulus package for the world’s second-biggest economy as its post-pandemic recovery continues to stutter. Consumer price growth in June was flat year on year and down 0.2 per cent from the previous month, while factory gate prices fell at the fastest rate since 2016 as demand for goods weakened, exacerbated by slowing global economic growth. The CPI figures follow data showing manufacturing activity shrinking for the third consecutive month.The situation stands in stark contrast to the US and Europe, where stubbornly high inflation means interest rates are likely to rise further over the summer.

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China’s faltering recovery is taking a heavy toll on the country’s youth: more than a fifth of 16 to 24-year-olds were unemployed in May, the largest proportion since records began in 2018 and higher than in European countries such as France and Italy. Although jobs are still being created, many are unskilled positions unpopular with university graduates. Crackdowns on the tech, finance and gaming sectors have limited what were once sought-after opportunities among young people.Some blame the skills mismatch on the government as it tries to tilt the economy towards high-tech manufacturing. But with the sector not yet ready to absorb all the engineering students coming out of universities, there are insufficient graduate-level jobs. Others say the causes go deeper, with domestic consumption not growing enough to create jobs. “When you build your manufacturing competitiveness based on low wages, once low wages become a problem because of weak domestic demand, you’re sort of stuck,” said one analyst.In response, Beijing recently urged jobless graduates to “roll up their sleeves” and try manual work, publishing profiles of those who had allegedly made a fortune in low-skilled jobs such as selling street food or growing fruit, rather than pursuing a career in their chosen field. Perhaps unsurprisingly, the message drew much scorn on social media.The slower than expected economic recovery in China has led the government in Beijing to seek more foreign investment but recent tit-for-tat trade sanctions with the US have taken their toll on sentiment. In that regard, there was progress over the weekend after the visit of US Treasury secretary Janet Yellen appeared to calm some of the political tensions between the two countries as she talked up the potential for trade and economic co-operation.Try our global inflation tracker to see how your country compares on rising pricesNeed to know: UK and Europe economyChancellor Jeremy Hunt ruled out big pre-election tax cuts this autumn and told the Financial Times ahead of a set-piece speech this evening that he was looking to the City of London to bolster UK growth by changing rules that are holding back investment. Bank of England governor Andrew Bailey said the UK economy had shown “unexpected resilience” in the face of a range of external shocks. Fears of more UK interest rate rises have led to a rush of homeowners signing new mortgage deals. “There’s been a real shift in borrower behaviour over this last month,” said one finance company. “It’s changed to: ‘Oh my goodness, I’ve got to get one of these deals before they go, even though I don’t like the rate’.”Proposals to make the UK electricity network more efficient could lead to large variations in price depending on communities’ proximity to where power is generated. “Locational pricing” is just one option being considered by regulator Ofgem and the government as part of a plan to decarbonise the grid by 2035.Chief economics commentator Martin Wolf said green energy proposals from the UK’s opposition Labour party were unlikely to enable the country to exit a long, painful period of economic stagnation.Representatives of 168 member states of the International Seabed Authority met today to begin talks about large-scale mining in the deep seas. France and Germany are concerned that a China-supported push to harvest battery metals from the seabed could do lasting harm.Need to know: global economyTalks between the US and Mexico on trade problems involving energy and the motor industry have ended with little progress, frustrating business leaders who say neither government is abiding by regional dispute procedures. Central banks are bringing their physical gold reserves back home to avoid any Russian-style sanctions on their foreign assets. Gold is increasingly in demand as a haven from high inflation and volatile bond prices. Mozambique’s former finance minister is set for extradition and trial in the US over a $2bn “tuna bonds” scandal, relating to the looting of money from loans for maritime projects, including a state tuna fishing fleet, which directly led to the southern African nation defaulting on its debt. Vietnam’s economic moment has arrived, says the FT editorial board, as it becomes a key beneficiary of manufacturers’ efforts to “de-risk” exposure to China. Vietnam was the fastest-growing economy in Asia last year and one of only a handful globally to achieve two consecutive years of growth since the pandemic. Need to know: businessThe biggest US banks this week are set to report the biggest jump in loan losses since the start of the Covid-19 pandemic as rising interest rates pile pressure on borrowers. The top US banking regulator announced sweeping changes to capital rules for midsized lenders as part of an effort to shore up a financial system rattled earlier this year by a string of bank failures.Soaring interest rates have also had a profound effect on the UK’s pensions industry. A new Big Read explains.EasyJet cancelled 1,700 summer flights, mostly from Gatwick airport, because of air traffic control problems. Congestion caused by the closure of Ukrainian and Russian airspace means only about 80 per cent of normal airspace is available, just as passenger demand bounces back from the pandemic.The hype around “additive manufacturing” enabled by 3D printing has begun to wear off. Leading manufacturers are in the middle of merger talks as they face stubborn barriers to using the technology for mass-produced goods.A new FT film details the story of Gautam Adani, the billionaire Indian businessman who saw the value of his listed companies plummet after being targeted by a short seller. The fallout has spread into politics: Adani had become inextricably linked to Prime Minister Narendra Modi’s vision of a new India.

Video: Gautam Adani: the Indian billionaire vs the short seller

The world of workEmployers are warming to the idea of staff naps, reinforced by recent research showing regular napping might slow the pace the brain shrinks as we age, lowering the risk of dementia and other diseases. We’ve all been there. Columnist Pilita Clark discusses one of the biggest horrors of office life: writing an email to a friend to moan about a detested work colleague and sending it straight to the detested colleague instead of the friend.Some good newsDeforestation in Brazil’s Amazon fell by a third in the first six months of 2023 compared with last year, according to (yet to be independently verified) government satellite data. President Luiz Inácio Lula da Silva has pledged to end forest clearance by 2030. More

The UK and France are Europe’s closest relations. They have economies of similar sizes and shapes. They have colonial pasts of a similar hue and geographic spread, though the British empire was the larger. Given this, anyone interested in improving the lot of people in one country would do well to study the successes and mistakes in the other. British policymakers have much to learn from France, not least its embrace of nuclear power, its first-class healthcare system and its central role in the EU. Given the UK’s biggest social and economic problems, such comparisons are often a source of real and deserved embarrassment. Indeed, one reason why the British political class leapt upon the recent unrest in France is so they could talk about what sometimes feels like a vanishingly small number of areas in which the French have something to learn from the British. The UK’s integration model and approach to race relations does perform better than the French one. Some of that may be about the benefits of a multicultural model over a more coercive form of secularism or differences in the labour market. But perhaps the most underrated British strength is simply our ability to count. In a country often defined by poor management and inadequate capital investment, the Office for National Statistics really is world-leading. This highly effective organisation produces reliable and consistently good data with comparatively few limitations on what it can ask about. As a result, British policymakers simply know a lot more about the shape of their country and its social and cultural problems. The benefit goes far beyond race relations. It helped the UK enjoy a rapid rollout of the Covid-19 vaccine and a faster end to lockdown. It also means that we can say, with high certainty, that the children of immigrants in the UK are more likely to be in work than their parents, with the exception of black Caribbean and Indian men. Indeed, some groups, like second generation Bangladeshi men and second generation black African women, have lower unemployment rates than white British men and women respectively.In France, which like Germany, Japan and a host of other OECD nations does not collect data about race and ethnicity, much more of what we know is based on extrapolation. The headlines are not good for this model: second-generation immigrants in France have a 19 per cent lower standard of living than those not descended from recent immigrants. These compare unfavourably to the overall British statistics, which show a relatively marginal difference between the native population and the foreign-born. Of course, outcomes among immigrants are also a flawed measure with which to consider a country’s minority population given both the UK and France have well-established non-immigrant minority populations. But we are forced to do so in part because the French state collects no data on minorities.Some defenders argue that for France, the problem isn’t the policy, it’s the migrants. Put bluntly, they say, the issue is that many are from Africa and many are Muslims. But the type of people coming to both countries since 1945 is not that different: a wide range of migrants from former colonial possessions, working in all kinds of industries. Look at how African migrants to the UK perform better than white Britons across a range of measures or the strong academic performances of Britons from the Indian subcontinent. It’s possible, I suppose, that Algerian Muslims are just harder to integrate than Bangladeshi ones or west Africans from the Gold Coast more able to thrive abroad than west Africans from the Côte d’Ivoire. But it doesn’t seem all that likely.It seems more likely that UK policymakers are better able to respond to problems because they have better data. For example, the school census determines how much central government funding schools receive per pupil who speaks English as a second or third language. When you don’t have data, policy debates inevitably become driven by anecdote and supposition, as do the levers that governments reach for. It’s thus not surprising that the gap between outcomes in France and the UK is significant: if anything it’s more surprising that it is not larger still. Narayana Murthy, the Indian billionaire, is fond of the saying that “in God we trust, but everyone else needs to bring data to the table”. It’s a phrase his son-in-law has reached for too. As it happens, this son-in-law, the prime minister Rishi Sunak, is himself good anecdotal evidence of the success of the British model. But the real secret lies in the fact that the UK doesn’t need to reach for anecdote to show its approach to integration is [email protected] More

(Reuters) – Brazil likely registered mild deflation in June in monthly terms from lower fuel costs and cheaper foodstuffs, adding to the case for a potential start of a monetary easing cycle awaited by global investors as soon as next month, a Reuters poll showed.The probable drop, to be confirmed in a release due Tuesday, would be the first since September, the last month in a brief period of falling consumer prices that was interrupted after the election of President Luiz Inacio Lula da Silva in October.An inflation cool-off would catch global attention as a lead for future trends in other top economies, possibly allowing Banco Central do Brasil to unwind a hawkish approach of the kind the U.S. Federal Reserve is still pursuing.Consumer prices measured by the IPCA index likely fell 0.10% in June vs May, according to the median estimate of 13 economists polled July 5-7. On a yearly basis, inflation is seen decelerating further to 3.20%, its lowest since September 2020.”What is pushing down the headline figure is a drop in fuel and cooking gas prices, in addition to a continuous cooling of wholesale food costs due to the record harvest in the first quarter,” analysts at 4intelligence said.Motorists are seeing relief at pump stations following a raft of gasoline price cuts by Brazilian state-run oil company Petrobras, which is changing its pricing strategy to smooth fuel cost swings.Meanwhile, food prices remain under downward pressure as the country experiences an agricultural boom that is now turning into a threat for U.S. corn export dominance and overflowing Argentina with soybeans as Brazil’s neighbour own crop dwindles.Looking forward, the prospect for inflation in Latin America’s No. 1 economy keeps improving slowly, with market consensus pointing at a 4.98% clip for 2023 according to a central bank survey, under 5.36% at the beginning of this year.But this would still exceed the official goal of 3.25% plus a tolerance margin of 1.5 percentage points up or down, in what would become the third consecutive year of overshooting. Last week, the government set the target at 3% for 2026, in line with the goals for 2024 and 2025.The decision to aim at a relatively low inflation rate in the longer term, combined with a surprising appreciation of the local currency this year, could reinforce the moderation of consumers prices and bring their variation closer to target.The main risk is the evolution of the primary deficit under Lula’s government plans to expand welfare spending, particularly after Congress delayed a vote on a fiscal framework seen as a key commitment to maintain expenditures in check. (Reporting and polling by Gabriel Burin; editing by David Evans) More

A growing number of countries are bringing their physical gold reserves back home to avoid Russian-style sanctions on their foreign assets, while increasing their purchases of the precious metal as a hedge against high levels of inflation.Central banks globally made record purchases of gold in 2022 and into the first quarter of this year, as they hunted for safe havens from high inflation and volatile bond prices, according to a survey of sovereign investors by asset manager Invesco. China and Turkey together accounted for almost one-fifth of these purchases.Concerned by the decision by the US and others to freeze Russian assets, central banks opted to buy physical gold rather than derivatives or exchange traded funds that track the metal’s price.They also preferred to hold it in their own country as global tensions increased. Invesco’s survey found that 68 per cent of central banks held part of their gold reserves domestically, up from 50 per cent in 2020. In five years, that figure is expected to rise to 74 per cent, the survey showed. “Up until this year, central banks were willing to buy or sell gold through ETFs and gold swaps,” said Invesco’s head of official institutions Rod Ringrow.“This year it’s been much more physical gold and the desire to hold gold in country rather than overseas with other central banks . . . it’s part of the reaction to the freezing of the Bank of Russia’s reserves,” he said.Just after Moscow began its full-scale invasion of Ukraine, the EU, US and other G7 countries announced that they would impose sanctions on Russia’s central bank and prevent it from accessing some $300bn in reserves held abroad. The EU is now considering the legal implications of diverting the interest from these holdings to Ukraine.According to the survey of 57 central banks and 85 sovereign wealth funds managing some $21tn in assets, many sovereign investors were “concerned” by the precedent set by the confiscation of Russian assets, with 96 per cent saying further investment in gold was driven by its status as a safe haven.“We increased the exposure eight to 10 years ago and had it held in London, using it for swaps and to enhance yields,” one central banker from a western country told Invesco. “But we’ve now transferred our gold reserves back to our own country to keep it safe — its role now is to be a safe-haven asset.”Global demand for gold hit an 11-year high of 4,741 tonnes in 2022, up from 3,678 tonnes in 2020, driven by central bank purchases and heightened retail investor interest, according to research from the World Gold Council. But while physical gold was in demand, gold ETFs suffered combined outflows of almost 300 tonnes in 2021 and 2022.Other countries that have made significant gold purchases include Singapore, India and central banks in the Middle East.The record central bank buying of gold in 2022 contributed to a powerful rally in bullion prices, although prices have fallen back to $1,923 per troy ounce in recent weeks due to the prospect of higher US interest rates for longer. Rate rises dim the appeal of the non-yielding asset compared with other investments.Net purchases of gold by central banks are expected to soften this year after Turkey turned into a larger seller. The central bank has had to supply gold to satisfy demand from domestic consumers as they bought bullion to protect their savings from a lira that has been trading at historic lows around the election in May. In a sign of the move to repatriate gold, holdings at the Bank of England, one of the main storage hubs for official financial institutions globally, have slipped 12 per cent from their 2021 peak to 164mn troy ounces at the start of June. The attraction of holding gold in large liquid hubs such as London has also been reduced by the fact that hedging by gold miners peaked at the turn of the millennium and has since fallen. That has limited the ability for central banks to earn a yield by swapping out bullion stored overseas. More

Last November, the People’s Bank of China (PBOC) issued a notice outlining 16 measures to support the cash-strapped sector, including loan repayment extensions, in a push to ease a liquidity crunch that has plagued it since mid-2020.The extended policies encourage financial institutions and property firms to negotiate independently, and actively support property developers through the rollover of existing loans and the adjustment of repayment arrangements, the People’s Bank of China (PBOC) said in a statement.An additional one-year extension to these kind of existing loans due to be repaid before the end of 2024 is allowed, the PBOC added. Separately, loans issued to support the delivery of unfinished projects before the end of 2024 will not be downgraded in risk classification during the loan term, the central bank said.For newly issued ancillary financing that becomes non-performing, the relevant institutions and personnel are exempted from liability as long as they have exercised due diligence, it added.Measures and policies without clear deadlines remain in effect. China’s debt-ridden developers are struggling to raise funds and sell homes, prompting a mortgage-repayment boycott among homebuyers which dented confidence in the sector.The market is expecting more concrete stimulus measures to be announced this month when a meeting of the country’s powerful politburo is held. More

TOULOUSE, France (Reuters) -Europe’s Airbus inaugurated a new assembly line for its A321neo passenger jet in Toulouse, southwestern France, on Monday, granting a new lease of life to the deserted hangar where the defunct A380 superjumbo was once built as it basks in record demand for smaller medium-haul jets.Finance Minister Bruno Le Maire toured the partially automated line inside the Jean-Luc Lagardere plant, which Airbus says will create 700 jobs by 2026, or about half the full-time total when the world’s largest jetliner was built there.The plant’s makeover highlights a shift in the industry’s attention from its largest and boldest creations like the double-decker A380 to stalwart single-aisle designs, which are enjoying a second wind due to increased range and high demand.The A321neo is the largest version of the A320 series of jets, which was relaunched with new engines in 2010 just in time for a boom in demand stoked partly by low interest rates.It is the eighth European assembly line for the A320 family, with previously announced expansion plans in the United States and China due to bring the worldwide total to 10. The first plane is due to be completed in late 2023 for delivery next year.Its opening comes as competition between Airbus and arch-rival Boeing (NYSE:BA) shifts towards production, with both companies crafting strategies to deliver on bulging order books in the most efficient way, after months of chronic disruption.The new line sits along one edge of the world’s second-largest building by usable space, alongside a row of stores where robotic pickers will select parts and tools for workers. Other robots will be deployed to join aircraft sections.The new line is part of a reorganisation that Airbus says will help it lift total A320-family output to 75 a month in 2026 from some 45 now. Some suppliers say the target is ambitious. In a game of industrial musical chairs designed to recoup investment in the cavernous plant, an adjacent bay allows room for the existing A320-family production line in Toulouse to be transferred from its current home, where Concorde was built. Boeing too is reallocating space from large to small jets.The ghost of the A380 is not entirely laid to rest, however.A walled-off area in the rest of the plant is being pressed back into service for an 18-month programme of A380 inspections and repairs after cracks were found in wing spars, Reuters reported on Friday. More

SEOUL (Reuters) -South Korea’s financial services regulator has asked major commercial banks to prepare around $4 billion in financing to support a credit cooperative hit by customer withdrawals, two banking sources familiar with the matter said on Monday.An official at the Financial Services Commission said it could not confirm the amount or other details, but it had asked the banks for cooperation in preparing liquidity through repurchase-agreement facilities to aid MG Community Credit Cooperatives (MGCCC).”(Authorities) are closely monitoring the liquidity of MGCCC,” the official said, declining to be named due to the sensitivity of the matter. The commission had no further comment.Depositors were lining up last week to withdraw funds from a branch of the cooperative after local media reported a rise in non-performing loans tied to real estate projects. The branch, in the city of Namyangju east of Seoul, is due to be closed soon.South Korea’s top financial authorities pledged on Sunday to ensure liquidity at the credit cooperative, which has nearly 1,300 branches, saying in a statement that MGCCC’s capital ratio and liquidity far exceeded regulatory ratios and it had sufficient cash-equivalent assets.Sharply rising interest rates and a cooling property market have raised concerns about the potential impact on Asia’s fourth-largest economy.South Korea’s five major commercial banks have signed or are in the process of signing repurchase agreements with the credit union, said the sources, who declined to be identified because of the sensitivity of the issue. Repurchase facilities allow for raising cash in exchange for collateral, such as bonds.Woori Bank, Hana Bank, Shinhan Bank, KB Kookmin Bank and NongHyup Bank had been asked to make financing available to MGCCC, although the actual amount extended to the credit union would depend on deposit withdrawals, the sources said.The sources added that each of the banks was asked to prepare 1 trillion won of financing, or 5 trillion won in total ($3.84 billion), as potential support.State-run Korea Development Bank and Industrial Bank of Korea are also setting up repurchase agreements with the credit union, Yonhap news agency reported on Monday, citing unnamed financial industry sources. MGCCC and the banks did not immediately respond to requests for comment.MGCCC said in a statement last week that its debt delinquency rate was manageable and it would work with the Interior Ministry to improve its financial soundness.Sunday’s statement, from officials at the Bank of Korea and the Ministry of Finance as well as the Financial Services Commission, added that withdrawals at MGCCC had slowed and new deposits had been coming in since last Thursday.An investor note from Citi last week played down the risks from the incident but warned of negative effects on economic growth from the indebted real estate sector.”We don’t see systematic risks from the event,” said Kim Jin-wook, an economist for Citi in Seoul, adding that any negative effects would likely be far less than those of a missed bond payment by a theme park developer late last year. South Korean financial authorities coordinated with financial groups to set up a liquidity programme last November when a missed bond payment by theme park developer Gangwon-Jungdo Development sparked worries about a credit crunch. ($1 = 1,302.7800 won) More

Welcome to Trade Secrets. The spotlight’s off the economics and trade policy area this week, with the big international event being the Nato summit in Vilnius. Mind you, the fact that US policymakers sound keener on Ukraine acceding to the EU than joining Nato intensifies the debate about how the union can incorporate a corrupt low-income country that also happens to be globally competitive in agriculture, Europe’s most sensitive sector. Today’s newsletter is mainly about the great global hunt for critical minerals, plus a note on the EU’s new trade deal with New Zealand and what it tells us about Brexit and the Asia-Pacific. Charted waters looks at the sorry state of Russia’s currency.Calming the commodities commotionThe global tussle for minerals needed for the green transition was always likely to be a pretty exciting spectator sport for trade types. Fortunes made in the (literally and politically) dirty business of mining; importing countries coaxing, bullying and bribing exporters to supply them first; the riveting spectacle of an EU bilateral trade agreement being tweaked to relax restrictions on preferential domestic supply: it’s all there.There have been some juicy new developments. China last week announced it was restricting exports of the metals gallium and germanium which European, Asian and US manufacturers used to make various high-tech goods. (As noted by Karthik Sankaran, veteran markets guru and inexhaustible source of globalisation-related gags, it’s rather embarrassing for the EU to run short of elements named after France and Germany.)On Friday the EU, which won a World Trade Organization ruling against Indonesia’s export controls on nickel only to see Jakarta put the case into limbo by appealing to the WTO’s non-functioning Appellate Body (AB), unsheathed a shiny new trade dispute weapon, the “enforcement regulation”. The legal instrument enables Brussels to impose compensatory trade sanctions without an AB hearing.The conventional wisdom is that export controls defeat themselves by stimulating supply elsewhere. The best cure for high prices is high prices, cartels contain the seeds of their own destruction, you know the drill.It’s certainly true that there’s a big push on to increase output. Precedents and habits are being overturned. Germany, a country with Greens running the economy ministry, is now reopening mines that closed a quarter of a century ago.It’s also true that previous attempts to corner markets were self-correcting. In 2010, China imposed export quotas to divert its rare-earth supply to domestic manufacturers, but reversed course in 2015 after a combination of mines being opened up elsewhere, minerals being smuggled out of China and losing a WTO case to the US.Thing is, though, it still gave Chinese manufacturers a few years of preferential supply, and in fast-moving green tech sectors that might be all you need to get a global edge in technology and process. How can importing countries respond? Jennifer Harris, who recently left her White House post as senior director for international economics, said in last week’s FT that one common suggestion, the EU, US and Japan explicitly or implicitly setting up a “buyers’ club” to control prices and ensure supply, was likely to provoke exporters into forming a counterbalancing cartel.A better solution, she reckoned, was an agreement with exporting and importing countries to stabilise prices and supply. Nice idea, but the Biden administration isn’t exactly renowned for its rock-solid commitment to good faith international co-operation, as I wrote last week about its proposed green steel climate club. And of course there’s always the spectre of a second term for Donald Trump, and God only knows what he thinks of the matter. It looks to me like the entertaining critical minerals free-for-all has a while to run.Europe cuts a deal with the KiwisBy contrast, the EU signing a preferential trade deal with New Zealand, as it did yesterday, doesn’t immediately look like a crowd-pleasing spectacular. Apart from its small size, New Zealand is a pretty open economy anyway, so no huge gains for the EU. Also, Brussels, not being politically desperate for a deal, conceded fewer tariff cuts on agriculture than the UK did in its New Zealand agreement.There are a couple of interesting aspects, though. One is the importance of the EU’s sheer economic heft to trading partners like New Zealand. The EU opened up less than the UK did, but its massively bigger economy means that, for example, New Zealand’s tariff savings just for kiwi fruit will be bigger than all the gains from the entire UK deal. The UK just isn’t big enough to matter that much.Certainly any Brexiters’ ideas that Brussels negotiators were panicking about being outflanked by London are pretty delusional. Brexit didn’t deliver a huge gain for New Zealand (or the UK) despite what some British Commonwealth sentimentalists would like to believe. Oh yes, and New Zealand also just joined the EU’s Horizon research network, the one that the UK has embarrassingly tried to haggle over the price of rejoining.Second, while the EU’s trade initiatives in the Asia-Pacific are unlikely to rival the Trans-Pacific Partnership (CPTPP), the New Zealand agreement does mean it has concluded a deal in the region with an advanced economy CPTPP member with some of Brussels’ favourite stuff about shared progressive values and regulatory co-operation. The EU’s having difficulties in negotiations with another CPTPP member, Malaysia, thanks to its policies on palm oil and deforestation, but it’s certainly not absent from the region. Nor, evidently, is its model trade agreement entirely alien to the US-inspired approach of the CPTPP. Charted watersThe Russian rouble last week hit its lowest level since the invasion of Ukraine. That should have caused some satisfaction to the rich countries trying to deprive Russia of oil revenues through price caps and diversifying suppliers. Only some satisfaction, though, because while Russia’s oil and gas revenues have dropped by a quarter from a year ago, its imports have rebounded as traders have found ways of evading sanctions. Capital flight and falling export earnings are weakening Russia’s ability to fight the war, but it’s still managing to buy more from abroad than its opponents would like.Trade linksThe latest Global Trade Alert report on protectionism argues that attempts to restrict critical minerals supply don’t necessarily work and that countries have in fact reduced their rare earths sourcing from China already.The European Commission has proposed a co-ordinated EU withdrawal from the Energy Charter Treaty, the overbroad provisions of which it says threaten the green transition. This has been coming for a while, not least because some hardline signatories to the ECT, notably Japan, have resisted reform that might constrain its reach. There’s a 20-year sunset clause though, so this is a long game.Another big economy lines up to join the race to produce semiconductors, with India saying they will be rolling off the production line in 18 months. (Just in time to add to the global glut, if they’re unlucky.)More subsidy race news as Canada decides it’s going to go for its own version of Joe Biden’s green handouts to revive its flagging plans for battery plants.The Wall Street Journal reports on what happens when industrial policy goes wrong — the massive underperformance of a huge factory built with public money by New York state and then leased to Tesla supposedly to create the Western Hemisphere’s biggest solar panel plant. Trade Secrets is edited by Jonathan Moules More