Economy

BOGOTA (Reuters) -The election of Colombia’s first leftist president, Gustavo Petro, is indicative of widespread yearning for a more equal and inclusive society, analysts and business leaders said, but the former guerrilla will need to act fast to reassure investors.Petro, a 62-year-old former mayor of the capital Bogota and current senator, won some 50.4% of votes on Sunday, handily beating construction magnate Rodolfo Hernandez.The election of a former guerrilla marks a radical change for a country still scarred by decades of conflict and highlights the depth of frustration with the right-leaning political establishment accused of overseeing a wide gap between rich and poor. Petro has pledged to fight inequality with free university education, pension reforms and high taxes on unproductive land in the Andean country, where nearly half the population lives in poverty. His proposals – especially a ban on new oil projects for environmental reasons – have startled some investors, though he has promised to respect current contracts.This campaign was Petro’s third presidential bid and his victory adds the Andean nation to a list of Latin American countries that have elected leftists in recent years.Petro will take office at a time when Colombia is struggling with low credit ratings, a large trade deficit and national debt which is predicted to end the year at 56.5% of GDP.Oil accounts for nearly half of exports and close to 10% of national income.”Colombia was governed for so many years by the economic and political elite,” said Gimena Sanchez-Garzoli, Andes Director for the think tank Washington Office on Latin America. “In many ways this election is basically the voice of most of the population in the country, especially the rural poor, women, Afro-Colombians, the indigenous.””People didn’t want a change at any cost, they wanted a change that would actually be with actual proposals which include making the peace accord a priority,” said Sanchez-Garzoli referring to the 2016 peace deal with the Revolutionary Armed Forces of Colombia (FARC), which brought an end to that group’s role in the nearly 60-year-old internal conflict.Petro has pledged to fully implement the FARC accord – which detractors accuse current President Ivan Duque of failing to adequately support – and to seek talks with the still-active ELN rebels.”Petro’s election may have just saved the peace process,” said Oliver Kaplan, associate professor at the University of Denver’s Josef Korbel School of International Studies.On Sunday night, as he celebrated his win, Petro told his supporters: “Peace is someone like me being able to be president.”BUSINESS JITTERSPetro regularly praises the mostly young protesters who have taken to the streets over the last three years to decry inequality and police violence, in demonstrations where more than 40 people were killed.The president-elect, who was arrested by the military in 1985 while carrying weapons for the M-19 rebels, has said he was tortured during his 16-month detention. His victory has high-ranking armed forces officials bracing for change.”There’s a segment of the population that is totally opposed to him because of his M-19 past,” Kaplan said. “Maintaining security and protection of civilians will depend on good civil-military relations, and it’s uncharted waters in that regard.”But Petro’s proposals will face challenges, not least because of a deeply divided congress where a dozen parties hold seats.”Petro is going to have a very strong opposition from day one, we’re going to have a congress that all of a sudden is disjointed from the executive branch,” said Colombia Risk Analysis founder Sergio Guzman. “I think this means people’s priorities have moved beyond the conflict,” Guzman said. “This marks a really stark departure from where we’ve been as a country.”Business leaders and the market were awaiting ministerial appointments, especially for key positions like finance minister, and have predicted volatility in the peso and in bonds when trading opens on Tuesday after a holiday weekend.Petro has floated some moderates as possible finance ministers, including Alejandro Gaviria, a centrist economist and former health minister, as well as ex-ministers like Rudolf Hommes and Jose Antonio Ocampo.”It will be very important that total confidence between everyone is restored, that there is confidence for businesses, citizens, that there is confidence for investors, that there is confidence with the rule of law,” Bruce Mac Master, president of the Colombian Business Association (ANDI), said in a statement following Petro’s victory.”In us, he can expect a constructive partner,” he said.Petro was emphatic that business and development had important roles to play under his government. He has pledged to strengthen agriculture, tourism and manufacturing.”We are going to develop capitalism in Colombia,” told supporters on Sunday. Development is needed to overcome the “feudalism” and “pre-modernity” from which Colombia still suffers, he said. More

The writer, a former permanent secretary to the Treasury, is a visiting professor at King’s College LondonLast week’s interest rate rise by the Bank of England has provided some temporary respite to sterling. But the pound is still 10 per cent weaker against the US dollar compared with its January peak, and 3 per cent weaker against the euro.Apart from the occasional shrug about the cost of a pint of lager in Marbella or an entry ticket to Disney World in Florida, the British people always seem profoundly relaxed about devaluation. Why is this the case? And are they right?The past hundred years of British history divides neatly into two periods. Until 1972, the pound’s exchange rate was generally fixed, first under the gold standard and then under the Bretton Woods system. Britain’s addiction to consumption over investment and its chronic productivity problems meant that balance of payment difficulties tended to emerge for any given exchange rate. Governments would resist devaluation in pursuit of credibility, arguing that this time it was different. But sooner or later the dam would burst, with successive devaluations in 1931, 1949 and 1967. Devaluation was humiliating for the government and traumatising for the electorate, who tended to punish the government accordingly.British politicians did not cause the break-up of the Bretton Woods system in 1972, but they were major beneficiaries. The pound floated. Its value gyrated. When the British economy encountered problems, sterling would fall. The British people were more tolerant of devaluation by stealth. The British state duly took note.Only when John Major tied sterling and himself to the mast of the European exchange rate mechanism in 1990 was there a brief reversion to the old days of making a fetish of the exchange rate. But sterling did not stay the course. Major pushed the ejector button in 1992, and to this day governments have made a virtue of not having an exchange rate target.From the politicians’ point of view a downward drift in sterling is the perfect policy instrument. It allows the economy to adjust after a period when the country has been living beyond its means. I saw this at first hand in the Treasury in the early 1990s and again after the financial crisis. We saw it again with the Brexit referendum. But it carries a cost and one which has potentially increased over time.First, devaluation tended to benefit exporters, helping to reduce, albeit briefly, Britain’s persistent trade deficit. However, there are signs that exports have become less responsive to recent devaluations either because the service economy behaves differently from the old industrial economy, or because of post-Brexit trade barriers.Second, a weak exchange rate increases the cost of living. Back in the summer of 2008 the oil price was much higher in dollar terms than it is now. But because the pound has fallen by 40 per cent against the dollar, the price at the pumps is approximately 50 per cent higher than it was 14 years ago.Although the UK’s current inflation rate has not yet diverged from that of the US or the eurozone, there are grounds for thinking that inflation will remain higher for longer than that of our competitors.Labour markets are much more flexible than they were in the latter half of the 20th century. That means we are unlikely to witness the structural unemployment of the 1930s or the 1980s. But the flip side is that in the absence of a strong trades union movement, real wages of those working are likely to fall at potentially alarming rates.There are other consequences, too. Britain tends to save less than other industrialised nations. We therefore need foreign investors to buy our public debt. As former BoE governor Mark Carney memorably put it, we rely on the kindness of strangers. But however kind those strangers are, they require a premium to buy bonds in a depreciating currency. You don’t have to agree with the Bank of America’s claim that sterling has become an emerging market currency to recognise they may be on to something. In its March forecast, the Office for Budget Responsibility suggested this year’s record debt interest bill would be an aberration. Debt interest would fall back by £30bn next year as inflation receded. But with interest rates and inflation rising further and faster than expected, chancellor of the exchequer Rishi Sunak will be dreading the OBR’s autumn forecast.Faced with a drop in living standards, and debt interest eating into resources better spent on the NHS and education, the British people may begin to reflect on the consequences of devaluation. Maybe it’s not a free lunch. Maybe it’s time to embrace sound money. More

MILAN (Reuters) – Telecom Italia (BIT:TLIT)’s (TIM) top investor Vivendi (OTC:VIVHY) wants its fixed landline network to be valued at 31 billion euros ($33 billion) in any sale, far higher than analysts and the telecom company had forecast, a source close to the French group said.TIM’s landline grid should carry at least 10 billion euros of the company’s debt were it to be separated from the group’s services arm, the person said, asking not to be named because deliberations are confidential.Shares in TIM extended gains after the report and were up more than 3% by 1132 GMT, outperforming a 0.6% rise in Italy’s blue-chip index.Vivendi owns 23.8% of TIM and its support is important for any asset separation deal to go through. TIM declined to comment.The comments come as TIM’s new CEO Pietro Labriola works on a revamp plan for the debt-laden phone group centred on the separation of its wholesale fixed network operations from its services businesses.Labriola will present his strategy to investors on July 7.As part of the plan, TIM is considering an outright sale of its domestic landline grid and its international cable unit Sparkle, sources have previously said. TIM has signed a non-binding accord with state lender CDP – the second-biggest investor in TIM after Vivendi – to create a unified broadband champion in Italy combining TIM’s network assets with those of CDP-controlled rival Open Fiber.CDP would control the combined network entity. After opposing for years the idea that TIM could lose control of its main infrastructure asset, Vivendi has opened the door to supporting Rome’s efforts to create a single broadband operator under state oversight.However, Vivendi CEO Arnaud de Puyfontaine has warned Vivendi would only back a sale of the network that valued it fairly, rejecting as inadequate analyst valuations for the grid of 17-21 billion euros before synergies. The value is also far higher than a price tag for the business estimated by TIM of about 20 billion euros including debt.Vivendi’s much higher valuation could potentially complicate reaching an accord with CDP and Open Fiber over the sale of the network.The source close to Vivendi said the French media group was a long-term investor in TIM and, following a split, would focus its strategic efforts on the group’s services arm which it ruled out selling. ($1 = 0.9511 euros) More

The photograph on the mining conglomerate’s social media account showed 70 ethnic Uyghur workers standing at attention under the flag of the People’s Republic of China. It was March 2020 and the recruits would soon undergo training in management, etiquette and “loving the party and the country,” their new employer, the Xinjiang Nonferrous Metal Industry Group, announced.But this was no ordinary worker orientation. It was the kind of program that human rights groups and U.S. officials consider a red flag for forced labor in China’s western Xinjiang region, where the Communist authorities have detained or imprisoned more than 1 million Uyghurs, ethnic Kazakhs and members of other largely Muslim minorities.The scene also represents a potential problem for the global effort to fight climate change.China produces three-quarters of the world’s lithium ion batteries, and almost all the metals needed to make them are processed there. Much of the material, though, is actually mined elsewhere, in places like Argentina, Australia and the Democratic Republic of Congo. Uncomfortable with relying on other countries, the Chinese government has increasingly turned to western China’s mineral wealth as a way to shore up scarce supplies.That means companies like the Xinjiang Nonferrous Metal Industry Group are assuming a larger role in the supply chain behind the batteries that power electric vehicles and store renewable energy — even as China’s draconian crackdown on minorities in Xinjiang fuels outrage around the world.The Chinese government denies the presence of forced labor in Xinjiang, calling it “the lie of the century.” But it acknowledges running what it describes as a work transfer program that sends Uyghurs and other ethnic minorities from the region’s more rural south to jobs in its more industrialized north.Xinjiang Nonferrous and its subsidiaries have partnered with the Chinese authorities to take in hundreds of such workers in recent years, according to articles displayed proudly in Chinese on the company’s social media account. These workers were eventually sent to work in the conglomerate’s mines, a smelter and factories that produce some of the most highly sought minerals on earth, including lithium, nickel, manganese, beryllium, copper and gold.It is difficult to trace precisely where the metals produced by Xinjiang Nonferrous go. But some have been exported to the United States, Germany, the United Kingdom, Japan, South Korea and India, according to company statements and customs records. And some have gone to large Chinese battery makers, who in turn, directly or indirectly, supply major American entities, including automakers, energy companies and the U.S. military, according to Chinese news reports.It is unclear whether these relationships are ongoing, and Xinjiang Nonferrous did not respond to requests for comment.But this previously unreported connection between critical minerals and the kind of work transfer programs in Xinjiang that the U.S. government and others have called a form of forced labor could portend trouble for industries that depend on these materials, including the global auto sector.A new law, the Uyghur Forced Labor Prevention Act, goes into effect in the United States on Tuesday and will bar products that were made in Xinjiang or have ties to the work programs there from entering the country. It requires importers with any ties to Xinjiang to produce documentation showing that their products, and every raw material they are made with, are free of forced labor — a tricky undertaking given the complexity and opacity of Chinese supply chains.A Critical Year for Electric VehiclesAs the overall auto market stagnates, the popularity of battery-powered cars is soaring worldwide.Charging Stations: The Biden administration unveiled proposed regulations that would require stations built with federal dollars to be located no more than 50 miles apart.General Motors: The company hopes to become a leading force in the electric vehicle industry. Its chief executive shared how G.M. intends to get there.Turning Point: Electric vehicles still account for a small slice of the market, but this year, their march could become unstoppable. Here’s why.New Materials: As automakers seek to electrify their fleets and to direct electricity more efficiently, alternatives to silicon are gaining traction.The apparel, food and solar industries have already been upended by reports linking their supply chains in Xinjiang to forced labor. Solar companies last year were forced to halt billions of dollars of projects as they investigated their supply chains.The global battery industry could face its own disruptions given Xinjiang’s deep ties to the raw materials needed for next-generation technology.Trade experts have estimated that thousands of global companies may actually have some link to Xinjiang in their supply chains. If the United States fully enforces the new law, it could result in many products being blocked at the border, including those needed for electric vehicles and renewable energy projects.Some administration officials raised objections to cutting off shipments of all Chinese goods linked with Xinjiang, arguing that it would be disruptive to the U.S. economy and the clean energy transition.Representative Thomas R. Suozzi, a Democrat from New York who helped create the Congressional Uyghur Caucus, said that while banning products from the Xinjiang region might make goods go up in price, “it’s too damn bad.”“We can’t continue to do business with people that are violating basic human rights,” he said. To understand how reliant the battery industry is on China, consider the country’s role in producing the materials that are critical to the technology. While many of the metals used in batteries today are mined elsewhere, almost all of the processing required to turn those materials into batteries takes place in China. The country processes 50 to 100 percent of the world’s lithium, nickel, cobalt, manganese and graphite, and makes 80 percent of the cells that power lithium ion batteries, according to Benchmark Mineral Intelligence, a research firm.“If you were to look at any electric vehicle battery, there would be some involvement from China,” said Daisy Jennings-Gray, a senior analyst at Benchmark Mineral Intelligence.The materials Xinjiang Nonferrous has produced — including a dizzying array of valuable minerals, like zinc, beryllium, cobalt, vanadium, lead, copper, gold, platinum and palladium — have gone into a wide variety of consumer products, including pharmaceuticals, jewelry, building materials and electronics. The company also claims to be one of China’s largest producers of lithium metal, and its second-largest producer of nickel cathode, which can be used to make batteries, stainless steel and other goods.Xinjiang Non-Ferrous Metal Industry Group was one of the region’s earliest miners, operating the state-owned No. 3 pegamite mining pit beginning in the 1950s.Shen Longquan/Visual China Group, via Getty ImagesIn recent years, the company has expanded into Xinjiang’s south, the homeland of most Uyghurs, acquiring valuable new deposits that executives describe as “critical” to China’s resource security.Ma Xingrui, a former aerospace engineer who was appointed Communist Party secretary of Xinjiang in 2021, has talked up Xinjiang’s prospects as a source of high-tech materials. This month, he told executives from Xinjiang Nonferrous and other state-owned companies that they should “step up” in new energy, materials and other strategic sectors.Xinjiang Nonferrous’s role in work transfer programs ramped up several years ago, as part of efforts by the Chinese leader Xi Jinping to drastically transform Uyghur society to become richer, more secular and loyal to the Communist Party. In 2017, the Xinjiang government announced plans to transfer 100,000 people from southern Xinjiang into new jobs over three years. Dozens of state-owned companies, including Xinjiang Nonferrous, were assigned to absorb 10,000 of those laborers in return for subsidies and bonuses.Transferred workers appear to make up only a minor part of the labor force at Xinjiang Nonferrous, perhaps a few hundred of its more than 7,000 employees. The company and its subsidiaries reported recruiting 644 workers from two rural counties of southern Xinjiang from 2017 to 2020, and training more since then.Some laborers were sent to the company’s copper-nickel mine and smelter, which are operated by Xinjiang Xinxin Mining Industry, a Hong Kong-listed subsidiary that has received investment from the state of Alaska, the University of Texas system and Vanguard. Other laborers went to subsidiaries that produce lithium, manganese and gold.Before being assigned to work, predominantly Muslim minorities were given lectures on “eradicating religious extremism” and becoming obedient, law-abiding workers who “embraced their Chinese nationhood,” Xinjiang Nonferrous said.Inductees for one company unit underwent six months of training including military-style drills and ideological training. They were encouraged to speak out against religious extremism, oppose “two-faced individuals” — a term for those who privately oppose Chinese government policies — and write a letter to their hometown elders expressing gratitude to the Communist Party and the company, according to the company’s social media account. Trainees faced strict assessments, with “morality” and rule compliance accounting for half of their score. Those who scored well earned better pay, while students and teachers who violated rules were punished or fined.Even as it promotes the successes of the programs, the company’s propaganda hints at the government pressure on it to meet labor transfer goals, even through the coronavirus pandemic.A 2017 article in the Xinjiang Daily quoted one 33-year-old villager as saying that he was initially “reluctant to go out to work” and “quite satisfied” with his income from farming, but was persuaded to go to work at Xinjiang Nonferrous’ subsidiary after party members visited his house several times to “work on his thinking.” And in a visit in 2018 to Keriya County, Zhang Guohua, the company president, told officials to “work on the thinking” of families of transferred laborers to ensure that no one abandoned their jobs.Chinese authorities say that all employment is voluntary, and that work transfers help free rural families from poverty by giving them steady wages, skills and Chinese-language training.“No one has been forced to become ‘transferred labor’ in Xinjiang,” Wang Wenbin, a spokesman for the Chinese foreign ministry, told reporters in Beijing this month.It is difficult to ascertain the level of coercion any individual worker has faced given the limited access to Xinjiang for journalists and research firms. Laura T. Murphy, a professor of human rights and contemporary slavery at Sheffield Hallam University in Britain, said that resisting such programs is seen as a sign of extremist activity and carries a risk of being sent to an internment camp.“A Uyghur person cannot say no to this,” she said. “They are harassed or, in the government’s words, educated,’ until they are forced to go.”Files from police servers in Xinjiang published by the BBC last month described a shoot-to-kill policy for those trying to escape from internment camps, as well as mandatory blindfolds and shackles for “students” being transferred between facilities.Other Chinese metal and mining companies also appear to be linked with labor transfers at a smaller scale, including Zijin Mining Group Co. Ltd., which has acquired cobalt and lithium assets around the globe, and Xinjiang TBEA Group Co. Ltd., which makes aluminum for lithium battery cathodes, according to media reports and academic research. Other entities that were previously sanctioned by the United States over human rights abuses are also involved in the supply chain for graphite, a key battery material that is only refined in China, according to Horizon Advisory, a research firm.An indoctrination center in Hotan, China. In 2017, the regional government announced plans to transfer 100,000 people from the cities of Kashgar and Hotan in southern Xinjiang into new jobs.Gilles Sabrié for The New York TimesThe raw materials that these laborers produce disappear into complex and secretive supply chains, often passing through multiple companies as they are turned into auto parts, electronics and other goods. While that makes them difficult to trace, records show that Xinjiang Nonferrous has developed multiple potential channels to the United States. Many more of the company’s materials are likely transformed in Chinese factories into other products before they are sent abroad.For example, Xinjiang Nonferrous is a current supplier to the China operations of Livent Corporation, a chemical giant with headquarters in the United States that uses lithium to produce a chemical used to make automobile interiors and tires, hospital equipment, pharmaceuticals, agrochemicals and electronics.A Livent spokesman said that the firm prohibits forced labor among its vendors, and that its due diligence had not indicated any red flags. Livent did not respond to a question about whether products made with materials from Xinjiang are exported to the United States.In theory, the new U.S. law should block all goods made with any raw materials that are associated with Xinjiang until they are proven to be free of slavery or coercive labor practices. But it remains to be seen if the U.S. government is willing or able to turn away such an array of foreign goods.“China is so central to so many supply chains,” said Evan Smith, the chief executive of the supply chain research company Altana AI. “Forced labor goods are making their way into a really broad swath of our global economy.”Raymond Zhong More

DOHA (Reuters) -Pent-up demand from the pandemic means consumers are weathering high airfares, but as summer ends and inflation and interest rate rises begin to bite, there are growing questions over whether the appetite for travel is sustainable.Global airlines are now expected to post a $9.7 billion loss in 2022, a sharp improvement from a revised $42.1 billion loss in 2021, the International Air Transport Association (IATA) said on Monday, and to possibly claw their way back to profit in 2023.But earnings remain well short of pre-pandemic levels as highly indebted carriers grapple with fresh challenges from rising fuel costs and high wages bills that they are attempting to pass on to consumers in the form of higher fares.”We have a certain degree of insensitivity to prices this year,” IATA Chief Economist Marie Owens Thomsen said, citing high household savings rates during the pandemic and pent-up travel demand. “That could fade into next year.”Industry leaders gathering at IATA’s annual meeting in Doha said bookings generally looked very strong for the next few months, but there was less certainty beyond that. “The demand is pent up. It is revenge travel,” Malaysia Airlines Chief Executive Izham Ismail said. “Airfares have gone up tremendously. It is not only in Malaysia or Malaysia Airlines – it is throughout the industry globally. If the price continues to be high the demand will taper off.”IATA forecasts yields, a proxy for airfares, will rise by 5.6% this year globally.Air New Zealand Chief Executive Greg Foran said fares at his airline were now running 20% to 25% above pre-COVID levels, in part to cover fuel prices that have more than doubled.”We are communicating to our customers and letting them know … what they’re seeing in ticket prices is not Air New Zealand trying to recover money that it lost over the last 800-plus days. It’s about dealing with cost pressures that we have in front of us today,” he said.Consumers in many countries are now facing higher prices for everyday items such as groceries and gasoline that are rising faster than wages.To date, that has not hit the appetite for travel, with many having saved up during the pandemic when many borders were closed and holidays were postponed.Hawaiian Airlines Chief Executive Peter Ingram said demand from the U.S. mainland and Canada was “incredibly robust”, with capacity running around 15% above pre-pandemic levels.”It’s impossible not to be aware of the fact that we’re seeing a lot of inflation in the United States. But as we look at the demand right now, we aren’t really seeing any effects,” he said. “That’s not to say we won’t see some as the year goes on. But right now, all the demand indicators are very strong.”IATA Director General Willie Walsh also played down concerns of a so-called “demand cliff” that would spell a short-lived recovery.”I don’t think it’s a flash in the pan,” he said. “I think there is some pent-up demand being fulfilled at the moment, but you’ve got to remember we’re still well below where we were in 2019.””So I think there’s still a lot of ground to make up before we can get into the debate as to whether we’ll see that taper off.”But in India, where airlines are entering a traditionally lower travel period in July to September during monsoon season, there are rising concerns about the sustainability of demand given airfares have not fully covered the impact of rising fuel prices, Vistara Chief Executive Vinod Kannan said.”We have to cross our fingers, wish, pray and see what happens,” he said of the low season. “Fare increases can help you to a certain extent. But if your demand drops off, you’re back to square one.” More

It’s a little over three days after the World Trade Organization ministerial came to an agreement as dawn broke over Lake Geneva, and I’m sure some attendees are still catching up on sleep. There’s been a veritable banquet since of hot takes for you to choose from. Among the more thoughtful and optimistic are this thread from academic and former WTO official Nicolas Lamp and this on the fishing subsidies issue from piscine guru Alice Tipping. In today’s main piece I talk with Ngozi Okonjo-Iweala, the institution’s director-general, who was very pugnacious indeed in declaring the ministerial a success, and muse on a couple of themes about how negotiations work and what they mean. Charted Waters looks at UK-EU trade on the sixth anniversary of the Brexit vote. Thoughts, tips, questions: [email protected] or hit reply to this email.Modest fare, but ministers will come back for moreIt’s all about expectations, obviously. If you believed a failed ministerial would kill the WTO outright — especially if you genuinely feared India and its allies might end the 24-year-old moratorium on taxing digital trade — last week was a heroic escape act. Conversely, if you really thought the WTO would clear the thicket of intellectual property (IP) protection around manufacturing Covid-19 vaccines and treatments you might regard the outcome as worse than nothing. On Friday night I talked with Okonjo-Iweala, who had quite a bit to say about those who were intellectually invested in the WTO’s failure. “People predicted total failure for this conference,” she said. “When you then deliver, the incentive is to minimise that as much as possible . . . there’s an industry of negativism against the WTO which has to stop.”Okonjo-Iweala hasn’t made herself popular with health campaigners in particular, who supported India and South Africa’s initial proposal for a complete waiver in the WTO’s “Trips” agreement on IP. “You were never going to get the 100% waiver,” she said. “It wasn’t going to happen because this is an issue where you had members on opposing sides and by the nature of the organisation, when that happens, members have to negotiate.”In some ways, to channel Zhou Enlai, it’s too early to tell the success of the summit. The decision to go for a limited outcome on fishing subsidies was portrayed as a temporary tactical retreat from a full-scale deal covering fishing overcapacity more generally. The idea is that governments can come back for another go at the next ministerial, to be held probably next year.The Trips issue also has a built-in deadline, with negotiators due to look at IP for tests and treatments as well as vaccines within six months. That’s not going to be easy: the US (which those campaigners have now twigged has been stringing them along for two years with its purported support for a waiver) will resist expanding coverage to antiviral treatments at the behest of its pharma industry. Talking of the US, the ministerial also promised to try to restore the dispute settlement process — still handicapped by the US blocking appointments to the appellate body — to full functioning order by 2024.The old-school view is that this bitty kind of approach, doing issues individually on different timelines, doesn’t work. Governments need grand bargains (the “single undertaking” principle) to trade off concessions in one area from gains in another. Unfortunately, as we saw with the late and unlamented Doha round, there are so many strands in a full negotiation that the complexity of constructing trade-offs outweighs the flexibility.The WTO leadership and negotiation chairs have more recently tried to keep subjects separated. Okonjo-Iweala told me: “Sometimes, all this leveraging and cross connections between outcomes I think in the past has led to the failure to achieve anything, because then everything just doesn’t work and collapses. I was really determined from the get-go that wasn’t going to happen and I was trying to discourage members from linking one thing to another.” Santiago Wills, the Colombian ambassador who chairs the fisheries talks, argued last week that an urgent environmental global public good issue shouldn’t get tangled up in more routine subjects of commerce.This didn’t entirely succeed. India arrived waving its threat to end the digital trade moratorium to get its way on the entirely separate issue of giving production-distorting subsidies to its farmers in the name of building buffer stocks of food (it’s an intriguing question whether Delhi would have gone ahead and killed the moratorium if other governments had tried to call its bluff). “India is very clear about what it wants . . . and will leverage outcomes to try to get what it wants,” Okonjo-Iweala told me. “Members do that. India is quite open about doing it.” The geopolitics also currently favour Delhi using that leverage. The advanced economies are keen not to drive India closer to Russia by alienating it, and both they and India itself are looking for strategic counterweights to China. Australia and the UK are in the process of agreeing fairly thin bilateral deals with India that have more to do with strategic than economic considerations.One final point. A lot of commentary naturally wraps this ministerial and indeed the general functioning of the WTO together with the future of globalisation. Certainly, a collapse last week would have given more material to the globalisation doomsters to work with. But recall that throughout the great surge of globalisation from the late 1990s to the global financial crisis in 2008, the WTO basically achieved nothing except a series of failed ministerials (Seattle 1999, Cancún 2003, Geneva 2008). In the real world, trade was taking off like a leaping salmon. At the WTO we had to watch the doomed Doha round flap around helplessly like a dying cod stranded on the deck of a subsidised fishing trawler.Trade isn’t the same as the WTO, and the WTO isn’t the same as trade. The WTO isn’t even necessarily representative of trade policy. Fresh from being awkward over every single issue and floridly denouncing the iniquities of the rich countries in Geneva, Indian trade minister Piyush Goyal on Friday immediately skipped off to Brussels to relaunch bilateral talks with the EU, declared EU trade commissioner Valdis Dombrovskis his “partner in crime” (an unlikely pair of villains to be honest) and did a photo-op with some Indian mangoes. Striking postures at the WTO doesn’t equal wanting to watch the global trading system burn. Frankly, that’s just as well.As well as this newsletter, I write a Trade Secrets column for FT.com every Wednesday. Click here to read the latest, and visit ft.com/trade-secrets to see all my columns and previous newsletters too.Charted watersThis Thursday marks six years since the UK referendum vote that sparked the country’s departure from the EU. Downing Street this week insisted that it was “too early to pass judgment”, but that has not stopped my colleagues George Parker and Chris Giles, the FT’s political and economics editor respectively, from providing a fulsome assessment today.

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The above chart tells a story. Despite sterling losing 10 per cent of its value after the referendum result was announced, there was no subsequent uplift in British exports. The country was just hit by inflation due to rising import costs.The second point to note is that trade did not initially fall off a cliff. But that did happen at the start of 2021, not because of new tariffs between the EU and the UK but because of the friction caused by the introduction of significant border controls. (Jonathan Moules)Trade linksThe head of Maersk, the world’s second-largest shipping group, says he doesn’t see global trade going into reverse.The FT editorial board opines that the WTO is on life support, but the world still needs it.Doug Irwin of Dartmouth College and the Peterson Institute argues that globalisation helped all countries get richer.Bill Reinsch of the Center for Strategic and International Studies examines the US Congress’s complaints it is being cut out of trade policy.Trade Secrets is edited by Jonathan Moules More

DOHA (Reuters) -Global airlines battered by COVID-19 seem confident of narrowing their losses and went on the offensive at an industry summit in Qatar, criticising governments and airports over their handling of the recovery from the pandemic.”The cost of government mismanagement was substantial. It devastated economies, disrupted supply chains and destroyed jobs,” Willie Walsh, director general of the International Air Transport Association, told the sector’s annual meeting of more than 100 airline bosses.Airlines have themselves been under fire from governments and consumer groups for disruption as travel demand resumes more briskly than expected, but the airline industry sees a common thread in uncoordinated government responses to the crisis. “There was one virus, but each government invented its own methodology,” Walsh told the conference. “How can anybody have confidence in such a shambolic, uncoordinated, and knee-jerk response by governments?”Aside from the painful recovery, airlines executives also focused on issues such as labour shortages at airports.Recent flight delays and cancellations have been widely blamed on a lack of staff as an increasing number of people desert low-paid airport work for flexible working practices that prospered during the pandemic.The head of host airline Qatar Airways, Akbar Al Baker, said labour shortages will be a big challenge in the coming months, though he added that his airline is “inundated with job applications”.”People got into a bad habit of working from home,” Al Baker told a news conference.”They feel they don’t need go to an industry that really needs hands-on people,” he said, adding shortages in airport staff could restrict the post-crisis growth of airlines. JetBlue Airways (NASDAQ:JBLU) Corp CEO Robin Hayes, speaking about industry labour shortages on the same panel in Doha, said he is confident that we will get back to “a new normal” over the next two to three years.’NOT THE RIGHT RESPONSE’IATA’s Walsh cited research showing that border closures had barely arrested the spread of the pandemic while virtually halting international travel and crippling economies.”Closing borders is not the right response to a pandemic,” Walsh said.Governments worldwide lent more than $200 billion of support to airlines to curb bankruptcies during the pandemic, according to UK-based aviation consultancy Ishka.Airlines expected to narrow losses in 2022 and may make a profit next year as air travel recovers, IATA said. Walsh said he was “not concerned” about the current demand and supply environment.Walsh said confused government policies had worsened disruption seen particularly in Europe as flying restarted.Britain has criticised airlines for delays and called on the industry to refrain from overbooking flights they can’t operate.Airlines and airports frequently spar at the industry’s major gatherings, with government interests and jobs at stake.Walsh, who built a reputation as a bruiser in clashes with unions and governments as former head of British Airways, rallied under-pressure CEOs with an attack on the practice of hiking airport fees to recoup revenues lost during the crisis.”Try that in a competitive business. ‘Dear Valued Customer, we are charging you double for your coffee today because you could not buy one yesterday’. Who would accept that?” he said.Airports have said they are unfairly criticised by airlines and called on them to focus on resolving their own problems. More

LONDON (Reuters) – Britain plans to make “buy now, pay later” (BNPL) companies carry out affordability checks, gain approval by the Financial Conduct Authority (FCA) and ensure adverts are fair and clear, the government said on Monday, in measures to regulate the sector.BNPL businesses, which are unregulated, typically offer interest-free short-term loans that spread payments for retail goods such as clothing and have, according to the government, rapidly increased in popularity. “Buy-now, pay-later can be a helpful way to manage your finances but we need to ensure that people can embrace new products and services with the appropriate protections in place,” said John Glen, economic secretary to the finance ministry.The government said it would publish a consultation on draft legislation towards the end of this year and would then lay secondary legislation, used to fill in the details of Acts, by mid-2023. After that, the FCA would consult on its rules for the sector, it added.Martin Lewis, founder of consumer campaign group MoneySavingExpert.com, said progress to ensure proper checks has been “painfully slow”.”Buy now, pay later is often insidiously marketed as a simple payment option … It’s not. It’s a debt,” Lewis said.The FCA in February told BNPL operators Clearpay, Klarna, Laybuy and Openpay to change their contracts after identifying potential harm to customers. It had to use Britain’s consumer rights law.BNPL companies charge online retailers a fee for each transactionLaybuy co-founder Gary Rohloff said the company has always favoured proportionate rules that reflect the low risk of BNPL and that it is supportive of the government’s approach.The BNPL business model emerged in times of very low interest rates, but the prospect of sustained increases to interest rates could spell trouble for the sector.Britain last week said that it will update its decades-old consumer credit law https://www.gov.uk/government/news/uk-commits-to-reform-of-the-consumer-credit-act?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=e6a7d4d4-1a94-420e-8e2c-28a7c6e07341&utm_content=immediately to simplify rules and cut costs, with a public consultation due by the end of the year. More