Mexico, Turkey seen as keys
Taiwan will use Mexico and Turkey as gateways to stepping up trade with the US and the EU, in a bid to reduce the impact of the free-trade agreements (FTAs) between South Korea and the two major economies, according to the country’s main trade promotion body. The Taiwan External Trade Development Council (TAITRA, 外貿協會) said in a recent document that it would set up business centers in Mexico City and Istanbul, and hold seminars and lead delegations to the two markets to further trade ties. TAITRA said Taiwan is choosing to have its exports shipped to Mexico and Turkey first before being rerouted to the US and EU because Mexico and Turkey enjoy zero tariffs to the US and EU respectively. Taiwanese products shipped from Mexico and Turkey would enjoy reduced tariffs or tariff-free access to their intended destinations, TAITRA said.
Tsang expects improvement
Hong Kong’s economy should perform “slightly better” this year than last year, Financial Secretary John Tsang (曾俊華) wrote in a blog post dated Sunday. China’s economic growth is showing signs of accelerating, while markets in Europe and the US “seem to be more stabilized” than last year, Tsang wrote. The remarks contrast with Tsang’s warning in November that Hong Kong’s trade-reliant economy may enter recession if its major partners show a loss of growth momentum or signs of contraction. The city’s GDP will expand 3.7 percent this year, up from an expected 1.5 percent last year, according to economists surveyed by Bloomberg. Tsang pledged in the post to do more for the city’s middle class, especially the younger generation which is under “significant” pressure to pay housing mortgages and children’s education expenses.
Australian approvals drop
Australian home-loan approvals fell in December for a third month and the proportion to first-home buyers slumped to an eight-and-a-half-year low as central bank rate cuts failed to lure buyers into the market The number of loans granted to build or buy houses and apartments declined 1.5 percent from November, when they dropped a revised 0.7 percent, the statistics bureau said in Sydney yesterday. The number of loans approved for home construction climbed 1.2 percent in December from a month earlier, the report showed, the first increase since July. The report also showed first-home buyers made up 14.9 percent of the loans approved in December, the lowest proportion since June 2004. Still, first-time buyers’ average loan size climbed to a record A$293,900 (US$302,570) in December, it showed.
Ericsson wins India contract
Ericsson AB, the world’s largest maker of wireless networks, won a US$1 billion contract to manage the systems of Indian phone company Reliance Communications Ltd. About 5,000 Reliance employees will transfer to Ericsson as part of the eight-year contract, according to a statement yesterday from the Stockholm-based company. Ericsson will operate and manage Reliance’s wireline and wireless networks in the northern and western states of India. Ericsson is trying to sell more services such as network management and maintenance as wireless operators in Europe curb investing in new infrastructure amid contracting economies and increasing competition. Ericsson stock closed little changed at 77.55 kronor in Stockholm on Friday. Reliance advanced 0.5 percent to 75.6 rupees yesterday at 12:55pm in Mumbai.
ECB official urges Cyprus aid
A top European Central Bank (ECB) official is pressing for an agreement soon on a rescue package for Cyprus — a prospect viewed with little enthusiasm in Germany. ECB executive board member Joerg Asmussen was quoted yesterday as telling Germany’s Handelsblatt newspaper that he expects an aid program to be drawn up by the end of next month. He says it would be “negligent” to speculate about when Cyprus might run out of money, but added: “If anyone hopes to delay a decision until after the German parliamentary election [on Sept. 22], that won’t work.”
FBI probes EADS unit
The FBI is investigating allegations of corruption involving a British unit of aerospace group EADS over a contract in Saudi Arabia for the UK’s Ministy of Defence, the Financial Times said yesterday. US authorities have yet to decide whether to launch an investigation against the unit, GPT Special Management Systems, the paper said. An EADS spokesman said the company had not been contacted by the FBI. The newspaper said the FBI had interviewed a witness and acquired documents in connection with allegations that GPT, which sells communications equipment to the Saudi National Guard through the UK defense ministry, bribed Saudi officials.
Boards delay merger talks
The boards of American Airlines parent AMR Corp and US Airways have pushed back meetings to consider final plans for their merger, Associated Press sources said on Sunday. If American and US Airways combine, it would create the world’s biggest airline as measured by passenger traffic. It is not clear when the two boards would finally meet. People familiar with the matter said negotiations are continuing on issues that include AMR CEO Tom Horton’s exact title and role in the combined company. Discussions were centered on Horton being a non-executive chairman of the board while US Airways management, led by CEO Doug Parker, would run the day-to-day operations of the new carrier.
Tougher auditing urged
Banks should have tougher internal auditors to stand up to senior decisionmakers within the firm and oversee risk taking, said Andrew Bailey, head of banking supervision at the UK’s Financial Services Authority. Regulators now expect banks to have internal auditors that can provide a challenge to management, “driving improved governance, risk management and internal controls,” Bailey said in an e-mailed statement. “The expectations of internal audit functions within financial services firms have hitherto been set too low,” Bailey said. Bailey’s comments came in support of draft guidelines published yesterday by the Chartered Institute of Internal Auditors that seek to improve governance within banks.
Taxes help shrink deficit
Sri Lanka’s new taxes on cars and luxury goods helped reduce imports last year and narrow the trade deficit, the central bank said yesterday. The doubling of vehicle taxes from April last year and credit restrictions helped rein in imports, while exports including tea and garments also recorded declines, the bank said. Export earnings dropped to US$9.77 billion, down 7.4 percent from US$10.55 billion in 2011. Imports also slowed to US$19.08 billion, down 5.8 percent from US$20.26 billion. The trade deficit was down 4.1 percent to US$9.31 billion.