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Developing countries say Doha talks make progress

Talks on a deal to free up world trade are making progress, developing country leaders said on Monday, but the chairman of key industry negotiations said more needed to be done to reach an agreement by the year’s end.

Brazilian President Luiz Inacio Lula da Silva said the Doha round of trade talks, launched six years ago to boost the global economy and help poor countries export more, could end in a deal by the end of the year despite remaining obstacles.

“Nothing is decided but I think we are close to that,” Lula, who met the leaders of India and South Africa in Pretoria last week and spoke with US President George W. Bush by telephone, said on his weekly radio program.

India’s Trade Minister Kamal Nath also sounded a positive note, saying the World Trade Organization (WTO) talks had progressed over the past two months.

WTO Director General Pascal Lamy, in Washington for talks with U.S. Trade Representative Susan Schwab and the annual fall meeting of the World Bank and the International Monetary Fund, agreed a deal was within reach if countries can grab it.

Negotiators have made significant progress on technical issues since September, and world leaders from Bush to Lula to the European Commission to Indian Prime Minister Manmohan Singh seem sincerely interested in reaching a deal, Lamy said.

“In one word, it is now doable, which of course is different from saying it will be done,” Lamy said in a speech at Georgetown University’s law school. “Both in scope and in depth, there is a substantial package on the table.”

The United States and European Union are calling on developing countries to open up their markets for manufacturers by cutting import tariffs in return for cuts by rich countries to trade-distorting subsidies and tariffs on farm goods.

Developing countries say proposals currently on the table are not in the spirit of the Doha round’s development mandate because they require poor countries to cut their industrial tariffs by more than rich countries would do.

Some are also concerned that opening up food markets could hurt the livelihoods of millions of subsistence farmers.

“Brazil is absolutely right to take a tougher stance on industry tariffs. We can’t open our economy in exchange for uncertain gains in agriculture,” said Fernando Pimentel, director with the textile association Abit.

Under proposals made in July by Canada’s WTO ambassador Don Stephenson, who chairs the industry talks, developed countries would cut tariffs in line with a formula where the lower the coefficient, the deeper the cuts in tariffs.

Stephenson has proposed a coefficient range of 19-23 for developing countries, whose tariffs are much higher than those of rich countries, and 8-9 for developed nations.

Canada is now willing to take a coefficient of 5, Stephenson told WTO negotiators in the industry talks known as “NAMA” for Non-Agricultural Market Access.

One senior developing country diplomat said a cut to five for rich countries would not help developing countries, who needed either higher coefficients themselves or more flexibility to shield sensitive products from tariff cuts.

“As long as they insist on what seems to be a pretty ambitious result in NAMA, and on being so ‘realistic’ in agriculture, then we’re stuck,” he said.

Stephenson said he would continue talks for the next two weeks and aim to produce a revision of his July negotiating text by mid-November, although talks in the past six weeks had left him little material to work on for a new compromise draft.

Failure to agree the outlines of a deal by the end of the year risked the failure of the entire Doha round, he said.

GENEVA, Tuesday. Reuters

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Indonesia wants to cut gas exports to Japan

Indonesia wants to cut its liquefied natural gas (LNG) exports to Japan from 12 to 3.0 million tons per year after current contracts between the two nations expire, an official said Monday. Indonesia has said that it needs more gas to meet soaring demand for power to fuel Southeast Asia’s largest economy amid record oil prices.

Indonesia wants to lower the volume of its exports from 2011 to 2016 and then reduce them further to 2.0 million tons in the subsequent five years, said Iin Arifin, vice president of state oil and gas company Pertamina. “Japan wants us to keep volume at 12 million tons per annum but we disagree. We are still negotiating,” Arifin told reporters.

AFP

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American Express quarterly earnings rise 10 pct

American Exp-ress Co, a credit card and travel services company, said on Monday that third-quarter earnings rose 10 per cent, helped by increased spending among its consumer and corporate clients.

The results beat analysts’ expectations on average, and overall credit losses edged higher, but were in line with recent quarters. The company’s shares rose 3 per cent in after hours trading.

“The credit performance was a relief to a lot of people, given what some of the banks had reported recently,” said Gordon Marchand, a principal and portfolio manager at Sustainable Growth Advisers, which manages about $3.7 billion in equities.

Major banks including Bank of America Corp. and Citigroup reported higher loss ratios in their credit card businesses last week.

Investors are watching for signs that difficulty among U.S. subprime mortgage borrowers may be spreading elsewhere.

But American Express, which tends to focus on wealthier borrowers, has not seen any direct evidence that the U.S. subprime crisis was influencing its credit portfolio, the company’s chief financial officer said on a conference call on Monday.

American Express said on Monday that third-quarter profit rose to $1.067 billion, or 90 cents a share, from $967 million, or 79 cents a share, a year earlier. Analysts had on average expected earnings of 86 cents a share, according to Reuters Estimates. Revenue rose 11 per cent to $6.945 billion.

American Express wrote off its managed loans globally at an annualized rate of 4.0 per cent, up from 3.5 per cent in the third quarter of last year, but identical to the write-off rate in the second and first quarters.

Managed accounts that were 30 days or more delinquent edged higher to 2.8 per cent, from 2.7 per cent the same quarter last year. The 2.8 per cent level is identical to the level in the first quarter.

The company’s volume of outstanding loans at quarter end grew dramatically—American Express had managed loans of $72 billion at the end of the quarter, up 23 per cent from the same quarter last year. Big increases in a lenders’ loan volumes can signal possible higher credit losses in the future. American Express shares have fallen about 6 per cent so far this year.

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Hitachi pulls out of home PCs

Hitachi Ltd said on Tuesday it is withdrawing from the home personal-computer business amid sluggish sales, the latest move by a Japanese electronics group to trim struggling operations.

Hitachi, which helped pioneer PC technology in Japan three decades ago, has not developed new Prius-brand PCs for the year-end shopping season and will stop making them, Hitachi spokesman Keisaku Shibatani said.

“We want to develop new computers for use in the broadcasting industry, which is becoming more digitised,” he said, without giving further details.

The conglomerate, whose products range from nuclear reactors to washing machines, is pulling out of under performing businesses to pool resources to fight price falls and mounting development costs.

Hitachi ranked eighth in Japan’s PC market with only 4.5 per cent share, shipping 580,000 units in the year ended March, and trailing the likes of NEC Corp, Fujitsu Ltd, Dell Inc and Toshiba Corp, according to MM Research Institute.

The firm, which has pledged to focus on growth areas, sold its stake in Japan Servo Co to precision motor maker Nidec Corp in April. It is also looking to sell a stake in its loss-making hard disk drive arm to a strategic investor, sources have told Reuters.

Rival Toshiba has focused on its microchips and nuclear power businesses, ramping up its NAND flash memory chip production lines and leveraging its U.S. unit Westinghouse’s brand to win nuclear orders abroad.

Hitachi will scale back PC production at its factory in Toyokawa, central Japan, to server-based computers for businesses. Hitachi contracted out production of its other PCs to Hewlett-Packard Co earlier this year.

Reuters