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Global Trade: Key Data Is a Mixed Bag

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Plus, Citigroup expands its global trade financing wing, and more.

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MINYANVILLE ORIGINAL The troubled state of the global economy was underscored by the release of disappointing trade data over the past week.

Weak Chinese trade data was released on Monday, showing that exports grew 2.7% on the year, failing to beat a 3% forecast. This is a steep tumble from the 20% growth rate Chinese exports had a year ago. Import data was even more distressing, falling 2.6% on the year.

Yesterday, Director-General of the World Trade Organization Pascal Lamy said the WTO would likely lower its forecasts for global trade in 2012. In April, the WTO said global trade growth would likely decline to 3.7%.

There were also reports that South Korean exports fell 6.2% year-over-year to $42.97 billion, while imports dived 9.8% to $40.93 billion Taiwan's exports have fallen consistently over the past half-year, falling to $24.69 billion, or 4.2% from August 2011.

This week, it was also reported that the UK's trade deficit actually tightened, as non-EU exports rose sharply, from $2.1 billion in June to $21.3 billion in July. The UK's overall deficit sank from $6.9 billion to $2.4 billion month-over-month.

Earlier in the summer, an International Trade in Goods and Services report released by the Department of Commerce showed that the US trade deficit increased to $42 billion from $41.8 billion in June -- the first time the trade gap has widened since March. Deficits with China and the EU are at record highs. Trade volume is suffering, too, with exports to the EU down 11.7% since last month.

More Global Trade News From the Past Week:
  • Citi Group (C) announced that it will grow the Global Trade wing of its Transaction Services business, with new hires and the initiation of the Global Commodity Finance Platform.
  • Airbus (EAD.PA) officials have stated that they will attempt to delay the EU's Emissions Trading System after China threatened to retaliate if the country was punished for not taking part in the emissions trading. A $14 billion deal between the China and Germany made last week for 50 Airbus planes has been halted due to the disagreement.
  • While Chinese trade across the board has slowed down, trade with the United Arab Emirates has exploded in the past ten years. According to a report released by the UAE's Ministry of Foreign Trade, since 2002, trade between the two countries has grown at a rate of nearly 400%. Currently, this amounts to $15.6 billion, with expectations that this amount will only grow larger.
  • The Federation of Indian Exports expects trade between India and CIS nations like Russia, Armenia, and non-official member Ukraine will reach $30 billion by the end of the decade. In the last year, trade between India and CIS was $12 billion.
  • India has asked Japan to remove non-tariff barriers in a move that would open up Japan's pharmaceutical market (the world's second largest) to India's generic drug exports. Dropping these tariffs would allow the full benefits of the Comprehensive Economic Partnership Agreement (CEPA) between the two countries, and it is believed that this would increase trade by $25 million over the next two years.
  • Russia has only been a member of the WTO for two weeks, and it's already gotten itself a slap on the wrist. The EU warned Russia that it needed to drop a long list of restrictions, such as a ban on European livestock and taxes on imported cars, or face penalties. This comes after Vladimir Putin announced Russia would unitize its new membership to help fuel the global recovery, in addition to boosting Russia's nearly $2 trillion economy.
  • The Pentagon has released a list of 66 countries allowed to buy military drones from the United States. The US. made $66.3 billion in arms transfer deals in 2011, more than any other country.
(See also: Highlights From Summer Davos.)

Twitter: @brokawbrokaw
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