Nigeria, Germany explore new opportunities to strengthen economic ties

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As part of efforts to grow stronger economic ties between Nigeria and Germany, the delegation of German Industry and Commerce in Nigeria in collaboration with Nigeria-German Business Association and the German-African Business Association (Afrika-Verein der deutschen Wirtschaft) hopes to explore new investment opportunities at this year’s forum.

According to the organisers, the investment forum which kicked-off yesterday with the theme; “Leveraging partnership for economic growth”, will provide opportunities for Nigerian and German businesses to network, exchange information and establish business contacts.

Speaking at the German-Nigeria business forum, the Governor of Lagos state, Akinwunmi Ambode represented by the Commissioner for Commerce, Industry and Cooperatives, Lagos, Olayinka Oladunjoye assured investors of stable political environment, improvement in power supply, security in the state, among others.

Ambode said his government is currently focusing on the development of critical business sectors such as agriculture and food processing, provision of equipment to farmers, promotion of agricultural value chains, and expansion of fish production.He further revealed that 1000MW of power out of the proposed 4000MW will be available this year, stressing that it will reduce dependence on gas from the Niger delta as he also called on investors to take advantage of the Lagos State free trade zone which is open to all nationals and countries of the world.

“Without doubt, Lagos state is a commercial and industrial state in Nigeria with the population of 24.8 million and at annual population growth rate of 3.2 per cent, immigration rate of six persons per hour, 25 per cent active youth population between 15 and 25 years. Lagos State is the fifth largest economy in Africa having a gross domestic product of $136 billion and accounting for almost third per cent of the country’s GDP. Therefore as an economic giant of Africa, Lagos state will continue to design and administer policies and initiatives that will help attract investment to Nigeria”, he added.

A delegate, Delegation of German Industry and Commerce in Nigeria, Dr. Marc Lucassen said the aim of the forum was to promote economic prosperity between Nigeria and German, create more business opportunities and provide excellent relationship between both countries.The Ambassador of Germany to Nigeria, Dr. Bernhard Schlagheck called on the Federal Government of Nigeria to provide adequate security for investors as economic stability is imperative in any economy. He also implored the government to ensure free and fair election in the country.

The Executive Secretary/CEO Nigeria Investment Promotion Council (NIPC), Yewande Sadiku during her presentation described Africa as the most attractive investment destination in the world, stating that the population speaks to market and potential consumers as Africa is the only continent designated in 2050 to grow more than double in size, while Nigeria will grow more than five per cent a year.

She urged investors to believe Africa and Nigeria’s attractiveness will improve in the future, stating that statistics shows 66 per cent believe attractiveness has improved over the past year in Africa, while 81 per cent believe the attractiveness will improve over the next few years.According to her, part of the nation’s growth plan is to diversify the economy and a lot of growth seen has been driven by the non-oil sector.

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German car shares dip on Trump tariff tweet

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Shares in European carmakers took a hit on Friday, after US President Donald Trump redoubled his threats of tariffs against their cars.

Mr Trump tweeted that the US would place a 20% import tax on European cars, if the EU’s “tariffs and barriers are not broken down soon and removed”.

Shares in BMW, Daimler, Porsche and Volkswagen each dropped more than 1%, before regaining ground.

Mr Trump’s comment came amid a US national security probe of car imports.

Mr Trump launched the investigation last month, ordering the Commerce Department to determine if car imports are a risk to national security.

The US followed a similar process for the steel and aluminium industry, which led it to impose tariffs on the foreign metals this spring.

The EU, China, Mexico, Canada and India are among the places that have plans to retaliate or have already done so.Twitter post by @realDonaldTrump: Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!

The decision to expand the Trump administration’s trade disputes to foreign car manufacturers has come under fire from some in the US Congress, as well as many business lobby groups.

At a hearing this week, Senator Orrin Hatch, a Republican from Utah, said he was “stunned” that the Trump administration was investigating the national security risk of vehicle imports, which is estimated to affect about $200bn worth of imports.

He said the probe alienates allies and tariffs would lead to job losses and increased costs in the US.

US Commerce Secretary Wilbur Ross assured the congressional panel that there has been “no decision” made about whether to recommend tariffs.

“We’re in the early stages of the process,” he said.

He said Thursday that the Commerce Department hopes to complete the investigation by the end of July or August.

Job losses

The EU sent almost $50bn in vehicles and auto parts to the US last year, with roughly half coming from Germany.

Cars from the UK accounted for about $9bn, according to the Peterson Institute for International Economics, a Washington think tank.

The organisation estimates that a 25% tariff on foreign vehicles and parts for them, assuming the US does not grant exemptions to some countries, would lead to the loss of about 195,000 jobs in the US.

Shares in major European car companies were already on edge due to trade tensions.

Daimler earlier this week warned that it expects lower sales of Mercedes-Benz cars due to a tax on the import of US vehicles into China.

RBI revises upwards housing loan limits under priority sector

MUMBAI: Housing loans of up to Rs 35 lakh, for dwellings costing less than Rs 45 lakh, will be treated as priority sector lending (PSL) to give a fillip to the low-cost segment, the Reserve Bank said on Tuesday.

PSL loans are relatively cheaper than market interest rate.

“With a view to bringing convergence of the PSL guidelines for housing loans with the Affordable Housing Scheme, and to give a filip to low-cost housing for the Economically Weaker Sections and Low Income Groups, the housing loan limits for eligibility under priority sector lending will be revised to Rs 35 lakh in metropolitan centres, and Rs 25 lakh in other centres…,” the RBI said in a notification.

There is a condition however that the overall cost of the dwelling unit in the metropolitan centre (with population of ten lakh and above) and at other centres should not exceed Rs 45 lakh and Rs 30 lakh, respectively, for being classified as priority sector.

Currently, loans to individuals for up to Rs 28 lakh in metropolitan centres and Rs 20 lakh in other centres, can be classified under priority sector, provided that the cost of dwelling unit does not exceed Rs 35 lakh and Rs 25 lakh respectively.

An announcement in this regard was made in the ‘Statement on Developmental and Regulatory Policies’ released along with the Second Bi-Monthly Monetary Policy on June 6.

The RBI notification further said that the existing family income limit of Rs 2 lakh per annum for loans to housing projects for Economically Weaker Sections (EWS) and Low Income Groups (LIG) stands revised to Rs 3 lakh per annum and Rs 6 lakh per annum, respectively.

Govt prepares standardization plan to boost economy, promote brand India

The government today came out with a product and services standardization strategy, which includes promoting brand India, developing quality norms for services sector and ease compliance burden for small and medium enterprises.

It is expected that all elements of the strategy would be undertaken and completed over a five-year period (2018-23).

“The rapid growth of the Indian economy, its size and emerging relevance in global trade, makes it essential to establish a robust quality ecosystem in India with a harmonised, dynamic and mature standards framework,” according to the strategy paper.

The strategy would focus on four areas – standards development, conformity assessment and accreditation, technical regulations, and awareness and education.

It intends to develop a comprehensive ecosystem for standards and quality development besides using standards for providing a level-playing field to domestic industry and enhancing the competitiveness of Indian goods and services in domestic and global markets.

Releasing the strategy, Commerce Minister Suresh Prabhu said at a CII function that standards of goods and services would help promote exports and boost the domestic economy.

The implementation of the strategy would be monitored by a high-level committee with quarterly reviews.

As part of standards development, it has set eight goals including the convergence of all standards development activities in India, harmonizing standards with international norms, and development of services sector standards.

 “The topic of standardization in services is relatively new and is also weakly addressed in trade law…with services accounting for a major share in the Indian and global economy, there is an urgent need to develop standards in services,” it said.
It has also proposed to set up a national task force with the mandate to identify the service quality gaps in the 12 champion sectors, including IT and communication.
Further, it said that to expand the outreach of the products for a global audience, the ‘brand India’ label would need to be significantly large in scale, and operated on professional lines.

Who will blink first? How the US-China trade war could play out

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Trump said Friday the US will slap duties on $50 billion in Chinese imports, with the first wave of tariffs to cover $34 billion of goods and take effect July 6. The president threatened to raise the total even higher if China retaliated, which it swiftly pledged to do. The Communist Party-run government countered with a list of goods slated for tariffs, including cars and farm products, that could cause political damage for Republicans.

The US is still showing interest in talks with Beijing.

“Our hope is that it doesn’t lead to a rash reaction from China,” US Trade Representative Robert Lighthizer said in an interview with the Fox Business Network after the tariffs were announced. “We hope that this leads to further negotiations and we hope it leads to China changing its policies.”

The US duties are intended to punish China for abusing American intellectual-property rights. Trump also has signaled he wants to reduce America’s $376-billion trade deficit in goods with China.

Much depends on how far Trump is willing to go to reach his goals. He has already threatened to put tariffs on an additional $100 billion in Chinese goods. US officials are close to completing the list of products that would cover that amount, according to two people briefed on the matter, meaning the administration could escalate the conflict on short notice. The administration says it’s developing restrictions on Chinese investment and will release proposals on June 30.

“The question is, does the Trump administration really want to negotiate with China, or just draw blood and only after that start a serious negotiation with the Chinese?” said Scott Kennedy, deputy director of China studies at the Center for Strategic and International Studies in Washington.

Here are four scenarios that could come to pass in the coming weeks and months:

BOTH SIDES BACK DOWN

Less than a month ago, this seemed possible. Following talks between the two powers in Washington, Treasury Secretary Steven Mnuchin said the administration was “putting the trade war on hold” and wouldn’t impose tariffs. Hope grew that the US would accept a modest increase in purchases by China of American products. But within days, the president backed away from the framework for the talks.

A short-term truce now seems unlikely. On Friday, a senior administration official said the US is looking for structural changes to the way China deals with technology. The administration wants Beijing to stop forcing American firms to transfer know-how. Beijing has signaled it won’t accept major changes to its Made-in-China 2025 blueprint, which lays out how the Asian nation plans to lead in emerging industries such as artificial intelligence.

CHINA BLINKS

President Xi Jinping has defended the existing global trade order. Certainly, China has a lot at stake. For years, state-driven investment and exports drove growth. Xi’s government is trying to engineer a gradual slowdown that puts more emphasis on consumer spending. A trade war could disrupt Beijing’s careful management of the economy, which showed signs of underperformance in May.

In the best-case scenario for the US, China would back down on technology issues and open its market to more American goods and services. “If you’re a trade negotiator, in some sense, having President Trump is a great advantage because everybody knows he will impose tariffs and that gives the trade negotiator a lot of leverage,” said Rod Hunter, a partner at law firm Baker McKenzie and former director of international economics at the White House National Security Council under President George W. Bush.

US BLINKS

Trump prides himself on his negotiating prowess. He co-authored a book called “The Art of the Deal,” in which Trump describes how he extracted concessions in real-estate transactions.

But the jury is still out on Trump’s negotiating record as president. The US push to overhaul the North American Free Trade Agreement is in limbo. Critics say Trump gained little from his high-profile meeting this week with North Korean leader Kim Jong Un. It’s quite possible China may call Trump’s bluff, knowing how much the president enjoys a rising stock market and strong US economy.

China’s list of products designated for tariffs includes a range of agricultural items like soybeans, sorghum and cotton, a potential blow to rural states that backed Trump in the 2016 presidential election.

“What Trump is signaling here is that he wants to not only continue negotiations, but he’d actually like to have them resolved in the short term rather than the long term,” Terry Haines, managing director and head of political analysis at Evercore ISI, told Bloomberg Television.

ALL-OUT TRADE WAR

There’s reason to believe the US and China won’t solve this soon — and things could escalate quickly. Neither side wants to be seen as weak. Trump rode to power on his appeal in Rust Belt states hit hard by globalisation. With midterm elections in Congress in November, he’s under pressure to appease his political base. Turning China into a global technology leader is a key part of Xi’s long-term strategic plan.

If Trump pushes for systemic changes to China’s basic economic model, the world could be in store for a long period of tensions between the two nations. Past US administrations have urged Beijing to loosen control of industries as steelmaking, with little effect.

 

 “A trade war can be anything from a minor skirmish to a full-blown battle, with lots of collateral damage to American workers, farmers and consumers,” said Michael Smart, managing director at Rock Creek Global Advisors in Washington and a former international trade director on the National Security Council. “We’re not there yet, but it’s scary, because it seems like we’re on a path toward major conflict, and it’s hard to see the off ramp.”

Trade tariffs: Chinese media in Trump ‘fools build walls’ jibe

Chinese media have mocked US President Donald Trump over plans to impose 25% tariffs on $50bn worth of Chinese goods, saying “wise men build bridges but fools build walls”.

Mr Trump announced the tariffs on Friday, accusing Beijing of intellectual copyright theft.

China retaliated, saying it would impose an additional 25% tariff on 659 US goods worth $50bn.

Stock markets fell after the announcements amid fear of a trade war.

The US had earlier warned that it will impose even more tariffs should China retaliate.

Mr Trump said the tariffs were “essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.”

The Chinese product lines that have been hit range from aircraft tyres to turbines and commercial dishwashers.

State-controlled media made a concerted attack on the new US measures.

“Following the path of expanding and opening up is China’s best response to the trade dispute between China and the United States, and is also the responsibility that major countries should have to the world,” said an editorial in Xinhua news agency.

“The wise man builds bridges, the fool builds walls,” it commented.

Social media users were quick to make light of the comment, with many making reference to the Great Wall of China.

Elsewhere official Communist Party newspaper the People’s Daily condemned what it described as the US administration’s “obsession with playing the disgraceful role of global economic disruptor”.

The Global Times, meanwhile, said Mr Trump was disrupting the world order to appeal to voters who think he’s fighting for them.

However, the English-language China Daily said it hoped the worst could still be avoided.

“Given the frequent flip-flopping of the Donald Trump administration, it is still too early to conclude that a trade war will start,” it said.

The media response came as China announced tariffs on $34bn of US goods including agricultural products, cars and marine products which will also take effect from 6 July.

Tariffs on other US goods will be announced at a later date, Xinhua said.

US tariffs that affect more than 800 Chinese products worth $34bn in annual trade are due to come into effect on 6 July.

The White House said it would consult on tariffs on the other $16bn of products, and would apply these later.

The US wants China to stop practices that allegedly encourage transfer of intellectual property – design and product ideas – to Chinese companies, such as requirements that foreign firms share ownership with local partners to access the Chinese market.

However, many economists and businesses in the US say the tariffs are likely to hurt some of the sectors the administration is trying to protect, which depend on China for parts or assembly.

The US announced plans for tariffs this spring, after an investigation into China’s intellectual property practices.

It published a draft list of about 1,300 Chinese products slated for tariffs in April. The list released on Friday is slightly shorter, incorporating feedback and criticism received in the ensuing weeks.

The plans have elicited a mixed political reaction, drawing praise from Democrats and opposition from Republicans, who typically favour free trade policies.

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SON, market leaders seek ways to check influx of substandard goods

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The Standards Organisation of Nigeria (SON) has partnered Balogun Business Association (BBA) to combat the preponderance of fake and substandard in the country.

The Director General, SON, Osita Aboloma, explained that this move was the agency’s resolve to work together as a team to surmount the menace of substandard goods edging out quality products in the market.

Aboloma, while receiving members of the BBA who sought collaboration with SON to such end, said, “We have agreed to work together and they have agreed to collaborate with us by imbibing the culture of quality assurance and reporting to us whenever they see something unwholesome.

“Some of these traders are law-abiding; what we intend to do is to beam the search light of quality assurance on the market to take out the non-conforming and substandard goods.”

He noted that SON decided to partner with the association because it is the biggest single market in West African region, pointing out that the association is the best and the most reasonable place to start our fight against substandard goods.

“We want to them to know that if they certify and register their products, they will not be affected by the wrath of the law.

We are coming against the perpetrators of substandard goods with all the laws available to us as an agency.

It is no longer going to be business as usual. It is either you close your shops, move away from our markets or you have us to contend with,” he warned.

In his response, the Chairman of the Board, BBA, Trade Fair Complex, Okey Ezibe, expressed the association’s willingness to support SON in its fight against substandard goods.

In his words: “We have to realise that the present Director General has new ideas to combat the menace of substandard goods.

Any country without standards is doomed to fall and we have listened to him and he is committed to fighting the preponderance of fake and substandard goods.”

He added: “We will give him our maximum support. We have decided to turn a new leaf and we will sink this message into the minds of our people.

We have extended our invitation to the Director General to visit the trade Fair complex and see firsthand on how we do things.

There are local arrangements to check the excesses because we are the losers at the end of the day. If people go overseas to bring in substandard goods only for it to be destroyed, then we have lost revenue and businesses.”

He however called on the managers of the economy to bring SON back to the nation’s seaports, adding that this is the easiest and safest way to stop these goods from coming into the country.

“These goods are better checked at the ports not in the markets.

Dealing in fake and substandard products is a crime to humanity and poses great danger for the nation’s economy, as a result of this, we have decided to collaborate with SON to collectively fight this battle against a substandard goods.

We were not doing this before, but the SON boss has convinced us that this is the only way out to stamp out these goods.

We have seen his desires and commitment to fighting this war and we would contribute our own quota by lending our support,” he added.