The slight increase of petroleum prices served as good news to the world's major oil producers and exporters. It must be noted that during the past months, the global oil market has suffered from a continuing fall of prices. But the members of the Organization of Petroleum Exporting Countries (OPEC) have also implemented output cuts in a move to control the decrease of prices. The reduction of the OPEC quota was also triggered by the high level of supplies in the world market. Recently, petroleum recorded a price level of $55 per barrel. The increase served as good news to major oil producers that have been affected by the fall of prices in the market during the past months.

Meanwhile, EU Competition Chief Neelie Kroes has called for major petroleum producers and exporters to provide a cheaper, but more efficient service to all their clients. With the recent energy dispute involving Russia and Belarus, the EU has also sought for tougher sanctions against producers that would violate trade policies. It must be noted that just recently, Russia cut its energy supplies to Belarus due to a dispute, thus rousing concerns among European nations. Ofgem Chief Allistair Buchanan stated that the call for more effective energy services was aimed at relieving many European countries from the high prices of supplies.

WTO Nations Work on Resumption of Doha Talks

EU Trade Chief Peter Mandelson  recently stated that the global trade talks was on the brink of failure. He added that the negotiations would only be completed with the support of US President George W. Bush. In an interview with The Times, the EU trade commissioner said that the global trade talks were on a "knife-edge" and that a free trade agreement could only be reached with the support of Mr. Bush. According to a source, the EU was now taking its last big shot in trying to push the Americans to support the Doha talks. The World Trade Organization was supposed to reach a consensus on a global free trade deal last July. But negotiations collapsed after key negotiators, including the US, the EU, India, and Brazil, have failed to settle their disputes on market access and tariff cuts.

After closing a successful meeting regarding the resumption of the international trade talks, both the United States and the European Union are looking forward to another round of negotiations. In an official statement, EU trade representatives said that they would keep in touch with their US counterparts in order to push for the revival of the Doha Development Round of Trade Talks. It must be noted that both parties are aiming to close the global trade talks by the end of the first quarter of 2007. The two sides blamed each other after the Doha negotiations had failed last July. But the recent meeting in Washington finally gave them the opportunity to discuss and settle their differences. Both the US and the EU are expected to hold another meeting regarding the matter.

US President George W. Bush and European Commission President Jose Manuel Barroso agreed last Monday that both the US and the EU should resolve their disputes concerning agricultural subsidies in order to save the global trade talks. After his meeting with Mr. Barroso in Washington, Mr. Bush said that both parties agreed that the best measure to assist poor countries was to push for the completion of the Doha talks. Meanwhile, Mr. Barroso said that he and Mr. Bush had already instructed their respective trade negotiators to come up with an effective solution to the issue. Prior to his trip to the US, Mr. Barroso said that the US held a vital role in the success of the global trade talks.

Meanwhile, German trade officials think that the US government is prepared to make a move in breaking global trade barriers in order to improve its relationship with its trade partners. Michael Glos, who is Germany's economy minister, said that the multilateral approach followed by the US government was the best measure to resolve trade disagreements. The German official is optimistic that the Doha talks would be successfully completed with the support and efforts of the US. It must be noted that the WTO talks showed some signs of progress during the past few days after US and EU officials had held a meeting in Washington to discuss the resumption of the negotiations. It must be noted that both sides agreed to resolve their disputes during the meeting in order to save the Doha talks.

US in Trade Talks with Partners

Recently, a business leader recently stated that an international trade agreement between the US and the United Arab Emirates was still possible despite the failure of the talks between the two countries last year. Bill Reinsch, the chief of the National Foreign Trade Council, said that the UAE was still deciding whether it would cancel the proposed trade pact or not. Last year, trade between the US and the UAE reached up to $10 billion, thus making the UAE the third-biggest trade partner of the US in the Middle East region. Although the US only buys a few items from the UAE, its major imports include petroleum, clothing, aluminium, and chemicals. Meanwhile, UAE's imports from the US include farm products, industrial equipments and engines, drilling equipments, and aircraft. An official from the US Trade Representative Office said that both parties held a meeting several times during the past two months in order to talk about the proposed international trade agreement. According to the official, the discussions have centralized on some key issues such as the protection of investors under the proposed deal.

Meanwhile, Canada has voiced its concern regarding the losses suffered by its corn industry during the past two years due to the the trade-distorting subsidies provided by the US to its corn growers. In fact, a formal complaint has already been filed to the WTO for a thorough investigation whether the $9 billion average of farm subsidies released in 2005 and 2006 complied with the imposed global trade rules. But the US agricultural sector, which is currently reviewing the existing farm bill, is also firm to defend its programs for producers and exporters of farm products such as corn. Meanwhile, an official said that the Office of the US Trade Representative could not comment on Canada's appeal since it was still studying the issue. But Gretchen Hamel commented that the US farm subsidies did not at all harm Canada's local industry and that such kind of support was legally implemented.

The US trade deficit recently recorded a significant decrease due to the growth of export demands from the country's international trade partners. Needless to say, the US Commerce Department and other trade experts are worried, saying that the $701.6 billion trade deficit was still high. Economists and other observers said that if the trend persisted, it would positively affect the US economy in the coming months. According to them, the increase of exports and the continuing fall of petroleum prices would further strengthen the US economy. Meanwhile, the US is currently in the process of resolving its trade gap with China. It must be noted that many US industries have blamed China's unfair trade practices as the major factor behind the rise of the deficit. Particularly, they have accused China of keeping its yuan at a low value in order to have an unfair advantage in world trade. However, the Chinese government has denied such allegations.

Report Indicates High Confidence on EU Concerning Trade

According to a Grant Thornton report, foreign partners tend to have more confidence with the EU than the US in terms of international trade. In the report, India took the top spot, while the Philippines and Japan followed with confidence rates of 97% and 88% respectively. Among the 32 nations surveyed, 29 showed an above level optimism on their economic success for 2007. The increased confidence with the EU was due to the continued growth and expansion of the economic bloc during the past years, as well as its reforms. Particularly, Grant Thornton's Alex MacBeath pointed out that the economic reforms imposed by both Italy and Germany have improved the EU's position in world trade.

Chinese Economy Continues to Grow

The China's economy continues to grow as the country becomes more involved in global trade. Last year, China's trade surplus reached an impressive $177.5 billion, thus breaking its previous record of $102 billion in 2005. China's export industry also recorded a 27.2% increase, thus settling to $969 billion. Meanwhile, its imports only increased by 20% to $791.5 billion. This was due to China's strict spending on foreign equipments and goods in order to avoid over-investment that might result to either an inflation or debt crisis.

Russia-Belarus Oil Dispute Ends