logo-cropped

Louisiana International Trade Briefs: Cuba, Mississippi Dredging, Trade Agreements
Written by  // Monday, 14 March 2011 11:00 //

How is Louisiana doing in business investment, in exports-imports and in its port system?

Below is the first in a continuing series focusing upon International Trade and more particularly, Louisiana International trade, written and compiled by Eugene Schreiber, the retired Managing Director of the World Trade Center of New Orleans and the principal of Schreiber International Trade, featuring the follow:

1. LOUISIANA JUMPS TO THIRD IN U.S. FOR 2010 BUSINESS INVESTMENT

2. LOUSIANA EXPORTS EXCEEDED  $41 BILLION IN 2010

3. NEW ORLEANS AIRPORT IS ONE OF 8 AUTHORIZED NEW FLIGHTS TO CUBA

4. PORT OF NEW ORLEANS CONTAINER SHIPMENTS INCREASED 31% IN 2010

5. POSITION OPEN WITH GULF STATES MARITIME ASSOCIATION

6. EFFORTS CONTINUE FOR FUNDING LOWER MISSISSIPPI RIVER DREDGING

7.DUFFY JOINS MISSISSIPPI RIVER MARITIME ASSOCIATION AS EVP

8. FUNDING PLAN ANNOUNCED FOR PORT OF MIAMI DREDGING PROJECT

9. CONGRESSIONAL STATUS OF THREE U.S. FREE TRADE AGREEMENTS

10. MAERSK ORDERS 10 RECORD-SIZE CONTAINER SHIPS

11. IMF WARNS FOOD PRICES TO STAY HIGH

12. LOCKE TO BE NAMED U.S. AMBASSADOR TO CHINA

13. CHINA ANNOUNCES PLANS TO IMPORT MORE FROM ABROAD

14. U.S. PROCEEDS AGAINST CHINA AT WTO OVER CARD RESTRICTIONS

15. CHINA DISCUSSING “DRY CANAL” ACROSS COLOMBIA

 

16. CHINA PLANS 45 MORE AIRPORTS

 

17. FACTOID: CHINA'S ECONOMY SURPASSES JAPAN'S

 

18.  FACTOID: NUMBER OF SUBWAYS WORLDWIDE PASSES MCDONALD’S

 

 

1. LOUISIANA JUMPS TO THIRD IN U.S. FOR 2010 BUSINESS INVESTMENT

 

Site Selection magazine released its annual "Governor's Cup" rankings, in which Louisiana's national economic development projects ranking improved 12 spots to third best in the U.S., behind only Texas and Ohio. The ranking was Louisiana's highest ever in the 23-year history of the "Governor's Cup" project rankings. Additionally, on a per-capita basis, Louisiana's projects ranking jumped from ninth in 2009 to first in the U.S. for 2010. The "Governor's Cup" measures the quantity of significant business development projects for the calendar year. The announcement marks another significant improvement for Louisiana, which overall was ranked 15th in 2009 and 27th in 2008. Since January 2008, LED has secured projects that will create more than 39,500 new direct and indirect jobs and more than $8.5 billion in new capital investment, as well as billions in new sales for small businesses.

 

 

2. LOUSIANA EXPORTS EXCEEDED  $41 BILLION IN 2010

 

Louisiana worldwide merchandise exports in 2010 reached $41.3 billion in value, the second best year ever, a 26.8 percent increase over the 2009 level. The top three foreign markets for Louisiana products were China ($6.5 billion), Japan ($3.1 billion), and Mexico ($2.7 billion), the same country ranking as the prior year. The state's principal export shipment in 2010 were agricultural commodities valued at $19.5 billion and petroleum and coal products at $10.8 billion. Louisiana's overseas shipments of agricultural products ranked number one among the states, while petroleum and coal exports ranked number two.

 

Louisiana was the ninth largest exporting state in 2010 in terms of dollar value. The trade figures were generated by the World Institute of Strategic Economic Research (WISER) from U.S. Census Bureau data. They cover the exports of both Louisiana originating products and some major commingled bulk commodities (especially grain and coal) that are produced in other states and shipped abroad from Louisiana's ports and recorded as Louisiana exports because of the difficulty of identifying the actual states of origin. The detailed WISER-generated trade data will be posted soon on the WTC website at www.wtcno.org.

 

 

3. NEW ORLEANS AIRPORT IS ONE OF 8 AUTHORIZED NEW FLIGHTS TO CUBA

 

Louis Armstrong International Airport in New Orleans was one of eight cities that have gained federal approval to schedule charter flights to and from Cuba, opening new gateways for Cuban Americans to visit relatives in the communist island nation and for other limited travel, the U.S. Customs and Border Protection (CBP) announced on March 8. In addition to New Orleans, CBP officials said such charter flights can now be scheduled from Atlanta's Hartsfield-Jackson, the world's busiest airport, as well as Chicago's O'Hare International Airport and international airports in Baltimore, Dallas/Fort Worth, Pittsburgh, Tampa, and San Juan, Puerto Rico. Previously, such flights were only allowed from Los Angeles, Miami and New York. The decision to add airports comes as part of an expanded effort to reach out to the Cuban people announced by President Obama earlier this year.

 

 

4. PORT OF NEW ORLEANS CONTAINER SHIPMENTS INCREASED 31% IN 2010

 

The Port of New Orleans' container volumes rose 31 percent in 2010, compared to 2009. Port President and CEO Gary LaGrange announced that the Napoleon Avenue Container Terminal handled 426,091 TEUs (twenty-foot equivalent units), compared to 325,857 one year ago. LaGrange stated that "These gains are attributed to a strong export market and the result of non-traditional cargoes, such as steel products and grain, now moving by container," LaGrange said. "Our terminal operators – Ports America and New Orleans Terminal – are to be commended on the service they provide, as well as our container carriers that serve the Port." The Napoleon Avenue Container Terminal is served by Mediterranean Shipping Company, Hapag-Lloyd, Maersk, Seaboard Marine and CSAV.  

 

In a new development, the Port of New Orleans is expected to retain its largest shipping carrier for an additional decade under a new lease arrangement approved on March 4 by the Port's Board of Commissioners. The agreement would consolidate New Orleans Terminal's current leases with the port and add an additional five acres at the Napoleon Avenue Container Terminal for 10 years at an annual rate of $6 million, which would rise by less than one percent each year, according to the proposal.  New Orleans Terminal is a joint venture owned by the Mediterranean Shipping Company and Ceres Gulf, a terminal operations and ancillary services company. The Board unanimously authorized Port President LaGrange to enter into final discussions on the proposal, which would still need to be approved by New Orleans Terminal's board.

 

In other Port news, two contracts were awarded for the renovation of the Julia Street Cruise Terminal. The Port awarded an $8.97 million contract to Metairie, Louisiana--based Ryan Gootee General Contractors LLC, for the renovation and expansion of the terminal. A $3.98 million contract was also awarded to Jackson, Mississippi.-based Silverton Construction Company for modifications to the Julia Street Wharf and substructure. The estimated $13.7 million project will renovate two smaller terminals at Julia Street into one large modern terminal. The project includes the installation of a new climate-controlled articulated gangway, currently under construction in Sweden. The terminal will be home to Royal Caribbean’s Voyager of the Seas, which will home-port in New Orleans beginning this fall. The 1,020-foot cruise ship carries 3,838 passengers and will be the largest cruise ship ever to call on the Port of New Orleans.

 

 

5. POSITION OPEN WITH GULF STATES MARITIME ASSOCIATION

 

The Gulf States Maritime Association, a New Orleans-based organization with 99
years of service to the maritime industry, is seeking qualified individuals to lead the group into its next millennium. Successful candidates must have a strong working knowledge of the maritime industry and maritime-related government affairs. Excellent verbal and written communication skills, including public speaking, are essential for participation in regional and national maritime forums on the Association’s behalf. This dynamic position requires candidates who have excellent public relations skills and who are available for light travel. Interested parties should send a detailed resume, as well as personal and professional references. Please reply to This email address is being protected from spambots. You need JavaScript enabled to view it.">'+addy_text97645+'<\/a>'; //--> .

 

 

6. EFFORTS CONTINUE FOR FUNDING LOWER MISSISSIPPI RIVER DREDGING

A wide-ranging group of businesses and organizations that rely on Mississippi River commerce and U.S. exports via the  river system are continuing their coordinated efforts to convince the Obama administration and the Congress to adequately fund the dredging and deep-draft navigation maintenance of the lower  river channel.  The Big River Coalition has been warning that budget restrictions have caused the Army Corps of Engineers to delay and reduce dredging on the deep-draft portion of the Mississippi, resulting in restrictions that are now being put in place.

This year, the Army Corps has $63 million budgeted for the deep-draft Mississippi, even though the actual cost of maintaining the river has averaged more than $100 million for the past few years. As a result, the Corps has delayed dredging even though silting has caused the river to become steadily shallower and narrower for several months.. Corps officials have warned that they can only guarantee a 40-foot channel in the late spring when silting is at its worst. That would be five feet less than the authorized channel depth.

The members of the Louisiana Congressional delegation and other members of Congress from states along the Mississippi River are spearheading legislation in Congress that would direct needed funding for the dredging and maintenance work  One possible remedy is to authorize the use of the Harbor Maintenance Trust Fund, which is a tax paid on cargo that moves through U.S. ports in order to pay for channel maintenance. The trust fund already has a surplus of nearly $5 billion which could be used to keep the Mississippi and other rivers properly dredged. Instead these funds have been added to the U.S. treasury and spent on projects unrelated to harbor maintenance.

The Mississippi River dredging problem has serious repercussions for America:

* The 14,000 miles of waterways connecting through the river system carry the most cargo of any river in America and is the second most productive river transportation system in the world, behind only the Yangtze River in China.

* The Mississippi allows some 30 states to ship their goods to export markets.

* Cargo exports through the ports on the lower Mississippi are estimated to be worth more than $100 billion a year.

Neglecting the maintenance needs of the river threatens to raise the cost of transportation in a way that harms farmers, industries and shippers throughout the heartland of American. More importantly. it harms America's international competitiveness.
 

7. DUFFY JOINS MISSISSIPPI RIVER MARITIME ASSOCIATION AS EVP

Sean M. Duffy, Sr., who for the past seven years served as President/CEO of the Gulf States Maritime Association and its predecessor organizations, on January 17 became Executive Vice President/Maritime Advocate of the Mississippi River Maritime Association  (www.mrma.vesselagents.org).  He can be reached by email at This email address is being protected from spambots. You need JavaScript enabled to view it.">'+addy_text96068+'<\/a>'; //--> , by telephone at (504) 888-MRMA (6762), and by cell phone at (504) 338-3165.

 

 

8. FUNDING PLAN ANNOUNCED FOR PORT OF MIAMI DREDGING PROJECT

 

Governor Rick Scott announced plans to fully fund the $77m shortfall for the port dredging project so that larger ships can enter the port. “Today I directed the Florida Department of Transportation to amend their work plan to include $77 million so that

Florida can take another leap forward in international trade,” Scott said. “This is the type of infrastructure project that will pay permanent, long-term dividends, and provide a solid return on investment for Florida’s taxpayers.” Flanked by Senator Marco Rubio,

Congressman Mario Diaz-Balart, Congressman David Rivera, and Colombian Ambassador Gabriel Silva, the Governor unveiled his intention to invest in the types of infrastructure projects that have long-term, permanent payoffs.

 

The Port of Miami dredge project is projected to result in 30,000 new jobs for the region in the coming years. Once the port is dredged to a depth of 50 feet, larger, “New Panamax” ships can load and unload cargo there, enabling the Port of Miami to become a “first port of call” for ships coming through the expanded Panama Canal in 2014. “This is a solid first step toward enhancing Florida’s infrastructure and getting our state ready for a new generation of international trade with South America and beyond,” said Governor Scott. There are a number of worthy infrastructure projects that deserve our attention, and as Floridians, we know best where our resources should be focused.” (Summarized from a  March 8, 2011 MarineLink.com article)

 

 

9. CONGRESSIONAL STATUS OF THREE U.S. FREE TRADE AGREEMENTS

 

U.S. Trade Representative Ron Kirk has appealed to Congressional leaders to begin work "without delay" toward ratifying a free-trade deal with South Korea, even as Republican leaders continued to press to link such action with movement on trade pacts with Colombia and Panama. In a letter sent on March 6 to leaders of the House Ways and Means and Senate Finance committees, Mr. Kirk asked Congress to begin a process that would lead to a vote on the Korea pact this spring. His letter did not address pending trade-opening deals with Colombia and Panama, which prompted criticism from House Ways and Means Chairman Dave Camp (R., Mich.)."We really need all three agreements to have a specific path forward," Mr. Camp said. All three, he said, "will help support jobs here in the United States—250,000 jobs, using the president's own measure."

 

Mr. Camp said the administration hasn't provided Congress with a time frame for reviving the trade deals with Colombia and Panama. Republican lawmakers do not oppose the Korea trade deal, but want to leverage their support for it to push through the accords with Colombia and Panama. Democrats say they are reluctant to back the Colombia deal without revisions that address reports of violence against trade-union organizers there. Trade officials say the Panama deal awaits passage of legislation by that country's government that would change its tax code and end its reputation as a tax haven. Administration trade officials say they are working on revising both Latin America pacts this year and will send them to Congress for approval immediately thereafter. Mr. Kirk is expected to outline the next steps on the Colombia and Panama agreements when he appears before the Senate Finance Committee, which has jurisdiction over trade pacts in that chamber.

 

The Korea pact is a high priority for President Obama, who has pledged to double U.S. exports by the end of 2014. The administration made revisions to the agreement that favor U.S. auto makers, changes expected to garner critical Democratic support. The trade agreements need to pass the House and the Senate and be signed by the president to take effect. The Colombia and Panama trade deals have languished since they were negotiated by the administration of George W. Bush. (Summarized from a March 8, 2011 Wall Street Journal article.)
 

 

10. MAERSK ORDERS 10 RECORD-SIZE CONTAINER SHIPS

Denmark's A.P. Moller-Maersk A/S, the world largest container shipping line, signed a $1.9 billion deal on February 21 to buy what would be the 10 biggest ships ever built, as the ocean-shipping industry continues its recovery from a steep global-trade slump in 2009. The order "changes the whole landscape in the container-ship market," said Nam Sang-tae, chief executive of Daewoo Shipbuilding & Marine Engineering Co., the South Korean company that agreed to deliver the 10 ships by 2014. The deal, which the two companies said was the biggest in shipbuilding history, includes options for 20 more of the $190 million vessels.

The new ships will be 1,312 feet long, 193 feet wide and 239.5 feet high, longer than a modern aircraft carrier and bulkier than an oil tanker. They will be able to carry 18,000 20-foot containers, 2,500 more than the largest class of container ships now in service, which are also in Maersk's fleet. Maersk will use the ships to carry cargo ranging from iPhones to powdered milk between Asia and the ports of Rotterdam, the Netherlands; Felixstowe, England, and Bremerhaven, Germany. Maersk's order, which was signed in London, could reshape competition in the highly fragmented industry. Three European companies -- Maersk, CMA-CGM S.A. in Marseilles, and Mediterranean Shipping Co.in Geneva --control 35 percent if the global market for container shipping, with dozens of smaller operators dividing up the remainder. (Summarized from February 22 articles in The Wall Street Journal and the Financial Times.)


11. IMF WARNS FOOD PRICES TO STAY HIGH

The world faces a prolonged period of high food prices, the International Monetary Fund has warned, arguing that the main reason for the sharp rise in agricultural commodity prices is a structural shift in demand. The warning came as the UN Food and Agricultural Organization's (FAO) index of global food prices rose to a record high in February, the eighth consecutive monthly increase. In an article published on March 3, IMF commodities economists wrote that "the world may need to get used to higher food prices." The economists said that a large part of the surge in food prices was related to temporary factors, such as the weather. "Nevertheless, the main reasons for rising demand for food reflect structural changes in the global economy that will not be reversed,"  they added. (Summarized from a March 4, 2011 Financial Times article.)

 

 

12. COMMERCE SECRETARY LOCKE TO BE NAMED AMBASSADOR TO CHINA

 

President Obama plans to nominate Gary F. Locke, the U.S. Secretary of Commerce and one of the highest-ranking Chinese-Americans in the administration, as the next American ambassador to China, administration officials stated on March 7.  Mr. Locke, 61, would succeed  John Huntsman, Jr.  who is stepping down in April to explore a bid for the Republican nomination for President. Mr. Locke, a former Governor of Washington, was both the first Chinese-American Commerce Secretary and the first Chinese-American Governor, serving for two terms, from 1996 to 2005. He was born in Seattle, the son of immigrants from Hong Kong, and traces his Chinese ancestry to southern Guangdong Province.  Before going to Washington, Mr. Locke built a reputation as an expert on trade relations with China. While governor, he made several trade trips to China on behalf of Washington.

 

 

13. CHINA ANNOUNCES PLANS TO IMPORT MORE FROM ABROAD

 

China plans to shrink its trade surplus further this year but is looking for ways other than rapid yuan appreciation to ease tensions with global trading partners, said the nation's commerce minister. Beijing wants to "stabilize exports, grow imports, and shrink the trade surplus," Chen Deming said at a press briefing on the sidelines of the National People's Congress, the annual meeting of China's legislature.  China's leaders' pledges during the Congress include boosting the incomes of the less wealthy and taming inflation. Minister. Deming’s  comments, on the heels of a long list of economic goals laid out by Premier Wen Jiabao, indicate that while the government wants to reduce its large surpluses, it remains wary of allowing rapid appreciation of the currency as a means to do so. The U.S. and others have long accused China of manipulating its currency to keep it artificially low, giving the country an unfair trade advantage. 

 

Mr. Chen said China's trade surplus would likely fall this year, both in absolute terms and as a percentage of gross domestic product, as imports grow faster than exports. Several adverse conditions, including rising prices for raw materials, rising labor costs, and a still-uncertain outlook for the global economy, cloud the outlook for China's exports, he said. To boost imports, China is considering cutting tariffs on imported goods and will unilaterally cut tariffs on goods imported from less-developed countries, Mr. Chen said, underscoring the government's priority to shift the economy away from its dependence on exports and industry and toward greater domestic consumption. In particular, China wants to expand imports from the U.S. and views rebalancing bilateral trade with the world's largest economy as the key to resolving its overall trade surplus, Mr. Chen said.

 

China's trade surplus narrowed for the second consecutive year to $183 billion in 2010, according to government figures. However, the country's surplus with the U.S. for the year expanded by 26%, to $181.27 billion, which has led to calls from U.S. officials for China to allow faster appreciation of the yuan against the dollar. Mr. Chen reiterated China's standard line that reform of the yuan exchange rate will be gradual and controlled. He expressed skepticism of an argument that a rising yuan can help offset inflation pressure. In wide-ranging comments, Mr. Chen also defended China's stance on limiting exports of rare-earth metals, arguing that their development is harmful to the environment. He said he hopes that other countries can share the burden of rare-earth development. China has about 30% of the world's rare-earth reserves, but accounts for more than 90% of global rare-earth production, he said. (Summarized from a Wall Street Journal March 8, 2011 article.)

 

 

14.  U.S. PROCEEDS AGAINST CHINA AT WTO OVER CARD RESTRICTIONS

 

The U.S. announced on February 10 that it would proceed with a complaint against China at the World Trade Organization over restrictions on foreign payment-card firms such as Visa Inc. and American Express Co. The U.S. also said it would challenge antidumping duties imposed on certain imports of U.S. steel in 2009, signaling that the Obama administration is intent on pursuing a muscular trade policy with China. Only China UnionPay, a company set up by the People's Bank of China, is allowed to handle card payments in Chinese currency, and when Chinese travel overseas their transactions in foreign currencies must also be handled by China UnionPay.

 

Visitors can use foreign cards in China, but the card companies can have no piece of processing transactions between the merchants and intermediary banks. If, as expected, the WTO accepts the case, it will take 12 to 18 month to rule. If it rules in favor of the U.S., it could then force China to get rid of the monopoly. A spokesman for the Chinese mission to the European Union said Beijing is committed to respect its WTO obligations but declined to comment further. (Summarized from a February 12, 2011 article in The Wall Street Journal.)

 

 

15. CHINA DISCUSSING “DRY CANAL” ACROSS COLOMBIA

 

China is in talks to build an alternative to the Panama Canal that would link Colombia's Atlantic and Pacific Coasts by rail - a move that Bogota hopes will spur Washington to push for congressional approval of a U.S.-Colombia free trade pact. "It's a real proposal .  . . and it is quite advanced," Juan Manuel Santos, Colombia's President told the Financial Times. "The studies [the Chinese] have made on the costs of transporting per tonne, the cost of investment, they all work out." The mooted rail link is the latest example of China's increasingly aggressive lending to the developing world, as evidenced by Chinese banks having lent more to developing countries over the past two years than the World Bank. The 220-km "dry canal" could run from the Pacific to a new city near Cartagena, where imported Chinese goods would be assembled for re-export to the Americas. Colombia-sourced raw materials would make the return journey to China. Bilateral Sino-Colombia trade has meanwhile soared from $10 m in 1980 to more than $5bn in 2010, making China Colombia's second-biggest trade partner, after the US. "Colombia has a very important strategic position, and we view the country as a port to the rest of Latin America," said  Gao Zhenhyue, China's ambassador to Colombia. (Summarized from a February 14 Financial Times article.)

 

 

16. CHINA PLANS 45 MORE AIRPORTS

 

China intends to build another 45 airports during the next five years, the industry regulator has said. Mr. Li Jiaxing, head of the Civil Aviation Administration of China, stated on February 24 that the investment would increase the number of airports in the country to 220. The expansion in air transport infrastructure has accelerated during the economic stimulus programme of the past two years. Mr. Li, who used to run Air China, the country's biggest airline before becoming regulator, said the government would spend Rmb 1,500 bn ($228 billion) in the period up to 2015. (Summarized from a February 25, 2011 Financial Times article.)

 

 

17. FACTOID: CHINA'S ECONOMY SURPASSES JAPAN'S

 

China passed Japan in 2010 to become the world's second-largest economy after the U.S. The Japanese government made official the long-expected flip on February 13 in Tokyo, reporting  that the economy shrank at a 1.1 perecent annual rate for the last three mopnths of the year, a period when China's gross domestic product surged 9.8 percent from a year earlier. With those figures, Japan's full-year GDP was $5.47 trillion --about 7 percent smaller than the $5.88 trillion China reported in January. Both economies still remain considerably smaller than the U.S. economy. Japan and China combined are still worth less than the U.S.'s 2010 GDP of $14.66 trillion. (Summarized from a Februrary 14, 2011 Wall St. Journal article

 

 

18. FACTOID: NUMBER OF SUBWAYS WORLDWIDE PASSES MCDONALD’S

It's official: the Subway sandwich chain has surpassed McDonald's Corp. as the world's largest restaurant chain, in terms of units. At the end of last year, Subway had 33,749 restaurants worldwide, compared to McDonald's 32,737. The race for global dominance is an important one for an industry that's mostly saturated in the U.S. Chains are increasingly looking overseas for growth, particularly in Asia.  Subway just opened its 1,000th location in Asia, including its first in Vietnam. It surpassed the number of McDonald's in the U.S. about nine years ago and expects China to eventually become one of its largest markets. The sandwich shop only has 199 restaurants in China now, but expects to have more than 500 by 2015.

 

Starbucks Corp. recently said it plans to triple its number of outlets in China, and Dunkin' Brands Inc., parent of Dunkin' Donuts and Baskin-Robbins, plans to open thousands of new outlets in China in coming years as well as its first stores in Vietnam in the next 18 months. Subway, which opened its first international restaurant in 1984, in Bahrain, expects its number of international restaurants to exceed its domestic ones by 2020 The chain currently has just over 24,000 restaurants in the U.S., where it generated $10.5 billion of its $15.2 billion in revenue last year. McDonald's is still the leader when it comes to sales. The burger chain reported $24 billion in revenue last year. (Summarized from a March 8, 2011 Wall Street Journal article.)

 

 

Eugene Schreiber retired in July, 2010 as Managing Director of the World Trade Center of New Orleans after 31 years and is now an international trade consultant.  He continues to serve as a Senior Advisor with the WTC. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.">'+addy_text66979+'<\/a>'; //-->

 

INTERNATIONAL TRADE BRIEFS   

March , 2011

Eugene J. Schreiber
Schreiber International Trade

(This email address is being protected from spambots. You need JavaScript enabled to view it.)

 

Join  Louisiana International Trade Group

 

latter-blum2

Dead Pelican

Optimized-DeadPelican2 1 1