Trade well and truly Trumped

Andrew Hudson
The results are in but they are not the results that most had anticipated, leaving us with a Trump Presidency from 20 January 2017. No doubt that the political commentators will be sifting through the results for some time to attempt to find the true reasons for the outcome. It does appear that a large block of US voters felt so alienated by the idea that Clinton would be another version of the same leaders who had abandoned them to overseas and local ‘minority’ interests that they moved to someone who offered something different and a return to ‘middle ground’ issues. In that sense, it has a similarity to the vote in favour of Brexit and even has a resonance to some of the shift to independents in our Senate. Like Brexit though there is nothing clear on what the ‘something different’ may constitute. Which, in many respects becomes the ultimate disruptor.
There’s probably an argument that not even the Trump camp has properly thought out the agenda.
In any event with the outcome clear it comes to us to try and work out what could be the impact for the trade agenda from a Trump administration. At the start it is reasonable to say that there is some uncertainty as to the exact nature of the agenda given that there has been no substantive policy released. Based on those comments which have been made and, assuming that policies will follow those comments, then the consequences could include the following.

  • The prospects of the TPP being passed in the ‘lame duck’ session of Congress in the US have plummeted (as a ‘dead duck’), unless in a response to the election, the existing Congress decides to pass the TPP, whether for spite or other reasons. However, that may take more courage and resolve than an end of term Congress could muster in face of an apparently overwhelming vote against the current regime. Even then, there is the risk that a Trump administration would seek to withdraw the US membership of the TPP. There could be a similar outcome for the proposed US and EU FTA
  • Regardless of the evidence of the benefits of free trade, there appears to be little love for the free trade (or freer trade) agenda on the basis that it is perceived as being contrary to the interests of the US, its citizens, its industries and employment prospects. Whatever we think, there is a strong argument that this drove the sentiment of the electorate and their votes. That could lead to the US to reduce (or withdraw altogether) its engagement at the WTO and WCO and seek to reverse membership of other FTAs such as NAFTA. After all, the President – elect had threatened to ‘rip up’ NAFTA.
  • There has been the threat of the imposition of a 45% duty on goods imported into the US from China. Of course, that would be contrary to any number of international agreements to which the US is currently a party and would also be contrary to the whole ‘trade facilitation’ agenda, whether through the WTO Trade Facilitation Agenda or otherwise. More immediately, it could be the basis for a trade ‘war’ with China, would add to inflation in the US and possibly reduce GDP in China by 1%. None of which are cheerful outcomes especially when there is little evidence that the moves would actually assist the US economy or create jobs.
  • There would be additional resources to US government agencies to support additional anti – dumping and countervailing actions together with additional changes to regulation along protectionist lines. That will no doubt feed through to changes in the USTR office, if not at the very top, at least at the middle levels influenced by the new administration.
  • There is some doubt that the result will change US consumption, which will still be driven by the reliance on overseas markets for less expensive, reliable and vital consumer goods. Would a Trump agenda close the door to cheaper Korean and Japanese cars and exclude access to smart phones and TVs made in Asia?

In the face of this, the rest of the world may drift away from the US as it loses its relevance in terms of global economic influence. That gives the impression of an ‘isolationist’ US merely looking to its own interests. It didn’t work that well for the US and the world economy in the 20’s and 30’s but at least the world economy is less reliant on the US now and has managed to develop and integrate more thoroughly.
The issue is whether that causes a realignment of global trade leadership away from the traditional US dominance towards leadership by China and, potentially, other countries still engaged in free trade such as Canada and other TPP parties Those parties (including Australia) may now seek to drive separate FTAs based on TPP commitments or re – convene towards TPP 2.0 excluding the US and incorporating other countries who have been in line waiting to join the TPP such as Korea and Indonesia. It would also go some way to encouraging parties to the RCEP to galvanise their efforts to complete a substantive deal which leaves the US out to manage its new reality. Yes, the US has a significant place in the world economy but I think that with good will and good planning the rest of the world would be able to manage to develop a revised trade agenda on its own.
There is a cliché that with great crisis comes great opportunity. Our Foreign Affairs Minister was interviewed on the Trump election success and said that our Government had plans in place to deal with either US election result. Similarly, I have total confidence that our trade negotiators at DFAT and their counterparts around the region and around the world would have a closely guarded ‘Plan B’ to action if Trump was successful and the US (as threatened) withdrew from the trade agenda to bolster its local industry. It’s not ideal as the aim has always been global multilateral improvements but that it always subject to political well and domestic judgement. Based on comments to date the US seems resolved to take an agenda focused on its own interests to the exclusion of others (except, perhaps Russia). That still leaves open a significant agenda to advance the international trade agenda – hopefully the other major trading countries maintain their agendas and efforts which would advance the interests of those parties.
It’s a new day and a different day for international trade and it’s up to other nations to resume and improve the world trade agenda even if the US reverts to neo-isolationism.
Andrew Hudson is a partner at Gadens Lawyers.

Ramco opens headquarters in Melbourne

Ramco Systems has opened new offices in Melbourne which will double as the Oceania Headquarters for the company.
It was also announced at the opening that SeaRoad Holdings, SeaRoad Shipping and SeaRoad Logistics’ parent group, have chosen to engage with Ramco Logistics Suite.
Since its launch in Australia in 2012, Ramco has seen a record growth in business, with this market contributing 11 per cent to the overall revenue in FY 2016. The strategic decision to focus on two key offerings – Global Payroll and Logistics as an Industry vertical – has helped the region yield good results.
“The appetite of Australian businesses to adopt disruptive technologies and test new waters has been a key driver behind Ramco’s growth in the region,” says P.R. Venketrama Raja, Vice Chairman & Managing Director, Ramco Systems. “We have been able to win the trust of some of the largest conglomerates and business houses and are thrilled by the progress made.”
Ramco intends to work with the Government aimed at transforming Victoria into a pivotal business destination in the Asia Pacific.
With notable recent business pick-ups like GMK Logistics in Australia, AAI Philippines and Nationwide Couriers in Malaysia, Ramco has seen rapid growth in the logistics domain.
SeaRoad, an Australian integrated transport and logistics service provider, will replace its legacy system with an integrated suite from Ramco. This will cover transport management, fleet management, warehouse management, Hub management, logistics command center, customer and Vendor contracting, finance and accounting and human capital management including Australia payroll.
By integrating Ramco Logistics Suite, SeaRoad will experience seamless transactions across its business divisions ensuring better visibility and streamlined operations. In addition, with the inclusion of workforce via Mobility and electronic integration with Customers and Suppliers, all audiences of SeaRoad will be addressed under a single platform.
The logistics services industry is the backbone of global supply chains and is expected to integrate and support complex processes in real-time, using future-ready technologies. Addressing the need, Ramco Systems built a logistics solution, an integrated, end-to-end, cloud-based platform targeted at third-party logistics firms, freight forwarding companies, and courier firms among others.

Konecranes receives $280 million notice of intent

Konecranes has received a Notice of Intent to Award Contracts (the Award) from the Virginia Port Authority (VPA) in the USA.
The Award includes the provision of 86 Automated Stacking Cranes or Automated Rail Mounted Gantry (ARMG) cranes, which are available throughout Australasia, to be delivered in phases between 2018 and 2020, with a total contract value in excess of EUR 200 million (over AUD $280 million).
The Virginia Port Authority intends to award two separate contracts, once approved by their board of commissioners. The first involves 60 Automated Stacking Cranes for Norfolk International Terminals (NIT) and the second involves 26 Automated Stacking Cranes for Virginia International Gateway (VIG).
The Konecranes ASC system offers valuable advantages in an ever-more automated industry, including high performance, reliability, accuracy, low operating costs and low energy consumption.
“Konecranes ARMGs have a light, intelligent steel structure. When this is combined with our Active Load Control (ALC) technology, the cranes deliver fast, accurate container stacking over a range of real world conditions,” says Ms Cindy Shi, Marketing Manager – Ports, Konecranes Asia Pacific, which includes Australia and New Zealand.
Konecranes ARMG cranes are part of a range of container handling equipment offered by Konecranes, including Automated Rubber Tyre Gantry (ARTG) cranes, RTG cranes, RMG cranes, Ship-to-shore Gantry (STS) cranes and straddle carriers.

Ontime wins freight supplier of the year

National transport firm, Ontime Group, has been awarded freight supplier of the year at the prestigious Dulux Group Annual Supplier Awards for 2016.
Dulux Group has held the annual awards for 26 years, to “recognise service excellence among its 7,000 plus suppliers”. Dulux Group’s suppliers are evaluated across 16 award categories against a range of complex criteria including account and relationship management, innovation, DIFOT (delivered in full, on-time), customer service, supply and quality.
Ontime Group is one of over 100 freight suppliers to Dulux Group, and was selected the award winner among three other finalists including Toll Intermodal and Mainfreight NZ.
Ontime Group’s win was based on its accomplishing a doubling in the delivery standard, from once-per-day to twice-per-day, for Dulux subsidiary Lincoln Sentry without adversely impacting cost. This provided a significant upturn in business.
Dulux Group also mentioned Ontime’s impeccable, ‘on time’ delivery record to a customer base spread throughout the three major cities of Melbourne, Sydney and Brisbane.
Walter Scremin, General Manager of Ontime Group, was on-hand to collect the award and said the transport provider had enjoyed a long association with Dulux Group. “We enjoy working with Dulux Group immensely, they are an outstanding organisation and we value their acknowledgment.
“Dulux Group is like many fast-moving businesses which need flexible and responsive freight solutions, with outstanding customer service.”

Union demands govt keep train building jobs local

West Australian rail workers have demanded a State Government strategy to maximise job opportunities for local manufacturing workers and businesses, with the mining boom over and unemployment continuing to rise.
Workers, represented by the Australian Manufaucturing Workers’ Union (AMWU), signed a petition that will be presented to State Parliament calling for more public transport procurement to remain in WA rather than sent offshore with many major infrastructure projects now fabricated overseas and shipped to Australia for assembly.
As part of the Union’s Plan for WA Jobs campaign, the group has called for the $3.1 billion of new trains due be purchased for WA’s public transport network to be built in WA to stimulate local industry, encourage more apprenticeships and provide brighter job prospects as the mining boom comes to an end.
The Union’s WA State Secretary Steve McCartney said the local rail manufacturing industry was facing an uncertain future because of the State Government’s plans to purchase future rail cars from overseas manufacturers.
“The WA manufacturing sector and its highly skilled workforce has the capacity and capability to build the new rail assets needed for an expanding public rail network.
“Yet skilled railcar builders are losing their jobs because of the shortage of work at a time when the economy is already struggling due to the collapse of the mining boom,” McCartney said.
“WA has a good track record in railcar manufacturing. Thousands of WA-built rail cars are carting tonnes of iron-ore through the Pilbara every day, with the first fleet of electric Transperth trains in Perth, which were manufactured by UGL Rail in Bassendean, still ferrying commuters on millions of trips each year.
“Yet the Barnett Government has absolutely no intention of continuing to procure locally built railcars for future West Australian projects. We know this because as recently as September, the previous Transport Minister rejected outright a suggestion for more investment in the local train manufacturing sector when he spoke at a Chamber of Commerce and Industry event.
“This is cold comfort to the thousands of skilled workers in the rail manufacturing sector who have lost their jobs and many others who face uncertain futures at a time when the WA economy is already grappling with the end of the resources boom.”
The petition will be presented to State Parliament by Shadow Transport Minister Rita Saffioti.

iSeekplant Endorsements – Changing the face of Plant Hire

With yet another major product announcement iSeekplant are at it again. The young company recently rolled out their Endorsements system, solving the issue of finding reliable and quality operators online.
The Endorsements system allows plant hire companies holding up their end of the bargain to be acknowledged for their hard work. When a contractor is happy with the work that a plant hire company has done, they can endorse them on the iSeekplant platform – demonstrating to users that they are a quality supplier.
A recurring complaint that iSeekplant hears about the online plant hire model is that it’s difficult to tell who’s able to take on a sophisticated civil or mining contract. In construction and mining, there isn’t much room for error and productivity of machine and operation is crucial to profitability. You can’t waste time and money on a poor operator with ancient or unmaintained machines.
There are plenty of shades of grey in plant hire, and the performance of an earthworks or plant and equipment hire contract involves many components. This is the key reason that iSeekplant endorsements are only positive. It isn’t a rating or review system. Endorsements allow iSeekplant users to endorse the good work and recommend companies, anonymously (but with many filters applied to ensure endorsements are legitimate), to others in the industry.
The decision to keep things positive was a simple one. Sally McPherson, CEO of iSeekplant, commented on the issue.
“Negative reviews are far more common than positive ones on most online review platforms, such as Yelp. That is the inherent flaw in online ratings systems – the attitudes expressed are highly polarised and people are more inclined to unload when they are unhappy. People are really angry, or really happy; rarely in between. We don’t believe it’s possible to create an unbiased and fair ratings system in our industry, given all the factors associated with contract performance. The best execution of this concept is to only allow people to gain recommendations from previous clients. The more endorsements each of our customers have for their work, the more the user can trust them with their job. We’ll also take steps in the near future to prioritise endorsed companies in our search results.”
In the couple of weeks that it’s been live, iSeekplant’s Endorsement feature has seen significant uptake. Managers and marketers for plant hire companies recognise the value of word of mouth – it’s how they get a lot of their jobs. Endorsements are a great way of showing that someone’s trust in you was validated.
The Endorsements feature builds on a string of impressive announcements from iSeekplant in the second half of 2016. The new app for both Android and iPhone launched in August. The Real Short Film Series also went live around the same time, and has recently received over ½ a million views. The Customer Portal was completely revamped, giving plant hire companies a huge amount of data and options to attract more work.
Click here to read more about iSeekplant’s Endorsement feature.

ACCC not happy with how supermarkets treat suppliers

Supermarkets need to improve the way they notify suppliers when delisting their products to avoid breaching the Food and Grocery Code of Conduct, ACCC Chairman Rod Sims said.
The Code provides default protections to all Aldi, Coles and Woolworths suppliers as of 1 July this year. Under the Code, supermarkets can only delist a supplier’s product for genuine commercial reasons and must give reasonable written notice. Supermarkets must also inform the supplier of their right to have decisions reviewed by a senior buyer.
Mr Sims said the ACCC has raised its concerns with Aldi, Coles and Woolworths following recent compliance checks known as Code audits.
“Some delisting notices did not give suppliers reasonable notice; the worst examples were delistings that appear to have occurred on the same day as the notice was served,” Mr Sims said.
“Some delisting notices did not include any real reasons for delisting and where reasons were provided, they were typically very general in nature.”
“In some instances, retailers largely cited a failure to meet ‘commercial sales or profitability targets’ without providing any real detail,” Mr Sims said.
Mr Sims said the ACCC is looking at these concerns closely and expects the supermarkets to address them quickly.
He said the delisting notices and other issues raised in the AFGC survey were disappointing as the supermarkets are working to make real and positive changes to their dealings with suppliers.
Mr Sims also stressed to the food and grocery sector that the ACCC is cracking down on large businesses that make misleading health claims.
“If you are going to put a so-called ‘health halo’ on your product make sure you don’t create an overall impression that is likely to mislead,” Mr Sims said.
He said claims about health benefits of food are important triggers for consumers who want to make healthy choices.
“Those [claims] directed to choices for children are particularly important and hence some of our recent enforcement activity,” Mr Sims said.
He listed Heinz Little Kids Shredz, Unilever’s Rainbow Paddle Pops, and Smith’s Sakata Paws Pizza Supreme Rice Snacks as recent examples.

Trans-Tasman trade outlook remains firm

DHL Melbourne warehouse
The mutually beneficial trade relationship between Australia and New Zealand continues to provide Australian exporters with opportunities to grow, according to the 2016 DHL Export Barometer.
The latest research shows that 56 per cent of Australian exporters trade with New Zealand, making it the most popular trading partner in front of North America (51 per cent) and China (42 per cent).
Senior vice president of DHL Express Oceania Gary Edstein said: “Australia and New Zealand have traditionally been very significant trading partners and we have seen very solid growth in shipment volume over the past five years, with double digit volume growth.
“The increasing popularity of online shopping has opened up a raft of export opportunities for small- and medium-sized businesses to reach new customers internationally. Trans-Tasman trade, in particular, has benefitted from this trend.”
The 2016 DHL Export Barometer shows trade across the Tasman is set to continue on a steady growth path. When Australian exporters were asked about their expectations regarding future export orders to New Zealand, 50 per cent said they predict demand to increase in the next 12 months, mirroring the results of the previous two years.
Confidence in New Zealand as a trading partner continues to dominate overall, with 42 per cent of exporters expecting orders to be the same as 2015 and just 8 per cent expecting a decrease.
Comparatively, Australian exporters are most confident about trade growth from the China and North America markets. Three in five (60 per cent) exporters believe export orders to China will rise over the coming year, with North America following closely at 59 per cent.
More than half (51 per cent) of the 302 Australian exporters surveyed in the 2016 DHL Export Barometer indicated the current trade agreement with New Zealand had a positive impact on exports.
This reflects AusTrade data, which shows that trade between Australia and New Zealand has increased at an annual rate of approximately 8 per cent since the implementation of the current Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA)[1].
Gary Edstein commented: “Whilst exporters see a lot of opportunities in North America and Asia, New Zealand remains one of our most popular trading partners and continues to be an important source of revenue for Australian businesses. The free trade agreement has proven to provide a range of benefits including the smooth transition of goods.
“With comparable markets and business cultures, Australia and New Zealand make ideal export destinations for small and medium-sized businesses that are starting to export internationally.”
DHL Express investing in Trans-Tasman trade
The latest Trans-Tasman growth figures reflect DHL Express facility investments in Australia and New Zealand, totalling approximately AU$40 million in the past 18 months.
This includes a NZ$15.3 million Auckland Gateway facility expansion, AU$20 million Melbourne Gateway new facility and AU$1.8 million upgrade to the Canberra service centre that helps facilitate the increase in shipments across the Tasman.

Alibaba likes fish: the world's largest online seafood marketplace created

At the China Fisheries and Seafood Expo in Qingdao, Gfresh officially announced that the company had raised $20 million USD in funding from Alibaba (Riverhill) and Legend Capital. Along with the funding, Simon Xi, the co-founder of Alibaba and Tony Wang of Legend Capital will also be joining the board.
With this new investment, Gfresh plans to pursue product initiatives for its online seafood marketplace, expand to new markets, and upgrade its logistics supply chain service, all the while leading the Chinese seafood industry into a new stage of development.
The distribution of Gfresh’s online marketplace covers Beijing, Shanghai, Guangzhou, Chongqing, etc., and aims to become the leading online business-to-business marketplace for global seafood. Gfresh went live in November 2014, and has sold over $200 million in gross merchandise in under two years of operation.
Along with developing a multi-channel distribution, other key initiatives include innovation in product and technology. This covers an international logistics tracking system, an improved inspection service, the unique Gfresh reverse auction model for seafood, and G-pay, an escrow account for payment.
Over 30 countries or regions trade seafood online, including Australia, North America, New Zealand, south-eastern Asia and several European countries.

Go People raises another $825,000, hits 10,000 deliveries/month

Crowdsourced delivery and courier service Go People has raised in excess of $2 million in two rounds of funding over the last three months, with its latest round raising a further $825,000.
Go People continues to see significant interest for its services, as the company looks to capitalise on the demand for on-demand couriers and become dominant in simpler deliveries. Go People (formerly People Post) has also undergone a facelift, with a new brand name and revamped technology platform to match.
Wayne Wang, founder and CEO of Go People, believes the recent raise and surge in demand marks a significant turning point for the company.
“Since I started the business in 2014, I believed the courier model could be much more efficient. We went to market to change the delivery industry and disrupt legacy delivery and courier rules,” he said.
“The fact we’ve had two successful funding rounds, 83 per cent month on month growth and seen significant demand on our platform, with more than 10,000 deliveries being made a month, it’s clear we’re heading in the right direction. This demand shows there is hunger for more flexible and convenient services among Australian consumers.”

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