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World Trader - Feb10
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February 2010
Volume 7 | Issue 2

World Trader

From the President

Upcoming Events

Your World, Today

BIS Launches Online System for Tracking Export License Applications

Copenhagen Conference 2009

Country of the Month: Kazakhstan, Part II – The Central Asian Economic Miracle

Sponsor Spotlight: Hyundai Merchant Marine

MGTA Featured Volunteer: Andrea Burns

Who Said It?

The Grab Bag

Welcome New MGTA Members!


From the President

by Mari McClafferty, MGTA President

Mari McClaffertyThe MGTA membership had a great turn out at the 2010 Annual Meeting in January with close to two hundred members present. Minnesota weather cooperated with us this year. It was mild with no snow for a change. Thanks to all our sponsors and companies listed in this newsletter and on the MGTA website at www.mgta.org who donated cash or prizes for the event. Your generosity makes this evening fun year after year! Check out the Flickr photo slideshow below.

A special thanks to the MGTA Events Committee – Colleen Erickson, Whitney Docken, Amanda Oates and Andrea Burns – who volunteered many hours to make the night a success in partnership with Ewald Management (Ashley Crunstedt and Paul Hanscom).

One of our first collaborative events of the year with the Minnesota Trade Office and the U.S. Department of Commerce, Commercial Services was held February 10, hosted by Medtronic. Our guest speakers Bryan O'Byrne and Dr. Trevor Gunn dodged the huge snow storm in D.C. to speak in sunny Minnesota. Now that is a switch! They provided inside tips on how to overcome obstacles to trade with examples of situations in foreign countries where business was improved by removing technical trade barriers. I am impressed with Mr. O'Byrne's Japanese negotiation techniques to gain consensus and help sway opinion on policy. We have a wonderful local resource with Lisa Foss. Lisa is the friendly expert on anti-dumping and can intervene with foreign authorities when appropriate.

Thank you to the following companies/individuals for donating door prizes at the Annual Meeting:

BarOle Trucking
Best Buy
CH Robinson
DSV Air & Sea, Inc.
Evergreen Shipping Agency
Frederique Toft
Griffin & Company Logistics
Hyundai Merchant Marine
Independent Packing Services
K2 Logistics

Medtronic
Minnesota Trade Office
Multi-Modal Transport
Neville Peterson LLP
Norman G. Jensen
Northstar World Trade Services, Inc.
Port of Tacoma U.S.A.
SBS Group of Companies
Target Corporation
Trade Acceptance Group, Ltd.

 

Thank you ALL for your time and providing these valuable resources to our membership.

Our next outreach will be with the North Dakota Trade Office at Amity Technologies in Fargo, ND.

Stay warm and I hope to see you there!

Mari

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Upcoming Events

MGTA Outreach: The Road to Trade Recovery

March 10, 2010
Fargo, ND

MGTA is proud to announce an industry update event entitled "The Road to Trade Recovery.” This event will be hosted by Amity Technology in Fargo, North Dakota. Join industry experts for a discussion on global trade market conditions, current trends in the Midwest, and what to expect in 2010. Space is limited for this event, so make sure to sign up right away. Learn more


Canada’s Gateways

March 30, 2010
Bloomington, MN

The Montreal Port Authority and the Consulate General of Canada request the pleasure of your company at a reception for transportation and logistics professionals to be held on Tuesday, March 30, 2010, 5:00 to 7:00 pm.

The Montreal Port Authority operates the world's largest inland port. It is a leader among container ports, handling 26 million tonnes of cargo annually. Please join us to learn about new developments at the Montreal Port Authority and explore new opportunities to utilize Canada’s gateways.

Please RSVP by Tuesday, March 23, 2010 by telephone 612.492.2912 or jessica.fritz@international.gc.ca.

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Your World, Today

by Jason Lloyd, TSC Container Freight

In the first State of the Union address from President Obama, exports were made a priority. The president is focusing on an ambitious goal of doubling our export over the next five years. Achieving such goals will create two million jobs in the United States and will keep jobs here in America instead of moving them overseas. Obama’s focus in accomplishing this is with small businesses and farmers.

During the address, Obama emphasized the importance of trade agreements such as Doha and opening new opportunities on global markets. The largest players that we import from will now be more essential than ever as we develop trade partnerships in order to meet the imperative objective of doubling our exports. America will now look to export goods to such areas as Asia and South America in greater volumes. Creating jobs within the United States is vital to increase our exports and a significant contributing solution to the global trade crisis.

Increasing exports and creating jobs are essential to the growth of the economy. Much of what we do every day in global trade creates opportunities for more than just us. This will be a great opportunity for members within the MGTA to take an aggressive role within their organizations and communities.

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BIS Launches Online System for Tracking Export License Applications

From Expeditors Newsflash

The U.S. Department of Commerce's (Commerce) Bureau of Industry and Security (BIS) has launched an online version of its System for Tracking Export License Applications (STELA).

The system, intended to eventually replace the phone version of STELA currently provided, will allow users to check the status of export and re-export license applications, classification requests, and AGR (agricultural commodities) notifications.

More information on STELA can be accessed online here. The STELA online system can be accessed here.

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Copenhagen Conference 2009

Daniel Gyurta: In your articles leading up to the Copenhagen conference, there is a fair amount of criticism of other countries, especially China. There does not, however, seem to be an equally critical view of the United States, both for its status as the world's largest historical polluter and the lukewarm attitude of the U.S. government and people in addressing this problem. Many people around the world have concluded that the United States is trying to evade its responsibilities. Do you think the United States can continue to dictate the behavior of others while not doing anything substantial itself?
A: The United States needs to step up its own efforts if it is to be effective internationally. Recent moves to tighten automobile fuel-economy standards, bolster clean technology through the stimulus package, and threaten Environmental Protection Agency regulation are steps in that direction, but the United States will need comprehensive climate and energy legislation if it wants to be a genuine leader. This will be necessary not only to cut its own emissions but also to deliver on promises of money to help with mitigation and adaptation that it has recently made to others.

Daniel Gyurta: Copenhagen revealed huge gaps between stakeholders when it comes to the scale of the climate crisis and what individual countries must do about it. Does that mean that the United States should give up the idea of international agreements and instead pursue bilateral talks that could form the basis of international norms one day?
A: The United States should not give up on the idea of international agreements, but it needs to pursue its international climate policy through a wide variety of forums. The UN process is severely limited, as I argued in an essay earlier this week. But bilateral talks are not the only substitute. The United States should also work through multilateral institutions such as the G-20 and the Major Economies Forum, as well as through global operating institutions such as the World Bank and the United Nations Development Program (UNDP).

Nicholas Seeley: Much of the media has declared the Copenhagen conference to be an absolute, dismal failure -- and according to most estimates of what the conference was supposed to accomplish, this seems accurate. Remarks made by Lumumba Di-Aping, the Sudanese diplomat who was the lead negotiator for the G-77 and China, suggest that Copenhagen was a disaster for the developing world. Do these loud declarations of failure and impotence risk derailing public support for the negotiating process? After Copenhagen, will the public give up on climate talks?
A: Di-Aping's comments, which likened Copenhagen to the Holocaust, are reprehensible. The declarations of complete "failure" are unfair -- they are more a reflection of unreasonable expectations than of the actual outcome. (See my original article in Foreign Affairs, for example, for a set of reasonable expectations and goals that have been roughly borne out.) The public may give up on the UN track of climate negotiations; alternatively, it may turn up the volume on its demands. Only time will tell.

Michael Rohfls: Was there any breakthrough at Copenhagen in designating black carbon -- a widespread form of particulate air pollution -- as an emission with "global warming potential," a move that could lead to the establishment of a value for black carbon in emissions-trading systems?
A: No. Progress on black carbon is far more likely to come from the bottom up. Watch for national aid institutions as well as bodies like the UNDP and the United Nations Environment Program to tackle this problem.

Oliver Stolpe:
What, if any, progress was made in Copenhagen concerning Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD), the UN program that offers countries incentives to not cut down their forests? Also, were the potential risks of abuse and corruption in REDD payments discussed, along with ways to ensure that these funds contribute to the development of local communities?
A: Copenhagen took three steps forward on REDD before taking one step back. Parties largely agreed to a meaningful legal text on REDD, but it was shelved because no legal outcomes were adopted by the conference; the substance underlying that text, however, survives. Perhaps more important, countries promised that they would aim to raise $100 billion annually by 2020 to deal with mitigation and adaptation in the developing world. I would expect a large part of the U.S. contribution to go toward helping to avoid deforestation. The formal negotiations did not confront the important issues you raise in your second question; those will need to be dealt with as programs are implemented.

Graham Dumas: Many human rights scholars and activists, as well as several indigenous groups and even some countries such as the Maldives, have begun pressing for a human-rights-based approach to climate change, arguing that existing treaties, such as the International Covenant on Civil and Political Rights, and customary international law place binding commitments on states to reduce their carbon emissions. Does this posture help or hinder the movement for a new convention on climate change?
A: I doubt that this will have any impact one way or the other. The bottom line is that polluting countries must see it as being in their interests to reduce emissions. Asserting other legal obligations has not forced them to reduce their emissions thus far; it is not clear how bringing in another claimed obligation from another sphere would change that.

Klaus Kondrup: Given China's role in the negotiations and its reluctance to allow verification of its initiatives to lower emissions, what is the solution to the problem of transparency in the various commitments to come out of Copenhagen?
A: Copenhagen takes a step in the right direction on transparency, but it is one that must be carefully fleshed out if it is to be worthwhile. Countries agreed to "consultation and analysis" on their emissions-cutting efforts. U.S. President Barack Obama compared the agreement on transparency to that under the World Trade Organization's Trade Policy Review Mechanism. If it can be elaborated properly, and if shortcomings of the TPRM can be addressed, such an agreement would deliver a solid outcome. (I made the case for using the TPRM as a partial model for review in a recent paper.)

Simon Bennett: Your article "Copenhagen's Inconvenient Truth" suggested that a comprehensive agreement was too ambitious a goal in Copenhagen but that a more limited agreement on measurement, reporting, and verification (MRV) could potentially be reached. Did negotiators make any headway toward such an agreement, or were any components of an MRV agreement approved?
A: The Copenhagen Accord made important progress on this front; I described some of it in the answer to the previous question. Much, however, remains to be done. States will now need to work out detailed MRV arrangements for actions that receive external support and for "consultation and analysis" procedures for actions that are unilateral.

Lawrence Wheeler: How important is the pending climate-change bill on Capitol Hill? Will a weak piece of legislation in the United States hamper global efforts to move forward, or is significant progress possible regardless of the bill that emerges from Congress next year?
A: The pending bill is extremely important, both for U.S. credibility and for actual emissions reductions. I do not believe that the bills currently being considered are weak. But a substantially weaker bill signaling the United States' inability to deliver on its mitigation or financing promises would hurt U.S. leverage in global efforts going forward.

Bernie Solomon: Did Copenhagen give any indication of how countries that are emerging powers but still relatively poor in per-capita terms, such as China and India, might be able to fast-forward their economic and social development? Many political leaders in the West seem to be urging leaders of such countries to embrace emissions restrictions and other "green" measures as their economies are developing and modernizing, not after. The fear, of course, is that such agreements may end up slowing growth in the developing world. But without them, can China and India truly become regional and global powers? Are there any clues coming out of Copenhagen for how this tension will resolve itself?
A: This is a great question. China and India are becoming true regional and global powers (if they have not already) regardless of what they do about their emissions. What needs to happen is to figure out how to increase their confidence that they can take a different course of modernization. I doubt that this will come simply from the United States and other developed countries setting "an example" -- after all, the developed world is at a very different economic stage, which makes example setting hard. The biggest clue out of Copenhagen on this front points to efforts outside the UN process to confront this problem. Each country's concerns and challenges are different; each one's will need to be addressed separately, something that can't happen with a simple universal deal.

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Country of the Month: Kazakhstan, Part II – The Central Asian Economic Miracle

by Jonathan Pixler

I remember my first New Year’s Eve in Almaty, Kazakhstan, during which myself and a few local students, joined with thousands of local citizens along with several expats in saying goodbye to 1999 and welcoming in the new millennium. As we all huddled together, trying to keep warm again the icy cold winds of "Republic Square” (formerly known during Soviet times as "Brezhnev Square”). I wondered as I stood there what the next 10 years would bring to Kazakhstan, a nation just beginning to show promising signs of modernization and development. Little did I know how rapidly things would change, especially beginning in 2002 when Almaty went from a relatively quiet city where almost everyone walked or bussed to work, to a city overrun by 2.5 million cars (many of them imports from Germany and Japan) made to handle 200,000 cars. From that point on, there seemed to be some kind of "invisible hand” moving everywhere as new office buildings and homes sprung up, replacing the classic Soviet-style block buildings along with increasing air pollution and traffic jams.

Today, Kazakhstan’s rapid economic growth is viewed by many around the world as "Central Asia’s Economic Miracle.” In just this past decade, "both the EU and USA recognized Kazakhstan (first in the CIS and leader among the Central Asian Republics) as a country with a market economy beginning 2001 and 2002 respectively. Kazakhstan has enjoyed impressive economic growth over the past five years, buoyed by increased oil exports, as well as by bold economic reforms, prudent fiscal policies and economic initiatives that were instituted in 1999.” 1

Economics. Kazakhstan photosIn regard to International Trade, "The main driver behind Kazakhstan's economic growth has been foreign investment, mainly in the country's booming oil and natural gas industries. Since independence from Soviet rule in 1991, Kazakhstan has received more than 30 billion US$ of foreign direct investment - the highest per capita indicator in the former Eastern Bloc.” 2

While living in the country for 10 years I was appreciative of the fact that we had internal political stability and here and there you could see small signs of democratic reforms taking place. I learned just recently that the United States made the decision to support this effort through something called, "The Houston Initiative - a comprehensive partnership with Kazakhstan to build a modern, market-based economy, with particular emphasis on small and medium-sized enterprises.” 3

In regard to international trade, the country's investment potential will continue to be based on minerals and raw materials. Nearly half of Kazakhstan’s GDP relies on the country’s raw material reserves. "According to certain estimates, in the next 10 years the oil and gas sector of the country, particularly the Kazakh sector of the Caspian Sea, could attract between to 150-200 billion US$." 3 Kazakhstan is currently trying to get more investment in its agriculture sphere and therein lie great opportunities for those who have know-how in this area.

While living there, we would often see billboards and advertisements proclaiming "Kazakhstan 2030” known as the plan by which the government put forth seven major initiatives in its attempt to reduce poverty in Kazakhstan, something that I saw everyday, especially for those in need of medical care. Today, the motto touted is: "Prosperity, security, and improved living standards for all Kazakhs." I believe it will improve the overall infrastructure of the country, but at what cost for the citizens of Kazakhstan today, as many of them now find themselves in debt due to the "housing bubble” that finally burst in 2008. And yet I am optimistic that living standards will continue to gradually improve and people will continue to be optimistic for better things in this new decade. Recently a colleague of mine shared a great Kazakh saying when it comes to business: "Trade occurs while stroking your beard.” This sayimg means that brokerage is a very profitable trade and to be successful at it you must be a vivacious and eloquent orator as well). 4 The citizens of Kazakhstan are resourceful people and they know how to make things work, even in tough times.

At the stroke of midnight 1999, Y2K never did materialize. Instead, all around us were explosions of fireworks from all parts of the city as people cheered and downed shots of vodka and cognac, while the skies were lit up like the "awe and shock” campaign in Baghdad 1991. This went on literally until the wee hours of the morning, and I found myself caught up in the excitement of the moment. I also sensed a genuine anticipation by many citizens that this new decade would be kinder to them, and their country would shine brightly after having endured so many economic hardships during the 1990s. Like the enthusiasm and hope I felt on New Year’s Eve 1999, Kazakhstan’s citizens believe their country will continue to confound the experts, despite the current world economic crisis, and they also believe their country is the best hope for the Central Asia Economic Miracle to continue.

1 "Economy of Kazakhstan, Economic Review” (Google Internet Article)
2 IBID
3 IBID
4 Kristina Gray "KazNomad” Blog (Internet)

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Sponsor Spotlight: Hyundai Merchant Marine

by Sandy Taylor, Hyundai Merchant Marine

HMMWho is Hyundai:

Hyundai Merchant Marine is not Hyundai the car company.

HMM is an integrated logistics company, operating over 110 state-of-the-art vessels. HMM offers worldwide global service network, diverse logistics facilities, leading IT shipping related systems, and continual effort to provide premiere transportation services.

HMM transports nationally strategic materials such as crude oil, LNG, iron ore/coal and diverse special products as well as import/export goods. Asia, Europe and North America are our ports of call, with some service in/out of the Middle East.

HMM invests to continuously expand vessel fleet, acquires container terminals in the worldwide primary locations and inland logistics facilities, and develops premiere customer oriented IT system. As a result of these endeavors, HMM will become a world top integrated logistics company giving "hope to shareholders, satisfaction to customers and pride to employees."

Why is Hyundai involved in MGTA:

Hyundai joined the MGTA for a number of reasons but initially joined due to a client asking me to be involved. Once a member, I found that it was a great way to meet many people outside of the normal sales call arena. The MGTA is a great way to meet many of my peers and get to know members on a more personal level. I love the networking events. It has been a nice venue for attending the occassional seminar so I can stay up-to-date on current market changes. I think of the annual meeting as a class reunion of our industry and the golf event is always fun. I've gotten to know a lot of wonderful people while volunteering at events and than by being on the board. The MGTA is a great organization to be a part of.

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MGTA Featured Volunteer: Andrea Burns

by Jonathan Pixler

Andrea BurnsQ: How long have you been an MGTA member?
A:
While I just became involved in the MGTA last year, our company, Independent Packing Services, Inc., has been involved with MGTA for more than 15 years.

Q: How does the MGTA help you grow as a trade professional?
A:
Working for a customer-intimate company, we are continually striving to provide valuable resources for our clients. MGTA’s mission helps me fulfill this aspect of our business.

Q: What have you learned through your volunteer experience with the MGTA?
A:
The crating industry may be considered unique, but it is fundamentally similar to other industries. I have learned that the most important business philosophy is trust. Everyone wants to know that they can rely on their supplier. A personal goal of mine is to continue to develop trusting relationships as an active member of the MGTA.

Q: What do you enjoy most about volunteering with the MGTA?
A:
One of the highlights of working on the networking/events committee is having had the opportunity to work with people outside of my industry. As I become more involved with MGTA I look forward to bringing fresh ideas to help push MGTA’s mission further into the business community.

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Who Said It?

by Jonathan Pixler

"If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception, it is a prevailing attitude.”
– Colin Powell, former Secretary of State

"A business has to be involving, it has to be fun, and it has to exercise your creative instincts.”
– Richard Branson, British Virgin Group Founder

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The Grab Bag

When working in an international context with college students I was always coming across interesting articles or pieces of information. I begin putting them in folders and one day I got the idea that it would be fun to provide all of these ideas for my students. In the same way, in international trade and business we all come across pieces of information that we find interesting and would like to share with others. We would love to hear from you our readers what kinds of interesting articles or ideas you have and then put them in our reader's "Grab Bag."

Glassmaking Thrives Offshore but is Declining in U.S.

by Louis Uchitelle, The New York Times

The lower floors of the new 1 World Trade Center will be sheathed in Chinese glass. No imported glass was used in the two towers destroyed on 9/11. Justin Lane/European PressPhoto Agency

The majestic steel beams of a soaring office tower beginning to rise from the ruins of the World Trade Center are a tribute to American resilience, but also a marker in the decline of yet another industry. Not an inch of imported glass went into the two lost towers, built 40 years ago. The lower floors of the new one will soon be sheathed in Chinese glass.

The decline of glassmaking in America started gradually in the 1990s and accelerated during the Great Recession. What’s more, the big companies, like Corning and Guardian Industries, say that even as the economy improves, they are unlikely to bring domestic employment and production back to prerecession levels. Imports, for one thing, inhibit sales. And bigger profits lie abroad, so they are channeling investment and expansion to their overseas factories.

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Welcome New MGTA Members!

The MGTA gains its strength as the leading organization to enhance the international business opportunities as we expand the reach of our membership. Now with well over 500 members, we proudly welcome the following individuals who have become a part of the MGTA:

Giselle Baillos
Sally Neubauer, 3M Company
Chad Harley, Crane Worldwide Logistics
Dan Jerik, Multi-Modal Transport, Inc.
Miah Boerner, NOVUS, Inc.
Mark Toov, Caterpillar Auction Services

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Thank you Newsletter Sponsor:

Port of Seattle

2010 Annual Sponsors:

 

ZepolCH RobinsonBremerUS Bank
HMMNeville Peterson LLP

© 2010 Midwest Global Trade Association. All Rights Reserved.
World Trader is distributed bi-monthly to MGTA members.
Articles submitted by our membership do not express the views of MGTA or the Board of Directors. If you would like to submit an article for publication in the World Trader, please contact the MGTA office at office@mgta.org.

Midwest Global Trade Association
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p 651.290.7482 | f 651.290.2266 | office@mgta.org |
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