Bloomberg: U.S. Removes Vietnam Tariff Threat After Currency-Dispute Truce
The U.S. revoked the threat of tariffs on Vietnamese goods after the two nations reached an agreement under which the Asian nation will allow more flexibility in its currency.
The agreement between the U.S. Treasury and State Bank of Vietnam provides “satisfactory resolution of the matter,” and no trade action is warranted, the Office of the U.S. Trade Representative said in a statement Friday. The USTR and Treasury will monitor Vietnam’s implementation, it said.
During the closing days of President Donald Trump’s administration in January, the USTR labeled Vietnam’s currency actions unreasonable and restrictive to American businesses following a so-called section 301 Trade Act probe, but refrained from hitting the nation with punitive tariffs. The Biden administration had been facing an imminent deadline for publishing a proposed product list under the probe begun under Trump.
The U.S. is Vietnam’s biggest export market, with the value of shipments doubling over the past five years. But the Southeast Asian country has seen a widening trade gap with the U.S. that made it a target for Trump; this year it has the largest merchandise surplus with the U.S. behind China and Mexico.
The Herald: Zimbabwe to deploy US$1 Billion IMF SDRs to strategic areas
Zimbabwe will deploy its windfall of nearly US$1 billion in special drawing rights likely to be issued by the International Monetary Fund to push harder and faster the economic recovery and key social programmes for vulnerable groups.
While Zimbabwe expects a strong economic growth of 7,4 percent this year, driven by agriculture and mining, after a good rainy season, it still faces shortage of foreign currency needed to support key economic sectors and the poor.
The country is, however, set to receive a shot in the arm now that the IMF is in the final stages of approving an issue of SDRs equivalent to US$650 billion to its 190 members to provide the needed liquidity to absorb global shocks and support recovery from the impact Covid-19 pandemic.
Zimbabwe’s share will be just under US$1 billion.
Finance and Economic Development Minister Professor Mthuli Ncube said recently Zimbabwe will use its share as guided by the IMF, focusing on areas that support economic recovery as well as key social programmes.
The new SDR allocations are meant by the IMF to supplement members’ foreign exchange reserves to reduce reliance on more expensive domestic or external debt.
A fortnight ago, the IMF executive board gave its backing for the SDR distribution and the IMF has since indicated that it is working to have the distributions of the funds done by next month.
“I will now present the new SDR allocation proposal to the IMF’s Board of Governors for their consideration and approval. If approved, we expect the SDR allocation to be completed by the end of August,” said IMF managing director Kristalina Georgieva recently.
Of the US$650 billion, African members will receive a total of US$33 billion.
Typically, the distribution of the SDRs is done according to each member state’s IMF quota.
And Zimbabwe’s current quota stands at 0,15 percent, which means the country could receive just under US$1 billion.
Unlike commercial loans from the global lender, SDRs are an accounting unit of the IMF, which any member can exchange with another for cash. They are not a loan and neither do they impose any financial burden on the receiver.
This year’s planned SDR distribution, if approved, would be almost double the US$500 million SDRs equivalent that Zimbabwe received in 2009.
The 2009 SDRs contributed significantly to recovery from the 2008 global financial crisis.
“Every country should be receiving SDRs, so Zimbabwe is expecting them, but we want to wait until we know for sure, and what that quantum is. We will use it for what it is targeted.
“ We expect the IMF to issue a guidance note in terms of the usage of SDRs. It’s really to support economic recovery and social sectors.
“We will do the same and support health, education, vaccine acquisition and social protection programmes, but also we need to invest the money in future growth so that it supports the real economy,” said Minister Ncube.
“So we want to invest in positive rate of return projects and sectors to support the economy, and finally we will have to use a portion to stabilise our currency and build our reserves.”
According to the IMF, “the SDR allocation will help every IMF member country — particularly vulnerable countries — and strengthen their response to the Covid-19 crisis.”
Under the IMF’s Articles of Agreement, the managing director may make a proposal for a general SDR allocation if the managing director is satisfied that the allocation would help meet a long-term global need to supplement existing reserve assets in a manner that will avoid stagnation and deflation as well as excess demand and inflation, and there is broad support among IMF members for the allocation.
Minister Ncube said Zimbabwe will not be using the funds for transactional purposes.
“I won’t specifically say that we will use it for the foreign currency auction, because that is transactional. There is a difference between a stock and a flow, we would rather have SDRs being a stock than a flow,” he said.
America is ready to help Iraq by implementing the White Paper on Economic Reform
The United States confirmed its readiness to help Iraq implement the white paper for economic reform through a new transparent program, on the sidelines of the strategic dialogue activities between the two sides held in Washington.
Today, Saturday, the US State Department stated that the United States intends to work with Iraq currently to provide a revised nationally determined contribution under the Paris Agreement of the United Nations Framework Convention on Climate Change, according to the Iraq News Agency, “Ana”.
The United States also intends to cooperate with Iraq to enhance the capacity of managing climate adaptation and mitigation, reducing gas flaring, developing renewable and clean energy initiatives, promoting water conservation, and supporting the protection of local flora and fauna, according to the US State Department.
The US Department stated that the two sides discussed ways to advance vital energy projects with American companies and facilitate trade in American agricultural products, and the United States’ readiness to assist Iraq in implementing the White Paper on economic reform, through assistance from the United States Agency for International Development and a possible new program from the State Department focusing on Financial transparency.
She noted that the American International Development Finance Corporation continues to participate with Iraq on the memorandum of understanding and intends to invest up to one billion dollars to enhance private sector activity that creates jobs and provides opportunities for Iraqis, and the American International Development Finance Corporation intends to hold a virtual meeting with American and Iraqi companies this year to help To facilitate investment projects.
Yesterday, during the activities of the strategic dialogue between Iraq and the United States held in Washington, Fouad Hussein, the Iraqi Minister of Foreign Affairs , said that this round comes as a continuation of the previous three rounds, which were held consecutively between the two countries, which indicate the relationship of partnership and alliance between Iraq and the United States and the efforts of the two governments. diligently to consolidate it link
Source: Dinar Recaps
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