Trade pullback to hamper growth: OECD

French President Francois Hollande (R) speaks with International Monetary Fund (IMF) Managing Director Christine Lagarde during a meeting with International economic organisations at the OECD headquarter in Paris, in this file photo taken on October 17, 2014. (Reuters)
Updated 08 March 2017

Trade pullback to hamper growth: OECD

PARIS: Any rollback of international trade deals would hurt global growth, which is already soft with only a modest recovery on the cards this year, the Organization for Economic Cooperation and Development (OECD) said on Tuesday.
The OECD did not mention US President Donald Trump by name, but warned that ripping up trade agreements hurts everybody, especially those who put up new obstacles to trade.
“An increase in trade barriers in the major global trading economies... would have a major adverse impact on trade and gross domestic product (GDP), particularly for those economies that imposed new trade barriers,” the OECD said in an interim version of its Economic Outlook.
The Paris-based OECD advises its 35 members, mostly developed countries, on economic development.
“There is significant uncertainty about the future direction of trade policy globally, in part because of falling public support for trade in advanced countries,” the report said.
“A rollback of existing trade openness would be costly, with a significant share of jobs in many countries linked to participation in global value chains,” it said.
Only last week, Trump’s administration made clear it did not feel bound by the World Trade Organization (WTO) rulings, saying it “will aggressively defend American sovereignty over matters of trade policy.”
Trump has also repeatedly trashed the North American Free Trade Agreement (NAFTA) and threatened to slap tariffs on imports from Mexico.
Trump also complained that the US gave up too much in the Trans-Pacific Partnership (TPP), an Asia-Pacific regional deal he scrapped immediately after taking office.
Meanwhile, the OECD said it stood by its 3.3 percent estimate for global gross domestic product (GDP) growth this year. It first gave the figure in November.
Most individual country forecasts were unchanged from the earlier estimate, but Britain is headed for 1.6 percent growth this year, up from the OECD’s earlier 1.2 percent projection. But several obstacles could still get in the way of the global recovery.
“Confidence has improved, but consumption, investment, trade and productivity are far from strong,” it said.
“Disconnect between financial markets and fundamentals, potential market volatility, financial vulnerabilities and policy uncertainties could, however, derail the modest recovery,” the report added.
One remedy would be for governments to use any leeway in public finances to help struggling demand.
“Countries should use increased fiscal space to implement effective fiscal initiatives that boost demand and make government taxes and spending more supportive of long-term growth and equity,” the OECD said.
European powerhouse Germany, which is running a record-high budget surplus, has recently come under increasing pressure from its EU partners to loosen its purse strings to push imports and consumer spending.


Libya’s NOC says production to rise as it seeks to revive oil industry

Updated 22 September 2020

Libya’s NOC says production to rise as it seeks to revive oil industry

  • Libya produced around 1.2 million bpd – over 1 percent of global production – before the blockade
  • Libya’s return to the oil market is sustainable

LONDON: Libya’s National Oil Company said it expected oil production to rise to 260,000 barrels per day (bpd) next week, as the OPEC member looks to revive its oil industry, crippled by a blockade since January.
Oil prices fell around 5 percent on Monday, partly due to the potential return of Libyan barrels to a market that’s already grappling with the prospect of collapsing demand from rising coronavirus cases.
Libya produced around 1.2 million bpd — over 1 percent of global production — before the blockade, which slashed the OPEC member’s output to around 100,000 bpd.
NOC, in a statement late on Monday, said it is preparing to resume exports from “secure ports” with oil tankers expected to begin arriving from Wednesday to load crude in storage over the next 72 hours.
As an initial step, exports are set to resume from the Marsa El Hariga and Brega oil terminals, it said.
The Marlin Shikoku tanker is making its way to Hariga where it is expected to load a cargo for trader Unipec, according to shipping data and traders.
Eastern Libyan commander Khalifa Haftar said last week his forces would lift their eight-month blockade of oil exports.
NOC insists it will only resume oil operations at facilities devoid of military presence.
Nearly a decade after rebel fighters backed by NATO air strikes overthrew dictator Muammar Qaddafi, Libya remains in chaos, with no central government.
The unrest has battered its oil industry, slashing production capacity down from 1.6 million bpd.
Goldman Sachs said Libya’s return should not derail the oil market’s recovery, with an upside risk to production likely to be offset by higher compliance with production cuts from other OPEC members.
“We see both logistical and political risks to a fast and sustainable increase in production,” the bank said. It expects a 400,000 bpd increase in Libyan production by December.
The Organization of the Petroleum Exporting Countries and allies led by Russia, are closely watching the Libya situation, waiting to see if this time Libya’s return to the oil market is sustainable, sources told Reuters.