GENEVA, Dec. 19--The United States has failed to scrap a series of illegal subsidies paid to American cotton growers, the World Trade Organization officially announced Tuesday, a ruling that could open the door to Brazilian trade sanctions worth billions of dollars (euros).
The result is a major victory for Brazil’s cotton industry and for West African countries that have claimed to have been harmed by the American payments, AP reported.
“The United States has failed to comply,“ the three-member WTO compliance panel said.
Details of the 188-page decision have been known since July, when the panel delivered its interim findings confidentially to the US and Brazil. The two nations confirmed then, and again in October, that the panel found that export credit guarantees and US subsidies under the 2002 Farm Bill unfairly helped American cotton farmers undersell foreign competitors.
Brazil has reserved the right to impose annual sanctions of up to $4 billion (2.8 billion euros) on the United States, but would probably seek less in retaliatory measures because the US has removed some of the offending subsidies.
The office of the US trade representative in Washington said it was considering a final appeal.
“We are very disappointed with the compliance panel’s findings,“ said spokeswoman Gretchen Hamel. “We continue to believe that support payments and export credit guarantees under our programs are fully consistent with our WTO obligations.“
Despite repeated legal setbacks, Washington looks set to continue with the payments. The US Senate joined the House of Representatives on Friday in approving a new $286 billion (198 billion euros) farm bill that would leave cotton programs largely intact for the next five years. US President George W. Bush has threatened to veto the legislation, saying it costs too much and it should instead be cutting subsidies at a time of record-high crop prices.
Senator Saxby Chambliss, the ranking Republican on the agriculture committee, said the farm bill enjoys the support of US farmers and ranchers.
“Critics of the US cotton program and of all farm programs will no doubt call for drastic changes to the farm safety net“ as a result of the WTO decision, Chambliss said.

Japanese government estimates that the overall consumer price index will rise by 0.3 percent in fiscal 2008 following a projected 0.2 percent increase in the current year.

TOKYO, Dec. 19--Japan’s economy is likely to grow at a faster pace in the financial year from April 2008, supported by brisk domestic demand, according to an economic outlook approved by the cabinet Wednesday.
The government expects gross domestic product (GDP) to grow 2.0 percent in real terms in the year, compared to a revised estimate of 1.3 percent in the current year, AFP reported
On a nominal basis, or before adjustments for changes in prices, Japan’s GDP is projected to grow at a faster rate of 2.1 percent with consumer prices projected to rise for the third straight year.
But the Cabinet Office said it would closely monitor the impact on the Japanese economy of volatile financial and capital markets stemming from the subprime mortgage meltdown in the United States and higher crude oil prices.
The government estimates that the overall consumer price index will rise by 0.3 percent in fiscal 2008 following a projected 0.2 percent increase in the current year as prices of fuel products are expected to remain high.
Economy Minister Hiroko Ota said that in the current financial year, Japan would see GDP growth of 1.3 percent--lower than previously forecast. The Bank of Japan is this week expected to peg interest rates at 0.5 percent, BBC wrote.
Lackluster growth and lingering deflationary pressures in the world’s second largest economy mean that the bank is expected to refrain from raising its key rate until the second half of 2008, analysts say.
Ota said that while domestic demand would be playing a key role in boosting the nation’s economy, growth in consumption would be limited because “wage increases will likely continue to be moderate“.
He also warned that if the slowdown in the US--Japan’s largest export market--continued then next year’s growth “may be lower than the projection“. “Higher crude oil prices could also have an impact,“ Ota said.

From the depths of Earth’s oilfields to the rarefied atmosphere of space, evidence of China’s modernization seemed to be everywhere in 2007--a rise set to be enshrined with next year’s Olympics.
China will soon overtake Germany as having the world’s third biggest economy after a fifth straight year of double-digit growth, and the Asian giant’s expanding wealth had huge impacts at home and abroad over the past 12 months, AFP wrote.
In Shanghai, the value of China’s stock market climbed spectacularly as investors continued to plough in their new riches, while around the country the building of skyscrapers and new factories pushed ahead at a frantic pace.
But while the rest of the world enjoyed the countless cheap products exported from China and the increasing economic opportunities offered inside the country, its growing influence in world trade also caused problems.
The United States and Europe hauled China before the World Trade Organization over a range of what they alleged were unfair trade practices, with one of the complaints from the US side over rampant copyright abuse.
China’s tight control over its currency remained one of the biggest points of tension with its major trading partners, who believe the yuan is being kept artificially weak and thereby giving Chinese exporters an unfair advantage.
The “Made in China“ reputation also took a battering throughout the year as a wide range of exports to the United States, Europe and elsewhere failed to meet safety and quality standards.
But China’s export juggernaut withstood all these problems, and the nation’s trade surplus is on track for a record annual total of well over $200 billion.
China’s rise in other spheres generated many other concerns around the world.
But the increasingly confident Asian power--led by President Hu Jintao who was installed in October as ruling Communist Party chief for another five years--shrugged off the criticism and ploughed ahead.
One of the most contentious issues was China’s determination to deal with so-called pariah regimes to secure resources to fuel its booming economy.
Western critics lambasted China for not taking into account human rights and geopolitical considerations when signing oil contracts with governments such as the one in Sudan, which the US administration has accused of genocide.
One other high-profile act from China was its successful shooting down of a satellite in January--becoming only the third nation to do so--in a test that raised global concerns of a renewed arms race to weaponize outer space.
While the United States and others expressed concern, China pressed on with what it insisted was its peaceful space program and in October sent its first lunar probe into orbit.
One undeniably negative impact of China’s economic rise was the consequences for the environment.
The International Energy Agency said in November that China would this year overtake the United States as the world’s biggest polluter of greenhouse gases, which are blamed for global warming.
The Chinese capital’s polluted skies were a particular concern for the organizers of the 2008 Beijing Olympics.
International Olympic Commission chief, Jacques Rogge warned events at the Games may be postponed if the pollution was too severe. The Olympics also offered a platform for critics of China’s human rights record, and they offered a hint of their intentions for the August Games during the one-year countdown with a series of protests.
But preparations for the Olympics were otherwise almost perfect and China’s hopes to use the Games as a global coming-of-age party remained well on track.
“The Olympics are all about China being accepted as a major power in the global system and that they are capable of hosting a major global event,“ said Brian Bridges, a political professor at Lingnan University in Hong Kong.

FRANKFURT, Germany, Dec. 19--The European Central Bank on Tuesday opened its credit tap wide open, pumping a whopping 348.6 billion euros--the equivalent of more than half a trillion dollars--into money markets to keep banks from Finland to France flush with the cash they need to operate.
The move, along with another liquidity infusion by the Bank of England, was aimed at keeping jittery markets calm amid a credit squeeze caused by the US subprime crisis, AP wrote.
So far, it seemed to be soothing stock investors, with most equity markets in Europe and the US higher, including Germany’s DAX which was up 1 percent to 7,904.52 and Wall Street, where the Dow was up more than half a percent to 13,245.07.
Banks have been afraid to loan each other money for short-term needs amid the credit squeeze, driving up short term rates. The central banks are sharply stepping up their normal role as providers of liquidity, a job that usually gets far less attention than their interest rate moves.
The ECB, which oversees monetary policy among the 13 nations that use the euro, said it allocated the exceptionally large amount of 348.6 billion euros ($502.54 billion), in its main refinancing operation, a process that also boasts duration of 16 days, meaning it will not mature until after the New Year, on Jan. 4.
The bank said its lowest, or marginal bid, rate that it accepted was 4.21 percent, matching the weighted average allotment.
The ECB unusually pledged to satisfy any and all bids at or above 4.21 percent--the weighted average allotment rate of the main refinancing operation that settled on Dec. 12--at the main refinancing tender Tuesday, to smooth out continued heavy demand for liquidity in the euro-zone banking system.
The ECB also said that 390 banks and financial institutes submitted bids totaling 377.1 billion euros ($542.76 billion) at rates of between 4 percent and 4.45 percent.
That maximum bid rate left analysts puzzled about why the banks that bid did so at that level, given that on Monday, the ECB said it was an honor all bids were at or above 4.21 percent--the weighted average allotment.

MOSCOW, Dec. 19--Russian President Vladimir Putin on Tuesday said the construction of two new energy pipelines to southern Europe would boost the energy security of the continent as a whole.
The pipelines will “give a major boost to the energy security of the entire European continent,“ Putin said at a press conference shown on state television after talks with Greek Prime Minister Costas Caramanlis in the Kremlin, AFP reproted.
Europe depends on Russia for around a quarter of its energy consumption.
Putin was referring to two planned pipelines, one to pump Russian oil from the Black Sea to the Aegean and another one to pump Russian gas from Russia to Bulgaria and onwards to central and southern Europe.
A deal on the Burgas-Alexandroupolis Oil Pipeline was signed earlier this year and construction of the 900-million dollar (624-million euro) line is expected to start next year. The pipeline will carry up to 50 million tons of Russian oil per year.
The South Stream Gas Pipeline is planned to run 900 kilometers (560 miles) under the Black Sea and is being developed jointly by Gazprom and Italy’s ENI, which signed a deal earlier this year.
South Stream will have a capacity of 30 billion cubic meters of gas per year.
Putin was speaking on the same day that Dmitry Medvedev, the chairman of state gas giant Gazprom, launched a new gas field that he said would also boost Europe’s energy security.
“It will make an important contribution to the energy security of Europe,“ Medvedev said at a joint press conference in Moscow with German Foreign Minister Frank-Walter Steinmeier at which the two pressed a button starting production at the Russian-German project in northern Siberia.
“We are pleased with this joint success,“ Steinmeier said at the event.
Medvedev also hailed the project, in which German chemicals giant BASF holds a 25 percent minus one share stake, as an example of Russia’s openness to foreign partnerships and a boost to the global competitiveness of the two Russian and German companies.

Commerce Minister Kamal Nath

NEW DELHI, India, Dec. 19--Foreign investment in India jumped 65 percent in the first half of the fiscal year that began in April compared with a year earlier, the country’s commerce minister said Tuesday.
Commerce Minister Kamal Nath said India saw $7.2 billion in inflows, retaining its place as the second most attractive foreign investment destination after China, according to a Press Trust of India agency report. “FDI inflows continue with great momentum,“ said Nath.
India received a total of $15.7 billion in foreign investment in 2006-2007, more than a 100 percent increase from a year earlier.
India’s services sector, dominated by the call centre business, saw the biggest investment followed by telecom services and real estate, the report said.
Even with increasing investment however, India lags far behind China, which receives at least five times as much foreign investment.
India launched market reforms in 1991 but their implementation has been spotty and has slowed drastically in recent years.
India’s communists, who offer crucial outside support to the Congress-led government, bitterly oppose foreign investment in the retail sector and resist raising caps on foreign investment in other areas.

KARACHI, Pakistan, Dec. 19--Home remittances sent by overseas Pakistanis during July-November, 2007 rose to $2.587 billion, recording a 23.62 percent growth against the same period of the year before.
This amount included $0.97 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs), APP wrote.
The monthly average remittances during five months comes out to $517.41 million as compared to $418.56 million during the same corresponding period of the last fiscal year.
The inflow of remittances in the July-November, 2007 period from USA, Saudi Arabia, UAE, PGCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $733.76 million, $481.81 million, $423.00 million, $380.00 million, $197.41 million and $76.09 million, respectively as compared to $533.46 million, $398.99 million, $318.12 million, $91.47 million, $180.10 million and $62.57 million, respectively during July-November.
Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first five months of the current fiscal year 2007-08 amounted to $294.03 million as against $306.93 million in the same period last year.
During the last month (November 2007), Pakistani workers remitted an amount of $505.58 million, showing a rise of 12.70 percent with $448.61 million sent home in November 2006.
Earlier, Prime Minister Shaukat Aziz said that overseas Pakistanis are excellent ambassadors of the country and are helping Pakistan by remitting over $5.5 billion per year in remittances to the country.
The prime minister said that over seven million Pakistanis are living in different parts of the world, including North America, Europe, Middle East and Far East.
He said that these people are performing important tasks in their host countries and improving Pakistan’s image as well as improving their standard of living and that of their families by remitting money to homeland.
Shaukat Aziz said that the government would encourage more Pakistanis to seek skilled jobs overseas and has launched several initiatives in this connection for vocational and technical training so that Pakistanis can attract higher wages when they go abroad.