Wine and olives: No, not a sexy evening, but two trade spats
- Wine and olives: Two trade spats
- Callidus denies allegations, shares sink
- Stocks sink amid U.S.-North Korea tensions
- New York poised for weaker open
- ‘Traders are on red alert’
- Canadian dollar just above 78.5 cents
- CI in $780-million deal for Sentry
- Spectrum sale boosts Quebecor results
- Canadian Tire profit rises
- Canada Goose posts smaller loss
Wine and olives
Wine and olives may sound like the prelude to something sexy. But, alas, not in this case.
They each mark a trade spat for the Trump administration, with wine also to be part of NAFTA negotiations.
(To my knowledge, there are no trade disputes involving oysters, which are big products for B.C. and Atlantic Canada.)
I'm not sure which comes first in a romantic dinner – wine, presumably – but let's start with olives given that they're what the Commerce Department and United States International Trade Commission most recently targeted.
They're probing allegations that ripe olives from Spain are being dumped in the United States, or are being subsidized.
Commerce Secretary Wilbur Ross announced the antidumping and countervailing duties probes in mid-July, investigations that involves about $71-million (U.S.) in imports as the domestic industry erodes.
Dumping involves selling in a foreign market at below the cost at home. Subsidies, of course, are forms of support from home governments.
These probes, involving Spanish olives used as everything from appetizers to pizza toppings, were prompted by complaints from Bell-Carter Foods Inc. and Musco Family Olive Co.
On Friday, the USITC voted to forge ahead with its investigation, saying in a statement that it "determined that there is a reasonable indication that a U.S. industry is materially injured by reason of imports of ripe olives from Spain that are allegedly subsidized and sold in the United States at less than fair value."
The Asociación Española de Exportadores e Industriales de Aceituna de Mesa has rejected the allegations, saying it works within the laws of the World Trade Organization.
The wine, in turn, is a Canadian issue, related to British Columbia.
The former Obama administration went to the WTO over B.C.'s decision to allow the sale of only local wines on certain grocery shelves.
Now, the Trump administration is flagging the issue as one for the renegotiation of the North American free-trade agreement, set to begin next week.
"Market access issues have arisen in Canada with respect to dairy, wine, grain and other products – barriers that the current agreement is unequipped to address," the Office of the United States Trade Representative said in a mid-July statement with details of America's focus for the talks.
It's a big issue for B.C., which has said it believes it's onside with the law.
"The press release's reference to wine reflects an escalation of the USTR's long-standing complaint about provincial policies on alcohol retailing, which, it's argued, discriminate against foreign producers," Bank of Montreal deputy chief economist Michael Gregory and senior economists Aaron Goertzen and Alex Koustas said in a report on the upcoming negotiations.
"This will be a matter of considerable importance for domestic wineries, which export only around 10 per cent of production while yielding more than 70 per cent of the domestic market to imports – nearly one-quarter of which originate in the U.S.," they added.
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Traders would require nerves of steel to start buying into the stock market now, given the standoff between the U.S. and North KoreaDavid Madden
Screens are flashing red this morning as global markets sink amid rising tensions between the U.S. and North Korea.
Tokyo's Nikkei lost less than 0.1 per cent, while Hong Kong's Hang Seng slumped 1.1 per cent, and the Shanghai composite 0.4 per cent.
In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 0.3 and 1.1 per cent by about 8:5 a.m. ET.
New York futures were also down, and the Canadian dollar was down to almost 78.5 cents (U.S.).
"Traders are on red alert as the mention of war has sent them running for cover," said CMC Markets analyst David Madden.
"In tense situations like this, equity markets move lower exceptionally fast, and investors don't want to be caught on the wrong side of the markets, so they are getting out now," he added.
"Traders would require nerves of steel to start buying into the stock market now, given the standoff between the U.S. and North Korea."
CI in deal for Sentry
CI Financial Corp. is expanding in a $780-million deal for Sentry Investments Corp.
The cash-and-stock deal combines "two of Canada's largest independent active asset managers," CI said in a statement.
The acquisition of Sentry will bring CI's assets under management to about $140-billion, up 16 per cent.
- Callidus Capital denies it is subject to whistle-blower complaints
- Quebecor earnings boosted by spectrum sale to Shaw
- Canadian Tire profit rises, sales pick up in June after slow spring
- Canada Goose posts smaller quarterly loss