Showing posts with label Panama Canal. Show all posts
Showing posts with label Panama Canal. Show all posts

Tuesday, 19 March 2024

United States: Disrupter of Global Trade

Washington has taken further steps to increase pressure on Tehran. This time, the White House, despite the negative impact of its decisions on the global stage, has leveraged its political influence on Panama to counter Tehran’s expansion of foreign policy.

The US has opted to exert pressure on Panama to prohibit Iranian vessels, sanctioned by Washington, from flying its flag. During a visit to Panama on Wednesday, Abram Paley, Deputy Special Envoy in the US Office of the Special Envoy for Iran, stated that the measure aims to prevent ships from being utilized for what he termed as illegal actions.

Paley emphasized in a statement that the US is endeavoring to enhance the enforcement of sanctions as part of a broader diplomatic outreach campaign. "Iran and affiliated entities are attempting to circumvent sanctions here in Panama," he remarked. "They seek to exploit Panama's flag registry."

"We anticipate that the Panamanian government will continue to collaborate with us in accordance with their domestic legislation and international commitments," Paley added.

Washington's recent action follows shortly after Iranian Oil Minister Javad Owji declared that Tehran's oil sales would remain unaffected by sanctions, even if Donald Trump were to win the US presidential elections in November.

Panama leads globally in providing flags of convenience, enabling shipping companies to register their vessels in countries with which they have no connection — for a fee and exemption from oversight.

It appears that the White House intends to reinforce the implementation of existing sanctions as the regional crisis escalates. This move by Washington stands in stark contrast to what Washington's Iran hawks call Biden's appeasement policy in West Asia.

The United States has consistently wielded its power as leverage to advance its interests, regardless of the potential repercussions on the regional and international scale. This approach is evident in the consistent US formula for intervening in the policy-making systems of other countries.

For instance, Washington's policy towards Caracas and the imposition of sanctions on Venezuela have served as tools for intervening in Venezuela's political system. Similarly, the US employs similar tactics in West Asia, as evidenced by the array of American military bases in the region and unwavering support for Tel Aviv. These actions reflect a policy that prioritizes Washington's interests above all else, irrespective of their broader effects.

The Biden Administration's pressure on Panama exemplifies this approach, indicating that Washington is not inclined to pursue diplomatic channels in its dealings with Iran. Instead, the primary objective appears to be preventing the Islamic Republic of Iran from expanding its political influence.

Despite the Biden administration's initial endorsement of a more conciliatory policy in West Asia and its expressed willingness to revive the 2015 Iran nuclear deal, formally called the JCPOA, the White House has demonstrated a lack of political resolve to take concrete actions. Moreover, the Biden administration has yet to lift any sanctions on Iran, failing to demonstrate a tangible commitment to resolving issues through diplomatic means. 

The recent US stance in Panama and its maneuver in the Red Sea have triggered alarm bells regarding their potential ramifications on the seamless flow of global trade. What emerges from these developments is a pattern of US behavior wherein the pursuit of its own interests takes precedence, even at the expense of disrupting international commerce. 

Take, for instance, the situation in Panama. The US exertion of pressure seems to transcend the immediate issue at hand, instead serving as a means to constrain Iran's influence. This strategic maneuver underscores Washington's inclination to prioritize geopolitical objectives over the broader interests of global trade. Similarly, the US confrontational stance towards certain factions in the Red Sea region has stirred unnecessary friction along a crucial trade artery.

Such actions raise legitimate concerns about the US approach to international affairs. By prioritizing its own objectives over collaborative efforts aimed at fostering global economic stability, the US risks sowing seeds of discord that could have far-reaching consequences. Indeed, this prioritization of unilateral interests over multilateral cooperation threatens to set off a chain reaction of instability, imperiling the very foundation upon which the global economy rests.

As the world navigates through increasingly complex geopolitical terrain, it becomes imperative for nations to uphold principles of cooperation and mutual benefit. The recent US actions serve as a sobering reminder of the dangers inherent in a myopic pursuit of national interests at the expense of broader global imperatives. Only through concerted efforts to promote dialogue, understanding, and collaboration can we hope to safeguard the integrity of the global trade system and steer clear of the choppy waters of economic uncertainty.

 

 

Wednesday, 25 May 2022

Suez Canal revenues to rise by 27% for financial year ending June 30, 2022

According to Finance Minister Mohamed Maait of Egypt, Suez Canal revenues are expected to rise to US$7 billion for the financial year 2021-22 ending on June 30, 2022, up 27% from US$5.5 billion for the last year.

Calendar year 2021 saw canal revenues hit a record US$6.3 billion, up 13% from US$5.6 billion seen in 2020.

The canal is the fastest route between Europe and Asia, and despite a 10% increase in toll rates implemented in March 2022, still saves shipping lines potentially hundreds of thousands of dollars in time and fuel, compared to sailings around the Cape of Good Hope.

Asian ship owners have been among the most vocal to complain about the toll hike, in addition to tariff increases introduced at the beginning of February this year.

Seatrade Maritime News calculates a 9.4% rise in fees for a southbound transit by a standard dry bulk vessel, as well as a similar increase in rebate, as of today, as compared to rates in November 2020.suez_canal_table.JPG

Egypt mobilized public support for a widely subscribed national public debt program to finance a US$8.5 billion canal expansion, finished in 2015. Completion of further works is expected next year.

With container shipping lines reporting profits of around US$190 billion last year, US$60 billion in the first quarter of 2022, Egypt can be expected to maintain the pressure on toll rates for some time to come.

Despite the fact that tourism flows to Egypt declined by 35% due to the Russian invitation of Ukraine, Maait expects tourism revenues to hover around US$12 billion by the end of the financial year.

The canal, as well as tourism receipts are important to Egypt’s GDP, which the International Monetary Fund expects to reach US$435.6 billion in nominal terms in 2022.

The Asian Shipowners’ Association (ASA) member hit out at recent proposed toll changes at both the Panama Canal and Suez Canal.

At a meeting on April 18, 2022, ASA delegates noted the significance of the Suez and Panama canals as critical global infrastructure and called for the canals to avoid “sudden and significant” changes in tolls and charges.

“Delegates expressed their confusion against new surcharges introduced on March 01, 2022 with only 48 hours prior notice, then to be revised on May 01, 2022 by the Suez Canal Authority (SCA), which resulted in roughly a 7% to 20% toll increase for many types of vessels, in addition to a 6% tariff hike for most types of vessels, implemented on February 01, 2022,” said ASA.

Uncertainty around how surcharges operate could undermine the stability of the Canal, said the committee, calling for the industry to express its concerns to SCA.

ASA delegates some positives in the Panama Canal’s new toll system proposed earlier in April 2022 by the Panama Canal Authority (ACP). Delegates said the ACP had given sufficient notice and a formal consultation period, but were concerned that significant toll hikes could affect the long-term viability of the canal, “as the mark-up for some types of vessels may exceed 100% in 2025, compared with the current toll.”

The ASA meeting also discussed the review of anti-trust exemptions for carriers on the US, a policy delegates said was “indispensable for the healthy development of the liner shipping industry and the maintenance of a reliable service to the entire trading community.” ASA will continue its efforts to maintain anti-trust exemptions for liner shipping agreements.

 

Friday, 22 April 2022

Asian Shipowners’ Associations oppose hike in toll changes by Panama and Suez Canals

According to Seatrade Maritime News, Asian Shipowners’ Associations (ASA) are critical of recent proposed toll changes at both Panama Canal and Suez Canal Authorities. At a recent meeting, ASA delegates expressed concern and disappointment over the proposed hike in canal toll changes.

They reiterated the significance of Suez and Panama canals as critical global infrastructure and called for the canal authorities to avoid sudden and significant changes in tolls and charges.

“Delegates expressed their confusion against new surcharges introduced on March 01, 2022 with only 48 hours prior notice, then to be revised on May 01, 2022 by Suez Canal Authority (SCA), which resulted in roughly a 7 to 20 percent increase in toll for different types of vessels, in addition to a 6 percent tariff hike for most types of vessels, implemented on February 01, 2022,” said ASA.

Uncertainty around how surcharges operate could undermine the stability of the Canal, said the committee, calling for the industry to express its concerns to SCA.

ASA delegates appreciated some positives in the Panama Canal’s new toll system proposed earlier in April 2022 by the Panama Canal Authority (ACP). Delegates said the ACP had given sufficient notice and a formal consultation period, but were concerned that significant toll hikes could affect the long-term viability of the canal, “as the mark-up for some types of vessels may exceed 100% in 2025, as compared to the current toll.”

The ASA meeting also discussed the review of anti-trust exemptions for carriers on the US, a policy delegates said was “indispensable for the healthy development of the liner shipping industry and the maintenance of a reliable service to the entire trading community.” ASA will continue its efforts to maintain anti-trust exemptions for liner shipping agreements.