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According to Deutsche Welle German radio, Germany and France are considering cooperation on developing a successor to the tank Leopard 2.
The current model has been in service since 1979, and aging Bundeswehr equipment is currently in stark focus. The German Defense Ministry announced its plans for the “Leo 3″ (as it’s likely to be nicknamed in Germany) in a report on Friday, May 22, to the German Bundestag, which was obtained by multiple media outlets. “Technologies and concepts will be investigated between 2015 and 2018 in joint studies also involving German industry,” Markus Grabel, a deputy minister in the German Defense Ministry told his parliamentary colleagues. He cited the Leopard 2’s long years of service as the reason that a new battle tank was required. The Leopard 2’s 50-year service life is set to expire in 2030. The tank, which came into service in 1979, was conceived as part of a plan for Cold War-era land defense. Germany commissioned more than 2,000 of them at the peak of the arms race of the early 1980s. Currently, however, only about 240 are in active service; but last month, citing the security situation in Ukraine, Defense Minister Ursula von der Leyen announced plans to reactivate 100 mothballed Leopard 2 tanks. In November of last year, von der Leyen also announced a move to add more than 100 additional “Boxer” armored personnel carriers to the Bundeswehr’s ranks. The Defense Ministry is in the process of drawing up a new “white paper” listing Germany’s security policies and goals for the present day. The manufacturer of the current Leopard 2, Krauss-Maffei Wegmann, is scheduled to fuse with French firm Nexter Systems in the course of this year. This has prompted media reports in Germany saying that the new Franco-German firm, with more than 6,000 staff and a combined turnover of around 2 billion euros ($2.2 billion), could be a strong candidate to win the contract to develop a new battle tank for the German Bundeswehr. In parallel Russia has unveiled a new-generation battle tank called Armata T-14 ahead of World War Two Victory Day celebrations on 9 May. Armata will come standard with a 125 mm cannon capable of firing several types of shells and even anti-tank guided missiles — but these munitions are already fielded by older and cheaper Russian tanks like the T-72. Though the cannon is a new design, Armata will be using ammunition manufactured for the T-72. The tank wil be a vast improvement on Soviet designs The Armata is highly automated compared to its Soviet predecessors, featuring an advanced targeting system that makes it faster and more accurate than older tanks. When Lockheed Martin said last year it was to use a European-built satellite as part of its offset offering in a $7 billion agreement with South Korea to buy F-35A fighters, the company was short on detail as to exactly what was involved in this unusual arrangement.
That veil of secrecy lifted a little Tuesday, when a seemingly innocuous press release posted on the website of Blenheim Capital announced the British offset experts had set up a subsidiary company in Luxembourg to "purchase, launch and provide satellite communications capacity, initially to the Asia Pacific region." Neither Lockheed Martin nor Blenheim would comment on whether there was a link between the statement last year and the offset companies announcement this week. But a European executive with knowledge of the satellite communications industry said Blenheim is part of a deal involving the supply of one military and two civil satellites as part of the offset arrangement between Lockheed Martin and South Korea. Lockheed agreed to a deal with South Korea for the sale of 40 F-35 combat jets last year. Some 50 percent of the value of the near $7 billion agreement is covered by offset arrangements. There are no official details of how any satellite arrangement might work, but the executive — who asked not to be named — said he believed that one route might involve discharging the offset through the provision of low-cost equity funding to support the satellite production and launch. Blenheim said in its release that the business "will be seeded with a $150 million investment," but declined comment on the source of those funds. Reuters last September reported Lockheed's F-35 international business development director, Steve Over, as saying the company would buy and launch the satellite by 2017. The satellites would be built in Europe, even though Lockheed Martin is a spacecraft supplier in its own right. Blenheim said in a press release on its website that its new Luxembourg subsidiary, known as Blenheim Space, had entered into a "supply agreement with a major satellite provider for an initial three satellites and is currently in negotiation with a global telecommunications provider to further develop the business." "The first satellite is nearing full technical definition with a view to launching in early 2018 with an established launch services provider. It is anticipated that the subsequent two satellites will be fully defined and scheduled in the next six months with launch anticipated in mid-2018," Blenheim said in the release. The offset provider declined to comment on the name of the satellite supplier. Airbus Defence and Space and Thales are Europe's main satellite builders. Lockheed declined to comment on why its own satellites are not being used in the deal. The European executive said the reason for not using Lockheed Martin-built satellites may be related to ITAR restrictions but it could just as likely be something such as a lack of suitable export finance in the US. Grant Rogan, the CEO of Blenheim Capital, said the company's space venture is "entering a market that is undergoing rapid change and evolution with smaller commercial players now able to work alongside major corporations and governments to enable cost-effective solutions to our growing need for fast and secure communications around the world." Offsets typically require overseas defense equipment suppliers to directly or indirectly invest cash and technology in the economic and social development of the nation buying the arms. The requirement for offsets differ from country to country but usually run between 50 and 100 percent of the contract price although sometimes they can be more than the value of the equipment or service contract itself. Lockheed Martin had offset obligations totaling just over $13 billion by the end of last year, according to its latest annual report. Entirely by coincidence, military communications capacity in Asia received a further boost earlier this week when the British Ministry of Defence announced it was repositioning one of its Skynet 5 satellites to the Asia Pacific region for the first time. A ground station is being built in Australia as part of a multimillion pound investment to provide the British with secure communications in the region. US offers to make the M777 artillery guns in India under Transfer of Technology and enable India to have an airborne artillery division. The M777 is the world's most successful 155 mm artillery gun which can be carried under a chopper on to mountain posts. It has been used effectively in the Afghan War, and also in Iraq.
Ultra Light artillery guns like the M777 are urgently required to give teeth and firepower to Indian Army formations deployed along long disputed Himalayan boundaries with China and Pakistan. It is central to arming India's new Mountain Strike Corps, with which India hopes to deter China. This artillery gun is made of titanium, which drastically reduces its weight as compared to other artillery guns, and enables it to be carried in aircraft to distant mountainous posts. India has an initial requirement of 145 ultra-light howitzers, and the total requirement is expected to be about 450 guns. The US has offered the sale of 145 M777 guns "Made in India" at a cost of about $ 750 million. This deal had stalled last year due to issues over price and offsets (countertrade obligations on the US). It was then offered as a direct import under a Government-to-Government sale under the US Foreign Military Sales (FMS) route. The US and the owners of the M777 manufacturing company, British Aerospace Systems have re-opened dialogue with India and changed their offsets offer to make it complaint with Indian requirements. The price has also been pegged at about $150 million lower than what was previously understood. In its fresh bid to revive the deal ahead of the Obama visit, the US has sweetened the deal by offering to shift the assembly line of the gun to India If India says yes to this deal, the M777 will be the first new artillery gun to be bought by India after the Bofors guns in the tainted 1986 deal. This will also significantly ramp up Indian capability to make modern artillery guns. Lack of artillery firepower is a big gap in the Indian Army capability The Indian subsidiary of the UK-based BAE Systems, a leading defence equipment manufacturer has approached the government seeking changes in policies related to defence offsets and procurement, foreign trade, and taxation for ease of operations.
With a presence of over 60 years, UK-headquartered BAE Systems is developing India as a key international market with a strategic vision to become a major and integral part of the domestic Indian defence and security industry. The proposals submitted by the company to the DIPP, Union ministry of commerce and industry, will be discussed at a meeting on January 12 in New Delhi, just a few days ahead of the visit of US President Barack Obama. The government is keen to get the support of the world’s leading defence companies, especially as it is looking to boost domestic manufacturing of defence equipment. The overseas defence company has recommended that in order to provide impetus to the ‘Make in India’ campaign, transactions relating to supply of a product assembled, integrated and tested and delivered to Indian OEM in country by the Indian Offset Partner (IOP) on behalf of the foreign OEM should be treated as ‘deemed exports’ for the purposes of offsets. Seeking amendment of the Foreign Trade Policy 2009-14, it has suggested that where the ministry of defence is the end user for goods and services supplied by an Indian manufacturer including DPSUs/OFB/DRDO, on behalf of the foreign OEM who has obtained a contract from the government under global tender process/inter governmental agreements such as foreign military sales under US procurement laws should qualify as ‘deemed exports.’ On the offsets policy in Defence, should be made more broad based to cover other sectors where the need for investment flows is equally acute, but where the ability of India to absorb investment if far greater and the offset commitments can provide the required push to enable investment flows. Also, that the OEM and their vendors be allowed flexibility in meeting the offset requirements both in terns of extent and content to work share in the programme. This would help build genuine capacity in the country through consolidated offsets rather than piecemeal offsets obligations by crafting sustainable business models for the global supply chain. Ahead of the January 12 meeting, the company was advised to meet joint secretary IPP and to explain the proposals relating to offsets. Comprehensive Economic and Trade Agreement (CETA): focus on offset
The CETA is the free trade agreement, not yet in force, between the European Union and Canada. On September 26, 2014, the Canadian government and Herman Van Rompuy, the President of the European Council, officially reveal the CETA content. On the chapter X “public procurement”, the article IV-6 strictly forbids civil offsets: “with regard to covered procurement, a Party, including its procuring entities, shall not seek, take account of, impose or enforce any offset”. Indeed, the article III-1 of the same chapter excludes this ban for essential security interests: “nothing in this Chapter shall be construed to prevent a Party from taking any action or not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war material, or to procurement indispensable for national security or for national defence purposes”. China agrees to invest $20bn in Venezuela to help offset effects of oil price slump © The Guardian1/9/2015 Venezuela’s president Nicolás Maduro says money will be used for housing, technology, energy and infrastructure projects.
China has agreed to invest more than $20bn (£13.2bn) in Venezuela to help it overcome an economic slump exacerbated by plummeting oil prices, the Venezuelan president has announced. Nicolás Maduro has been in Beijing since Monday to participate in a major meeting between China and the Community of Latin American and Caribbean States (CELAC) – a coalition of 33 countries that was formed in 2011. He announced the $20bn deal after meeting with the Chinese president, Xi Jinping. “We rounded up more than $20 billion in investment,” Maduro told Venezuela’s official AVN news agency. The Venezuelan president did not give further details, and it remains unclear whether the sum represents a fresh arrangement or is part of pre-existing oil-for-loans deals. Beijing has not confirmed Maduro’s claim, and even if the investments are new, it is far from certain that this is money that the Venezuelan government can use for imports or debt repayments. Maduro told the Caracas-based VTV television channel that the money will be used for housing, technology, energy and infrastructure projects. “With the China Development Bank and Bank of China we are strengthening a series of financing deals that have been approved on this visit.” Xi said on Thursday China would invest $250bn in Latin American countries over the next decade. The move is part of an attempt by Beijing to boost its influence in a region that tends to look to the US as its largest trading partner. Beijing has extended $50bn of credit to Venezuela since 2007, mostly in exchange for oil shipments. The country exports about 600,000 barrels of oil to China a day, nearly half of which go towards repaying its loans. Last July, China offered to loan Venezuela $4bn while Xi visited Caracas during a 10-day tour of Latin American. He described Maduro as “an old and good friend of the Chinese people” at a meeting on Wednesday. “It can be said that the development of China-Venezuela relations and win-win positive cooperation have been raised to a new level,” Xi said. Maduro’s popularity has plunged with his country’s economy – his approval rating stood at 24.5% in November, less than half of what is was when he took office. Analysts say that deepening social, political and economic crises under his leadership presents a challenge to Beijing, which forged a strong diplomatic relationship with Hugo Chávez, the country’s leader from 1999 until his death in 2013. “China created a special relationship with Chávez when he was alive and well, and in political control of the situation in Venezuela – even if some of his economic policies were ultimately unsustainable,” said Matt Ferchen, an expert on the China-Latin America relationship at Tsinghua University in Beijing. “And Maduro today is dealing with some of these outcomes. “China is now dealing with the aftermath of this, as the situation in Venezuela has significantly deteriorated … [China] holds all the cards for a place that’s falling apart. So what do they do with that? Just looking at the oil side of things – even if they put forward another however many billions of dollars, there’s zero guarantee that that will line up with more oil flow.” Crude oil makes up 95% of Venezuela’s exports, and with oil prices plunging by more than half since the summer fears have grown that the country could default on its loans. Petrol in Venezuela is now the cheapest in the world, at 4 cents a gallon, even as its citizens face shortages of basic goods like toilet paper, cooking oil, and detergent. Maduro has blamed the economic woes on a plot by political opponents. “Sometimes there’s an international conspiracy to try making Venezuela look like it’s bankrupt,” he said in Wednesday’s broadcast. “Venezuela has its own economic power, with a productive people, with gigantic economic potential, with the largest oil reserves in the world.” Before the CELAC forum convened in Beijing this week, China also pledged $7.5bn in financing for Ecuador, another left-leaning Latin American state that has been hit hard by falling oil prices. “My sense is that Maduro is kind of crashing the party,” said Ferchen. “Chávez used to do this too – he would show up in Beijing, and China had to put on a good face for him. But it wasn’t always necessarily a cause for joy.” Interested in knowing more about #Countertrade and more especially #Offset? Contact us Russian Industry and Trade Minister Denis Manturov has proposed military cooperation with Thailand and has also expressed interest in buying a lot of Thai rubber, oficials say.
In talks on Friday with Deputy Prime Minister and Defence Minister Prawit Wongsuwon, Mr Manturov proposed military cooperation that would cover personnel development, technological transfer and weaponry procurement. Gen Prawit suggested both sides form a joint working group to consider Thai weaponry needs and that Russia consider countertrade deals for Thai farm products for mutual benefit. Mr Manturov also met Prime Minister Prayut Chan-o-cha. Gen Prayut said the Russian minister proposed to expand bilateral relations, especially those concerning trade. He said Russia started to import frozen pork from Thailand last December and he hoped it would import more Thai farm products, food and natural rubber in the future. He quoted the Russian minister as saying that Russia would need a large amount of natural rubber from Thailand. For more news, see http://www.bangkokpost.com/print/455712/ Trade is what keeps economies and nations alive. Trade demands create domestic production and the inflows of funds from overseas. Countries that have limited domestic resources, such as Singapore, must be able to keep up with domestic production of various goods and services so as to maintain a trade surplus, as they cannot produce everything they need in within their own borders. Exporting is increasing yearly, globally. This is due to various factors. First, both large and small firms export – not just large firms. Also, under the World Trade Organization (WTO) there has been a decline in trade barriers. This holds true for other regional trade agreements such as the European Union (EU) and North American Free Trade Agreement (NAFTA).
When a firm decides to export to another country, it needs to address the following:
Opportunities and Risks Exporting is a means to increase a company’s overall market size. This usually occurs when a company has reached a certain saturation or limit in its domestic market and it needs to expand. This is why large firms tend to aggressively explore new export possibilities. While it is true that many small firms export, they tend to be more reactive and let opportunities come to them. Many companies, especially small, tend to underestimate the potential of the export market, and are overwhelmed by the intricacies, laws, and regulations surrounding exportation. Common pitfalls of exporting are:
Export Expertise However, if the proper groundwork is done, firms can avoid many of the aforementioned perils of exporting. For example, some countries offer exportation advice and help to local companies. Another means is via export management companies (EMCs). These are companies that provide all the services a firm needs to export. They can work as the export department for a company or simply on behalf of the exporter. Financing Transferring of funds internationally, to parties with which one has never done any prior business is often complicated, as there will likely be a lack of trust between them. To overcome this lack of trust, reputable international banks are included in the transaction. 1. Importer receives bank’s promise to pay on behalf of importer 2. Bank promises to pay exporter on behalf of importer 3. Exporter makes shipment to the bank, trusting the bank to pay 4. Bank pays the exporter 5. Bank sends shipment to importer 6. Importer pays the bank A letter of credit can be issued by a bank on behalf of the importer. This states that the bank will pay a certain amount to another party (usually the exporter), upon receipt of certain documents. A letter of credit instills trust as a bank is involved. A draft, or bill of exchange, is the means normally employed for international payment. A draft is a document from an exporter that instructs an importer (or an importer’s agent) to pay a certain amount of money at a certain time. There are two types of drafts: Sight drafts and time drafts. Sight drafts demand payment upon presentation, while time drafts request payment in 30, 60, 90, or 120 days. A bill of lading is a document from the common carrier which transports the good to the exporter. It is a receipt, a contract, and a document of title. Financial Export Assistance Companies that wish to export can look to their government for guidance and assistance in their financial matters. Countertrade At times, standard goods-for-cash payment structures do not work, are cumbersome, expensive, or simply impossible. In these cases, companies can adopt countertrade. Countertrade involves the exchange of goods in barters or other ways in exchange for money. For example, if a nation’s currency is not exchangeable or no good overseas, they may offer a commodity or other product in place of cash. Countertrade was common in the USSR in the 1960s when its currency was nonconvertible. It was their only means of purchasing foreign goods. Countertrade grew in the 1980s as many other nations did not have the foreign reserves required to make imports. Countertrade increased yet again during the Asian financial crisis in 1997, as many currencies became devalued and had severely limited buying power. One example of countertrade was when the USSR paid Coca-Cola in vodka. Poland did the same with Coca-Cola but paid in beer. Countertrade can be separated into five variants: Barter, Counterpurchase, Offset, Buyback or Compensation, and Switch Trading. Countertrade and its variants can be beneficial when it offers a company a means to finance an export transaction in the absence of other means. Companies that do not wish to engage in countertrade activities can lose export opportunities to other domestic competitors that may be willing to enter such agreements. Some governments may require that exports undertake countertrade when dealing with certain other countries. However, countertrade can often result in firms ending up with quantities of unusual products that they find be difficult to resell or dispose of. In such cases firms may have to establish in-house trading and distribution divisions to deal with the countertrade goods. For this aspect, and other aspects of countertrade, Taxadvice can assist you. Countertrade is best handled by large, diversified, multi-national corporations that have existing distribution channels and networks, but with proper assistance it is also a very useful instrument for smaller companies. |
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