AFP

Ministers were frantically haggling through the night into Thursday at the World Trade Organization in a bid to salvage deals on food security, fishing and combating Covid-19.

The global trade body’s 164 members added on an extra fifth day of talks to try to break the deadlock gripping the WTO headquarters in Geneva.

But despite relaxing their original Wednesday deadline, countries were trading concessions through the early morning hours to cobble together a wide-ranging set of results.

Countries have hit a brick wall trying to secure each separate deal on its own merits, so are now making tit-for-tat offers in an attempt to keep them all afloat.

“They’re looking at a broad package: what can be achieved, trade-offs in different areas,” a Geneva trade official told reporters.

“It’s basically, ‘what can I get here, (in exchange) for this’,” the official said.

“We’re into the real bargaining part of the meeting. This is where all the action is happening and hopefully where some deals are going to be struck.”

– Juice and sandwiches –

US Trade Representative Katherine Tai was seen heading in and out of the late-night talks, while a giant tray of sandwiches was brought in to keep the deal-makers going.

“It’s going to go all night. Everything. People look tired,” the Geneva-based trade official told AFP, adding: “They’re negotiating, which is good news.”

He said the talks had run out of juice — but only fruit juice, rather than energy.

The WTO is hoping to prove it still has a role to play in tackling big global challenges.

WTO chief Ngozi Okonjo-Iweala, who took over in March 2021, has hinged her leadership on breathing new life into the sclerotic organisation.

“Progress is being made but it needs a little more work and more time,” the director-general said.

“It requires that we work and work nights; whatever it takes.”

The last WTO ministerial conference, in December 2017 in Buenos Aires, was widely considered a flop, closing without a major agreement and Okonjo-Iweala wants no repeat.

The global trade body only takes decisions by consensus among all 164 members, making deals all the harder to conclude.

Okonjo-Iweala was hoping to pull off a coup by securing a long-sought deal on curbing harmful fishing subsidies.

– India in the firing line –

Negotiations towards banning subsidies that encourage overfishing and threaten the sustainability of the planet’s fish stocks have been going on at the WTO for more than two decades.

Diplomats say a deal is closer now than ever before.

But India threw a spanner in the works late Tuesday, insisting it would not sign up without a 25-year exemption — far longer than many are comfortable with.

Some emerging from the negotiating rooms are blaming Indian intransigence on not just fisheries but across the board.

Citing their “destructive tactics”, one diplomatic source close to the negotiations said: “The question is are they really going to pull the whole edifice down, or whether they’re willing to go along with the views of the vast majority of members.”

On fishing, the source added: “Now is the time… civil society wants this, fishing communities want it, and our fish need it.”

WTO reform, agriculture and e-commerce deals are also on the table.

– ‘Saving WTO, not lives’ –

“There are things that are going in the right direction and others that unfortunately are not progressing very much,” France’s foreign trade minister Franck Riester told reporters before the all-night talks, with health issues looking among the most promising.

One pandemic-related text seeks to tackle supply constraints faced by certain countries in getting hold of Covid-fighting tools.

Ministers are also discussing the possibility of imposing a temporary waiver on Covid-19 vaccine patents.

But some countries that host major pharmaceutical companies, like Britain and Switzerland, are finding some of the draft wording problematic.

NGOs believe the text does not go nearly far enough.

Civil society activists staged a “die-in” protest in the WTO’s atrium, accusing the EU, Britain, Switzerland and the United States of scuppering a meaningful Covid intellectual property waiver.

“The proposal on the table is intended to save the reputation of the WTO but it will not save a human life from the pandemic,” demonstration organiser Deborah James told AFP.

Swiss economy minister Guy Parmelin insisted he remained against a wide-ranging waiver, adding: “Patents have not slowed access to vaccines — quite the opposite”.

Not sure which Disney resort to visit next summer? 

Disney chiefs have a solution for its most obsessive — and deep-pocketed — fans, offering a round-the-world package trip to all 12 parks, starting at a hefty $110,000 per person.

“Disney Parks Around The World — A Private Jet Adventure” will fly 75 mega-fans around the world in July 2023, with VIP visits to Disney resorts in California, Tokyo, Shanghai, Hong Kong, Paris and Florida.

Across 24 days, there will also be stops at countries which do not have Disney parks, including tours of the Taj Mahal in Agra, India and Egypt’s Pyramids of Giza.

According to its brochure, the “bucket list adventure” also includes a “rare opportunity to be a guest at Summit Skywalker Ranch,” founded by “Star Wars” creator George Lucas outside San Francisco.

“You’ll travel in luxury via a VIP-configured Boeing 757, operated by Icelandair, with long-range capabilities that allows for direct flights to maximize your time in each destination,” it says.

Guests will be joined on board by “experts and staff, who use an audiovisual system for informative briefings and lectures,” while Disney “leaders” and “Imagineers” will be on hand at various points.

As well as the movies, TV shows and theme parks it is best known for, the Walt Disney Company has long offered travel packages, including cruises.

With theme park attendances and tourism more generally recovering from the pandemic, Disney’s latest offering is its most luxurious yet.

The $109,995 per person price tag is based on two people sharing, with those who travel solo facing an additional surcharge of at least $10,995.

No discount is offered for children, who must be at least 12, and airfare to Los Angeles and from Orlando for the first and last legs is excluded.

The US Federal Reserve announced the most aggressive interest rate increase in nearly 30 years on Wednesday, and said it is prepared to do so again next month in an all-out battle to drive down surging inflation.

The super-sized 0.75-percentage-point hike came with the Fed under intense pressure to curb soaring gas and food prices that have left millions of Americans struggling to make ends meet and sent President Joe Biden’s approval ratings plunging.

Fed Chair Jerome Powell said it was “essential” to lower inflation, and policymakers “have both the tools we need and the resolve it will take to restore price stability on behalf of American families.”

He stressed that the goal is to achieve that without derailing the US economy, but acknowledged there is always a risk of going too far.

The Fed’s policy-setting Federal Open Market Committee raised the benchmark borrowing rate to a range of 1.5-1.75 percent, up from zero at the start of the year.

It was the first 75-basis-point increase since November 1994.

Powell told reporters the move was “an unusually large one,” but he does not expect “moves of this size to be common.”

However, “from the perspective of today, either a 50-basis-point or a 75-basis-point increase seems most likely at our next meeting,” he said.

“It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all.”

Biden has endorsed the Fed’s effort and is hoping for success as his Democrats face the possibility of losing control of Congress in key midterm elections in November.

He has blamed opposition Republicans for blocking bills meant to help lower costs and ease supply constraints.

White House economic adviser Brian Deese told Fox News “the most constructive steps that Congress and the executive branch can take to help support what the Fed is trying to do are to lower the cost that families face directly and to lower the federal deficit.”

– ‘Brace yourself’ –

Wall Street loved the aggressive posture, closing sharply higher following Powell’s comments.

But Kansas City Federal Reserve Bank President Esther George, a noted inflation hawk, dissented from the committee vote, preferring a smaller, half-point increase.

Until recently, the central bank seemed set to approve a 0.5-percentage-point increase, but economists say the rapid surge in inflation put the Fed behind the curve, meaning it needed to react strongly to prove its resolve to combat scorching price increases.

Committee members now see the federal funds rate ending the year at 3.4 percent, up from the 1.9 percent projection in March, according to the median quarterly forecast.

They also expect growth slowing to 1.7 percent in 2022 from the previous 2.8 percent forecast.

However, Powell stressed that “we are not trying to induce a recession now.”

But Diane Swonk of Grant Thornton, a long-time Fed watcher, said, “It is not clear the economy will be as resilient as the Fed expects.”

She called the central bank’s outlook “fanciful” and compared the current situation to the early 1980s when then-Fed chief Paul Volcker drove interest rates up to 20 percent to choke off inflation, tumbling the economy into recession.

“Brace yourself for what comes next. This is a Volcker-Esque Fed. That means the Fed is willing to take a rise in unemployment and a recession to avert a repeat of mistakes of the 1970s,” she said on Twitter. “Growing up in Detroit, I remember that period well. It was ugly with deep scars.”

– Caught off guard –

US central bankers began raising interest rates off zero in March as buoyant demand from American consumers for homes, cars and other goods clashed with transportation and supply chain snarls in parts of the world where Covid-19 remained — and remains — a challenge.

That fueled inflation, which got dramatically worse after Russia invaded Ukraine in late February and Western nations imposed steep sanctions on Moscow, sending food and fuel prices up at a blistering rate.

US gasoline prices have topped $5.00 a gallon for the first time ever and are setting new records daily.

Economists thought March was the peak for consumer price hikes, but the rate spiked again in May, jumping 8.6 percent in the latest 12 months.

The Fed was caught off guard with the speed of the price increases, and while policymakers usually prefer to clearly telegraph any policy shift to financial markets, the latest data changed the calculus.

Wall Street stocks welcomed Wednesday’s aggressive moves by the Federal Reserve to counter inflation, while European equities also gained following an emergency central bank meeting to address fallout from monetary tightening.

The US central bank raised the benchmark borrowing rate by 0.75 percentage points, bigger than the telegraphed 0.5-percentage-point increase after economic data in recent days showed inflation strengthening and consumer confidence weakening.

Fed Chair Jerome Powell said the Fed has the “tools” and “resolve” to do what it takes to lower inflation from the highest level in more than 40 years, noting that the central bank could hike the benchmark interest rate by another 0.75 percentage points in July.

Powell emphasized that the Fed was not trying to induce a recession, but that aggressive measures were needed to counter inflation.

Stocks climbed after the Fed decision, strengthening somewhat during the news conference. The S&P 500, which tumbled into a “bear market” earlier this week, finished up 1.5 percent.

However, stocks also rallied after the Fed raised interest rates in May, only to weaken substantially in subsequent sessions.

“The market is getting comfortable with the idea that the Fed is now starting to take the inflation situation very seriously,” said Tom Cahill of Ventura Wealth Management, who nonetheless expressed skepticism that the Fed could achieve a “soft landing.” 

Data released Wednesday showed US retail sales declined by 0.3 percent in May, confounding analysts who had expected a modest rise.

“These numbers were worse than expected and point to a US economy that appears to be weaker than thought,” said CMC Markets analyst Michael Hewson. 

Wells Fargo economist Jay Bryson shifted his outlook from an economic soft landing to a “mild recession starting in mid-2023,” noting signs that inflation is becoming “increasingly entrenched in the economy” and cautioning that higher interest rates will curtail some spending.

– Emergency meeting –

Earlier, Frankfurt, London and Paris all rallied as investors were reassured by news of an emergency European Central Bank meeting.

The ECB said after its surprise meeting that it would use “flexibility” to ease stress on sovereign debt markets and design a new instrument to ward off a fresh crisis in the eurozone.

The borrowing costs of some eurozone countries have risen faster than those of others as the ECB tightens its monetary policy. The bank has vowed to prevent such “fragmentation,” which occurred during the eurozone debt crisis a decade ago.

Markets.com analyst Neil Wilson called the announcement “somewhat underwhelming” and did not merit a special meeting.

Earlier, Wilson had said the emergency meeting “smacks of panic and a lack of control — but the market is happy to see it happen.”

The ECB is due to raise eurozone interest rates and end its massive bond-buying stimulus program in July.

Asian stock markets closed mixed Wednesday with investors on edge over the looming Fed decision that has taken on greater significance since forecast-busting US inflation recently sent shockwaves through world markets.

– Key figures at around 2030 GMT –

New York – Dow: UP 1.0 percent at 30,668.53 (close)

New York – S&P 500: UP 1.5 percent at 3,789.99 (close)

New York – Nasdaq: UP 2.5 percent at 11,099.15 (close)

London – FTSE 100: UP 1.2 percent at 7,273.41 (close)

Frankfurt – DAX: UP 1.4 percent at 13,485.29 (close)

Paris – CAC 40: UP 1.4 percent at 6,030.13 (close)

EURO STOXX 50: UP 1.6 percent at 3,532.32 (close)

Tokyo – Nikkei 225: DOWN 1.1 percent at 26,326.16 (close)

Hong Kong – Hang Seng Index: UP 1.1 percent at 21,308.21 (close)

Shanghai – Composite: UP 0.5 percent at 3,305.41 (close)

Euro/dollar: DOWN at $1.0457 from $1.0416 late Tuesday

Pound/dollar: UP at $1.2181 from $1.1997

Euro/pound: DOWN at 85.80 pence from 86.83 pence

Dollar/yen: DOWN at 133.69 yen from 135.47 yen

Brent North Sea crude: DOWN 2.2 percent at $118.51 per barrel

West Texas Intermediate: DOWN 3.0 percent at $115.31 per barrel

US President Joe Biden on Wednesday chastised the oil industry over soaring fuel prices at the heart of 40-year-high inflation, warning of unspecified emergency measures.

In a letter to seven major oil corporations, Biden delivered his most direct salvo yet in a campaign to blame the industry for stoking price increases. 

Average fuel prices are now $5 a gallon for drivers in the United States, up from $3 a year ago, and the spike is reverberating through the entire economy, helping to sink Biden’s approval ratings to below 40 percent.

“Refinery profit margins well above normal being passed directly onto American families are not acceptable,” Biden wrote in the letter to executives from Shell, Marathon Petroleum Corp, Valero Energy Corp, ExxonMobil, Phillips 66, Chevron and BP.

Biden said the economy is in “a time of war,” referring to the global fallout from President Vladimir Putin’s invasion of Ukraine and subsequent sanctions against energy exporter Russia.

“My administration is prepared to use all reasonable and appropriate federal government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied,” Biden said, without detailing what kind of actions he could take.

White House Press Secretary Karine Jean-Pierre told reporters that Biden sees it as US oil companies’ “patriotic duty” to increase capacity.

The president has regularly lambasted the oil industry for what he says is a failure to tap into already approved wells and increase output. 

But the letter, accompanied by a graph depicting rising producer profits, marked an escalation in the war of words.

In the letter Biden asked for “explanation of any reduction in your refining capacity since 2020 and any concrete ideas that would address the immediate inventory, price, and refining capacity issues in the coming months — including transportation measures to get refined product to market.”

“The crunch that families are facing deserves immediate action. Your companies need to work with my Administration to bring forward concrete, near-term solutions that address the crisis,” he wrote.

Biden’s Democratic Party risks a heavy defeat, losing control of Congress, in November elections and polls show that fears over the economy dominate.

In a fiery speech Tuesday, Biden blamed Republican obstruction in Congress and Russia’s war in Ukraine for price increases that he said are “sapping the strength of a lot of families.”

The US Federal Reserve announced the most aggressive interest rate increase in nearly 30 years Wednesday, raising the benchmark borrowing rate by 0.75 percentage points.

The goal is to tamp down inflation, but Federal Reserve Chair Jerome Powell said the central bank was “not trying to induce a recession.”