Your Weekly Commercial Awareness Update – w/c 16th April 2018

Your Weekly Commercial Awareness Update – w/c 16th April 2018

Here are this week’s headlines, brought to you by our Student Commercial Awareness Team:

China imposes tariffs on US sorghum producers, having to pay a 179% deposit on the value of their imports

Reported by Andrew MacDonald

On April 17th, China’s Ministry of Commerce announced it would impose a 178.6% anti-dumping deposit on the imports of the crop sorghum from the US.

The measures are designed with the aim of raising the cost for US producers to export to China which in turn will damage the US sorghum industry. Sorghum is used for making animal fodder and alcoholic drinks.

President Donald Trump is using tough trade talk against China with the goal of ending its ‘illicit trade practices.’ Analysts agree that many of these practices apply to the intellectual property sector.

This comes amidst President Trump’s initial decision to impose tariffs on Chinese aluminium and steel imports to the US. Furthermore, the US recently added to trade tensions by banning US firms from selling parts to the Chinese telecommunications company ZTE.

The sorghum deposits will hurt the key Central US states that grow it. Nebraska, Kansas, South Dakota, Oklahoma and Texas.

“It’s extremely frustrating and very disappointing” said Jesse McCurry, executive director of the Kansas Grain Sorghum Commission; “half of Kansas sorghum or more was going to China, and that probably stops, at least for now.”

China launched a preliminary investigation into the sorghum trade. The report found that US firms have been selling sorghum into China at below market prices, which hurts Chinese farmers.

China has said that the market share of American sorghum jumped from 8% in 2013 to 61% in 2016 and that the price of imported sorghum from the US had crept down from $289.61 per tonne in 2013 to $214.78 per tonne in 2016.

The recent measures applied to US sorghum imports could also have a negative impact on the domestic Chinese agriculture sector. As reported by the BBC, Deborah Elms from the Asian Trade Centre said that ‘In the longer run, Chinese farmers may suffer as they rely on these imported products as feeding stock for their animals. They can shift to other sources, but this will take time and presumably cost more.’

For more information, see Bloomberg and the BBC.

Challenge in the courts over refusal to issue gender neutral passports

Reported by Anna-Mei Harvey 

Christie Elan-Cane, who identifies as non-gendered, has pressed for a judicial review regarding the Home Office’s refusal to grant gender neutral passports. On Wednesday, Justice Gilbart granted the claimant permission to bring a judicial review.

The challenge is brought after Canada became the latest in a growing list of states offering ‘unspecified’ as a gender option on their application forms.

Kate Gallafent QC told the Court that British policy could be in breach of the right to respect for private life. She added that the policy also comes in to conflict with the right not to be discriminated against on grounds of gender as prescribed by the ECHR (European Convention on Human Rights). Miss Gallafent concluded that forcing applicants to falsely identify with another gender causes “considerable distress.”

Lawyers, representing home secretary Amber Rudd, argued that the case should be dismissed on the grounds that Britain’s policy is not in contention with the rights.

The protection of public safety, security and the avoidance of identity fraud were all cited as reasons to retain the need to declare gender.  Mr Eadie QC also claimed that the proposed amendments would result in the HM Passport Office incurring “significant administrative and financial cost.”

The outcome of this battle between public and private rights could affect more than 600,000 people in the UK who identify as non-gendered. What remains to be seen is whether the court will rule in favour of national security or social diversity.

Read more at The Guardian and The Independent.

Martin Sorrell leaves WPP

Reported by Spencer Yap

Traditional marketing agencies have been having their own set of problems recently. As previously reported, tech giants, such as Facebook and Google, are able to provide cheaper and more effective advertising for clients. Recently, the industry giant in advertising, WPP, had its CEO Martin Sorrell step down from his position. Interestingly however, his reasons for stepping down were nothing to do with the company’s performance. Instead it had to do with allegations of personal misconduct. His resignation came after an investigation conducted by law firm WilmerHale, which was sparked by a whistle-blower who shone light on Sorrell’s actions, namely his misuse of the company’s assets. However, the company remains tight-lipped about the situation, offerings news outlets nothing more than a mere confirmation that the investigation took place.

Sorrell, who was known to be a cut-throat businessman, created a competitive environment within the company and built WPP into the giant it is today. It is of no surprise that his sudden departure has left the company in disarray, partly due to the fight for business it has with tech companies. On top of which, it has to compete with other marketing agencies in the industry for the clients who opt the route of traditional marketing firms (such as WPP). Sorrell’s exit, also means his connections leave along with him, and after an astonishing 32 years of working for the company, it is reasonable to assume that there is many. Sharks are already circling the bloodied water. An unnamed senior executive, from a competing firm, commented on this issue saying that she/he is confident that WPP’s rivals are ready to swoop in and poach their clients in the wake of Sorrell’s departure.

Admittedly, Sorrell’s departure might be a blessing in disguise. The board has often been chastised for coddling its CEO, paying him excessive remunerations to the tune of £70 million in 2015, despite the company under-performing. Furthermore, Sorrell was also known to micromanage, and was always reluctant to take disciplinary actions against his employees or sell certain segments of the company when required.

Due to the absence of an succession plan, in the interim, the company’s top position lies with its non-executive chairman, Roberto Quarta, who will hold both the CEO and Chairman position whilst the company searches for a replacement for Sorrell.

Read more here.

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