Moody’s reserves judgment on U.S. rating until after budget

NEW YORK, Wed Nov 7, 2012 – Moody’s Investors Service said on Wednesday it will hold off on its judgment of whether to cut its sovereign credit rating for the United States until after the 2013 budget process is completed.

The re-election of U.S. President Barack Obama removed the uncertainty over who would lead the country but the maintenance of the status quo in a still-divided Congress means the likelihood of a continued tough fight to hammer out a budget.

Moody’s currently has the United States at its highest rating of Aaa, but with a negative outlook.

If policymakers are able to reach consensus and produce a budget that results in a stabilization of the fiscal outlook and “then a downward trend in the ratio of federal debt to GDP (gross domestic product) over the medium term,” Moody’s reiterated it would like affirm the Aaa rating and return the rating outlook to stable.

“In contrast, if negotiations fail to produce policies that lead to debt stabilization and ultimately reduction, then we expect to lower the rating, probably to Aa1,” Moody’s said, outlining a one notch downgrade.

WTO backs U.S. in case against China duties on steel

GENEVA/WASHINGTON, Fri Jun 15, 2012 – A World Trade Organisation panel on Friday ruled in favor of the United States in a case against import duties imposed by China on a specialty steel product used in power transformers.

“With respect to each of the 11 programs at issue, the panel concluded that China had acted inconsistently” with WTO rules governing the use of countervailing duties, the panel said in its ruling.

The case involved Chinese duties on potentially hundreds of millions of dollars of “grain-oriented flat-rolled electrical steel” (GOES), a specialty steel product made by AK Steel Corp of Ohio and ATI Allegheny Ludlum of Pennsylvania.

“Today’s victory is important not only for steelworkers in Pennsylvania and Ohio, but also for American farmers and workers in other sectors that export to China,” U.S. Trade Representative Ron Kirk said in a statement.

“The panel upheld our claims that China’s duties on U.S. exports of steel products failed to comply with many WTO rules. This decision sends another clear signal to China that it must do more to fulfill its WTO commitments, and that it will be held accountable to play by WTO rules,” he said.

U.S., Mexico sign accord for joint oil exploration in gulf

WASHINGTON, D.C. — U.S. Secretary of State Hillary Clinton and Mexican Foreign Minister Patricia Espinosa signed an agreement today for development of oil and gas reservoirs that straddle the two nations’ boundaries in the Gulf of Mexico.

The agreement is the first of its kind signed by the U.S., establishing a legal framework and creating incentives for U.S. energy companies to develop oil and gas resources jointly with Petroleos Mexicanos, the Mexican state oil company known as Pemex. When it comes into force, the agreement will end the current moratorium on oil exploration and production in the Western Gap portion of the Gulf of Mexico.

“With this, we are setting aside the old fear that honestly exists among many Mexicans that Mexico’s oil could be extracted from the other side,” said Mexican President Felipe Calderon. “Any joint reservoir will be jointly exploited,” and we will all gain the benefits.

U.S. Secretary of the Interior Kenneth Salazar called the agreement an historic step that “opens to door to previously off-limits areas in the Gulf of Mexico,” an area larger than the state of Delaware.