Curious about what's going on in the photograph above? To find out, check out FP's latest photo essay, "Gaza's (Literal) Underground Economy."

Photo: Abid Katib/Getty Images

Impressive. Somali pirates have now succesfully hijacked a Saudi oil tanker -- their biggest, though apparently not their first, such vessel. A crew of 25 is on board. This is just one of several pirate incidents this week.

Even more impressive? All this goes on under the watch of U.S., Russian, NATO, Indian, and now South Korean and EU ships. 

The world's largest shipping line, Odfjell SE, owns the ransomed tanker and now says that its shipping route will change -- steering around Africa's cape rather than across the perilous Gulf of Aden. Since 4 percent of the world's oil supply passes through the pirate-infested route, a change of direction would be no small shift. Two million barrels of oil were lost to pirates today, and now shipping costs -- and probably oil prices, to some extent -- will go up.

Under normal circumstances, the world would be pressuring the Somali government to reign in the renegade ship-lifters. But that government is no shape to do so. It's falling apart as Islamic insurgent groups gain terrority.

I can think of a few pirates who are smiling right now.

In what is being billed as an "historic" agreement, Chinese and Taiwanese officials concluded a pact today that increases the number of cross-strait airline flights and establishes new trade and postal links. The goal is to eliminate the hassle of making travelers stop in Hong Kong on their way between the mainland and Taiwan and to ease similar restrictions on cargo and mail. To be sure, the lead-up to today's deal was a gradual process. Direct charter flights first took off in 2005 and regularly scheduled direct flights began in July of this year.

What all this means for Taiwanese sovereignty, though, is unclear. Does breaking down barriers between Taiwan and the Mainland increase Taiwan's stature as a sovereign state? Or does it expose itself to greater control from Beijing should the Communist Party leaders ever decide to use new economic ties as leverage? Some half a million protesters took to the streets of Taipei a week and a half ago, fearful that Taiwan President Ma Ying-jeou's engagement policies could lead the small island state right into Beijing's hands.

This is a relationship built on ambiguity though. So long as Taiwanese politicians aren't beating the drum for independence and economic ties continue to strengthen, it is hard to imagine what kind of catalyst could induce Beijing to demand immediate reunification. Taiwan's independence would be a humiliating defeat for Beijing, but forcing its hand on reunification would spark a major, and needless, international incident. Thus, a continuation of Taiwan's muddled identity with ever closer economic ties to the mainland seems to be viable indefinitely.

Photo: SAM YEH/AFP/Getty Images

This autumn, an ancient trade route that crosses the disputed Kashmiri border between India and Pakistan opened after being closed 61 years ago, when the two countries broke free of the British Empire. Many hope the opening of the trade route, in a bitterly disputed Himalayan region, will boost the economy on both sides of the “Line of Control” that divides the territory. In the photo above, the first truck carrying goods from the Pakistani side rumbles across the bridge to the Indian side.

For Kashmir's artisans, famed for their rugs, copper bowls, and other handicrafts, the opening of the trade route is a sign of hope. Check out some of their beautiful creations and learn more about the trade route in this week's photo essay, "Making Peace, One Trinket at a Time."

TAUSEEF MUSTAFA/AFP/Getty Images

It makes sense that the British government would want to smooth over relations with Russia by sending a cabinet minister to visit Moscow, the first such visit in over a year. But couldn't the Brits have sent someone -- anyone -- other than Business Secretary Peter Mandelson, who is currently at the center of a scandal over his relationship with a Russian oligarch?

Mandelson's friendly overtures to the Kremlin have been entirely overshadowed by questions from the British press. At issue is whether favors from metals magnate Oleg Deripaska played a role in Mandelson's decision to reduce aluminum tariffs while he was EU trade commissioner, a decision that greatly benefited Russia's richest man. Months after the change, Deripaska entertained Mandelson and other VIPs on his yacht in the Mediterranean.

Mandelson angrily brushed aside a question about the scandal during a press conference Wednesday, telling the reporter, "You have wasted your question." Mandelson has been cleared by the British government of any wrongdoing, but during a BBC interview, also yesterday, he noticeably failed to deny that he and Deripaska had discussed lowering the tariffs prior to the decision being made.

The tabloids have been having a field day with the $9,000-a-night hotel suite where Lord Mandelson is staying during his Moscow visit, a questionable PR move during an economic crisis. The Daily Mail proclaimed the room, "Fit for an Oligarch." It also can't help Mandelson that Deripaska is back in the headlines for the $4.5 billion bailout he received from the Russian government this week.

The Brits might want a do-over on this one.

Photo: Alexey SAZONOV/AFP/Getty Images

Christopher Furlong/Getty Images

As I sip my coffee this morning, the Financial Times has given me new reason to appreciate my Robusta roast. Stung by the falling price of coffee, exporters -- particularly Southeast Asian exporters like Vietnam and Indonesia -- have started hoarding their stocks. Other big exporters, such as Colombia and Brazil, also look worried.

The coffee industry took a quick and nasty turn when markets fell last month and credit froze up. Traders found it harder to get credit to buy supplies, so demand -- and prices -- plummeted. Prices for Robusta have fallen anywhere from 20 to 40 percent in just two months. Some say the problem is less hoarding than the fact that traders are purchasing cautiously small sums at a time.

That's bad news for my wakeup call. Before the crash, the United States imported over 2 million 60kg bags of coffee in just 5 months. It's even worse news for the farmers whose crops are now worth less. Coffee plants don't produce beans for two to three years after planting -- meaning the newest converts to the crop are the hardest hit; their first payoffs are naught.

That could be hard to swallow.

Still think the global credit crunch is all about the TED spread and collateralized debt obligations? Think harder. Export-bound grain has started piling up in Canada as sellers have begun refusing to trust the credit lines and financial institutions linked to their foreign buyers.

The problem is that Canada's export cargoes don't get loaded until buyers can prove their ability to pay -- proof that has been increasingly hard to come by in the wake of bank defaults and shrinking credit markets worldwide. Unable to get credit lines, many buyers have left the grain market, generating big losses for Canadian shippers. Add to this the greater costs that shippers now shoulder because of delayed payments, and the picture starts looking pretty bleak. 

And Canada isn't the only country suffering from the crunch. U.S. and South American shippers are taking even harder hits. Los Angeles and Long Beach -- home to two of the biggest ports in the United States -- have already seen a 9 percent drop in imports this year. Global shipping rates are down 74 percent from last May. 

With 90 percent of the world's trade in goods going by ship, credit access is key to trade's survival. It's also key to investment in product development, which surely will fall as manufacturers face greater declines in profits. Moldy grain looks like small peanuts by comparison, but don't tell that to Canadian shippers. Grain is their country's biggest agricultural export. 

BEHROUZ MEHRI/AFP/Getty Images

Pistachio farmers in Iran are going nuts: Colder-than-normal weather has harmed this year's crop, whose harvest could end up being 75 percent lower than last year's. If so, the United States could dethrone Iran from its proud position of being the world's top producer of pistachios.

There's reason for Iranian optimism, though: If Mother Nature cooperates, the Islamic Republic could reclaim the top spot next year. Plus, Iranian farmers say their pistachios taste the best.

Screenshot from bbc.co.uk

This week's map is the centerpiece of The Box, a new multimedia project from the BBC. The producers have painted an ordinary shipping container with the BBC logo, outfitted it with a GPS transmitter, and released it into the wilds of global shipping routes. Along the way, the Beeb will be producing video and text content on trade and globalization, based on the box's activities.

You can follow the progress with only a few hours delay here. After its launch last Monday, the box picked up a shipment of scotch whisky in Glasgow and is now back in the South of England waiting to be shipped off to East Asia.

Also be sure to watch Declan Curry's feature on how the standardization of shipping containers made much of what we call globalization possible. It's truly one of the more underrated technological innovations of recent history.

(Hat tip: Ethan Zuckerman)

On this August Friday afternoon, you're surely looking for a distraction or two if you are unlucky enough to be at the office like the rest of us. Look no further than FP's latest (first?) interactive quiz: Spot the Fake Drug. Given a choice between real medicines and counterfeit ones, can you recognize the dangerous fakes?

And check out Roger Bate's fascinating -- and disturbing - (subscribers-only) look at the growing global fake drug trade in the latest issue of FP. He reveals how counterfeiters in India and China mix chalk and dust into phony Viagra pills and cancer meds that are sold around the world. After taking the quiz, you may be more worried than ever about these fakes winding up in your neighborhood pharmacy.

FABRICE COFFRINI/AFP/Getty Images

Tuesday's collapse in negotiations in the Doha trade talks was not a complete surprise, yet seemed to amplify the dour mood recently regarding the global economy. As always is the case with trade talks, there were winners and there will be losers.

Despite arguments from some development groups that no deal was better than the one on the table, the Financial Times reports today that poorest countries are the big losers from the breakdown in talks:

The impact of failure is going to be substantial," said Uhuru Kenyatta, Kenya's trade minister. "It's always the poorest of the poor who carry the biggest burden."

Among the hardest hit are African cotton farmers, who had hoped for a cut in U.S. cotton subsidies, as well as a contingent of banana-exporting countries hoping for a cut in tariffs from the EU. On the other hand, a rival banana bunch from West Africa, the Caribbean, and the Canary Islands pay no EU import tariff and are happy to see the competition miss out on a deal.

Other winners include, of course, developed-country agriculture interests, who remain shielded against foreign competition by a phalanx of tariffs and subsidies. Some farmers in the United States, however, as well as those in the developing world, will miss out on new markets for their products.

That said, before the recent talks began, some poor countries expressed concern that trade liberalization would open markets too quickly. All in all, the cost to the global economy from the Doha round's demise is hard to quantify and, in the end, not all that large. It's not like trade is going to suddenly dry up. But the talks' failure definitely doesn't do much to improve the mood.

NELSON ALMEIDA/AFP/Getty Images

Despite the recent biofuel backlash, there is one place still singing the praises of ethanol. It's estimated that Brazil has cut fuel costs by 30 percent since switching to fuels based on sugarcane -- an agricultural commodity that the country produces in droves. And the country hasn't just saved money from its biofuel habit: it has been turning some profit too, exporting several million tons of its crop to the United States, Europe, and even Japan this year and last.

Brazil's happiness with the ethanol boom underlies an important point about biofuel production: namely, that a regional or country-tailored approach works best. For a nation with a high production of sugarcane -- which packs more than five times the energy of corn and hasn't resulted in major environmental degradation -- it's understandable why biofuel is so popular and promising.

The sugarcane situation in Brazil isn't without its shortcomings: some sugarcane workers face slave-labor conditions, while some worry that their jobs will be replaced by more mechanized cane-cutting. But sugarcane production is an overwhelming boon for Brazil, and other countries would do well to learn from it's success -- and to benefit from it themselves.

The U.S. could step up its imports of cheaper, greener Brazilian fuel rather than continuing to subsidize domestically produced corn-based ethanol. The anti-biofuel crusaders could also stop lumping together Brazil's sugarcane with other "bad" ethanols so that countries like the U.S. will continue to lower trade barriers. That'll be a sweet deal for everyone.

SHAH MARAI/AFP/Getty Images

Disneyland it's not, but war-torn Afghanistan is still hoping to lure international tourists -- at least those who don't mind venturing off the beaten path. Eight hours by car from Kabul, the country's Bamiyan province boasts the country's first National Park, complete with several crystal-blue lakes and Afghanistan's own picturesque "Grand Canyon."

The area is no secret to local Afghans, who have been coming to the Band-e Amir area for years. Local families come on the weekends to picnic, swim and rent boats, as do a few more adventurous foreigners.

While the area is beautiful and much safer than other parts of the country, violence in surrounding areas has cut into the tourist flow. So has a lack of funds according to provincial Governor Habiba Serobi, the country's only female governor:

Unfortunately the aid is always going to the more difficult areas where there are problems and conflict - that's where the international community puts more money."

While addressing the country's security situation is a necessary reality, it's sad to see it hamper development in other parts of the country like Band-e Amir--especially after all the effort and hope that went into the park's creation. The US government still strongly warns its citizens against traveling to Afghanistan, but hopefully, in time, we'll see more foreigners in Afghanistan with cameras rather than rifles.

JOHN MACDOUGALL/AFP/Getty Images

Though it's the one remaining member of the "Axis of Evil," the value of U.S. exports to Iran has reportedly increased tenfold since George Bush took office. While there are reportedly strict rules about what the U.S. can ship over there, they apparently aren't too limited--US tobacco companies have reportedly exported $158 million worth of cigarettes to the nation since 2000, more than any other product. The U.S. has also sold Iran about $12.6 million worth of bull semen. You're welcome, Mr. Ahmadinejad.

The value of yearly trade with Iran has skyrocketed from $8 million in 2001 to $146 million in 2007, totalling $546 million since the president's tenure began. Yet Bush keeps pushing multi-country sanctions on Iran. Looks like he either hasn't been paying attention to this trade increase or has just turned a blind eye.

For more, check out this video.

Here are some wild scenes from the ongoing beef protests in South Korea:

Photos by KIM JAE-HWAN/AFP/Getty Images

Apparently, the South Korean riot police have been working in shifts, as some of the most violent protests have happened overnight. The protesters failed to convince South Korean President Lee Myung-bak, who moved Thursday to lift the ban on American beef. Read the backstory here.

Spencer Platt/Getty Images

As the general election heats up, John McCain is adamantly proclaiming himself a free trader while attempting to paint Barack Obama as a protectionist. But the attempted hostile takeover of Anheuser-Busch by Belgain brewery InBev may place McCain in a precarious political position.

McCain, who sided with the Bush administration during the Dubai Ports World controversy two years ago, has been mum on the issue so far. The spotlight instead has focused on his wife, Cindy, who owns beer distributor Hensley & Co. and some $1 million in Anheuser-Busch shares and would stand to benefit from a deal.

With tradition and patriotism on one side, and financial gain and free trade principles on the other, McCain faces a tough choice. Although his reputation as a straight-talking maverick precedes him, I wouldn't be suprised if politics won out, just as it did with McCain's support of offshore drilling and Obama's decision to forgo public campaign financing.

The reason? Missouri, which went Republican the past two presidential elections, could be in play this year. Missouri politicans from both sides are lining up against the deal, and saveAB.com, which has garnered over 59,000 signatures on its online petition offers the following message, dripping in election year rhetoric:

Like baseball, apple pie and ice cold beer (wrapped in a red, white and blue label), Anheuser-Busch is an American original. ... With your help we can fight the foreign invasion of A-B. We will fight to protect this American treasure. We will take to the Internet, to the streets, to the marble halls of our capitals, whatever it takes to stop the invasion.

If you're a struggling American newspaper trying to maintain quality and improve local coverage, what's one possible solution?

Outsource to India, says the deputy editor of the Orange County Register, California's fifth-largest newspaper. On a one-month trial basis, Mindworks Global Media, an India-based company, will copy-edit some of the Register's stories and lay out pages for a community newspaper at the same company that owns the Register.

This isn't the first time an American news outlet has outsourced to India. Last year, Passport blogged about a Pasadena, California, news Web site that hired Indian journalists to cover meetings of the Pasadena City Council, which are broadcast over the Internet.

There are bound to be some hiccups and gaffes along the way, but it could work better than expected. Mindworks says on its Web site that its workers are "trained thoroughly to become familiar with the client publication and the region," and some employees are bound to have been educated at American universities. And perhaps articles about India and other countries will include more nuance and context.

For American editors and reporters, increased outsourcing is understandably scary. But what if it's key to fundamentally reinventing newspapers, whose U.S. circulation and advertising revenue have been plummeting? Those of us who work in journalism will have to up our game and make ourselves relevant. It's creative destruction at work.

I see that some in the U.S. Congress are gearing up to crack down on "speculators" accused of driving up prices for key commodities like oil and corn. Connecticut Sen. Joseph Lieberman is seeking to ban institutional investors from investing in commodities markets at all, and his colleague, Michigan Sen. Carl Levin, is urging the Commodity Futures Trading Commission, which regulates commodities trading in the United States, to take action.

As Diana Henriques explains for the Times, there's a risk the proposed cure would be worse than the disease. Not only is it tough to identify who is engaging in "excessive speculation" versus merely "speculation," it's also completely legal to try to make money from trading commodities. What's more, some analysts argue that speculators actually make the markets function more smoothly by keeping them liquid. (Here's an example of one such argument.)

There's also a fierce debate about to what extent speculators are, in fact, to blame for the high prices. Fatih Birol, chief economist at the International Energy Agency, put the matter thusly in a recent interview:

I believe the main reason for the high prices [is] the growing perception in the markets that the growing demand growth may not be met by the supply growth. And this provides fertile ground for the speculators... [T]he main issue here is the fundamentals but the speculators play an amplifying role in that respect.

The Financial Times provides some support for this view today:

Refiners are paying record premiums for the high-quality crude oil they use to produce diesel and petrol, a sign of strong demand in the physical oil market that calls into question claims that soaring oil prices are being driven by speculators.

Refiners are paying up to $5-$6 a barrel on top of current record prices to secure high-grade oil, traders said, double the level of a year ago. The mark-ups are four times higher than the 2000-2008 average. The movement in prices paid for physical barrels of oil has gone largely undetected outside the refinery industry because financial markets pay almost exclusive attention to the price of oil futures traded in London and New York.

Harvard economist Greg Mankiw responds at length to Robert Driskill's recent article for ForeignPolicy.com, "Why Do Economists Make Such Dismal Arguments About Trade?" An excerpt:

I agree with Professor Driskill about one thing: Any normative statement goes beyond sheer economics and involves a degree of political philosophy. Economists' devotion to free trade is based not only on the positive conclusion that it leads to a bigger economic pie but also on a couple of related philosophical positions. [...]

Note that the arguments that Professor Driskill uses would also suggest that we economists should not be so hard on the Luddites. After all, there are sometimes losers from technological progress. And the original Luddites were precisely such losers. Yet I doubt that one would find many thoughtful libertarians or utilitarians (or economists of any other stripe) siding with the Luddite cause.

Read them both, and feel free to weigh in below.

Wow, South Koreans are really upset about the resumption of U.S. beef imports. Here's a shot of a recent candlelight vigil protesting the move:

Chung Sung-Jun/Getty Images