EU, Japan and US China officially open trade dispute with China over rare minerals
GENEVA, SWITZERLAND – The seven-year old battle between the USA and the European Union over possible subsidies for Boeing appears no closer to resolution following Monday’s decision by the WTO (World Trade Organization) to uphold its previous decision that Boeing did indeed receive illegal government subsidies. Both sides are calling the decision a victory and the tussle is widely expected to continue.
The WTO “court” or appellate body, ruled that from 1989 to 2006 the federal government and several states had indeed subsidized aircraft manufacturer Boeing, but it calculated the amount as $5.3 billion rather than the $19.1b that the EU has argued was spent, to the detriment of its own Airbus company. The appellate body reviewed a number of contentious issues that include tax rate reductions and benefits from research for the US Department of Defense and Nasa, the space programme. (WTO: summary of key findings)
Obama argues that China is hoarding essential technology materials
Tuesday 13 March a new trade dispute that has been brewing was officially opened at the WTO in Geneva by the EU, Japan and the US. The three countries separately filed “requests for consultation”, WTO parlance for opening a dispute, covering restrictions on exports from China of various forms of rare earths, tungsten and molybdenum.
US President Barack Obama fired the opening salvo by making a widely publicized speech Tuesday in the White House Rose Garden, addressing the issue of fair trade.
“We’re bringing a new trade case against China – and we’re being joined by Japan and some of our European allies. This case involves something called rare earth materials, which are used by American manufacturers to make high-tech products like advanced batteries that power everything from hybrid cars to cell phones.
“We want our companies building those products right here in America. But to do that, American manufacturers need to have access to rare earth materials – which China supplies. Now, if China would simply let the market work on its own, we’d have no objections. But their policies currently are preventing that from happening. And they go against the very rules that China agreed to follow.”
China holds a large to very large share of the Earth’s supplies of a number of rare earth materials, several of which are considered essential for technology. AP reported, and it was widely carried by newspapers, that Obama’s speech signals that the new WTO is part of what he sees as a larger field of unfair trade practices by China.
China’s official news agency Xinhua reports that
“the Chinese Ministry of Commerce said in a statement posted on its website that it will properly deal with the issue. China, the statement said, has no intention of protecting domestic industries by distorting its foreign trade.
“Earlier in the day, Chinese Minister of Industry and Information Technology Miao Wei told Xinhua that the Chinese side would prepare to defend itself if a complaint was filed with the WTO. Miao said China’s rare earth export policy is drawn up out of concern for the development of resources and environmental damage. Some rare earth metals would last only 20 years if China does not stop excessive mining, Miao added.
“China’s rare earth export restriction was not targeted at any specific country, nor was it a kind of trade protectionism, the minister said.”
Background, OECD paper for the WTO on limiting exports of strategic raw materials
Airplanes have made it into the air, with a little help from their governments, other nations argue
GENEVA, SWITZERLAND – The World Trade Organization (WTO) in Geneva has confirmed that an Appellate Body has backed a 2010 WTO decision that $18 billion in subsidies to Airbus by the European Union have been illegal, a decision quickly welcomed by US Trade Representative Ron Kirk.
“The WTO Appellate Body has confirmed without a doubt that Airbus received massive subsidies for more than 40 years and that these subsidies have greatly harmed the United States, including causing Boeing to lose sales and market share in key markets throughout the world. Today’s landmark ruling will significantly benefit the U.S. aerospace industry and American aerospace workers, simply by affirming that there must be fairness and accountability in the global race for aerospace business.”
The WTO’s ruling 18 May did not back the entire earlier decision, The Geneva organization notes in its “summary of key findings”, but it says that “the principal subsidies covered by the ruling include financing arrangements (known as “Launch Aid” or “Member state financing”) provided by France, Germany, Spain, and the UK for the development of the A300, A310, A320, A330/A340, A330-200, A340-500/600, and A380 LCA projects. The ruling also covers certain equity infusions provided by the French and German governments to companies that formed part of the Airbus consortium.”
The summary also adds a reminder that the Airbus decisions are just one side of the battle over what is called Trade in Large Civil Aircraft. “A separate dispute brought by the European Union against the United States for subsidies allegedly provided to Boeing is currently before the Appellate Body. ”
The US has argued against what it sees as direct government handouts while Europe has argued that the US subsidizes Boeing indirectly, by the Pentagon buying only from Boeing, at inflated prices.
The Jumbo Airbus 380, the world’s largest plane, nicked a plane that was landing at JFK airport in New York Tuesday. The Air France jumbo was taxiing for takeoff when its wing hit that of a much smaller regional plane, a Delta connection Comair flight, which was readying to park after landing, reports CNN, one of whose correspondents was aboard the French plane.
There were no injuries and passengers from both planes disembarked without problem, but it appears that one of the wings of the A380 was damaged. Bloomberg carries a long story on how the accident may have happened and what investigators will be looking for.
World Trade Organization, home to the Doha Round talks (photo, Jared Bloch)
Geneva, Switzerland (GenevaLunch) – A long-awaited decision about US subsidies for Boeing is expected at the WTO (World Trade Organization) in Geneva Thursday 31 March.
Depending on who you ask, it will either go badly against the company and the US, which in June 2010 was accused at the WTO of providing up to $20 million in illegal funds to the aircraft maker, or it will be a vindication of the US point of view that Airbus has received even more in government subsidies, reports UPI news agency.
It’s been a rough week at the Doha Round trade talks, with US Ambassador Michael Punke issuing a gloomy statement last Thursday that “in light of this week’s consultations, we share with other members a significant concern that the Doha negotiations have not made the progress we had all hoped they would achieve by now.” He mentioned that “the gaps among members remain wide.”
His optimistic final note was barely enough to cover the gloom: “The United States is fully committed to working hard in coming weeks to find productive ways forward.”
Punke addressed other members at the WTO in equally gloomy tones 29 March, indicating few signs of progress and pointing to continuing major “gaps” in stances for the negotiations.
Singapore Airlines A380 jumbo jet
Geneva, Switzerland (GenevaLunch) - The huge and nearly quiet A380 Airbus jumbojet made what is likely to be a rare appearance in Geneva Thursday morning 21 January. It flew in from Zurich in order to be sure there are no problems landing the plane, in order for the airport to be certified to welcome it.
Singapore Airlines flew the plane in and out of Zurich Wednesday, in order for Kloten airport to be certified for it. Singapore will begin scheduled flights there in the summer of 2010. Geneva is a back-up emergency landing airport for the plane, and thus also needs to be certified. The A380′s other European airports are London Heathrow and Paris Charles de Gaulle.
Links to other sites: TDG (Fre), 20 Minutes with video (Fre) and TSR television (Fre)
US and EU, warming up to aircraft negotiations
US Trade Representative Ron Kirk with EC Trade Commissioner Catherine Ashton, March 2009, at their first meeting
Geneva, Switzerland (GenevaLunch) – A confidential interim WTO (World Trade Organization) report on European assistance to the aircraft industry, notably Airbus, was issued Friday, reports Frances Williams in the Financial Times, and a similar report on US assistance to Boeing is expected in the next few months.
French authorities in their official report one month after the crash of AF447, the Air France flight that went down over the Atlantic 1 June, say they are far from knowing the cause of the crash, but that examination of debris shows that the plane “fell like a stone”, almost vertically from the sky, and landed flat. Le Monde, Fre and CNN
Update 07:53 Rescuers searching among the debris of the doomed Yemenia Airbus pulled a 14-year-old girl from the sea alive 30 June. Her father, in Paris, has spoken to her on the phone, reports AP (Fre) and says she felt nothing, but was ejected and found herself in the water next to the plane. She spent 12 hours in the water and is being treated for hypothermia. Her father describes her as extremely shy, fragile, and says she barely knows how to swim.
Brussels, Belgium (GenevaLunch) – The European Union’s transport commissioner, Antonio Tajani, called for a worldwide blacklist of unsafe airlines, at a press conference in Brussels Tuesday morning 30 June, following the crash of a Yemeni airlines Airbus near the Comoros Islands.
