India's new FDI policy against free trade, discriminatory: China

India’s new policy on allowing investment from foreign countries go against international rules on free trade and investment, said China on Monday.
India on Saturday mandated that investments from neighbouring countries would now require government approval, effectively closing the “automatic route” used by firms and individuals to set up business in the country.
India’s move was attributed to the rising possibility of “opportunistic takeovers” of its companies, as the coronavirus pandemic wreaks havoc on the economy.
"The additional barriers set by Indian side for investors from specific countries violate WTO's principl e of non-discrimination, and go against the general trend of liberalisation and facilitation of trade and investment," Chinese embassy spokesperson Ji Rong said in a statement in Delhi.
There were calls to curb Chinese investments after the People’s Bank of China (PBoC) increased its shareholding in Housing Development Finance Corporation (HDFC) amid a sharp correction in the stock of India’s largest mortgage lender.
VDO.AI

The new rules will also apply to all the existing and planned investments by foreign firms in Indian businesses, said the Department for Promotion of Industry and Internal Trade (DPIIT). Several Indian start-ups have existing investment from Chinese investors. For instance, Flipkart has an investment from Tencent (about 5 per cent) and Alibaba owns a significant stake in Paytm.

WTO rejects EU claims that it no longer provides subsidies to Airbus

International News
PARIS/BRUSSELS (Reuters) - The World Trade Organization on Monday rejected European Union claims that it no longer provides subsidies to planemaker Airbus, underscoring tariffs recently imposed by the United States on European goods.
A new compliance report from the Geneva trade watchdog found that the Airbus A380 and A350 jetliners continue to be subsidised as a result of past European government loans.It is the latest move in a record transatlantic trade dispute involving mutual claims of illegal aircraft subsidies, coming to a head at a time of rising global trade tensions.
The United States was in October awarded the right to impose tariffs on $7.5 billion of annual EU imports in the case against Airbus. It went ahead with partial tariffs on most Airbus jets and products from cheese to olives and single-malt whisky.A decision on retaliation rights for the EU in a parallel case on aid for Boeing is due next year..
In Monday's finding, a three-person panel rejected EU claims that a recent decision by Airbus to stop producing the slow-selling A380 meant the giant airliner could no longer be seen as a threat to Boeing, whose competing 747 is also out of fashion.While the WTO no longer faulted Airbus for causing lost sales to Boeing with the A380, which is no longer marketed, it ruled that the superjumbo would continue to cause market-share damage to Boeing for as long as it is produced and delivered.
Airbus plans to shut production in mid-2021.

The WTO appeared to strengthen findings against the A350, saying it had both cost sales and damaged Boeing's market-share prospects - a process called impedance - in the busier twin-engined long-haul market where Boeing offers its 787 Dreamliner...Read More

US threat to pull China's WTO developing nation tag will fail: State media

International News

A US threat to pull recognition of China's "developing nation" status at the World Trade Organisation is a pressure tactic ahead of this week's trade talks and is bound to fail, a commentary in state media said Monday.
The reaction followed a memo issued on Friday by President Donald Trump to US Trade Representative Robert Lighthizer.
It said the WTO, which operates a global system of trade rules and settles disputes, uses "an outdated dichotomy between developed and developing countries that has allowed some WTO members to gain unfair advantages." Without "substantial progress" to reform WTO rules within 90 days, Washington will no longer treat as a developing country any WTO member "improperly declaring itself a developing country and inappropriately seeking the benefit of flexibilities in WTO rules and negotiations," said the statement, which focused mostly on China.
The memo came ahead of meetings in Shanghai on Tuesday and Wednesday between US and Chinese negotiators aiming to resolve a trade dispute that has led to tariffs on more than $360 billion worth of two-way trade involving the world's two largest economies.
Washington "obviously timed the memo to serve as a new bargaining chip" in the trade talks, the commentary from state-run Xinhua news agency said of the WTO threat.

 "But the tactic of imposing pressure is nothing new to China and has never worked," it said.Xinhua added that the US government's "latest hegemonic attempt" to coerce the WTO "is destined to hit a wall of opposition." Developing country status in the WTO allows governments longer timelines for implementing free trade commitments, as well as the ability to protect some domestic industry and maintain subsidies...Read More

Trade growth slowdown likely to worsen amid tariff war, says WTO

Current Affairs

Rising trade tensions have prompted the World Trade Organization (WTO) to dim its prospect for trade growth in the second quarter of the 2019 calendar year.

“World trade growth is likely to remain weak into the second quarter of 2019,” the WTO said on Monday, pointing towards falling levels of growth in international air freight, automobile production, sales and trade in agriculture raw materials. “The outlook for trade could worsen if heightened trade tensions are not resolved or if macroeconomic policy fails to adjust to changing circumstances,” it further said.

While the WTO did not mention the US and China in its latest assessment, the escalating trade war between the two largest economies had been blamed by it earlier as a source of destabilisation of growth. The Geneva-based body brings out its quarterly forecast of global trade growth through the World Trade Outlook Indicator (WTOI) index. It shows a sustained slowdown in container port throughput, stemming from slow growth in crucial sectors.

The WTO has maintained that the index is not intended as a short-term forecast, suggesting it provides an indication of trade growth in the near future. The index had correctly forecast continued reduction in trade growth since 2018. Readings greater than 100 suggests growth above medium-term trends, while those below the number indicate the opposite. However, actual trade volumes have closely followed its predictions.


 This was driven by declines in all, but two component indices, electronic components and most importantly, export orders, which managed to rise slightly.graph Indices for export orders (96.6) and electronic components (96.7) appear to have bottomed out, even as both remained firmly below-trend, the WTO said. Elsewhere, the index for container port throughput (101.0) also declined but remained above 100, suggesting growth in line with recent trends.