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

This is going to be prolonged war with Japan: Korean Prez warns biz leaders

International News

South Korean President Moon Jae-in warned top business leaders of an extended battle with Japan over its export controls on vital manufacturing materials, raising concerns their latest fight could disrupt global supply chains.
On Wednesday, Moon told executives from companies including Samsung Electronics Co., SK Group, Hyundai Motor Co. and Lotte Group, that he saw Japan targeting South Korea’s economy for political gains. Japan last week imposed curbs on highly specialized products needed to make semiconductors and computer displays, and could also remove its neighbor from a list of trusted buyers.
“Our government is forming a response system demanding Japan to withdraw its unfair export limit measures with a sense of urgency,” Moon said in Seoul, calling the current situation an “unprecedented emergency.”
Japan has said it made the move to ensure proper security and questioned its trust of South Korea after courts there last year ruled that Japanese companies needed to pay compensation to Koreans conscripted to work at mines and factories during Japan’s 1910-45 colonial rule over the Korean Peninsula. Tokyo said all claims were settled by a 1965 treaty and that it didn’t see the court decisions as valid.

 The dispute has moved into the economic arena what the two see as proper contrition for Japan’s colonial rule over the Korean Peninsula. Past fights have mostly kept industries on both sides out of the fray but the worry now is that tensions between the major trading partners and U.S. allies could spiral out of control.Moon on Wednesday proposed an “active support” from the government’s end for companies to diversify importers and expand local production, adding that the export curbs would be reflected in an upcoming extra budget bill proposal within the National Assembly.

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.