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  • China’s trade with US sinks in November

    Sun, 2019-12-08 22:10

    BEIJING: China’s trade with the US sank again in November as negotiators worked on the first stage of a possible deal to end a tariff war.

    Exports to the US fell 23 percent from a year earlier to $35.6 billion, customs data showed Sunday. 

    Imports of American goods were off 2.8 percent at $11 billion, giving China a surplus with the US of $24.6 billion.

    Exports to some other countries including France rose, helping to offset the loss.

    China’s global exports were off 1.1 percent from a year earlier at $221.7 billion despite weakening worldwide demand. Imports were up 0.3 percent at $183 billion, giving China a global surplus of $38.7 billion.

    Hopes for a settlement to the fight over Beijing’s technology ambitions and trade surplus rose after President Donald Trump’s announcement of a “Phase 1” agreement following talks in October. But there has been no sign of agreement on details nearly two months later.

    The dispute has disrupted global trade in goods from soybeans to medical equipment and threatens to depress economic growth.

    Trump put off a tariff increase in October but penalties already imposed by both sides on billions of dollars of imports stayed in place. Another US increase is due on Sunday on $160 billion of Chinese goods. That would extend penalties to almost everything Americans buy from China.

    Chinese spokespeople have expressed hope for a settlement “as soon as possible,” but Trump spooked financial markets last week by saying he might be willing to wait until after the US presidential election late next year.

    Financial markets have repeatedly risen on optimism about the talks only to fall back when no progress is announced.

    The “Phase 1” agreement doesn’t cover contentious issues including US complaints that Beijing steals or pressures companies to hand over technology. Economists warn tensions could rise again next year and the bulk of tariff hikes are likely to stay in place for some time.

    For the first 11 months of 2019, China’s total global exports were off 0.3 percent at $2.3 trillion despite the tariff war. Imports were down 4.5 percent at $1.8 trillion, adding to signs Chinese domestic demand is cooling.

    China’s exporters have been hurt by the US tariff hikes but its overall economy has been unexpectedly resilient. Growth in the world’s second-largest economy slipped to 6 percent over a year earlier in the three months ending in September, down from the previous quarter’s 6.2 percent but still among the world’s strongest.

    Weaker Chinese demand has global repercussions, depressing demand for industrial raw materials and components from other Asian economies and oil, iron ore and other commodities from Brazil, Australia and other suppliers.

    The Ministry of Finance announced Friday that China was waiving punitive import duties on US soybeans, keeping a promise announced in September.

    A sticking point is Beijing’s insistence that Washington roll back its most recent penalties on Chinese goods as part of the “Phase 1” deal. Beijing said last month the US side agreed, but Trump dismissed that.

    A Chinese spokesman repeated Thursday that Beijing expects such a move in a “Phase 1” agreement.

    Main category: 

    Global shares advance amid hopes for US-China deal

    Posted: by Arab News

  • France ready to take Trump’s tariff threat to WTO

    Sun, 2019-12-08 22:27

    PARIS: France is ready to go to the World Trade Organization to challenge US President Donald Trump’s threat to put tariffs on French goods in a row over a French tax on internet companies, its finance minister said on Sunday.

    “We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches US companies in the same way as EU or French companies or Chinese. It is not discriminatory,” Finance Minister Bruno Le Maire told France 3 television. Paris has long complained about US digital companies not paying enough tax on revenues earned in France.

    In July, the French government decided to apply a 3 percent levy on revenue from digital services earned in France by firms with more than €25 million in French revenue and €750 million ($845 million) worldwide. It is due to kick in retroactively from the start of 2019.

    Washington is threatening to retaliate with heavy duties on imports of French cheeses and luxury handbags, but France and the EU say they are ready to retaliate in turn if Trump carries out the threat. Le Maire said France was willing to discuss a global digital tax with the US at the Organization for Economic Cooperation and Development (OECD), but that such a tax could not be optional for internet companies.

    “If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” Le Maire said.

    He added that new EU Commissioner for Economy Paolo Gentiloni had already proposed to restart such talks.

    France pushed ahead with its digital tax after EU member states, under the previous executive European Commission, failed to agree on a levy valid across the bloc after opposition from Ireland, Denmark, Sweden and Finland.

    The new European Commission assumed office on Dec. 1.

    Main category: 

    EU to respond ‘as one’ on US tariff threat against France‘China wants US tariffs rolled back in phase one trade deal’

    Posted: by Arab News

  • IMF and Ukraine reach tentative $5.5bn deal

    Sun, 2019-12-08 22:07

    KIEV: The International Monetary Fund said it had reached a “staff-level” agreement with Ukraine on a new $5.5 billion, three-year aid program for the war-scarred country.

    IMF Managing Director Kristalina Georgieva said she was “pleased to note that IMF staff has reached agreement with the authorities” on the deal, adding it was “subject to IMF management approval.”

    Georgieva said she spoke by telephone on Saturday to President Volodymyr Zelensky and commended him on “impressive progress” on reforms and “sound economic policies.”

    “The president and I agreed that Ukraine’s economic success depends crucially on strengthening the rule of law, enhancing the integrity of the judiciary, and reducing the role of vested interests,” she said.

    She added that it was “paramount to safeguard the gains made in cleaning up the banking system and recover the large costs to the taxpayers from bank resolutions.”

    The IMF and other international donors have repeatedly pressed Kiev to attract much-needed investment by addressing pervasive corruption and reducing the power of oligarchs. But bankers and analysts said they fear the current authorities are targeting former bankers who have helped clean up the market instead of the oligarch owners of banks that go bankrupt.

    At his inauguration in May, the president urged people with Ukrainian heritage to return home.

    The country is in the spotlight due to the impeachment proceedings against US President Donald Trump.

    Trump is accused of abusing his office by pressuring Ukraine to find dirt on former US Vice President Joe Biden, his potential challenger in the 2020 election.

    The White House maintains Trump was simply encouraging the new government of Ukraine to rein in corruption.

    More than 13,000 people have been killed in Ukraine’s conflict with Russian-backed separatists in the industrial east which broke out shortly after Moscow annexed Crimea in 2014.

    Main category: 

    Ukraine protesters demand no ‘capitulation’ to Russia

    Posted: by Arab News

  • US debate on internet liability spills over to global trade deals

    Sun, 2019-12-08 21:45

    WASHINGTON: US lawmakers seeking to rein in Big Tech have been stepping up efforts to limit legal immunity for online services, and now are taking that fight global.

    House Speaker Nancy Pelosi this week backed a move by fellow lawmakers to carve out the so-called Section 230 protection — which some activists say is a cornerstone of the open internet — from a North American trade pact with Canada and Mexico, known as USMCA.

    “There are concerns in the House about enshrining the increasingly controversial Section 230 liability shield in our trade agreements, particularly at a time when Congress is considering whether changes need to be made in US law,” Pelosi spokesman Henry Connelly said.

    Debate on Section 230, a clause in the 1996 Communications Decency Act, has been raging for months amid rising concerns about the failure of tech platforms to curb hate speech, extremist content, copyright infringement and other abuses.

    The effort to modify the law — which immunizes online services from third-party content on their sites — has drawn support from both Democrats and Republicans.

    Republican Senator Josh Hawley proposed legislation earlier this year that would end the immunity unless companies submit to an “external audit” which shows they are acting in a “politically neutral” manner.

    “With Section 230, tech companies get a sweetheart deal that no other industry enjoys: Complete exemption from traditional publisher liability in exchange for providing a forum free of political censorship,” Hawley said in introducing the legislation. “Unfortunately, and unsurprisingly, big tech has failed to hold up its end of the bargain.”

    Civil liberties activists said Hawley’s bill is unconstitutional and would put the government in charge of regulating speech. Other analysts point out that Section 230 has enabled the internet to thrive and that modifying it could be devastating for the internet and online speech.

    “The services that we enjoy the most exist because of Section 230,” said Eric Goldman, director of the High-Tech Law Institute at Santa Clara University.

    Goldman said Section 230 has become a “proxy” for the frustrations with Facebook and Google but that “American consumers would be the losers” if the law is weakened.

    Corynne McSherry of the Electronic Frontier Foundation told a congressional hearing in October that Section 230 protects not only major tech platforms, but any online activity — from forwarding an email to commenting in a news forum to sharing pictures and videos of friends — from “third party liability.”

    McSherry said that without Section 230, tech firms such as Google, Facebook, and Twitter would not exist in their current form because they would not be able to host user content without fear of a lawsuit.

    She argued that eliminating Section 230 would “cement the dominance” of these firms, because it would mean higher costs to filter and moderate content that new startups could not afford.

    According to Katherine Oyama, Google’s head of intellectual property policy, the internet would be a far different experience without the liability shield.

    “Without Section 230, platforms could face liability for decisions around removal of content from their platforms,” she told lawmakers.

    Main category: 

    World equities markets sink as global trade war fears build2 weeks left, final US debate is on foreign policy

    Posted: by Arab News

  • WTO faces crisis over disputes settlement

    Sun, 2019-12-08 21:39

    GENEVA: The World Trade Organization’s capacity to settle international disputes, a core function throughout the body’s 25-year history, is on the brink of collapse following relentless US opposition.

    The appellate branch of the WTO’s Dispute Settlement Body (DSB), sometimes dubbed the supreme court of world trade, was a target of US criticism before President Donald Trump took office.

    His predecessor Barack Obama’s administration began a policy of blocking the appointment of appeals judges over concerns that their rulings violated American interests.

    Trump’s trade team has both extended that policy and escalated the fight.

    Barring a shock breakthrough in the coming days, the court will cease functioning on Wednesday.

    The WTO appellate branch normally counts seven judges but has just three left — the minimum required to hear an appeal. Two more judges are due to retire on Tuesday.

    WTO Director General Roberto Azevedo warned on Friday that the organization was facing a stark choice.

    “You could restore the impartial, effective, efficient two-step review that most members say they want,” he said.

    “Alternatively, your choices could open the door to more uncertainty, unconstrained unilateral retaliation — and less investment, less growth, and less job creation.” Various reform proposals have secured broad support.

    But according to EU trade commissioner Cecilia Malmstrom, there can no solution without US buy-in because the WTO works on consensus.

    “This is a dispute between the 163 members of the WTO and the US,” she told the European Parliament last month.

    US WTO envoy Dennis Shea argued on Friday that Washington had “engaged constructively over the past year” to resolve the crisis, but would not relent until its concerns were fixed.

    “This is not an academic question; we will not be able to move forward until we are confident we have addressed the underlying problems and have found real solutions to prevent their recurrence,” he told a WTO meeting.

    US concerns regarding the WTO appeals court include allegations of judicial overreach, delays in rendering decisions and bloated judges’ salaries.

    But top American trade officials have also insisted that the US Constitution does not permit a foreign court to supersede an American one — and that WTO appellate judges assert such superiority in international trade law.

    Washington reportedly threatened to block the WTO’s 2020 budget over the dispute, raising the prospect of a Jan. 1 shutdown.

    The US ultimately backed a provisional budget compromise on Thursday but it included substantial appellate body cuts.

    “There is no question the Trump administration has killed the appellate body,” said Edward Alden, a trade expert at the Council of Foreign Relations think tank. “That was its intention, and it has succeeded.”

    The appellate body’s demise will place international trade disputes in legal limbo.

    Countries will still be able to file grievances and dispute panels can issue rulings, but nations unhappy with those rulings can simply delay enforcement by filing an appeal to a non-functioning court.

    The EU, Canada and others have reaffirmed their commitment to a two-step dispute process, arguing that the right of appeal is essential in any legal system.

    Brussels and Ottawa have agreed to set up a temporary appellate process, which mirrors the WTO court, and would handle any bilateral disputes that arise during the impasse. Norway has joined that accord.

    Leading WTO members also say they are open to wider reform.

    “We have made clear that we are fully committed to tackling the root causes of the discontent around the existing system,” the EU ambassador to the WTO Aguiar Machado told AFP.

    Another Western diplomat who requested anonymity told AFP the EU was willing to tackle concerns about the court’s “excesses” but said the US must first agree to begin recruiting new judges — a non-starter for Washington.

    Some have suggested that a solution might have to wait until after next year’s presidential election in the US.

    In the meantime, the WTO has been left diminished.

    Since its founding in 1995, the organization has been tasked with promoting liberal international trade through a rules-based system backed by a dispute settlement process.

    Trade promotion has faltered as the body has struggled to agree any major new deals and Alden of the Council on Foreign Relations predicted: “There will never be another big, liberalising trade round.”

    Certainly, court-backed rule enforcement appears certain to suffer a heavy blow next week.

    Main category: 

    WTO slashes forecast for trade growth as conflicts mountTrump tells WTO to stop lenient trade treatment of China

    Posted: by Arab News

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