Accord on revised Pacific Rim trade pact stalled
Accord on revised Pacific Rim trade pact stalled
Trump pulled out of the Trans-Pacific Partnership in January. Leaders of the 11 countries remaining in the TPP had been due to meet and endorse a deal worked out in last-minute talks overnight.
Japanese Prime Minister Shinzo Abe said Friday that the 11 leaders had to postpone their meeting on the sidelines of the annual summit of the Asia-Pacific Economic Cooperation forum in Danang, Vietnam.
“It was said that it is not at a stage where (the agreement) can be confirmed at the summit level,” said Abe, who was to co-chair the meeting. He made the comments to Japanese reporters after meeting with his Canadian counterpart, Justin Trudeau, who stayed away from the planned TPP leaders’ gathering while most other leaders showed up.
There was no immediate word from Canada on its stance. However, Trudeau had said days earlier that Canada would not be rushed into an agreement.
The chances for a deal by the time the summit ends on Saturday were unclear.
Earlier in the day, officials from Japan and some other countries expressed differing opinions on whether an “agreement in principle” had been reached.
The TPP member countries are trying to find a way forward without the US, the biggest economy and, before Trump took office, one of its most assertive supporters. Trump has said he prefers country-to-country deals and is seeking to renegotiate several major trade agreements to, as he says, “put America first.”
Vietnamese officials did not immediately respond to requests for comment.
Trump reiterated his markedly different stance on trade before the 21-member APEC summit convened late Friday with a gala banquet.
The US president told an APEC business conference that “We are not going to let the United States be taken advantage of anymore.” He lambasted the World Trade Organization and other trade forums as unfair to the United States and reiterated his preference for bilateral trade deals, saying “I am always going to put America first.”
Trump said he would not enter into large trade agreements, alluding to US involvement in the North American Free Trade Agreement and the TPP.
In contrast, Chinese President Xi Jinping told the same group that nations need to stay committed to economic openness or risk being left behind.
The Chinese president drew loud applause when he urged support for the “multilateral trading regime” and progress toward a free-trade zone in the Asia-Pacific.
APEC operates by consensus and customarily issues nonbinding statements. TPP commitments would eventually be ratified and enforced by its members.
But even talks this week on a declaration to cap the APEC summit had to be extended for an extra half day as ministers haggled over wording. It’s unclear what the exact sticking points were, but officials have alluded to differences over the unequal impact more open trade has had on workers and concerns over automation in manufacturing that could leave many millions in a wide array of industries with no work to do.
As a developing country with a fast-growing export sector, this year’s host country, Vietnam, has a strong interest in open trade and access for its exports to consumers in the West. The summit is an occasion for its leaders to showcase the progress its economy has made thanks largely to foreign investment and trade. Danang, Vietnam’s third largest city, is in the midst of a construction boom as dozens of resorts and smaller hotels pop up along its scenic coastline.
APEC’s members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taiwan, Thailand, the US and Vietnam.
Breaking up is hard to do for GE, America’s industrial aristocrat
- Experts question whether GE can survive in its present form much longer.
- Company removed from Dow Jones Industrial Average on Tuesday
DUBAI: You would not have noticed it from the self-confident assurance of GE’s executives last week, but their company — an aristocrat of the American business scene, a symbol of the power of US capitalism and a major partner of Saudi Arabia — is in serious trouble.
The 125-year-old company hosted journalists from around the world to showcase its expertise in power generation and distribution at major plants in the southern US, and it spun a persuasive story for GE to be regarded as a giant of the “digital industrial” universe.
GE is without doubt at the cutting edge of the power industry, from the gigantic monitoring walls in Atlanta, Georgia — where it can instantly diagnose problems at any one of nearly 1,000 plants in 76 countries — to the 3-D printing or “additive” facilities at Greenville, South Carolina, where it produces technology for the latest, most efficient and environmentally sound gas turbines.
But all the time there was a big elephant in the control centers, research labs and conference rooms: GE at group level is going through one of the most testing times in its history, with many experts questioning whether it can survive in its present form much longer.
Shareholders are in open revolt because the value of their investment has been halved in the past 12 months. Last year the dividend was cut for the first time since 1938 and only the second time in its history. Corporate debts are huge, and the company’s paper, once triple A-rated, is careering toward junk status.
The latest humiliation came on Tuesday when the company founded by Thomas Edison, the legendary technology entrepreneur and the inventor of the light-bulb, was kicked out of the Dow Jones Industrial Average, the 30-strong stock index of which it was an original constituent in 1896.
As recently as the 1990s, GE was America’s largest company by market capitalization, and less than 10 years ago was in the top five. Now it is ranked 44th by market size on the bigger S&P 500 index.
All this made the commitment of GE power executives all the more commendable, given the fact many of them are involved in pensions and savings schemes linked to the company’s plummeting shares.
The men and women who still proudly wear the GE badge were not willing to talk openly about the reasons for the company’s grand demise, or give their public views on what should be done to turn it around. Executives spoke of the need to make GE a “simpler, leaner” organization, especially regarding the big expensive group functions spawned by such a sprawling conglomerate.
But privately, they unanimously blamed the stewardship of former CEO Jeff Immelt, who a year ago stepped down from the job after nearly 16 tumultuous years. He is credited with getting GE through the difficult period after the 9/11 terrorist attacks and the global financial crisis, but generally is reckoned to have made a bad job of managing and directing future growth.
Many of his acquisitions and disposals over those 16 years were badly timed and value-destructive; some have landed GE in regulatory investigations that could cost further billions of dollars in write-offs and charges.
As to the way forward, the current chief, John Flannery, seems to be considering what some big investors are openly advocating: A break-up of the sprawling GE portfolio into its still-valuable constituents, including the power business.
The four big divisions are power, health care, aviation engineering and oil services, and there may be some industrial logic for keeping them together. Technicians and engineers were keen to point out that there are significant synergies between the aircraft engines and turbines businesses, and that some of the X-ray machines developed by health care are also used in turbine diagnostics.
But faced with the investor onslaught, such marginal benefits may not be enough to justify holding the conglomerate together. Oil services, in particular — only recently added with the merger of Baker Hughes to GE’s existing energy business — looks like an odd man out.
All of this matters in Saudi Arabia because of the prominent role GE continues to play in the Gulf. It has been involved in Saudi Arabia almost since the Kingdom was founded, and is still a valued and respected industrial partner for Saudi Aramco and Saudi Electric, among others.
Journalists were reminded of this when Scott Strazik, the power services division chief executive, announced that GE is planning a big manufacturing program for gas turbines — perhaps including the latest model the 9HA — in Dammam in the Eastern Province, and was committed to creating 100 jobs for Saudi male and female workers there.
Saudi Arabia was a major partner in one of Immelt’s few successful deals — the $11.6 billion disposal of GE’s plastics business to SABIC
Might Saudi Arabia play a part again in what many observers regard as the inevitable break-up of GE? Executives in the southern US were tight-lipped on that, too, and, of course, it will be decided at GE’s Boston HQ and in Riyadh — if it gets that far.
But it is clear that all options are under consideration and nothing can be ruled out for GE in extremis.
“Everything is on the table,” Flannery said recently.