Southeast Asian leaders to vow to fight protectionism

Foreign ministers from ASEAN (Association of Southeast Asian Nations) member countries pose for a group photograph during the 17th ASEAN Political-Security Community Council Meeting in Singapore on April 27. (AFP)
Updated 27 April 2018
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Southeast Asian leaders to vow to fight protectionism

SINGAPORE: Southeast Asian leaders are expected to rally against protectionism at a summit in Singapore this weekend amid fears that tit-for-tat tariffs between the US and China could escalate into a global trade war.
A region of around 650 million people, Southeast Asia is home to some of the world’s fastest growing economies, thanks largely to the benefits of free and open trade.
But officials and analysts have warned that an escalation of trade tensions between the world’s two biggest economies poses a risk to the region’s growth.
Leaders from the 10-country Association of Southeast Asian Nations (ASEAN) are expected to pledge to fight protectionism when they meet in the city-state on Saturday, according to a draft of their final statement seen by AFP.
The statement warns of “uncertainties surrounding global economic recovery, the rising trends of protectionism, and global policy uncertainties.”
“We reiterated our strong commitment to open and inclusive regionalism, free and open markets and underscored the critical importance of the rules-based multilateral trading system,” it says.
US President Donald Trump sent shockwaves around the world last month when he imposed tariffs on steel and aluminum imports.
He also authorized tariffs on about $50 billion worth of Chinese exports in response to Beijing’s alleged theft of American intellectual property.
Beijing has responded by slapping duties on key US agricultural exports, in measures intended to target the American president’s support base.
Trump accuses China of driving up a yawning, $337 billion trade deficit with the United States through unfair trade practices.
The Southeast Asian leaders will also welcome Friday’s historic summit between North Korean leader Kim Jong Un and South Korea’s President Moon Jae-in, while calling on Pyongyang to get rid of its atomic weapons.
Regional foreign ministers met Thursday before the leaders’ summit, and “ASEAN feels there is a greater chance for peace in the Korean Peninsula,” a diplomat, who asked not to be named, said.
On the disputed South China Sea, the leaders are expected to take note of “the concerns expressed by some leaders on the land reclamations and activities in the area, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region.”
Four ASEAN states — Brunei, Malaysia, the Philippines and Vietnam — have laid partial claims to the sea, pitting them against China which asserts sovereignty over almost the entire area.
China rankled its smaller neighbors when it carried out massive land reclamations in the sea, and is now putting up structures, which analysts say include runways and military facilities.


Boeing crisis, trade tensions cast pall over Paris Air Show

Updated 58 min 14 sec ago
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Boeing crisis, trade tensions cast pall over Paris Air Show

  • Marquee event is a chance to take the pulse of the $150-billion-a-year commercial aircraft industry
  • Aerospace executives are concerned about the impact of the Boeing 737 MAX crisis on public confidence in air travel

PARIS: Safety concerns, trade wars and growing security tensions in the Gulf are dampening spirits at the world’s largest planemakers as they arrive at this week’s Paris Air Show with little to celebrate despite bulging order books.
The aerospace industry’s marquee event is a chance to take the pulse of the $150-billion-a-year commercial aircraft industry, which many analysts believe is entering a slowdown due to global pressures from trade tensions to flagging economies, highlighted by a profit warning from Lufthansa late on Sunday.
Humbled by the grounding of its 737 MAX in the wake of two fatal crashes, US planemaker Boeing will be looking to reassure customers and suppliers about the plane’s future and allay criticism of its handling of the months-long crisis.
“This is a defining moment for Boeing. It’s given us pause. We are very reflective and we’re going to learn,” Chief Executive Dennis Muilenburg pledged on Sunday.
The grounding of the latest version of the world’s most-sold jet over safety concerns has rattled suppliers and fazed rival Airbus, which is avoiding the traditional baiting of Boeing while remaining distracted by its own corruption probe.
Aerospace executives on both sides of the Atlantic are concerned about the impact of the crisis on public confidence in air travel and the risk of a backlash that could drive a wedge between regulators and undermine the plane certification system.
Airlines that rushed to buy the fuel-efficient MAX are taking a hit to profits since having to cancel thousands of flights following the worldwide grounding in March.
Even the planned launch of a new longer-range version of the successful A320neo jet family from Airbus, the A321XLR, is unlikely to dispel the industry’s uncertainty, analysts said.
The planemaker is hoping to launch the plane with up to 200 orders with the support of at least one major US buyer such as American Airlines but faces a last-minute scramble to win deals.
“Boeing’s MAX crisis isn’t the most ominous dark cloud, since it can be solved, but traffic numbers are genuinely scary,” said Teal Group aerospace analyst Richard Aboulafia.
“If March and April are a sign of things to come, we’re looking at broader industry demand and capacity problems.”
“Net orders might be the lowest in years,” Aboulafia added.
Others dismiss fears of a downturn, citing the growth of the middle class in Asia and the need for airlines to buy new planes to meet environmental targets.
“The only solution that the industry has is the newest most fuel-efficient aircraft,” John Plueger, Chief Executive of Air Lease Corp, told Reuters. “So that replacement cycle is going to continue.”
“We’re talking to so many airlines who still want more aircraft, and there’s really been no lessening of those discussions,” he said.
Boeing is delaying decisions on the launch of a possible new aircraft, the mid-sized NMA, to give full attention to the 737 MAX and last-minute engine trouble on the forthcoming 777X, industry sources said.
But it could unveil a number of deals favoring widebody jets where it has the upper hand against Airbus, including at least a dozen 787 aircraft for Korean Air Lines and some demand for 777 freighters. Airbus is meanwhile set to confirm an order for A330neo jets from Virgin Atlantic.
“We’ll have some orders flow. We anticipate some widebody orders that you’ll be hearing about through the week. But that’s not our focus for the show,” Muilenburg told reporters.
Robert Stallard of Vertical Research Partners expects roughly 800 aircraft orders at the show, but noted it can be hard to tell which are truly new, firm business or old orders, or switched models. That compares with some 959 orders and commitments at the Farnborough Airshow last year.
Some analysts pegged the likely total closer to 400.