Airbus warns could leave Britain if no Brexit deal

A new Airbus A330neo is pictured after landing at the end of its first flight on October 19, 2017, at the Toulouse-Blagnac airport, near Toulouse. (AFP)
Updated 22 June 2018
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Airbus warns could leave Britain if no Brexit deal

  • Industry analysts say Airbus would be unlikely to pull out of the UK abruptly because of long lead times and waiting lists for its planes
  • Airbus, which makes wings for all its passenger jets in the UK, said that leaving both the EU’s single market and customs union immediately

LONDON: Aviation giant Airbus has warned it could pull out of Britain if it leaves the European Union without a deal, upping the pressure Friday on Prime Minister Theresa May to make progress in Brexit negotiations with Brussels.
The European group, which directly employs nearly 15,000 people, warned that crashing out of the bloc would be “catastrophic” and force it to consider its investments.
“Put simply, a ‘no deal’ scenario directly threatens Airbus’ future in the UK,” said chief operating officer Tom Williams.
May’s government holds out the possibility of walking away as a negotiating tactic, but says she expects to get a deal before it exits the bloc on March 29 next year.
“We have made significant progress toward agreeing a deep and special partnership with the EU to ensure trade remains as free and frictionless as possible, including in the aerospace sector,” a spokeswoman said.
However, talks are stalled on the issue of the Irish border and Britain’s indecision over what it wants.
EU leaders, who will meet May at a summit next week, have warned that time is running out, while Brussels has urged them to step up preparations for no deal.
Britain intends to leave the EU’s single market and customs union to forge its own independent trade policy and end free movement of labor.
In a Brexit risk assessment, Airbus said if plans for a transition deal failed and this break happened in March, it “would lead to severe disruption.”
“This scenario would force Airbus to reconsider its investments in the UK, and its long-term footprint in the country,” the report said.
Airbus builds wings and landing gear for commercial aircraft in Britain and also has a space technology center in the country, supporting 117,000 jobs overall.
In Wales, where one of the largest of more than 25 Airbus sites is based, the devolved government run by the UK’s opposition Labour party said the warning was “extremely worrying.”
Labour’s UK Brexit spokesman Keir Starmer said May’s “reckless decision to keep no deal on the table and to rule out a customs union or strong single market deal after Brexit is putting jobs and the economy at risk.”
Former Wales minister Stephen Crabb, a member of May’s Conservative party, said it was a “wake-up call.”
Steve Turner, of Britain’s biggest trade union Unite, added: “People voted to leave the EU, but didn’t back leave to lose their jobs and see their livelihoods smashed on the cliff face of a ‘hard Brexit’.”
However, Ian Paisley Jr., an MP for the Brexit-supporting Democratic Unionist Party (DUP) which props up May’s government, said it was a “scare story.”
“The EU needs a deal and the UK is going to get a deal!“
A string of airlines, banks and other corporate household names have already activated their contingency plans to move jobs or restructure because of Brexit.
The government has agreed a post-Brexit transition period that will last until December 2020, to allow time for a new economic partnership to be struck with the EU.
But Airbus said this was “too short” for a new agreement to be made and “too short for Airbus to implement the required changes with its extensive supply chain.”
It said it would “carefully monitor any new investments,” and Williams admitted that “in any scenario, Brexit has severe negative consequences.”
May’s spokeswoman said there would be talks with Airbus later on Friday, adding: “There is an open dialogue there and we continue to talk to them.”
Carmaker BMW also warned that uncertainty was affecting the investment climate.
“If we don’t get clarity in the next couple of months we have to start making those contingency plans — which means investing money in systems that we might not need, in warehouses that might not be usable in the future, in effectively making the UK automotive industry less competitive than it is in a very competitive world right now,” Ian Robertson, special representative of the BMW Group in the UK, told the BBC.


US courts allies with free trade offers at G20, France resists

Updated 22 July 2018
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US courts allies with free trade offers at G20, France resists

BUENOS AIRES: The US sought to woo Europe and Japan with free trade deals on Saturday to gain leverage in an escalating tariff war with China but its overtures faced stiff resistance from France at a G20 finance ministers meeting dominated by trade tensions.
US Treasury Secretary Steven Mnuchin told reporters at the gathering of the financial leaders of the world’s 20 largest economies in Buenos Aires that he was renewing President Donald Trump’s proposal that G7 allies drop trade barriers between them.
“If Europe believes in free trade, we’re ready to sign a free trade agreement,” Mnuchin said, adding that such a deal would require the elimination of tariffs, non-tariff barriers and subsidies. “It has to be all three issues.”
Trump has angered European allies by imposing import tariffs of 25 percent on steel and 10 percent on aluminum, causing the European Union to retaliate with similar amounts of tariffs on Harley-Davidson motorcycles, Kentucky bourbon and other products.
Trump, who frequently criticizes Europe’s 10 percent car tariffs, is also studying adding a 25 percent levy on automotive imports, which would hit both Europe and Japan hard.
French Finance Minister Bruno Le Maire said the European Union would not consider launching trade talks with the United States unless Trump first withdraws the steel and aluminum tariffs and stands down on a car tariff threat.
“We refuse to negotiate with a gun to our head,” Le Maire told reporters on the sidelines of the G20 meeting.
Trump has angered European allies by imposing import tariffs of 25 percent on steel and 10 percent on aluminum, causing the European Union to retaliate with similar amounts of tariffs on Harley-Davidson motorcycles, Kentucky bourbon and other products.
Trump, who frequently criticizes Europe’s 10 percent car tariffs, is also studying adding a 25 percent levy on automotive imports, which would hit both Europe and Japan hard.
French Finance Minister Bruno Le Maire said the European Union would not consider launching trade talks with the United States unless Trump first withdraws the steel and aluminum tariffs and stands down on a car tariff threat.
“We refuse to negotiate with a gun to our head,” Le Maire told reporters on the sidelines of the G20 meeting.
IMF Managing Director Christine Lagarde presented the G20 finance ministers and central bank governors meeting in Buenos Aires with a report warning that existing trade restrictions would reduce global output by 0.5 percent.
In the briefing note prepared for G20 ministers, the IMF said global economic growth may peak at 3.9 percent in 2018 and 2019, while downside risks have increased due to the growing trade conflict.
Lagarde’s presentation came shortly after Mnuchin said there was no “macro” effect yet on the US economy.
Mnuchin said that, while there were some “micro” effects such as retaliation against US-produced soybeans, lobsters and bourbon, he did not believe that tariffs would keep the United States from achieving sustained 3 percent growth this year.
The US dollar fell the most in three weeks on Friday against a basket of six major currencies .DXY after Trump complained again about the greenback’s strength and about Federal Reserve interest rate rises, halting a rally that had driven the dollar to its highest in a year.
The last G20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy except for a commitment to “further dialogue.”
Brazilian Finance Minister Eduardo Guardia said participants agreed the risks to the global economy had increased since their last meeting, citing rising trade tensions and higher interest rates by major central banks.
He said the final communique would reflect the need for members, particularly in emerging markets that have been roiled by currency weakness, to undertake reforms to protect themselves against volatility.
German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low.
“I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires.
The US tariffs will cost Germany up to 20 billion euros ($23.44 billion) in income this year, according to the head of German think-tank IMK.
Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G20 gathering would lead to an easing of retaliatory trade measures.
“Trade protectionism benefits no one involved,” he said. “I think restraint will eventually take hold.”