China, EU to form group to modernize global trade rules

The European Union and China held high-level economic meetings in Beijing as both face rising trade tensions with the United States. (AFP)
Updated 25 June 2018
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China, EU to form group to modernize global trade rules

  • China and the EU agreed to launch a group that will work to update global trade rules
  • Companies worry the US-Chinese dispute could chill global trade and economic growth if other governments respond by raising their own import barriers

BEIJING: China and the European Union agreed Monday to launch a group that will work to update global trade rules to address technology policy, subsidies and other emerging irritants and preserve support for international trade amid US threats of import controls.
Actions such as US President Donald Trump’s unilateral tariff hikes in a technology dispute with Beijing show World Trade Organization rules need to keep pace with changes in business, said an EU vice president, Jyrki Katainen.
Katainen said Europe was not siding with Beijing in its dispute with Trump but was taking action to protect the global system of regulating free trade. He said the EU wants other governments to join the WTO group.
Companies worry the US-Chinese dispute could chill global trade and economic growth if other governments respond by raising their own import barriers. Even before Trump took office, economists were warning countries were tightening import restrictions and taking steps to favor their companies over foreign rivals.
US officials complain the WTO, the Geneva-based arbiter of trade rules, requires an overhaul because it is bureaucratic, rigid and slow to adapt to changing business conditions.
Katainen said Europe wants to focus on issues including subsidies to industry, government pressure on foreign companies to hand over technology and the status of state-owned industry — all areas in which Beijing faces complaints by Trump as well as other trading partners.
“I don’t expect these negotiations to be easy,” Katainen said at a news conference. But if nothing is done, “the environment for multilateral trade will vanish.”
Trump has threatened to impose tariffs of 10 percent to 25 percent on up to $450 billion of Chinese goods. Beijing responded to Washington’s first round of hikes on $34 billion of imports by raising duties on US soybeans, whiskey and other products.
Other governments have similar complaints but Trump has been more direct about challenging Beijing and threatening to disrupt exports.
Beijing might agree to talks to deflect further sanctions but is unlikely to agree to changes that hamper its technology plans, said Mark Williams of Capital Economics.
“I very much doubt they would agree to anything that would have teeth and punish them,” said Williams. Policies companies object to are “integral to the growth model China is pursuing,” he said.
Beijing agreed to narrow its multibillion-dollar trade surplus with the United States by purchasing more American goods but scrapped that after Trump went ahead two weeks ago with a tariff hike on $34 billion of imports.
Beijing also has cut import duties on autos and some consumer goods and promised to remove limits on foreign ownership in its auto, insurance and finance industries.
But the Communist government has resisted any change to its plans that call for challenging US and European technology dominance by creating Chinese companies capable of competing in fields including clean energy, biotech and aerospace.
Chinese officials deny foreign companies are required to give up technology. But in many industries they are compelled to work through state-owned partners, which requires them to share know-how with potential competitors.
One in five companies that responded to a survey by the European Union Chamber of Commerce in China released last week said they felt compelled to hand over technology in exchange for market access.
Trump infuriated US allies — from the EU to Canada and Mexico — last month by imposing tariffs of 25 percent on imported steel and 10 percent on aluminum. He said imports threatened America’s national security — a justification countries use rarely because it can be easily abused.
Beijing has tried to recruit European allies in its dispute with Washington, promising visiting leaders including Germany’s Chancellor Angela Merkel in May to open industries wider to their companies.
On Monday, Premier Li Keqiang, China’s No. 2 leader, told visiting French Premier Edouard Philippe that Beijing would allow more imports of beef and other food from France. Li said French companies were welcome to invest.
“China takes a positive attitude to cooperation with the French side,” Li said.


50 years after Concorde, US start-up eyes supersonic future

Boom Supersonic co-founder, Blake Scholl, poses for a photograph in front of an artists impression of his company's proposed design for an supersonic aircraft, dubbed Baby Boom, at the Farnborough Airshow, south west of London, on July 18, 2018. (AFP)
Updated 22 July 2018
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50 years after Concorde, US start-up eyes supersonic future

  • Boom Supersonic’s aircraft is expected by the company to fly for the first time next year
  • The Concorde was retired following an accident in 2000 in which a Concorde crashed shortly after takeoff from Paris, killing 113 people

WEYBRIDGE, United Kingdom: Luxury air travel faster than the speed of sound: A US start-up is aiming to revive commercial supersonic flight 50 years after the ill-fated Concorde first took to the skies.
Blake Scholl, the former Amazon staffer who co-founded Boom Supersonic, delivered the pledge this week in front of a fully-restored Concorde jet at the Brooklands aviation and motor museum in Weybridge, southwest of London.
Boom Supersonic’s backers include Richard Branson and Japan Airlines and other players are eyeing the same segment.
The company aims to manufacture a prototype jet next year but its plans have been met with skepticism in some quarters.
“The story of Concorde is the story of a journey started but not completed — and we want to pick up on it,” Scholl said.
The event coincided with the nearby Farnborough Airshow.
“Today... the world is more linked than it’s ever been before and the need for improved human connection has never been greater,” Scholl said.
“At Boom, we are inspired at what was accomplished half a century ago,” he added, speaking in front of a former British Airways Concorde that flew for the first time in 1969.

Boom Supersonic’s aircraft, dubbed Baby Boom, is expected by the company to fly for the first time next year.
“If we can’t continue where you left off, and build on that, then the shame is on us,” Scholl said, addressing himself to an audience that included retired Concorde staff.
“Our vision is to build a faster airplane that is accessible to more and more people, to anybody who flies.”
Boom Supersonic is making its debut at Farnborough and hopes to produce its new-generation jets in the mid-2020s or later, with the aim of slashing journey times by half.
The proposed aircraft has a maximum flying range of 8,334 kilometers (5,167 miles) at a speed of Mach 2.2 or 2,335 kilometers per hour.
If it takes off, it would be the first supersonic passenger aircraft since Concorde took its final flight in 2003.
The Concorde was retired following an accident in 2000 in which a Concorde crashed shortly after takeoff from Paris, killing 113 people.
Some analysts remain skeptical over the push back into supersonic.
“Supersonic is not what passengers or airlines want right now,” said Strategic Aero analyst Saj Ahmed, stressing that many travelers wanted cheap low-cost carriers instead.
Ahmed said supersonic jets were “very unattractive” because of high start-up development costs, considerations about noise pollution and high prices as well as limited capacity.

Independent air transport consultant John Strickland also noted supersonic travel was unproven commercially.
“Business traffic, on the face of it, is the most lucrative for airlines,” Strickland told AFP.
“But if there is an economic downturn or something happens where the market for business class traffic drains away, then you have nothing else left to do with that aircraft.
“I think it’s going to be some time before we see whether it can establish a large viable market... in the way that Concorde never managed to do.”
These concerns have not stopped interest from other players.
US aerospace giant Boeing had last month unveiled its “hypersonic” airliner concept, which it hopes will fly at Mach 5 — or five times the speed of sound — when it arrives on the scene in 20 to 30 years.
And in April, NASA inked a deal for US giant Lockheed Martin to develop a supersonic “X-plane.”