WTO chief warns of economic danger of trade war

Director General of the World Trade Organization (WTO) Roberto Azevedo, is welcomed by Argentina's President Mauricio Macri at Costa Salguero in Buenos Aires during the G20 Leaders' Summit, on November 30, 2018. (AFP)
Updated 06 December 2018
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WTO chief warns of economic danger of trade war

  • The “outcome in all simulations is that trade and economic growth will slow down and that all countries, without exceptions, will lose out in a global trade war,” Azevedo said

WASHINGTON: All countries will lose in a global trade war, the head of the world’s trade referee warned in a speech on Wednesday.
Under attack from US President Donald Trump, the head of the World Trade Organization, Roberto Azevedo, acknowledged that reforms are needed, but rejected criticism that trade is the main cause of job losses.
Azevedo welcomed the commitment by the Group of 20 over the weekend in Buenos Aires to reform the WTO to better preside over the modern trading system, saying the “system can be better.”
But as the Trump administration has aggressively imposed punitive tariffs on trading partners, especially on China, with the goal of reducing the US trade deficit, Azevedo said that “we have to get away from the idea that trade is a zero-sum proposition.”
“It is not. Everyone can benefit,” he said in a speech to the National Foreign Trade Council.
He welcomed the US-China truce reached in Buenos Aires, and the commitment to reach a deal to defuse the conflict between the world’s two biggest economies.
The alternative of escalating the trade conflict would undermine the global economic recovery, he said.
The “outcome in all simulations is that trade and economic growth will slow down and that all countries, without exceptions, will lose out in a global trade war,” Azevedo said.
That is a warning the International Monetary Fund also has issued.
Azevedo acknowledged the growing anxiety in a changing economy, but stressed that most of the job losses are due to technological change, rather than trade.
Trade is “an engine of growth, productivity, innovation, job creation,” he said.
The Trump administration has blocked the workings of the WTO dispute arbitration system.
Azevedo again flagged the dangers of that path, saying it could undermine the WTO. But he said that after the agreement by the G20, “I believe that this is a once-in-a-generation opportunity to renew the trading system.”


UAE property developers’ earnings give Gulf markets a boost

Updated 17 February 2019
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UAE property developers’ earnings give Gulf markets a boost

  • Real estate sector gets confidence boost
  • DAMAC gains despite 87 pct drop in Q4 net profits

DUBAI: Most stock markets in the Middle East closed higher on Sunday, reflecting a rally in global stock markets on Friday, and were also boosted by better-than-expected company results, particularly in real estate.

The Abu Dhabi index gained 0.7 percent and the Dubai index 0.6 percent, as two of the largest property developers in the United Arab Emirates posted positive fourth-quarter financial results last week that beat market expectations.

“The market is starting to rebuild confidence in earnings as a driver for sentiment,” said Arqaam Capital in a research note. “Sentiment on the UAE was very weak in 2018, specifically for real estate, on concerns over oversupply risk, pricing pressure that is leading to extended payment plans, and a rental yield compression that is continuing to fall,” Arqaam said.

“But Q4 numbers provided evidence that a few developers have emerged as winners (Emaar Co’s, Aldar) out of market consolidation.” Emaar Properties, Dubai’s largest listed developer, reported a 27 percent rise in fourth-quarter profit.

The stock rose 2 percent on Sunday. DAMAC Properties closed up 0.8 percent, despite having reported a nearly 60 percent fall in full-year profit and an 87 percent drop in fourth-quarter net profits.

In Abu Dhabi, Aldar Properties gained 3.6 percent. Last week, the developer reported a rise in fourth-quarter earnings and higher dividends for 2018. In other sectors, Abu Dhabi Islamic Bank rose 0.5 percent after saying it had no merger and acquisition plans. This was in response to a Bloomberg report last week which said the bank was considering such options.

The Saudi index closed 0.4 percent down, in contrast to the rest of the region’s markets. Arab National Bank reported an increase in full- year net profit to 3.13 billion riyals ($834.62 million) from 3.03 billion riyals one year earlier.

The stock remained unchanged and this failed to give support to the banking sector. Alinma Bank < 1150.SE> and Al Rajhi Banking & Investment Corp. lost 0.3 percent and 0.6 percent, respectively.

In Egypt, where the main index gained 1.4 percent, Orascom Investment Holding, up 3.2 percent, was among the stocks attracting the highest trading volume. Shares in the company jumped last week after its chairman, Egyptian billionaire businessman Naguib Sawiris, said he saw possible investment opportunities in North Korea if a summit between its leader Kim Jong Un and US President Donald Trump later this month was successful.

SAUDI The index lost 0.4 pct to 8,592 points ARABIA DUBAI The index rose 0.6 pct to 2,550 points ABU DHABI The index rose 0.7 pct to 5,070 points QATAR The index gained 0.7 pct to 10,011 points EGYPT The index rose 1.4 pct to 15,199 points KUWAIT The index gainedd 0.1 pct to 5,427 points OMAN The index was down 0.8 pct at 4,077 points BAHRAIN

The index went up 0.6 pct to 1,381 points ($1 = 3.7502 riyals)