China’s slams US ‘arrogance’ on WTO status

Trump’s memo said the WTO, which operates a global system of trade rules and settles disputes, uses “an outdated dichotomy between developed and developing countries that has allowed some WTO members to gain unfair advantages.” (AFP)
Updated 29 July 2019

China’s slams US ‘arrogance’ on WTO status

  • Trump’s WTO memo is widely seen as a swipe at China

BEIJING: China Monday said the US threat to pull recognition of China’s “developing nation” status at the World Trade Organization showed its “arrogance and selfishness,” ahead of crucial trade talks this week.
The reaction followed a memo issued on Friday by President Donald Trump to US Trade Representative Robert Lighthizer, stressing that some countries were enjoying lenient treatment by “improperly” identifying themselves as developing economies.
The memo is widely seen as a swipe at China.
The Trump administration’s demand “further exposed its wayward arrogance and selfishness,” Chinese foreign ministry spokeswoman Hua Chunying said at a regular briefing Monday.
One or a few countries “should not have the final say” on which nations should be categorized as developing countries, Hua said.
She insisted that China needs to maintain its status as a developing economy to “achieve real trade fairness.”
Trump’s memo said the WTO, which operates a global system of trade rules and settles disputes, uses “an outdated dichotomy between developed and developing countries that has allowed some WTO members to gain unfair advantages.”
Without “substantial progress” to reform WTO rules within 90 days, Washington will no longer treat as a developing country any WTO member “improperly declaring itself a developing country and inappropriately seeking the benefit of flexibilities in WTO rules and negotiations,” said the statement, which focused mostly on China.
The memo came ahead of meetings in Shanghai on Tuesday and Wednesday between US and Chinese negotiators aiming to resolve a trade dispute that has led to tariffs on more than $360 billion worth of two-way trade involving the world’s two largest economies.
Washington “obviously timed the memo to serve as a new bargaining chip” in the trade talks, the official Xinhua news agency said in a commentary.
“But the tactic of imposing pressure is nothing new to China and has never worked,” it said.
Xinhua added that the US government’s “latest hegemonic attempt” to coerce the WTO “is destined to hit a wall of opposition.”
Developing country status in the WTO allows governments longer timelines for implementing free trade commitments, as well as the ability to protect some domestic industry and maintain subsidies.
But Jennifer Hillman, a former top US trade official who served at the WTO, has said the benefits granted to countries with the special status in most cases has long passed.
The Trump administration has long complained that WTO rules are unfair to the United States, and has nearly throttled significant WTO proceedings by refusing to name new members of the appellate body for the dispute settlement system, which will cease to function later this year.
Despite Trump’s criticisms Washington has, in fact, won the majority of complaints it has filed with the WTO.


S&P 500 inches closer to record high

Updated 12 August 2020

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.