Global share rally cools as Trump turns trade heat on Europe

NEW YORK -- The dollar fell and the rally in global equities lost steam on Tuesday as a US threat to slap tariffs on hundreds of European goods and a downgrade by the International Monetary Fund in its global economic growth forecasts dimmed the appetite for risk.

The IMF warned that growth could slow further due to trade tensions and a potentially disorderly British exit from the European Union. China, Germany and other major economies might need to take short-term actions to support growth, the IMF said.

US Treasury Secretary Steven Mnuchin told lawmakers the Trump administration is preparing for the possibility of a "hard Brexit."

Asian shares rose to an eight-month high overnight but US and European markets fell after President Donald Trump welcomed the World Trade Organization's finding that Europe's subsidies to planemaker Airbus had hurt the United States.

The US Trade Representative on Monday proposed a range of EU products, from large commercial aircraft and parts to dairy products and wine, to target as retaliation for subsidies given to Airbus.

Equities fell in Europe and on Wall Street, snapping an eight-day rally for the S&P 500, after an EU official said the European trade bloc was beginning preparations to retaliate over Boeing subsidies.

Uncertainty over tariffs and trade between the United States and China have dented business confidence and led corporate investment to dry up, said Hank Smith, co-chief investment officer at The Haverford Trust Co in Radnor, Pennsylvania.

"Business investment is now being put on hold because of the uncertainty around tariffs," he said.

A weak US-China trade deal probably is priced into the market, but a very good trade deal is not, Smith said.

"Even if it's not so good, it is going to have a positive effect on the economy because it is going to remove an uncertainty," he said.

MSCI's all-country world index, a gauge of stock performance in 47 countries, fell 0.35 percent. The pan-European STOXX 600 index closed down 0.47 percent and the FTSEurofirst 300 index of leading regional shares fell 0.41 percent.

Airbus said it saw no legal basis for the US move toward imposing tariffs on its aircraft and warned of deepening trade tensions.

Airbus shares fell 1.86 percent and many of its key suppliers lost between 0.7 percent and 1.2 percent. Boeing shares fell 1.46 percent ahead of its aircraft delivery and order numbers for March.

On Wall Street, the Dow Jones Industrial Average fell 190.44 points, or 0.72 percent, to 26,150.58. The S&P 500 lost 17.57 points, or 0.61 percent, to 2,878.20 and the Nasdaq Composite dropped 44.61 points, or 0.56 percent, to 7,909.278.

The yen rose as traders favored the safe-haven currency in the wake of the US proposal for tariffs on European goods.

The dollar index fell 0.04 percent, with the euro up 0.04 percent to $1.1263. The Japanese yen strengthened 0.32 percent versus the greenback at 111.14 per dollar.

US Treasury yields slid, pressured by concerns about the IMF's global economic outlook for 2019 as well as a round of headlines on Britain's messy departure from the EU.

In Europe, government borrowing costs in southern countries hit fresh lows, pushed down by hopes that this week's European Central Bank meeting will reinforce expectations for supportive policy measures in the months ahead.

Portugal's 10-year government bond yield fell to 1.195 percent, a 25-year low.

Benchmark U.S. 10-year Treasury notes rose 5/32 in price to push yields down to 2.4989 percent.

Oil fell from a five-month high above $71 a barrel after Russia signaled a possible easing of a supply-cutting deal with the Organization of the Petroleum Exporting Countries.

Brent, the global benchmark, rose to $71.34 a barrel, the highest since November, but later settled down 49 cents at $70.61 per barrel. U.S. crude also hit a November high of $64.79, but settled down 42 cents at $63.98.

Gold rose to its highest in more than a week as the dollar and equities weakened.

US gold futures settled 0.5% higher at $1,308.3 an ounce.

source: news.abs-cbn.com

Soaring trade restrictions spark 'serious concern': WTO

GENEVA -- The world's biggest economies slapped import restrictions on nearly half a trillion dollars' worth of trade over the past six months, the World Trade Organization said Thursday, voicing "serious concern".

Forty new import barriers were erected by G20 states between mid-May and mid-October this year -- 6 times more than during the preceding 6 months -- impacting $481 billion in trade, a fresh WTO report showed.

That was the highest figure recorded since the WTO started calculating the measure in 2012.

"The report's findings should be of serious concern for G20 governments and the whole international community," WTO chief Roberto Azevedo said in a statement.

"Further escalation remains a real threat," he warned, calling for an immediate reversal of the trend.

"If we continue along the current course, the economic risks will increase, with potential effects for growth, jobs and consumer prices around the world," Azevedo said.

An average of eight new restrictions on international trade, including tariff increases, import bans and export duties, were imposed by the big economies each month, the report showed. 

The report appears to show the impact of US President Donald Trump's relentlessly confrontational trade policy, including launching a trade war with China and slapping stiff tariffs on steel and aluminum imports from many countries.

On Wednesday, the WTO's Dispute Settlement Body agreed to review complaints from a range of countries over the US tariffs, as well as Washington's complaints over retaliatory duties.

"The WTO is doing all it can to support efforts to de-escalate the situation, but finding solutions will require political will and it will require leadership from the G20," Azevedo said. 

source: news.abs-cbn.com

EU states agree draft tariff rates on WTO quotas post-Brexit

BRUSSELS - EU ambassadors agreed on Wednesday draft tariff rates that the bloc will apply to quotas of imported goods after Britain leaves the European Union, the EU said in a statement.

The adjustment of the quotas entails dividing up existing quotas - set for the EU at the World Trade Organisation (WTO) - between Britain and EU member states after Brexit, "based on previous trade patterns", the statement said.

The existing EU tariff rate quotas for agricultural, fish and industrial products at the WTO were established while Britain was an EU member.

Tariff rate quotas are tariffs applied to a certain amount of quotas of imported goods.

The EU will have to engage in negotiations with WTO partners for each of the new tariff rate quotas.

However, "the EU needs to be able to proceed unilaterally to the dividing up of the tariff rate quotas for the period between the UK's withdrawal from the EU and the conclusion of a final agreement within the WTO," the statement said.

The agreement reached by EU states will need the approval of the EU Parliament before becoming law.

(Reporting by Francesco Guarascio Editing by Andrew Heavens and Susan Fenton)

source: news.abs-cbn.com

WTO chief downplays Trump withdrawal threat

GENEVA - World Trade Organization (WTO) head Roberto Azevedo said on Friday U.S. President Donald Trump's comments about potentially leaving the WTO were consistent with what the United States has said previously and did not reflect new concerns.

Trump said on Thursday that he could pull out of the WTO, potentially undermining one of the foundations of the modern global economy, which the United States was instrumental in creating.

"If they don't shape up, I would withdraw from the WTO," Trump said.

In a response on Friday, Azevedo, the WTO's director general, said there was no reason for "panic".

"The U.S. concerns about areas in the WTO that they would like to improve are not new. And I think what he said yesterday is consistent with what they have expressed before."

Trump has previously called the WTO a "disaster" and a "catastrophe".

During his election campaign he told NBC's Meet the Press programme that if the WTO rules blocked his policies, he would renegotiate U.S. membership or pull out.

Trump's ambassador has said the United States will not shy away from being disruptive to shake up what it sees as a complacent organisation, and has precipitated a crisis by blocking appointments of WTO appeals judges, forcing other countries to discuss potential reforms to assuage Trump.

Many diplomats say that although they dislike the U.S. tactics, they agree that the WTO needs reform, and hope that the situation can be used to make the 23-year-old trading club more efficient and effective.

The WTO is run on the basis of "consensus", meaning that every one of its 164 members has an effective veto and it is almost impossible to get agreement on any change to the rules.

Azevedo said many WTO members were now talking about improvements, which was a good development.

"Everyone that would like to see improvements in the WTO is very welcome to present their ideas and their suggestions to improve the organisation, sit down with the other members and get the job done," he said.

source: news.abs-cbn.com

Women are solution to Japan's labor shortage: head of int'l body

GENEVA - Women are the solution to Japan's expected labor shortage and economic difficulties stemming from a decline in its population, the head of a joint agency of the World Trade Organization and the United Nations recently told Kyodo News.

"There is a big potential in Japan to grow the economy with the participation of women in this growth, by putting women in the economy," Arancha Gonzalez, executive director of the International Trade Center said.

The institution is dedicated to supporting the internationalization of small and medium-sized companies, paying special attention to the role of women entrepreneurs.

"I think the position by Prime Minister Shinzo Abe to direct one of his 'arrows' towards more participation of women in society and economy is the right one," Gonzalez said, referring to the government's "Abenomics" economic and fiscal policy mix.

In addition to fiscal stimulus and monetary easing -- the first two arrows -- "Abenomics" implies structural reforms. Female empowerment is one component of this third arrow, Abe having announced in September 2013 at the U.N. General Assembly his intention to create "a society in which women shine."

The Abe administration has for example set a goal of raising the proportion of women in leading corporate positions to 30 percent by 2020.

"Since 2003, Japan has lost eight million people in the age bracket between 18 and 65. But it has increased the participation of employees in this age bracket, and this is because women have participated more into the job market," Gonzalez said.

Japan's fertility rate is one of the lowest among industrialized countries, standing at 1.42 in 2014, compared with 1.86 for the United States, 1.98 for France and 1.37 for Italy, according to the Japanese government's Declining Birthrate White Paper.

Japan still faces many challenges in terms of female empowerment, however.

"We have not done enough in ensuring that women are a greater part of our economy. And this is very clearly the case in Japan, where the participation of women in the workforce is well below that of men and where the pay gap between men and women is huge," Gonzalez said.

Japan is constantly ranked low by international reports on female empowerment.

The 2016 edition of the Global Gender Gap Report, compiled by the World Economic Forum, ranked Japan 111th out of a total of 144 countries because of the huge disparity between men and women in terms of political empowerment and economic participation.

"The issue of women empowerment is to a large extent, especially for a country like Japan, about changing mentalities. And in order to change mentalities, the best way is to first have a dialogue," Gonzalez said.

A Cabinet Office survey released in late October found that 54.2 percent of the respondents approved of the idea that women should continue to work after having a baby, up 9.4 percentage points from the previous poll in 2014.

Still, some 8.4 percent said women should leave the job market after having their first child, while 4.7 percent said they should do so after they get married and 3.3 percent responded that women should never work.

Gonzalez will participate in the World Assembly of Women on Dec. 13 and 14 in Tokyo, a conference organized by the Abe administration to promote female empowerment.

"I think this kind of conference is very effective because it is about discussing, conveying, in order to prepare a change in mentalities," Gonzalez said.

==Kyodo

source: news.abs-cbn.com

EU tries to look beyond Greece to deepen China ties

BRUSSELS - The European Union will briefly put aside worries about Greece to broaden its relations with China at a summit in Brussels on Monday, hoping for Chinese investment in Europe's new infrastructure fund and support for a global climate deal.

As China seeks to move Sino-European ties beyond trade and win a bigger role in international affairs, the European Union is relieved to find a more cooperative partner, agreeing to play down tensions that have bedevilled relations in the past.

"This meeting will send a positive signal that China and the EU can push growth through reform and innovation," said Chinese Deputy Commerce Minister Wang Shouwen before the first summit between China's premier, Li Keqiang, and the new heads of the European Commission, Jean-Claude Juncker, and the European Council of EU leaders, Donald Tusk.

An expected multi-billion euro pledge by Beijing to invest in European telecoms infrastructure, reported first by Reuters earlier this month, is the most concrete sign that trade disputes and issues about China's human rights are no longer dividing Brussels and Beijing at the highest level.

While the amount is still to be decided, the pledge will mark the latest step in China's efforts to shape global economic governance and follows decisions by major EU governments to join the Chinese-led Asian Infrastructure Investment Bank (AIIB) in defiance of Washington.

Underscoring the change in tone, China's Li may hold a news conference at the EU summit, diplomats said.

In the past, the unwillingness of senior Chinese officials to hold news conferences following high-level meetings in Brussels was a source of conflict because the European Union prides itself on its openness to the media.

Monday's summit is also expected to be the occasion for China to boost its environmental credentials and voice solidarity with the European Union's push for a new global deal on climate change at U.N. talks late this year hosted by France.

China, the world's biggest polluter, has shifted its stance since the U.N. summit of 2009, the last attempt to reach a climate deal, as it faces social unrest because of pollution.

Beijing had said it will submit its plans for emissions reduction to the United Nations in the first half of this year. People familiar with the issue in both China and the European Union say Monday could be the day Beijing chooses, although it is unclear if the announcement will be made in Brussels.

TRADE TENSIONS STILL LURK

China, responsible for around 25 percent of all greenhouse gas emissions, has already said its emissions will peak "around 2030, with the intention to try to peak early". Diplomats have said China could also announce a new target for the carbon intensity of its economy for 2030.

Jos Delbeke, director general of the European Commission's
climate department, said the significance of a formal Chinese pledge to the United Nations would be that "we are going to see more than half of the emissions in the world covered".

There are still trade tensions, however, as many in Europe refuse to see China as anything but a state-led and subsidised economy. That sets up a dispute next year over Beijing's bid to win a different status at the World Trade Organisation that would make it harder for Europe to protect local industry.

The WTO recognised when Communist China joined the trade body in 2001 that its local prices are not set by market forces but expected that 15 years after the date of accession, Beijing would play less of a role in directing the economy.

"China is considered in the WTO setting as a developing country and at the same time, wants market economy status," said Italy's deputy economy minister Carlo Calenda, who is responsible for trade. "It is clear that it is not a market economy. So what are we debating?"

source: www.abs-cbnnews.com

WTO chief calls for 'European growth budget'

PARIS - World Trade Organization chief Pascal Lamy backed calls for a rethink of European economic policy on Tuesday, calling for a "European growth budget".

In an opinion piece published on the website of French newspaper Le Monde, Lamy and former European Bank for Reconstruction and Development head Jacques Attali called for deeper integration to combat the eurozone debt crisis.

"In the months and years to come, the countries of the eurozone are facing a major political and social crisis if they do not go through an additional step in integration," the two wrote.

Both men are closely linked with France's Socialists, whose candidate Francois Hollande defeated Nicolas Sarkozy Sunday to become France's president and who has called for a refocus in Europe on growth instead of austerity.

"The survival of the eurozone depends on an economic government and a European growth budget. Only federalism is capable of avoiding the disastrous consequences of its (the euro's) collapse on our standard of living," they wrote.

The two called for pooling some European debt the creation of "project bonds" to generate more than a billion euros ($1.3 billion) in financing for investment projects in industry and infrastructure.

They also called for Europe-wide carbon and financial transaction taxes and reforms to deepen political integration.

"Europe cannot emerge from this crisis without a change in logic. If the current situation continues... (the euro's) disappearance is only a question of time," they wrote. "Another exit path is possible.

source: interaksyon.com