The United States and European Union said Tuesday they have resolved a 17-year-long fight over aircraft subsidies, agreeing to suspend tariffs for five years stemming from the Boeing-Airbus dispute.
“This meeting has started with a breakthrough on aircraft,” said European Commission President Ursula von der Leyen, who met with President Joe Biden at a U.S.-EU summit in Brussels. “This really opens a new chapter in our relationship because we move from litigation to cooperation on aircraft — after 17 years of dispute.”
At a subsequent press conference, von der Leyen added: The agreement we found now really opens a new chapter in our relationship, because we move from litigation to cooperation.”
U.S. trade representative Katherine Tai said during a videocall Tuesday that: “Today’s announcement resolves a longstanding trade irritant in the U.S.-Europe relationship.
“Instead of fighting with one of our closest allies, we are finally coming together against a common threat,” she added, mentioning China.
She added in a joint statement with the EU that both sides “now have time and space to find a lasting solution through our new Working Group on Aircraft, while saving billions of euros in duties for importers on both sides of the Atlantic.”
CNBC reported last week that the EU was pressing the White House to reach a deal to end trade tariffs imposed during the Trump administration, in relation to the Airbus and Boeing dispute that emerged in 2004.
As part of the deal, the EU and the U.S. agreed to provide research and development funding through an open and transparent process as well as to not give specific support, such as tax breaks, to their own producers that would harm the other side.
The idea is also to collaborate in addressing nonmarket practices conducted by other countries, including China, which is developing its own civilian aircraft.
Tai said the tariffs on EU products would be suspended as long as government support for Airbus meets the agreement terms.
“Should EU support cross a red line and U.S. producers are not able to compete fairly and on a level playing field, the United States retains the flexibility to reactivate the tariffs that are being suspended,” she said.
Valdis Dombrovskis, the EU’s trade chief, said the agreement “shows the new spirit of cooperation between the EU and the U.S. and that we can solve the other issues to our mutual benefit. Together we can deliver for our citizens and businesses.”
Airbus and Boeing cheer deal
Tuesday’s big announcement marked Biden’s first trip to the EU’s headquarters and the first EU-U.S. summit since 2014.
Airbus and Boeing, which dominate the commercial airplane market, cheered the deal, which comes just as the manufacturers are starting to regain their footing from the Covid-19 pandemic.
“Anything that levels the playing field in this highly competitive industry and avoids this terrible lose-lose proposition of tariffs across the Atlantic or across any borders for that matter is good,” said Airbus’ Chief Commercial Officer Christian Scherer during a media call on Tuesday. “You don’t need to take that from Airbus … Just ask our customers.”
Customers of European-made Airbus aircraft include Delta Air Lines, but Airbus has expanded its manufacturing footprint in the U.S. with its factory in Mobile, Alabama, where it makes some of its narrow-body jetliners.
“The understanding reached commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action,” Boeing said in a statement. “Boeing will fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected.”
Boeing has considered developing a new jetliner, efforts that were derailed by two crashes of its best-selling 737 Max in 2018 and 2019. Airbus’ Scherer said Tuesday that his company has “wind in its sails” to develop a freighter version of its A350 plane, which would compete against Boeing cargo planes.
Delta, which recently upsized an order for narrow-body Airbus planes, said the agreement “will help protect U.S. airlines, the millions of Americans they employ both directly and indirectly — and the U.S. traveling public.”
Robert Martinez, president of the 600,000-member International Association of Machinists and Aerospace Workers, applauded the deal and the governments’ common focus on China.
“As thousands upon thousands of U.S. aerospace jobs are outsourced throughout the world to countries like Mexico and China, we are also heartened by an acknowledgement that at least one non-market economy, China, has become the focus of these talks,” he said in a statement.
The EU-U.S. relationship hit a low during the previous White House administration with then-President Donald Trump accusing the EU of being worse than China with its trade practices.
Trump imposed duties worth $7.5 billion on European products after the World Trade Organization ruled that the EU had given unfair subsidies to Airbus.
Shortly afterward the EU imposed tariffs worth $4 billion on U.S. products off the back of another WTO ruling that said the U.S. had granted illegal aid to Boeing.
Boeing shares gained 0.6% Tuesday, while the S&P 500 lost 0.2%. Paris-listed Airbus shares added 0.4%.
Separately, the United Kingdom also said Tuesday it was hoping for a similar deal with the United States within coming days.
The U.K. was a member of the EU when the dispute emerged and was hit by the trade tensions that developed during the Trump presidency.
The EU and U.S. in March agreed to a four-month suspension of the tariffs, a step toward resolving the long-running trade war.
Steel and aluminum tariffs
The European Union also wanted to reach a deal on metal tariffs during Biden’s visit, but von der Leyen explained that the priority was aircraft subsidies.
The Trump presidency decided in 2018 to impose a 25% tariff on European steel and a 10% duty on European aluminum on the grounds of national security — something the EU vehemently opposed and retaliated against. In response, a first round of tariffs worth 2.8 billion euros ($3.4 billion) was implemented by the EU and another round worth 3.6 billion euros was due to kick in this month.
However, the EU decided to put these metal-related duties on hold last month in a sign of good faith in order to boost negotiations.
Speaking Tuesday, von der Leyen said that she is “confident we will find a solution” on this matter. (CNBC)
Antics of State Minister and Pohottu Mayor; mum on chemical fertiliser mistake; The Ganga – a link
Reams have been written in all local newspapers; much comment has traversed social media and persons have been bold to call for justice on two absolutely unrestrained and yes, evil, SLPP VIPs who have recently been dancing the devil as the saying goes. These evil doers seem to be pathologically unable to control themselves and behave as human beings: heads outsised with hubris and apparently bodies often pickled with liquor.
Very succinct comments have been made on Lohan Ratwatte, one being: “a leopard never changes his spots” referring to the many crimes supposed to have been committed by him, and the other that he is a gem of a man who may make a jewellery heist soon enough. He has the audacity to say he did nothing wrong in barging into two prisons; in one to show off to pals the gallows and in the other, to brandish a gun and place it against the heads of two shivering Tamil prisoners. All done within the week when world attention was focused on Sri Lankan human rights violations directed by the UNHRC
Cass’ comment is that Lohan Rat was committing hara-kiri (minus even a trace of the Japanese spirit of self sacrifice) and taking the entire country on a suicidal mission through his inability to hold his drinks and destructive hubris and murderous inclination. Cass particularly favoured Don Mano’s summation in his comment on the unlawful prison intrusions in the Sunday Times of September 19. “Any semblance of a shabby cover-up to enable Lohan Ratwatte to retain his position as State Minister of Gems and Jewellery will not only endanger the economy by depriving the nation’s dollar bare coffers of a GSP benefit of nearly 2.7 billion dollars, but will risk putting 21 million Lankans from the frying pan into the fire and test their tolerance to the core.”
The visit to the Welikada prison by the State Minister of Prison Reform and … was said to be with some men and one woman. Identities were kept under wraps and confusion raised by making the dame a beauty queen or cosmetician. But who she was, was soon known along the vine of gossip. One report said the person in charge of the prison or its section with the gallows, cautioned Lohan Rat and tried to dissuade his advance with friends in tow since the lady companion was in shorts and them walking through where prisoners were, would cause a commotion. But no, the State Minister advanced to show off the gallows with his short-shorts wearing woman companion and imbibing mates.
Cass is actually more censorious of this woman than even of the State Minister himself. Is she a Sri Lankan, so vagrant in her woman-ness? Doesn’t she have even an iota of the traditional lajja baya that decent women exhibit, even to minor level nowadays? Is associating with a State Minister and his drinking pals such a prized social event? Shame on her! She, if people’s assumption of identity is correct, has boasted political clout and been elevated by it too. Such our young girls! Do hope they are very few in number, though this seems to be a baseless hope as social events unroll.
Pistol packing – correction please – toy pistol packing Eraj Fernando is aiding the ex State Minister of Prison Reform to deface, debase and deteriorate Sri Lanka in the eyes of the world. He is interested in land and not in gallows or scantily clad gals. With thugs in tow he trespassed a property in Bamba and assaulted two security guards. Repetition of an incident he was embroiled in – a land dispute in Nugegoda a couple of weeks ago. He was taken in by the police and before you could say Raj, he was granted bail. What quick work of police and courts.
As the editor of The Island opined in the lead article of September 20: “The Rajapaksas have created quite a few monsters who enjoy unbridled freedom to violate the law of the land.” A convicted murderer known for his thug ways was presidentially pardoned a short while ago.
The good thing is that people talk, write, lampoon, and draw attention to these heinous crimes and do not seem scared for their necks and families. White vans have not started their rounds. And very importantly the memories of Ordinaries are not as fickle as they were. Wait and see is their immediate response.
New fad – jogging lanes on wewa bunds!
Some monks and men gathered recently on the partly torn up bund of Parakrama Samudraya and had the foolish audacity to say the bund needed a jogging lane. Tosh and balderdash! Then news revealed that other wewas too were being ‘attacked and desecrated’ to construct jogging lanes. In such remote rural areas which even tourists do not visit? Is there illicit money-making in this activity? Otherwise, no explanation is available for this sudden interest in farmers’ and toilers’ physical well being. They get enough exercise just engaging in their agriculture, so for whom are these jogging lanes?
Sharply contrasting persons
As apposite to the former two, are superb Sri Lankans up front and active and giving of their expertise, albeit unobtrusively. Consider the medical men and women and their service to contain the pandemic; farmers who protest to ensure harvests are not damaged too severely by false prophets who won the day for the banning of chemical fertilisers, pesticides and weedicides. The latest blow and justification of what so very many agriculturists, agrochemists, have been saying all along – organic is good but to be introduced very slowly; without importing compost from overseas, is the Chinese import containing evil microorganisms. Experts have categorically stated that chemical fertilisers are sorely needed for all agriculture; more so paddy and tea; and if used prudently cause no illness to humans or injurious side effects.
The four experts who comprised the panel at the MTV I Face the Nation discussion monitored by Shameer Rasooldeen on Monday September 20, agreed totally on these two facts and went on to say that it must be admitted a hasty decision was taken to stop import of chemical fertilizers. We listened to the considered wise opinions backed by true expertise of vibrantly attractive and articulate Dr Warshi Dandeniya – soil scientist, of Prof Saman Seneweera from the University of Melbourne, Prof Buddhi Marambe – crop scientist, and Dr Roshan Rajadurai – media person of the Planters Association. Listening to them, Cass swelled with pride and told herself see what sincerely-interested-in-the-country’s welfare eminent scientists we have in this land of rowdy politicians and uneducated MPs. They labeled the sudden banning of chemical fertilisers and insecticides and pesticides as “very dangerous and causing irreversible harm. It is not too late to reverse the decision, even if admitting fault is not possible.”
Oh dear! The stench! Never ending series of scams; executed or approved by politicians and all for illicit gains. Even the tragedy of the pandemic and suffering of much of the population does not seem to have curbed selfish lust for money.
Focus on the Mahaweli Ganga
Interesting and deserving of thanks. Chanaka Wickramasuriya wrote two excellent articles in the Sunday Islands of September 12 and 19 on the Mahaweli Ganga, imparting invaluable facts of the present river and its history, as for example which king built which wewa or anicut. He ended his second article by hoping the waters of the great river will feed the north of the island too: “Maybe then this island will be finally uplifted. Not just from north to south, but across class and caste, language and philosophy, and political partisanship. Hopefully driven by a newfound sanity among its denizens, yet symbolically attested to by the waters of the Mahaweli.”
These humans are Crazy!
Those of us who grew up reading the “Asterix” comics by Goscinny and Uderzo will no doubt remember the resonant words of Obelix, the menhir delivery man. So many times, he has observed the actions of characters ranging from Roman Emperors to Goths and made the statement “these humans are crazy” often accompanied by a few taps from his forefinger to his ample brow. These words remain a universal truth and valid even today when looking at what is going on around us.
Let’s start in Aotearoa – New Zealand with the continuing saga of the young man of Sri Lankan origin who went berserk in a supermarket and stabbed so many innocent people. Despite many assurances from the government and almost all the Kiwi friends and even acquaintances we have in this country that we Lankans are not responsible, we feel deep down inside us that we are in some way, shape or form, responsible for this person’s behaviour. Articles not only from people of my (archaic) generation but young upstanding millennials and those even younger have expressed this emotion in their own characteristic fashion. Also, we feel responsible that our network of ex citizens of the Pearl living in Aotearoa have been unable to offer any support or counselling to this person or others of his ilk.
Just as we start clawing our way out of this mire of guilt somewhat reduced by finding out just how greatly the immigration and refugee systems of New Zealand have been duped, we are now told how a currency smuggler has been granted refugee status. Now currency smuggling happens all the time, mainly due to the punitive profits taken from customers by those licenced daylight robbers the banks, but more on that later. Apparently, a currency smuggler who arrived on a forged passport, evading arrest by the authorities in the Pearl has been granted refugee status! REFUGEE seems to be the magic word as far as the NZ authorities go. Those of us who have gone through the legal immigration channels and filled reams of forms and waited years for replies are left gasping at how those worthies in the government departments of Aotearoa have one set of rules and standards for us and another completely if one puts the word REFUGEE on one’s documents.
We move on to the pearl, if I were to attempt to apologise for the “offensive actions” of members of my family (bearing my “sir” name and direct relatives) that would take up a series of tomes resembling the encyclopaedia Britannica! It may also feature my name in a few volumes as well! The current antics of a kinsman with regard to using his position and power calls for a level of responsibility, on my part. The only caveat being a request to the fourth estate to use the person’s first name. Frequent displays of a family name which some have treasured and tried to bring enhancement to, associated with behaviour of this kind, brings dismay at a level that can only be understood by those who have tried to live up to the standards set by ancestors who held high office with honour in the past. There have been many articles some ranging from biting sarcasm (unfortunately not understood by the majority) to others simply parroting what they have read on the internet. The bottom line is standby O denizens of the Pearl, this maybe just another episode in the teledrama that is Lanka under Paksa rule! There are possibilities of scripting to distract the majority and even a wider spectrum involving human rights issues in Geneva. Also, scrutinize yourselves and remember that “those who live in glass houses should not throw stones” and “let he who is without sin cast the first stone”?!
In Aotearoa, we call our Prime Minister by her first name and a PM that has gained the utmost respect of the people not to mention the world! Isn’t it time the Pearl followed suit? Of course, comments by the leader of the opposition like “Opposition Leader Premadasa said he vehemently condemned the disgraceful and illegal behaviour” reiterates the comments of Obelix. Especially when allegations and witnesses exist to “disgraceful and Illegal” behaviour by the person who uttered those very words. It may have been in a different context and “only” to do with the decimation of a national park in the Pearl but the behaviour had the same connotations. Looks like social media is the mitigating factor, as in those days, too, the fourth estate had to take care of continuing to exist and survive! Being the first party to spotlight such actions usually led to the “death of the messenger”.
As promised, back to the licenced daylight robbers of today, the banks. There is a “Robin Hood” tax in effect in some of the leading economies of Europe. The most “interesting” aspect for me being taxes on the profits of banks. The billions it could raise every year could give a vital boost to tackling poverty and climate change around the world and definitely in the Pearl. We call upon the “genius” in charge of the Central Bank as he is the “acknowledged” financial maestro of the Pearl (although he is never going to take RESPONSIBILITY for our plight) to look at this aspect if he has the cohunes to do it! But then again levels of corruption and obligations to high profit-making organisations that fund election campaigns, have to be taken into account in countries such as the Pearl.
Powerful efficient and successful economies like Germany and modern Demi-Gods like Bill Gates endorse this tax. Here is an idea for the government of the Pearl. Tax the banks on their huge profits and give some of that money back to the people without burdening an already insufferably burdened people! I fear ideas expressed in this column will meet their usual end either in the oblivion chaos and mayhem or the lack of mental fortitude that exists in the Pearl and her officials.However, one can only hope that people who wish the Pearl renewed status in the Indian Ocean region if not the world, continue to survive in these circumstances, as the village of indomitable Gauls in the face of the mighty Roman empire. We need an “Asterix” brave and quick-thinking warrior, armed with some magic portion from “Getafix” the druid. Instead, we seem to have plenty of pseudo “Getafix’s” concocting “dammika Pani” and such portions and far too many “Vitalstastix’s”- muddle-headed incompetent chiefs!
Policy quandaries set to rise for South in the wake of AUKUS
From the viewpoint of the global South, the recent coming into being of the tripartite security pact among the US, the UK and Australia or AUKUS, renders important the concept of VUCA; volatility, uncertainty, complexity and ambiguity. VUCA has its origins in the disciplines of Marketing and Business Studies, but it could best describe the current state of international politics from particularly the perspective of the middle income, lower middle income and poor countries of the world or the South.
With the implementation of the pact, Australia will be qualifying to join the select band of nuclear submarine-powered states, comprising the US, China, Russia, the UK, France and India. Essentially, the pact envisages the lending of their expertise and material assistance by the US and the UK to Australia for the development by the latter of nuclear-powered submarines.
While, officially, the pact has as one of its main aims the promotion of a ‘rules- based Indo-Pacific region’, it is no secret that the main thrust of the accord is to blunt and defuse the military presence and strength of China in the region concerned. In other words, the pact would be paving the way for an intensification of military tensions in the Asia-Pacific between the West and China.
The world ought to have prepared for a stepping-up of US efforts to bolster its presence in the Asia-Pacific when a couple of weeks ago US Vice President Kamala Harris made a wide-ranging tour of US allies in the ASEAN region. Coming in the wake of the complete US troop withdrawal from Afghanistan, the tour was essentially aimed at assuring US allies in the region of the US’s continued support for them, militarily and otherwise. Such assurances were necessitated by the general perception that following the US troop withdrawal from Afghanistan, China would be stepping in to fill the power vacuum in the country with the support of Pakistan.
From the West’s viewpoint, making Australia nuclear-capable is the thing to do against the backdrop of China being seen by a considerable number of Asia-Pacific states as being increasingly militarily assertive in the South China Sea and adjacent regions in particular. As is known, China is contending with a number of ASEAN region states over some resource rich islands in the sea area in question. These disputed territories could prove to be military flash points in the future. It only stands to reason for the West that its military strength and influence in the Asia-Pacific should be bolstered by developing a strong nuclear capability in English-speaking Australia.
As is known, Australia’s decision to enter into a pact with the US and the UK in its nuclear submarine building project has offended France in view of the fact that it amounts to a violation of an agreement entered into by Australia with France in 2016 that provides for the latter selling diesel-powered submarines manufactured by it to Australia. This decision by Australia which is seen as a ‘stab in the back’ by France has not only brought the latter’s relations with Australia to breaking point but also triggered some tensions in the EU’s ties with the US and the UK.
It should not come as a surprise if the EU opts from now on to increasingly beef-up its military presence in the ‘Indo-Pacific’ with the accent on it following a completely independent security policy trajectory, with little or no reference to Western concerns in this connection.
However, it is the economically vulnerable countries of the South that could face the biggest foreign policy quandaries against the backdrop of these developments. These dilemmas are bound to be accentuated by the fact that very many countries of the South are dependent on China’s financial and material assistance. A Non-aligned policy is likely to be strongly favoured by the majority of Southern countries in this situation but to what extent this policy could be sustained in view of their considerable dependence on China emerges as a prime foreign policy issue.
On the other hand, the majority of Southern countries cannot afford to be seen by the West as being out of step with what is seen as their vital interests. This applies in particular to matters of a security nature. Sri Lanka is in the grips of a policy crunch of this kind at present. Sri Lanka’s dependence on China is high in a number of areas but it cannot afford to be seen by the West as gravitating excessively towards China.
Besides, Sri Lanka and other small states of the northern Indian Ocean need to align themselves cordially with India, considering the latter’s dominance in the South and South West Asian regions from the economic and military points of view in particular. Given this background, tilting disproportionately towards China could be most unwise. In the mentioned regions in particular small Southern states will be compelled to maintain, if they could, an equidistance between India and China.
The AUKUS pact could be expected to aggravate these foreign policy questions for the smaller states of the South. The cleavages in international politics brought about by the pact would compel smaller states to fall in line with the West or risk being seen by the latter as pro-China and this could by no means be a happy state to be in.
The economic crisis brought about by the current pandemic could only make matters worse for the South. For example, as pointed out by the UN, there could be an increase in the number of extremely poor people by around 120 million globally amid the pandemic. Besides, as pointed out by the World Bank, “South Asia in particular is more exposed to the risk of ‘hidden debt ‘from state-owned Commercial Banks (SOCBs), state-owned enterprises (SOEs) and public-private partnerships (PPPs) because of its greater reliance on them compared to other regions.” Needless to say, such economic ills could compel small, struggling states to veer away from foreign policy stances that are in line with Non-alignment.
Accordingly, it is a world characterized by VUCA that would be confronting most Southern states. It is a world beyond their control but a coming together of Southern states on the lines of increasing South-South cooperation could be of some help.
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