The EU called Friday on the United States to lift tariffs imposed in a long-running dispute over aircraft subsidies after Airbus said it had brought itself into compliance with World Trade Organization rulings.

The billions of dollars in tariffs, which apply to a wide range of food and agricultural goods in addition to planes, have been even more burdensome due to the economic disruption caused by the coronavirus pandemic.

Airbus said Friday it had reached agreement with the French and Spanish governments that raises the interest rates on funds provided to help develop its long-haul A350 jet to levels the WTO considers appropriate.

The European Commission said this removes any grounds for the US to maintain tariffs imposed on EU exports under WTO rulings as well as making a strong case for a rapid settlement of the dispute.

“Unjustified tariffs on European products are not acceptable and, arising from the compliance in the Airbus case, we insist that the United States lifts these unjustified tariffs immediately,” EU trade commissioner Phil Hogan said in a statement.

– Epic legal battle –

An epic legal battle between Airbus and Boeing at the WTO began in 2004 when Washington accused Britain, France, Germany and Spain of providing illegal subsidies and grants to support the production of a range of Airbus products.

A year later, the EU alleged that Boeing had received $19.1 billion worth of prohibited subsidies from 1989 to 2006 from various branches of the US government.

The two cases were then tangled up in a legal quagmire, with each side being given partial vindication after a long series of appeals and counter appeals.

In 2019 the WTO authorised the US to impose up to 100 percent in taxes on $7.5 billion of European goods, its biggest ever penalty.

Washington then slapped 25 percent tariffs on a number of EU goods including wine, cheese and olives.

A 10 percent tariff on Airbus planes was increased to 15 percent in March, which also affects US airlines which buy Airbus aircraft, as the manufacturer points out.

In June the US threatened to levy tariffs on another $3.1 billion in EU goods as it has been authorised to do under a WTO ruling.

– Resolution in ‘mutual interest’ –

Airbus said the impact of those tariffs plus the coronavirus pandemic were the reason it was making the effort to resolve the dispute.

“The tariffs imposed by the United States Trade Representative (USTR) are currently harming all targeted industry sectors, including US airlines, and are adding to a very difficult environment as a consequence of the COVID-19 crisis,” the firm said.

Airbus said Friday that it “considers itself in complete compliance with all WTO rulings” after increasing the interest rate paid on the government funds it received.

The low interest rates on these funds were one of the arguments the US made that the EU was improperly subsidising Airbus.

“After 16 years of litigation at the World Trade Organization, this is the final step to stop the long-standing dispute and removes any justification for US tariffs,” said Airbus.

In addition to there no longer being a justification for the tariffs, the EU believes that in light of the global recession triggered by the coronavirus pandemic it makes sense to resolve the dispute.

“Especially under the current economic circumstances, the EU believes that it is in the mutual interest of the EU and the US to discontinue damaging tariffs that unnecessarily burden our industries and agricultural sectors,” the Commission statement said.

Hogan noted a WTO decision is expected soon that could give the EU the right to impose tariffs against the United States.

“In the absence of a settlement, the EU will be ready to fully avail itself of its own sanction rights,” he warned.

Source: AFP

The International Chamber of Commerce (ICC) has established a new presence in Cameroon, building on the organisation’s regional focus in Africa.

On 23 June, ICC’s World Council approved the opening of a new regional office (known as a national committee) in Cameroon. ICC Cameroon, which is located in Douala, works in cooperation with the Chamber of Commerce, Industry, Mines, and Artisans of Cameroon. The new office is led by Perrial Jean Nyodog, as Chair, and Ebenezer Njanga, as Secretary General. Mr Nyodog is also the CEO of Tradex, which trades in oil and oil by-products, while Mr Njanga is also the CEO of the Free Market Foundation of Central Africa.

John W.H. Denton AO said: “We’re pleased to welcome ICC Cameroon to our growing community of regional offices around the world. As Cameroon is a critical economy in Central Africa, ICC Cameroon will equip local businesses – both large and small – with the expertise required to address emerging challenges and forge long-term solutions for the future.”

The opening of ICC Cameroon is the latest step in ICC’s regional expansion in Africa. In response to the COVID-19 pandemic, Mr Denton convened a landmark Sub-Saharan Africa action group that brought together participants from close to 20 African countries to discuss a wide variety of regional issues, including operationalising the African Continental Free Trade Area. This past week, ICC joined the United Nations Capital Development Fund (UNCDF) and other partner organisations to launch a major survey to understand the unique challenges faced by small- and medium-sized enterprises (SMEs) in least-developed countries (LDCs), such as Burkina Faso.

ICC Cameroon will add to the success of these regional initiatives, by strengthening dialogue with regional, continental and international business communities. Local commissions and working groups are being created by ICC Cameroon in the following areas: arbitration and law; banking and finance; e-Commerce and digital economy; energy and environment; intellectual property; international trade; marketing and communication; and transport and logistics.

Mr Njanga, ICC Cameroon’s Secretary General, said that his team is well positioned to strengthen commercial relations between Central African businesses and ICC’s global network of over 45 million companies. “ICC Cameroon is looking forward to working with the ICC Global Headquarters in Paris and with ICC offices and members around the world to bring the perspective of Cameroonian businesses to ICC’s policies and standards for global trade,” said Mr Njanga. “This partnership will strengthen ties between Cameroon and the international business community, which will lead to improved development opportunities for all.”

Mr Njanga also noted the timeliness of the announcement as the world continues to respond to the economic and social consequences of COVID-19. “ICC Cameroon’s action plan includes activities that will allow companies to efficiently tackle challenges and issues that negatively impact international trade – and more urgently – give support to Cameroon and the business community in our ongoing response against COVID-19.”

With the addition of Cameroon, ICC now operates national offices in 90 countries worldwide. ICC Cameroon becomes the latest national committee since ICC Vietnam, which opened in November 2019.

Culled from International Chamber of Commerce

Mask wearing, temperature controls, disinfection of aircraft: the International Civil Aviation Organization on Monday published a series of health recommendations for a pandemic-hit airline industry as it relaunches air travel.

The protocol was drawn up by an international task force formed by the Montreal-based ICAO with the help of other UN agencies like the World Health Organization and the powerful International Air Transport Association (IATA).

Its report on relaunching aviation in the wake of COVID-19 was expected to be approved Monday by the ICAO’s executive committee.

The changes being suggested are the most important for air travel since the massive security measures put in place after the September 11, 2001 attacks on the United States.

IATA’s director general, Alexandre de Juniac, unveiled the main measures proposed in the “best practices” guide at the end of last week.

The recommendations are intended to serve as a “framework” for assuring the safety of passengers and workers on planes and at airports.

On their arrival at airports, travelers should present a health certificate and undergo an initial temperature check, under the guidelines.

Online check-in before arriving at the airport should be given priority, and passages through security should be re-thought to limit physical contact and waiting in lines.

The wearing of a mask or face covering should be obligatory inside aircraft and terminals, where physical distancing of at least three feet (one meter) should be respected.

Aboard planes, passengers should wear masks, move as little as possible within the cabin, and not line up outside toilets to lessen the risk of infecting other passengers.

– ‘Global reference’ –

But the ICAO does not advocate leaving every other seat open to assure physical distancing, a restriction that the airline industry industry sees as a threat to its profitability.

The organization, nevertheless, asks passengers to remain as far from one another as possible, to the extent occupancy rates allow it.

It also advocates that food on board be pre-packaged and that aircraft be regularly disinfected.

Temperature checks should also be taken on a flight’s arrival, according to the recommendations.

The measures aren’t obligatory but they are the product of a broad consensus that imparts “an authority that will make them a global reference for the first time on this issue since the start of the COVID-19 crisis,” said Philippe Bertoux, France’s representative on ICAO’s board, which led the “task force” debate.

“These measures will facilitate a safe and sustainable return of the air travel,” Bertoux told AFP.

To reopen after having been grounded for months and brought to its knees financially, the airline industry is pressing for rules to be harmonized to reassure passengers and states that have closed their borders in an attempt to halt the spread of the virus.

The ICAO estimates that the pandemic will reduce the number of air passengers by 1.5 billion by the end of the year.

Source: AFP

Boeing Co (BA.N) says it is eliminating more than 12,000 US jobs as the largest American planemaker restructures in the face of the coronavirus pandemic.

Boeing also disclosed it plans “several thousand remaining layoffs” in coming months but did not say where those would take place.

Boeing is slashing costs as a sharp drop in airplane demand during the pandemic worsened a crisis for the company whose 737 MAX jet was grounded last year after a second fatal crash.

Boeing said it restarted 737 MAX production at a “low rate” at its Renton, Washington factory. Reuters reported in April that regulatory approval for the MAX was not expected until at least August.

Boeing shares closed up 3.3% at $149.52, then rose another 4.6% to $155.84 after hours on news of the MAX production restart.

The company announced in April it would cut 10% of its worldwide workforce of 160,000 by the end of 2020. Boeing said Wednesday 5,520 US employees will take voluntary layoffs, and also disclosed it was notifying 6,770 workers of involuntary layoffs.

Chief Executive Dave Calhoun told employees in an email the “pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices. … I wish there were some other way.”

CFRA analyst Colin Scarola upgraded Boeing to buy and raised his price target to $174 from $112 saying Boeing “can weather its current crises and grow over the long term.”

In April, Boeing recorded zero orders for the second time this year and customers canceled another 108 orders for the 737 MAX, compounding its worst start to a year since 1962.

Last month, Boeing raised $25 billion in a bond offering that allowed it to avoid taking government aid.

The job cuts include more than 9,800 employees in Washington State. Boeing said the “several thousand remaining layoffs will come in additional tranches over the next few months.”

Boeing said it expects to resume 737 MAX deliveries in the third quarter following regulatory approvals before gradually increasing to 31 per month during 2021.

The aerospace sector has been hard hit including many Boeing suppliers.

General Electric Co (GE.N) said this month it planned to cut its aviation unit’s global workforce this year by as much as 25%, or up to 13,000 jobs. SpiritAero Systems Holdings (SPR.N) announced it is cutting another 1,450 jobs in Kansas.

American Airlines to cut management, support staff by 30%

American Airlines Group Inc must reduce its management and support staff by about 30% and may have to cut frontline employees as it downsizes due to the coronavirus outbreak, showed a letter to employees made public on Wednesday.

All major US airlines have said they will need to shrink in the fall, once US government payroll aid that bans involuntary job cuts expires on Sept. 30.

Competitor United Airlines Holdings Inc has also said it will need to reduce its management and administrative staff by about 30%.

Despite the bailout and other liquidity raises, American must “plan for operating a smaller airline for the foreseeable future,” Executive Vice President of People and Global Engagement Elise Eberwein said in the letter.

American, with over 100,000 employees, will offer voluntary options before implementing involuntary reductions if there is not enough take-up, she said.

Once it has reduced its management ranks, the company will turn to frontline employees including flight attendants and pilots, who will receive fresh voluntary leave and early retirement options in June with the aim of avoiding involuntary furloughs.

“This is a goal, though, not a commitment, and a stretch goal at that,” Eberwein said, adding the company will be working with unions in coming weeks and months.

American has said it is accelerating fleet retirement and expects to fly roughly 100 fewer aircraft in the summer of 2021. Nearly 40,000 employees have already opted for temporary voluntary leave or early retirement.

Earlier, American Chief Executive Doug Parker said the airline hoped to avoid furloughs and rejected speculation that it or another major US carrier will have to file for Chapter 11 bankruptcy protection due to the coronavirus crisis.

(Source: Reuters)