Trade war risk to dominate BRICS summit in South Africa

China’s President Xi Jinping is on a whistle-stop tour to cement relations with African allies. (AFP)
Updated 24 July 2018
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Trade war risk to dominate BRICS summit in South Africa

  • Earlier this month, China said that it would step up cooperation with other developing nations like the BRICS grouping to counter ‘trade protectionism’
  • The trade war risk also dominated a meeting of Group of 20 finance ministers and central bankers at the weekend in Buenos Aires

JOHANNESBURG: Leaders of the BRICS emerging economies — Brazil, Russia, India, China and South Africa — will meet in Johannesburg this week, with the threat of a worsening global trade war topping the agenda.
US President Donald Trump’s hardening stance has compounded fears of an all-out trade war after he slapped levies on goods from China worth tens of billions of dollars as well as tariffs on steel and aluminum from the EU, Canada and Mexico.
Russian President Vladimir Putin, China’s President Xi Jinping and Indian Prime Minister Narendra Modi will attend the annual three-day summit opening in Johannesburg on Wednesday.
Earlier this month, China said that it would step up cooperation with other developing nations like the BRICS grouping to counter “trade protectionism.”
China on Monday rejected accusations by Trump that it was manipulating the yuan to give its exporters an edge, saying Washington appeared “bent on provoking a trade war.”
Trump has said he is ready to impose tariffs on all $500 billion of China imports, complaining that China’s trade surplus with the US is due to unfair currency manipulation.
“As to the US being bent on provoking a trade war, China does not want a trade war but is not afraid,” China’s foreign ministry spokesman said when asked about Trump’s threat to impose the across-the-board tariffs on Chinese goods.
Russian Economy Minister Maxim Oreshkin said last week ahead of the Johannesburg meeting that “this summit is about the context — we are at a time when the US and China announce new measures almost every week.”
He said much of the discussions with China would likely focus on what is happening with the US.
“This is a trade war, so leaders’ discussions are particularly important in coordinating our positions,” said Oreshkin.
Sreeram Chaulia, of the Jindal School of International Affairs outside Delhi, said BRICS leaders would “concur that the US has unleashed punitive trade wars that are hurting all the BRICS members.”
“They have a collective interest in promoting intra-BRICS trade. The urgency this time is greater,” he said.
The BRICS group, comprising more than 40 percent of the global population, represents some of the biggest emerging economies, but has struggled to find a unified voice — as well as achieving sharply different growth rates.
Analysts say US trade policy could give the group some renewed momentum.
“Trade agreements between associations of countries like BRICS have become increasingly important given the self-seeking, and ultimately short-sighted, barriers to trade that are being instigated by the US,” Kenneth Creamer, an economist at Johannesburg’s Wits University, told AFP.
“South Africa, and Africa more broadly, can benefit from increasing exports to fast growing countries like India and China. BRICS has the strategic potential to re-shape world trade.”
The trade war risk also dominated a meeting of Group of 20 finance ministers and central bankers at the weekend in Buenos Aires, while International Monetary Fund chief Christine Lagarde again spoke out against the tit-for-tat tariffs.
China’s President Xi was due to hold bilateral talks with South African Cyril Ramaphosa on Tuesday after visiting Senegal and Rwanda as part of a whistle-stop tour to cement relations with African allies.
Signaling diplomatic rivalry over influence in Africa, India’s Narendra Modi is visiting Rwanda and Uganda on his own five-day tour of the continent including the BRICS summit.
Turkish leader Recep Tayyip Erdogan will also attend a summit as the current chair of the Organization of Islamic Cooperation (OIC). Erdogan will reportedly meet Putin on the summit’s sidelines.
European Commission chief Jean-Claude Juncker travels to Washington on Wednesday to meet Trump as part of the EU’s effort to head off a trade war.


Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

Updated 28 min 54 sec ago
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Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

  • British Airways owner IAG signs letter of intent to buy 200 of its 737 MAX jets
  • Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes

PARIS: Airbus, reeling from the potential loss of a major customer for its best-selling A320neo as British Airways owner IAG placed a lifeline order for the grounded 737 MAX, prepared to hit back with more orders for its A321XLR on Wednesday.
The planemaker has been negotiating with US airlines investor Bill Franke whose Indigo Partners has also been known to place orders for multiple airlines within its portfolio and could reel it in for the Paris Air Show, industry sources said.
Airbus declined to comment.
After weathering intense scrutiny over safety and its public image, Boeing won a vote of confidence on Tuesday as IAG signed a letter of intent to buy 200 of its 737 MAX jets that have been grounded since March after two deadly crashes.
The surprise order lifted the energy of a previously subdued Paris Airshow, where the talk had been of the possible end of the aerospace cycle, given the issues at both Boeing and Airbus as well as geopolitical and trade tensions around the world.
Australia’s Qantas Airways said on Tuesday it would order 10 Airbus new A321XLR jets and convert a further 26 from existing orders already on the Airbus books.
Airbus is also in talks with leasing company GECAS and has been trying to secure an eye-catching order for the A321XLR from American Airlines, though the world’s largest carrier does not typically make announcements at air shows.
Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes.