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FINANCIAL CRISIS

Industrial federation says crisis creates credit problems

The international financial crisis will now make credit conditions tougher for German companies, the head of the national industrial federation BDI said on Tuesday in a press interview.

Industrial federation says crisis creates credit problems
File photo os werner Scnappauf, BDI head. Photo: DPA

“It will be harder and more expensive for companies to obtain credit,” Werner Schnappauf told the Financial Times Deutschland. He added that it was certain that the financial crisis would hit the economy in general in the coming months.

The crisis, combined with higher raw material costs and a strong euro in the first half of 2008 would undermine German growth, the BDI forecast, estimating that the crucial export sector would grow by 3.9 percent this year and by 1.9 percent in 2009. German exports, the motor of Europe’s biggest economy, expanded in 2007 by 8.5 percent.

According to a study by the research group Factset that was quoted in the business daily Handelsblatt, the top 30 listed German companies are expected to see their profits drop by an average of 7.5 percent this year, following four years of record profits.

“The state must take action. That is its duty now,” Schnappauf said in defense of repeated interventions by the German government in the past weeks. After agreeing to guarantee a large part of a rescue plan for the mortgage lender Hypo Real Estate, the government also said it would back fully private bank accounts, which contain more than €1.0 trillion ($1.35 trillion).

FARMING

WTO rules US tariffs on Spanish olives breach rules

A US decision to slap steep import duties on Spanish olives over claims they benefited from subsidies constituted a violation of international trade rules, the World Trade Organisation ruled Friday.

WTO rules US tariffs on Spanish olives breach rules
Farmers had just begun harvesting olives in southern Spain when former US President Donald Trump soured the mood with the tariffs' announcement. Photo: Jorge Guerrero/AFP

Former US president Donald Trump’s administration slapped extra tariffs on Spain’s iconic agricultural export in 2018, considering their olives were subsidised and being dumped on the US market at prices below their real value.

The combined rates of the anti-subsidy and anti-dumping duties go as high as 44 percent.

The European Commission, which handles trade policy for the 27 EU states, said the move was unacceptable and turned to the WTO, where a panel of experts was appointed to examine the case.

In Friday’s ruling, the WTO panel agreed with the EU’s argument that the anti-subsidy duties were illegal.

But it did not support its stance that the US anti-dumping duties violated international trade rules.

The panel said it “recommended that the United States bring its measures into conformity with its obligations”.

EU trade commissioner Valdis Dombrovskis hailed the ruling, pointing out that the US duties “severely hit Spanish olive producers.”

Demonstrators take part in a 2019 protest in Madrid, called by the olive sector
Demonstrators take part in a 2019 protest in Madrid called by the olive sector to denounce low prices of olive oil and the 25 percent tariff that Spanish olives and olive oil faced in the United States. (Photo by PIERRE-PHILIPPE MARCOU / AFP)
 

“We now expect the US to take the appropriate steps to implement the WTO ruling, so that exports of ripe olives from Spain to the US can resume under normal conditions,” he said.

The European Commission charges that Spain’s exports of ripe olives to the United States, which previously raked in €67 million ($75.6 million) annually, have shrunk by nearly 60 percent since the duties were imposed.

The office of the US Trade Representative in Washington did not immediately comment on the ruling.

According to WTO rules, the parties have 60 days to file for an appeal.

If the United States does file an appeal though, it would basically amount to a veto of the ruling.

That is because the WTO Appellate Body — also known as the supreme court of world trade — stopped functioning in late 2019 after Washington blocked the appointment of new judges.

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