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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (33943)	7/21/2005 1:15:29 AM
From: regli	Respond to of 116555

Airbus-Boeing battle gets under way at WTO today.reuters.co.uk Wed Jul 20, 2005 5:36 PM BST By Richard Waddington GENEVA (Reuters) - The World Trade Organisation (WTO) on Wednesday launched twin probes into state aid for aviation giants Boeing and Airbus, but both Washington and Brussels reaffirmed they were still ready to negotiate a deal. The Geneva-based trade referee set up panels to investigate accusations by the United States and the European Union over billions of dollars they say have been paid to the world's two largest civil aircraft makers in violation of trade rules. The row, the biggest and most complex commercial dispute ever, could strain transatlantic relations just as the United States and the EU are struggling to give impetus to troubled WTO free trade talks. But even as the WTO started the legal ball rolling, both sides declared that they were open to further bilateral talks to resolve the argument. "We continue to prefer a negotiated solution and are prepared to negotiate in parallel with our WTO case," said Rich Mills, a spokesman for the United States Trade Representative, by telephone from Washington. In Brussels, EU trade spokeswoman Claude Veron-Reville had a similar message. "We are not negotiating (right now), but of course the channels of communication remain open." The decision to investigate the complaints was an automatic one under WTO rules as it was the second request by both sides. Washington, which has been setting the pace in the dispute, initially went to the WTO with its complaint against the Europeans last October, prompting a tit-for-tat reaction from Brussels. DOOR REMAINS OPEN Both sides immediately agreed to put litigation on hold and made a fresh bid to negotiate a solution. But with no deal in sight, the United States returned to Geneva to seek a ruling from the WTO, and the EU did the same. Both blamed the other for the stalemate. Even agreeing on who should sit on the trade panel could take a couple of months and a final verdict -- after any appeals against the panel findings are heard -- is unlikely before the end of next year, trade officials say. The dispute has come to a head because of Airbus plans for a new regional airliner to compete with Boeing's (BA.N: Quote, Profile, Research) 787, with the European firm saying it will seek assistance for the launch from financial backers France, Germany, Spain and Britain. Airbus, owned by Franco-German-Spanish aerospace firm EADS (EAD.PA: Quote, Profile, Research) and BAE Systems (BA.L: Quote, Profile, Research), overtook Boeing as the world's largest commercial plane maker in 2003. The United States says the company has received billions of dollars of assistance, including $6.7 billion (3.8 billion pounds) in subsidies for its A380 superjumbo. Brussels says that Boeing has benefitted from even larger amounts of aid through grants from the U.S. state of Washington to keep its plants there and in U.S. defence contracts. If either is found guilty, then the other could win the right to impose sanctions that far outstrip the record so far -- the $4.0 billion a year that the EU was awarded in a fight with the United States over export taxes.

To: mishedlo who wrote (33943)	7/21/2005 1:17:37 AM
From: regli	Respond to of 116555

June retail data may show growth near 10-yr low today.reuters.co.uk Wed Jul 20, 2005 4:24 PM BST By Fiona Shaikh LONDON (Reuters) - Retail sales are expected to have picked up slightly in June, helped by early summer discounting and hot weather, but data on Thursday may still show the lowest annual growth rate in almost a decade. The Office for National Statistics publishes June retail sales data at 8:30 a.m. on Thursday. Economists polled by Reuters forecast retail sales in June rose by 0.2 percent from the previous month, with the annual rate of growth at 0.7 percent. That would be the lowest since January 1996. In May, retail sales rose by 0.1 percent on the month and 1.3 percent year-on-year. Analysts said signs that British house prices are stabilising combined with the early start of summer sales this year may have encouraged consumers back into the shops last month. "It's a wild guess how the early discounting will affect sales, but a stabilisation of house prices should have helped hold up demand," said Kenneth Broux, financial markets economist at Lloyds TSB. This view was borne out by retail conglomerate GUS (GUS.L: Quote, Profile, Research), which on Wednesday said sales at its Argos general stores were up two percent in the three months to June 30, while sales at its Homebase DIY chain were also strong in an otherwise challenging market. Retailers normally start their summer sell-off in July, but weak sales so far this year prompted many to cut their prices in June. This will have been captured in the ONS figures, which were collected in the five weeks between May 29 and July 2. NO MORE SHOPPING After a spending boom lasting almost a decade, consumers have recently reined in spending as they are uncertain over house prices, rising fuel prices and the impact of previous interest rate hikes. The sudden thriftiness has dragged on economic growth and prompted widespread calls for the Bank of England to cut interest rates to shore up flagging demand. "Consumers have become over-indebted...and their key issue is not to go out and buy products, but to reduce their borrowings and pay off the interest that's outstanding -- that's the real driver here," said GUS Finance Director David Tyler. But the Bank of England is almost certain to cut interest rates from their current 4.75 percent in August. This could boost the housing market, and help buoy spending in the coming months. "The retail sales release will help clarify whether more stable housing turnover is lifting spending growth," said Malcolm Barr, economist at JP Morgan. Earnings statements from a number of British retailers on Thursday will give a further insight into how business has fared. Health and beauty products retailer Boots, furniture store chain MFI and Kesa, which owns electrical goods retailer Comet, are all due to publish earnings statements.