Mon, Sep 05, 2016 - Page 14 News List

G20: SUMMIT: EU leaders push China on excess steel

CHINESE CHARACTERISTICS:A glut that is inhibiting prices and costing jobs, ‘is a global problem, but with a specific Chinese dimension we have to address,’ the EU’s Juncker said

AP, HANGZHOU, China

European Commission President Jean-Claude Juncker, right, is escorted by a Chinese official as he arrives at the G20 Summit in Hangzhou yesterday.

Photo: AP

EU leaders yesterday called for China to take action on its bloated steel industry and defended an order that Ireland collect taxes from Apple, highlighting the trade tensions looming over a global economic summit.

The G20 meeting of leaders of the US, China, Germany and other major economies “must urgently find a solution” to excess steel production, European Commission President Jean-Claude Juncker said.

He called on Beijing to accept a monitoring mechanism for overproduction that Beijing’s trading partners blame for low prices and job losses.

Juncker also rejected US criticism of the order for Ireland to collect US$14.5 billion in back taxes from Apple.

An EU panel ruled the company’s low taxes were improper government aid.

“Free trade must be fair trade,” Juncker said at a news conference with European Council President Donald Tusk.

The toughly worded comments reflected the political pressures on governments at a time of weak global economic growth that is fueling demands to protect local industries.

Another prominent issue at the summit is G20 member Britain’s June vote to leave the 28-nation EU, a move seen by some analysts as the first in a wave of moves by other nations to retreat from free trade.

China, the G20 host, has made trade a headline issue for the meeting in Hangzhou. Chinese officials have said they will propose a plan to boost commerce through closer cooperation on regulation, finance, tax and other issues.

China hopes its status as G20 host will bring it more influence in management of the global economy.

Chinese leaders have said they want the G20 — launched to coordinate the response to the 2008 financial crisis — to take on a longer-term role overseeing global economic management.

Germany, South Korea and other governments have said they also want to use the meeting to discuss climate, energy and possible reforms to the global tax system to reduce tax evasion.

The two-day meeting began yesterday on a diplomatic high note following a joint announcement by US President Barack Obama and Chinese President Xi Jinping (習近平) that their governments had submitted documents committing them to carrying out the Paris climate agreement.

However, US and other officials said they plan to bring up Chinese industrial overcapacity and other potentially thorny issues.

Washington has imposed import duties of up to 500 percent on Chinese steel to offset what regulators said are improper subsidies.

China, the world’s biggest steel producer, has committed to reducing its production capacity by 100 million to 150 million tonnes by 2020, a pledge Xi repeated on Saturday.

“This is a global problem, but with a specific Chinese dimension we have to address,” Juncker said. “We are really insisting on the need to take this seriously.”

Juncker defended the EU’s tax order on Apple against US criticism.

An EU panel concluded Apple received improper aid because it paid lower rates than other companies. Ireland has made its low taxes part of its strategy to attract investment.

Juncker rejected suggestions the EU was targeting a US company.

He said previous tax orders have affected European companies, including a January ruling that covered 35 companies, most of them from Europe.

“This is not a decision against the United States of America,” Juncker said.

Tusk affirmed the EU’s stance on Britain’s departure, saying there would be no talks with London over future relations until it formally begins the withdrawal process.

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