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Thursday, June 12, 2008

Europe against USA, the fight of the titans

3 really fun articles on the battle of the decade-Europe against USA round N (though some could classify Europe against Russia for the greatest battle, but that's a matter of taste)
  • EU-US biodiesel row heats up
  • EU competitiveness 'much better' than US, says Barroso
  • EU business 'cautiously optimistic' over economic prospects

EU-US biodiesel row heats up

28 April 2008

European biodiesel manufacturers have filed an official complaint to the Commission regarding "unfair" US biodiesel subsidies, substantiating expectations that biofuels could be at the heart of the next large-scale trade spat at the WTO.

As part of Europe's strategy to reduce oil dependency and fight climate change, EU leaders committed, at the March 2007 European Council, to raising the share of biofuels in transport from current levels of around 2% to at least 10% by 2020.

The two most important liquid biofuels currently available in Europe are ethanol and biodiesel, made from agricultural crops such as corn, sugar cane and rapeseed.

According to the European Biodiesel Board (EBB), a US Federal measure allowing for minimal biodiesel blends to be subsidised before being exported has led to a "dramatic surge" in US biodiesel exports to the EU and is "creating a severe injury" to the European industry.

The organisation explains that, under US law, producers of the so-called "B99" blend qualify for subsidies of approximately €200 per tonne. Yet the blend is made simply by mixing pure biodiesel (often cheaply imported from countries like Indonesia or Malaysia) with as little as 0.1% or less of mineral diesel.

This 99.9% biodiesel blend can then be resold in Europe as pure biodiesel, where it is again eligible for European blending subsidy schemes. According to the EBB, the process allows US biodiesel exporters to undercut EU biodiesel prices – some say by as much as 30%. And the weak dollar is doing nothing to alleviate the pressure.

The group, which represents 56 companies and associations, responsible for 80% of biofuel production in the EU, presented a legal complaint to the Commission on 25 April, calling for it "to initiate an anti-dumping and anti-subsidy investigation, with a view to imposing as soon as possible countervailing measures against US 'B99' exports to the EU".

This intense price competition "has progressively disrupted the margins of European biofuel producers, putting most of them out of business," said the European Biodiesel Board in a statement on 25 April.

According to the EBB, the problem is not only threatening European industry, it is also undermining progress towards the Union's ambitious target of achieving a 10% share for biofuels in transport fuel by 2020.

Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson, confirmed that the Commission would look at any such complaint "very carefully", adding: "We will not under any circumstances tolerate unfair trade."

But American biodiesel manufacturers immediately counter-attacked, accusing European producers of being "hypocritical".

"The supposed woes facing the European biodiesel industry have nothing to do with US exports. The EBB's membership produce fuel from a more expensive feedstock than American producers and the cost of that feedstock has significantly increased," argued the US National Biodiesel Board in a statement released on 25 April.

The US group says it "plans to use every resource at its disposal to wage a vigorous defence against the EBB's baseless allegations".

What's more, the NBB will be asking the US Trade Representative to take action against "blatant" EU trade barriers, which "provide preferential treatment to European fuel producers," it said.

The main bone of contention for US producers relates to certain technical content specifications imposed in the EU, which largely favour Europe's main biofuel crop: rapeseed.

US producers are also wary of "sustainability criteria" for biofuel production, currently under preparation within the EU (EurActiv 01/04/08). At the very least, the criteria are expected to introduce a ban on biofuels planted in protected areas, forests, wetlands and grasslands, as well as an obligation for biofuels to deliver life-cycle CO2 savings of at least 35% compared to fossil fuels. They could also include social standards, such as an obligation for producers to respect International Labour Organisation accords on equal pay and child labour.

But the EU's trade partners are already sounding the alarm that such standards are unlikely to be compatible with World Trade Organisation rules and could lead to retaliatory measures.source.

My comment: I'm waiting for the happy moment when the EU will clash with the hated WTO. I so hope Europe will make the right decision and vote for the sustainability conditions. Because this is right and needed to protect the Earth and the business actually from the unfair concurrence of countries that think they can sacrifice their Nature for the money. And the people that trashed the Nature will go spending their money on Hawaii and the country will apply for grants for the EU for the trashed nature. No thanks! And as for USA producers, my heart is crying for them. Almost...

EU competitiveness 'much better' than US, says Barroso

17 April 2008

The European Union is "uniquely placed to make the most of globalisation," says Commission President José Manuel Barroso, despite concerns raised by his colleague Employment and Social Commissioner Vladimir Spidla relating to the "far-reaching and often brutal consequences of globalisation", which include "the outsourcing of jobs and the closure of factories".

Speaking at a conference on the theme 'A social Europe fit for globalisation," Barroso noted that at present, Europe is "doing much better" in competitiveness terms than the US. He went on to argue that this advantage, coupled with the EU's considerable experience, gave Europe a strong position to "respond to and shape globalisation".

The same argument was taken up by European Parliament President Hans-Gert Pöttering. "If we didn't have the euro and single market, the US sub-prime crisis would have caused economic chaos in member states," claimed Pöttering at the conference.

Pöttering also slammed analysts who make unfavourable comparisons between European and Chinese growth rates. "China has 9% growth rates, but this not the only way to measure economic growth," he said, arguing that increases in GDP must occur in conjunction with social and environmental improvements. "We need a new definition of economic growth" to reflect European social values, Pöttering concluded.

However, both presidents noted that EU unemployment rates are still too high, and stressed that much work remains to reduce the gap between the winners and losers of globalisation.

This was reflected in a speech by Slovenian Labour and Social Affairs Minister Marjeta Cotman, who also participated in the round-table conference. "The advantages and disadvantages of globalisation are not equally distributed," she noted. "For the 78 million Europeans who live on the poverty threshold, fear of globalisation is real and understandable," she said.

President Barroso referred to the European Globalisation Fund, which has been operating for over a year. "The fund has already interevened in several member states," he said, arguing that it is "important to show that we care" for those who lose out in the globalisation game. "One size doesn't fit all," he concluded.

All speakers made the point that Europe has a strong foundation to drive globalisation as a force for both economic and social progress. "We need to be sure that from a social point of view, we are ready to face the great challenge of our time," said President Barroso. source

My comment: Ok, that's a little bit of nice propaganda. But I don't mind hearing it for a change :) And by the way, I really do believe in Europe and its power. People use it and abuse it, but with time, things might just fit in place. And then Europe will flourish!

EU business 'cautiously optimistic' over economic prospects

25 April 2008

Although economic growth is expected to continue to slow, EU businesses still consider the EU economy sound enough to outperform the US for the third consecutive year, according to an assessment by BusinessEurope.

Cooling down from 2.9% growth last year, EU economies are nevertheless expected to achieve growth rates of 2% this year and 2.1% in 2009. Prospects in the US are darker, with economic growth not expected to exceed a rate of 1.5%, according to the business confederation's Spring Economic Outlook presented on 24 April, four days before the Commission presents its official figures.

This positive outlook is mainly due "a substantial improvement" on labour markets, especially in Germany, said Philippe de Buck, the secretary general of BusinessEurope. Following the creation of more than ten million jobs over the past three years, European companies are confident they can create an additional two million this year, according to de Buck.

"European companies are resilient and they continue to invest, export and create jobs despite all the uncertainties," he said.

The new member states Lithuania, Bulgaria and Latvia top the class with growth rates exceeding 6%, while large member states in particular are likely to experience weaker growth, the business federation estimates.

Following its weak performance in 2007 with only 1.5% growth, Italy is expected to remain at the bottom of the list this year. "Even the projection of annual growth of 0.7% this year could prove to be too optimistic," de Buck stated.

Rising oil and commodity prices as well as the looming recession in the US are considered to be the main obstacles to further growth, according to BusinessEurope.

While de Buck expressed confidence that the current price surges could be attenuated thanks to the euro's strength and better levels of energy efficiency than global competitors, he voiced concern that the recession risk on the other side of the Atlantic "will exert a substantial drag on the European economy over the coming quarters".

De Buck concluded that it was now up to governments "to create the right conditions" to support companies' confidence. One priority is to contain "inflationary pressures", he said. Inflation is due to rise to 2.8% this year, considerably diminishing citizens' purchasing power, but is expected to fall to 2.3% in 2009. source

My comment: Lol, we're in the top of economical growth! How cool is this :)

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