Latest news with #competitiveness
CNA
9 hours ago
- Business
- CNA
EU, Japan vow joint push for 'fair' global trade
TOKYO: The EU and Japan pledged on Wednesday (Jul 23) to work together on championing a "free and fair" trade global system, as US tariffs and disputes with China rattle their economies. Brussels and Tokyo announced a "competitiveness alliance" to increase bilateral trade, address unfair practices, and boost innovation, at a summit in the Japanese capital. "In today's world, competitiveness has to be built with trusted partners such as Japan," European Union chief Ursula von der Leyen told journalists after talks with Japanese Prime Minister Shigeru Ishiba. "Together, Europe and Japan represent a fifth of global GDP and a market of 600 million people," she added. "So, we have the scale to shape global rules on trade and tech in line with our values of fairness and openness." Facing a swirl of speculation over his future following a weekend election debacle, Ishiba said the EU and Japan concurred to work together to strengthen a "stable and predictable rules-based free and fair economic order". Von der Leyen congratulated the prime minister on his "successful negotiations" to secure a tariff deal with Washington, a feat that has so far escaped the European Commission she leads. US President Donald Trump announced on Tuesday a "massive" trade deal with Japan, as a deadline looms for the EU and other major US trade partners to strike agreements or face steep levies. Tokyo said the deal would see a tariff on Japanese car cut to 15 per cent. The EU's top trade negotiator Maros Sefcovic is due to speak once again to US Commerce Secretary Howard Lutnick later on Wednesday. Von der Leyen's commission, the EU's top executive body, is in charge of trade policy for the 27-nation bloc. "In a world of growing uncertainty, we are also stepping up joint efforts to boost economic security and resilience," Antonio Costa told journalists in Tokyo. Costa heads the European Council representing EU member states. He said the EU and Japan - who back Ukraine in its war with Russia - would push to deepen cooperation between their defence industries. Costa and von der Leyen will visit Beijing next for talks with China's top leaders on Thursday. Beijing and Brussels will mark the 50th anniversary of their establishment of diplomatic ties.
Japan Times
12 hours ago
- Business
- Japan Times
Japan and EU launch trade ‘alliance' amid concerns over U.S. and China
Jolted by the threat of sweeping U.S. tariffs and 'unfair' Chinese trade practices, the European Union and Japan on Wednesday launched a 'competitiveness alliance' to expand bilateral trade ties, promote business cooperation and explore ways to diversify critical mineral supply chains. The move comes as both sides have faced increased economic pressure from Washington. U.S. President Donald Trump said Tuesday that Washington had reached a new trade deal with Tokyo that leaves in place some tariffs, but the EU still faces a 30% levy with an Aug. 1 deadline. The alliance, which will also include an expanded economic dialogue in a format similar to what are known as two-plus-two talks involving senior officials, was among a series of agreements reached by Prime Minister Shigeru Ishiba, European Council President Antonio Costa and European Commission President Ursula von der Leyen during an EU-Japan summit in Tokyo. The alliance framework envisages greater collaboration and policy coordination on a host of issues ranging from boosting industrial competitiveness and supply-chain resilience to reducing strategic dependency. It also calls on the two sides to step up coordination and jointly lead international discussions, for instance, by steering trade-related talks at the World Trade Organization and the Group of Seven meetings. "On geoeconomics, we are witnessing growing trade tensions and uncertainty, even among long-standing partners," von der Leyen said in a written interview Wednesday with the Nikkei daily. "For strategic partners like Europe and Japan, this means bringing our relationship even closer to meet the realities of our time and shape the future." Through the expanded high-level economic dialogue, which will now include Stephane Sejourne, the European Commission's executive vice president for prosperity and industrial strategy, the two sides will aim to identify strategic goods and sectors, while addressing economic coercion and nonmarket policies and practices, including any resulting overcapacity. One key topic discussed was strengthening 'reliable' supply chains, with an initial focus on critical raw materials such as rare earths and batteries — a type of collaboration that Brussels said 'could extend to other sectors in the future.' Last month, Sejourne announced the selection of 13 strategic projects focused on the supply of critical raw materials in countries outside the EU. These include projects for graphite supply in Ukraine, Norway, Greenland, Madagascar and Kazakhstan, with nickel and cobalt production being addressed in Canada, Brazil and Zambia. Von der Leyen told the Nikkei that the EU will explore investment opportunities with Japan throughout Europe, saying for the first time that there are "strong prospects" for collaborating on mining. This comes after China imposed export restrictions in April on seven rare earth elements and magnets used in the defense, energy and automotive sectors in response to increased U.S. tariffs on Chinese products. While Chinese exports have largely resumed under certain conditions, the restrictions have impacted both EU and Japanese industries, with the two sides now considering public-private partnerships to explore new supply chains and reduce their overreliance on Beijing, which currently dominates global rare earth production. Under their new alliance, Tokyo and Brussels also plan to simplify and streamline rules to reduce administrative burdens for Japanese and European businesses and citizens, all while deepening industrial policy cooperation and facilitating investment and business collaborations. Other objectives of the new framework include promoting and protecting critical and emerging technologies, enhancing research security as well as the physical and cybersecurity of critical infrastructure. The ambitious alliance framework also includes steps to work closer together in the areas of energy, decarbonization, the bioeconomy, space, digital, the defense industry as well as research and innovation. Jose Parejo, head of the JP & Associates intelligence consultancy, said that four critical factors had converged to drive the two sides to seek alternative economic partnerships, with the first two being Trump's tariff threats and Beijing's weaponization of critical materials, both of which exposed dangerous vulnerabilities. The third factor, Parejo said, has been the WTO's institutional paralysis. 'Its dysfunctional appellate body has pushed like-minded partners toward plurilateral arrangements that can establish high standards and effective dispute resolution,' he said. Finally, the EU's new Competitiveness Compass positioned innovation, decarbonization, and dependency reduction as growth pillars where Japan emerges as the bloc's 'natural technological and values-based partner,' he added. The European Union and Japan on Wednesday launched a 'competitiveness alliance' to expand bilateral trade ties, promote business cooperation and explore ways to diversify critical mineral supply chains. | REUTERS EU-Japan relations are based on a strategic partnership agreement and a free-trade deal that has been in force since 2019. EU firms already export nearly €70 billion ($81.8 billion) in goods and €28 billion ($32.7 billion) in services to Japan every year. Together, the partners account for almost a quarter of the world's gross domestic product and 20% of global trade in goods and services counted together. Still, the new alliance could take ties even further in a number of areas, experts said. In critical minerals, for instance, Europe could benefit from Japan's world-leading rare-earth refining expertise while Japan could potentially access European Investment Bank financing and joint procurement platforms that reduce costs and enhance negotiating power against Chinese dominance. Green technology coordination, meanwhile, would create the scale necessary to compete with Chinese manufacturers, while digital sovereignty benefits could include joint 6G, AI and semiconductor laboratories that close the innovation gap with the U.S. and China. Market access is equally significant as Japanese companies look to gain preferential single market entry to 450 million consumers, while European firms benefit from Japan as a gateway to the 12-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that bridges European and Asian economic spheres. That said, the alliance's strategic objectives go beyond bilateral cooperation, as it rebalances dependencies away from China and the U.S. 'This isn't anti-American or anti-Chinese positioning, but sophisticated maintenance of European agency in a multipolar world,' Parejo said. 'The alliance represents cornerstone 'selective multilateralism' where rule-making democracies coordinate resilient, sustainable markets while reducing systemic vulnerabilities.' The EU-Japan summit comes after von der Leyen proposed to EU leaders last month the launch of a Europe-led initiative to establish a more structured trade cooperation with Asian countries, potentially laying the groundwork for an alternative to the gridlocked WTO. "I said that we can think about this as the beginning of redesigning the WTO," she said, while referring to the CPTPP as 'a project we should truly engage in.' Whether Brussels is truly aiming to join the free-trade pact is unclear. Some observers say that the European Commission president could be posturing as a way to gain leverage over the Trump administration. EU envoys will reportedly meet as early as this week to formulate a plan to respond to a possible no-deal scenario on tariffs. A growing number of EU member states reportedly wants the bloc to activate its most powerful trade tool, what is called the anti-coercion instrument (ACI), against the U.S. should the two sides fail to reach an acceptable agreement and Trump follows through on his tariff threats. The ACI would give officials broad powers to take retaliatory action. Those measures could include new taxes on U.S. tech giants or targeted curbs on U.S. investments in the EU.
Malay Mail
15 hours ago
- Business
- Malay Mail
Malaysia must focus on strengthening the Ringgit, before and after August 1 — Phar Kim Beng
JULY 23 — Let's face it. With or without a tariff from US, pegged at 25 per cent or lowered potentially to 19 per cent, Malaysia has to negotiate the tax down to zero in order to make our export sectors competitive. This is the formula of Indonesia, the Philippines and Vietnam; which is also aspired by Thailand. In other words, bite the bullet of Trump's tariffs on August 1 or after, but lock the Trump Administration in a perpetual negotiation to take the tariff down to zero. Not unlike how Malaysia's Semi Conductors and integrated circuits are exempted completely from any Trump tariffs. In this context, Prime Minister Anwar Ibrahim's speech to Malaysia was extremely important. On 23 July 2025, Anwar delivered a detailed account of Malaysia's economic progress, supported by a catalogue of impressive statistics. The 4.4 per cent GDP growth in Q1 2025, a projected 4.5 per cent in Q2, and a meteoric rise of 11 places to 23rd in the World Competitiveness Index are not easy to achieve, especially when the US and Chinese economies are locked in a trade war. As and when Anwar takes a more confident outlook, this underscores an administration working with clear intent and focus. Yet, among all the indicators, one stands out as the most consequential for long-term national resilience: the strengthening of the Ringgit. In the past year, the Ringgit has appreciated over 5 per cent, placing it among Asia's top five performing currencies. Even though the Ringgit was Asia's best currency in 2024. Sino-US turbulence has affected Ringgit as much as it has rocket Singapore Dollar too this year. As and when Anwar takes a more confident outlook, this underscores an administration working with clear intent and focus. — Picture by Sayuti Zanudin It was Jeff Friedman, a leading Professor of Economics at Harvard, who affirmed: 'When all figures are too difficult to compute, focus on the currency. Just the currency.' By this token, Ringgit is a structural cornerstone of Malaysia's fiscal independence, investor confidence, and people's purchasing power. A strong Ringgit cushions the economy against imported inflation, especially in a world where commodity prices are volatile and geopolitics is increasingly zero-sum. A strong Ringgit lowers the cost of food imports, medical supplies, industrial components, and educational materials— all of which directly impact the cost of living. Indeed, while initiatives such as raising the minimum wage hike to RM1,700 — parallel to the living wage policy for 153,000 GLIC/GLC workers, and the targeted RON95 subsidy — are all critical, they are vulnerable to external shocks too. That is, if the Ringgit is forever weak. But the Ringgit remains strong, which is why Anwar puts it at the start of his speech. The rest were the icing on the cake. Ringgit Malaysia, for lack of a better word, was the cake that could help the Malaysian economy to grow. When the Ringgit is strong, no credit rating agencies dare to lower our National Credit Ratings. Not by Fitch. Let alone by Moody's and Standard and Poor's. Alternatively, when the Ringgit falters, every gain in wages is offset by higher prices of essentials. Malaysians can't even travel to Thailand or anywhere in Asean writ large. In turn, inflation would quietly erode lol purchasing power, especially among the B40 and M40 who do not hold dollar-denominated assets at all. Moreover, Malaysia's record-high approved investments of RM384 billion in 2024 (+17 per cent YoY) will only translate into real economic dividends if the currency holds strong. No FDI will flow in if the value of RM is highly questionable in the short and long term. Foreign direct investors seek not just opportunity, but also currency stability to preserve the value of their returns. In this regard, the Ringgit's performance is the ultimate litmus test of macroeconomic credibility. A strong Ringgit also allows Malaysia to hold its ground diplomatically and economically in increasingly transactional trade negotiations. As President Donald Trump prepares to impose 25 per cent baseline tariffs on imports from countries such as Malaysia, a robust currency offers some insulation. Ringgit acts as an internal buffer against price hikes on strategic imports—especially on food, fuel, fertilizers and animal feed. A fragile Ringgit under these conditions would further delay investments in high-tech clusters like Johor-Singapore's data processing corridor. In turn, eroding trust in Malaysia's medium-term economic outlook. Furthermore, domestic fiscal policy can be more targeted when the Ringgit is strong. Cash aid can be meted out, no matter how minute, as Anwar did. Without currency stability, such cash transfers risk triggering demand-driven inflation, thereby undermining the very goal of cost-of-living relief. Similarly, the doubling of Rahmah Sales to RM600 million across all 600 state constituencies will only succeed in easing household burdens if supply chains remain unshaken by currency fluctuations. The government's decision to postpone toll rate hikes—absorbing RM500 million in compensation—and the maintenance of the RON95 petrol price at RM1.99 per litre is a salving grace. But these measures would not be possible if the Ringgit is weak. Say, at RM 4.70 to USD 1. Invariably, a strong Ringgit mirrors the electricity subsidy model; all depend heavily on a firm currency footing. Otherwise, the government will find itself locked in a losing game of chasing subsidies amid a depreciating exchange rate. What is more, even Malaysia's noble efforts in poverty eradication—150,000 hardcore poor households lifted out of poverty—can be reversed if inflation rises due to currency depreciation. Once again, Ringgit plays a pivotal role. While fiscal transfers under STR and SARA (RM15 billion combined) and JKM aid (RM2.9 billion) are critical, the medium-term efficacy of these programmes rests on stable pricing for essentials, which in turn depends on the Ringgit. In short, Malaysia can no longer afford to treat the Ringgit as a passive indicator. It must be made the centerpiece of strategic planning. Bank Negara Malaysia and the Ministry of Finance must synchronize monetary and fiscal policy with foreign investment flows, ensure minimal capital flight, and enhance Ringgit-denominated savings and bond issuances. The goal is to make the Ringgit a trustworthy store of value not just for Malaysians, but for Asean partners and regional investors. The message from Anwar Ibrahim is clear: 'the people, the people, the people.' But to protect the people from future shocks—from tariff wars to food crises—Malaysia must now pivot to 'the Ringgit, the Ringgit, the Ringgit.' A dignified life for all Malaysians begins not only with job creation and subsidies, but with a stable and respected national currency. The foundation has been laid. It is time to build. * Phar Kim Beng is a professor of Asean Studies and director of the Institute of Internationalization and Asean Studies at the International Islamic University of Malaysia ** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
Bloomberg
2 days ago
- Business
- Bloomberg
Bloomberg Talks: Christian Sewing & Roland Busch
The CEOs of Deutsche Bank and Siemens join Bloomberg's Oliver Crook in Berlin to discuss their "Made in Germany" initiative, which looks to help mobilize the private sector towards the goal of reviving the country's economic growth and competitiveness. The powerhouse pair discuss plans for over €600B of pledges to invest in the country over the coming period including in modernization, AI and the digital transformation.
Telegraph
2 days ago
- Business
- Telegraph
The mask of Davos Man has slipped. The elites will do anything to discredit Brexit
Former President of the European Commission Jean-Claude Juncker famously said: 'When things get serious, you have to know how to lie.' Policymakers in multiple settings have taken this message to heart in recent years – consciously telling untruths in the service of a perceived greater good. There's even a term for it going back to Plato's The Republic: the 'noble lie'. The latest revelations in this spirit concern Klaus Schwab, founder of the Davos conference and the subject of innumerable online conspiracy theories. It appears from reports today and previously in the Swiss press that he did allegedly conspire to misrepresent the UK's ranking in international competitiveness leagues. The UK ought to have been fourth in the 2017/18 report, but Schwab apparently feared this would be interpreted as some kind of endorsement of the Brexit vote in the EU Referendum and is accused of having instructed his staff to make sure the UK did not rise – meaning the UK fell from 7th to 8th in the final report, with Schwab's World Economic Forum warning that the Brexit vote would inevitably undermine UK competitiveness. This was, of course, on top of numerous warnings ahead of the Brexit vote about how dire its impacts would be – not only from the UK government but from other international politicians and agencies as well. We now know for certain that many of these predictions were false – e.g. the Brexit vote did not trigger an instant year-long 'RECESSION' in the UK as the Treasury ominously warned. But how many of them were lies, policymakers saying things they didn't even believe to be true themselves, in the hope of manipulating the public into acting in the manner they felt promoted a greater good? A popular online meme mocks Michael Gove's much misquoted statement during the EU Referendum campaign that 'the people of this country have had enough of experts with organisations with acronyms saying that they know what is best and getting it consistently wrong.' But it's more than simply that these 'experts' get it wrong by accident. They often say things they don't believe themselves to be true or that they know are incomplete, in the hope of manipulating the public. In the US that practice is widely believed to have extended to the mainstream media, with many in the public regarding 'fake news' as an accepted norm. This belief has devalued truthfulness in politics to the point that those on the Trump side appear to consider blatantly lying themselves as just 'playing the game' and everyone appears to accept this as normal. In the UK accusing a politician of 'lying' in Parliament is forbidden, leading to all kinds of famous circumlocution to avoid using that word. Some commentators argue that we should avoid calling politicians liars because it degrades political debate. But that attitude requires a norm of good faith – that politicians will almost always be trying to be as truthful as they can be and even when unable to tell the full truth will go out of their way to avoid actually lying. But the public belief in that good faith is almost gone. Integrity takes a long time to build up but can be shattered quickly. And once it is shattered it is very hard to repair. It could take decades before the public believes they can take statistics, modelling results or the public statements of experts, let alone of politicians, at face value again. Being unable to tell the public difficult truths and have them believed may have dire consequences for decades to come.
