document.writeln("

Textile quotas: Mandelson concedes system has "serious glitch''
Paris: In what is being perceived as a major embarrassment, Peter Mandelson, the European trade commissioner, acknowledged Wednesday that a system of quotas the European Union imposed on Chinese textile imports had a "serious glitch," and dispatched officials to Beijing to try to renegotiate a deal.

Currently, 75 million Chinese-made sweaters, pants, bras and other garments have piled up in European ports.

The quota system, which Mandelson pushed heavily on assuming office, has underscored north-south divisions inside the European Union.

France, Spain and Italy had lobbied Brussels to adopt textile quotas as a way to protect the European textile industry, which is based primarily in southern countries. Countries like Denmark, the Netherlands and Sweden were vehemently opposed to the textile limits.

From the Chinese perspective, the possible unraveling of the trade deal is an important victory that shows the extent to which Europe and other developed markets are dependent on Chinese products.

In response to Mandelson's terming of the quota system as a 'glitch' European retailers said that the problems were more than just a "glitch."

The heads of associations representing European clothing shops and retail chains say the quota system was botched from the start because it was implemented too quickly to allow them to switch suppliers.
Back to News Review index page  

Moody's cuts GM and Ford debt to junk status
New York: Moody's Investors Service on Wednesday cut General Motors Corp.'s (GM) and Ford Motor Co.'s (F) debt ratings to junk status, citing continued operating losses, global competition and challenges to restructuring for long-term viability.

Moody's also cut GM's finance arm, General Motors Acceptance Corp, to junk status. The cuts affect about US$170bn of outstanding debt, Moody's said.

Moody's was the last of the three major rating services to cut the auto giant to junk status. Moody's cut GM's senior unsecured debt rating to "Ba2" from "Baa3," and GMAC's senior unsecured rating to "Ba1" from "Baa2." The outlook is negative on the new ratings.

Moody's also cut Ford's debt ratings, the second cut to junk for the No. 2 automaker. Moody's cut its ratings on Ford's finance arm but left them at investment-grade status. Most of Ford's debt is held at its finance arm, Ford Motor Credit Co.

Moody's cut Ford's long-term credit ratings by one notch to "Ba1," the highest junk rating, from "Baa3." It cut the long-term ratings on Ford Motor Credit by one notch to "Baa3," the lowest investment-grade rating, from "Baa2." The rating outlook for both companies is negative, meaning another rating cut is likely over the next 12 to 18 months.

In May, rating agency Standard & Poor's cut Ford and Ford Credit to junk status, citing declining sales of sports utility vehicles and trucks.
Back to News Review index page