Alcatel's deal runs into political obstacles
Paris: Alcatel's bid to merge with US rival Lucent and sign a satellites deal with defence electronics group Thales has run into politicians. According to reports in French newspapers French president Jacques Chirac is unlikely to approve a deal between Alcatel and Thales in a hurry, because he wants European defence group EADS involved in any defence electronics tie-up.

Alcatel said on Thursday it would make no further comment until the negotiations with Lucent were wrapped up. It said that the proposed $3.5 bn merger announced last week - will be carried out at market prices, which means that Alcatel will be left with around 62 per cent of the combined stock.
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U.S. and Europe charge China with imposing discriminatory tariffs
Washington: In a coordinated move, the United States and the European Union have filed a complaint with the World Trade Organization, accusing China of imposing discriminatory tariffs on foreign suppliers of auto parts just 10 days before the beginning of a round of high-level trade talks between the United States and China, and less than three weeks Chinsese president Hu Jintao is due to visit Washington.

The complaint is also seen as part of a broader attempt to address the growing criticism resonating in Washington and Brussels against China's trade policies.

The complaint is the second brought against China since it joined the trade organization in 2001; earlier the United States filed a complaint in 2004 over China's tax treatment of domestic and imported semiconductors.

The European Commission says China requires that when imported parts make up more than 60 percent of the final value of a locally assembled car, the parts will be charged the tariff that applies to whole vehicles, which is much higher. This would force carmakers in China to find local sources for more parts.

Over the last few years, American and European manufacturers have been moving into China, where the car market is already one of the biggest in the world and still growing while other markets are stagnating. Many big parts suppliers have followed the manufacturers there.

However, American auto parts makers export relatively little to China. Auto parts exports to China from the US grew by about 6 percent last year, to $645 million comprising a small part of the overall market, at $19 billion in 2004. It also makes up a tiny slice of American manufactured exports to China, which grew more than 20 percent last year, to $32.5 billion.
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