WTO rules U.S. unfair subsidies for Boeing illegal

The U.S. is hailing a World Trade Organization ruling on illegal Boeing subsidies as a victory. (Roslan Rahman/AFP Reuters

The World Trade Organization has ruled that U.S. aircraft manufacturer Boeing received $3 billion to $4 billion in illegal subsidies in the form of federal research grants and local tax breaks, the top U.S. trade official said Monday.

But U.S. Trade Representative Ron Kirk called the decision "a tremendous victory" for the United States because he said a separate WTO panel ruled last year that European governments provided $18 billion in subsidized funding for Airbus.

"It is now clear that European subsidies to Airbus are far larger -- by multiples -- and far more distortive than anything that the United States does for Boeing," Kirk said in a statement.

"The United States is ready to address all of the WTO findings, and we expect Europe to do the same. Airbus is a mature, highly capable company with ready access to commercial financing. It doesn't need the launch aid that European governments are continuing to provide," he added.

The WTO appellate body ruling on Monday faulted the United States for research funded by NASA and the Department of Defense that benefited Boeing and for tax breaks granted by the state of Washington and city of Wichita, Kansas.

The United States will have six months to comply with the ruling, once it is formally adopted this month, Kirk said.  

Appellate body rules unfair US subsidies have damaged rival Airbus

GENEVA: The World Trade Organisation has ordered the United States to halt unfair subsidies and tax breaks to planemaker Boeing, judging them to have damaged European rival Airbus.

The WTO's appellate body said that it found that certain subsidies and tax breaks “caused, through their effects on Boeing's prices, serious prejudice in the form of significant lost sales” to Airbus in the market for civil aircraft with 100 to 200 seats, according to a summary of the 700-page ruling.

That segment is for the medium-haul Airbus A320 and Boeing 737, which are their top selling aircraft.

It also found that research and development subsidies skewed competition for larger aircraft of 200 to 300 seats, and that such subsidies for the 787 Dreamliner “caused serious prejudice to the interest of the European Communities.” The United States has six months to comply with the ruling.

An Airbus A380 behind a Boeing 787 plane’s vertical tail. The WTO confirms that Boeing has received illegal subsidies, a decision that is seen as a victory by both the US aircraft maker and Airbus

 

Even before the publication of the WTO ruling, both the European Union (EU) and United States claimed victory in the dispute.

The EU had launched the complaint, claiming the United States gave Boeing billions of dollars in illegal subsidies after Washington had disputed EU aid to European aircraft manufacturer Airbus.

In a ruling on March 31, 2011, the WTO partly upheld the EU complaint, but it was appealed.

The European Commission welcomed the WTO final ruling, saying it confirmed that billions of dollars in US subsidies to Boeing were illegal under WTO rules.

“The ruling vindicates the EU's long-held claims that Boeing has received massive US government hand-outs in the past and continues to do so,” said EU Trade Commissioner Karel De Gucht.

The United States took the opposite stand, saying the WTO decision confirmed that Europe's unfair trade subsidies to Airbus have dwarfed US aid to Boeing.

“This decision is a tremendous victory for American manufacturers and workers - and demonstrates the Obama administration's commitment to ensuring a level playing field for Americans,” Ron Kirk, the US Trade Representative, said in a statement before the WTO appeals panel published its findings.

“It is now clear that European subsidies to Airbus are far larger - by multiples - and far more distortive than anything that the United States does for Boeing,” he said.

The United States highlighted that the WTO had found last May in a separate case that the EU gave Airbus US$18bil (13.7 billion euros) in subsidised funding that resulted in lost market share and sales for Boeing.

“In yesterday's findings, the comparable figures (for Boeing) were between US$3bil and US$4bil in subsidies, and lost sales (for Airbus) of just slightly more than 100 aircraft,” the statement said.

The European Commission said the WTO appeal ruling found that Boeing received between US$5bil and US$6bil of illegal subsidies between 1989 and 2006, and was estimated to have received US$3.1bil more since.

Airbus said the WTO ruling found the effects of the illegal funding were much larger.

“The report confirms the existence of illegal US subsidies to Boeing previously identified by the WTO as at least US$5.3bil' and extended by billions of US dollars as a result of yesterday's decision - resulting in an estimated loss of approximately US$45bil in sales for Airbus,” the company said in a statement. AFP

Aging Parents, Embattled Kids: Can You Find Pain Relief?

By Carolyn Rosenblatt, Forbes Contributor

This is a real situation.

Three brothers are engaged in pitched battle over their mother’s living situation.  Mom is severely demented and can’t care for herself independently. She had long term care insurance, but she has almost exhausted that benefit.  Her only remaining asset is her home.  She needs full time care.

The eldest brother, James, seized power over her finances from the middle brother, Paul.  He got mom to appoint him the power of attorney and the agent on the healthcare directive, and displaced Paul, who had always been on both documents . Mom wasn’t competent to sign anything when she did, but James didn’t seem to care.  That infuriated Paul.  Little brother Joe is somewhat passive, but sides with Paul.

The three never got along very well, even as kids. There was a lot of arguing and their communication did not improve as they grew up. They largely avoided one another. Until now.

James decided, without communicating with either of his brothers, to move mom to an assisted living facility that takes care of people with dementia.  She would have her own room. It would be in her neighborhood. Her house would be sold to pay for it.  A deposit was paid.

When Paul heard of this, he became enraged, told Joe and they both threatened to sue James.   In response, James found a lawyer and began guardianship proceedings.  There is no money in mom’s checking account to pay the lawyer, so James promised the attorney that she could get paid when the house was sold.  It’s a nice home.

Mom’s long time estate attorney suggested mediation.  She urged the siblings to stop upsetting their mom and each other by using a neutral person to help them try to reach some agreements.  This sounds like a good solution, doesn’t it?  They could meet with the mediator,  and see if they could figure out a way to be more civil to each other around the move for mom. They definitely needed help to work toward a less aggravating future for each other caring for their mom.

James refused to go to mediation.

The guardianship proceeds apace.  Thousands of dollars will be needlessly wasted on the litigation,  James against Paul and Joe.  The brothers will become ever more acrimonious and the story will not end well during mom’s final days.

As a mediator for families in conflict, I can only say that this story keeps repeating itself in different forms.  It’s frustrating for me, as I know that in most instances, mediation of family conflicts about elders can really help and it is quite often successful.  The hard thing to understand is why wouldn’t the Jameses of the world want to give it a try?  Is it the power they yield?  Is it control over their siblings via legal documents and court cases?

Certainly, the cost of mediation can’t be the reason to refuse it.  It is far, far less expensive than just about any court proceeding.  If siblings are scattered, as in James, Paul and Joe’s case, mediation can even be done over the phone. You can’t make anyone do it though. It’s voluntary.

A factor at play is James’s attorney’s motive in handling the guardianship proceedings. Lots of money is at stake if the litigation keeps going.  She can rake it in when that house sells.  If she agrees to go to mediation with Paul, and the siblings settle their differences, there goes her paycheck.  If you don’t think some lawyers want to keep conflict alive and churning for their own selfish sakes, think again.

What’s the takeaway here?

Mediation works.  Think about it if your family is in conflict over an aging parent.  Here’s an illustrative quick video http://agingparents.com/wp/about-carolyn-l-rosenblatt-r-n-attorney-at-law/ (scroll to bottom of the page).

It is a dignified way to resolve your differences without a court. No one judges you. You work it out as you choose, not how anyone else tells you to do it.

After my 27 years as a litigator, I can tell you firsthand that in so many instances, no one feels very satisfied when you’re done with litigation.

Some of us call ourselves “elder mediators”. We work in this arena of warring families and parents. It’s not therapy. It’s short term problem solving.  I encourage those who are feeling the heartbreak of scenes like the one above to find a mediator and get going.  There is hope, even when it seems impossible.  You can make it better.

Until next time,

AgingParents.com
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Taiwan's Phison IC design project, a 'brain gain' for Malaysia

By CECILIA KOK cecilia_kok@thestar.com.my

KUALA LUMPUR: Phison Engineering Corp will set up a branch in Malaysia, with operations targeted to begin in the next three to six months.

The Taiwan-listed company, which specialises in the design of integrated circuit (IC) for use in data storage devices, would base its Malaysian unit in the northern region.

It would operate as a wholly-owned subsidiary before becoming an “independent” company after three years.

“We choose the northern region in Malaysia because we find that there is some semblance of ecosystem there that can provide a better environment for our operations to thrive,” Phison chairman and CEO Pua Khein-Seng said.

“We also want to be close to our clients who are mostly based in the north for the sake of cost as well as operational efficiencies,” he said at a press conference in conjunction with the launch of his book, Driven to Success.

Pua, a Malaysian raised in Sekinchan, Selangor, founded Phison with four of his university friends in 2000. He left to study engineering in Taiwan in 1993 and lived there after graduation.

For a start, Phison will have Silterra Malaysia Sdn Bhd, a semiconductor wafer maker owned by Khazanah Nasional Bhd, as the main partner for its Malaysian unit.

On the initial capital outlay for Phison's project in Malaysia, Pua said it would range from US$1mil (RM3.03mil) to US$3mil.

He stressed that Phison was not a “manufacturing” operation that required high capital investment to set up operations and buy equipment. All it needed was the right amount of space and several engineers.

“Our Malaysian unit will have the full support of our team in Taiwan during the initial stage because we want to ensure 100% success of our venture in Malaysia,” Pua said.

StarBizWeek broke the news about Pua planning to set up a Phison branch in Malaysia last Saturday.

The report, quoting sources, also said Mida had drawn up a list of attractive incentives to entice Pua to set up the IC design house in Malaysia.

Mida CEO Datuk Noharuddin Nordin said the incentives were one of the attractions.

“But while we cannot disclose the details of the incentives we are giving Phison, we can tell you that whatever we give to Phison is nothing more than what we are giving to our other investors.”

“Historically, the E&E (electrical and electronics) sector has been a major contributor to Malaysia's gross domestic product growth,” he said.

“Under the Economic Transformation Programme, which includes E&E as the National Key Economic Areas, IC design has been identified as one of the key components that would accelerate the growth of the semiconductor cluster in Malaysia, with a target of 50 new IC design houses and five more Mature Technology Semiconductor Foundries to be established by 2020,” he said.

He added that the initiative was expected to generate an additional gross national income of RM7.4bil and create 8,500 highly skilled jobs for the industry.

Describing Pua's project in Malaysia as “brain gain” for Malaysia, Noharuddin said he hoped Phison's presence would help establish an ecosystem that would encourage overseas talent to return to the country.

Pua has a 2.55% stake Phison that has a market capitalisation of NT$47bil (RM4.8bil).

The company counts heavyweights such as Toshiba Corp, Kingston Technology, Vanguard Group Inc, Blackrock and Fidelity as its other shareholders.

IBM takes giant step to faster, quantum computers

IBM researchers presenting the results at this week’s American Physical Society meeting in Boston said that quantum computing “has the potential to deliver computational power that is unrivaled by any supercomputer today.” – Reuters File Photo

WASHINGTON: IBM researchers have taken a leap in computing by using quantum mechanics to harness the power of atoms and molecules, a move likely to lead to vast increases in speed and security of computers and other devices.

IBM researchers presenting the results at this week’s American Physical Society meeting in Boston said that quantum computing “has the potential to deliver computational power that is unrivaled by any supercomputer today.” The new type of computing uses information encoded into quantum bits or qubits, putting into use a theory that scientists have been discussing for decades.

“The special properties of qubits will allow quantum computers to work on millions of computations at once, while desktop PCs can typically handle minimal simultaneous computations,” an IBM statement said.

“For example, a single 250-qubit state contains more bits of information than there are atoms in the universe.” “The quantum computing work we are doing shows it is no longer just a brute force physics experiment,” said IBM scientist Matthias Steffen, manager of the research team that is working on applications for quantum computing systems.

“It’s time to start creating systems based on this science that will take computing to a new frontier.” Quantum computing expands on the most basic piece of information that a typical computer understands — a bit. While a normal bit can have only one of two values: “1” or “0,” qubits can hold a value of “1” or “0” as well as both values at the same time.

“Described as superposition, this is what allows quantum computers to perform millions of calculations at once,” IBM says.

A problem for scientists is that qubits have a short life of several billionths of a second, but IBM has succeeded in developing “three dimensional” superconducting qubits which retain their quantum states up to 100 microseconds – an improvement of two to four times prior records.

“Based on this progress, optimism about superconducting qubits and the possibilities for a future quantum computer are rapidly growing,” says IBM.

To harness the power of quantum computing, scientists have had to work to minimize errors in calculations caused by interference from factors such as heat, electromagnetic radiation, and materials defects.

The use of quantum computing “will have widespread implications foremost for the field of data encryption where quantum computers could factor very large numbers like those used to decode and encode sensitive information,” IBM said.

“Other potential applications for quantum computing may include searching databases of unstructured information, performing a range of optimization tasks and solving previously unsolvable mathematical problems.”

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Quantum strategy offers game-winning advantages, even without entanglement

By Lisa Zyga PhysOrg.com

Enlarge

Experimental and theoretical results both show that quantum gain - measured as the difference between the winning chances for classical and quantum players - is highest under maximum entanglement. Quantum gain remains even when entanglement disappears, and approaches zero along with the discord. Image credit: Zu, et al. ©2012 IOP Publishing Ltd and Deutsche Physikalische Gesellschaft

(PhysOrg.com) -- Quantum correlations have well-known advantages in areas such as communication, computing, and cryptography, and recently physicists have discovered that they may help players competing in zero-sum games, as well. In a new study, researchers have found that a game player who uses an appropriate quantum strategy can greatly increase their chances of winning compared with using a classical strategy.

The researchers, Chong Zu from Tsingua University in Beijing, China, and coauthors, have published their study on how quantum mechanics can help game players in a recent issue of the New Journal of Physics.

In their study, the researchers focused on a two-player game called matching pennies. In the classical version of this game, each player puts down one penny as either heads or tails. If both pennies match, then Player 1 wins and takes both pennies. If one penny shows heads and the other shows tails, then Player 2 wins and takes both pennies. Since one player’s gain is always the other player’s loss, the game is a zero-sum game.

In the classical version of the game, neither player has any incentive to choose one side of the coin over the other, so players choose heads or tails with equal probability. The random nature of the players’ strategies results in a “mixed strategy Nash equilibrium,” a situation in which each player has only a 50% chance of winning, no matter what strategy they use.

But here, Zu and coauthors have found that a player who has the option of using a quantum strategy can increase his or her chances of winning from 50% to 94%. This quantum version of the game uses entangled photons as qubits instead of pennies. And instead of choosing between heads and tails, players use a polarizer and single-photon detector to implement their strategies. While the classical player can still choose only one of two states, the quantum player has more choices due to her ability to rotate a polarizer 360° before the single-photon detector. The researchers calculated that the quantum player can maximize his or her chances of winning by rotating the polarizer at a 45° angle.

“Each player can apply any operation to their qubit (or coin), and then measure it in computational basis,” Zu explained to PhysOrg.com. “For a classical player, the operation he can do is to flip the bit or just leave it unchanged. However, if a player has quantum power, he can apply arbitrary single-bit operations to his qubit. But the measurement part is the same for the quantum and classical players.”

The researchers found that the quantum advantage depends heavily on how correlated the original photons are, with a maximally entangled state providing the largest gain. The researchers were surprised to find that the quantum advantage doesn’t decrease to zero when entanglement disappears completely, since a different kind of quantum correlation – quantum discord – also provides an advantage. This finding may even be the most interesting part of the study.

“There is no wonder that quantum mechanics will lead to advantages in game theory, but the interesting part of our work is that we find out the quantum gain does not decrease to zero when entanglement disappears,” Zu said. “Instead, it links with another kind of quantum correlation described by discord for the qubit case, and the connection is demonstrated both theoretically and experimentally.”

He added that this finding could potentially be useful for making real-world strategies.

“Our work may help people to understand how quantum mechanics works in game theory (in some cases, entanglement is not necessary for a quantum player to achieve a positive gain),” he said. “It may also give a good example of people making strategies in a future quantum network.”

More information: C. Zu, et al. “Experimental demonstration of quantum gain in a zero-sum game.” New Journal of Physics, 14 (2012) 033002. DOI: 10.1088/1367-2630/14/3/033002

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