Spanish factory output in two-year free fall

Spain's factories axed output in July, official data showed on Friday, completing a near two-year industrial decline as domestic demand evaporated in a job-wrecking recession.

Spanish factory output in two-year free fall
Photo: Josep Lago

Factories and utilities reduced production by 1.4 percent in the year to July after smoothing out seasonal blips, the National Statistics Institute said.

Output fell 2.2 percent on an annual basis in the previous month.

It was the 23rd straight month showing an annual decline in industrial production from the eurozone's fourth-largest economy.

The news comes as Spain hopes to crawl out of a two-year recession in this quarter and shake off the aftermath of a decade-long property bubble that imploded in 2008.

Output of consumer goods tumbled 1.5 percent overall.

But in a worrying sign for the economy, production of durable consumer goods such as cars or washing machines plunged 10.5 percent while output of non-durable consumer goods such as food or paper eased 0.4 percent.

Producers boosted output of business equipment by 3.9 percent.

Production of intermediate goods used in manufacturing, such as chemicals, fell 4.6 percent.

Utilities lowered energy output by 2.3 percent.

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WTO rules US tariffs on Spanish olives breach rules

A US decision to slap steep import duties on Spanish olives over claims they benefited from subsidies constituted a violation of international trade rules, the World Trade Organisation ruled Friday.

WTO rules US tariffs on Spanish olives breach rules
Farmers had just begun harvesting olives in southern Spain when former US President Donald Trump soured the mood with the tariffs' announcement. Photo: Jorge Guerrero/AFP

Former US president Donald Trump’s administration slapped extra tariffs on Spain’s iconic agricultural export in 2018, considering their olives were subsidised and being dumped on the US market at prices below their real value.

The combined rates of the anti-subsidy and anti-dumping duties go as high as 44 percent.

The European Commission, which handles trade policy for the 27 EU states, said the move was unacceptable and turned to the WTO, where a panel of experts was appointed to examine the case.

In Friday’s ruling, the WTO panel agreed with the EU’s argument that the anti-subsidy duties were illegal.

But it did not support its stance that the US anti-dumping duties violated international trade rules.

The panel said it “recommended that the United States bring its measures into conformity with its obligations”.

EU trade commissioner Valdis Dombrovskis hailed the ruling, pointing out that the US duties “severely hit Spanish olive producers.”

Demonstrators take part in a 2019 protest in Madrid, called by the olive sector
Demonstrators take part in a 2019 protest in Madrid called by the olive sector to denounce low prices of olive oil and the 25 percent tariff that Spanish olives and olive oil faced in the United States. (Photo by PIERRE-PHILIPPE MARCOU / AFP)

“We now expect the US to take the appropriate steps to implement the WTO ruling, so that exports of ripe olives from Spain to the US can resume under normal conditions,” he said.

The European Commission charges that Spain’s exports of ripe olives to the United States, which previously raked in €67 million ($75.6 million) annually, have shrunk by nearly 60 percent since the duties were imposed.

The office of the US Trade Representative in Washington did not immediately comment on the ruling.

According to WTO rules, the parties have 60 days to file for an appeal.

If the United States does file an appeal though, it would basically amount to a veto of the ruling.

That is because the WTO Appellate Body — also known as the supreme court of world trade — stopped functioning in late 2019 after Washington blocked the appointment of new judges.