Australia, Canada Trade Blows over Wine

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Australia has filed a formal complaint with the World Trade Organization that accuses Canada of placing “discriminatory” rules on the sales of imported wine.

Canada is Australia’s fourth-biggest wine market. Officials in Canberra say rules in Canada unfairly discriminate against overseas wine.

An official protest has been lodged with the World Trade Organization (WTO) against regulations in the Canadian province of British Columbia, where wine produced locally can be sold in grocery stores but imports must be sold in a “store within a store” with a separate cash register.

Canberra’s objection also targets policies in other provinces, including Ontario, Quebec and Nova Scotia, as well as federal practices in Canada, which could breach a WTO agreement. They mean higher prices for foreign wines, as well as other barriers to sale, according to the Australian complaint.

“Australia is seeing its market share and that market erode. That concerns me, it concerns wine exporters,” said Australian trade minister Steve Ciobo. “Potentially this could cost Australian jobs, so I want to make sure we are on the front foot about protecting Australia’s interests.”

Australia’s complaint to the WTO is similar to one made by the United States, which has accused Canada of placing unfair limits on the sale of imported wine.

In October, the U.S. said British Columbia was favoring local vineyards by giving their wine an exclusive retail outlet in grocery store shelves and cutting out U.S. competition.

A spokesman for Canada’s international trade minister said the federal government works to ensure its liquor policies “are consistent with our international trade commitments”.

Under WTO rules, Canada has 60 days to settle the dispute with Australia.

After that, Canberra could ask the WTO to adjudicate, which could result in Canada being forced to change its laws or risk trade sanctions.






Iran May Try to Loosen Revolutionary Guard’s Grip on Economy

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Iran’s supreme leader has ordered the Revolutionary Guard to loosen its hold on the economy, the country’s defense minister says, raising the possibility that the paramilitary organization might privatize some of its vast holdings.

The comments this weekend by Defense Minister Gen. Amir Hatami appear to be a trial balloon to test the reaction of the idea, long pushed by Iran’s President Hassan Rouhani, a relative moderate. Protests over the country’s poor economy last month escalated into demonstrations directly challenging the government.


But whether the Guard would agree remains unclear, as the organization is estimated to hold around a third of the country’s entire economy.


Hatami, the first non-Guard-affiliated military officer to be made defense minister in nearly 25 years, made the comments in an interview published Saturday by the state-run IRAN newspaper. He said Supreme Leader Ayatollah Ali Khamenei ordered both the country’s regular military and the Guard to get out of businesses not directly affiliated to their work.


“Our success depends on market conditions,” the newspaper quoted Hatami as saying.


He did not name the companies that would be privatized. The Guard did not immediately acknowledge the supreme leader’s orders in their own publications, nor did Khamenei’s office.


The Guard formed out of Iran’s 1979 Islamic Revolution as a force meant to protect its political system, which is overseen by Shiite clerics. It operated parallel to the country’s regular armed forces, growing in prominence and power during the country’s long and ruinous war with Iraq in the 1980s. It runs Iran’s ballistic missile program, as well its own intelligence operations and expeditionary force.


In the aftermath of the 1980s war, authorities allowed the Guard to expand into private enterprise.


Today, it runs a massive construction company called Khatam al-Anbia, with 135,000 employees handling civil development, the oil industry and defense issues. Guard firms build roads, man ports, run telecommunication networks and even conduct laser eye surgery.


The exact scope of all its business holdings remains unclear, though analysts say they are sizeable. The Washington-based Foundation for Defense of Democracies, which long has been critical of Iran and the nuclear deal it struck with world powers, suggests the Guard controls “between 20 and 40 percent of the economy” of Iran through significant influence in at least 229 companies.


In his comments, Hatami specifically mentioned Khatam al-Anbia, but didn’t say whether that too would be considered by the supreme leader as necessary to privatize. The Guard and its supporters have criticized other business deals attempting to cut into their piece of the economy since the nuclear deal.


Saudis Urge Oil Production Cooperation Beyond 2018

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Saudi Arabia’s energy minister urged global oil producing nations on Sunday to extend their cooperation beyond 2018, but said this might mean a new form of deal rather than continuing the same supply cuts that have boosted prices in recent months.

It was the first time that Saudi Arabia had publicly raised the possibility of a new form of coordination among oil producers after 2018. Their agreement on supply cuts, originally launched last January, is set to expire in December this year.

Cooperation ‘here to stay’

Khalid al-Falih, speaking to reporters ahead of a meeting later in the day of the joint ministerial committee, which oversees implementation of the cuts, said extending cooperation would convince the world that coordination among producers was “here to stay.”

“We shouldn’t limit our efforts to 2018, we need to be talking about a longer framework of cooperation,“ Falih said. ”I am talking about extending the framework that we started, which is the declaration of cooperation, beyond 2018.

“This doesn’t necessarily mean sticking barrel by barrel to the same limits or cuts, or production targets country by country that we signed up to in 2016, but assuring stakeholders, investors, consumers and the global community that this is something that is here to stay. And we are going to work together.”

Falih said the global economy had strengthened while supply cuts, of which Saudi Arabia has shouldered by far the largest burden, had shrunk oil inventories around the world. As a result, the oil market will return to balance in 2018, he said.

$70 a barrel oil

Falih and energy ministers from the United Arab Emirates and Oman noted that the rise of the Brent oil price to three-year highs around $70 a barrel in recent weeks could cause an increase in supply of shale oil from the United States.

But both Falih and UAE minister Suhail al-Mazroui said they did not think the rise in prices would hurt global demand for oil.

Kuwait’s oil minister Bakheet al-Rashidi said any discussion among producers on the future of the agreement on supply cuts would not occur Sunday, but was expected to happen at a meeting in June. OPEC and other producers led by Russia are next scheduled to meet to discuss oil policy in June.


Dow Closes Above 26,000, Just 8 Sessions After Earlier Milestone

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Wall Street roared upward Wednesday, with investor enthusiasm sending all three major stock indices to record finishes, and the Dow to its first close above 26,000 points.

The blue-chip Dow gained 1.3 percent to close at 26,115.65 — just eight trading sessions after breaking the 25,000 mark — with strong showings from Boeing, IBM and Intel. 

The broader S&P 500 added 0.9 percent to close at 2,802.56, while the tech-heavy Nasdaq gained a full percentage point to settle at 7,298.28.

With just 11 trading days so far in 2018, Wednesday’s session marked the seventh time this year all three major indices closed at all-time highs.

Maris Ogg of Tower Bridge Associates told AFP the sustained rally was boosted by a “confluence of good news,” including strong company earnings, slashed corporate tax rates, higher worker compensation and new investment.

“This is a boost for productivity” and gave market players greater confidence, she said.

IBM gained 2.9 percent after analysts upgraded their price target for the company’s stock, and chipmaker Intel rose a similar amount, while aviation giant Boeing jumped 4.7 percent after announcing a joint venture to make aircraft seats.

Buoyant markets were comforted in midafternoon as a Federal Reserve survey portrayed the national economy growing at a “modest to moderate” pace.

Persistent cold weather in the United States helped oil prices shrug off weakness early in the weak, helping oil stocks nudge markets higher.

Exxon Mobil rose 1.2 percent, and ConocoPhillips increased 1.7 percent, while Royal Dutch Shell and Chevron each rose 0.3 percent.

The jubilant performance came despite continued pain at General Electric, which sank 4.7 percent as investors worked to evaluate component businesses within the company ahead of a possible breakup.

Goldman Sachs fell 1.8 percent after reporting a steep quarterly drop in trading income.


US Financial Crime Fighters Eye Overseas Virtual Currency Platforms

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Financial crime fighters at the U.S. Treasury are “aggressively” pursuing virtual currency platforms that lack strong internal safeguards against money laundering, a top official told a Senate panel on Wednesday.

With more criminals using the emerging asset class to store and transmit their ill-gotten gains, Treasury’s Financial Crimes Enforcement Network (FinCEN) will pursue malfeasant virtual currency platforms even if they are located overseas, Sigal Mandelker, the U.S. Treasury Department’s undersecretary for terrorism and financial crimes, told the Senate Banking Committee.

U.S.-based platforms for bitcoin and other virtual currencies are required to comply with antimoney laundering (AML) rules including filing suspicious activity reports, with around 100 such platforms registered with FinCEN. But many other countries have no such requirements.

“The real vulnerability that we all have to address is that while we have regulatory authorities in place here in the United States and we do enforce those… we need other countries to do the same,” Mandelker told the committee’s hearing on U.S. antimoney laundering laws.

Mandelker said the U.S. government would also encourage other countries to introduce stricter regulation of virtual currencies, which law enforcement officials say are attractive to criminals making illegal transactions because they can be used anonymously.

In July, the Treasury moved to shut down the website of Russia’s BTC-e exchange, one of the world’s largest bitcoin platforms, and ordered it to pay a $110 million fine for allegedly facilitating transactions involving ransomware, computer hacking, and drug trafficking, among other crimes.

A U.S. jury also indicted a Russian man in July in connection with the alleged crimes perpetrated by the platform.

Regulators and governments around the world are still debating how to address risks posed by cryptocurrencies. In recent weeks, South Korea, Japan and China have all made noises about a regulatory crackdown while officials in France vowed to investigate the emerging asset class.

Senators on Wednesday expressed concerns over the risks posed by cryptocurrencies to the global financial system with Democratic Senator Mark Warner saying the U.S. had “a lot of work to do” to get a grip on the issue.

U.S. markets regulators said this month they plan to take more aggressive enforcement action against exchanges that may be defrauding investors or allowing market manipulation.

The price of bitcoin slumped to $10,000 on Wednesday, halving in value from its peak price of almost $20,000 hit just in December, with investors gripped by fears regulators could clamp down on the volatile currency.


Apple to Build 2nd Campus, Hire 20,000 in $350B Pledge

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Apple is planning to build another corporate campus and hire 20,000 workers during the next five years as part of a $350 billion commitment to the U.S. economy.

The pledge announced Wednesday is an offshoot from the sweeping overhaul of the U.S. tax code championed by President Donald Trump and approved by Congress last month.


Besides dramatically lowering the standard corporate tax rate, the reforms offer a one-time break on cash being held overseas.


Apple plans to take advantage of that provision to bring back more than $250 billion in offshore cash, generating a tax bill of roughly $38 billion.


The Cupertino, California, company says it will announce the location of a second campus devoted to customer support later this year.




Gourmet Chocolate Becomes Economic Lifeline in Venezuela

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In a modest apartment near a Caracas slum, nutrition professor Nancy Silva and four aids spread rich, dark Venezuelan cocoa on a stone counter to make chocolate bars to be sold in local shops that cater to the crisis-hit country’s dwindling elite.

Like some 20 recently launched Venezuelan businesses, Silva uses the country’s aromatic cocoa to make gourmet bars of the kind that can fetch more than $10 each in upscale shops in Paris or Tokyo.

The oil-rich but recession-devastated nation’s Byzantine bureaucracy makes large-scale exports nearly impossible for small businesses.

As a result, most of her bars are sold locally for less than one U.S. dollar – well out of reach of millions of Venezuelans who earn less than that in a week, but reasonably priced for the well-heeled of an increasingly two-tiered economy.

But entrepreneurs who have launched new Venezuelan chocolatiers in recent years say producing gourmet bars allows them to make a living amid the collapse of a socialist economic system – and dream of exports as a golden opportunity down the road.

“Our real oil is cocoa,” said Silva, owner of the chocolatier Kirikire that in 2014 won an award from the prestigious Salon du Chocolat fair in Paris. “In Europe, they’re snatching up these bars.”

Silva faces constant operational challenges due to hyperinflation and Soviet-style product shortages. But these are offset by steady access to high-quality aromatic cocoa from a cocoa farm in eastern Venezuela owned by her family.

Her bars are sold in high-end Caracas grocery stores, delis and liquor stores, where everything from staple products to luxury goods are amply available to the well-heeled – in contrast to the long lines and bare shelves of most shops.

Silva is now focused on getting her chocolate to France, where she once sold a single kilo of her chocolate for the equivalent of 80 euros ($96), which is today the equivalent of five years of minimum wage salary in Venezuela.

Standing in her way are a range of permits such as customs authorizations and sanitary inspections that take months in Venezuela’s notoriously inefficient bureaucracy.

The Information Ministry did not respond to a request for comment.

Venezuela was the world’s leading cocoa producer at the end of the 18th century when it was still a Spanish colony, according to Jose Franceschi, who has written books about cocoa and whose great-grandfather founded the Venezuela’s gourmet Franceschi chocolate brand.

But the cocoa trade was overshadowed by the rise of the oil industry in the early 20th century. Critics say it was further weakened by state takeovers under late President Hugo Chavez, who boosted state involvement in the economy as part of promises to create a society of equals.

But since the crash of oil markets, Venezuela has become a sharply divided society where oil engineers and public hospital doctors rarely make as much as $50 a month while a small group citizens with access to even modest amounts of hard currency can afford fine dining and gourmet products.

Bean to Bar

Output of 16,000 tons per year is less than 1 percent of the global total, and less than 10 percent of the production of regional heavyweights Brazil and Ecuador.

Many gourmet bars made in the United States now prominently advertise the use of Venezuelan cocoa but generally mix in other less-desirable cocoas. Bars made in Venezuela, in contrast, are made with 100 percent local cocoa.

This gives the new Venezuelan chocolatiers a leg up as they tap into the global ‘bean-to-bar’ movement, in which chocolate makers oversee the entire process of turning cocoa fruit into sellable treats.

On the second floor of an old mansion in Caracas, economist and chef Giovanni Conversi has been making specialty chocolate for two years under the name Mantuano.

Sprinkled with sea salt or aromatic fruits from the Amazon, the chocolate bars are a hit in London, Miami and Panama City in specialty chocolate stores or shops that specialize in Latin American food.

He and four assistants produce 9,000 bars a month in Caracas. He has opened a factory in Argentina that buys cocoa from small-scale producers like Yoffre Echarri, who two decades ago inherited his grandfather’s plantation in the beach town of Caruao.

He opens the fruit to remove the beans and the accompanying sweet white pulp, which has a strong aroma of tropical fruit and then ferments the mixture in plastic bags buried underground.

That process retains more aroma than the traditional method of fermenting in wooden boxes.

He sells the beans to Venezuelan chocolatiers for less than $1 per kilo, about half the international price.

“Clients can’t get enough. Those who three months ago were asking for five kilos now call for 50,” said Echarri.

Many small chocolatiers only manage to get products to foreign markets by carrying them in suitcases on commercial flights, though well-established brands such as El Rey have formal export operations to the United States and Europe.

In Japan, El Rey is represented by the food division Japanese trading house Mitsubishi. Mitsubishi did not immediately respond to a request for comment.

Still, some 1,700 people have recently studied artisanal chocolate at the Simon Bolivar University.

“Everyone wants to give it a shot,” said Rosa Spinosa, the head of the program created two years ago.

($1 = 0.8363 euros)


El Salvador Eyes Work Scheme with Qatar for Migrants Facing Exit from US

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El Salvador is discussing a deal with Qatar under which Salvadoran migrants facing the loss of their right to stay in the United States could live and work temporarily in the Middle Eastern country, the government of the Central American nation said on Tuesday.

Last week, U.S. President Donald Trump’s administration said that as of September 2019, it would eliminate the temporary protected status, or TPS, that allows some 200,000 Salvadorans to live in the United States without fear of deportation.

Presidential communications chief Eugenio Chicas said El Salvador was in talks to see how Salvadorans could be employed in Qatar, a wealthy country of some 2.6 million people that is scheduled to host the soccer World Cup in 2022.

“The kingdom of Qatar … has held out the possibility of an agreement with El Salvador whereby Salvadoran workers could be brought across in phases (to Qatar),” Chicas told reporters.

After an unspecified period, the Salvadorans would return home, Chicas added, without saying how many workers the program could encompass.

El Salvador’s foreign minister, Hugo Martinez, is in Qatar until Friday and said in a statement that Salvadorans could work in engineering, aircraft maintenance, construction and agriculture.

Martinez also noted that Qatar had offered to provide health services to the Central American country, which is struggling with a weak economy and gang violence.


Mexican Car Sales Slump Ahead of Election

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Car dealerships in Mexico City have kicked off the new year offering “clearance sales” and free insurance as 2017 models collect dust on their lots, a reminder that consumer nerves over high interest rates could slow the economy ahead of elections.

The first drop in auto sales in eight years is the most visible sign that the great Mexican shopper, the heart and soul of Latin America’s second-largest economy, is feeling the pinch of inflation at a 16½-year high and a battered peso.

A government decision to scrap fuel subsidies last year has made running a car more expensive, while the central bank’s battle with inflation has put car loans out of reach for many.

“If I’m going to buy a new car and then not be able to fill it up with gasoline, then it’s better to sit tight,” said Jaime Asrael, as he window-shopped outside a Chevrolet dealership in the central Guerrero neighborhood of the capital.

Beyond cars, consumer confidence is slipping more broadly. The consumer confidence index declined to 88.4 in December from 88.8 the previous month, the statistics agency said last week.

​Ruling party in trouble

This has worried government officials who are trying to persuade voters to re-elect the ruling Institutional Revolutionary Party (PRI) in July. Experts doubt increased public spending in the campaign will be enough to boost confidence much in Mexico, where private consumption accounts for a whopping two-thirds of gross domestic product.

Leftist opposition candidate Andres Manuel Lopez Obrador has enjoyed a double-digit poll lead over his ruling-party rival in recent surveys.

“It certainly helps his case. The fact that we’ve seen this jump in inflation squeezing real incomes, that all [goes] into the mix,” said Neil Shearing, chief emerging markets economist at Capital Economics.

A blow such as an eventual collapse of talks to renegotiate the North American Free Trade Agreement could make more consumers snap their wallets shut.

“I wouldn’t be surprised if we see a more significant deceleration of private consumption” considering inflation’s impact on wages, tighter credit conditions, and NAFTA and election concerns, said Goldman Sachs economist Alberto Ramos.

“Instead of going on vacation for two weeks, they go one week. Instead of buying the automobile this year, they wait a little bit to see how things go. … That is serious in the sense that private consumption has been so far the main engine of growth,” said Ramos.

Domestic car sales in 2017 fell 4.6 percent from a year earlier, according to data from the Mexican Auto Industry Association. It was the first drop in annual auto sales since the global financial crisis of 2008-09.

​Inflation blamed

“Inflation is what hit us the most. And most people want to buy with credit, and financial institutions and banks weren’t able to cover the market,” said Jose Luis Salas, general manager at Grupo Surman, which runs 13 General Motors dealerships in the country.

“That’s what caused the drop in new car sales,” he added. 

Wider retail sales slowed to growth of 7.7 percent through November, not far above the 2017 inflation rate of 6.77 percent and below the average growth of some 10 percent the prior two years.

For years, stable prices compensated for Mexico’s sluggish economic growth, so accelerating inflation has caused outrage.

Sporadic looting broke out this month after reports that gasoline and food prices were about to be hiked, and angry posts filled social media, echoing unrest last year after the government liberalized fuel prices.

The central bank in November revised downward its 2017 economic growth forecast, blaming the NAFTA talks, the impact of storms and two major earthquakes in September, and a drop in domestic oil production to the lowest in more than 20 years.

It forecast economic growth of 1.8 percent to 2.3 percent in 2017 and 2 to 3 percent in 2018.

The bank, which in December hiked its key rate to a consumption-sapping, nearly nine-year high of 7.25 percent, said it expected a “nascent deceleration” in consumer spending. It is widely expected to raise rates again in February, according to bets in the interest rate swap market.


Global Carmakers to Invest at Least $90B in Electric Vehicles

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Ford’s plan to double its electrified vehicle spending is part of an investment tsunami in batteries and electric cars by global automakers that now totals $90 billion and is still growing, a Reuters analysis shows.

That money is pouring in to a tiny sector that amounts to less than 1 percent of the 90 million vehicles sold each year and where Elon Musk’s Tesla, with sales of only three models totaling just over 100,000 vehicles in 2017, was a dominant player.

With the world’s top automakers poised to introduce dozens of new battery electric and hybrid gasoline-electric models over the next five years — many of them in China — executives continue to ask: Who will buy all those vehicles?

“We’re all in,” Ford Motor Executive Chairman Bill Ford Jr. said of the company’s $11 billion investment, announced on Sunday at the North American International Auto Show in Detroit. “The only question is, will the customers be there with us?”

“Tesla faces real competition,” said Mike Jackson, chief executive of AutoNation Inc, the largest U.S. auto retailing chain. By 2030, Jackson said he expects electric vehicles could account for 15-20 percent of New vehicle sales in the United States.

Investments in electrified vehicles announced to date include at least $19 billion by automakers in the United States, $21 billion in China and $52 billion in Germany.

But U.S. and German auto executives said in interviews on the sidelines of the Detroit auto show that the bulk of those investments are earmarked for China, where the government has enacted escalating electric-vehicle quotas starting in 2019. 

Mainstream automakers also are reacting in part to pressure from regulators in Europe and California to slash carbon emissions from fossil fuels. They are under pressure as well from Tesla’s success in creating electric sedans and SUVs that inspire would-be owners to flood the company with orders.

While Tesla is the most prominent electric car maker, “soon it will be everybody and his brother,” Daimler AG Chief Executive Dieter Zetsche told reporters on Monday at the Detroit show.

Daimler has said it will spend at least $11.7 billion to introduce 10 pure electric and 40 hybrid models, and that it intends to electrify its full range of vehicles, from minicompact commuters to heavy-duty trucks.

“We will see whether demand will drive our (electric vehicle) sales or whether we will all be trying to catch the last customer out there,” Zetsche said. “Ultimately, the customer will decide.”

For now, Nissan’s 7-year-old Leaf remains the world’s top-selling electric vehicle and the company’s sole battery-only car — an offering soon to be swamped by new rivals bringing tougher competition that could add pressure to pricing.

“Everybody will find out that if you push you will have a lot of bad news on residual values,” Nissan Chief Performance Officer Jose Munoz told Reuters.

Jim Lentz, chief executive of Toyota’s North American operations, said it took Toyota 18 years for sales of hybrid vehicles to reach 3 percent share of the total market. And hybrids are less costly, do not require new charging infrastructure and are not burdened by the range limits of battery electric vehicles, he said.

“What’s it going to take to get to 4 to 5 percent” share for electric cars, Lentz said. “It’s going to be longer.”

The largest single investment is coming from Volkswagen AG , which plans to spend $40 billion by 2030 to build electrified versions of its 300-plus global models.

In the United States, General Motors has outlined plans to introduce 20 new battery and fuel cell electric vehicles by 2023, most of them built on a new dedicated, modular platform that will be introduced in 2021.

GM Chief Executive Mary Barra has not said how much the automaker will spend on electric vehicles. Much of the investment will be made in China, where GM’s Cadillac brand will help spearhead the company’s more aggressive move into electric vehicles, according to Cadillac President Johan de Nysschen.

In an interview on Monday at the Detroit show, de Nysschen said Cadillac would “play a central role” in GM’s electric vehicle strategy in China, and will introduce an unspecified number of models based on GM’s future electric-vehicle platform.

Some of those Cadillacs could be assembled in China, de Nysschen said.

Chinese automakers, including local partners of Ford, VW and GM, all have publicized aggressive investment plans.

Not every multinational automaker is moving so aggressively into electric vehicles.

In Detroit on Monday, Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne said it did not make sense to announce a specific number of new electric vehicles — and he said the company was not under pressure, but working to meet emissions requirements. 

“We do not have a gun to our head,” Marchionne said. He said EVs will likely become mandatory in Europe because of emissions rules.


Rural Women in India, Elderly in Japan Open Homes to Airbnb Guests

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Mobile apps that help women in the Indian countryside and tiny villages in Japan to open their homes to visitors from across the world are generating incomes, revitalizing remote communities and helping to curb migration to cities.

A women’s organization in the western Indian state of Gujarat has tied up with Airbnb, the short-term home rental service, to train rural women to be hosts and list their homes on its site.

A year in, the number of women earning from home sharing has doubled, according to the Self Employed Women’s Association (SEWA), which has about 2 million members, mostly in villages.

“At first, we weren’t sure how the women would fare and if people would respond to homestays in these areas,” said Reema Nanavaty, a director at SEWA.

“But once they began getting guests, the women invested in upgrading their homes and started using Google Translate to communicate with guests. It has become a significant source of income for them,” she told the Thomson Reuters Foundation.

Guests to the colorful homes are treated to home-cooked Gujarati food, and can participate in kite flying and garba dancing with sticks in traditional costume, she said.

The partnership will extend to 14 more states, aiming to boost incomes of women in rural areas and help boost tourism in otherwise neglected areas, she said.

Cheap smartphones are also aiding those looking for work, with job matching sites helping even illiterate job seekers from rural Cambodia to India find employers without middlemen who may dupe them.

Airbnb also has partnerships in South Korea, Japan and Taiwan for rural tourism.

In Japan, the Yoshino Cedar House, a collaboration with Tokyo-based architect Go Hasegawa and the local community, came about as a response to shrinking rural populations in the rapidly ageing country.

It was inspired by a host whose listing helped rejuvenate her village, said Airbnb co-founder Joe Gebbia.

Hundreds of villages and towns “will disappear in the next decade if we do not find ways to create regenerative and adaptive systems”, he said via e-mail.

The Cedar House is run by a cooperative of about two dozen community members who take turns at being the host.

Most of the proceeds remain in the community, with a percentage of profits reinvested in local projects, Gebbia said.

“If we can get community-driven empowerment right in Japan, we can find ways of adapting this to other countries,” he said.

In India, the 50 rural homes listed on Airbnb are drawing guests from the United States and Europe, Nanavaty said.

“Some of the villages were not even on Google Maps. For the women, it is a new way to make money, be independent,” she said.


Intel Underfoot: Floor Sensors Rise as Retail Data Source

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The next phase in data collection is right under your feet.

Online clicks give retailers valuable insight into consumer behavior, but what can they learn from footsteps? It’s a question Milwaukee-based startup Scanalytics is helping businesses explore with floor sensors that track people’s movements.

The sensors can also be used in office buildings to reduce energy costs and in nursing homes to determine when someone falls. But retailers make up the majority of Scanalytics’ customers, highlighting one of several efforts brick-and-mortar stores are undertaking to better understand consumer habits and catch up with e-commerce giant Amazon.

Physical stores have been at a disadvantage because they “don’t have that granular level of understanding as to where users are entering, what they’re doing, what shelves are not doing well, which aisles are not being visited,” said Brian Sathianathan, co-founder of, a small Denver-based company that helps businesses find and test technologies from startups worldwide.

But it’s become easier for stores to track customers in recent years. With Wi-Fi — among the earliest available options — businesses can follow people when they connect to a store’s internet. One drawback is that not everyone logs on so the sample size is smaller. Another is that it’s not possible to tell whether someone is inches or feet away from a product.

Sunglass Hut and fragrance maker Jo Malone use laser and motion sensors to tell when a product is picked up but not bought, and make recommendations for similar items on an interactive display. Companies such as Toronto-based Vendlytics and San Francisco-based Prism use artificial intelligence with video cameras to analyze body motions. That can allow stores to deliver customized coupons to shoppers in real time on a digital shelf or on their cellphones, said Jon Nordmark, CEO of

With Scanalytics, Nordmark said, “to have [the sensors] be super useful for someone like a retailer, they may need to power other types of things,” like sending coupons to customers.

Using the data

Scanalytics co-founder and CEO Joe Scanlin said that’s what his floor sensors are designed to do. For instance, the sensors read a customer’s unique foot compressions to track that person’s path to a digital display and how long the person stands in front of it before walking away, he said. Based on data collected over time, the floor sensors can tell a retailer the best time to offer a coupon or change the display before the customer loses interest.   

“Something that in the moment will increase their propensity to purchase a product,” said Scanlin, 29, who started developing the paper-thin sensors that are 2-square feet (0.19-sq. meters) as a student at the University of Wisconsin-Whitewater in 2012. He employs about 20 people.

Wisconsin-based bicycle retailer Wheel and Sprocket uses Scanalytics’ sensors — which can be tucked under utility mats — to count the number of customers entering each of its eight stores to help schedule staff.

“That’s our biggest variable expense,” said co-owner Noel Kegel. “That sort of makes or breaks our profitability.”

Privacy and surveillance

Kegel wants to eventually have sensors in more areas throughout his stores to measure where customers spend most of their time and what products are popular, but he said it’s too expensive right now.

The cost of having the sensors ranges from $20 to $1,000 per month, depending on square footage and add-on applications to analyze data or interact with digital signs, Scanlin said. He said he’s working with 150 customers in the U.S. and other countries and estimates that about 60 percent are retailers.  

The emergence of tracking technologies is bound to raise concerns about privacy and surveillance. But Scanlin noted his sensors don’t collect personally identifying information.

Jeffrey Lenon, 47, who was recently shopping at the Shops of Grand Avenue mall in Milwaukee, said he wasn’t bothered by the idea of stores tracking foot traffic and buying habits.

“If that’s helping the retailer as far as tracking what sells and what no, I think it’s a good idea,” Lenon said.

These technologies have not become ubiquitous in the U.S. yet, but it’s only a matter of time, said Ghose Anindya, a business professor at New York University’s Stern School of Business.

“In a couple of years this kind of conversation will be like part and parcel of everyday life. But I don’t think we’re there yet,” he said.


Energy Agency Sees Oil Price Decline, But Analyst Predicts a Boom

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Crude oil prices reached a 30-month high this week. But the government agency that analyzes and disseminates energy information says the rally may have run its course. The Energy Information Administration predicts U.S. crude prices will stabilize to about 55 dollars a barrel for West Texas Crude and 60 dollars a barrel for Brent Crude, with slightly higher prices for both in 2019. One energy expert disagrees and says oil prices are on their way up. Mil Arcega explains.


Wahlberg Donates $1.5 Million After Pay Gap Outcry

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Following an outcry over a significant disparity in pay between co-stars, Mark Wahlberg agreed Saturday to donate the $1.5 million he earned for reshoots for All the Money in the World to the sexual misconduct defense initiative Time’s Up.

Wahlberg said he’ll donate the money in the name of his co-star, Michelle Williams, who reportedly made less than $1,000 on the reshoots.

“I 100% support the fight for fair pay,” Wahlberg said in a statement.

Williams issued a statement Saturday, saying: “Today isn’t about me. My fellow actresses stood by me and stood up for me, my activist friends taught me to use my voice, and the most powerful men in charge, they listened and they acted.”

She noted that “it takes equal effort and sacrifice” to make a film.

“Today is one of the most indelible days of my life because of Mark Wahlberg, WME (William Morris Endeavor) and a community of women and men who share in this accomplishment.”

The announcement Saturday came after directors and stars, including Jessica Chastain and Judd Apatow, shared their shock at reports of the huge pay disparity for the Ridley Scott film. The 10 days of reshoots were necessary after Kevin Spacey was replaced by Christopher Plummer when accusations of sexual misconduct surfaced against Spacey. USA Today reported Williams was paid less than $1,000 for the 10 days.

Both Williams and Plummer were nominated for Golden Globes for their performances.

Talent agency William Morris Endeavor, which represents both Williams and Wahlberg, said it will donate an additional $500,000 to Time’s Up. The agency said in a statement that wage disparity conversations should continue and “we are committed to being part of the solution.”


Protests in Tunisia Spur Government to Pledge Aid to Poor

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Tunisia plans to increase aid for poor families by $70.3 million, after nearly a week of protests over austerity measures, an official said Saturday.

“This will concern about 250,000 families,” Mohamed Trabelsi, minister of social affairs, said. “It will help the poor and middle class.”

President Beji Caid Essebsi was also scheduled to visit the poor district of Ettadhamen in the capital, Tunis, which was hit by protests.

Essebsi was set to give a speech and open a cultural center, Reuters reported. It was to be the president’s first visit to the district.

Several hundred protesters took to the streets Saturday in Sidi Bouzid, where a 2011 uprising began, touching off the Arab Spring protests. And on Friday, protesters in cities and towns across the country waved yellow cards — a warning sign to the government — and brandished loaves of bread, a symbol of the day-to-day struggle to afford basic goods.

Anger has been growing since the government introduced price hikes earlier this month, which came atop already soaring inflation.

WATCH: Protests Erupt Again in Tunisia, Cradle of 2011 Arab Spring

Since Monday, security forces have been deployed in Tunis and across the country. Several hundred people have been arrested, including opposition politicians, while dozens have been injured in clashes with police. A 55-year-old man died earlier this week, though the circumstances of his death remained unclear.

The scenes of protest are reminiscent of January 2011, when demonstrations swept across the country, eventually toppling dictator Zine al-Abedine Ben Ali before spreading across the region.

“Why did we do the revolution? For jobs, for freedom and for dignity. We obtained freedom, sure — but we’re going hungry,” unemployed protester Walid Bejaoui said Friday.

One of the main protest organizations is using the Arabic social media hashtag “Fesh Nestannew?” or “What Are We Waiting For?” The group is urging a return to the spirit of the 2011 revolt.

“We believe a dialogue is still possible and reforms are still possible. The yellow card is to say, ‘Attention: Today we have the same demands that we have been having for years. It’s time to tackle the real problems, the economic crisis, the high cost of living,’ ” said Henda Chennaoui, a Fesh Nestannew protester.

The government enacted a new law this month raising taxes to try to cut the deficit, a move largely driven by Tunisia’s obligations to its international creditors, said analyst Max Gallien of the London School of Economics.

“I think that this government feels that its ability to make its own economic policy or its ability to roll back these austerity reforms is very much limited by the demands of international financial institutions,” he said, “primarily the IMF,” or International Monetary Fund.

The government has condemned the violence but pledged to listen to the protesters.

“No matter what the government undertakes, its top priority — even during tough decisions — is improving the economic and social conditions of the people,” Prime Minister Youssef Chahed told reporters Thursday.

So could the region witness a repeat of 2011, with the protests gaining momentum?

“We’re looking at a different region now. But at the same time, there are similarities: the issue of austerity, of socioeconomic nationalization, of corruption and predation by elites,” analyst Gallien said.

The Tunisian government’s task is to address those deep-rooted problems before the protests spin out of control.


Report: Traffic Fatalities Hold Back Developing Economies

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Deadly traffic accidents are more than just individual tragedies. They’re a drag on economic growth in developing countries, according to a new World Bank report.

The study is among the first to show that investing in road safety in low- and middle-income countries would raise national incomes.

Ninety percent of the world’s annual 1.25 million traffic deaths happen in the developing world. The World Health Organization says traffic accidents are the leading cause of death worldwide for people between 15 to 29 years old. That includes crashes that kill pedestrians, bicyclists and motorcyclists.

But the issue does not get much official attention, according to World Bank transportation expert Dipan Bose.

“There is not a lot of political will in many low and middle income countries to take definitive actions to reduce road deaths and injuries,” he said.

Bose co-authored a study focused on five countries: China, India, Thailand, the Philippines and Tanzania. The authors used economic models to estimate what each country’s overall economy would gain over a 24-year period by cutting traffic deaths in half.

“The results were quite startling,” he said.

Thailand would see a 22 percent boost to national income. The country’s high rates of both economic growth and traffic accidents meant it had the most to gain.  

Tanzania would gain seven percent. The other countries fell in between.

These kinds of economic gains are “something which no national government can ignore,” Bose said. The report “gives the economic story of why it is important to take strong actions on road safety.”

Enforcing speed limits, helmet and seat belt laws and cutting down on drunk driving are “low-hanging fruit” to reduce traffic injuries, the report says.

Not only drivers at fault

But drivers are only partly responsible for traffic deaths, according to a separate report co-authored by the World Bank and the World Resources Institute. City planners and government officials are responsible for building safety into the transportation system.

“If the system’s not safe – if people don’t have the opportunity to cross the road safely, or drive in a safe vehicle – then a small error can result in a fatality,” said report co-author Anna Bray Sharpin at the World Resources Institute. “And that should not be the case.”

For example, she said, “many cities have applied highway design guidelines even to their city streets.” Wide, multi-lane boulevards are designed for “maximum traffic flow and speed,” but not for cyclists or pedestrians.

“People tend to take risks to try and cross the road,” she said. “And that comes back to this issue of whether this is a personal responsibility, or a co-responsibility between governments and planners and people using the road.”

The report offers guidance for incorporating safety into road design. Public transit, walking and biking lower the number of cars on the road and the number of accidents. Installing sidewalks, raised crosswalks and protected cycle lanes helps keep these road users out of harm’s way. On rural roads, median barriers can reduce head-on collisions.

Bray Sharpin notes that many developing countries are currently planning major road infrastructure projects.

“There’s a window of opportunity now to integrate safety into their planning,” she said. It’s much cheaper than trying to retrofit it later. Plus, once these roads are built, they’ll be around for decades.

If they don’t build in safety now, she added, they will be “locked into their dangerous infrastructure for the very long term.”


Awash in Corn, Soybeans, US Farmers Focus on Trade Deals

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For Illinois farmer Garry Niemeyer, it’s a slow time of year, spent indoors fixing equipment, not outdoors tending his fields, which now lie empty.

All of his corn and soybeans were harvested in what has turned out to be a good year.

“This is the largest amount of corn we’ve had ever,” he said.

And this bounty is not limited to Niemeyer’s farm. It can be seen throughout the United States.

“We’re talking 14½ billion bushels of corn,” Niemeyer told VOA. “That’s a lot of production.”

WATCH: Awash in Corn, Soybeans, US Farmers Focus on Trade Deals

Piles of corn, soybeans

That production is easy to see at nearby elevators, where large piles of corn under white plastic wrap extend into the sky. There is more corn and soybeans than existing storage facilities can hold.

“You can drive by just about any elevator out here in the country and see some pretty large piles of corn that are covered outside of the bins,” said Mark Gebhards, executive director of Governmental Affairs and Commodities for the Illinois Farm Bureau. “That is a direct result of a lot of carry-over from last year; i.e., we need to move this and create market demand to get the product moving.”

The U.S. Department of Agriculture reports record harvests of corn and soybeans in the United States in 2017, with stocks overflowing at elevators and storage bins across the country.

In Illinois, Gebhards notes that up to half of the state’s corn supply, and even more soybeans, will eventually reach foreign shores.

“Usually we say every other row of beans is going into the export market,” Gebhards said.

But Niemeyer wants even more of his crop to find a market overseas.

“We have overproduced for our domestic market,” he told VOA. “Our profits will lie in the amount of exports we are able to secure in the future.”

​The NAFTA question

Which is why the Illinois farmer is looking for some indication from U.S. President Donald Trump on the current efforts to renegotiate the North American Free Trade Agreement, or NAFTA.

“NAFTA is huge,” Niemeyer said. “NAFTA consumes $43 billion worth of our crops and livestock and other things we exported out of this country in 2016.”

Niemeyer is pleased with Trump’s efforts to roll back environmental regulations and institute tax reform. But there was little hint of NAFTA’s fate during Trump’s Jan. 8 speech to the American Farm Bureau Federation Convention in Nashville, Tennessee.

“If anything was maybe left as an area of concern, it’s still what’s going to happen to that trade agreement,” said Gebhards, who warns the U.S. withdrawing from NAFTA could impact prices.

“On the livestock side, it’s estimated you would see $18 per hog or $71 per cow if we were to withdraw. It’s estimated that we would see potentially a $0.30 per bushel decrease in the corn price and $0.15 on the soybean side.”

Prices are a factor growers like Niemeyer maintain a close watch on.

“(The) price of corn is about $3.30 a bushel, so $3 corn, it’s hard to make anything work, even with a large yield,” which, Niemeyer said, is why many farmers are holding on to what they have.

“Everybody’s sitting still, that’s the reason you aren’t seeing much corn move right today because the price has done absolutely nothing,” he said.

Niemeyer wants a final NAFTA agreement soon, so negotiators can focus on new trade agreements that could help create more demand, improve prices and ultimately move the supply that has piled up in the U.S.

Gebhards said the world is watching the negotiations for clues on how reliable the U.S. is as a trading partner under Trump.

“It’s a short term issue for us not to lose ground as we try to renegotiate NAFTA,” Gebhards said. “But I think the long term is what kind of a signal do you send as a reliable trading partner to the rest of the world that if you enter into this agreement with the United States you know that you will be able to get that product that you’ve agreed to buy.”

Trump has recently suggested a deadline extension for modernizing NAFTA, which means the uncertainty for farmers like Niemeyer could extend into March or April, when he is preparing to put a new crop in the ground.


Awash in Corn, Soybeans, U.S. Farmers Focus on Trade Deals

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The United States Department of Agriculture reports record harvests of corn and soybeans in the United States in 2017, with stocks overflowing at elevators and storage bins across the country. But as VOA’s Kane Farabaugh reports, record yields don’t necessarily translate into stronger bottom lines for farmers, who increasingly depend on international trade to move their product and improve their prices.


Protests Erupt Again in Tunisia, Cradle of 2011 Arab Spring

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Protesters took to the streets in towns and cities across Tunisia for a fourth day Friday, as anger grows over price hikes introduced by the government. Demonstrations in 2011 in Tunisia grew into the revolution that overthrew the government and triggered a wave of uprisings across the Arab world. Seven years on, the dictatorship may have gone but, as Henry Ridgwell reports, lingering social and economic problems are driving the anger, raising the prospect that the unrest could spread.


Transit Shutdown in Greece as Unions Strike for Right to Strike

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The Athens subway came to a standstill Friday as Greeks protested new reforms that parliament is set to approve Jan. 15 in return for bailout funds, including restrictions on the right to strike.

In the first major industrial upheaval of 2018, the shutdown of the Athens metro, used by about 938,000 commuters daily, caused traffic gridlock in the city of 3.8 million people.

Ships were unable to sail as workers went on strike and state-run hospitals had to rely on reserve staff as doctors walked off the job. More work stoppages were expected Monday.

The bill pending approval in parliament Monday would reduce family benefits, introduce a new process for foreclosures on overdue loans and make it harder to call a strike.

It has outraged many Greeks, who have seen living conditions and incomes plummet since the country first sought international aid to stave off bankruptcy in 2010, and required another two bailouts thereafter.

Rule changes

At present, unions can call strikes with the support of one-third of their members. The new law would raise that to just more than 50 percent, which creditors hope would limit the frequency of strikes and improve productivity that lags about 20 percent behind the EU average.

PAME, a communist-affiliated union, was scheduled to hold a demonstration in central Athens at midday (1000 GMT) Friday.

“Blood was shed by generations which came before us to have the right to strike. Now a so-called left wing government is trying to abolish it,” said Nicos Papageorgiou, a 50-year-old hotel worker.

Syriza, the dominant party in the government elected in 2015, has its roots in left-wing labor activism.

Papageorgiou and about 200 other PAME members rallied outside the finance ministry Thursday evening. Earlier in the week, there were angry scenes when some union members burst into the labor ministry, demanding the government rescind the bill.

ADEDY, the largest union of public-sector workers, scheduled a work stoppage for Monday.

The government says it needs the reforms to receive tranches of bailout aid. The latest bailout, worth up to 86 billion euros ($104 billion), expires in August. So far Greece has received 40.2 billion euros, and a new tranche is expected to be worth around 4.5 billion euros.


As Sanctions Bite, China Trade With North Korea Plummets

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China’s trade with North Korea plunged 50 percent in December as U.N. sanctions imposed over Pyongyang’s nuclear and missile development tightened, the government reported Friday.


China accounts for nearly all of the isolated North’s trade and energy supplies. Beijing has imposed limits on oil sales and cut deeply into the North’s foreign revenue by ordering North Korean businesses in China to close, sending home migrant workers and banning purchases of its coal, textiles, seafood and other exports.


Imports from the North shrank 81.6 percent to $54 million in December while exports to the isolated, impoverished country contracted 23.4 percent to $260 million, said a spokesman for the Chinese customs agency, Huang Songping.

UN sanctions 

The U.N. Security Council has steadily tightened trade restrictions as leader Kim Jong Un’s government pressed ahead with nuclear and missile development in defiance of foreign pressure.


Beijing was long Pyongyang’s diplomatic protector but has supported the U.N. sanctions out of frustration with what Chinese leaders see as their neighbor’s increasingly reckless behavior.


Despite the loss of almost all trade, the impoverished North has pressed ahead with weapons development that Kim’s regime sees as necessary for its survival in the face of U.S. pressure.

China has steadily increased economic pressure on Pyongyang while calling for dialogue to defuse the increasingly acrimonious dispute with U.S. President Donald Trump’s government.

Pressure, but not too much

Analysts see North Korea’s need for Chinese oil as the most powerful economic leverage against Pyongyang. But Chinese leaders have warned against taking drastic measures that might destabilize Kim’s government or send a wave of refugees fleeing into China.


Chinese leaders have resisted previous U.S. demands for an outright oil embargo but went along with the latest limits.


Under restrictions announced Jan. 5, Chinese companies are allowed to export no more than 4 million barrels of oil and 500,000 barrels of refined petroleum products to the North per year. They are barred from supplying its military or weapons programs.


Chinese officials complain their country bears the cost of enforcement, which they say has hurt businesses in its northeast.


Fiat Chrysler to Invest $1 Billion in Michigan Plant, Add 2,500 Jobs

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Fiat Chrysler Automobile said on Thursday it will shift production of Ram heavy-duty pickup trucks from Mexico to Michigan in 2020, a move that lowers the risk to the automaker’s profit should President Donald Trump pull the United States out of the North American Free Trade Agreement.

Fiat Chrysler said it would create 2,500 jobs at a factory in Warren, Michigan, near Detroit and invest $1 billion in the facility. The Mexican plant will be “repurposed to produce future commercial vehicles” for sale global markets. Mexico has free trade agreements with numerous countries.

Fiat Chrysler Chief Executive Sergio Marchionne a year ago raised the possibility that the automaker would move production of its heavy-duty pickups to the United States, saying U.S. tax and trade policy would influence the decision.

If the United States exits NAFTA, it could mean that automakers would pay a 25 percent duty on pickup trucks assembled in Mexico and shipped to the United States. About 90 percent of the Ram heavy-duty pickups made at Fiat Chrysler’s Saltillo plant in Mexico are sold in the United States or Canada, company officials said.

Negotiators for the United States, Mexico and Canada are scheduled to meet later this month for another round of talks on revising NAFTA. Canadian government officials earlier this week said they are convinced that Trump intends to announce his intention to quit the agreement.

Trump has threatened to force the rollback of NAFTA, which enables the free flow of goods made in the United States, Canada and Mexico across the borders of those countries.

He also has criticized automakers for moving jobs and investment in new manufacturing facilities to Mexico and prodded them to add more auto production in the United States.

On Wednesday, Toyota Motor Corp and Mazda Motor Corp announced they would build a new $1.6 billion joint venture auto assembly plant in Alabama, drawing praise from Trump.

Vice President Mike Pence praised Fiat Chrysler’s announcement. “Manufacturing is back. Great announcement. Proof that this admin’s AMERICA FIRST policies are WORKING!” Pence said in a Twitter posting.

Chrysler raised its output in Mexico by 39 percent in 2017 to 639,000 vehicles, according to Mexican government data. That made Fiat Chrysler the third-largest producer of vehicles in Mexico in 2017, after Nissan Motor Co and General Motors Co.

The United States and Canada are the principal markets for full-size heavy-duty pickup trucks, most of which are produced in the United States by FCA, GM, Ford Motor Co, Toyota Motor Corp and Nissan Motor Co.

Miguel Ceballos, FCA spokesman for Mexico, said the company in 2018 and 2019 expects more growth in Mexico, and the moment it stops producing the Ram Heavy Duty pickups it will start to produce the new commercial vehicle, “which still does not have a name,” Ceballos said.

“It is going to be for global distribution, at the moment the Ram is only distributed at the level of NAFTA,” he said. Ceballos said there was no current plan to either reduce or grow the workforce in Mexico.

GM has been readying a plant in Silao, Mexico, to build a new generation of large pickup trucks.

FCA on Thursday said it also would make a special bonus payment of $2,000 to about 60,000 FCA hourly and salaried employees in the United States totaling about $120 million.

Typically, U.S. automakers only pay bonuses to hourly workers as part of collective bargaining agreements.


Trump’s EPA Aims to Replace Obama-era Climate, Water Regulations in 2018

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The U.S. Environmental Protection Agency will replace Obama-era carbon and clean water regulations and open up a national debate on climate change in 2018, part of a list of priorities for the year that also includes fighting lead contamination in public drinking water.

The agenda, laid out by EPA Administrator Scott Pruitt in an exclusive interview with Reuters on Tuesday, marks an extension of the agency’s efforts under President Donald Trump to weaken or kill regulations the administration believes are too broad and harm economic growth, but which environmentalists say are critical to human health.

“The climate is changing. That’s not the debate. The debate is how do we know what the ideal surface temperature is in 2100? … I think the American people deserve an open honest transparent discussion about those things,” said Pruitt, who has frequently cast doubt on the causes and implications of global warming.

Pruitt reaffirmed plans for the EPA to host a public debate on climate science sometime this year that would pit climate change doubters against other climate scientists, but he provided no further details on timing or which scientists would be involved.

Pruitt said among the EPA’s top priorities for 2018 will be to replace the Clean Power Plan, former President Barack Obama’s centerpiece climate change regulation which would have slashed carbon emissions from power plants. The EPA began the process of rescinding the regulation last year and is taking input on what should replace it.

“A proposed rule will come out this year and then a final rule will come out sometime this year,” he said. He did not give any details on what the rule could look like, saying the agency was still soliciting comments from stakeholders.

He said the agency was also planning to rewrite the Waters of the United States rule, another Obama-era regulation, this one defining which U.S. waterways are protected under federal law. Pruitt and Trump have said the rule marked an overreach by including streams that are shallow, narrow, or sometimes completely dry — and was choking off energy development.

Pruitt said that in both cases, former President Barack Obama had made the rules by executive order, and without Congress. “We only have the authority that Congress gives us,” Pruitt said.

Pruitt’s plans to replace the Clean Power Plan have raised concerns by attorneys general of states like California and New York, who said in comments submitted to the EPA on Tuesday that the administrator should recuse himself because as Oklahoma attorney general he led legal challenges against it.

Biofuels and staff cuts

Pruitt said he hoped for legislative reform of the U.S. biofuels policy this year, calling “substantially needed and importantly” because of the costs the regulation imposes on oil refiners.

The Renewable Fuel Standard, ushered in by former President George W. Bush as a way to help U.S. farmers, requires refiners to blend increasing amounts of biofuels like corn-based ethanol into the nation’s fuel supply every year.

Refining companies say the EPA-administered policy costs them hundreds of millions of dollars annually and threatens to put some plants out of business. But their proposals to change the program have so far been rejected by the Trump administration under pressure from the corn lobby.

The EPA in November slightly raised biofuels volumes mandates for 2018, after previously opening the door to cuts.

The White House is now mediating talks on the issue between representatives of both sides, with input from EPA, and some Republican senators from states representing refineries are working on possible legislation to overhaul the program.

Pruitt said he also hoped Congress could produce an infrastructure package this year that would include replacing municipal water pipes, as a way of combating high lead levels in certain parts of the United States.

“That to me is something very tangible very important that we can achieve for the American people,” he said.

Pruitt added that EPA also is continuing its review of automobile fuel efficiency rules, and would be headed to California soon for more meetings with the California Air Resources Board to discuss them.

California in 2011 agreed to adopt the federal vehicle emission rules through 2025, but has signaled it would opt out of the standards if they are weakened, a move that would complicate matters for automakers serving the huge California market.

In the meantime, Pruitt said EPA is continuing to reduce the size of its staff, which fell to 14,162 employees as of Jan. 3, the lowest it has been since 1988, under Ronald Reagan when the employment level was 14,400. The EPA employed about 15,000 when Obama left office.

Nearly 50 percent of the EPA will be eligible to retire within the next five years, according to the agency.