Australia’s government is expected to release annual spending plans on Tuesday with a focus on winning votes at elections due within a year. Cheaper craft beer plus personal tax cuts compensated by strengthening company tax revenue have been flagged as well as more investment on roads and rail to stimulate economic growth.

Some media have reported that the government might better its timetable for returning the budget to surplus by the 2020-21 fiscal year by balancing the books 12 months earlier.

New budget starts July 1

Treasurer Scott Morrison, who will reveal to the Parliament later Tuesday his economic blueprint for the year starting July 1, said the government would live within its means.

“The plan for a stronger economy that I will be announcing tonight is about improving the opportunities for all Australians to live in a stronger economy,” Morrison told reporters outside Parliament House.

“It’s a plan to lower taxes and reducing the pressure on households. It’s a plan to back business to create more jobs. … It’s a plan to guarantee the essential services that Australians rely on every day,” he added.

The budget is Morrison’s third since he became treasurer and the last before the next election.

Universal health care

The government recently announced it had abandoned plans announced a year ago to increase the levy that Australians pay for their universal health care system from 2 percent of their income to 2.5 percent to pay for a newly established disability insurance program.

The Senate had refused to endorse the increase, and Morrison said it was no longer needed because the government’s bottom line had improved in the past year through more tax revenue.

Global credit ratings agency Fitch Ratings last week said scrapping the levy increase while committing to fully funding the insurance program “poses a challenge” for the forecast surplus in 2020-21.

The government recently announced it would correct an anomaly that charged craft beer brewers a higher tax rate on alcohol produced than mass beer producers because the craft brewers typically use smaller kegs.

“Why should their business be held back because of tax systems that are out of date?” Morrison asked about the unfair treatment of small breweries that are being set up by the hundreds around Australia.

The government has also flagged modest tax cuts to low and middle income earners.

Rescue plan for reef

The government has already announced AU$500 million ($376 million) for a Great Barrier Reef rescue plan that includes programs to reduce fertilizer runoff from farming, reducing numbers of the destructive crown-of-thorns starfish and to fund research into coral bleaching.

Environmentalists argue that the funding won’t tackle the main threat to the reef, global warming. They have urged the government to take greater action to reduce Australia’s greenhouse gas emissions.

Prime Minister Malcolm Turnbull has said he will call an election early next year. But he could be tempted to call an early election if the budget is well received and his conservative coalition’s standing in opinion polls improves. The government consistently trails the center-left opposition Labor Party in polling.
…

Nestle is paying more than $7 billion to handle global retail sales of Starbucks’s coffee and tea outside of its coffee shops.

The deal comes with a huge price tag for Nestle, but it could pay off big for the Swiss company. Its Nescafe and Nespresso don’t carry anywhere near the heft in America that Starbucks brand does, with its $2 billion in annual sales.

The deal gives Nestle the rights to market, sell and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia packaged coffee and tea. It will also be able to put the Starbucks brand on Nestle single-serve capsules. The agreement excludes bottled drinks like ice coffees and Frappuccinos that are sold in and outside of Starbucks stores.

Nestle had hinted last year that it was looking at focusing on higher-growth areas like pet care, coffee and infant nutrition. In January it announced it was selling its U.S. candy business to Italy’s Ferrero for approximately $2.8 billion.

With the strength of the Starbucks brand, (equals) Nestle will be able to better compete against JAB Holdings, an investment holding company that has gobbled up businesses and brands associated with Peet’s Coffee & Tea, Caribou Coffee Co., Stumptown Coffee and Krispy Kreme Doughnuts.

Nestle announced Monday that Starbucks Corp. will receive $7.15 billion in an up-front cash payment. Approximately 500 Starbucks employees will join Nestle, and operations will continue to be located in Seattle.

The deal is subject to regulatory approval and is expected to close by the end of the year.

 
…

A small band of Belgian monks are planning to start producing their own beer again, more than 200 years after invading French troops stopped all brewing at the abbey.

The men from Grimbergen Abbey started making beer in 1128, but stopped in 1797 when the French took over the site and sold off the equipment.

After that, some of the world’s biggest drink brands filled the gap – Heineken unit Alken-Maes makes brown and blond lagers with the Grimbergen brand in Belgium. Carlsberg sells them abroad, paying royalties to the abbey.

Now the monks have drawn up plans for their own micro-brewery to produce their own beers to sell alongside the other Grimbergen drinks on the market.

“We want to build a micro-brewery, on a small scale and linked with tradition, on the site where the brewery stood before the French Revolution,” said Sub-prior Karel Stautemas.

“What exactly the beer will be, we don’t yet know, but the tastes of before and now have changed. This will be a beer of the 21st century.”

The operation will be much smaller than the ones run by Belgium’s trappist abbeys, such as Chimay or Westmalle, he added. Other abbeys such as Leffe have also allowed their names to be used in products made by large brewers.

The abbey, which is home to about 20 monks, still needs to complete a feasibility study and secure approvals and licenses, but hopes the new Grimbergen will be flowing by 2020, Stautemas said.

Alken-Maes and Carlsberg supported the project, he added.
…

Afghanistan’s poverty rate has worsened sharply over the past five years as the economy has stalled and the Taliban insurgency has spread, with more than half the population living on less than a dollar a day, a survey published on Monday showed.

The Afghanistan Living Conditions Survey (ALCS), a joint study by the European Union and Afghanistan’s Central Statistics Organization, showed the national poverty rate rising to 55 percent in 2016-17 from 38 percent in 2011-12.

“The high poverty rates represent the combined effect of stagnating economic growth, increasing demographic pressures, and a deteriorating security situation,” Shubham Chaudhuri, World Bank director for Afghanistan, said in a commentary about the survey.

The report underlines the problems facing the Western-backed government in Kabul which needs economic growth to help replace foreign aid and to provide jobs for its fast-growing population.

As international forces have withdrawn and the billions of dollars in foreign aid that once poured in have dried up, Afghanistan’s battered agricultural economy has struggled.

More than a decade and a half after a U.S.-led campaign toppled the Taliban in 2001, the poverty line was defined as an income of 70 afghanis, or about one U.S. dollar, per person a day.

The ALCS report comes at a time when 20 of Afghanistan’s 34 provinces are suffering from serious drought and international aid agencies are seeking millions of dollars to help them.

Food insecurity has risen from 30.1 percent to 44.6 percent in five years, meaning many more people are forced to sell their land, take their children out of school to work or depend on food aid, the survey found.

Chaudhuri said the survey was the first estimate of the economic situation since Afghan forces took over security responsibilities in 2014 from international troops.

“In recent years, as population growth outstripped economic growth, an increase in poverty was inevitable,” he said on the World Bank blog site.

The survey found that 50 percent of the population is younger than 15.

This month, President Ashraf Ghani’s government said it had listed job creation among its priorities and aimed at creating 2.1 million jobs within three years.

However, according to the IMF, the economy is set to grow at 2.5-3 percent in 2017-18, too slowly to stop unemployment from rising.

The needs to produce some 400,000 new jobs a year to keep pace with population growth and tens of thousands of qualified people struggle to find work in cities, and farmers were unable to earn a sustainable livelihood due to the drought.

Officials at the European Union said the ALCS report was based on data collected from 21,000 households over 12 months.
…

An innovative consumer awareness campaign will be launched this summer in several cities in the United States. The campaign is aimed at preventing the waste of food that costs the world billions of dollars and has severe consequences on global food security and the environment. Verónica Balderas Iglesias spoke with experts.
…

The U.S. and China ended the second day of high level talks Friday aimed at avoiding a possible trade war.

The U.S. delegation, headed by Treasury Secretary Steven Mnuchin, will brief President Donald Trump Saturday and “seek his decision on next steps,” the White House said in a statement, adding that the administration had “consensus” for “immediate attention” to change the U.S.-China trade and investment relationship.

“We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with U.S. trade wins!” Trump said in a Twitter post late Friday.

“Both sides recognize there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by Xinhua state news agency.

An editorial Saturday by China’s ruling Communist Party newspaper, the People’s Daily, however, said that “in the face of the U.S.’s fierce offensive of protectionism, China resolutely defends its national interest,” adding that Beijing “will never trade away its core interests and rejects the U.S.’s demand for an exorbitant price.”

The announcement followed comments by Mnuchin earlier in the day that the two sides were having “very good conversations.”

Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted U.S. goods.
…

President Trump reveled in the 3.9 percent U.S. unemployment rate Friday, following the release of figures by the Bureau of Labor Statistics. But some say that these numbers don’t tell the whole story. From Washington, VOA’s Jill Craig has more.
…

The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies, people familiar with the talks said Friday.

The lengthy list of demands was presented to Beijing before the start of talks Thursday and Friday between top-level Trump administration officials and their Chinese counterparts to try to avert a damaging trade war between the world’s two largest economies.

A White House statement did not mention specific demands, but said the U.S. delegation “held frank discussions with Chinese officials on rebalancing the United States-China bilateral economic relationship, improving China’s protection of intellectual property, and identifying policies that unfairly enforce technology transfers.”

The statement gave no indication that U.S. President Donald Trump would back off on his threat to impose tariffs on up to $150 billion in Chinese goods over allegations of intellectual property theft.

​Trump, delegation to meet Saturday

The delegation was returning to Washington to brief Trump and “seek his decision on next steps,” the White House said, adding that the administration had “consensus” for “immediate attention” to change the U.S-China trade and investment relationship.

Trump said he would meet with the delegation Saturday.

China’s state-run Xinhua news agency described the talks as “constructive, candid and efficient” but with disagreements that remain “relatively big.”

Tariff threats have roiled stock markets in recent weeks, but the inconclusive outcome of the Beijing talks did little to stop a rally in U.S. shares prompted by jobs data that eased fears of faster Federal Reserve rate hikes. Stocks in Shanghai ended 0.5 percent lower while they fell 1.3 percent in Hong Kong.

Trump told reporters in Washington that he was determined to bring fairness to U.S.-China trade.

“We will be doing something one way or the other with respect to what’s happening in China,” Trump said. He added that he had “great respect” for China’s President Xi Jinping. “That’s why we’re being so nice, because we have a great relationship.”

​Intellectual property

China during the meetings asked that the United States ease crushing sanctions on Chinese telecom equipment maker ZTE Corp, people with knowledge of the matter said.

Washington’s demand for a $200 billion cut from China’s U.S. goods trade surplus doubles Trump’s previous request for a $100 billion cut. China had a record U.S. goods trade surplus of $375 billion in 2017.

Trump has also demanded “reciprocity” between U.S. and Chinese tariffs, frequently complaining about China’s 25 percent car tariff while the U.S. equivalent is 2.5 percent.

The U.S. team, led by U.S. Treasury Secretary Steven Mnuchin, demanded that China lower tariffs to levels no higher than those imposed by the United States, two people familiar with the demands said. The delegation also asked China to halt subsidies for advanced technology linked to its “Made in China 2025,” the sources said.

At the heart of the dispute are U.S. allegations that Chinese joint venture requirements and other policies force American companies to turn over their intellectual property, costing them billions of dollars annually and giving China’s state enterprises an edge in the race to develop new industries crucial to future growth.

China denies such coercion. Its 2025 industrial plan seeks to upgrade China’s manufacturing sector to more advanced products, including information technology, semiconductors and aircraft.

“I think the U.S. is asking for the impossible. Reducing the deficit by $200 billion by 2020 is quite an unrealistic demand, but it may also be a negotiation tactic to start high first,” said Tommy Xie, economist at OCBC Bank in Singapore.

Beijing offers

China offered to increase U.S. imports and lower tariffs on some goods, including cars, according to the sources.

But Beijing asked the United States to treat Chinese investment equally under national security reviews, refrain from new restrictions on investments and halt a proposal to impose 25 percent tariffs under its “Section 301” intellectual property probe.

China also offered to reconsider anti-dumping duties on U.S. sorghum, according to a proposal it submitted.

Xinhua said there had been exchanges of opinion on intellectual property protections, expanding U.S. exports and bilateral services trade. It gave no indication of what actions might be taken but said the two sides committed to resolve their trade disputes through dialogue.

U.S. negotiators agreed to bring up the ZTE sanctions with Trump after new representations from the Chinese side, Xinhua said. ZTE was hit last month with a seven-year ban on American companies’ selling components and software to it after the U.S. Commerce Department found ZTE failed to comply with an agreement to settle breached U.S. sanctions on Iran.

“My impression was that (the talks) didn’t go well given the rhetoric,” said Kevin Lai, senior economist at Daiwa Capital markets in Hong Kong. “I think the divide is still very big.”
…

U.S. employers stepped up hiring modestly in April, and the unemployment rate fell to 3.9 percent, evidence of the economy’s resilience amid the recent stock market chaos and anxieties about a possible trade war.

Job growth amounted to a decent 164,000 last month, up from an upwardly revised 135,000 in March. The unemployment rate fell after having held at 4.1 percent for the prior six months largely because fewer people were searching for jobs.

The overall unemployment rate is now the lowest since December 2000. The rate for African-Americans — 6.6 percent — is the lowest on record since 1972.

Many employers say it’s difficult to find qualified workers. But they have yet to significantly bump up pay in most industries. Average hourly earnings rose 2.6 percent from a year ago.

The pace of hiring has yet to be disrupted by dramatic global market swings, a recent pickup in inflation and the risk that the tariffs being pushed by President Donald Trump could provoke a trade war.

Much of the economy’s strength, for the moment, comes from the healthy job market. The increase in people earning paychecks has bolstered demand for housing, even though fewer properties are being listed for sale. Consumer confidence has improved over the past year. And more people are shopping, with retail sales having picked up in March after three monthly declines.

Workers in the private sector during the first three months of 2018 enjoyed their sharpest average income growth in 11 years, the Labor Department said last week in a separate report on compensation. That pay growth suggests that some of the momentum from the slow but steady recovery from the 2008 financial crisis is spreading to more people after it had disproportionately benefited the nation’s wealthiest areas and highest earners.

The monthly jobs reports have shown pay raises inching up. At the same time, employers have become less and less likely to shed workers. The four-week moving average for people applying for first-time unemployment benefits has reached its lowest level since 1973.

The trend reflects a decline in mass layoffs. Many companies expect the economy to keep expanding, especially after a dose of stimulus from tax cuts signed into law by Trump that have also increased the federal budget deficit.

Inflation has shown signs of accelerating slightly, eroding some of the potential wage growth. Consumer prices rose at a year-over-year pace of 2.4 percent in March, the sharpest annual increase in 12 months. The Federal Reserve has an annual inflation target of 2 percent, and investors expect the Fed to raise rates at least twice more this year, after an earlier rate hike in March, to keep inflation from climbing too far above that target.

The home market, a critical component of the U.S. economy, has been a beneficiary of the steady job growth. The National Association of Realtors said that homes sold at a solid annual pace of 5.6 million in March, even though the number of houses for sale has plunged. As a result, average home prices are rising at more than twice the pace of wages.
…

Venezuela said on Thursday it would take over the country’s leading private bank, Banesco, for 90 days and announced the arrest of 11 top executives for “attacks” against the country’s rapidly depreciating bolivar currency.

The detentions came on the heels of last month’s shock arrests of two Venezuelan executives working in the country for U.S. oil company Chevron Corp.

Oil-rich Venezuela is suffering from hyperinflation and a steady collapse of the bolivar currency, which President Nicolas Maduro has attributed to an “economic war,” but critics blame on incompetence and failed socialist policies.

Maduro’s foes say he is cracking down on the business sector to try to shore up support and halt price increases ahead of a controversial May 20 presidential election, which key opposition parties have boycotted as a sham.

Chief Prosecutor Tarek Saab announced the arrests in a televised press conference, but did not provide evidence of wrongdoing or take any questions.

“We have determined the [executives’] presumed responsibility for a series of irregularities, for aiding and concealing attacks against the Venezuelan currency with the aim of demolishing the Venezuelan currency,” said Saab, a former ruling party governor.

State television late on Thursday broadcast a statement announcing the temporary takeover of Banesco, which the government said was designed to ensure the bank continues operating.

The government also said it would be appointing a board of directors led by the country’s vice finance minister, Yomana Koteich.

Banesco’s president, Juan Carlos Escotet, who lives in Spain, earlier blasted the arrests as “disproportionate” and said he was flying to Venezuela to try to free the 11 executives, who include Chief Executive Oscar Doval.

“In the next few hours, I’m taking a plane for Venezuela. We’re going to knock on every door so that this problem is cleared up and they are freed as they deserve to be,” Escotet, who was born in Venezuela to Spanish parents and holds both nationalities, said in a video posted on Twitter.

Escotet has been a frequent target of criticism by ruling party heavyweight Diosdado Cabello, who recently announced that the government was buying Banesco. Escotet denied any sale.

Escotet temporarily excused himself from his role as chairman of Galicia-based bank ABANCA, the bank said in a statement to Spain’s stock market regulator on Thursday.

‘More crisis and misery’

Venezuela’s opposition said the arrests were another sign of Maduro’s turn to authoritarianism.

“The irresponsible government … continues to deny its responsibility in the destruction of our bolivar. Now they’re attacking Banesco. [This] … will only spawn more crisis and misery,” tweeted opposition lawmaker Carlos Valero.

Venezuela maintains exchange controls under which the government is meant to provide hard currency at a steadily weakening official rate, currently 69,000 bolivars per dollar.

But the dollar is fetching around 800,000 bolivars in unofficial trade, which government officials have for years harshly criticized but broadly tolerated.

Hyperinflation has turned once-powerful banks into warehouses of unwanted and mostly useless cash worth a total of only $40 million, according to a recent Reuters analysis of regulatory data.
…

A federal grand jury in Detroit has indicted former Volkswagen CEO Martin Winterkorn with conspiracy and wire fraud in the car builder’s scheme to rig diesel emissions tests.

“If you try to deceive the United States, then you will pay a heavy price,” Attorney General Jeff Sessions said Thursday. “The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.”

Winterkorn is alleged to have conspired with other top Volkswagen bosses to defraud the U.S. government and consumers with false claims that the company was complying with the Clean Air Act.

Volkswagen already admitted it installed devices on diesel models designed to turn on pollution control devices during emissions tests and turn them off when the car is driven on actual highways.

Volkswagen was fined $2.5 billion and ordered to recall the affected cars.

Winkerton is the ninth Volkswagen executive or employee to be charged. However, he currently lives in Germany, which has no extradition treaty with the United States, and is unlikely ever to see the inside of the U.S. courtroom.
…

A federal grand jury in Detroit has indicted former Volkswagen CEO Martin Winterkorn on charges stemming from the company’s diesel emissions cheating scandal.

The four-count indictment unsealed Thursday alleges that the automaker’s top executive at the time knew about the plot.

The 70-year-old Winterkorn is charged with three counts of wire fraud and one of conspiring to violate the Clean Air Act. He was indicted in March.

Volkswagen has admitted to programming its diesel engines to activate pollution controls when being tested in government labs and turning them off when on the road.

The U.S. government believes Winterkorn is in Germany, so it’s unlikely he’ll ever see a U.S. courtroom or jail. Germany does not typically allow extradition of its citizens to other countries.
…

The U.S. trade deficit narrowed sharply in March as exports increased to a record high amid a surge in deliveries of commercial aircraft and soybeans, bolstering the economy’s outlook heading into the second quarter.

While other data on Thursday showed a modest increase in new applications for jobless benefits last week, the number of Americans receiving unemployment aid fell to its lowest level since 1973, pointing to tightening labor market conditions.

Wage growth is also rising, with hourly compensation accelerating in the first quarter, more evidence that inflation pressures are building.

“The good news is that we are exporting more, but with the labor markets incredibly tight, labor costs are accelerating as well,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “The rise in labor costs will undoubtedly factor into policymakers’ thinking when they meet again in June.”

The Federal Reserve on Wednesday left interest rates unchanged. The Fed said policymakers expected “economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong.”

The Commerce Department said the trade deficit tumbled 15.2 percent to $49.0 billion in March, the lowest level since September. The trade gap widened to $57.7 billion in February, which was the highest level since October 2008.

March’s decline ended six straight monthly increases in the trade deficit. Economists polled by Reuters had forecast the trade gap narrowing to $50.0 billion in March.

The politically sensitive goods trade deficit with China dropped 11.6 percent to $25.9 billion, which will probably do little to ease tensions between the United States and China.

U.S. President Donald Trump has threatened tariffs on up to $150 billion worth of Chinese goods to punish Beijing over its joint-venture requirements and other policies Washington says force American companies to surrender their intellectual property to state-backed Chinese competitors.

China, which denies it coerces such technology transfers, has threatened retaliation in equal measure, including tariffs on U.S. soybeans and aircraft. A U.S. trade delegation arrived in China on Thursday for trade talks.

Trump, who claims the United States is being taken advantage of by its trading partners, has already imposed broad tariffs on imported solar panels and large washing machines. He recently slapped 25 percent import duties on steel and 10 percent on aluminum.

The Trump administration argues that the perennial trade deficit is holding back economic growth. The government reported last week that trade contributed 0.20 percentage point to the first quarter’s 2.3 percent annualized growth pace. The economy grew at a 2.9 percent rate in the fourth quarter.

Brightening prospects

Prospects for the economy are brightening. In a separate report, the Labor Department said initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 211,000 for the week ended April 28.

Claims remained near a more than 48-year low of 209,000 touched during the week ended April 21. The labor market is considered to be near or at full employment. The unemployment rate is at a 17-year low of 4.1 percent, close to the Fed’s forecast of 3.8 percent by the end of this year.

The number of people receiving benefits after an initial week of aid dropped 77,000 to 1.76 million in the week ended April 21, the lowest level since December 1973. With labor conditions tightening, wage growth is picking up.

A second report from the Labor Department showed hourly worker compensation accelerated at a 3.4 percent rate in the first quarter after rising at a 2.4 percent pace in the October-December period. It increased at a 2.5 percent rate compared to the first quarter of 2017.

Prices for U.S. Treasuries were trading higher, while the dollar was little changed against a basket of currencies. U.S. stocks were lower.

In March, exports of goods and services increased 2.0 percent to an all-time high of $208.5 billion, lifted by a $1.9 billion increase in shipments of commercial aircraft. There were also increases in exports of soybeans, corn and crude oil. Real goods exports were the highest on record.

Exports to China jumped 26.3 percent in March.

Imports of goods and services fell 1.8 percent to $257.5 billion, in part as the boost from royalties and broadcast license fees related to the Winter Olympics faded. Imports of capital goods fell by $1.5 billion, weighed down by declines in imports of computer accessories, telecommunications equipment and semiconductors.

Imports of consumer goods decreased by $0.9 billion. Crude oil imports dropped by $0.5 billion in March. Imports from China fell 2.1 percent.

Another report from the Commerce Department showed factory goods orders rose 1.6 percent in March after a similar increase in February. The department, however, revised March orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, to show them falling 0.4 percent instead of dipping 0.1 percent as reported last month.

Orders for these so-called core capital goods rose 1.0 percent in February. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, declined 0.8 percent in March instead of the 0.7 percent drop reported last month.

March’s drop in core capital goods orders and shipments suggest business spending on equipment is slowing.
…

South Korea is looking into developing and financing economic projects with North Korea that could take effect if a nuclear deal is reached with the United States.

South Korean Finance Minister Kim Dong-yeon said on Wednesday the government was “internally carrying out preparations” to organize, finance and implement possible inter-Korea projects. But he also emphasized that Seoul would first seek support from the international community for any North Korean development projects, and would only proceed if the U.S. -North Korea summit, expected to be held in late May or June, produces a joint denuclearization agreement.

North Korea is under tough sanctions imposed by the U.N. Security Council for its nuclear weapons and missiles tests, including accelerated efforts in the last two years to develop a long-range nuclear missile that could potentially target the U.S. mainland. The international sanctions ban an estimated 90 percent of the country’s external trade.

Seeking sanctions relief is considered a key motivating factor in North Korean leader Kim Jong Un’s diplomatic pivot this year to suspend further provocative missile and nuclear tests, and to engage in talks to dismantle his nuclear arsenal.

But easing sanctions would make it more difficult to enforce the North’s denuclearization promises.

“Once the sanctions are lifted, North Korea will gain autonomy over its trade, and considering its low labor costs and skilled workforce, I think the North Korean economy would gain power again,” said Shin Beom-chul, the director of Center for Security and Unification at the Asan Institute for Policy Studies in Seoul.

U.S. President Donald Trump has insisted he will keep sanctions in place until North Korea completely dismantles its nuclear program.

Infrastructure projects

South Korea, however, is considering a range of economic incentives to encourage Kim to follow through on a nuclear deal with Trump. But these investments are prohibited by the U.N. sanctions and would require a Security Council exemption to proceed.

At the recent inter-Korean summit, Kim and South Korean President Moon Jae-in agreed to increase economic cooperation, in addition to supporting the complete denuclearization of the Korean Peninsula.

Developing modern railways that would connect South and North Korea to Russia and China were specifically mentioned in their joint statement. Other possible projects include improving seaports, as well as building roads and electrical power plants in the impoverished and underdeveloped North.

The cost of these infrastructure projects could cost more than $65 billion, and would require extensive financing, as South Korea currently has only $1 billion in its Inter-Korean Cooperation Fund that was established for this purpose.

If North Korea does give up its nuclear weapons, there will likely be economic aid provided by strategic regional powers, including the U.S., China, Japan and Russia. But South Korea is taking a proactive role to be a major investor in developing the North’s mineral trade and other markets.

“It is expected that South Korea will carry most of the costs. In fact there are many economic resources that are strategically valuable in developing North Korea,” said Joung Eun-lee, a research fellow at the Korea Institute for National Unification.

Peacetime economy

Funding infrastructure projects could also help transition the North to a peacetime economy, even while the trade sanctions remain in place.

The two Koreas have agreed to pursue a peace treaty to replace the armistice put in place at the end of the Korean War in 1953. If implemented, North Korea would likely be expected to significantly reduce its conventional forces that currently include over one million soldiers.

International funding could also be used to provide jobs for former soldiers to work on building roads, bridges and other needed development projects.

“It is not so much the relaxation of the trade sanctions as it is subsidized infrastructure development. That is what North Korea needs upfront,” said Bruce Bennett, a North Korea analyst at the Rand Corporation research organization.

South Korea had invested billions of dollars into North Korean development projects in the past, like the Kaesong Industrial Complex that employed over 5,000 North Korean workers before it was shut down in 2016 following a nuclear test, and the Kumgang Mountain tourism program that ended when a South Korean visitor was shot by a North Korean soldier in 2008.
…

President Trump plans to meet next week with leaders from U.S. and foreign carmakers on trade and changes to emission standards.

“When the White House wants to meet with us about our sector and policy, we welcome the opportunity,” Alliance of American Automobile Manufacturers spokeswoman Gloria Bergquist said Wednesday.

The time and agenda of the talks are still to be announced. But the car builders want to make their concerns about possible changes to the North American Free Trade Agreement known to the president.

They are also expected to talk about Trump administration plans to revise strict Obama-era emission standards for U.S. cars and light trucks.

Seventeen states and Washington, D.C., are suing the administration over the plans, accusing the Environmental Protection Agency of breaking the law.

“This is about health. This is about life and death,” California Governor Jerry Brown said Tuesday. “Pollutants coming out of tailpipes does permanent damage to children. The only way we’re going to overcome this is by reducing emissions.”

Brown accused Trump of wanting people to buy more gasoline and create more pollution.

The lawsuit argues the EPA acted arbitrarily and violated the Clean Air Act when it decided emission standards were too high.

In 2012, former president Barack Obama ordered emission standards to be raised to about 21 kilometers per liter of gasoline by 2025. The goal was to cut pollution and make cars and small trucks more energy efficient.

The EPA is seeking to freeze fuel efficiency requirements at 2020 levels until 2026.

EPA chief Scott Pruitt said last month that Obama’s decision was politically based and the emission standards Obama set were too high and did not “comport with reality.”

Pruitt said his EPA will set fresh standards so new cars that use less gas and are safer than older models will be affordable.

But environmental groups said the American public overwhelmingly supports the stricter standards.
…

The International Monetary Fund censured Venezuela on Wednesday for failing to hand over essential economic data to the fund.

“The [Executive] Board noted that adequate data provision was an essential first step to understanding Venezuela’s economic crisis and identifying possible solutions,” an IMF statement said.

The board is giving Venezuela another six months to comply or face possible expulsion from the IMF.

“The Fund stands ready to work constructively with Venezuela toward resolving its economic crisis when it is prepared to re-engage with the Fund,” the IMF said.

Venezuela has not responded to the IMF’s action. But President Nicolas Maduro’s socialist government has long declined to provide data to the IMF. It regards the IMF as a U.S. tool and part of a Washington-inspired economic war against Venezuela.

Corruption and the collapse of world energy prices has led to an economic calamity in oil-rich Venezuela, including hyperinflation and severe shortages of many basic goods.
…

A Chinese company that manufactured Ivanka Trump shoes and has been accused of serious labor abuses is being celebrated in a blockbuster propaganda film for extending China’s influence around the globe.

The state-backed documentary “Amazing China” portrays the Huajian Group as a beneficent force spreading prosperity — in this case, by hiring thousands of Ethiopians at wages a fraction of what they’d have to pay in China. But in Ethiopia, Huajian workers told The Associated Press they work without safety equipment for pay so low they can barely make ends meet.

“I’m left with nothing at the end of the month,” said Ayelech Geletu, 21, who told the AP she earns a base monthly salary of 1,400 Birr ($51) at Huajian’s factory in Lebu, outside Addis Ababa. “Plus, their treatment is bad. They shout at us whenever they want.”

With epic cinematography, “Amazing China” — produced by China Central Television and the state-owned China Film Group Co. Ltd. — articulates a message of how China would like to be seen as it pursues President Xi Jinping’s vision of a globally resurgent nation, against a reality that doesn’t always measure up.

China’s ruling Communist Party recently announced it would take direct control of major broadcasters and assume regulatory power over everything from film and TV to books and news.

As the party deepens its ability to cultivate “unity of thought” among citizens, “Amazing China” demonstrates the scope of China’s propaganda machine, which not only crafted a stirring documentary about China’s renaissance under Xi but also helped manufacture an adoring audience for it.

The movie, which weaves together extraordinary feats of engineering and military, environmental and cultural achievements, hit theaters three days before China’s rubber-stamp legislature convened to amend the constitution and allow Xi to potentially rule China for life.

The star — duly noted by IMDb.com — is Xi himself, who appears more than 30 times in the 90-minute film.

“Amazing China” presents Huajian as an inspiring example of China exporting the success of its own economic miracle by creating transformative jobs for thousands of poor Ethiopians and sharing China’s knowledge, language and can-do discipline to build a new industrial foundation for Ethiopia’s economy.

The company is celebrated as a model of the inclusiveness at the heart of a much larger project: Xi’s signature One Belt One Road initiative, a plan to spread Chinese infrastructure and influence across dozens of countries so ambitious in scope that it’s been compared to the U.S.-led Marshall Plan after World War II.

“In opening to the outside world, China’s pursuit is not to only make our lives better, but to make the lives of others better,” the narrator says.

In the film, Huajian chairman Zhang Huarong stands before neat rows of Ethiopian workers singing a song about unity, describing himself as a father to his employees, who “like me very much.”

But four current and former Huajian employees told the AP their wages were so low that they struggled to pay their bills. They said they had no protective gear, were forced to work 12 hours a day and participate in military-style physical drills, were not permitted to form a union and were regularly yelled at by their Chinese managers.

All that made it hard for them to relate to the inspirational video about Huajian circulated by mobile phone with its sweeping shots of a gleaming factory and a soundtrack that repeats in operatic Mandarin: “Huajian has come, Huajian has come … holding the torch of hope.”

“If someone complains, he will be accused of disturbing the workplace and will be fired right away,” said Ebissa Gari, a 22-year-old who estimated he earns 960 Birr ($35) a month. “That’s why we keep quiet and work no matter how much we are subdued.”

Getahun Alemu, a 20-year-old who quit Huajian last year to continue his studies, complained of inadequate safety gear.

“There are chemicals that hurt our eyes and nose, and machines that cut our hands,” he said. “They have no idea about hand gloves! If you refuse to work without that protective gear, then you will be told to leave the company.”

Huajian declined the AP’s requests for comment. Ivanka Trump’s brand said it no longer does business with Huajian and “has always and continues to take supply chain integrity very seriously.”

Huajian’s investment in Ethiopia was part of a government-led industrialization drive. In the last few years, Ethiopia’s leaders and business allies came under intense criticism, with more than 300 businesses attacked by protesters who saw them as bolstering a repressive regime.

These days, armed soldiers stand guard at the entrance to the Eastern Industrial Zone in Ethiopia’s Oromia region, where Huajian opened its first factory.

Six years after the company’s arrival, the dream of turning Ethiopia into a shoe-manufacturing hub remains unrealized, and few harbor illusions about the main incentive for Huajian’s investment in a country where there is no legal minimum wage.

“These companies are moving out of Asia and coming to Africa to save labor costs,” said Fitsum Arega, who recently stepped down as head of the Ethiopian Investment Commission to become an adviser to the new prime minister. He praised Huajian for employing more than 5,000 Ethiopians, but said the company “could have done better.”

“I’m not saying all employees are happy and there are no abuses here and there,” Arega said, adding that the government pushes companies to protect workers. “There’s a labor law which actually the companies say favors the employees.”

The Chinese-owned Eastern Industrial Zone effectively took fertile land from Ethiopian farmers and handed it over to foreign investors — a strategy the Ethiopian government is rethinking, according to Nemera Mamo, a teaching fellow in economics at the University of London.

“You can clearly see that these industrial zones are absolutely favorable to the Chinese investors, but not to the local communities or the local private investors,” he said. Huajian workers told the AP they made 960 Birr ($35) to 1,700 Birr ($62) a month. A basic living wage in Ethiopia is about 3,000 Birr ($109) a month, according to Ayele Gelan, a research economist at the Kuwait Institute for Scientific Research.

In a post promoting “Amazing China” on its official WeChat account, Huajian claimed to be Ethiopia’s largest exporter — an exaggeration also promulgated by China’s official Xinhua News Agency.

Huajian is Ethiopia’s largest shoe exporter, shipping out $19.3 million worth of goods last fiscal year, according to Ethiopia’s Leather Industry Development Institute. But coffee producer Mullege PLC said it exported $42 million worth of coffee during the same period and that other companies export even more.

Huajian’s record within China also has been troubled. In at least five cases since 2015, Huajian sued workers in Chinese court rather than pay compensation mandated by a government arbitration panel. Huajian lost every case, court records show, and the court had to freeze Huajian’s assets to get one worker the 44,174 yuan ($7,000) he was owed.

Last year, Huajian found itself entangled in labor and human rights controversies that made global headlines but attracted little attention in China’s official media. Three men working with the New York-based non-profit group China Labor Watch were arrested after their investigation of Ivanka Trump’s suppliers zeroed in on Huajian. The men are out on bail, but remain under police surveillance.

China Labor Watch founder Li Qiang said Huajian’s factory in Ganzhou, in southeastern Jiangxi province, had some of the worst conditions he has ever encountered, including excessive overtime, low pay, and verbal and physical abuse.

Huajian has called those allegations “completely not true to the facts, taken out of context, exaggerated” and accused the investigators of conducting industrial espionage — a charge that was parroted in China’s party-controlled media.

Wei Tie, the director of “Amazing China,” said he wasn’t aware of the controversy surrounding Huajian until the AP informed him. That’s not too surprising given the years of positive coverage of Huajian in party-controlled media and the fact that many foreign news sites, especially Chinese-language ones, are blocked inside China.

Wei said he included the company in the film because it is “introducing China’s experience of prosperity to Africa.”

He said he prefers to focus on the good. “What I did was absorb the essence and discard the dross,” he said, citing a longstanding aphorism of Chinese political thought.

At first glance, Wei’s selective approach appears to have resonated with Chinese audiences. “Amazing China” smashed box-office records for documentary films, raking in 456 million yuan ($72 million) in its first five weeks, according to ticketing website Maoyan.com. It even thumped “Star Wars: The Last Jedi.”

Wei attributed this success to the “spontaneous feeling” of citizens inspired by the arc of tremendous progress they’ve witnessed, a national rejuvenation forged with sweat and skill that he compared to Europe’s Renaissance and the pioneering days of the American republic.

In Shanghai, midday screenings during the week sold out immediately, suggesting either unquenchable public appetite or organized bulk ticket sales.

None of the viewers surveyed by AP had purchased their own tickets. Instead, they said they got them from state-run companies, neighborhood committees or government departments that handed them out as part of their “party building work.”

Douban, a popular film review website, blocked users from rating and commenting on the movie. The only entries came from official media, which gave it an 8.5 out of 10 ranking. On IMDb.com, a subsidiary of Amazon, “Amazing China” earned only one star.

But for some, “Amazing China” is balm for old feelings of inferiority and a welcome reaffirmation that China is ready to resume its rightful place in the community of great nations.

“I did not know how good our country is until I watched this movie,” said Zuo Qianyi, a 68-year-old retiree. “I have been to many countries, Britain, Spain, and they are not as good as China, at least not as Shanghai. I am very happy, and I will love my country more.”
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When Andrew Chamberlain started in his job four years ago in the research group at jobs website Glassdoor.com, he worked in a programming language called Stata.

Then it was R. Then Python. Then PySpark.

“My dad was a commercial printer and did the same thing for 30 years. I have to continually stay on stuff,” said Chamberlain, who is now the chief economist for the site. Chamberlain already has one of the jobs of the future — a perpetually changing, shifting universe of work that requires employees to be critical thinkers and fast on their feet. Even those training for a specific field, from plumbing to aerospace engineering, need to be nimble enough to constantly learn new technologies and apply their skills on the fly.

When companies recruit new workers, particularly for entry-level jobs, they are not necessarily looking for knowledge of certain software. They are looking for what most consider soft skills: problem solving, effective communication and leadership. They also want candidates who show a willingness to keep learning new skills.

“The human being’s role in the workplace is less to do repetitive things all the time and more to do the non-repetitive tasks that bring new kinds of value,” said Anthony Carnevale, director of the Georgetown Center on Education and the Workforce in the United States.

So, while specializing in a STEM (science, technology, engineering and mathematics) field can seem like an easy path to a lucrative first job, employers are telling colleges: You are producing engineers, but they do not have the skills we need.

It is “algorithmic thinking” rather than the algorithm itself that is relevant, said Carnevale.

Finding gems

Out in the field, Marie Artim is looking for potential. As vice president of talent acquisition for car rental firm Enterprise Holdings Inc, she sets out to hire about 8,500 young people every year for a management training program, an enormous undertaking that has her searching college campuses across the country.

Artim started in the training program herself, 26 years ago, as did the Enterprise chief executive, and that is how she gets the attention of young adults and their parents who scoff at a future of renting cars.

According to Artim, the biggest deficit in the millennial generation is autonomous decision-making. They are used to being structured and “syllabused,” she said.

To get students ready, some colleges, and even high schools, are working on building critical thinking skills.

For three weeks in January at the private Westminster Schools in Atlanta, Georgia, students either get jobs or go on trips, which gives them a better sense of what they might do in the future.

At Texas State University in San Marcos, meanwhile, students can take a marketable-skills master class series.

Case studies

One key area zeroes in on case studies that companies are using increasingly to weed out prospects. This means being able to answer hypothetical questions based on a common scenario the employer faces, and showing leadership skills in those scenarios.

The career office at the university also focuses on interview skills. Today, that means teaching kids more than just writing an effective resume and showing up in smart clothes.

They have to learn how to perform best on video and phone interviews, and how to navigate gamification and artificial intelligence bots that many companies are now using in the recruiting process.

Norma Guerra Gaier, director of career services at Texas State, said her son just recently got a job and not until the final step did he even have a phone interview.

“He had to solve a couple of problems on a tech system, and was graded on that. He didn’t even interface with a human being,” Guerra Gaier said.

When companies hire at great volume, they try to balance the technology and face-to-face interactions, said Heidi Soltis-Berner, evolving workforce talent leader at financial services firm Deloitte.

Increasingly, Soltis-Berner does not know exactly what those new hires will be doing when they arrive, aside from what business division they will be serving.

“We build flexibility into that because we know each year there are new skills,” she said.
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With their manicured nails, immaculate makeup and matching handbags and

stilettos, you would be forgiven for mistaking the five women seated in the cafe of the upscale Nairobi hotel for a group of senior female executives.

Sipping white hot chocolate from delicate porcelain cups, they discuss their long working hours and challenges in finding time with their children, and share strategies on networking and dealing with difficult clients.

But these Kenyan women aren’t company directors, finance professionals or corporate lawyers — they are part of a new breed of women who are breaking into the male-dominated taxi sector and hitting Nairobi’s roads as e-cabbies.

“Taxi driving is not something I would have considered before, but after driving for a taxi app service, I think it’s a really good job for women,” said Lydia Muchiri, 29, in a knee-length fitted white dress with floral print.

“It’s convenient, easy and safe — much better than sitting at home and depending on handouts,” she said, as the other women, in their 20s and 30s, nodded in agreement.

As taxi-hailing apps mushroom to fill a hole in Nairobi’s poor public transport system, rising numbers of women are taking up jobs as drivers — citing benefits such as flexible working hours, the ability to select passengers, and guaranteed payment.

Online female cabbies currently make up only about 3 percent of the city’s estimated 12,000 e-taxi drivers, but industry officials say their numbers are growing exponentially.

Little Cabs, one of Nairobi’s popular ride-sharing platforms, and the only app offering riders the choice of a male or female driver, has witnessed a 13-fold increase in the number of female drivers over the last two years.

“There were 27 women drivers registered with Little Cabs when we first started in June 2016, now there are 381. We aim to have 1,000 women drivers by the end of this year,” said Jefferson Aluda, operations manager for Little Cabs.

“Many people think taxi driving is a man’s job, but that view is changing. Customers tell us that women are careful drivers and very professional. Through our recruitment campaigns, we expect more women to join.”

Empowering

Kenya’s economy has grown on average by 5 percent annually over the last decade, but the benefits have not been equally distributed — and women remain disadvantaged socially, economically and politically.

Women make up only a third of the 2.5 million people employed in the formal sector and own only 1 percent of agricultural land, according to the Kenya National Bureau of Statistics (KNBS).

Despite global criticism that the sharing economy lowers wages, encourages tax evasion and provides little protections to users, the emergence of platforms such as taxi-hailing apps in Kenya is in fact helping to empower women.

In the last three years, at least a dozen e-cab apps have launched to meet the demands of a growing smartphone-armed middle class seeking an affordable and safer alternative to the city’s reckless overcrowded matatus, or minivans.

Drivers earn a minimum of 30 Kenyan shillings ($0.30) per minute and companies take up to 25 percent their earnings, but female drivers still welcome the opportunity provided by firms such as Uber, Taxify, Little Cabs and Pewin.

Minus the company fee, fuel and car rental costs, drivers working 12 hours daily can earn on average 60,000 shillings ($600) in a month, say industry sources.

Faridah Khamis, a single mother of five children, decided to become an online taxi driver in February last year after chatting with a male driver who encouraged her to apply.

“The rates are low and I have to work 12 hours daily — when my children are at school and at night when they are asleep. But it’s better money than an office job these days,” said the 36-year-old woman standing beside her silver Mazda.

“I also think it’s very safe for women. I choose when I work, where I work, and which clients I work with. If I was a regular taxi driver, I would be on the roads looking for passengers. The app means I can find customers from my home.”

The women choose riders with higher ratings and opt for locations in populated rather than isolated areas. Their companies also track them via GPS, and they have an alert/SOS button on their apps for support if they need help. 

Not always a smooth ride

Uber officials say ride-sharing apps can provide a great economic opportunity for women, particularly in developing nations such as Kenya.

“We think apps like Uber can help break down global, structural barriers that keep women from fully participating in the economy,” Uber’s East Africa spokeswoman Janet Kemboi told the Thomson Reuters Foundation.

“These include social biases, security risks, financial and digital inclusion, and access to vehicles and other assets.”

But it’s not always a smooth ride for Kenya’s female e-cabbies. They occasionally face discrimination and abuse — from difficulties renting cars due to biased perceptions that women are bad drivers, to fending off drunken male passengers.

And with their phone numbers accessible to customers through the app, the women also endure daily “follow-up calls” from former customers who want to date them after the trip is over.

The female cabbies say they also face sexist comments where people perceive them to be sex workers simply because they are well-dressed, working at night, and doing a “man’s job.”

But such instances are rare, say the female drivers, and working in the taxi sector has inspired some of them to one day have their own fleet of taxis — for women, driven by women.

“There is a demand for women taxi drivers. Customers appreciate our appearance and professionalism. Some say we drive safer and our cars are cleaner than [those of] male drivers,” said Muchiri.

“We take pride in ourselves and in our job. We are no less than someone who works in an office. We see our car as our office and believe that once we are in the car, we must behave like a professional.”
…

Workers and protesters throughout the world observed May Day Tuesday with rallies and strikes demanding their governments address better working conditions and other labor issues.

In addition to being an international day honoring workers or a traditional spring time festival, Tuesday is also International Worker’s Day in many countries.

Russia

In Moscow, about 120,000 people marched from Red Square to the main streets in a traditional May Day parade.

In St. Petersburg, Russia, several hundred citizens upset over the Kremlin’s efforts to restrict internet freedom, joined the official May Day celebration. They protested the ban of the messaging application Telegram, a move that triggered a rally in Moscow that was attended by 10,000 people.

Spain

Marches calling for gender equality, higher salaries and better pensions were held in more than 70 cities in Spain. Thousands of people turned out for the largest rally in Madrid, displaying a show of unity behind the slogan “Time to Win.”

General Union Workers’ Union of Spain leader Pepe Alvarez said meeting the demands of feminists, youths and workers are necessary to “redistribute wealth.”

Spain’s economy has been among the fastest growing in Europe in recent years.

United States

May Day Demonstrations for immigrant and labor rights were planned in California, New York, Florida and other U.S. cities.

“The Trump administration has made very clear that they’ve declared war on the immigrant community on all levels,” said Javier Valdez of the advocacy group Make the Road New York.

Immigration rights organizations have participated in May Day activities for over a decade to resist anti-immigration legislation. Now the advocates are focusing on voter turnout in the November mid-term elections.

South Korea

In downtown Seoul, South Korea, about 10,000 labor union members took to the streets to call for a higher minimum wage and to make other demands.

The rally, organized by the Korean Federation of Trade Unions, urged the government to approve a $9.34 minimum wage and convert non-regular workers to regular employees with equal pay.

Turkey

Dozens of demonstrators were detained during May Day events in Istanbul, most of whom tried to march toward the city’s main square in defiance of a government ban.

Citing security concerns, the Turkish government declared Taksim Square off-limits. Nevertheless, small groups of people chanting “Taskim cannot be off limits on May 1” tried to push their way into the square, resulting in scuffles and the detention of 45 demonstrators.

Taksim Square is symbolically significant to Turkey’s labor movement. Thirty-four people were killed there during a May Day event in 1977 when shots were fired into the crowd from a nearby building.

Indonesia

Some 10,000 workers rallied near the presidential palace in Jakarta, Indonesia, urging the government to raise wages and to refrain from outsourcing. They also called for a ban on foreign laborers in Indonesia, saying their presence reduces job opportunities for local workers.

Greece

Thousands of Greeks marched through central Athens in several May Day demonstrations.

Museums were closed and public transportation operated on a reduced schedule.

Police said at least 7,000 people attended one rally in Athens that was planned by the communist party-led union. They marched past parliament toward the United States Embassy.

Cambodia

Prime Minister Hun Sun observed May Day in Cambodia with about 5,000 garment workers just outside the capital of Phnom Penh.

About 2,000 other garment workers gathered at a park in Phnom Penh for a rally. They wanted to march to the National Assembly to convince lawmakers to assist them with labor issues, but the group was stopped by riot police.

Philippines

Some 5,000 people demonstrated near the presidential palace in Manila to protest Philippine President Rodrigo Duterte’s failure to fulfill a campaign promise to halt the practice of short-term employment.

They also demanded that the government provide higher wages and address joblessness and trade union repression.  

South Africa

Separate May Day marches organized by rival trade unions were held in the coastal South African city of Durban and in other parts of the country.

Riot police were deployed as members of the Congress of South African Trade Unions and the South African Federation of Trade Unions marched through routes that were designed to put distance between the two unions.

On Monday, COSATU President S’dumo Diamini said at a news conference, “We call upon all workers to work together. Their enemy is one: Monopoly capital.”
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Pakistan has formally reopened a major trade route with landlocked Afghanistan after nearly four years.

Authorities had closed the remote Ghulam Khan border crossing in North Waziristan in 2014 after launching a major army-led counter-militancy offensive in the tribal district, once condemned as the “epicenter” of international terrorism.

Military officials say the Waziristan region has since been almost completely secured and rehabilitation as well as reconstruction activities are currently under way there.

Pakistani Prime Minister Shahid Khaqan Abbasi traveled to the tribal region on Monday and inaugurated a newly constructed terminal to formally resume cross-border trading activities.

Ghulam Khan is the third-largest official crossing point on the nearly 2,600-kilometer, largely porous frontier between Pakistan and Afghanistan.

Torkham and Chaman are the other two crossings that Afghans use for bilateral trade and transit through Pakistani land and sea routes. Additionally, the two installations are used by visitors traveling in either direction.

The United States and NATO also rely heavily on Pakistan’s ground and air lines of communications for ferrying supplies and non-lethal military equipment to thousands of international troops stationed in Afghanistan.

Pakistan’s relations with Afghanistan have deteriorated in recent years over mutual allegations of supporting militant attacks against each other.

Political tensions often have prompted Pakistani authorities to abruptly close the Torkham and Chaman border crossings, reducing bilateral trade to just over $1 billion from $2.6 billion about two years ago.

Officials and traders on both sides have welcomed resumption of trade through Ghulam Khan, hoping the move will help ease political tensions and increase bilateral trade.

Afghan and Pakistani traders have long urged their respective governments to “segregate” business and trade ties from political and security tensions for promoting mutual trust.

Lately, troubled relations have prompted Afghans to look for alternate routes and they have turned their attention to the India-funded Iranian port of Chabahar for transit trade, bypassing Pakistan.

The Pakistani port of Karachi, however, is still the most economical route for Afghan transit trade, say business leaders in both countries.
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U.S. President Donald Trump is extending tariff exemptions on aluminum and steel exports from the European Union, Canada, and Mexico for at least another month.

The temporary exemptions of the tariffs already imposed on such nations as China, Japan, and Russia, were to have expired Tuesday.

But the White House says it is giving negotiators 30 more days to work out a deal.

The European Commission criticized the temporary extension in a statement Tuesday, saying the European Union has been willing to discuss the issue and “will not negotiate under threat.”

“The U.S. decision prolongs market uncertainty, which is already affecting business decisions,” it said.  “The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.”

Trump has called the tariffs a national security issue because overproduction by some countries makes U.S. exports more expensive and undesirable on the global markets.

WATCH: US trade and tariffs

​The White House also announced late Monday it reached a final deal on steel exports with South Korea, granting it a permanent exemption,  while reaching agreements in principle with Argentina, Australia, and Brazil.

“These agreements underscore the Trump administration’s successful strategy to reach fair outcomes with allies to protect our national security and address global challenges to the steel and aluminum industries,” a White House statement said.

Trump imposed a 25 percent tariff on steel imports and 10 percent on aluminum in March on China, Russia, Japan, and other exporters to for what he says is a remedy for unfair competition.

U.S. Treasury Secretary Steven Mnuchin and other senior U.S. officials head to China this week for trade talks, as reminded by Trump in a post on Twitter.

“Delegation heading to China to begin talks on the Massive Trade Deficit that has been created with our Country.  Very much like North Korea, this should have been fixed years ago, not now.  Same with other countries and NAFTA…but it will all get done.  Great Potential for USA!”

Canadian Prime Minister Justin Trudeau said Monday imposing tariffs on Canadian steel and aluminum would be a major disruption because U.S. and Canadian industries – including U.S. car and fighter jet manufacturing – are closely integrated.

German Chancellor Angela Merkel is warning of a possible trade war if the United States does not grant the European Union a permanent exemption.
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U.S. President Donald Trump has postponed a decision on imposing steel and aluminum tariffs on Canada, the European Union and Mexico until June 1, and has reached an agreement in principle with Argentina, Australia and Brazil, a source familiar with the decision said on Monday.

The decision came just hours before temporary exemptions were set to expire at 12:01 a.m. (0401 GMT) on Tuesday.

“The administration has reached agreements in principle with Argentina, Australia, and Brazil, details of which will be finalized in the next 30 days. The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days,” the source said.

Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum in March, but granted temporary exemptions to Canada, Mexico, Brazil, the European Union, Australia and Argentina. He also granted a permanent exemption on steel tariffs to South Korea.

Trump administration officials have said that in lieu of tariffs, steel and aluminum exporting countries would have to agree to quotas designed to achieve similar protections for U.S. producers. South Korea’s permanent exemption is in exchange for having agreed to cut its steel exports to the United States by about 30 percent.

Canadian Prime Minister Justin Trudeau said on Monday that any move by the United States to impose tariffs on Canadian steel and aluminum would be a “very bad idea” guaranteed to disrupt trade between the two countries.

Canada is the largest source of steel imports into the United States, with a steel industry that is highly integrated with its southern neighbor.

Trump has invoked a 1962 trade law to erect protections for U.S. steel and aluminum producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.

If the EU is subject to tariffs on the 6.4 billion euros ($7.7 billion) of the metals it exports annually to the United States, it has said it will set its own duties on 2.8 billion euros of U.S. exports of products ranging from makeup to motorcycles.
…

The head of popular messaging service WhatsApp is planning to leave the company because of a reported disagreement over how parent company Facebook is using customers’ personal data. 

WhatsApp billionaire chief executive Jan Koum wrote in a Facebook post Monday, “It’s been almost a decade since (co-founder) Brian (Acton) and I started WhatsApp, and it’s been an amazing journey with some of the best people. But it is time for me to move on,” he said.

Koum did not give a date for his departure.

The Washington Post reported Monday that Koum is stepping down because of disagreements over Facebook’s attempts to use the personal data of WhatsApp customers, as well as efforts to weaken the app’s encryption. 

Action left the company last fall and since then has become a vocal critic of Facebook, recently endorsing a #DeleteFacebook social media campaign.

The Post, citing people familiar with internal WhatsApp discussions, said Koum was worn down by the differences in approach to privacy and security between WhatsApp and Facebook.

When WhatsApp agreed to the company’s sale to Facebook in 2014 for $19 billion, it said WhatsApp would remain an independent service and would not share its data with Facebook. 

However, 18 months later, Facebook pushed WhatsApp to change its terms of service to give the social network access to the personal data of WhatsApp users. 

WhatsApp is the largest messaging service in the world with 1.5 billion monthly users. However, Facebook has been struggling to find ways to make enough money from the app to prove its investment was worth the cost. 

Facebook has faced intense criticism since March when news broke that the personal data of millions of Facebook users had been harvested without their knowledge by Cambridge Analytica, a British voter profiling company that U.S. President Donald Trump’s campaign hired to target likely supporters in 2016.

Facebook chief executive Mark Zuckerberg testified before Congress earlier this month and apologized for inadequately protecting the data of millions of social media platform users. 

Facebook also recently announced it would allow all its users to shut off third-party access to their apps and said it would set up “firewalls” to ensure users’ data was not unwittingly transmitted by others in their social network.

Some members of Congress said Facebook’s actions to rectify the situation did not go far enough and have called for greater regulation of the internet and social media.
…

U.S. consumer prices accelerated in the year to March, with a measure of underlying inflation surging to near the Federal Reserve’s 2 percent target as weak readings from last year dropped out of the calculation.

The rise in the annual inflation gauges reported by the Commerce Department on Monday was anticipated by economists and Fed officials and is not expected to alter the U.S. central bank’s gradual pace of interest rate increases.

Annual inflation readings in March of last year were held down by large declines in the price of cell phone service plans, and decelerated through much of 2017.

“The Fed has been talking about today’s inflation increase since last March,” said Chris Low, chief economist at FTN Financial in New York. “There is no reason to think the Fed will accelerate the pace of rate hikes as a result.”

Price index jumps

Consumer prices as measured by the personal consumption expenditures (PCE) price index jumped 2.0 percent on a year-on-year basis last month. That was the biggest gain since February 2017 and followed a 1.7 percent rise in February. The PCE price index was unchanged on a monthly basis largely because of cheaper gasoline after advancing 0.2 percent in February. 

Excluding the volatile food and energy components, the PCE price index soared 1.9 percent in the 12 months through March, also the biggest increase since February 2017, after increasing 1.6 percent in February.

The so-called core PCE price index rose 0.2 percent on a month-on-month basis in March after a similar gain in February.

The core PCE index is the Fed’s preferred inflation measure.Last month’s increase was in line with economists’ expectations.

Minutes of the Fed’s March 20-21 policy meeting published this month showed officials expected the annual PCE price indexes to accelerate in March partly because of “the arithmetic effect of the soft readings on inflation in early 2017 dropping out of the calculation.”

Two additional rate hikes expected

The minutes also noted that the rise in inflation emanating from the so-called base effects “by itself, would not justify a change in the projected path” for the central bank’s benchmark overnight interest rate.

Fed officials are scheduled to convene on Tuesday and Wednesday for a regular policy meeting. The Fed raised rates last month and forecast at least two more rate hikes for 2018.

The dollar rose to near a three-month high against the euro on Monday on the back of weaker-than-expected German data.

Prices for longer-dated U.S. Treasuries rose marginally while U.S. stocks were mixed.

Tightening labor market

Economists expect the core PCE price index to hit 2.0 percent in May because of favorable base effects. Inflation is also rising as the labor market tightens. The government reported last Friday that wages and salaries recorded their biggest increase in 11 years in the first quarter.

In addition, regional factory surveys have shown increases in prices paid and received by manufacturers. Inflation is also likely to be fanned by an anticipated pickup in economic growth, driven by a $1.5 trillion tax cut package and increased government spending.

“We think that will convince the Fed to raise rates a total of four times this year, with the next hike coming in June,” said Michael Pearce, a senior economist at Capital Economics in New York.

Small increase for consumer spending

The Commerce Department’s report on Monday also showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.4 percent in March after being unchanged in February.

The data was included in last Friday’s advance first-quarter gross domestic product report, which showed the economy growing at a 2.3 percent annualized rate during that period.

When adjusted for inflation, consumer spending increased 0.4 percent in March. The so-called real consumer spending fell 0.2 percent in February. The rebound in real consumer spending last month supports expectations that consumption was held back by temporary factors in the January-March period and will gain momentum in the second quarter.

Personal income rose 0.3 percent in March after increasing by the same margin in February. With spending outpacing income, savings fell to $460.6 billion last month from $483.1 billion in February.

Manufacturing data on Monday also offered an upbeat assessment of the economy. The MNI Chicago Business Barometer rose 0.2 points to a reading of 57.6 in April, ending three straight monthly declines.

Factory activity in Texas accelerated sharply in April, with the Dallas Fed Texas Manufacturing Outlook Survey’s production index surging 11 points to a reading of 25.3.

But the housing market continues to be hobbled by an inventory squeeze that is restraining sales growth. The National Association of Realtors said contracts to buy previously owned homes rose 0.4 percent in March, slowing from February’s 2.8 percent increase.
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The third and fourth biggest U.S. wireless carriers, T-Mobile and Sprint, said Sunday they plan to merge, the third attempt they’ve made to join forces against the country’s two biggest mobile device firms, Verizon and AT&T.

The deal, if it happens this time, calls for T-Mobile to buy Sprint for $26 billion in an all-stock deal.

The combined carrier would have 126 million customers, still third in the pecking order of U.S. wireless carriers, but closer to the top two. Verizon has more than 150 million customers, and AT&T more than 142 million.

The latest agreement caps four years of on-and-off talks between T-Mobile and Sprint. Sprint dropped its bid for T-Mobile more than three years ago after U.S. regulators objected and another proposed merger fell through last November.

The new deal could help the combined companies slash costs to make the new business more competitive with industry leaders. But customers could also pay more for wireless coverage because the combined company may not have to offer as many deals to attract new customers.

U.S. regulators at the Federal Communications Commission are expected to take a close look at the merger’s effects on customers and whether the deal violates antitrust laws.
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From T-shirts, socks and toys to knives and lanterns, a store in upstate New York takes pride in only selling goods that are made in America. Olga Loginova from VOA’s Russian service talked to the store owner about his business, which emerged after the 2008 financial crisis.
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The U.S. economy likely slowed in the first quarter as growth in consumer spending braked sharply, but the setback is expected to be temporary against the backdrop of a tightening labor market and large fiscal stimulus.

Gross domestic product probably increased at a 2.0 percent annual rate, according to a Reuters survey of economists, also held back by a moderation in business spending on equipment as well as a widening of the trade deficit and decline in investment in homebuilding.

Those factors likely offset an increase in inventories. The economy grew at a 2.9 percent pace in the fourth quarter. The government will publish its snapshot of first-quarter GDP Friday at 8:30 a.m. 

Don’t lose sleep

The anticipated tepid first-quarter growth will, however, probably not be a true reflection of the economy, despite the expected weakness in consumer spending. First-quarter GDP tends to be soft because of a seasonal quirk. The labor market is near full employment and both business and consumer confidence are strong.

“I would not lose sleep over first-quarter GDP, there is the residual seasonality issue,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Overall the economy is doing very well and will continue to do well this year and into 2019.”

Economists expect growth will accelerate in the second quarter as households start to feel the impact of the Trump administration’s $1.5 trillion income tax package on their paychecks. Lower corporate and individual tax rates as well as increased government spending will likely lift annual economic growth to the administration’s 3 percent target, despite the weak start to the year.

Federal Reserve officials are likely to shrug off weak first-quarter growth. The U.S. central bank raised interest rates last month in a nod to the strong labor market and economy, and forecast at least two rate hikes this year.

Minutes of the March 20-21 meeting published earlier this month showed policymakers “expected that the first-quarter softness would be transitory,” citing “residual seasonality in the data, and more generally to strong economic fundamentals.”

Consumer spending lackluster

Economists estimate that growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked to below a 1.5 percent rate in the first quarter. That would be the slowest pace in nearly five years and follows the fourth quarter’s robust 4.0 percent growth rate.

Consumer spending in the last quarter was likely held back by delayed tax refunds and impact of tax cuts. Rebuilding and clean-up efforts following hurricanes late last year probably pulled forward spending into the fourth quarter.

“Our new consumer survey found that 37 percent of consumers thought they didn’t get any extra income from the tax cut or did not know what to do with it,” said Michelle Meyer, head of U.S. economics at Bank of America Merrill Lynch in New York. “It is possible this means that there is a lag in the consumer response to tax cuts.”

Business spending

Business spending on equipment is forecast to have slowed after double-digit growth in the second half of 2017. The expected cooling in equipment investment partly reflects a fading boost from a recovery in commodity prices. Economists expect a marginal impact on business spending on equipment from rising interest rates and more expensive raw materials.

“While we do not expect rising rates to crush equipment spending, a slowdown nevertheless appears in store,” said Sarah House, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “Higher interest rates will hurt at the margin.”

Investment in homebuilding is forecast to have declined in the first quarter after rebounding in the October-December period. Government spending probably contracted after two straight quarterly increases. Spending is, however, expected to rebound in the second quarter after the U.S. Congress recently approved more government spending.

Trade was likely a drag on GDP growth for a second straight quarter after royalties and broadcast license fees related to the Winter Olympics boosted imports.

With consumer spending slowing, inventories probably accumulated in the first quarter. Inventory investment is expected to have contributed to GDP growth after subtracting 0.53 percentage point in the fourth quarter.
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Amazon.com Inc. more than doubled its profit Thursday and predicted strong spring results as the world’s biggest online retailer raised the price for U.S. Prime subscribers, added U.S. football games and touted its cloud services for business.

The results showed the broad strength of the company, which has been expanding far beyond shipping packages, the business that has drawn the ire of U.S. President Donald Trump.

The forecast beat expectations on Wall Street, sending shares up 7 percent to a new record in afterhours trade and adding $8 billion to the net worth of Jeff Bezos, Amazon’s chief executive and largest shareholder.

Seattle-based Amazon is winning business from older, big box rivals by delivering virtually any product to customers at a low cost, and at times faster than it takes to buy goods from a physical store. It is expanding across industries, too, striking a $130 million deal to stream Thursday night games for the U.S. National Football League online and working to ship groceries to doorsteps from Whole Foods stores nationwide.

Sales jumped 43 percent to $51.0 billion in the quarter, topping estimates of $49.8 billion, according to Thomson Reuters.

Prime now $119

Prime, Amazon’s loyalty club that includes fast shipping, video streaming and other benefits, has been key to Amazon’s strategy. Its more than 100 million members globally spend above average on Amazon.

The company announced Thursday it will increase the yearly price of Prime to $119 from $99 for U.S. members this spring.

The fee hike is expected to add a windfall to Amazon’s subscription revenue, already up 60 percent in the first quarter at $3.1 billion.

“We do feel it’s still the best deal in retail,” Brian Olsavsky, Amazon’s chief financial officer, said on a call with analysts. He said the number of items Prime members can get within two days had grown fivefold since the last price increase four years ago.

Advertising and the cloud

Despite the surge in shopping, Olsavsky gave credit for Amazon’s $1.6 billion profit last quarter to two younger businesses: advertising and Amazon Web Services.

Revenue from third-party sellers paying to promote their products on Amazon.com was an unusually large bright spot during the quarter, with sales in the category, which includes some other items, growing 139 percent to $2.03 billion. This included $560 million from an accounting change.

Amazon Web Services (AWS), which handles data and computing for large enterprises in the cloud, won new business and saw its profit margin expand. It posted a 49 percent rise in sales from a year earlier to $5.44 billion, beating estimates.

Amazon remains the biggest in the space by revenue, and its stock trades at a significant premium to cloud-computing rival Microsoft Corp.

Amazon’s shares have also outperformed the S&P 500, rising 30 percent this year as of Thursday’s market close, compared with the S&P’s less than 1 percent decline.

More workers, spending

Notorious for running on a low profit margin, Amazon has still reaped rewards for shareholders as it has bet on new services like voice-controlled computing and has expanded across continents and industries.

Global headcount was up 60 percent from a year earlier at 563,100 full-time and part-time employees, thanks to a hiring spree and an influx of workers from Whole Foods Market.

The company plans to increase its video content spending this year, Amazon’s Olsavsky said, with a prequel to “The Lord of the Rings” in the works. The third quarter will also see extra spending to prepare for the busy holiday season.

Amazon is working with JPMorgan Chase & Co and Berkshire Hathaway Inc to determine how to cut health costs for hundreds of thousands of their employees.

And it is expanding its retail footprint outside the United States, particularly in India. Amazon’s international operating loss grew 29 percent to $622 million in the first quarter.
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Much remains to be done before a new North American Free Trade Agreement is reached, Mexican Economy Minister Ildefonso Guajardo said Thursday, tempering hopes for a quick deal as ministers met in Washington for a third successive day.

Negotiators from the United States, Mexico and Canada have been working constantly for weeks to clinch a deal, but major differences remain on contentious topics such as autos content.

Complicating matters, the Trump administration has threatened to impose sanctions on Canadian and Mexican steel and aluminum on May 1 if not enough progress has been made on NAFTA.

President Donald Trump, who came into office in January 2017 decrying NAFTA and other international trade deals as unfair to the United States, has repeatedly threatened to walk away from the agreement with Canada and Mexico, which took effect in 1994.

“It is going, it’s going, but not easy — too many things, too many issues to tackle,” Guajardo told reporters after a meeting with U.S. Trade Representative Robert Lighthizer.

Now under way for eight months, the talks to revamp the accord underpinning $1.2 trillion in trade entered a more intensive phase after the last formal round of negotiations ended in March with ministers vowing to push for a deal.

Lighthizer is due to visit China next week, and when asked if a deal was possible before the USTR left, Guajardo said: “It will depend on our abilities and creativity. We are trying to do our best, but there are still a lot of things pending.”

Although Washington is keen for an agreement soon to avoid clashing with a July 1 Mexican presidential election, the three NAFTA members remain locked in talks to agree on new rules governing minimum content requirements for the auto industry.

Still, Canadian Foreign Minister Chrystia Freeland rejected the notion that discussion of the so-called rules of origin for the automotive sector was holding up the process.

“I would very much disagree with the characterization of the autos conversation as being log-jammed,” she said as she entered the USTR offices. “This is a week when very good, significant progress is being made on rules of origin for the car sector.”

Freeland said she would skip a planned visit to a NATO summit in Brussels on Friday, and vowed to stay in Washington for “as long as it takes.” Guajardo, too, said he was ready to remain in Washington this week for more talks.

Disagreements

The three sides are also trying to settle disagreements over U.S. demands to change how trade disputes are handled, to restrict access to agricultural markets and to include a clause that would allow a country to quit NAFTA after five years.

Bosco de la Vega, head of Mexico’s National Agricultural Council, the main farm lobby, said he believed the three would be able to reach an agreement on agricultural access.

But the auto sector rules were still contentious, he added.

“It’s the most important issue there,” he said, adding that he had earmarked May 10 as the deadline for a quick deal.

Separately, Canada on Thursday unveiled details of how it plans to prevent the smuggling of cheap steel and aluminum into the North American market in a bid to avoid the U.S. tariffs.

Prime Minister Justin Trudeau, who announced the plan last month, said Ottawa would hire 40 new trade officers to probe complaints, including those related to steel and aluminum.
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