U.S. home builders created more than a million units of housing in 2016. Often, older homes are demolished to make way for the new buildings, and things like doors, floors, windows and more are thrown away. Arash Arabasadi reports from Washington on one nonprofit that reclaims old materials and gives back to the community.
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Hurricane Harvey may temporarily slow U.S. consumer spending, hurt national economic growth and boost unemployment for a while. Experts say it is very hard to accurately predict just how seriously Harvey will hurt Houston and the U.S. economy. But, as VOA’s Jim Randle reports, one expert on the Texas economy is bullish on Houston’s recovery.
…

Trade negotiators plan to take small steps forward in a second round of talks to rework the North American Free Trade Agreement (NAFTA) this weekend, trying to ignore daily threats from U.S. President Donald Trump

to tear it up if he does not get his way.

Trump has used Twitter, press conferences and speeches to attack NAFTA in recent days, a ploy Mexican and Canadian officials regard as a negotiating strategy to wring concessions, but which has heightened uncertainty over the accord.

“Hopefully we can renegotiate it, but if we can’t, we’ll terminate it and we’ll start all over again with a real deal,” Trump told cheering workers at a factory in Missouri on Wednesday, as Mexico’s foreign and trade ministers met their U.S. counterparts in Washington to keep relations on track.

Away from the diplomatic noise, trade experts from the three NAFTA nations hope to advance the revamp during the five days of talks in Mexico that start on Friday by working through areas of greater consensus before turning to trickier issues.

“We want to see positive signs of progress at the

negotiating tables,” said Moises Kalach, head of the

international negotiating arm of Mexico’s CCE business lobby, which is leading the private sector in the talks. “Hopefully we’ll get it, even if it doesn’t have to be stated publicly. Hopefully we’ll start getting closure on some issues.”

Overall, the Mexican round, which follows talks two weeks ago in Washington, is expected to define more clearly the priorities of each nation rather than yield major breakthroughs.

The emergence of detailed positions on the tougher points looks less likely in this round, officials said.

Kalach and one Mexican negotiator, who spoke on condition of anonymity, saw broad agreement between the NAFTA members on how to improve conditions for small businesses, as well as in salvaging elements of the Trans-Pacific Partnership (TPP) trade accord that Trump ditched after taking office.

Some agreement but hurdles remain

Some consensus was forged between the three countries when the TPP was finalized in 2015 on issues including the environment, anti-corruption, labor rules and digital trade.

More divisive issues that could enter the talks range from exploring the scope to raise NAFTA content requirements for autos to the contested U.S. demand to scrap the so-called Chapter 19 dispute settlement mechanism for resolving complaints about illegal subsidies and dumping, officials say.

A key plank of the U.S. strategy is how to reduce its trade deficit with Mexico, which has sent negotiators scrambling for creative ways to rebalance trade, Kalach said.

One hope is that Mexico’s incipient oil and gas sector opening will result in more imports and infrastructure investment from U.S. companies, some of which have already entered the market, such as Exxon Mobil Corp and Chevron Corp.

Folding that reform into NAFTA in a way that would make any attempt to unwind it politically costly for a future Mexican government would give U.S. and Canadian investors more security, Kalach and the Mexican negotiator said.

The risk the reform will stall has preoccupied officials in the region because the current front-runner for Mexico’s July 2018 presidential election, Andres Manuel Lopez Obrador, opposed the opening of the energy industry.

“The best thing [the United States and Canada] can do is protect NAFTA because this essentially protects their investments,” said Kalach.

Throwing words around

Trump has accused Mexico and Canada of being “very difficult”, and officials from both countries say his words come as little surprise given his confrontational negotiating style.

Still, Mexico’s government has touted a back-up plan, seeing a “high risk” that NAFTA could unravel.

Canada’s Prime Minister Justin Trudeau on Tuesday shrugged off the threats and Canadian officials close to the process said they remained fully focused on the talks.

“There are always going to be words thrown about here and there but … we will continue to work seriously and respectfully to improve NAFTA to benefit not just Canadians but our American and Mexican friends as well,” Trudeau said.

A spokeswoman for U.S. Trade Representative (USTR) Robert Lighthizer declined to comment directly on how Trump’s comments would affect the talks. However, trade experts say they are unlikely to foster a spirit of cooperation.

“I think his tweets and statements are just complicating what’s already a difficult negotiation,” said Wendy Cutler, a former deputy USTR and lead U.S. negotiator for the TPP. “I think it will embolden the naysayers in Canada and Mexico who don’t want to move in certain areas by telling the negotiators, ‘don’t move on these issues because the president has already said he probably won’t sign off on this deal’.”
…

The French government said on Thursday it would cap unfair dismissal payouts and give companies more flexibility to adapt pay and working hours to market conditions in a labor reform France’s biggest union said was disappointing.

The reform, President Emmanuel Macron’s first major policy step since his election in May, is also the first big test of his plans to reform the euro zone’s second-biggest economy.

For decades governments of the left and right have tried to reform France’s strict labor rules, but have always diluted them in the face of street protests.

The government said in a document presenting the reform that it will make it possible to adapt work time, remuneration and workplace mobility to market conditions based on agreements reached by simplified majority between employers and workers.

Workers compensation for dismissal judged in a labor court to be unfair would be set at three months of wages for two-years in the company with the amount rising progressively depending on how long a worker was with the firm, unions said.

However, normal severance pay would be increased from 20 percent of wages for each year in a company to 25 percent, Liberation reported.

The government consulted with unions for weeks as it drafted the reform, and only the hardline CGT union, the country’s second biggest, said from the start that it would hold a protest, set for Sept. 12.

France’s biggest union, the reformist CFDT, said that it would not call a strike against the reform but described the reform as a missed opportunity to improve labor relations.

“CFDT disappointed,” the union’s leader Laurent Berger told reporters after a meeting with the government, but he added: “Taking to the streets is not the only mode of action for unions.”
…

In the coming weeks, as Houston turns its attention to rebuilding areas devastated by Tropical Storm Harvey, people like Jay De Leon are likely to play an outsized role — if they stay around.

De Leon, 47, owns a small construction business in Houston, and he and his 10 employees do exactly the kind of demolition and refurbishing the city will need. But like a large number of construction workers in Texas, De Leon and most of his workers live in the United States illegally, and that could make things complicated.

The Pew Research Center estimated last year that 28 percent of Texas’s construction workforce is undocumented, while other studies have put the number as high as 50 percent. Construction employed 23 percent of working undocumented adults in Texas at the end of 2014, higher than any other sector, according to the Migration Policy Institute.

Undocumented immigrants nervous

However, undocumented immigrants are growing increasingly nervous in Texas because of an immigration crackdown by the Trump administration that has cast a wide net.

In addition, a new Texas law that would have taken effect later this week bars cities from embracing so-called sanctuary policies, where they offer safe harbor to illegal immigrants, and allows local police to inquire about a person’s immigration status. A federal judge Wednesday temporarily blocked most of the law from taking effect.

De Leon, who has lived in the country for 20 years and has two citizen children, says the changes have spooked the city’s migrant workforce. In recent weeks, he said, one of his employees left the state and another returned to Mexico. Both feared that if they stayed they risked arrest.

Departing workers, he says, pose a problem for Houston in the wake of Harvey, which has caused flood damage to commercial buildings, houses, roads and bridges expected to run into tens of billions of dollars.

“The situation that Houston is going through now with the hurricane is going to be the trial by fire for the Republicans and the governor that approved these radical laws,” De Leon said. “They will need our migrant labor to rebuild the city. I believe that without us it will be impossible.”

Undocumented workers perform a wide range of construction jobs, from framing and dry-walling to plumbing and wiring.

Shortage of U.S. trained workers

Stan Marek, chief executive of Marek Construction in Texas, said his company doesn’t hire undocumented immigrants and has long had difficulty finding enough trained U.S. workers.

“It’s a crisis,” Marek said. “We are looking at several thousand homes that have flood damage. There is no way the existing (legal) workforce can make a dent in it.”

Marek would like to see the federal government grant emergency work authorization for undocumented workers in the rebuilding effort, he said. Otherwise, those immigrants are likely to be hired by firms that do not pay payroll taxes or provide benefits like workers’ compensation and legally mandated overtime.

It isn’t yet possible to estimate how many construction jobs will be added in Texas as it rebuilds, but in the 12 months after Hurricane Katrina hit in 2005, Louisiana added 14,800 jobs in the sector, U.S. government data shows.

About 25 percent of the construction workers involved in the cleanup of New Orleans were undocumented, according to a study by researchers at Tulane and UC Berkeley universities. Those without papers were “especially at risk of exploitation,” the study found.

Worker exodus

The labor shortages are likely to grow worse, many builders warn. Earlier this year, a group of Hispanic contractors sent a letter to Texas Governor Greg Abbott warning that the pending ban on sanctuary city policies would make it “difficult to find and retain experienced workers.”

Javier Arrias, chairman of the Hispanic Contractors Association de Tejas and one of the letter’s signers, told Reuters that “many construction workers are already moving to other states.”

Abbott’s office did not respond to a request for comment about the role undocumented workers might play in the recovery.

Elizabeth Theiss, president of Houston-based anti-immigration group Stop the Magnet, sees another option besides looking to workers in the country illegally. She says the rebuilding effort should be used to help train U.S. veterans and other citizens who need jobs.

Theiss acknowledged that reconstruction might proceed more slowly, at least initially, if immigrants without work documents are not part of the effort, but she noted that rebuilding would be slow under any scenario.

Personal hardships

Whatever role undocumented people play in rebuilding Houston, they could face hardships rebuilding their own lives.

While the Federal Emergency Management Agency provides emergency food, water and medicine to anyone, regardless of immigration status, cash assistance and other longer term aid is only available to citizens and immigrants in households where at least one family member has legal status.

Immigrant advocates are launching private fundraising drives to help fill the void.

“It is deeply tragic and un-American that so many of those working men and women who will be rebuilding Houston and the rest of the state will be doing so while facing tragedy in their own lives,” said Jose Garza, executive director of the Workers Defense Project.

De Leon said his family was lucky and did not suffer flood damage. He is now busy rounding up supplies for immigrant families stuck at shelters who are afraid to seek out more help from authorities.

In the end, he says, President Donald Trump has to know “it’s going to be impossible to rebuild Houston without the labor force of immigrants. It is illogical, what he says with his words and what really has to happen.”
…

Two weeks before Harvey’s floodwaters engulfed much of Houston, President Donald Trump quietly rolled back an order by his predecessor that would have made it easier for storm-ravaged communities to use federal emergency aid to rebuild bridges, roads and other structures so they can better withstand future disasters.

Now, with much of the nation’s fourth-largest city under water, Trump’s move has new resonance. Critics note the president’s order could force Houston and other cities to rebuild hospitals and highways in the same way and in the same flood-prone areas.

“Rebuilding while ignoring future flood events is like treating someone for lung cancer and then giving him a carton of cigarettes on the way out the door,” said Michael Gerrard, a professor of environmental and climate change law at Columbia University. “If you’re going to rebuild after a bad event, you don’t want to expose yourself to the same thing all over again.”

Trump’s action is one of several ways the president, who has called climate change a hoax, has tried to wipe away former President Barack Obama’s efforts to make the United States more resilient to threats posed by the changing climate.

Consideration of climate predictions

The order Trump revoked would have permitted the rebuilding to take into account climate scientists’ predictions of stronger storms and more frequent flooding.

Bridges and highways, for example, could be rebuilt higher, or with better drainage. The foundation of a new fire station or hospital might be elevated an extra 3 feet (1 meter).

While scientists caution against blaming specific weather events like Harvey on climate change, warmer air and warmer water linked to global warming have long been projected to make such storms wetter and more intense. Houston, for example, has experienced three floods in three years that statistically were once considered 1-in-500-year events.

The government was still in the process of implementing Obama’s 2015 order when it was rescinded. That means the old standard — rebuilding storm-ravaged facilities in the same way they had been built before — is still in place.

Trump revoked Obama’s order as part of an executive order of his own that he touted at an August 15 news conference at Trump Tower. That news conference was supposed to focus on infrastructure, but it was dominated by Trump’s comments on the previous weekend’s violence in Charlottesville, Virginia.

Trump didn’t specifically mention the revocation, but he said he was making the federal permitting process for the construction of transportation and other infrastructure projects faster and more cost-efficient without harming the environment.

“It’s going to be quick, it’s going to be a very streamlined process,” Trump said.

Asked about the revocation, the White House said in a statement that Obama’s order didn’t consider potential impacts on the economy and was “applied broadly to the whole country, leaving little room or flexibility for designers to exercise professional judgment or incorporate the particular context” of a project’s location.

Construction curbs

Obama’s now-defunct order also revamped Federal Flood Risk Management Standards, calling for tighter restrictions on new construction in flood-prone areas. Republicans, including Senator John Cornyn of Texas, opposed the measure, saying it would impede land development and economic growth.

Revoking that order was only the latest step by Trump to undo Obama’s actions on climate change.

In March, Trump rescinded a 2013 order that directed federal agencies to encourage states and local communities to build new infrastructure and facilities “smarter and stronger” in anticipation of more frequent extreme weather.

Trump revoked a 2015 Obama memo directing agencies developing national security policies to consider the potential impact of climate change.

The president also disbanded two advisory groups created by Obama: the interagency Council on Climate Preparedness and Resilience and the State, Local and Tribal Leaders Task Force on Climate Preparedness and Resilience.

Obama’s 2015 order was prompted in part by concerns raised by Colorado Governor John Hickenlooper after severe flooding in his state two years earlier. Hickenlooper was dismayed to learn that federal disaster aid rules were preventing state officials from rebuilding “better and smarter than what we had built before.”

The “requirements essentially said you had to build it back exactly the way it was, that you couldn’t take into consideration improvements in resiliency,” Hickenlooper, a Democrat, said Tuesday. “We want to be more prepared for the next event, not less prepared.”

Bud Wright, the Federal Highway Administration’s executive director during George W. Bush’s administration, said this has long been a concern of federal officials.

He recalled a South Dakota road that was “almost perpetually flooded” but was repeatedly rebuilt to the same standard using federal aid because the state didn’t have the extra money to pay for enhancements.

“It seemed a little ridiculous that we kept doing that,” said Wright, now the American Association of State Highway and Transportation Officials’ executive director.

Big federal ‘checkbook’

But Kirk Steudle, director of Michigan’s Department of Transportation, said states can build more resilient infrastructure than what they had before a disaster by using state or nonemergency federal funds to make up the cost difference.

“That makes sense, otherwise FEMA would be the big checkbook,” he said, referring to the Federal Emergency Management Agency. “Everybody would be hoping for some disaster so FEMA could come in and build them a brand-new road to the 2020 standard instead of the 1970 standard.”

Even though Obama’s order has been revoked, federal officials have some wiggle room that might allow them to rebuild to higher standards, said Jessica Grannis, who manages the adaptation program at the Georgetown Climate Center.

If local building codes in place before the storm call for new construction to be more resilient to flooding, then federal money can still be used to pay the additional costs.

For example, in Houston regulations require structures to be rebuilt 1 foot (30 centimeters) above the level designated for a 1-in-100-year storm. And in the wake of prior disasters, FEMA has moved to remap floodplains, setting the line for the 1-in-100-year flood higher than it was before.
…

The International Monetary Fund said Wednesday that transportation and food costs in Qatar had “edged up” because of a diplomatic rift that led four Arab countries to cut ties with the small Gulf state.

An IMF team visited the capital, Doha, this week, saying in a statement that Qatar’s government was able to soften the immediate impact of trade disruptions, but that some costs had gone up as a result of delays caused by rerouting trade. Non-oil growth is projected to shrink to 4.6 percent this year, down 1 percentage point.

In June, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport links with Qatar. Saudi Arabia also sealed Qatar’s only land border, a major conduit for imports.

Qatar turned to other exporters like Turkey, Iran and Morocco to fill gaps in its food imports and the construction material needed to build infrastructure for soccer’s World Cup in 2022, set to take place there. Qatar also rerouted its shipments through ports in Oman after the UAE blocked Qatar-bound shipments from using its national waters.

The IMF said Qatar’s banking sector remained sound and that the impact of the severed ties was mitigated by liquidity injections by the Qatar Central Bank and increased public sector deposits. The international lender said Qatar was prepared for any withdrawal of nonresident deposits.

The four countries accused Qatar of sponsoring terrorism and backing extremist groups. Qatar denied the accusations and said the moves were aimed at pressuring the country to fall in lockstep with policies formulated in Riyadh and Abu Dhabi.

The IMF warned the rift could have a wider impact across the Gulf Cooperation Council, which consists of Qatar, Saudi Arabia, the UAE, Bahrain, Kuwait and Oman.

“Over the longer term, the diplomatic rift could weaken confidence and reduce investment and growth, both in Qatar and possibly in other GCC countries as well,” the statement said.
…

With the animals sent to safety before Harvey hit, the owners of CityVet in Houston kept watch on their empty practice by security camera, hoping not to see floodwaters rush in.

But they lost the video stream Monday morning, apparently when power to the building near Houston’s Galleria failed. So, it was impossible to assess if any damage was occurring, said Paul Kline, a veterinarian based in and watching from Dallas. To his relief, the video came back Tuesday and “we could see cars going by on the street outside — a good sign,” Kline said. By Wednesday, with the rains gone, he could see the practice had escaped the flooding in the area.

Plenty of small-business owners spent a long five days, waiting to see if the rainfall that totaled more than 50 inches in some places would flood their businesses. Harvey’s winds and rains damaged or destroyed many small businesses in the storm’s path along the Gulf Coast.

It was a tornado spawned by Harvey that destroyed the office of Kenneth Bryant’s used-car dealership in Katy, Texas, just west of Houston. The winds Saturday morning picked up the office and slammed it into the building next door.

“I lost everything in there: titles to vehicles, keys, paperwork, computers,” said Bryant, whose business was not insured. Two of the 10 cars in his inventory were destroyed.

There was more bad news Wednesday: The remaining cars had been flooded. Bryant won’t know how severely they were damaged until he is able to unlock them.

“Where do we go from here? I don’t know. It’s going to be such a long road ahead,” Bryant said.

Lost sales, revenue, profits

For many companies, damage to their premises was just the start. Some lost inventory that would cost them future sales. Workers were stranded or dealing with the devastation of their homes. Companies that couldn’t operate were losing revenue and profits every day.

Fiyyaz Pirani estimates that his Houston-based company, Medology, lost $100,000 in new business. It’s been operating with six staffers instead of its usual 60 since the storm began, and accommodating only existing customers.

“We had a couple of employees who sustained a lot of damage to their homes, and some people are in shelters,” he said.

The company, which helps patients get low-cost lab tests and other services, moved back to its regular location Tuesday from temporary quarters, with generator power but no air conditioning. Staffers were working around some puddles of water at their top-floor office.

Eleanor Rem had several inches of water in her Houston home, which also houses her business. Rem, who helps children with dyslexia learn to read, opted not to try what might have been a difficult evacuation with an 88-year-old relative.

The rains that flooded her street, backyard and driveway on Monday began creeping into her home. She and her husband got their first-floor furniture upstairs, but the carpet was soaked. Rem said she was constantly checking to see how bad the damage was.

“We’re pretty exhausted. You’re kind of nervous to go to sleep,” she said Wednesday. She expects she won’t be able to work for several weeks, in part because her students may not be able to get to her home.

‘Cross your fingers and hope for the best’

Other business owners who tried to keep an eye on their companies by watching the video from surveillance cameras ran into the same problems as the veterinary practice.

With all three of Clint Hall’s Beef Jerky Outlet stores near Houston in danger of flooding, he watched from his home in Cypress. The Galveston Island store got a foot of water as the rains continued Monday and Tuesday, but he could see the Tomball location was safe. The League City shop lost power and its cameras Saturday, so Hall had to rely on the owner of a nearby pizzeria for periodic updates. When the rains finally stopped, it had suffered one minor leak.

It was a hard five days. As Hall watched his cameras, he said, “we’re doing as well as we can.” He planned to open at least two of the stores Wednesday.

Lindsey Rose King spent five days not knowing whether the inventory for Mostess, her home decor gift box company, was safe. The warehouse where it’s all stored — cloth napkins and tablecloths, bottles of spices and cocktail mixes and other items — is in the Galleria section. The warehouse owners had to evacuate their home and couldn’t monitor the situation.

“It’s nerve-wracking. If that inventory gets wet, that’s my whole business,” King said. But Wednesday morning, the email came: Although the building did get some water, King’s merchandise was safe and dry.

Merin Guthrie worried about the possibility that water had seeped into the old loft building near downtown Houston that houses Kit, her clothing design business. Her studio is on the second floor, but friends in similar buildings said they had water coming in through their windows. Even if her fabric, samples and sewing equipment were dry, there was a threat of mold.

She got into the building Wednesday morning, found that water had indeed gotten in, but that her supplies and equipment were OK.

“You have to cross your fingers and hope for the best,” Guthrie said.
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The Peruvian attorney general’s office has opened a criminal probe into opposition leader Keiko Fujimori for allegedly laundering money for scandal-plagued Brazilian builder Odebrecht, Fujimori’s attorney said on Tuesday.

The twice-defeated right-wing presidential candidate and eldest daughter of Peru’s imprisoned former leader Alberto Fujimori denied that she or her political party ever took money from Odebrecht.

“I’m certain the investigation will confirm that Odebrecht did not give us any money,” Fujimori said on Twitter. “I’ve always collaborated with all investigations and this will not be an exception.”

Fujimori’s lawyer, Edward Garcia, told Reuters the preliminary probe was opened in connection with notes that mention Fujimori by name that were taken by Odebrecht’s jailed former chief executive, Marcelo Odebrecht.

The attorney general’s office, which declined to comment, said on Monday it had received the contents of notes made on the cellphone of Odebrecht, but did not detail them.

Fujimori is already the subject of a money-laundering investigation related to 2016 campaign donations, but a probe in connection with Odebrecht might do more to hurt support for her and her Popular Force party, which controls a majority of seats in Congress.

Odebrecht is at the center of Latin America’s biggest corruption scandal and is reviled by many in Peru since admitting late last year to having bribed local officials over a decade-long period.

News website IDL Reporteros has published what it says are  notes taken by Odebrecht and confiscated by Brazilian authorities that include the phrase: “Raise Keiko to 500 and pay her a visit.”

Prosecutor German Juarez will lead the investigation into Fujimori, Garcia said.

Juarez recently persuaded local courts to jail former President Ollanta Humala for up to 18 months before trial while he is investigated for accusations of taking undeclared campaign donations from Odebrecht.

Humala narrowly defeated Fujimori during her first presidential bid in 2011. He is now sharing a prison with her father, who is serving a 25-year sentence for human rights violations and graft.
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South Texas ranchers are scrambling to relocate cattle from massive flooding spawned by Tropical Storm Harvey, with many hauling livestock up to the north of the state while others rush to move the animals to higher ground nearby.

About 1.2 million cattle are located in a 54-county disaster area drenched by Harvey, which made landfall as a hurricane last weekend. With more torrential rain in the forecast, ranchers are expressing worry that some animals could perish despite efforts to save them.

State is top producer of cattle, cotton   

Texas leads U.S. states in cattle and cotton production. An estimated $150 million worth of cotton has been lost as the storms ripped the bolls off plants and left white fiber strewn across fields.

Texas Gulf Coast export terminals that handle about a quarter of U.S. wheat exports also remained shuttered.

Of immediate concern to ranchers were cattle stranded by high water infested with venomous snakes, fire ants and alligators, said Hollis “Peanut” Gilfillian, a cattle rancher in Winnie, Texas, about 60 miles (96 km) east of hard-hit Houston.

“We’re in gator country … period,” said Gilfillian, adding that nearly every pond on the ranches in his area contain alligators.

“It’s not unusual to see an alligator in my backyard or road ditch,” he said, but added, “There’s plenty other animals that they (alligators) would much rather eat, such as fish, as opposed to trying to go after cattle.”

Ranchers had tried to prepare for the storm last week by moving cattle to the nearest hills or trucking them to safety in the north of the state, cattle industry groups said.

Chuck Kiker, who raises cattle on his farm near Beaumont, about 60 miles (96 km) northeast of Houston, opted to leave his animals in place but was caught off guard by the storm’s severity.

“You can’t move animals at this point, so you’re kind of stuck because of high water everywhere. There’s really no place to move them,” he said.

Disaster area declared

Texas Governor Greg Abbott has declared 54 counties a disaster area. About 27 percent of the state’s 4.46 million-head beef cow herd is in those 54 counties, according to Texas A&M University livestock economist David Anderson.

“Given that it’s August, I’m not sure that we would’ve seen a lot of the calves already sold. So you’ve a lot of young calves out there too that are in that disaster area,” Anderson said.

Grain terminals closed

Longer-term concerns for the cattle include foot rot from standing in water or muddy fields for long periods and the risk of disease from mosquitoes.

Heavy rains and flooding closed bulk grain terminals along the Texas Gulf Coast owned by major exporters including Archer Daniels Midland and Cargill, although the companies say the facilities were not severely damaged.

BNSF Railway and Union Pacific suspended service to the flood-ravaged region, depriving exporters of a fresh supply of grain. The U.S. Coast Guard closed Texas Gulf ports including Houston, Galveston and Corpus Christi.

“With additional flooding likely during the next few days, normal train flows in the area may not resume for an extended period,” BNSF said in a customer service advisory.

Cotton blown away

On cotton farms, more than 300,000 bales have likely been lost, between cotton yet to be harvested and bales sitting on fields awaiting ginning, according to John Robinson, an agricultural economist at Texas A&M University.

The loss, though a small part of the total U.S. cotton crop of about 20 million bales a year, was devastating for individual farmers.

“The cotton that was where the hurricane hit was affected by the winds, it was blown right off the plant. Some of those fields are obliterated,” Robinson said.

“Some of the cotton will still be on the plant but strung out like someone papered your field with toilet paper,” he said.

Record crop lost

South Texas and Coastal Bend cotton farmers were expecting a record crop this year. Thirteen of the counties in the disaster area are major cotton producers.

“The South Texas Cotton and Grain Association has preliminary crop losses projected at $150 million. That’s just devastating to all of farmers down there,” Texas Agriculture Commissioner Sid Miller said in a statement.

Monday’s Intercontinental Commodity Exchange benchmark cotton price spiked 2.5 percent as a portion of the unharvested crop in Texas was destroyed or damaged by rain and high winds, traders said.

“The cooperative’s growers still have a lot of cotton in the field, maybe like 50 percent still out there. A lot of that will be lost because of the wind and rain,” said Jimmy Roppolo, general manager of United Agricultural Cooperative Inc in El Campo, Texas.

“It was the best cotton crop we ever raised. We really needed it this year to make up for other years,” Roppolo said.

 
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Food and beverage companies face the risk of forced labor in countries where they obtain sugarcane but most fall short in efforts to tackle the problem that threatens millions of workers, according to a study released on Tuesday.

Most of 10 companies studied offered only limited details of how they assess and monitor risks of forced labor in specific countries, and most of grievance procedures for workers are weak, said KnowTheChain (KTC), a partnership founded by U.S.-based Humanity United.

Sugarcane, a major agricultural commodity, can be found in a list of household foods and beverages from cereals to sauces and is often harvested by rural migrant workers with machetes who work long hours for low wages in hazardous conditions.

KTC said there is often little law enforcement and those workers are vulnerable to becoming victims of forced labor, especially by recruiters who deceive them about work and wages in other regions or countries.

“It is possible that the sugar in the cereal you ate for breakfast or the soda you drank at lunch was produced with forced labor,” said Kilian Moote, KnowTheChain project director, in a statement.

“Agricultural workers, particularly migrants, are at most risk of abuse.”

Sugarcane produced by forced labor has been found in Bolivia, Brazil, the Dominican Republic, Myanmar and Pakistan, according to a list published in 2016 by the U.S. government.

Risk Assessment?

Verite, a KTC partner, also found reports of debt bondage of sugarcane workers in India and found sugarcane workers in Guatemala at a high risk of trafficking.

Globally, about 21 million people are victims of forced labor, made to work for free after falling into debt or forced to work due to deception, coercion or threat of violence, according to the International Labor Organization (ILO).

In Brazil, the world’s largest producer of sugarcane, roughly a half million people work cutting the crop, according to industry statistics.

The companies studied were Coca-Cola, Fomento Economico Mexicano S.A.B (FEMSA), Monster Beverage, PepsiCo, The Hershey Co., Mondelēz International, Nestlé, Archer Daniels Midland, Associated British Foods (ABF) and Wilmar International.

PepsiCo, Coca-Cola, Nestlé and ABF were the only four companies to undertake forced labor risk assessments of sugarcane supply chains in specific countries, the study said.

Coca-Cola has committed to conduct 28 country-level studies on child labor, forced labor, and land rights for its sugar supply chains by 2020, it said.

Most companies were lacking in revealing details of their risk assessment, monitoring and grievance procedures, it said.

“Few companies disclose information explaining how they address forced labor risks in specific countries, and, where they do, the information is typically focused on understanding and assessing risks, with limited information on concrete follow-up steps,” the researchers said.

Asked for a response, a Coca-Cola spokesman said the company provided detailed information to KTC.

“We believe the report speaks for itself,” a spokesman said, citing Coca-Cola’s policies on human and workplace rights posted on its website.

Contacted by email, none of other nine companies responded immediately to requests for comment.

The study compared policies and practices and used a questionnaire, to which eight of the 10 companies responded. ADM supplied only limited answers and Monster Beverage, a U.S. maker of energy drinks, did not respond, it said.

Coco-Cola, PepsiCo, and Nestlé listed the countries they sourced from most, while Hershey, Mondelēz and Monster Beverage disclosed just one of their sugarcane-sourcing countries, it said.

ADM and Monster Beverage disclosed nothing about if or how they monitor working conditions in their sugarcane supply chains, it said.
…

Japan leads the world in the number of robots per person that are used in the workplace. Instead of being wary, people apparently like them. VOA’s Deborah Block takes us to a hotel and a beer factory where droids are doing just about everything.
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There are two ways to deal with climate change: stop or slow it through controlling emissions, or adapt to it. Chances are we’re going to have to do both. In the dry areas of Texas and California, researchers are getting started on the adapting part. VOA’s Kevin Enochs reports.
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Peru expects a “very ambitious” free trade deal with Australia that covers goods, services and investments to be implemented as early as next year, Peru’s deputy trade minister said on Monday.

The two countries resumed free trade talks in Australia on Monday following a first round of negotiations in July in which “a lot of progress was made,” said Deputy Trade Minister Edgar Vasquez.

“This is going to be an agreement that we should be able to implement as soon as possible, starting in 2018,” Vasquez said by telephone in Lima. “That’s what we’d like to happen and what we think is viable.”

Peru and Australia are important global producers of minerals and their bilateral trade is relatively small.

Forging a free trade deal so quickly would mark one of the first steps toward reducing trade barriers in the Pacific region after U.S. President Donald Trump withdrew the United States from the 12-nation Trans-Pacific Partnership (TPP) trade agreement, which Australia and Peru had signed onto.

The remaining signatories to the TPP are in Australia this week discussing ways to salvage the deal. The 11 countries, which include Japan, Canada and Mexico, have a combined gross domestic product of $12.4 trillion.

Vasquez said the experience of negotiating the TPP had put Peru and Australia on solid footing for quickly hashing out a bilateral agreement.

“We also both have very open economies, so we’re really going to see a broad inclusion of sectors that will benefit from it – goods as well as services and investments,” Vasquez said.

Peru’s trade ministry said last month that rules of origin, migration and e-commerce were also under discussion and that Peru was eager to increase agricultural exports to Australia while spurring trade of mining and other professional services.

Australian trade officials were not immediately available for comment.

Peru’s exports to Australia amounted to $260 million last year, according to Peru’s trade ministry.
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Kenya has become the latest African country to ban the use of polythene plastic bags, imposing stiff fines and even jail time for anyone found using, importing or manufacturing the bags.

In one of the biggest garbage dumping sites in Nairobi, it was business as usual Monday. Loads of plastic bags full of garbage were brought in, a testament to their widespread use in the capital.

But no more, says the government.

A new law went into effect Monday making the manufacture, sale and use of polythene plastic bags illegal. Offenders can get slapped with penalties up to a four-year jail term and a $40,000 fine.

The National Environment Management Authority, with the help security agencies, has been going around Nairobi to urge retailers and manufacturers to heed the new ban.

Geoffrey Wahungu is the director general of NEMA. He is promoting the “take-bag scheme,” basically calling on consumers to bring their own cloth bags or baskets from home.

“I hope soon we’ll start seeing people who are carrying out these recycling materials, or alternative bags, which are eco-friendly. All this is creating much more employment than is being lost,” he said.

Economic impact

Two plastic bag importers unsuccessfully challenged the ban before the High Court Friday. Kenya produces plastic bags for local use and export in the region. The National Association of Manufacturers has argued that the ban will cost more than 60,000 jobs and hurt more than 170 companies.

NEMA gave six months’ notice of the new ban, but it still appears to have taken many in Kenya by surprise.

Some large retailers have already switched to paper, but small traders are feeling the pinch.

Simon Njenga runs a grocery kiosk. He says he lost customers Monday.

He says “the ban pains me a lot because a customer wants to purchase vegetables, but he doesn’t have a bag and I can’t give him one, so they leave my kiosk without buying. The government has to bring back the plastic bags. My livelihood depends on it.”

Tanzania, Uganda, Malawi and Cameroon have announced similar bans on plastic bags, although the bans aren’t widely enforced. Rwanda is the only African country so far to both declare a ban and push people to follow the law.

Kenyan Environment Minister Judy Wakhungu told Reuters news agency that manufacturers and importers will be the ones initially targeted for enforcement of the ban.

Experts argue that polythene bags are bad for the environment and public health. The thin plastic bags have been blamed for polluting cities and shorelines and killing animals who eat them.

NEMA says the single-use polythene bags “never fully biodegrade, remaining in the environment as small or even microscopic particles, essentially forever.”

 
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Fall armyworm has spread to Cameroon.  The pest has attacked crops in at least 24 African countries.  In Cameroon, the Ministry of Agriculture says it is particularly concerned about the impact of the fall armyworm infestation in the north and the east of the country. 

Minister-delegate Ananga Messina says fall armyworm has infested six of the central African state’s 10 regions.

She says the armyworms have been a serious threat to food security in Cameroon because cereals like maize, sorghum, rice and legume plants like cow-pea, peanuts and beans are increasingly being attacked every day.  She says the situation is particularly worrisome on Cameroon’s northern border with Nigeria where the population and 100,000 Nigerian refugees are already suffering from food scarcity due to the Boko Haram conflict.

The Ministry of Agriculture says nearly two million people are currently in need of food assistance in northern Cameroon.

Messina told VOA about half of Cameroon’s 23 million inhabitants and millions of livestock risk hunger in the months ahead.  She said the armyworms have extended to Cameroon’s eastern border, putting neighboring Central African Republic at risk, a country gripped by a severe humanitarian crisis after years of conflict.  

Cameroon has launched a task force to manage the infestation.

Some farmers have been using chemicals to kill the pests, but agriculture technician Anicet Mvondo says that is not the best approach.

“The problem is that the insecticide is not good for the health of the farmer,” said Mvondo. “It is not good for the environment.  It kills other organisms in the environment.  Using insecticides is not a good way.  We should try to look for other solutions because these insects on the field are also eaten by other organisms.”

The U.N. Food and Agriculture Organization reports fall armyworm was first detected in four countries in West Africa in early 2016.  It has since spread to at least 20 other countries. 

Experts say the fall armyworms can reproduce rapidly and can fly long distances in moth form, though it remains unknown how the pest spread to West Africa from South America.

The FAO is leading the regional response efforts in Africa, and it says it is drawing from lessons learned in the America’s on sustainable fall armyworm management.  FAO Subregional Coordinator for Southern Africa, David Phiri says methods like regular monitoring and hand-picking of worm larvae can be effective.

“Fall armyworm has a lot of natural enemies and we should enhance their use to control the fall armyworm … So the message is that fall armyworm has come here to stay and also that use of chemical pesticides should be reduced to a minimum,” said Phiri.

Staple crops like maize, sorghum, rice and sugarcane have been hit hard in Africa, though the fall armyworm can ravage more than 80 other plant species.  Losses for Africa are estimated at at least $13 billion.
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Gasoline prices have been rising and oil costs have been changing as Hurricane Harvey’s winds and rising floodwaters slam into a part of Texas that has a significant portion of the nation’s oil industry, particularly oil refineries, shipping, and production.

By Monday, gasoline futures rose by as much as seven percent, hitting two-year highs as investors calculated that shutting down numerous refineries and other facilities could create shortages. At one point, crude oil future prices fell because refinery closures were expected to hurt demand for crude.

One report (on CNBC) says about one million barrels a day of refining capacity is off line.

About one fifth of the offshore crude oil production is also shut off as companies evacuated crews and closed production before the dangerous storm. Some shipping facilities have also been closed.

Harvey’s winds sometimes exceeded 200 kilometers per hour, and the storm brought an entire year’s worth of rain in just a few days, adding record floods to the wind damage. Severe rains are expected to continue for days, and it is not clear how long it will take for the water to recede and allow facilities to reopen and for staff to return.

It is also unclear how much damage has been done to critical energy infrastructure and how long it will take to return to full capacity.

More than six million people live in or near Houston, the biggest city in the storm’s path. Many fled before the storm, thousands have since been rescued, and tens of thousands are leaving flooded homes for emergency shelters.

The Federal Emergency Management Agency says 450,000 people are expected to seek government financial assistance because of the disaster.

The U.S. Federal Reserve, which supervises banks, says banks should try to work out accommodations with businesses and others that are having difficulty repaying loans because of the storm. The Fed says efforts to work with “borrowers under stress” can be consistent with “safe-and-sound” banking practices, and the public interest.

 
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U.S. President Donald Trump renewed his threat to scrap NAFTA and ripped on trading partners Canada and Mexico in a tweet early on Sunday, days before the three countries were scheduled to hold a second round of negotiations on rewriting the 23-year-old agreement.

“We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada. Both being very difficult, may have to terminate?” he wrote.

In a separate Sunday morning tweet, Trump repeated his pledge that Mexico will eventually pay for his proposed border wall, saying the barrier is needed due to Mexico’s high crime rate.

In response, Mexico’s foreign ministry issued a statement Sunday afternoon reiterating the country’s position that it will not “in any way or under any circumstance” pay for Trump’s signature border wall.

The ministry added that overcoming violent crime associated with cross-border drug trafficking is the responsibility of both nations, pointing to the high demand for drugs in the United States from Mexico and other countries.

Trump, a Republican, promised during his campaign to build the wall and overhaul or eliminate the North American Free Trade Agreement, which he cast as killing jobs and exacerbating the U.S. deficit, and to adopt a more protectionist stance for trade generally.

The first five-day round of talks between the three countries concluded last Sunday, with all sides committing to follow an accelerated process in revamping the agreement, which was originally signed by former President Bill Clinton, a Democrat whose wife, former Secretary of State Hillary Clinton, ran against Trump in the 2016 election.

The second round of NAFTA talks will kick off on Friday in Mexico City.

Mexico’s negotiating position will continue to be “serious and constructive” and the country’s negotiators will not hash out differences “via social media or the press,” the foreign ministry’s statement said.

Going into the next round of NAFTA talks, Trump has kept the heat turned up. Both Mexico and Canada have dismissed his musing in a Tuesday speech that “we’ll end up probably terminating NAFTA at some point” as a negotiating tactic.
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The head of the U.S. central bank says the financial system is safer now than it was before the recession, and urges Washington to make some adjustments in financial regulations, rather than trash them.

Federal Reserve Chair Janet Yellen says the recession of 2008 cost nine million American jobs and meant millions of people lost their homes. She says financial reform regulations were intended to make it less likely that big institutions would fail in the future and to provide an orderly way to resolve the debts of big financial companies that do fail without government bailouts.

She says financial firms, particularly very large ones that could hurt the entire economy if they fail, are now required to keep larger reserves. That way if one loan goes bad, the firm is less likely to have to hastily sell off other assets at bad prices to cover the losses. Low reserve levels prompted a downward spiral when many fragile firms ran into trouble all at once, all of them trying to sell assets and no one willing to buy them.

Yellen acknowledges that over-regulation could hamper the lending and risk-taking needed for economic growth, but she says some research shows the current level of regulation hurts lending, while other research shows it helps.

In a Friday speech to a gathering of top economic officials from around the world at a resort in Wyoming, she said Fed officials are looking at ways to simplify regulations for small banks that would not cause problems for the national economy if they failed.

Small banks complain the cost of complying with complex regulations makes it hard to make loans. Small banks are important because they are often the source of capital for small companies, and such small, growing firms are the source of most new jobs.

Yellen’s closely-watched speech at the annual gathering of economists at a resort in Jackson Hole, Wyoming, comes after criticism from Republicans and others that stricter regulation is hurting lending and economic growth.

President Donald Trump has called for repealing a key part of the regulations called “Dodd-Frank” named after the legislators who crafted the law.
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South Korea this week pushed back against the United States’ demand to renegotiate the free trade agreement (FTA) between the close allies. 

U.S. President Donald Trump has repeatedly criticized the five-year-old Korea-U.S. (KORUS) FTA as a horrible deal that created a $27 billion U.S. trade deficit with South Korea last year, and has said his administration would either renegotiate or terminate it.

Agree to disagree

At Washington’s urging, an initial special session was held on Tuesday by video conference between South Korean Trade Minister Kim Hyun-chong and his American counterpart, U.S. Trade Representative (USTR) Robert Lighthizer, to negotiate amendments to the trade pact.

Afterwards the South Korea trade minister said the two sides disagreed on the need to amend the trade deal.

“We have found that the two sides have different views on the effects of the U.S. and South Korea Free Trade Agreement, the reason behind the trade deficit, and necessity for an amendment to the U.S. and South Korea FTA,” said Trade Minister Kim Hyun-chong.

South Korean officials maintain the bilateral trade deficit is not the result of the FTA, but of the underperforming South Korean economy, where demand for imports have declined, contrasted with the more robust U.S. economy.

“For the last 10 years, South Korea’s market economy was not good, so the U.S. did not get opportunities to sell its products (to South Korea). If South Korea’s economy gets better and the U.S. economy gets worse, we may face the opposite situation,” said Chung Sye-kyun, the speaker of the South Korean National Assembly on Thursday at an event organized by the American Chamber of Commerce in Korea.

KORUS supporters in Seoul also argue the FTA benefits the U.S. economy and American workers. Last year, Korean companies like the electronics giant Samsung and the automaker Hyundai, employed 45,000 Americans and contributed $138 billion to the U.S. economy, according to the American Chamber of Commerce in Korea.

‘Korea unique standards’

The USTR released a statement Wednesday saying it will continue bilateral talks to amend or modify the agreement and specifically identified the “burdensome regulations which often exclude U.S. firms or artificially set prices for American intellectual property” as a major issue of contention.

The auto industry accounts for nearly 80 percent of the bilateral trade deficit, as American car sales in South Korea have been slow, while Korean automobile sales in the United States have soared. The American business community has long blamed the deficit in part on non-tariff related “Korea unique standards,” often linked to environmental regulations or certification procedures that they say are imposed to protect the domestic market. Foreign companies are then forced to spend an inordinate amount of time and money to deal with these regulations that are often introduced without notice or clear explanations.

South Korean authorities have downplayed charges of unfair trade practices, saying most complaints have been resolved through negotiations without the need for amending the FTA.

The South Korean Trade Minister said while this week’s meeting did not reach any agreement on how to proceed, neither side talked about terminating the FTA. 

The Korea Times newspaper in Seoul on Friday published an editorial advising the South Korean government that “a good offense is the best defense” in any upcoming trade negotiations. It recommended Seoul press Washington to loosen its intellectual property rights protections and rules regarding disputes between investors and the state, and to threaten to reduce agriculture and energy imports if the situation becomes overly contentious.

The potential rift over trade comes at a time when Washington and Seoul have been emphasizing their close military alliance and joint support for increasing sanctions on North Korea to pressure the Kim Jong Un government to return to international denuclearization talks.

This week some 17,500 American and 50,000 South Koreans troops are participating in joint strategic military exercises that deal with how to respond to possible North Korean attack scenarios.

Youmi Kim in Seoul contributed to this report
…

When Ha Tran of Ho Chi Minh City shops for food, clothes or electronics, she avoids merchandise she can tell comes from Vietnam’s giant neighbor, China. It might not work, she said, and China is no friend of Vietnam anyway.

“China exports many low-quality products to Vietnam, but we know they don’t export products to other countries around the world (that are) that bad, so we try to avoid the products that are made in China,” said Ha, 24, a design company worker in the Vietnamese financial hub city. Vietnamese prefer to buy stuff from Japan or the West. “We’ve tried (Chinese goods) many times in the past but it turns out like they get broken very easily.”

Political ties between Vietnam and China are another “factor” discouraging purchases, she said.

Ha is hardly a shopping renegade. Consumers around Vietnam typically shun “Made-in-China” purchases to protest what they see as poor-quality goods from a country that already has a record of disputes with their country. The two sides dispute, for example, a tract of territory in the South China Sea east of Vietnam. Competing claims sparked naval battles 1974 and 1988. The two also fought a land border war in the 1970s.

Vietnamese feel China has an unfair upper hand in the maritime dispute by using its larger military to control the contested Paracel Islands.

Consumers make up a growing force in Vietnam, as the Boston Consulting Group forecasts more than a third of the country’s nearly 93 million people to be middle class or higher by 2020. Fast growth in export manufacturing has added to Vietnam’s wealth since 2012 by creating jobs.

“If they find a product that might be the same price, and they find out that one product is Chinese and another product is from Japan, Korea or anywhere else, you know which one they’re going to go for,” said Oscar Mussons, senior associate with the Dezan Shira & Associates business consultancy in Ho Chi Minh City. “Vietnamese people see them not as big brothers, but as rivals.

“This is also because of recent problems, like Chinese are hitting national icons like the islands in the South China Sea,” Mussons said. “For Vietnamese, this is something that cannot be accepted in any way, even through you don’t hear much about or the government doesn’t try to make much publicity about it.”

Vietnamese officials have tried to sideline political disputes with China since anti-Chinese riots of 2014 killed more than 20 people and threatened to scare off investors. China’s go-ahead to construct an oil rig in the disputed sea touched off the rioting.

But Vietnam still counts China as its biggest trade partner. Combined imports and exports came to $25.5 billion in the first four months of the year, according to Vietnamese media reports. Export manufacturers in Vietnam rely as well on China for raw materials.

On top of the political issues, Vietnamese consumers widely suspect China sends lower-quality merchandise to its shelves. Giant Chinese firms, often bigger than Vietnamese counterparts, can send over excess merchandise for sale at low prices because of their production run sizes.

“Generally amongst Vietnamese, China-made products are perceived to be of low quality. Some of this is fact, but some of this is also driven by social media posts and ensuing perceptions,” said Jason Moy, principal with the Boston Consulting Group in Singapore. Lower-income, less educated consumers are particularly prone to those perceptions, he added. “Hence, Chinese products are generally selected when they are the last or only option.”

Trade in shoes, toys and daily necessities along the land border particularly leaves cheap but possibly suspect Chinese goods in Vietnam, where lower-income people buy them for their low prices, said Le Hong Hiep, research fellow with ISEAS Yusof Ishak Institute in Singapore. Goods trucked across the border in some cases have “pushed Vietnamese merchandise out of their traditional markets,” Le said.

An organized boycott against Chinese goods after the riots of 2014 gained little traction because poorer people couldn’t afford merchandise from other places, he said.

Although Chinese smartphones are gaining a solid reputation, Ha said she once bought a made-in-China phone for her mother because it was all they could afford. It broke after “several months,” she said, so the family bought another phone.

Only Chinese thong flip-flops are worth the money, she said, because at about $1 per pair you can afford to scrap and replace a pair after a few uses.

“People are conscious of the kind of low standards, low quality of Chinese products,” Le said. “I think one of the reasons is that many of these products are consumer items and small items, and they are imported by border trade, not through official channels which normally have stricter regulations and inspections to ensure the quality.”

Shoppers with more money prefer Japanese products as top quality, especially ever-popular motor scooters and consumer electronics, Moy said.Korean food and consumer electronics are also gaining favor with consumers, he said. 
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Argentina’s government is investigating all options and reserves the right to take legal action over the United States’ imposition of steep duties on imports of Argentine biodiesel, the Foreign Ministry said in a statement Thursday.

The statement said the imposition of duties above 50 percent, announced Tuesday, does not correspond to any type of methodology acceptable under the rules of the World Trade Organization (WTO).

In 2016, 90 percent of the 1.6 million metric tons of biodiesel Argentina exported went to the United States, Argentine government data show.

An Argentine industry group said Tuesday that the U.S. Commerce Department’s decision to slap countervailing duties of up to 64.17 percent on the imports would cause them to immediately stop exports to the United States.

“The Argentine government, along with the private sector, is cooperating with the investigation,” the statement said. “It has been established that Argentina does not award subsidies to biodiesel producers.”

The WTO last year ruled in favor of Argentina in a dispute over anti-dumping tariffs the European Union had applied to Argentine biodiesel, but the European Commission has not yet removed the tariffs.

The U.S. duties were announced a week after U.S. Vice President Mike Pence pledged to boost two-way trade in a visit to Buenos Aires.

“Argentina will seek to revert this preliminary decision defending the interest of our country, will evaluate all available options and reserves the right to bring forward pertinent legal action,” the statement said.
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Tesla next month plans to unveil an electric big-rig truck with a working range of 200 to 300 miles, Reuters has learned, a sign that the electric car maker is targeting regional hauling for its entry into the commercial freight market.

Chief Executive Elon Musk has promised to release a prototype of its Tesla Semi truck next month in a bid to expand the company’s market beyond luxury cars. The entrepreneur has tantalized the trucking industry with the prospect of a battery-powered heavy-duty vehicle that can compete with conventional diesels, which can travel up to 1,000 miles on a single tank of fuel.

Tesla’s electric prototype will be capable of traveling the low end of what transportation veterans consider to be “long-haul” trucking, according to Scott Perry, an executive at Miami-based fleet operator Ryder System. Perry said he met with Tesla officials earlier this year to discuss the technology at the automaker’s manufacturing facility in Fremont, California.

Perry said Tesla’s efforts are centered on an electric big-rig known as a “day cab” with no sleeper berth, capable of traveling about 200 to 300 miles with a typical payload before recharging.

“I’m not going to count them out for having a strategy for longer distances or ranges, but right out of the gate I think that’s where they’ll start,” said Perry, who is the chief technology officer and chief procurement officer for Ryder.

Tesla responded to Reuters questions with an email statement saying, “Tesla’s policy is to always decline to comment on speculation, whether true or untrue, as doing so would be silly. Silly!”

Tesla’s plan, which could change as the truck is developed, is consistent with what battery researchers say is possible with current technology. Tesla has not said publicly how far its electric truck could travel, what it would cost or how much cargo it could carry. But Musk has acknowledged that Tesla has met privately with potential buyers to discuss their needs.

Reuters reported earlier this month that Tesla is developing self-driving capability for the big rig.

‘Manufacturing hell’

Musk has expressed hopes for large-scale production of the Tesla Semi within a couple of years. That audacious effort could open a potentially lucrative new market for the Palo Alto, California-based automaker.

Or it could prove an expensive distraction. Musk in July warned that the company is bracing for “manufacturing hell” as it accelerates production of its new Model 3 sedan. Tesla aims to produce 5,000 of the cars per week by the end of this year, and 10,000 per week sometime next year.

Tesla shares are up about 65 percent this year. But skeptics abound. Some doubt Musk’s ability to take Tesla from a niche producer to a large-scale automaker. About 22 percent of shares available for trade have been sold “short” by investors who expect the stock to fall.

Musk, a quirky billionaire whose transportation ambitions include colonizing the planet Mars, has long delighted in defying conventional wisdom. At Tesla’s annual meeting in June, he repeated his promise of a battery-powered long-haul big rig.

“A lot of people don’t think you can do a heavy-duty, long-range truck that’s electric, but we are confident that this can be done,” he said.

Trucking’s sweet spot

While the prototype described by Ryder’s Perry would fall well short of the capabilities of conventional diesels, Musk may well have found a sweet spot if he can deliver. Roughly 30 percent of U.S. trucking jobs are regional trips of 100 to 200 miles, according to Sandeep Kar, chief strategy officer of Toronto-based Fleet Complete, which tracks and analyzes truck movement.

A truck with that range would be able to move freight regionally, such as from ports to nearby cities or from warehouses to retail establishments.

“As long as [Musk] can break 200 miles, he can claim his truck is ‘long haul’ and he will be technically right,” Kar said.

Interest in electric trucks is high among transportation firms looking to reduce their emissions and operating costs.

Electric motors require less maintenance than internal combustion engines. Juice from the grid is cheaper than diesel.

But current technology doesn’t pencil when it comes to powering U.S. trucks across the country. Experts say the batteries required would be so large and heavy there would be little room for cargo.

An average diesel cab costs around $120,000. The cost of the battery alone for a big rig capable of going 200 to 400 miles carrying a typical payload could be more than that, according to battery researchers Shashank Sripad and Venkat Viswanathan of Carnegie Mellon University.

Battery weight and ability would limit a semi to a range of about 300 miles with an average payload, according to a paper recently published by Viswanathan and Sripad. The paper thanked Tesla for “helpful comments and suggestions.” Tesla did not endorse the work or comment on the conclusions to Reuters.

A range of 200 to 300 miles would put Tesla at the edge of what the nascent electric truck industry believes is economically feasible, the researchers and industry insiders said.

Short-haul trucks

Transportation stalwarts such as manufacturer Daimler AG and shipping company United Parcel Service said they are focusing their electric efforts on short-haul trucks. That’s because smaller distances and lighter payloads require less battery power, and trucks can recharge at a central hub overnight.

Daimler, the largest truck manufacturer in the world by sales, will begin production this year on an electric delivery truck. The vehicle will have a 100-mile range and be capable of carrying a payload of 9,400 pounds, about 1,000 pounds less than its diesel counterpart, according to Daimler officials.

Daimler has been joined by a handful of startups such as Chanje, a Los Angeles-based manufacturer that has a partnership with Ryder to build 100-mile-range electric trucks for package delivery.

Ryder and its customers believe electric trucks could cost more to buy but may be cheaper to maintain and have more predictable fuel costs. As batteries become cheaper and environmental regulation increases, the case for electric trucks could strengthen.

“This tech is being seen as a major potential differentiator. Everyone wants to understand how real it is,” said Perry, the chief technology officer.
…

Former U.S. President Ronald Reagan will be inducted into the Labor Department’s Hall of Honor.

Labor Secretary Alexander Acosta made the announcement Thursday at the Ronald Reagan Presidential Library & Museum in Simi Valley, California.

Reagan is the only union leader to occupy the White House. The former actor was president of the Screen Actors Guild in the 1940s and ’50s. He led the guild through three strikes and negotiated residual payments and health and pension benefits for the union’s members, Acosta said.

Reagan also was a staunch supporter of the first free and independent trade union in the Soviet bloc during the Cold War: Solidarity, a movement established in 1980 that led to the downfall of communist rule in Poland a decade later.

At the White House, however, Reagan’s policies led to a fraught relationship with labor unions. Early in his presidency, he fired 11,000 striking air traffic controllers. The president said the 1981 strike was illegal, and he dismissed controllers who did not follow his command to return to work.

The Labor Department’s Hall of Honor was established in 1988 to honor Americans who improved working conditions, wages and quality of life for families.

Reagan was elected in 1980 and served two terms as president, leaving office in 1989. He died in 2004.
…

President Donald Trump’s comments at a Phoenix rally that he will probably end up terminating the North American Free Trade Agreement brought cheers from the crowd but groans from the state’s top business group.

Arizona Chamber of Commerce and Industry President Glenn Hamer posted a video calling any termination a “terrible mistake” within hours of Trump’s remarks Tuesday night. Hamer is in Mexico on a trade mission with a bipartisan delegation of about two dozen state lawmakers.

“It would be a mistake that the administration would feel each and every day,” Hamer said. “And why would that be? The administration has set a noble goal of 3 percent growth. You can’t get there if your start unraveling trade agreements.

“You need good tax policy, you need good regulatory policy and you need good trade policy,” he said.

Trump hints NAFTA is done

Trump said at the campaign-style rally that he believes Mexico and Canada are coming out ahead on the 23-year-old trade agreement. Renegotiations began in recent weeks.

“Personally, I don’t think we can make a deal, because we have been so badly taken advantage of,” Trump said. “I think we’ll end up probably terminating NAFTA at some point, OK? Probably.”

Modernizing agreement

Republican Sens. Jeff Flake and John McCain have called for modernizing an agreement they say has brought huge benefits for Arizonans.

Flake has put on a full court press in recent months, launched an effort in May to highlight what he calls the agreement’s “huge boon to Arizona and the U.S.” He’s put out videos featuring people and businesses that have benefited from the trade pact.

On Wednesday, he said he won’t stop that effort.

“I will continue to speak up for the countless Arizonans whose jobs and businesses rely on the billions of dollars that NAFTA injects into our state’s economy,” Flake said in a statement.

 
…

President Donald Trump said Tuesday that he was willing to shut down the government to get funding for a U.S.-Mexico border wall, complicating two must-pass measures Congress will take up in September: a spending package and raising the debt ceiling.

Here is what you need to know about both, and the potential for a shutdown of the U.S. government:

What is a shutdown?

Congress must pass annual spending bills around the end of the federal fiscal year on September 30 to fund much of the U.S. government. When disagreements prevent that, which is frequent, lawmakers often pass a temporary bill extending existing spending levels with no changes for days, weeks or months, while they work on a longer-lasting deal. When they cannot agree on either a new spending plan or a short-term extension, the government shuts down. That has happened many times since the 1970s, usually for a few days, and can rattle markets.

Congress will return from its long summer recess September 5. At that time, it will have only about 12 working days to approve spending measures to keep the government open.

What if Congress fails?

If spending measures are not passed before October 1, portions of the government will begin to shut down and nonessential employees will go without pay until an agreement is reached.

The government most recently shut down for about two weeks in October 2013 over funding for former President Barack Obama’s health care law. There were three shutdowns in the 1990s, the longest lasting 21 days. In the 1970s and 1980s, there were 14 shutdowns, some partial and most lasting only a few days.

What is the debt ceiling?

The debt ceiling is a legislative limit on how much money the federal government can borrow through debt issued by the U.S. Treasury. Once the limit is reached, Congress must raise it or the government cannot continue borrowing money and would default, or be unable to pay its bills.

The Treasury has said it wants Congress to increase the debt ceiling by September 29, although default most likely could be staved off until mid-October, thanks to “extraordinary measures” the Treasury put in place in March to delay a debt reckoning.

Legislation to raise the debt limit will need to be adopted, at the very latest, by early to mid-October.

What if the ceiling is not raised?

If the debt ceiling is not raised, the government would not be able to borrow more money or pay its bills, including payments on its debts, which could hurt the U.S. credit rating.

Political gridlock has never led to the United States reaching its debt ceiling and its bills going unpaid, but there have been close calls. An August 2011 standoff cost the country its top-notch bond rating from the credit rating agency Standard & Poor’s and caused the most jarring two weeks in financial markets since the 2007-09 global financial crisis.

How are the budget and debt ceiling related?

The two move on separate tracks, but are likely to get tangled together, with Republican opponents of a debt ceiling increase most likely demanding federal spending cuts. Some analysts say Congress may try to tackle both issues at the same time.

What are the politics?

Both the spending and debt ceiling bills can pass the Republican-led House of Representatives by a simple majority vote, but will need 60 votes to pass the Senate, where Republicans hold 52 of 100 seats, meaning they will need some Democratic support.

Trump made his U.S.-Mexico border wall a central promise of his 2016 presidential campaign. He also promised that Mexico would pay for the wall, but Mexico has steadfastly refused and Trump has largely stopped talking about that pledge.

Conservative House Republicans agree with the Republican president on the need for a wall and say funding for it should be a priority in any spending legislation. Some of them have already indicated they are willing to shut down the government to get it.

Moderate Republicans have called a shutdown unwise, and Republican leaders are determined to prevent one, fearing it would worsen doubts about the party’s ability to govern.

Democrats are uniformly opposed to Trump’s wall and say the responsibility for a shutdown would rest solely with Republicans.

The Trump administration reversed course earlier this month and said it would back a “clean” raising of the debt ceiling, meaning it would not be tied to other policy measures.

Democrats and moderate Republicans also support a clean debt-ceiling increase. But conservative Republicans, especially in the House, often use debt-ceiling legislation to insist on changes to spending, making them opposed to a clean bill.
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Just beyond the outskirts of Cairo on a desert road to the Suez Canal, a sprawling industrial zone is coming to life as Egypt’s leather industry leaves behind its ancient tanning quarters for modern workshops of Robiki Leather City.

The new complex is part of a major expansion drive of a sector Egypt considers as one of its most competitive. The trade ministry has set an official target for leather exports to reach over $1 billion a year in 2020, from about $200 million a year currently.

By mid-2018, Robiki should house the entire supply chain, from animal slaughtering to finished leather production, allowing global manufacturers to source materials and export final goods in a single location, said Mohamed El Gohary, chairman of a state firm marketing the site.

“The value added of our exports will increase five times when we reach the stage where we’re exporting final products like shoes and bags,” Gohary said.

Foreign investors can begin purchasing space in Robiki in 2018, and the zone has received strong interest from Italian companies, Gohary said.

Egyptian exports were given a boost when Egypt floated its pound currency last year as part of an International Monetary Fund loan program.

With projects like Robiki, Egypt hopes to pull back capital that fled after its 2011 political uprising. In the fiscal year ending in June, it netted $8.7 billion in foreign direct investment and is targeting above $10 billion this year.

Around 220 tanneries are being relocated to Robiki, said Mohamed Harby, head of a leather tanning industry group.

They are moving under the orders of the government, which is paying for the transfer of machinery, constructing subsidized housing for workers and facilitating low-interest loans for businesses looking to expand.

The tanners’ centuries-old home of Magra Al-Ayoon in Old Islamic Cairo, which runs along the city’s ancient aqueduct, will most likely be developed into a tourist site, though plans have yet to be finalized, said Omar Khorshid, a trade ministry adviser to the Robiki project.

There, workers dye animal hides in small, ramshackle buildings without infrastructure for absorbing hazardous waste byproducts.

“Egypt a long time ago was a leader in leather tanning, and for a period of time everyone wanted to expand, but there was just no space to,” Ahmed Al-Gabbas, managing director of Al-Rowad Tannery, said at his factory in Robiki.

Al-Rowad, one of the country’s three largest tanneries, will complete its relocation over the next month. Gabbas said the company was using the space to scale up and triple exports over the next year.
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White House adviser Jared Kushner and visiting U.S. officials were snubbed by the Foreign Ministry in Cairo on Wednesday in apparent protest over the Trump administration’s move to cut and delay aid to Egypt.

Egypt’s top diplomat, Sameh Shoukry, was to meet with the U.S. delegation headed by Kushner, but a modified version of the minister’s schedule showed the meeting had been called off, shortly after the Americans landed in Cairo.

US aid cuts

The protest came after the Trump administration on Tuesday cut nearly $100 million in military and economic aid to Egypt and delayed almost $200 million more in military financing, pending human rights improvements and action to ease harsh restrictions on civic and other non-governmental groups.

Egypt’s President Abdel-Fattah el-Sissi was still due to meet with the American delegation, which also includes Jason Greenblatt, U.S. envoy for international negotiations, and Dina Powell, deputy national security adviser, according to the presidency. That meeting was due later on Wednesday.

The Egyptian ministry said in a separate statement that Egypt regrets the U.S. decision to reduce the aid funds and considered it “a misjudgment of the nature of the strategic relations that binds the two countries over decades, and reflects the lack of understanding of the importance of supporting the stability and success of Egypt.”

The American delegation, headed by Kushner, who is also the son-in-law of President Donald Trump, stopped in Cairo as part of a Mideast tour to press Israeli-Palestinian peace efforts.

Egypt is among the top recipients of U.S. military and economic assistance. It receives $1.3 billion annually in aid, plus hundreds of millions in economic assistance.

Human rights issues

Egyptian authorities have clamped down on civil society, particularly human rights groups and other organizations that receive foreign funding. Such groups played a central role in the 2011 uprising that toppled longtime autocrat Hosni Mubarak, and pro-government media often present them as part of a conspiracy to undermine the state.

The authorities also arrested thousands of people in the months following the 2013 overthrow of President Mohammed Morsi, mainly his Islamist supporters but also a number of secular and liberal activists.

When Trump met with el-Sissi in the White House in April he made no mention of Egypt’s human rights record in the post-meeting statement, an omission that many took as a sign that the issue was not a priority for the administration. Yet, two months later, two senators from Trump’s Republican Party slammed as “draconian” a new Egyptian law that effectively bans the work of non-governmental organizations and urged that it be repealed.

The law has triggered wide international backlash and raised concerns over human rights conditions in Egypt. But Egypt has defended the law, saying it was drafted and passed in accordance with constitutional provisions.

El-Sissi is grappling with an insurgency by Islamic militants in the northern part of the Sinai Peninsula, an economy struggling to keep up with demands and employment needs of Egypt’s surging population, and a sustained campaign of violence against the country’s Christian minority.
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China has objected to new sanctions the United States imposed against a group of Chinese and Russian companies for allegedly supporting North Korea’s nuclear program.

Chinese Foreign Ministry spokeswoman Hua Chunying said at a news briefing that the sanctions are not helping U.S.-China cooperation on efforts to rein in North Korean nuclear activity.

She said the United States should “immediately correct its mistake,” and reiterated China’s calls for restraint and dialogue to resolve the situation with North Korea.

The U.S. Treasury Department announced the sanctions Tuesday, saying they were a complement to a U.N. Security Council resolution passed earlier this month that applied new sanctions against North Korea and condemned the country’s ballistic missile tests. China was among the countries that unanimously approved the resolution.

A U.S. Treasury statement listed 10 companies and six people, including Chinese coal, steel and financial firms.

“It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region,” said Treasury Secretary Steven Mnuchin. “We are taking actions consistent with U.N. sanctions to show that there are consequences for defying sanctions and providing support to North Korea, and to deter this activity in the future.”
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South Korea’s top trade negotiator said Tuesday that Seoul will not discuss renegotiation of the free trade agreement with the U.S. without first looking into what is really causing the U.S. trade imbalance.

Speaking after a video conference with U.S. trade representative Robert Lighthizer, South Korean Trade Minister Kim Hyung-chong said Seoul proposed a joint study with Washington to evaluate the impact of the 5-year-old bilateral trade deal and the cause of the U.S. trade deficit.

“We did not agree to the unilateral proposal from the U.S. to amend the Korea-U.S. FTA,” Kim told reporters in a briefing after a talk with U.S. trade representatives. “We made our position clear that investigation, analysis and evaluation of the impact of the Korea-U.S. FTA must be preceded.”

​Two sides, two views

The two sides found they had different views on the impact of the free trade deal and could not reach any agreement during the talks, he added. Kim said Seoul will be waiting for Washington’s response to its proposal for the joint study.

The countries’ trade officials held their first talks in Seoul, in what Washington hoped would lead to discussing amendment or modification of the trade deal that took effect five years ago under President Barack Obama.

The U.S. trade official said discussions will continue.

“Unfortunately, too many American workers have not benefited from the agreement,” Lighthizer said in a statement posted on the USTR website. “President Trump is committed to substantial improvements in the Korean agreement that address the trade imbalance and ensure that the deal is fully implemented.”

Trade deal and trade deficit

The Trump administration criticized the pact with its ally, saying that the U.S. trade deficit with South Korea had doubled since the deal went into effect. The U.S. trade deficit with South Korea widened from $13.2 billion in 2011 to $27.6 billion last year.

But South Korea said the deal has been beneficial to both countries. The U.S. runs a trade surplus with South Korea in services such as banking and tourism, estimated at $10.7 billion in 2016. South Korea also believes that the FTA is not the cause of the U.S. trade imbalance, and that other, complex factors in the global economy are to blame.

The Trump administration is seeking to renegotiate the trade deal with South Korea as part of its broader efforts to reduce the U.S. trade deficit. It has begun an effort to renegotiate the North American Free Trade Agreement with Mexico and Canada.

South Korea is the sixth-largest trading partner for the U.S., while the U.S. is South Korea’s second-largest trading partner.
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