China is probing the loan practices of a group of big private sector conglomerates who have been on a high-profile global spending spree over the past few years.

And although the review targets only a few of the country’s most politically-connected companies, some analysts see an attempt to increase government control over the role played by the private sector in foreign markets.

“I think this is an attempt to change the direction (of) the role these Chinese companies play in the Chinese economy,” says Paul Gillis, a professor at Peking University’s Guanghua School of Management. “To align them more closely with the policies of the government and to reduce the risks that actions of these private companies could end up having a shock effect on the economy as a whole.”

Chinese authorities say they launched the probe because of worries that highly leveraged overseas deals pose risks to China’s financial system. Officials have already expressed worries over mounting debt among Chinese lenders, some of which may remain hidden by China’s opaque lending networks.

Notable companies targeted

According to media reports, the list of companies under review is a relative who’s who of Chinese enterprises.

Among those reportedly targeted are Dalian Wanda, which owns the AMC Theaters chain in the United States and has been actively courting deals in Hollywood. High-flying insurance company Anbang, which owns New York’s Waldorf Astoria and Essex House hotels. Also on the list is Hainan Airlines, which bought a 25 percent stake in Hilton Hotels last year and another insurance company Fosun, which owns Cirque de Soleil and Club Med.

Over the past few years, China has seen massive amounts of capital moving overseas with companies and wealthy individuals buying assets abroad. Authorities began taking steps late last year to tighten controls. But many big conglomerates view foreign investment as a golden opportunity – given the low global interest rate environment – and worth the risk of highly-leveraged investments.

Peking University’s Gillis says it appears the Chinese government is coming to terms with how to effectively regulate private enterprises, companies that behave more aggressively than their state-owned counterparts. But he also sees the move as a further consolidation of power by President Xi Jinping, bringing companies more under the control of the central government.

“I think many of the companies had a pretty favorable treatment from prior administrations, and I think Xi Jinping is less enamored of these large private companies than some of his predecessors were.”

Expensive acquisitions by companies like Wanda and Anbang have thrust China into the global spotlight. But the news and commentary that followed the companies’ mega-deals has not always been positive.

In some cases, the deals have given China a black eye, says Fraser Howie, author of the Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise. Anbang’s attempt last year to purchase Starwood Hotels is one example, he says.

“This is high profile, global Bloomberg headline, Chinese company buys Starwood Group, next week it’s all off because the funding was never there, the due diligence could never be completed there, it made all Chinese bidders look horrible,” said Howie. “It looks dreadful for the party and for the leadership that these private entrepreneurs are running out there and yet China as a country is being impacted by it.”

Earlier this month, the head of Anbang was the latest to be swept up in the ongoing financial crackdown.

Regulating private spending?

Authorities so far have not said specifically what the targeted companies may have done wrong, if anything. Some analysts argue that the probe is just a part of a process that began six month ago to curtail the flight of capital from China.

“If cross-border M&A deals make sense, if they deliver strong returns, then there should be no problem either for bankers or those doing the buying. But, if Chinese groups overpay and get the money to do so from Chinese banks providing risky or underpriced loans, then Chinese regulators have an obligation to step in,” Peter Fuhrman, Chairman and Chief Executive Officer of China First Capital tells VOA in an emailed response.

Others see a deeper message about Xi Jinping’s view on the role that private companies should serve broader national goals.

Howie says the probe challenges assumptions about the role of private enterprises in China.

“If anyone ever thought these companies were truly private in the sense of being independent or beyond government reach. Clearly that was never true,” he says. “Everyone operates at the discretion of the Communist Party, even if you’ve done nothing wrong and clearly even if you are wealthy.”
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China let through the first shipments of beef from the United States in 14 years on Friday, after the two nations agreed to resume the trade in May, state media reported.

The imports were brought in by Cofco Meat Holdings Ltd from U.S. meat processor Tyson Foods Inc., China National Radio (CNR) reported on Friday, citing Beijing Entry-Exit Inspection and Quarantine Bureau.

China officially allowed U.S. beef imports from Tuesday this week after the two sides settled the conditions for exports last week.

Under the new rule, boneless and bone-in beef from cattle under 30 months of age will be eligible for imports. Beef destined for China must also be from cattle that can be traced to its birth farm, according to the rule.

Chinese importers are racing to bring in American beef to meet increasing demand for premium meat in the $2.6 billion beef import market.

Cofco’s imports, the first to have landed in China, will be sold on Cofco’s e-commerce platform Womai.com, according to CNR.

Arrivals of U.S. beef could erode sales of Australian beef in China’s lucrative premium meat market, as U.S. beef is expected to be cheaper because of low grain prices in the nation.
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Demeaning images in advertising of women doing domestic chores or scantily clad act as stubborn obstacles to gender equality, the head of U.N. Women said Thursday, urging the global ad industry to become a weapon for good.

Advertising has the power to create positive portrayals of women and eliminate stereotypes, Phumzile Mlambo-Ngcuka, executive director of the United Nations’ agency on women, told the Thomson Reuters Foundation.

Mlambo-Ngcuka spoke from France, where she is calling on advertising leaders who are attending the industry’s annual Cannes Lions Festival of Creativity to eliminate stereotypes and commit to gender equality.

“People are more likely to see adverts in their lives than read books,” she said. “It’s a waste if we are not using this opportunity for good.”

​Stereotypes everywhere

Stereotypes of women permeate the globe, she said, be it in nations such as Iceland with high gender equality or those with very little in the way of equal rights, like Yemen.

“Of the many things that we’ve tried to do to obtain gender equality, we are not getting the kind of traction and success that we are looking for, because of the underlying stereotypes and social norms in existence in society,” she said.

“Adverts create a role model that people look up to, even mimic and try to be like,” said the veteran South African politician.

“If they see men in powerful positions most of the time and do not see women and people who look like them … then they think this is not for them.”

Research illustrates issue

Research by the Geena Davis Institute on Gender in Media illustrates the issue, said Philip Thomas, chief executive of the annual advertising event in Cannes, who also participated in the interview with the Thomson Reuters Foundation.

One in 10 female characters in advertising is shown in sexually revealing clothing, six times the number of male characters, he said.

Of characters portrayed as intelligent, such as doctors or scientists, men are 62 percent more likely than women to play those roles, he said. Women are 48 percent more likely to be shown in the kitchen, he said.

Creative teams at advertising agencies are predominantly male, and just 11 percent of creative directors around the world are female, he said.

The industry can make an effort to mentor women, employ and promote more female creative teams and reward work that promotes positive images, he said.

Mlambo-Ngcuka said she welcomed efforts such as one in Berlin, where the city’s ruling coalition has agreed on a ban on degrading or sexist advertising.

An expert committee will examine and prevent discriminatory advertising on both privately and publicly owned advertising billboards and hoardings.

Opposition parties in Berlin say such a ban infringes on free speech.

“When it’s so much that is against us, I think we are allowed sometimes to make some extreme measures even if there’s a controversy,” she said. “Let’s have the discussion.”
…

Minnesota’s government and businesses will continue to engage with Cuba in the areas they can, like agricultural trade, despite U.S. President Donald Trump’s partial rollback of the detente, Lieutenant Governor Tina Smith said on Thursday.

The first U.S. state representative to make an official visit to Communist-run Cuba since Trump’s announcement on Friday, Smith said authorities there were worried about the setback to bilateral relations.

Leading a bipartisan trade delegation from Minnesota, she said she was therefore glad to carry the message that there was still plenty of support for continuing to normalize relations.

“There is no denying the actions Trump took last Friday are a real setback,” Smith, a Democrat, said in an interview in the gardens of Havana’s iconic Hotel Nacional. “But the important thing to me is that there is bipartisan support at the federal level for normalizing and modernizing our relationship.”

U.S. Sen. Amy Klobuchar, a Minnesota Democrat, in May led a bipartisan coalition of lawmakers, including Republican Sen. Jeff Flake of Arizona, to introduce legislation to lift the U.S. trade embargo on Cuba.

Minnesota is one of the largest U.S. farming states, and Smith’s delegation included its agriculture commissioner and the head of its corn growers association. The delegation hopes to improve ties with and promote exports to Cuba.

U.S. farm groups have been particularly critical of the decision by Trump, a Republican, to retreat from Democratic predecessor Barack Obama’s opening toward Cuba, saying it could derail huge growth in agricultural exports that totaled $221 million last year.

U.S. law exempts food from a decades-old embargo on U.S. trade with Cuba, although cumbersome rules on executing transactions have made deals difficult and costly.

While Trump’s new Cuba policy does not directly target agriculture, it damages improved relations, the farm groups say.

Trump ordered tighter restrictions on Americans traveling to Cuba and a clampdown on U.S. business dealings with the island’s military, which manages much of the economy.

The Minnesota delegation met this week with officials of the Cuban ministries of foreign affairs and agriculture, while also visiting a cooperative and local food markets.

But the tour did not include the usual trip to the Mariel port and special development zone, which Cuba hopes will attract foreign investment and become a major shipping hub in the Caribbean. It is controlled by a military-affiliated company.

“In Minnesota we don’t have a lot of cocoa or coffee or pineapples, but we do have a lot of corn and beans,” Smith said. “We need each others’ products.”

Cuba invited the Minnesota delegation to a trade show later in the year, Smith said, while Minnesota invited Cuban officials to visit.

“I am very hopeful all of those things will lead us to a place where we can move forward.”
…

JetSmart, a low-cost airline set to launch this year in Chile, said on Thursday it will offer one-way tickets for less than $2, as the nation’s passenger air market becomes increasingly competitive.

“We will have 30,000 tickets for 1,000 pesos ($1.50) per one-way trip plus taxes, to fly within Chile … in 2017,” JetSmart, owned by Indigo Partners, an airline-focused U.S. investment fund Indigo Partners, said on its website.

Indigo Partners has already carved out a niche in ultra-low-cost airlines and owns Mexican low-cost carrier Volaris and part of Denver-based Frontier Airlines.

Indigo is known for unbundled, or a la carte, fares that carry cheap base prices but charge additional fees for extras, such as carry-on bags too big to fit under the seat and advance seat assignments.

In February, Indigo announced that JetSmart would operate three Airbus A320s in Chile in 2017, and another six in 2018.

While the company will focus on domestic routes, it will eye opportunities for regional expansion once established in Chile, Indigo managing partner Bill Franke said at the time.

Chile’s airline market is dominated by LATAM Airlines, Latin America’s largest carrier, with a smaller share taken by established low-cost carrier Sky.

LATAM, which has been facing increasing pressure from low-cost airlines throughout the region, is rolling out a partial low-cost model this year.

Low-cost carrier Viva Air launched in Peru in May, low-cost airline Flybondi is set to launch later this year in Argentina, and Norwegian Air is set to launch long-haul, low-cost routes from Europe to Buenos Aires early next year.
…

A booming plastics and packaging industry in Asia – including China – is being driven by rising incomes and consumption, with analysts saying a growing middle class will add to the rise in plastics demand across the region. But it comes along with a rising environmental alarm over plastic pollution in rivers and oceans.

Online plastics industry websites paint a picture of growth and trade and investment worth billions of dollars to Asian economies.

Robust plastics industry

China has been a regional leader in plastics production rising over the past six decades to capture more than a 20 percent share of global plastics production. Southeast Asia accounts for a further 20 percent of global output.

Economists at Australia’s ANZ Bank say global plastics consumption has roughly tripled over the past 20 years.

“In developing markets, population growth, rising disposable incomes, urbanization, and changing lifestyles will drive this demand even further, particularly for plastic packaging, building and construction, automotive and health care industries,” they said in a recent report.

Vietnam has reported an average growth of 18 percent in the plastics industry, with bags a leading export.

Within the 10 member Association of South East Asian Nations (ASEAN) plastics and plastic products netted the region almost $40 billion in export revenues in 2013.

Thailand is a regional leader in plastics per capita consumption of plastics at 40 kilograms. Malaysia reports 35 kilograms per person and Indonesia is at 17 kilograms per person.

Bad for environment

But the plastics and food packaging industries have a dark side. Plastic pollution in rivers and oceans has at times creating floating islands, and with floating debris and micro-plastics ingested by marine life.

In February, United Nations Environment “declared war on plastics pollution”, launching an “unprecedented” campaign targeting sources of marine litter, micro-plastics in cosmetics and excessive waste of single-use plastics by 2022.

A research paper published in the Nature Communications journal by the Ocean Cleanup – a Dutch Foundation, said between 1.15 and 2.41 million metric tons of plastic waste entered the oceans each year. “The top 20 polluting rivers, mostly in Asia, account for 67 percent of the global total,” the journal read.

China’s Yangtze River reported “considerably higher plastic concentrations” than any other sampled river worldwide” dumping 330,000 metric tons of plastic into the East China Sea. India’s Ganges river is also of major concern to environmentalists.

The U.N. Secretary General Antonio Guterres recently warned unless steps are taken to curb the pollution, plastics could outweigh fish by 2050.

Environmentalists estimate more than eight million tons of plastic ends up in the ocean, impacting ecosystems, killing around one million sea birds, some 100,000 sea mammals and millions of fish.

A U.N. Oceans Conference in early June called on nations to take steps on plastics consumption with China, Thailand, and Indonesia and the Philippines committing to reduce plastics consumption.

Thailand’s difficult task

Penchom Saetang, director of Thai–based Ecological Alert and Recovery Thailand (EARTH), said reducing Thai consumption of plastics will be a challenge.

“In my opinion, it’s very difficult because the Thai people are very familiar with the easy going way, easy to use plastics because in Thailand, Thailand is a country that consumers – we have a lot of food and we need plastic bags in every aspect of consumption. So to decrease the plastic is very, very difficult”, Penchom told VOA.

The government in Bangkok has sent out a 20 year strategy for tackling the problem.

But Greenpeace Thailand director, Tara Buakamsri, said although the Thai government has set out a plastic debris management plan, they should now focus on specific goals.

“On the one hand they are looking at a very holistic approach on how to deal with plastic waste. In the other hand they are missing something that is very important – they don’t have a specific target for reduction. It has to set a very ambitious target for this but they maybe it’s something I see missing from the plan,” Tara said.

 Food industry

New Zealand based environmental activist Anna Dawson spent three months in the Philippines in 2016. She cycled 2,000 kilometers on a bamboo bike scouring and cleaning beaches of plastics and supporting local communities to reduce plastics use.

Dawson says the food industry should be a target to reduce plastics use.

“The change has to start with food and how we go about eating food – that was probably from the beach cleanups the most clear statistic that came through whether it be compostable packaging or just encouraging people to eat more fresh fruit and veggies – market shopping instead of supermarket shopping,” Dawson told VOA.

Dawson said government policies should focus on reducing plastics production.
…

Every 45 seconds or so, a neatly wrapped VanHeusen dress shirt destined for a J.C. Penney store in the United States drops off a new production line at a factory north of Vietnam’s capital.

Next door, rice paddies the size of 40 football fields have been filled for the $320 million textile mill which Hong Kong based TAL Group plans to build so it won’t need to import cloth for the shirts.

As elsewhere in Vietnam, there has been no sign of an impact on investment plans since U.S. President Donald Trump abandoned the proposed Trans Pacific Partnership (TPP) trade deal which had been expected to benefit Vietnam more than any country.

In fact, foreign direct investment rose 6 percent year-on-year to $6.15 billion in the first five months of 2017.

Cheap labor is an obvious lure for foreign investors. TAL’s chief executive, Roger Lee, said Vietnam also scores highly on middle management, work ethic and government policy.

Though the removal of U.S. import tariffs under a TPP pact would have been a bonus, Lee said he had no second thoughts about investment plans after Trump pulled out of the deal soon after taking office.

“Vietnam is a very compelling proposition,” said Lee.

The wage for garment workers is $250 a month in Vietnam, compared to $700 in China, where TAL recently shut a factory for cost reasons.

The removal of tariffs of up to about 30 percent would have made clothing firms particular beneficiaries of the TPP deal, which had been forecast to add 28 percent to Vietnam’s exports and 11 percent to its gross domestic product over a decade.

Other clothing firms were also not discouraged by the scrapping of the deal. Lawsgroup’s chief executive, Bosco Law, told Reuters it was now seeking to expand from its three factories with 10,000 workers.

Vietnam’s trade surplus over the United States – the sixth biggest last year – has come under scrutiny as a result of Trump’s “America First” policy to bring manufacturing jobs back to America. But it hasn’t discouraged investment.

“We have started working for a couple of American manufacturing companies that contacted us after the TPP’s demise and that are willing to relocate part of their operations from China,” said Oscar Mussons, Senior Associate at Dezan Shira and Associates professional services firm.

Cheaper than China

Vietnam has been a big winner as Chinese manufacturing costs have risen and China itself is now one of the three biggest investors in Vietnam.

The TPP deal would have further improved access to U.S. and other markets for manufacturers based there, but also bound Vietnam to reforms meaning everything from opening up food import markets to strengthening labour rights.

Investment and Planning Minister Nguyen Chi Dung told Reuters that Vietnam planned to go ahead with its commitments under TPP anyway – both to strengthen the economy and because of other trade deals, such as one with the European Union. The 11 remaining TPP members are also still trying to keep it alive.

Dung said Vietnam had a target of $10 billion a year in foreign direct investment over the next five years — compared to nearly $16 billion in 2016 alone — as it sought a change in the type of investment it wants to draw.

“Before we focused on quantity, now we switch to quality,” Dung said. “Higher technology, higher added value, less use of energy, less use of raw materials, less cheap labor.”

That is where Vietnam has a greater challenge. It lags competitors for top skills. The proportion of secondary school leavers going on to further studies is a third higher in China and over three times higher in South Korea.

“Vietnam is still a very attractive country, but companies might not invest as much as expected because they find the employees lack the skills for that added value,” Mussons said. “Companies have been too focused on reducing costs and not enough on training.”
…

Military conflicts and growing threats around the world continue to underpin demand for weapons, but industry and government leaders from the United States, Europe, Russia and the Middle East say they don’t see a huge near-term spike in arms orders.

Executives report being busier than ever at this year’s Paris Airshow, the oldest and biggest aerospace expo in the world, which featured aerial acrobatics by Lockheed Martin Corp.’s F-35 fighter jet.

But they caution that foreign arms sales take years to complete, and NATO governments must get through lengthy budget and bureaucratic processes before they can raise military spending to meet a NATO target for members to spend 2 percent of gross domestic product (GDP) on defense.

No big spurt seen

“We’re seeing some growth, but I like to be pragmatic. I’m not seeing a big tick up in defense spending across the board,” Leanne Caret, who heads Boeing’s defense business, told Reuters in an interview. Her division generates about 40 percent of its revenues overseas, a big change from just several years ago.

Boeing officials expect steady gains in weapons sales, but warn against expectations for any kind of “gold rush” despite U.S. President Donald Trump’s pledge to boost military spending, saying there may be more of a shift in what platforms and weapons programs are in demand.

Recent increases in tensions between Russia and the United States have raised concerns about another arms race, but top officials in both countries agree that there will not be a mad rush to bulk up on weapons.

Moscow’s top arms trade official, Dmitry Shugaev, told reporters at the show that Russian weapon makers remained competitive despite Western sanctions, but the cyclical nature of the business and budget constraints are dampening prospects for a big surge in global arms sales.

He also expressed skepticism that NATO members would rapidly increase their military budgets, despite pledging to move toward the 2 percent goal.

Trump position

Trump’s public declarations that NATO members are not pulling their weight may have had some impact. Lockheed Martin’s Aeronautics business leader, Orlando Carvalho, said national security budgets and military systems’ demand outside the United States are beginning to increase, “especially with the focus that the president has put on NATO.”

In 2016, total world military expenditure rose 0.4 percent to $1.69 trillion, according the Stockholm International Peace Research Institute (SIPRI).

The European Union’s economic and financial affairs commissioner, Pierre Moscovici, also cited that risk, warning that European countries needed to match political pledges to boost military spending with actual resource commitments.

“There is now a window of opportunity for investing more in European defense … but as with all windows, a window closes if you don’t go through it,” he said.

Gradual increases in Europe

Germany and other European countries are boosting military spending, concerned about terrorism and Russia’s increasingly assertive military stance after its annexation of Crimea and its support for separatists in eastern Ukraine, but the increases are likely to be more gradual than dramatic.

In the missile defense arena, Western concerns about rapid advances in technology by North Korea, China and Iran, as well as Russia’s increased military activities, are driving orders for a range of defensive systems, according to U.S. and European executives.

“The threat is absolutely increasing and it’s increasing rapidly,” said Tim Cahill, vice president of air and missile defense systems at Lockheed. “In every region around the world, the level of interest in integrated air and missile defense has been going up in the last few months.”

Wes Kremer, president of Raytheon’s Integrated Defense Systems, said he was meeting with officials from countries that had not shown any interest in missile defense systems just four or five years ago.

“Back then, they didn’t see a ballistic missile threat, or they didn’t see Russia as a threat, but now that has changed,” he said.
…

Webster Allen Two Hawk Jr. had not had a drink in six weeks – one of the conditions for getting a bed at the Rapid City, South Dakota rescue mission. But the 55-year-old Sicangu Lakota artist had received some bad news that cold day in March: All of his artwork had been stolen.

In his distress, Two Hawk got drunk with friends in a downtown park. When he returned to the mission to sleep, he was turned away.

“So, my brother sat down by some of those big electrical boxes near Memorial Park, probably to get a break from the wind,” said Castle LaCroix Kelly. “And that’s where they found him the next morning. Frozen to death in the snow,” she said.

South Dakota is home to nine federally recognized tribes, and its reservations are among the poorest in the country. Tribal members flock to Rapid City in search of jobs, but often end up on the streets.

The Black Hills Regional Homeless Coalition makes annual counts of Rapid City’s homeless population to gauge funding needs. This year, it counted more than 240, most of them Native American. But the numbers likely are much higher.

“We are unable to count those who are in jail, detox, living in hotels, doubled up, or ‘couch surfing.’ All of those situations are still situations of homelessness, and those individuals are living in situations that are far from appropriate, safe or ‘housed,’” said Anna Quinn, executive director of the HOPE Center, a faith-based group serving Rapid City’s homeless.

Mean streets

Shane Boudreaux, Sigangu Lakota, has been homeless several times, and knows firsthand how rough the streets can be.

In 2002, the National Coalition of the Homeless rated Rapid City the third most dangerous U.S. city for the homeless—especially Native Americans. Cut off from family and culture, they are vulnerable to alcohol, drugs and violence. Sometimes they are harassed by the locals. And sometimes their lives are cut short.

“One of my friends died here just a few weeks ago,” said Boudreaux. “They found him floating in Rapid Creek. Police said he was riding his bike and must have hit a railing and fallen off the bridge into the water.”

Homeless women are particularly at risk, said one Lakota woman who asked not to be named.

“I’ve been raped. I’ve had things thrown at me. I’ve had my purse ripped off my shoulder. I’ve been left behind by my boyfriend after getting beaten. I’ve been called names.”

She said she doesn’t believe authorities take these crimes seriously, and said local police are harder on Native Americans than other groups.

A 2015 study on race disparities in Rapid City policing showed more Native Americans are arrested than other group in the city, and that police were more likely to use force against Native Americans than any other race.

Rapid City Police Chief Karl Jegeris admitted to age-old tensions between Native Americans and the city’s population, but denied that his officers are heavy-handed.

“I think that in comparison to other cities that I’ve been to, I would say we’re a much safer city for our homeless population. We have a specialized street crimes unit that patrols downtown and park areas. We get to know the homeless on a first name basis and get along very well with them generally,” he said. “But there are certainly exceptions.”

When Native American homeless are arrested, Jegeris said, it is usually for low-level crimes, such as drinking in public or disorderly conduct. But more serious conflicts sometimes arise.

“Due to historic and generational trauma issues, there is a lot of distrust in the Native American community, especially toward authority figures,” he said. “And unfortunately, law enforcement is the most visible sign of government authority. So, we run into conflict somewhat regularly when we are just trying to help ensure general safety for that person.”

Investing in tribes

Rapid City is looking to expand services and shelters for the homeless. But the National American Indian Housing Council (NAIHC) believes the fundamental problem is the shortage of suitable housing on reservations.

“It’s a lot harder to get capital investment in these communities,” said NAIHC executive director Tony Waters. “Building homes on reservations is more expensive because of the lack of infrastructure in these areas. So, the budget cuts we’ve seen proposed by the administration this year certainly would be bad news for Indian Country.”

The Department of Housing and Urban Development (HUD) provides tribes with $650 million in housing grants, under obligation by historic treaties. President Donald Trump has proposed cutting that amount by $50 million, which Waters said would devastate communities already living in poverty.

Back in Rapid City, Anna Quinn worries about the fate of programs like the HOPE Center.

“Any reduction in budget would also be detrimental to those who are working so hard to help the homeless get out of their situations,” she said.
…

Although Afghan businesses have long wanted to exploit the potential of India’s huge market, trade between the two countries has been hampered due to their tense relations with Pakistan.

But a plane loaded in Kabul with 60 tons of medicinal plants landed in New Delhi this week, raising hopes of giving a major boost to commerce between landlocked Afghanistan and India.

The flight flagged off the establishment of a new air cargo corridor between the two countries. Along with another, more long-term initiative to develop the Iranian port of Chabahar, India hopes to ease access to conflict-ridden Afghanistan and eventually to Central Asian countries.

Pakistan is a barrier

Pakistan allows Afghanistan to send a limited amount of perishable goods over its territory to India, through which the shortest and most cost effective land routes lie. However, India is not allowed to send any imports through Pakistani territory.

Indian Prime Minister Narendra Modi and Afghan President Ashraf Ghani decided to establish the air corridor last September after Pakistan rejected fresh calls by the Afghan leader to allow his country to engage in direct trade with India over its territory.

Although India is the second largest destination for exports from Afghanistan, this lack of easy access has been a dampener.

Air corridor trade

In New Delhi, officials hope the new corridor will boost annual trade between the two countries from $700 million to $1 billion in three years and give a lift to exports of Afghanistan’s agricultural and carpet industries.

A second flight is scheduled to land in New Delhi next week, bringing 40 tons of dried fruit from Kandahar.

At a ceremony marking the inaugural flight in Kabul on Monday, Afghan President Ashraf Ghani said he wants to make Afghanistan an exporter country.

“As long as we are not an exporter country, then poverty and instability will not be eliminated,” he said.

Indian foreign ministry officials say the connectivity will allow Afghan businessmen to leverage India’s economic growth and trade networks for its benefit and give farmers quick access to sell perishable products.

Does the air corridor trade have a viable future?

A prominent trader in New Delhi, Shyam Sunder Bansal, said he stopped trading with Afghan businesses several years ago due to the challenges such as transit routes, banking and currency facilities.

India is hoping to eventually extend air cargo flights to other cities. 

But Bansal is skeptical whether it will be commercially viable to sustain imports via air. “They cannot continue it forever because that will be unconventional, uneconomical,” he said.

However, a South Asia expert with the Indian Institute of Defense Studies and Analyses in New Delhi, Sukh Deo Muni, said since the distance involved is not too long, the air freight corridor could be viable.

He said New Delhi is committed to the project as it will open up access for India to not just Afghanistan but also Central Asian markets. According to Muni, “broader significance is to give two messages. We are committed to Afghanistan and we want to tell Pakistan, you cannot obstruct our access to Afghanistan and Central Asia. This is the long term view.”

Afghanistan mainly sends fresh and dried fruits, vegetables and oilseeds to India. It also takes a host of products from India — a flight from New Delhi has carried pharmaceuticals, water purifiers and medical equipment to Kabul as part of the initiative.

Indian foreign ministry spokesperson Gopal Baglay said the frequency of the air service would depend on demand. “It is, at the end of the day, a commercial venture which is supported very heavily, very strongly and very purposefully by both the governments.”

Land corridor through Iran

India has also initiated another key project to develop the Iranian port of Chabahar and open a direct transport corridor to Central Asia and Afghanistan bypassing Pakistan. This would also give Kabul an alternate route to the Indian Ocean, which currently uses the Pakistani port of Karachi for sea trade.

There was optimism last year that the project would take off, but it is barely making headway amid fresh worries that the U.S. administration under President Donald Trump may reimpose sanctions on Iran. 
…

Travis Kalanick, the combative and troubled CEO of ride-hailing giant Uber, resigned Tuesday under pressure from investors.

The company’s board confirmed the move early Tuesday, saying in a statement that Kalanick is taking time to heal from the death of his mother in a boating accident -while giving the company room to fully embrace this new chapter in Uber’s history.” He will remain on the Uber Technologies Inc. board.

In a statement, Kalanick said his resignation would help Uber go back to building -rather than be distracted with another fight.”

The resignation came after a series of costly missteps by Kalanick and the fast-growing company that he helped found eight years ago. Uber on Monday embarked on a 180-day program to change its image by allowing riders to give drivers tips through the Uber app, something the company had resisted under Kalanick.

The San Francisco-based company is trying to reverse damage done to its reputation by revelations of sexual harassment in its offices, allegations of trade secrets theft and an investigation into efforts to mislead government regulators.

Uber’s board said in a statement that Kalanick had -always put Uber first.”

While building the world’s biggest ride-hailing service, Uber developed a reputation for ruthless tactics that have occasionally outraged government regulators, drivers, riders and its employees.

The company’s hard-charging style has led to legal trouble. The U.S. Justice Department is investigating Uber’s past usage of phony software designed to thwart regulators.

Uber also is fighting allegations that it relies on a key piece of technology stolen from Google spin-off Waymo to build self-driving cars.
…

The United States Treasury Department announced additional sanctions Tuesday against Russia, pro-Russian separatists in eastern Ukraine, and individuals and companies associated with them.

The move comes on the heels of a White House meeting Tuesday between President Donald Trump and Ukrainian President Petro Poroshenko.

The increased sanctions is in response to continued Russian support for pro-Russian rebels in eastern Ukraine. Prior to his meeting with Trump, Poroshenko stressed the importance of taking such action before the U.S. president’s meeting with Russian leader Vladimir Putin.

The sanctions will target 38 individuals and business entities linked to the continuing conflict in eastern Ukraine. The penalties will remain in place until Russia meets the terms of 2014 and 2015 peace accords reached in Minsk, Belarus.

“These designations will maintain pressure on Russia to work toward a diplomatic process that guarantees Ukrainian sovereignty,” U.S. Treasury Secretary Steve Mnuchin said in a statement. “There should be no sanctions relief until Russia meets its obligations under the Minsk agreement.”

Among those sanctioned are two high-level Russian officials, Deputy Economy Minister Sergey Nazarov and Russian MP Alexander Babakov.

Nazarov, who oversees Russia’s humanitarian aid programs in separatist-controlled areas of Ukraine’s Donetsk and Luhansk regions, has been designated for materially assisting and sponsoring the separatist campaigns and advocating international investment in Crimea.

Babakov, Putin’s special liaison for expatriates, voted in favor of annexing Crimea in 2014 on the grounds that Moscow is obligated to represent ethnic Russians living abroad.

Russia’s largest arms producer, Kalashnikov Concern, has been designated along with a number of small Russian-owned banks for operating in Crimea, along with Oboronlogistyka, a Russian Defense Ministry subsidiary in charge of procurement and provisioning for the annexed Black Sea peninsula.

KPSK, one of Russia’s top corporate property underwriters, has been designated for insuring the Kerch Bridge project, which, if completed, would link Crimea and mainland Russia.

The action follows moves by lawmakers last week to pass a bill to limit the White House’s authority to lift sanctions against Russia without congressional approval. The bill passed with 98 votes in the Senate and now moves on to the House of Representatives.

The Trump administration had pushed back against the Senate bill.

“I would urge Congress to ensure any legislation allows the president to have the flexibility to adjust sanctions,” Secretary of State Rex Tillerson told lawmakers last week.

Ukrainian President Poroshenko said he received strong assurances of U.S. support for his country from Trump during Tuesday’s meeting.

Trump is expected to meet with Putin at the upcoming Group of 20 (G-20) summit slated for July 7-8 in Hamburg, Germany, under the theme “Shaping an Interconnected World.”

Oksana Bedratenko and Oleksiy Kuzmenko of VOA’s Ukrainian Service contributed to this article.
…

It’s so hot in the southwestern United States that flights out of Phoenix, Arizona are being cancelled because of the extreme heat.

Temperatures on Tuesday were expected to reach 49C, which is too hot for some planes to operate.

American Airlines said it was going to cancel 38 flights leaving from Phoenix’s Sky Harbor airport during the hottest part of the day from 3 p.m. to 6 p.m.

Most of the cancelled flights were shorter distance, regional flights because of the smaller planes they utilize. One commonly used smaller jet, the Bombardier CRJ, has a maximum operating temperature of 48C.

The reason is that hot air is thinner than cold air and requires more speed in order to provide an airplane enough lift to take off. High-altitude airports face similar problems due to the thinner air.

According to a 2016 report from the International Civil Aviation Organization, high temperatures “have severe consequences for aircraft take-off performance, where high altitudes or short runways limit the payload or even the fuel-carrying capacity.”

Larger Boeing and Airbus jets can fly in temperatures as high as 53C.
…

Ford Motor Co. will export the next-generation Focus compact car from China to North America in 2019, rather than from Mexico as earlier planned, saving the company $500 million, a top executive said on Tuesday.

It’s the first major manufacturing investment decision made by new Chief Executive Officer Jim Hackett, who succeeded Mark Fields in late May. Discussion about the small-car production shift from Mexico to China began “a couple months ago” under Fields, said Joe Hinrichs, president of global operations.

In January, after U.S. President Donald Trump criticized Ford for shipping small-car manufacturing to Mexico, Ford said it would kill plans to build a $1.8-billion Focus plant in San Luis Potosi and instead produce the new Focus at an existing plant in Hermosillo.

Although it is cheaper to build and ship cars to the United States from Mexico than China, “this was not a variable cost decision,” Hinrichs said in a Tuesday morning briefing. “It allows us to free up a lot of capital” because Ford now has to retool only one plant – the existing Focus factory in Chongqing – rather than two to supply North America.

Given dwindling overall U.S. demand for small cars such as the Focus, “we thought this was the best balance of that cost/capital tradeoff,” Hinrichs said.

He said Ford planned to inform the White House this morning.

Asked if Ford was concerned about having to pay a border tax, as Trump has threatened on vehicle imports from Mexico, Hinrichs said “the capital saving outweighs the risk” of a potential tax on the Chinese-built Focus.

Ford stock fell 0.8 percent at $11.15.

The current Focus will be phased out of production in Wayne, Michigan in mid-2018, according to Hinrichs. The Wayne plant will begin building a new Ranger compact truck in late 2018.

No U.S. jobs will be affected, Ford said, adding that it employs more U.S. hourly workers and builds more vehicles in the United States than any other automaker.

The White House and the United Auto Workers union were not immediately available to comment.

The redesigned Focus for North America will be built at a joint-venture plant operated with Chinese partner Changan Automobile, beginning in mid-2019. Ford also said some future variants of the new Focus will be shipped later from Europe.

Hinrichs said Ford remains a major exporter to China, shipping about 80,000 vehicles a year from North America.

General Motors Co has been exporting Buick and Cadillac cars from China to the United States, as has Volvo Cars, a unit of Chinese automaker Geely.
…

As South Korea’s new leadership works toward easing long strained inter-Korean relations, U.S. experts are eyeing the country’s conciliatory overtures to the Kim Jong Un regime, worried that a possible resumption of the Kaesong Industrial Complex could provoke discord with the Trump administration.

Shortly after South Korean President Moon Jae-in named Cho Myoung-gyun to be his North Korea point man on June 13, Cho, who played a key role in launching the now-stalled economic cooperation project, told reporters, “Operations at the Kaesong Industrial Complex should be restored. I will speak after thoroughly looking into the details.” 

That statement caused a flurry of criticism in Washington, with many analysts saying reviving activities at the complex possibly could hurt Washington-Seoul relations and diminish their alliance coordination. Seoul closed the complex in February 2016 as punishment for the regime’s nuclear test and long-range rocket launch.

“Reopening the Kaesong Industrial Complex is very problematic from Washington’s perspective,” Sue Mi Terry, a former CIA analyst who specializes in North Korea, told VOA’s Korean Service.

Launched in 2004 to enhance cooperation between the two Koreas, the jointly run industrial complex in Kaesong, just north of the border, has reportedly provided $100 million a year in wages to 54,000 North Korean workers and contributed almost $2 billion in trade for Pyongyang.

Terry said any conciliatory action that translates into significant financial benefits for Pyongyang contradicts Washington’s North Korea policy, which is focused on thwarting the Kim regime’s nuclear weapons program by severing all possible revenue streams that fund it. 

“We don’t know where the money is going,” Terry said. “It could be contributing to North Korea’s WMD (weapons of mass destruction) missile program. There is no evidence that it’s not.”

Thomas Countryman, who served in the Obama administration as assistant secretary of state for international security and nonproliferation, said restarting Kaesong’s activities would not only reward Kim for the continued provocations, but also throw cold water on international efforts.

“It would be inconsistent with the [U.N. Security Council] resolutions if not in the letter, then in the spirit,” Countryman said. “There is simply no way that [South Korea] could convince China to have a strict enforcement of the U.N. resolutions, if South Korea is reopening a complex that provides tens of millions of dollars of hard currency every year to the North Korean regime.” 

Formerly the Obama White House coordinator for arms control and WMD, Gary Samore of the Belfer Center at Harvard University said Seoul should be more strategic and use Kaesong as a bargaining chip in response to or as part of a deal with Pyongyang to take steps toward limiting and eventually eliminating its nuclear activities.

“It would be a big mistake to resume the Kaesong Industrial Park without getting something in return,” Samore said. “So if Kim Jong Un agrees to some limits on nuclear and missile activity — for example, a freeze on testing — then I think one response that [South Korea] could make would be to resume the Kaesong Industrial Park, with the understanding that the facility would be suspended if Kim Jong Un resumed nuclear and missile testing.”

Negotiations on Pyongyang’s nuclear program have been in limbo for almost a decade, with Washington and Seoul ratcheting up economic pressure and a stubborn Pyongyang persisting with weapons development. But since Moon took office last month, he appears to be easing conditions for talks with the North.

“I make it clear that we will open dialogue without a precondition” should North Korea stop launching missiles and testing nuclear devices, Moon said Thursday at an event marking the 2000 inter-Korean summit.

But when President Donald Trump’s top diplomat Rex Tillerson led a U.N. Security Council special meeting in April, he rejected negotiations with Kim, saying North Korea “must take concrete steps to reduce the threat that its illegal weapons programs pose to the U.S. and our allies before we can even consider talks.” Those steps would be dismantling its nuclear and missile programs.

Moon Chung-in, South Korea’s special presidential advisor for foreign and security affairs, commented at an event in Washington Friday that his president proposed “scaling down” the Washington-Seoul joint military drills if North Korea “suspends its nuclear and missile activities.”

The State Department downplayed the significance of the comments.

“We understand these views are the personal views of Mr. Moon and may not reflect official ROK govern policy,” said Bureau of East Asian and Pacific Affairs spokesperson Alicia Edwards in an email to VOA.

A senior official at the South Korean presidential office said the advisor did not coordinate with the president’s office on the proposal.

This report originated on VOA Korean.
…

The U.S. Supreme Court on Monday handed a victory to Chevron Corp. by preventing Ecuadorean villagers and their American lawyer from trying to collect on an $8.65 billion pollution judgment issued against the oil company by a court in Ecuador.

The justices turned away an appeal by New York-based lawyer Steven Donziger, who has spent more than to two decades trying to hold Chevron responsible for pollution in the Ecuadorean rain forest, of lower court rulings blocking enforcement in the United States of the 2011 judgment.

While not disputing that pollution occurred, San Ramon, California-based Chevron has said it is not liable and that Donziger and his associates orchestrated the writing of a key environmental report and bribed the presiding judge in Ecuador.

U.S. District Judge Lewis Kaplan in Manhattan barred enforcement of the judgment in 2014, citing the corruption used to obtain it. The New York-based 2nd U.S. Circuit Court of Appeals last year upheld Kaplan’s decision, citing “a parade of corrupt actions” by Donziger and his associates, including coercion and fraud, culminating in the bribe offer.

The 2nd Circuit found that Chevron’s $8.646 billion judgment debt was “clearly traceable” to corrupt conduct by the legal team representing the villagers from the area affected by the pollution.

The lengthy legal battle with Chevron has been waged in several countries and was documented in “Crude,” a 2009 documentary film. The plaintiffs have said they plan to continue efforts to enforce the judgment in other countries, regardless of the outcome in the United States.

The saga was drawn extensive media attention over the years, with a succession of reporters given tours by both sides of the affected sites on the edge of the Amazonian jungle near the town of Lago Agrio. The plaintiffs also touted the backing of several celebrities including actors Mia Farrow and Danny Glover.

Donziger and representatives of residents of the Lago Agrio region have sought to force Chevron to pay for water and soil contamination caused from 1964 to 1992 by Texaco, which Chevron acquired in 2001. Chevron has said a 1998 agreement between Texaco and Ecuador absolved it of further liability.

Donziger’s crusade began to unravel when Chevron noticed a deleted scene in the “Crude” documentary, released in 2009, showing Donziger working with supposedly neutral experts in preparing a report for the Ecuadorean court.

Chevron was then able to get access to out-takes and other material related to the documentary via court order. Chevron cited this evidence when it filed its lawsuit in 2011 seeking to block enforcement of the judgment, saying Donziger’s actions violated U.S. anti-racketeering law.

Donziger has also tried to enforce the judgment in Canada, Brazil and other countries where Chevron operates.

 
…

The U.S. Supreme Court on Monday tightened rules on where injury lawsuits may be filed, handing a victory to corporations by undercutting the ability of plaintiffs to bring claims in friendly courts in a case involving litigation over the Bristol-Myers Squibb Co. blood-thinning medication Plavix.

The justices, in an 8-1 ruling, threw out a lower court decision allowing hundreds of out-of-state patients who took Plavix to sue the company in California. State courts cannot hear claims against companies that are not based in the state when the alleged injuries did not occur there, the justices ruled.

The court last month reached a similar conclusion in a separate case involving out-of-state injury claims against Texas-based BNSF Railway Co.
…

Climate change, trade and terrorism were highlighted Monday at a Beijing meeting of foreign affairs officials from Brazil, Russia, India, China and South Africa, known collectively as the BRICS nations.

The five nations are seeking to further align their views on key issues at a time when President Donald Trump is withdrawing the U.S. from multilateral arrangements such as the Paris climate accords and the Trans-Pacific Partnership trade deal.

Chinese Foreign Minister Wang Yi said China in the coming year would look to “expand with more broad and wide-ranging cooperation in areas such as trade and commerce and investment.”

Together the BRICS countries account for roughly 40 percent of the world population and 20 percent of the global economy. All five countries are members of the G20, although their economic prospects have declined somewhat amid crises in Brazil and South Africa and the effect of sanctions lodged against Russia by the West.

South African Foreign Minister Maite Nkoana-Mashabane pointed to climate change as a major concern.

“There is one climate and for future generations we must employ every effort at our disposal to reverse the effects of climate change,” she said.

Nkoana-Mashabane also pointed to the need to form joint efforts to fight terrorism, sentiments reflected by Vijay Kumar Singh, an Indian External Affairs official.

“It is important to enhance BRICS security in counterterrorism matters,” Singh said.

Leaders of the five nations are due to meet for a summit in the southeastern Chinese city of Xiamen in September.
…

When Wal-Mart Stores Inc. bought online retailer Jet.com for $3 billion last year, it marked a crucial moment — the world’s largest brick-and-mortar retailer, after years of ceding e-commerce leadership to arch rival Amazon, intended to compete.

On Friday, Amazon.com Inc. countered. With its $14 billion purchase of grocery chain Whole Foods Market Inc., the largest e-commerce company announced its intention to take on Wal-Mart in the brick-and-mortar world.

The two deals make it clear that the lines that divided traditional retail from e-commerce are disappearing and sector dominance will no longer be bound by e-commerce or brick-and-mortar,  but by who is better at both.

Amazon’s purchase of Whole Foods also brings disruption to the $700 billion U.S. grocery sector, a traditional area of retailing that stands on the precipice of a ferocious price war.

German discounters Aldi and Lidl are battling Wal-Mart, which controls 22 percent of the U.S. grocery market, with each vowing to undercut whatever price the others offer.

The stakes are highest for Wal-Mart. Amazon’s move aims at the heart of the Bentonville, Arkansas-based retail giant’s business — groceries, which account for 56 percent of Wal-Mart’s $486 billion in revenue for the year ending Jan. 31. With the deal, Whole Foods’ more than 460 stores become a test bed with which Amazon can learn how to compete with Wal-Mart’s 4,700 stores with a large grocery offering that are also within 10 miles (16 km) of 90 percent of the U.S. population.

Amazon is expected to lower Whole Foods’ notoriously high prices, enabling it to pursue Wal-Mart’s customers. The push comes as Wal-Mart is headed in the opposite direction — going

after Amazon’s higher-income shoppers with a recent string of acquisitions of online brands such as Moosejaw and Modcloth and on Friday, menswear e-tailer Bonobos.

Wal-Mart may be ready. In preparation for the grocery price war, Wal-Mart in recent months has cut grocery prices, improved fresh food and meat offerings, modernized shelving and lighting

in its grocery aisles, and expanded its online grocery pickup service.

Marc Lore, the Jet.com founder who now runs Wal-Mart’s e-commerce business after selling a startup to Amazon, told Reuters in an interview that Amazon’s move does not change Wal-Mart’s game plan. “We’re playing offense,” he said.

Wal-Mart is offering curbside pickup of online grocery purchases at 700 locations, with 300 more planned by year end.

It also is testing same-day fresh and frozen home delivery from 10 of its stores. “We see an opportunity to do a lot more of that,” Lore said.

Roger Davidson, who oversaw Wal-Mart’s global food procurement and now is president of Oakton Advisory Group, said the deal will reduce Wal-Mart’s brick-and-mortar advantage.

“I think this acquisition is a concern,” he said.

Some industry observers say Amazon will find it difficult to use Whole Foods to pull away Wal-Mart shoppers because the two stores appeal to different customers. But Michelle Grant, head of retailing at market research firm Euromonitor, said Amazon could use an obscure part of the Whole Foods portfolio — Whole Foods 365 — to lure Wal-Mart shoppers.

Whole Foods 365 offers private-label goods and lower prices than typical Whole Foods stores, and is targeted at younger, value-conscious shoppers. Amazon could provide the financial

capital and tactical ability to build that into something big.

“That [Whole Foods 365] may become a big problem for Wal-Mart,” Grant said.

Amazon, which reported $12.5 billion in cash and equivalents and a free cash flow of $10.2 billion in the year ended March 31, has plenty to spend. Wal-Mart reported $6.9 billion in cash

and equivalents and $20.9 billion in free cash flow at its year ended Jan. 31.

Brittain Ladd, a former senior manager at Amazon who worked on its brick-and-mortar strategy, said Amazon will use Whole Foods to test concepts for the grocery store of the future.

Ladd, who left Amazon in March, said Amazon will seek to eliminate checkout lines by using technology that automatically scans goods as customers add them to their shopping carts. It

will select merchandise based on Amazon’s vaunted customer data, and potentially expects the use of technology to change prices during the course of a day.

Amazon declined comment on competition with Walmart but spokesman Drew Herdener said in a statement the company has no plans to cut jobs or use technology in development at its

Seattle Amazon Go store to automate jobs of cashiers.

Ladd, who helped with AmazonFresh’s global expansion and now is a supply chain consultant, said an Amazon-owned Whole Foods also likely will offer in-car pickup of online purchases, and

home delivery from Whole Foods stores, add pharmacies and showcase Amazon devices inside the stores.

“Amazon will reduce prices and change the assortment of products carried in Whole Foods stores to attract a larger customer base,” said Ladd. “Kroger and Wal-Mart will be impacted as their customers will defect to Amazon.”
…

A key part of House Republicans’ plan to overhaul the way corporations pay taxes is on life support, leaving lawmakers scrambling to save one of President Donald Trump’s biggest priorities and increasing the chances the GOP will simply pass a tax cut instead of overhauling the tax code.

A proposed tax on imports is central to the GOP plan to lower the overall corporate tax rate. It would generate about $1 trillion over the next decade to finance the lower rates without adding to the deficit. It would also provide strong incentives for U.S.-based companies to keep their operations in the United States and perhaps persuade companies to move overseas operations to the U.S.

But the tax faces strong opposition from retailers, automakers and the oil industry, and a growing number of congressional Republicans have come out against it. They worry that it will increase the cost of imports, raising consumer prices.

Import tax

Majority Leader Mitch McConnell, R-Ky., says there probably aren’t enough votes to pass the import tax in the Senate — not a single Republican senator has publicly endorsed it. And a powerful group of House conservatives says it’s time to dump the idea.

“The sooner we acknowledge that and get on with a plan that actually works and actually can build consensus, the better off we will be,” said Rep. Mark Meadows, R-N.C., chairman of the conservative Freedom Caucus.

Even one of the biggest backers of the new tax says he is open to other ideas.

Rep. Kevin Brady, R-Texas, has pushed the tax as chairman of the powerful House Ways and Means Committee. He still says it’s the best way to promote economic growth and domestic jobs, but he has softened his stance on alternatives.

“I’m still confident that we’re going to stay at the table until we solve that problem, which is how do we stop U.S. jobs from continuing to leave the United States,” Brady said. “We’re going to remain open to the best ideas on how we do that.”

On Tuesday, Brady proposed gradually phasing in the tax over five years to give corporations time to adjust.

It wasn’t received well by opponents.

“Forcing consumers to pay more so that some profitable companies can operate tax-free is no better of an idea in five years than it is today,” said Brian Dodge of the Retail Industry Leaders Association.

What next?

But if the import tax is dead, then what?

“I would never declare anything dead until there was a fully formed alternative,” said Rohit Kumar, a former tax counsel to McConnell who now heads PwC’s Washington tax office. “I think that’s one of the big challenges that Republicans are struggling with right now.”

Thirty-one years after the last tax overhaul, there is widespread agreement that the current system is too complicated and picks winners and losers, compelling companies to make decisions based on tax implications instead of sound business reasons.

The goal — for now — is to simplify the tax code and make it more efficient in a way that does not add to the federal government’s mounting debt. That means some would pay more and some would pay less, a heavy political lift among politicians who have deep political and practical disagreements.

Lawmakers also are trying to overhaul taxes on individuals, which raises another set of big challenges.

“It’s easier to get a coalition to cut taxes,” said Mark Mazur, a former Treasury official under President Barack Obama. “And if the conversation is, `how long do they last and how deep are the tax cuts,’ each party knows how to do that conversation. It’s not like you’re asking for a huge lift.”

The new import tax, which is called a border adjustment tax, would radically change the way corporations are taxed. Under current law, corporations pay a top tax rate of 35 percent on their profits. But the tax code is filled with so many exemptions, deductions and credits that most corporations pay a much lower rate.

Proposal

Under the proposed system, American companies that produce and sell their products in the U.S. would pay a new 20 percent tax on the profits from these sales. However, if a company exports a product, the profits from that sale would not be taxed by the U.S.

Foreign companies that import goods to the U.S. would also have to pay the tax, and they would not be able to deduct the cost of the imported good as a business expense.

Republicans in Congress and at the White House have been meeting behind closed doors for weeks to come up with viable alternatives. Democrats have been largely excluded from the talks, leaving Republicans with little room for error.

“I still think that Republicans, out of pure political necessity, if nothing else, are likely to find a way to get some sort of tax bill to the president’s desk for his signature,” Kumar said.

Whether it’s genuine tax reform or simply a tax cut “is still very much in question right now,” he added.
…

U.S. farm groups criticized President Donald Trump’s decision to retreat from his predecessor’s opening toward Cuba, saying it could derail huge increases in farm exports that totaled $221 million last year.

A trade delegation from Minnesota, one of the largest U.S. agriculture states, vowed to carry on with its planned visit to Cuba next week. 

“We’re going to continue to beat the drum and let them (the Trump administration) know that trade is good for agriculture,” said Kevin Paap, a farmer in the delegation.

Trump signed a presidential directive Friday rolling back parts of former President Barack Obama’s opening to the Communist-ruled country after a 2014 diplomatic breakthrough between the two former Cold War foes.

Farm groups saw the move as a step backward in what had been an improving trade relationship between the two countries, which are 90 miles (145 kms) apart, even though agriculture is not directly targeted.

U.S. law exempts food from a decades-old embargo on U.S. trade with Cuba, but cumbersome rules on how transactions were executed have made deals difficult and costly.

Since Obama’s detente, substantial headway has been made with shipments of U.S. corn and soybeans to Cuba soaring 420 percent in 2016 from a year earlier to 268,360 tons, U.S. Department of Agriculture data shows.

Through the first four months of 2017, total shipments of U.S. grain and soy were 142,860 ton, up from 49,090 tons during the same period of 2016.

While the quantities are dwarfed by total U.S. exports — nearly 56 million ton of corn alone last year — the added volumes were welcome as farmers face a fourth year of languishing grain prices and crimped incomes.

“At a time when the farm economy is struggling, we ask our leaders in Washington not to close doors on market opportunities for American agriculture,” Wesley Spurlock, president of the National Corn Growers Association, said in a statement.

The group sees an opportunity for $125 million more a year in trade to Cuba.

Trump’s move could cut off near-term sales and stymie economic development that would drive longer-term demand growth, said Tom Sleight, president of the U.S. Grains Council, a grain trade development organization, in a statement.

“Neither of those outcomes is favorable for the U.S. ag sector or the Cuban people,” he added.

Paap said the United States should be doing more to encourage exports.

“It’s frustrating because we’ve made some advances and built those relationships,” he said. 
…

The key to success for ride-hailing providers like Uber is keeping drivers happy so they run their app, ensuring that enough cars respond to passenger demand.

Estonia upstart Taxify is hoping to win over drivers and take on Uber Technologies Inc., the industry leader, by offering a larger share of the profit.

Upstarts across the world, such as Lyft Inc. and Ola, are trying to catch Uber in the on-demand car-ride market by securing brand loyalty.

But Uber has gathered critical mass and reached a valuation of more than $60 billion in eight years, despite a lack of profits. It has kept rivals at bay, partly by offering incentives to drivers to stay online.

Taxify hopes to lure drivers

Taxify, a minnow compared with Uber, cannot afford these perks but believes that by taking a smaller share of fares, 15-20 percent compared with Uber’s 20-25 percent, it can steal market share from its San Francisco-based rival.

It also hopes that allowing drivers to take cash as well as credit card fares will also help it attract more passengers.

“Taxify’s biggest advantage is the focus on good service by treating the drivers and riders better than other platforms. This means having higher pay for drivers, thanks to lower fees,” Chief Executive Markus Villig told Reuters at Taxify’s headquarters in Estonia.

An Uber spokeswoman declined to comment but the company has said it had fare revenue of around $20 billion last year. Villig said Taxify generated fares worth “tens of millions of euros” each month. Taxify runs in just 25 cities in Europe and Africa, while Uber operates in nearly 600 cities worldwide.

Its basic business model is identical — both connect passengers with self-employed drivers. Many incumbent cab companies in Europe have developed apps to operate in a similar manner but most have focused on their domestic markets.

Markets not Uber dominated

But Taxify is unusual in launching in about 18 countries, mainly smaller markets in Eastern Europe and Africa, where Uber is absent or not yet dominant.

Uber usually takes market share by giving drivers money to sign on to its app, paying them even if they are not driving passengers. Then, as it becomes more popular with passengers, it withdraws the inducements. Analysts say Uber aims to build a customer franchise and stable of drivers to dominate the market.

“The way I see it, Taxify is cheaper than Uber,” said Tumelo Malatjie, 33, a former truck driver for a logistics firm turned full-time Taxify driver in Johannesburg. “Taxify takes 15 percent and Uber about 25 percent or 30 percent,” said Malatjie, who nonetheless is on a waiting list to become an Uber driver.

Taxify has avoided expensive head-to-head battles with its much larger rival but its model will soon be tested as Villig plans to launch in London, Uber’s biggest European market in the coming months.

“We are coming in as a second wave,” Villig said.

Small but growing

Founded 3½ years ago, Taxify has 140 staff worldwide, a third of whom are based in Estonia. It says it has 2.5 million active passengers in 18 countries. Uber says it has more than 12,000 people across the world and millions of passengers in 70 countries.

In Africa, Villig said Taxify has hired away 20 former Uber executives, helping its expansion in cities like Lagos, Cairo and Johannesburg.

The start-up has raised 2 million euros in outside financing from local venture capitalists. Like Uber, it is losing money, although it was “close to profitability for the past six months,” Villig said.

Uber reported in late May that its net loss, excluding employee stock options and other items, narrowed in the first quarter to $708 million, from $991 million in the fourth quarter.

Same challenges

Taxify and Uber face many of the same regulatory and commercial challenges.

Uber was dealt a major setback to its European ambitions in May when the lead advocate for Europe’s highest court said it should be regulated like a transport company rather than an online electronic intermediary.

Taxify could face the same legal treatment, which would make it more susceptible to new regulations being introduced by a growing number of European cities.

Similarly, bans on ride-sharing in cities such as Brno in the Czech Republic, apply to Taxify as much as Uber.

Uber has faced complaints from its drivers in London, France and the United States who were unhappy about compensation.

But Taxify has also had protests from drivers in Estonia unhappy at how the company had slashed fare rates. Villig declined to comment.

While analysts do not expect Uber to be dethroned by Taxify anytime soon, the Estonian company’s lower commission model may put pressure on Uber’s margins in countries where it is seeking to cut fares or increase its share of fares.
…

Colombia on Friday reached a deal with public school teachers to end a 37-day strike that has kept millions of children out of classes, amid criticism the government has failed to keep its promise to improve public education after a peace deal with Marxist rebels.

Union members participating in the nationwide walkout held near-daily marches, often blocking busy roads in the capital Bogota to demand more funding for school maintenance, supplies, student meals and salaries.

President Juan Manuel Santos says he is focused on combating inequality and improving education now that a peace deal with the Revolutionary Armed Forces of Colombia (FARC), an end of more than 52 years of war, is under way.

But educators said improvements are nowhere to be seen and their salaries, some as low as 1.8 million pesos per month (about $610), are not adequate compensation for work that requires extensive and expensive higher education.

“The government’s priority was always to reach an agreement that recognizes the work of teachers and the indispensable role of education in the development of the country and, at the same time, be responsible with public finances,” Education Minister Yaneth Ghia told reporters.

The deal, among other things, will improve salaries through progressive bonus payments and allow bigger union involvement in how money is spent on education, she said.

The powerful Colombian Federation of Education Workers (Fecode) union, which represents more than 350,000 teachers, agreed to the deal after meeting with Finance Minister Mauricio Cardenas.

“The president said the money that went to the war would go to education but now there’s no FARC, no guns and we don’t see the funds,” said high school teacher Jose Escobar, 36, earlier on Friday during a protest in Bogota’s main square.

Places at his school, Colegio German Arciniegas in Bogota’s poor Bosa neighborhood, are in such high demand that it has been impossible to implement the government’s goal of full-day classes, Escobar said. Instead, 4,800 students in grades nine through 11 attend half-day, or six hours.

Friday’s deal will push toward the aim of full-day study.

Santos has weathered a wave of strikes in recent weeks, reaching agreements to halt protests in the port city Buenaventura and a strike by public workers.

“If the government truly is working for peace, they need to start here,” said Adriana Tunjo, a fifth-grade teacher in southern Bogota, who like other protesters decried problems which included electricity outages and sporadic provision of meals.
…

From the president of Mozambique to the US Secretary of Commerce, greater US economic engagement in Africa is the dominant theme at this year’s business summit organized by the Corporate Council on Africa. VOA Correspondent Mariama Diallo was there and reports.
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U.S. authorities moved on Thursday to seize a Picasso painting given to American movie star Leonardo DiCaprio and the rights to two Hollywood comedies, as they filed complaints to recover about $540 million they say was stolen from the 1Malaysia Development Berhad sovereign wealth fund.

The U.S. Justice Department filing was the latest legal action tied to alleged money laundering at the fund set up by Malaysian Prime Minister Najib Razak in 2009 to promote economic development. In the complaints, the department alleges more than $4.5 billion was taken from 1MDB by high-level fund officials and their associates.

“This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people,” Kenneth Blanco, acting assistant attorney general, said in a statement. 1MDB could not be immediately reached for comment.

Najib has denied taking money from 1MDB or any other entity for personal gain, after it was reported that investigators traced nearly $700 million to bank accounts that were allegedly in his name.

The assets U.S. authorities are seeking to seize include the rights to Dumb and Dumber To, a 2014 comedy starring Jim Carrey, they allege was financed with tens of millions of dollars stolen from 1MDB, and the 2015 film Daddy’s Home, starring Will Ferrell. Last year, U.S. authorities moved to seize rights to the 2013 film The Wolf of Wall Street, which starred DiCaprio.

The three films were produced by Red Granite, a company founded by Najib’s stepson Riza Aziz. Red Granite said in a statement it was in discussions with the Justice Department “aimed at resolving these civil cases and is fully cooperating.”

U.S. authorities accuse Jho Low, a Malaysian financier, of laundering more than $400 million stolen from the fund through an account in the United States, where he and his friends used the money to pay for lavish parties, gambling and yachts.

Despite the civil allegations, U.S. authorities have not charged Low with any crime.

Low did not immediately respond to a request for comment sent to his Hong Kong-based company Jynwel Capital.

Artwork, Oscar for DiCaprio

Authorities said that in 2014 Low used $3.2 million diverted from a 1MDB bond sale to buy a Picasso painting for DiCaprio.

“Dear Leonardo DiCaprio, Happy belated Birthday! This gift is for you,” a friend of Low’s wrote in a note.

Low also used $9.2 million diverted from 1MDB bond sales to buy a collage made by the New York artist Jean-Michel Basquiat which was also given to DiCaprio. DiCaprio and Low signed a note in March 2014 absolving the star of “any liability whatsoever resulting directly or indirectly from these art-work,” according to the filings.

A spokesman for DiCaprio said in an emailed statement on Thursday the actor last July “initiated the return” of gifts he had received from financiers connected to the 1MDB case. The spokesman said DiCaprio also returned an Oscar won by actor Marlon Brando which was given to DiCaprio by Red Granite “to thank him for his work on The Wolf of Wall Street,” the statement said.

DiCaprio’s spokesman said the star accepted the gifts to raise funds in an auction for his environmental foundation.

Complaints against 1MDB

Fraud allegations against 1MDB go back to 2009, the Justice Department said, and the fund is subject to money laundering investigations in at least six countries, including Switzerland and Singapore.

The complaints allege that officials at 1MDB, their relatives and other associates allegedly laundered the funds using complex transactions and shell companies with bank accounts located in the United States and abroad.

That allowed the origin, source and ownership of the funds to be hidden and ultimately passed through U.S. financial institutions, with the money being used to buy and invest in assets in the United States and overseas, according to the complaints.
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The White House lacks a unified plan to increase the government’s borrowing cap as a likely September deadline is drawing near, said Mick Mulvaney, director of the Office of Management and Budget.

A failure by Congress to raise the debt ceiling could send dangerous shock waves through the global economy. The federal government could be at risk of defaulting on obligations such as interest payments on bonds as well as temporarily halting benefit programs.

The White House budget director suggested in an interview Thursday with reporters that neither the Trump administration nor Capitol Hill lawmakers had set their terms for an agreement.

“It’s fair to say we haven’t settled on a final way to address the debt ceiling any more than the Hill has,” Mulvaney said.

The former South Carolina congressman added that none of this was necessarily “unusual.”

Possible extension

Under the current borrowing restrictions, the government has already been taking extraordinary measures and will likely be unable to pay its bills at some point in September. But Congress still has a recess scheduled in August that could create time pressures. Private analysts say the debt ceiling deadline could be extended into October.

Mulvaney said he would like to see the debt ceiling raised in July.

But Trump administration officials still have yet to resolve internal differences on the best strategy to increase the legal cap on government debt, which already exceeds $19.8 trillion.

Mulvaney suggested he would like to have any increase in the borrowing authority be attached to other spending changes, a move that could attract Republican support but alienate Senate Democrats. President Donald Trump’s budget proposal seeks to beef up spending on the military and border security while cutting many social programs.

Treasury Secretary Steve Mnuchin has indicated he would like a “clean” bill to raise the debt ceiling, so it would not have to be tied to any spending changes, but Capitol Hill conservatives are resisting the idea.

“Secretary Mnuchin believes it needs to be clean. I think the vast majority of the Republican conferences would not agree,” said Representative Mark Meadows R-N.C., chairman of the Freedom Caucus, a group of strongly conservative House Republicans.

Mulvaney said Mnuchin would ultimately be in charge of handling the debt ceiling push “once we do settle on our formal policy, if we do.”

A 2011 standoff between Republicans and the Obama administration over the debt ceiling led to tighter controls on spending. That standoff was not resolved until the 11th hour and prompted Standard & Poor’s to impose the first-ever downgrade to the country’s credit rating.

Talks with lawmakers

The administration is also engaged in talks with House and Senate Republican leaders about what kind of increase they could possibly pass. Mulvaney said the issue was not a source of division inside the White House or the Republican Party.

The discussions involve whether the House should increase the debt limit enough to last through the 2018 election or the president’s first term.

“It would be foolish of us to come up with a policy devoid of having talked to the Hill,” Mulvaney said.

Congress also faces pressure to pass a budget in September for next fiscal year, as well as to address administration priorities that include a tax code rewrite and the proposed repeal of former President Barack Obama’s 2010 health insurance law.

Failure to pass spending bills could cause a government shutdown and cause nonessential government agencies to close. Trump suggested on Twitter last month that he might welcome a shutdown to help shake up the government.

Mnuchin told the Senate Budget Committee this week that “at times there could be a good shutdown,” though he cautioned it’s not the administration’s “primary objective.”

With action on the budget front otherwise stalled, the House Appropriations Committee on Thursday approved the first of 12 spending bills, an $89 billion measure that contains generous increases for veterans programs and Pentagon construction projects.

But the White House and its GOP allies — much less opposition Democrats — haven’t come up with an overall plan for implementing Trump’s promises to increase the Pentagon budget and advance more than $500 billion worth of annual domestic agency spending bills.
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The U.S. central bank raised its benchmark interest rate Wednesday amid concerns about sluggish growth, a slowdown in consumer spending and low inflation. But the head of the U.S. Federal Reserve says the one-quarter of 1 percent increase in the federal funds rate demonstrates the committee’s confidence in the overall health of the U.S. economy. Mil Arcega has more.
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The real estate firm owned by the family of Jared Kushner has withdrawn a request for a big tax break for one its buildings in Jersey City, New Jersey, the latest setback for the company in the area.

The Kushner Cos. sent a letter withdrawing its application for a 30-year break from city taxes for a planned two-tower project in the struggling Journal Square section of the city, Jersey City spokeswoman Jennifer Morrill said Wednesday. Opponents of the tax breaks marched downtown earlier this year and the city’s mayor recently came out against the Kushner request.

Jared Kushner was CEO of the family company before stepping down to become a senior adviser to his father-in-law, President Donald Trump.

Committed to area

Kushner Cos. spokesman James Yolles said the company is committed to the “much-needed investment” in that area of the city.

The loss of the tax break is the latest blow for the company in a city where it is major real estate developer.

The 79-story building, One Journal Square, gained attention last month after Jared Kushner’s sister, Nicole Kushner Meyer, mentioned her brother in a presentation in Beijing where she had hoped to attract Chinese investors in the building. Marketing material noted the “celebrity status” of her family.

Government ethics experts blasted the family for what they said was an attempt to profit off Jared Kushner’s position in Washington, and the Kushner Cos. canceled upcoming investor presentations in the country.

The company said Meyer wasn’t trying to use her White House ties to attract investors.

EB-5 visa program

The Kushner family is seeking 300 wealthy Chinese to invest a total of $150 million in One Journal Square. The family was trying to raise money through the EB-5 visa program that grants temporary U.S. residency to wealthy foreigners in exchange for investments of at least $500,000 in certain U.S. projects

The company also is in danger of losing another tax break for the building. The shared office space firm WeWork recently pulled out as anchor tenant. That has put in doubt a state tax break tied to WeWork.

Another project is off, too. The Kushner Cos. once considered bidding to develop a 95-acre industrial site along the Hackensack River in the city for housing, called Bayfront. Last month, it was revealed the family had withdrawn from those plans last year.

The Kusnher Cos. has said politics had nothing to do with its decision to withdraw from Bayfront, and that “economics of the deal” drove the move.

As for One Journal Square, company spokesman Yolles said the project will provide 4,000 construction jobs and $180 million in tax revenue for the city over 30 years.

Tax breaks an issue

Jersey City Mayor Steven Fulop, a Democrat, is running for re-election this fall, and tax breaks to developers have become a major issue.

Unlike neighboring Hoboken, Jersey City has granted dozens of tax breaks in recent years. Fulop had campaigned to reform the practice, but critics say he has done little.

Another Kushner property in the city overlooking the Hudson River got a five-year tax break soon after Fulop was elected mayor. That 50-story building has licensed the Trump name and is called Trump Bay Street. The building was also partly financed with EB-5 visa money from abroad.

The Kushner family owns or manages 20,000 apartments, 13 million square feet of office space and industrial properties in several states, including New York, New Jersey, Maryland and Illinois. 
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Fierce competition among car manufacturers requires constant search for ways to cut expenses without compromising safety and other standards. One of the areas with room for improvement is in manufacturing of car bodies, which could be made lighter but still strong enough to protect passengers. VOA’s George Putic visited the National Institute for Science and Technology, NIST, outside Washington, where everything starts with new ways of testing sheet metal.
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China’s three big Internet-driven companies, Alibaba, Tencent, and Baidu, are set to influence a vast section of the country’s business because they control data concerning the consumer and social behavior of millions of people. The awesome power comes from the government’s drive to develop a “big data” industry, which is thriving in China.

Several other players, including utilities like phone companies and retail chains, are also trying to dip into the newly discovered pot of money from buyers who need information to understand buying preferences of potential customers, and design their products and strategies in line with the data flows.

“It [big data] is an improvement to do [a] better job, but unfortunately your [consumer’s] lifeline is more and more dependent on these big three guys,” said Chiang Jeongwen, a professor of marketing at the China Europe International Business School.

Recent studies have shown that nearly 90 percent of China’s 731 million online users have made at least one online purchase, often involving the use of Baidu’s search facilities, e-commerce sites and third-party transactions using mobile phone apps.

Predicting trends

“People are buying things and using their third party payment systems. [That] information [is] also being captured by Tencent and Alibaba. That is huge because now they know both offline and online information of consumers,” said Chiang.

These companies own a wide range of businesses that makes it possible for them to gather both online and offline data that is generated when a customer uses a phone app to make payments at a physical shop.

Alibaba owns Alipay while Tencent runs the highly popular WeChat service which offers mobile payment options. Baidu is China’s biggest internet search engine and holds the kind of influence that Google does in other countries.

“They have diversified the services [that] they offer. Alibaba, they are big in e-commerce. The kind of data they generate comes from anything ranging from what you buy online to your bill payments, travel bookings you do with, for example, the Alipay app,” said Shazeda Ahmed, visiting academic in the technology and economics division of Mercator Institute of Chinese Studies.

“People use the same platforms to make purchases, so there is a sense of extreme power in this situation because you can do all of these on one platform,” she explained.

These companies have a very strong predictive power that comes from a vast store of historical data and real-time data that they are collecting from users of different services. “They kind of able to anticipate the next thing a user might want before the user himself is aware of it,” she said.

Trading in data

The expansion of big data has given rise to serious concerns about the privacy of millions of people, who reveal both their transaction information and facets of social behavior through social media.

China has seen the rise of a black market for data. Data sellers offer a wide range of data on a targeted person, business or community by cracking into official databases and privately run sites.

But Chinese officials insist the government has put in place strong safeguards.

“There is a very strong firewall built before the big data center was established,” Zhang Bin, a senior official of the main big data center established by the Chinese government in Guiyang city. “We also made strict policy to control the data leaks from the government, so these are the two ways to protect information not to be leaked to the private companies for illegal use.”

The government has established a big data exchange center in Guiyang to encourage private and state-run companies to trade in data in a transparent manner, and help the industry find out the real price of the information. The center has come in for some praise by foreign companies who visited it but some questions remain unanswered.

“Having a legitimate place to trade data is an idea, but how does an exchange ensure that the data controllers has to requisite rights to sell data and it’s not breach of privacy?” Gagan Sabharwal, director of the National Association of Software and Service Companies in India, said after a recent visit.
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