India’s plans to invest in a strategic port in Sri Lanka as a counterbalance to China’s massive infrastructure investments in the Indian Ocean island country got a push Wednesday as Sri Lankan Prime Minister Ranil Wickremesinghe visited New Delhi.

China’s development of the key Hambantota port in Sri Lanka, which is a gateway to crucial shipping lanes, has raised concerns in New Delhi about Beijing’s widening naval influence in its neighborhood.

In New Delhi, India and Sri Lanka signed a memorandum of understanding on economic cooperation and expressed commitment to its implementation. Foreign Ministry spokesperson, Gopal Baglay, tweeted that it signaled “deepening economic collaboration.”

The specific deal to develop the World War II oil storage facility in the eastern port of Trincomalee, South Asia’s deepest natural harbor, is expected to be signed next month when Modi visits Colombo.

Although India’s planned investment in energy infrastructure in Trincomalee will be far more modest compared to Beijing’s ambitious Hambantota project, analysts say it will enable New Delhi to secure a foothold and ensure that no other country uses the harbor for military purposes.

While Colombo has assured India that Hambantota will be used only for commercial activity, its potential use as a naval base worries New Delhi. Those worries have intensified since a Chinese submarine docked briefly in Colombo port in 2014.

India has long fretted about China’s expanding foothold in the Indian Ocean region through infrastructure projects in countries such as Sri Lanka, Pakistan and Bangladesh.

“We find that India is now getting more and more strategically encircled by economic infrastructure projects,” according to Vijay Sakhuja, Director of the National Maritime Foundation in New Delhi.

Besides Hambantota port in Sri Lanka, he points to China’s building of Gwadar port in Pakistan. Warning that these projects, built to facilitate trade, also have a strategic element, he says, “We should not be surprised by frequent PLA [People’s Liberation Army] navy presence in the Indian Ocean, particularly in Gwadar, which will cause some discomfort to the naval planners in New Delhi.”

For Sri Lanka, India’s planned investment in the energy project in Trincomalee will help counterbalance the massive infrastructure deals signed with China by the former government of Mahinda Rajapaksa, who had leaned heavily toward Beijing.

“The spin off of that [project] is balancing what is perceived as predominant Chinese influence as far as the economy is concerned,” said Paikiasothy Saravanumuttu at the Center for Policy Alternatives in Colombo.

The new government is trying to move away from the heavy dependance on Beijing for foreign investment. During a recent visit to Tokyo, Prime Minister Wickremesinghe sought Japanese investment for the Colombo and Trincomalee ports.

 
…

Some 200 taxis and buses have parked outside the government offices in Romania’s capital, Bucharest, demanding that Uber and other online taxi services be outlawed in the country. 

Transport in the already crowded city was disrupted Wednesday morning as the protest, scheduled to last until the evening, got underway.

Drivers arrived early and parked their yellow taxis and blew vuvuzela horns in protest. Some met Premier Sorin Grindeanu to present their demands.

Bogdan Dinca, a transport union leader, told The Associated Press that they want the government to approve an emergency ordinance “to eradicate the piracy” they accuse Uber of. The ordinance awaits final approval by the prime minister. 

The Confederation of Licensed Transport Operators says it wants “online technology platforms that provide unauthorized taxi services to be outlawed,” to protect licensed carriers. 

Uber says it is a ride-sharing service with transparent costs and its drivers pay taxes. It says some 250,000 clients have used its services in the Romanian capital and other major cities in the past two years.
…

President Donald Trump and Commerce Secretary Wilbur Ross on Tuesday said they did not fear a trade war with Canada after American punitive action on lumber and milk.

“They have a tremendous surplus with the United States,” Trump said, adding “people don’t realize Canada’s been very rough on the United States. … They’ve outsmarted our politicians for many years.”

Trump added that he wanted “a very big tax” on Canadian lumber and timber.

He made the comments at a meeting with American farmers where he signed an executive order aimed at helping agriculture and rural areas.   

Trump also talked to Canadian Prime Minister Justin Trudeau Tuesday. Trudeau “refuted the baseless allegations by the U.S. Department of Commerce and the decision to impose unfair duties,” according to a summary of the call released by Trudeau’s office.

“The prime minister stressed that the government of Canada will vigorously defend the interests of the Canadian softwood industry, as we have successfully done in all past lumber disputes with the U.S.,” the statement said.

The Canadian dollar fell to a 14-month low against the greenback after the United States imposed preliminary tariffs averaging 20 percent — more than $1 billion of countervailing duties — on imported Canadian softwood.

Earlier in the day, Trump vowed moves to protect the American dairy industry.

On Tuesday morning, he tweeted: “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”

Against NAFTA

Trump, since his time campaigning for the presidency, has voiced his strong displeasure with the 1994 North American Free Trade Agreement (NAFTA), but until now he has vented most of his ire southward, toward Mexico.

Ross, speaking to reporters on the White House podium, would not explicitly characterize the actions on lumber and dairy as the opening shots on renegotiating NAFTA, but he did say: “Everything relates to everything else when you’re trying to negotiate.”

He described Canada as “generally a good neighbor,” asserting that its allegedly unfair trade practices regarding lumber and dairy were not very neighborly.

Asked on Tuesday in Kitchener, Ontario, about the U.S. trade actions and the fate of NAFTA, Canadian Prime Minister Justin Trudeau replied, “Standing up for Canada is my job, whether it’s softwood or software.”

Trudeau added, “Any two countries are going to have issues that will be irritants to the relationship and, quite frankly, having a good, constructive, working relationship allows us to work through those irritants.”

Some other Canadians were less diplomatic in their reactions.

“In Canada, the perception is that we’re always very nice,” said Unifor President Jerry Dias, representing forestry workers across the country. “But we can’t get trampled by this guy [Trump].”

‘Ignore, do not engage’

The majority of Canadians, including the prime minister and his colleagues, “understand that President Trump is prone to making ill-informed, off-the-cuff and arbitrary comments about a host of domestic and foreign policy issues,” Donald Abelson, the chairman of the political science department at the University of Western Ontario in London, told VOA.

“Canada will likely respond to Trump’s Tuesday tweet in a manner similar to how a competent parent responds to a child’s temper tantrum — ignore, do not engage,” added Abelson, who is also director of the school’s Canada-U.S. Institute.  

Other Canadians displayed wry humor — a traditional reaction to irritations from south of the border (at least since the last U.S. invasion during the War of 1812), considering the asymmetry of power.   

The president’s messages prompted immediate puns on Canadian social media, with tweets referencing “sacred cows” and calling the American trade action on dairy “udderly stupid” and “cheesy,” Sparkle Hayter, veteran Canadian journalist and author, told VOA.

The dairy dispute goes back decades. Currently, there is an overproduction of milk, according to dairy farmers on both sides of the border.

The U.S.-Canada lumber squabble is rooted in a couple of centuries of history.

In response to the proposed tariff on softwood lumber, “Canada to strike back by charging duties on exported Cdn actors,” tweeted the account of 22 Minutes, a satirical news program on national public broadcaster CBC.

Cows are No. 1

The Twitter account also noted the U.S. president “tweeted about Canadian dairy industry first thing this morning, so on his list of priorities: 1. Canadian Cows. 2. North Korea.”  

Trump’s attention on Canada comes amid indications he is pivoting away — at least temporarily — from the southern border and his quest to quickly fund his border wall with Mexico.

“We have plenty of time” to complete the wall during his first term, Trump assured reporters Tuesday afternoon.  

The presidential desire for border protection might find a better reception to the north, considering the comments from some Canadians.

“Some [in Canada] would like to separate from the U.S., like literally,” by digging a two-mile moat at the border “and filling it with beavers and mosquitoes,” quipped Hayter from her home province of Alberta.   

But many Canadians see themselves confronting a cross-border creature bigger than a beaver.

“Sleeping with an elephant” is how the late Pierre Trudeau, the current Canadian prime minister’s father, once characterized relations with the United States, “affected by every twitch and grunt.”
…

U.S. President Donald Trump is set to call for a sharp reduction in the nation’s corporate tax rate, the highest among the world’s industrialized countries.

Trump is planning to unveil his tax plans Wednesday, with aides saying he will ask Congress to slash the current 35 percent rate down to 15 percent, a pledge he first made during last year’s presidential election campaign.

White House spokesman Sean Spicer said the U.S. has been “uncompetitive” against other countries in attracting new businesses, “largely because of our rates.”

U.S. lawmakers have for years vowed to adopt broad tax reforms, but the efforts have foundered. Congress has been unable to reconcile competing demands to eliminate tax breaks for some corporate and individual interests and raise taxes on others.

Trump’s tax plans are likely to face months of hearings and debate in Congress, where his Republican colleagues have their own ideas on how the tax code ought to be reshaped. Some lawmakers have expressed concerns that Trump’s call for a big corporate tax cut would balloon the nearly $20 trillion in long-term debt the U.S. has accumulated if there are not corresponding measures to raise more revenue.

U.S. Treasury chief Steven Mnuchin said Monday, “The tax reform will pay for itself with economic growth” that would boost tax revenues. Mnuchin called for tax simplification as well, saying U.S. reforms ideally would let taxpayers file their annual tax returns on a “large postcard.”

The U.S. economy, the world’s largest, grew at a tepid 1.6 percent pace last year, a figure Trump is hoping to boost to 3 percent a year, which the United States has not reached since 2005.

Tax experts say the 35 percent U.S. corporate tax rate is the highest among the world’s 35 industrialized nations, although U.S. corporations rarely pay that much because they are permitted to deduct their business expenses from their revenues before paying the amount they owe.

When the 35 percent rate is added to the average state corporate tax rate, the figure reaches 38.9 percent, which ranks third in the world among 188 countries surveyed by the Washington-based Tax Foundation. The U.S. figure trails only that of the United Arab Emirates at 55 percent and the U.S. territory of Puerto Rico at 39 percent.
…

Canadian officials say a new tariff imposed by the Trump administration will raise the cost of new homes in the United States by $1,000 each, and shut 150,000 Americans out of home ownership. Washington’s decision also puts “thousands” of U.S. homebuilding jobs at risk, according to Canada’s ministers of natural resources and foreign affairs.

The comments follow preliminary action by the U.S. Commerce Department to impose a 20 percent tariff on $5.77 billion worth of soft wood imports from Canada to the United States. The wood is a key ingredient of family homes.

U.S. officials allege that Canada unfairly subsidizes exported wood. Subsidies could make the product cheaper, making it difficult for U.S. companies to compete on price.

Canada “strongly disagrees” with the decision to impose this “unfair and punitive” tax, says Canada’s resources minister, Jim Carr. Canada’s foreign minister, Chrystia Freeland, says Canada will take the issue to court, where the United States has lost similar cases in the past. 

U.S. Commerce Secretary Wilbur Ross says this has been “a bad week” in U.S.-Canadian trade relations, noting an additional dispute over Canadian milk exports.

While the dispute over wood tariffs might raise the cost of new homes in the United States, a report published Tuesday by the Census Bureau shows sales of newly-constructed homes jumped upward by 5.8 percent last month. If sales continue at that pace for a year, 621,000 homes would change hands. Prices also rose.

A separate report from a business group called the Conference Board showed consumer confidence declined in April. Economists at Wells Fargo say that despite the drop, consumer confidence remains near a 12-year high. Experts watch consumer confidence for clues about consumer spending, which drives 70 percent of U.S. economic activity.
…

U.S. Senator Dan Sullivan on Monday called on both the American and Chinese governments to exercise “true reciprocity” in relations, including trade and diplomacy. 

The Republican senator from Alaska, in a speech concerning Chinese outbound investment, and in an interview with VOA afterward, said China has been aggressively buying companies in key sectors such as robotics, biotech, advanced machineries, software, entertainment and media “throughout America and Western Europe. But if you’re an American firm, or a firm from Germany, and you want to go to China and buy Chinese companies in those same sectors, you would be told ‘no;’ you would be prohibited.”

Making “true reciprocity” US policy

Sullivan’s proposed “true reciprocity” is rather simple and straightforward: “If Chinese companies want to invest in America’s biotech sector, then American companies should be able to invest in China’s biotech sector. It’s simple, it’s fair, it’s what China has said it wants to do but it doesn’t do, and we need to be much more serious about implementing it.”

Should China continue to ignore Washington’s calls for equal treatment and a level playing field, Sullivan says he is prepared to introduce legislation aiming at closing what he identifies as China’s “credibility gap,” and making sure that “true reciprocity” becomes official U.S. policy.

The Alaska Republican, who serves on both the Senate’s Commerce and Armed Services Committees, called on the U.S. government to reject “Middle Kingdom diplomatic practices” that fail to grant U.S. diplomats the same level of access Chinese diplomats receive in Washington. 

“Middle kingdom” diplomatic practices

Quoting from a study done by the New York-based Asia Society, Sullivan said “for a number of years, the U.S. ambassador in Beijing was only getting deputy minister level access while we, of course, give higher access to Chinese ambassadors here in Washington.”He called the solution to such unequal diplomatic treatments “a no brainer.” 

“If our ambassador in Beijing only gets deputy minister level access, then that’s what we should provide China’s ambassador in Washington, period. Middle Kingdom diplomatic practices should be firmly and aggressively rejected by the U.S. government everywhere,” Sullivan said.

He agreed that his proposed “true reciprocity” ought to also include issues such as granting journalists visas and access in both countries.

Growing domestic consensus

Sullivan said “there’s growing domestic consensus” in the United States that America’s strategic interests, including strategic economic interests, outweigh the market price of individual transactions, while acknowledging that each individual American businessman or woman naturally want the highest return for their individual product.

“The broader strategic interest of having a strong U.S. economy, and signaling to the next biggest economy in the world, China, that you need to play by the rules we play by, is also very important; and in my view, that importance strategically overrides the interest of the ability of American firms to sell to Chinese investment funds.”

Senator Dan Sullivan: China needs to play by rules we play by

Geo-economics

Daniel Twining, counselor and director of the Asia Program at the German Marshall Fund of the United States and an associate of the U.S. National Intelligence Council, thinks the U.S. economic power so far has not been sufficiently utilized to advance the nation’s overall strategic, political and economic interests. 

“The U.S. is used to this traditional foreign policy tool kit that involves the armed forces, the diplomatic corps and development (foreign aid), but there’s really a fourth link here, which is our economic statecraft,” he told VOA.

Twining said other major powers, including China, appear to be much more adept at what he called “geo-economics,” using trade and investment “quite actively” and “quite smartly” to advance overall national interests.“It may be smart for us to think more about our economic strategies in the world,” including acknowledging and adopting strategies accordingly based on the fact that “market forces are not working everywhere, including in an economy like China that is still somewhat closed or controlled in some respects.”

Daniel Twining: Market forces are not working everywhere

​

Forgoing short-term profit

A newly released report by Baker McKenzie put Chinese worldwide outbound investment at $200 billion in 2016, nearly half of which targeted assets in North America and Europe. 

According to Robert Shapiro, chairman of Sonecon and former U.S. Undersecretary of Commerce for Economic Affairs, the primary goal of China’s overseas investments does not lie in short-term profit but rather in gaining strategic advantage, and that means not necessarily in gaining immediate economic return.

Robert Shapiro: China playing the long game

​
…

General Motors’ Venezuelan subsidiary has sent a message to almost 2,700 staff informing them that they are no longer employed by the company and had received severance pay in their bank accounts, according to two employees.

A Venezuelan court last week ordered the seizure of the company’s Valencia plant, ruling in favor of two dealers that had filed a case in 2000 against the subsidiary on grounds they had not complied with an agreed sale of 10,000 vehicles.

Workers say that before the seizure was announced, GM had been dismantling the plant, which has not produced a car since the beginning of 2016 because of shortages of parts and strict currency controls in the OPEC nation.

The seizure, which GM called “illegal,” comes amid a deepening economic and social crisis in leftist-led Venezuela that has already roiled many U.S. companies.

“We all received a payment and a text message,” said a worker who had worked for the company for more than a decade, adding that his corporate email account had been deactivated over the weekend.

“Our former bosses told us the executives left and we were all fired. There is no longer anyone in the country,” added another employee who received the same message on his personal cell phone and a payment to his account. He had been at GM for five years.

The company did not immediately respond to a request for comment about the layoffs or the worker allegations it had already been dismantling the plant.

GM said last week that it was halting operations and laying off workers due to the “illegal judicial seizure of its assets.”

‘Show Your Face’

The leftist government of Nicolas Maduro says it is not seeking to expropriate the plant, which has been operating for 35 years, and has called on GM to come back.

“To the current General Motors president of Venezuela, Jose Cavaileri: You come here, show your face and share with us the options to restore normality,” said Labor Minister Francisco Torrealba said Monday.

GM is not the first company to fire Venezuela employees by text message. Clorox did the same two years ago when announcing its exit from the crisis-struck country, after which workers took over the plant.

GM’s plant closure comes after Venezuela’s automobile production fell in 2016 to a record low of eight cars per day, according to a local automotive group.

Two union spokespeople said they had no official company information on the layoffs, but said that most workers received the messages along with a bank deposit.

Neither employee would reveal the amount they received but union leaders said it was too low.
…

Tesla Chief Executive Elon Musk took many risks with the technology in his company’s cars on the way to surpassing Ford Motor Co.’s market value.

Now Musk is pushing boundaries in the factory that makes them.

Most automakers test a new model’s production line by building vehicles with relatively cheap, prototype tools designed to be scrapped once they deliver doors that fit, body panels with the right shape and dashboards that don’t have gaps or seams.

Tesla, however, is skipping that preliminary step and ordering permanent, more expensive equipment as it races to launch its Model 3 sedan by a self-imposed volume production deadline of September, Musk told investors last month.

Musk’s decision underscores his high-risk tolerance and willingness to forego long-held industry norms that has helped Tesla upend the traditional auto industry.

While Tesla is not the first automaker to try to accelerate production on the factory floor, no other rival is putting this much faith in the production strategy succeeding.

Musk expects the Model 3 rollout to help Telsa deliver five times its current annual sales volume, a key target in the automaker’s efforts to stop burning cash.

“He’s pushing the envelope to see how much time and cost he can take out of the process,” said Ron Harbour, a manufacturing consultant at Oliver Wyman.

Investors are already counting on Tesla’s factory floor success, with shares soaring 39 percent since January as it makes the leap from niche producer to mass producer in far less time than rivals.

There are caution signs, however. The production equipment designed to produce millions of cars is expensive to fix or replace if it doesn’t work, industry experts say. Tesla has encountered quality problems on its existing low-volume cars, and the Model 3 is designed to sell in numbers as high as 500,000 vehicles a year, raising the potential cost of recalls or warranty repairs.

“It’s an experiment, certainly,” said Consumer Reports’ Jake Fisher, who has done extensive testing of Tesla’s previous Models S and X. Tesla could possibly fix errors quicker, speeding up the process, “or it could be they have unsuspected problems they’ll have a hard time dealing with.”

Musk discussed the decision to skip what he referred to as “beta” production testing during a call last month with an invited group of investors. Details were published on Reddit by an investor on the call.

He also said that “advanced analytical techniques” — code word for computer simulations – would help Tesla in advancing straight to production tooling.

Tesla declined to confirm details of the call or comment on its production strategy.

The auto industry’s incumbents have not been standing still.

Volkswagen AG’s Audi division launched production of a new plant in Mexico using computer simulations of production tools — and indeed the entire assembly line and factory – that Audi said it

believed to be an industry first. That process allowed the plant to launch production 30 percent faster than usual, Audi said.

An Audi executive involved in the Mexican plant launch, Peter Hochholdinger, is now Tesla’s vice president of production.

Making Tools Faster

Typically, automakers test their design with limited production using lower grade equipment that can be modified slightly to address problems. When most of the kinks are worked out, they order the final equipment.

Tesla’s decision to move directly to the final tools is in part because lower grade, disposable equipment known as “soft tooling” ended up complicating the debut of the problem-plagued Model X SUV in 2015, according to a person familiar with the decision and Tesla’s assembly line planning.

Working on a tight deadline, Tesla had no time to incorporate lessons learned from soft tooling before having to order the permanent production tooling, making the former’s value negligible, the source said.

“Soft tooling did very little for the program and arguably hurt things,” said the person.

In addition, Tesla has learned to better modify final production tools, and its 2015 purchase of a Michigan tooling company means it can make major equipment 30 percent faster than before, and more cheaply as well, the source said.

Financial pressure is partly driving Tesla’s haste. The quicker Tesla can deliver the Model 3 with its estimated $35,000 base price to the 373,000 customers who have put down a $1,000 deposit, the closer it can log $13 billion.

Tesla has labored under financial pressure since it was founded in 2003. The company has yet to turn an annual profit, and earlier this year Musk said the company was “close to the edge” as it look toward capital spending of $2-2.5 billion in the first half of 2017.

Tesla has since gotten more breathing room by raising $1.2 billion in fresh capital in March and selling a five percent stake to Chinese internet company Tencent Holdings

Ltd.

Musk has spoken to investors about his vision of an “alien dreadnought” factory that uses artificial intelligence and robots to build cars at speeds faster than human assembly workers could manage.

But there are limits to what technology can do in the heavily regulated car business. For example, Tesla will still have to use real cars in crash tests required by the U.S. government, because federal rules do not allow simulated crash results to substitute for data from a real car.
…

A fungus that causes “vomitoxin” has been found in some U.S. corn harvested last year, forcing poultry and pork farmers to test their grain, and giving headaches to grain growers wrestling with massive supplies and low prices.

The plant toxin sickens livestock and can also make humans and pets ill.

The appearance of vomitoxin and other toxins produced by fungi is affecting ethanol markets and prompting grain processors to seek alternative sources of feed supplies.

Researchers at the U.S. Department of Agriculture first isolated the toxin in 1973 after an unusually wet winter in the Midwest. The compound was given what researchers described as the trivial name vomitoxin because pigs refused to eat the infected corn or vomited after consuming it. The U.S. Corn Belt had earlier outbreaks of infection from the toxin in 1966 and 1928.

The spread of vomitoxin is concentrated in Indiana, Wisconsin, Ohio, and parts of Iowa and Michigan, and its full impact is not yet known, according to state officials and data gathered by food testing firm Neogen Corp. 

In Michigan, Wisconsin and Indiana, a considerable share of corn crops tested since last fall’s harvest have had vomitoxin levels high enough to be considered too toxic for humans, pets, hogs, chickens and dairy cattle, according to public and private data compiled by Neogen. The company did not state what percent of each state’s corn crop was tested.

Toxin levels

The U.S. Food and Drug Administration allows vomitoxin levels of up to 1 part per million (ppm) in human and pet foods and recommends levels under 5 ppm in grain for hogs, 10 ppm for chickens and dairy cattle. Beef cattle can withstand toxin levels up to 30 ppm.

Alltech Inc, a Kentucky-based feed supplement company, said 73 percent of feed samples it has tested this year have vomitoxin. The company analyzed samples sent by farmers whose animals have fallen ill.

“We know there is lots of bad corn out there, because corn byproducts keep getting worse,” said Max Hawkins, a nutritionist with Alltech.

Neogen, which sells grain testing supplies, reported a 29 percent jump in global sales for toxin tests, with strong demand for vomitoxin tests, in their fiscal third quarter, ending Feb. 28.

“We’re polling our customers and continually talking to them about the levels they’re seeing. Those levels are not going down,” said Pat Frasco, director of sales for Neogen’s milling, grain and pet food business.

The problem, stemming from heavy rain before and during the 2016 harvest, prompted farmers to store wet grain, said farmers, ethanol makers and grain inspectors.

The issue was compounded by farmers and grain elevators storing corn on the ground and other improvised spaces, sometimes covering the grain piles with plastic tarps. Grain buyers say they will have a clearer picture of the problem later this spring, as more farm-stored grain is moved to market.

Iowa State University grain quality expert Charles Hurburgh said the sheer size of the harvest in 2016 — the largest in U.S. history — complicates the job of managing toxins in grain, especially in the core Midwest.

“Mycotoxins are very hard to handle in high volume,” he said. “You can’t test every truckload, or if you do, you are only going to unload 20 trucks in a day.” By comparison, corn processors in Iowa unload 400 or more trucks a day.

Biofuel impact

Ethanol makers are feeling the impact. Turning corn into ethanol creates a byproduct called distillers dried grains (DDGs), which is sold as animal feed. With fuel prices low, the DDGs can boost profitability.

But the refining process triples the concentration of mycotoxins, making the feed byproduct less attractive. DDG prices in Indiana fell to $92.50 per ton in February, the lowest since 2009, and now are selling for $97.50 per ton, according to USDA.

Many ethanol plants are testing nearly every load of corn they receive for the presence of vomitoxin, said Indiana grain inspector Doug Titus, whose company has labs at The Andersons Inc., a grain handler, and energy company Valero Energy sites.

The Andersons in a February call with analysts said vomitoxin has hurt results at three of its refineries in the eastern U.S. 

“That will be with us for some time,” Andersons’ chief executive Pat Bowe said.

Mixing with clean grain

Missouri grain farmer Doug Roth, who put grain into storage after last year’s wet harvest, has seen a few loads of corn rejected by clients who make pet food after the grain tested positive for low levels of fumonisin, a type of mycotoxin.

Roth said he paid to reroute the grain to livestock producers in Arkansas, who planned to blend it with unaffected grain in order to mitigate the effect of the toxins.

U.S. farmers with clean corn are reaping a price bump. A Cardinal Ethanol plant in Union City, Indiana, is offering grain sellers a 10-cent per bushel premium for corn with less than one-part-per-million or less of vomitoxin in it, according to the company’s website.
…

Lawmakers from coal-mining states are pushing to extend health benefits for more than 22,000 retired miners and widows whose medical coverage is set to expire at the end of April.

West Virginia Sen. Joe Manchin and other coal-state Democrats threatened to shut down the government over the issue in December, but they retreated after winning a four-month extension that preserves benefits through April 30.

As lawmakers return to the Capitol following a two-week recess, Manchin says the time for extensions is over.

“We will use every vehicle we can, every pathway we can, to make sure we do not leave here … until we have our miners protected,” he said in a speech on the Senate floor before the break.

“We’ve been very patient,” Manchin said. “I am not going to have another notice sent out to our retired miners, to their widows, saying we’ve given you 90 days or 120 days extension. That’s not going to happen this time.”

Deadline is Friday

But as a Friday deadline looms to keep the government open, lawmakers have not reached agreement on extending the benefits. A plan pushed by GOP leaders in the House would extend health benefits for 20 months, through the end of 2018.

Manchin said Senate Democrats are against that idea because it’s only a partial fix. At least a dozen Senate Republicans are willing to join Democrats in support of a more complete plan that addresses health benefits and a related issue over failing pension plans for nearly 100,000 unionized miners, Manchin said.

“This shouldn’t be a Republican or Democrat issue,” he said in an interview. “This is an issue of fairness.”

A spokesman for Senate Majority Leader Mitch McConnell, R-Ky., said McConnell supports legislation to protect and permanently extend the health benefits, but had no word on the progress of talks related to the spending bill.

A spokesman for House Speaker Paul Ryan also offered no update.

Pieces and parts

President Donald Trump, who has vowed to revive the struggling coal industry, has given “verbal support” for the miners’ benefits, Manchin said, but needs to do more.

“I need him now to either tweet or call Senator McConnell and tell him it’s time to act,” Manchin said. “Mr. President, if you are listening, please tweet out: ‘Mitch, help us. We need you.’”

Trump and Republicans have decried what they describe as a “war on coal” waged by the Obama administration, and have taken a series of actions since Trump took office to boost coal production and reduce regulations, including a rule to protect streams from coal-mining debris.

Trump’s budget director, Mick Mulvaney, told reporters that the White House is “happy to talk … about pieces and parts of the miners’ programs” as part of negotiations on a bill to keep the government open.

“I don’t think we’re very interested in the pension component of that but more interested in talking about the health care component of that,” Mulvaney said.

Pension problem is bigger

Phil Smith, a spokesman for the United Mine Workers of America, said he is hopeful a compromise can be reached on health benefits, but he complained that Republicans appear unwilling to address the far more costly pension issue. Congress scrapped a $3 billion, 10-year measure to stabilize failing pension funds last year.

“The pension part is not going to go away. It only gets worse by the day,” he said.

Account balances have dwindled amid the coal’s industry steep decline, including continued layoffs and a rash of bankruptcy filings that have spread to the industry’s largest companies. Without congressional intervention, some pension funds could run out of cash by next year, the union says.

For the moment, Congress appears focused on health benefits.

In West Virginia, about 8,500 retired miners and their families face loss of benefits if Congress does not act. Some mining families have been unable to make doctor’s appointments after May 1 because of uncertainty over whether medical bills will be paid, Smith said.

Other states affected include Pennsylvania, Kentucky, Ohio, Illinois, Indiana, Virginia and Alabama.
…

Motorists in Pyongyang are scrambling to fill their tanks as gas stations begin limiting services or closing amid concerns of a spreading shortage.

A sign outside one station in the North Korean capital said Friday that sales were being restricted to diplomats or vehicles used by international organizations, while others were closed or turning away local residents. Lines at other stations were much longer than usual and prices appeared to be rising significantly. 

The cause of the restrictions or how long they might last were not immediately known. 

Fuel from China

North Korea relies heavily on China for its fuel supply, and Beijing has reportedly been tightening its enforcement of international sanctions aimed at getting Pyongyang to abandon its development of nuclear weapons and long-range missiles.

The issue was raised at a regular Chinese Foreign Ministry news conference in Beijing Friday after a Chinese media outlet, Global Times, reported gas stations were restricting service and charging higher prices. 

But spokesman Lu Kang gave an ambiguous response when asked if China was restricting fuel deliveries.

“As for what kind of policy China is taking, I think you should listen to the authoritative remarks or statements of the Chinese government,” he said, without elaborating on what those remarks or statements are. “For the remarks made by certain people or circulated online, it is up to you if you want to take them as references.” 

New sanctions an option

One of China’s top North Korea scholars, Kim Dong-jil, director of the Center for Korean Peninsula Studies of Peking University, said he had not heard of new restrictions on fuel to pressure Pyongyang, but said they are considered to be an option.

China’s Ministry of Commerce had no immediate comment 

Gasoline was selling at $1.25 per kilogram at one station, up from the previous 70-80 cents. According to a sign outside a station where ordinary North Korean vehicles were being turned away, the restrictions took effect Wednesday.

Gasoline is sold in North Korea by the kilogram, roughly equivalent to a liter (0.26 gallon).

When buying gas in North Korea, customers usually first purchase coupons at a cashier’s booth for the amount of fuel they want. After filling up the tank, leftover coupons can be used on later visits until their expiration date. A common amount for the coupons is 15 kilograms (19.65 liters or 5.2 U.S. gallons).

Supply is controlled by the state, but prices can vary from one station to another. 

More cars to fuel

The military, state ministries and priority projects have the best access. Several chains of gas stations are operated under different state-run enterprises, for example, Air Koryo, the national flagship airline, operates gas stations as well. 

Traffic in Pyongyang has gotten heavier than in past years, when visitors had often been struck by the lack of cars on the capital’s broad avenues.

The greater number of cars, including swelling fleets of taxis, has been an indication of greater economic activity, as many are used for business purposes, such as transporting people or goods.
…

Even after disembarking from North Korea’s Air Koryo plane at Pyongyang airport, it’s difficult to miss the airline’s brand. The Air Koryo conglomerate makes cigarettes and fizzy drinks, besides owning a taxi fleet and petrol stations – and all have the same flying crane logo as the carrier.

The military-controlled airline expanded into consumer products in earnest in recent months, visitors to the isolated country say. It was not clear if the diversification into the domestic market was related to the loss of many international routes when the United Nations slapped economic sanctions on North Korea for its nuclear and ballistic missile programs.

Washington is now considering tougher measures, including a global ban on Air Koryo itself, to punish North Korea for continuing weapons tests, U.S. officials have said.

But any U.S. action on Air Koryo would not be binding on other nations and would have little effect unless joined by China and Russia – both of which have sought to introduce exceptions to United Nations sanctions on North Korea in the past.

“China may indeed agree to this kind of ban on Air Koryo since it seems like China and the U.S. have reached an agreement that North Korea needs to be dealt with in some way. But the question is whether Russia will agree to sanctions against Air Koryo,” said Sun Xingjie, an associate professor at China’s Jilin University.

North Korean officials are rarely accessible to reporters, and it was not possible to get comment from Air Koryo or from the Pyongyang government.

Air Koryo now flies only to Beijing and three other cities in China, and to Vladivostok in Russia. Flights to Bangkok, Kuala Lumpur and Kuwait were dropped last year but just last month, Air Koryo added a route from Pyongyang to the Chinese city of Dandong, the main transit point for trade between the two countries.

Air Koryo has 15 active planes on its fleet, either Russian or Ukrainian-made, and uses refuelling, maintenance and repair facilities in China and Russia, according to aviation databases and U.N. documents.

The airline has a number of domestic flights connecting the capital Pyongyang to Orang, Sondok and Samjiyon towns, according to a schedule available last year.

Businesses in secretive North Korea do not publicly share information about revenues or costs, so it was not possible to determine what effect any existing sanctions have had or may have in future.

But visitors to North Korea say the Air Koryo conglomerate, owned by the country’s air force, is clearly expanding.

Cabs, Gas Stations

In 2015, the conglomerate launched its own brand of sky-blue taxis which now parade the streets of Pyongyang alongside cabs from at least eight other state-owned companies.

Air Koryo colas and cigarettes are available in shops across Pyongyang.

Air Koryo started branching into soft drinks late last year, said Simon Cockerell of Beijing-based Koryo Tours, which organizes travel to North Korea.

It got into retail sales of petrol in January. “They have at least one petrol station in Pyongyang, perhaps two,” Cockerell said. “I wouldn’t be surprised to see more Air Koryo products make it to market before too long.”

A United Nations panel which investigates North Korean sanctions infringements said in a report in February there was an “absence of boundaries” between Air Koryo and the air force.

“The airline’s assets are actively utilised for military purposes,” the report said.

“Outwardly, this seems like a commercial airline, but in effect, this is run by the government,” said Kim Yong-hyun, a professor of North Korean Studies at Dongguk University in South Korea.

The United Nations has not sanctioned Air Koryo, although it has accused it of being involved in the smuggling of banned goods. Civilian aircraft are exempt from the U.N. ban on jet fuel exports to North Korea when refuelling overseas. Member states are required to inspect any cargo originating from North Korea, including on Air Koryo flights.

In December, the United States designated Air Koryo, 16 of its aircraft and 10 of its offices as “sanctioned entities,” meaning that U.S. citizens are generally prevented from engaging in transactions with them. It was not clear if the ban extended to Americans flying on the airline for tourism.

Officials at Pyongyang’s airport said they were unconcerned about any attempts by the global community to strengthen sanctions that could target Air Koryo directly.

“We are not afraid, we have our own counter actions prepared,” said a customs official, without elaborating, standing at the Air Koryo check-in counter.

Kim, the South Korean professor, said any sanctions on Air Koryo would have mostly a symbolic effect.

“It will not cause huge damage to the North Korean economy,” he said in the Korean language. “Air Koryo is not a ‘dollar box'[which makes a lot of foreign money].”
…

U.S. President Donald Trump has ordered a full review of the powers given to government regulators to oversee the banking and finance industries following the financial meltdown of 2008.

Trump went to the Treasury Department on Friday to sign three executive orders that start the process of fulfilling his campaign pledges to undo regulations that he says unduly strain the U.S. economy.

“My entire administration [is] working around the clock to help struggling Americans achieve their financial dreams … and have real confidence in the future,” Trump said as he signed the orders. “Together we will restore prosperity to this nation.”

U.S. Treasury Secretary Steve Mnuchin explained that two of the orders could eventually lead to a significant revision of controversial provisions of the 2010 Dodd-Frank Wall Street Reform law.

“Our goal is to make this a smarter, more effective process that reduces the kind of systemic risk that harmed so many Americans during the financial crisis of 2008,” Mnuchin said.

Dodd-Frank reform

One order temporarily freezes a portion of Dodd-Frank known as the Orderly Liquidation Authority, which gives the federal government broad discretion in making loans to failing financial institutions. The Trump administration argues that the OLA encourages excessive risk-taking by banks because taxpayers are potentially liable for bad loans.

Trump on Friday called the Dodd-Frank regulations “unfair” and “damaging,” saying they had “failed to hold Wall Street firms accountable.”

Critics say the review is aimed at revoking Obama-era reforms that have brought stability and transparency to the sometimes murky world of high finance, and helped to prevent another crisis.

Edwin Truman, who served as a senior Treasury official in the Clinton and Obama administrations, says Dodd-Frank encourages banks to raise more capital and be more open about their activities.

“That doesn’t mean that a complicated piece of legislation like Dodd-Frank couldn’t be improved and tweaked,” Truman told VOA. “It’s like Obamacare. It could be improved while maintaining its basic principles. So there’s scope for reform but not really repeal or replacement.”

Boston University law professor Tamar Frankel, an expert in financial system regulation, said Dodd-Frank has not achieved the purpose for which it was designed, which is to create consumer confidence in the banking industry. But she worries that a rollback of Obama-era regulations could bring about a return to dangerous lending practices.

“Loans of the kind banks made before 2008 are the poison of any financial system,” Frankel said.

Tax laws

Trump’s latest orders also authorize a review of tax laws, which the president argues impose an undue burden on taxpayers.

“This is such a privilege for me to sign,” he said during the ceremony. “This is really the beginning of a whole new way of life that this country hasn’t seen in really many, many years.”

Secretary Mnuchin told reporters Friday he was looking forward to taking a hard look at the tax code.

“We are going to go through and look at every significant financial regulation that’s been done in the past year and a half,” Mnuchin explained. “We’re going to determine if they’re needed in the tax code, or if they’re unnecessary.”

In making his case, Mnuchin pointed to statistics showing individuals and businesses cumulatively spend a total of 6.1 billion hours complying with the tax code each year, at a cost to the U.S. economy of $234.4 billion. He said the basic Form 1040 used to file taxes had grown from 34 lines and two pages of instructions to 79 lines and 211 pages of instructions.

Mnuchin has 180 days to report back to the president with recommended reforms.

Trump also hinted Friday that he’s almost ready to make another big announcement on taxes, saying he was ready to unveil a “massive tax cut” next week, shortly before he reaches the symbolic 100-day mark of his presidency.

“The process has begun long ago, ” he said, “but it really formally begins on Wednesday.”

In a separate interview with The Associated Press, Trump said the plan would provide tax cuts for both individuals and businesses. He would not provide details of the plan, saying only that the tax cuts will be “bigger I believe than any tax cut ever.”
…

As economic and political leaders gather in Washington for the annual spring meetings of the World bank and International Monetary Fund — new warnings Thursday about the impact of rapid change on the global economy. At issue, the pace of technological advance and its Impact on jobs, particularly in developing economies. Mil Arcega has more.
…

U.S. officials are reviewing Venezuela’s seizure of General Motors’ assets in the country, U.S. State Department spokesman Mark Toner said Thursday.

“We are reviewing the details of the case,” Toner said in a statement, saying the United States hoped to resolve the matter “rapidly and transparently.”

GM said Wednesday that Venezuelan authorities had taken over its plant in the industrial hub of Valencia, adding that it was halting operations and laying off 2,700 workers due to the “illegal judicial seizure of its assets.”

The largest U.S. automaker vowed to “take all legal actions” to defend its rights. The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many U.S. companies.

The seizure is the result of a civil dispute with a Venezuelan concessionaire dating back to 2000 and does not represent a nationalization as such, according to local media reports.

GM, the market leader in Venezuela for 35 years, said in a statement that in addition to the plant seizure “other assets of the company, such as vehicles, have been illegally taken from its facilities.”

Total auto production in Venezuela fell to a historic low of 2,849 cars in 2016, nearly 75 percent less than the year before, according to Venezuela’s automotive industry group.

In the first two months of 2017, GM has not produced any vehicles, while total Venezuelan auto production was just 240 vehicles, down 50 percent over the same period last year. The New York Times reported the GM plant had been closed for the last six weeks as a result of a takeover by members of one of its unions.

Nearly all vehicles built in Venezuela in the first two months this year were assembled by Toyota Motor Corp, which said Thursday that its plant was operating normally.

But a spokesman added the automaker was “only producing based on orders that come in.”

Venezuela’s car industry has been hit by a lack of raw materials stemming from complex currency controls.

In early 2015, Ford Motor Co wrote off its investment in Venezuela when it took an $800 million pre-tax writedown. The company said Thursday it was not producing vehicles in Venezuela.

The South American nation’s economic crisis has hurt many other U.S. companies, including food makers and pharmaceutical firms. A growing number are removing their Venezuelan operations from their consolidated accounts.
…

President Donald Trump has ordered an investigation into whether foreign steel imports are damaging U.S. national security, saying his administration would “fight for American workers and American-made steel.”

The probe is authorized under a rarely used section of a 1962 trade law that allows a president to restrict imports in cases where security interests are at stake.

“This has nothing to do with China,” Trump insisted, adding, “This has to do with worldwide, what’s happening. The dumping problem is a worldwide problem.”

Steel industry

Surrounded by steel industry executives at an Oval Office signing ceremony Thursday, Trump clearly stated the probe was not directed at China, which has long been accused of dumping its excess steel production on U.S. markets.

The president said the investigation could be completed within 50 days, far ahead of the nine months prescribed by law.

Shares of steel companies surged on news of the probe. The price of United States Steel Corporation stock was up more than 8 percent soon after the announcement.

“The important question is protecting our defense needs,” said Commerce Secretary Wilbur Ross, who added the investigation is designed to find a balance between free trade and national security while building up the U.S. military. “And we will do whatever is necessary to do that.”

Ross noted that steel imports rose nearly 20 percent in the first two months of this year, much of it from China, and now make up more than 26 percent of the entire American marketplace.

“Steel imports, despite measures already taken, have continued to rise despite repeated Chinese claims that they were going to reduce their steel capacity,” he said. “Instead, they have actually been increasing it consistently.”

Investigation sought

Steel industry executives attending Thursday’s Oval Office ceremony applauded Trump’s call for an investigation.

Mario Longhi, the CEO of U.S. Steel Corporation, said, “The signing of this executive order clearly demonstrates your understanding of the fundamental importance that our industry has, not just to the national economy, but to the national defense.”

Trade experts and free market advocates, however, were skeptical of Trump’s rationale for the investigation.

“It’s just a bogus attempt to limit imports,” said Dan Griswold, a research fellow at the Mercatus Center at Virginia’s George Mason University.

Griswold said any move to restrict imports would be bad for U.S. industry and consumers because it would drive up prices for products that contain steel, from appliances to automobiles to new houses.

“But it will make certain steel producers and their politically active unions increase their profits and the gains they make by restricting competition,” he said.

Issue of national security

Gary Hufbauer, senior fellow at the Peterson Institute of International Economics in Washington, questions the idea that dependence on foreign steel is a national security issue.

Hufbauer, who served as a senior Treasury Department official under former President Jimmy Carter, said the probe reflects the thinking of Commerce Secretary Ross, a billionaire investor with close ties to the steel industry.

“It’s not coming from the defense industry,” Hufbauer said. “It’s coming from the steelmakers, and key administration figures starting with Ross and others who feel the steel industry has been beset by steel from abroad and that’s weakening the U.S. steel industry. But that’s from a commercial standpoint, not a defense standpoint.”

Ross stepped down from the board of the Luxembourg-based steel giant ArcelorMittal after accepting the job as Trump’s commerce secretary.

A financial disclosure form he filed with the Office of Government Ethics shows Ross served on ArcelorMittal’s board for nearly a decade, and was paid more than $100,000 in director’s fees last year. He was also reported to have divested himself of between $750,000 and $1.5 million in equity holdings in the company, which is described on its home page as “the world’s leading integrated steel and mining company.”

Bloomberg News reported this week that while U.S. steelmakers may be counting on Trump to help business, any regulatory change could take years.

In a note to clients, Bloomberg Intelligence analyst Caitlin Webber wrote that changes would also likely be challenged at the World Trade Organization.
…

The head of the International Monetary Fund says she “has every reason to believe” that the global lender can cooperate with the Trump Administration to support and improve global trade.

IMF Managing Director Christine Lagarde spoke in Washington as economic and political officials gathered from around the world at this week’s meetings of the IMF and the World Bank.

Candidate Donald Trump blamed what he called unfair trade for the loss of many jobs in the United States, and proposed tax increases for imported goods. President Trump recently signed an order to give U.S. firms a better shot at selling goods to the U.S. government, and has been sharply critical of immigration policies.

Lagarde says trade is one of the “pillars” of prosperity. She vowed to continue to support the growth of trade, seeking ways to make it more efficient and fair, and fight against protectionist measures.

Lagarde said the global economy is “picking up momentum,” because of “sensible” policies in many nations. Speaking a little earlier, World Bank President Jim Yong Kim said he is “encouraged” to see stronger economic prospects after years of “disappointing” global growth. He said growth is hampered by conflict, climate shocks, the worst refugee crisis since World War II, and famine in certain areas.
…

Anti-corruption activists in Nigeria say the president’s suspension of two top officials is only a first step and must be followed up with more action.

On Wednesday, Buhari suspended national intelligence agency chief Ayo Oke, who was linked to more than $40 million found in an empty Lagos apartment, and the secretary of his government, David Babachir Lawal, who allegedly collected money on a phony contract.

Abdulkarim Dayyabu is chairman of the Movement for Justice in Nigeria, a non-governmental organization.  He says the suspensions are overdue.

“This should have been done a long time ago,” Dayyabu told VOA’s Hausa Service on Thursday.  “Someone like Buhari ought to take immediate measures against any official accused of corruption; he should not wait for too long.”

Abdulmajid Dan Bilki Kwamanda is a member of the ruling APC coalition who recommends the president move against other aides.

“Buhari is finally fighting corruption from within.  He must continue to look inwards and confront his senior officials who are accused of corruption head-on,” he said.”

Another activist, Naja’atu Mohammed, is skeptical that the suspended officials will be held accountable, saying the administration shielded Lawal previously when senators accused him of corruption.

“We are looking for results,” she told VOA.

There have been calls, including one from Nigeria’s Senate, for the removal of Lawal over his alleged complicity in the mismanagement of funds meant for a presidential initiative on northeastern Nigeria

Rholavision Engineering, a company owned by Lawal, received payments of about $500,000 from a contract he awarded for the clearing of “invasive plant species” in Yobe state.

Oke, director-general of the National Intelligence Agency (NIA), is embroiled in the discovery of $43 million in cash by the Economic and Financial Crimes Commission, EFCC.

So far, no one has claimed ownership of the money, which was in both local and foreign currencies.

Ownership of the apartment complex in which the funds were found, Osborne Towers Lagos, is still unclear, but the building is occupied by many powerful Nigerians including the former chairman of the opposition party, Ahmadu Muazu, whose PDP ruled Nigeria for years under former president Goodluck Jonathan.

Government spokesman Femi Adesina said the government has launched an investigation into the funds.

Another presidential spokesman, Garba Shehu, told VOA’s Umar Farouk Musa in Abuja that Buhari has given two probe panels, headed by Vice President Yemi Osinbajo, two weeks to investigate and submit their findings.

The suspensions follow recent discoveries of large amounts of money by the EFCC in strange places, including homes of senior government officials.

Last month, the EFCC found about $1.25 million abandoned in large bags at the Kaduna airport.

Earlier, nearly $10 million was seized from the home of a former head of Nigeria’s National Petroleum Company, NNPC, in the northern state of Kaduna.

The EFCC also uncovered yet another unclaimed $1 million in two shops at a shopping mall in Victoria Island, Lagos.  

A new government initiative to reward whistleblowers is encouraging many Nigerians to reveal the secret locations of money stashed away by corrupt officials. The EFCC, Nigeria’s anti-corruption agency, has offered to give up to 5 percent of amounts recovered to the informants, whose identities it protects.
…

Peru’s economy will recover in coming years with investment in construction after recent flooding, likely growing 4.5 percent in 2018 and 5 percent in 2019, Finance Minister Alfredo Thorne said on Wednesday.

Previously, the government had expected growth of 4.3 and 4.1 percent for the next two years.

The estimate for 2017 growth was lowered this month to 3 percent from 3.8 percent previously due to flooding.

“The shock will be temporary,” Thorne said in a presentation at Lima’s Chamber of Commerce.

The floods have damaged 6,000 kilometers (3,728 miles) of roads, destroyed thousands of houses and killed 106 people since December.

Peru’s economy, which has also been hurt by paralyzed infrastructure projects due to a corruption investigation involving Brazil’s Odebrecht, grew at its lowest rate in more than two years in February.
…

Over the last six months, the skyline over the sleepy fishing city of Gwadar has been transformed by machines that dredge the Arabian Sea and cranes that set up shipping berths in what is projected to become Pakistan’s biggest international port.

Infrastructure developments have enabled the hammer-shaped Gwadar peninsula to emerge as the centerpiece of China’s determined effort to shorten its trade route to the Persian Gulf and obtain access to the rich oil reserves there.

A mini-“Chinatown” has appeared, with prefabricated living quarters, a canteen and a karaoke center. After hours, the workers have the grounds to play their favorite game, badminton.

A spokesman for the Chinese team in Gwadar said in an interview that his government had invited employment bids in China, then brought the workers here.

He proudly touted the successful test run conducted by China in November when it used Pakistan’s land route from Kashgar to Gwadar to transport a convoy of 60 containers for export to the Middle East and North Africa.

Prior to that, he said, China had sailed materials through the South China Sea and the Indian Ocean to reach Gwadar.

The Chinese propose to cut down that 12,000-kilometer sea route by about one-fourth once they adopt the land route from the northwestern province of Xinjiang to Gwadar.

So eager is China to save on distance, time and expense — and the challenge posed by the U.S. Navy in the South China Sea — that it has weathered Pakistan’s unstable law-and-order situation to build its economic corridor.

Small wonder that the Chinese spokesman omitted an incident — related by locals to VOA — that the test convoy came under fire in Hoshab, Baluchistan, despite protection from a special security force.

Since then, Pakistan has enhanced its 12,000-plus security force to protect the Chinese. That has turned Gwadar into a military zone, with strict checks of vehicles and ID cards, plus an encampment of intelligence officials.

Still, Baluch insurgents use attacks on “soft targets,” like laborers from other provinces, to drive away investors from the China Pakistan Economic Corridor. On April 5, as road workers from Sindh were gunned down in Kharan in targeted killings claimed by the Baluchistan Liberation Front, former army Col. Farooq Ahmed said suspicion fell on militants operating from Afghanistan.

The Chinese, for their part, have taken heart from the security provided by Islamabad to plan ahead. A prefabricated coal plant will be brought from China to Gwadar to fire up its energy needs. Moreover, China will finance Gwadar international airport, according to the spokesman.

Distances inside Pakistan have shortened as the Frontier Works Organization builds a 3,000-km network of roads funded by Chinese investment.

Symbolizing skepticism

Despite Pakistan’s ongoing military operation against the Taliban, sporadic terror attacks are the biggest hurdle to the country’s development. After 9/11, when Pakistan allied with the U.S. in combating terrorism in Afghanistan, militant organizations put down their roots and threatened the nation from inside.

As social indicators fell and Pakistan became one of the world’s most food-insecure nations, it opened its doors to China — one of America’s rivals — to help fight poverty, a key factor in fundamentalism and terrorism.

When U.S. envoy Nikki Haley recently spoke of nations that use their United Nations veto to stop non-state actors from being designated as terrorists, it was seen as a reference to China’s refusal to let Kashmiri militant Masood Azhar be so named. Pakistani analysts interpreted this to mean the U.S. would move closer to India, even while revisiting ties with Pakistan because of its key role in Afghanistan.

Now the road from Karachi to Gwadar is smooth and empty, with awe-inspiring, wind-carved hills and mysterious canyons that dip into golden sands that run for kilometers along the deep blue-green Arabian Sea. It has enabled locals to rediscover their country — even as some marvel at the speed of construction.

But in a country that suffers from grinding poverty, little industry and high unemployment, the benefits of China’s investment are still hard to sell to the average person.

Gwadar symbolizes the skepticism. A miniscule amount has been spent by Islamabad and Beijing on people’s welfare, including a vocational training center, a hospital and school. The peninsula’s natural beauty belies erratic electricity, scarce drinking water and lack of proper sewerage.

Gwadar Port Authority Chairman Dostain Jamaldini explains to delegations arriving daily from across the country that revenue generation is the key to uplifting the area.

He showed off a huge quadrangle in the center of Gwadar that “can even be seen on Google Earth.” There, he has recommended to Islamabad that a multipurpose lighthouse be constructed to guide incoming ships and generate revenue.

Until that happens, the fishermen who build wooden boats along Gwadar beach will likely lose their livelihood as their shanty homes are removed.

Already, the vacant plots in Gwadar’s Sinjhaar area overlooking the sea have been repossessed by the Pakistan Navy and earmarked for sale to military officials and politicians.

For the well-connected, a real estate boom is on the horizon. Trader Abbas Rashanwala said he waited for years for peace to come to Gwadar. Now his real estate business has taken off, with investors flocking in to buy land.

Many realtors are betting on Gwadar as on the stock market — making deals online or on the phone. Several sit in the Punjab, selling property they have never seen in Gwadar, all on speculation that prices will soon skyrocket.

Meanwhile, China’s investment in Gwadar is helping control maritime crime. Officials tell how traffickers from Africa and the Middle East used to dock on the beach at night to swap slaves for narcotics.

In February, 36 nations, including the U.S. and Russia, participated in the Pakistan Navy’s multinational patrolling of the Arabian Sea in a global recognition of China’s role in making the waterways safer.

Still, China’s emerging role in Pakistan has raised many questions. The most prominent criticism is that China will become Pakistan’s “East India Company” — a metaphor for the British empire’s plunder of India.

Notwithstanding the doomsayers, there also is a readiness to accept that development and peace are inextricably linked to Pakistan’s future.
…

The Brazilian government on Wednesday agreed to lower the minimum retirement age for police officers in its pension reform proposal, a day after members of their unions stormed Congress to protest the controversial bill.

In the reform draft, congressman Arthur Maia, a government ally in charge of making changes to the original proposal, reduced the minimum retirement age for police to 55 from 60.

After he revealed the details of his proposal on Tuesday, hundreds of police unions dressed in black shirts broke the windows of the main entrance of the legislature in Brasilia and clashed with congressional guards.

The violent clash, during which the guards used pepper spray and stun grenades to disperse the protesters, illustrated the unpopularity of the reform proposal that is central to President Michel Temer’s austerity agenda.

The protest was the latest in what is expected to be months of street demonstrations by workers’ unions even after Temer has repeatedly watered down the proposal, which aims to reduce some of the world’s most generous pension benefits.

Maia is scheduled to read his full reform draft at a special lower house commission later on Wednesday. The initial vote of the proposal, which is a constitutional amendment, has been set for May 2 at the commission.

As it is a constitutional amendment, the measure has to be approved by a three-fifths majority in separate votes by both houses of Congress.

 
…

U.S. President Donald Trump on Tuesday signed an executive order aimed at making it harder for companies to hire temporary foreign workers.

The order, called “Buy American — Hire American,” will take initial steps to reform the H1-B visa program.

H1-Bs allow employers — mostly high-tech firms — to hire skilled foreign workers to work in the U.S. for three years. There are 85,000 slots available each year, 65,000 for applicants with bachelor’s degrees and 20,000 for those with master’s degrees or higher.

“We are going to use a tool you all know very well. It’s called the sledgehammer,” Trump said Tuesday during a speech at Snap-on Tools, a company in Kenosha, Wisconsin.

The administration will require companies to demonstrate that the visas are going only to the most highly skilled workers in their fields.

“They [H1-Bs] should be given to the most skilled and highest-paid applicants and not be used to replace Americans,” Trump said.

WATCH: H1-B Visas Let US Firms Hire Foreigners for Specialized Jobs

Open to abuse

The administration says the visas, which can be renewed once, have contributed to a slide in American wages; 80 percent of H1-B visa holders are paid less than the median wage in their fields.

Howard University political science professor Ron Hira said the Trump administration is right: “The laws are loose, and so what happens is it’s become a way for employers to bring in cheaper, indentured workers as opposed to filling those skills gaps. As a result, the program is oversubscribed, and it’s actually undercutting Americans.”

When the application season opened for H1-Bs this month, federal offices were quickly flooded. As in recent years, there were so many applications that the U.S. government stopped accepting them within a week. Visa winners will be chosen by a computer-generated lottery.

Hira also said the intent of the program is good in serving as a guest worker program for when there are shortages of American workers. What got in the way? Politics.

Companies are making so much money, he said, that they are able to influence Congress to prevent changes in the H1-B program. And it’s all legal.

Fixing H1-Bs

Hira said that if the sledgehammer seemed to be velvet-coated, that’s because the executive order is not really intended to change policy so much as to guide policy changes. Federal agencies will have to implement it.

“The idea behind the executive order is to make it merit-based, that the really highly skilled people get preference over the cheap labor that goes on,” Hira said.

Overwhelmingly, India has been the biggest recipient of H1-B visas. The Department of Homeland Security reports that 71 percent of H1-Bs went to Indians in 2015. China was a distant second with 10 percent of the visas.

India’s success is attributed to its huge outsourcing firms that submit thousands of applications every year, increasing their chances of winning the visa lottery.  

Outsourcing firms, which supply services to other companies, are controversial because they are not subject to a federal requirement that they not displace American workers if they pay the H1-Bs at least $60,000 a year.

Hira said the new policy might help high-tech American companies at the expense of the outsourcing firms that abuse the system.

But “expect the Indian government to lobby against the changes,” he predicted.

The executive order also called on all federal agencies to buy American. It established a 220-day review on waivers and exemptions to government “Buy American” rules.

VOA’s Mil Arcega contributed to this report.
…

Not a US citizen? Got skills? Need work? This might be the visa for you.
…

When Mark Pavlyukovskyy, founder of a do-it-yourself computer kit maker, was looking for investors last year, he wanted someone who knew the Chinese market.

Turns out, Pavlyukovskyy didn’t have to go to Beijing or Shanghai. Chinese venture capitalists are everywhere in Silicon Valley.

Last year, Pavlyukovskyy, a Ukrainian-born American entrepreneur working in San Francisco, raised $2.1 million from nine investors, including a Chinese firm based in the Valley.

“We’re looking not just for financial capital, but interpersonal capital with expertise and knowledge of the education market in China,” said Pavlyukovskyy. His company, Piper, sells a $299 augmented reality computer kit that children assemble themselves. Now, Piper is in schools in Hong Kong. Over 150,000 kits have been distributed around the world.

For the past decade, Silicon Valley money flowed to China as the communist country opened its markets and companies sought to expand there. That cross-border investing reversed as Chinese companies started to look outside their borders for investment opportunities. While Chinese investors have made their impact felt in the U.S. real estate, energy and transportation sectors, it was only in recent years they turned to tech.

Chasing U.S. innovation

Now, Chinese investors are pouring money into Silicon Valley deals, where it might take longer to see a return on an investment than in commercial real estate but where the potential to strike it big is higher.

“This is the very beginning,” said David Cao, who came from Singapore as a programmer before founding F50, a full-service investment firm, in 2014.

Fueling the Chinese capital is a perception that the majority of innovation is still coming out of the U.S., and that China is playing catch-up, said Chris Evdemon, who in 2014 opened Sinovation, the U.S. arm of Chuangxin, one of China’s leading early-stage venture firms. There are now 38 startups in his portfolio, which includes firms specializing in internet-of-things, robotics and education technology.

“We thought we should put some capital to work and see if we can be a great go-to market,” said Evdemon.

Chinese investors, particularly traditional media groups, are interested in firms specializing in virtual reality and augmented reality technologies, which might enhance digital entertainment. Other areas of interest for Chinese backers include robotics, artificial intelligence and technologies that focus on the financial, health and education markets. There are now more than 30 Chinese incubators in Silicon Valley.

Strategic U.S.-developed tech

But this wave of Chinese investment has called into question whether advanced technologies that are seen as critical to U.S. strategic interests are, instead, going to a competitor. A recent Pentagon report raised concerns about whether the Chinese government and Chinese investors in Silicon Valley were gaining access to key technologies through these investments.

Those concerns did not gain much attention at a recent cross-border investment summit held by F50 in Menlo Park. Instead, investors talked about how Chinese investors have become more savvy, with an emphasis on working with Silicon Valley companies to test their ideas in the U.S. first, before thinking about the Chinese market.

“I don’t see any barriers anymore between the two ecosystems,” said Evdemon. “I’m enjoying seeing wall gardens disappear.”
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The Trump Administration says it is time for tougher enforcement of rules governing hiring certain foreign workers in the United States, and to review laws requiring U.S. government agencies to use American-made products. The president is scheduled to sign an executive order regarding “Buy American/Hire American” rules on Tuesday.

In a briefing for journalists, senior administration officials said lax enforcement and numerous legal loopholes mean American workers and companies lose jobs and business to foreign competition, which hurts the U.S. economy.

Government agencies are being directed to review their procurement practices and require that exceptions to the “buy American” rules be approved by the head of the agency.

Officials also said government procurement portions of existing trade agreements will be reviewed to see if U.S. companies get the same chance to sell products to the governments of our trading partners that foreign firms get in Washington.

Another review is aimed at rules governing visas issued to foreigners with certain skills, called the “H-1-B visa” program. The program is supposed to bring workers with skills that are scarce in the United States into the country. But Trump Administration officials say they are concerned that companies are hiring foreigners who do the same work as Americans at lower wages.

Government agencies are being directed to do “top to bottom” reviews of these rules and laws, and report problems and recommendations that may bring changes to laws and rules.
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Retail sales were weaker than expected in both March and February, after government data showed the worst two-month performance for the retail sector in two years. US Census data suggest the weakness was the result of lower fuel prices and reduced auto profits. But retail experts say the industry itself is changing, driven by technological and demographic change.
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A state-backed newspaper in the United Arab Emirates that was bought by an Emirati who oversees the English soccer club Manchester City is undergoing layoffs, those with knowledge of the firings said Monday.

They told The Associated Press that staffers at The National were informed Sunday they had been let go. They spoke to the AP on condition of anonymity for fear of repercussions.

It wasn’t clear how wide the layoffs were or what specific plans The National’s new owner had for the daily newspaper. Repeated calls to the newspaper rang unanswered Monday.

The layoffs come after months of turmoil at The National, which was founded in 2008 and staffed with top writers and editors from Western newspapers. Its owner, the state-backed firm Abu Dhabi Media, hoped it would become the Mideast’s standard for independent, hard-nosed newspapering.

But while the paper broke local stories on skyscraper fire safety and other issues, it largely stayed away from controversial topics in a country with strict laws governing speech.

International Media Investments, a subsidiary of Abu Dhabi Media Investment Corp. owned by Sheikh Mansour bin Zayed Al Nahyan of Manchester City, bought The National in November from Abu Dhabi Media. Sheikh Mansour’s media firm has a joint venture with Britain-based Sky to run the Arab satellite news channel Sky News Arabia.

In a statement, International Media Investments said: “The National is putting together its team, made of existing and new talent,” and will undergo “a digital transformation while retaining its print product.” It answered no questions from the AP about the layoffs.

Although the newspaper sale has yet to finalize, staffers had to reapply for jobs at the paper. All this comes as low global oil prices have pinched the economy of the United Arab Emirates, a federation of seven sheikhdoms on the Arabian Peninsula.

Sheikh Mansour is a member of the ruling family of Abu Dhabi, the UAE’s oil-rich capital. He also serves as a deputy prime minister and minister of presidential affairs.
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Mini motorcycle and go-kart maker Monster Moto made a big bet on U.S. manufacturing by moving assembly to this Louisiana town in 2016 from China.

But it will be a long ride before it can stamp its products “Made in USA.”

The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago.

“There’s just no way to source parts in America right now,” said Monster Moto Chief Executive Alex Keechle during a tour of the company’s assembly plant. “But by planting the flag here, we believe suppliers will follow.”

Monster Moto’s experience is an example of the obstacles American companies face as they, along with President Donald Trump, try to rebuild American manufacturing. U.S. automakers and their suppliers, for example, have already invested billions in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed “border tax” on imported goods were to become law.

When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist.

For now, finding U.S.-based suppliers “remains one of the top challenges across our supplier base,” said Cindi Marsiglio, Wal-Mart Stores Inc.’s vice president for U.S. manufacturing and sourcing. Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods.

Their experience has shown Americans’ patriotic shopping habits have limits, namely when it comes to price.

Take Monster Moto’s bikes, which sell for between $249 to $749. Keechle, the CEO, says he can’t raise those prices for fear his price sensitive prospective customers will turn to less expensive rivals made in China.

“Consumers won’t give you a free pass just because you put ‘Made in USA’ on the box,” Keechle says. “You have to remain price competitive.”

Keeping a sharp eye on labor costs in their factory is one thing these U.S. Manufactures can control. They see replacing primarily lower-skilled workers on the assembly line with robots on American factory floors as the only way to produce here in a financially viable, cost-competitive way. It’s a trend that runs against the narrative candidate Donald Trump used to win the U.S. presidency.

Since taking office, Trump has continued promises to resurrect U.S. manufacturing’s bygone glory days and bring back millions of jobs. On March 31, Trump directed his administration to clamp down on countries that abuse trade rules in a bid to end to the “theft of American prosperity.”

But it’s more complicated on the ground for companies like Monster Moto.

“It’s almost as if people think you can just unplug manufacturing in one part of the world and plug it in to the U.S. and everything’s going to be fine,” said David Abney, Chief Executive Officer of package delivery company United Parcel Service Inc., which helped Monster Moto reconfigure its supply chain to bring its Chinese-made parts to Ruston.

“It’s not something that happens overnight,” he said.

A White House official said that the Trump administration’s efforts to encourage manufacturers to reshore production will be focused on cutting regulations and programs to provide new skills to manufacturing workers.

“We recognize that the manufacturing jobs that come back to America might not all look like the ones that left,” a White House official said, “and we are taking steps to ensure that the American workforce is ready for that.”

Making robots great again

In Monster Moto’s cavernous warehouse in Ruston, boxes of imported parts that are delivered at one end then become bikes on a short but industrious assembly line of a few dozen workers.

A solitary, long-bearded worker by the name of Billy Mahaffey fires up the bikes to test their engine and brakes before a small group of workers puts them in boxes declaring: “Assembled in the USA.”

Helped by that label, Monster Moto has experienced a recent boom in demand from major customers that include Wal-Mart. The company expects to double production to 80,000 units and increase its assembly workers — who make $13 to $15 an hour — to 100 from around 40 in 2017.

The most likely components Monster Moto could produce in America first are black, welded-metal frames for bikes and go-karts, but they would have to automate production because human welders would be too expensive.

“We can’t just blow up our cost structure,” said Monster Moto President Rick Sukkar. “The only way to make it work in America is with robotics.”

The same principle applies for much larger manufacturers, such as automotive supplier Delphi Automotive PLC’s.

Chief Financial Officer Joe Massaro told analysts in February that 90 percent of the company’s hourly workforce is in “best-cost countries.”

When asked about shifting production to the United States from Mexico, Massaro said depending on what happens to trade rules “it would have to be much more of the sort of the automated type manufacturing operations just given… the labor differential there.”

That trend is already showing up in data compiled by Economic Policy Institute, a Washington-based think tank.

According to senior economist Rob Scott, not only did America lose 85,000 factories, or 23.5 percent of the total, from 1997 to 2014, but the average number of workers in a U.S. factory declined 14 percent to 44 in 2014 from 1997. According to Scott, much of the decline in workers was due to automation.

“We’re going to see more automation in this country because it makes good sense economically for every company,” said Hal Sirkin, a managing director at the Boston Consulting Group. “You can spend a lot of time bemoaning it, but that’s not going to change.”

Manufacturers say automated production requires fewer, but more skilled workers such as robot programmers and operators.

The National Association of Manufacturers (NAM) estimates because of the “skills gap” there are 350,000 unfilled manufacturing jobs today in a sector that employs over 12 million people.

In Ruston, Mayor Ronny Walker bet on Monster Moto by guaranteeing the company’s lease because he wants to diversify the city’s economy, and envisions suppliers setting up alongside Monster Moto’s assembly plant.

“Could it take a long time to bring manufacturing back here?

Sure,” he says. “But you have to start somewhere.”
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China’s economic recovery is gaining traction, with growth rising to its fastest pace in over a year in January-March.

The 6.9 percent annual pace of expansion for the world’s second-largest economy, reported Monday, surpassed economists’ forecasts and was an improvement from 6.8 percent growth in the last quarter of 2016.

Growth last was that strong in July-September of 2015.

Analysts said government spending and a property boom spurred by easy credit were the main factors helping to driving stronger demand.

China saw its slowest growth in nearly three decades in 2016, at 6.7 percent. The official full-year economic growth target for 2017 is 6.5 percent.

“Currently, China’s economy is demonstrating good signs of pickup in growth, overall price stability, expansion in employment and improvement in the international balance of payments,” Mao Shengyong, a spokesman for the National Bureau of Statistics, told reporters in Beijing.

Fears of being dragged into a trade and currency war with the U.S. have abated after U.S. President Donald Trump toned down his previously antagonistic comments against Beijing.

A summit earlier this month with Chinese President Xi Jinping ended calmly, and the U.S. Treasury Department did not label China a currency manipulator in its latest assessment.

During the first quarter, investment in fixed assets such as factories expanded 9.2 percent from a year earlier, while retail sales grew 10 percent. Industrial production rose 6.8 percent, including a stronger-than- expected 7.6 percent year-on-year gain in March.

Although exports have also shown sharp improvement, strong lending and investment figures suggest Beijing is relying on its traditional strategy of powering growth through government stimulus. China’s leaders have been trying to shift to an approach based more on consumer demand but tend to open the spending and credit taps at times when growth appears to be slowing too much.

“The question we need to ask is whether this investment-led model is sustainable as the authorities have trouble taming credit,” said Raymond Yeung and David Qu, economists at ANZ.

The latest figures indicate China’s economy is on track to meet its official growth target — a good sign for China’s communist leaders, who don’t like surprises and are preparing for a twice-a-decade party congress in the autumn to appoint new leaders.

“The 6.5 percent target this year, you could say it’s more important than ever, because of the political reshuffle later this year,” said Amy Zhuang, chief Asia analyst at Nordea Markets. “At least being able to maintain the stability in growth is very, very important for Beijing.”

On a quarter-to-quarter basis, which is how other major economies report data, the economy lost steam, expanding just 1.3 percent. That’s slower than 1.7 percent in the fourth quarter of 2016.

The economists at ANZ said such figures should be viewed cautiously because they might reflect changes in how the government made adjustments for seasonal factors.

Economists say they expect the boost from the government’s policies and the property boom to persist for a few more months before fading later in the year.

Real estate plays an outsize role in fueling growth in the wider Chinese economy by spurring knock-on demand in the manufacturing and service sectors.

House prices will likely start cooling this year as tighter restrictions finally kick in, but Beijing will probably take steps to offset that decline with more stimulus to meet its annual growth target, Zhuang said.
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Each day, millions of Americans drink purified water and other beverages from disposable plastic bottles. More than 60 million of those bottles are dumped in landfills or burned in incinerators daily. But a couple of American entrepreneurs are putting some of them to good use by recycling them into shoes.
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