Community and conservation groups in Myanmar have branded a planned highway linking a port project to Thailand an “ecological and social disaster,” saying it would uproot indigenous people from their homes and farms.

Critics said an environmental and social impact assessment for the road project, approved by the Myanmar government in June, failed to adequately specify compensation for loss of land and livelihoods, among other problems.

“This is a road to an ecological and social disaster (in Myanmar),” said Christy Williams, Myanmar director for the World Wide Fund for Nature (WWF), an international conservation group.

The highway is considered strategically important to both nations as it would link Thailand to a deep-sea port and planned Special Economic Zone (SEZ) in Dawei, a town on the Myanmar side of an isthmus divided between the two countries.

The industrial complex would serve as a gateway to Southeast Asia’s markets, with goods trucked between Dawei and Thailand, avoiding the need for ships to sail southward through the Malacca Straights, the world’s busiest shipping lane.

​Region of rich biodiversity

But Williams said the planned road would pass through a region of “huge ecological importance with rich biodiversity.”

The assessment looked only at the effects on people and the environment within 500m (550 yards) of the road, he added, but the impact will affect a much wider area.

He said WWF had been working with communities and provided “extensive recommendations and solutions” to the Myanmar government and Myandawei Industrial Estate Co. Ltd, the Thai firm developing the road and SEZ, but these had “been ignored.”

The impact assessment failed to address many issues brought forward by residents during consultation sessions, said Thant Zin, director of the Dawei Development Association, a local civil society group.

“Our main concerns over the project are forced relocation of thousands of local indigenous people, potential industrial pollution … land grabbing and livelihood issues, and human rights violations in project area,” he said.

A spokesman for Myanmar’s environment ministry did not respond to repeated requests for comment.

Gunn Bunchandranon, a spokesman for Myandawei Industrial Estate Co. Ltd, said the highway’s impact assessment was in line with the laws of both Myanmar and Thai.

He said people from affected communities who attended public consultations did not raise any concerns about compensation for loss of land.

However, a 2015 draft of the impact assessment provided by conservation group EarthRights International included the minutes of one such meeting where the land compensation question was raised.

Risk of renewed conflict

Myanmar residents have also expressed fear that the highway could reignite conflict between the government and Myanmar’s oldest armed group, the Karen National Union (KNU), according to Ben Hardman of EarthRights International.

Those concerns did not make it into the impact assessment, Hardman said.

The KNU signed a cease-fire agreement with the military in 2012, ending six decades of fighting. In 2015 it signed a national cease-fire agreement (NCA), along with other armed ethnic groups.

But relations with the government remain tense, and the KNU claims control over territory the highway would pass through.

Saw Tah Doh Moo, the group’s secretary general, said the NCA required that the KNU be consulted about any development projects in areas under its control.

However, neither the company nor the government have officially discussed the road project with them, he said.

“I don’t want to say what would happen, but it would undermine the NCA,” he told the Thomson Reuters Foundation by phone. “We have to think about how to respond.”
…

U.S. President Donald Trump notified Congress on Friday of his intent to sign a trade agreement with Mexico after talks with Canada broke up earlier in the day with no immediate deal to revamp the tri-nation North American Free Trade Agreement.

U.S. Trade Representative Robert Lighthizer said U.S. officials would resume talks with their Canadian counterparts next Wednesday with the aim of getting a deal all three nations could sign.

All three countries have stressed the importance of NAFTA, which governs billions of dollars in regional trade, and a bilateral deal announced by the United States and Mexico on Monday paved the way for Canada to rejoin the talks this week.

But by Friday the mood had soured, partly on Trump’s off-the-record remarks made to Bloomberg News that any trade deal with Canada would be “totally on our terms.” He later confirmed the comments, which the Toronto Star first reported.

“At least Canada knows where I stand,” he later said on Twitter.

Ottawa has stood firm against signing “just any deal.” 

​’Making progress’

But at a news conference Friday afternoon, Canadian Foreign Minister Chrystia Freeland expressed confidence that Canada could reach agreement with the United States on a renegotiated NAFTA trade pact if there was “goodwill and flexibility on all sides.”

“We continue to work very hard and we are making progress. We’re not there yet,” Freeland told reporters.

“We know that a win-win-win agreement is within reach,” she added. “With goodwill and flexibility on all sides, I know we can get there.”

The Canadian dollar weakened to C$1.3081 to the U.S. dollar after The Wall Street Journal first reported that the talks had ended Friday with no agreement. Canadian stocks remained 0.5 percent lower.

Global equities were also down following the hawkish turn in Trump’s comments on trade.

Lighthizer has refused to budge despite repeated efforts by Freeland to offer some dairy concessions to maintain the Chapter 19 independent trade dispute resolution mechanism in NAFTA, The Globe and Mail reported Friday.

However, a spokeswoman for USTR said Canada had made no concessions on agriculture, which includes dairy, but added that negotiations continued.

The United States wants to eliminate Chapter 19, the mechanism that has hindered it from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to cut the mechanism. For Ottawa, Chapter 19 is a red line.

Trump argues Canada’s hefty dairy tariffs are hurting U.S. farmers, an important political base for his Republican Party.

But dairy farmers have great political clout in Canada too, and concessions could hurt the ruling Liberals ahead of a 2019 federal election.

At a speech in North Carolina on Friday, Trump took another swipe at Canada. “I love Canada, but they’ve taken advantage of our country for many years,” he said.
…

Coca-Cola is hoping for a caffeine-fueled boost with the acquisition of British coffee chain Costa.

Costa is Britain’s biggest coffee company, with over 2,400 coffee shops in the U.K. and another 1,400 in more than 30 countries, including around 460 in China, its second-biggest market. Coca-Cola said Friday it will buy the Costa brand from Whitbread for 3.9 billion pounds ($5.1 billion) in cash.

The deal, expected to close in the first half of 2019, comes on the heels of Coca-Cola’s announcement earlier in August that it was buying a minority ownership stake in sports drink maker BodyArmor for an undisclosed amount. Coca-Cola’s other investments in recent years have included milk that is strained to have more protein and a push into sparkling water.

The move is Coca-Cola’s latest diversification as health-conscious consumers, at least in America, move away from traditional soda.

Rival PepsiCo, meanwhile, recently bought carbonated drink maker SodaStream, which produces machines that allow people to make fizzy drinks in their own homes.

Coca-Cola already owns the Georgia and Gold Peak coffee brands, which make bottled and canned drinks, but the purchase of Costa could allow it to compete with brands like Starbucks.

Coffee is growing by 6 percent a year, making it one of the fastest-growing beverage categories in the world, said James Quincey, Coca-Cola president & CEO.

“Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand,” he said.

Coca-Cola has over 500 brands in its stable including Fanta, innocent smoothies and Powerade sports drinks. In 2017, it generated operating income of $9.7 billion on revenues of $35.4 billion.

Without being specific about expansion plans, Quincey said in a video posted on Coca-Cola’s website that the company would “over time” look to take Costa “to more people in more places.”

Costa doesn’t currently have a presence in North or South America, but Quincey indicated that one potential early expansion route would be to use Costa’s vending operation and grow the company’s ready-to-drink products. In addition to its shops, Costa has self-serve coffee machines in grocery stores and gas stations.

Whitbread bought Costa for 19 million pounds in 1995, when it had just 39 shops. In recent years, Whitbread has invested heavily in Costa’s expansion overseas, but had been looking to siphon off the business to generate funds for the expansion and for its other business, the budget hotel chain Premier Inn.

Then Coca-Cola got in touch with what Whitbread said was a “highly compelling” offer. The Whitbread board unanimously backed the deal.

Whitbread will use a “significant majority” of the net cash proceeds — around 3.8 billion pounds after taking into account such things as transaction costs — returning cash to shareholders. Some will be used to pay down debt and to make a contribution to the pension fund.

Doing so, Whitbread said, would “provide headroom” to further expand the Premier Inn budget hotel chain in Britain and Germany.

Whitbread’s share price soared 17 percent in early afternoon trading in London.

Nicholas Hyett, equity analyst at London-based stockbrokers Hargreaves Lansdown, said Costa will get “lots of care and attention” from Coca-Cola.

“Its global reach should turbo-charge growth in the years to come, and hot drinks are one of the few areas of the wider beverages sector where the soft drinks giant doesn’t have a killer brand,” he said.
…

Top NAFTA negotiators from Canada and the United States increased the pace of their negotiations Thursday to resolve final differences to meet a Friday deadline, with their Mexican counterpart on standby to rejoin the talks soon.

Despite some contentious issues still on the table, the increasingly positive tone contrasted with U.S. President Donald Trump’s harsh criticism of Canada in recent weeks, raising hopes that the year-long talks on the North American Free Trade Agreement will conclude soon with a trilateral deal.

“Canada’s going to make a deal at some point. It may be by Friday or it may be within a period of time,” U.S. President Donald Trump told Bloomberg Television. “I think we’re close to a deal.”

Trilateral talks were already underway at the technical level and Mexican Economy Minister Ildefonso Guajardo was expected to soon rejoin talks with U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland, possibly later on Thursday, people familiar with the process said.

Trump said in a Bloomberg interview: “Canada’s going to make a deal at some point. It may be by Friday or it may be within a period of time,” Trump said. “I think we’re close to a deal.”

Negotiations entered a crucial phase this week after the United States and Mexico announced a bilateral deal on Monday, paving the way for Canada to rejoin talks to modernize the 24-year-old accord that underpins over $1 trillion in annual trade.

The NAFTA deal that is taking shape would likely strengthen North America as a manufacturing base by making it more costly for automakers to import a large share of vehicle parts from outside the region. The automotive content provisions, the most contentious topic, could accelerate a shift of parts-making away from China.

A new chapter governing the digital economy, along with stronger intellectual property, labor and environmental standards could also work to the benefit of U.S. companies, helping Trump to fulfill his campaign promise of creating more American jobs.

Trump has set a Friday deadline for the three countries to reach an agreement, which would allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under U.S. law, Trump must wait 90 days before signing the pact.

The U.S. president has warned he could try to proceed with a deal with Mexico alone and levy tariffs on Canadian-made cars if Ottawa does not come on board, although U.S. lawmakers have said ratifying a bilateral deal would not be easy.

Dairy, dispute settlement

One sticking point for Canada is the U.S. effort to dump the Chapter 19 dispute-resolution mechanism that hinders the United States from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.

Trump also wants a NAFTA deal that eliminates dairy tariffs of up to 300 percent that he argues are hurting U.S. farmers, an important political base for Republicans.

But any concessions to Washington by Ottawa is likely to upset Canadian dairy farmers, who have an outsized influence in Canadian politics, with their concentration in the provinces of Ontario and Quebec.

 “Ultimately, we’ve got huge issues that are still to be resolved,” said Jerry Dias, head of Canada’s influential Unifor labor union. “Either we’re going to be trading partners or we’re going to fight.”
…

Microsoft will begin requiring its contractors to offer their U.S. employees paid leave to care for a new child.

It’s common for tech firms to offer generous family leave benefits for their own software engineers and other full-time staff, but paid leave advocates say it’s still rare to require similar benefits for contracted workers such as janitors, landscapers, cafeteria crews and software consultants.

“Given its size and its reach, this is a unique and hopefully trailblazing offering,” said Vicki Shabo, vice president at the National Partnership for Women and Families.

The details

The new policy affects businesses with at least 50 U.S.-based employees that do substantial work with Microsoft that involves access to its buildings or its computing network. It doesn’t affect suppliers of goods. Contractors would have to offer at least 12 weeks of leave to those working with the Redmond, Washington-based software giant; the policy wouldn’t affect the contractors’ arrangements with other companies. Leave-takers would get 66 percent of regular pay, up to $1,000 weekly.

The policy announced Thursday rolls out over the next year as the company amends its contracts with those vendors. That may mean some of Microsoft’s costs will rise to cover the new benefits, said Dev Stahlkopf, the company’s corporate vice president and general counsel.

“That’s just fine and we think it’s well worth the price,” she said.

Microsoft doesn’t disclose how many contracted workers it uses, but it’s in the thousands.

The new policy expands on Microsoft’s 2015 policy requiring contractors to offer paid sick days and vacation.

Facebook

Other companies such as Facebook have also committed to improve contractor benefits amid unionization efforts by shuttle drivers, security guards and other contract workers trying to get by in expensive, tech-fueled regions such as the San Francisco Bay Area and around Washington’s Puget Sound.

Facebook doesn’t guarantee that contract workers receive paid parental leave, but provides a $4,000 new child benefit for new parents who don’t get leave. A much smaller California tech company, SurveyMonkey, announced a paid family leave plan for its contract workers earlier this year.

Washington state law

Microsoft said its new policy is partially inspired by a Washington state law taking effect in 2020 guaranteeing eligible workers 12 weeks paid time off for the birth or adoption of a child. The state policy, signed into law last year, follows California and a handful of other states in allowing new parents to tap into a fund that all workers pay into. Washington will also require employers to help foot the bill, and will start collecting payroll deductions next January.

A federal paid parental leave plan proposed by President Donald Trump’s daughter, Ivanka Trump, could rely on a similar model but has gained little traction.

“Compared to what employers are doing, the government is way behind the private sector,” said Isabel Sawhill, a fellow at the Brookings Institution who has urged the White House and Congress to adopt a national policy.

Sawhill said it is “very unusual and very notable” that Microsoft is extending family leave benefits to its contract workers. Microsoft already offers more generous family leave benefits to its own employees, including up to 20 weeks fully paid leave for a birth mother.

Pushing the feds

Microsoft’s push to spread its employee benefits to a broader workforce “sends a message that something has to happen more systematically at the federal level,” said Ariane Hegewisch, a program director for employment and earnings at the Institute for Women’s Policy Research. Until then, she said, it’s helpful that Microsoft seems willing to pay contracting firms more to guarantee their workers’ better benefits.

“Paid family leave is expensive and they acknowledge that,” Hegewisch said. Otherwise, she said, contractors with many employees of child-bearing age could find themselves at a competitive disadvantage to those with older workforces.

Republican state Sen. Joe Fain, the prime sponsor of the measure that passed last year, said Microsoft’s decision was “a really powerful step forward.”

By applying the plan to contractors and vendors around the country, “it really creates a pressure for those state legislatures to make a similar decision that Washington made.”
…

Argentina’s Central Bank on Thursday increased its benchmark interest rate to 60 percent — the world’s highest — in an effort to halt a sharp slide in the value of the peso, which plunged to a record low.

The peso fell more than 13 percent against the dollar, closing at an all-time low of 39.2 per greenback, after slipping about 7 percent the day before.

The Central Bank said in a statement that it was hiking its benchmark interest rate by 15 percentage points to 60 percent in response to the currency problems and the risk of greater impact on local inflation, which is already running at about 30 percent a year.

The tumult in the exchange market came a day after President Mauricio Macri said he was asking for an early release of some International Monetary Fund money under an $50 billion backup financing arrangement approved earlier.

Some experts said the announcement, combined with the interest rate hike, had the unintended effect of fueling the crisis of confidence.

“I think today’s interest hike announcement will do nothing but leave investors even more jittery,” said Monica de Bolle, senior fellow at the Peterson Institute for International Economics.

“I’m finding it difficult to understand why, after yesterday’s announcement about front-loading more of the IMF funding, the government thought the hike was warranted,” she said. “Hyperactivity starts to look like desperation.”

Macri has struggled to calm markets and bring confidence to Argentines who continue to lose purchasing power. Many are frustrated with layoffs, higher utility rates and a rise in poverty levels.

Many also have bad memories of the IMF and blame its free-market economic policies for contributing to the country’s worst crisis in 2001-02, when one of every five Argentines went unemployed and millions fell into poverty.

Seeing journalists filming screens showing the exchange rates in downtown Buenos Aires, Ruben Montiel, 55, burst out: “Macri is an embarrassment!”

“You can’t live like this. The prices of everything go up on a daily basis,” he said. “There’s no work, utility rates have gone through the roof … people are sleeping on the streets.”

Macri, a pro-business conservative who came into office in 2015, had promised to trim Argentina’s fiscal deficit, reduce poverty and curb inflation. He cut red tape and tried to reduce the government’s budget deficit by ordering layoffs and cutting utility subsidies, but it triggered labor unrest.

Then in December, officials announced a rise in the inflation target, which caused investors to begin doubting Macri’s commitment to taming price rises.

Meanwhile, the peso slumped against the dollar as rising U.S. interest rates lured investors to pull greenbacks out of Argentina.

That caused jitters among Argentines, who have been used to stashing away dollars as a cushion since the 2001 crisis, when banks froze deposits and put up sheet-metal barricades as thousands of protesters unsuccessfully tried to withdraw their savings. Dozens died in protests and looting in December 2001 as the economy unraveled and Argentina eventually suffered a record $100 billion debt default.

“The government will need to shuffle its cabinet and strike deals with provincial governors for next year’s budget,” said Argentine economist Marcos Buscaglia. “In the short-term, the government just needs to stop this crisis.”
…

Hmong farmers in St. Paul, Minnesota have the best advocate for their business enterprises: themselves, working together.

Originally from China, the Hmong are an Asian ethnic group that migrated to Vietnam and Laos in the 18th century. They have never had a country of their own. After the Vietnam War ended, many resettled in the U.S., giving the U.S. the largest Hmong population outside of Asia. The population in Minnesota is more than 60,000, second behind the state of California.

The Hmong, who are long time farmers, did what they knew best when they got to Minnesota. And by the late 1980’s they spearheaded the revitalization of local farmers’ markets, making them some of the most vibrant in the city.

But the Hmong also discovered that as immigrant farmers, they faced barriers in buying land, obtaining financing, accessing markets and building sustainable family businesses. They were struggling. To combat all that, a group of Hmong farmers established the non-profit Hmong American Farmers Association (HAFA) in 2011.

“One of the reasons HAFA was created was because Hmong farmers were experiencing so much uncertainty. They didn’t always have access to land,” HAFA co-founder Pakou Hang explained. “So when you don’t have land tenure or land certainty you can’t actually invest in organic certification, you can’t invest in perennials, which actually have higher profit margins.”

HAFA’s intent was to “advance the prosperity of Hmong American farmers through cooperative endeavors.” At the center of the association is a 63-hectare (155-acre) farm outside St. Paul where member farmers have long-term leases on two to four hectare (five to 10-acre) parcels to grow their vegetables and flowers.

How HAFA helps

On a recent Friday, Mao Moua and her husband were harvesting vegetables at their plot – for a Saturday farmer’s market.

The Mouas were among the mass exodus of Hmong people fleeing Laos for Thailand and eventually the U.S. in the 1970s. Ever since they arrived, they have been farming in Minnesota and in recent years on the HAFA membership farm.

“I like farming on the HAFA farm because this is a Hmong association,” Moua said. “There are Hmong workers who help us. They are like our hands, eyes and ears. I like there is also water, electricity and the food hub.”

She added proudly, “[I grow] corn, sweet potato, cherry, snap pea, cucumber, and a little cherry tomato. That’s all.”

HAFA’s alternative markets program is called Food Hub.

“Our Food Hub is the place where we aggregate HAFA farmers’ produce and we distribute, sell it to different institutions such as schools, co-ops, or restaurants. And then we also have a CSA program or community supported agriculture that we have about 350 currently members. They get a weekly subscription of produce,” explained Operations Manager Kou Yang.

And if any of the farmers need micro loans to buy tractors or new farming equipment, HAFA’s business development programs are there to help. But Hang said all the programs are not just for income generation.

“What we’re really interested in, what we are focused on is actually wealth creation not just intergenerational wealth but community wealth,” Hang said.

Community wealth

Today, Hmong American farmers make up more than 50 percent of all produce growers selling at area farmers’ markets.

“The Hmong growers’ participation in the farmers’ market has really revitalized the farmers’ market,” said David Kotsonas a director of the Minnesota Farmers’ Market Association.

The Hmong are also at the center of a Minnesota-based local foods economy that has changed the way Minnesotans eat.

“Hmong farmers are major contributors to our local food economy and to our overall economy,” Hang said. “I mean studies have shown that they produced over $250 million in sales.”

Hang was born in a refugee camp in Thailand and came to the U.S. with her parents in 1976.

“During the Vietnam war in Laos my father joined actually a secret army that was allied with the United States CIA. When the Vietnam War ended and the communist faction came into power in Laos they actually began to target Hmong soldiers,” she said.

Hang has big dreams for the HAFA farm which in addition to enabling farmers, conducts research and fosters community ties.

“A hive of learning. A hive of community building,” Hang described it.
…

Nearly all of the currency removed from circulation in a surprise 2016 attempt to root out illegal hoards of cash came back into the financial system, India’s reserve bank has announced, indicating the move did little to slow the underground economy.

Prime Minister Narendra Modi’s currency decree, which was designed to destroy the value of billions of dollars in untaxed cash stockpiles, caused an economic slowdown and months of financial chaos for tens of millions of people.

Modi announced in a November 2016 TV address that all 500-rupee and 1,000-rupee notes, then worth about $7.50 and $15, would be withdrawn immediately from circulation. The banned notes could be deposited into bank accounts but the government also said it would investigate deposits over 250,000 rupees, or about $3,700. The government eventually released new currency notes worth 500 and 2,000 rupees.

In theory, the decree meant corrupt politicians and businesspeople would suddenly find themselves sitting on billions of dollars in worthless currency, known here as “black money.”

“A few people are spreading corruption for their own benefit,” Modi said in the surprise nighttime speech announcement of the order. “There is a time when you realize that you have to bring some change in society, and this is our time.”

But even as the decree caused turmoil for those in India who have always depended on cash — the poor and middle class, and millions of small traders — the rich found ways around the currency switch. In the months after the decree, businesspeople said that even large amounts of banned currency notes could be traded on the black market, though middlemen charged heavy fees.

The reserve bank report said in its Wednesday report that 99.3 percent of the $217 billion in notes withdrawn from circulation had come back into the economy. Some officials had originally predicted that number could be as low as 60 percent.

“Frankly, I think demonetization was a mistake,” said Gurcharan Das, a writer and the former head of Proctor & Gamble in India. He said that while it did broaden the country’s tax base, it was a nightmare for the immense, cash-dependent informal economy.

“You can’t overnight change that in a country which is poor and illiterate. Therefore, for me it’s not only an economic failure but a moral failure as well,” Das said.

 
…

U.S. President Donald Trump has signed proclamations permitting targeted relief from steel and aluminum quotas from some countries, the U.S. Commerce Department said on Wednesday.

Trump, who put in place tariffs on steel and aluminum imports in March, signed proclamations allowing relief from the quotas on steel from South Korea, Brazil and Argentina and on aluminum from Argentina, the department said in a statement.

“Companies can apply for product exclusions based on insufficient quantity or quality available from U.S. steel or aluminum producers,” the statement said. “In such cases, an exclusion from the quota may be granted and no tariff would be owed.”

Trump, citing national security concerns, placed tariffs of 25 percent on steel imports and 10 percent on aluminum imports.

The tariffs on steel and aluminum imports from the European Union, Canada and Mexico took effect June 1, and Commerce Secretary Wilbur Ross said May 31 that arrangements had been made with some countries to have non-tariff limits on their exports of the two metals to the United States.

Ross said the arrangement with South Korea was for a quota of 70 percent of average steel exports to the United States in the years 2015 to 2017.

The Brazilian government said at the time the U.S. quotas and tariffs on Brazil’s steel and aluminum exports were unjustified but that it remained open to negotiate a solution.

Brazilian semi-finished steel exports to the United States are subject to quotas based on the average for the three years from 2015-2017, while finished steel products will be limited to a quota of 70 percent of the average for those years.
…

The U.S. economy expanded at a 4.2 percent annual rate in April, May and June, the Commerce Department said Wednesday.

The second-quarter growth figure for gross domestic product was one-tenth of a percentage point higher than initial estimates.

“The economy is in good shape,” said PNC Bank Chief Economist Gus Faucher. He wrote that this was the best “year-over-year increase in three years.”

But Faucher also said growth above 4 percent was “unsustainable” and that the economy was “set to slow somewhat in the second half of 2018,” hitting 3.4 percent growth for the whole year. He predicted U.S. economic growth would slow further in 2019 and 2020 as the “stimulus from tax cuts and spending increases fades.”

U.S. President Donald Trump cheered the news:

But Senate Minority Leader Chuck Schumer, a New York Democrat, had a different take on the report.

“No amount of President Trump tweets can change the fact that real wages are declining,” he said in a statement, adding that the cost of living — particularly gas and health care costs, “thanks in large part to Republicans and the Trump administration” — is “continuing to climb.”

Wednesday’s report from the Commerce Department was a routine revision; such changes are made as more complete data become available.

Growth figures were boosted by a decline in imports, particularly petroleum, and by some temporary factors.

One of those factors was a surge in soybean exports, which were rushed at a faster-than-usual pace to beat tariffs imposed by China in retaliation for new tariffs imposed by the Trump administration on Chinese goods.

The new second-quarter figures were nearly double those of the first quarter.
…

Faced with plunging U.S. orders, surgical glove maker Ren Jiding is hunting for new markets amid Chinese government calls to reduce reliance on the United States. But no other market can absorb the 60 percent of his sales that went to American customers last year.

“Other countries import much less than the United States,” said Ren, a co-owner of Hongyeshangqin Medical Science and Technology Co. Ltd. in the eastern city of Zibo.

From medical products to smartphone chips to soybeans, Beijing is responding to President Donald Trump’s tariff hikes by pushing companies to trade more with other countries. But there are few substitutes for the United States as an export market and source of technology for industries including telecom equipment makers that Chinese leaders are eager to develop.

Beijing has announced tariff cuts and other changes while rejecting U.S. demands to scale back plans such as “Made in China 2025,” which calls for state-led creation of Chinese champions in robotics, biotech and other fields. American leaders say those violate Beijing’s market-opening promises and might erode U.S. industrial leadership.

The response highlights the cost the ruling Communist Party is willing to pay in lost sales and jobs to stick to plans that are fueling conflict with Washington, Europe and other trading partners.

​’Fundamental’ to growth

“China sees its technology and industrial policies as fundamental to its growth,” Tianjie He of Oxford Economics said in an email. “It is thus hard to see China’s leadership committing to significant changes.”

Trump has raised duties on $50 billion worth of Chinese imports, including ultrasound scanners and industrial components that Washington says benefit from improper policies. China retaliated with similar penalties.

The U.S. is poised to raise duties on $200 billion worth of imports, including the gloves made by Ren’s company. Beijing has issued a list of American goods for retaliation.

The impact on China is “small and is containable, at least for the time being,” said Vincent Chan of Credit Suisse. He said the “worst case” outlook if all threatened U.S. tariff hikes go ahead would cut China’s growth by 0.2 percentage point this year and 1.3 percent in 2019.

Chinese leaders have tried to cushion the blow to their own economy by targeting American goods its importers can get from other countries — soybeans from Brazil, gas from Russia, cars from Germany and fish from Vietnam.

Beijing has promised to use revenue from the higher tariffs to help struggling exporters and has ordered banks to lend more freely to them.

The biggest jolt so far came from Beijing’s cancellation of orders for soybeans, the biggest American export to China at $21 billion last year. That hammered farm states that voted for Trump in the 2016 election. It also pushed up prices for Chinese farmers that use soybeans for animal feed and food processors that crush them for cooking oil.

That could be a windfall for Brazil. But China already is its top market and consumes two-thirds of the global supply. Chinese total imports last year of 95 million metric tons were 50 percent more than the South American giant’s entire exports.

​Few sources

“The Chinese can talk all they want about finding other sources of soybeans,” but 80 percent come from the United States, Brazil and Argentina, said Michael Cordonnier, president of Soybean & Corn Advisor Inc., a U.S. research firm.

“If you want to import soybeans, it generally must be from one of those three countries,” Cordonnier wrote in an email.

Regulators also cut import duties on automobiles on July 1 but raised them on vehicles from the United States. That helps luxury brands that import from Germany and Japan.

Replacing markets for Chinese exporters that support tens of millions of jobs will be harder.

The United States bought $430 billion of China’s exports last year, or 20 percent of the $2.2 trillion total. The No. 2 market was the 28-nation European Union at $370 billion.

“We can’t afford to lose the U.S. market,” said David Hu, general manager of Sinohood Bags Factory Ltd. in the southeastern city of Yiwu.

Americans bought 40 percent of Hu’s canvas tote bags last year, including the most profitable customized versions with Christmas and other designs.

“What we export to Europe is lower-end products with lower prices,” said Hu. “We could explore the Indian, Vietnamese or Philippine markets. But the prices they offer would be too low.”

Chinese officials point to potential markets in the Belt and Road Initiative, a multibillion-dollar plan led by President Xi Jinping to boost trade by building ports, railways and other infrastructure across Asia to Europe.

That has brought a flood of contracts to Chinese state-owned builders, but complaints about costs have hurt its appeal. Prime Minister Mahathir Mohamad of Malaysia announced this month the cancellation of plans for Chinese-built projects, including a $20 billion rail line.

“There is potential for development in areas such as Central Asia, Eastern Europe, Africa and South America. But their problems are development imbalance and economic instability,” said Li Yong, a senior fellow at the China Association of International Trade, an industry group.

​Focus on diversification

Local officials have met with exporters to exhort them to “diversify markets,” according to the state press.

Authorities in the central city of Jingzhou visited exporters to help with customs forms, financing and other details, the website China Industry and Commerce News said.

Ren, the surgical glove maker, said his 300-employee company was looking at Europe and developing countries, but demand was sluggish.

Some companies are confident of keeping their U.S. market share. That reflects the possible success of official efforts to develop higher-tech goods instead of competing on price alone.

The general manager of Yihua Electronic Equipment Co. in southern China’s Guangdong said the tariffs should not affect sales of its digital soldering guns, one-fifth of which are sold to the United States.

“With the 25 percent tariffs, ours still are cheaper than similar German- or Japanese-made products,” said the manager, who would give only his surname, Gou. “We are not producing something like shoes and clothing that could be easily replaced.”

Trump’s pressure could encourage Beijing to throw even more resources at nurturing its own technology creators.

China’s search for non-U.S. suppliers could help companies such as Taiwanese chipmaker MediaTek Inc. But redesigning a phone or network gear and then gaining regulatory and customer approval can take a minimum of three to five years.

“For now,” said He of Oxford Economics, “China remains technologically dependent on the U.S.”
…

More than a week after the floodwater began subsiding, animal carcasses are  still floating in Kerala’s backwaters, and in places a nauseating stench rises like a wall when the wake from a passing boat breaks the surface.

These inland lagoons running parallel to the coast are one of the biggest tourist draws in India’s most southwesterly state, but the stain of death and devastation wrought by Kerala’s worst flood in a century will take longer than a season to wash away.

The quaint towns and villages scattered between the lush forests and paddy fields bordering the backwaters are now communities in despair.

Houses in low-lying areas are still submerged, roads are waterlogged and the sewage from drains have washed into channels that are too slow-moving to effectively flush out the effluent.

Sudarsanan T.K., a houseboat owner in the town of Alappuzha,  had been looking forward to the peak tourist season, but as his home disappeared under 2.5 meters (8 feet) of water his family now have to live aboard the boat he would otherwise be renting to tourists from Europe, China, Malaysia and India.

“I’ve nothing left, but this houseboat. I don’t know how I can repay my bank loan in this condition. The bank may take back my boat. I will have nothing at all then,”  Sudarsanan, a 64-year-old father of two, told Reuters.

​Some 1,500 houseboats are tied up at Alappuzha, going nowhere, with many of the owners still paying off loans taken to buy the boats.

Sudarsanan owes about $8,600 on the loan taken eight years ago to buy the boat, and he could have earned up to $7,000 by December if the deluge hadn’t washed away his hopes.

Hundreds of people perished in the flood and more than one million of Kerala’s 35 million people were forced to abandon their homes and take shelter in relief camps.

Blessed with natural beauty, fertile land and bountiful seas, Kerala has been dubbed “God’s own country” by its people, but the Marxists running the state government reckon it will need $3.57 billion to rebuild over the next two years.

“Kerala’s GDP growth may fall by 2 percent,” state Finance Minister T.M. Thomas Isaac told Reuters, forecasting growth of 6 percent for the financial year ending next March.

Crops have been lost, the construction industry was dead for a month, and tourism, which contributes 10 percent of the state’s economy but accounts for about 25 percent of jobs creation, has been badly hit.

Festival washout

For discerning tourists looking for a more laid back Indian experience, Kerala has it all — long sandy beaches, lazy waterways, charming, historic towns like Kochi and the cool, forested hills of the Western Ghats.

Kerala doesn’t draw numbers like the northern tourist circuit, the so-called “Golden Triangle” running from New Delhi to the Taj Mahal in Agra, and Jaipur’s palaces in the desert state of Rajasthan, but it has carved out a sizable niche.

Last year, one million foreigners visited Kerala, along with 15 million domestic tourists, but state government and industry officials reckon the flood will result in losses for the tourism sector of $357 million.

The floods struck just as Kerala was gearing up for Onam,

the harvest festival which is one of the highlights of the state’s cultural calendar.

Festivities, including the spectacular Vallam Kali races involving traditional war canoes, some manned by more than 100 paddlers, were postponed.

“Kerala has lost out on one of the best seasons, as the calamity struck during the 10-day run up to Onam,” said Ranjini Nambiar, who heads a travel consultancy.

Thousands of volunteers have joined a clean-up campaign mounted by the state, and Shilendran M., an executive with the CGH Earth luxury hotel chain, expected some kind of order to be restored within the next few weeks.

“The state administration is working on a war footing,” said Shilendran, whose group has more than a dozen properties in Kerala. “We are limping back to normal.”

Hardly anywhere in the state escaped the calamity.

Ernakulam district, the biggest industrial and tourism contributor to Kerala’s economy and home to the historic city of Kochi, suffered major damage, and its busy international airport was shut for nearly two weeks.

Munnar, a hill resort overlooking the tea and cardamom plantations high in the Ghats was cut off, as bridges were washed away and landslides blocked roads.

Once every dozen years a bright purplish-blue bell-shaped flower called the Neelakurinji, blossoms on the slopes around Munnar — and this was one of those years.

The state tourism had marketed 2018 as the Kurunji year, but people in Kerala are more likely to remember the mud.
…

President Donald Trump’s trade deal with Mexico could struggle to win approval from Congress unless Canada comes on board, lawmakers from both parties said on Tuesday, saying support from Democrats would be needed to pass a purely bilateral deal.

Trump unveiled the Mexico deal on Monday and threatened to slap tariffs on Canadian-made cars if Canada did not join the revamp of the trilateral North American Free Trade Agreement (NAFTA), which Trump has long criticized.

If Trump, a Republican, tries to get the Senate to vote in favor of a bilateral deal as a replacement for NAFTA, he will face an uphill struggle to win passage, lawmakers said. Some lawmakers said only a trilateral pact would be eligible for fast-track, 51-vote Senate approval.

A bilateral deal, on the other hand, would need 60 votes and that would require some support from Democrats, who likely would be reluctant to help Trump, they said. There are now 50 Republican-held seats in the 100-member Senate.

To get fast-track Senate ratification, “the administration must also reach an agreement with Canada,” said Republican Senator Pat Toomey in a statement.

“NAFTA was a tri-party agreement only made operative with legislation enacted by Congress,” said Toomey, a member of the committee that oversees trade policy.

“Any change, such as NAFTA’s termination, would require additional legislation from Congress. Conversion into a bilateral agreement would not qualify for … ‘fast track’ procedures and would therefore require 60 votes in the Senate.”

The White House did not immediately respond to a request for comment about fast track treatment for the Mexico deal. Canada’s top trade negotiator arrived in Washington on Tuesday for talks with her Mexican and U.S. counterparts, in a bid to remain part of the trade pact.

Democratic Senate Leader Chuck Schumer said a bilateral deal would face “serious legal concerns,” while he also questioned a lack of details on the terms of the Mexico pact

“I’m a little worried that this one is like North Korea. They have a nice announcement, but then we don’t see the details,” Schumer told reporters in a Capitol hallway. U.S. stock markets surged on Monday after Trump said he had reached an understanding with Mexico. On Tuesday, stocks had given up some of their early gains by the closing bell.

Senator Ron Wyden, the senior Democrat on the trade committee, said: “We know very few details right now. There are real questions about whether this is even enforceable … We are far from being done on this and the fact is you cannot really move this substantively without the Canadians.”

In the House of Representatives, Democrat Bill Pascrell urged Republicans in a statement to convene a bipartisan House trade council to advise the White House.

 
…

Kenya’s President Uhuru Kenyatta says his country wants to increase bilateral trade with the United States and attract more U.S. investors. U.S. President Donald Trump received Kenyatta at the White House on Monday for talks that focused on trade and security. Ahead of the talks, Kenyatta told VOA African Service in an interview that his country is battling corruption and boosting security to create the right environment for foreign investment. VOA’s Zlatica Hoke reports.
…

The United States and Mexico agreed on Monday to a sweeping trade deal that pressures Canada to accept new terms on autos trade, dispute settlement and agriculture to keep the trilateral North American Free Trade Agreement (NAFTA).

U.S. Trade Representative Robert Lighthizer said the White House was ready to notify the U.S. Congress by Friday of President Donald Trump’s intent to sign the bilateral document, but that it was open to Canada joining the pact.

The 24-year-old NAFTA is a trilateral deal between the United States, Canada and Mexico that underpins $1.2 trillion in North American Trade.

Here are some of the main issues at the heart of the negotiations:

Autos Dominate

The new deal requires 75 percent of the value of a vehicle to be produced in the United States or Mexico, up from the NAFTA threshold of 62.5 percent.

The higher threshold is aimed at keeping more parts from Asia out, boosting North American automotive manufacturing and jobs. Even if more plants are built in Mexico, jobs will grow in the United States due to high levels of integration, with studies showing that U.S. parts make up 40 percent of the value of every Mexican-built car exported to the United States.

The pact also requires greater use of U.S. and Mexican steel, aluminum, glass and plastics.

The provision started out as a U.S. demand for 85 percent regional content, with 50 percent coming from U.S. factories.

That plan was vehemently opposed by Mexico, Canada and the auto industry. It later morphed into the U.S.-Mexico deal’s requirement of 40 to 45 percent of a vehicle’s value to be made in high wage areas paying at least $16 an hour, requiring significant automotive production in the United States.

Although full automotive details have not yet been released, auto industry officials say it will allow Trump the ability to impose higher national security tariffs on vehicles that do not comply with the new thresholds.

Most Mexican auto exports are in a position to comply with the new limits, the country’s economy minister said.

No Sunset

Trump backed off from an initial U.S. demand for a “sunset” clause that would kill the pact unless it was renegotiated every five years and which businesses said would stymie long term investment in the region.

Canada and Mexico were strictly opposed to the clause.

Instead, the United States and Mexico agreed to a 16-year lifespan for NAFTA, with a review every six years that can extend the pact for 16 years more, providing more business certainty.

Dispute Settlement

Mexico agreed to eliminate a settlement system for anti-dumping disputes, NAFTA’s Chapter 19.

The move, sought by the United States, puts Canada in a difficult position because Prime Minister Justin Trudeau had insisted on maintaining Chapter 19 as a way to fight U.S. duties on softwood lumber, paper and other products that it views as unfair. Ottawa now has less than a week to decide to accept a deal without that provision.

A settlement system for disputes between investors and states was scaled back, now only for expropriation, favoritism for local firms and state-dominated sectors such as oil, power and infrastructure.

Agriculture, Labor

The new deal will keep tariffs on agricultural products traded between the United States and Mexico at zero and seeks to support biotech and other innovations in agriculture. It lacks a previous U.S. demand to erect trade barriers to protect seasonal U.S. fruit and vegetable growers from Mexican competition.

It contains enforceable labor provisions that require Mexico to adhere to International Labor Organization labor rights standards in an effort to drive Mexican wages higher.

Now Canada

The U.S.-Mexico NAFTA deal opens the door for Canada to immediately rejoin the talks and is a major step forward in updating the accord.

Canada, which sat out the last leg of discussions while the United States and Mexico ironed out their bilateral differences, is now pressured to agree to the new terms on auto trade and other issues to remain part of the three-nation pact.

Trump has presented this as a bilateral deal and threatened Canada with car tariffs. Some lawmakers have said that a bilateral deal would face a higher vote threshold in Congress because the NAFTA fast-track negotiating authority law calls for a trilateral agreement.
…

Mexican president-elect Andres Manuel Lopez Obrador welcomed a deal between Mexico and the United States to overhaul the North American Free Trade Agreement (NAFTA) that he said preserved Mexican “sovereignty” in the energy sector.

The U.S.-Mexico deal was announced by U.S. President Trump on Monday, putting pressure on Canada to agree to new terms and details that were only starting to emerge. Lopez Obrador said it was important that Canada be part of the deal.

Lopez Obrador, who is scheduled to take office on Dec. 1, said Trump “understood our position” and accepted his incoming administration’s proposals on the energy sector. The text of the new agreement has not yet been made public.

“We put the emphasis on defending national sovereignty on the energy issue and it was achieved,” Lopez Obrador told reporters after arriving in the southern state of Chiapas.

“We are satisfied because our sovereignty was saved. Mexico reserves the right to reform its constitution, its energy laws, and it was established that Mexico’s oil and natural resources belong to our nation,” he said.

Lopez Obrador opposed a constitutional change pushed through by Mexican President Enrique Pena Nieto that opened production and exploration in the energy sector to private capital.

Mexico has already awarded more than 100 oil exploration and production contracts to private companies.

Lopez Obrador has said he would pour resources into state oil company Pemex while still respecting private sector contracts, as long as a review does not find evidence of corruption.

He is expected to slow down or stall the process of offering more contracts to private players.

Jesus Seade, Lopez Obrador’s designated chief NAFTA negotiator, participated in the latest talks between the current Mexican administration and the U.S. Trade Representative to strike the new NAFTA agreement.

Seade said on Monday that both Pena Nieto’s team and the United States had agreed to change language in a draft proposal of the NAFTA overhaul on energy that had previously been a “cut and paste” from the text of Mexico’s energy reform.

The new language still preserved the same ideas and was consistent with Pena Nieto’s reform, Seade said, adding that Lopez Obrador was not seeking to change the legal framework for private energy projects in Mexico.

While the new administration planned to increase production at Pemex, Seade told a news conference in Washington “there will be areas where cooperation with the private sector is needed.”
…

The United States and Mexico have reached a trade agreement, leaving Canada as the odd man out in efforts to revise or replace the North American Free Trade Agreement (NAFTA), according to U.S. President Donald Trump.

The new deal will be called the United States-Mexico Trade Agreement, Trump said Monday.

“We’ll get rid of the name NAFTA, it has a bad connotation because the United States was hurt very badly by NAFTA for many years,” Trump said.

“It’s a big day for trade, it’s a big day for our country,” Trump said with reporters present, who were called to the Oval Office to watch as Trump spoke on the telephone with Mexican President Enrique Pena Nieto.

The Mexican leader expressed hope to “renew, modernize and update” NAFTA while Trump’s rhetoric indicated he sees that 24-year-old three-nation deal as dead.

“We’ll have a formal news conference in the not-too-distant future,” about the trade pact, Trump said to Pena Nieto.

“This is something very positive for the United States and Mexico,” Pena Nieto replied, saying he is looking forward to toasting Trump with tequila to celebrate, expressing to his American counterpart that he is “really grateful and greatly recognize and acknowledge your political will in all of this.”

Mexico has agreed to immediately begin purchasing as many agricultural products from the United States as possible, according to Trump.

Pena Nieto leaves office on December 1, turning over the Mexican government to his leftist successor, Andres Manuel Lopez Obrador. That means the clock is ticking to give Mexico’s legislature enough time to ratify it before the change of administration.

Congressional notification expected

The White House is also expected to formally notify Congress by the end of this week of its intention to sign a new trade agreement within 90 days.

“It will be likely be signed at the end of November,” said U.S. Trade Representative Robert Lighthizer, who was also in the Oval Office, along with Mexico’s foreign and trade ministers, for the Trump-Pena Nieto phone call.

The U.S. president, since the time of his 2016 election campaign has referred to NAFTA as the worst trade deal in history and repeated especially inflammatory rhetoric about America’s southern neighbor.

Trump, who blames NAFTA for the destruction of manufacturing jobs in the United States, repeatedly threatened to abandon the trade pact with Canada and Mexico, which came into effect during the Clinton administration in 1994.

Trump has rejected other multi-national deals, such as the Trans-Pacific Partnership (another trade pact) and the Paris Agreement on climate change mitigation, expressing a strong preference for one-on-one negotiations on trade and other matters with countries.

Negotiations with Canada

Trump said he would call Canadian Prime Minister Justin Trudeau soon and that the United States is open to talks with Canada if it is willing to negotiate fairly.

“I’ll be terminating the existing deal,” Trump said in reference to NAFTA.

The U.S. president also threatened America’s northern neighbor with penalties if there is no agreement.

“Frankly, a tariff on cars is the much easier way to go,” said Trump.

In Ottawa, officials are expressing resilience.

“We will only sign a new NAFTA that is good for Canada and good for the middle class,” said the Canadian foreign ministry in a statement, indicating Ottawa’s willingness to “continue to work toward a modernized NAFTA.”

“We hope that Canada can join in now,” Lighthizer subsequently told reporters during a conference call.

White House officials are denying that Monday’s announcement by the presidents of the United States and Mexico was designed to pressure the Canadians.

“Leaving Canada out of a new NAFTA would be a mistake and it is questionable whether the Office of the U.S. Trade Representative has the authority under current Trade Promotion Authority legislation to conclude just a bilateral with Mexico,” a visiting scholar at the Cato Institute, Inu Manak, who focuses on trade conflicts, tells VOA News.  “What happens next is anyone’s guess, but we should keep our eyes open for the return of Canada’s Foreign Minister, Chrystia Freeland, to Washington to wrap up the discussions soon.”

The three North American countries do about $1 trillion in trade among themselves annually.

 
…

Economist Andrej Bertoncelj is to become Slovenia’s finance minister in the minority center-left government of Prime Minister designate Marjan Sarec, a spokeswoman for Sarec’s party said on Monday.

Bertoncelj’s main task will be to keep a lid on public spending in the small Alpine country and reduce public debt which reached 73.6 percent of GDP last year, down from 78.6 percent in 2016, but was still well above the 60 percent of GDP level allowed for European Union members.

Outgoing Prime Minister Miro Cerar will become foreign minister, replacing Karl Erjavec who shifts to defense, while Economy Minister Zdravko Pocivalsek will retain his portfolio, the spokeswoman, Nika Vrhovnik, told Reuters.

Parliament is due to confirm the new government in the first half of September after ministers have presented themselves to parliamentary hearings.

Bertoncelj, who is an independent, is a member of the management board of state investment fund Slovenian Sovereign Holding, which manages state assets and is in charge of privatization of state firms.

Before that he worked at a university as a professor of management after holding top positions in two pharmaceutical companies previously. He will replace the outgoing finance minister Mateja Vranicar Erman.

Earlier in August parliament elected Sarec as the next prime minister following a June 3 election in which the centre-right anti-immigrant Slovenian Democratic Party got most votes but lacked coalition partners to form a government.

Sarec, who heads the The List of Marjan Sarec (LMS) party, formed a coalition with four other center-left parties – the Social Democrats, the Party of Modern Center, the Party of Alenka Bratusek and pensioners’ party Desus.

The five parties hold 43 out of 90 parliamentary seats but have agreed with the left-wing party the Left, which holds 9 seats, that it will support the government in its key projects although it will not join the coalition.

Some analysts say the minority government will find it hard to complete its four year mandate due to differences between the coalition partners.

One of the first tasks of the new government will be to sell a majority in Slovenia’s largest bank Nova Ljubljanska Banka (NLB). Slovenia has committed itself to selling the bank in exchange for European Commission’s approval of state aid to the bank in 2013.

Slovenians will also be looking to the new government to improve the inefficient national health system. Pension reform to ease the burden of the rapidly ageing population on the state budget will also be a challenge.
…

President Donald Trump says the prospects are “looking good” for an agreement with Mexico that could set the stage for an overhaul of the North American Free Trade Agreement.

“A big deal looking good with Mexico!” Trump tweeted Monday morning.

U.S. and Mexican negotiators worked over the weekend to narrow their differences. Once they reach an agreement, the third country in NAFTA — Canada — would be brought back in to finalize a revamp of the 24-year-old pact.

NAFTA reduced most trade barriers between the three countries. But Trump and other critics say it encouraged U.S. manufacturers to move south of the border to exploit low-wage Mexican labor.

The Trump administration wants a higher percentage of auto production to come from within the NAFTA bloc before qualifying for duty-free status.
…

Mexico’s Economy Minister Ildefonso Guajardo said on Sunday that bilateral negotiations with the United States about the North American Free Trade Agreement (NAFTA) were in the “final hours.”

Speaking as he arrived for talks at the U.S. Trade Representative’s office, Guajardo said the negotiators would need at least a week to work with Canada, the third country in the trilateral trade pact, pushing any possible final deal into at least September.

U.S. President Donald Trump said on Saturday that the United States could reach a “big Trade Agreement” with Mexico soon as incoming Mexican trade negotiators signaled possible solutions to energy rules and a contentious U.S. “sunset clause” demand.

 
…

John Cronin has never been one to let disability hold him back. The 22-year-old from Long Island, N.Y., was born with Down syndrome, a genetic disorder that causes developmental and intellectual delays. Motivated by his family’s love and encouragement, Cronin teamed up with his father 18 months ago to open a business. But not just any business. John’s Crazy Socks sells, you guessed it, socks. And as Faiza Elmasry reports, it’s a business worth $4 million. Faith Lapidus narrates.
…

Tesla Inc. CEO Elon Musk says investors have convinced him that he shouldn’t take the company private, so the firm will remain on the public stock markets.

The eccentric and sometimes erratic CEO said in a statement late Friday that he made the decision based on feedback from shareholders, including institutional investors, who said they have internal rules limiting how much they can sink into a private company.

Musk met with the electric car and solar panel company’s board on Thursday to tell them he wanted to stay public and the board agreed, according to the statement.

In an Aug. 7 post on Twitter, Musk wrote that he was considering taking the company private. He said it would avoid the short-term pressures of reporting quarterly results.
…

U.S. Commerce Secretary Wilbur Ross has appointed a former federal prosecutor to monitor China’s ZTE Corp — after people familiar with the matter said he rescinded an offer to a former U.S. official for signing a “Never Trump” letter before the 2016 presidential election.

A new monitor for ZTE is required as part of a June settlement that ended a ban on U.S. companies selling components to China’s No. 2 telecommunications equipment maker. The ban threatened ZTE’s survival and became a source of friction in trade talks between Washington and Beijing.

Roscoe Howard, a former U.S. attorney in Washington, will lead a compliance team designed to help ensure that ZTE does not illegally sell products with American parts to Iran and other sanctioned countries.

Howard, who got his law degree from the University of Virginia in 1977, is a partner in Barnes & Thornburg’s litigation department in Washington, and served as associate independent counsel during the Clinton and George H. W. Bush administrations.

Howard was not the first choice of Commerce Department officials.

Peter Lichtenbaum, a former assistant secretary for export administration at the Commerce Department, received a letter on Aug. 15 offering him the post, sources said.

Ross then learned that Lichtenbaum was among the dozens of former national security officials who signed a letter in August 2016 saying Trump was not qualified to be president and they would never vote for him, the sources said on condition of anonymity.

Last Friday, two days after making the offer, the department withdrew it, the sources said.

“This is the final decision. Period,” a Commerce Department spokesman said about Ross’ decision to rescind the offer to Lichtenbaum and choose Howard.

Trump, a former real estate magnate and reality television star, drew opposition from establishment Republicans who opposed his candidacy during the 2016 presidential campaign. His administration has been known to reject people who opposed him.

Violations by ZTE

ZTE, which relies on American-origin components for its smartphones and computer networking gear, pleaded guilty last year to violating U.S. sanctions by illegally shipping U.S. goods and technology to Iran.

The ban on ZTE was imposed in April after officials said the company made false statements about disciplining 35 employees tied to the wrongdoing.

As part of the 2017 guilty plea, ZTE paid nearly $900 million. To lift this year’s ban, it paid an additional $1 billion penalty, placed $400 million in escrow in case of future violations, and installed a new board and senior management.

Two monitors​

Under the latest agreement, the Commerce Department is selecting a monitor to oversee compliance for ZTE and its worldwide affiliates for 10 years. Howard will have a staff of at least six people funded by ZTE, including at least one expert in export controls, the Commerce spokesman said.

The government monitor has been designated as a “special compliance coordinator” to distinguish from another monitor for ZTE appointed by a U.S. judge in Texas when the company pleaded guilty last year.

That monitor, James Stanton, a lawyer who has handled personal injury cases among others, was picked by U.S. District Judge Ed Kinkeade, sources told Reuters last year. Kinkeade has control over that monitor.

A key reason the Commerce Department sought a second monitor, according to sources, was to have a qualified person police the company and report directly to the department and the company.
…

Federal Reserve Chairman Jerome Powell signaled Friday that he expects the Fed to continue gradually raising interest rates if the U.S. economic expansion remains strong.

Powell added that while annual inflation has risen to near the Fed’s 2 percent target rate, it doesn’t seem likely to accelerate above that point. That suggests that he doesn’t foresee a need for the Fed to step up its rate hikes. Late next month, the Fed is widely expected to resume raising rates.

Speaking to an annual conference of central bankers in Jackson Hole, Wyoming, Powell said the Fed recognizes that it needs to strike a careful balance between its mandates of maximizing employment and keeping price increases stable. He said a gradual approach is the best way for the Fed to navigate between the risks of raising rates too fast and “needlessly shortening the expansion” and moving too slowly and risking an overheated economy.

“My colleagues and I,” the Fed chairman said in his speech, “are carefully monitoring incoming data, and we are setting policy to do what monetary policy can do to support continued growth, a strong labor market, and inflation near 2 percent.”

Powell made no mention of the recent public criticism from President Donald Trump, who has said he’s unhappy with the Fed’s rate hikes. The president has complained that the Fed’s tightening of credit could threaten the continued strong growth he aims to achieve through the tax cuts enacted late last year, a pullback of regulations and a rewriting of trade deals to better serve the United States.

Many have seen Trump’s complaints about the Fed’s rate hikes as an intrusion on the central bank’s longstanding independence from political influence. On Thursday, two top Fed officials made clear Thursday that Trump’s criticism won’t affect their decisions on whether to continue raising rates.

Powell also made no mention in his speech of what many economists see as the most serious threat to the economy: The trade war that Trump has launched with America’s main trading partners — a conflict that risks depressing U.S. and global economic growth the longer it goes on.

The Fed chairman focused his remarks in part on the difficulty the Fed faces in setting interest-rate policies at a time when the economy seems to be undergoing changes that challenge long-standing beliefs of how low unemployment can fall before it ignites inflation pressures. He said there is also much uncertainty over the “neutral” rate of inflation —  the point at which the Fed’s policy rate is neither stimulating economic growth or holding it back.

The Fed’s economic projections, compiled from estimates of all Fed officials, estimates the current neutral rate at 2.9 percent. But Powell noted that there’s a wide difference of opinion about it.

After having kept its key policy rate near zero for seven years to help lift the economy out of the Great Recession, the Fed has raised rates seven times, most recently in March and June this year. Most Fed watchers foresee two more hikes this year — next month and then in December.

Powell said the Fed’s incremental approach to raising rates has so far succeeded.

“The economy is strong,” he said. “Inflation is near our 2 percent objective and most people who want a job are finding one. We are setting policy to do what monetary policy can do to support continued growth, a strong labor market and inflation near 2 percent.”
…

The United States and China imposed more tariff hikes on billions of dollars of each other’s automobiles, factory machinery and other goods Thursday in an escalation of a battle over Beijing’s technology policy that companies worry will chill global economic growth.

The 25 percent increases took effect as envoys from both sides held their first high-level talks in two months in Washington. No details were released about the two-day meeting that started Wednesday.

The penalties, previously announced, apply to $16 billion of goods from both sides including automobiles and metal scrap from the United States and Chinese-made factory machinery and electronic components. They follow last month’s first round of tariff increases of the same size by both sides on $34 billion of each other’s imports.

The Chinese government criticized the U.S. increase as a violation of World Trade Organization rules and said it would file a legal challenge. 

Beijing has rejected U.S. demands to scale back plans for state-led technology development that its trading partners say violate its market-opening commitments and American officials worry might erode the United States’ industrial leadership.

With no settlement in sight, economists warn the conflict could spread and knock up to 0.5 percentage points off global economic growth through 2020.
…

A new set of tit-for-tat tariffs imposed by the United States and China on each other’s goods took effect Thursday.

The U.S. announced earlier this month that it would impose 25 percent tariffs on $16 billion worth of Chinese goods, on top of the 25-percent tariffs it imposed on $34 billion worth of Chinese products in early July. Beijing has followed suit in each case with an identical percentage of tariffs in retaliation.

China’s commerce ministry issued a statement Thursday criticizing the U.S. tariffs as a violation of World Trade Organization rules, and says it will file a legal challenge under the WTO’s dispute resolution mechanism.

The new round of tariffs took effect the day after delegations from both nations met in Washington for first of two days of talks aimed at resolving the dispute, the first such formal discussions since June.

U.S. President Donald Trump told Reuters in an interview this week he does not expect much progress from the discussions.

When asked about the issue at Wednesday’s news briefing by VOA, White House Press Secretary Sarah Huckabee Sanders said, “As you said, these conversations are continuing. I don’t have any announcements on them. They’re ongoing. Certainly, what we’d like to see is better trade deals for the United States. he president wants to see free, fair, and more reciprocal trade between other countries, particularly with China, and we’re going to continue in those conversations.”

The Trump administration is demanding that Beijing change its practice of heavily subsidizing its technology sector and open its markets to more U.S. goods.

The U.S. Trade Representative’s office on Monday began six days of public hearings on the president’s plans to impose tariffs on a wider array of Chinese imports, affecting an additional $200 billion worth of Chinese goods.

Economists warn that the trade war between the world’s biggest economies would reduce global economic growth by around 0.5 percent through 2020.
…

When reforms began in Myanmar in 2011, its tourism sector was considered as one of those most likely to take advantage of the economic opportunities as the country looked to reconnect with the outside world. 

Authorities and businesspeople were confident that foreign tourists would be drawn to Myanmar, eager to see such sites as the ancient temples of Bagan, the unique culture of Inle Lake, or the picturesque beaches overlooking the Bay of Bengal. 

For a while it worked, as Myanmar’s international reputation improved in-line with the reforms happening at the time, the country was at the top of many visitors’ wish lists. Official figures showed that more than 4.68 million tourists visited the country in 2015, up from 816,000 in 2011. In 2017, 3.4 million tourists visited. 

But the situation has changed again. The tourism sector has been heavily impacted by the crisis in Rakhine State, which has seen 700,000 Rohingya cross into Bangladesh to flee a brutal army crackdown. Myanmar’s military has been accused of ethnic cleansing the Rohingya, leading many tourists to stay away because of ethical concerns. 

Myanmar’s government recognizes the need to take action, and in early August held a meeting for stakeholders to discuss what measures can be taken to improve the situation. 

At that event, de facto leader Aung San Suu Kyi said the country should focus on measures such as improving rail and water transport, providing clean accommodation and developing more community-based tourism projects.

“Tourists can get many opportunities such as viewing the beautiful scenery and enjoying new experiences,” Aung San Suu Kyi said. “That is why roads, water ways and railways should be considered aside from air travel.” 

Tourist operators in the country welcomed the remarks, but said that there are more short-term measures that can be made, and have also called for a nationwide strategic plan to tackle the malaise the industry is currently undergoing. 

“What is needed is a comprehensive integrated approach from [the government] and the private sector to improve the tourism sector,” said Aung Kyaw Swar, former principal of the Inle Heritage Foundation. “This should include infrastructure, products, channels of communication, public relations, marketing and sales.” 

He said he welcomed Aung San Suu Kyi’s speech, particularly the calls to improve infrastructure, but said a cohesive plan should be formed, including one that ensures that the respective ministries work closely together. 

He also said that the government should invest in research teams, in order to effectively research potential clients’ expectations when they visit the country.

Foreign visitors to Myanmar have traditionally been drawn towards the major cities of Yangon and Mandalay, as well as Bagan and Inle Lake, but new destinations are emerging, and tourist development in lesser known areas could bring economic benefits. 

U Bawla, a hotelier in Kale, the gateway to Chin State, one of Myanmar’s most scenic but underdeveloped regions, said that government support for tourism development would bring huge improvements for the lives of Chin people. 

“When people come to Chin State, [they say] it is an amazing, and beautiful place,” he said, adding that only a handful of tourists visit each month. “I think that if the government concentrates on [developing tourism] in Chin State, that will bring many improvements for the Chin people, including improvements in roads and transportation.” 

Bertie Lawson, managing director of Yangon-based Sampan Travel, said that Aung San Suu Kyi’s recommendations were “a good start”, but that much more needed to be done. 

As examples, he highlighted the practice by domestic airlines of charging foreigners double the price of Myanmar citizens, and the fact that buses to tourist destinations are often scheduled to arrive in the middle of the night, rather than at times more convenient for visitors. 

“This might seem small and petty, but they add up and make people wonder if Myanmar is really worth it, when they could go elsewhere and not have to deal with this,” he told VOA. 

“People aren’t complaining about the lack of CBT projects, or waterways. They’re complaining about the price, or about the issues they have traveling around the county. Those things can be changed, and should be looked at first,” he said. 

Lawson said he believed the impact of the Rakhine crisis on tourism would likely be long-term, but said there was still reason to be optimistic. 

“Repairing that reputation will take quite a long time,” he said. “I don’t think that means that tourism can’t do well, I just don’t think it will grow quite at the rate many were previously expecting.” 
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Following Seoul’s announcement that South Korean companies have illegally imported North Korean coal, U.S. experts are worried about North Korean trade that contravenes international sanctions.

The Korea Customs Service (KCS) announced earlier this month that three South Korean companies illegally imported North Korean coal that was transshipped at Russian ports, in violation of United Nations resolutions.

The U.N. Security Council adopted a resolution on August 5, 2017, banning North Korea from exporting coal, iron, lead and other materials. Another resolution later that year, on December 22, called for U.N. members to seize and inspect vessels suspected of transporting prohibited items. 

According to the KCS, in seven shipments between April and October of last year, three South Korean companies imported a total of 35,038 tons of North Korean coal and pig iron with a combined worth of $5.81 million.

North Korean coal on ships registered under a third country set sail either from its ports of Songlim, Wonsan, Chongjin and Daean, and the cargoes were transshipped via the Russian ports of Kholmsk, Vladivostock and Nakhodka before arriving at the South Korean ports of Dangjin, Pohang, Masan, Incheon and Donghae.

Action by Seoul

The South Korean government is now seeking the prosecution of the three companies for the illicit import of the materials and forging customs documents to state the coal and pig iron were of Russian origin. It also banned four ships – the Sky Angel, Rich Glory, Shining Rich and Jin Long – that transported the coal to South Korea from entering its ports. 

Sanctions experts said South Korea’s illegal import of banned North Korean coal is a major violation of U.N. sanctions and that the U.N. panel of experts on North Korea may want to try to further investigate the ships that transported the coal to South Korea. 

“It’s major in the sense that North Korea is very skilled at getting around sanctions,” said Robert Huish, a sanctions expert at Canada’s Dalhousie University in Halifax, Nova Scotia.  “The issue with this is that when sanctions are put in place, they are never simple because the target, which is North Korea, will always have the chance to circumvent them.” 

George Lopez, former member of the U.N. Panel of Experts for monitoring and implementing U.N. sanction on North Korea, said although he does not think the U.S. or U.N. will open a new investigation into the case, the panel of experts “may want to follow their own linkages to other sanctions violations, especially regarding particular ships and their owners and insurers.”

Lopez continued, “Their own connecting of the dots might lead to a critique of the [South Korea] customs service or an encouragement to other nations to follow this case as a model.” 

Joshua Stanton, a Washington-based attorney who helped draft the North Korean Sanctions Enforcement Act for the House Foreign Affairs Committee, thinks the U.S. or U.N. should probe the case further if there is an indication that the South Korean government knowingly committed the illegal acts.

“If the evidence shows South Korea did it willfully or that it stood by after having enough knowledge to know that the coal was North Korean, they should be sanctioned [by the U.S.],” Stanton said. “I think there are things that the U.S. law enforcement and the U.N. panel of experts can investigate and should investigate. And the fact that the South Korean government denies it, is not persuasive to me.” 

Some experts are concerned that South Korea’s illicit import could have a significant impact on the U.S. policy to apply maximum pressure on North Korea. 

“Sanctions leakage does lessen the pressure on Pyongyang,” said Troy Stangarone, senior director at Korea Economic Institute specializing in South Korean trade and North Korea, adding, “North Korea has a long history of working to evade sanctions, and it is unsurprising that some of its efforts are coming to light.”

Length of investigation

The South Korean government faced a criticism that the investigations into this case, which took over 10 months, were overly drawn out, reflecting its reluctance to enforce sanctions. 

In an interview with VOA’s Korean Service last week in Seoul, Cho Hyun, the vice foreign minister of South Korea, said the pace of the investigation reflected nothing other than a desire for accuracy.

“It took time to accurately probe the case, and following the principle of being presumed innocent until guilty, [we] could not inform [the public of the investigation] in the interim period,” he said.

Kim Yung-moon, the commissioner of Korean customs, also told VOA’s Korean Service that it took time to prove the coal was actually from North Korea.

“Because the North Korean coal entered [South Korea] after being transshipped from Russia, taking three months at times, we needed to prove that the coals were, in fact, from North Korea,” he said.

The Trump administration remains cautious about making accusations against the South Korean government for failing to enforce sanctions, stressing the importance of fully implementing U.N. sanctions. 

The U.S. Treasury Department said in an email sent to VOA last week, the “Treasury strictly enforces OFAC (Office of Foreign Asset Control) sanctions and U.N. Security Council Resolutions prohibiting illicit transactions with North Korea and works closely with our South Korean partners to continue to implement existing sanctions.” It further stated that the department does not speculate publicly on possible violations. 

In July, the State Department issued a “North Korea Sanctions and Enforcement Actions Advisory” warning that businesses “should be aware of deceptive practices employed by North Korea,” emphasizing that the OFAC has “authority to impose sanctions on any person determined to … have sold, supplied, transferred, or purchased, directly or indirectly, to or from North Korea or any person acting for or on behalf of the government of North Korea.” The advisory was distributed in five foreign languages, including Korean.

On Tuesday, the U.S. Treasury Department imposed sanctions on two Russian individuals, three companies, and six Russian-flagged ships for doing business with North Korea.

Christy Lee of the VOA Korean Service contributed to this report.
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Chilean President Sebastian Pinera said on Tuesday that his overhaul of the country’s tax structure would “modernize” Chile’s revenue system and stimulate investment by local and foreign companies.

The conservative leader said in a televised address that reform would, among other proposals, calibrate taxes paid by conventional companies with those paid by digital technology companies. The reform aims “to create a simpler and more equitable and fully integrated tax system for all Chilean companies.”

Digital commerce companies with local operations like Netflix and Uber are likely to be affected under the reform.

E-commerce is gaining traction in Latin America after a slow start. Last month, an Amazon Web Services vice president met with Pinera to discuss Amazon investing in the country as part of a longer-term regional expansion plan.

Pinera, a billionaire second-term president, whose first term as president was marred by protests over rising inequality, in June detailed a $26 billion spending plan and called for unity as Chile continues its “vigorous march towards development.”
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U.S. President Donald Trump’s administration weakened environmental controls on coal production Tuesday, overturning national regulations set by his predecessor, former President Barack Obama.

The Environmental Protection Agency said it will now allow individual coal-producing states to set their own rules for carbon emissions rather than have to adhere to an overall country-wide standard. The plan is subject to a 60-day comment period before it is finalized.

The action marks a fulfillment of a 2016 Trump campaign pledge to boost the fortunes of coal companies and coal-producing states.

It came hours before the president headed to a political rally for a Senate candidate in West Virginia, the second biggest U.S. coal production state, where he was expected to promote the plan. During his successful run for the White House, Trump supporters in coal states often held signs saying, “Trump Digs Coal.”

The EPA decision is Trump’s latest effort to topple Obama’s environmental legacy, following his withdrawal of the U.S. from the 2015 international Paris climate control accord championed by the former president.

At the time that he revoked U.S. participation in the agreement, Trump said, “I was elected by the citizens of Pittsburgh, not Paris.”

The EPA said its new rule is designed to replace Obama’s 2015 Clean Power Plan that targeted greenhouse gas emissions from coal plants and sought to shift power production away from coal to abundant natural gas supplies in the U.S., along with wind and solar energy. Trump’s EPA called the Obama rules “overly prescriptive and burdensome.”

The White House said the policy change will “significantly decrease bureaucratic red tape and compliance costs” for coal companies, “keeping American energy affordable and competitive on the world stage.”

But environmental groups immediately attacked the Trump administration edict, with the Natural Resources Defense Council calling it a “Dirty Power Plan.”

Environmental advocates said the Trump policy change, assuming some states weaken their regulations compared to the current national standards, will boost emissions from coal-fired power plants and worsen global warming.

Congressman Frank Pallone, a New Jersey Democrat, said “once again, this administration is choosing polluters’ profits over public health and safety.”
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