Petrobras Argentina Sale Under Scrutiny in Brazil

Brazilian prosecutors plan to investigate last year’s controversial sale of the Argentine subsidiary of Petrobras, Brazil’s state-controlled oil company, a lawyer representing some Petrobras shareholders said on Wednesday.

Petrobras, formally known as Petroleo Brasileiro SA , sold its 67.2 percent stake in Petrobras Argentina SA for $892 million to Pampa Energia SA, Argentina’s largest power company.

The sale has already drawn scrutiny from Brazil’s Congress and a federal audit court, and lawyer Felipe Caldeira said prosecutors were now looking into it as part of Brazil’s sweeping “Car Wash” anti-corruption investigation.

Caldeira, representing a group of minority Petrobras shareholders, told Reuters he spoke on Tuesday to prosecutors on a task force in Curitiba leading the Car Wash probe and gave them information on the sale.

“They are very interested and will investigate this,” said Caldeira, who filed a civil case in a Rio de Janeiro court in May alleging that the sale fetched a below-market price and was harmful to the interests of minority shareholders.

Federal prosecutors in Curitiba said the task force had not met with Caldeira but said that any relevant information about the case would be studied.

Petrobras bought the Argentine unit from energy conglomerate Perez Companc in 2002 for $1 billion, plus $2 billion in debt.

The sale 14 years later for much less sparked controversy in Brazil and led lawmakers to call on Petrobras and Pampa executives, and lawyer Caldeira, to testify before a committee hearing on Wednesday.

The controversy has grown since, Aldemir Bendine, chief executive officer of Petrobras at the time of the sale, was jailed last month on suspicion he received bribes from construction conglomerate Odebrecht in a political graft scandal that has led to the arrest of dozens of executives and politicians.

Pampa’s executive vice president and legal director Diego Salaverri told the committee the sale was transparent and competitive and his company made the best offer that was a “fair” price in a depressed market.

Oil prices had dropped drastically from $100 to $30 and a climate of uncertainty prevailed in Argentina, which had currency controls and a ban on remittances, he said.

Petrobras’ legal manager for acquisitions and divestment, Claudia Zacour, told the committee the sale of Petrobras Argentina was part of the Brazilian oil company’s divestment plan to reduce debt and focus on core activities.

The net positive result for Petrobras of owning and selling the Argentine unit was $1.6 billion when taking into account intercompany loans, the sale of some of its assets and the distribution of dividends, Zacour said.

Brazil’s federal audit court has said it was investigating the sale of Petrobras Argentina at the request of a senator but has not concluded its findings.

In response to Caldeira’s lawsuit, a federal judge in Rio de Janeiro sent Argentine authorities a request that the chairman of Pampa Energia, Marcos Marcelo Mindlin, testify in the case.

With a majority stake, Pampa SA, Mindlin’s holding company, continued its takeover of Petrobras Argentina in November by acquiring 11.85 percent held by the Argentine state pension system ANSES.

The transaction is being investigated by Argentine judge Claudio Bonadio, who ordered the search and seizure of documents from government offices in May in a case brought by center-left lawmaker Victoria Donda.

“The fund’s shares were sold very cheap, and we want to know why, because thousands of pensioners lost money,” Donda told Reuters in Brasilia, where she traveled to attend Wednesday’s hearing.

As Rural Sri Lanka Dries Out, Young Farmers Look for Job Options

Scorched by a 10-month drought that has killed crops and reduced residents to buying trucked-in water, Adigama’s young people are voting with their feet.

At least 150 youth have left this agricultural village 170 kilometers northwest of Sri Lanka’s capital since the drought began, looking for jobs in the country’s cities, or overseas, village officials say.

Few are expected to come back, even when the rains end.

“If they get the lowest-paying job overseas, or in a garment factory, they will not return,” Sisira Kumara, the main government administrative officer in the village of 416 families, said as he walked through a dried and long-abandoned maize plot. “They will work at construction sites or as office helpers — anything they can get their hands on.”

W.M. Suranga, 23, who left his family’s withering rice paddy six months ago for Colombo, said working for low wages in the city is preferable to struggling with no rain at home.

“At least I am sure of a paycheck at the end of the month. This uncertainly of depending on the rains is too much of a risk,” he said.

As Sri Lanka struggles with its worst drought in 40 years, farmers in the hardest-hit areas are migrating for work — with some wondering whether farming remains a viable career as climate change brings more frequent extreme weather.

“There is no income here. All the crops have failed in the last four seasons,” Kumara said.

Little to harvest for a year

Paddy rice and vegetables are usually the main source of income in Adigama. But since the last big rains in July 2016, there has been little to no harvest.

Older villagers like Rajakaruna Amaradasa, 55, say that at their age they don’t have the option of looking outside the village for a new life.

After four decades of harvesting rice and herding cattle, he abandoned his paddy fields earlier this year when his harvest failed, and now spends his days moving his cattle around, looking for scarce water.

“It will take us another two to three harvests to recover our losses and pay off any debt. Even then it all depends on the rain,” Amaradasa said.

With average rains, Amaradasa said he used to make between 30,000 and 40,000 rupees a month ($200-$260). Now his income has fallen to a third of that, he said.

Sri Lanka’s drought, which by mid-August had affected 19 of the island’s 25 districts, has particularly devastated arid regions that lie outside the country’s wet western plains and mountains.

A joint report by the World Food Program and the U.N. Food and Agriculture Organization, released in mid-June, classified the drought as worst in 40 years.

It predicted rice production this year in Sri Lanka would be almost 40 percent less than last year, and 35 percent lower than the five-year average. That amounts to the lowest harvest since 2004, it said.

Climate change

It also warned that Sri Lanka “is highly susceptible to climate change, and therefore the frequency of the weather hazards will likely increase as the earth warms.”

The impact on Sri Lanka’s economy is also likely to be substantial, with more than a quarter of the country’s labor force working in agriculture, a sector that contributes 8 percent of gross domestic product, the report said.

The situation is worst in villages like Adigama that rely almost entirely on rain to grow crops.

Suranga, the Adigama youth now working in Colombo, said he has no plans to return home. Instead he dreams of traveling to the Middle East as a construction worker.

“What is the guarantee there will be no more droughts or floods?” he asked. “When my father was my age, maybe the rains were much more predictable. Now only a fool will bet on the rains.”

Ukraine Scrambles to Quash Fallout From North Korea Allegations

Ukrainian officials and analysts were quick to deny allegations that the Soviet-era Yuzhmash arms factory was a likely source of engine technology used in North Korea’s missiles and to redirect suspicions to Russia.  

“It is a complex and bulky piece of equipment. It is simply not possible to supply it by bypassing export procedures,” said Mykola Sunhurovskyi, director of military programs at the Razumkov Center, a Kyiv think tank, to VOA’s Ukrainian Service. “What is possible, is for North Korea to obtain engines left behind after rocket dismantling in Russia. That could be possible. Meaning Russia could have kept the engines after it had taken apart the rockets, which had been slated for dismantling. Those could have been supplied.”

Michael Elleman, the author of a research report by the International Institute for Strategic Studies, says Pyongyang probably got illicit help from inside Ukraine. But Elleman acknowledges that help also could have come from Russia.  

“There’s a lot of uncertainty as exactly how it could have been transferred. But, I think the likelihood is that the source is either in Russia or Ukraine,” Elleman told VOA’s Ukrainian Service.  

Elleman says he first became aware of the possibility of Ukrainian technology when he noticed similarities in photos of North Korea’s September 2016 ground test.

“Well, according to two sources that I’ve spoken with, the modifications that we’ve seen in North Korea – that modified engine has actually been seen in Ukraine. That doesn’t mean it was done by Yuzhnoye [Yuzhmash’s design bureau], it could have been done by others or simultaneously. This was a product that was made long ago and it’s just been leveraged by unsavory types who were able to extract it from either Ukraine or Russia.”

‘Completely untrue’

Yuzhmash, the Ukrainian factory, called the claims “completely untrue” and said it had not produced military-grade ballistic missiles since Ukraine’s 1991 independence from the Soviet Union.  

“There is such a high level of confidentiality at the factory and in general it is ensured by a multi-level system of security, which includes not only Yuzhmash services, but also municipal and state services,” Yuzhmash Deputy Director Oleh Lebedev told Reuters TV.

Elleman was first quoted in The New York Times, which cited its own intelligence sources, saying that Ukraine was a likely source. 

But Elleman says that even if Ukraine was a source, he sees no indication Ukrainian authorities would have been involved.

“I don’t believe the Ukrainian government was responsible in any way,” he said. “And I suspect if it did occur in Ukraine, they may not have known. It’s likely they would not have known.”

Other analysts argue that North Korea can build its own engines and would not need help. But all agree it would be a good idea for Ukraine to allow an investigation.  

“I believe in this situation, the MFA [Ministry of Foreign Affairs] of Ukraine needs to invite the international community, with the first invitation to be extended to the USA, to conduct an investigation here in Ukraine, as well as globally to study exactly how North Korea was able to develop its missile program, whether there is a Chinese connection or a Russian connection,” said the director of Ukraine’s National Institute for Strategic Studies and former head of Ukraine’s National Security and Defense Council, Volodymyr Horbulin.  

“These are the two countries which maintain close relations with the DPRK [North Korea]. The proposal from Ukraine for such an investigation should put an end to constant attacks on our country by those who suggest that it is constantly trading in something banned by international accords or agreements,” said Horbulin.  

Possible implications for U.S.-Ukraine cooperation

Ukrainian President Petro Poroshenko on Tuesday ordered an official inquiry into whether any missile engine technology could have been supplied to North Korea. Some experts in Ukraine worry that the allegations could affect any U.S. decision on whether to provide Ukraine with defensive weapons to fend off Russia-backed separatists.

“There’s ongoing discussion about the possibility to transfer lethal weapons to Ukraine,” noted the Ukrainian Center for Army’s Ihor Fedyk. “This story may have a negative impact on the process,” he told VOA’s Ukrainian Service.  

There are concerns that other areas of bilateral cooperation, such as space programs, could be affected.  

“America is our strategic partner, a very serious strategic partner, in space programs,” said the acting head of Ukraine’s State Space Agency, Yurii Radchenko. “It is not in our interests to harm relations with U.S. official agencies.”

U.S. State Department Spokeswoman Heather Nauert commented Tuesday, saying “We’re certainly aware of those reports that have come out. That’s an issue that we would take very seriously if that were to be the case.”  

“As a general matter, we don’t comment on intelligence reports. Ukraine, though, we have to say, has a very strong nonproliferation record. And that includes specifically with respect to the DPRK,” Nauert added.

The allegations surfaced as North Korea threatens to send missiles near the U.S. island territory of Guam.  

While Elleman’s allegations are investigated, the North Korean government appears to have stepped back from its threat to Guam, saying it will wait to see what further actions the United States takes.

UK Vows Brexit Won’t Mean the Return of Irish Border Posts

The British government has vowed repeatedly to end the free movement of people from the European Union when the U.K. leaves the bloc in 2019. But on Wednesday it acknowledged that, in one area of the country, it won’t.

Britain said there must be no border posts or electronic checks between Northern Ireland and the Irish republic after Brexit, and it committed itself to maintaining the longstanding, border-free Common Travel Area covering the U.K. and Ireland.

“There should be no physical border infrastructure of any kind on either side of the border between Northern Ireland and Ireland,” Conservative British Prime Minister Theresa May said.

That means free movement across the border for British, Irish — and EU —  citizens. After Britain leaves the bloc, EU nationals will be able to move without checks from Ireland to Northern Ireland, and onto other parts of the U.K.

Free movement among member states is a key EU principle, and has seen hundreds of thousands of people move to Britain and get jobs there since the bloc expanded into eastern Europe more than a decade ago.

Many Britons who voted last year to leave the EU cited a desire to regain control of immigration as a key reason.

In a paper outlining proposals for the Northern Ireland-Ireland border after Brexit, the British government insisted it will be able to control who can settle in the U.K. through work permits and other measures.

It said “immigration controls are not, and never have been, solely about the ability to prevent and control entry at the U.K.’s physical border.” Control of access to the labor market and social welfare are also “an integral part” of the immigration system, the paper added.

Northern Ireland is an especially thorny issue in Brexit talks, because it has the U.K.’s only land border with the EU — and because an open border has helped build the economic prosperity that underpins the peace process in Northern Ireland.

Since the 1998 Good Friday peace accord, British military checkpoints along the Ireland-Northern Ireland border have been dismantled, rendering it all but invisible. Thousands of people cross the 300-mile (500-kilometer) border every day.

Britain said it was determined that “nothing agreed as part of the U.K.’s exit in any way undermines” the Northern Ireland peace agreement.

The government’s Department for Exiting the European Union acknowledged that “unprecedented” solutions would be needed to preserve the peace process and maintain the benefits of an open border after Britain leaves the EU, its single market in goods and services and its tariff-free customs union.

It suggested a future “customs partnership” between Britain and the EU could eliminate the need for checks on goods crossing the border.

For agricultural and food products, Britain said one option could be “regulatory equivalence,” where the U.K. and EU agree to maintain the same standards. But it’s unclear what that would mean for Britain’s ability to trade with countries that do not always meet EU standards, such as the United States.

The Northern Ireland proposals came in a series of papers covering aspects of Brexit negotiations, which are due to resume in Brussels at the end of this month.

Irish Foreign Affairs Minister Simon Coveney said the document “brings some clarity and is certainly helpful to move this process forward.” But, he said, “there are still significant questions that are unanswered.”

European Commission spokeswoman Annika Breidthardt said Britain’s position papers — which come after allegations from EU officials that the U.K. is underprepared for the EU divorce negotiations — are “a positive step.”

 

“The clock is ticking and this will allow us to make progress,” she said.

 

Lorne Cook in Brussels contributed to this story.

Plan to Silence Big Ben’s Beloved Bell Under Review

British Parliament officials said Wednesday they will review plans to silence Big Ben during four years of repairs after senior politicians criticized the lengthy muting of the beloved bell.

When the repairs were announced last year, officials said the massive bell in Parliament’s clock tower would be silenced for several months. But this week they said the ringing pause would last until 2021.

Prime Minister Theresa May said “it can’t be right for Big Ben to be silent for four years.”

The 13.5 British ton (15.1 U.S. ton, 13.7 metric ton) bell has sounded the time almost uninterrupted since 1859, but it’s due to fall silent on Monday so repairs can be carried out on the Victorian clock and the Elizabeth Tower.

Officials say the silencing is needed to ensure the safety of workers.

Adam Watrobski, principal architect at the Houses of Parliament, rejected claims that the great bell that survived German bombing raids was the victim of overcautious health and safety regulations.

“It is quite simply that we can’t have the bells working with those people adjacent to it. It simply isn’t practical to do that,” he said.

In a statement Wednesday headlined “update on Big Ben’s bongs,” Parliament officials said that in light of the concerns expressed by lawmakers, authorities “will consider the length of time” Big Ben is stifled.

But they rejected calls to allow the bell to strike at night once workers have gone home. “Starting and stopping Big Ben is a complex and lengthy process,” they said.

The sound of Big Ben’s bongs became associated with Britain around the world during wartime BBC news broadcasts. It’s still heard live each day on BBC radio through a microphone in the belfry.

The BBC says it will use a recording during the renovation works.

Ireland Rejects EU’s Demand to Collect Billions From Apple

Ireland’s finance minister rejected the European Commission’s demand that it retroactively collect 13 billion euros in taxes from Apple, saying this was not Dublin’s job in an interview with Germany’s Frankfurter Allgemeine (FAZ) newspaper.

In the interview, extracts from which the FAZ published on Wednesday, Finance Minister Paschal Donohoe said the tax rules from which Apple benefited had been available to all and not tailored for the U.S. technology giant. They did not violate European or Irish law, he added.

“We are not the global tax collector for everybody else,” the paper quoted him as saying. The European Commission last year ruled that Apple paid so little tax on its Ireland-based operations that it amounted to state aid.

UK’s Biggest Warship HMS Queen Elizabeth Sails into Home Port for First Time

Britain’s most advanced and biggest warship, the 65,000-ton aircraft carrier HMS Queen Elizabeth, berthed for the first time at its home port of Portsmouth on Wednesday.

The 280-meter (920-foot) vessel entered the harbor on England’s southern coast at 0610 GMT, greeted by thousands of spectators.

HMS Queen Elizabeth is the largest warship ever built for the Royal Navy, according to the Ministry of Defense.

“Today we welcome our mighty new warship, HMS Queen Elizabeth, to her home for the very first time,” said Defense Secretary Michael Fallon. “She is Britain’s statement to the world: a demonstration of British military power and our commitment to a bigger global role.”

The ship is currently undergoing sea trials. It cannot yet deploy planes, but flying trials from its deck are due to begin in 2018.

It took eight years to build HMS Queen Elizabeth, with construction taking place in six cities and involving 10,000 people.

Along with its sister ship, HMS Prince of Wales, it is part of a defense program worth 6 billion pounds ($7.65 billion).

Commanding officer Captain Jerry Kyd told the BBC that the carrier “sends the right signals to our allies and indeed potentially to our enemies that we mean business.”

Canada Approves First Cryptocurrency Sale in Property Rights Shake-Up

Canadian financial regulators have approved the public sale of a new digital currency in the country’s first official endorsement of money created independently of the government or central banks, company officials said on Wednesday.

Produced with digital encryption techniques, cryptocurrencies like Montreal-based impak Coin allow users to create their own money supply – with potentially significant impacts for how wealth and property rights are controlled.

Impak Coin has already raised more than C$1.5 million ($1.18 million) for the new currency and plans to launch an Initial Coin Offering – or a public sale of the digital money – this month.

By allowing people to create a new currency, the project aims to reduce the power of big banks in determining how property rights are managed and money is created, said Paul Allard, chief executive of impak Finance, the social enterprise behind the project.

“It is up to communities to decide how to manage a currency, it is not only for the government to decide,” Allard told the Thomson Reuters Foundation.

‘No need for government’

Throughout modern history governments have had control over how money is created and the power to enforce contracts and determine how goods and services are transferred.

Cryptocurrencies – through blockchain, the information storage and database system they use – have challenged that power, said Simon Trimborn, a professor at the Free University of Berlin who studies digital networks.

“The link between cryptocurrencies and individual property rights is the information storage and transaction system behind cryptocurrencies, the blockchain,” Trimborn told the Thomson Reuters Foundation.

“It is a database which can guarantee property rights while there is no need for relying on a company or government.”

Contracts are made digitally between peers and transactions are often conducted without government oversight, reducing the state’s power over the market.

The move by financial authorities to approve the sale of the digital money means “confidence and trust for investors”, said Jean-Philippe Vergne, a professor at the Ivey Business School in Ontario, Canada, who studies cryptocurrencies.

“We are observing a profound change in the nature of capitalism,” Vergne told the Thomson Reuters Foundation. “For the first time we have a technology that allows us to remove intermediaries such as government or central banks.”

Digital impact

Impak Finance hopes to raise up to C$10 million from its first sale of coins. Users who buy the new currency will be able to spend it via a mobile wallet connected to their phones.

More than 500 businesses have signed up to accept the new currency when it launches, Allard said.

He expects that will grow into the thousands as the project develops a “critical mass” of users, leading to more buyers and sellers making transactions.

Users will be able to exchange impak coins for traditional money which will be credited to their accounts after an initial waiting period in order to stop speculators from causing volatility in the currency’s value, Allard said.

Impak Finance will initially keep 40 percent of the money invested in the new currency as reserves in order to have cash on hand if users want to exchange it for traditional money.

Only businesses adhering to social and environmental standards are able to use the currency, said Allard, who hopes consumers interested in ethical purchasing will be attracted to the plan.

The “impact economy” – a small but growing sector that seeks to put the achievement of social good at the center of business – is expected to grow by more than 15 percent next year in North America, Allard said.

New type of property

Impak Finance will be entering a crowded market of new digital currencies, analysts said.

Following the growth of bitcoin, the most well known cryptocurrency, there are now more than 1,000 similar digital currencies being traded over the internet, said Arvind Narayanan, a computer science professor at Princeton University in the United States.

Most of these new digital offerings, however, are used for speculation – investors hoping the currency will gain popularity and then rise in value – rather than buying and selling tangible goods and services, Narayanan said.

“People are trying to get the state out of money and various forms of property,” Narayanan told the Thomson Reuters Foundation. “regulators and law enforcement are trying to adapt to a new technological development.”

($1 = 1.2707 Canadian dollars)

 

US Trade Envoy Says NAFTA Has ‘Failed’ Americans

U.S. President Donald Trump’s top trade official laid down a hard negotiating line for revamping the North American Free Trade Agreement on Wednesday, saying that major changes were needed to slash U.S. trade deficits and boost U.S. content in autos.

U.S. Trade Representative Robert Lighthizer said NAFTA had “failed many, many Americans” and Trump was not interested in merely tweaking the 23-year-old pact, and would seek major changes that would increase North American and U.S. content for autos and strong labor standards.

“We need to ensure that the huge trade deficits do not continue and we have balance and reciprocity. This should be periodically reviewed,” Lighthizer said in opening remarks at NAFTA negotiations in Washington. “The rules of origin, particularly on autos and auto parts, must require higher NAFTA content and substantial U.S. content.”

In Rare Rebuke of Trump, UK’s May Says Leaders Must Condemn Far-Right Views

British Prime Minister Theresa May said on Wednesday there was no equivalence between fascists and those who opposed them, a rare rebuke of U.S. President Donald Trump by one of his closest foreign allies.

Trump inflamed tensions after a deadly rally of white supremacists in Charlottesville, Virginia, by insisting that counter-protesters were also to blame, drawing condemnation from some Republican leaders and praise from white far-right groups.

“There’s no equivalence, I see no equivalence between those who propound fascist views and those who oppose them and I think it is important for all those in positions of responsibility to condemn far-right views wherever we hear them,” May told reporters when asked to comment on Trump’s stance.

WATCH: May responds to Trump’s comments

On Monday, May’s spokesman had said that while Britain condemned racism, what the U.S. president said was “a matter for him”.

May has been widely criticized by domestic political opponents for her efforts to cultivate close ties with Trump, who she visited at the White House days after his inauguration and invited for a state visit to Britain.

Her openly critical comment on Wednesday was an unexpected shift from May, who is keen to cement what she and many other Britons see as a “special relationship” between London and Washington as Britain prepares to leave the European Union.

The invitation to Trump to make a state visit to Britain sparked immediate controversy in Britain when the U.S. head of state announced his widely-criticized ban on travel from Muslim-majority countries just hours after May left the White House.

Trump’s stance on the Charlottesville violence drew renewed calls for Trump’s state visit, which would be hosted by Queen Elizabeth and involve lavish pageantry, to be cancelled. May had rejected similar calls after previous Trump-related controversies.

“Donald Trump has shown he is unable to detach himself from the extreme-right and racial supremacists,” said Vince Cable, leader of the opposition Liberal Democrats. “It would be completely wrong to have this man visit the UK on a State Visit.”

No date has been announced for the visit.

Trump Goes After Amazon, Again

President Donald Trump is renewing his attacks on e-commerce giant Amazon, and he says the company is “doing great damage to tax paying retailers.”

 

Trump tweets that “towns, cities and states throughout the U.S. are being hurt – many jobs being lost!”

The president has often criticized the company and CEO Jeff Bezos, who also owns The Washington Post.

 

Many traditional retailers are closing stores and blaming Amazon for a shift to buying goods online. But the company has been hiring thousands of warehouse workers on the spot at job fairs across the country. Amazon has announced goal of adding 100,000 full-time workers by the middle of next year.

Trump has in the past tweeted that Amazon was not paying “Internet taxes.” But it’s unclear what he meant by that. Amazon.com collects state sales taxes in all 45 states with a sales tax and the District of Columbia, according to their website. State governments have sought to capture sales taxes lost to internet retailers, though they have struggled with a 1992 Supreme Court ruling that retailers must have a physical presence in a state before officials can make them collect sales tax.

 

The issue arose recently in South Carolina, which has pursued legal action to recoup tax revenue it says it’s owed. This summer, the state Department of Revenue filed a case with the Administrative Law Court, alleging that Amazon had failed to collect taxes on third-party merchant sales.

 

Third-party merchant sales involve items that can be bought on Amazon.com, but the company acts solely as a middleman between buyers and sellers. Amazon processes the payments and offers other support to the parties involved.

 

The state claims that Amazon owes the state $12.5 million in taxes, penalties and interest from first quarter of last year alone, according to the complaint obtained by The Associated Press.

 

For years, the Seattle company fought against collecting sales taxes from its customers. According to the National Conference of State Legislatures, South Carolina was among 10 states that initially gave Amazon a temporary tax reprieve in exchange for jobs and investment, voting in 2011 to give the company until the beginning of 2016 before the state levied taxes.

 

According to the conference, that deal made South Carolina the last state to collect among those where officials cut similar deals with Amazon. The company promised to create at least 2,000 full-time jobs and invest $125 million by Dec. 31, 2013. It opened two distribution centers in the state.

 

Amazon did not immediately respond to an emailed request for comment.

 

 

Brazil Lawmakers Seek $1B in Taxpayer Money for Election Campaigns

Brazilian lawmakers facing a dearth of financing for their re-election campaigns next year proposed on Tuesday creating a fund of 3.6 billion reais ($1.1 billion) in taxpayer money to help their parties foot the bills.

The Supreme Court banned corporate donations to campaigns in 2015, drastically reducing political fund-raising.

On top of that, a massive investigation into endemic corruption in the country has uncovered a web of political bribes and kickbacks that effectively shut off under-the-table payments that politicians also relied upon.

The taxpayer fund proposed by a special committee of the lower house of Congress is part of an effort to reform Brazil’s discredited political system by reducing the proliferation of parties and making politicians more accountable to voters.

The constitutional amendment is expected to face the first of two floor votes next week in the lower chamber. It must also be approved twice by two-thirds of the Senate.

Creation of the fund was backed by most parties, despite public criticism that lawmakers should not be appropriating public money for campaigning in the midst of a budget crisis and deep recession.

The proposed legislation includes replacement of a proportional system for electing congressmen based on party lists by one where candidates with the most votes get elected.

Smaller parties opposed the change, saying it will favor the bigger established parties and the re-election of better-known politicians, while hindering the emergence of fresh faces in Brazilian politics.

Backers of the so-called “district” system say it would stop highly popular candidates from pulling in unknown politicians by party lists.

Another reform bill that has already passed the Senate establishes a minimum of votes that parties need to continue existing, a move to reduce the number of parties, now at 35.

The proliferation forces governments to forge complex coalitions to stay in power by distributing jobs, influence and pork barrel projects, which critics say is fertile ground for graft.

The proposals must be approved in Congress by Oct. 7 to apply for next year’s elections.

Individual campaign donations are allowed, but lawmakers are discussing limits of self-financing to even out the playing field and avoid rich Brazilians getting elected with their own money as millionaire Sao Paulo Mayor Joao Doria did last year.

Trump Orders Faster Permitting on Infrastructure Projects

U.S. President Donald Trump on Tuesday signed an executive order to speed approvals of permits for highways, bridges and other major building efforts as part of his proposal to spend $1 trillion to fix aging U.S. infrastructure.

The text of Trump’s executive order was not immediately available. Earlier, sources said it revoked an Obama-era executive order that required strict building standards for government-funded projects to reduce exposure to increased flooding from sea level rise and other consequences of climate change.

“No longer will we allow the infrastructure of our magnificent country to crumble and decay,” Trump said at a press conference at Trump Tower in New York.

“While protecting the environment, we will build gleaming new roads, bridges, railways, waterways, tunnels and highways.

We will rebuild our country with American workers, American iron, American aluminum, American steel,” Trump said.

Revoking standards set by Obama

By revoking standards set by the Obama administration, Trump hopes to “streamline the current process” for infrastructure projects, a government official said.

Separately a White House spokesperson said the order would set a two-year goal for completing permits needed on major infrastructure plans, and create a “one Federal decision” protocol for big projects.

The Trump administration has complained that it takes too much time to get permits and approvals for construction projects. It has issued dozens of rules and orders to reverse Obama-era regulations addressing climate change and its consequences such as rising sea levels and more severe storms.

Factor in scientific projections

The Obama-era standard required that builders factor in scientific projections for increased flooding and ensure projects can withstand rising sea levels and stronger downpours.

The Obama administration required all federal agencies apply the standard to public infrastructure projects from housing to highways.

It raised base flood levels to a higher vertical elevation to “address current and future flood risk and ensure that projects funded with taxpayer dollars last as long as intended,” according to a 2015 Treasury Department presentation.

U.S. officials have estimated the United States suffered $260 billion in flood related damages between 1980 and 2013.

Some disagree with decision

Rafael Lemaitre, former director of public affairs at FEMA who worked on the Obama-era order, said Trump is undoing “the most significant action taken in a generation” to safeguard U.S. infrastructure.

“Eliminating this requirement is self-defeating; we can either build smarter now, or put taxpayers on the hook to pay exponentially more when it floods. And it will,” he said.

Flood policy expert Eli Lehrer, president of the libertarian R Street Institute who has criticized many Obama initiatives, said that in this case, “The Trump administration is acting very rashly in part out of the desire to undo a climate measure” from its predecessor.

He called Trump’s order “an enormous mistake that is disastrous for taxpayers,” adding the Obama rule “would have saved billions of dollars over time.”

 

Tech Companies Ramp Up NAFTA Lobbying on Eve of Trade Talks

Technology companies, such as Microsoft and Cisco Systems, have ramped up lobbying ahead of talks to renegotiate the North American Free Trade Agreement, looking to avoid any future restrictions on cloud storage and to promote an international pact to eliminate technology goods tariffs.

U.S., Mexican and Canadian negotiators are due to start talks on the 23-year-old trade pact on Wednesday. Farming and transportation groups have traditionally dominated lobbying on NAFTA, but technology lobbyists are helping lead the recent surge in efforts to influence Washington, according to data from the Center for Responsive Politics.

Tech companies and trade organizations disclosed they had 48 arrangements with lobby groups that discussed NAFTA with administration officials or lawmakers in the second quarter, up from 17 groups in the first quarter and one group at the end of 2016, according to the data.

“It’s both defensive and offensive,” Devi Keller, director of global policy for the Semiconductor Industry Association, said of the industry’s position on the new talks. “There is an opportunity for expansion.”

The industry now has almost as many lobby groups representing its views on NAFTA as the transport sector, which includes automakers. That sector had 52 lobbying groups discussing the trade pact with government officials between April and June. Agriculture still dominates the NAFTA lobbying effort with 86 arrangements with lobbying groups.

While the auto and farm lobbies are seeking to preserve cross-border supply chains and to retain access to markets in Mexico and Canada, the tech sector wants a revamped NAFTA to help it grow future business.

President Donald Trump has blamed NAFTA for the loss of U.S. manufacturing jobs and threatened to withdraw from the pact unless it can be reworked in the United States’ favor.

Tech firms want a ban on any future government requirements that providers of services, such as cloud computing, store data in a particular country. They also seek a commitment by NAFTA members to join a broader international pact to eliminate all tariffs on a broad range of information technology goods, including computers, smartphones, semiconductors and medical devices.

Today, the United States and Canada already subscribe to the broader tech agreement but Mexico does not.

Template for future trade

While tech goods already face no tariffs under NAFTA and industry representatives said there are no data flow restrictions in the region hampering trade, U.S. firms want an updated NAFTA to help them access other markets by serving as a tech template for future trade pacts.

Tech industry associations have sent letters to the Trump administration asking negotiators to prioritize free flows of data and low tariffs as well as global cybersecurity standards, and have met with staff at the U.S. Trade Representative.

“We’re fairly confident the issues we identified will be addressed in the negotiations,” said Ed Brzytwa, director of global policy at the Information Technology Industry Council.

It remains unclear, however, how prominently tech concerns will feature at NAFTA talks given Trump’s focus on manufacturing.

The CRP, a nonprofit group that advocates for government transparency, includes media and publishing firms in the technology sector, but the overwhelming majority of the sector’s disclosures on NAFTA came from hardware, software and digital services firms.

The CRP’s database incorporates disclosures to both the Senate and the House of Representatives and includes both in-house lobbyists and external lobbying firms.

Cisco, Microsoft, Amazon

Cisco Systems, a networking hardware company, had as many as 10 lobbyists working on NAFTA issues. On a lobby disclosure form reviewed by Reuters, Cisco Systems listed NAFTA and government procurement as the trade issues handled by its lobbyists.

Microsoft, which counts cloud computing and software as core businesses, had as many as 13 lobbyists working on NAFTA, according to the CRP database.

The disclosure forms filed by Microsoft do not make clear whether all 13 lobbied on NAFTA, which is listed along with several other trade-related issues and cloud computing.

Amazon, a major cloud services provider and internet retailer, also cited NAFTA as well as “customs procedures” in its lobbying disclosure. The Trump administration has proposed easing customs barriers for online purchases.

Cisco Systems and Amazon declined to comment for this story, while Microsoft representatives did not respond to a request for comment.

Greece Seeks EU Help as Wildfires Rage

Firefighters battled wildfires raging northeast of Athens for a third day on Tuesday as Greece asked for help from its European partners to prevent them from spreading.

The fire started in Kalamos, a coastal holiday spot some 45 km (30 miles) northeast of the capital, and has spread to three more towns, damaging dozens of homes and burning thousands of hectares of pine forest. A state of emergency has been declared in the area.

“The blaze is advancing with great speed. Because of the scale and intensity of the wildfires, the country submitted a request for aerial means,” fire brigade spokeswoman Stavroula Maliri told a press briefing.

Cyprus offered a group of 60 firefighters, and a Greek air force plane was headed there to pick them up. But a request for two pairs of CL-415 firefighting aircraft was turned down by France as it had to deal with its own wildfires, she said.

Three firefighting planes and six water-throwing helicopters operated through the day, assisting 210 firefighters and about 100 military personnel battling the blaze on the ground near the town of Kapandriti.

Rugged terrain dotted with small communities made the fire-fighting difficult, with winds rekindling the blaze at many spots. Thick, billowing smoke rendered operations from the air difficult.

Across Greece, firefighters were battling more than 55 forest fires, an outbreak fed by dry winds and hot weather that fanned blazes in the Peloponnese and on the Ionian islands of Zakynthos and Kefalonia.

Arson?

On Zakynthos, an island popular with foreign tourists, a dozen fires burned for a fifth day. Authorities declared a state of emergency there on Monday. A government minister said there was no doubt the fires had been set deliberately.

“It’s arson according to an organized plan,” Justice Minister Stavros Kontonis, the member of parliament for Zakynthos, told state TV.

Late July and August often see outbreaks of forest and brush fires in Greece, where high temperatures help create tinder-box conditions.

In Kalamos, community president Dimitris Kormovitis told Reuters TV: “If we don’t manage to cut it off today, there will be terrible consequences. There has been devastation of a biblical scale in our area, which is one of the last lungs of the Attica region.”

Andreas Theodorou, a local councilor in Kalamos, said the blaze had damaged several dozen homes. “Help did not arrive fast enough, and if you don’t stop a forest fire so large as soon as it breaks out, it’s very hard to put it out,” he said.

In the Peloponnese region of Ilia, blazes that broke out in three areas Monday and looked tamed early Tuesday flared up again, fanned by winds. In 2007, the same area was the site of Greece’s worst fires, with more than 70 people killed.

“We asked for the evacuation of the village of Peristeri. The fire has gotten very close, it cannot be contained due to strong winds,” Ilia vice prefect George Georgiopoulos told SKAI TV.

Italy Minister Sees Light at End of Tunnel on Migrant Flows

Italy’s interior minister said on Tuesday he saw light at the end of the tunnel for curbing migrant flows from Libya after a slowdown in arrivals across the Mediterranean in recent months.

But a United Nations investigator said that Italy’s recent effort to draw up a code regulating the operations of humanitarian ships rescuing migrants at sea would cause more deaths.

The subject of immigration is dominating Italy’s political agenda ahead of general elections due before May next year, with public opinion increasingly hostile to migrants. Almost 600,000 migrants have arrived in Italy over the past four years.

“We are still under the tunnel, it’s a long tunnel, but I start seeing the light at the end of it,” Interior Minister Marco Minniti told a news conference.

Small drop in migrant arrivals

After a surge in migrant arrivals from Libya at the start of the year, the numbers have slowed. Data from the Interior Ministry on Tuesday showed that 97,293 people had reached Italy so far in 2017, down 4.15 percent from the same period in 2016.

Minniti said that these trends would continue in August but did not comment further.

Italy has approached the migrant problem with a dual track strategy, strengthening Libya’s efforts to fight smuggling and at the same time putting pressure on non-governmental organisations (NGOs) involved in rescue operations.

“It was important to intervene on the other side of the Mediterranean and we have focused on Libya. It seemed difficult, but it now appears that something is moving,” he added.

Italy offers instruction, upgrades

In Libya, Italy has trained members of the coastguard and upgraded its fleet, in line with the EU’s investments to support search and rescue operations at sea as well as those along its borders.

Minniti said that attention would also be given to the conditions of migrants brought back from sea to Libya and that Italy would start distributing aid in the cities of Sabratha and Zowarah, two hubs for the smuggling of migrants.

At home, the Italian government has introduced a code of conduct for the operations NGOs, demanding that armed police travel on their boats to help root out people smugglers.

Five out of the of eight groups operating in the southern Mediterranean agreed to the terms so far. Doctors Without Borders (MSF) has refused to sign so far.

‘Code of conduct’

Hours earlier, a member of the United Nations largest body of independent experts said Italy’s policy could restrict the NGOs’ life-saving work and result in more deaths.

“This code of conduct and the overall action plan suggest that Italy, the EU Commission and the EU Member states deem the risks and the reality of deaths at sea a price worth paying in order to deter migrants and refugees,” Agnes Callamard said in a statement.

Minniti said he would meet his counterparts from Libya, Chad, Niger and Mali on Aug. 28 and that he would soon meet in Rome the mayors of the main Libyan cities involved.

“A democratic country (like Italy) does not chase migrants flows, but governs them … ungoverned flows threaten a country’s democracy,” Minniti said. “Italy is not retreating but remains firmly committed to rescues at sea.”

 

Iran’s Top General Makes Rare Visit to Ankara

In a rare visit, the head of Iran’s armed forces is in Turkey. The two neighbors have found themselves increasing rivals in Iraq and Syria, but both sides are trying to find common ground.

The chief of staff of the Iranian armed forces, Major General Mohammad-Hossein Baqeri, arrived in Ankara, leading a high-ranking military and political delegation, for three days of talks. It is the first visit by Iran’s chief of staff since the 1979 Iranian revolution.

Regional rivalries

Former Turkish ambassador to Iraq Unal Cevikoz now heads the Ankara Policy Forum. He says conflicts in Iraq and Syria have exacerbated regional rivalries.

“Iran is becoming a very important actor in the region, particularly in Iraq and Syria,” he said. “It seems Iran has certain intentions. And when we look at the Turkish Iranian relations pertaining to the situation in Iraq and Syria, it is obvious Turkey and Iran are not on the same page.”

Turkish President Recep Tayyip Erdogan has positioned himself as an advocate of Sunni Muslim rights in the region and has been in the forefront of criticizing Tehran’s policy in Iraq and Syria.

Erdogan has strongly criticized the treatment of Sunnis by Iraqi militia backed by Tehran. Ankara is one of the main supporters of Syrian rebels fighting the Damascus government supported by Iran.

The Iranian general’s visit comes as Tehran, Ankara and Moscow are cooperating in what is called the Astana process to resolve the Syrian civil war. The conflict is expected to be discussed during the visit.

Idlib enclave

Political columnist Semih Idiz of the Al Monitor website says talks will include the Syrian enclave of Idlib, one of the last areas the rebel forces control.

“Idlib is a potential hornets nest. There is infighting there between two radical Islamist groups,” said Idiz. “One is considered nominally more moderate and supported by Turkey and the other one more close to ISIS in sentiment. It is not clear how that is going to play out in Idlib and [Syrian President] Assad is going to take advantage of that.”

Idlib borders Turkey, and there are growing concerns in Ankara that if it is overrun by Syrian government forces Turkey could experience a major refugee influx, which could include many radical jihadists. Last week Ankara closed its border crossing into Idlib due to security concerns.

The aspirations of the region’s Kurds is also expected to be on the Iranian general’s agenda in Ankara, with both countries having large and restive Kurdish minorities. Next month’s independence referendum by Iraqi Kurds will provide common ground, with Tehran and Ankara strongly opposing the vote.

 

Difficult Negotiations Ahead as NAFTA Talks Begin in Washington

The first round of negotiations between the US, Canada and Mexico begins this week on what President Donald Trump has called “the worst trade deal ever.” He blames the 2-decades-old North American Free Trade Agreement (NAFTA) for the loss of millions of manufacturing jobs in the US. Trump has vowed to scrap the agreement, unless the US gets a ‘fair deal.’ But trade experts warn that failure is not an option, especially when the stakes are so high. Mil Arcega reports.

China: US ‘Baring of Fangs’ on Trade Will Hurt Both Sides

A decision by the United States to investigate China’s trade practices is a unilateralist “baring of fangs” that will hurt both sides, China’s state news agency Xinhua said Tuesday.

U.S. President Donald Trump on Monday authorized an inquiry into China’s alleged theft of intellectual property that administration officials said could have cost the United States as much as $600 billion.

U.S. Trade Representative Robert Lighthizer will have a year to look into whether to launch a formal investigation of China’s trade policies on intellectual property, which the White House and U.S. industry lobby groups say are harming U.S. businesses and jobs.

“While it is still too soon to say that the United States intends a showdown with China on trade, it is no exaggeration that the latest baring of fangs on Washington’s part against China, like all the other unilateral moves by Washington, will hurt not only China, but the United States itself in the long run,” Xinhua said.

Xinhua said while Chinese exporters could be the first to suffer from trade sanctions, the pain would soon spread to U.S. industries and households, adding that China was willing to resolve any disputes between the two sides through dialogue. 

The investigation is likely to cast a shadow over U.S. relations with China, its largest trading partner, just as Trump is asking Beijing to put more pressure on North Korea to give up its nuclear program.

Ken Jarrett, president of the American Chamber of Commerce in Shanghai, said in a statement Tuesday that trade and North Korea should not be linked, and said the investigation was a sign of growing U.S. discontent with Chinese trade practices.

“The president’s executive order reflects building frustration with Chinese trade and market entry policies, particularly those that pressure American companies to part with technologies and intellectual property in exchange for market access,” he said. “Chinese companies operating in the United States do not face this pressure.”

“We support actions that recognize the importance of U.S.-China commercial ties but which also encourage progress toward a more equitable trading relationship,” he said.

Norway PM Doubles Down on Tax Cuts in Bid for Second Term

With four weeks to go before an election that is too close to call, Norway’s Conservative prime minister, Erna Solberg, pledged on Monday to cut taxes to boost growth and job creation if she was re-elected.

In power as head of a minority coalition government since 2013, Solberg is attempting to become the first right-wing prime minister to win re-election since 1985.

While taxes, unemployment and a rural backlash against government reforms are hotly debated, opinion polls show a near dead heat between Solberg’s right-wing coalition and center-left parties seeking to replace it in a Sept. 11 vote for parliament.

Support for the main opposition Labor Party, which seeks to raise taxes on high earners and the wealthy, has slipped slightly in recent weeks, erasing the narrow lead held by the center-left in most polls during spring and early summer.

“We must get across the message that Norwegian politics won’t have to go left when it’s so obvious that the economy is improving and jobs are being created,” Solberg told Reuters on the sidelines of a news conference.

She highlighted spending on education and transport, as well as “growth-enabling tax cuts” as key priorities ahead.

The price of oil, Norway’s key export, fell by more than 70 percent from 2014 to 2016, lifting unemployment to a 20-year high of five percent last year, but crude has since staged a partial recovery and the jobless rate has eased to 4.3 percent.

The government increased spending from Norway’s $975 billion sovereign wealth fund, the world’s largest, to aid the recovery, but the growth in public spending should moderate now that growth is normalizing, Solberg added.

Labor leader Jonas Gahr Stoere reiterated a plan to raise income and wealth taxes by up to 15 billion Norwegian crowns ($1.89 billion) to pay for public services while avoiding becoming too dependent on the wealth fund’s cash.

“It’s fair and necessary to do this,” he told independent broadcaster TV2, adding the money would be used to hire more teachers, improve care for the elderly and help combat climate change.

A survey published by TV2 on Monday, asking eligible voters who they believed would win, showed 50.3 percent expected Gahr Stoere to become prime minister, while 48.4 percent of those polled thought Solberg would stay in power.

An Aug. 11 poll by Respons on behalf of the newspaper Aftenposten showed Labour and two key backers, the Center Party and the Socialist Left, obtaining a combined 44.6 percent support, down from 46.3 percent in June. The government and its backers rose to 47.1 percent from 46.3 percent.

The outcome of the vote could ultimately be decided by the results for several small parties, including the right-leaning Liberals, the far-left Reds and the unaligned Green Party. All are battling to surpass a four-percent election threshold.

Leaders of all eight parties that currently hold seats in parliament, as well as the Red Party, are due to hold their first televised debate of the campaign at 1930 GMT.

($1 = 7.9371 Norwegian crowns)

Firefighters Battle Wildfires Across Greece

Firefighters battled more than 90 forest fires across Greece on Monday, an outbreak fed by dry winds and hot weather that saw blazes burning near Athens, in the Peloponnese, and on the Ionian islands of Zakynthos and

Kefalonia.

The fire near Athens was burning unchecked for a second day, damaging dozens of homes. It had started in Kalamos, a coastal holiday spot some 45 km (30 miles) northeast of the capital, and spread overnight to three more towns. A state of emergency was declared in the area.

On Zakynthos, an island popular with foreign tourists, several fires continued to burn for a fourth day and authorities declared a state of emergency. One minister said those fires had been set deliberately.

“It’s arson according to an organised plan,” Justice Minister Stavros Kontonis, who is the MP for Zakythnos, told state TV when asked to comment on the dozen fires burning on the island. “There is no doubt about it.”

It is not clear what caused the fires, and no investigation has begun into possible arson. Late July and August often see a outbreaks of forest and brush fires in Greece, where high temperatures help create tinder-box conditions.

Near Athens, authorities ordered a precautionary evacuation of two summer camps and homes in the area and evacuated a monastery after flames reached its fence on Monday. Hundreds of Kalamos residents fled, heading to the beach to spend the night.

“It was a terrible mess, that’s what it was. You could see homes on fire, people running, people desperate, it was chaos and the fire was very big,” a resident told Reuters TV.

Andreas Theodorou, a local councillor, said the blaze had damaged “several dozens of homes.”

“Help did not arrive fast enough, and if you don’t stop a forest fire so large as soon as it breaks out, it’s very hard to put it out,” he said.

The fire brigade said rugged terrain dotted with small communities made the fire fighting difficult.

In the Peloponnese region of Ilia, the site of Greece’s worst fires in 2007, which killed more than 70 people, blazes broke out in three areas on Monday, prompting the evacuation of a village.

Russian Security Agency Says It Foiled IS Attack Plot

Russia’s top domestic security agency said Monday it has thwarted suicide bombings in Moscow planned by the Islamic State group in Syria.

Four people have been arrested on suspicion of plotting attacks on Moscow transit system and shopping malls, the Federal Security Service, or FSB, said in a statement.

Those arrested included two would-be suicide bombers along with an Islamic State envoy and an expert in explosives. One of them is a Russian national and three others are from ex-Soviet Central Asia, the FSB said.

The agency released a video in which its agents inspect a house used by the group to make explosives while two suspects lie down on the floor in handcuffs. It didn’t say when the arrests took place.

The FSB said the attacks were planned by two senior IS militants who fight with IS. The agency didn’t give their nationalities, but their names given by the FSB appear to indicate they hail from the former Soviet Union.

In May, the FSB arrested another group of suspected IS members in May who were also accused of plotting terror attacks in the capital.

The arrests follow a suicide bombing in St. Petersburg’s subway that left 16 dead and wounded more than 50 in April.

President Vladimir Putin said in April that some 9,000 militants, about half of them from Russia and the rest from ex-Soviet Central Asian nations, have joined the Islamic State in Syria.

He emphasized that a key goal for the Russian military operation in Syria is to crush them there and prevent them from coming back home.

Critiques Fly as Tillerson Struggles to Define his Mission

In a wood-paneled stateroom in the Philippine presidential palace, Rex Tillerson sat across from a leader who boasts of hunting down drug dealers to personally kill. Whether he’d confront his host for letting police kill thousands — and how forcefully – was being closely scrutinized for proof the Trump administration has any commitment to human rights.

When the secretary of state ultimately broached it last week with President Rodrigo Duterte, he backed into it, rattling off U.S. death tolls and addiction rates that tell the story of America’s opioid crisis. Then he noted matter-of-factly that Americans have voiced concern about Duterte’s approach to his country’s drug war. He offered U.S. help, two of the meeting’s participants said.

To Tillerson’s critics, it was the latest underperformance by a secretary of state they see as abdicating traditional roles and aspirations of American diplomacy. To Tillerson, aides said, it was a concrete solution to a problem, rather than grandstanding for grandstanding’s sake.

Since taking office in February, Tillerson has earned praise from President Donald Trump despite policy differences, top Cabinet members and even some Democrats, including those who take solace in the tempering role he plays in an otherwise frenetic and unpredictable administration.

Yet he’s also stoked deep doubts about his leadership among many U.S. diplomats and the traditional foreign policy establishment, with a daily drumbeat of editorials like “Why Has Rex Tillerson Belly-Flopped as Secretary of State?” and “How Rex Tillerson is Wrecking the State Department.”

And so difficult has Trump made Tillerson’s job at times that it’s sparked talk of a “Rexit,” a potential early departure from the job. As with the histrionic headlines, Tillerson has brushed it all off, calmly telling reporters last month, “I’m not going anywhere.”

This account of Tillerson’s first six months draws on interviews with roughly two dozen State Department officials, foreign diplomats and other Tillerson associates. Some weren’t authorized to comment publicly and spoke on condition of anonymity.

In private conversations, Tillerson has taken issue with the approach of his predecessors, and especially John Kerry, whose high public profile, constant travel and impulse to plunge himself into every crisis became a running State Department joke.

Tillerson has told those in his orbit he can get more done if countries know they can negotiate in confidence without their positions being dissected in the press.

That argument hasn’t caught on among the chorus of diplomats and foreign policy scholars who have piled on, claiming he’s squandering the only real tool in his arsenal. After all, diplomats don’t have weapons at their disposal, only words.

There are questions about why he took the job if he doesn’t have a particular mark he hopes to leave on the world. In a Washington Post column entitled “Rex Tillerson is a Huge Disappointment,” former Bush administration official Michael Gerson asked, “Who would want to be known as the secretary of state who retreated from the promotion of justice and democracy?”

Many past secretaries reached eagerly and early for Nobel Peace Prize-worthy achievements. Tillerson’s most enthusiastic focus has been streamlining the State Department’s inner workings, a project expected to extend the rest of the year or longer.

“I think he came to the job with a feeling that America was approaching foreign policy with too much of a missionary zeal. We were telling the world what they ought to do,” said John Hamre, president of the Center for Strategic and International Studies, where Tillerson served 11 years on the board. “He’s not a missionary for grand causes. He’s a pragmatist.”

Two decades ago, as Tillerson was rising through Exxon’s management, the oil company merged with Mobil to become the world’s biggest, with revenues exceeding many countries’ economies. Tillerson has told aides the State Department redesign is tougher than the merger ever was.

“This takes time,” said R.C. Hammond, a senior Tillerson adviser. “We’re not changing one light switch. We’re rewiring an entire house.”

On his first day as America’s top diplomat, Tillerson spoke in the marbled lobby of the State Department’s Harry S. Truman Building headquarters. He told assembled employees that he knew the election was “hotly contested” and that while all were entitled to their beliefs, it mustn’t overwhelm “our ability to work as one team.”

Much of the diplomatic corps was deeply suspicious of the new administration’s worldview. An astonishing 900 signed a rare “dissent memo” – before Tillerson even arrived – objecting to Trump’s initial travel ban on people from seven mainly Muslim countries.

Tillerson, the Exxon Mobil CEO until just weeks earlier, represented to some the prospect of a sober, levelheaded “adult in the room” for Trump’s national security decisions. As Sen. Ben Cardin of Maryland, the Foreign Relations Committee’s top Democrat, put it in Tillerson’s confirmation hearing, “You don’t strike me as someone likely to be naive.”

Addressing State Department workers, Tillerson emphasized honesty, respect and accountability for all – themes borrowed from the Boy Scouts of America that he once led.

Then he started talking about efficiency. He predicted “changes to how things are traditionally done.” The mood in the room changed.

“Change for the sake of change can be counterproductive, and that will never be my approach,” Tillerson said. “But we cannot sustain ineffective traditions over optimal outcomes.”

When, two months later, Tillerson embraced a 37-percent cut to foreign aid and diplomatic spending, lawmakers of both parties balked, accusing him of weakening diplomacy and U.S. influence. Trump’s final proposed budget softened the cuts somewhat, but still calls for roughly one-third less money, fewer workers and consolidation of many offices.

Tillerson locked in his reputation as an under-the-radar secretary on his first trip abroad, when he told the one reporter allowed to travel with him he was “not a big media press access person” and said, “I personally don’t need it.”

In Texas, that approach paid off for Tillerson, and Exxon flourished. Corporations are rarely harmed by their CEOs avoiding the limelight.

But in Washington, the same approach has denied Tillerson the chance to define his own narrative — or to effectively calm the inevitable concerns when a workforce of 75,000 is told big cuts are coming.

“I will say this: It’s very Rex,” said Paul Tetreault, director of Washington’s Ford’s Theatre, where Tillerson was involved for a decade. “He is disciplined, he is methodical, he has a plan. You, me, we may not know what that plan is, but I think he does.”

Still, the vacuum has been filled by a steady stream of rumors, leaks and reports about impending changes that, left largely unchallenged by Tillerson, have reached sky-is-falling proportions. Among them:

– That promotion of a just and democratic world may be removed from the State Department’s mission statement. An early draft that relied on employee feedback didn’t include it, but officials say the final version likely will.

– That Tillerson wants to move passports and visas to the Homeland Security Department. Outside consultants recommended it, but Tillerson and Deputy Secretary John Sullivan oppose the move.

– That a micromanaging Tillerson has taken back all authorities previously delegated to subordinates. In fact, Tillerson rescinded a few, left most in place and issued a dozen-plus other new ones.

“There are elements of truth in some of these stories,” Sullivan, Tillerson’s deputy, said. “But then they’re twisted in a way that makes it sound as though the secretary is out of touch, mismanaging, whatever. I see him, when he’s in town, three or four times a day. The guy is committed to the mission.”

On one critique, even Tillerson agrees.

So slow has Trump’s administration been to staff the State Department that nearly the entire upper echelon of assistant secretaries who oversee specific regions and functions is vacant. Foreign embassies, reluctant to publicly criticize Tillerson, privately complain they have no point person- or only an “acting” official with limited authority.

“No,” Tillerson said last month when asked if he’s satisfied with the pace of hiring. “I’d like it to go faster.”

The empty offices are due in part to Trump, in part Tillerson. While political spats with the White House have stalled some of Tillerson’s preferred picks, in some cases he’s leaving positions vacant because they might be eliminated or combined with other posts in the overhaul.

Many “special envoys” and issue-specific offices are expected to be merged into related State Department bureaus. That’s sparked concern among some lawmakers and special interest groups but also enjoys support from some diplomats who have long complained about a notoriously unwieldy bureaucracy.

No secretary before Tillerson has faced the unique challenge of working for a president like Trump. So often does Trump contradict or undermine him that foreign diplomats have struggled to determine when Tillerson truly speaks for his boss.

No sooner had Tillerson tried to calm the nation by downplaying prospects for a North Korea military conflict than Trump reaffirmed his “fire and fury” threat and boasted about U.S. nuclear weapons.

But Trump also defends Tillerson, saying Friday they were “totally on the same page.” Tillerson often downplays signs of incongruity between their messages, and on North Korea, Tillerson says boss was merely “trying to support our efforts by ensuring that North Korea understands what the stakes are.”

There have been similar divisions over Qatar, Iran and the Paris climate accord.

In the Cabinet, it’s Tillerson who’s made the most concerted effort to translate Trump’s “America First” mantra into cohesive policy. In a May speech, Trump said alliances remain critical but that as the world changed economically and militarily over the last two decades, things grew “out of balance” and no longer serve U.S. interests as well.

What Tillerson said next fueled growing concerns that traditional values of human rights, democracy and global well-being were falling away under Tillerson and Trump. The secretary said America’s values are not its policies, and that forcing values on others too heavily “really creates obstacles” for U.S. interests.

Tillerson’s aides argue he’s actually promoting those values more effectively than his predecessors, by using a “light touch” and offering specific solutions or help rather than issuing demands or self-righteous lectures. In each case, aides said, Tillerson emphasizes why doing the right thing advances another country’s self-interests.

Six months in, Tillerson presides over a State Department deeply uneasy about its future, but still hopeful he’ll lead American diplomacy more successfully than the panicked editorials predict.

Insigniam, a consulting firm Tillerson hired for the department’s redesign, warned in a 110-page report that prolonged uncertainty would have negative repercussions. Tillerson says he’s mindful of that but hopes the uncertainty will ebb as the redesign takes shape.

“It’s to be expected that we will go through some morale issues early on,” Tillerson said this month. But, he added, “I cannot change what we’re doing from a policy standpoint, if that’s what’s behind people’s unhappiness.”

China Banning Coal, Iron, Seafood Imports From North Korea

China announced Monday it is banning imports of coal, iron ore, seafood and other products from North Korea in line with new United Nations sanctions approved earlier this month.

Chinese leaders had pledged to fully enforce the sanctions, which China and the other members of the U.N. Security Council unanimously adopted in response to North Korean ballistic missile tests.

The sanctions could block as much as $1 billion in North Korean exports.

China’s Commerce Ministry said the new trade ban will be fully in place by September 5.

U.S. President Donald Trump and other members of his administration have urged China to use its position as North Korea’s most important ally to pressure the country to give up its nuclear weapons program.

China has said it complies with U.N. resolutions, and on Monday the Chinese foreign ministry reiterated calls for restraint and the need to find a political resolution to the situation.

US Takes Another Look at Providing Lethal Weapons to Ukraine

Seeking leverage with Russia, the Trump administration has reopened consideration of long-rejected plans to give Ukraine lethal weapons, even if that would plunge the United States deeper into the former Soviet republic’s conflict.

The deliberations put pressure on President Donald Trump, who’s fighting perceptions he is soft on the Kremlin amid investigations into whether his campaign colluded with Moscow to interfere in the 2016 U.S. election.

The proposal, endorsed by the Pentagon and the State Department, reflects his administration’s growing frustration with Russian intransigence on Ukraine and a broader deterioration in U.S.-Russian ties. The tensions were seen most recently in Russian leader Vladimir Putin’s order for America to eliminate more than half its diplomatic personnel in Russia.

Awaiting Trump and his closest advisers is an authorization to provide Ukraine with anti-tank and potentially anti-aircraft capabilities, according to U.S. officials familiar with the plan. It’s not dramatically different from proposals rejected by President Barack Obama, who feared an influx of U.S. weapons could worsen the violence responsible for more than 10,000 deaths in Ukraine since 2014 and create the possibility of American arms killing Russian soldiers. Such a scenario could theoretically put the nuclear-armed nations closer to direct conflict.

While Obama was still in office, Trump’s campaign also rejected the idea of arming Ukraine, preventing it from being included in the Republican platform.

Now, however, it’s under discussion by Trump’s senior national security aides, according to the officials, who spoke on condition of anonymity because they weren’t authorized to talk about the matter publicly. While there is no deadline for a decision and one is not expected imminently, the debate is going on as U.S. and Russian diplomats prepare to meet as early as this coming week to explore ways to pacify eastern Ukraine, where Russian-backed separatists have fought the central government for three years.

“The Russians have indicated some willingness to begin to talk with us about a way forward on Ukraine,” Secretary of State Rex Tillerson said after seeing his Russian counterpart, Foreign Minister Sergey Lavrov, last week in the Philippines.

Tillerson noted his recent appointment of a special representative for Ukraine, Kurt Volker, who will coordinate with Russia and European countries to give “full visibility to all the parties that we’re not trying to cut some kind of a deal on the side that excludes their interests in any way.”

Russia hawks in the U.S. and uneasy American allies have feared such a prospect since Trump took office after a campaign in which he questioned NATO’s viability and repeatedly expressed his wish for a new U.S.-Russian partnership. At one point, two years after Russia’s annexation of Ukraine’s Crimea region, Trump even challenged the notion that the Russians would “go into Ukraine.”

Volker has proposed a meeting with his Russian counterpart, Putin ally Vladislav Surkov, before the end of the month. Lavrov said after his talks with Tillerson that the meeting would be in Moscow. U.S. officials say no venue has been determined, with the neutral venues of Geneva or Vienna also in play.

Volker, a former U.S. ambassador to NATO who is known as a Russia hawk, supports arming Ukraine. Such action, he says, would boost the U.S. negotiating position in the east and offer Kiev the means to defend itself against any future aggression. Unsurprisingly, Russia opposes such assistance and warns of consequences.

“I hear these arguments that it’s somehow provocative to Russia or that it’s going to embolden Ukraine to attack. These are just flat out wrong,” Volker told an interviewer last month as he visited Europe on his first trip in his new post. He argued that arming Ukraine would help rather than hurt efforts to stop Russia from threatening or interfering in its neighbor’s territory.

All proposals in recent years have focused on arms that are deemed “defensive” in nature and none would appear to give Ukraine any strategic edge over Russia’s vastly superior military forces.

“We have not provided defensive weapons nor have we ruled out the option to do so,” State Department spokeswoman Heather Nauert said on Aug. 3. “That’s an option that remains on the table.”

A White House official would not comment on internal administration deliberations but noted that since the crisis began in 2014, the U.S. has provided Ukraine with support equipment for its forces and training and advice to further defense reforms.

Some U.S. officials say the idea is gaining currency because of Washington’s impatience with Russia and its start-and-stop implementation of a 2015 agreement designed to end the conflict in eastern Ukraine. The Minsk Accords were agreed to by Ukraine, France, Germany and Russia with the goal of enforcing a cease-fire in the east and introducing political reforms to give the area more political autonomy.

While the Obama administration allowed Europe to take the lead on the Minsk process, Volker has been empowered to make the U.S. a player in the effort.

The objective now is to change Russia’s strategic thinking, one official said, and providing defensive weapons to Ukraine would be one way to do that.

Chinese Newspaper Warns Trump Risks ‘Trade War’

A Chinese state newspaper warned Monday that President Donald Trump “could trigger a trade war” if he goes ahead with plans to launch an investigation into whether China is stealing U.S. technology.

In a commentary by a researcher at a Commerce Ministry think tank, the China Daily said Trump’s possible decision to launch an investigation, which an official says he will announce Monday, could “intensify tensions,” especially over intellectual property.

The official told reporters Saturday the president would order his trade office to look into whether to launch an investigation under Section 301 of the Trade Act of 1974 of possible Chinese theft of U.S. technology and intellectual property.

The Chinese government has yet to comment on the announcement.

A decision to use the Trade Act to rebalance trade with China “could trigger a trade war,” said the commentary under the name of researcher Mei Xinyu of the ministry’s International Trade and Economic Cooperation Institute.

“And the inquiry the U.S. administration has ordered into China’s trade policies, if carried out, could intensify tensions, especially on intellectual property rights.”

The commentary gave no indication of how Beijing might respond but Chinese law gives regulators broad discretion over what foreign companies can do in China.

If an investigation begins, Washington could seek remedies either through the World Trade Organization or outside of it.

Previous U.S. actions directed at China under the 1974 law had little effect, said the China Daily. It noted China has grown to become the biggest exporter and has the world’s largest foreign exchange reserves.

“The use of Section 301 by the U.S. will not have much impact on China’s progress toward stronger economic development and a better future,” said the newspaper.

Portugal Asks for Help from Europe to Fight Fires

More than 3,000 firemen struggled to put out forest fires across Portugal on Sunday, after the country requested assistance from Europe to fight blazes that threaten to spread with more hot weather in the coming days.

Exceptionally dry and hot weather ignited Portugal’s worst fire disaster in memory early this summer, killing 64 people, and fires have continued to flare up in recent weeks with the arrival of each new hotter spell of weather.

Interior Minister Constanca Urbana de Sousa said the country sent the request for help to Europe late on Saturday because of concerns that high temperatures and high winds in the coming days could increase the number of fires.

The minister said the request was carried out “because of a question of prudence” due to the weather forecast for coming days, according to news agency Lusa. It covered requests for firefighting airplanes and firemen and is part of a European mechanism for cooperation to fight fires.

Emergency services said 268 fires broke out on Saturday, the highest number for any single day this year, with 6,500 firemen fighting to put them out. There are fears that many of them could flare up again later on Sunday, with higher winds and temperatures that hit in the afternoon.

The central district of Coimbra adopted a local state of emergency to deal with fires, as did four smaller municipalities in the region.

While fires have burned through the summer none has had the tragic impact of the one in late June, as emergency services have gone to far greater efforts to evacuate villages and shut roads early in affected areas.

But the country could face many more weeks of fires before the end of summer.

More than 140,000 hectares of forest have burned this summer in Portugal, more than three times higher than the average over the last 10 years, according to European Union data.

Danish Police Say No Body Found Inside Sunken Submarine

Danish police say they have not found the body of a missing Swedish journalist inside an amateur-built submarine that sunk off the Nordic country’s eastern coast last week.

Copenhagen police spokesman Jens Moller Jensen says Sunday that investigators uncovered no trace of 30-year-old freelance journalist Kim Wall in the UC3 Nautilus sub, which was raised and transported for investigation Saturday.

 

Police will now continue to search for Wall in the waters near the island in Copenhagen’s harbor where the sub’s owner Peter Madsen allegedly dropped her off late Thursday.

 

Madsen made a last-minute escape from the sinking sub and has denied any responsibility on the fate of Wall. He was arrested Friday on preliminary manslaughter charges.

 

Moller Jensen said there are indications that the Danish inventor deliberately sank his submarine.

Amid Criticism, UK Government Tries to Show Unity on Brexit

The British government tried to fight back Sunday against criticisms that it is divided and unprepared for Brexit, saying it will set out detailed plans for the U.K.’s exit from the European Union and issuing a joint statement by two Cabinet rivals over Europe.

 

Trade Secretary Liam Fox, a strong supporter of leaving the European Union, and the more pro-EU Treasury chief Philip Hammond, wrote in the Sunday Telegraph that they agreed there should be a “time-limited” transition period after Britain formally leaves the bloc in 2019, to avoid a “cliff-edge” for people and businesses.

 

Fox and Hammond said the transition period “cannot be indefinite; it cannot be a back door to staying in the EU.” They didn’t say how long the transition would last or what rules would apply during that period.

 

The government also said Sunday it wants to increase pressure on the 27 other EU nations to start negotiating a “deep and special” future relationship that would include a free trade deal between Britain and the EU.

 

The EU says those negotiations can’t start until sufficient progress has been made on three initial issues: how much money the U.K. will have to pay to settle its outstanding commitments to the bloc; whether security checks and customs duties will be instituted on the Irish border; and the status of 3 million EU nationals living in Britain.

 

The government’s Brexit department said Britain wants to show that progress on the preliminary issues has been made and “we are ready to broaden out the negotiations” by the time of an EU summit in October.

 

Brexit Secretary David Davis said that “with time of the essence, we need to get on with negotiating the bigger issues around our future partnership to ensure we get a deal that delivers a strong U.K. and a strong EU.”

 

The push comes after EU officials expressed impatience with the pace of Britain’s preparations.

 

The bloc’s chief negotiator, Michel Barnier, said last month there was “a clock ticking” on the talks. Irish Prime Minister Leo Varadkar said last week that Brexit advocates “already had 14 months” to issue detailed proposals, but had not.

 

Barnier is due to meet Davis for a new round of negotiations at the end of August.

 

Britain voted to leave the EU in June 2016, but did not trigger the formal two-year exit process until March.

 

Prime Minister Theresa May then called a snap election in an attempt to increase her Conservative Party’s majority in Parliament and strengthen her negotiating hand. But voters did not rally to her call, leaving May atop a weakened minority government.

 

In recent weeks, with May on her summer vacation, members of her Cabinet have openly disagreed about what direction Brexit should take.

 

Opponents of Brexit have become increasingly vocal, arguing that the public or Parliament must get the chance to vote on any final deal between Britain and the EU.

 

David Miliband, who was foreign minister in Britain’s previous Labour government, said leaving the EU was “an unparalleled act of economic self-harm.”

 

Writing in The Observer newspaper, Miliband said there must be “a straight vote between EU membership and the negotiated alternative.”

 

 

Analysts Say Trump’s Mixed Russia Policy Still Taking Shape

U.S. President Donald Trump’s reluctant support for tighter sanctions against Russia, and recent comments about Russia, have been interpreted in Moscow as a turning point in hopes for improved relations. The tougher line, despite Trump’s continued apathy on alleged Kremlin interference in the U.S. election, dismissal of possible collusion, and flattery of President Vladimir Putin, raise the question: What is Trump’s Russia policy? VOA’s Daniel Schearf reports from Washington.