After 100 Days, US-China Trade Talks Have Far to Go

Bilateral talks aimed at reducing the U.S. trade deficit with China have yielded some initial deals, but U.S. firms say much more needs to be done as a deadline for a 100-day action plan expires Sunday.

The negotiations, which began in April, have reopened China’s market to U.S. beef after 14 years and prompted Chinese pledges to buy U.S. liquefied natural gas. American firms have also been given access to some parts of China’s financial services sector.

More details on the 100-day plan are expected to be announced in the coming week as senior U.S. and Chinese officials gather in Washington for annual bilateral economic talks, rebranded this year as the “U.S.-China Comprehensive Economic Dialogue.”

A U.S. Commerce Department spokesman declined to discuss potential areas for new agreements since a May 11 announcement on beef, chicken, financial services and LNG.

​Trade deficit grows

Earlier in April, when Chinese President Xi Jinping met U.S. President Donald Trump for the first time at his Florida resort, Xi agreed to a 100-day plan for trade talks aimed at boosting U.S. exports and trimming the U.S. trade deficit with China.

The U.S. goods trade deficit with China reached $347 billion last year. The gap in the first five months of 2017 widened about 5.3 percent from a year earlier, according to U.S. Census Bureau data.

“It is an excellent momentum builder, but much more needs to be done for U.S.-China commercial negotiations to be considered a success,” said Jacob Parker, vice president of China operations at the U.S.-China Business Council (USCBC) in Beijing.

Biggest irritants

There has been little sign of progress in soothing the biggest trade irritants, such as U.S. demands that China cut excess capacity in steel and aluminum production, lack of access for U.S. firms to China’s services market, and U.S. national security curbs on high-tech exports to China.

The Trump administration is considering broad tariffs or quotas on steel and aluminum on national security grounds, partly in response to what it views as a glut of Chinese production that is flooding international markets and driving down prices.

Deals struck

American beef is now available in Chinese shops for the first time since a 2003 U.S. case of “mad cow” disease, giving U.S. ranchers access to a rapidly growing market worth around $2.6 billion last year.

More beef deals were signed during an overseas buying mission by the Chinese last week.

“There are hopes there will be even more concrete results,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing in Beijing on Friday. He did not elaborate.

Critics of the 100-day process said China had agreed to lift its ban on U.S. beef last September, with officials just needing to finalize details on quarantine requirements.

China, meanwhile, has delivered its first batch of cooked chicken to U.S. ports after years of negotiating for access to the market. 

But unlike the rush by Chinese consumers for a first taste of American beef, Chinese poultry processors have not had a flurry of orders for cooked chicken.

Biotech crops, financial services

Other sectors in China under U.S. pressure to open up have moved more slowly.

Beijing had only approved two of the eight biotech crops waiting for import approval, despite gathering experts to review the crops on two occasions in a six-week period.

U.S. industry officials had signaled they were expecting more approvals. U.S. executives say the review process still lacks transparency.

Financial services is another area where little progress has been made, U.S. officials say.

USCBC’s Parker said it is unclear how long it will take for foreign credit rating agencies to be approved, or whether U.S.-owned suppliers of electronic payment services will be able to secure licenses.

The bilateral talks have also not addressed restrictions on foreign investment in life insurance and securities trading, or “the many challenges foreign companies face in China’s cybersecurity enforcement environment,” Parker said.

In an annual report released Thursday, the American Chamber of Commerce in Shanghai said China remained a “difficult market.”

Farmers Find Healthy Soils Make for Healthy Profits

Take care of your soil, and your soil will take care of you. That’s the message agriculture experts have for farmers worldwide. They say farmers can halt the degradation of their land and save money by using techniques known as conservation agriculture. But as VOA’s Steve Baragona reports, adopting those techniques takes a change of attitude.

Spain’s Muguruza Defeats Venus Williams to Win Wimbledon

Spain’s Garbine Muguruza has won her first Wimbledon title, defeating American Venus Williams in straight sets Saturday, 7-5, 6-0.

The 10th seeded Williams, 37, had been seeking to become the oldest women’s Grand Slam champion but couldn’t overcome the 14th seeded Muguruza.

Muguruza, who lost in the Wimbledon finals in 2015 to Venus’ sister, Serena, saved two set points in the 10th game of the first set and then won nine straight games to clinch the championship. It is her second Grand Slam title.

Venus Williams was seeking her first Wimbledon title since 2008.  She has won a total of five.

France Urges Qatar, Arab Neighbors to Resolve Diplomatic Standoff

France’s foreign minister has expressed concern about the deterioration of relations between Qatar and its Arab neighbors and called for sanctions that target Qatari nationals to be lifted.

Jean-Yves Le Drian spoke to reporters after talks with his Qatari counterpart, Sheikh Mohammed bin Abdulrahman Al-Thani, in Doha on Saturday.

A group of nations that includes Saudi Arabia, the United Arab Emirates, Bahrain and Egypt accuses Qatar of supporting terrorism and has given Doha a 13-point list of demands after severing diplomatic ties in early June.

Qatar has said it is willing to negotiate but will not give up its sovereignty.

“France calls for the lifting, as soon as possible, of the measures that affect the populations, in particular binational families, that have been separated, or students,” Le Drian told reporters in Doha after he his meeting with Al-Thani.

Later in the day, Le Drian flew to Jeddah, where he repeated his concerns about the effects of the standoff in a televised press appearance with Saudi Foreign Minister Adel al-Jubeir.

Jubeir said any resolution of the worst Gulf crisis in years should come from within the six-nation Gulf Cooperation Council.

“We hope to resolve this crisis within the Gulf house, and we hope that wisdom prevails for our brothers in Qatar in order to respond to the demands of the international community — not just of the four countries,” he said.

He reiterated that Qatar should not support terrorist groups and their financing or host their members and should end incitement through the media.

Qatar has repeatedly denied such accusations and rejected demands to close down the Al Jazeera network, as initially requested by the boycotting states.

Le Drian, who will visit the United Arab Emirates and Gulf mediator Kuwait on Sunday, followed in the steps of other world powers in the region, including the United States.

U.S. Secretary of State Rex Tillerson visited the region earlier this week but left with little apparent progress in resolving the standoff.

Some information for this report came from Reuters.

Germany Confirms 2 of Its Nationals Stabbed to Death in Egypt

Germany has confirmed that two of its nationals were stabbed to death in an attack at an Egyptian resort hotel.

A German Foreign Ministry statement said “We can now sadly confirm that two German tourists died in the attack at Hurghada.”

Officials say the female tourists were killed Friday when the assailant swam ashore from another Red Sea beach.

Egyptian authorities say the man has been arrested.

A German Foreign Ministry spokeswoman said, “According to what we know, the act was a deliberate attack on foreign tourists – a particularly devious and criminal act that leaves us sad, dismayed and furious.”

Four other people were wounded in the incident.

Hurghada is one of Egypt’s most popular beach resorts, especially with Europeans.

 

Who Is Rinat Akhmetshin, the Russian-American Lobbyist Who Met With Trump’s Son?

As recently as last year, Rinat Akhmetshin could be seen regularly pedaling through downtown Washington, D.C., nattily dressed, with a pocket square and heavy-framed thick glasses, riding a retro hipster orange bicycle. 

He also showed an affinity for vintage motorcycles, which he parked for two years in the Washington driveway of renowned investigative reporter Seymour Hersh. 

Hersh later gave a public endorsement to a controversial film linked to Akhmetshin that sought to undermine a 2012 U.S. law that infuriated the Kremlin. 

At the center of scandal

Now Akhmetshin, a dual Russian-American citizen who has both denied and bragged about being a former Soviet military intelligence officer, is at the center of a growing scandal reaching high into President Donald Trump’s White House. 

U.S. media reported that he attended a June 9, 2016, meeting with Trump’s son, Donald Jr., accompanying a Russian lawyer who was also seeking to undermine the 2012 law.

Akhmetshin did not respond to an e-mail, text messages, or a voice mail from RFE/RL on July 14. But he told the Associated Press that the lawyer, Natalya Veselnitskaya, gave Trump associates at the meeting information on what she said were funds being illegally funneled to the Democratic National Committee and suggested the information could help the Trump campaign.

“This could be a good issue to expose how the [Democratic National Committee] is accepting bad money,” Akhmetshin was quoted as recalling Veselnitskaya saying.

Decades behind the scenes

Until last year, Akhmetshin’s longtime behind-the-scenes work in and around Washington lobbying circles had escaped wider notice. But his work is substantial, stretching back two decades.

He has been a key figure in past PR campaigns to bolster Kazakh opposition figures, to discredit a Russian member of parliament, to lobby on Azerbaijani politics, and to undermine a Russian-owned mining company that sued another in a Dutch lawsuit. 

It’s not cheap work, as Akhmetshin himself stated in an affidavit as part of a 2015 lawsuit: He said he charged $450 an hour for his services. 

In 1998, Akhmetshin said he founded the Washington office of an organization called the International Eurasian Institute for Economic and Political Research, to “help expand democracy and the rule of law in Eurasia.” 

In the late 1990s, he organized meetings with journalists, elected officials, and policymakers in Washington for opposition lawmakers from Kazakhstan. Later, he worked to undermine a businessman and diplomat who was divorced from the daughter of Kazakhstan’s longtime president, Nursultan Nazarbaev, and then had a falling out with Nazarbaev.

Accused in smear campaign

In 2011, Akhmetshin was accused of involvement in a smear campaign aimed at maligning a former Russian lawmaker who sought political asylum in the United States. 

The goal, according to court documents, was to persuade U.S. officials to revoke the lawmaker’s asylum status and force him to return to Russia, where he was involved in a dispute with a billionaire businessman over a Moscow hotel project. 

Akhmetshin was not the target of the lawsuit but, according to the complaint, he was enlisted, along with a Washington public relations company and private investigators, to portray the lawmaker as anti-Semitic. 

During the suit, Akhmetshin fought to keep his e-mails from being released to the opposing lawyers.

“Some of my clients are national governments or high ranking officials in those governments,” he said in an Aug. 21, 2012, affidavit. “My government clients have highly sensitive discussions in my emails concerning the location or relocation of American military bases in areas within the former Soviet Union.”

The underlying lawsuit, and a related countersuit, were dismissed in March 2014. 

Hacking accusations

A more recent legal fight concerned a $1 billion dispute over a potash mining operation in central Russia. While the main fight took place in European courts, a sideshow unfolded in U.S. courts beginning in 2014 when Akhmetshin was accused of hacking into the opposing parties’ computers. 

Court papers filed New York State Supreme Court accused Akhmetshin of being a former Soviet military counterintelligence officer who “developed a special expertise in running negative public relations campaigns.” 

In e-mail and in-person interviews with RFE/RL last year, Akhmetshin denied working for Soviet or Russian military intelligence. However, in private conversations and other published reports, he spoke openly about it.

The campaign he was associated with last year focused on the 2012 Magnitsky Act. That law imposed visa bans and other measures against Russian officials involved in the death of Russian whistle-blower Sergei Magnitsky and the $230 million tax-fraud scheme he helped uncover.

​The campaign was two-pronged. The first involved the ban on adoptions of Russian children by American parents, which President Vladimir Putin imposed in retaliation for the Magnitsky Act. 

Akhmetshin set up a benign-sounding organization to lobby Congress ostensibly in an effort to restore Russian adoptions. He enlisted former congressmen, and set up meetings with current members, including Representative Dana Rohrabacher (R-California), long known for his rosy rhetoric regarding the Kremlin. 

Veselnitskaya said she discussed the adoption issue in her meeting with Donald Trump Jr. 

The second involved organizing а screening at Washington’s Newseum of a Russian director’s film that took a semifictionalized look at Magnitsky’s whistle-blowing and his death. The screening happened June 13, 2016, four days after he joined Veselnitskaya at the meeting at Trump Tower with Donald Trump Jr.

Veselnitskaya, who also attended the screening, served as a lawyer for a Russian-owned company known as Prevezon that U.S. prosecutors had accused of laundering some of the Magnitsky tax-fraud money. In May 2017, that case was settled on the eve of its trial with Prevezon admitting no wrongdoing and paying $6 million. 

Another Washington public relations firm, along with Akhmetshin, was also connected to the effort to undermine the Magnitsky Act: Fusion GPS, which was behind the so-called Steele dossier, a compilation of damaging information about Donald Trump that was put together by a former British spy. 

In May, Senator Chuck Grassley (Republican-Iowa) asked the Justice Department to investigate both Fusion and Akhmetshin, suggesting that they were unregistered agents of Russian interests. 

Before the screening, Hersh, the renowned investigative reporter, told RFE/RL that he had seen the film a few months earlier at Akhmetshin’s behest. Hersh said he was intrigued enough by it that he agreed to Akhmetshin’s request to host a postscreening discussion free of charge. 

Hersh also told RFE/RL that he knew Akhmetshin through mutual acquaintances and that he had let Akhmetshin park several antique motorcycles in the driveway of his Washington-area home, motorcycles he said Akhmetshin had bought thinking they dated from World War II but in fact they were of German manufacture and had been painted over to look like Soviet motorcycles. 

At the conclusion of the June 13 film screening, as the discussion turned loud and rowdy, Hersh said the film “goes a long way toward deconstructing a myth.” 

Turkey Marks Coup Anniversary with National Holiday

Turkey marks the one-year anniversary Saturday of a defeated military coup.

Since then, President Recep Tayyip Erdogan has dismissed at least 100,000 civil servants he has characterized as supporters of the aborted coup. The government has arrested another 50,000 people.

Turkish officials have declared July 15 a national holiday of “democracy and unity.”

The Turkish opposition says that Erdogan’s government is moving toward authoritarianism, while the Turkish leader says that the crackdown on rights is necessary to thwart security threats to the ruling government.

Erdogan claims the coup was led by a cleric, Fethullah Gulen, who has been living in self-imposed exile in the United States for nearly two decades. Gulen denies any involvement.

In a statement on the anniversary of the coup, Gulen said the Turkish government’s “treatment of innocent citizens during the past year is dragging Turkey into the category of the countries with the worst record of democracy, the rule of law and fundamental freedoms in the world,” and that the Turkish people “are being rallied en masse around hate messages.”

On Friday, Turkey fired more than 7,000 police officers, government officials and academics.

A government order, published by the official state-run Gazette shows that among those dismissed are 2,303 police, including some high ranking officers, along with more than 300 academics from universities.

The decree also striped 342 retired officers and soldiers from their ranks.

The order was published under a state of emergency imposed after last year’s attempted coup.

Uber, Lyft Bankrupting Cab Drivers and Their Lenders

Ride-hailing apps such as Uber and Lyft have been so disruptive to New York City’s taxi industry, they are causing lenders to fail.

 

Three New York-based credit unions that specialized in loaning money against taxi cab medallions, the hard-to-get licenses that allow the city’s traditional cab fleet to operate, have been placed into conservatorship as the value of those medallions has plummeted.

 

Just three years ago, cab owners and investors were paying as much as $1.3 million for a medallion. Now they are worth less than half that, and some medallion owners owe more on their loans than the medallions are worth.

Like subprime loans

 

“You’ve got borrowers who are under water. This is just like the subprime loan crisis,” said Keith Leggett, a credit union analyst and former senior economist at the American Bankers Association.

LOMTO Federal Credit Union, which was founded by taxi drivers in 1936 for mutual assistance, was placed into conservatorship by the National Credit Union Administration on June 26 “because of unsafe and unsound practices.”

 

New York City has the nation’s largest taxi industry, with more than 13,000 medallions.

Value went up, then down

 

Marcelino Hervias bought his medallion in 1990 for about $120,000 and thought its value would hit $2 million by the time he was ready to retire.

 

Instead, the 58-year-old said he owes $541,000 and is driving 12 to 16 hours a day to make ends meet.

While some medallions are held by large owners with fleets, owning a single medallion was long seen as a ticket to the middle class for immigrants like Hervias, who is from Peru.

 

Many of them now owe more on their medallion loans than they originally paid for the medallions because they used their equity in the medallion for a home, a child’s education or other expenses.

 

Other medallion owners tell similar stories.

 

Constant Granvil bought his medallion for $102,000 in 1987 and said he now owes more than $300,000 to his lender. He could have sold the medallion for two or three times that a few years ago, “but I said no, I’m not going to sell it,” said Granvil, who is 76. “And then I got caught.”

 

The value of Granvil’s medallion is hard to pinpoint because 2017 sale prices have varied from the $200,000s to the $500,000s depending on whether lenders are willing to finance the purchase. 

 

Meanwhile, Granvil, who no longer drives because of poor health and uses a broker to hire a driver, said he is facing threats from the lender, Melrose Credit Union, to foreclose on not just his medallion, but also his house.

Level playing field

Supporters of the yellow cab industry have sued and pushed for city legislation to try to level the playing field between taxis and ride-hailing apps, which they say enjoy advantages like not paying a public transportation improvement surcharge that’s levied on yellow cabs and not having to outfit a percentage of cars with disabled-access features.

 

City Council member Ydanis Rodriguez, who chairs the council’s transportation committee, called this week for a panel to investigate the fall in medallion values. 

 

According to a Morgan Stanley report, there were 11.1 million yellow cab trips in the city in April 2016, compared with 4.7 million Uber trips and 750,000 Lyft trips. The 11.1 million taxi rides were 9 percent fewer than the April 2015 number.

 

Some observers believe that the yellow cab’s market share will continue to shrink and that the value of a medallion won’t recover.

 

“This is a commodity that has been fundamentally disrupted,” said Leggett, who has written about medallion loans in his online newsletter Credit Union Watch. “I don’t see the value of the medallions getting close to what they were.”

White House: Budget Deficit to Spike to $702B

The White House said Friday that worsening tax revenues would cause the budget deficit to jump to $702 billion this year. That’s a $99 billion spike from what was predicted less than two months ago.

The report from the Office of Management and Budget came on the heels of a rival Congressional Budget Office analysis that scuttled White House claims that its May budget, if implemented to the letter, would balance the federal ledger within 10 years. The OMB report doesn’t repeat that claim and instead provides just two years of updated projections.

The White House budget office also said the deficit for the 2018 budget year that starts on October 1 would increase by $149 billion, to $589 billion. But lawmakers are already working on spending bills that promise to boost that number even higher by adding to President Donald Trump’s Pentagon proposal and ignoring many of his cuts to domestic programs.

Last year’s deficit registered $585 billion.

The White House kept the report to a bare-bones minimum and cast blame on “the failed policies of the previous administration.”

“The rising near-term deficits underscore the critical need to restore fiscal discipline to the nation’s finances,” said White House budget director Mick Mulvaney. “Our nation must make substantial changes to the policies and spending priorities of the previous administration if our citizens are to be safe and prosperous in the future.”

In late May, Trump released a budget plan proposing jarring cuts to domestic programs and promising to balance the budget within a decade. But the CBO said Trump relied on rosy predictions of economic growth to promise a slight surplus in 2027.

Trump’s budget left Social Security retirement benefits and Medicare alone, though House Republicans are poised next week to again propose cutting Medicare as they unveil their nonbinding budget outline.

Trump’s budget predicted that the U.S. economy would soon ramp up to annual growth in gross domestic product of 3 percent; CBO’s long-term projections predict annual GDP growth averaging 1.9 percent.

US Lawmaker Calls for Hearing on Amazon’s Whole Foods Deal

The top Democrat on the U.S. House of Representatives’ antitrust subcommittee has voiced concerns about Amazon.com Inc.’s $13.7 billion plan to buy Whole Foods Market Inc and is pushing for a hearing to look into the deal’s potential impact on consumers.

The deal announced in June marks the biggest acquisition for the world’s largest online retailer. Amazon has not said what it will do with Whole Foods’ stores and other assets, but analysts and investors worry the move could upend the landscape for grocers, food delivery services and meal-kit companies.

U.S. Representative David Cicilline requested the hearing on Thursday in a letter to the chair of the House Judiciary Committee and the subcommittee chairman. Shares of Amazon were up 0.3 percent in mid-morning trading on Friday.

“Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America,” Cicilline said in a statement. “Congress has a responsibility to fully scrutinize this merger before it goes ahead.”

The deal must be approved by U.S. antitrust enforcers, in this case most likely the Federal Trade Commission. Congress plays no formal role in that process but hearings are often used to highlight the possible impact of deals on consumers. The hearing is unlikely to happen without Republican support.

Amazon and Whole Foods declined to comment.

Also this week, hedge fund manager Douglas Kass from Seabreeze Partners Management Inc. said he was shorting shares of the retailer because of concern about Amazon in Washington.

Kass said he had heard rumblings on Capitol Hill regarding concern about Amazon’s size and clout but did not specify what the concerns were.

“I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington, D.C.,” he wrote in a note to investors late on Wednesday. “If I am correct, word of this could lower Amazon’s shares by 10 percent overnight.”

Kass said in emailed comments to Reuters on Friday that he has what he called a “core” short position in Amazon, meaning a sizeable bet based on a long-term outlook.

“This has the potential of being the biggest business news story of [the] year,” he said. Kass declined to comment when asked for more details about pressure from Capitol Hill.

Kass is followed for his bets on declines in companies’ share prices. He shorted Marvel Entertainment in 1992 when its shares were in the high $60s, and the company went bankrupt 1-1/2 years later.

He also bet against big U.S. banks leading into the 2007-2009 financial crisis, shorting Bank of America, MGIC, Citigroup and several other financials that ultimately averaged a 98 percent price decline by the time they bottomed in 2009.

While antitrust experts have said they expect Amazon’s bid to win regulatory approval, some critics argue the deal should be blocked because it gives the retailer a big head start towards domination of online grocery delivery.

They argue the Whole Foods acquisition will give Amazon an unfair advantage over traditional grocers and new players that might emerge in the market, potentially grounds for the deal to be blocked for antitrust reasons.

Russia’s Ban on US Adoptions Gets Snarled in New Melodrama

More than four years after it was imposed, Russia’s ban on adoptions by Americans is back in the news, rekindling frustration and sadness among some of those affected by it.

Chuck Johnson, CEO of the National Council for Adoption, worries that any efforts by President Donald Trump’s administration to get the ban lifted might now be more complicated because of revelations regarding Donald Trump Jr.

The younger Trump, explaining a meeting last year with a Russian lawyer, initially issued a statement saying the subject was the adoption ban, but later released emails showing his motive was to obtain negative information about Hillary Clinton.

“Because Russia is so much in the news, it’s now made lifting the ban even more awkward and difficult,” Johnson said. “You’d have Democrats and the hawkish Republicans who would see it as further collusion.”

The ban has had “disastrous results” for orphans in Russia, said Johnson, a leading advocate of international adoption.

Signed by Russian President Vladimir Putin in December 2012, the ban served as retaliation for a U.S. law targeting alleged Russian human-rights violators. It also reflected resentment over the 60,000 Russian children adopted by Americans in the previous two decades, about 20 of whom died of abuse, neglect or other causes while in the care of their adoptive parents.

Heartache for families

More than 200 U.S. families were in the process of trying to adopt children from Russia when the ban took effect. Many of those children have now been placed in Russian homes; the fate of other children remains unknown to their would-be adoptive families.

That’s the case for a Minneapolis-area couple who adopted a boy from Russia in 2008 and were trying to adopt his biological brother, Nikolai, when the ban was imposed.

The wife, Renee Carlson — who is now divorced and remarried — campaigned relentlessly for an exception to be made for her family. She even traveled to Moscow in early 2014 and made an emotional appeal on Russian television, but the second adoption never went through.

In an email this week, Carlson said she was told by some of her Russian contacts that Nikolai may have been adopted in Russia, but that she has been unable to confirm that.

“The Russian people I met with were just like us as Americans, good people, just perhaps had their hands tied by their administration’s direction,” she wrote. “I respect and understand, as we face similar politics in the U.S.”

High-level talks

Resumption of adoptions from Russia has been a goal of the Trump administration, as it had been for the Obama administration. But there was no movement until Secretary of State Rex Tillerson and Russian Foreign Minister Sergey Lavrov agreed in April to include the matter in high-level talks aimed at resolving festering conflicts that have hindered cooperation on broader strategic and security issues.

Those talks, between the third-ranking U.S. diplomat, Tom Shannon, and Deputy Russian Foreign Minister Sergei Ryabkov, were suspended by Moscow last month after the Treasury Department hit Russia with new sanctions for its actions in Ukraine. But the State Department now says a new round of talks between Shannon and Ryabkov will take place in Washington on Monday.

Estimates of the number of orphans in Russia vary widely, but the country has been trying to place more of the orphans with Russian families through an expansion of domestic adoption.

A U.S.-based organization, Kidsave, has been assisting in those efforts, arranging for hundreds of orphans to visit Russian families during weekends and holidays with the aim of encouraging the families to consider adoption. According to Kidsave, more than 1,000 children in the Smolensk region found homes outside the orphanages or established long-term connections with mentors.

Tatiana Stafford, who oversees Kidsave’s Russia program, said the adoption ban was unfortunate but didn’t affect the program.

“A lot of families who were in the process of adoption — they suffered, the children suffered,” she said. “But at the same time, it gave momentum to domestic adoption.”

This will be the last full year of Kidsave’s Russia operation. It plans to transfer the program to a Russian nonprofit next year.

Radical Steps Needed to Fix Polish Judiciary, Party Leader Says

Poland’s most powerful politician insisted Friday that “radical changes” are necessary to heal the nation’s judiciary and vowed to push ahead despite vehement protests from Poland’s opposition and European bodies.

Jaroslaw Kaczynski, head of the ruling populist Law and Justice party, was referring at a news conference to new regulations that give lawmakers power over the body that chooses judges and to a draft law that would empower the justice minister to appoint or dismiss Supreme Court justices.

Earlier, the party had put its loyalists on another top court, the Constitutional Tribunal, and took control of state-owned media.

The opposition and some European politicians say these moves snuffed out judicial independence and violated democracy and the rule of law.

Under the euroskeptic party, Poland already is subject to a European Union procedure reviewing the government’s dedication to European values.

Kaczynski, a lawyer, contended that the judiciary sector has not been reformed since communist times, lacks moral principles, is inefficient and needs younger personnel.

“You cannot change that without far-reaching moves, without radical changes,” Kaczynski said. “What we need to do, we will do.”

He insisted the changes were in the public interest and fulfilled the party’s election campaign promises. Law and Justice won the 2015 elections and controls the parliament. It enjoys steady support of above 30 percent of voters. Critics say that is chiefly due to the party’s generous program of social benefits to the poorest.

The head of the Supreme Court, Malgorzata Gersdorf, who was member of the anti-communist Solidarity movement in the 1980s, has protested the proposed changes as going in the wrong direction and has defended the “highest level of professionalism” of the judges.

Report: Poor Coordination Undercuts Sanctions Against Rogue States

A lack of coordination between the European Union and the United States can undermine sanctions against rogue nations, said a new report from the Royal United Services Institute, a British research group.

 

The report’s authors also called for improved guidance for the private sector in implementing the penalties.

 

The assessment came as the United States pushes for stricter controls following North Korea’s test earlier this month of an intercontinental ballistic missile. Washington wants new sanctions against both Pyongyang and the foreign firms, most of them Chinese, that it says provide North Korea with an economic lifeline.

 

“We intend to present these firms with a clear choice. You can do business with us or you can do business with North Korea, but you cannot do business with both,” Democrat Senator Chris Van Hollen told reporters Wednesday after presenting a bipartisan bill in Washington.

 

The fragmented nature of international sanctions, which are enforced separately by the United Nations, U.S. and EU, renders them less effective against Pyongyang, argued report author Emil Dall.

“North Korea relies on a complex network of overseas front companies, shell companies, agents that are acting on behalf of the North Korean regime —  people that are simply not captured on sanctions lists,” he said.

 

Dall noted recent examples of effective coordination. It has been two years since the so-called P5+1 countries — the United States, China, France, Russia, the United Kingdom, plus Germany — agreed on the Joint Comprehensive Plan of Action with Iran. That agreement saw the EU and U.S. lift some sanctions on Iran in return for limits on Tehran’s nuclear program.

The United States and Europe have also implemented coordinated sanctions against Russian individuals and companies following its forceful takeover of Crimea and invasion of eastern Ukraine in 2014.

​The nature of the EU means targets are often able to evade its sanctions over time.

“You’ve got all member states who have to agree unanimously to imposing new sanctions. In the European Union, there is also the prospect of legal challenges in the European courts,” said Dall.

He added that U.S. sanctions are more adaptable as rogue states try to evade the measures.

 

“The U.S. is able to more rapidly put in place new measures and new designations that counteract that,” he said. “The solution is closer communication both between the U.S. and the EU on sanctions regimes, but it’s also closer communication with the private sector.”

 

Britain’s pending EU exit, known as Brexit, complicates the picture further. The report said London will be able to move more quickly in imposing and adapting sanctions outside the bloc — but any measures will have less clout without European enforcement.

Germany Checking Daimler Cars Amid Diesel Emissions Probe

The German Transport Ministry says the country’s motor transport authority will examine cars made by Daimler amid an investigation into suspected manipulation of diesel emissions controls.

Daimler said in May that prosecutors would search several offices in Germany and it was cooperating with the probe.

Company representatives met with a Transport Ministry commission Thursday following a report by the Sueddeutsche Zeitung newspaper, citing a search warrant, that over a million vehicles may have had engines whose software manipulated emissions levels. Neither the company nor prosecutors commented on that detail.

Ministry spokesman Ingo Strater said Friday the company “set out its position that Daimler is behaving in accordance with the law.”

Strater said the Federal Motor Transport Authority is examining Daimler cars, as it has in the past other manufacturers’ vehicles.

Radio Flyer Marks 100 Years of Wagon Production

Radio Flyer is rolling its largest “little” red wagon into its hometown of Chicago in celebration of the company’s 100-year anniversary.

Radio Flyer’s gargantuan wagon was the centerpiece for the company’s anniversary event Thursday in the city’s downtown area, the Chicago Tribune  reported. The wagon was created 20 years ago for the brand’s 80th anniversary.

 

Attendees of the event had the opportunity to take a photo with the large wagon and participate in free giveaways. Radio Flyer also will donate 2,000 wagons to children’s hospitals across the country in partnership with Starlight Children’s Foundation.

According to Guinness World Records, the wagon, which is 27 feet (8.23 meters) long and weighs over 15,000 pounds (6803.96 kilograms), is the world’s largest toy wagon. It was inspired by a 1930s statue featured in the World’s Fair in Chicago.

Radio Flyer has locations around the world, but Robert Pasin, chief wagon officer of Radio Flyer, said Chicago is still the company’s home.

“Chicago has so much to do with our heritage and story,” Pasin said. “It’s truly a part of the brand’s DNA.”

The company has evolved since its establishment in 1917 and now offers customizable wagons made of various materials and other products, including tricycles, bicycles and scooters.

Democrats Overplaying Russia Card, Trump Contends

President Donald Trump told reporters on Air Force One that the “media witch hunt” linking his 2016 presidential campaign to Russia was “bad for the country,” because “there’s no collusion, there’s no obstruction, there’s no nothing.”   

Trump accused Democrats of playing “their card too hard on the Russia thing, because people aren’t believing it,” especially in making accusations of treason.

“When they say ‘treason’ — you know what treason is? That’s Julius and Ethel Rosenberg for giving the atomic bomb [to the Russians], OK?” the president said.

Trump, during a one-hour conversation on his plane as it flew to France, defended face-to-face talks with Russian President Vladimir Putin, whom he met last week in Germany, because of mutual interests concerning Syria and other geopolitical issues.  

“If you don’t have dialogue, you have to be fools,” Trump said. “Let’s be the smart people, not the stupid people.”

Question for Putin

Trump said he wanted to ask Putin, at their next meeting, whom the Russian leader really wanted to win last year’s U.S. presidential election, “because I can’t believe that he would have been for me.” Trump contended that his stances on defense and energy policy were more detrimental to Moscow’s interests than those of his opponent, Democrat Hillary Clinton.

The president, when asked about sanctions in place against Russia and whether he might relax them — despite opposition in Congress to doing that — replied that the United States has “very heavy sanctions on Russia right now. I would not and have never even thought about taking them off.”  

Trump denied that Putin had raised the issue during their discussions at the Group of 20 meeting in Hamburg.

He said he was willing to invite Putin to the White House, but “I don’t think this is the right time. But the answer is, yes, I would.”

Trump’s conversation on the plane was initially deemed to be off the record, but on Thursday in Paris he queried one of the reporters from the flight about why his comments had not been published.

In the exchange with New York Times reporter Maggie Haberman, in the office of French President Emmanuel Macron, Trump “asked if I had heard him say it could be on-record,” she recounted in a pool report.

“Your pooler replied truthfully, ‘no’ (co-poolers also were not under the impression it was on-record, since Sarah Huckabee Sanders had declared it off-record),” Haberman wrote.

Excerpts released

After that exchange, Sanders, the primary deputy White House press secretary, told reporters traveling with the president that excerpts of the Air Force One conversation would be released. A transcript, in excess of 3,500 words, was sent to reporters Thursday afternoon, detailing the wide-ranging conversation.

Some of what the president said about Donald Trump Jr.’s meeting in June 2016 with a Russian lawyer reflected what the president had said in two interviews Wednesday and at his news conference with Macron on Thursday.

“Honestly, in a world of politics, most people are going to take that meeting,” Trump said, according to the White House transcript.

Both the senior and junior Trumps have been criticized by people on both sides of the political aisle for asserting it is not a problem to accept an offer of derogatory information from a foreign government on a political opponent.

Trump told the reporters on the flight that twice he asked Putin whether the Russian government interfered in last year’s presidential election.

“He said absolutely not, twice,” according to Trump. “What do you do? End up in a fistfight with somebody?”

Trump also had blunt words about U.S. trade deficits with China and South Korea.

“We are being absolutely devastated by bad trade deals,” he said. “We have the worst of all trade deals with China. We have a bad deal with South Korea. We’re just starting negotiations [to modify the free trade agreement] with South Korea.”  

Trade negotiations

Trump also linked trade negotiations to his push to have Beijing increase pressure on Pyongyang because of the fast-developing North Korean ballistic missile and nuclear weapons programs.

“In terms of North Korea, our strength is trade [with China],” he said. “You make reciprocal deals, you’re talking about hundreds of billions of dollars. But before I did that I wanted to give it a good shot.”  

Trump, when queried by a reporter about retaliatory action against Beijing for dumping of Chinese steel onto the U.S. market, replied that “there are two ways — quotas and tariffs. Maybe I’ll do both.”

He also told the journalists that his previous remark about placing solar panels on his proposed border wall with Mexico was no joke.

“We have major companies looking at that,” Trump said. “Look, there’s no better place for solar than the Mexico border — the Southern border. And there is a very good chance we can do a solar wall, which would actually look good.” 

Because of the presence of natural barriers, Trump said, the solar wall would need to span only 700 to 900 miles (1,127 to 1,448 kilometers) to be effective in halting illegal migration.

Gaza’s Electricity Shortage at Crisis Level

The electricity supply to Gaza’s 2 million residents has dropped to unprecedented lows, with blackouts lasting for more than 24 hours, the territory’s power distribution company said Thursday, prompting fears of a humanitarian and environmental crisis.

The Palestinian enclave needs at least 400 megawatts of power a day, but only 70 megawatts were available as of late Wednesday, when Gaza’s power plant shut down after fuel shipments from Egypt were interrupted following a militant attack last week.

The Gaza-based Palestinian Center for Human Rights said the power cuts have caused a rapid deterioration in basic services, “especially health and environmental services, including water and sewage draining.”

The coastal strip had been experiencing the worst electricity shortage in years, limiting Gazans to about four hours of electricity per day.

​Abbas asks Israel to cut shipments

Palestinian President Mahmoud Abbas recently asked Israel, the main provider of power to Gaza, to cut shipments as a way of pressuring the Islamic militant group Hamas, which seized power in Gaza a decade ago.

Several neighborhoods were without electricity for more than 24 hours Thursday.

Late Thursday, Hamas said 27 Egyptian trucks with 1.5 million liters of diesel entered Gaza for the power plant. It was unclear when operations would resume.

Diesel fuel from neighboring Egypt had kept the station running at half capacity since June 21, but deliveries were interrupted after a deadly attack on Egyptian soldiers last week near the border. Gaza’s power station has low storage capacity, and requires new fuel shipments on an almost daily basis.

Abbas pressures Hamas

Abbas has tried to squeeze Hamas financially in recent months, hoping to force it to cede power. He slashed salaries of his employees there, stopped payments for ex-prisoners and reinstated heavy taxes on the power plant’s fuel.

Palestinians have been split since 2007, with Hamas ruling Gaza and Abbas governing parts of the West Bank. Repeated reconciliation attempts have failed.

The Egyptian diesel shipments were facilitated by Mohammed Dahlan, a former leading figure in Abbas’ Fatah movement who fell out with the Palestinian president in 2010, went into exile and has since forged strong ties with the United Arab Emirates and Egypt.

Venezuela Oil Exports to Cuba Drop, Energy Shortages Worsen

Venezuela’s crude and fuel deliveries to Cuba have slid almost 13 percent in the first half this year, according to documents from state-run oil company PDVSA viewed by Reuters, threatening to worsen gasoline and power shortages in the communist-run island.

Cuba’s government since 2016 has reduced fuel allocations 28 percent to most state-run companies, and has cut electricity consumption. Public lighting was cut 50 percent, while residential electric use was spared.

Beginning in March, Cubans also have reported minor gasoline and diesel shortages at service stations.

Cuba’s economy depends heavily on Venezuelan crude shipments under a series of bilateral agreements started in 2000 by the South American country’s late President Hugo Chavez. In return, the island nation has provided Venezuela with Cuban doctors and other services.

Venezuela’s shipments of crude for Cuba’s refineries dropped 21 percent to 42,310 barrels per day (bpd), the documents showed. Last year, Venezuela made up for a shortfall in crude shipments by sending Cuba more fuels, but this year’s data showed refined products sent to Cuba remained almost unchanged at around 30,040 bpd.

In total, PDVSA sent Cuba an average of 72,350 bpd of crude and refined products in the first half of 2017, down almost 13 percent from the same period of last year, according to the data from internal PDVSA trade reports.

“Cuba needs at least 70,000 bpd from Venezuela to cover its energy deficit and avoid deeper rationing. A larger or total loss of the Venezuelan supply would have a high political and financial cost for Cuba,” which has been gearing up to welcome more tourists, said Jorge Pinon, a Cuban energy expert at the University of Texas in Austin.

Cuba suffered severe energy rationing in the 1990s after the collapse of the Soviet Union, an ally that had provided cheap fuel. In 2016, Cuba’s economy went into recession for the first time since those days, declining almost 1 percent as shrinking export earnings left it short of funds to import oil on the open market and replace declining Venezuelan supplies.

With Venezuela’s crude production sliding in 2017 for the sixth year in a row, the OPEC nation has had less oil to send Cuba and other customers in regions from Asia to North America and the Caribbean.

Cuba, which produces extremely heavy crude used by industry and power plants, received 103,226 bpd of oil from Venezuela in the first half of 2015, according to the same data.

PDVSA, whose full name is Petroleos de Venezuela SA, did not reply to a request for comment.

Venezuela’s oil shipments to Cuba have been falling since 2008, when they peaked at 115,000 bpd mainly due to a decline in crude exports. The poor shape of Venezuelan refineries cut into fuel exports this year, and Venezuela has also had to boost fuel imports to meet domestic demand.

Cuba, in addition to rationing fuel, is seeking oil cargoes from other producers including Russia, something it had not done for more than a decade.

In one of several recent shipments, the Ocean Quest tanker loaded with fuel oil at Russia’s Tuapse terminal, arrived in Havana on July 9 and is waiting to discharge, according to Reuters vessel tracking data. The Tuapse terminal is operated by state-run Rosneft.

Cuba’s three aged refineries have been operating at reduced rates since last year due to a shortage of light crude, which also affects Venezuela’s 1.3-million-bpd refining network.

Corruption Undermining Ukraine’s Progress, EU’s Juncker Says

Corruption is undermining all efforts to rebuild Ukraine in line with European Union norms, European Commission chief Jean-Claude Juncker said on Thursday, as President Petro Poroshenko vowed to pursue ever-closer integration with the bloc.

Juncker and European Council President Donald Tusk were in Kyiv for a 24-hour summit with Poroshenko following the final ratification of a new trade pact that has angered Russia.

“What we are asking … is to increase the fight against corruption, because corruption is undermining all the efforts this great nation is undertaking,” Juncker said at a joint briefing. “We remain very concerned.”

The criticism suggests the EU delegation may have taken a tougher-than-expected line in talks forecast to be largely upbeat after the confirmation on Tuesday of an association agreement for closer political and trade ties.

Seven conditions still in works

Separately, European Commission Vice president Valdis Dombrovskis said Kyiv had a shrinking window to meet 21 conditions to unlock 600 million euros ($684 million) of further financial assistance from the EU, of which seven are outstanding.

These conditions include making sure that a landmark reform forcing officials to declare their assets online is properly implemented, and Kyiv lifting a ban on wood exports.

“What we are emphasizing currently is that we have quite limited time,” Dombrovskis told reporters. “So all the conditions need to be implemented already in October … because the macrofinancial assistance program ends on Jan. 4 next year.”

Reforms lead to investments

The pro-Western government in Kyiv has sought to boost EU relations since the ousting of a Moscow-backed president in 2014, implementing reforms in exchange for billions of dollars in aid and a new visa-free travel deal with the European Union.

But Ukraine’s allies have repeatedly expressed concern that vested interests and corrupt practices remain entrenched, partly due to weak rule of law.

The European Union and the International Monetary Fund, Ukraine’s main financial backer, have called for the creation of a specialized anti-corruption court, but Juncker said a new solution had been agreed at the summit.

“Today we agreed that if Ukraine establishes … a special chamber devoted to this issue, that will be enough,” he said.

EU membership remains far off

Mykhailo Zhernakov, a judicial expert at the non-governmental coalition Reanimation Package of Reforms, said the agreement would be a disappointment to those campaigning for greater accountability.

“There’s no way that a chamber in any court will be as independent as a separate court,” he told Reuters. “It’s not going to help.”

While full EU membership for Ukraine remains far off, Poroshenko stressed that Kyiv hopes to integrate further by joining the customs union and becoming a member of the bloc’s Schengen open-border zone.

“As early as today, it’s important to start developing a roadmap to the realization of our dreams,” he said.

 

UN Experts Tell Peru to Halt Oil Talks Until Pollution Remedied

United Nations human rights experts on Thursday called on Peru to suspend negotiations on a new contract for a large oilfield in the Amazon until past pollution was cleaned up and the rights of indigenous groups respected.

Canada’s Frontera Energy Corporation now operates Block 192 in the Peruvian Amazon and is in talks with Peru about renewing its contract once the current one expires in September.

U.N. Special Rapporteurs Baskut Tuncak and Victoria Tauli-Corpuz, independent experts tasked with investigating human rights issues, said Peru had failed to clean up pollution from oil spills in the region and was not doing enough to ensure indigenous groups had a voice in talks.

“The Peruvian Government must suspend the direct negotiations with companies until the right to free, prior and informed consent is guaranteed, and all environmental damage has been remedied,” Tuncak and Tauli-Corpuz said in a statement from the U.N. Human Rights Council.

The remarks will likely be welcomed by indigenous rights activists in Peru who say a law requiring the government to include native groups in talks on projects affecting them has not been fully enforced.

Peru’s environment ministry and energy and mines ministry did not immediately respond to requests for comment. In previous years, the government has declared several environmental emergencies in the region due to oil pollution.

Frontera did not immediately respond to requests for comment.

Peru’s government has been trying to jump start investments in the country’s oil industry that have dropped sharply since global oil prices fell and a series of ruptures largely shuttered the main pipeline serving the sector.

The aging pipeline, operated by state-owned oil company Petroperu, suffered a new rupture this week, Petroperu said Wednesday. The company has blamed most of the dozen spills from the pipeline last year on attacks from unknown parties.

In June, Frontera reached a deal with indigenous people who had occupied Block 192 in a land-use dispute. The company agreed to pay them for use of land and finance community projects.

Block 192 has produced an average of 2,565 barrels of oil per day this year, a sharp drop from previous years when it churned out some 10,000 bpd, according to data from state regulator Perupetro.

U.S. oil company Occidental Petroleum produced oil from Block 192 for decades before Argentine energy company Pluspetrol took over operations in 2001. Frontera was awarded a two-year contract in 2015.

Federal Reserve Chief Calls Risks of Inflation ‘Two-sided’

Federal Reserve Chair Janet Yellen on Thursday said she believed the risks concerning inflation are “two-sided,” stressing that price gains could both accelerate or slow down.

 

Testifying for the second day before Congress, Yellen sought to expand on remarks she had made Wednesday before the House Financial Services Committee in an apparent effort to adjust views in financial markets.

 

In her House comments, Yellen discussed the possibility that a recent slowdown in inflation could persist longer than the Fed expects. The comments helped trigger a big market rally, with the Dow Jones industrial average hitting a record high. Investors saw the remarks as a signal that the Fed, which has raised interest rates three times since December, might slow the pace of future interest rate increases.

 

But on Thursday, Yellen said that she believed it would be “premature” to conclude that a recent slowdown in price gains meant that the Fed would not be able to achieve its goal of 2 percent annual inflation.

 

After keeping its key policy rate at a record low near zero for seven years, the central bank began raising rates gradually with one quarter-point hike in December 2015, another one last December and two more in March and June of this year. It is now in a range of 1 percent to 1.25 percent. Many economists believe the Fed will raise rates one more time this year, in either September or December.

 

Some senators asked Yellen whether she believed the Trump administration’s goal of lifting economic growth to 3 percent is realistic. President Donald Trump has pledged to boost growth through a combination of tax cuts, regulatory relief and tougher enforcement of trade laws.

 

Yellen said hitting 3 percent growth in the next five years “would be wonderful. … I would love to see it. But I think it would be challenging.”

 

On a regulatory matter, Yellen said that the Fed had the power to remove directors of banks, but she did not give a specific commitment to do so when pressed by Sen. Elizabeth Warren.

 

Warren, D-Massachusetts, wants to see those directors of San Francisco-based Wells Fargo replaced if they were responsible for the bank’s creation of fake accounts.

 

“Time after time, big banks cheat their customers, and no actual human beings are held into account,” Warren told Yellen.

 

Yellen described the actions at Wells Fargo as “unacceptable.” She said the Fed needs to conduct a full investigation to understand the root causes of the problems at the bank. Yellen said the central bank is prepared to take appropriate enforcement actions but did not say whether that action would include removal of any bank directors.

Poverty in Italy at Worst for Over a Decade in Blow for Ruling Party

The number of people living in poverty in Italy climbed to its highest level for more than a decade in 2016 despite a modest economic recovery, data showed on Thursday, in a report that could hurt the ruling Democratic Party (PD).

Those living in “absolute poverty” rose to 4.74 million last year, or 7.9 percent of the population, up from 7.6 percent in 2015 and the highest since current records began in 2005, national statistics bureau ISTAT reported.

ISTAT defines absolute poverty as the condition of those who are unable to buy goods and services “essential to avoid grave forms of social exclusion.”

Italy emerged from a long recession in 2014, but the report shows that the slow growth posted since then has done little to help the poorest sectors of society.

Gross domestic product is forecast to rise by around 1.1 percent this year, up from 0.9 percent in 2016, but leaving Italy in its customary position among the eurozone’s most sluggish economies.

The country faces elections next spring, and opposition parties were quick to blame the PD and its leader, Matteo Renzi, for the record poverty levels.

“When a government is unable to provide for people’s basic needs, we can undoubtedly say it has failed,” said Giovanni Barozzino, a senator for the Italian Left party, which split from the PD in 2015, complaining Renzi had dragged it to the right.

In the underdeveloped south of Italy, 9.8 percent of people were living in absolute poverty, compared with 7.3 in central regions including the capital Rome, and 6.7 percent in the wealthier north, including the business capital Milan.

ISTAT said Italians living in “relative poverty,” or those whose disposable income is less than around half the national average, also edged up in 2016 to 8.5 million people, or 14.0 percent of the population.

That compared with 13.7 percent in 2015 and was the highest since current records began in 1997.

McDonald’s Sees Its Future: Be More Convenient

McDonald’s is hoping to make a difference in its future seven seconds at a time.

 

The company that helped define fast food is making supersized efforts to reverse its fading popularity and catch up to a landscape that has evolved around it. That includes expanding delivery, digital ordering kiosks in restaurants, and rolling out an app that saves precious seconds.

 

Much of the work is on display in an unmarked warehouse near the company’s headquarters in suburban Chicago, where a blowup of a mobile phone screen shows the app launching nationally later this year. McDonald’s estimates it would take 10 seconds for a customer to tell an employee their order number from the app, down from the 17-second average of ordering at the drive-thru, a difference that could help ease pileups. Elsewhere at the Innovation Center, the digital ordering kiosk shows how customers can skip lines at the register.

 

“Five, 10 years ago, we were the dominant player in convenience, as convenience was defined in those days,” CEO Steve Easterbrook said last month. “But convenience continually gets redefined, and we haven’t modernized.” 

 

The push come as McDonald’s Corp.’s stock has hit all-time highs as investors cheer a turnaround plan that has included slashed costs and expansion overseas. Yet the asterisk on the headlines is the chain’s declining stature in its flagship U.S. market, where it is fighting intensifying competition, fickle tastes and a persistent junk food image.

 

In an increasingly crowded field of places to eat, the number of McDonald’s locations in the U.S. is set to shrink for the third year in a row. At established locations, the frequency of customer visits has declined for four straight years, even after the launch of a popular “All-Day Breakfast” menu. 

 

The chain that popularized innovations like drive-thrus in the 1970s acknowledges it has been slow to adapt, and is scrambling to better fit into American lifestyles. 

 

Running to keep up

 

Lots of once-dominant restaurant chains are feeling the pressure of people having more eating options.

 

An estimated 613,000 places were selling either food or drink in the U.S. last year, up 17 percent from a decade earlier, according to government figures. Supermarkets and convenience stores are offering more prepared foods, and meal-kit delivery companies have been expanding. 

 

“Better burger” places like Shake Shack and Habit Burger Grill don’t come close to McDonald’s roughly 14,000 U.S. locations, but they’re growing. And even if Starbucks and Dunkin Donuts don’t serve burgers and fries, they are among those promoting food more aggressively.

 

“They’re still taking customers from the same market pool,” said Nick Karavites, a McDonald’s franchisee with 22 locations in the Chicago area and chairman of a regional leadership committee.

 

Richard Adams, a former McDonald’s franchisee who is now a consultant to those businesses, has questioned whether the chain can return to the height of its popularity in such a fragmented marketplace. He also noted that many of the new offerings the company is pursuing, such as delivery, are already available at other places.

 

Still, McDonald’s needs to make changes to keep customer visits from falling further. 

 

‘Turning a very large ship’

 

One main focus is the drive-thru, where McDonald’s gets roughly 70 percent of its business. 

 

Customers who place orders on the mobile app, for instance, could also pull into a designated parking spot where an employee would bring out their order. That would theoretically ease backups at the drive-thru, which in turn might prevent potential customers from driving past without stopping during peak hours.

 

Then there’s the partnership with UberEats to offer delivery. McDonald’s gives an undisclosed percentage of the sale to UberEats, in addition to a fee of about $5 that customers pay. So a risk is that delivery could draw from in-store sales, eating into profitability.

 

So far, however, McDonald’s says delivery is bringing in new business during slower times at the roughly 3,500 locations where it has rolled out since the start of the year. 

 

Either way, such changes aren’t likely to transform operations overnight, since most of McDonald’s customers might prefer to order the way they always have. 

 

“That’s like turning a very large ship,” said Karavites, noting the range of company efforts intended to build sales over time. At his remodeled restaurant in Chicago where delivery was recently launched, he said sales are climbing. 

 

To bring more people in over the short-term, the company is promoting $1 sodas and $2 McCafe drinks. Glass cases displaying baked goods are also popping up in stores. And at about 700 locations, the company is testing “dessert stations” behind the counter where employees can make sundaes topped with cake or brownie chunks. 

 

Those stations could eventually handle an expanded menu of sweets.

 

Junk food image

 

At the same time, McDonald’s is trying to shake its image for serving junk food, especially since its appeal to families with children has long helped keep it ahead of rivals like Burger King and Wendy’s.

 

It’s made changes to its Happy Meal, and made a high-profile pledge to offer healthier options. It plans to start using fresh beef instead of frozen patties in Quarter Pounders. But as other chains emphasizing quality or health keep emerging, it may get harder for McDonald’s to hold onto families or change perceptions. 

 

Larry Light, a former chief marketing officer at McDonald’s, says the company strayed in recent years by chasing customers who may have been going to places like Chipotle, but that it is refocusing on burgers and fries. He thinks that will help get people visiting more often.

 

“You cannot build an enduring, profitable business on a shrinking customer base,” Light said.

 

And Bernstein analyst Sara Senatore cited the changes the company is pursuing in raising her rating on McDonald’s to “buy” in April.

 

“I wouldn’t underestimate the power of scale,” Senatore said.

Russian Jets Buzz NATO Airspace as ‘Close Encounters’ Rise Sharply

NATO forces in Europe scrambled fighter jets to intercept approaching Russian aircraft close to 800 times last year – almost double the figure from 2014. That’s according to a new report, which calls for a new agreement and improved communication between NATO and Russia to avert potentially dangerous incidents. Henry Ridgwell has more from London.

Art Exhibit in Poland Shows Auschwitz Through Inmates’ Eyes

A new exhibition in southern Poland shows the brutality of the Nazi German death camp of Auschwitz through the artistic work of its inmates. Some of the artworks are being shown publicly for the first time.

The “Face to Face: Art in Auschwitz” exhibition opened last week at the Kamienica Szolayskich (Szolayski Tenement House) of the National Museum in Krakow to mark 70 years of the Auschwitz Museum. The museum’s task is to preserve the site in the southern town of Oswiecim and to educate visitors about it. More than 2 million people visited the museum last year.

The curator of the Krakow exhibit, Agnieszka Sieradzka, said Wednesday it includes clandestine as well as commissioned drawings and paintings by Jews, Poles and other citizens held at Auschwitz during World War II.

“These works help us see Auschwitz as the inmates saw it and experienced it,” Sieradzka told The Associated Press. “We stand face to face with the inmates.”       

The Nazis sometimes ordered talented inmates to make paintings for various purposes. One such painting is a portrait of a Roma woman that pseudo-scientist Josef Mengele experimented on. Mengele ordered portraits like this from inmate painter Dina Gottliebova, a Jewish woman from Czechoslovakia.

The task helped Gottliebova survive. After the war, she traveled to the U.S. and started a family. She died in 2009 in California under the name Dina Babbitt.

Among the clandestine art is the so-called Auschwitz Sketchbook by an unknown author. It has 22 drawings of scenes of beatings, starvation and death. It was found in 1947, hidden in a bottle in the foundation of a barrack at Birkenau, a part of the Auschwitz-Birkenau complex. It is the first time it is being shown to the general public. It is housed at the museum and only shown on request. 

Also being displayed is the original “Arbeit Macht Frei” (Work Sets You Free) gate top that was stolen and retrieved in 2009 and is now kept under guard at the museum. 

From 1940 to 1945, some 1.1 million people, mostly European Jews but also Poles, Roma and Russians, were killed in the gas chambers or died from starvation, excessive forced labor and disease at Auschwitz, which Nazi Germany operated in occupied Poland.

Coal Mine Crackdown Dims Prospects for Mongolia’s Fortune Seekers

Working 50 meters (164 feet) under ground with minimal air supply, Uuganbaatar is one of thousands of Mongolians trying to make a living digging for coal.

Although the mining season does not begin until autumn, when the ground freezes and work is safer, the 31-year-old and his colleagues are seeking to gain a head start by digging a shaft in Nalaikh, one of the nine districts of Mongolia’s capital Ulaanbaatar, in late June.

But their mine could soon be shut by the government, which has launched an unprecedented crackdown on sites that don’t meet safety standards.

That would mean even fewer opportunities for Mongolia’s individual prospectors, who have already been hit hard by the privatization of mines previously open to all.

Miners such as Uuganbaatar dig for coal under loose arrangements with local unions and private companies.

“Things seem really tough for private miners now,” said Uuganbaatar, who, like many Mongolians, goes by one name. “All the licenses have been bought up by influential big shots. Whenever you start to dig somewhere, someone shows up and chases us away. It’s impossible to find a place or mine to dig in.”

A weak economy and particularly harsh winters drove herdsman from across Mongolia to Nalaikh’s private mines in the late 1990s and early 2000s.

The district, with a population of nearly 30,000, was home to Mongolia’s first state mining company, which collapsed in the 1990s in the midst of a post-communist economic crisis. The firm’s dilapidated buildings dot the landscape.

With the economy slowing again after a commodities boom earlier in the decade, authorities fear more people could be tempted down the mines.

“More mines will probably be shut down,” said Byambadorj, a woman who ran two private mine shafts with her husband for 13 years until the government closed them in June.

“In Nalaikh, life revolves around mining, and mining is the main means to support our lives,” she says, insisting that her mines were operating according to the safety standards.

The government had tried to get companies to improve safety by issuing licenses. An official said nine companies had been granted licenses, but not all had met the standards.

“People were working in shafts with no air supply,” said S. Battulga, an official whose department is responsible for reviewing mining licenses across the country.

“Therefore, it was requested that the private mining licenses in Nalaikh be cancelled” on health and safety grounds, he added.

Nalaikh authorities would like people to switch from mining to work in brick factories, but no one seems keen to switch despite the danger.

In the past 25 years, the government has recorded 234 fatalities in Nalaikh’s coal mines, although residents say the real number is hundreds higher.

Trump Arrives in Paris for Bastille Day Celebrations 

U.S. President Donald Trump, who in the past has disparaged Paris as an unsafe city because of terrorism, has arrived in the French capital. He will mark the French national holiday, Bastille Day, on Friday after holding counterterrorism talks with President Emmanuel Macron and marking the 100th anniversary of U.S. troops entering World War I.

Air Force One, the presidential jet, lifted off on schedule (at 7:49 p.m. EDT) Wednesday evening from Joint Base Andrews, outside the nation’s capital. First lady Melania Trump is accompanying the president on the trip to France. They arrives just before 9 a.m. local time.

Before departing the U.S., the president gave several interviews at the White House, including an extended conversation with Pat Robertson of the Christian Broadcasting Network, a prominent figure in conservative political and religious circles.

In contrast to reports from U.S. intelligence agencies that Russian President Vladimir Putin intervened in last year’s U.S. elections to increase Republican Trump’s chances of victory, the president said he believes Putin had hoped Democratic candidate Hillary Clinton would win the race.

According to excerpts of the interview released Wednesday evening by CBN, the president said the Kremlin would have preferred to see Clinton win the White House, because Russian officials thought she would “decimate” the U.S. military once in power.

Watch: Trump Heads for Difficult Encounter in France

Paris ‘out of control’

A year ago Trump described Paris as “so, so, so out of control, so dangerous,” because of terrorists operating there. More recently he suggested that Islamic State attacks in Paris had diminished its standing as a world-class destination.

As he pulled the U.S. out of the 2015 international Paris accord to control greenhouse gas emissions, Trump said he was elected to represent “Pittsburgh, not Paris.” Nevertheless, he subsequently accepted President Macron’s invitation to attend the country’s annual mid-July celebrations.

During his two-day visit, Trump will meet with Macron, whose political fortunes have soared this year. The U.S. president also will lunch with military officials, tour the tomb of Napoleon Bonaparte and join in Bastille Day celebrations Friday.

The two leaders are scheduled to meet Thursday before speaking to reporters.

“We will talk about all the issues which are of interest to us both, including those about which we have disagreements when we have them, but also a lot of the issues on which we are working together — the terrorism threat, the crises in Syria and Libya, and a lot of issues which are of interest to us both,” Macron said.

Syria, G-20 follow-up

A senior U.S. official told reporters the White House expects the civil war in Syria and U.S.-French cooperation both there and on other counterterror issues to take up most of the discussion, while there could also be some follow-up to last week’s G-20 summit in Germany.

France is part of the U.S.-led coalition that has been carrying out airstrikes against Islamic State targets in Syria and Iraq since late 2014. A large majority of those strikes this year have taken place in Syria, where the militants have their de facto capital in the city of Raqqa.

Trump and Macron are both in their first year in office and have shown policy differences when it comes to international efforts to combat climate change. But they also share certain goals, such as reducing the number of workers in their respective governments.

The senior Trump administration official described the relationship between the presidents as “very positive.”

Bastille Day

On Friday, Trump and his wife, Melania, will attend the annual Bastille Day parade, which will include both French and U.S. military personnel.

“The fact that we participated in such a major way in World War I, side by side with the French, is a clear parallel to what we’re doing today,” the senior administration official said. “We still live in a dangerous world. We still live in a world that has many, many threats.”

A French government spokesman, Christophe Castaner, said, “Sometimes Trump makes decisions we don’t like, such as on climate, but we can deal with it in two ways: we can say, ‘We are not going to talk to you,’ or we can offer you our hand to bring you back into the circle. Macron is symbolically offering Trump his hand.”

Britain Hails Spanish Investment as Sign of Confidence in Economy

Spanish companies will commit millions of pounds of investment to Britain on Thursday, the British government said, as it seeks to limit the economic impact of leaving the European Union.

The investment plans, which include building trains and trams in Britain, coincide with a three-day state visit to Britain by Spain’s King Felipe and Queen Letizia.

King Felipe and British trade minister Liam Fox are due to address a U.K.-Spain business forum in London on Thursday, before the Spanish monarch holds bilateral talks with Prime Minister Theresa May at her Downing Street residence.

Britain said the investments would include Spanish manufacturer CAF committing 30 million pounds ($39 million) to build trains and trams at a new factory in Wales, creating 300 jobs, and Spanish infrastructure company Sacyr unveiling plans for a new office in London.

Bilateral trade strong

Bilateral trade between the two countries was worth 40 billion pounds in 2015, and more than 400 Spanish companies are registered in Britain, the government said.

“The sheer scale of Spanish investment in Britain demonstrates Spain’s continued confidence in the strength of the UK economy, and shows that we can and will maintain the closest possible relationship,” May said in a statement.

The government also highlighted more than 100 million pounds which is being invested in the expansion of Luton Airport, majority owned Spanish airport operator AENA, and the construction of a 26 million pound factory in the West Midlands by Spanish steel producer Gonvarri Steel Services.

Gibraltar remains issue

Away from the financial deals, the Spanish royal visit comes amid tensions over the post-Brexit future of the British territory of Gibraltar, which Spain wants back.

The future of Gibraltar, a rock on the southern tip of Spain captured by Britain in 1704, and its 30,000 inhabitants, is set to be a major point of contention in the Brexit talks.

During an address to members of both houses of parliament in London on Wednesday, Felipe said he was confident that Spain and Britain could work towards an acceptable arrangement over Gibraltar.

May to meet with King Felipe

The EU and Britain have also yet to agree on guarantees for EU citizens living in the UK and British expats living in other EU countries. More than 300,000 Britons live in Spain, while more than 130,000 Spaniards live in Britain.

On Wednesday, Felipe said these citizens had “a legitimate expectation of decent and stable living conditions” and urged the British and Spanish governments to work to ensure the Brexit agreement provided sufficient assurance and certainty.

May’s office said that during her talks with Felipe she would welcome the contribution that Spanish citizens make to Britain’s economy and society.

 

Media Crackdown Silencing Criticism of Turkish Government

A satirical cover for a political news magazine was all it took to see its editor eventually sentenced to more than two decades in prison.

 

Cevheri Guven, editor in chief of Turkey’s Nokta magazine, fled while out on bail late last year, smuggling his family out of a country he says is rapidly descending toward all-out dictatorship. He took refuge in Greece, where he applied for political asylum.

 

Guven is far from alone in feeling the full force of the Turkish government’s wrath against press critical of President Recep Tayyip Erdogan, particularly after last year’s failed coup attempt. About 160 journalists are currently in jail, mostly on terrorism-related charges, while more than 150 media outlets, from broadcasters to newspapers and magazines, have been shut down, leaving thousands unemployed.

 

Pressure on Turkey’s media is nothing new. Ranked 155th out of 180 countries in the 2017 World Press Freedom Index, Turkey fared only marginally worse than it had the previous year, when it was ranked at 151. Some journalists in prison today have been there for years.

 

“Turkey is the world leader in jailing journalists and has decimated the independent print media and cracked down heavily on news websites and social media,” said Emma Sinclair-Webb, Turkey director for Human Rights Watch. Most of the journalists now imprisoned “have not yet been convicted of any crime but face trumped-up terrorism charges,” she said.

 

Rights groups have criticized Turkey for decades for imprisoning journalists. The country has seen at least three coups, in 1960, 1971 and 1980, each leading to regimes that restricted the media in various ways. Guven’s own troubles started with a September 2015 magazine cover, long before last year’s July 15 coup attempt.

 

But, he says, the coup aftermath, with its state of emergency granting authorities sweeping powers, has plunged the country to new lows.

 

“There have been [bad times] in Turkey, in the junta years,” Guven said, speaking through a translator from his temporary home in Greece. “But now is the worst time for journalists.”

Some of his colleagues have been released from detention by court order, only to be re-arrested outside the prison gates. Others are held in isolation, and are threatened with life sentences.

 

“This shows that there is no chance for journalists to be free in Turkey,” he said. Guven himself has been sentenced to 22.5 years in prison for a variety of terrorist-related crimes, including making propaganda for both the outlawed Kurdistan Workers’ Party and Islamic cleric Fethullah Gulen, two groups that are hostile to each other. Erdogan blames Gulen, a former ally living in self-imposed exile in Pennsylvania, for the coup.

 

The situation in Turkey, Guven said, “is obviously” going toward a dictatorship.

 

Erdogan bristles at accusations he is muzzling the press, insisting authorities are simply rooting out criminals.

 

“When we take a look at the names, we see that they include everyone from murderers to robbers, from child abusers to swindlers. All that’s missing in the list are journalists,” he said in March, referring to lists of imprisoned journalists he says are constantly presented to him by foreign officials.

 

Asked at the end of last week’s G20 meeting in Hamburg, Germany, about the media situation, Erdogan again insisted that those arrested had been detained for criminal activity.

 

“Journalists commit crimes too and when they do the judiciary makes the necessary assessment,” he said. “I want you to know that those you know as being members of the press are mostly people who aided and abetted terror.”

 

Critical reporting has been all but silenced by the detentions and sackings, which have included the editor and top staff at Turkey’s most respected opposition newspaper, Cumhuriyet.

 

“The crackdown on the media is not only about censoring critical reporting,” said HRW’s Sinclair-Webb, “but about preventing scrutiny of government policies and of the deeply repressive measures taken under the ongoing state of emergency.”

 

For Guven, serious problems began with Nokta’s satirical cover in September 2015 depicting a smiling Erdogan taking a selfie in front of a Turkish soldier’s flag-draped coffin. It was strong criticism of the president’s reported comments that soldiers killed fighting Kurdish militants would be happy for their martyrdom.

 

The result: distribution of the magazine was banned and police raided its offices, accusing its leadership of insulting the president. In May, Guven’s colleague Murat Capan was caught trying to flee to Greece and has been locked up in Turkey, also on a 22.5- year sentence. Greek media said Capan had made it across the Greek border but was pushed back into Turkey, where authorities detained him. The Greek government denies pushing back asylum seekers.

 

Activists say the media crackdown has fostered a climate of fear in which self-censorship has increased among the remaining journalists.

 

“The fact that there are journalists in jail is not the only proof of the lack of press freedoms in Turkey. The censorship and self-censorship imposed on media organs also remove press freedoms,” Gokhan Durmus, head of the Turkish Journalists’ Syndicate, said in a speech on May 3, World Press Freedom Day. “In our country, which is governed under a state of emergency, journalism is being destroyed. They are trying to create a media with one voice, a Turkey with one voice.”

 

The purge has affected almost every sector of Turkey’s professional classes, from the judiciary and military to academia, hospitals, kindergartens, businesses and diplomats. Human rights activists, including members of Human Rights Watch and Amnesty International, have been among the latest wave of detentions.

 

Anyone deemed to be linked to Gulen’s network of schools, charities and businesses has fallen under suspicion. About 150,000 people have been detained, one-third of them formally arrested; more than 100,000 have been fired, sometimes for links as tenuous as using a particular bank.

 

 

 

Italy Uses Imams in Prisons to Deter Extremism Among Inmates

Italy’s plan to reduce the risk of a jihadi-inspired attack is pinned in small part on Mimoun El Hachmi, an imam who bikes to the prison here every week and exhorts Muslim inmates not to stray from life’s “right path” or hate people who aren’t Muslim.

Seven inmates — three Moroccans, three Tunisians and a Somali — left their cells at Terni Penitentiary on an early summer day to listen as the Moroccan-born imam led prayers and delivered a sermon. Sunlight from a high barred window streamed through Mimoun’s gauzy, off-white robe.

“If I am praying, I am not cooking up ideas to harm others on the outside,” a 35-year-old Tunisian inmate said, sitting cross-legged in the small, beige-tiled room that was converted into the prison’s Mosque of Peace.

None of the inmates would give their names, and prison rules precluded asking why they were serving time.

So far spared the attacks that have stunned France, Belgium, Britain and Germany, Italy has relied mostly on arresting and deporting suspected extremists to try to keep the country safe. But the Italian government has come to embrace prevention, too, especially in the prisons it doesn’t want to become training grounds for potential extremists.

Preaching pluralism

Inviting in imams who have been vetted to make sure they espouse “moderate views” is a tactic now being employed in Italian prisons to counter radicalization among inmates. In February, the government signed a recruiting agreement with the Union of Islamic Communities and Organizations in Italy, which professes to foster Islamic “pluralism.”

When preaching to inmates, “we stress that we are Italians of Muslim faith, Europeans of Muslim faith … We are 100 percent citizens with rights and duties,” UCOII president Izzeddin Elzir said.

Italy’s second generation of Muslim immigrants is just coming of age now. For the most part, the nation lacks neighborhoods with heavy concentrations of Muslim residents. But Muslims make up a disproportionate share of the population in Italy’s prisons.

More than a third of all inmates in Italian penitentiaries are foreigners, and 42 percent of those come from the majority Muslim countries of Morocco, Albania and Tunisia, according to a 2017 report by inmate advocacy group Antigone.

The advocacy group counted 411 chaplains, but only 47 imams working in Italy’s 200 prisons. Prison system officials worry that if imams don’t make regular visits, inmates might be more vulnerable to the influence of those who are already radicalized.

“It’s not so much those (inmates) who preach, but those who submit to this proselytizing” who are considered at risk, Terni Penitentiary Superintendent Natascia Bastianelli said.

Justice Ministry Undersecretary Gennaro Migliore stressed in an interview that of about 11,000 Italian prison inmates from predominantly Muslim countries, “those who could be potentially radicalized, or already radicalized don’t exceed 400” inmates.

So far, 13 UCOII imams have started preaching in eight prisons after being screened by interior ministry officials. Government officials and the organization plan to evaluate the strategy’s effectiveness as a de-radicalization tool this fall.

Wakeup call

If Italy needed a wakeup call, it came with the morning news two days before Christmas.

Before dawn, officers in Milan confronted and killed a young Tunisian suspected of driving the truck that plowed through shoppers at a Berlin Christmas market that week, killing 12. Anis Amri is believed to have become radicalized during the 3 years he spent in Italian prisons for his role in a riot at a migrant center.

In a separate case, authorities accused a Tunisian inmate with alleged links to extremist groups of recruiting fellow Muslims at an Italian prison, and attacking inmates who resented his extremist propaganda.

Terni police commander Fabio Gallo said learning that Amri had spent time in Italian prisons spurred him and other prison officials to sharpen their skills at recognizing an inmate who is becoming radicalized.

About 20 percent of the penitentiary’s personnel have taken courses to make them aware of possible signs, such as preaching to other inmates or exulting at television news coverage about extremist attacks in Europe, Gallo said.

But he stressed that it’s often difficult to realize which words or gestures might be worrisome signals, especially for staff who don’t understand Arabic. And inmates are catching on to what tips prison personnel off, Gallo said.

“Nobody has a long beard” anymore, the commander said.

Vetting imams may not prove to be a straightforward process either.

“Where do you set the bar? Is it OK if someone is saying Western society is decadent, but at the same time condemns ISIS?” asked Lorenzo Vidino, an Islamism expert, using an alternative abbreviation for IS.

Former anti-terrorism magistrate Stefano Dambruoso, who is now a lawmaker in Italy, endorses careful screening of who will be preaching to men and women behind bars. He thinks it’s essential “they have been trained in schools, in environments respectful of the founding principles of our Constitution.”

Yet Dambruoso also expresses concern about the imams invited into prisons “turning into some kind of secret eye, or a spy for the institutions.” 

On the day when Mimoun was at Terni Penitentiary, 46 of the 109 foreigners in the medium-security section were from northern Africa. The imam delivered his sermon in Arabic, sprinkled with Italian and French phrases.

He said he teaches his followers to “respect Italians, respect neighbors, your colleagues, your cellmates.”

One of the inmates who came to pray in the mosque said that “if you respect religion, our religion, you won’t commit” extremist attacks.

After the seven were accompanied back to their cells, Mimoun told of how an inmate once confided in him that he “hated Italians.” 

“I showed him in the Quran where it says you cannot hate others of different religions,” the imam said.