U.S. authorities moved on Thursday to seize a Picasso painting given to American movie star Leonardo DiCaprio and the rights to two Hollywood comedies, as they filed complaints to recover about $540 million they say was stolen from the 1Malaysia Development Berhad sovereign wealth fund.

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

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

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

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

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

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

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

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

Artwork, Oscar for DiCaprio

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

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

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

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

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

Complaints against 1MDB

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

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

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

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

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

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

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

Possible extension

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

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

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

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

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

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

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

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

Talks with lawmakers

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

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

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

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

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

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

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

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

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

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

Committed to area

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

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

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

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

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

EB-5 visa program

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

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

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

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

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

Tax breaks an issue

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

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

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

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

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

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

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

Predicting trends

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

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

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

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

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

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

Trading in data

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

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

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

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

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

“Having a legitimate place to trade data is an idea, but how does an exchange ensure that the data controllers has to requisite rights to sell data and it’s not breach of privacy?” Gagan Sabharwal, director of the National Association of Software and Service Companies in India, said after a recent visit.
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Panama’s business community on Tuesday cheered the Central American country’s decision to establish full diplomatic ties with China and ditch Taiwan, hoping to deepen links with a key customer of the nation’s shipping canal.

Although there was regret at the cost to Taiwan, an ally of various Central American nations, there was broad support for President Juan Carlos Varela’s decision to throw his lot in with China, whose growing global ambitions contrast with U.S. President Donald Trump’s isolationist rhetoric.

“I’m sure it wasn’t an easy decision, given the long-term links we’ve had with Taiwan, but nonetheless, [China] is a global superpower, the world’s No. 2 economy, the second biggest user of the canal – and so we think this is a positive development that will result in more business and investment in Panama,” said Inocencio Galindo, president of Panama’s Trade, Industry and Agriculture chamber.

The diplomatic U-turn comes as China attempts to position itself as a defender of free trade in the face of the “America First” policy of Trump, who was elected in November 2016.

Chinese officials also celebrated the news.

Wang Weihua, the permanent representative in the Office of China-Panama Trade Development and Beijing’s top representative in the country, said various attempts had been made over the years without success to establish formal ties.

Late last year, more advanced talks began with Varela’s team that concluded only this week, said Wang, who added he was involved in the discussions.

China is interested in Panama for its strategic location, and as a trade and logistics hub, he added.

“China has made a big bet on Latin America, where it has strategic investments, and Panama, which didn’t have diplomatic relations, was losing out on those advantages,” he said in an interview. “Now Panama will be able to enjoy what our country can offer it in various sectors.”

Almost a fifth of the cargo crossing the isthmus last year went to or from China, which has been taking an increasing interest in the Panama Canal.

In March, the canal’s administrator, Jorge Quijano, said Chinese state firms were considering developing land around the waterway, which was recently expanded.

A spokesman for the canal said Quijano would address the implications of the diplomatic change for commerce on Thursday.

Bright Future

Taiwanese economic aid has helped support Central America, a region in the United States’ backyard that relies heavily on agriculture and struggles with law and order.

Its remaining allies were guarded about what the future held for their ties with Taiwan, which China considers a renegade province.

Panama’s foreign minister, Isabel de Saint Malo, said Varela had expressed an interest a decade ago in establishing ties with China. She hoped the move would lead to trade, investment and tourism opportunities, especially for “exporting more goods from Panama to China.”

According to Panamanian statistics, total trade between Panama and China was worth $1.1 billion in 2016 – roughly 12 times the value of the nation’s commerce with Taiwan. Chinese exports accounted for the vast majority of it.

Alvin Weeden, a former comptroller of Panama, said the decision to break ties with Taipei in favor of Beijing would boost business and should have been taken years ago, given Panama’s reliance on global trade and Chinese shipping.

“Every day, Taiwan is more isolated,” he said, adding he did not expect the move to hurt Panama’s ties with the United States, the top canal customer. “This is a reality that’s happening, a geopolitical reality.”

Octavio Vallarino, a partner of Desarrollos Bahia, a local real estate firm, said he hoped direct flights would soon be established between the two countries, and that the commercial real estate market would be bolstered by arriving Chinese firms.

Sara Pardo, president of Panama’s hotel association, said the accord could help make travel between the two countries easier.

“This is definitely going to strengthen the economy,” she said.
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Mexico’s ancient civilizations cultivated crops such as maize, tomatoes and chilies for thousands of years before the Spanish conquerors arrived — and now those native plants could hold the key to sustainable food production as climate change bites, said a leading ecologist.

José Sarukhán Kermez, who helped set up Mexico’s pioneering National Commission for the Knowledge and Use of Biodiversity (CONABIO), said that analyzing the genetic variability of traditional crops, and supporting the family farmers who grow most of the world’s food offered an alternative to industrial agriculture.

“We don’t need to manipulate hugely the genetic characteristics of these [crops] … because that biodiversity is there — you have to just select and use it with the knowledge of the people who have been doing that for thousands of years,” said Sarukhán, CONABIO’s national coordinator, in a telephone interview.

The emeritus professor and former rector of the National University of Mexico (UNAM) recently won the Tyler Prize for Environmental Achievement, often referred to as a “Nobel for the Environment.”

Making use of the knowledge held by indigenous groups is “absolutely essential,” Sarukhán told the Thomson Reuters Foundation.

That requires working with a wide range of people, from local cooks to small-scale farmers, especially in states like Oaxaca and Chiapas in the south of Mexico where indigenous farmers have a strong traditional culture, he said.

“They haven’t gone to university, and they don’t have a degree — but they damn well know how to do these things,” he said.

For example, they discover and incorporate new knowledge as they exchange seeds with peers from different areas.

Key is funding

CONABIO is hoping to win some $5 million in funding from the Global Environment Facility for a five-year project worth more than $30 million to speed up research into indigenous crops.

The aim is to enrich the commission’s vast online database of biodiversity, with a view to influencing national agricultural policy, said Sarukhán.

CONABIO’s information on the genetic adaptability of native plants will enable scientists to develop new lines that can tolerate wetter or more arid conditions as the climate changes, he said.

Highlighting the potential of climate-adapted native crops, Sarukhán said around 60 types of maize are grown across Mexico, from the coast to 3,000 meters (9,843 feet) above sea-level, while only a handful of species are sold commercially.

Forest protection

With Mexico’s hugely varied ecosystems and biodiversity under threat, the ecologist urged a greater focus on schemes to boost local incomes rather than giving grants to encourage people to maintain vast swaths of the country’s forest.

Projects like growing organic coffee in Oaxaca’s forests or ecotourism in Chiapas are helping provide communities with a decent income and an incentive to protect the environment, he said.

Rural and indigenous communities own 60 to 70 percent of all Mexico’s forests and natural ecosystems, he noted.

“That is the patrimony they have — they don’t have anything else to live on,” Sarukhán explained. “There are ways in which you can combine the sustainable management of the forest with more attractive incomes for the owners of the forest.”
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The World Bank on Tuesday approved financing worth more than $500 million for Afghanistan to support a string of projects to boost the economy, help improve service delivery in five cities and support Afghan refugees sent back from Pakistan.

The bank said the six grants, including donor money, worth some $520 million would help the Afghan government “at a time of uncertainty when risks to the economy are significant.”

The international troop withdrawal, which began in 2011, and political uncertainties have impacted Afghanistan’s economy, while a worsening security situation has added to budget pressures, the World Bank said.

“The package will help Afghanistan with refugees, expand private-sector opportunities for the poor, boost the development of five cities, expand electrification, improve food security and build rural roads,” the World Bank said in a statement.

In May, a World Bank report said economic growth in the country was likely to pick up this year but not enough to provide jobs needed by its growing population.

The largest chunk of the package, some $205.4 million, will go toward supporting communities affected by refugees returning from Pakistan, the World Bank said. Some 800,000 Afghans have been sent back from Pakistan and Iran, many of them left to rely on subsistence income in rural areas or low-paid work in towns.

In addition, $100 million will support reforms and business development for the poor; $20 million will go to improving services in five provincial capital cities; $29.4 million will help establish wheat reserves and improve grain storage; and $60 million will boost electricity in the western Herat province.
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The World Bank on Tuesday approved a $500 million loan to support Tunisia’s budget, a government official for the North African country said on Tuesday.

The funding followed the release by the International Monetary Fund of a delayed $320-million tranche of Tunisia’s IMF loan, after the government agreed to speed up economic reforms.

Praised as a model of democratic transition following its 2011 uprising to oust autocrat leader Zine El-Abidine Ben Ali, Tunisia has so far mostly failed to deliver on planned economic reforms to help create jobs and cut public deficits.

In a statement, the World Bank said the funding would support economic reforms to improve the business environment and boost investor confidence, as well as help expand access to finance.

“Along with supporting the implementation of the new competition and investment laws, this development policy loan will help the government’s efforts to improve the efficiency of public investments and promote greater participation of the private sector through public-private partnerships,” said Abdoulaye Sy, the bank’s senior economist for Tunisia.
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The United States is weighing imposing sanctions on countries that do business with North Korea and looking for ways to revive strained relations with Russia, U.S. Secretary of State Rex Tillerson said on Tuesday.

At a committee hearing, he also defended President Donald Trump’s plans for steep reductions in U.S. spending on diplomacy and foreign aid. Senators from both major parties charged that such cuts would ultimately hurt America.

At the start Tillerson told lawmakers that North Korea had released Otto Warmbier, a U.S. university student held captive for 17 months, and the United States was seeking the release of three other detained Americans.

Washington has sought to increase economic and political pressure on Pyongyang because of its nuclear and ballistic missile programs. The North has conducted five nuclear tests and is believed to be making progress toward an intercontinental ballistic missile that could hit the United States.

Tillerson said Washington is discussing North Korea with all of its allies, and seeing some response from China, its biggest trading partner. He said North Korea would top the agenda at next week’s high-level talks between U.S. and Chinese officials.

Tillerson said the United States would have to work with other countries to deny North Korea access to basics such as oil and will have to consider whether to impose sanctions on those doing business with North Korea.

“We are in a stage where we are moving into this next effort of, ‘Are we going to have to, in effect, start taking secondary sanctions because countries we have provided information to have not, or are unwilling, or don’t have the ability to do that?'” Tillerson told the Senate Foreign Relations Committee.

Because the United States has no trade with the North, its strongest way to impose economic pressure is through “secondary sanctions” that threaten companies from third countries with losing access to the U.S. market if they deal with Pyongyang.

Ties With Russia at a Low

Asked whether the United States wanted to see an Iran-style global embargo to deny exports of petroleum and other products to North Korea, Tillerson said that this would only work if Russia and China, the North’s main suppliers, cooperated.

Tillerson repeated his view that U.S. relations with Russia were at an all time-low and still deteriorating. Ties have been strained by differences over Syria, Ukraine and allegations, denied by Moscow, of Russian efforts to influence the 2016 U.S. presidential election.

He said the administration was trying to find a way to re-establish a working relationship, notably on Syria.

It took years of diplomacy with Russia and China to achieve consensus among major powers to impose the sanctions on Iran and a similar result with the North seems unlikely given Beijing’s reluctance to destabilize its neighbors.

Asked if China had lived up to its pledges to crack down on the North, Tillerson said its actions had been “uneven,” but added: “They have taken steps, visible steps that we can confirm. We are in discussions with them about entities inside of China.”

The purpose of Tillerson’s appearance, his first of four congressional hearings this week, was to discuss the budget. In all, the Trump proposal cuts about 32 percent from U.S. diplomacy and aid budgets, or nearly $19 billion.

Committee members, including some of Trump’s fellow Republicans, spoke sharply against the plan. Republicans control both houses of Congress, which sets the federal government budget.

Separately, 16 retired senior generals and other ex-military officers said they would submit joint testimony to the Senate on Wednesday about the importance of foreign aid to national security.
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The Trump administration is proposing to curb the authority of the consumer finance watchdog created following the economic crisis as it drives toward easing restrictions on banks and financial institutions.

The Treasury Department issued Monday the first part of a review that was ordered by President Donald Trump in one of his earliest acts as president.

The report reviewing the Dodd-Frank financial oversight law also urges changes to rules for banks that were put in place under the 2010 law. The law aimed to restrain banks – which received hundreds of millions in taxpayer bailouts – from the kind of misconduct that many blamed for the crisis.

The law was enacted by President Barack Obama and Democrats in Congress to tighten regulation after the 2008-09 financial crisis that sparked the Great Recession that cost millions of Americans their jobs and homes.

Trump, however, has called Dodd-Frank a “disaster” that has crimped lending, hiring and the overall economy. He promised to do “a big number” on it.

“Properly structuring regulation of the U.S. financial system is critical to achieve the administration’s goal of sustained economic growth, and to create opportunities for all Americans to benefit from a stronger economy,” Treasury Secretary Steven Mnuchin said in a statement Monday.

The report outlines what it calls core principles of financial regulation – including overhauling the Consumer Financial Protection Bureau and having more “efficient” bank rules.

The CFPB oversees the practices of companies that provide financial products and services, from credit cards and payday loans to mortgages and debt collection. It has been a prime target of Republican lawmakers, who accuse it of regulatory overreach.

The new report urges Congress to remove the agency’s authority to supervise banks and financial companies, returning that power to other federal and state regulators, respectively. And it proposes enabling the president to remove the CFPB director at will without citing a cause for firing. That’s the subject of a battle now in federal court.

The CFPB’s structure and broad regulatory powers have led to “abuses and excesses,” and hindered consumer choice and access to credit, the report says.

The Treasury report comes a few days after the Republican-led House approved sweeping legislation to undo much of Dodd-Frank, repealing about 40 of its provisions. That was passed on a largely party-line vote of 233-186, but is unlikely to clear the Senate in its current form.

The administration’s report is narrower in scope and ambition than the House-passed legislation. It could provide a blueprint for regulators to rewrite the Dodd-Frank rules, as Trump continues to fill out his team of top financial overseers.

Mnuchin said in separate congressional testimony Monday that he expects to be able to work with the regulators on 70 to 80 percent of the proposed changes. But Congress would need to pass legislation to actually revamp the law – for example, to change the CFPB’s authority.

Among the banking rules, the new report focuses closely on the so-called Volcker Rule, established by Dodd-Frank to generally bar banks from trading for their own profit instead of for customers. The idea behind the rule was to prevent high-risk trading bets that could imperil federally insured deposits.

The report proposes exempting from the rule banks with less than $10 billion in assets and those that have over $10 billion with few trading assets. The House legislation would repeal it altogether.

So-called living wills, the plans that big banks must submit to regulators detailing how they would reshape themselves in the event of failure, should be required every two years instead of the current annual mandate, the report says.

Aaron Klein, a Treasury Department official in the Obama administration, said the proposed changes were unlikely to achieve the economic growth Trump is seeking.

“The financial regulatory system isn’t what is stopping 3 percent economic growth,” said Klein, now a fellow at the Brookings Institution. “If you’re looking in the wrong place, you’re not likely to find the answer.” Better for the administration to find ways to promote investment in the U.S., he suggested.

Klein said the changes proposed for the CFPB would inject more politics into financial regulation. He did see some positive ideas, however, such as increased coordination among financial regulators.

Bank industry groups, which had consulted with Mnuchin and other Treasury officials as they prepared the report, expressed approval of it Monday.

Looking outside Dodd-Frank, the report calls for a task force to reconsider the Community Reinvestment Act, a 1977 law designed to monitor banks’ practices in low-income and minority communities, such as new branch openings. Regulators can fine or sanction banks under the law when they find patterns of discrimination.

The law is widely promoted by Democratic lawmakers and community and civil rights groups.
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Britain’s descent into political crisis just days before Brexit talks begin has sapped confidence among business leaders and infuriated bosses who were already grappling with the fallout from the vote to leave the EU.

The failure by Prime Minister Theresa May to win a parliamentary majority in last week’s election has pushed the world’s fifth largest economy towards a level of political uncertainty not seen since the 1970s.

May called the election to secure a mandate for her vision of a “hard Brexit” – driving down migration by taking Britain out of the single market and the customs union. Instead, she got a hung parliament in which no single party has a majority. Business leaders demanded a re-think.

“The U.K. has had a reputation, earned over the generations, for stability and predictability in its government,” a senior executive at a multi-national company listed on the London FTSE 100 told Reuters on condition of anonymity. “That reputation in 12 months has been destroyed, truly destroyed. First by Brexit and now through this election.”

A survey by the Institute of Directors (IoD) found only 20 percent of its nearly 700 members were now optimistic about the British economy over the next 12 months, compared with 57 percent who were quite or very pessimistic.

The IoD survey, taken after the election, found a negative swing of 34 points in confidence in the economy from its previous survey in May.

“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could — if not addressed immediately — be disastrous for the U.K. economy,” said Stephen Martin, director general of the IoD.

The collapse in confidence, which follows a short-term drop after last year’s Brexit vote, coincides with a slowdown in the wider economy that has taken hold since the start of this year, as rising inflation pushes up the price of goods.

Figures from credit card firm Visa showed British consumers turned more cautious even before the shock election result, with households cutting their spending for the first time in nearly four years last month.

The Confederation of British Industry (CBI) warned there was now a risk businesses would cut back on investment which has largely held up since last year’s Brexit vote.

And the trade group that represents manufacturers, the EEF, said its members were having to navigate the most uncertain political territory in Britain for decades.

Both groups called on the government to rethink its approach to Brexit, saying the country needed tariff-free access to the single market and a steady flow of migrant workers.

Some executives hoped the political paralysis would lead to a ‘softer Brexit’, with access to markets prioritized over a clamp down on immigration.

“Here we are again: another bolt from the blue, a political earthquake that we didn’t think used to happen in the U.K.,” CBI Director General Carolyn Fairbairn said at a conference hosted by the Resolution Foundation. “But I do think there are opportunities in this, and it is an opportunity to refocus back on the economy to talk about jobs, growth, future prosperity.”

Having slid to its lowest for nearly two months against the dollar on Friday, the pound fell broadly again on Monday.

Left in limbo

Business executives warned the political uncertainty could be felt across a wave of sectors.

Leaders of the drugs industry warned of the hazards of government limbo at a critical time for the highly regulated sector as companies seek clarity on the rules that will govern their business after Brexit.

Andy Bruce, the CEO of Lookers, one of Britain’s biggest car dealerships, said the lack of a clear result meant the highly successful industry had now entered “uncharted waters” in terms of how many new cars it could sell.

And Martin Sorrell, CEO of WPP, the world’s largest advertising agency, told Reuters he feared increased economic uncertainty, which meant “weak investment and postponement of decision making.”

“Now it seems that we could have no deal because of the short time fuse and lack of decisive government decision making, or a soft Brexit, the latter with more movement and membership of the single market,” he said.

Bankers, at the heart of London’s huge financial center, cautioned of the impact on takeover activity.

“So long as uncertainty is there I don’t see that as particularly positive for M&A in the short term,” Karen Cook, chairman of investment banking at Goldman Sachs said at the Reuters Global M&A summit.

Gareth Vale, marketing director at recruitment group Manpower, said its clients were very apprehensive, and had not yet fully grasped the impact that Brexit would have.

“I think the uncertainty around Brexit, and more recently the general election, has created a sense of almost inertia, which has prevented them from considering some of the bigger seismic shifts that are on the horizon.”
…

The Trump administration has a backup plan to keep the government from defaulting on its financial obligations even if Congress misses an August deadline to raise the debt limit, Treasury Secretary Steven Mnuchin told a congressional panel Monday.

Mnuchin had previously set an August deadline for the federal government to avoid a catastrophic default. Mnuchin said he still prefers that Congress increase the government’s authority to borrow before lawmakers leave on a five-week break in August.

However, he said he is “comfortable” that the Treasury Department can meet the government’s financial obligations through the start of September. Private analysts say Mnuchin probably has even greater leeway.

“If for whatever reason Congress does not act before August, we do have backup plans that we can fund the government,” Mnuchin said without elaborating. “So I want to make it clear that that is not the timeframe that would create a serious problem.”

The federal government technically hit the debt limit in March, but Treasury has been using accounting steps known as “extraordinary measures” to avoid a default.

Shortly before Mnuchin testified, a Washington think tank projected that despite the slowdown in revenues, the government will have enough cash to pay its bills until October or November.

The Bipartisan Policy Center says that revenue results from this month’s quarterly tax payments could clarify the deadline, but for now it forecasts that Mnuchin has sufficient maneuvering room to keep the government solvent into the fall. The policy center says a big Oct. 2 payment into the military retirement trust fund could trigger default.

As of Friday, the Treasury had a cash balance of $148 billion, down from $204 billion a month ago. The national debt is nearly $20 trillion, including money owed to several federal programs.

Vote on debt limit

Raising the debt limit has become a politically-charged vote in Congress, even though economists believe that an unprecedented default would be catastrophic for the economy. Republicans, who control Congress and the White House, are struggling to come up with a strategy to raise the debt limit, with some GOP members demanding spending cuts in exchange for their vote.

But since Republicans have many members who simply refuse to vote for a debt increase, GOP leaders such as Speaker Paul Ryan of Wisconsin may have no choice but to seek help from Democrats, who are demanding that any debt limit hike be “clean” of GOP add-ons.

Lawmakers are trying to deal with the debt limit while at the same time a House panel is beginning work on spending bills to fund the government.

Republicans controlling the House are taking the first steps to approve President Donald Trump’s big budget increase for veterans’ health care and the Pentagon.

Spending bill

At stake is an $89 billion spending bill for the Department of Veterans Affairs and Pentagon construction projects that’s scheduled for a preliminary panel vote on Monday. The bill would give the VA a 5 percent budget hike for the budget year beginning in October as the agency works to improve wait times and correct other problems.

The Defense Department, meanwhile, would receive a $2 billion, 10 percent increase for military construction projects at bases in both the U.S. and abroad.

“This legislation includes the funding and policies necessary to deliver on our promises to our military and our veterans,” said House Appropriations Committee Chairman Rodney Frelinghuysen, a Republican from New Jersey.

Republicans are still struggling to come up with a broader budget that would dictate spending levels for other agencies. Trump has proposed sharp cuts to many domestic agencies and foreign aid as a means to pay for increases for the military. But many GOP lawmakers have already signaled that they disagree with Trump.

Under Washington’s arcane budget rules, lawmakers are first supposed to pass an overall fiscal blueprint called a budget resolution before tackling the annual round of spending bills. This year, that budget plan is also the key to unlocking action later this year on legislation to overhaul the tax code, a top GOP priority.

Instead, Republicans are split into three camps on spending: defense hawks who want even more money for the military than proposed by Trump; pragmatists who are defenders of domestic programs; and conservatives who agree with Trump’s plan to cut domestic agencies and deliver the proceeds to the Pentagon.

For now, those GOP divisions have meant an impasse for Trump’s overall budget and tax agenda.
…

General Electric says Jeff Immelt is stepping down as CEO. John Flannery, president and CEO of the conglomerate’s health care unit, will take over the post in August.

The 61-year-old Immelt will stay on as chairman until his retirement from the position at the end of the year, with the 55-year-old Flannery stepping into the role after that.

In addition, Chief Financial Officer Jeff Bornstein was named vice chair.

GE said Monday that the moves were part of its succession plan.

Shares of General Electric Co. climbed more than 2 percent in premarket trading.

 
…

The board of Uber was meeting Sunday to consider placing the CEO of the ride-hailing company on leave, according The New York Times and other news outlets.

The Times reported that three people with knowledge of the matter have confirmed that Uber’s board was meeting to consider recommendations from a law firm hired to review Uber’s corporate culture and that the board may decide to put CEO Travis Kalanick on temporary leave.

The newspaper said its sources requested anonymity because they were not authorized to speak for Uber.

Uber Technologies Inc. has been rocked by accusations that its management has fostered a workplace environment where harassment, discrimination and bullying are left unchecked.

Uber spokesman Matt Kallman said that he wasn’t sure the company would make a statement after the meeting.

Reuters and the tech blog Recode reported the board meeting earlier. The Wall Street Journal also was citing unnamed sources about the meeting.

Uber has hired the law firm of former Attorney General Eric Holder to review policies and recommend changes. A report by his firm, Covington & Burling, was expected to be made public soon.

Uber announced last week that it fired 20 employees for harassment problems.

Under CEO Kalanick, Uber has shaken up the taxi industry in hundreds of cities and turned the San Francisco-based company into the world’s most valuable startup. Uber’s valuation has climbed to nearly $70 billion.

Management style at issue

But Kalanick has acknowledged his management style needs improvement. The 40-year-old CEO said earlier this year that he needed to “fundamentally change and grow up.”

In February, former Uber engineer Susan Fowler wrote on a blog that she had been propositioned by her boss in a series of messages on her first day of work and that superiors ignored her complaints. Uber set up a hotline for complaints after that and hired the law firm of Perkins Coie to investigate.

That firm checked into 215 complaints, with 57 still under investigation.

Uber has been plagued by more than sexual harassment complaints in recent months. It has been threatened by boycotts, sued and subject to a federal investigation that it used a fake version of its app to thwart authorities looking into whether it is breaking local laws.

Kalanick lost his temper earlier this year in an argument with an Uber driver who was complaining about pay, and Kalanick’s profanity-laced comments were caught on video.

In a March conference call with reporters after that incident, board member Arianna Huffington expressed confidence that Kalanick would evolve into a better leader. But Huffington, a founder of Huffington Post, suggested time might be running out.

He’s a “scrappy entrepreneur,” she said during the call, but one who needed to bring “changes in himself and in the way he leads.”

The board meeting comes fresh on personal tragedy in Kalanick’s life. His mother was killed in late May after the boat she and her husband were riding in hit a rock. Kalanick’s father suffered moderate injuries.

The Wall Street Journal reported Sunday that Chief Business Officer Emil Michael is planning to resign as soon as Monday.

The company has faced high turnover in its top ranks. In March, Uber’s president, Jeff Jones, resigned after less than a year on the job. He said his “beliefs and approach to leadership” were “inconsistent” with those of the company.

In addition to firing 20 employees, Uber said Tuesday that it was hiring an Apple marketing executive, Bozoma Saint John, to help improve its tarnished brand. Saint John most recently was head of global consumer marketing for Apple Music and iTunes.
…

U.S. Commerce Secretary Wilbur Ross is likely to impose a new sugar trade deal with Mexico even if final revisions to it fail to win support from the U.S. industry, trade lawyers and experts say.

After announcing a deal this week that would dramatically cut the amount of refined sugar that Mexico ships to the United States, officials from the two countries are working with their industries on final language that would govern its operation.

At issue is a new right of first refusal granted to Mexico to supply all U.S. sugar needs not met by domestic suppliers or other foreign quota holders.

A coalition of American sugar cane and beet farmers and a major refiner want a more explicit guarantee that the U.S. Department of Agriculture, not Mexican producers, will dictate what type of sugar fills that gap. They are worried that a flood of refined sugar will pour in, rather than the raw sugar needed to keep U.S. mills running.

Sugar, lumber issues

The final sticking point stands in the way of resolving a years-long dispute over Mexican access to the highly regulated U.S. sugar market, which is protected by a complex web of subsidies and rationed quotas for foreign producers.

The sugar industry is known for its sway in Washington. But its point of view on Mexican imports is not shared by sugar users such as confectioners and soda makers.

The Trump administration wants to clear away the sugar dispute and a lumber trade row with Canada before starting full-scale negotiations to revise the North American Free Trade Agreement.

An industry rarely objects to a government-negotiated settlement of its anti-dumping case, and U.S. sugar producers could do little to stop the Commerce Department from implementing a final deal after a two-week comment period, said Seattle-based trade lawyer William Perry, who previously worked at Commerce and the U.S. International Trade Commission.

‘Never entirely happy’

While the industry could ask the International Trade Commission to overturn the settlement that suspends anti-dumping and anti-subsidy duty orders issued in 2014, chances for success look slim. The panel in 2015 rejected a challenge by two sugar refiners to the previous U.S.-Mexico pact.

“Petitioners are never entirely happy with suspension agreements like this,” Perry said. “They would rather have anti-dumping and countervailing duty orders with rates high enough to shut out imports.”

A Commerce spokesman said that Ross hoped the U.S. sugar industry would ultimately endorse the final agreement.

Willing to compromise

Gary Hufbauer, a trade expert at the Peterson Institute for International Economics, said the administration was probably willing to compromise on some industry-specific concerns to help reach its larger NAFTA goals of reducing U.S. trade deficits.

The U.S. sugar industry must probably present evidence of new Mexican dumping before going back to Commerce for more changes to the deal, said Daniel Pearson, a senior fellow of the libertarian Cato Institute and former International Trade Commission chairman.

“They would do well to take this agreement and run with it and see how it works,” Pearson said, noting that it raises prices and keeps U.S. refiners well-supplied with raw sugar.

Mexico OK with language

Mexico made major concessions to maintain its access to the lucrative U.S. market, agreeing to ship no less than 70 percent of its quota volume as raw sugar to U.S. refineries. It gave ground on nearly all of the U.S. producers’ demands.

American Sugar Alliance spokesman Phillip Hayes said the final hurdle should be easy to address by making clear that the USDA, not Mexico, can dictate the type and purity level of any additional imports.

But Juan Cortina, head of Mexico’s main sugar trade group, said there was no problem with the language because any additional needs would filled with raw sugar, as Mexican producers would have to keep higher inventories of that grade.
…

French cosmetics and luxury goods group L’Oreal has started exclusive talks to sell The Body Shop business to Brazilian makeup company Natura Cosmeticos in a possible 1 billion euros ($1.1 billion) deal.

Earlier this year, L’Oreal had announced it was reviewing its strategy for The Body Shop, which it bought for 652 million pounds in 2006, and the sale of the business had attracted a wide range of bidders.

L’Oreal said on Friday it had received a firm offer from Natura Cosmeticos, and the proposed deal put an enterprise value (equity plus debt) of 1 billion euros on the four-decades-old beauty brand — an innovator in the mass marketing of cosmetics made without animal testing and with natural ingredients.

Founded in 1976 by British entrepreneur Anita Roddick, The Body Shop was a pioneer in its field but had since fallen victim to increased competition from newcomers offering similar products based on natural ingredients with no animal testing.

L’Oreal shares were up 0.7 percent in late session trading, as investors welcomed progress toward a deal and the price tag.

“It’s a good move, given that The Body Shop had been one of the least profitable parts of the L’Oreal business,” said Roche Brune Asset Management fund manager Gregoire Laverne.

Keren Finance fund manager Gregory Moore said the price tag had pleased L’Oreal investors, since earlier reports had stated it could be sold for around 800 million euros.

“The stock has reacted well to the news, because there were some people who thought it could be sold for less,” said Moore, whose firm owns L’Oreal shares in its portfolio.

Shares in Natura fell 2.4 percent on the Brazil stock exchange, with Natura saying it would take on loans to finance the deal.

Natura chief executive Joao Paulo Ferreira said The Body Shop would fit in well with Natura’s similar businesses, such as its Aesop brand.

L’Oreal shares are up around 10 percent so far in 2017, broadly in line with the CAC-40, with the stock having touched a record high earlier this month.
…

Thanks to an explosion of bike share apps and providers, China is rediscovering its love of bicycles. In cities across the country and in the capital of Beijing, a colorful bike-share revolution is taking over on the streets, helping ease traffic snarls and keeping the air cleaner. It is also creating some problems.

China used to be called the “kingdom of bicycles,” and though cars have taken over in a major way, the growing popularity of bike-share apps seems to indicate two-wheelers are making a come back.

​Color revolution

For drab and dusty Beijing, the bike-share color revolution of yellows, oranges and blues is a welcome sight. People of all ages are enjoying the convenience the bikes provide, which combines cell phone technology, and GPS tracking in some cases, to help users find a ride.

Traveling by car across the sprawling, densely populated city is often a nightmare. Even distances of a few kilometers can take up to an hour when traffic is snarling.

Cheng Li, a bike-share user, said he has been driving his car less and using the metro more since he started using the service about six months ago.

“After I get off the metro, I usually have to walk another kilometer or two, so I’ll grab a bike share and go. It’s less stressful,” Cheng said.

For many, the convenience of cycling is its biggest attraction. Beijing’s city government has long had a bike-share program in place, but many of its bike-share stations were inconveniently located. Getting registered for the smart phone based apps is also much easier.

For Zhang Jian, the bike-share revolution is not only convenient, but nostalgic.

“Now, when we’re riding home from work, especially in the evening, when it’s not as rushed, it feels like we’re reliving the past,” Zhang said.

​Great Wall of bikes

But with a growing number of providers, competition is getting increasingly fierce. One key tactic of providers has been to flood the streets with bikes — so much so that sidewalks are almost blocked in some cases.

The surge of bikes has become a major headache for city governments. Users frequently leave bikes in the middle of the street or just dump them on the sidewalk blocking passageways in an already densely populated city.

In Beijing’s southern district of Daxing, authorities have been fighting the surge by seizing the illegally parked bikes that clog streets and metro exits, one transportation worker said.

“Bike sharing is really convenient, but no one is taking care of the problem of illegally parked bikes,” the worker said. Behind her are several thousand bikes that have been seized. It was unclear when or how they would be returned to the companies that made them.

“Since the Lunar New Year, the number of bikes has been growing rapidly. At least 10,000 bikes have been added to the streets (of Daxing) since then, and we’ve collected about a third of that total,” she said.

China’s two biggest operators, Ofo and Mobike, have deployed more than 3 million bikes in scores of cities across the country. And the numbers continue to grow.

Mobike aims to expand to 100 cities at home and abroad by the end of this year.

Bike hunters

While many complain the bike-share revolution has taken over city streets, some like Gao Xiaochao are taking matters into their own hands.

Gao is one of many who call themselves bike-share hunters. Bike-share hunters find and report stolen and vandalized bikes that users deliberately park outside their homes or inside gated communities. With some bike-share apps, riders can report illegally parked bikes or other problems the two-wheelers may have.

Gao uses his lunchtime to find, report and move illegally parked bikes.

“Bike hunting is like a game, a hobby, a way to get some exercise. It’s like a new way of living,” Gao said. “Sometimes, I spend two to three hours looking for illegally parked bikes and it’s just like talking a walk.”

Many like Gao are passionate about bike sharing and what it is doing to help transportation and the city’s notoriously smoggy air.

However, as complaints grow and competition gets increasingly cut-throat, they hope companies will do more to improve their service and not just focus on flooding the streets with bikes to edge out competitors.
…

Ivanka Trump’s fashion brand sought to distance itself from a Chinese manufacturer that has come under scrutiny after activists investigating labor conditions there were detained, saying the company last made its products three months ago.

In a statement released Wednesday, the brand’s president, Abigail Klem, said Ivanka Trump shoes, which are made by licensing partner Mark Fisher, have not been produced since March at the Huajian Group factory where alleged labor abuses occurred. She added “our licensee works with many footwear production factories and all factories are required to operate within strict social compliance regulations.”

But it is unclear whether that was really the end of the relationship.

Undercover workers

China Labor Watch, a New York nonprofit, began scrutinizing Ivanka Trump supply chains more than a year ago, according to Li Qiang, the group’s executive director. Three China Labor Watch investigators went into Huajian Group factories undercover posing as workers in March, April and May of this year and found Ivanka Trump merchandise inside, Li said.

He said the investigators also found evidence of planned production, namely an April production schedule indicating pending orders for nearly 1,000 pairs of Ivanka Trump shoes due by the end of last month.

Now all three men are in jail, accused of using illegal recording devices to disrupt Huajian’s business. The U.S. State Department and Amnesty International have spoken out against the arrests. So far, Ivanka Trump and her brand have not.

Two days off a month?

China Labor Watch laid out its initial allegations in an April letter to Ivanka Trump. It said workers regularly put in more than 15 hours a day, with just two days off a month. It said most were paid by the piece, taking home just $363 a month for 300 hours of work, and that managers verbally abuse workers.

“China Labor Watch expects you, as an assistant to the president and an advocate for women’s rights, to urge your brand’s supplier factories to improve their conditions,” Li wrote in the letter. “Your words and deeds can make a difference in these factory workers’ lives.”

The Huajian Group says the undercover activists were out to steal trade secrets and denies the allegations of poor working conditions.

Global companies take a hit

Some argue that the arrest of independent monitors threatens to hamper the ability of global companies to adequately monitor their Chinese suppliers. China has rebuffed the State Department’s request to release the activists, saying the men will be dealt with under China’s own sovereign laws.

China has swept up hundreds of human rights lawyers and labor activists in recent years and has scrutinized groups with foreign ties, like China Labor Watch, much more closely.

Alicia Edwards, a State Department spokeswoman, said this week that the U.S. is concerned by “the pattern of arrests and detentions.” Labor activists, she added, are instrumental in helping American companies understand conditions in their supply chains and holding Chinese manufacturers accountable under Chinese law.

 
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Days before the first supertanker carrying 140,000 tons of Chinese-bound crude oil arrived in Myanmar’s Kyauk Pyu port, local officials confiscated Nyein Aye’s fishing nets.

The 36-year-old fisherman was among hundreds banned from fishing a stretch of water near the entry point for a pipeline that pumps oil 770 kilometers (480 miles) across Myanmar to southwest China and forms a crucial part of Beijing’s “Belt and Road” project to deepen its economic links with Asia and beyond.

“How can we make a living if we’re not allowed to catch fish?” said Nyein Aye, who bought a bigger boat just four months ago but now says his income has dropped by two-thirds because of a decreased catch resulting from restrictions on when and where he can fish. Last month he joined more than 100 people in a protest demanding compensation from pipeline operator Petrochina.

The pipeline is part of the nearly $10 billion Kyauk Pyu Special Economic Zone, a scheme at the heart of fast-warming Myanmar-China relations. Its success is crucial for the Southeast Asian nation’s leader, Aung San Suu Kyi.

Embattled Suu Kyi needs a big economic win to stem criticism that her first year in office has seen little progress on reform. China’s support is also key to stabilizing their shared border, where a spike in fighting with ethnic armed groups threatens the peace process Suu Kyi says is her top priority.

China’s state-run CITIC Group, the main developer of the Kyauk Pyu Special Economic Zone, says it will create 100,000 jobs in the northwestern state of Rakhine, one of Myanmar’s poorest regions.

Local suspicion

But many local people say the project is being rushed through without consultation or regard for their way of life.

Suspicion of China runs deep in Myanmar, and public hostility due to environmental and other concerns has delayed or derailed Chinese mega-projects in the country in the past.

China says the Kyauk Pyu development is based on “win-win” cooperation between the two countries.

Since Beijing signaled earlier this year that it might abandon the huge Myitsone Dam hydroelectric project in Myanmar, it has pushed for concessions on other strategic undertakings — including the Bay of Bengal port at Kyauk Pyu, which gives it an alternative route for energy imports from the Middle East.

Internal planning documents reviewed by Reuters and more than two dozen interviews with officials show work on contracts and land acquisition began before the completion of studies on the impact on local people and the environment, which legal experts said could breach development laws.

The Kyauk Pyu Special Economic Zone will cover more than 4,200 acres (17 square kilometers). It includes the $7.3 billion deep sea port and a $2.3 billion industrial park, with plans to attract industries such as textiles and oil refining.

A Reuters tally based on internal planning documents and census data suggests 20,000 villagers, most of whom now depend on agriculture and fishing, are at risk of being relocated to make way for the project.

“There will be a huge project in the zone and many buildings will be built, so people who live in the area will be relocated,” said Than Htut Oo, administrator of Kyauk Pyu, who also sits on the management committee of the economic zone.

He said the government has not publicly announced the plan, because it didn’t want to “create panic” while it was still negotiating with the Chinese developer.

Twin signings

In April, Myanmar’s President Htin Kyaw signed two agreements on the pipeline and the Kyauk Pyu port with his Chinese counterpart, Xi Jinping, as Beijing pushed to revive a project that had stalled since its inception in 2009.

The agreements call for environmental and social assessments to be carried out as soon as possible.

While the studies are expected to take up to 15 months and have not yet started, CITIC has asked Myanmar to finalize contract terms by the end of this year so that the construction can start in 2018, said Soe Win, who leads the Myanmar management committee of the zone.

Such a schedule has alarmed experts who fear the project is being rushed.

“The environmental and social preparations for a project of these dimensions take years to complete and not months,” said Vicky Bowman, head of the Myanmar Center for Responsible Business and a former British ambassador to the country.

CITIC said in an email to Reuters it would engage “a world-renowned consulting firm” to carry out assessments.

Although large-scale land demarcation for the project has not yet started, 26 families have been displaced from farmland because of acquisitions that took place in 2014 for the construction of two dams, according to land documents and the landowners.

Experts say this violates Myanmar’s environmental laws.

“Carrying out land acquisition before completing environmental impact assessments and resettlement plans is incompatible with national law,” said Sean Bain, Myanmar-based legal consultant for the International Commission of Jurists, a human rights watchdog group.

School, development funds

CITIC says it will build a vocational school to provide training for skills needed by companies in the economic zone. It has given $1.5 million to local villages to develop businesses.

Reuters spoke to several villagers who had borrowed small sums from the village funds set up with this money.

“The CITIC money was very useful for us because most people in the village need money,” said fisherman Thar Sai Aung, who borrowed $66 to buy new nets.

Chinese investors say they also plan to spend $1 million during the first five years of the development, and $500,000 per year thereafter to improve local living standards.

But villagers in Kyauk Pyu say they fear the project would not contribute to the development of the area because the operating companies employ mostly Chinese workers.

From more than 3,000 people living on the Maday island, the entry point for the oil pipeline, only 47 have landed a job with the Petrochina, while the number of Chinese workers stood at more than double that number, data from labor authorities showed.

Petrochina did not respond to requests for comment. In a recent report it said Myanmar citizens made up 72 percent of its workforce in the country overall and it would continue to hire locally.

“I don’t think there’s hope for me to get a job at the zone,” said fisherman Nyein Aye. He had been turned down 12 times for job applications with the pipeline operator. “Chinese companies said they would develop our village and improve our livelihoods, but it turned out we are suffering every day.”
…

Indonesia, the world’s biggest archipelago has called for the United Nations to establish illegal, unreported and unregulated fishing, known under its acronym of IUUF, as a transnational crime. The proposal has the support of the president of the U.N. General Assembly but there’s still a long way to go before member countries adopt it. Patsy Widakuswara reports from the U.N. headquarters in New York.
…

The U.S. job market is getting stronger, according to Labor Department data published Thursday.

The number of Americans signing up for unemployment assistance fell by 10,000, to a nationwide total of 245,000. Experts say readings below 300,000 indicate a healthy job market, where layoffs are scarce and employers are trying to hang on to workers.

Layoffs have been below this key level now for 118 weeks, the longest such stretch since the early 1970s.

The U.S. unemployment rate is reported separately and stands at a low 4.3 percent. The economy had a net gain of 138,000 jobs in one month. The rate of hiring has slowed recently, as employers say they are having trouble finding people with the right skills.

Next week, leaders of the U.S. central bank will consider the job market and other aspects of the world’s largest economy as they debate how soon and by how much to raise interest rates. The Federal Reserve is widely expected to boost the benchmark interest rate by one-quarter of one percent.
…

From a Peruvian trout farm manager to the head of an Indonesian meatball company, a list of 500 women entrepreneurs in emerging markets was launched Thursday to challenge the stereotype of a typical company boss and inspire women globally.

The “Foundation 500” list features the portraits and careers of 500 female entrepreneurs in 11 emerging markets where women are often refused the same access to education, financial services and bank loans as men.

The list, an initiative of humanitarian agency CARE and the nonprofit H&M Foundation, mirrors the Fortune 500 list of U.S. companies but highlights unusual chief executives, ranging from a Zambian woman who set up a mobile drug store to a woman in Jordan who set up a temporary tattoo studio.

Create role models

Karl-Johan Persson, CEO of Swedish retailer H&M, said the project was designed to create role models for women in emerging markets and challenging perceptions in developed countries of business leaders.

“The entrepreneur is our time’s hero and a role model for many young but the picture given of who is an entrepreneur is still very homogenous and many probably associate it to men from the startup world,” Persson said in an email.

He said all the women in the list had made an incredible effort.

“But one that stands out to me is Philomene Tia, a multi-entrepreneur from the Ivory Coast who has overcome setbacks such as war and being a refugee, and who has, in spite of it, always returned to the entrepreneurship to create a better future and a strong voice in society.”

Buses, fish and tattoos

Tia is the owner of a bus company in the Ivory Coast, a chain of beverage stores, a hotel complex, and a cattle breeding operation.

“I often tell other women that it is the force inside you and your brains that will bring you wherever you want to go. I mean, I started with nothing and I don’t even speak proper French, but look at me now,” she was quoted on the project’s website www.foundation500.com.

The women featured are from Indonesia, the Philippines, Nepal, Sri Lanka, Peru, Guatemala, Jordan, Zambia, Burundi, the Ivory Coast and Yemen.

One of the women portrayed is Andrea Gala, 20, a trout farm manager in Peru and president of the women-only Trout Producers Association.

“This business has worked out so well for us now we don’t depend on our fields anymore, which is hard work and often badly paid,” Gala said in a report on the project.

“With the association we want to open a restaurant one day, next to the trout farm, so we can attract more visitors. We want to turn the area into a tourist zone, where people can come and relax and enjoy our restaurant with trout-based dishes.”

The H&M Foundation, privately funded by the Persson family that founded retailer H&M, said this was part of a women’s empowerment program started with CARE in 2014 in Latin America, Asia and Africa.

As part of this project H&M Foundation Manager Diana Amini said about 100,000 women in 20 countries had received between 2,000-15,000 euros in seed capital and skills training to start and expand businesses.

In Burundi, the average rate of increase in income among women in the program was 203 percent in the three years to the end of 2016, she said.
…

Small-business owners who install solar panels or help customers use clean energy don’t seem fazed by President Donald Trump’s plan to withdraw the U.S. from the Paris climate accord, saying they expect demand for their services will still keep growing.

They’re confident in two trends they see: A growing awareness and concern about the environment, and a desire by consumers and businesses to lower their energy costs.

“It’s an economic decision people are making, although it also makes environmental sense,” said Suvi Sharma, CEO of Solaria, a Fremont, California-based company that designs and sells solar energy panel systems.

Trump said he was putting U.S. interests ahead of international priorities in leaving the agreement that would, among other things, require the U.S. and other countries to report greenhouse gas emissions. The U.S. is the world’s second-largest emitter of carbon after China, and carbon is one of the gases that scientists cite as a key factor in global warming.

Reaction to withdrawal split

Many of the nation’s largest companies opposed Trump’s move, and some have already committed to reducing emissions and are spending billions to do it.

Small business advocacy groups are split over the impact of a U.S. withdrawal. The Small Business & Entrepreneurship Council doesn’t believe Trump’s action will hurt the United States.

“Even without the U.S.’s formal participation in the pact, we believe our nation will continue to lead in carbon reduction and clean energy,” said Karen Kerrigan, CEO of the group. “The market is demanding as much and the private sector and investment are responding.”

But the Small Business Majority, which has supported limits on greenhouse gas emissions as a way to help the environment and the economy, said the U.S. needs government policies that “promote the development of renewable energy and the implementation of energy efficiency standards.”

“America’s entrepreneurs understand that the future of our economy and the job growth associated therewith depends upon policies that move us forward, not backward,” said John Arensmeyer, the group’s CEO.

The American Sustainable Business Council also warned that global warming would hurt companies, giving them “a chaotic and unsustainable future of business disruptions from rising seas and changing weather patterns.”

Whether business owners outside energy-related industries are likely to support the Paris accord may depend on how much they’re worried about climate change, and whether they’re concerned about saving on energy bills.

Demand, awareness growing

A private equity firm that invests in clean energy companies doesn’t expect Trump’s action to have much impact on U.S. companies whose business is reducing greenhouse gas emissions. Neil Auerbach, CEO of Hudson Clean Energy in Teaneck, New Jersey, said the U.S. has been able to move away from carbon fuels with more use of natural gas and renewables.

Arcadia Power, which helps consumers and companies switch to wind and solar power for their electricity, has seen orders rise 5 percent from its usual pace since Trump’s announcement last week, says Ryan Nesbitt, president of the Washington, D.C.-based company. Demand was particularly strong for the electricity supply plans the company offers through solar power producers.

“They sold out over the weekend. We’re scrambling to get more,” Nesbitt said. Some customers who signed up for Arcadia’s service said they were doing so in response to Trump’s announcement, Nesbitt says.

State and local environmental laws, which can be tougher than federal statutes and regulations, have contributed to the growth of small businesses in the energy sector. So companies that help businesses track and report their carbon and other emissions shouldn’t see their business disappear if the U.S. isn’t part of the Paris accord.

At ERA Environmental Management Solutions, whose customers include companies that use paints and other chemicals, “nobody’s coming out and telling us they’re going to stop doing a project,” owner Gary Vegh said.

But Vegh, whose company is based in Bala Cynwyd, Pennsylvania, says companies are also reacting to changing perspectives.

“Each generation is getting more educated about the environment,” Vegh said. “Even preschool and elementary children — the new generation is already aware.”

Barry Cinnamon’s homeowner customers buy solar panels because they believe the climate is in trouble. “They understand from a science and engineering perspective that there’s a problem and there’s a solution,” said Cinnamon, the owner of Cinnamon Solar in Campbell, California.

Installing solar panels on a home can run into the tens of thousands of dollars, so owners aren’t expecting an immediate windfall from lower energy prices — they’re willing to wait five or 10 years for their investment to pay off, Cinnamon says.

For some owners, it’s the “what ifs” that are worrisome. Many business customers at Vitaliy Vinogradov’s lighting business base their buying decisions on tax rebates for green LED fixtures.

“What I am afraid of is that this may be a slippery slope — where eventually green technology loses subsidies, rebates, or gets taxed,” said Vinogradov, whose Modern Place Lighting is located in Pensacola, Florida.

Saagar Govil, CEO of Cemtrex Inc., an environmental technology company, fears it will lose business in the U.S. because there may be less need for his equipment that monitors and destroys greenhouse gases. He hopes the Farmingdale, New York-based company will be able to sell those products overseas, and in states that have pledged to follow the Paris accord.

“But until we start to see something concrete, it’s unclear how that will fly,” he said.

Some business owners, however, think Trump’s action will ultimately help their companies. John-Paul Maxfield, whose Denver-based Waste Farmers sells agricultural products and technology to greenhouse operators, believes it will raise awareness of global warming.

“It reinforces the need for alternative systems in the face of climate change,” Maxfield said.
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It was almost sunset as fishermen guided their boats back onto the beach at Joal, Senegal, after a long day at sea.

At first glance, it looks as though they’d collected a good day’s haul, but their nets were full of small sardinella, known locally as yaabooy.

Fisherman Mamdou Lamine had caught just one bucket of mackerel. He held one up next to a yaabooy to show how much bigger it was — and there are many more yaabooy than mackerel these days, he said. Furthermore, A local favorite, grouper, called thiof in Senegal, is getting harder to find.

The U.N. Food and Agricultural Organization says more than half of West Africa’s fisheries are dangerously depleted. Local officials in Senegal say it’s the foreign-owned industrial boats that have depleted fish stocks and destroyed marine habitats.

When fishermen at Joal set off on trips, they have to carry more fuel to reach waters farther away, and the added fuel costs cut into their earnings.

Longer trips, more fuel

Saff Sall was heading to Guinea-Bissau, about 200 kilometers south, in search of the elusive thiof. He said the fish are found among rocks, but that there are no more rocks because they have all been destroyed by the big industrial boats. That’s why they have to go to Guinea-Bissau to search for fish.  

Before, Senegalese fishermen had to spend only a week at sea to have all the fish they needed, he said, but now they have to spend twice as long to catch what they need.

Under-regulated fishing by locals has also contributed to the problem, said Joal Fishing Wharf chief of operations El Hadji Faye.

He said the government was making an effort, but the situation was very complicated.  He said that in the Senegalese city of Saint Louis, for example, each neighborhood has a designated day it can fish. But in Joal, they do not do that yet.  Every day, he said, all the fishermen go to sea.  Sometimes when a lot of them go, they bring back a lot of fish and the price is not good.

Economic staple

Fish are the backbone of the town’s economy. The day’s catch is taken to the local smokehouse, turned into fish meal for export abroad or sold fresh at the market, where knife-wielding female vendors prep the fish for sale.

Business is tough even for vendors with the rare large fish. Scarcity has driven up the prices. The price of thiof per kilogram has doubled in the past five years, local officials said.

Fish vendor Rose Ndour said that maybe those in the industry would do other work — if there were better jobs available.

The impact of overfishing is felt in households. The wife of the fishing wharf manager, Coumba Ndiaye, said that for the family’s evening Ramadan meal, she had to make due with sardinella because she could not get an affordable thiof at the market.

She made thieboudienne, Senegal’s national dish. Its name literally translates to “fish and rice.”  But for a good thieboudienne, you need good fish like dorade or thiof.

The fish are a part of Senegal’s culture. Ndiaye said that  “when someone says your husband is ‘thiofee,’ they are comparing him to thiof. The thiof is beautiful and noble. The thiof is classy.”

IN PHOTOS: No Good Fish in the Sea: Overfishing in Senegal

The children sat on their parents’ knees as the family ate around the large shared bowl of thieboudienne.

The fishermen would return to the sea the next day to try their luck again.
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Peru joined Indonesia Wednesday as the only two countries worldwide to make their fishing boat tracking data available to the public.

Such access will give conservationists, along with those who buy, sell and eat seafood, a clearer picture where their favorite dishes come from.

Officials from both countries made their announcements Wednesday at the United Nations Ocean Conference in New York.

Indonesia said its data is available now, while Peru promised to follow suit.

“This is another demonstration of the Peruvian government’s commitment to fight illegal activities at sea,” fisheries vice minister Hector Soldi said. “The Peruvian government intends to make the utmost effort to achieve sustainable management of our fisheries in order to increase its contribution to nutrition and global food security.”

The independent Global Fishing Watch uses satellites and terrestrial receivers to track the activities of 60,000 commercial and private fishing boats across the globe.

Global Fishing Watch is not an enforcement agency but a tool for environmentalists and conservationists, and not available to private citizens.

Jackie Savitz, senior vice president of the Oceana conservation group, tells VOA that once a fishing boat leaves port and disappears over the horizon, it’s hard to monitor the vessels. For example, she says, are they fishing in protected parts of the sea or encroaching into another country’s exclusive economic zone?

Savitz says she applauds the very strong leadership by Indonesia and Peru in allowing anyone to monitor their fishing boats at any time.

“With more eyes on the ocean, there are fewer places for illegal fishers to hide,” she said.

Savitz says she hopes other countries will follow Indonesia and Peru in helping to ensure the sustainability and health of one of the world’s most valuable resources.
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President Donald Trump has chosen a regional banker as his nominee for a key government position in bank regulation.

Trump announced late Monday he is naming Joseph Otting as comptroller of the currency, heading a Treasury Department agency that is the chief overseer for federally chartered banks. If confirmed by the Senate, Otting will play a role in the Trump administration’s efforts to ease rules written under the Dodd-Frank law that stiffened financial regulation after the 2008-09 crisis.

The Office of the Comptroller of the Currency charters and supervises national banks and savings and loans. The agency has hundreds of bank examiners, many of them working inside the nation’s largest financial institutions, who focus closely on lending practices.

Otting was CEO from 2010 to 2015 of OneWest Bank, where he worked with then-chairman Steven Mnuchin, who is now Treasury secretary. Democrats who objected to Mnuchin’s appointment as Treasury chief accused him of running a “foreclosure machine” when he headed the big California-based bank. The bank foreclosed on thousands of homeowners in the aftermath of the housing crisis caused by high-risk mortgages.

Mnuchin, who led an investor group that bought the failed IndyMac bank in 2009 and turned it into a profitable OneWest, has defended his actions as the bank’s chairman. He has said he worked hard during the financial crisis to help homeowners with refinancing mortgages so they could remain in their homes.

OneWest was among a number of big banks that signed consent orders with the OCC over alleged mortgage servicing abuses. The bank didn’t admit or deny wrongdoing under the 2011 order but agreed to undertake a plan to correct problems.

“If Mr. Otting didn’t deal fairly with the customers at his own bank, it’s difficult to see why he’s the best choice to look out for the interests of customers at more than 1,400 banks and thrifts across the country,” Sen. Sherrod Brown of Ohio, senior Democrat on the Senate Banking Committee, said in a statement.

Before he worked at OneWest, Otting was vice chairman of U.S. Bancorp, parent of Minneapolis-based U.S. Bank, one of the largest banks in the country.

With Otting’s appointment, Trump continues to fill out his key team of financial regulators, as his administration looks to easing rules and meet his campaign promises. Republicans have long complained that regulations were made too restrictive following the financial meltdown and have hampered economic growth by making it harder for banks to lend.

Jay Clayton, a Wall Street lawyer with ties to Goldman Sachs, is now chairman of the Securities and Exchange Commission. Trump has three vacancies to fill on the Federal Reserve’s board of governors, including the key slot that holds the portfolio of bank supervision.

Otting would replace Keith Noreika, a financial services lawyer who was installed last month as acting comptroller in an unusual move apparently aimed at avoiding Senate confirmation and normal ethics requirements.

Noreika succeeded Thomas Curry, an Obama appointee, who had been comptroller since 2012 and leaned toward strict bank oversight.
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A decade ago, the first inklings of the coming recession emerged as a housing bubble fueled by scant regulation, low interest rates and easy credit gradually began to crater and soon would take the rest of the economy along for the painful ride.

By the time the Great Recession ended in June 2009, almost no one was spared.

Home prices fell 30 percent on average, the unemployment rate nearly doubled and the S&P 500 lost about half its value. The net worth of U.S. households and nonprofit organizations fell by nearly $14 trillion, about 20 percent.

In the midst of a presidential election, Washington struggled in its response. The bankruptcy of Lehman Brothers and the takeover of Merrill Lynch turned the spotlight on Democratic Senator Barack Obama of Illinois and Republican Senator John McCain even brighter, with McCain’s assertion that the “the fundamentals of our economy are strong” used to depict him as out of touch.

After the economy stabilized, Congress shifted from economic stimulus and bailouts to establishing the kind of regulatory framework that might keep another Great Recession from happening. The result was the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

This week, House Republicans will vote on legislation to gut Dodd-Frank and replace it with their own version. A look at the background of the legislation and the GOP plan.

Passed with little GOP support

In June 2010, the House passed the financial regulatory overhaul 237-192. Only three Republicans sided with the vast majority of Democratic members in support of the bill.

Two weeks later, the Senate passed the bill 60-39. This time, only two Republicans voted for the bill, Olympia Snowe of Maine and Scott Brown of Massachusetts. But that was just enough to overcome procedural hurdles that can stop major legislation in the Senate.

Obama signed Dodd-Frank into law on July 21, 2010: “In the end, our financial system only works — our market is only free — when there are clear rules and basic safeguards that prevent abuse, that check excess, that ensure that it is more profitable to play by the rules than to game the system,” Obama said. “And that’s what these reforms are designed to achieve — no more, no less.”

What does it do?

Under the act, large banks undergo “stress tests” to ensure they have enough capital necessary to absorb losses during an economic crisis. The law also put into place strict limits on how commercial banks could invest capital in speculative investments.

Dodd-Frank also established a process by which the federal government could break up and wind down a failing financial company whose failure threatened financial stability in the United States. And it established a new agency with a mission of ensuring that banks and other financial companies don’t abuse consumers.

That’s just a small snapshot of the changes put into place through the nearly 2,300-page bill.

Who were Dodd and Frank?

Representative Barney Frank was the top Democrat on the House Financial Services Committee. When the financial crisis hit, the Massachusetts lawmaker worked closely with the Bush administration to enact a historic bailout of the nation’s financial system so that the government could purchase as much as $700 billion in troubled assets to stabilize banks and get them lending again. Once the crisis began to subside, he turned his attention to an overhaul of the entire financial services industry. Frank was renowned for his knowledge of public policy and parliamentary rules, but also for his gruff, piercing criticism of those who disagreed with him. He declined to seek re-election in 2012 after serving 16 terms.

Senator Christopher Dodd was the chairman of the Senate’s Banking Committee. He announced in January 2010 that he would not seek re-election once his term ended, and he led the debate on the Senate side without fear of how it would harm his political standing. His home state of Connecticut counts several of the insurance companies that were shaken in the crisis.

Republican replacement

Republicans, most notably President Donald Trump, view the regulations associated with Dodd-Frank as increasing compliance costs for financial companies and making it harder to lend money and spur economic growth. Trump calls the law a “disaster.”

The replacement in the House has been authored by Texas Representative Jeb Hensarling, the chairman of the Financial Services Committee. At its core, the Financial Choice Act would give banks regulatory relief so long as they meet a strict basic requirement for the capital they build to cover unexpected big losses.

Federal regulators would also lose the power to dismantle a failing financial firm and sell off the pieces if they decide its collapse could endanger the system. The legislation also paints a bull’s eye on the Consumer Financial Protection Bureau, which gained powers to scrutinize the practices of virtually any business selling financial products and services, such as credit card companies, payday lenders, mortgage servicers and debt collectors. Hensarling’s bill would eliminate those powers.

It would allow the president to remove the CFPB director at will, without needing a specific cause. Hensarling is backing off one provision, though, in the face of Republican division: He has promised to pull a provision that eliminates the cap on fees that banks can charge retailers when customers use a debit card.

What people are saying about the bill

House Republicans frequently speak about the need for economic growth.

“This is the Republican plan to reform Wall Street and revitalize Main Street — all while protecting the financial futures of Americans,” House Speaker Paul Ryan, a Wisconsin Republican, said in a statement Monday.

No Democratic lawmaker voted for the bill when it was approved by the Financial Services Committee, saying it would allow a return to the kind of risky practices that crashed the economy nearly 10 years ago.

“It’s an invitation for another Great Recession, or worse,” said Representative Maxine Waters of California, the ranking Democratic member of the committee.

While the bill is expected to pass the House, its prospects are uncertain in the Senate, where Democrats have the votes to block it.
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The U.S. and Mexican governments reached a new agreement to significantly shift their sugar trade mix, but U.S. sugar producers have failed to endorse the deal, leaving question marks over whether it could still sour broader trade relations.

U.S. Commerce Secretary Wilbur Ross said the “agreement in principle” with Mexican Economy Minister Ildefonso Guajardo calls for Mexico to reduce the share of refined sugar in its exports to the United States, while increasing the share of raw sugar.

He said Mexico met nearly every request by the U.S. sugar industry to fix problems with a 2014 sugar trade agreement.

“Unfortunately, despite all of these gains, the U.S. sugar industry has said it is unable to support the agreement in its present form,” Ross said without elaborating on their objections.

He added that the agreement would go through a final drafting stage in which he hoped that the U.S. producers could come on board with it.

Asked how long this would take, Ross said, “It should be days, not weeks or months.”

The deal cut by Ross and Guajardo leaves Mexico’s overall access to the U.S. sugar market unchanged but refined sugar must fall to 30 percent of overall imports from Mexico from a previous limit 53 percent.

It also lifts the U.S. price paid for Mexican raw sugar to 23 cents per pound from 22.25 cents, while, the price for refined sugar will rise to 28 cents per pound from 26 cents.

These prices exclude shipping and packaging costs, the Commerce Department said in a summary.

An agreement was expected to help avoid potential retaliation from Mexico on imports of U.S. high-fructose corn syrup, a trade battle that would heighten U.S.-Mexico tensions as both countries along with Canada prepare to begin renegotiating the 23-year-old North American Free Trade Agreement in August.

Ross on Monday extended the deadline for the negotiations by 24 hours to complete what he called “final technical consultations” for a deal.

Sources on both sides of the border said on Monday that the U.S. sugar industry had added new demands outside of the terms agreed on earlier in the day by the two governments.

U.S. refiners have complained that high-quality Mexican raw sugar was going straight to sugar consumers, rather than passing through U.S. refineries.

The deal would mark the culmination of a years-long dispute between the countries over sugar, after U.S. groups three years ago asked the government for protection from dumping of subsidized imports from Mexico.

In 2014, the U.S. government slapped large duties on Mexican sugar but hammered out a deal with Mexico that suspended those levies. Factions of the U.S. industry have said that the deal has failed to eliminate harm from Mexican imports.

The U.S. industry involved in the dispute include a coalition of cane and beet farming groups as well as ASR Group, the maker of Domino Sugar that is owned by the politically connected Fanjul family.

ASR and fellow cane refiner Imperial Sugar, owned by commodities firm Louis Dreyfus Company BV, have said they are being starved of raw supplies under the current deal.

They have asked the U.S. government to terminate the pact.

The latest talks began in March, two months after U.S. President Donald Trump took office vowing a tougher line on trade to protect U.S. industry and jobs.
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