Gasoline prices have been rising and oil costs have been changing as Hurricane Harvey’s winds and rising floodwaters slam into a part of Texas that has a significant portion of the nation’s oil industry, particularly oil refineries, shipping, and production.

By Monday, gasoline futures rose by as much as seven percent, hitting two-year highs as investors calculated that shutting down numerous refineries and other facilities could create shortages. At one point, crude oil future prices fell because refinery closures were expected to hurt demand for crude.

One report (on CNBC) says about one million barrels a day of refining capacity is off line.

About one fifth of the offshore crude oil production is also shut off as companies evacuated crews and closed production before the dangerous storm. Some shipping facilities have also been closed.

Harvey’s winds sometimes exceeded 200 kilometers per hour, and the storm brought an entire year’s worth of rain in just a few days, adding record floods to the wind damage. Severe rains are expected to continue for days, and it is not clear how long it will take for the water to recede and allow facilities to reopen and for staff to return.

It is also unclear how much damage has been done to critical energy infrastructure and how long it will take to return to full capacity.

More than six million people live in or near Houston, the biggest city in the storm’s path. Many fled before the storm, thousands have since been rescued, and tens of thousands are leaving flooded homes for emergency shelters.

The Federal Emergency Management Agency says 450,000 people are expected to seek government financial assistance because of the disaster.

The U.S. Federal Reserve, which supervises banks, says banks should try to work out accommodations with businesses and others that are having difficulty repaying loans because of the storm. The Fed says efforts to work with “borrowers under stress” can be consistent with “safe-and-sound” banking practices, and the public interest.

 
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U.S. President Donald Trump renewed his threat to scrap NAFTA and ripped on trading partners Canada and Mexico in a tweet early on Sunday, days before the three countries were scheduled to hold a second round of negotiations on rewriting the 23-year-old agreement.

“We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada. Both being very difficult, may have to terminate?” he wrote.

In a separate Sunday morning tweet, Trump repeated his pledge that Mexico will eventually pay for his proposed border wall, saying the barrier is needed due to Mexico’s high crime rate.

In response, Mexico’s foreign ministry issued a statement Sunday afternoon reiterating the country’s position that it will not “in any way or under any circumstance” pay for Trump’s signature border wall.

The ministry added that overcoming violent crime associated with cross-border drug trafficking is the responsibility of both nations, pointing to the high demand for drugs in the United States from Mexico and other countries.

Trump, a Republican, promised during his campaign to build the wall and overhaul or eliminate the North American Free Trade Agreement, which he cast as killing jobs and exacerbating the U.S. deficit, and to adopt a more protectionist stance for trade generally.

The first five-day round of talks between the three countries concluded last Sunday, with all sides committing to follow an accelerated process in revamping the agreement, which was originally signed by former President Bill Clinton, a Democrat whose wife, former Secretary of State Hillary Clinton, ran against Trump in the 2016 election.

The second round of NAFTA talks will kick off on Friday in Mexico City.

Mexico’s negotiating position will continue to be “serious and constructive” and the country’s negotiators will not hash out differences “via social media or the press,” the foreign ministry’s statement said.

Going into the next round of NAFTA talks, Trump has kept the heat turned up. Both Mexico and Canada have dismissed his musing in a Tuesday speech that “we’ll end up probably terminating NAFTA at some point” as a negotiating tactic.
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The head of the U.S. central bank says the financial system is safer now than it was before the recession, and urges Washington to make some adjustments in financial regulations, rather than trash them.

Federal Reserve Chair Janet Yellen says the recession of 2008 cost nine million American jobs and meant millions of people lost their homes. She says financial reform regulations were intended to make it less likely that big institutions would fail in the future and to provide an orderly way to resolve the debts of big financial companies that do fail without government bailouts.

She says financial firms, particularly very large ones that could hurt the entire economy if they fail, are now required to keep larger reserves. That way if one loan goes bad, the firm is less likely to have to hastily sell off other assets at bad prices to cover the losses. Low reserve levels prompted a downward spiral when many fragile firms ran into trouble all at once, all of them trying to sell assets and no one willing to buy them.

Yellen acknowledges that over-regulation could hamper the lending and risk-taking needed for economic growth, but she says some research shows the current level of regulation hurts lending, while other research shows it helps.

In a Friday speech to a gathering of top economic officials from around the world at a resort in Wyoming, she said Fed officials are looking at ways to simplify regulations for small banks that would not cause problems for the national economy if they failed.

Small banks complain the cost of complying with complex regulations makes it hard to make loans. Small banks are important because they are often the source of capital for small companies, and such small, growing firms are the source of most new jobs.

Yellen’s closely-watched speech at the annual gathering of economists at a resort in Jackson Hole, Wyoming, comes after criticism from Republicans and others that stricter regulation is hurting lending and economic growth.

President Donald Trump has called for repealing a key part of the regulations called “Dodd-Frank” named after the legislators who crafted the law.
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South Korea this week pushed back against the United States’ demand to renegotiate the free trade agreement (FTA) between the close allies. 

U.S. President Donald Trump has repeatedly criticized the five-year-old Korea-U.S. (KORUS) FTA as a horrible deal that created a $27 billion U.S. trade deficit with South Korea last year, and has said his administration would either renegotiate or terminate it.

Agree to disagree

At Washington’s urging, an initial special session was held on Tuesday by video conference between South Korean Trade Minister Kim Hyun-chong and his American counterpart, U.S. Trade Representative (USTR) Robert Lighthizer, to negotiate amendments to the trade pact.

Afterwards the South Korea trade minister said the two sides disagreed on the need to amend the trade deal.

“We have found that the two sides have different views on the effects of the U.S. and South Korea Free Trade Agreement, the reason behind the trade deficit, and necessity for an amendment to the U.S. and South Korea FTA,” said Trade Minister Kim Hyun-chong.

South Korean officials maintain the bilateral trade deficit is not the result of the FTA, but of the underperforming South Korean economy, where demand for imports have declined, contrasted with the more robust U.S. economy.

“For the last 10 years, South Korea’s market economy was not good, so the U.S. did not get opportunities to sell its products (to South Korea). If South Korea’s economy gets better and the U.S. economy gets worse, we may face the opposite situation,” said Chung Sye-kyun, the speaker of the South Korean National Assembly on Thursday at an event organized by the American Chamber of Commerce in Korea.

KORUS supporters in Seoul also argue the FTA benefits the U.S. economy and American workers. Last year, Korean companies like the electronics giant Samsung and the automaker Hyundai, employed 45,000 Americans and contributed $138 billion to the U.S. economy, according to the American Chamber of Commerce in Korea.

‘Korea unique standards’

The USTR released a statement Wednesday saying it will continue bilateral talks to amend or modify the agreement and specifically identified the “burdensome regulations which often exclude U.S. firms or artificially set prices for American intellectual property” as a major issue of contention.

The auto industry accounts for nearly 80 percent of the bilateral trade deficit, as American car sales in South Korea have been slow, while Korean automobile sales in the United States have soared. The American business community has long blamed the deficit in part on non-tariff related “Korea unique standards,” often linked to environmental regulations or certification procedures that they say are imposed to protect the domestic market. Foreign companies are then forced to spend an inordinate amount of time and money to deal with these regulations that are often introduced without notice or clear explanations.

South Korean authorities have downplayed charges of unfair trade practices, saying most complaints have been resolved through negotiations without the need for amending the FTA.

The South Korean Trade Minister said while this week’s meeting did not reach any agreement on how to proceed, neither side talked about terminating the FTA. 

The Korea Times newspaper in Seoul on Friday published an editorial advising the South Korean government that “a good offense is the best defense” in any upcoming trade negotiations. It recommended Seoul press Washington to loosen its intellectual property rights protections and rules regarding disputes between investors and the state, and to threaten to reduce agriculture and energy imports if the situation becomes overly contentious.

The potential rift over trade comes at a time when Washington and Seoul have been emphasizing their close military alliance and joint support for increasing sanctions on North Korea to pressure the Kim Jong Un government to return to international denuclearization talks.

This week some 17,500 American and 50,000 South Koreans troops are participating in joint strategic military exercises that deal with how to respond to possible North Korean attack scenarios.

Youmi Kim in Seoul contributed to this report
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When Ha Tran of Ho Chi Minh City shops for food, clothes or electronics, she avoids merchandise she can tell comes from Vietnam’s giant neighbor, China. It might not work, she said, and China is no friend of Vietnam anyway.

“China exports many low-quality products to Vietnam, but we know they don’t export products to other countries around the world (that are) that bad, so we try to avoid the products that are made in China,” said Ha, 24, a design company worker in the Vietnamese financial hub city. Vietnamese prefer to buy stuff from Japan or the West. “We’ve tried (Chinese goods) many times in the past but it turns out like they get broken very easily.”

Political ties between Vietnam and China are another “factor” discouraging purchases, she said.

Ha is hardly a shopping renegade. Consumers around Vietnam typically shun “Made-in-China” purchases to protest what they see as poor-quality goods from a country that already has a record of disputes with their country. The two sides dispute, for example, a tract of territory in the South China Sea east of Vietnam. Competing claims sparked naval battles 1974 and 1988. The two also fought a land border war in the 1970s.

Vietnamese feel China has an unfair upper hand in the maritime dispute by using its larger military to control the contested Paracel Islands.

Consumers make up a growing force in Vietnam, as the Boston Consulting Group forecasts more than a third of the country’s nearly 93 million people to be middle class or higher by 2020. Fast growth in export manufacturing has added to Vietnam’s wealth since 2012 by creating jobs.

“If they find a product that might be the same price, and they find out that one product is Chinese and another product is from Japan, Korea or anywhere else, you know which one they’re going to go for,” said Oscar Mussons, senior associate with the Dezan Shira & Associates business consultancy in Ho Chi Minh City. “Vietnamese people see them not as big brothers, but as rivals.

“This is also because of recent problems, like Chinese are hitting national icons like the islands in the South China Sea,” Mussons said. “For Vietnamese, this is something that cannot be accepted in any way, even through you don’t hear much about or the government doesn’t try to make much publicity about it.”

Vietnamese officials have tried to sideline political disputes with China since anti-Chinese riots of 2014 killed more than 20 people and threatened to scare off investors. China’s go-ahead to construct an oil rig in the disputed sea touched off the rioting.

But Vietnam still counts China as its biggest trade partner. Combined imports and exports came to $25.5 billion in the first four months of the year, according to Vietnamese media reports. Export manufacturers in Vietnam rely as well on China for raw materials.

On top of the political issues, Vietnamese consumers widely suspect China sends lower-quality merchandise to its shelves. Giant Chinese firms, often bigger than Vietnamese counterparts, can send over excess merchandise for sale at low prices because of their production run sizes.

“Generally amongst Vietnamese, China-made products are perceived to be of low quality. Some of this is fact, but some of this is also driven by social media posts and ensuing perceptions,” said Jason Moy, principal with the Boston Consulting Group in Singapore. Lower-income, less educated consumers are particularly prone to those perceptions, he added. “Hence, Chinese products are generally selected when they are the last or only option.”

Trade in shoes, toys and daily necessities along the land border particularly leaves cheap but possibly suspect Chinese goods in Vietnam, where lower-income people buy them for their low prices, said Le Hong Hiep, research fellow with ISEAS Yusof Ishak Institute in Singapore. Goods trucked across the border in some cases have “pushed Vietnamese merchandise out of their traditional markets,” Le said.

An organized boycott against Chinese goods after the riots of 2014 gained little traction because poorer people couldn’t afford merchandise from other places, he said.

Although Chinese smartphones are gaining a solid reputation, Ha said she once bought a made-in-China phone for her mother because it was all they could afford. It broke after “several months,” she said, so the family bought another phone.

Only Chinese thong flip-flops are worth the money, she said, because at about $1 per pair you can afford to scrap and replace a pair after a few uses.

“People are conscious of the kind of low standards, low quality of Chinese products,” Le said. “I think one of the reasons is that many of these products are consumer items and small items, and they are imported by border trade, not through official channels which normally have stricter regulations and inspections to ensure the quality.”

Shoppers with more money prefer Japanese products as top quality, especially ever-popular motor scooters and consumer electronics, Moy said.Korean food and consumer electronics are also gaining favor with consumers, he said. 
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Argentina’s government is investigating all options and reserves the right to take legal action over the United States’ imposition of steep duties on imports of Argentine biodiesel, the Foreign Ministry said in a statement Thursday.

The statement said the imposition of duties above 50 percent, announced Tuesday, does not correspond to any type of methodology acceptable under the rules of the World Trade Organization (WTO).

In 2016, 90 percent of the 1.6 million metric tons of biodiesel Argentina exported went to the United States, Argentine government data show.

An Argentine industry group said Tuesday that the U.S. Commerce Department’s decision to slap countervailing duties of up to 64.17 percent on the imports would cause them to immediately stop exports to the United States.

“The Argentine government, along with the private sector, is cooperating with the investigation,” the statement said. “It has been established that Argentina does not award subsidies to biodiesel producers.”

The WTO last year ruled in favor of Argentina in a dispute over anti-dumping tariffs the European Union had applied to Argentine biodiesel, but the European Commission has not yet removed the tariffs.

The U.S. duties were announced a week after U.S. Vice President Mike Pence pledged to boost two-way trade in a visit to Buenos Aires.

“Argentina will seek to revert this preliminary decision defending the interest of our country, will evaluate all available options and reserves the right to bring forward pertinent legal action,” the statement said.
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Tesla next month plans to unveil an electric big-rig truck with a working range of 200 to 300 miles, Reuters has learned, a sign that the electric car maker is targeting regional hauling for its entry into the commercial freight market.

Chief Executive Elon Musk has promised to release a prototype of its Tesla Semi truck next month in a bid to expand the company’s market beyond luxury cars. The entrepreneur has tantalized the trucking industry with the prospect of a battery-powered heavy-duty vehicle that can compete with conventional diesels, which can travel up to 1,000 miles on a single tank of fuel.

Tesla’s electric prototype will be capable of traveling the low end of what transportation veterans consider to be “long-haul” trucking, according to Scott Perry, an executive at Miami-based fleet operator Ryder System. Perry said he met with Tesla officials earlier this year to discuss the technology at the automaker’s manufacturing facility in Fremont, California.

Perry said Tesla’s efforts are centered on an electric big-rig known as a “day cab” with no sleeper berth, capable of traveling about 200 to 300 miles with a typical payload before recharging.

“I’m not going to count them out for having a strategy for longer distances or ranges, but right out of the gate I think that’s where they’ll start,” said Perry, who is the chief technology officer and chief procurement officer for Ryder.

Tesla responded to Reuters questions with an email statement saying, “Tesla’s policy is to always decline to comment on speculation, whether true or untrue, as doing so would be silly. Silly!”

Tesla’s plan, which could change as the truck is developed, is consistent with what battery researchers say is possible with current technology. Tesla has not said publicly how far its electric truck could travel, what it would cost or how much cargo it could carry. But Musk has acknowledged that Tesla has met privately with potential buyers to discuss their needs.

Reuters reported earlier this month that Tesla is developing self-driving capability for the big rig.

‘Manufacturing hell’

Musk has expressed hopes for large-scale production of the Tesla Semi within a couple of years. That audacious effort could open a potentially lucrative new market for the Palo Alto, California-based automaker.

Or it could prove an expensive distraction. Musk in July warned that the company is bracing for “manufacturing hell” as it accelerates production of its new Model 3 sedan. Tesla aims to produce 5,000 of the cars per week by the end of this year, and 10,000 per week sometime next year.

Tesla shares are up about 65 percent this year. But skeptics abound. Some doubt Musk’s ability to take Tesla from a niche producer to a large-scale automaker. About 22 percent of shares available for trade have been sold “short” by investors who expect the stock to fall.

Musk, a quirky billionaire whose transportation ambitions include colonizing the planet Mars, has long delighted in defying conventional wisdom. At Tesla’s annual meeting in June, he repeated his promise of a battery-powered long-haul big rig.

“A lot of people don’t think you can do a heavy-duty, long-range truck that’s electric, but we are confident that this can be done,” he said.

Trucking’s sweet spot

While the prototype described by Ryder’s Perry would fall well short of the capabilities of conventional diesels, Musk may well have found a sweet spot if he can deliver. Roughly 30 percent of U.S. trucking jobs are regional trips of 100 to 200 miles, according to Sandeep Kar, chief strategy officer of Toronto-based Fleet Complete, which tracks and analyzes truck movement.

A truck with that range would be able to move freight regionally, such as from ports to nearby cities or from warehouses to retail establishments.

“As long as [Musk] can break 200 miles, he can claim his truck is ‘long haul’ and he will be technically right,” Kar said.

Interest in electric trucks is high among transportation firms looking to reduce their emissions and operating costs.

Electric motors require less maintenance than internal combustion engines. Juice from the grid is cheaper than diesel.

But current technology doesn’t pencil when it comes to powering U.S. trucks across the country. Experts say the batteries required would be so large and heavy there would be little room for cargo.

An average diesel cab costs around $120,000. The cost of the battery alone for a big rig capable of going 200 to 400 miles carrying a typical payload could be more than that, according to battery researchers Shashank Sripad and Venkat Viswanathan of Carnegie Mellon University.

Battery weight and ability would limit a semi to a range of about 300 miles with an average payload, according to a paper recently published by Viswanathan and Sripad. The paper thanked Tesla for “helpful comments and suggestions.” Tesla did not endorse the work or comment on the conclusions to Reuters.

A range of 200 to 300 miles would put Tesla at the edge of what the nascent electric truck industry believes is economically feasible, the researchers and industry insiders said.

Short-haul trucks

Transportation stalwarts such as manufacturer Daimler AG and shipping company United Parcel Service said they are focusing their electric efforts on short-haul trucks. That’s because smaller distances and lighter payloads require less battery power, and trucks can recharge at a central hub overnight.

Daimler, the largest truck manufacturer in the world by sales, will begin production this year on an electric delivery truck. The vehicle will have a 100-mile range and be capable of carrying a payload of 9,400 pounds, about 1,000 pounds less than its diesel counterpart, according to Daimler officials.

Daimler has been joined by a handful of startups such as Chanje, a Los Angeles-based manufacturer that has a partnership with Ryder to build 100-mile-range electric trucks for package delivery.

Ryder and its customers believe electric trucks could cost more to buy but may be cheaper to maintain and have more predictable fuel costs. As batteries become cheaper and environmental regulation increases, the case for electric trucks could strengthen.

“This tech is being seen as a major potential differentiator. Everyone wants to understand how real it is,” said Perry, the chief technology officer.
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Former U.S. President Ronald Reagan will be inducted into the Labor Department’s Hall of Honor.

Labor Secretary Alexander Acosta made the announcement Thursday at the Ronald Reagan Presidential Library & Museum in Simi Valley, California.

Reagan is the only union leader to occupy the White House. The former actor was president of the Screen Actors Guild in the 1940s and ’50s. He led the guild through three strikes and negotiated residual payments and health and pension benefits for the union’s members, Acosta said.

Reagan also was a staunch supporter of the first free and independent trade union in the Soviet bloc during the Cold War: Solidarity, a movement established in 1980 that led to the downfall of communist rule in Poland a decade later.

At the White House, however, Reagan’s policies led to a fraught relationship with labor unions. Early in his presidency, he fired 11,000 striking air traffic controllers. The president said the 1981 strike was illegal, and he dismissed controllers who did not follow his command to return to work.

The Labor Department’s Hall of Honor was established in 1988 to honor Americans who improved working conditions, wages and quality of life for families.

Reagan was elected in 1980 and served two terms as president, leaving office in 1989. He died in 2004.
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President Donald Trump’s comments at a Phoenix rally that he will probably end up terminating the North American Free Trade Agreement brought cheers from the crowd but groans from the state’s top business group.

Arizona Chamber of Commerce and Industry President Glenn Hamer posted a video calling any termination a “terrible mistake” within hours of Trump’s remarks Tuesday night. Hamer is in Mexico on a trade mission with a bipartisan delegation of about two dozen state lawmakers.

“It would be a mistake that the administration would feel each and every day,” Hamer said. “And why would that be? The administration has set a noble goal of 3 percent growth. You can’t get there if your start unraveling trade agreements.

“You need good tax policy, you need good regulatory policy and you need good trade policy,” he said.

Trump hints NAFTA is done

Trump said at the campaign-style rally that he believes Mexico and Canada are coming out ahead on the 23-year-old trade agreement. Renegotiations began in recent weeks.

“Personally, I don’t think we can make a deal, because we have been so badly taken advantage of,” Trump said. “I think we’ll end up probably terminating NAFTA at some point, OK? Probably.”

Modernizing agreement

Republican Sens. Jeff Flake and John McCain have called for modernizing an agreement they say has brought huge benefits for Arizonans.

Flake has put on a full court press in recent months, launched an effort in May to highlight what he calls the agreement’s “huge boon to Arizona and the U.S.” He’s put out videos featuring people and businesses that have benefited from the trade pact.

On Wednesday, he said he won’t stop that effort.

“I will continue to speak up for the countless Arizonans whose jobs and businesses rely on the billions of dollars that NAFTA injects into our state’s economy,” Flake said in a statement.

 
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President Donald Trump said Tuesday that he was willing to shut down the government to get funding for a U.S.-Mexico border wall, complicating two must-pass measures Congress will take up in September: a spending package and raising the debt ceiling.

Here is what you need to know about both, and the potential for a shutdown of the U.S. government:

What is a shutdown?

Congress must pass annual spending bills around the end of the federal fiscal year on September 30 to fund much of the U.S. government. When disagreements prevent that, which is frequent, lawmakers often pass a temporary bill extending existing spending levels with no changes for days, weeks or months, while they work on a longer-lasting deal. When they cannot agree on either a new spending plan or a short-term extension, the government shuts down. That has happened many times since the 1970s, usually for a few days, and can rattle markets.

Congress will return from its long summer recess September 5. At that time, it will have only about 12 working days to approve spending measures to keep the government open.

What if Congress fails?

If spending measures are not passed before October 1, portions of the government will begin to shut down and nonessential employees will go without pay until an agreement is reached.

The government most recently shut down for about two weeks in October 2013 over funding for former President Barack Obama’s health care law. There were three shutdowns in the 1990s, the longest lasting 21 days. In the 1970s and 1980s, there were 14 shutdowns, some partial and most lasting only a few days.

What is the debt ceiling?

The debt ceiling is a legislative limit on how much money the federal government can borrow through debt issued by the U.S. Treasury. Once the limit is reached, Congress must raise it or the government cannot continue borrowing money and would default, or be unable to pay its bills.

The Treasury has said it wants Congress to increase the debt ceiling by September 29, although default most likely could be staved off until mid-October, thanks to “extraordinary measures” the Treasury put in place in March to delay a debt reckoning.

Legislation to raise the debt limit will need to be adopted, at the very latest, by early to mid-October.

What if the ceiling is not raised?

If the debt ceiling is not raised, the government would not be able to borrow more money or pay its bills, including payments on its debts, which could hurt the U.S. credit rating.

Political gridlock has never led to the United States reaching its debt ceiling and its bills going unpaid, but there have been close calls. An August 2011 standoff cost the country its top-notch bond rating from the credit rating agency Standard & Poor’s and caused the most jarring two weeks in financial markets since the 2007-09 global financial crisis.

How are the budget and debt ceiling related?

The two move on separate tracks, but are likely to get tangled together, with Republican opponents of a debt ceiling increase most likely demanding federal spending cuts. Some analysts say Congress may try to tackle both issues at the same time.

What are the politics?

Both the spending and debt ceiling bills can pass the Republican-led House of Representatives by a simple majority vote, but will need 60 votes to pass the Senate, where Republicans hold 52 of 100 seats, meaning they will need some Democratic support.

Trump made his U.S.-Mexico border wall a central promise of his 2016 presidential campaign. He also promised that Mexico would pay for the wall, but Mexico has steadfastly refused and Trump has largely stopped talking about that pledge.

Conservative House Republicans agree with the Republican president on the need for a wall and say funding for it should be a priority in any spending legislation. Some of them have already indicated they are willing to shut down the government to get it.

Moderate Republicans have called a shutdown unwise, and Republican leaders are determined to prevent one, fearing it would worsen doubts about the party’s ability to govern.

Democrats are uniformly opposed to Trump’s wall and say the responsibility for a shutdown would rest solely with Republicans.

The Trump administration reversed course earlier this month and said it would back a “clean” raising of the debt ceiling, meaning it would not be tied to other policy measures.

Democrats and moderate Republicans also support a clean debt-ceiling increase. But conservative Republicans, especially in the House, often use debt-ceiling legislation to insist on changes to spending, making them opposed to a clean bill.
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Just beyond the outskirts of Cairo on a desert road to the Suez Canal, a sprawling industrial zone is coming to life as Egypt’s leather industry leaves behind its ancient tanning quarters for modern workshops of Robiki Leather City.

The new complex is part of a major expansion drive of a sector Egypt considers as one of its most competitive. The trade ministry has set an official target for leather exports to reach over $1 billion a year in 2020, from about $200 million a year currently.

By mid-2018, Robiki should house the entire supply chain, from animal slaughtering to finished leather production, allowing global manufacturers to source materials and export final goods in a single location, said Mohamed El Gohary, chairman of a state firm marketing the site.

“The value added of our exports will increase five times when we reach the stage where we’re exporting final products like shoes and bags,” Gohary said.

Foreign investors can begin purchasing space in Robiki in 2018, and the zone has received strong interest from Italian companies, Gohary said.

Egyptian exports were given a boost when Egypt floated its pound currency last year as part of an International Monetary Fund loan program.

With projects like Robiki, Egypt hopes to pull back capital that fled after its 2011 political uprising. In the fiscal year ending in June, it netted $8.7 billion in foreign direct investment and is targeting above $10 billion this year.

Around 220 tanneries are being relocated to Robiki, said Mohamed Harby, head of a leather tanning industry group.

They are moving under the orders of the government, which is paying for the transfer of machinery, constructing subsidized housing for workers and facilitating low-interest loans for businesses looking to expand.

The tanners’ centuries-old home of Magra Al-Ayoon in Old Islamic Cairo, which runs along the city’s ancient aqueduct, will most likely be developed into a tourist site, though plans have yet to be finalized, said Omar Khorshid, a trade ministry adviser to the Robiki project.

There, workers dye animal hides in small, ramshackle buildings without infrastructure for absorbing hazardous waste byproducts.

“Egypt a long time ago was a leader in leather tanning, and for a period of time everyone wanted to expand, but there was just no space to,” Ahmed Al-Gabbas, managing director of Al-Rowad Tannery, said at his factory in Robiki.

Al-Rowad, one of the country’s three largest tanneries, will complete its relocation over the next month. Gabbas said the company was using the space to scale up and triple exports over the next year.
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White House adviser Jared Kushner and visiting U.S. officials were snubbed by the Foreign Ministry in Cairo on Wednesday in apparent protest over the Trump administration’s move to cut and delay aid to Egypt.

Egypt’s top diplomat, Sameh Shoukry, was to meet with the U.S. delegation headed by Kushner, but a modified version of the minister’s schedule showed the meeting had been called off, shortly after the Americans landed in Cairo.

US aid cuts

The protest came after the Trump administration on Tuesday cut nearly $100 million in military and economic aid to Egypt and delayed almost $200 million more in military financing, pending human rights improvements and action to ease harsh restrictions on civic and other non-governmental groups.

Egypt’s President Abdel-Fattah el-Sissi was still due to meet with the American delegation, which also includes Jason Greenblatt, U.S. envoy for international negotiations, and Dina Powell, deputy national security adviser, according to the presidency. That meeting was due later on Wednesday.

The Egyptian ministry said in a separate statement that Egypt regrets the U.S. decision to reduce the aid funds and considered it “a misjudgment of the nature of the strategic relations that binds the two countries over decades, and reflects the lack of understanding of the importance of supporting the stability and success of Egypt.”

The American delegation, headed by Kushner, who is also the son-in-law of President Donald Trump, stopped in Cairo as part of a Mideast tour to press Israeli-Palestinian peace efforts.

Egypt is among the top recipients of U.S. military and economic assistance. It receives $1.3 billion annually in aid, plus hundreds of millions in economic assistance.

Human rights issues

Egyptian authorities have clamped down on civil society, particularly human rights groups and other organizations that receive foreign funding. Such groups played a central role in the 2011 uprising that toppled longtime autocrat Hosni Mubarak, and pro-government media often present them as part of a conspiracy to undermine the state.

The authorities also arrested thousands of people in the months following the 2013 overthrow of President Mohammed Morsi, mainly his Islamist supporters but also a number of secular and liberal activists.

When Trump met with el-Sissi in the White House in April he made no mention of Egypt’s human rights record in the post-meeting statement, an omission that many took as a sign that the issue was not a priority for the administration. Yet, two months later, two senators from Trump’s Republican Party slammed as “draconian” a new Egyptian law that effectively bans the work of non-governmental organizations and urged that it be repealed.

The law has triggered wide international backlash and raised concerns over human rights conditions in Egypt. But Egypt has defended the law, saying it was drafted and passed in accordance with constitutional provisions.

El-Sissi is grappling with an insurgency by Islamic militants in the northern part of the Sinai Peninsula, an economy struggling to keep up with demands and employment needs of Egypt’s surging population, and a sustained campaign of violence against the country’s Christian minority.
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China has objected to new sanctions the United States imposed against a group of Chinese and Russian companies for allegedly supporting North Korea’s nuclear program.

Chinese Foreign Ministry spokeswoman Hua Chunying said at a news briefing that the sanctions are not helping U.S.-China cooperation on efforts to rein in North Korean nuclear activity.

She said the United States should “immediately correct its mistake,” and reiterated China’s calls for restraint and dialogue to resolve the situation with North Korea.

The U.S. Treasury Department announced the sanctions Tuesday, saying they were a complement to a U.N. Security Council resolution passed earlier this month that applied new sanctions against North Korea and condemned the country’s ballistic missile tests. China was among the countries that unanimously approved the resolution.

A U.S. Treasury statement listed 10 companies and six people, including Chinese coal, steel and financial firms.

“It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region,” said Treasury Secretary Steven Mnuchin. “We are taking actions consistent with U.N. sanctions to show that there are consequences for defying sanctions and providing support to North Korea, and to deter this activity in the future.”
…

South Korea’s top trade negotiator said Tuesday that Seoul will not discuss renegotiation of the free trade agreement with the U.S. without first looking into what is really causing the U.S. trade imbalance.

Speaking after a video conference with U.S. trade representative Robert Lighthizer, South Korean Trade Minister Kim Hyung-chong said Seoul proposed a joint study with Washington to evaluate the impact of the 5-year-old bilateral trade deal and the cause of the U.S. trade deficit.

“We did not agree to the unilateral proposal from the U.S. to amend the Korea-U.S. FTA,” Kim told reporters in a briefing after a talk with U.S. trade representatives. “We made our position clear that investigation, analysis and evaluation of the impact of the Korea-U.S. FTA must be preceded.”

​Two sides, two views

The two sides found they had different views on the impact of the free trade deal and could not reach any agreement during the talks, he added. Kim said Seoul will be waiting for Washington’s response to its proposal for the joint study.

The countries’ trade officials held their first talks in Seoul, in what Washington hoped would lead to discussing amendment or modification of the trade deal that took effect five years ago under President Barack Obama.

The U.S. trade official said discussions will continue.

“Unfortunately, too many American workers have not benefited from the agreement,” Lighthizer said in a statement posted on the USTR website. “President Trump is committed to substantial improvements in the Korean agreement that address the trade imbalance and ensure that the deal is fully implemented.”

Trade deal and trade deficit

The Trump administration criticized the pact with its ally, saying that the U.S. trade deficit with South Korea had doubled since the deal went into effect. The U.S. trade deficit with South Korea widened from $13.2 billion in 2011 to $27.6 billion last year.

But South Korea said the deal has been beneficial to both countries. The U.S. runs a trade surplus with South Korea in services such as banking and tourism, estimated at $10.7 billion in 2016. South Korea also believes that the FTA is not the cause of the U.S. trade imbalance, and that other, complex factors in the global economy are to blame.

The Trump administration is seeking to renegotiate the trade deal with South Korea as part of its broader efforts to reduce the U.S. trade deficit. It has begun an effort to renegotiate the North American Free Trade Agreement with Mexico and Canada.

South Korea is the sixth-largest trading partner for the U.S., while the U.S. is South Korea’s second-largest trading partner.
…

Violence surged in rural central Kenya earlier this year as armed northern herders brought thousands of cattle, sheep and goats onto private property, prompting clashes that took the lives of humans and wildlife.

As drought raged on, it did not help that some politicians encouraged constituents to graze their livestock wherever they could find grass and water.

Peter Hetz, executive director of the Laikipia Wildlife Forum, says that although the recent elections and change in government were peaceful, there are still unresolved issues.

“People are feeling optimistic and empowered by the power of the vote and the ability to vote out some of the people who were implied in the early politicization of this county and the maneuverings of armed people, and livestock. And I think people are generally feeling good,” said Hetz. “The fact remains that there are still people who have guns and there are still livestock that don’t belong here, roaming the territory and the government must still resolve to do something about that.”

According to Kenya’s Ministry of Interior spokesman, Mwenda Njoka, security operations in the central parts of the country are still ongoing.

“I could give assurance to both the locals and the foreigners who are in that area that at least security has returned to normal, has significantly normalized,” said Njoka.

Josh Perrett, manager of Laikipia’s Mugie Ranch, agrees that things have improved since earlier this year: the grass has returned, the wildlife look better, and poaching has dropped “significantly.”

Illegal grazing remains

But Perrett says the illegal grazing continues, citing several occasions since the end of July when his team has caught herds of roughly 400 cattle at a time on the property.

“Every day we have issues with cows coming in from somewhere. It’s just not to the scale or to the aggression that it was in January,” said Perrett.

The relative gains experienced in central Kenya have not reached the northern semi-arid rangelands, home of many of the pastoralists, according to Frank Pope, CEO of Save the Elephants.

He says that after many decades of sustained overgrazing and rising human populations, the top soil has now disappeared from many of the areas. And as a result, there is nowhere for the large numbers of goats and cattle to graze.

“And everyone is chasing the last grass. There’s been no good rain in the north. There have been some patches of rain, but really, there’s no let up for the situation in the north. And we’ll wait to see what the new government decides to do and whether they decide they can grasp this nettle of how to control grazing amongst the pastoralists. But if they don’t, I think the north will continue its march towards full desert conditions,” said Pope.

Experts have encouraged the government to implement long-term rangeland management practices in the north, and to explore options of tagging livestock, in order to keep track of who owns which animals.

 
…

McDonald’s India has announced it will close 169 McDonald’s outlets in northern and eastern India after the American fast food giant decided to terminate a franchise agreement with its Indian partner.

McDonald’s said its partner Connaught Plaza Restaurants violated the terms of the franchise agreement, including reneging on payment of royalties.

Connaught Plaza Restaurants, which runs 169 McDonald’s outlets in northern and eastern India, said Tuesday it is considering legal action in the long-drawn legal battle. In June, it shut 43 McDonald’s outlets in the capital, New Delhi, after it failed to renew their licenses.

McDonald’s said its Indian partner would have to “cease using the McDonald’s name, trademarks, designs, branding, operational and marketing practice and policies” within 15 days of the termination notice.

The decision to close nearly a third of the 430 McDonald’s outlets in India creates a challenge for the company, disrupting operations in the world’s second most populous country.

Vikram Bakshi, the managing director of Connaught Plaza Restaurants, described the McDonald’s decision as “mindless and ill-advised.”

“Appropriate legal remedies that are available under law are being explored,” Bakshi said in a statement.

McDonald’s said it is looking for a new partner to work with in north India. McDonald’s franchises in southern and western India are run by a separate company.

 
…

Hyundai Motor plans to launch a pickup truck in the United States as part of a broader plan to catch up with a shift away from sedans in one of the Korean automaker’s most important markets, a senior company executive told Reuters.

Michael J. O’Brien, vice president of corporate and product planning at Hyundai’s U.S. unit, told Reuters that Hyundai’s top management has given the green light for development of a pickup truck similar to a show vehicle called the Santa Cruz that U.S. Hyundai executives unveiled in 2015.

Hyundai currently does not offer a pickup truck in the United States.

O’Brien said Hyundai plans to launch a small SUV called the Kona in the United States later this year.

People familiar with the automaker’s plans said separately that Hyundai plans to launch three other new or refreshed SUVs by 2020.

So-called crossovers — sport utilities built on chassis similar to sedans — now account for about 30 percent of total light vehicle sales in the United States. Consumers in China, the world’s largest auto market, are also substituting car-based SUVs for sedans.

People familiar with Hyundai’s plans said the company plans to roll out a new version of its Santa Fe Sport mid-sized SUV next year, followed by an all-new 7-passegner crossover which will replace a current three-row Santa Fe in early 2019 in the United Sates. A redesigned Tucson SUV is expected in 2020, people familiar with Hyundai’s plans said.

Hyundai’s U.S. dealers have pushed the company to invest more aggressively in SUVs and trucks as demand for sedans such as the midsize Sonata and the smaller Elantra has waned.

“We are optimistic about the future,” Scott Fink, chief executive of Hyundai of New Port Richey, Florida, which is Hyundai’s biggest U.S. dealer, said. “But we are disappointed that we don’t have the products today.”

Hyundai’s U.S. sales are down nearly 11 percent this year through July 31, worse than the overall 2.9-percent decline in U.S. car and light truck sales. Sales of the Sonata, once a pillar of Hyundai’s U.S. franchise, have fallen 30 percent through the first seven months of 2017. In contrast, sales of Hyundai’s current SUV lineup are up 11 percent for the first seven months of this year.

“Our glasses are fairly clean,” O’Brien said. “We understand where we have a shortfall.”

 
…

Senate Majority Leader Mitch McConnell says there is “zero chance” Congress will allow the country to default on its debts by voting to not increase the borrowing limit.

McConnell’s comments came Monday during a joint appearance in his home state of Kentucky with U.S. Treasury Secretary Steven Mnuchin. It was one of McConnell’s first public appearances since President Donald Trump publicly criticized him for failing to pass a repeal and replacement of former President Barack Obama’s health care law.

McConnell did not mention Trump in his remarks, and he did not take questions from reporters after the event. But in response to a question about where he gets his news, McConnell said he reads a variety of sources, including The New York Times.

“My view is most news is not fake,” McConnell said, which appeared to be a subtle rebuke of one of Trump’s favorite phrases. “I try not to fall in love with any particular source.”

The government has enough money to pay its bills until Sept. 29. After that, Congress would have to give permission for the government to borrow more money to meet its obligations, including Social Security and interest payments.

McConnell sought to calm a crowd of nervous business leaders by interjecting at the end of Mnuchin’s answer to a question about what would happen if lawmakers did not increase the borrowing limit.

“Let me just add, there is zero chance, no chance, we won’t raise the debt ceiling,” McConnell said. “America is not going to default.”

Addressing the country’s borrowing limit will be the most pressing issue when lawmakers return to Washington following their August recess. After that, Republicans will likely turn their attention to overhauling the nation’s tax code.

McConnell said Congress is unlikely to repeal a pair of Obama-era laws most hated by conservatives. While negotiations about health care are ongoing, McConnell said the path forward is “somewhat murky.” And he said it would be “challenging” to lift the restrictions placed on banks following the 2008 financial crisis, known as “Dodd-Frank.”

On tax reform, McConnell said the only thing lawmakers won’t consider eliminating are deductions on mortgage interest and charitable deductions.
…

Wisconsin Assembly Democratic Leader Peter Barca was branded as failing “on all accounts” by a fellow Democrat who was “incredibly frustrated and concerned” with his actions after Barca joined Republicans in voting for a $3 billion tax incentive package for Foxconn Technology Group.

Emails obtained by The Associated Press show that Democratic state Rep. Lisa Subeck of Madison spelled out her grievances to Barca on Friday, the day after the Assembly passed the incentive package backed by Republicans designed to attract Foxconn to build a massive display panel factory in the state.

Barca was one of three Democrats to vote for the measure Thursday, with 28 Democrats against. Barca, of Kenosha, and the other Democrats who voted for it represent southeast Wisconsin, near where Foxconn plans to build a factory that could employ thousands. Reps. Cory Mason of Racine and Tod Ohnstad of Kenosha joined Barca and 56 Republicans in voting for the bill; two Republicans joined all other Democrats in opposition.

Most Democrats were outspoken in their opposition to the measure, branding it as a corporate welfare giveaway that also puts Wisconsin’s environment in jeopardy because of requirements that would be waived to speed construction of the plant that could open as soon as 2020.

Barca tried to walk a line, criticizing the process of quickly acting on the bill and saying that more improvements could be made to protect taxpayers, Wisconsin businesses and the environment. But ultimately he said he supported the incentive package because of the backing it has from people in his district.

Subeck, in an email sent to all Assembly Democrats obtained by the AP, accused Barca of failing “on all accounts” to differentiate his views on Foxconn with that of the rest of Democrats who voted against the measure. She was particularly upset with Barca for holding an impromptu news conference in the Assembly parlor, right around the corner from his office, shortly after the evening vote Thursday.

“I am also concerned that the message you conveyed,” Subeck wrote. “It seems you were trying to justify your own vote rather than share the caucus perspective consistent with our agreed upon message.”

She said that Barca’s public comments “have not been consistent with the majority position of the caucus and have served counter to our interest.”

Barca wrote in response that he hadn’t planned to have a news conference but after the Thursday vote “we had one outlet in particular that was very aggressive and several others that wanted to talk.” Barca said his staff asked the reporters to move to the nearby parlor, where he and Assistant Majority Leader Dianne Hesselbein of Middleton and Rep. Mark Spreitzer of Beloit answered questions.

Barca did not address her concerns about what he actually said.

Barca spokeswoman Olivia Hwang said in an email that it was known Democrats had different opinions on the Foxconn bill and he supports efforts to oppose legislation they believe is wrong for their district or the state.

Barca does not plan to testify at a public hearing Tuesday in Racine on the bill, she said. Subeck raised concerns in her email about Barca testifying at the hearing scheduled for near where the plant may locate.
…

Venezuelan President Nicolás Maduro says new measures will be rolled out this week to combat economic speculation in the crisis-ridden country.

In an interview distributed via state-run media Sunday, Maduro said he was working with a “special commission” of the new, pro-government Constituent Assembly to clamp down on price gouging.

The commission is “going to announce a set of actions so that the maximum price of the products is respected,” Maduro said, without providing details. He also warned that “very severe justice” would “shake the society.”

​Venezuelans constantly complain of scarcity of food, medicine and personal hygiene products — and of outrageous prices amid soaring inflation.

The currency has shriveled in value, down from eight bolivars to the dollar in 2010 to more than 8,000 bolivars last month, as CNN Money recently pointed out. A single-serve bottle of water can cost about 1,200 bolivars.

Maduro previously declared a war on speculation in 2013, according to the Washington Office on Latin America. 

Carlos Larrazabal, president of Fedecamaras, a union representing Venezuela’s business sector, accused the socialist administration of trying to smother private enterprise.

“The government has a political agenda. Instead of correcting problems of supply and production,” the Constituent Assembly has “deepened” Venezuela’s crisis, Larrazabal said in an interview Sunday with Caracas television station Televen.

The assembly declared on Friday that it would wrest legislative power from the opposition-led National Assembly, a move denounced by many in Venezuela and beyond. The United States does not recognize the Constituent Assembly as valid.

Larrazabal said Venezuela is suffering “the consequences of bad economic policy, with an exchange mechanism that is not transparent, which does not allow raw materials” into the country. He also complained of price controls.

The archbishop of Caracas, Jorge Urosa Savino, recently reiterated his call to the Maduro government to ease Venezuelans’ suffering. He said the Roman Catholic Church has repeatedly urged the opposition “to defend the rights of the Venezuelan people.”

This article originated with VOA’s Spanish service.

 
…

The port of Tripoli in northern Lebanon wants the world to know it’s ready for business.

British safety managers are training local hires to operate heavy machinery and Chinese technicians are running diagnostics on two new container cranes that tower over the harbor, just 28 kilometers (18 miles) from the Syrian border.

After six years of civil war in Syria, markets across the Middle East are anticipating a mammoth reconstruction boom that could stimulate billions of dollars in economic activity. Lebanon, as Syria’s neighbor, is in prime position to capture a share of that windfall and revive its own sluggish economy.

Battles still rage in Syria’s north and east, and in pockets around the capital, Damascus, but the survival of President Bashar Assad’s government now appears beyond doubt.

That is introducing an element of stability into forecasts not seen since 2011, when the war broke out. The Damascus International Fair, a high-profile annual business event before the war, opened on Thursday evening for the first time since war broke out. The 10-day event kicked off with much fanfare, with participants from 43 countries and hundreds of attendees.

The World Bank estimates the cost to rebuild Syria at $200 billion.

For Lebanon, that could be just the stimulus it needs — the tiny Mediterranean country’s growth rate has hovered around 1.5 percent since 2013. And though the capital, Beirut, has grown visibly richer over the years, Tripoli and the impoverished north have lagged behind.

“Lebanon is in front of an opportunity that it needs to take very seriously,” said Raya al-Hassan, a former finance minister from northern Lebanon who now directs the Tripoli Special Economic Zone project that’s planned to be built adjacent to the port.

Ahmad Tamer, the port manager, estimates Syria’s reconstruction will create a demand for 30 million tons of cargo capacity annually.

Syria’s chief ports, Tartous and Latakia, also on the Mediterranean Sea, have a combined capacity of 10 to 15 million tons, he says. He wants Tripoli port to be ready to step in for a portion of the rest.

“We could provide up to 5 or 6 or 7 million tons,” he says.

The port is nearing the completion of the first phase of an expansion project first drawn up in 2009, then revised with an eye on Syria in 2016. Capital investment has reached around $400 million, according to the port manager.

On a map, Tamer pointed to a vacant quadrant where preparations are underway to build silos to hold grain destined for regional markets.

Syria’s conflict has decimated its food production, which included an average of 4.1 million tons of wheat annually before the war, according to the U.N.’s Food and Agriculture Organization.

In 2017, it managed to produce just 1.8 million tons.

Lebanon’s businessmen and politicians have always maintained close relations with Syrian counterparts. Syria is among Lebanon’s largest trade partners, and arguably its most reliable supplier of cheap labor. Lebanon, in exchange, is the banker to many of Syria’s enterprises and its wealthy elites.

These ties give Lebanon — and Tripoli in particular — an edge over competitors vying for the Syrian market.

The city’s location is also attracting foreign investment. Tripoli port signed a 25-year lease with the Emirati port operator Gulftainer in 2013, to manage and invest in the terminal.

“Our aim was to invest here in anticipation of Syria’s reconstruction,” said Ibrahim Hermes, the CEO of Lebanon’s subsidiary of Gulftainer.

Lebanon is now a fixture on itineraries of prospective investors. Hermes said he has seen delegations arriving from Europe, Asia and especially China, to scope out trade opportunities.

Before the war in Syria, goods coming through Lebanon’s ports used to transit as far afield as Iraq — saving ships from having to take the sea journey through the Suez Canal and around the Arabian Peninsula.

There is talk now that Tripoli could even be a terminal in China’s trillion-dollar new “Silk Road” project, carving a trade route from east Asia to Europe.

The Chinese firm Qingdao Haixi Heavy-Duty Machinery Co. sold the two 28-story container cranes now at the port. Safety signs inside the structures are posted in English and Mandarin.

“Tripoli can be a main transshipment hub for the eastern Mediterranean,” said Ira Hare, a sunburned British manager working for Gulftainer.

Lebanon has officially sought “dissociation” from the Syrian war so as not to fuel rancor among political parties split between those aligned with Damascus and those against it.

But there is also an air of inevitability about the re-normalization of relations, as Assad looks, for the short-term at least, to stay on in power.

Syria’s chief champion in Lebanon, the militant Hezbollah group, which is fighting alongside Assad’s forces, evinces little doubt.

“Our national interest is for the border between Lebanon and Syria to be open … because, tomorrow the routes will open to Iraq and to Jordan and we want to be able to transport Lebanese goods,” Hezbollah’s leader, Hassan Nasrallah, said in a speech this week.

A Hezbollah minister, Hussein Hajj Hussein, is one of two Cabinet ministers headed to Syria this week in a highly controversial visit, the first since the start of the war. Prime Minister Saad Hariri, an Assad critic, said the visit did not have government backing.

Damascus also knows it will be brought back in from the cold.

The Damascus International Fair, which promises to attract investors from Russia, China, Iran, and other places, is a telling indicator of the mood in the Syrian capital.

Europe and the United States are hesitant to finance the reconstruction projects so long as Assad, a pariah to the West, remains in power. But Russia, China, and Iran, as well as investors in Lebanon and the Middle East, are showing no signs of hesitation.

“As soon as there is a political agreement to end the war, we will be among the first countries to play a role in reconstruction,” said al-Hassan, the former finance minister.
…

The United States, Canada and Mexico wrapped up their first round of talks on Sunday to revamp the NAFTA trade pact, vowing to keep up a blistering pace of negotiations that some involved in the process said may be too fast to bridge deep differences.

In a joint statement issued at the end of five days of negotiations in Washington, the top trade officials from the three countries said Mexico would host the next round of talks from Sept. 1 to 5.

The talks will move to Canada later in September, then return to the United States in October, with additional rounds planned for later this year, U.S. Trade Representative Robert Lighthizer, Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland said.

“While a great deal of effort and negotiation will be required in the coming months, Canada, Mexico and the United States are committed to an accelerated and comprehensive negotiation process that will upgrade our agreement,” the officials said.

One person directly involved in the talks described the schedule as exceedingly fast, given that past trade deals took years to negotiate.

The three countries are trying to complete a full modernization of the 23-year-old North American Free Trade Agreement by early 2018, before Mexico’s national election campaign starts.

U.S. President Donald Trump has threatened to scrap NAFTA without major changes to reduce U.S. goods trade deficits with its North American neighbors, describing it as a disaster that cost Americans hundreds of thousands of manufacturing jobs.

The joint statement said the three countries made “detailed conceptual presentations” across the scope of NAFTA issues and began work to negotiate some of the agreement’s texts, although it did not provide details on the topics.

Negotiating teams “agreed to provide additional text, comments or alternate proposals during the next two weeks,” ahead of the Mexico round.

Not All Cards on the Table

The source involved in the talks, who was not authorized to speak publicly, said there had been no drama as the three countries exchanged proposals.

Not all cards were put on the table, the source added, saying that during four four-hour sessions on rules of origin, the United States did not reveal its proposed targets for boosting North American and U.S. content for the automotive sector.

Lighthizer had made clear that strengthening rules of origin was one of his top priorities.

“The instructions that the groups received are clear: Work and work fast,” said a second person participating in the talks.

“This is not a negotiation like others we’ve been in. “We will not sacrifice the substance of a negotiation to meet a schedule,” added the source, who was not authorized to speak publicly about the talks. Trade experts have consistently said that the schedule is

far too ambitious, given the amount of work and differences on key issues.

“It’s hard to imagine how they can do something very substantive and do it very quickly. It’s almost as if you can have one or the other. You can have it quick, or you can have it meaningful,” said John Masswohl, director of government relations at the Canadian Cattlemen’s Association.
…

Add next week’s total eclipse of the sun to the list of worker distractions that cost U.S. companies hundreds of millions of dollars in lost productivity.

American employers will see at least $694 million in missing output for the roughly 20 minutes that outplacement firm Challenger, Gray & Christmas estimates workers will take out of their workday on Monday, Aug. 21 to stretch their legs, head outside the office and gaze at the nearly two-and-a-half minute eclipse.

And 20 minutes is a conservative estimate, said Andy Challenger, vice president at the Chicago-based firm. Many people may take even longer to set up their telescopes or special viewing glasses, or simply take off for the day.

“There’s very few people who are not going to walk outside when there’s a celestial wonder happening above their heads to go out and view it,” Challenger said, estimating that 87 million employees will be at work during the eclipse.

To get the overall figure of nearly $700 million, Challenger multiplied that by the Bureau of Labor Statistics’ latest estimate for average hourly wages for all workers 16 and over.

Just as the Earth is a mere speck in the universe, however, Challenger said this is still a small sum.

“Compared to the amount of wages being paid to an employee over a course of a year, it is very small,” Challenger said. “It’s not going to show up in any type of macroeconomic data.”

It also pales when compared with the myriad other distractions in the modern workplace, such as the U.S. college basketball championship known as March Madness, the recent U.S. shopping phenomenon called Cyber Monday and the Monday after the Super Bowl.

During the opening week of March Madness, the firm estimated employers experienced $615 million per hour in lost productivity as people watched games and highlights, set up pool brackets and avidly tracked their standings rather than performed actual work.

The Monday after the Super Bowl, meanwhile, resulted in an estimated $290 million in lost output for every 10 minutes of the workday spent by workers discussing the game or watching game highlights and re-runs of their favorite Super Bowl commercials.

And Cyber Monday on the heels of the U.S. Thanksgiving holiday at the start of the annual holiday shopping season resulted in $450 million in lost productivity for every 14 minutes spent shopping, not working.

Events like this are likely to have an outsized effect on smaller companies, Challenger said. When their workers are absent, small firms may not have sufficient coverage from coworkers, especially in the current tight labor market where it is hard to find skilled workers.

“When three or four people are missing from an office of 15, it’s a lot more disruptive,” Challenger said.

EVENT AMOUNT IN LOST PRODUCTIVITY

Total Eclipse:   $694 million for the 20 minutes it takes to go outside and watch the eclipse

Cyber Monday:   $450 million for every 14 minutes spent

shopping

March Madness:   $615 million for each hour spent on March Madness activities

Super Bowl:   $290 million for every 10 minutes lost

discussing the game

Fantasy Football:   $990 million for each hour of work time

spent on Fantasy Football

 
…

Sometimes, it just doesn’t pay to manufacture in the United States. Labor and land are expensive. It is why most consumer products sold here come from overseas. But a multinational electric guitar manufacturer still produces one-third of its instruments near where it started decades ago. Arash Arabasadi names that tune from Maryland.
…

Danelle Johnson started designing her own clothes when she was a teenager. Not just because sewing was her hobby. She wanted to stand out among her classmates with a personal, distinctive look. Johnson’s vision of fashion motivated her to start her own design company … on wheels. As Faiza Elmasry reports, the fashion entrepreneur attracts customers who prefer her rolling retail boutique to big malls and online shopping. Faith Lapidus narrates.
…

Hansaben Rasid knows what it is like to live without a water tap or a toilet of her own, constantly fearful of being evicted by city officials keen on tearing down illegal settlements like hers in the western Indian city of Ahmedabad.

The fear and lack of amenities are but a memory today, after she became a community leader in the Jadibanagar slum and pushed residents to apply for a program that gave them facilities and a guarantee of no evictions for 10 years.

“We didn’t even have a water tap here — we had to fetch water from the colony near by, and so much time went in just doing that. People kept falling sick because there was just one toilet,” she said.

“Now that we have individual water taps and toilets, we can focus on work and the children’s education. Everyone’s health has improved, and we don’t need to be afraid of getting evicted any day,” she said, seated outside her home.

Jadibanagar, with 108 homes, is one of more than 50 slums in Ahmedabad that have been upgraded by Parivartan — meaning “change” — a program that involves city officials, slum dwellers, a developer and a nonprofit organization.

Every household pays 2,000 rupees ($31) and in return, each home gets a water tap, a toilet, a sewage line and a stormwater drain. The slum gets street lights, paved lanes and regular garbage collection.

Each home also pays 80 rupees as an annual maintenance fee, and the city commits to not evicting residents for 10 years.

Negotiation skills

A crucial part of the program is the involvement of a woman leader who brings residents on board, deals with city officials and oversees the upgrade.

Nonprofit Mahila Housing Trust has trained women residents to be community leaders in a dozen cities in the country, including more than 60 in Ahmedabad.

“Women are responsible for the basic needs of the family, and most also work at home while the husband works outside, so the lack of a water tap or a toilet affects them more,” said Bharati Bhonsale, program manager at Mahila Housing Trust.

“Yet they traditionally have had little influence over policy decisions and local governance. We train them in civic education, build their communication and negotiation skills, and teach them to be leaders of the community,” she said.

About 65 million people live in India’s slums, according to official data, which activists say is a low estimate.

That number is rising quickly as tens of thousands of migrants leave their villages to seek better prospects in urban areas. Many end up in overcrowded slums, lacking even basic facilities and with no claim on the land or their property.

Yet slum dwellers have long opposed efforts to relocate them to distant suburbs, which limits their access to jobs. Instead, they favor upgrading of their slums or redevelopment.

Earlier this month, officials in the eastern state of Odisha said they would give land rights to slum dwellers in small towns and property rights to those in city settlements in a “historic” step that will benefit tens of thousands.

In Gujarat state, as Jadibanagar is on private land, it is not eligible for the city’s redevelopment plan.

“These homes are all illegal, but that doesn’t mean the people cannot live decently,” said Bhonsale.

“With redevelopment, there is demolition and a move, and that can take longer to convince people of, with the men usually making the decision. But with an upgrade, the women make the decision very quickly by themselves,” she said.

Bottom up

Elsewhere, in Delhi’s Savda Ghevra slum resettlement colony where about 30,000 people live, nonprofit Marg taught women residents to demand their legal right to water, sanitation and transport.

A group of women then filed Right to Information petitions, to improve their access to drinking water, buses and sanitation.

“The women bear the brunt of not having these amenities, and are therefore most motivated to do something about the situation,” said Anju Talukdar, director of Marg.

“The leaders are the ones who show up for meetings, are engaged and keen to learn how to use the law to improve their lives,” she told the Thomson Reuters Foundation.

Contrary to perceptions that slums are run by petty criminals who resist efforts to redevelop or upgrade, women leaders in Jadibanagar and Savda Ghevra are actively engaged in bettering everyone’s lives.

Leaders often emerge from a bottom-up process, with reputations for getting things done — in particular, resisting evictions and securing basic services, according to research by Adam Auerbach at the American University and Tariq Thachil at Vanderbilt University.

“They are themselves ordinary residents, living with their families and facing the same vulnerabilities and risks as their neighbors; they, too, want paved roads, clean drinking water, proper sanitation and schools for their children,” they said.

Women leaders, while still a minority, are “rarely token figures” serving male heads of households, and are “just as active, assertive and locally authoritative as their male counterparts,” they said in an email.

Rasid in Jadibanagar, whose two sons and their families live in homes alongside hers, is certain her leadership helped residents improve their homes and their lives.

“Everyone wants security and nicer homes, and they are willing to pay. Someone just has to get it done,” she said.

“I am illiterate, I cannot read, but I know now how to talk to officials and the developer and tell them what we want, and make sure they deliver,” she said.
…

How does a former stay-at-home mom become an employee of a tech company that could be worth more than $1 billion?

For Ellein Cheng, mom to a 5½- and a 2½-year-old, the answer involved a “returnship.”

So-called returnships are internships that target men and women who have been out of the workforce, either for childrearing or other caregiving. It gives them a chance to retrain in a new field.

In Cheng’s case, the former math teacher and tutor took a returnship at AppNexus, an online advertising company.

For companies, returnships are an opportunity to tap into more mature and professionally diverse talent pools. For participants who may be out of the workforce, it’s a chance to refresh their networks, learn new skills and try on new roles.

Beneficial arrangement

For both parties, it’s a low-risk, low-commitment arrangement. Companies can achieve their goals to make the employee ranks more diverse. Job seekers can potentially find full-time work.

Cheng’s returnship was set up by Path Forward, a New York-based nonprofit that works with tech companies to coordinate 16-week, paid assignments for those who have been away from the labor market for two or more years because of caregiving.

The organization partners with tech companies that range in size from 30-person startups to behemoths such as PayPal, which has more than 10,000 employees.

“What these companies of every size in the tech sector have in common is rapid growth, and also not enough talent to fulfill their needs,” said Tami Forman, executive director at Path Forward.

Women re-entering the workforce often struggle to explain the gap in their resume and find employment harder to come by, Forman said.

“They often get feedback from companies and recruiters and hiring managers that makes them believe that they’ll never be hired, that no one will ever overlook their gap,” she said. The organization says it gets results — 40 out of the 50 women who have gone through the program were offered ongoing employment at the companies in which they interned.

Teaching background

In her job search, Cheng applied for teaching positions but was also open to other fields. The product support work struck a chord with her in its appeal for candidates “passionate about learning and teaching.”

The program gave both managers and participants the chance to see if a long-term opportunity would be the right fit for them.

It also provided a dose of inspiration.

Other employees were “inspired to see people stepping out of their comfort zone, taking a big risk, working on something they haven’t done before,” Lorraine Buhannic, senior director of talent acquisition at AppNexus, said.

For Cheng, the inspiration came from a more personal place — her daughters.

They are growing up “in a world that is changing so quickly with technology, and I just want to be part of that,” she said. “I want to grow with them, I want to learn with them.”

In the end, the match worked. After the returnship, AppNexus hired Cheng as a product support specialist.

Now working in the fast-paced world of online advertising, Cheng says she doesn’t feel she has left her old self behind.

“I’m still obviously learning a lot, because I’m switching careers completely, but at the same time, still bringing the teaching element part of it every day to work,” she said.
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Steps away from this week’s NAFTA trade negotiations, business unified in hopes of sending a singular message: do no harm.

Representatives from the United States, Canada and Mexico convened behind closed doors at a Washington hotel in an effort to strike a new North American Free Trade Agreement. And not far away, industry representatives from all three nations sat waiting and hoping to influence the talks.

After two days of meetings, lobbyists admitted privately that they remained mostly in the dark, swapping rumors about dates and times of future meetings but unsure what progress was being made in the first round of discussions. The meetings were largely expected to be procedural, with little discussion on substance in the early days.

The decision to renegotiate NAFTA has largely been driven by politics, chiefly U.S. President Donald Trump, who earlier this year threatened to withdraw entirely.

Business, on the other hand, has largely praised the agreement and hopes to persuade all three governments to make minimal changes to the pact.

More than $1 trillion in trade

U.S.-Canada-Mexico trade has quadrupled since NAFTA took effect in 1994, surpassing $1 trillion in 2015.

“We’re all in the same boat,” said Flavio Volpe, president of the Canada’s Automotive Parts Manufacturers’ Association. “In the end we all serve primarily the U.S. consumer. So if you’re going to raise the cost structure, or if you’re going to change the dynamic flow of goods or people in those three countries, you’re really hurting the cost to market for the U.S. customer.”

The U.S. had an autos and auto parts trade deficit of $74 billion with Mexico last year, without which, there would have been a U.S. trade surplus

The United States had a much smaller $5.6 billion automotive trade deficit with Canada last year, but autos was the still a major component of an $11.8 billion overall U.S. goods trade deficit with Canada last year. But including services trade, the United States ran an overall surplus with Canada.

Volpe’s counterparts from the United States and Mexico were also on hand, with hopes of presenting a united front not to see a disruption to the auto industry.

Matt Blunt, president of the American Automotive Policy Council, which represents General Motors, Ford and Fiat Chrysler Automobiles, stopped by the talks hotel to chat with negotiators, answer questions and “glean information” about U.S. negotiating objectives.

However, he said insights into the talks were hard to come by, as negotiating teams had not yet revealed details of their proposals to each other.

“There are a lot of poker-faces around here,” he said.

Lobbyists always nearby

He wasn’t the only American lobbyist floating in and out of the hotel. Some held lunch meetings in the hotel restaurants and then returned to their downtown offices. From mining, to textiles to dairy farmers, various groups held sideline meetings.

About 100 business representatives from Mexican companies waited in a meeting room to see if there were any questions negotiators might have for them. And Canadian industry groups mostly worked on their own.

For the most part, the business groups presented a united front.

Juan Pablo Castanon, president of the Mexican business group Consejo Coordinador Empresarial, said his group has been working with the U.S. Chamber of Commerce for three years. After the November U.S. elections, they began working to tout the benefits of NAFTA.

“The level of contact and communication is intense and one of collaboration,” Castanon said.

The U.S. Chamber of Commerce, the largest business lobby in Washington that represents companies big and small across the country, confirmed they plan to attend all the sessions, where they expect to hold sideline meetings with other business groups and government officials. The Chamber may also hold sideline events or briefings during future discussions.

Even industry groups who weren’t in agreement with their North American counterparts found other stakeholders to discuss common ground.

The Canadian Dairy Farmers are at odds with their American counterparts, but still found a chance to talk, said the Canadian group’s spokeswoman Isabelle Bouchard.

“To have discussions with counterparts within our own industry and even different industries who are in similar situations than us, it’s important, and we have seen though past trade negotiations how important it is,” Bouchard said.

 
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Auto industry groups from Canada, Mexico and the United States are pushing back against the Trump administration’s demand for higher U.S. automotive content in a modernized North American Free Trade Agreement.

At talks underway this week in Washington, automaker and parts groups from all three countries were urging negotiators against tighter rules of origin, said Eduardo Solis, president of the Mexican Automotive Industry Association.

But U.S. Trade Representative Robert Lighthizer confirmed the industry’s fears that the administration of President Donald Trump was seeking major changes to these rules to try to reduce the U.S. trade deficit with Mexico.

“Rules of origin, particularly on autos and auto parts, must require higher NAFTA content and substantial U.S. content. Country of origin should be verified, not ‘deemed,’” Lighthizer said on Wednesday in opening remarks.

Fiat Chrysler, Ford, GM represented

Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland both said they were not in favor of specific national rules of origin within NAFTA — a position that the industry agrees with.

“We certainly think a U.S.-specific requirement would greatly complicate the ability of companies, particularly small- and medium-size enterprises, to take advantage of the benefits of NAFTA,” said Matt Blunt, president of the American Automotive Policy Council.

The trade group represents Detroit automakers General Motors, Ford, and Fiat Chrysler.

His comments were echoed by Flavio Volpe, president of Canada’s Automotive Parts Manufacturers Association.

“Anytime you say this list or a part of this list has to come from one specific country you’re going to hurt all three countries,” he said.

Deficits can’t continue to grow

The United States had an autos and auto parts trade deficits of $74 billion with Mexico and $5.6 billion with Canada, both major components of overall U.S. goods trade deficits with its North American neighbors — deficits that Lighthizer said could no longer continue.

Lighthizer’s mention of tightening verification requirements is a reference to expanding the parts tracing list, which is used to determine whether companies meet the 62.5 percent North American content requirement for autos and 60 percent for components.

Devised in the early 1990s, the tracing list covers almost none of the sophisticated electronics found in today’s cars and trucks, most of which come from Asia. Putting these on the tracing list could force suppliers to source these components from North America or pay tariffs on them.

Software content a new issue

Volpe said any changes to this must also capture the North American system design work and software content for these components that is not currently included.

“A car today probably has 25 to 30 percent advanced electronics, software content in it. In 1994, it had zero or 1 percent,” Volpe said. “Could you address the tracing to help you get to NAFTA compliance level by capturing some of the work that’s being done in Silicon Valley or Waterloo, Canada? Yes.”

John Bozzella CEO of the Association of Global Automakers, which represents international-brand carmakers, said NAFTA has allowed a major expansion of auto exports, with more than 1 million more vehicles built annually in the United States than in 1993.

“Negotiators should be mindful of this success as they work to modernize the agreement,” Bozzella said, whose organization represents international brand carmakers with U.S. plants, including Toyota, Honda and BMW.

 
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U.S. Vice President Mike Pence said on Thursday that Washington wants more trade and investment with Latin America, pushing back against perceptions in the region that the Trump administration has an isolationist agenda.

Speaking during a visit to the Panama Canal at the end of a Latin American tour, Pence said the United States was seeking to keep the spirit of the original North American Free Trade Agreement (NAFTA) in the pact now being renegotiated in Washington.

Pence said he wanted a NAFTA deal that was a “win, win, win” for the United States, Mexico and Canada, taking a more conciliatory tone than U.S. negotiators who have warned the deal needed a major overhaul to favor U.S. workers.

Pence later reiterated the United States’ concerns about the tense political situation in Venezuela, but took a more measured approach than U.S. President Donald Trump.

Last week, Trump said the United States had “many options for Venezuela including a possible military option if necessary.”

Pence said on Thursday that Venezuela was becoming a dictatorship and that the United States would not stand by while it was destroyed.

He said he was sure the United States, with its allies in Latin America, would find a peaceful solution to the situation in Venezuela.

Panama’s President Juan Carlos Varela voiced concern over Venezuela and said that Panama would in the coming days announce measures against it, including immigration actions, to pressure Caracas into restoring democratic order.
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