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Solar Boom or Bust? Companies Seek Tariffs on Solar Imports

Cheap solar panels imported from China and other countries have led to a boom in the U.S. solar industry, where rooftop and other installations have surged 10-fold since 2011.

But two U.S. solar manufacturers say the flood of imports has led one to bankruptcy and forced the other to lay off three-quarters of its workforce.

The International Trade Commission is set to decide Friday whether the imports, primarily from Asia, are causing “serious injury” to the companies. If so, the commission will recommend this fall whether the Trump administration should impose tariffs that could double the price of solar panels from abroad.

President Donald Trump has not cozied up to the solar industry, as he has for coal and other fossil fuels, but he is considered sympathetic to imposing tariffs on solar imports as part of his “America first” philosophy. A White House spokeswoman declined to comment Thursday.

Both sides of the dispute were making their case ahead of Friday’s meeting.

“Simply put, the U.S. industry cannot survive under current market conditions,” a lawyer for Georgia-based Suniva Inc. wrote in a petition filed with the commission. Suniva brought the case with Oregon-based SolarWorld Americas.

Opposition to tariffs

Governors of four solar-friendly states — Nevada, Colorado, Massachusetts and North Carolina — oppose the tariff, warning it could jeopardize the industry. They cited a study showing that a global tariff could cause solar installations to drop by more than 50 percent in two years, a crushing blow as states push for renewable energy that does not contribute to climate change.

“The requested tariff could inflict a devastating blow on our states’ solar industries and lead to unprecedented job loss, at steep cost to our states’ economies,” the two Republicans and two Democrats wrote in a letter Thursday to the trade commission.

A group of former U.S. military officials also urged the Trump administration to reject solar tariffs, noting that the Defense Department is the nation’s largest energy consumer and follows a federal law calling for the Pentagon to procure 25 percent of its energy from renewable sources by 2025.

Suniva called the case a matter of fairness. Even with better manufacturing methods, lower costs and “dramatically improved efficiency,” the company has “suffered substantial losses due to global imports,” Suniva said in its petition. The company declared bankruptcy this spring after laying off 190 employees and closing production sites in Georgia and Michigan.

SolarWorld Americas, meanwhile, has trimmed its workforce from 1,300 to 300, with more cuts likely.

“After nearly 30 factories have shut down in the wake of surging imports, the legacy of this pioneering American industry hangs in the balance,” said Juergen Stein, CEO and president of SolarWorld Americas.

“We believe that the promise of solar — energy sustainability and independence — can be realized only with healthy American manufacturing to supply growing U.S. demand,” Stein said in a statement to The Associated Press.

Trade group speaks out

In a twist, the main trade group for the solar industry opposes tariffs and calls the trade case “an existential threat” to the industry.

“The stakes are exceedingly high. We are talking about 88,000 people in this country who could lose their jobs if these tariffs are put in place,” said Abigail Ross Hopper, president of the Solar Energy Industries Association, which represents an array of solar companies.

A global tariff could cause a sharp price hike that could force the U.S. to lose out on solar installations capable of powering more than 9 million homes over the next five years — more than has been installed to date, Hopper said. States could lose out on billions of dollars of infrastructure investment, she added.

Suniva and SolarWorld have themselves to blame for their struggles — not pressure from overseas, Hopper said.

“Here is the real story of this case: We have two foreign-owned, poorly managed companies using U.S. trade laws to put U.S. manufacturers out of business and causing U.S. employees to lose their jobs,” she said.

Indeed, while Suniva’s U.S. operations are based in Georgia, the company’s majority owner is in China. SolarWorld Americas is a subsidiary of German solar giant SolarWorld, which declared insolvency last month.

If an injury finding is made, the trade commission would have until mid-November to recommend a remedy to the president, with a final decision on tariffs expected in January.

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Mercedes-Benz to Invest $1 Billion in US Electric Car Plant 

German carmaker Mercedes-Benz has announced plans to invest $1 billion to start making electric vehicles at its manufacturing plant in the southern U.S. state of Alabama.

The luxury automaker said it will manufacture electric SUVs under Mercedes’ EQ subbrand at the plant in Tuscaloosa, Alabama in just more than three years. The expansion is expected to create 600 jobs.

Daimler-Benz, which has more than 30 plants worldwide, said the Tuscaloosa plant will become the first in the U.S. to produce electric vehicles, and only the sixth in the world to do so.

Construction is to begin next year on the 92,900-square-meter facility. Daimler also said it will build a new global logistics center and aftersales North American hub in Bibb County, Alabama, about 8 kilometers from the Tuscaloosa plant.

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Next Round of NAFTA Talks Take on Thornier Issues

The United States will present new proposals and begin to weigh into thornier issues of the North American Free Trade Agreement in the third round of negotiations starting in Ottawa Saturday, U.S. chief negotiator John Melle said Thursday.

The stepped-up negotiations come with four more rounds of talks left after Ottawa and a self-imposed year-end deadline to finish the talks before Mexico launches campaigning for its July presidential election.

“With progress made in several issue areas in the first two NAFTA negotiation rounds, USTR (United States Trade Representative) looks to move forward with additional new text proposals in round three of the negotiations,” Melle said in comments emailed to Reuters.

“At this point in the negotiations, more challenging issues will start taking center stage,” he added, without elaborating.

Third round

The first two rounds of talks between the United States, Canada and Mexico focused on consolidating language on chapters covering small- and medium-sized enterprises, competitiveness, digital trade, services and the environment.

Now, negotiators will begin to weigh into more contentious issues such as rules of origin — how much of a product’s components must originate from within North America — labor standards aimed at increasing Mexican wages and mechanisms for resolving trade and investment disputes.

In its negotiating strategy for revising NAFTA ahead of the start of the talks in July, the United States said it would emphasize reducing the U.S. trade deficit as a priority.

It also said it wanted to eliminate an arbitration system for resolving trade disputes, known as Chapter 19, that has largely prohibited the United States from pursuing anti-dumping and anti-subsidy cases against Canadian and Mexican firms.

Canada has suggested it will walk away from the talks if Chapter 19 is tossed aside.

Dispute resolution, sunset clause

Politico reported Thursday that the United States was considering dropping a binding mechanism in NAFTA for resolving government-to-government disputes in favor of an advisory system.

The proposal would be a major shift away from a decades-old push by the United States to build an international system of enforceable trade rules, Politico reported.

Canada and Mexico have dismissed a proposal by the Trump administration to add a five-year sunset provision to NAFTA.

U.S. Commerce Secretary Wilbur Ross said last week such a provision was needed because forecasts for U.S. export and job growth when NAFTA took effect in 1994 were “wildly optimistic” and failed to live up to expectations.

Mexico’s Foreign Minister Luis Videgaray told Reuters Sept. 15 that the sunset clause was unnecessary because the pact’s members can trigger a renegotiation or leave it at any time.

Since U.S. President Donald Trump has repeatedly attacked NAFTA and threatened to tear up the agreement, Mexico has pushed to secure more access to the European Union, Brazil, Israel, Singapore, Australia and New Zealand.

Polls show support for NAFTA

A Reuters poll of economists Thursday found that Mexico and Canada will survive current talks with the United States on trade relatively unscathed.

Meanwhile, a separate poll by IPSOS published Thursday showed broad-based support among Americans, Canadians and Mexicans for NAFTA.

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Rohingya Crisis Dents Myanmar Hopes of Western Investment Boom

When officials from Myanmar’s commercial capital Yangon toured six European countries in June, they were hoping to drum up investment in transport, energy and education.

Instead, they were bombarded with questions about the country’s treatment of the Rohingya Muslim minority, who have long complained of persecution by the Buddhist majority in the oil-rich, ethnically divided, western state of Rakhine.

“In each of every country, that issue was always brought up,” Hlaing Maw Oo, secretary of Yangon City Development Committee, told Reuters after the 16-day trip.

The situation in Rakhine has worsened dramatically since then, with more than 400,000 Rohingya fleeing to Bangladesh to escape a military counterinsurgency offensive the United Nations has described as “ethnic cleansing.”

Western trade and investment in Myanmar is small, but there were hopes that a series of reforms this year would pry open an economy stunted by international sanctions and decades of mismanagement under military rule.

With most sanctions now lifted, an expected flood of Western money was seen as a key dividend from the transition to civilian rule under Nobel laureate Aung San Suu Kyi. Regional diplomats saw it balancing China’s growing influence over its neighbor.

But Aung San Suu Kyi has been beset by international criticism for saying little about human rights abuses against the Rohingya, and lawyers, consultants and lobbyists say the European and U.S. companies that had been circling are now wary of the reputational risks of investing in the country.

Louis Yeung, managing principal of Yangon-based investment firm Faircap Partners, said one of his business partners — a listed, U.S.-based food and beverage company — decided to hold off its plan to enter the Myanmar market for three to five years, citing factors including slower-than-expected reforms and the Rohingya crisis.

“Their conclusion is that it wasn’t the right time for them,” he said. “They want to see more traction from the government and Rakhine is not helpful.”

On hold

The pressure has been growing in recent months, even on existing investors, with rights group AFD International calling on foreign firms to stop investing in Myanmar.

A small group of investors in U.S. oil major Chevron filed an unsuccessful motion at its annual general meeting urging it to pull out of its production-sharing contract with a state-run firm to explore for oil and gas, while Norwegian telecoms firm Telenor, which runs a mobile network in Myanmar, issued a statement calling for human rights protection.

Chevron declined to comment on its investment in Myanmar, while Telenor did not respond to several requests for comment.

Bernd Lange, chair of the European Parliament Committee on International Trade, said last week his delegation postponed a visit to Myanmar indefinitely, saying the human rights situation “does not allow a fruitful discussion on a potential EU-Myanmar investment agreement.”

Khin Aung Tun, vice chairman of the Myanmar Tourism Federation, told Reuters that global firms planning to hold conferences in Myanmar were now considering other locations.

“People were just starting to see Myanmar as a ‘good news’ story,” said Dane Chamorro, head of South East Asia at Control Risks, a global risk consultancy.

“Now you can imagine a boardroom in which someone mentions Myanmar and someone else says ‘hold on, I’ve just seen something on Myanmar on TV: villages burned down, refugees, etc.'”

In an interview published in Nikkei Asia Review on Thursday, Aung San Suu Kyi acknowledged it was “natural” for foreign investors to be concerned, but repeated her view that economic development was the key to solving poor Rakhine’s long-standing problems.

“So, investments would actually help make the situation better,” she said.

In China’s orbit

Myanmar’s $70 billion economy should be a strong investment proposition for Western firms. It boasts large oil and gas reserves and natural resources such as rubies, jade and timber.

Wages are low and its youthful population of more than 50 million is eager for retail and manufacturing jobs.

In April, Myanmar passed a long-awaited investment law, simplifying procedures and granting foreign investors equal treatment to the locals. A game-changing law allowing foreigners to buy stakes in local firms is expected later this year.

“The investment conditions were improving,” said Dustin Daugherty, ASEAN lead for business intelligence at Dezan Shira & Associates, a consultancy for foreign investors in Asia.

Myanmar’s economy may not suffer much, however, if Western firms shun the country — or even if their governments were to reimpose some sanctions, although that appears unlikely for now.

Aung San Suu Kyi has sought to deepen relations with China at a time when Beijing is keen to push projects that fit with its Belt and Road initiative, which aims to stimulate trade by investment in infrastructure throughout Asia and beyond.

Myanmar trades with China as much as it does with its next four biggest partners: Singapore, Thailand, Japan and India.

None of that top five participated in previous sanctions.

Trade with the United States is only about $400 million and U.S. investment is just 0.5 percent of the total. Europe accounts for around a 10th of investment, while China and Hong Kong make up more than a third, and Singapore and Thailand another third.

Than Aung Kyaw, Deputy Director General of Myanmar’s Directorate of Investment and Company Administration, told Reuters that European investors might have “second thoughts,” but he expected Asian investors to stay put.

China is already in talks to sell electricity to energy-hungry Myanmar and pushing for preferential access to a strategic port on the Bay of Bengal. In April, the two countries reached an agreement on an oil pipeline that pumps oil across Myanmar to southwest China.

“It is going to feed Aung San Suu Kyi straight into the hands of [Chinese President] Xi Jinping,” said John Blaxland, director at the ANU Southeast Asia Institute and head of the Strategic and Defense Studies Center.

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The ATM at 50: How It’s Changed Consumer Behavior

An automated teller machine. The cash machine. In Britain, a cashpoint. ATMs, known for spitting out $20 bills (and imposing fees if you pick the wrong one), turn 50 years old this year. They’re ubiquitous – and possibly still a necessity, despite the big changes in how people pay for things.

It was a radical move when Barclays installed cash machines in a London suburb in 1967. The utilitarian machine gave fixed amounts of money, using special vouchers – the magnetic-striped ATM card hadn’t been invented yet. There was no way for a customer to transfer money between accounts, and bank employees tabulated the transactions manually at the end of each day.

As the ATMs became familiar, though, they changed not only the banking industry but made people comfortable interacting with kiosks in exchange for goods. Now that means getting movie tickets and boarding passes, self-checkout at grocery stores, and online shopping that brings products to your door with a few clicks. All are based on the idea that people can handle routine transactions by themselves without a teller or cashier.

“The ATM tapped into that innate force in people that gives gratification for doing a task on their own and it grew from there,” said Charles Kane, a professor at the MIT Sloan School of Management.

It was a radical concept at the time. The ATM wasn’t the first self-service device – vending machines and the automat had been popular before. But those dispensed items people could hold in their hand.

Bernardo Batiz-Lazo, a business professor and ATM historian (yes, they exist!) at Bangor University in Britain, said early users of automated tellers were often checking their balances twice: once to see how much was in their account, then again after withdrawing money to see if it registered.

“They were popular, but it took a long time to slowly convince customers to learn about ATMs and use them regularly,” Batiz-Lazo said.

For the banking industry, ATMs meant banks could be in thousands of places at once, not just in branches, and earn billions of dollars in fees from non-customers. Banks used to staff dozens of tellers at each branch to handle routine transactions, now many staffers work on other tasks, like sales or account maintenance.

Around the U.S. today are roughly 3 million cash machines, according to the ATM Industry Association. Most are actually not owned by banks, but by private companies that install them at convenience stores, restaurants and bars in hopes of grabbing customers who don’t want to find a bank branch.

The wide acceptance of the ATMs changed the types of cash Americans typically carry in the pocketbooks. Since ATMs became more widely available in the early 1980s, the twenty-dollar bill has regularly been the second-most printed bank note each year by the Bureau of Engraving and Printing. The first place spot is held by the $1 bill.

Even as people use cash less, and credit cards or mobile payments more often, the ATM isn’t going anywhere for a while. At least, that’s what historians and – unsurprisingly – the ATM industry says. Devon Watson, vice president at Diebold Nixdorf, the world’s largest manufacturer of ATMs, says 85 percent of all transactions worldwide are still in cash.

Newer ATMs have more functions than ever. They accept check deposits, can transfer money between accounts, show an account balance, pay a credit card or mortgage payment, or even sell you stamps. NCR, another major manufacturer of ATMs, say the latest models are also designed to act more like smart devices. Kevin King of NCR says that includes “swipe, gesture, multi-touch.”

And future ATMs will likely start selling products as well. Have a checking account? The ATM will ask you whether you want to open a brokerage account. Much like tellers did.

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French Protesters Stage Fresh Protests to Macron’s Labor Law

French labor unions staged fresh protests against President Emmanuel Macron’s contested labor law reforms Thursday — a day before he adopts them by executive order.

 

The nationwide action backed by the powerful, hard-left CGT trade union, saw protesters take to the streets in the second round of public opposition to the long-touted reforms that will give more power to employers to hire and fire workers. Macron says that’s needed to power the stagnant French economy and boost jobs.

 

In cities across the country, demonstrators waved anti-capitalist placards and angry personal messages against Macron, whose popularity has recently taken a hit.

 

In Paris, demonstrators brandishing posters reading “The state ruins the people” marched past the posh La Rotonde restaurant where Macron was branded arrogant for prematurely celebrating his victory in the first round of the elections before he had won the presidency.

 

The latest protests come a week after hundreds of thousands of protesters — half a million, according to the unions — took to the streets in the first major challenge to Macron’s fledgling presidency.

 

Macron is waving away the opposition and his government is pressing ahead with the labor reforms, backed by a robust majority in parliament.

 

 

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Claims for US Jobless Aid Fall as Hurricane Impact Recedes

The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

 

The Labor Department said Thursday that the less-volatile four-week average rose by 6,000 to 268,750. Overall, nearly 2 million Americans are collecting jobless aid, down almost 6 percent from a year ago.

 

In early September, jobless claims shot up by the most in five years as Harvey battered Texas. But last week claims in Texas fell 45 percent as more people returned to work. Hurricane Irma continued to have an impact on the job market in Florida, where claims more than doubled from the previous week.

 

Despite the weather shocks, claims nationwide remain low by historic standards. New weekly claims have remained below 300,000 for the longest stretch going back to 1970.

 

Claims are a proxy for layoffs, and most employers are confident enough to be holding onto staff. Unemployment is near a 16-year low at 4.4 percent. Employers are adding an average 176,000 jobs a month so far in 2017, down from 187,000 last year and 226,000 in 2015. Some businesses say the job market is so tight that they can’t find workers to fill job openings.

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Fed Keeps US Rates Steady, to Start Portfolio Drawdown in October

The U.S. Federal Reserve left interest rates unchanged on Wednesday but signaled it still expects one more increase by the end of the year despite a recent bout of low inflation.

The Fed, as expected, also said it would begin in October to reduce its approximately $4.2 trillion in holdings of U.S. Treasury bonds and mortgage-backed securities acquired in the years after the 2008 financial crisis.

New economic projections released after the Fed’s two-day policy meeting showed 11 of 16 officials see the “appropriate” level for the federal funds rate, the central bank’s benchmark interest rate, to be in a range between 1.25 percent and 1.50 percent by the end of 2017, or 0.25 percentage points above the current level.

U.S. bond yields rose, pushing up the U.S. dollar after the Fed’s decision, but U.S. benchmark stock indexes were little changed.

U.S. benchmark 10-year Treasury note yields rose as far as 2.29 percent, the highest since August 8, a move which helped push bank stock prices higher also.

“The Fed took another step on its path of beautiful normalization, announcing that the gradual balance sheet reduction will start next month and limiting revisions to both projections and policy guidance,” said Mohamed El-Erian, Chief Economic Adviser at Allianz, in California.

In its policy statement, the Fed cited low unemployment, growth in business investment, and an economic expansion that has been moderate but durable this year as justifying it’s decision. It added that the near-term risks to the economic outlook remained “roughly balanced” but said it was “closely” watching inflation.

Inflation mystery

Fed Chair Janet Yellen said in a press conference after the end of the meeting that the fall in inflation this year remained a mystery, adding that the central bank was ready to change the interest rate outlook if needed.

“What we need to figure out is whether the factors that have lowered inflation are likely to prove persistent,” she said. If they do, “it would require an alteration of monetary policy,” Yellen said.

While the interest rate outlook for next year remained largely unchanged in the Fed’s latest projections, with three rises envisioned in 2018, the U.S. central bank did slow the pace of anticipated monetary tightening expected thereafter. It forecasts only two increases in 2019 and one in 2020. It also lowered again its estimated long-term “neutral” interest rate from 3.0 percent to 2.75 percent, reflecting concerns about overall economic vitality.

“The US Federal Reserve has firmly signaled that a December rate rise is still on the table,” said Luke Bartholomew, of Aberdeen Standard Investments Investment Strategist in London.

“Clearly the Fed still believes that lower unemployment will eventually translate into a pick-up in inflation, but if inflation continues to undershoot it is hard to see the Fed following through on a hike,” he said.

Fed bond portfolio to shrink from October

The Fed, as expected, also said it would begin in October to reduce its approximately $4.2 trillion in holdings of U.S. Treasury bonds and mortgage-backed securities by initially cutting up to $10 billion each month from the amount of maturing securities it reinvests.

That action will start a gradual reversal of the three rounds of quantitative easing, or bond buying, the Fed pursued between 2008 and 2014 to stimulate economic growth after the 2007-2009 financial crisis and recession.

The limit on reinvestment is scheduled to increase by $10 billion every three months to a maximum of $50 billion per month until the central bank’s overall balance sheet falls by perhaps $1 trillion or more in the coming years.

Yellen said it would take a “a material deterioration” in the economy’s performance for the Fed to reverse a schedule that she expects to proceed “gradually and predictably.”

Balancing act

The policy statement and accompanying projections showed the Fed still in the middle of a balancing act between an economic recovery that has kept U.S. unemployment low and is gaining steam globally and a recent worrying drop in U.S. inflation.

Three of the hawkish policymakers appeared to move their expected policy rate down to account for only one more hike by the end of 2017, leaving a core 11 clustered around a likely December increase. The Fed has raised rates twice this year.

The Fed noted that the recent hurricanes in the United States would affect economic activity but are “unlikely to materially alter the course of the national economy over the medium term.”

Forecasts for economic growth and unemployment into 2018 and beyond were largely unchanged. Gross domestic product is now expected to grow at a rate of 2.4 percent this year, 2.1 percent next year and 2.0 percent in 2019.

The unemployment rate is forecast to remain at 4.3 percent this year before falling to 4.1 percent next year and remaining there in 2019.

Inflation is expected to remain under the Fed’s 2 percent target through 2018 before hitting it in 2019. There were no dissents in the Fed’s policy decision.

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US Advises Banks to Watch for Venezuelan Corruption

The U.S. Treasury is advising banks to be on the lookout for suspicious financial activity involving corrupt Venezuelan officials as the Trump administration tightens its financial noose around President Nicolas Maduro’s embattled socialist government.

Wednesday’s advisory by the Financial Crimes Enforcement Network asks banks to keep watch for Venezuelan government contracts, wire transfers from shell companies, and real estate purchases in south Florida and Houston by senior Venezuelan officials, their families or associates. It said the advisory arose out of concern expressed by financial institutions that transactions involving state-owned enterprises were being used to launder kickbacks and bribes.

U.S. officials fear that endemic corruption will take an additional toll on Venezuelans already struggling with triple-digit inflation and widespread shortages amid a tense political standoff aggravated by Maduro’s decision to rewrite the constitution in the face of months of deadly protests.

Last month, the Trump administration slapped sanctions on Venezuela for Maduro’s decision to go forward with his plans to consolidate power. The actions ban investors from buying the nation’s debt and prevents U.S.-based Citgo, a subsidiary of the state-owned oil company, from sending badly needed dollar dividends back to Venezuela.

“Not all transactions involving Venezuela involve corruption, but, particularly now, during a period of turmoil in that country, financial institutions need to continue their vigilance to help identify and stop the flow of corrupt proceeds and guard against money laundering and other illicit financial activity,” said acting FinCEN Director Jamal El-Hindi.

‘Blockade’

Maduro has accused the U.S. of trying to impose a financial “blockade” on Venezuela after the opposition-led protests failed to oust him from power. Even before the recent round of sanctions, many Wall Street banks like Citibank and Credit Suisse that used to collect large fees serving Venezuela’s financial needs stopped doing business with the government, fearing legal action or damage to their reputations.

Wednesday’s action lists several red flags to assist banks in identifying suspected schemes. They include any transactions involving government contracts payable directly to personal accounts, hard-to-identify trading companies or products charged at substantially higher prices than market rates.

It also warns about real estate purchases — primarily in south Florida and the Houston area — involving current or former Venezuelan government officials, family members or associates that are not commensurate with their official salaries.

The U.S. over the past year has sanctioned dozens of Venezuelan officials, including Maduro himself, for a variety of alleged offenses including drug trafficking and human rights abuses. Among the state-owned enterprises referenced in recent sanctions are the nation’s electricity and telephone companies as well as the foreign trade bank and foreign currency exchange commission that provides U.S. dollars to select businesses and individuals at a highly favorable exchange rate that most Venezuelans can’t access due to strict currency controls

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EU, Canada Launch Free Trade Agreement While Britain Eyes Own Deal

The European Union and Canada will begin cutting import duties from Thursday on thousands of products and services in a reminder to Britain of the work it will take to replace the trade alliances it will give up when it leaves the EU.

The Comprehensive Economic and Trade Agreement (CETA) will provisionally enter force on Thursday, eight years after negotiations begun. It will be the EU’s first major trade deal since it began implementing its South Korea agreement in 2011.

The Canada agreement is the EU’s first trade pact with a G7 country, marking a success after its credibility took a beating from Britain’s 2016 vote to leave the block.

It has since struck a deal with Japan and hopes for further agreements with Mexico and the Mercosur countries of South America by the end of this year.

May, Trudeau agree

British Conservatives in the European Parliament said on Wednesday that the EU-Canada deal would bring 1.3 billion pounds ($1.76 billion) in benefits to Britain and said they hoped CETA’s benefits for Britain would continue after Brexit.

“I believe CETA will become the gold standard of agreements and one we can tailor to suit the priorities of the British and Canadian economies post-Brexit,” lawmaker Emma McClarkin said in a statement.

British Prime Minister Theresa May said in Ottawa on Monday that she and Canada’s Justin Trudeau had agreed that CETA should be “swiftly transitioned” into a new U.K.-Canada deal after Brexit.

How fast that transition occurs will depend on how much post-Brexit Britain wants to tailor the deal, perhaps by including closer convergence on financial services, rather than largely copying what is in place.

Duties, quotas to change

CETA will abolish some 98 percent of customs duties, open up public tenders to companies and allow the EU to export more cheese and wine and Canada more pork and beef in quotas that expand over the next six years.

The 1,598-page CETA text is full of negotiated details, including the right of European companies to ship up to 537,000 knitted jerseys to Canada and Canadian companies’ ability to send up to 196,000 square meters of carpet to Europe.

Britain and Canada will still have to create their own free trade agreement, which took five years to negotiate.