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Mexico Expects NAFTA Talks by Late August, Its Economy Minister Says

Mexican Economy Minister Ildefonso Guajardo said Tuesday that he expected U.S. President Donald Trump’s administration to tell Congress early next week of plans to renegotiate the North American Free Trade Agreement, a move that would produce talks by late August.

Guajardo said he would have more information after meeting with U.S. Trade Representative Robert Lighthizer in Vietnam on Thursday as part of Asia-Pacific Economic Cooperation meetings.

During the 2016 U.S. election campaign, Trump vowed to scrap the 1994 deal between the United States, Canada and Mexico if he could not adjust it to benefit U.S. interests.

“Probably the notification will be sent to Congress by the U.S. executive at some time early next week,” Guajardo told Mexican reporters, a day after meetings in Washington with U.S. Commerce Secretary Wilbur Ross and other U.S. officials.

In Washington, Ross declined to predict the timing of the notification, saying that there were more consultations with Congress needed first.

Current format

In a meeting Tuesday, U.S. senators said Ross and Lighthizer expressed their preference to keep the current trilateral format in the NAFTA talks.

Guajardo also said that a dispute over sugar with the United States could be resolved within two weeks, before a June 5 deadline to break the impasse.

The U.S. sugar industry pressed the U.S. Commerce Department late last year to withdraw from a 2014 agreement that sets prices and quotas for U.S. imports of Mexican sugar unless the deal could be renegotiated. The U.S. sugar lobby wants Mexico to export less refined sugar and has become emboldened since Trump took office.

A U.S. Commerce Department spokesman said Ross and Guajardo discussed possible solutions and that they were continuing to work toward a negotiated settlement.

Any deal, however, would need agreement from the U.S. sugar producers who brought an anti-dumping case against Mexican competitors.

On Monday, Mexico’s sugar chamber said no deal had been reached in talks on Monday to resolve the dispute.

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Greek Seamen Extend Strike; No Ferries for 4 Days

Greek seamen and journalists walked off the job Tuesday, a day before a nationwide general strike to protest new austerity measures the government is legislating for in return for more bailout funds.

The seamen’s union announced Tuesday afternoon they would extend their strike, originally planned to last 48 hours, for a further two days, leaving ferries servicing Greece’s islands tied up in port until midnight Friday night.

 

The Panhellenic Seamen’s Federation said it was asking “for the understanding and full support of both the traveling public and all Greek workers,” adding that the new measures would lead seamen “to poverty and destitution.”

 

Journalists were holding a 24-hour strike Tuesday, pulling news broadcasts off the air from 6 a.m. (0300 GMT). News websites were not being updated, and no Wednesday newspapers would be printed. Public bus company employees were also holding work stoppages during the day.

 

Wednesday’s general strike is expected to affect services across the country, from schools and hospitals to public transport. Air traffic controllers have declared participation with a four-hour work stoppage, leading to the rescheduling of 99 flights and the cancellation of a further nine by Greece’s Aegean and Olympic Air. Another airline, Sky Express, announced the rescheduling of 41 domestic flights between Athens and the Greek islands.

 

Protest marches have been scheduled for central Athens in the morning.

 

Workers are protesting a new deal with Greece’s international creditors that impose a raft of new tax hikes and spending cuts beyond the end of the country’s third bailout in 2018. The measures, which are to be voted on in parliament at midnight Thursday, will include additional pension cuts in 2019 and higher income tax in 2020.

 

Without the agreement with its creditors, Greece faced the prospect of running out of cash to service its debts this summer, which could have seen it have another brush with bankruptcy.

 

Greece is currently in its third international bailout, which is due to end in mid-2018. It has been dependent on rescue loans from its creditors — mainly other European countries that use the euro, and the International Monetary Fund — since its first bailout in 2010.

 

In return for the funds, successive governments have had to impose repeated waves of reforms, which have included tax hikes and salary and pension cuts. While the country’s finances have improved under the bailouts and the strict supervision they imposed, the belt-tightening has led to spiraling poverty and unemployment rates.

 

Although the jobless rate has been falling from a high of above 27 percent, it still hovers at around 23 percent.

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US Industrial Production Posts Biggest Gain Since 2014

American industry expanded production last month at the fastest pace in more than three years as manufacturers and mines recovered from a March downturn.

 

The Federal Reserve said Tuesday that industrial production at U.S. factories, mines and utilities shot up 1 percent in April from March, biggest gain since February 2014 and the third straight monthly gain. The increase was more than twice what economists had expected.

 

Factory production rose 1 percent after declining 0.4 percent in March. Mine production increased 1.2 percent after falling 0.4 percent in March. And utility output rose 0.7 percent after surging 8.2 percent in March.

 

Factory production has risen three of four months this year. Manufacturing has recovered from a rough patch in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods costlier in foreign markets.

 

The overall U.S. economy grew at a lackluster 0.7 percent annual pace from January through March. But economists expect growth to pick up the rest of the year as consumers ramp up spending.

 

A healthy job market bolsters consumer confidence. Employers last month added 211,000 jobs and unemployment fell to 4.4 percent, lowest in a decade.

 

 

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US-China Trade Deal Brings Mixed Reaction

The new U.S.-China trade deal, which includes 10 initial agreements on agricultural trade, financial services, investment and energy, is drawing mixed reviews.

The agreement is being panned by some as a poor deal for the United States that does not address fundamental issues concerning the Chinese market. But others say the agreement represents incremental progress.

Robert Atkinson, president of the Information Technology and Innovation Foundation, argued the deal has failed to address issues facing advanced industries that are critical to the U.S. economic future.

 

In a statement, he said the plan, which opens up Chinese markets for mostly commodity-based and finance industries, has in return given, “China free rein to use its massive foreign reserves to buy up American companies in advanced industries.”

Atkinson urged the Trump administration’s simple focus on the trade deficit be shifted to two-way trade and demand real changes in Chinese policies related to America’s advanced, knowledge and technology-based industries.

Deal means nothing

 

Derek Scissors, a resident scholar at the American Enterprise Institute, argued that the deal, by itself, means almost nothing since the increase in market access that China now promises has been promised before.

 

“Even if they are fully implemented, [the increase in market access] can be easily undone,” Scissors wrote in an emailed reply to VOA, adding that he doesn’t foresee the U.S. trade deficit with China being reduced this year.

Scissors urged the United States to prioritize its negotiations with China on reduction of subsidies to Chinese state-owned enterprise, which he believes will improve foreign firms’ market access in China.

 

“It should also prioritize reducing Chinese complicity in theft of intellectual property [IP]. The IP goal should be accompanied by the threat of sanctions,” Scissors said, adding both steps would allow the emergence of the American competitive edge.

Incremental progress

Agreeing that it isn’t a major deal, Christopher Balding, a professor at Peking University HSBC Business School, however, said the agreement is a step forward for the Trump administration.

“If the agreement is actually implemented, it would represent, I think, a solid step forward for U.S. market access to China. And it needs to be viewed in that context, though, that it is one step further from where we were before,” Balding told VOA, disagreeing that President Trump got played or out-maneuvered.

Balding agreed China has employed what others called a “delay-and-diversion’ strategy and waited for years to honor its commitments, some of which dated back to China’s accession to the World Trade Organization in 2000.

 

Yet, the diplomatic reality is that, as an advanced economy, the United States doesn’t have a lot of leverage over China to open its market, the professor added.

 

However, China now appears to respond to embarrassment, triggered by Trump’s earlier angry tweets, which the professor said may provide some unconventional leverage in pushing China.

 

“If the Trump administration keeps public pressure on China, I do think it would be very likely that you could see additional incremental progress in various specific markets or industries,” Balding added.

 

While it’s urgent for the United States to demand full market access in China, C.Y. Huang, a partner of FCC Partners, warned U.S. companies are losing their edge in competing with their fast-growing Chinese rivals.

 

“China is no longer afraid of opening up its market and competition from the United States. Many U.S. companies can hardly compete with their Chinese counterparts in China,” Huang told VOA.

Gigantic steps

Washington heralded last week’s deal as “a Herculean accomplishment.”

 

According to U.S. Commerce Secretary Wilbur Ross, China will open its market to U.S. beef by mid-July while, in return the United States will issue a proposed rule to allow Chinese cooked poultry to enter U.S. markets by the same deadline.

 

Beijing will also allow U.S.-owned firms in China to provide credit rating and electronic payment services, the latter of which is already dominated by China’s UnionPay.

Ross said the deal, part of the 100-day plan after the meeting between U.S. President Donald Trump and Chinese President Xi Jinping last month, aims to reduce the U.S. trade deficit with China, which reached $347 billion last year.

“This is more than has been done in the whole history of U.S.-China relations on trade,” Ross told a news briefing at the White House, adding the deal takes three “gigantic” step to chip away at the country’s crippling trade deficit.

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Anheuser-Busch Boosts Spending to Adapt to Fragmented Market

Anheuser-Busch is upgrading its U.S. breweries and plans to build two new distribution centers as it adapts to an increasingly fragmented beer market.

The maker of Budweiser, Corona, Stella Artois says the upgrades and new distribution centers in Los Angeles and Columbus, Ohio, will allow it to store a greater variety of products and get them to customers faster. The measures are part of the $500 million that the company said Monday it will invest in its U.S. operations this year, marking an increase compared with recent years. It’s a portion of the $3.7 billion in global capital expenditures that the Belgian company had already budgeted for 2017.

Anheuser-Busch has struggled to boost sales volumes as craft beers grow increasingly popular in an already crowded marketplace. In 2016, total volume at Anheuser-Busch declined 2 percent, including a 1.6 percent volume decline in North America.

The same thing is happening with non-alcoholic drinks. PepsiCo CEO Indra Nooyi has said the industry is becoming more “niche,” and that PepsiCo needs to learn how to thrive amid that growing complexity.

The investment announced Monday by Anheuser-Busch includes upgrades to breweries in Fort Collins, Colorado, and St. Louis, Missouri. The company did not say how many new jobs it expects this year’s U.S. investments to create. It has added around 2,500 jobs since 2013, the company said. Anheuser-Busch employs more than 17,000 people in the U.S.

In 2015, Anheuser-Busch had said it expects to invest $1.5 billion from that year to 2018. The Monday announcement was an update, with the company saying it is spending $2 billion from this year through 2020.

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Dubai Plans $1.7 Billion Tourist Project on New Artificial Islands

Dubai plans to develop a 6.3 billion dirham ($1.7 billion) tourist resort on two man-made islands it will build on either side of the Burj Al Arab, its luxury sail-shaped hotel.

It is the latest development planned by the emirate as it aims to attract 20 million visitors a year by 2020 when Dubai will host the World Expo 2020 exhibition.

Spanning 4 million square feet, Marsa Al Arab will be made up of two islands, one dedicated to entertainment and family tourism and the other featuring luxury villas and a private marina, state news agency WAM reported Monday.

Dubai is already one of the world’s most visited cities, although its hotels, shopping malls and state-owned airline, Emirates, have been buffeted by a strong U.S. dollar which has made the emirate pricier for many overseas visitors. The United Arab Emirates pegs its dirham to the dollar.

Around 4.6 million tourists visited Dubai during the first quarter, up by 11 percent compared to the same period of last year, according to Dubai Tourism data.

Marsa Al Arab will feature 140 villas, a marine and water park, and a theatre with capacity for 1,700 people to host Cirque du Soleil, local media reported. Work on the project will break ground in June and be completed by late 2020, WAM said.

The agency did not mention how the project would be funded.

Dubai is working on several big projects due for completion in the next few years and being funded by debt.

It is building the World Expo 2020 exhibition site, an extension to Dubai’s Metro system and Al Maktoum International Airport, a new airport being developed on the edge of Dubai, which will serve up to 146 million passengers by 2025.

Marsa Al Arab will add 2.2 km (1.4 miles) of beach to the emirate’s coastline, WAM said.

Dubai’s most famous artificial island, Palm Jumeriah, is home to several hotels, villas and apartments. But other islands it planned to develop were stalled or scaled back after the emirate’s 2009 debt crisis.

Palm Jebel Ali, which began construction in 2002, has yet to be completed, while plans for Palm Deira have been reworked to create a scaled-down project called Deira Islands.

Another man-made archipelago, The World, a 300-island chain laid out in the shape of the world’s continents, has only been partially developed.

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Gingerly, Deals Start Taking Shape Between Rivals China and Vietnam

Historic rivals China and Vietnam are working on substantive agreements that could cover trade, investment and maritime resource sharing despite a bitter sovereignty dispute that had snarled relations less than a year ago.

The Communist neighbors are inching toward new trade and investment ties that analysts say would help shore up overall relations. Some believe the two might later approach stickier topics such as joint use of disputed waters or humane treatment of each other’s fishermen. The two countries still contest sovereignty over tracts of the vast, resource-rich South China Sea east of Vietnam and southwest of Hong Kong.

Prospects of some kind of agreement came into focus during Vietnamese President Tran Dai Quang’s visit to China, which ends Monday. He suggested the two sides work on complementing each other’s trade and investment advantages with a view toward improving overall relations, state media from Hanoi said.

“President Quang is in China, and China promised a lot,” said Yun Sun, senior associate with the East Asia Program under Washington-based think tank the Stimson Center. “From an economic point of view, it is certainly practical and beneficial for Vietnam to have some sort of deal, but then again I think this still relatively early to tell.”

In a meeting with Quang Thursday, Chinese President Xi Jinping called for more cross-border economic cooperation zones and joint infrastructure building, according to  China’s official Xinhua News Agency reported. China pledged to “mitigate” its trade deficit with Vietnam and increase direct investment, Sun said.

“Talking probably does help lower tensions and improve the odds of things happening,” said Alaistair Chan, an economist covering China for Moody’s Analytics.

The Vietnamese president suggested China finalize rules on opening the Chinese market for farm products, dairy and seafood, media outlet vietnamnet.vn said. He also called on China to make more “preferential loans” and urged a working group to develop renewable energy investment projects that play on China’s strengths and demand in Vietnam, the Vietnamese news report said.

On Friday companies from both countries signed agreements on milk distribution, tourism and rice processing.

China is the largest trade partner of Vietnam, with imports and exports worth about $72 billion last year. Vietnam also calls China one of the top 10 investors in the country.

But both countries are likely to hedge on letting outsiders invest in infrastructure, a possible source of direct investment, Chan said. “If they can get there purely on trade and stay away from investment, a touchy subject in both countries, I think that’s probably where they can get their quickest gain,” he said.

China and Vietnam stepped up dialogue after July 2016, when a world arbitration court ruled that Beijing lacked a legal basis to claim more than 90 percent of the sea, a boon to rival claimants in Southeast Asia: Vietnam, Brunei, Malaysia and the Philippines. China responded to the ruling by seeking one-on-one dialogue with each country. Vietnam was one of the most hostile toward China before the court ruling.

Beijing and Hanoi dispute sovereignty over much of the 3.5 million-square-kilometer sea, including two chains of tiny islets. Beijing’s go-ahead for a Chinese oil rig in contested waters set off a clash in 2014. The two countries also still face distrust fanned by centuries of political rivalry as well as a border war in 1979.

Both countries stake their fast-growing economies on export manufacturing. Vietnamese companies resent China for using their larger production scales to sell goods in bulk at relatively low prices.

Relations got a lift in September when the Chinese premier and Vietnamese prime minister agreed to manage maritime differences. Vietnamese Communist Party General Secretary Nguyen Phu Trong visited China in January to help smooth relations.

Another boost came as China emerged last year as the top single-country source of tourism for Vietnam. About 2.2 million Chinese visited Vietnam from January to October. Chinese tourists have reshaped the economies of Hong Kong and Taiwan over the past decade.

Agreements on managing disputed tracts of the South China Sea may come later if the two sides keep getting along, experts say.

Vietnam and China have agreed to an “informal” median line in the tract of sea where their claims overlap, said Carl Thayer, Southeast Asia-specialized emeritus professor of politics at The University of New South Wales in Australia. They might eventually work on expanding joint exploration for oil under the seabed and a way to ensure “humane” treatment of fishermen, he said.

“It’s to stop the ramming, boarding, seizing fish catches and radio equipment and in the old days taking them hostages for money,” Thayer said. Under a human treatment agreement, he said, “If you find them, you report them to the other side and return them rather than bash them up and take everything.”

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Mnuchin Says G-7 Nations More Comfortable With New US Economic Approach

U.S. Treasury Secretary Steven Mnuchin said Saturday after meeting with officials from the world’s other industrialized democracies that he thought they were more at ease with Donald Trump’s economic policies.

“People are more comfortable today, now that they’ve had the opportunity to spend time with me and listen to the president and hear our economic message,” Mnuchin said after a two-day meeting in Bari, Italy, with members of the Group of Seven, industrialized nations commonly known as the G-7.

Officials from the G-7 countries hoped to learn more about the U.S. president’s plans, which they feared would revive protectionist policies and result in a global regression on issues such as banking reform and climate change.

After the meeting, officials from Japan and member European countries remained concerned about the economic shift in Washington, particularly after Mnuchin said the U.S. reserved the right to be protectionist if it thought trade was not free or fair.

“All the six others … said explicitly, and some very directly, to the representatives of the U.S. administration that it is absolutely necessary to continue with the same spirit of international cooperation,” said French Finance Minister Michel Sapin.

Don’t ‘backpedal’ on free trade

Bank of France Governor Francois Villeroy de Galhau said continued uncertainty about U.S. policy could dampen optimism within the G-7 about the global economy’s gradual recovery from the financial crisis that began nearly a decade ago.

De Galhau echoed the sentiments of Japanese Finance Minister Taro Aso, who said, “We must not backpedal on free trade, as it has contributed to economic prosperity.”

European officials complained that the U.S. meaning of “fair trade” remained unclear and that the only way to establish fairness was to abide by the multilateral framework developed by the World Trade Organization.

A senior Japanese Finance Ministry official said the most significant question pertained to Trump’s U.S. tax cut proposal that could fuel America’s economic recovery.

Trump has proposed slashing the U.S. corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought back to the U.S.

The G-7 is composed of Britain, Canada, France, Germany, Italy, Japan and the U.S.

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Companies Affected by Global Cyber Attack

A global cyber attack on Friday affected British hospitals, government agencies and companies in 99 countries, with Russia, Ukraine and Taiwan the top targets, security software maker Avast said.

Hacking tools widely believed by researchers to have been developed by the U.S. National Security Agency that were leaked online last month appear to have been leveraged to launch the attacks.

Around 1,000 computers at the Russian Interior Ministry were affected by the cyber attack, a spokeswoman for the ministry told Interfax.

Some of the companies affected:

FedEx Corp

Telefonica SA

Portugal Telecom

Telefonica Argentina

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By the Numbers: China’s Chase of ‘Golden Visa’ Abroad

From the United States and Canada to small islands in Europe and the Caribbean, Chinese are spending billions on new passports and visas to move their families away from their homeland.

China’s middle and upper classes are demanding better schools, cleaner air and a more secure life for their children. And as China gets wealthier, millions of families have the means to purchase a new life elsewhere.

 

Their demand has transformed a once obscure market for immigration by investment. To study China’s impact, the Associated Press collected statistics from 13 countries that offer citizenship or permanent residency for a price.

Here’s a look at AP’s analysis of the market, by the numbers.

China’s favorite programs

Consulting firms in China’s biggest cities hawk investor visa programs in weekly sessions at hotels and on social media. The market leader is the United States, as urban Chinese are widely familiar with American schools and culture.

 

Here are the five countries in the AP’s analysis with the most visas issued to Chinese investors and their families in the last decade:

— 43,448: the United States’ investment visa program, known as EB-5.

— 35,278: Canada’s investment bond programs, including a program offered by the province of Quebec.

— 7,875: Portugal’s “golden visa” program for real estate investors.

 

— 6,405: Hungary’s residence bond program, recently suspended by the government.

— 4,640: Australia’s program for high-dollar “significant investors.”

 

What they buy

Depending on the country, Chinese investors looking for a second home can join business projects, invest in bonds or make an outright payment to the government. Currency conversions are as of May 11.

 

— $250,000: the minimum price of citizenship in Antigua & Barbuda for an investor who donates to the island government’s development fund and pays a $50,000 government fee.

 

— $380,000 (350,000 euro): the minimum value of real estate investors must purchase in Portugal’s “golden visa” program.

 

— $500,000: the minimum business investment in the United States’ EB-5 program, with a “green card” given to investors whose money creates or saves 10 jobs.

 

— $584,000 (800,000 Canadian dollars): the minimum amount of interest-free investment to be made or financed for residence in the Canadian province of Quebec. (Canada closed a similar national program in 2014.)

 

— $3.7 million (5 million Australian dollars): the required investment in Australia’s Significant Investor Visa program in a mix of developing businesses and funds as defined by the government. Australia’s program is by far the most expensive in the AP survey.

 

What they spent

To understand how China has changed the global investor migration market, the AP estimated how much Chinese families have invested at a minimum in foreign countries for a visa or passport. The AP multiplied the number of investors, excluding family members, by the minimum investment level for each year, in each program for the last decade. In some cases, the AP estimated the number of investors with the help of government data or experts on investment migration.  

 

The figures below are an undercount because some investors put in more than what’s required. Investment amounts for each year were converted to U.S. dollars based on the average exchange rate that year. The figures have not been adjusted for inflation.

 

— $7.7 billion: estimated minimum investment in the United States through the EB-5 program.

 

— $6 billion: estimated minimum investment in Australia through its Significant Investor Visa program.

— $4.3 billion: estimated minimum investment in Canada, including Quebec, through its immigrant investor programs.

— $1.96 billion: estimated minimum investment in the United Kingdom through its Tier 1 investor program.

— $1.71 billion: estimated minimum investment in New Zealand through its investor and entrepreneur programs.