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Iran Needs Billions to Upgrade Gas Fields, But Will Investors Invest?

Iran sits on what are thought to be the world’s largest gas reserves, yet can barely supply its own domestic demand.

Since the United Nations-backed deal over Tehran’s nuclear program spurred the lifting of international sanctions, the country has strived to attract foreign investment in developing oil fields and upgrading its aging infrastructure. 

The Ministry of Petroleum helped to convene the CWC Iran Gas Conference this week in Frankfurt, Germany, to bring together government figures and private investors.

Watch: Energy Giants Say Iran Needs $100 Billion for Gas Upgrade

Industry experts: $100 billion needed

Industry estimates suggest Iran needs to invest $100 billion in order to fully exploit the reserves. The nuclear agreement removed some sanctions on Iran, but mainly in Europe. It remains extremely difficult for American companies to do business, according to Reiner Jahn, vice president of the German-Iranian Chamber of Commerce and expert on financing deals with Iran.

“Unless it’s licensed by OFAC, the U.S. sanctions authority, there is no way for an American to negotiate any transaction with an Iranian,” he said.

So Iran is looking elsewhere. 

Indian demand for gas is forecast to grow rapidly, and Tehran sees it as a key market. The private consortium South Asia Gas Enterprise, or SAGE, has advanced plans for the world’s deepest underwater pipeline connecting the two countries.

“Our reconnaissance survey was performed between Oman and India. Unfortunately at that time the leg that went to Iran couldn’t be surveyed because of sanctions. SAGE is expecting to perform the remaining leg of the survey to Iran this year,” project director Ian Nash told delegates at the conference.

The 1,300-kilometer, $5 billion pipeline would lie on the seabed, more than 2,500 meters below the ocean’s surface. The viability of such investments depends on the price of gas, currently difficult to predict, says Vincent Groote of Dutch engineering firm Twister Supersonic Gas Solutions.

An OPEC for natural gas

“You get [the price] floating up and down, which is not what investors would like. So I can imagine that as a natural development, similarly as OPEC for oil, in the long future we could think about a ‘GPEC’ — let’s say a Gas-Producing-Exporting Country’ type of infrastructure.”

Iran likely would wield considerable power in such a cartel, though there are clouds on the horizon.

U.S. President Donald Trump has repeatedly criticized the nuclear deal, and he has imposed new sanctions on Iran following a recent missile test. History shows that the United States could still intervene to disrupt foreign investment, says Jahn.

“The U.S. invented secondary sanctions, where they sanction European companies that acted in complete accordance with EU law, but not in accordance with U.S. law. Therefore. I think they have an impact in our market,” he said.

The French bank BNP Paribas was fined $8.9 billion by U.S. authorities in 2014 for breaking such sanctions.

The nuclear deal may have lifted some restrictions, but analysts say Trump has introduced new uncertainty just as foreign investment in Iran starts to build.

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Energy Giants Say Iran Needs $100 Billion for Gas Upgrade

Iran sits on what are thought to be the world’s largest gas reserves, yet can barely supply its own domestic demand. Since the nuclear deal lifted sanctions, the country has sought foreign investment in exploration and infrastructure. But will the hawkish stance of U.S. President Donald Trump put them off? Henry Ridgwell reports from the CWC Iran Gas Conference in Frankfurt, Germany.

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Imagine a Day Without Immigrants in a Country Full of Immigrants

Immigrants in the United States have had a bad rap through a divisive presidential election. Now, with a new administration in the White House, there seems to be real consequences, ranging from travel bans to deportations. But immigrants are fighting back, and on Thursday in Washington, some businesses gladly suffered the loss of a day without their workforce. Arash Arabasadi explains.

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Small US Company Bucks a Trend, Adds Manufacturing Jobs

A rising tide of automation, trade problems and lagging growth in productivity have slashed millions of jobs from the U.S. manufacturing sector. At the same time, a small factory in Massachusetts has been hiring, expanding and exporting. Riverdale Mills hopes to grow further by making unusual products and building a strong workforce. VOA’s Jim Randle reports.

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Brazil Hopes to Lure Back Billions in Foreign Assets With Amnesty

Brazil’s Lower House of Congress on Wednesday approved a bill that reopens a program providing an amnesty against criminal prosecution to Brazilians holding undeclared assets abroad if they pay tax and a fine.

In a 303 to 124 vote, lawmakers approved legislation that is expected to yield 13.2 billion reais ($4.32 billion) in extra revenues this year. The bill, which was changed by the lower house, will return to the Senate for final approval.

The extra cash would help ease the financial strains of many states struggling to pay wages and public services while also improving the fiscal position of the federal government, which has posted three straight years of hefty budget deficits.

A group of governors met in Brasilia earlier Wednesday to call for their allies in Congress to support the legislation, whose proceeds would be shared between the federal government and states and municipalities. 

To avoid any legal challenges over the constitutionality of the tax rate, lawmakers raised the fine to 20.25 percent from 17.50 percent, of the undeclared assets, while lowering the tax percentage to 15 percent from 17.5 percent.

“Most states and municipalities are under heavy financial stress and need this money now,” said Alexandre Baldy, the congressman in charge of reviewing the legislation. 

Lawmakers continued to debate a controversial provision in the bill that allows relatives of elected politicians to participate in the amnesty program. 

In the initial program, the government collected a total of 46.8 billion reais, which helped authorities meet their primary budget deficit goal for 2016.

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Immigrants to Show Their Presence in US by Being Absent 

Organizers in cities across the U.S. are telling immigrants to miss class, miss work and not shop Thursday as a way to show the country how important they are to America’s economy and way of life.

“A Day Without Immigrants” actions are planned in cities including Philadelphia, Washington, Boston and Austin, Texas.

The protest comes in response to President Donald Trump and his 1-month-old administration. The Republican president has pledged to increase deportation of immigrants living in the country illegally, build a wall along the Mexican border, and ban people from certain majority-Muslim countries from coming into the U.S. He also has blamed high unemployment on immigration.

Employers in solidarity

Employers and institutions in some cities were expressing solidarity Wednesday with immigrant workers. Washington restaurateur John Andrade said he would close his businesses Thursday, and David Suro, owner of Tequilas Restaurant in Philadelphia and himself a Mexican immigrant, said he also planned to participate.

The Davis Museum at Wellesley College in Massachusetts said it would remove or shroud all artwork created or given by immigrants to the museum through February 21.

In New Mexico, the state with the largest percentage of Hispanic residents in the nation, school officials worried that hundreds of students may stay home Thursday.

“We respectfully ask all parents to acknowledge that students need to be in class every day to benefit from the education they are guaranteed and to avoid falling behind in school and life,” principals with the Albuquerque Public Schools wrote in a letter to parents.

Students who take part in the protest will receive an unexcused absence, Albuquerque school officials said.

Organizers in Philadelphia said they expect hundreds of workers and families to participate.

What would US look like?

“Our goal is to highlight the need for Philadelphia to expand policies that stop criminalizing communities of color,’’ said Erika Almiron, executive director of Juntos, a nonprofit group that works with the Latino immigrant community. “What would happen if massive raids did happen? What would the city look like?”

Almiron said that while community groups have not seen an uptick in immigration raids in the city, residents are concerned about the possibility.

Philadelphia Mayor Jim Kenney is among leaders in several cities nationwide who have vowed to maintain their “sanctuary city’’ status and decline to help federal law enforcement with deportation efforts.

Many people who make the choice to skip work Thursday will not be paid in their absence, but social media posts encouraging participation stressed that the cause is worth the sacrifice.

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Tourism Industry Feels Financial Fallout from Trump’s Ban

You may have heard this before: uncertainty is bad for business.

With President Donald Trump’s controversial travel ban on hold for now — the result of an appeals court decision to uphold a lower court’s temporary restraining order — the approximately $7 billion U.S. travel and tourism industry has taken a breath, but is holding it.

Trump’s executive order was in effect for only one week, but that was long enough for there to be financial damage, particularly given the reality that once it travels through the court system, the travel ban may be back.

“Consumers don’t like uncertainty, and the travel industry doesn’t like uncertainty,” said Henry Harteveldt, a travel industry analyst and founder of Atmosphere Research Group.

Global travelers beyond the scope of the seven nations directly impacted by Trump’s ban, immediately felt discouraged from visiting the United States, according to the travel data company ForwardKeys.

Net airline bookings to the U.S. dropped 6.5% overall from the same period in 2016. Regionally, there was a 37.5% drop across the Middle East, 14% in the Asia Pacific region, and 13.6% in Western Europe.

Immediate impact

President Trump says the aim of his executive order is to keep Americans safe.

But the consequences of barring refugees and foreign nationals from certain countries — without definitive proof of an imminent threat — has sparked widespread debate and concern among affected immigrants and the international community at large. The order bans travelers from Syria, Iran, Iraq, Somalia, Sudan, Libya and Yemen.

In one week, the Global Business Travel Association (GPTA) noted an immediate loss of $185 million in business travel bookings, a number which Harteveldt says only skims the perimeter of a longer-term effect, due in part to continued confusion.

“Right now the United States has a sign on it that says, ‘You may not be welcome here,’ and that’s not very good for our national brand — the United States of America,” Harteveldt told VOA. “The bad image the U.S. has may have people saying, ‘You know, I love the United States, but it’s just not the right environment for us to go visit this year. We’ll wait.'”

According to data compiled by GPTA, U.S. business travel transaction levels in the week before and after the travel ban resulted in a net industry impact of -3.4%.

For every one percent impact on annual U.S. business travel spending, the country either gains or looses $5 billion in gross domestic product along with 71,000 jobs, according to GPTA’s calculations.

Pall over business’

In a January interview with VOA, Dan Ikenson, director of CATO Institute’s Herbert A. Stiefel Center for Trade Policy Studies, called the ban disruptive to U.S. and foreign professionals who engage in the services trade — and by extension, supply chains.

“Just as important as physical goods moving over borders is the expertise, the know how, the representation of companies to conduct business,” said Ikenson. “The threat of this restriction spreading is something that is going to put a pall over business and over investment.”

Companies that might have previously considered setting up affiliates and subsidiaries in the U.S., and vice-versa, Ikenson added, may suspend those plans for as long as uncertainty persists.

Replicating the US experience’

Harteveldt, who previously served as marketing director for Trump Shuttle, a Donald Trump-owned airline from 1989-1992, believes the president has no “ill will” towards the travel industry. However, he says the long-term unintended consequences of the president’s actions may be felt for many months.

“People start planning their summer holidays 90 days or more in advance,” Harteveldt said. “If we look less attractive — and when you couple that with factors that the dollar is strong right now — it makes the U.S. that much less attractive as a possible destination.”

Harteveldt notes the world is full of destinations — from Disney theme parks to beaches, hiking and fine dining — that are capable of replicating the U.S. experience. 

In New York’s Times Square, the quintessential live-entertainment-and-neon-bright American tourist experience may not be enough to persuade international travelers to return under persistently uncertain circumstances.

“The good thing about New York is the diversity,” said Erika Andrea López, a Colombian tourist. “If that’s impeded, they’ll lose their touch … you’ll feel that you’re coming to a place that discriminates against you.”

“Anything can happen,” added Isaac Quaye, a first-time visitor from Ghana to the United States. When asked if he would return if the ban were reinstated, he shrugged. “I don’t know … I can’t tell.”

Yuthicka Sirohi, from Delhi, India, says everyone has a right to protect their country, but believes a “100% ban” against specific countries goes too far.

While she might not hesitate to return one day, Sirohi says she might feel more comfortable visiting another cosmopolitan city like London to suit her “travel-a-holic” needs.

Still, she hopes it doesn’t get to that.

“I think freedom is in the air here,” she said.

VOA Latin America Division’s Vero Balderas contributed to this report.

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China Awards Trump Valuable New Trademark

China has awarded President Donald Trump a valuable new trademark. The win comes after a 10-year dispute and raises a host of ethical questions about the president’s foreign intellectual property.

 

China’s Trademark Office posted the registration of Trump’s new mark, which became official Feb. 14, to its website Wednesday. It gives Trump the right to use his name for building construction services in China through 2027.

 

This may be the first foreign trademark Trump has received as president, but it’s unlikely to be the last. He has 49 pending trademark applications in China alone.

 

Critics say Trump’s foreign intellectual property holdings are a conflict of interest and may violate the U.S. Constitution. But Trump’s lawyer says he has taken adequate steps to distance himself from his trademark portfolio.

 

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Tourism Industry Feels Financial Fallout from Trump’s Travel Ban

Despite a temporary halt to President Trump’s executive order banning travelers from 7 countries, travel and tourism executives are beginning to notice signs of financial damage, which may continue to cripple the multi-trillion dollar industry in the months ahead. VOA’s Ramon Taylor reports

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Despite Trump Talk of ‘Tweaking’ NAFTA, Canada Could Still Be Hurt

Although U.S. President Donald Trump says he only wants to tweak trade ties with Canada, his pledge to renegotiate NAFTA to focus on Mexico is almost impossible and Canada will not emerge unscathed, Canadian officials and trade experts said Tuesday.

Trump had warm words for Canadian trade following a meeting with Prime Minister Justin Trudeau on Monday, but his call for major changes to the North American Free Trade Agreement to target Mexico stymied experts.

“I can’t see how it’s possible at all. It would be very complicated to do and I don’t think Mexico would … ever go along with it,” said Mark Warner, a trade lawyer and principal at MAAW Law in Toronto.

Canada and Mexico send the bulk of their exports to the United States under NAFTA.

One senior Canadian government official, asked how the agreement could be tweaked for one partner and changed in a major way for another, admitted frankly, “I don’t know.”

Trump spoke after his first meeting with Trudeau, who is trying to sell the merits of NAFTA while opposing a border tariff, an idea circulating in U.S. political circles that could badly hit Canadian industries.

Warner said that if the U.S. government decided to impose the tariff, “the consequences of that could be described as a tweak but the significance of it would be major.”

Matthew Kronby, an international trade lawyer at Bennett Jones in Toronto, said “it is very hard to tease apart the elements of the deal that I suppose Trump might think are a disaster with Mexico while leaving it intact with Canada.”

Officials say that while Trump did not reveal any details about his intentions on NAFTA, Canada would suffer collateral damage, whatever the administration pushes for.

“We cannot be untouched or unscathed by this,” said one person familiar with the matter.

Separately, another official working on the bilateral trade file said that once talks started, the U.S. dairy industry was set to demand Canada dismantle its supply management system of tariffs and taxes that keep out most dairy imports, including those from the United States.

“That could be a very unpleasant conversation,” said the official, who asked to remain anonymous because of the sensitivity of the situation.

Trudeau’s ability to make concessions is limited since all of Canada’s major political parties have vowed to protect supply management. Holding out too firmly, though, could irritate the American side, which might demand concessions elsewhere.