YCLOAK

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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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
…

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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The billionaire head of South Korea’s Samsung Group, Jay Y. Lee, was jailed for five years for bribery on Friday after a six-month trial over a scandal that brought down the president.

Lee had paid bribes in anticipation of favors from then president Park Geun-hye, according to a landmark ruling by a Seoul court, which also found him guilty of hiding assets abroad, embezzlement and perjury.

Lee, the 49-year-old heir to one of the world’s biggest corporate empires, has been held since February on charges that he bribed Park to help secure control of a conglomerate that owns Samsung Electronics, the world’s leading smartphone and chip maker, and has interests ranging from drugs and home appliances to insurance and hotels.

Lee denied wrongdoing.

One of his lawyers, Song Wu-cheol, said Lee would appeal the lower court ruling.

“The entire verdict is unacceptable,” Song said, adding that he was confident his client’s innocence would be affirmed by a higher court.

Under South Korean law, sentences of more than three years can not be suspended. The five year-sentence is one of the longest prison terms given to a South Korean business leader.

The Seoul Central District Court said Samsung’s financial support of entities backed by Park’s close friend, Choi Soon-sil, constituted bribery, including 7.2 billion won ($6.4 million) in sponsoring the equestrian career of Choi’s daughter.

In return for the contributions, prosecutors say, Samsung sought government support for a controversial 2015 merger of two of its affiliates, which helped Lee tighten his control of the conglomerate.

His lawyers had argued that the merger was done on business merits but the court did not accept that.

Park, who was forced from office in disgrace, is facing her own corruption trial, with a ruling expected later this year.

Prosecutors have argued that Park and Lee two took part in the same act of bribery so Lee’s conviction would appear ominous  for Park.

Hundreds of rowdy, diehard Park supporters rallied outside the court earlier in the day to demand Lee’s acquittal.

“The trials of former President Park Geun-hye and Samsung Jay Y. Lee go hand in hand,” said Son Tong-sok, 63, who heads a conservative group, holding a Korean flag.

Son said prosecutors had built their cases on circumstantial evidence and unsubstantiated claims reported in the media.  “Arresting these two innocent people are violations of human rights,” he said.

Samsung, founded in 1938 by Lee’s grandfather, is a household name in South Korea and a symbol of the country’s dramatic rise from poverty following the 1950-53 Korean War.

But over the years, it has also come to epitomize the cosey ties between politicians and powerful family-controlled business groups – or chaebols – which have been implicated in a series of corruption scandals.

South Koreans, who once applauded the chaebols for catapulting the country into a global economic power, now criticize them for holding back the economy and squeezing smaller businesses.

South Korea’s new president, Moon Jae-in, who replaced the Park after a May 9 election, has pledged to rein in the chaebols, empower minority shareholders and end the practice of pardoning corporate tycoons convicted of white-collar crime.
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Environmentalists are condemning a decree by Brazilian President Michel Temer allowing mining in the heart of the Amazon.

The measure strips protection from a national reserve between the northern states of Para and Amapa and clears the way for the private mining sector to explore the forest.

The gold-rich area is larger than the Netherlands, measuring roughly 18,000 square miles (47,000 square kilometers). It is also home to numerous indigenous tribes.

The Brazilian branch of the World Wide Fund for Nature says Wednesday’s decree will create conflicts between miners, indigenous peoples and conservationists working in the area.

The government says indigenous groups will be protected and the mining will attract foreign investors and create jobs.
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Stonehenge is dry and has been for too long — seven years too long. You can taste the dust well before you cross the cattle grids that cut the only road into town.

More than 1,700 kilometers (1,056 miles) northwest of Sydney, Australia’s Stonehenge could not be more different from its famous namesake, the World Heritage prehistoric monument of Stonehenge in England.

Stonehenge in England averages 10 days a month of rainfall and a maximum temperature of 22 degrees Celsius (72 Fahrenheit).

The town in Australia averages 325 sunny days a year and summer temperature of about 45C (113F), and forget regular rain.

How the town got its name is a mystery.

“In the mid-1800s, dingo [wild dog] trappers built a stone fortress which they used as a shelter, but no one is really sure,” said resident Judy Baldry as she drove along a dusty road on the outskirts of town.

Another possibility is the stony landscape, with rocks ranging in size from marbles to boulders scattered across the plains as far as the eye can see.

The stones lure tourists to an area known as “The Address Book” on the outskirts of town, where people create their names or love messages using stones, such as “Jim loves Kerry” and “Dan 4 Jan.”

Praying for rain

Stonehenge’s remaining 23 residents say they are struggling to survive one of the longest droughts in memory.

“Certainly, this is the worst drought I’ve seen in the last 28 years because of its longevity. It’s just gone on for so long,” said cattle and sheep farmer Tony Jackson.

Jackson’s Hill View Park Station property of more than 150,000 acres (60,000 hectares) is excellent wool country because of the stones. Less dirt means better quality wool.

He manages 800 cattle and about 6,000 sheep on the drought-hit property, but he fears he will have no feed or water if there is no rain by Christmas.

Jackson and his neighbors have spent hundreds of thousands of dollars on feed.

Debt levels for broadacre farms, which include cattle, sheep and crops, is estimated to have increased by 7 percent during 2015-16 to average A$560,500 per farm, the Australian government’s agricultural bureau said.

Other parts of Australia have seen the drought break, and farmers there are looking at a bright future. Cash incomes on cattle farms are estimated to be the highest in more than 20 years, at A$204,000 per farm, because of rising beef prices.

But the drought has a stranglehold on Stonehenge.

For the first time in more than 34 years, the main water supply, the meandering Thomson River, has stopped flowing.

Farmer Dick Smith says it has been seven years since the last decent rain filled the river.

“This is drought country. No one forced me to live here. We have to expect a drought, but this one’s gone on too long,” he said on the veranda of his home on the Depot Glen property.

Smith usually manages about 1,500 cattle but has destocked to survive and now has just 47 cows and calves.

He said that because of droughts over the past decades, he had “completely destocked three times,” and the potential for a fourth was high.

When the rains do come, the farmers of Stonehenge will struggle to pay for new stock at a time when cattle prices are at record levels because of demand for beef.

Hard on families

The drought has taken its toll on families, with the emotional and financial stress contributing to poor mental health, according to a study by the Australian National University.

The study examined 8,000 people living in drought and found that the more severe the drought, the more severe the impact on the mental health of a farmer and his family.

Sue Smith knows the burden. She runs Depot Glen alone for many months while her husband, Dick, is away driving a grader or fixing fences thousands of kilometers away in the Northern Territory.

“You really have to love your husband to live out here,” said Sue, a champion equestrian when she was young.

“We’re not isolated up here. We have bitumen roads, telephones, internet, but I do miss white sheets,” she said, referring to the groundwater that stains her sheets.

Stonehenge has suffered a huge loss of people because of the drought. The town many years ago boasted three hotels, and until just a decade ago, a population of 106.

Frank Irwin, who used to work on a farm, now runs the Stonehenge Hotel, a tin building with a bar crowned with empty beer bottles and rodeo memorabilia.

Stonehenge, like its English namesake, will survive, he said. “We just batten down the hatches until it does rain.”
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Experts at credit rating agencies are watching Washington’s political squabbling over budgets and spending closely, and they might make another cut in the U.S. credit rating if the Republican-controlled White House, Senate and House cannot reach an agreement.

President Donald Trump has promised to build a massive wall along the southern U.S. border in a bid to stop illegal immigration. Trump has said he will press Congress hard to fund the controversial measure, even if it stalls action on other budget issues and forces the government to shut down.

Some of Trump’s fellow Republicans who ran on promises to limit or cut government spending are reluctant to fund the measure, and most rival Democrats oppose the wall.

U.S. law provides for a “debt ceiling,” meaning the Treasury cannot borrow more money unless Congress agrees to raise the limit. That limit was reached months ago, and the federal government will apparently run out of cash by the end of September or early October if nothing changes.

The political situation is made more complex by the fast-approaching end of the budget year and the need for Congress to agree on next year’s spending priorities.

Congress and presidents have bickered over budgets in the past, and in 2011 a debt ceiling impasse prompted the Standard & Poor’s agency to make the first downgrade of the U.S. credit rating.

The Fitch agency Wednesday said failure to raise the debt ceiling in a timely manner would prompt a review of the nation’s credit rating. Fitch currently gives the United States its top rating.

Moody’s experts Thursday wrote that they expected Washington politicians to work out their differences, but that failure to reach an agreement could prompt the government to shut down, disrupting the economy more and more if the impasse drags on.

Moody’s noted that a previous government shutdown prompted lenders to demand higher interest rates, raising the cost of government by about $1.3 billion in just one year.

Moody’s and other experts have urged Congress to remove the debt ceiling because it does not restrain spending but does add “to the noise” around the budget process.
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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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Oil is the main revenue source in Alaska. This year, the trans-Alaska pipeline celebrated 40 years of service. From Alaska, VOA’s Natasha Mozgovaya looks at the history of North America’s largest oil field.
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Congressional Republicans, seeking to address the complaints of small businesses, are floating changes to their controversial proposal to eliminate business tax deductions for debt interest payments, business lobbyists said Tuesday.

A top U.S. Republican on tax policy acknowledged that modifications are in the works but did not provide details.

The debt interest proposal, long seen by Republican policymakers as necessary to help drive economic growth, is backed by large companies with ready access to equity financing that they could substitute for debt if eliminating the interest deduction made issuing debt too costly. Debt-dependent small-business owners, farmers and ranchers don’t have that luxury.

As Republicans in Congress and the Trump administration slog ahead with a push to overhaul the U.S. tax code, a key task is figuring out how to resolve conflicting groups’ priorities, with business debt interest a clear example.

The tax code has not been overhauled since 1986, partly because reconciling these conflicts can be so difficult.

“We’ve asked businesses large and small to look at that, test-drive it and give us back their feedback,” House of Representatives tax committee Chairman Kevin Brady said in remarks at an event in Louisville, Kentucky, on Tuesday, without offering specifics about the modified proposal.

His staff at the committee had no comment.

Businesses lobbyists said the panel’s lawmakers have quietly agreed to focus on exemptions for small businesses, including farmers and ranchers, and an exemption for land.

Interest deduction

Lawmakers have also discussed a possible partial elimination of the interest deduction, with an exemption for existing debt, or eliminating the deduction only for businesses deemed to have an excessive amount of debt, according to lobbyists.

Brady is one of the “Big Six” negotiators from Congress and the Trump administration who are guiding the tax reform debate.

At the Louisville event, he described rolling back the business interest deduction as a “trade-off” for another proposal to accelerate expensing, which would allow businesses to write off investments in plants and equipment more quickly.

He said net interest deduction is one of a number of tax breaks that lawmakers are looking to eliminate to help pay for lower business tax rates. Republicans say tax cuts will help drive annual U.S. economic growth above the 3 percent mark.

Independent analysts say that eliminating the interest deduction would raise more than $1 trillion in federal revenues.

Republicans want to cut the corporate income tax rate to 20-25 percent from 35 percent. But they have been hard-pressed to pay for such a cut since jettisoning a border-adjusted import tax that would have raised more than $1 trillion.
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Indigenous people living on Peru’s largest oil field concession have seized some facilities operated by Frontera Energy demanding that the government apply an indigenous rights law before signing a new contract with the Canadian company, a tribal chieftain said on Tuesday.

The so-called prior consultation law, passed in 2011, requires the government to seek input from indigenous people before approving any development plans that might affect them.

Tribal chiefs in Frontera’s Block 192 said the government has refused to carry out the consultation process even though it is negotiating a new contract with Frontera, whose 2-year contract is due to expire this month.

“If the government says it’ll carry out prior consultation, we’ll automatically end the protest,” Wilmer Chavez, chief of the community of Los Jardines, said in a telephone interview.

Chavez said that protesters from the indigenous community had taken control of oil drums and other facilities to curb output in Block 192.

Government offices tasked with oil drilling and indigenous rights did not respond to requests for comment.

Frontera, which produced some 7,500 barrels a day from Block 192 in July, said in a statement that it values community consent and that only the government could legally carry out prior consultation.

“Since our arrival to the area of Block 192, Frontera Energy has been working to gain the community’s trust and act as a mediator to ease potential tensions between the government, the industry and the community,” the company said in the statement.

Amazonian tribes in Block 192 want the government to sign new commitments for the clean-up of oil pollution and for access to health care and education in the remote region before awarding Frontera a new contract, said Chavez.

Four other chiefs, speaking to foreign media in Lima where they had traveled to meet with government officials, described similar demands in the 16 out of 20 villages they represent in Block 192 and vowed to stage their own protests unless prior consultation was applied.

Carlos Sandi, chief of the Corrientes River basin, told reporters that the government must fulfill its promises to clean up oil pollution that is sickening local residents.

U.S. oil company Occidental Petroleum Corp operated Block 192 for about 40 years before Argentine energy company Pluspetrol took over in 2001.

Frontera said negotiations with Peru on a new deal for Block192 were ongoing and that in coming weeks it should have a better idea of whether it will continue to operate there.
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Jordan has opened its first job center inside a refugee camp, unlocking work opportunities across the country for thousands living in the world’s largest Syrian refugee camp, the U.N. labor agency said Tuesday.

So far, more than 800 refugees in the Zaatari camp in Jordan, which borders Syria and is home to nearly 80,000 people, have registered for work permits at the job center, the International Labor Organization said.

“Refugee workers now have a clear address to resort to when searching for jobs and applying for work permits, where they can receive all necessary information and benefit from expert support,” Maha Kattaa, ILO response coordinator in Jordan, said in a statement.

The Jordanian government says the country is home to 1.4 million Syrians, of whom more than 660,000 are registered with the U.N. refugee agency UNHCR.

Allowing refugees to work in host countries relieves pressure on social services, boosts the local economy and gives refugees the financial security to re-establish their lives, said UNHCR, which manages work permits and the flows in and out of the Zaatari camp.

“I am confident that having an increased number of Syrians entering the labor market will positively impact the local economy and bring stability to refugee families,” said Stefano Severe, a UNHCR spokesman in Jordan.

Earlier this month, Jordan became the first Arab country to issue Syrian refugees with a new type of work permit that opens up the growing construction sector.

The center, launched by the Jordanian government, will run job fairs and employment matching services with businesses across the country.

There are also plans to open a second center in a nearby camp in Azraq, ILO said.
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Argentina’s main labor unions took to the streets of the capital on Tuesday demanding more jobs and protesting center-right President Mauricio Macri’s economic policies.

Tens of thousands of workers gathered in the historic Plaza de Mayo criticizing Macri, who is trying to lower labor costs to attract investment and jump-start an economy that emerged from recession in the second half of last year.

“If some retrograde [in the government] thinks that lowering wages, precarious living conditions and destroying trade unions is going to line up investments … we say that is very wrong,” said Juan Carlos Schmid, a leader of Argentina’s largest umbrella union, the CGT.

Standing on a podium at the protest, he said the CGT would meet in late September to discuss a potential strike.

Macri told Reuters in an interview this month his government was negotiating labor agreements sector by sector rather than trying to pass a comprehensive labor reform like the one approved in neighboring Brazil.

Unions fear more drastic changes could be coming after mid-term legislative elections in October, however, especially after a primary vote on Aug. 13 pointed to strong support for Macri’s coalition.

Macri is trying to open Argentina’s long protected economy and focus on competitive industries like oil and agriculture, but has seen some manufacturing jobs lost in the meantime.

The most recent employment data showed the jobless rate rose to 9.2 percent in the first quarter of the year from 7.6 percent in the fourth quarter of last year.
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Ford Motor Co. and a Chinese automaker said Tuesday they are looking into setting up a joint venture to develop and manufacture electric cars in China.

Ford’s potential venture with Anhui Zotye Automobile Co. adds to the global auto industry’s rising activity in electric vehicles for China, which passed the United States last year as the biggest market for them.

Chinese planners who see electrics as a promising industry and a way to clean up smog-choked cities are pushing automakers to speed up development.

Ford previously said it plans to offer electric versions of 70 percent of its models in China by 2025.

Privately owned Zotye Auto, headquartered in the eastern city of Huangshan, produces its own electric vehicles and said sales in the first seven months of this year rose 56 percent over the same period of 2016 to 16,000.

“This presents us with an exciting opportunity to leverage each other’s strengths,” Zotye chairman Jin Zheyong said in a joint statement.

Sales of pure-electric and gasoline-electric hybrids in China rose 50 percent last year over 2015 to 336,000 vehicles, or 40 percent of global demand. U.S. sales totaled 159,620.

Beijing has supported sales with subsidies and a planned quota system that would require automakers to produce electric cars or buy credits from companies that do.

Ford said it expects China’s market for all-electrics and hybrids to grow to annual sales of 6 million by 2025.

Volvo Cars announced plans this year to make electric cars in China for global sale starting in 2019. General Motors Co., Volkswagen AG, Nissan Motor Co. and others also have announced plans to make electric vehicles in China.

 
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Ford Tuesday became the latest carmaker to launch a car scrappage scheme in Britain, joining the likes of BMW and Mercedes-Benz, after months of procrastination from the government over whether to begin a national program.

The U.S. automaker is offering customers a 2,000 pound ($2,580) discount off a range of Ford models when they trade in vehicles registered before the end of 2009.

BMW, Mercedes-Benz and Vauxhall, the British version of the Opel brand sold on the continent, have all launched similar schemes in recent weeks to incentivize motorists to reduce emissions by replacing their gas-guzzling models with greener cars.

The plans come after Britain delayed in July a decision over whether to introduce a nationwide or targeted vehicle scrappage scheme, with a consultation due to take place later this year, despite worries over emissions levels.

“Ford shares society’s concerns over air quality,” its managing director in Britain Andy Barratt said Tuesday.

“Removing generations of the most polluting vehicles will have the most immediate positive effect on air quality.”

Car sales slowing

Ford, BMW, Vauxhall and Mercedes sell around 1 million cars in Britain, more than a third of all new car registrations.

The scrappage schemes will help support sales at a time when demand for new cars is beginning to slide substantially for the first time in around six years.

In July, new car registrations fell for the fourth consecutive month, hit by a number of factors including uncertainty over Brexit and lack of clarity over future government plans around new levies on diesel models.

Britain’s last government-backed scrappage scheme came in the wake of the financial crisis and ran for nearly a year from mid-2009, helping to support the car sector, which had been hit by nose-diving sales.
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The U.S. Air Force has awarded Boeing and Northrop Grumman separate contracts to continue work on the replacement of the aging Minuteman III intercontinental ballistic missile system, the Pentagon said on Friday.

Though the award for the new Ground-Based Strategic Deterrent (GBSD) comes amid rising tensions with North Korea, the Air Force had asked the defense industry last summer for proposals to replace the aging ICBM system and its nuclear cruise missiles as the military moved ahead with a costly modernization of its aging atomic weapons systems.

“The Minuteman III is 45 years old. It is time to upgrade,” Air Force Chief of Staff General David Goldfein said in a statement on Monday.

Northrop Grumman was awarded $328 million, and Boeing $349 million over the three-year contract.

A milestone contract

The relatively small award is a milestone that would allow Boeing and Northrop to continue parallel detailed development and prototyping for the Minuteman replacement. The Pentagon’s office of Cost Assessment and Program Evaluation (CAPE) has said the total could cost the United States $85 billion. The Air Force has estimated $62 billion.

Lockheed Martin Corp, Northrop and Boeing were all competing for the contract which is needed to perform the three-year technology maturation and risk reduction (TMRR) phase of Minuteman replacement.

A Lockheed representative said the company was “disappointed” and looked “forward to a debrief about the selection.”

Boeing’s Strategic Deterrence Systems Director, Frank McCall, said in a statement, “Since the first Minuteman launch in 1961, the U.S. Air Force has relied on our technologies for a safe, secure and reliable ICBM force.” Boeing provided the Minuteman III missile for the current ground-based nuclear ICBM system.

Northrop Grumman’s chief Wes Bush said in a statement, “We look forward to the opportunity to provide the nation with a modern strategic deterrent system that is secure, resilient and affordable.”

‘Moving forward’

Secretary of the Air Force Heather Wilson said, “We are moving forward with modernization of the ground-based leg of the nuclear triad.”

Modernization of the U.S. nuclear force was expected to cost more than $350 billion over the next decade. The United States plans to replace its aging systems, including bombs, nuclear bombers, missiles and submarines. Some analysts estimated the cost at $1 trillion over 30 years.

“Our missiles were built in the 1970s. Things just wear out, and it becomes more expensive to maintain them than to replace them,” Wilson said.

 
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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.
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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.
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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.

 
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China’s Great Wall Motor Co Ltd is interested in bidding for Fiat Chrysler Automobiles (FCA), a company official said on Monday, confirming earlier reports that it is pursuing all or part of the owner of brands including Jeep and truckmaker Ram.

There has been speculation over Chinese interest in FCA since Automotive News reported last week that an unidentified “well-known Chinese automaker” made an offer earlier this month, triggering a jump in FCA’s Milan-listed shares.

“With respect to this case, we currently have an intention to acquire. We are interested in (FCA),” an official at Great Wall Motor’s press relations department, who declined to give his name, told Reuters by telephone. He gave no further details.

FCA Chief Executive Sergio Marchionne is seeking a partner or buyer for the world’s seventh-largest automaker to help it manage rising costs, comply with emissions regulations and develop technology for electric and self-driving cars.

An acquisition by Great Wall Motor would be audacious, and one of China’s highest profile manufacturing deals to date.

Earlier on Monday, two people familiar with the matter said Great Wall Motor had asked for a meeting with FCA, with the aim of making an offer for all or part of the Italian-American auto group. Also on Monday, citing an email from Great Wall Motor President Wang Fengying, Automotive News reported that Great Wall Motor had contacted FCA to express interest specifically in the Jeep brand.

The industry publication cited a Great Wall Motor spokesman confirming interest, but saying the Chinese automaker had not made a formal offer or met with FCA’s board.

“Our strategic goal is to become the world’s largest SUV maker,” Automotive News quoted the spokesman as saying, referring to sport utility vehicles. “Acquiring Jeep, a global SUV brand, would enable us to achieve our goal sooner and better (than on our own).”

FCA shares rose 3.9 percent to 11.12 euros in early Milan trading, outperforming a flat market. Great Wall Motor shares were up almost 3 percent in Shanghai.

FCA was not immediately available to comment on interest in the group. Earlier, officials declined to comment on the earlier Automotive News report focused on Jeep.

“Jeep is the most logical choice since (Great Wall) wants to be the largest SUV maker in the world,” said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight.

Ram could be an option, but “the Jeep brand is recognized globally. I think Great Wall Motor is eyeing a global strategy, not just the United States,” Zhang added.

A move for FCA or one of its main brands, if successful, would allow Great Wall Motor to accelerate a planned push into the U.S. market, the two people familiar with the matter told Reuters.

They said Great Wall Motor had been making plans for some time to enter the U.S. market, mainly by upgrading some of its key products and improving branding.

The company earlier this year officially launched a new “Wei” brand of potentially U.S.-market ready vehicles. Wei is the last name of Great Wall Motor founder and chairman Wei Jianjun.
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The founder of a Chinese luxury online retailer has been extradited from Indonesia to face charges his company smuggled goods into China by having travelers pretend they were personal belongings, news reports said Monday.

Ji Wenhong of Xiu.com joins a growing number of Chinese fugitives who are being returned from abroad to face charges of corruption or financial misconduct.

Ji faces charges of smuggling goods worth a total of 438 million yuan ($65.5 million) into China while failing to report their true value, the news reports said, citing government officials.

The reports said Ji was accused of arranging for his company to buy designer clothing from Europe and the United States and have it shipped to Hong Kong. They said the company arranged for travelers to carry it to the mainland in their baggage, avoiding import duties.

Ji left China in May 2016 after being charged with smuggling, according to the China Daily newspaper. He was returned Saturday by Indonesian authorities.

In a statement, Xiu.com said some individuals at the company were under investigation but didn’t mention Ji. It said the company was operating normally.
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