YCLOAK

U.S. Secretary of State Mike Pompeo warned on Monday that any potential International Monetary Fund bailout for Pakistan’s new government should not provide funds to pay off Chinese lenders.

In an interview with CNBC television, Pompeo said the United States looked forward to engagement with the government of Pakistan’s expected new prime minister, Imran Khan, but said there was “no rationale” for a bailout that pays off Chinese loans to Pakistan.

“Make no mistake. We will be watching what the IMF does,” Pompeo said. “There’s no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself,” Pompeo said.

The Financial Times reported on Sunday that senior Pakistani finance officials were drawing up options for Khan to seek an IMF bailout of up to $12 billion.

An IMF spokeswoman said: “We can confirm that we have so far not received a request for a Fund arrangement from Pakistan and that we have not had discussions with the authorities about any possible intentions.”

Pakistan is struggling to avert a currency crisis that has presented the new government with its biggest challenge. Many analysts and business leaders expect that another IMF bailout, the second in five years, will be needed to plug an external financing gap.

Pakistan, which already has around $5 billion in loans from China and its banks to fund major infrastructure projects, had sought another $1 billion in loans to stabilize its plummeting foreign currency reserves.

Officials in the Trump administration, including U.S. Treasury Secretary Steven Mnuchin, have criticized China’s infrastructure lending to developing countries, arguing that this has saddled them with unsustainable debt.

The China-Pakistan Economic Corridor, a series of port and rail improvements associated with China’s One Belt One Road infrastructure push, has led to massive imports of Chinese equipment and materials, swelling Pakistan’s current account deficit.

Pakistan has had 14 IMF financing programs since 1980, according to fund data, including a $6.7 billion three-year loan program in 2013.
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Mexican President-elect Andres Manuel Lopez Obrador says he wants to create 400,000 jobs by planting 1 million hectares (2.47 million acres) with timber and fruit trees.

 

Lopez Obrador said in a video posted Sunday that he wants to plant half the total amount in 2019, focusing on timber species like cedar and mahogany. The other half would be planted in 2020.

 

Referring to the Usumacinta river basin near the border with Guatemala, Lopez Obrador said 50,000 to 100,000 hectares could be planted there. He said the upper canopy of timber species could provide cover for cacao plantings beneath. Cacao is the source of chocolate.

 

Lopez Obrador sees the planting program as a way to offer rural Mexicans work in their home communities, so they do not have to emigrate.
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Building on President Donald Trump’s “Indo-Pacific” strategy,   U.S. Secretary of State Mike Pompeo will announce a series of investment initiatives in Asia on Monday focusing on digital economy, energy and infrastructure.

The announcement, to be made at a U.S. Chamber of Commerce forum in Washington, comes at a time when trade frictions with China have given U.S. trade diplomacy a sharper edge.

“The Indo-Pacific is an absolute priority of U.S. policymakers in the executive branch and in Congress,” Brian Hook, Pompeo’s senior policy advisor, told journalists in a conference call.

Countries in the region have been worried by Trump’s “America first” policy, withdrawal from the Trans Pacific Partnership trade deal, and pursuit of a trade conflict with China that threatens to disrupt regional supply chains.

The United States’ first outlined its strategy to develop the Indo-Pacific economy at an Asia-Pacific summit last year.

“Indo-Pacific” has become known in diplomatic circles as shorthand for a broader and democratic-led region in place of “Asia-Pacific,” which from some perspectives had authoritarian China too firmly at its center.

The Chamber of Commerce said on its website that the Indo-Pacific could account for half the world’s economy within decades, but needed investment of nearly $26 trillion in order to fulfill its potential.

The new U.S. initiatives and funding would be focused on digital economy, energy and infrastructure, Hook said, without giving any figures on investment amounts.

Aside from Pompeo, Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross will also attend the forum, along with officials from Japan, Australia, Singapore, India and Indonesia.

China’s way, US way

Hook said the United States approach to development of the region was not aiming to counter China’s Belt and Road Initiative, which comprises of mostly state-led infrastructure projects linking Asia, parts of Africa and Europe.

“It is a made in China, made for China initiative,” he said.

“Our way of doing things is to keep the government’s role very modest and it’s focused on helping businesses do what they do best.”

Critics of Beijing’s Belt and Road Initiative, which aims to recreate the ancient Silk Road, say it is more about spreading Chinese influence and hooking countries on massive debts.

Beijing says it is simply a development project that any country is welcome to join.

Hook said Washington “welcomed” Chinese contributions to regional development, but it wanted China to adhere to international standards on transparency, the rule of law and sustainable financing.

“We know that America’s model of economic engagement is the healthiest for nations in the region. It’s high-quality, it’s transparent and it is financially sustainable,” Hook said.
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White House economic adviser Larry Kudlow said Sunday he believes the 4.1 percent growth the U.S. recorded in the last three months is sustainable in the coming months despite skepticism expressed by independent economists.

“There’s just a lot of good things going on,” Kudlow told CNN.  He said President Donald Trump “deserves a victory lap,” with “low tax rates, rolling back regulations, opening up energy, for example. Trade reform I think is already paying off. The fundamentals of the economy look really good.”

He said “business investment spending is really booming. That’s a productivity creator. That’s a job creator. That’s a wage creator for ordinary mainstream folks, terribly important.”

Kudlow said the five calendar quarters occurring fully during Trump’s 18-month presidency have now been recorded with average economic growth of 2.9 percent for the world’s largest economy.

“I don’t see why we can’t run this for several quarters,” Kudlow said.

As the 4.1 percent growth rate for the April-to-June period was announced Friday, Trump boasted that the U.S. was on track to hit its highest annual growth rate in its gross domestic product in 13 years and predicted that as the country reaches new trade deals with other countries, the U.S. would exceed its second quarter advance.

“These numbers are very, very sustainable,” he said. “This isn’t a one-time shot.”

On Sunday, Trump said on Twitter, “The biggest and best results coming out of the good GDP report was that the quarterly Trade Deficit has been reduced by $52 Billion and, of course, the historically low unemployment numbers, especially for African Americans, Hispanics, Asians and Women.”

Skeptics less upbeat

Some independent economists, however, voiced skepticism that the $18.6 trillion annual U.S. economy would continue to advance at the same pace as the last three months.

Some forecasters said the gains in recent months were mostly, although not totally, the result of temporary factors, such as the initial boost from tax cuts Trump supported that took effect earlier this year. Most analysts say that for all of 2018 the U.S. could reach 3 percent growth, which would be the best since a 3.5 percent gain in 2005, but not again hit the annual 4.1 percent growth rate recorded last quarter.

“We believe quarter two will represent a growth peak as the boost from tax cuts fades, global growth moderates, inflation rises, the Fed tightens monetary policy and trade protectionism looms over the economy,” said Gregory Daco, chief U.S. economist at Oxford Economics.

Mark Zandi, chief economist at Moody’s Analytics, said, “The second quarter was a strong quarter, but it was juiced up by the tax cuts and higher government spending.”

In the U.S., consumer spending accounts for about 70 percent of the economy, with Ian Shepherdson, the chief economist of Pantheon Macroeconomics, saying that such spending accounted for the robust second quarter.

“Consumers were really on a tear,” he said. “So to grow at 4 [percent] probably tells you people were spending the tax cuts that they enjoyed back in January, but that’s extremely unlikely to happen again.”

 
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Agriculture ministers from the G-20 countries criticized protectionism in a joint statement Saturday and vowed to reform World Trade Organization (WTO)

rules, but did not detail what steps they would take to improve the food trade system.

In the statement, they said they were “concerned about the increasing use of protectionist nontariff trade measures, inconsistently with WTO rules.”

The ministers from countries including the United States and China, in Buenos Aires for the G-20 meeting of agriculture ministers, said in the statement they had affirmed their commitment not to adopt “unnecessary obstacles” to trade, and affirmed their rights and obligations under WTO agreements.

The meeting came amid rising trade tensions that have rocked agricultural markets. China and other top U.S. trade partners have placed retaliatory tariffs on American farmers after the Trump administration put duties on Chinese goods as well as steel and aluminum from the European Union, Canada and Mexico.

U.S. growers are expected to take an estimated $11 billion hit due to China’s retaliatory tariffs. Last week, the Trump administration said it would pay up to $12 billion to help farmers weather the trade war.

U.S. Agriculture Secretary Sonny Perdue told Reuters in an interview on the sidelines of the meeting that Trump’s plan would include between $7 billion and $8 billion in direct cash relief that U.S. farmers could see as early as late September.

Despite the payments, the measures are “not going to make farmers whole,” Perdue said.

Citing the Trump administration’s relief measures, German Agriculture Minister Julia Kloeckner said farmers “don’t need aid, [they] need trade.”

“We had a very frank discussion about the fact that we don’t want unilateral protectionist measures,” Kloeckner said in a news conference after the meeting.

The ministers, whose countries represent 60 percent of the world’s agricultural land and 80 percent of food and agricultural commodities trade, did not specify which measures they were referring to in the statement. Asked for details, Kloeckner said the ministers did not want to “criticize a single

country.”

“We all know what happens if a single person or country doesn’t adhere to WTO rules, trying to get a benefit for themselves through protectionism,” she said. “This will usually lead to retaliatory tariffs.”

In the statement, the ministers said they agreed to continue reforming the WTO’s agricultural trade rules.

“Independent of all the news there was surrounding [the meeting], we managed to reach a unanimous consensus,” Argentine Agriculture Minister Luis Miguel Etchevehere said.

U.S. President Donald Trump and European Commission President Jean-Claude Juncker struck a surprise deal on Wednesday that ended the risk of further escalating trade tensions between the two powers.

After the meeting, Trump said the European Union would buy “a lot” of U.S. soybeans.

Earlier, Kloeckner told Reuters that the trade relationship between the United States and the European Union was improving, but that there was no guarantee the bloc would import the quantity of soybeans that Washington expects.
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President Donald Trump falsely claimed he’s pulled off “an economic turnaround of historic proportions.”

Speaking at the White House Friday after the government reported that the economy grew at an annual rate of 4.1 percent in the second quarter, Trump declared that the gains were sustainable and would only accelerate. Few economists outside the administration agree with this claim.

His remarks followed events Thursday in Iowa and Illinois, where Trump falsely repeated a claim that the U.S. economy is the best “we’ve ever had” and incorrectly asserted that Canada’s trade market is “totally closed.”

 

WATCH: Trump Says Economy Numbers Sustainable, But Experts Doubtful

A look at the claims:

Historic turnaround

TRUMP: “We’ve accomplished an economic turnaround of historic proportions.” — remarks Friday at the White House.

THE FACTS: Trump didn’t inherit a fixer-upper economy.

The U.S. economy just entered its 10th year of growth, a recovery that began under President Barack Obama, who inherited the Great Recession. The data show that the falling unemployment rate and gains in home values reflect the duration of the recovery, rather than any major changes made since 2017 by the Trump administration.

While Trump praised the 4.1 percent annual growth rate in the second quarter, it exceeded that level four times during the Obama presidency. But quarterly figures are volatile and strength in one quarter can be reversed in the next. While Obama never achieved the 3 percent annual growth that Trump hopes to see, he came close. The economy grew 2.9 percent in 2015.

The economy faces two significant structural drags that could keep growth closer to 2 percent than 3 percent: an aging population, which means fewer people are working and more are retired, and weak productivity growth, which means that those who are working aren’t increasing their output as quickly as in the past.

Both of those factors are largely beyond Trump’s control.

Trade deficit

TRUMP: “One of the biggest wins in the report, and it is, indeed a big one, is that the trade deficit — very dear to my heart because we’ve been ripped off by the world — has dropped.”

THE FACTS: Trump is correct that a lower trade deficit helped growth in the April-June quarter, but it’s not necessarily for a positive reason.

The president has been floating plans to slap import taxes on hundreds of billions of dollars of foreign goods, which has led to the risk of retaliatory tariffs by foreign companies on U.S. goods.

This threat of an escalating trade war has led many companies to increase their levels of trade before any tariffs hit, causing the temporary boost in exports being celebrated by Trump.

Richard Moody, chief economist at Regions Financial, said the result is that the gains from trade in the second quarter will not be repeated.

​Best economy ever

TRUMP: “We’re having the best economy we’ve ever had in the history of our country.” — remarks in Granite City, Illinois.

THE FACTS: Even allowing for Trump’s tendency to exaggerate, this overstates things.

The unemployment rate is near a 40-year low and growth is solid, but by many measures the current economy trails other periods in U.S. history. Average hourly pay, before adjusting for inflation, is rising around a 2.5 percent annual rate, below the 4 percent level reached in the late 1990s when the unemployment rate was as low as it is now.

Pay was growing even faster in the late 1960s, when the jobless rate remained below 4 percent for nearly four years. And economic growth topped 4 percent for three full years from 1998 through 2000, an annual rate it hasn’t touched since.

Canada market closed

TRUMP: “The Canadians, you have a totally closed market … they have a 375 percent tax on dairy products, other than that it’s wonderful to deal. And we have a very big deficit with Canada, a trade deficit.” — remarks in Peosta, Iowa.

THE FACTS: No, it’s not totally closed. Because of the North American Free Trade Agreement, Canada’s market is almost totally open to the United States. Each country has a few products that are still largely protected, such as dairy in Canada and sugar in the United States.

Trump also repeated his claim that the U.S. has a trade deficit with Canada, but that is true only in goods. When services are included, such as insurance, tourism, and engineering, the U.S. had a $2.8 billion surplus with Canada last year.
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Friday’s positive numbers on the U.S. economic growth are “very, very sustainable,” according to U.S. President Donald Trump. His comments came after figures showed U.S. GDP growth hit 4.1 percent in the second quarter. The question is whether that growth is sustainable, as VOA’s Bill Gallo reports from the White House.
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Starbucks and other employers in California must pay workers for minutes they routinely spend off the clock on tasks such as locking up or setting the store alarm, the state Supreme Court ruled Thursday.

The unanimous ruling was a big victory for hourly workers in California and could prompt additional lawsuits against employers in the state.

The ruling came in a lawsuit by a Starbucks employee, Douglas Troester, who argued that he was entitled to be paid for the time he spent closing the store after he had clocked out.

Troester said he activated the store alarm, locked the front door and walked co-workers to their cars — tasks that he said required him to work for four to 10 additional minutes a day.

Starbucks said it was disappointed with the ruling. In a brief filed with the California Supreme Court, attorneys for Starbucks said Troester’s argument could lead to “innumerable lawsuits over a few seconds of time.” The U.S. Chamber of Commerce in a court filing also warned of the possibility of “significant liability” to businesses in the state.

A U.S. District Court rejected Troester’s lawsuit on the grounds that the time he spent on those tasks was minimal. But the California Supreme Court said a few extra minutes of work each day could “add up.”

Troester was seeking payment for 12 hours and 50 minutes of work over a 17-month period. At $8 an hour, that amounts to $102.67, the California Supreme Court said.

“That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” Associate Justice Goodwin Liu wrote. “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”

Trivial and not trivial

The ruling also applies to tasks done before the workday begins, said Bryan Lazarski, an attorney in Los Angeles who handles wage claims against employers.

Lazarski said he expects the ruling to open the door to additional lawsuits by workers in similar situations as Troester. But he also expects lawsuits that “test the boundary of what this case says” to determine how much time spent doing work off the clock is enough to get paid.

The court in Thursday’s ruling said it was not closing the door on all claims by employers that the amount of additional work was too negligible.

“The court is saying, ‘We haven’t really drawn a line with regard to what is trivial and what is not trivial, but in this case, the time that the employee was not compensated was significant,'” said Veena Dubal, a labor law expert at the University of California, Hastings College of the Law.

Associate Justice Leondra Kruger wrote separately to say that there may be some periods of time that are “so brief, irregular of occurrence, or difficult to accurately measure or estimate,” that requiring an employer to account for them would not be reasonable.

She cited as examples a glitch that delays logging in to a computer to start a shift or having to read and acknowledge an email or text message about a schedule change while off the clock.

Tracking time

The federal court that threw out Troester’s lawsuit also said it would be hard for an employer to track the additional time that he worked. But Liu said employers could use technology for that or restructure employees’ work so they don’t have any tasks after they clock out.

Employers can also estimate the additional time, he said.

Troester appealed the U.S. District Court’s decision to the 9th U.S. Circuit Court of Appeals. The appeals court asked the California Supreme Court to determine whether a federal rule permitting employers under some circumstances to require employees to work as much as 10 minutes a day without compensation applied under state law.

The lawsuit now returns to the 9th Circuit. 
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