YCLOAK

U.S.-based food company Kellogg said on Tuesday it had pulled out of Venezuela due to its brutal economic crisis, the latest business to end operations in the oil-rich nation heaving under hyperinflation and strict price controls.

“In December of 2016, Kellogg deconsolidated its Venezuela business from the company’s results. The current economic and social deterioration in the country has now prompted the company to discontinue operations,” Kellogg said in a statement.

Kellogg did not specify what difficulties it was facing in Venezuela, but companies typically struggle to find raw materials due to product shortages and currency controls that crimp imports. Socialist President Nicolas Maduro’s government also stops companies from raising prices to keep up with hyperinflation, denting profits and sometimes rendering operations unsustainable.

Venezuela’s Information Ministry did not respond to a request for comment.

The closure is not expected to significantly worsen food shortages in Venezuela, but it was a further blow to morale for many Venezuelans as Kellogg’s is the most popular and available cereal in the country.

Stunned workers were barred from entering Kellogg’s plant in the central city of Maracay and massed outside, seeking information, local business sources said.

The move by the multinational was a typical one in Venezuela after years of economic crisis. Others, including Clorox, Kimberly-Clark, General Mills, General Motors and Harvest Natural Resources, have given up on the OPEC country, abandoning assets or selling them cheap.

Venezuela is undergoing quintuple-digit annual inflation and millions suffer food and medicine shortages. Despite the problems, Maduro is expected to win re-election on Sunday in a vote the main opposition coalition says is a sham.

Maduro blames Venezuela’s crisis on an “economic war” he says is waged by Washington, greedy businessmen and coup-mongers.

In the past, his government has taken over the factories of some companies that have left the country. In 2014, authorities took over two plants belonging to U.S. cleaning products maker Clorox Co after its departure.

“No Kellogg products or brands should be commercialized in the country without the expressed authorization of the Kellogg Company,” Kellogg said in its statement, adding it would like to return to Venezuela in the future.

 
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Only a third of U.S. employers have taken new measures to prevent sexual harassment since the #MeToo movement sparked international debate about the issue, a poll said Tuesday.

The Harris survey showed the movement had failed to trickle down to the wider population or bring about meaningful change, said Margaret Stockdale, a psychology professor at the Indiana University-Purdue University Indianapolis (IUPUI).

“The high-profile stuff, while it’s important, doesn’t capture the typical portrait of a sexual harassment victim, who lacks access to power and resources,” she told Reuters by phone.

Inspired by multiple accusations, including rape, against film producer Harvey Weinstein in October 2017, millions of women took to social and mainstream media to share stories of sexual harassment or assault, using the #MeToo hashtag.

Since then, dozens of prominent men in fields including entertainment, politics and business have quit or been fired from high-profile posts, and police have opened investigations into some accusations of sex assault.

Between 25 to 85 percent of women reported being sexually harassed at work, the U.S. Equal Employment Opportunity Commission found in 2016, although it received less than 10,000 complaints a year.

About half of 1,500 U.S. workers polled said they are now more likely to report workplace sexual harassment if they experience or witness it and they are more likely to confront a coworker engaging in inappropriate sexual behavior at work.

But only 32 percent said their employers had taken new steps to combat sexual misconduct. Of those, more than half merely reminded staff of existing training or resources, found the poll commissioned by the American Psychological Association (APA).

“Relying solely on mandated training designed primarily to limit the organization’s legal liability is unlikely to be effective,” David Ballard, director of the APA’s Center for Organization Excellence, said in a statement.

Just one in 10 respondents said their employer had added training or other resources for employees.

Workers were more likely to say their employer has taken new steps to prevent and address sexual harassment in the workplace in organizations that have equal representation of women in senior leadership, the survey found.

Stockdale of IUPUI said employers may yet step up their actions as experts and human resources departments are still processing the movement’s impact.

“This requires careful study and not just a Band-Aid approach,” she said.
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China accused the European Union on Tuesday of risking a return to the “law of the jungle,” telling a dispute hearing at the World Trade Organization that it was astonished by what it called the EU’s disregard for the WTO’s rulebook.

China’s made its allegation during a dispute which some trade lawyers see as the most divisive piece of litigation in the WTO’s 28-year-history, pitting China’s claim to be treated as a market economy versus EU and U.S. claims that it does not deserve such treatment since it does not trade fairly.

China told the confidential dispute hearing that it placed  extraordinary emphasis on the case, which was of critical importance — legally, economically and politically.

Its case against the EU, and a parallel dispute against the United States, is based on a promise enshrined in China’s 2001 WTO membership agreement: that after 15 years Beijing would be granted “market economy” status.

“The EU’s effort to rescind the promises it made, and the legal obligations it undertook, makes one wonder, is it a real role model for the rule of law, or does it disavow its obligations when politically expedient?,” China’s representative asked.

“It also makes one wonder, is the WTO really a rules-based organization, or just a club where powerful traditional Members can bend the rules?”

The dispute centers on the use of anti-dumping tariffs, which are used to punish foreign goods being sold at unfairly cheap prices.

China said it was astonished by the blunt manner in which the EU was trying to revive their discriminatory use, considering that the agreement was “recorded in black and white.”

“Besides enjoying no basis whatsoever in the treaty, the EU’s argument would open a Pandora’s Box,” China said. “The multilateral anti-dumping disciplines that have been gradually formed and strengthened over many decades will be shattered in one single dispute. The world trading environment will return to the law of the jungle.”

Although the EU might single out China for using regulatory action that “distorts” its market, all governments tried to influence economic activity, China’s statement said.

“What, after all, is the purpose and function of the EU’s own common agricultural policy, if not to influence “some would say distort markets?” Similarly, the U.S. government provides substantial subsidies to the production of corn, influencing the production of downstream food products, including poultry and beef, is this not also government ‘distortion’?”

The EU did not immediately make available its arguments in the hearing.
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Russian lawmakers Tuesday unanimously approved, in first readings, legislation to retaliate against the United States and other Western countries for last month’s imposition by Washington of sanctions on some of Russia’s biggest companies and business people.

One measure would empower the Kremlin to impose sweeping “counter-sanctions” in response. Another would make it a criminal offense to observe sanctions imposed by the U.S. on Russia or to provide any information or advice on the punitive action.

Refusing to supply services or do business with Russian oligarchs or companies sanctioned by the U.S. would be punishable by up to four years in prison, under the proposed legislation. The proposed measures have prompted investor alarm and opened up the prospect of a tit-for-tat cycle of retaliation.

After the measures secured their first reading, Kremlin official Alexander Sinenko said the Russian government supports the parliamentary response to the sanctions aimed at punishing Moscow for its alleged meddling in the 2016 U.S. presidential election and other “malign activities.” U.S. President Donald Trump ordered the measures last month.

‘Absolutely unfriendly’

“The U.S. sanctions are of an absolutely unfriendly type,” said Vyacheslav Volodin, speaker of Russia’s lower house of parliament, the State Duma. “They affected over 400 Russian companies and about 200 citizens of our country. We are granting broad powers to our president and government to protect our country, our economy and workplaces.”

Prime Minister Dmitry Medvedev last month pledged that the Kremlin would help companies targeted by U.S. sanctions. The proposed legislation would halt all cooperation with the U.S. in the nuclear, missile and aircraft-building spheres and introduces restrictions on various American imports. The proposed measures also allow Russian companies to produce various goods copyrighted in the West.

Initially, Russian lawmakers said they would impose restrictions on a wide range of specific goods and services from the United States, including medicine and agricultural products; but, in the draft legislation approved Tuesday, language that targeted specific goods to soften the impact on Russian consumers and industries was removed.

Small impact expected

The U.S. is Russia’s fourth-largest trading partner, and imports of American goods totaled $12.7 billion last year. Cars, pharmaceuticals and medical equipment were among the top items. Russian exports to the U.S. totaled $17 billion in 2017.

The Russian retaliation would have negligible impact on the U.S., given trade flows are insignificant as far as America is concerned, but the retaliation envisaged would exacerbate already highly fraught U.S.-Russian relations, which analysts describe as being at their lowest point since the Cold War.

The U.S. sanctions imposed on Russia in April, targeting two dozen Kremlin insiders and oligarchs close to Russian President Vladimir Putin, have proven to have had a greater impact on Russia than had been expected, say analysts. But they’re doing nothing at this stage in turning ordinary Russians against the Kremlin or undermining the Russian leader’s overall popularity, if recent polling data is accurate.

The ruble suffered its worst week in four years in the immediate wake of the April 6 announcement of new sanctions on 24 extremely wealthy Russians and 14 companies.

‘Game-changer’

When the West imposed its first sanctions on Russia, following Moscow’s annexation of Crimea and fomenting separatism in eastern Ukraine, the effect was limited, according to analyst Nigel Gould-Davies of Britain’s Chatham House research group, and Russia found ways to adapt.

“But America’s latest financial sanctions, announced on April 6, are a game-changer,” he argued in a recent commentary, noting the latest sanctions have created bigger uncertainty.

“No one knows who might be targeted next,” he continued. “Russia faces a new systemic risk: expectations about U.S. sanctions are now as important as the oil price for assessing its prospects.”

The British government is starting the process of introducing legislation that will block Russian oligarchs and officials linked to human rights abuses from doing business in the country and buying property in Britain.

Russia-Crimea link

As Russian lawmakers debated the retaliatory measures, President Putin opened a controversial bridge linking southern Russia and the Crimean peninsula that Moscow annexed from Ukraine in 2014.

Before driving an orange truck on the 19-kilometer bridge that cost $3.6 billion to build, Putin told construction workers (and reporters): “I want to sincerely congratulate you with this remarkable, festive and, in the full sense of the word, historic day.”

“Even under the Tsar, people were dreaming of building this bridge,” he said, in reference to Russia’s last Tsar, Nicholas II, who had wanted to span a bridge across the Kerch Strait. In the 1930s, Communist autocrat Joseph Stalin also had proposed a Kerch Strait bridge.

Ukraine condemned the opening. “The Russian occupying powers, which have temporarily occupied Crimea, are continuing to act outside international law,” said Ukrainian Prime Minister Volodymyr Groysman.

 
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The United States has imposed sanctions on the head of Iran’s central bank Valiollah Seif , accusing him of helping funnel millions of dollars to Lebanon-based militant group Hezbollah.

“Iran’s Central Bank Governor covertly funneled millions of dollars on behalf of the IRGC-QF (the Islamic Revolutionary Guard Corps-Quds Force ) through Iraq-based al-Bilad Islamic Bank to enrich and support the violent and radical agenda of Hezbollah,” said Treasury Secretary Steve Mnuchin in a statment. “The United States will not permit Iran’s increasingly brazen abuse of the international financial system. The global community must remain vigilant against Iran’s deceptive efforts to provide financial support to its terrorist proxies.”

Also blacklisted were Ali Tarzali, assistant director of the international department of Iran’s central bank, and chairman of al-Bilad Islamic Bank, Aras Habib.

Mnuchin said the Tuesday action “cuts off Iran’s use of a critical banking network and follows last Thursday’s disruption of an IRGC-QF-associated currency exchange network procuring millions of dollars through the UAE.”

The United States and the United Arab Emirates said the currency exchange network allowed hundreds of millions of dollars to be transferred to the IRGC-QF to fund its insurgent operations in the Middle East.

“These actions build upon President Trump’s May 8 decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (JCPOA) and begin reimposing U.S. sanctions that had been lifted under the JCPOA, including against the Central Bank of Iran,” Secretary Mnuchin said Tuesday, referring to the 2015 Iran nuclear agreement.
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A Kenyan court on Monday rejected a plea for a change to the laws on how property should be split in divorce cases, a ruling activists said was a blow for women’s rights in the country.

Kenya’s High Court dismissed a 2016 petition from the Federation of Women Lawyers in Kenya (FIDA), an advocacy group that had argued the Marriage Properties Act was unconstitutional because it entitled each partner only to what they contributed.

The constitution states that married couples are entitled to equal rights and the group argued that the law unfairly impacted women, who were more likely to suffer financially from a marriage breakup.

In its ruling, the court said that changing the law would “open the door for a party to get into marriage and walk out of it in the event of divorce with more than they deserve.”

In response, FIDA head Josephine Mong’are said it was a “sad day for Kenyans.”

“Every year millions of women in Kenya still find themselves fighting to hold onto their property after a divorce or the death of their husband,” she said in a statement.

Less than seven percent of title deeds are held by women alone or jointly with men in Kenya, according to a 2014 survey by the United Nations Conference on Trade.

Land is usually passed on to sons, making it hard for women to secure rights except through their husbands. Women and their children are often evicted if the husband dies or they divorce.

Less than two percent of title deeds issued in Kenya since 2013 went to women, according to the Kenya Land Alliance, an advocacy network.
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The Turkish lira is increasingly under siege amid mounting international investors’ concerns. The publication Monday of unexpectedly poor economic data saw the lira approach record lows. The increasing financial turbulence comes as opposition parties begin to narrow the gap ahead of the June 24 presidential and general elections and voter concerns over the economy grow.

“We are in such a knife-edge situation,” said analyst Atilla Yesilada of Global Source Partners. “There is extremely fragile sentiment toward the lira. Sentiment is negative for emerging markets in general and in particular for Turkey. Investors smell blood and they are going to keep coming after the Turkish lira unless significant counter steps are taken.”

With double-digit inflation, investors have increasingly been warning the Turkish economy is overheating. In the last year, the government has spent billions of dollars to boost the economy in a process that has accelerated with elections. With opinion polls indicating a galvanized opposition narrowing the lead, President Recep Tayyip Erdogan has announced 2,000 lira (approximately $460) payments to all pensioners, at a cost of $5 billion.

International investors are pressing for a substantial increase in Turkish interest rates to support the lira and help to cool down the economy; but Erdogan Friday appeared to rule out such a move, describing interest rates as the “mother of all evil.” He pledged that Turkey will “emerge victorious in its fight against interest rates” after the June elections. On Sunday, he repeated his message before flying to London for a three-day visit.

Erdogan adheres to the unorthodox economic view that interest rates cause inflation instead of reducing it. While the Turkish central bank is ostensibly independent, there is an awareness that the president has the final say.

“It’s always difficult for the central bank to substantially raise rates given very strong political opposition and very shortly, before the election, it will be very difficult,” said economist Inan Demir of Nomura International Plc.

“But the costs of a rate hike will be much lower than letting the currency depreciate. Unless this happens, the likelihood is the currency will depreciate further and possibly lead to a slowdown in the economy,” added Demir.

Economic concerns are cited as the No. 1 issue of concern in many opinion polls.

“People are hungry and angry,” analyst Yesilada said. But a major interest rate increase would bring financial woe to the large numbers of voters with big credit card debts. “It’s an issue no one is talking about, but we have an explosion in credit card debt in Turkey,” political columnist Semih Idiz of Al-Monitor website said.

Turkey’s indebted construction industry, the major driver of the economy, would also, analysts warn, be hit hard by interest rate increases.

“Construction is a magnet industry, in the sense that it draws input from various indigenous industries, and it’s labor intensive. When construction stops, recession spreads,” analyst Yesilada said. “Construction companies are usually loyal supporters and contributors of the ruling AKP, so to lose their favor just before an election is not a good idea.”

An increase in borrowing costs would likely hit demand for new housing. Construction companies are already struggling to sell existing stock, with reports many firms are close to defaulting on bank loans. Analysts say construction company debts account for more than 10 percent of Turkish bank loans.

Erdogan’s opposition to interest rate increases could be tested further. On Wednesday, a New York court is set to sentence Hakan Atilla, a senior executive of Turkey’s state-owned Halkbank, on Iranian sanctions violation charges. Atilla’s sentencing opens the door to potential multibillion dollar fines on Halkbank and other Turkish banks, a prospect that analysts warn could further unnerve investor concerns over Turkey, leading to further currency falls and more pressure to increase rates.

Investors are also increasingly focusing on the outcome of the June election and the potential for political deadlock if opposition parties form the next government and Erdogan is re-elected. 

“The scenario markets would dislike most is a divided presidential parliamentary power scenario. That would create more uncertainties for the markets. I think the markets will watch the opinion polls with an eye on that possibility,” economist Demir said.

Turkey’s central bank is due to meet next month, and there is the expectation it may raise rates modestly. Analysts say that with Erdogan aware of the tightening polls, he will likely seek to perform a delicate balancing act in averting a currency collapse without a major rate increase before the elections.
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Eurasian Economic Union includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan
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Key U.S. lawmakers on Monday attacked President Donald Trump’s call to help save jobs at the Chinese technology giant ZTE, contending it overlooks American national security concerns.

Sen. Marco Rubio, one of Trump’s former rivals for the Republican presidential nomination in 2016, said on Twitter the “problem with ZTE isn’t jobs & trade, it’s national security & espionage. Any telecomm firm in China can be forced to act as tool of Chinese espionage without any court order or any other review process. We are crazy to allow them to operate in U.S. without tighter restrictions.”

The Florida lawmaker added, “I hope this isn’t the beginning of backing down to China.”

Senate Democratic leader Charles Schumer parodied Trump’s “Make America Great Again” political slogan, saying, “One of the few areas where the president and I agreed, and I was vocally supportive, was his approach towards China. But even here he is backing off, and his policy is now designed to achieve one goal: make China great again.”

Democratic Sen. Ron Wyden questioned the timing of Trump’s call to help ZTE “get back into business fast” after a U.S. trade ruling severely crippled the company and order to the U.S. Commerce Department “to get it done!”

“Unilateral concessions before an upcoming trade negotiation,” Wyden said. “This may be the art of the deal for China, but it’s a big loser for American workers, companies, and national security.”

Trump said Sunday he is working with Chinese President Xi Jinping to ease the economic fortunes of ZTE, which employs 80,000 workers and is China’s second-largest maker of telecommunications equipment.

The U.S. leader’s Twitter comments on ZTE came as the United States and China, the world’s two biggest economies, are locked in contentious talks about tariffs each has threatened to impose on hundreds of billions of dollars worth of each other’s exports. Recent U.S.-China trade talks in Beijing proved fruitless, but the discussions are resuming again this week in Washington.

For its part, Chinese Foreign Ministry spokesman Lu Kang said Monday that China “greatly appreciates the positive U.S. position on the ZTE issue.”

After Trump tweeted that he had “instructed” the Commerce Department to resolve the dispute over ZTE, the White House said that the president expected Commerce Secretary Wilbur Ross to make an independent decision.

“Too many jobs in China lost,” Trump tweeted Sunday, days after ZTE announced it had ceased “major operating activities.”

The U.S. had cut off exports of U.S.-made parts to ZTE — more than 25 percent of the components ZTE needs to build its wireless stations, optical fiber networks and smartphones.

The U.S. cutoff came after ZTE was, in the words of one expert, “caught red-handed” putting the U.S. technology into products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.

The U.S. fined ZTE $1.2 billion last year. But the U.S. said last month ZTE lied about punishing the employees believed to be involved in skirting the sanctions, paying them bonuses instead.

The Commerce Department cut off ZTE’s access to U.S. components until 2025, forcing it to shut down operations at its factory in Shenzhen.

“China and the United States are working well together on trade, Trump said in a second tweet Sunday, “but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!”

Douglas Jacobson, an attorney who represents suppliers who do business with ZTE, told VOA that Trump’s order to help ZTE is a stunning decision and one bound to make U.S. law enforcement officials unhappy by going over their heads.

“This has caught all of those in the exports and sanctions world certainly by surprise and with some degree of shock and awe,” Jacobson said. “This is unprecedented that the president of the United States would intervene in what really is a law enforcement case.”

But Jacobson said the ZTE matter is not a sign of a general thaw in trade tensions between the U.S. and China, including the recent tit-for-tat tariffs.

Jacobson said he believes Trump may be willing to make a concession on China in exchange for China’s help with North Korea.

Ira Mellman contributed to this report.

 
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