YCLOAK

As South Korea’s new leadership works toward easing long strained inter-Korean relations, U.S. experts are eyeing the country’s conciliatory overtures to the Kim Jong Un regime, worried that a possible resumption of the Kaesong Industrial Complex could provoke discord with the Trump administration.

Shortly after South Korean President Moon Jae-in named Cho Myoung-gyun to be his North Korea point man on June 13, Cho, who played a key role in launching the now-stalled economic cooperation project, told reporters, “Operations at the Kaesong Industrial Complex should be restored. I will speak after thoroughly looking into the details.” 

That statement caused a flurry of criticism in Washington, with many analysts saying reviving activities at the complex possibly could hurt Washington-Seoul relations and diminish their alliance coordination. Seoul closed the complex in February 2016 as punishment for the regime’s nuclear test and long-range rocket launch.

“Reopening the Kaesong Industrial Complex is very problematic from Washington’s perspective,” Sue Mi Terry, a former CIA analyst who specializes in North Korea, told VOA’s Korean Service.

Launched in 2004 to enhance cooperation between the two Koreas, the jointly run industrial complex in Kaesong, just north of the border, has reportedly provided $100 million a year in wages to 54,000 North Korean workers and contributed almost $2 billion in trade for Pyongyang.

Terry said any conciliatory action that translates into significant financial benefits for Pyongyang contradicts Washington’s North Korea policy, which is focused on thwarting the Kim regime’s nuclear weapons program by severing all possible revenue streams that fund it. 

“We don’t know where the money is going,” Terry said. “It could be contributing to North Korea’s WMD (weapons of mass destruction) missile program. There is no evidence that it’s not.”

Thomas Countryman, who served in the Obama administration as assistant secretary of state for international security and nonproliferation, said restarting Kaesong’s activities would not only reward Kim for the continued provocations, but also throw cold water on international efforts.

“It would be inconsistent with the [U.N. Security Council] resolutions if not in the letter, then in the spirit,” Countryman said. “There is simply no way that [South Korea] could convince China to have a strict enforcement of the U.N. resolutions, if South Korea is reopening a complex that provides tens of millions of dollars of hard currency every year to the North Korean regime.” 

Formerly the Obama White House coordinator for arms control and WMD, Gary Samore of the Belfer Center at Harvard University said Seoul should be more strategic and use Kaesong as a bargaining chip in response to or as part of a deal with Pyongyang to take steps toward limiting and eventually eliminating its nuclear activities.

“It would be a big mistake to resume the Kaesong Industrial Park without getting something in return,” Samore said. “So if Kim Jong Un agrees to some limits on nuclear and missile activity — for example, a freeze on testing — then I think one response that [South Korea] could make would be to resume the Kaesong Industrial Park, with the understanding that the facility would be suspended if Kim Jong Un resumed nuclear and missile testing.”

Negotiations on Pyongyang’s nuclear program have been in limbo for almost a decade, with Washington and Seoul ratcheting up economic pressure and a stubborn Pyongyang persisting with weapons development. But since Moon took office last month, he appears to be easing conditions for talks with the North.

“I make it clear that we will open dialogue without a precondition” should North Korea stop launching missiles and testing nuclear devices, Moon said Thursday at an event marking the 2000 inter-Korean summit.

But when President Donald Trump’s top diplomat Rex Tillerson led a U.N. Security Council special meeting in April, he rejected negotiations with Kim, saying North Korea “must take concrete steps to reduce the threat that its illegal weapons programs pose to the U.S. and our allies before we can even consider talks.” Those steps would be dismantling its nuclear and missile programs.

Moon Chung-in, South Korea’s special presidential advisor for foreign and security affairs, commented at an event in Washington Friday that his president proposed “scaling down” the Washington-Seoul joint military drills if North Korea “suspends its nuclear and missile activities.”

The State Department downplayed the significance of the comments.

“We understand these views are the personal views of Mr. Moon and may not reflect official ROK govern policy,” said Bureau of East Asian and Pacific Affairs spokesperson Alicia Edwards in an email to VOA.

A senior official at the South Korean presidential office said the advisor did not coordinate with the president’s office on the proposal.

This report originated on VOA Korean.
…

The U.S. Supreme Court on Monday handed a victory to Chevron Corp. by preventing Ecuadorean villagers and their American lawyer from trying to collect on an $8.65 billion pollution judgment issued against the oil company by a court in Ecuador.

The justices turned away an appeal by New York-based lawyer Steven Donziger, who has spent more than to two decades trying to hold Chevron responsible for pollution in the Ecuadorean rain forest, of lower court rulings blocking enforcement in the United States of the 2011 judgment.

While not disputing that pollution occurred, San Ramon, California-based Chevron has said it is not liable and that Donziger and his associates orchestrated the writing of a key environmental report and bribed the presiding judge in Ecuador.

U.S. District Judge Lewis Kaplan in Manhattan barred enforcement of the judgment in 2014, citing the corruption used to obtain it. The New York-based 2nd U.S. Circuit Court of Appeals last year upheld Kaplan’s decision, citing “a parade of corrupt actions” by Donziger and his associates, including coercion and fraud, culminating in the bribe offer.

The 2nd Circuit found that Chevron’s $8.646 billion judgment debt was “clearly traceable” to corrupt conduct by the legal team representing the villagers from the area affected by the pollution.

The lengthy legal battle with Chevron has been waged in several countries and was documented in “Crude,” a 2009 documentary film. The plaintiffs have said they plan to continue efforts to enforce the judgment in other countries, regardless of the outcome in the United States.

The saga was drawn extensive media attention over the years, with a succession of reporters given tours by both sides of the affected sites on the edge of the Amazonian jungle near the town of Lago Agrio. The plaintiffs also touted the backing of several celebrities including actors Mia Farrow and Danny Glover.

Donziger and representatives of residents of the Lago Agrio region have sought to force Chevron to pay for water and soil contamination caused from 1964 to 1992 by Texaco, which Chevron acquired in 2001. Chevron has said a 1998 agreement between Texaco and Ecuador absolved it of further liability.

Donziger’s crusade began to unravel when Chevron noticed a deleted scene in the “Crude” documentary, released in 2009, showing Donziger working with supposedly neutral experts in preparing a report for the Ecuadorean court.

Chevron was then able to get access to out-takes and other material related to the documentary via court order. Chevron cited this evidence when it filed its lawsuit in 2011 seeking to block enforcement of the judgment, saying Donziger’s actions violated U.S. anti-racketeering law.

Donziger has also tried to enforce the judgment in Canada, Brazil and other countries where Chevron operates.

 
…

The U.S. Supreme Court on Monday tightened rules on where injury lawsuits may be filed, handing a victory to corporations by undercutting the ability of plaintiffs to bring claims in friendly courts in a case involving litigation over the Bristol-Myers Squibb Co. blood-thinning medication Plavix.

The justices, in an 8-1 ruling, threw out a lower court decision allowing hundreds of out-of-state patients who took Plavix to sue the company in California. State courts cannot hear claims against companies that are not based in the state when the alleged injuries did not occur there, the justices ruled.

The court last month reached a similar conclusion in a separate case involving out-of-state injury claims against Texas-based BNSF Railway Co.
…

Climate change, trade and terrorism were highlighted Monday at a Beijing meeting of foreign affairs officials from Brazil, Russia, India, China and South Africa, known collectively as the BRICS nations.

The five nations are seeking to further align their views on key issues at a time when President Donald Trump is withdrawing the U.S. from multilateral arrangements such as the Paris climate accords and the Trans-Pacific Partnership trade deal.

Chinese Foreign Minister Wang Yi said China in the coming year would look to “expand with more broad and wide-ranging cooperation in areas such as trade and commerce and investment.”

Together the BRICS countries account for roughly 40 percent of the world population and 20 percent of the global economy. All five countries are members of the G20, although their economic prospects have declined somewhat amid crises in Brazil and South Africa and the effect of sanctions lodged against Russia by the West.

South African Foreign Minister Maite Nkoana-Mashabane pointed to climate change as a major concern.

“There is one climate and for future generations we must employ every effort at our disposal to reverse the effects of climate change,” she said.

Nkoana-Mashabane also pointed to the need to form joint efforts to fight terrorism, sentiments reflected by Vijay Kumar Singh, an Indian External Affairs official.

“It is important to enhance BRICS security in counterterrorism matters,” Singh said.

Leaders of the five nations are due to meet for a summit in the southeastern Chinese city of Xiamen in September.
…

When Wal-Mart Stores Inc. bought online retailer Jet.com for $3 billion last year, it marked a crucial moment — the world’s largest brick-and-mortar retailer, after years of ceding e-commerce leadership to arch rival Amazon, intended to compete.

On Friday, Amazon.com Inc. countered. With its $14 billion purchase of grocery chain Whole Foods Market Inc., the largest e-commerce company announced its intention to take on Wal-Mart in the brick-and-mortar world.

The two deals make it clear that the lines that divided traditional retail from e-commerce are disappearing and sector dominance will no longer be bound by e-commerce or brick-and-mortar,  but by who is better at both.

Amazon’s purchase of Whole Foods also brings disruption to the $700 billion U.S. grocery sector, a traditional area of retailing that stands on the precipice of a ferocious price war.

German discounters Aldi and Lidl are battling Wal-Mart, which controls 22 percent of the U.S. grocery market, with each vowing to undercut whatever price the others offer.

The stakes are highest for Wal-Mart. Amazon’s move aims at the heart of the Bentonville, Arkansas-based retail giant’s business — groceries, which account for 56 percent of Wal-Mart’s $486 billion in revenue for the year ending Jan. 31. With the deal, Whole Foods’ more than 460 stores become a test bed with which Amazon can learn how to compete with Wal-Mart’s 4,700 stores with a large grocery offering that are also within 10 miles (16 km) of 90 percent of the U.S. population.

Amazon is expected to lower Whole Foods’ notoriously high prices, enabling it to pursue Wal-Mart’s customers. The push comes as Wal-Mart is headed in the opposite direction — going

after Amazon’s higher-income shoppers with a recent string of acquisitions of online brands such as Moosejaw and Modcloth and on Friday, menswear e-tailer Bonobos.

Wal-Mart may be ready. In preparation for the grocery price war, Wal-Mart in recent months has cut grocery prices, improved fresh food and meat offerings, modernized shelving and lighting

in its grocery aisles, and expanded its online grocery pickup service.

Marc Lore, the Jet.com founder who now runs Wal-Mart’s e-commerce business after selling a startup to Amazon, told Reuters in an interview that Amazon’s move does not change Wal-Mart’s game plan. “We’re playing offense,” he said.

Wal-Mart is offering curbside pickup of online grocery purchases at 700 locations, with 300 more planned by year end.

It also is testing same-day fresh and frozen home delivery from 10 of its stores. “We see an opportunity to do a lot more of that,” Lore said.

Roger Davidson, who oversaw Wal-Mart’s global food procurement and now is president of Oakton Advisory Group, said the deal will reduce Wal-Mart’s brick-and-mortar advantage.

“I think this acquisition is a concern,” he said.

Some industry observers say Amazon will find it difficult to use Whole Foods to pull away Wal-Mart shoppers because the two stores appeal to different customers. But Michelle Grant, head of retailing at market research firm Euromonitor, said Amazon could use an obscure part of the Whole Foods portfolio — Whole Foods 365 — to lure Wal-Mart shoppers.

Whole Foods 365 offers private-label goods and lower prices than typical Whole Foods stores, and is targeted at younger, value-conscious shoppers. Amazon could provide the financial

capital and tactical ability to build that into something big.

“That [Whole Foods 365] may become a big problem for Wal-Mart,” Grant said.

Amazon, which reported $12.5 billion in cash and equivalents and a free cash flow of $10.2 billion in the year ended March 31, has plenty to spend. Wal-Mart reported $6.9 billion in cash

and equivalents and $20.9 billion in free cash flow at its year ended Jan. 31.

Brittain Ladd, a former senior manager at Amazon who worked on its brick-and-mortar strategy, said Amazon will use Whole Foods to test concepts for the grocery store of the future.

Ladd, who left Amazon in March, said Amazon will seek to eliminate checkout lines by using technology that automatically scans goods as customers add them to their shopping carts. It

will select merchandise based on Amazon’s vaunted customer data, and potentially expects the use of technology to change prices during the course of a day.

Amazon declined comment on competition with Walmart but spokesman Drew Herdener said in a statement the company has no plans to cut jobs or use technology in development at its

Seattle Amazon Go store to automate jobs of cashiers.

Ladd, who helped with AmazonFresh’s global expansion and now is a supply chain consultant, said an Amazon-owned Whole Foods also likely will offer in-car pickup of online purchases, and

home delivery from Whole Foods stores, add pharmacies and showcase Amazon devices inside the stores.

“Amazon will reduce prices and change the assortment of products carried in Whole Foods stores to attract a larger customer base,” said Ladd. “Kroger and Wal-Mart will be impacted as their customers will defect to Amazon.”
…

A key part of House Republicans’ plan to overhaul the way corporations pay taxes is on life support, leaving lawmakers scrambling to save one of President Donald Trump’s biggest priorities and increasing the chances the GOP will simply pass a tax cut instead of overhauling the tax code.

A proposed tax on imports is central to the GOP plan to lower the overall corporate tax rate. It would generate about $1 trillion over the next decade to finance the lower rates without adding to the deficit. It would also provide strong incentives for U.S.-based companies to keep their operations in the United States and perhaps persuade companies to move overseas operations to the U.S.

But the tax faces strong opposition from retailers, automakers and the oil industry, and a growing number of congressional Republicans have come out against it. They worry that it will increase the cost of imports, raising consumer prices.

Import tax

Majority Leader Mitch McConnell, R-Ky., says there probably aren’t enough votes to pass the import tax in the Senate — not a single Republican senator has publicly endorsed it. And a powerful group of House conservatives says it’s time to dump the idea.

“The sooner we acknowledge that and get on with a plan that actually works and actually can build consensus, the better off we will be,” said Rep. Mark Meadows, R-N.C., chairman of the conservative Freedom Caucus.

Even one of the biggest backers of the new tax says he is open to other ideas.

Rep. Kevin Brady, R-Texas, has pushed the tax as chairman of the powerful House Ways and Means Committee. He still says it’s the best way to promote economic growth and domestic jobs, but he has softened his stance on alternatives.

“I’m still confident that we’re going to stay at the table until we solve that problem, which is how do we stop U.S. jobs from continuing to leave the United States,” Brady said. “We’re going to remain open to the best ideas on how we do that.”

On Tuesday, Brady proposed gradually phasing in the tax over five years to give corporations time to adjust.

It wasn’t received well by opponents.

“Forcing consumers to pay more so that some profitable companies can operate tax-free is no better of an idea in five years than it is today,” said Brian Dodge of the Retail Industry Leaders Association.

What next?

But if the import tax is dead, then what?

“I would never declare anything dead until there was a fully formed alternative,” said Rohit Kumar, a former tax counsel to McConnell who now heads PwC’s Washington tax office. “I think that’s one of the big challenges that Republicans are struggling with right now.”

Thirty-one years after the last tax overhaul, there is widespread agreement that the current system is too complicated and picks winners and losers, compelling companies to make decisions based on tax implications instead of sound business reasons.

The goal — for now — is to simplify the tax code and make it more efficient in a way that does not add to the federal government’s mounting debt. That means some would pay more and some would pay less, a heavy political lift among politicians who have deep political and practical disagreements.

Lawmakers also are trying to overhaul taxes on individuals, which raises another set of big challenges.

“It’s easier to get a coalition to cut taxes,” said Mark Mazur, a former Treasury official under President Barack Obama. “And if the conversation is, `how long do they last and how deep are the tax cuts,’ each party knows how to do that conversation. It’s not like you’re asking for a huge lift.”

The new import tax, which is called a border adjustment tax, would radically change the way corporations are taxed. Under current law, corporations pay a top tax rate of 35 percent on their profits. But the tax code is filled with so many exemptions, deductions and credits that most corporations pay a much lower rate.

Proposal

Under the proposed system, American companies that produce and sell their products in the U.S. would pay a new 20 percent tax on the profits from these sales. However, if a company exports a product, the profits from that sale would not be taxed by the U.S.

Foreign companies that import goods to the U.S. would also have to pay the tax, and they would not be able to deduct the cost of the imported good as a business expense.

Republicans in Congress and at the White House have been meeting behind closed doors for weeks to come up with viable alternatives. Democrats have been largely excluded from the talks, leaving Republicans with little room for error.

“I still think that Republicans, out of pure political necessity, if nothing else, are likely to find a way to get some sort of tax bill to the president’s desk for his signature,” Kumar said.

Whether it’s genuine tax reform or simply a tax cut “is still very much in question right now,” he added.
…

U.S. farm groups criticized President Donald Trump’s decision to retreat from his predecessor’s opening toward Cuba, saying it could derail huge increases in farm exports that totaled $221 million last year.

A trade delegation from Minnesota, one of the largest U.S. agriculture states, vowed to carry on with its planned visit to Cuba next week. 

“We’re going to continue to beat the drum and let them (the Trump administration) know that trade is good for agriculture,” said Kevin Paap, a farmer in the delegation.

Trump signed a presidential directive Friday rolling back parts of former President Barack Obama’s opening to the Communist-ruled country after a 2014 diplomatic breakthrough between the two former Cold War foes.

Farm groups saw the move as a step backward in what had been an improving trade relationship between the two countries, which are 90 miles (145 kms) apart, even though agriculture is not directly targeted.

U.S. law exempts food from a decades-old embargo on U.S. trade with Cuba, but cumbersome rules on how transactions were executed have made deals difficult and costly.

Since Obama’s detente, substantial headway has been made with shipments of U.S. corn and soybeans to Cuba soaring 420 percent in 2016 from a year earlier to 268,360 tons, U.S. Department of Agriculture data shows.

Through the first four months of 2017, total shipments of U.S. grain and soy were 142,860 ton, up from 49,090 tons during the same period of 2016.

While the quantities are dwarfed by total U.S. exports — nearly 56 million ton of corn alone last year — the added volumes were welcome as farmers face a fourth year of languishing grain prices and crimped incomes.

“At a time when the farm economy is struggling, we ask our leaders in Washington not to close doors on market opportunities for American agriculture,” Wesley Spurlock, president of the National Corn Growers Association, said in a statement.

The group sees an opportunity for $125 million more a year in trade to Cuba.

Trump’s move could cut off near-term sales and stymie economic development that would drive longer-term demand growth, said Tom Sleight, president of the U.S. Grains Council, a grain trade development organization, in a statement.

“Neither of those outcomes is favorable for the U.S. ag sector or the Cuban people,” he added.

Paap said the United States should be doing more to encourage exports.

“It’s frustrating because we’ve made some advances and built those relationships,” he said. 
…

The key to success for ride-hailing providers like Uber is keeping drivers happy so they run their app, ensuring that enough cars respond to passenger demand.

Estonia upstart Taxify is hoping to win over drivers and take on Uber Technologies Inc., the industry leader, by offering a larger share of the profit.

Upstarts across the world, such as Lyft Inc. and Ola, are trying to catch Uber in the on-demand car-ride market by securing brand loyalty.

But Uber has gathered critical mass and reached a valuation of more than $60 billion in eight years, despite a lack of profits. It has kept rivals at bay, partly by offering incentives to drivers to stay online.

Taxify hopes to lure drivers

Taxify, a minnow compared with Uber, cannot afford these perks but believes that by taking a smaller share of fares, 15-20 percent compared with Uber’s 20-25 percent, it can steal market share from its San Francisco-based rival.

It also hopes that allowing drivers to take cash as well as credit card fares will also help it attract more passengers.

“Taxify’s biggest advantage is the focus on good service by treating the drivers and riders better than other platforms. This means having higher pay for drivers, thanks to lower fees,” Chief Executive Markus Villig told Reuters at Taxify’s headquarters in Estonia.

An Uber spokeswoman declined to comment but the company has said it had fare revenue of around $20 billion last year. Villig said Taxify generated fares worth “tens of millions of euros” each month. Taxify runs in just 25 cities in Europe and Africa, while Uber operates in nearly 600 cities worldwide.

Its basic business model is identical — both connect passengers with self-employed drivers. Many incumbent cab companies in Europe have developed apps to operate in a similar manner but most have focused on their domestic markets.

Markets not Uber dominated

But Taxify is unusual in launching in about 18 countries, mainly smaller markets in Eastern Europe and Africa, where Uber is absent or not yet dominant.

Uber usually takes market share by giving drivers money to sign on to its app, paying them even if they are not driving passengers. Then, as it becomes more popular with passengers, it withdraws the inducements. Analysts say Uber aims to build a customer franchise and stable of drivers to dominate the market.

“The way I see it, Taxify is cheaper than Uber,” said Tumelo Malatjie, 33, a former truck driver for a logistics firm turned full-time Taxify driver in Johannesburg. “Taxify takes 15 percent and Uber about 25 percent or 30 percent,” said Malatjie, who nonetheless is on a waiting list to become an Uber driver.

Taxify has avoided expensive head-to-head battles with its much larger rival but its model will soon be tested as Villig plans to launch in London, Uber’s biggest European market in the coming months.

“We are coming in as a second wave,” Villig said.

Small but growing

Founded 3½ years ago, Taxify has 140 staff worldwide, a third of whom are based in Estonia. It says it has 2.5 million active passengers in 18 countries. Uber says it has more than 12,000 people across the world and millions of passengers in 70 countries.

In Africa, Villig said Taxify has hired away 20 former Uber executives, helping its expansion in cities like Lagos, Cairo and Johannesburg.

The start-up has raised 2 million euros in outside financing from local venture capitalists. Like Uber, it is losing money, although it was “close to profitability for the past six months,” Villig said.

Uber reported in late May that its net loss, excluding employee stock options and other items, narrowed in the first quarter to $708 million, from $991 million in the fourth quarter.

Same challenges

Taxify and Uber face many of the same regulatory and commercial challenges.

Uber was dealt a major setback to its European ambitions in May when the lead advocate for Europe’s highest court said it should be regulated like a transport company rather than an online electronic intermediary.

Taxify could face the same legal treatment, which would make it more susceptible to new regulations being introduced by a growing number of European cities.

Similarly, bans on ride-sharing in cities such as Brno in the Czech Republic, apply to Taxify as much as Uber.

Uber has faced complaints from its drivers in London, France and the United States who were unhappy about compensation.

But Taxify has also had protests from drivers in Estonia unhappy at how the company had slashed fare rates. Villig declined to comment.

While analysts do not expect Uber to be dethroned by Taxify anytime soon, the Estonian company’s lower commission model may put pressure on Uber’s margins in countries where it is seeking to cut fares or increase its share of fares.
…

Colombia on Friday reached a deal with public school teachers to end a 37-day strike that has kept millions of children out of classes, amid criticism the government has failed to keep its promise to improve public education after a peace deal with Marxist rebels.

Union members participating in the nationwide walkout held near-daily marches, often blocking busy roads in the capital Bogota to demand more funding for school maintenance, supplies, student meals and salaries.

President Juan Manuel Santos says he is focused on combating inequality and improving education now that a peace deal with the Revolutionary Armed Forces of Colombia (FARC), an end of more than 52 years of war, is under way.

But educators said improvements are nowhere to be seen and their salaries, some as low as 1.8 million pesos per month (about $610), are not adequate compensation for work that requires extensive and expensive higher education.

 

“The government’s priority was always to reach an agreement that recognizes the work of teachers and the indispensable role of education in the development of the country and, at the same time, be responsible with public finances,” Education Minister Yaneth Ghia told reporters.

The deal, among other things, will improve salaries through progressive bonus payments and allow bigger union involvement in how money is spent on education, she said.

The powerful Colombian Federation of Education Workers (Fecode) union, which represents more than 350,000 teachers, agreed to the deal after meeting with Finance Minister Mauricio Cardenas.

“The president said the money that went to the war would go to education but now there’s no FARC, no guns and we don’t see the funds,” said high school teacher Jose Escobar, 36, earlier on Friday during a protest in Bogota’s main square.

Places at his school, Colegio German Arciniegas in Bogota’s poor Bosa neighborhood, are in such high demand that it has been impossible to implement the government’s goal of full-day classes, Escobar said. Instead, 4,800 students in grades nine through 11 attend half-day, or six hours.

Friday’s deal will push toward the aim of full-day study.

Santos has weathered a wave of strikes in recent weeks, reaching agreements to halt protests in the port city Buenaventura and a strike by public workers.

“If the government truly is working for peace, they need to start here,” said Adriana Tunjo, a fifth-grade teacher in southern Bogota, who like other protesters decried problems which included electricity outages and sporadic provision of meals.
…

McDonald’s Corp ended its 41-year-old sponsorship of the Olympic Games three years early, the International Olympic Committee said Friday, reflecting the U.S. fast-food giant’s focus on its core business as well as rising Olympics sponsorship costs and declining TV ratings.

McDonald’s deal would have run through the Tokyo Olympics in 2020, and bowing out will likely to save it hundreds of million of dollars if it had continued into the next four-year Olympics cycle and beyond.

McDonald’s has been trying to hold down costs as it invests in improving food quality, restaurant service and online ordering to woo back U.S. diners. Intense competition has gnawed away at sales.

“We are reconsidering all aspects of our business and have made this decision in cooperation with the IOC to focus on different priorities,” said McDonald’s Global Chief Marketing Officer Silvia Lagnado.

Sponsor since 1976

The company, first involved with the games in 1968 and a sponsor since 1976, was the Olympics’ food retail sponsor. Despite pulling out with immediate effect, McDonald’s will continue at next year’s Pyeongchang winter Olympics as a domestic sponsor.

The company’s move may also reflect a rising view among consumer brands that exclusive Olympics sponsorship deals do not offer the marketing impact they once did. Some companies find it is much cheaper to work directly with athletes or specific countries than the IOC.

Moreover, in a trend that began after the Beijing games in 2008, shrinking television audiences for the games could be diminishing the value of sponsors’ ads. With the Rio de Janeiro games in 2016, many viewers turned to social media alternatives like Twitter and Facebook.

In the United States, Comcast’s NBCUniversal said it had attracted 8.6 percent fewer eyeballs for Rio than it did for London in 2012.

$1 billion every four years

The fast food chain has been part of the IOC’s top sponsors program that contributes more than $1 billion in each four-year cycle for the games.

While terms of Olympic sponsorship are not disclosed, a source who negotiated previous IOC sponsorship deals said that top global sponsors like McDonald’s spend about $25 million a year or about $100 million for a four-year period that includes a summer and winter games.

Reuters previously reported that the IOC had wanted to roughly double fees to $200 million per four-year period starting in 2021.

While it is unusual for an Olympic sponsor to leave early, sponsors change regularly within the IOC’s top program. The most recent addition was China’s Alibaba Group Holding Ltd., which signed a deal in January for a partnership through 2028.

The next three Olympics take place in Asia, and this could turn off U.S. sponsors trying to reach a U.S. audience. The U.S. Olympic Committee also has lost recent sponsors such as AT&T and Citigroup ahead of the 2018 winter games in South Korea.

The IOC said it was not planning a direct replacement for McDonald’s, but it is expected to announce a new global deal with Intel next week, according a source familiar with the matter.

Intel did not immediately respond to a request for comment.
…

President Donald Trump’s Washington hotel saw almost $20 million in revenue during its first few months of operation, a period that coincided with his election and inauguration as the 45th president. His Mar-a-Lago resort in Florida, which he’s visited seven times as president, pulled in millions of dollars more than it had previously.

 

The new details were included in a financial disclosure that Trump voluntarily submitted Friday to the Office of Government Ethics, the first snapshot of the Trump Organization’s finances since its longtime leader became president.

 

Liabilities listed

The disclosure forms also listed his personal liabilities of at least $315.6 million to German, U.S. and other lenders as of mid-2017, according to a federal financial disclosure form released late Friday by the U.S. Office of Government Ethics.

Trump reported income of at least $594 million for 2016 and early 2017 and assets worth at least $1.4 billion.

The 98-page disclosure document posted on the ethics office’s website showed liabilities for Trump of at least $130 million to Deutsche Bank Trust Company Americas, a unit of German-based Deutsche Bank AG.

For example, Trump disclosed a liability to Deutsche exceeding $50 million for the Old Post Office, a landmark historic property in downtown Washington that he recently redeveloped into a hotel near the White House.

Trump reported liabilities of at least $110 million to Ladder Capital, a commercial real estate lender with offices in New York, Los Angeles and Boca Raton, Florida.

The largest component of Trump’s income was $115.9 million listed as golf-resort related revenues from Trump National Doral in Miami. His assets probably exceeded $1.4 billion because the disclosure form provided ranges of values.

Disclosures’ importance

When he took office in January, Trump turned over the reins of his global real estate, property management and marketing empire to his two adult sons and a senior executive. But Trump did not divest, instead placing his enormous portfolio of financial assets in a trust controlled by the executive and Donald Trump Jr. He can take back control of the trust at any time, and he’s free to withdraw cash from it as he pleases.

 

Trump’s financial disclosures have added importance because he isn’t following the long tradition of presidential candidates and office-holders making public their tax returns. Those returns provide more precise financial information than the disclosure forms that have broad ranges for income, assets and debts.

 

The latest report shows Trump resigned from more than 500 positions, stepping down from many on the day before his inauguration. His liabilities were about the same as in the previous report.

Income listed

 

Some of Trump’s ventures appear to be making more money than they had a year earlier.

 

His book The Art of the Deal is having a comeback of its own. Royalties from the 1987 autobiography ranged between $100,000 and $1 million, according to the new report. The 2016 report listed royalties as being between $50,000 and $100,000, and the 2015 report put them at $15,000 to $50,000.

 

Trump’s management fees from Indonesian companies tied to two planned resorts there more than doubled. The latest disclosure puts the fees at $380,000, up from $167,000 he reported in 2016. Trump is partnering with a billionaire Indonesian, Hary Tanoesoedibjo, on the two ventures. One is planned for the tourist island of Bali, the other near Jakarta.

 

Mar-a-Lago, where Trump played host to several foreign dignitaries during his seven weekends there this winter, has improved its finances. Trump listed the resort’s income as about $37 million, up from about $30 million it had taken in before his 2016 financial report.

 

His golf club in Bedminster, New Jersey, on the other hand, produced almost $20 million in revenue, about what it had during the previous reporting period. Trump recently began decamping to that property some weekends.

 

The documentation of revenue from each of those properties doesn’t account for expenses, meaning those figures are not pure profit.

 

The Trump International Hotel, housed in the Old Post Office building, has seen a burst of activity since opening its doors last fall. In addition to serving as a hub during inauguration festivities, it has hosted numerous events for foreign diplomatic and business interests.

 

The hotel is cited in three separate lawsuits arguing that Trump is violating the Constitution’s “emoluments” clause, a ban on foreign gifts and payments. Trump and the Justice Department have called those claims baseless.

Reuters contributed to this report.
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Nationwide strikes left commuters and tourists stranded across Italy on Friday, as transport unions called for better job conditions for workers and protested against privatization.

Underground and overground trains, airplanes and buses were cancelled in a series of strikes over a 24-hour period starting on Thursday evening.

Transport Minister Graziano Delrio said he had tried to negotiate with union leaders, but “sadly, it will be a black Friday.”

People seeking shade from the summer sun at bus stops around Rome’s Termini train station, the city’s main transport hub, said it was unfair that the country’s powerful labour unions still resorted to striking.

“I’ve waited for buses from three different lines for two hours and not even one has passed,” said Rome resident Franco Marini. “I find this way of protesting uncivil, in the 21st century there should be other ways to resolve labor issues.”

Italy is due to spin off parts of the state railway company under a delayed privatization plan to cut its huge public debt.

It is also looking for a buyer for struggling airline Alitalia, which was put under state management in May after making losses for years.

“The doctrine of privatization has gradually, dangerously spread through this sector, creating economic instability, unemployment, fewer services, and worrying reductions in safety, and sending salaries and workers’ rights and protections into free fall,” the SGB union said in a statement.

One of the special commissioners brought in to help salvage Alitalia said the strikes were “irresponsible” and “a gift to competitors”, adding the airline would try to cancel no more than 160 of 620 flights scheduled during the walk out.
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Greek stocks rallied to two-year highs Friday after the government struck a deal with European creditors that means the country won’t face another brush with bankruptcy anytime soon.

However, for austerity-weary Greeks, the deal does little to lift the pall from years of belt-tightening.

After months of haggling that raised fears of another escalation in Greece’s nearly eight-year debt crisis, the 19-country eurozone agreed late Thursday to release a further 8.5 billion euros ($9.5 billion) from its current, third bailout after the Greek government delivered on an array of reforms. Getting the money was becoming increasingly urgent because Greece has a big debt repayment hump next month.

Extending repayments

With an eye to the longer term, the eurozone creditors also made clear they are ready to ease the burden of Greece’s debt repayments when its bailout program ends next year, possibly by extending repayments by up to 15 years. The International Monetary Fund may also get involved financially, with up to $2 billion, but only if and when it sees the specifics of the debt relief and agrees it can make Greece’s debt bearable.

“I think that’s really the best agreement we’ve had for quite a while,” said Pierre Moscovici, the top economy official for the European Union, the 28-country bloc that includes the 19 states using the euro.

Even though some details remain sketchy, investors breathed a sigh of relief if just on the mere fact that a deal wasn’t postponed, as has occurred so many times previously. The main Athens stock index hit a two-year high, later closing up 0.8 percent on the day. The yields on both the two-year and 10-year Greek bonds fell, reflecting diminished investor fears of the chances of bankruptcy.

“While the deal might have proved the usual exercise in issue avoidance, the fact is that it’s now unlikely that a fresh crisis will emerge in Greece in July,” said Simon Derrick, chief markets strategist at BNY Mellon.

Greece’s left-led coalition government sought to present the deal as favorably as possible, even though the precise nature of the debt relief has to still be ironed out.

“We had a decisive step yesterday,” Prime Minister Alexis Tsipras told the country’s president. “A decisive step for the country’s exit from the long-running crisis.”

Government spokesman Dimitris Tzanakopoulos said Greece’s European creditors had accepted “nearly all the points that the Greek side was asking for.”

The spokesman highlighted the creditors’ acceptance of a long-standing Greek demand that debt repayments be linked to economic growth, meaning that repayments could be postponed if the economy entered recession.

Less optimism

Outside the government, the view was less rosy.

Dozens of protesting hospital workers held a rally outside the finance ministry building in central Athens, building a fake wall outside the entrance topped with a banner reading “They have made us drown in debt.”

Pictures pinned to the fake wall depicted Tsipras, with a tie pinned to his neck. Tsipras doesn’t wear a tie, and had once joked that the only time he would do so would be on the day Greece won debt relief.

 

Tsipras, elected in 2015 on promises to repeal bailout-related budget cuts, has lost popularity after implementing further austerity measures in return for the bailout money and a promise on debt relief.

As part of Thursday’s deal, the government committed to deliver primary budget surpluses — that is, a surplus excluding the cost of servicing debt — worth 3.5 percent of Greece’s annual gross domestic product until 2022, and 2 percent thereafter each year until 2060. That is a big commitment for Greece, but seems to have been agreed on in principle to show Greece’s debt can be sustained with help from creditors.

Despite years of spending cuts and tax increases since Greece was first bailed out in 2010, the public sector debt burden stands at about 320 billion euros, or 180 percent of GDP. That’s largely because the economy has contracted by around a quarter, meaning a worsening in the relative debt load even though the budget has improved.

An outright cut in Greece’s debt is not allowed under euro rules, but the length of time the country has in paying back its debts can be extended, and the interest rates can be cut. More comprehensive details should emerge in the coming months.
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