YCLOAK

Vietnam will test U.S. President Donald Trump’s openness to one-on-one trade deals as it starts nudging Washington for an eventual agreement to replace its role in the defunct Trans Pacific Partnership (TPP).

Official media outlets in Vietnam say Prime Minister Nguyen Xuan Phuc told an American business delegation last week he was ready to visit the United States, and that he hoped to meet Trump for a discussion about trade, among other topics.

Vietnam depends heavily on factory exports, which are about 19 percent of a $200 billion economy.

“A trade agreement with the U.S., a very large market, would certainly bring some benefits, that’s clear,” said Marie Diron, senior vice president at Moody’s Investors Service in Singapore. “It would be about, kind of about anchoring these export markets with a trade agreement in place.”

Trump is not expected to prioritize free trade deals in the short term, analysts say, but he may someday consider them. Trade deals usually obligate signatories to cut tariffs on each other’s good or services.  

US companies eye Vietnam market

Nguyen may have a chance at working out a trade deal with the United States because American firms selling products such as fast food, mobile phones and even insurance want more access to Vietnam’s fast-growing middle class.

More than one-third of the country’s roughly 93 million people will be middle class or higher by 2020, according to a Boston Consulting Group study.

“You would expect the direction of goods coming from Vietnam to the U.S. picking up more sharply than the other way around,” said Rahul Bajoria, a regional economist with Barclays in Singapore.

But, he said, “it could be the case there might be some pressure from the large [American] industrial manufacturers like the aircraft manufacturers or train companies. All of them may be much more interested in exporting to Vietnam.”

The United States is Vietnam’s top export market, giving the Asian country a trade surplus last year, with exports worth $38.1 billion and imports of $8.7 billion.

But in January, imports increased 14.6 percent, pointing to a possible soft spot in Vietnam for Western brands. American names such as Apple, Dell and Starbucks are easy to find in cities such as the financial center Ho Chi Minh City.

“The U.S. could export to Vietnam, to a market that’s growing so fast, with 90 plus million people who are very brand conscious, where Western brands have a very high reputation,” said Vojislav Milenkovic, analyst with the business advisory BDG Insights in Ho Chi Minh City.

“You can see this every day on the street. You can see that people are trying to save and to buy high-quality products from the foreign countries,” he said.

But Vietnamese consumers still earn just half of their counterparts in China, Diron said. “For some companies, that could be a hurdle,” she said. China’s market is also much larger that Vietnam’s.

End of TPP

Leaders in Hanoi had hoped the TPP would give them access to the U.S. market plus 10 other countries, including Japan. Trump withdrew the United States from the TPP in January, saying it would hurt the country.

Because of the size of the U.S. economy, Trump’s withdrawal made it effectively impossible for other countries to keep the TPP alive.

Trump said shortly after taking office he could consider one-on-one free trade agreements instead of regional ones.

Japanese Prime Minister Shinzo Abe has said he is open to the idea of a bilateral trade pact with the United States, and members of the U.S. Congress advocate an agreement with Britain.

In a phone call after his election in November, Trump told Nguyen he wanted to strengthen ties with Vietnam and that he was willing to meet in the United States.

In exchange for trade favors, Trump might ask Vietnam to support the U.S. presence in the South China Sea where the United States is trying to resist Chinese maritime expansion, said Oscar Mussons, international business advisory associate with the Dezan Shira & Associates consultancy in Ho Chi Minh City.

Vietnam may need to wait out most of Trump’s current term before getting any trade deals, Bajoria cautioned.

Any deal takes time to negotiate, he said, and the U.S. government may try first to build its relations with China, the world’s number two economy after the United States. “I don’t think there’s scope for an FTA over the next 12 months,” Bajoria said.

Since Trump was elected, Vietnamese leaders afraid that the TPP would die began looking instead to other trade deals.

An agreement reached with the European Union in 2015 is due to take effect next year if it clears hurdles in the European bloc’s parliament.

China is also keen to bolster trade ties, but Vietnam hopes to avoid dependence on the long-time political rival that’s known for unloading cheap mass-produced goods in Vietnam at prices lower than what local companies can charge.
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King Salman and hundreds of business leaders from Saudi Arabia are in Japan for talks Monday mainly expected to focus on economic ties.

The visit is the first by a Saudi king in 46 years, though Salman visited more recently as crown prince.

Saudi Arabia is one of Japan’s biggest suppliers of crude oil, accounting for about a third of its total imports of oil from the Middle East.

The kingdom is striving to diversify its economy away from its heavy reliance on oil exports, and Salman is on a month-long tour of Asia to advance his kingdom’s economic and business interests.

Japan’s Chief Cabinet Secretary Yoshihide Suga told reporters Monday that Japan is willing to provide support for the economic power in the Middle East.

“We will discuss growth strategy, including our `Saudi Vision’ project,” he said, referring to Japanese collaboration with Vision 2030, a roadmap adopted by the kingdom last year for its development and economic objectives  

He did not confirm reports that the countries would agree to set up a special economic zone in Saudi Arabia.

Salman met with Japanese Foreign Minister Fumio Kishida and was to meet Prime Minister Shinzo Abe later Monday.

Reports say Japan plans to urge that Saudi Aramco, the state-run oil company that is being partially privatized, seek a share listing on the Tokyo Stock Exchange.

Separately, Saudi Arabia’s sovereign wealth fund and Japanese telecoms provider and energy company Softbank have joined forces in setting up a $25 billion private fund for technology investments.

Trade between the countries fell overall last year as oil prices dropped. Japan’s 2.1 trillion yen ($18.6 billion) in imports from Saudi Arabia in 2016, mostly oil and gas, dwarfed its exports of 546.3 billion yen ($4.8 billion). 

The delegation arrived late Sunday on about 10 aircraft. Officials said top hotels and car hire services would be busy handling the unusually large group during its four-day visit.

Salman’s stop in Japan follows visits to Indonesia and Malaysia. He is due to travel on to Brunei, China and the Maldives.

While seeking investment and help with Saudi industrialization and development of its services sector, Salman has also offered help. Earlier, he pledged $1 billion in development finance for Indonesia and closer cooperation for combating transnational crime such as human trafficking, terrorism and the drugs trade.
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The risk of a steep slide in China’s economy has reduced, the head of a government research center said on Sunday, adding the country had moved through an “L-shaped” pattern of slowing to now “horizontal” growth.

China’s economy grew 6.7 percent last year, according to the government, the slowest pace in 26 years. The country met its growth target with support from record bank loans, a speculative housing boom and billions in government investment.

But as Beijing moves to cool the housing market, slow new credit and tighten its purse strings, China will have to depend more on domestic consumption and private investment.

The government last week trimmed its economic growth target to about 6.5 percent for this year. Li Wei, the director of the Development Research Center of the State Council, China’s cabinet, said many positive economic signs were emerging domestically and internationally, and the risk of a large slide in economic growth had “clearly lowered”.

China’s economic development has gone from a “downward stroke in the L-shape to the horizontal stroke,” the official Xinhua news agency said, citing Li’s comments on the sidelines of China’s annual session of parliament.

The horizontal trend points to long-term steady development, but does not eliminate the possibility of short-term fluctuations, or mean the economic transformation is complete, Li said.

“Our economy still has many difficulties to resolve, so we must prepare to respond to the emergence of possibly relatively large risks,” Li said.

Earlier on Sunday, a vice chairman of the state economic planner said China’s industrial output grew more than 6 percent in January and February, and that the survey-based unemployment rate in 31 major cities was about 5 percent for the two months.

National Development and Reform Commission (NDRC) Vice Chairman Ning Jizhe gave the approximations, which were in line with expectations for official data set to be issued on Tuesday.

Fixed asset investment growth kept pace with the final few months of last year, Ning said.

“China’s economic growth still mainly relies on domestic demand,” he said.

January and February data will be released together in a bid to smooth out seasonal factors caused by the timing of the long Lunar New Year holidays, which began in late January this year but fell in February last year.

China unexpectedly posted its first trade gap in three years in February as a construction boom pushed imports much higher than expected. That upbeat import reading reinforced the growing view that economic activity in China picked up in the first two months of the year.
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On Feb. 19, 2016, at a campaign rally in North Charleston, South Carolina, then-candidate Donald Trump gave a stump speech in which he railed against American jobs moving to Mexico: “We lose our jobs, we close our factories, Mexico gets all of the work,” he said. “We get nothing.” 

 

That same day a law firm in Mexico City quietly filed on behalf of his company for trademarks on his name that would authorize the Trump brand, should it choose, to set up shop in a country with which he has sparred over trade, migration and the planned border wall. 

 

The Trump trademarks have now been granted by the Mexican Institute of Industrial Property (IMPI). Records show the last three were approved February 21, just more than a month after Trump took office, and a fourth was granted October 6, about a month before the U.S. election.

Recent trademark approvals

 

Trump’s company has notched several trademark wins recently. The Associated Press reported Wednesday that the Chinese government recently granted preliminary approval for 38 trademarks to Trump and a related company. 

That sparked outrage from some Democratic senators and critics, who have been pushing Trump to sever financial ties with his global businesses to avoid potential violations of the emoluments clause of the U.S. Constitution, which bars federal officials from accepting anything of value from foreign governments unless approved by Congress.

 

The Mexican trademarks cover a broad range of business operations that can roughly be broken down into construction; construction materials; hotels, hospitality and tourism; and real estate, financial services and insurance. They are all valid through 2026.

 

The same four trademarks were previously held in the name of Donald J. Trump and expired in 2015, a year before the new applications. The new approvals list the trademark owner as the company DTTM Operations LLC, with an address in the Trump Tower on Fifth Avenue in New York.

No new deals abroad

 

As president, Trump has handed management of his business to his two adult sons and vowed to strike no new deals abroad while he is in office. However critics say questions remain about possible conflicts of interest, noting that foreigners could still seek to influence Trump by helping his existing foreign operations or by easing the way for future ones after he leaves the Oval Office.

 

Trump Organization General Counsel Alan Garten said the Mexican government’s decision was not a special favor to the president.

 

“We’re not being granted anything we didn’t have before,” he said. The original trademarks came “years before (Trump) even announced his candidacy.”

 

Garten said the Mexican trademarks originally had two purposes: laying the ground for possible new ventures and keeping other people from using Trump’s name for their own businesses. 

 

He said the trademarks are wholly defensive now.

 

“Circumstances have changed,” Garten said. “He’s been elected and we agreed not to do foreign deals.”

Ethical gray area 

Richard Painter, the chief White House ethics lawyer under George W. Bush, said the Mexican grants are in an ethical gray area: defensive in nature now, perhaps, but setting the president up to profit when he leaves office.

 

“To what extent is this appropriate? I don’t know,” Painter said. “We never had Obama running around the world locking up his name, or Bush.”

 

Intellectual property lawyer Enrique Alberto Diaz Mucharraz is listed on the trademark filings. A junior partner at the Mexico City law firm Goodrich Riquelme y Asociados, he declined to comment citing client confidentiality rules. Phones rang unanswered at the public relations office of IMPI, and there was no response to an emailed request for comment on a list of questions. 

 

Trademarks can prove enormously valuable to companies, especially in countries with a growing number of middle class consumers who recognize the brand, said Ashwinpaul C. Sondhi of A.C. Sondhi & Associates, an investment consultancy in Safety Harbor, Florida.

Why do business in Mexico?

 

Mexican political analyst Alejandro Hope said IMPI is generally considered to be apolitical and the trademark concession was most likely a technical decision. 

 

More remarkable, Hope said, was that the application was filed during a heated campaign when “he had already started using Mexico as a pinata” for political purposes. 

 

“What I find striking is that these guys were thinking about doing business in Mexico while they were trashing Mexico on the campaign trail,” Hope added.

Spotty business record

 

Last decade he and his children aggressively promoted a luxury hotel and condo development with the Trump name on it that was planned for the northern Baja California coast, near Tijuana. In December 2006, 188 units were sold for $122 million during an event at a hotel in San Diego. 

 

But the Trump Ocean Resort Baja Mexico project collapsed, and dozens of buyers who had lost their 30 percent deposits sued in March 2009. Trump settled out of court in November 2013 for an undisclosed sum; in a separate settlement the previous year, developer Irongate, which had licensed the Trump name, agreed to pay the buyers $7.25 million. 

 

On the Caribbean island of Cozumel, near Cancun, Trump tried in 2007 to purchase land for a luxury resort complete with an airstrip and golf course, according to Mexican media reports. It met with local and environmental opposition, and never went anywhere. 

Unpopular in Mexico

 

In all, Trump controls at least 20 trademarks in Mexico, including for Trump Ocean Resort and Trump Isla Cozumel. Others cover activities such as concierge and spa services, alcoholic beverages, golf club operations and home furnishings. For clothing, there’s the Donald J. Trump Signature Collection. 

 

If there are plans to take the Trump brand to Mexico, it could be tough going because of widespread popular anger toward the president for his comments disparaging Mexican immigrants who come to the United States illegally, his threats to tear up the North American Free Trade Agreement and his vows to make Mexico pay for the border wall. 

 

Hope said that if a Trump hotel were in the cards, its prospects could depend a lot on location. 

 

“In Mexico City, I guess they would face a lot of political backlash at this point,” Hope said. Maybe it would fly in more politically insulated areas, like the beach resorts of Cancun or Los Cabos. “But even that would be a hard sell.” 
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Thousands of Native Americans from across the Unites States marched in Washington to protest President Donald Trump’s decision to advance the construction of the Keystone XL Pipeline and Dakota Access oil pipelines. VOA’s Penelope Poulou has more.
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The first jobs report on President Donald Trump’s watch is a good one. The private sector added 235,000 jobs in February, more than expected, and a sign that the economy and consumer confidence are healthy. But the jobs report also means that higher borrowing costs, for consumers and businesses, are expected in the coming days and weeks. Mil Arcega reports.
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President Donald Trump is embracing government numbers he once maligned as “phony” as he tries to take credit for the latest U.S. jobs report.

The new administration on Friday promoted Labor Department statistics that show U.S. employers added 235,000 jobs in February. The unemployment rate dipped to 4.7 percent from 4.8 percent.

“Great news for American workers: economy added 235,000 new jobs, unemployment rate drops to 4.7% in first report for (at)POTUS Trump,” tweeted White House Press Secretary Sean Spicer. “Not a bad way to start day 50 of this administration,” he later said.

Watch: US Job Gains Make Higher Interest Rates a Near Certainty

What a difference a year makes

What a difference from last year’s presidential campaign, when Trump repeatedly assailed the report’s legitimacy.

 

Back then, candidate Trump denounced “phony unemployment numbers” he claimed had been invented to make the Democrats look good.

“Don’t believe those phony numbers when you hear 4.9 and 5 percent unemployment. The number’s probably 28, 29, as high as 35,” he said last February, on the day of the New Hampshire presidential primary.

“The 5 percent figure is one of the biggest hoaxes in modern politics,” he said.

That’s last year’s 5 percent, not the new numbers reported on his watch.

Numbers ‘very real now’

Asked about the apparent disconnect, Spicer offered a smile and a quip: “I talked to the president prior to this, and he said to quote him very clearly: ‘They may have been phony in the past but they are very real now.’”

During a speech at the Detroit Economic club last year, Trump pointed to figures that show one in five American households do not have a single member in the labor force. He failed to mention the one in five includes children, young people in school and senior citizens who are retired.

Though the jobless report has been criticized by others for omitting people who aren’t actively searching for work, it provides a benchmark that is similar to most other nations.

Weather makes difference

While business and consumer confidence have risen since the presidential election, economists also say it’s too soon for Trump to be taking credit for jobs.

“No new economic policies have yet been enacted,” said Scott Anderson, chief economist at Bank of the West. Instead, he pointed to an unusually mild winter that likely boosted hiring by construction firms.

Cold weather in February typically shuts down work sites across much of the country. But last month was the second-warmest February since 1895, helping construction firms add the most new jobs in a decade.

Optimism on the rise

A survey of small businesses shows that their optimism is up since the election, reaching the highest level in 12 years in January, according to the National Federation of Independent Business. Other measures also show greater business confidence.

But many of the corporate announcements of new jobs that Trump has promoted – by ExxonMobil, Intel and Ford, for example – will take place over many years and were already planned before the election.

Trump and Republicans have been quick to claim credit nonetheless.

“The February jobs report exceeded expectations by 50,000 jobs,” said the Republican National Committee in an email, “another sign President Donald Trump’s pro-growth agenda is spurring businesses to hire ‘aggressively.’”

Spicer offers apology

Spicer, meanwhile, may have jumped the gun with his tweets. A 1985 rule bars executive branch officials from commenting publicly on economic data until at least an hour after its release. Jason Furman, President Barack Obama’s top economic adviser, said on Twitter that the rule was intended to prevent White House officials, some of whom see the report a day early, from immediately spinning the data.

Spicer downplayed that mini-controversy, saying he didn’t think happily touting news that had been widely reported was “exactly a market disruption.”’

“I apologize if we were a little excited and we’re so glad to see so many fellow Americans back to work.”
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Happy birthday to the U.S. bull market! Eight years ago, the S&P 500 closed at 676.53, the low point for the worst bear market in equities since the Great Depression.

“No one would have ever believed it possible at the time, but at 97 months old, this now ranks as the second-longest bull market since World War II,” said Ryan Detrick, senior market strategist at LPL Financial. “On a percentage basis, though, both the 1950s and 1990s bull markets saw larger percentage gains.”

Detrick essentially says that age is just a number.

“We don’t believe bull markets die of old age; they die of excesses. This bull might be old, but we aren’t seeing the same type of overspending, overborrowing or overconfidence we’ve seen at other major market peaks.

“This doesn’t mean there won’t be pullbacks along the way, because there will be, but it does suggest this old bull could still have a few tricks up his sleeve.”

Stocks boosted by jobs

U.S. stocks ended higher Friday on the back of a very solid employment report. U.S. job growth increased more than expected in February, and wages rose steadily. Nonfarm payrolls rose by 235,000 jobs last month as the construction sector recorded its largest gain in nearly 10 years, thanks to unseasonably warm weather. And perhaps it reflects President Donald Trump’s infrastructure spending plans.

The unemployment rate fell one-tenth of a percentage point to 4.7 percent, even as more people entered the labor market.

Oil slick

U.S. crude oil prices fell below $50 a barrel to their lowest levels since mid-December early Thursday, after the Energy Information Administration reported an 8 million-barrel rise in U.S. stockpiles last week. That was about four times as much as analysts had expected, and marked the ninth week in a row of inventory gains.

J.J. Kinahan, chief market strategist at TD Ameritrade, points out in a note that “as supplies keep posting new record highs, energy sector stocks now bring up the rear in sector performance year to date, down more than 6 percent.”

Anticipated interest rate hikes

All eyes will be on the Federal Reserve on Wednesday, when the Federal Open Market Committee delivers its decision on interest rates.

Following the strong employment report, traders have essentially priced in a rate hike, giving a better-than-even chance of two more rate hikes during 2017, with a small chance of a fourth increase. Based on the price of fed funds futures contracts traded at CME Group, it appears the risk is to the downside, should the Fed not raise rates, or, conversely, if the central bank decides on a rise of more than 25 basis points.

If the Fed were to keep rates unchanged, it would send a signal that it does not have much confidence in the economy, and that could cause a spike in market volatility.

Trading week ahead

This month has been an unusually busy month for global markets, and that will continue next week. In addition to the Fed, the Bank of Japan and Bank of England are set to meet, the Netherlands holds an election, Chinese Premier Li Keqiang is holding a news conference and the G-20 finance ministers are meeting in Germany.

Stateside, investors will have a fresh set of retail sales data, as well as the Consumer Price Index, housing starts and leading indicators.

Debt ceiling

By the end of Wednesday, the U.S. Treasury is expected to reach its maximum debt ceiling, which means Treasury Secretary Steven Mnuchin will have to scramble to ensure the country can continue to keep paying its bills in full and on time.

The debt limit is the total amount of money that the U.S. government is authorized to borrow to meet its obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other payments.

Failing to increase the debt limit would have catastrophic economic consequences and is considered unthinkable. It would cause the government to default on its legal obligations, an unprecedented event in American history. Mnuchin sent a letter to Congress this week addressing the issue.

Merkel to meet Trump

German Chancellor Angela Merkel will meet with Trump in the U.S. capital on Tuesday, and the results of their talks will be watched closely to see if Berlin and Washington can get past a variety of potential strains to the trans-Atlantic relationship that have arisen this year.

During the U.S. political campaign, Trump said Merkel’s policy of accommodating immigrants was steering Germany toward “disaster.” And in contrast to Trump’s policies, Merkel has insisted that Europe can never isolate itself socially and economically from its neighbors.
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Foreign ministers and other officials from 25 Caribbean countries met in Havana on Friday to discuss a joint response in the face of Trump administration threats to migrants and trade.

Opening remarks at the closed-door event, attended by representatives from Colombia, Mexico, Cuba and other countries in Central America and the Caribbean islands, made clear the new U.S. administration and key economic partner was uppermost on the agenda, though the name “Trump” was never uttered.

“We are meeting at an exceptional historic moment when there are geographic changes on the global scene and we have to be prepared,” said June Soomer, from Saint Lucia and secretary general of the Association of Caribbean States.

“We are not going to resign ourselves to what others in the world dictate. We are not a mediocre region, we are one of excellence and peace,” Sooner added.

Cuban President Raul Castro also attended the meeting.

His foreign minister, Bruno Rodriguez, lit into U.S. President Donald Trump’s policies in his opening remarks and said the organization should come up with a joint response, as they threaten the development models of local economies.

“The excluding and repressive migration policies announced by countries of destination… as well as the implementation of extremely protectionist trade measures, are real challenges for our sub region,” he said.

“In the face of the walls intended to be built, our choice should continue to be unity, solidarity and cooperation to defend the most legitimate interests of our peoples,” he said.
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A World Bank arbitration panel has determined that Venezuela will not have to pay $1.4 billion to ExxonMobil for confiscating company assets during a wave of nationalizations.

 

ExxonMobil asked the bank’s investment dispute panel for $12 billion for the seizure of its Cerro Negro facilities in the Orinoco Basin under then-President Hugo Chavez. The panel awarded $1.4 billion, a decision that was appealed by Venezuela.

 

The Washington-based panel issued a ruling Friday that annulled most of a $1.6 million judgment against Venezuela. The decision was celebrated in Caracas, where the socialist government is facing a cash shortfall triggered by collapsing oil production in recent years.

 

A lawyer for Venezuela said the decision as “correct and courageous.”

ExxonMobil did not immediately respond to a request for comment.
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U.S. Commerce Secretary Wilbur Ross says he hopes to launch formal talks to renegotiate the North American Free Trade Agreement with Mexico and Canada in a little more than three months.

Ross spoke with reporters in Washington Friday, saying he hopes to notify Congress in the next couple of weeks that the 90-day countdown to talks has begun. He spoke in a joint news conference with Mexican Economy Minister Ildefonso Guajardo.

Ross is obligated to formally notify Congress of his plans to renegotiate the deal; the letter he sends to Congress officially starts the process. If he carries through on his promise, talks would likely begin in early July.

Ross said any revision of NAFTA would either be two bilateral agreements with Mexico and Canada or one deal among all three countries.

At Friday’s news conference, Guajardo voiced his support for a trilateral deal, resembling the trade agreement now in place. Rather than separate U.S.-Mexico and U.S.-Canada discussions, he said all three nations should negotiate together.

“NAFTA is a trilateral agreement, and it would make a lot of sense to have trilateral discussions,” he said. He also noted that Mexico will be ready to start negotiations by the end of May.

In Houston, Texas, Canadian Prime Minister Justin Trudeau told reporters he is open to working with the Trump administration to revise NAFTA.

President Donald Trump has said he plans to renegotiate NAFTA because, he says, the United States has lost more than one-fourth of its manufacturing jobs to Mexico. But the nonpartisan Congressional Research Service reported in 2015 that NAFTA caused only a modest effect on job losses.

Ball State University in Indiana reported that trade deals like NAFTA were responsible for about 10 percent of factory job losses since the 1970s, while automation was responsible for 88 percent of factory job losses over the same period.

 
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