YCLOAK

Serbian President-elect Aleksandar Vucic likes to use the past to explain the future.

In 1947, as Josip Broz Tito was consolidating Yugoslavia, he built a railway through Bosnia that linked Serbs, Croats and Muslim Bosniaks, friend and foe after World War II.

“Tito wasn’t stupid,” Vucic told Reuters. “People had to work together, build together, then travel together, live together. That’s what we need — connecting.”

Together again

Yugoslavia broke up in war 26 years ago, spawning seven states. Now, the European Union has taken up a project put forward by Vucic that would see five of them — plus Albania — joined once more, this time in a common market.

It would abolish all remaining tariff barriers, lift obstacles to the free movement of people, commodities and services and introduce standard regulations across the region.

The EU wants an outline agreed to in July, seizing on the idea as a way to re-engage with Balkan states unnerved by the bloc’s evaporating enthusiasm for further enlargement and exposed to the growing influence of Russia.

But it has received a mixed reception.

Some apprehensions

Kosovo, for one, fears being roped back into a Serbian-dominated union of the kind it fought to leave; others worry it will only slow their accession to the EU, or worse still replace it.

The EU has delegated development of the plan to the Regional Cooperation Council. Its head, Goran Svilanovic, told Reuters Balkan leaders were “increasingly realistic” about the reduced appetite in Brussels for EU enlargement.

“They see what’s up in the EU,” he said.

But they will work together on the Balkan market plan and with the EU “when it comes to something they see is … bringing change to their daily lives.”

Market of 20 million

For years, the prospect of EU accession has stabilized relations and driven reform in a turbulent and impoverished region. But since Croatia followed ex-Yugoslav Slovenia in joining in 2013, the EU has been beset by problems of migration, Brexit and right-wing populism.

A year later, European Commission President Jean-Claude Juncker ruled out any further expansion until at least 2020.

Stability and democracy in the Balkans have suffered.

Juncker was stating a fact, a senior EU official told Reuters, but in hindsight he had made “a huge mistake.”

“A lot of things that were in progress just stopped,” the official said. Another EU diplomat said Brussels had “dropped the ball” and was trying to re-engage.

Start with market, trade

One of the results is the Western Balkans Common Market, which would build on the Central European Free Trade Area, CEFTA. All six countries are members of CEFTA, but the pact has struggled to stimulate trade within the region and some barriers remain.

Backers of the plan say a single economic space with a market of 20 million people would be more attractive to investors than six small states each with their own red tape.

“Investors would be banging down our doors,” said Vucic, Serbia’s prime minister who was elected president Sunday.

The EU says it would mark a step toward membership, not an alternative.

But it did not go unnoticed that enlargement had no place in a March document by Juncker that set out the options for the EU after Britain leaves in 2019.

“Create your own common market [because you are not joining ours],” was the headline of an opinion piece last month by Kosovo analyst Besa Shahini on the Pristina Insight website.

Kosovo threw off Belgrade’s repressive rule in a 1998-99 war, and is wary of Serbia as the biggest country in the region and a friend of Russia.

“We don’t want to see a Serbia that behaves in the style of Russia, trying to politically dominate the region,” Kosovo Foreign Minister Enver Hoxhaj said of the initiative Tuesday.

Prime Minister Isa Mustafa took to Facebook: “We share different experiences of the past,” he wrote. “We do not want that past to return, repackaged.”

Sokol Havolli, an adviser to Mustafa, told Reuters the project risked slowing the region’s EU integration.

Alternative narratives

Asked if a common market may become a substitute for EU enlargement, Vucic said that “should not and must not” happen but said he had heard, unofficially, of such fears in Montenegro.

The office of Montenegrin Prime Minister Dusko Markovic told Reuters Podgorica had yet to receive a detailed proposal, but that it supported greater regional cooperation.

An Albanian official, who spoke on condition of anonymity, said Tirana was “skeptical.”

Kristof Bender, deputy chairman of the European Stability Initiative, a Brussels-based research group, said he would be surprised if creating a club of poor economies would do much to address the region’s woes.

Nor could it be a “credible alternative” to the narrative of prosperity and stability inside the EU.

“If this narrative evaporates, Balkan politicians will need to look for other narratives,” Bender told Reuters. “Given recent history, this is dangerous.”

Railroad holds lessons

Today, the railway Tito built speaks less of the future than the folly of the past: as trains cross between Bosnia’s two ethnically-based regions, different crews take over, reflecting how power was divided up in order to end the 1992-95 war. Part of the line is no longer used.

Vucic said critics of his idea argued they simply wanted to leave the Balkans behind and join the EU.

So does Serbia, he said. “But does that mean we should lose the next three, four, five years when we know we’re not going to become a member?”
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The U.S. economy had a net gain of 98,000 jobs in March, which is much weaker job growth than most economists expected.

Payroll growth was slowed by stormy weather in March after unusually good weather helped growth in January and February, according to economist Jed Kolko, of the job web site “Indeed.”

Friday’s report from the Labor Department also said the unemployment rate fell two-tenths of a percent, to 4.5 percent. Government data show that is the lowest level since April, 2007.  The unemployment rate has been five percent or lower for well over a year.

The slight decline in the jobless rate is due to 145,000 people entering the workforce and nearly half a million Americans finding jobs, according to S&P Global Rating’s economist Beth Ann Bovino. She says this is the latest in a series of mostly positive reports on the job market.   

PNC Bank economist Gus Faucher says the job market “is getting tighter and business are finding it more difficult to hire.”  That may force employers to raise wages to attract and keep workers.  

Job gains were found in professional and business services and mining, while retail continued to lose positions.  Faucher also said problems in retail may reflect a shift from traditional stores to on-line commerce.  That shift is evident in the announcement that several major retail chains are closing a large number of stories, according to economist Dean Baker of the Center for Economic and Policy Research.

While the report shows that the total number of unemployed Americans fell by over 300,000, there are still 7.2 million people out of work across the country.  

 
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U.S. Commerce Secretary Wilbur Ross held out hope Thursday that the Trump administration will revive the U.S. Export-Import bank’s full lending powers, saying the institution is part of its “trade toolbox” to boost exports.

The U.S. government trade lender has been hobbled for the better part of two years by conservative Republicans in Congress who tried to shut it down in 2015 by revoking its charter, and then limited its lending powers last year by blocking nominations to its board of directors.

Big loans impossible

With only two active members on its five-seat board, the bank cannot make or guarantee loans of more than $10 million, preventing it from financing large exports such as U.S.-built commercial aircraft, nuclear reactors or petrochemical plants.

Thus far, Trump administration officials have not said publicly whether they support reviving EXIM’s full lending powers, but some members of Congress say that Trump has told them privately that he supports the institution.

“The bank is part of a domestically focused trade toolbox that this administration will continue to focus on in the coming months,” Ross said in brief video remarks to EXIM’s annual conference in Washington. “We will use that toolbox to rebalance our trade policy in order to put American workers first.”

Ross did not provide details of how EXIM will be used in his trade strategy or whether the administration has specific plans to nominate new board members.

Trump appears to be an ally

He urged hundreds of U.S. manufacturers, lenders and foreign government and company officials attending the meeting to work toward increasing U.S. exports to create jobs.

U.S. Representative Chris Collins of New York, a Republican Trump ally who headed a small manufacturer that used EXIM working capital loan guarantees in the past, told the conference that Trump told him February 16 at a White House meeting that he was “all in” on supporting EXIM.

“We asked him very directly about the five board seats,” Collins said. “The president looked to his right and to his left and said ‘Can you get me some names? I’m all in.’ There was no hesitation whatsoever.”

Reviving EXIM, however, would anger conservative groups backed by the Koch brothers, the influential billionaire Republican donors. The groups have waged a campaign that has painted EXIM as unnecessary corporate welfare even though it is self-funding through the interest and fees it charges borrowers.
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Conservative activist groups that generally support Republicans but oppose a pro-export, anti-import Republican tax proposal released a study on Thursday estimating its impact on individual U.S. states, underscoring the party’s division over taxes.

The two activist groups, backed by billionaire industrialists Charles and David Koch, reported that seven states won by President Donald Trump in November’s election would be among the 10 hardest hit by the proposal.

Freedom Partners and Americans for Prosperity, both based in the Washington area, said the “border adjustment tax,” or BAT, would harm all 50 states, but that those heavily dependent on imports could suffer most.

The report predicted economic harm to Georgia, Kentucky, Louisiana, Michigan, South Carolina, Tennessee and Texas — all states Trump won in the 2016 presidential election. The list of hard-hit states also includes California, New Jersey and Illinois, which Democrat Hillary Clinton carried.

House Ways and Means Committee Chairman Kevin Brady, a Texas Republican who intends to include the BAT in tax reform legislation this spring, sharply criticized the study.

‘Fantasy figures’

“That so-called study will be easily discredited and probably fits the definition of fake news,” Brady told reporters. “It takes one provision, pretends the economy freezes … applies it in our current tax code and comes up with fantasy figures.”

BAT, billed as a way to boost U.S. manufacturing, would exempt export revenues from federal tax, while ending the deductibility of import costs by corporations, making imports for production or resale costlier.

The plan is part of a tax reform blueprint supported by House Speaker Paul Ryan. Trump is also working on a tax plan.

The proposal is also opposed by a number of Senate Republicans who could prevent its passage, should the House approve a tax reform bill that contains it.

Koch organizations, including the brothers’ privately held conglomerate, Koch Industries, have warned that BAT could devastate the U.S. economy by raising prices on consumer goods, including gasoline. Refineries owned by Koch Industries rely on oil imports from Canada.

The Koch groups say they support tax reform but oppose BAT.
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White House economic adviser Gary Cohn said he backed bringing back the Glass-Steagall Act, a Depression-era law that would revamp Wall Street banks by splitting their consumer-lending businesses from their investment arms.

The National Economic Council director, also a former Goldman Sachs president, expressed support to lawmakers for a banking system where firms would focus primarily on trading and underwriting securities or issuing loans.

Big banks have strongly opposed such a move that would fundamentally overhaul their business. Reinstating the law, which was repealed in 1999, has not attracted significant attention in Congress, but advocates in the White House and both parties now argue it would provide critical safeguards to prevent another financial crisis.

Critics of that approach say it lacks nuance and would not have prevented the last financial meltdown.

The fact Cohn, widely viewed as one of Wall Street’s own, was willing to push that position spooked big banks’ representatives in Washington.

The White House confirmed Cohn’s remarks in a private meeting with lawmakers on Wednesday. A spokesperson said he was “simply discussing the President’s previously stated position” in favor of a “21st century Glass-Steagall.”

Cohn’s remarks were first reported by Bloomberg.

The Trump administration has indicated support for a return to Glass-Steagall. The White House has stuck by the idea since it was included in the Republican Party platform during the presidential campaign, and Treasury Secretary Steven Mnuchin expressed interest in a modernized version of the law.

When asked on Thursday when large financial institutions should begin to worry about Glass-Steagall becoming a reality, one industry representative said, “Right now.”

However, any legislation establishing such a firewall faces long odds in the current Congress. The heads of the House and Senate banking committees have indicated support for alternative approaches, and efforts to move Glass-Steagall legislation in prior years have garnered little support.

“A new Glass-Steagall would require legislation, and it simply isn’t a priority issue in Congress,” wrote Ian Katz, a financial policy analyst for the research firm Capital Alpha Partners, in a note to clients.

In the meeting which was arranged by Senate Banking Committee Chairman Mike Crapo, Cohn was asked by Senator Elizabeth Warren about Glass-Steagall. Cohn responded favorably, noting that the Republican Party platform supports the idea, according to sources familiar with the meeting. The meeting included lawmakers from both parties and their staff.

Bringing back Glass Steagall would likely have a significant impact on banks like JPMorgan Chase, Bank of America and Citigroup that have large highly intertwined commercial lending and investment banking operations, say analysts.

It would impact Goldman Sachs Group and Morgan Stanley to a lesser degree although, they would likely have to revert to being standalone investment banks and shed their deposit funding.

Here are some details about the law, called the Glass-Steagall Act:

What is Glass-Steagall: Originally passed as part of the U.S. Banking Act of 1933, Glass-Steagall established a firewall between commercial and investment banking activity. The law was whittled away over time as banks gained permission to engage in more trading activity, and was repealed altogether in 1999 with the Gramm-Leach-Bliley Act.

Who supports it?: Since the 2008 financial crisis, Glass-Steagall has become a calling card for politicians eager to crack down on Wall Street. Democratic Senator Elizabeth Warren frequently invokes it, and Senator Bernie Sanders made it a major part of his presidential campaign. President Donald

Trump also seized on the policy during his campaign.

What does the White House say?: The Trump administration has not backed away from his campaign stance, but there are questions about how aggressively the president will push for a new law. The issue only tends to come up when officials are asked about it. Treasury Secretary Steven Mnuchin said he supported a modern version of Glass-Steagall in response to a

question during his confirmation hearing. White House Press Secretary Sean Spicer said the White House supports the proposal when asked by reporters. Cohn responded favorably when asked by Warren at a private meeting with senators.

What would a new Glass-Steagall look like?: There are number

of ideas to create what some refer to as a “21st Century Glass-Steagall.” Warren has proposed splitting commercial and investment banking, and also barring depository institutions from using modern financial instruments like derivatives. Thomas Hoenig, the vice chair of the Federal Deposit Insurance

Corporation, has proposed a similar split, and would subject banks to a higher, 10 percent capital requirement. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, would force big banks to take on so much capital they would prefer to split into smaller institutions.

Could it happen?: Although many Wall Street critics have seized on Glass-Steagall, efforts to change the law have garnered very little support. Warren’s proposal received just a handful of legislative co-sponsors. And because Congress and the White House are still consumed with complex fights over health care and tax reform, there seems to be little appetite for a

broad, controversial overhaul of the financial system.

Are there risks for banks?: Big U.S. lenders including JPMorgan Chase, Bank of America and Citigroup would be most impacted, because their commercial lending and investment banking operations are closely

intertwined, say analysts. Goldman Sachs and  Morgan Stanley might be less impacted, although they would likely have to revert to being standalone investment banks and shed their deposit funding. But even if Glass-Steagall does not become law, the industry may have to spend money, time and

energy lobbying against the idea, when they would rather focus on rolling back existing rules.
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Protesters in Argentina clashed with police during marches over government austerity measures on Thursday as labor unions challenged President Mauricio Macri in the first general strike since he took office 16 months ago.

Security forces used high-powered water cannon and tear gas to control picketers who had blocked the Pan-American Highway, the main road leading from the north to capital city Buenos Aires, where normally bustling streets were half-empty and businesses were closed.

Truck and bus drivers, teachers, factory workers, airport employees and the government customs agents who run Argentina’s all-important grains export sector walked off the job at midnight for 24 hours.

“No customs officials are here, so there will be no exports or imports today,” said Guillermo Wade, manager of the maritime chamber at Argentina’s main grain hub of Rosario. The country is the world’s top exporter of soymeal livestock feed and the third-largest supplier of soybeans.

Macri took office in December 2015. He eliminated currency and trade controls and cut government spending, including gas subsidies, a move that steeply pushed up home-heating bills.

The strike came as Macri welcomed hundreds of potential investors and foreign officials to a meeting of the World Economic Forum in Buenos Aires. Blocks away from the hotel where the meeting was held, protesters clamored for wage increases in line with inflation, which was 40 percent last year and expected to be about 20 percent in 2017.

“The situation is dramatic,” Julio Piumato, a spokesman for labor umbrella group CGT, said in a telephone interview.

“Wealth is being concentrated in the hands of a few at the same rate that poverty is growing,” he said. “Urgent measures are needed to create employment. One out of every three Argentines is poor.”

The one-day work stoppage came ahead of an October congressional election that will gauge Macri’s strength going into his 2019 re-election bid. The market is concerned about a political comeback by previous President Cristina Fernandez, who boosted the government’s role in the economy during her eight years in power.

Macri took office promising a wave of foreign investment that has been slow to manifest itself. Investors want to see that his Cambiemos coalition remains the biggest vote-getter in heavily populated areas like Buenos Aires, which will be key to the 2019 election.

He was elected after Fernandez left Argentina with rampant inflation, dwindling central bank reserves and a wide fiscal deficit.
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Brazilian President Michel Temer plans to water down its landmark pension reform proposal to ease lawmakers’ resistance to the controversial bill key to rebalance the government’s depleted finances.

Temer said in a radio interview on Thursday he has authorized the lawmaker sponsoring the plan to alter its terms as long as he maintains the bill’s minimum retirement age. He did not specify what changes could take place.

The reform plan, submitted last year to Congress, sets a minimum retirement age at 65 for both men and women and requires more years on the job for workers to gain full pension benefits.

Those points and others to limit benefits have drawn criticism from public servants and labor unions alike, irking lawmakers who face elections next year.

A newspaper survey of lawmakers on Wednesday showed support for the proposal fell well below the 308 votes necessary to pass the lower house of Congress, with only 92 in favor and 242 against.

Arthur Maia, the lawmaker sponsoring the legislation, told reporters later on Thursday that he will change the proposal to protect the poorest without hurting the “backbone” of the amendment. He is considering altering the transition rules for those nearing the retirement age, easing pension requirements for farmers and agricultural workers while keeping some special benefits to teachers and police.

Maia said he will unveil his proposed changes on April 18.

A revamp of Brazil’s costly pension system is the centerpiece of Temer’s crusade to balance the government budget and reverse the rise in public debt as he seeks to lift Latin America’s largest economy from its deepest recession on record.

Still, some investors fear he could face a rocky road ahead due to a bickering Congress and corruption probes ensnaring senior figures of his administration.

Temer could even be unseated if Brazil’s top electoral court rules that he and former President Dilma Rousseff, under whom he was vice president, used illegal money to fund their 2014 campaign. Rousseff was impeached in 2016.

The Supreme Electoral Tribunal (TSE) on Tuesday delayed any verdict in the trial until at least May, playing into what Temer’s aides have outlined as a defense strategy centered on dragging the case out through 2018.

Still, Temer said in the radio interview he wishes that the issue will be solved “as soon as possible” in order to reduce uncertainty.
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Many companies aim for “Best in Class” status, but some are seeking another “B” — B corporation certification.

Certified B corporations, or “B corps,” address the growing consumer interest in supporting socially and environmentally responsible companies.

B corps are essentially for-profit companies that behave more like nonprofits, tackling global issues such as pollution and income disparity through everyday business practices.

‘Business as a force for good’

“B corporations are companies that are using their business as a force for good,” said Andrew Kassoy, co-founder of B Lab, the nonprofit organization that issues B corp certification. “By having that B corp certification, it makes good easy for the consumer … to know that the company is having a positive impact on society,” he added.

For many companies, doing good may take a back seat to making money. But not for certified B corps.

Multimillion-dollar brands like fashion company Eileen Fisher and ice cream maker Ben & Jerry’s are among businesses certified as B corps.

“In some cases, it’s about the company trying to create more value for its workers, to create opportunity for workers to grow in the economy and have a job with dignity,” Kassoy said.

“In other cases, it might be about creating a product that’s more environmentally sustainable or socially responsible,” he said.

Growing around the globe

B corps are a growing global movement. Brands large and small make up the more than 2,000 certified B corporations, representing 130 different industries in 55 countries.

“Our foreign certifications are outpacing our U.S.-based certifications for the last year,” said Jennifer Warden, B Lab’s global partner manager. “We’ve got partners in 13 different regions — a lot in Latin America, Europe, a lot of momentum now in the Asia Pacific regions and Africa.”

To qualify as a B corp, companies must score at least 80 out of 200 points on an assessment that covers four key areas: corporate governance, employee rights, community outreach and environmental impact. Everything from waste reduction efforts to leadership roles for women and minorities are considered.

“You’re able to measure how you rank in terms of taking care of the community, how you rank in taking care of the environment, how you take care of your customer,” said Sean Cullen, project coordinator at Uncommon Goods, a Brooklyn-based online retailer that is a certified B corp.

Assessments are made every two years. In addition to maintaining a minimum score, certified B corps are also required to revise company bylaws to reflect accountability to workers and customers.

Depending on a company’s size, B corp certification costs $500 to $25,000 annually. For many, the payoff is in being among the best in the business.

Look for the logo

“When you see that certified B Corp logo on different products, you know that you’re getting a good product,” Cullen said.

B Lab maintains a website with a B corporation directory so consumers can look up a company and verify its certification.

“The goal is that one day, all companies will be able to manage and measure their impact with the same rigor as their profits,” Kassoy told VOA.

“And by doing that … all companies will compete to be best for the world, not just best in the world,” he said.
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