US to Proceed With Mexico Trade Pact, Keep Talking to Canada

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U.S. President Donald Trump notified Congress on Friday of his intent to sign a trade agreement with Mexico after talks with Canada broke up earlier in the day with no immediate deal to revamp the tri-nation North American Free Trade Agreement.

U.S. Trade Representative Robert Lighthizer said U.S. officials would resume talks with their Canadian counterparts next Wednesday with the aim of getting a deal all three nations could sign.

All three countries have stressed the importance of NAFTA, which governs billions of dollars in regional trade, and a bilateral deal announced by the United States and Mexico on Monday paved the way for Canada to rejoin the talks this week.

But by Friday the mood had soured, partly on Trump’s off-the-record remarks made to Bloomberg News that any trade deal with Canada would be “totally on our terms.” He later confirmed the comments, which the Toronto Star first reported.

“At least Canada knows where I stand,” he later said on Twitter.

Ottawa has stood firm against signing “just any deal.” 

​’Making progress’

But at a news conference Friday afternoon, Canadian Foreign Minister Chrystia Freeland expressed confidence that Canada could reach agreement with the United States on a renegotiated NAFTA trade pact if there was “goodwill and flexibility on all sides.”

“We continue to work very hard and we are making progress. We’re not there yet,” Freeland told reporters.

“We know that a win-win-win agreement is within reach,” she added. “With goodwill and flexibility on all sides, I know we can get there.”

The Canadian dollar weakened to C$1.3081 to the U.S. dollar after The Wall Street Journal first reported that the talks had ended Friday with no agreement. Canadian stocks remained 0.5 percent lower.

Global equities were also down following the hawkish turn in Trump’s comments on trade.

Lighthizer has refused to budge despite repeated efforts by Freeland to offer some dairy concessions to maintain the Chapter 19 independent trade dispute resolution mechanism in NAFTA, The Globe and Mail reported Friday.

However, a spokeswoman for USTR said Canada had made no concessions on agriculture, which includes dairy, but added that negotiations continued.

The United States wants to eliminate Chapter 19, the mechanism that has hindered it from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to cut the mechanism. For Ottawa, Chapter 19 is a red line.

Trump argues Canada’s hefty dairy tariffs are hurting U.S. farmers, an important political base for his Republican Party.

But dairy farmers have great political clout in Canada too, and concessions could hurt the ruling Liberals ahead of a 2019 federal election.

At a speech in North Carolina on Friday, Trump took another swipe at Canada. “I love Canada, but they’ve taken advantage of our country for many years,” he said.

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Coca-Cola Hopes for Caffeine Hit as It Buys Costa Coffee Chain

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Coca-Cola is hoping for a caffeine-fueled boost with the acquisition of British coffee chain Costa.

Costa is Britain’s biggest coffee company, with over 2,400 coffee shops in the U.K. and another 1,400 in more than 30 countries, including around 460 in China, its second-biggest market. Coca-Cola said Friday it will buy the Costa brand from Whitbread for 3.9 billion pounds ($5.1 billion) in cash.

The deal, expected to close in the first half of 2019, comes on the heels of Coca-Cola’s announcement earlier in August that it was buying a minority ownership stake in sports drink maker BodyArmor for an undisclosed amount. Coca-Cola’s other investments in recent years have included milk that is strained to have more protein and a push into sparkling water.

The move is Coca-Cola’s latest diversification as health-conscious consumers, at least in America, move away from traditional soda.

Rival PepsiCo, meanwhile, recently bought carbonated drink maker SodaStream, which produces machines that allow people to make fizzy drinks in their own homes.

Coca-Cola already owns the Georgia and Gold Peak coffee brands, which make bottled and canned drinks, but the purchase of Costa could allow it to compete with brands like Starbucks.

Coffee is growing by 6 percent a year, making it one of the fastest-growing beverage categories in the world, said James Quincey, Coca-Cola president & CEO.

“Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand,” he said.

Coca-Cola has over 500 brands in its stable including Fanta, innocent smoothies and Powerade sports drinks. In 2017, it generated operating income of $9.7 billion on revenues of $35.4 billion.

Without being specific about expansion plans, Quincey said in a video posted on Coca-Cola’s website that the company would “over time” look to take Costa “to more people in more places.”

Costa doesn’t currently have a presence in North or South America, but Quincey indicated that one potential early expansion route would be to use Costa’s vending operation and grow the company’s ready-to-drink products. In addition to its shops, Costa has self-serve coffee machines in grocery stores and gas stations.

Whitbread bought Costa for 19 million pounds in 1995, when it had just 39 shops. In recent years, Whitbread has invested heavily in Costa’s expansion overseas, but had been looking to siphon off the business to generate funds for the expansion and for its other business, the budget hotel chain Premier Inn.

Then Coca-Cola got in touch with what Whitbread said was a “highly compelling” offer. The Whitbread board unanimously backed the deal.

Whitbread will use a “significant majority” of the net cash proceeds — around 3.8 billion pounds after taking into account such things as transaction costs — returning cash to shareholders. Some will be used to pay down debt and to make a contribution to the pension fund.

Doing so, Whitbread said, would “provide headroom” to further expand the Premier Inn budget hotel chain in Britain and Germany.

Whitbread’s share price soared 17 percent in early afternoon trading in London.

Nicholas Hyett, equity analyst at London-based stockbrokers Hargreaves Lansdown, said Costa will get “lots of care and attention” from Coca-Cola.

“Its global reach should turbo-charge growth in the years to come, and hot drinks are one of the few areas of the wider beverages sector where the soft drinks giant doesn’t have a killer brand,” he said.

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Canada, US Push Toward NAFTA Deal by Friday

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Top NAFTA negotiators from Canada and the United States increased the pace of their negotiations Thursday to resolve final differences to meet a Friday deadline, with their Mexican counterpart on standby to rejoin the talks soon.

Despite some contentious issues still on the table, the increasingly positive tone contrasted with U.S. President Donald Trump’s harsh criticism of Canada in recent weeks, raising hopes that the year-long talks on the North American Free Trade Agreement will conclude soon with a trilateral deal.

“Canada’s going to make a deal at some point. It may be by Friday or it may be within a period of time,” U.S. President Donald Trump told Bloomberg Television. “I think we’re close to a deal.”

Trilateral talks were already underway at the technical level and Mexican Economy Minister Ildefonso Guajardo was expected to soon rejoin talks with U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland, possibly later on Thursday, people familiar with the process said.

Trump said in a Bloomberg interview: “Canada’s going to make a deal at some point. It may be by Friday or it may be within a period of time,” Trump said. “I think we’re close to a deal.”

Negotiations entered a crucial phase this week after the United States and Mexico announced a bilateral deal on Monday, paving the way for Canada to rejoin talks to modernize the 24-year-old accord that underpins over $1 trillion in annual trade.

The NAFTA deal that is taking shape would likely strengthen North America as a manufacturing base by making it more costly for automakers to import a large share of vehicle parts from outside the region. The automotive content provisions, the most contentious topic, could accelerate a shift of parts-making away from China.

A new chapter governing the digital economy, along with stronger intellectual property, labor and environmental standards could also work to the benefit of U.S. companies, helping Trump to fulfill his campaign promise of creating more American jobs.

Trump has set a Friday deadline for the three countries to reach an agreement, which would allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under U.S. law, Trump must wait 90 days before signing the pact.

The U.S. president has warned he could try to proceed with a deal with Mexico alone and levy tariffs on Canadian-made cars if Ottawa does not come on board, although U.S. lawmakers have said ratifying a bilateral deal would not be easy.

Dairy, dispute settlement

One sticking point for Canada is the U.S. effort to dump the Chapter 19 dispute-resolution mechanism that hinders the United States from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.

Trump also wants a NAFTA deal that eliminates dairy tariffs of up to 300 percent that he argues are hurting U.S. farmers, an important political base for Republicans.

But any concessions to Washington by Ottawa is likely to upset Canadian dairy farmers, who have an outsized influence in Canadian politics, with their concentration in the provinces of Ontario and Quebec.

 “Ultimately, we’ve got huge issues that are still to be resolved,” said Jerry Dias, head of Canada’s influential Unifor labor union. “Either we’re going to be trading partners or we’re going to fight.”

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Microsoft to Contractors: Give New Parents Paid Leave

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Microsoft will begin requiring its contractors to offer their U.S. employees paid leave to care for a new child.

It’s common for tech firms to offer generous family leave benefits for their own software engineers and other full-time staff, but paid leave advocates say it’s still rare to require similar benefits for contracted workers such as janitors, landscapers, cafeteria crews and software consultants.

“Given its size and its reach, this is a unique and hopefully trailblazing offering,” said Vicki Shabo, vice president at the National Partnership for Women and Families.

The details

The new policy affects businesses with at least 50 U.S.-based employees that do substantial work with Microsoft that involves access to its buildings or its computing network. It doesn’t affect suppliers of goods. Contractors would have to offer at least 12 weeks of leave to those working with the Redmond, Washington-based software giant; the policy wouldn’t affect the contractors’ arrangements with other companies. Leave-takers would get 66 percent of regular pay, up to $1,000 weekly.

The policy announced Thursday rolls out over the next year as the company amends its contracts with those vendors. That may mean some of Microsoft’s costs will rise to cover the new benefits, said Dev Stahlkopf, the company’s corporate vice president and general counsel.

“That’s just fine and we think it’s well worth the price,” she said.

Microsoft doesn’t disclose how many contracted workers it uses, but it’s in the thousands.

The new policy expands on Microsoft’s 2015 policy requiring contractors to offer paid sick days and vacation.

Facebook

Other companies such as Facebook have also committed to improve contractor benefits amid unionization efforts by shuttle drivers, security guards and other contract workers trying to get by in expensive, tech-fueled regions such as the San Francisco Bay Area and around Washington’s Puget Sound.

Facebook doesn’t guarantee that contract workers receive paid parental leave, but provides a $4,000 new child benefit for new parents who don’t get leave. A much smaller California tech company, SurveyMonkey, announced a paid family leave plan for its contract workers earlier this year.

Washington state law

Microsoft said its new policy is partially inspired by a Washington state law taking effect in 2020 guaranteeing eligible workers 12 weeks paid time off for the birth or adoption of a child. The state policy, signed into law last year, follows California and a handful of other states in allowing new parents to tap into a fund that all workers pay into. Washington will also require employers to help foot the bill, and will start collecting payroll deductions next January.

A federal paid parental leave plan proposed by President Donald Trump’s daughter, Ivanka Trump, could rely on a similar model but has gained little traction.

“Compared to what employers are doing, the government is way behind the private sector,” said Isabel Sawhill, a fellow at the Brookings Institution who has urged the White House and Congress to adopt a national policy.

Sawhill said it is “very unusual and very notable” that Microsoft is extending family leave benefits to its contract workers. Microsoft already offers more generous family leave benefits to its own employees, including up to 20 weeks fully paid leave for a birth mother.

Pushing the feds

Microsoft’s push to spread its employee benefits to a broader workforce “sends a message that something has to happen more systematically at the federal level,” said Ariane Hegewisch, a program director for employment and earnings at the Institute for Women’s Policy Research. Until then, she said, it’s helpful that Microsoft seems willing to pay contracting firms more to guarantee their workers’ better benefits.

“Paid family leave is expensive and they acknowledge that,” Hegewisch said. Otherwise, she said, contractors with many employees of child-bearing age could find themselves at a competitive disadvantage to those with older workforces.

Republican state Sen. Joe Fain, the prime sponsor of the measure that passed last year, said Microsoft’s decision was “a really powerful step forward.”

By applying the plan to contractors and vendors around the country, “it really creates a pressure for those state legislatures to make a similar decision that Washington made.”

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Republican US Senator Asks FTC to Examine Google Ads

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U.S. Senator Orrin Hatch on Thursday added to the growing push in Washington to have the Federal Trade Commission rekindle an antitrust investigation of Alphabet Inc’s Google.

Hatch, the Republican chairman of the Senate Finance Committee, sent a letter to FTC Chairman Joseph Simons recounting several news reports that identified complaints about Google’s anti-competitive conduct and privacy practices.

Alphabet shares were little changed after the release of the letter. The company declined to comment.

Lawmakers from both major parties and Google’s rivals have said this year they see an opening for increased regulation of large technology companies under the FTC’s new slate of commissioners.

Google’s critics say that ongoing European antitrust action against the web search leader and this year’s data privacy scandal involving Facebook Inc and political consulting firm Cambridge Analytica demonstrate their concerns about the unchecked power of the tech heavyweights. About 90 percent of search engine queries in the United States flow through Google.

Facebook and Twitter executives are expected to testify before the Senate Intelligence Committee on September 5 about their  efforts to deter foreign campaigns from spreading misinformation online ahead November’s midterm elections. Lawmakers have criticized Alphabet for not scheduling a top executive, such as Chief Executive Larry Page, for the hearings.

In 2013, the FTC closed a lengthy investigation of Google after finding insufficient evidence that consumers were harmed by how the company displayed search results from rivals. President Donald Trump accused Google’s search engine on Tuesday of promoting negative news articles and hiding “fair media” coverage of him.

Trump’s economic adviser, Larry Kudlow, later said the White House was “taking a look” at Google, and that the administration would do “some investigation and some analysis,” without providing further details.

Earlier this year, Representative Keith Ellison, a Democrat, and Representative Todd Rokita, a Republican, sent separate letters asking the FTC to probe Google.

Simon, the new Republican chairman of the FTC, said in July the agency would keep a close eye on big tech companies that dominate the internet.

An FTC representative was not immediately available for comment.

Hatch, at event hosted by reviews website and Google rival Yelp Inc in May, said moves made by “an entrenched monopolist” deserve extra skepticism.

“They may well be used, not to further consumer welfare, but to foreclose competitors,” he said, according to prepared remarks.

Yelp, a local-search service, said in a statement that Hatch’s letter was “heartening to see” as it underscored the bipartisan plea for FTC scrutiny of Google.

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Minnesota’s Hmong Farmers Drive Local Food Economy

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Hmong farmers in St. Paul, Minnesota have the best advocate for their business enterprises: themselves, working together.

Originally from China, the Hmong are an Asian ethnic group that migrated to Vietnam and Laos in the 18th century. They have never had a country of their own. After the Vietnam War ended, many resettled in the U.S., giving the U.S. the largest Hmong population outside of Asia. The population in Minnesota is more than 60,000, second behind the state of California.

The Hmong, who are long time farmers, did what they knew best when they got to Minnesota. And by the late 1980’s they spearheaded the revitalization of local farmers’ markets, making them some of the most vibrant in the city.

But the Hmong also discovered that as immigrant farmers, they faced barriers in buying land, obtaining financing, accessing markets and building sustainable family businesses. They were struggling. To combat all that, a group of Hmong farmers established the non-profit Hmong American Farmers Association (HAFA) in 2011.

“One of the reasons HAFA was created was because Hmong farmers were experiencing so much uncertainty. They didn’t always have access to land,” HAFA co-founder Pakou Hang explained. “So when you don’t have land tenure or land certainty you can’t actually invest in organic certification, you can’t invest in perennials, which actually have higher profit margins.”

HAFA’s intent was to “advance the prosperity of Hmong American farmers through cooperative endeavors.” At the center of the association is a 63-hectare (155-acre) farm outside St. Paul where member farmers have long-term leases on two to four hectare (five to 10-acre) parcels to grow their vegetables and flowers.

How HAFA helps

On a recent Friday, Mao Moua and her husband were harvesting vegetables at their plot – for a Saturday farmer’s market.

The Mouas were among the mass exodus of Hmong people fleeing Laos for Thailand and eventually the U.S. in the 1970s. Ever since they arrived, they have been farming in Minnesota and in recent years on the HAFA membership farm.

“I like farming on the HAFA farm because this is a Hmong association,” Moua said. “There are Hmong workers who help us. They are like our hands, eyes and ears. I like there is also water, electricity and the food hub.”

She added proudly, “[I grow] corn, sweet potato, cherry, snap pea, cucumber, and a little cherry tomato. That’s all.”

HAFA’s alternative markets program is called Food Hub.

“Our Food Hub is the place where we aggregate HAFA farmers’ produce and we distribute, sell it to different institutions such as schools, co-ops, or restaurants. And then we also have a CSA program or community supported agriculture that we have about 350 currently members. They get a weekly subscription of produce,” explained Operations Manager Kou Yang.

And if any of the farmers need micro loans to buy tractors or new farming equipment, HAFA’s business development programs are there to help. But Hang said all the programs are not just for income generation.

“What we’re really interested in, what we are focused on is actually wealth creation not just intergenerational wealth but community wealth,” Hang said.

Community wealth

Today, Hmong American farmers make up more than 50 percent of all produce growers selling at area farmers’ markets.

“The Hmong growers’ participation in the farmers’ market has really revitalized the farmers’ market,” said David Kotsonas a director of the Minnesota Farmers’ Market Association.

The Hmong are also at the center of a Minnesota-based local foods economy that has changed the way Minnesotans eat.

“Hmong farmers are major contributors to our local food economy and to our overall economy,” Hang said. “I mean studies have shown that they produced over $250 million in sales.”

Hang was born in a refugee camp in Thailand and came to the U.S. with her parents in 1976.

“During the Vietnam war in Laos my father joined actually a secret army that was allied with the United States CIA. When the Vietnam War ended and the communist faction came into power in Laos they actually began to target Hmong soldiers,” she said.

Hang has big dreams for the HAFA farm which in addition to enabling farmers, conducts research and fosters community ties.

“A hive of learning. A hive of community building,” Hang described it.

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Indian Currency Decree Did Little to Root Out ‘Black Money’

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Nearly all of the currency removed from circulation in a surprise 2016 attempt to root out illegal hoards of cash came back into the financial system, India’s reserve bank has announced, indicating the move did little to slow the underground economy.

Prime Minister Narendra Modi’s currency decree, which was designed to destroy the value of billions of dollars in untaxed cash stockpiles, caused an economic slowdown and months of financial chaos for tens of millions of people.

Modi announced in a November 2016 TV address that all 500-rupee and 1,000-rupee notes, then worth about $7.50 and $15, would be withdrawn immediately from circulation. The banned notes could be deposited into bank accounts but the government also said it would investigate deposits over 250,000 rupees, or about $3,700. The government eventually released new currency notes worth 500 and 2,000 rupees.

In theory, the decree meant corrupt politicians and businesspeople would suddenly find themselves sitting on billions of dollars in worthless currency, known here as “black money.”

“A few people are spreading corruption for their own benefit,” Modi said in the surprise nighttime speech announcement of the order. “There is a time when you realize that you have to bring some change in society, and this is our time.”

But even as the decree caused turmoil for those in India who have always depended on cash — the poor and middle class, and millions of small traders — the rich found ways around the currency switch. In the months after the decree, businesspeople said that even large amounts of banned currency notes could be traded on the black market, though middlemen charged heavy fees.

The reserve bank report said in its Wednesday report that 99.3 percent of the $217 billion in notes withdrawn from circulation had come back into the economy. Some officials had originally predicted that number could be as low as 60 percent.

“Frankly, I think demonetization was a mistake,” said Gurcharan Das, a writer and the former head of Proctor & Gamble in India. He said that while it did broaden the country’s tax base, it was a nightmare for the immense, cash-dependent informal economy.

“You can’t overnight change that in a country which is poor and illiterate. Therefore, for me it’s not only an economic failure but a moral failure as well,” Das said.

 

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Trump OKs Tariff Relief for Three Countries

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U.S. President Donald Trump has signed proclamations permitting targeted relief from steel and aluminum quotas from some countries, the U.S. Commerce Department said on Wednesday.

Trump, who put in place tariffs on steel and aluminum imports in March, signed proclamations allowing relief from the quotas on steel from South Korea, Brazil and Argentina and on aluminum from Argentina, the department said in a statement.

“Companies can apply for product exclusions based on insufficient quantity or quality available from U.S. steel or aluminum producers,” the statement said. “In such cases, an exclusion from the quota may be granted and no tariff would be owed.”

Trump, citing national security concerns, placed tariffs of 25 percent on steel imports and 10 percent on aluminum imports.

The tariffs on steel and aluminum imports from the European Union, Canada and Mexico took effect June 1, and Commerce Secretary Wilbur Ross said May 31 that arrangements had been made with some countries to have non-tariff limits on their exports of the two metals to the United States.

Ross said the arrangement with South Korea was for a quota of 70 percent of average steel exports to the United States in the years 2015 to 2017.

The Brazilian government said at the time the U.S. quotas and tariffs on Brazil’s steel and aluminum exports were unjustified but that it remained open to negotiate a solution.

Brazilian semi-finished steel exports to the United States are subject to quotas based on the average for the three years from 2015-2017, while finished steel products will be limited to a quota of 70 percent of the average for those years.

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Trump, Trudeau Upbeat About Prospects for NAFTA Deal by Friday

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The leaders of the United States and Canada expressed optimism on Wednesday that they could reach new NAFTA deal by a Friday deadline as negotiators prepared to talk through the night, although Canada warned that a number of tricky issues remained.

Under pressure, Canada rejoined the talks to modernize the 24-year-old North American Free Trade Agreement after Mexico and the United States announced a bilateral deal on Monday. Canadian Foreign Minister Chrystia Freeland said late on Wednesday that talks were at “a very intense moment” but said there was “a lot of good will” between Canadian and U.S. negotiators.

“Our officials are meeting now and will be meeting until very late tonight. Possibly they’ll be meeting all night long,” Freeland said. She and U.S. Trade Representative Robert Lighthizer had agreed to review progress early on Thursday.

U.S. President Donald Trump has set a Friday deadline for the three countries to reach an in-principle agreement, which would allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under U.S. law, Trump must wait 90 days before signing the pact.

Trump has warned he could try to proceed with a deal with Mexico alone and levy tariffs on Canadian-made cars if Ottawa does not come on board, although U.S. lawmakers have said ratifying a bilateral deal would not be easy.

“They (Canada) want to be part of the deal, and we gave until Friday and I think we’re probably on track. We’ll see what happens, but in any event, things are working out very well.” Trump told reporters at the White House.

The upbeat tone contrasted with Trump’s harsh criticism of Canada in recent weeks, railing on Twitter against Canada’s high dairy tariffs that he said were “killing our Agriculture!”

Canadian Prime Minister Justin Trudeau said he thought the Friday deadline could be met.

“We recognize that there is a possibility of getting there by Friday, but it is only a possibility, because it will hinge on whether or not there is ultimately a good deal for Canada,” he said at a news conference in northern Ontario on Wednesday.

“No NAFTA deal is better than a bad NAFTA deal.”

 Freeland, who is Canada’s lead negotiator, was sidelined from the talks for more than two months, and will be under pressure to accept the terms the United States and Mexico worked out.

She declined comment on the issues still in play, but said on Tuesday that Mexico’s concessions on auto rules of origin and labor rights had been a breakthrough.

Ottawa is also ready to make concessions on Canada’s protected dairy market in a bid to save a dispute-settlement system, The Globe and Mail reported late on Tuesday.

Sticking points

One of the issues for Canada in the revised deal is the U.S. effort to dump the Chapter 19 dispute resolution mechanism that hinders the United States from pursuing anti-dumping and anti-subsidy cases. U.S. Trade Representative Robert Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.

To save that mechanism, Ottawa plans to change one rule that effectively blocked American farmers from exporting ultra-filtered milk, an ingredient in cheesemaking, to Canada, the Globe and Mail reported, citing sources.

Trudeau repeated on Wednesday that he will defend Canada’s dairy industry.

Earlier on Wednesday, the Trump administration’s own anti-dumping duties on Canadian paper, used in books and newsprint, were thrown out by the U.S. International Trade Commission.

The independent panel ruled that about $1.21 billion in such paper imports from Canada were not harming U.S. producers.

Other hurdles to a NAFTA deal include intellectual property rights and extensions of copyright protections to 75 years from 50, a higher threshold than Canada has previously supported.

Some see the tight time-frame as a challenge.

“There’s nothing here that is not doable for Canada,” said Brian Kingston, vice president for international affairs at The Business Council of Canada.

“We’ve got the best negotiators in the world, but they can only stay awake so many hours of every day.”

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Germany, Seeking Independence From US, Pushes Cybersecurity Research

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Germany announced a new agency on Wednesday to fund research on cybersecurity and to end its reliance on digital technologies from the United States, China and other countries.

Interior Minister Horst Seehofer told reporters that Germany needed new tools to become a top player in cybersecurity and shore up European security and independence.

“It is our joint goal for Germany to take a leading role in cybersecurity on an international level,” Seehofer told a news conference with Defense Minister Ursula von der Leyen. “We have to acknowledge we’re lagging behind, and when one is lagging, one needs completely new approaches.”

The agency is a joint interior and defense ministry project.

Germany, like many other countries, faces a daily barrage of cyberattacks on its government and industry computer networks.

However, the opposition Greens criticized the project. “This agency wouldn’t increase our information technology security, but further endanger it,” said Greens lawmaker Konstantin von Notz.

The agency’s work on offensive capabilities would undermine Germany’s diplomatic efforts to limit the use of cyberweapons internationally, he said. “As a state based on the rule of law, we can only lose a cyberpolitics arms race with states like China, North Korea or Russia,” he added, calling for “scarce resources” to be focused on hardening vulnerable systems.

Germany and other European countries also worry about their dependence on U.S. technologies. This follows revelations in 2012 by U.S. NSA whistleblower Edward Snowden of a massive spying network, as well as the U.S. Patriot Act which gave the U.S. government broad powers to compel companies to provide data.

“As a federal government we cannot stand idly by when the use of sensitive technology with high security relevance are controlled by other governments. We must secure and expand such key technologies of our digital infrastructure,” Seehofer said.

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Virtual Reality: Digital Medicine to Combat Pain

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More than 100 hospitals across the United States are using virtual reality or VR, as a form of therapy for patients to help manage symptoms such as pain and anxiety. An increasing number of countries worldwide are taking an interest in VR and doctors are starting to develop international guidelines on how to apply and validate VR in healthcare. VOA’s Elizabeth Lee reports from Los Angeles, where one hospital is leading the effort in using VR as digital medicine.

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US Economy Grows a Bit Faster Than First Thought

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The U.S. economy expanded at a 4.2 percent annual rate in April, May and June, the Commerce Department said Wednesday.

The second-quarter growth figure for gross domestic product was one-tenth of a percentage point higher than initial estimates.

“The economy is in good shape,” said PNC Bank Chief Economist Gus Faucher. He wrote that this was the best “year-over-year increase in three years.”

But Faucher also said growth above 4 percent was “unsustainable” and that the economy was “set to slow somewhat in the second half of 2018,” hitting 3.4 percent growth for the whole year. He predicted U.S. economic growth would slow further in 2019 and 2020 as the “stimulus from tax cuts and spending increases fades.”

U.S. President Donald Trump cheered the news:

But Senate Minority Leader Chuck Schumer, a New York Democrat, had a different take on the report.

“No amount of President Trump tweets can change the fact that real wages are declining,” he said in a statement, adding that the cost of living — particularly gas and health care costs, “thanks in large part to Republicans and the Trump administration” — is “continuing to climb.”

Wednesday’s report from the Commerce Department was a routine revision; such changes are made as more complete data become available.

Growth figures were boosted by a decline in imports, particularly petroleum, and by some temporary factors.

One of those factors was a surge in soybean exports, which were rushed at a faster-than-usual pace to beat tariffs imposed by China in retaliation for new tariffs imposed by the Trump administration on Chinese goods.

The new second-quarter figures were nearly double those of the first quarter.

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Rights Groups to Google: No Censored Search in China

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More than a dozen human rights groups are urging Google not to offer censored internet search in China, amid reports it is planning to again provide the service in the giant market.

A joint letter Tuesday calls on CEO Sundar Pichai to explain what Google is doing to safeguard users from the Chinese government’s censorship and surveillance.

It describes the company’s secretive plan to build a search engine that would comply with Chinese censorship as representing “an alarming capitulation by Google on human rights.”

“The Chinese government extensively violates the rights to freedom of expression and privacy; by accommodating the Chinese authorities’ repression of dissent, Google would be actively participating in those violations for millions of internet users in China,” the letter says.

In a statement, Google said it has “been investing for many years to help Chinese users, from developing Android, through mobile apps such as Google Translate and Files Go, and our developer tools. But our work on search has been exploratory, and we are not close to launching a search product in China.”

In the U.S., President Donald Trump and other conservatives have lobbed charges of censorship at Google and other U.S. tech companies, though they haven’t provided evidence. On Tuesday, Trump claimed that Google had rigged search results about him “so that almost all stories & news is BAD.” A top adviser said the White House is “taking a look” at whether Google should face federal regulation. The companies deny the accusations.

The rights groups’ expression of concern over a Chinese search engine follows a letter earlier this month from more than a thousand Google employees protesting the China plans. The letter called on executives to review ethics and transparency at the company.

Google had previously complied with censorship controls starting in 2006 as it sought a toehold in the booming Chinese economy. But it exited the Chinese search market in 2010 under unrelenting pressure from human rights groups and some shareholders.

Tuesday’s letter, signed by groups including Amnesty International, Human Rights Watch and Reporters Without Borders, said China’s controls over the internet have only strengthened since then amid an overall crackdown on civil liberties and freedom of expression. The letter said it would be difficult for Google to relaunch a search engine “in a way that would be compatible with the company’s human rights responsibilities under international standards, or its own commitments.”

According to online news site The Intercept, Google created a custom Android app that will automatically filter out sites blocked by China’s so-called “Great Firewall.”

Google co-founder Sergey Brin was born in the Soviet Union in 1973 and lived there until age 6 when his family fled. He has said his experience with a repressive regime shaped his and the company’s views.

However, Pichai, who became CEO in 2015, has said he wants Google to be in China serving Chinese users.

In December, Google announced it was opening an artificial intelligence lab in Beijing, and in June, Google invested $550 million in JD.com, a Chinese e-commerce platform that is second only to Alibaba in the country. The companies said they would collaborate on retail solutions around the world without mentioning China, where Google services including Gmail and YouTube are blocked.

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Britain Seeks Ways to Continue Trading with Iran

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British officials have been turning to Japan for tips on how to dodge American sanctions on Iran, according to local media.

Britain is already seeking from Washington exemptions from some U.S. sanctions, which are being re-imposed by President Donald Trump because of the U.S. withdrawal earlier this year from a controversial 2015 nuclear deal with Tehran. The British are especially keen to maintain banking links with Iran and to import Iranian oil.

According to local media, U.K. officials have been asking their Japanese counterparts how they managed in the past to sidestep some aspects of the pre-2015 sanctions regime, which allowed Tokyo to sign oil deals with Iran as well as insurance contracts without incurring U.S. penalties.

Re-imposed U.S. sanctions penalize any foreign companies that deal with Iran by barring them from doing business in America. That threat has already persuaded more than 50 Western firms to shutter their operations in Iran, including French automakers Renault and Peugeot and the French oil giant Total as well as Germany’s Deutsche Bahn railway company and Deutsche Telekom.

Seeking waivers

British ministers have publicly announced that they are hoping to secure waivers from sanctions for oil imports, tanker insurance and banking. There is particular concern, say British officials, about the position of a gas field 240 miles from Aberdeen which is jointly owned by BP and a subsidiary of Iran’s state-controlled oil company.

According to The Times newspaper, British diplomats and Treasury officials have discussed with their Japanese counterparts what options they may have of evading penalties, if British firms continue to trade with Iran. Britain’s Foreign Office hasn’t commented on the specific claims in report. But in a general statement it says: “We are working with European and other partners, to ensure Iran continues to benefit from sanctions relief through legitimate business, for as long as Iran continues to meet its nuclear commitments under the deal.”

Faltering Iranian economy

On Tuesday, Iranian president Hassan Rouhani was grilled by the country’s lawmakers, who for the first time in his five-year tenure called him before parliament to answer questions about the country’s faltering economy amid the tightening U.S. sanctions.

They asked him about high unemployment, rising food prices and the collapsing value of the Iranian currency. Rouhani, who overcame the opposition of hardliners in the first place to sign the 2015 nuclear deal with the U.S. and other world powers, insisted Iran would overcome the “the anti-Iranian officials in the White House.”

He added: “We are not afraid of America or the economic problems. We will overcome the troubles.” His answers didn’t reassure lawmakers, who voted to reject most of them. Earlier this month the parliament impeached the economy and labor ministers amid growing anger about the economy.

In order to try to keep open financial channels with Tehran and facilitate Iran’s oil exports, the European Union has taken steps to counter renewed U.S. sanctions, including forbidding EU citizens and firms from complying with them.

The European Commission updated a blocking statute on August 7, which bans companies from observing the sanctions — unless expressly authorized by Brussels to do so. It would allow EU firms to recover damages arising from the sanctions. But many companies say they are fearful of losing current or potential business in the U.S.

“Under these conditions it is very difficult,” according to the Director for International Relations at BusinessEurope, a lobby group, Luisa Santos. She says even small and medium-sized businesses which don’t trade with U.S. will face significant challenges because they will need financing from Western banks.

The first round of U.S. nuclear sanctions on Iran officially snapped back into place earlier this month but the more biting sanctions will be re-imposed on November 4 as Washington seeks to pummel the Iranian economy. The first phase U.S. sanctions prohibit any transactions with Iran involving dollars, gold, precious metals, aluminum, steel, commercial passenger aircraft, shipping and Iranian seaports.

 

Earlier in August, Woody Johnson, the U.S. ambassador to Britain, cautioned there would be trade consequences for Britain, which he described as the closest U.S. ally, unless London breaks with the EU and abides by the re-imposed sanctions on Tehran.

The envoy also delivered a clear ultimatum to British businesses, instructing them to stop trading with Iran or face “serious consequences.”

Trump’s decision in May to withdraw from the 2015 nuclear deal, signed by his predecessor Barack Obama, in which Tehran agreed to nuclear curbs in return for sanctions relief, paved the way for the restoration of unilateral American economic penalties on Iran.

The U.S. administration blames Iran for fomenting instability in the Middle East and encouraging terrorism. Trump has described the 2015 nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), as a “horrible, one sided” agreement.

U.S. officials say Iran has used the money going into the country after the 2015 deal, when sanctions were eased, not to improve the lives of ordinary Iranians but to increase spending on the military and proxy forces in the Middle East, including Hezbollah in Lebanon and militants in Yemen.

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Sucking Carbon From Air, Swiss Firm Wins New Funds for Climate Fix

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A small Swiss company won $31 million in new investment on Tuesday to suck carbon dioxide from thin air as part of a fledgling, costly technology that may gain wider acceptance from governments in 2018 as a way to slow climate change.

Climeworks AG, which uses high-tech filters and fans to extract carbon dioxide from the atmosphere at a cost of about $600 a ton, raised the money from investors including Zurich Cantonal Bank.

“It’s all about cost reductions,” Jan Wurzbacher, a co-founder and co-CEO of Climeworks, told Reuters of how the company would use the funds.

Extracting vast amounts of carbon dioxide from the atmosphere could help to limit global warming, blamed for causing more heatwaves, wildfires, floods and rising sea levels.

The company says it has a long-term “vision” of capturing one percent of man-made carbon dioxide emissions by 2025.

But that is a far off. Its capacity is just 1,000 tons of carbon dioxide a year while global emissions totalled 32.5 billion tons in 2017, according to the International Energy Agency.

And costs are now too high.

In June, however, Climeworks’ main rival, Canadian-based Carbon Engineering, outlined the design of a plant that it said could extract carbon dioxide from the air for perhaps as little as $94 a ton.

That could make the technology more feasible if governments jack up penalties for carbon emissions this century. In a European market, carbon emissions prices are now about 21 euros a ton.

Climework’s industrial plant in Switzerland now sells carbon dioxide to nearby greenhouses as an airborne fertilizer for tomatoes or cucumbers. It also has a project in Iceland where the gas is buried deep underground.

After the new round, investments in Climeworks’s technology total about $50 million, it said. The company has expanded to 60 employees from 30 since the start of 2017.

A draft U.N. scientific report, due for publication in October about ways to achieve the goals of the 2015 Paris climate agreement, is likely to boost such “carbon dioxide removal” (CDR) technologies.

Until now, such CDR has often been bundled with other more exotic and risky “geoengineering” technologies such as spraying chemicals into the upper atmosphere to dim sunlight.

But the draft by the Intergovernmental Panel on Climate Change, seen by Reuters, categorizes CDR for the first time as “mitigation,” the mainstream term used for cutting greenhouse gas emissions.

($1 = 0.9957 Swiss francs)

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US Congress Skeptical of Trump’s Mexico Trade Deal

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President Donald Trump’s trade deal with Mexico could struggle to win approval from Congress unless Canada comes on board, lawmakers from both parties said on Tuesday, saying support from Democrats would be needed to pass a purely bilateral deal.

Trump unveiled the Mexico deal on Monday and threatened to slap tariffs on Canadian-made cars if Canada did not join the revamp of the trilateral North American Free Trade Agreement (NAFTA), which Trump has long criticized.

If Trump, a Republican, tries to get the Senate to vote in favor of a bilateral deal as a replacement for NAFTA, he will face an uphill struggle to win passage, lawmakers said. Some lawmakers said only a trilateral pact would be eligible for fast-track, 51-vote Senate approval.

A bilateral deal, on the other hand, would need 60 votes and that would require some support from Democrats, who likely would be reluctant to help Trump, they said. There are now 50 Republican-held seats in the 100-member Senate.

To get fast-track Senate ratification, “the administration must also reach an agreement with Canada,” said Republican Senator Pat Toomey in a statement.

“NAFTA was a tri-party agreement only made operative with legislation enacted by Congress,” said Toomey, a member of the committee that oversees trade policy.

“Any change, such as NAFTA’s termination, would require additional legislation from Congress. Conversion into a bilateral agreement would not qualify for … ‘fast track’ procedures and would therefore require 60 votes in the Senate.”

The White House did not immediately respond to a request for comment about fast track treatment for the Mexico deal. Canada’s top trade negotiator arrived in Washington on Tuesday for talks with her Mexican and U.S. counterparts, in a bid to remain part of the trade pact.

Democratic Senate Leader Chuck Schumer said a bilateral deal would face “serious legal concerns,” while he also questioned a lack of details on the terms of the Mexico pact

“I’m a little worried that this one is like North Korea. They have a nice announcement, but then we don’t see the details,” Schumer told reporters in a Capitol hallway. U.S. stock markets surged on Monday after Trump said he had reached an understanding with Mexico. On Tuesday, stocks had given up some of their early gains by the closing bell.

Senator Ron Wyden, the senior Democrat on the trade committee, said: “We know very few details right now. There are real questions about whether this is even enforceable … We are far from being done on this and the fact is you cannot really move this substantively without the Canadians.”

In the House of Representatives, Democrat Bill Pascrell urged Republicans in a statement to convene a bipartisan House trade council to advise the White House.

 

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Trump Expands Google Criticism to Include Facebook, Twitter

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U.S. President Donald Trump said Tuesday that Google, Twitter and Facebook were “treading on very, very troubled territory” and warned them to “be careful.”

Trump made the comments just hours after igniting controversy with a series of early-morning tweets claiming Google search results are “rigged” to turn up news unfavorable to the president’s administration.

The president asserted that people were complaining about biased results from social media searches.

“We have literally thousands and thousands of complaints coming in,” the president said. “You just can’t do that.”

In response to a reporter’s question in the Oval Office, Trump singled out Google, Facebook and Twitter for criticism and said, “You can’t do that to people.” 

“Google is really taking advantage of a lot of people,” the president said. “They better be careful.”

Google responded to Trump’s earlier criticism by saying its search engine is not used to promote any political agenda.

The company’s statement Tuesday said, “We never rank search results to manipulate political sentiment.” It also said its major goal was to give users “the most relevant answers in a matter of seconds.”

‘Hiding information’

In the early-morning tweets, Trump said Google was “suppressing” conservative voices and “hiding information” that would be more flattering to the president. He also said, “This is a very serious situation — will be addressed!”

Trump tweeted that a search for “Trump news” “shows only the viewing/reporting of Fake New Media [sic]. In other words, they have it RIGGED, for me & others, so that almost all stories & news is BAD.”

In addition, the president said 96 percent of those search results were from “National Left-Wing Media.” He did not cite a source for that statistic.

New York Times reporter Adam Satariano wrote Tuesday that Trump might have based his claims on comments that Fox Business Network host Lou Dobbs made late Monday. Dobbs reported on comments by the conservative website PJ Media, which said it had conducted an “unscientific study” showing 96 percent of Google search results for the word “Trump” came from what it called “left-leaning sites.”

Questioned later in the day about the president’s allegations, White House economic adviser Larry Kudlow told reporters, “We’re taking a look at it.”

U.S. Representative Ted Lieu, a California Democrat who is a frequent critic of the president, responded to Trump’s comments by tweeting, “House Judiciary Committee held two hearings on this issue … Private companies can do whatever they want with speech. What would be illegal is government regulating speech content or speech algorithms.”

Zach Graves, director of technology and innovation policy at the R Street Institute, a think tank in Washington, said PJ Media had drawn flawed conclusions about Google in its unscientific study.

Results ‘not surprising’

“I think the mistake they make is not understanding how search engine algorithms typically work,” Graves told VOA on Tuesday. He said one of the ways the sites are ranked in search results is the number of other web pages that link to it — a measure of how well-used a site is and how many other sites trust its information.

“With that in mind,” Graves said, “it’s not surprising at all that these big popular media outlets” such as CNN, The New York Times and Fox News “are outranking more niche conservative platforms like Hot Air, the Blaze, and so on.”

Data from media analysis firm Alexa.com, a subsidiary of media giant Amazon, show that 303,995 other sites link to The New York Times — the term is “backlink” — while CNN has 210,373 backlinks and Fox News has 76,164. The conservative Wall Street Journal has 128,015 backlinks, while PJ Media itself has 3,807.

“The interpretation is that there’s some kind of conspiracy, that Google’s coming in and manipulating these results for political reasons,” Graves said. “I think the correct interpretation is that this is a natural byproduct of the metrics that the algorithm uses.”

He added, however, that he thought Google would do itself a favor to be more transparent about its search algorithm and reach out to conservative groups to assuage their concerns about bias.

VOA’s Steve Herman contributed to this report.

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Iraq Sending Team to US to Seek Deal on Transactions with Iran

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Iraq will send a delegation to the United States seeking an agreement on financial transactions with Iran following Washington’s reimposition of sanctions on Tehran, Prime Minister Haider al-Abadi said Tuesday.

His statement was the first by an Iraqi official since Reuters reported last week that Baghdad was going to ask Washington for exemptions from some of the sanctions because Iraq’s economy is closely linked with neighboring Iran.

“We have requests for the American side, we have presented them and a delegation will go to negotiate within that framework,” Abadi told a weekly news conference.

“We have presented a clear vision of what Iraq really needs. This includes Iranian [natural] gas, which is very important, as well as other trade and the electricity sector.”

U.S. President Donald Trump withdrew the United States in May from world powers’ 2015 nuclear deal with Iran, calling it flawed, and reimposed trade sanctions on the Islamic Republic.

The Trump administration has warned of consequences for countries including European allies that co-signed the nuclear accord, that do not respect the new sanctions. Baghdad is in a difficult position — its two biggest allies are the United States and Iran, themselves arch-adversaries.

“We have had good promises initially, but as you know the American situation is complicated; you do not deal with one person, there are several institutions,” Abadi said.

He called the sanctions “unilateral” and “oppressive,” adding that Iraq would not be “part of a blockade” due to its own painful experience with international sanctions during the era of Saddam Hussein.

Iraqi government and central bank officials said the delegation would travel to Washington to ask for exemptions in applying the sanctions. They did not say when that trip would take place.

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Google, Indian Lenders Unite in Bid to Woo New Users

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Alphabet’s Google said Tuesday that it was partnering with a handful of Indian banks to bring quick loans to the masses, as it aims to woo tens of millions of new internet users in the country to its digital payments services.

At an annual Google event in New Delhi, Caesar Sengupta, vice president of Google’s Next Billion Users initiative, said the move would make banking services accessible to tens of millions of Indians.

Google launched payments app Tez, meaning fast in Hindi, in India last year, integrating it with the state-backed unified payments interface (UPI), as it sought to gain a foothold in the South Asian nation’s digital payments space — which, according to Credit Suisse, will grow fivefold to $1 trillion by 2023.

On Tuesday, Google rebranded the app as Google Pay and said it was partnering with four Indian banks — Federal Bank, HDFC Bank, ICICI Bank and Kotak Mahindra Bank — to provide instant loans to the app’s users.

“We’re talking to a lot of banks. We’re completely open with whom we work with in terms of banking partners,” Sengupta said in an interview on the sidelines of the event.

“Banks bring their financial capabilities, their understanding of the user, their customers. We bring our user experience, our ability to make complex processes extremely simple and very fast,” he added.

Challenge to Paytm

Google’s ambitions could pose a challenge for homegrown Paytm, backed by Japan’s SoftBank and China’s Alibaba and U.S. conglomerate Berkshire Hathaway. Paytm’s founder, Vijay Shekhar Sharma, and its parent, One97 Communications, run a payments bank, and the payments firm also plans to expand to selling financial products such as insurance and mutual funds in India — the world’s fastest-growing internet services market.

Sengupta said Google was open to collaborating with other Indian payments firms. “We are huge of fans interoperability … when a product like Tez does well, it creates more value in the network for everyone,” he said.

Tez has over 22 million monthly active users, according to Google.

Sengupta said Google also expected the KaiOS mobile operating system, in which the company has invested $22 million, to do well in Africa and parts of Southeast Asia.

KaiOS is a low-cost phone operating system that, among others, has been used by Indian billionaire Mukesh Ambani to sell his Jio telecom venture’s low-cost internet enabled phones.

Countries like India, with so many people coming online for the first time, “generate an incredible amount of opportunity for innovation,” Sengupta said.

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Five Key Takeaways From Trump’s US-Mexico Trade Deal

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The United States and Mexico agreed on Monday to a sweeping trade deal that pressures Canada to accept new terms on autos trade, dispute settlement and agriculture to keep the trilateral North American Free Trade Agreement (NAFTA).

U.S. Trade Representative Robert Lighthizer said the White House was ready to notify the U.S. Congress by Friday of President Donald Trump’s intent to sign the bilateral document, but that it was open to Canada joining the pact.

The 24-year-old NAFTA is a trilateral deal between the United States, Canada and Mexico that underpins $1.2 trillion in North American Trade.

Here are some of the main issues at the heart of the negotiations:

Autos Dominate

The new deal requires 75 percent of the value of a vehicle to be produced in the United States or Mexico, up from the NAFTA threshold of 62.5 percent.

The higher threshold is aimed at keeping more parts from Asia out, boosting North American automotive manufacturing and jobs. Even if more plants are built in Mexico, jobs will grow in the United States due to high levels of integration, with studies showing that U.S. parts make up 40 percent of the value of every Mexican-built car exported to the United States.

The pact also requires greater use of U.S. and Mexican steel, aluminum, glass and plastics.

The provision started out as a U.S. demand for 85 percent regional content, with 50 percent coming from U.S. factories.

That plan was vehemently opposed by Mexico, Canada and the auto industry. It later morphed into the U.S.-Mexico deal’s requirement of 40 to 45 percent of a vehicle’s value to be made in high wage areas paying at least $16 an hour, requiring significant automotive production in the United States.

Although full automotive details have not yet been released, auto industry officials say it will allow Trump the ability to impose higher national security tariffs on vehicles that do not comply with the new thresholds.

Most Mexican auto exports are in a position to comply with the new limits, the country’s economy minister said.

No Sunset

Trump backed off from an initial U.S. demand for a “sunset” clause that would kill the pact unless it was renegotiated every five years and which businesses said would stymie long term investment in the region.

Canada and Mexico were strictly opposed to the clause.

Instead, the United States and Mexico agreed to a 16-year lifespan for NAFTA, with a review every six years that can extend the pact for 16 years more, providing more business certainty.

Dispute Settlement

Mexico agreed to eliminate a settlement system for anti-dumping disputes, NAFTA’s Chapter 19.

The move, sought by the United States, puts Canada in a difficult position because Prime Minister Justin Trudeau had insisted on maintaining Chapter 19 as a way to fight U.S. duties on softwood lumber, paper and other products that it views as unfair. Ottawa now has less than a week to decide to accept a deal without that provision.

A settlement system for disputes between investors and states was scaled back, now only for expropriation, favoritism for local firms and state-dominated sectors such as oil, power and infrastructure.

Agriculture, Labor

The new deal will keep tariffs on agricultural products traded between the United States and Mexico at zero and seeks to support biotech and other innovations in agriculture. It lacks a previous U.S. demand to erect trade barriers to protect seasonal U.S. fruit and vegetable growers from Mexican competition.

It contains enforceable labor provisions that require Mexico to adhere to International Labor Organization labor rights standards in an effort to drive Mexican wages higher.

Now Canada

The U.S.-Mexico NAFTA deal opens the door for Canada to immediately rejoin the talks and is a major step forward in updating the accord.

Canada, which sat out the last leg of discussions while the United States and Mexico ironed out their bilateral differences, is now pressured to agree to the new terms on auto trade and other issues to remain part of the three-nation pact.

Trump has presented this as a bilateral deal and threatened Canada with car tariffs. Some lawmakers have said that a bilateral deal would face a higher vote threshold in Congress because the NAFTA fast-track negotiating authority law calls for a trilateral agreement.

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Mexico’s Next Leader: NAFTA Deal Preserves Energy ‘Sovereignty’

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Mexican president-elect Andres Manuel Lopez Obrador welcomed a deal between Mexico and the United States to overhaul the North American Free Trade Agreement (NAFTA) that he said preserved Mexican “sovereignty” in the energy sector.

The U.S.-Mexico deal was announced by U.S. President Trump on Monday, putting pressure on Canada to agree to new terms and details that were only starting to emerge. Lopez Obrador said it was important that Canada be part of the deal.

Lopez Obrador, who is scheduled to take office on Dec. 1, said Trump “understood our position” and accepted his incoming administration’s proposals on the energy sector. The text of the new agreement has not yet been made public.

“We put the emphasis on defending national sovereignty on the energy issue and it was achieved,” Lopez Obrador told reporters after arriving in the southern state of Chiapas.

“We are satisfied because our sovereignty was saved. Mexico reserves the right to reform its constitution, its energy laws, and it was established that Mexico’s oil and natural resources belong to our nation,” he said.

Lopez Obrador opposed a constitutional change pushed through by Mexican President Enrique Pena Nieto that opened production and exploration in the energy sector to private capital.

Mexico has already awarded more than 100 oil exploration and production contracts to private companies.

Lopez Obrador has said he would pour resources into state oil company Pemex while still respecting private sector contracts, as long as a review does not find evidence of corruption.

He is expected to slow down or stall the process of offering more contracts to private players.

Jesus Seade, Lopez Obrador’s designated chief NAFTA negotiator, participated in the latest talks between the current Mexican administration and the U.S. Trade Representative to strike the new NAFTA agreement.

Seade said on Monday that both Pena Nieto’s team and the United States had agreed to change language in a draft proposal of the NAFTA overhaul on energy that had previously been a “cut and paste” from the text of Mexico’s energy reform.

The new language still preserved the same ideas and was consistent with Pena Nieto’s reform, Seade said, adding that Lopez Obrador was not seeking to change the legal framework for private energy projects in Mexico.

While the new administration planned to increase production at Pemex, Seade told a news conference in Washington “there will be areas where cooperation with the private sector is needed.”

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Toyota to Invest $500 Million in Uber

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Toyota will invest half a billion dollars into ride-sharing giant Uber as part of a deal for the two companies to work together on developing self-driving vehicles. 

Toyota, one of the world’s largest car makers, is seen as lagging behind other companies, including General Motors and Google’s Waymo, in the autonomous-vehicle race. 

Uber has already begun testing self-driving vehicles, but was forced to remove hundreds of autonomous cars from the road in March after one of its test vehicles struck and killed a pedestrian on a street in Tempe, Arizona. 

The deal between Uber and Toyota is an indication that Uber does not want to go it alone in creating the complex, autonomous driving systems. 

Self-driving cars have always been important to Uber, which sees them as a way to reduce the cost of carrying passengers. Former Uber CEO Travis Kalanick had insisted on developing a proprietary self-driving system, however current CEO Dara Khosrowshahi has been working to develop more partnerships for the company. 

Uber has been doing safety evaluations since the March crash that killed a 49-year-old woman as she walked her bicycle across the street. The company took a step in July toward relaunching its vehicle testing in Pittsburgh, putting its self-driving cars back on the road in manual mode. 

Toyota has been cautious in its approach to self-driving vehicles and has focused on partial autonomous systems. However, the company says it plans to begin testing self-driving electric cars around 2020. 

Both companies aim to work together to solve the huge challenge of how to design and mass produce self-driving cars, which use computers, cameras and sensors to guide the vehicles.

Proponents of the new technology argue that self-driving cars will prove to be safer than human drivers because the cars will not get distracted and will obey all traffic laws.

Critics have expressed concern about the technology’s safety, including the ability of the autonomous technology to deal with unpredictable events.

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Call Growing for Treaty to Ban Killer Robots

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The Campaign to Stop Killer Robots is urging the United Nations to begin talks on a legally binding treaty to ban the use and development of lethal autonomous weapons systems. Representatives from more than 70 countries are attending a weeklong meeting of the Convention on Conventional Weapons, or CCW, to recommend future work on this issue.

The Campaign to Stop Killer Robots is a global coalition of 76 organizations in 32 countries. Members include Human Rights Watch, Amnesty International, Mines Action Canada and the Nobel Women’s Initiative. It began in April 2013 to pre-emptively ban lethal autonomous weapons systems, better known as killer robots.

Activists say momentum is building for states to negotiate a ban on the devices when the CCW holds its annual meeting in late November; however, the recommendation for further action is required during the current CCW meeting.

Since the last meeting in April, the Campaign to Stop Killer Robots reports 26 countries have joined the call for a ban. It says China is agreeable to a partial ban on the use of these weapons, though not on their development, and Russia has announced its support for a non-binding agreement.

Mary Wareham of Human Rights Watch, the coordinator of the campaign, says this is putting pressure on the United States and other countries to support a ban on fully autonomous weapons.

“All of the ingredients are there for states to take action now,” Wareham said. “It is just a matter of who is willing to be the bad guy and try and block this, and that is what we will know at the end of the week. … The CCW operates by consensus, and it is always an awkward thing to witness. We will find out on Friday if any country wants to block the consensus for the proposed mandate.” 

The proposed mandate is to negotiate a legally binding agreement by the end of 2019. During the last meeting, France, Israel, Russia, Britain and the United States emerged as potential spoilers — they all explicitly rejected moves to prohibit these weapons systems.

Activists say legally binding arrangements must be enacted to ensure human control over lethal fully autonomous weapons. To do otherwise, they say, would violate international ethical standards. They say it is not possible to hold killer robots accountable for acts that would amount to war crimes if triggered by a human.

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Ethiopia Ousts State Firm From Nile Dam Project

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Ethiopia has ousted state-run Metals and Engineering Corporation (METEC) from a $4 billion dam project on the River Nile due to numerous delays in completing the project.

The Grand Renaissance Dam is the centerpiece of Ethiopia’s bid to become Africa’s biggest power exporter.

Prime Minister Abiy Ahmed said at the weekend that the government had cancelled the contract of METEC, which is run by Ethiopia’s military, and would award it to another company.

Italian firm Salini Impregilo remains the main contractor building the dam, while METEC was the contractor for the electromechanical and hydraulic steel structure divisions of the project.

The government has touted the 6,000-megawatt dam project, which is 60 percent finished, as a symbol of its economic reforms.

“It is a project that was supposed to be completed within five years, but seven or eight years later not a single turbine is operational,” Abiy said during a news conference in Addis Ababa on Saturday.

“Salini has even demanded compensation because of the delays. We decided to cancel a contract with METEC and offer companies with experience. Otherwise, it will take even longer,” he said.

Abiy has presided over a series of reforms since coming to power in April, releasing political prisoners, relaxing state control of the economy and dramatically improving relations with Ethiopia’s neighbor Eritrea.

The government had previously said the dam would be completed within two years, but recently Abiy said it may face a lengthy delay.

An official at METEC, who did not wish to be named, said the company first heard of the cancellation on Saturday.

“Even now our workers are on the site,” the official said.

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Trade, Technology Rift may Have Economic and Political Impact on China

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The trade rift between the U.S. and China is taking on new dimensions with Washington scrutinizing the flow of technology to Chinese industries. Analysts said China might be in for both economic and political problems if the U.S. cuts off the supply of technologies that are essential for the survival of major Chinese companies.

Such a move would affect the performance and industrial competitiveness of Chinese industry, said Scott Kennedy, Deputy Director of the Freeman Chair in China Studies at the Center for Strategic & International Studies. Beijing may be forced to overhaul its industrial policy to meet with the emerging situation.

“It will put a lot of pressure on China to increase domestic consumption and domestic investments to replace the loss of opportunities with the United States and that could put pressure on Xi Jinping,” Kennedy said, referring to the Chinese President.

Washington’s measures, like imposing heavy duties on a wide range of Chinese exports, is already having a serious impact on China’s fixed asset investments (FAI) in areas like infrastructure projects and manufacturing plants. The FAI grew six percent in the first half of the year, down from previous periods. 

Blocking tech flows

The Trump administration has suggested it is trying to block the rampant theft of American technology in China as part of efforts to level the playing field in which China enjoys a big surplus over the U.S. But others see it as an attempt to hurt the Made in China 2025 technology development plan.

Past U.S. administrations focused on dual-use technologies, which are those that have both civilian and military value. But the Trump administration has indicated a willingness to curb the outflow of all kinds of American technology to China because of its ability to quickly adapt them and compete with U.S. companies.

The year 2017 ended with a trade deficit of $375 billion for the U.S.

There are signs Washington is considering a dual track approach regarding China. One of them involves restraining China’s industrial policy including its technology development plan. “And, another goal where they see China as a strategic rival and limit technology flows to China, and isolate it, and move supply chains out of China,” Kennedy said.

“It is unclear, which of these two goals is the dominant position within the Trump administration now,” the CSIS scholar said.

Beijing’s fear

Beijing’s main fear is over its supply of crucial semi-conductor technology from U.S.-based Intel and Qualcomm. China’s massive electronic industry relies heavily on U.S. made semiconductors.

“China still buys a lot of semi-conductors from U.S.,” said Lourdes Casanova, director of the Emerging Markets Institute at Cornell University’s SC Johnson School of Management. However, she explained, “China is investing a lot of money to make its own semi-conductors and be less dependent on Intel.”

China’s traditional strength in manufacturing has been its low labor costs. But new technologies like artificial intelligence, robotics, 3D printing and the “internet of things,” are replacing the need for labor-intensive manufacturing. That has made technology a key part of China’s long-term economic strategy. 

“The issues of technology transfers, intellectual property theft, and China’s industrial upgrading strategy, Made in China 2025, are not going to go away. On the contrary, the U.S. is likely to pump up the pressure even further and may step up efforts to work with European countries to try to isolate China in these areas,” said an editorial in Caixing, China’s prominent business magazine. 

Bad timing

Chinese technology companies have been suffering in recent weeks for unrelated causes, like a major stock market slide. The problem is about timing; bad news coming at a time when Chinese technology companies are exposed to Washington’s pressures. Tencent, world’s eight biggest company by stock valuation, recently lost $45 billion in stock value after it failed to obtain Beijing’s approval for some of its gaming products.

Earlier, the U.S. administration hit out at Chinese telecommunications equipment maker ZTE imposing a hefty fine and restricting its access to the lucrative American market. The decision came after U.S. regulators found the Chinese firm was violating UN sanctions to sell products to North Korea. Though the move is not related to the U.S.-China trade rift, it served as a wake-up call for Chinese companies seeking to expand into the western market.

“China has always pushed for as much independence from the rest of the world as possible, and ZTE was a wake-up call that they are still dependent for basic technological goods,” said John Artman, editor-in-chief of a web-based technology magazine, Technode.

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Mexico Minister says in ‘Final Hours’ of Bilateral NAFTA Talks

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Mexico’s Economy Minister Ildefonso Guajardo said on Sunday that bilateral negotiations with the United States about the North American Free Trade Agreement (NAFTA) were in the “final hours.”

Speaking as he arrived for talks at the U.S. Trade Representative’s office, Guajardo said the negotiators would need at least a week to work with Canada, the third country in the trilateral trade pact, pushing any possible final deal into at least September.

U.S. President Donald Trump said on Saturday that the United States could reach a “big Trade Agreement” with Mexico soon as incoming Mexican trade negotiators signaled possible solutions to energy rules and a contentious U.S. “sunset clause” demand.

 

 

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The Success Story Behind ‘John’s Crazy Socks’

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John Cronin has never been one to let disability hold him back. The 22-year-old from Long Island, N.Y., was born with Down syndrome, a genetic disorder that causes developmental and intellectual delays. Motivated by his family’s love and encouragement, Cronin teamed up with his father 18 months ago to open a business. But not just any business. John’s Crazy Socks sells, you guessed it, socks. And as Faiza Elmasry reports, it’s a business worth $4 million. Faith Lapidus narrates.

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Russian Artist Builds Cameras out of Wood

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A Russian artist is going back to the roots of photography, rejecting the digital trappings and the assembly-line convenience of the modern age, by designing and creating wooden cameras the way they were built a hundred years ago. Combining craftsmanship with the principles of old school photography, some consider his creations art forms in themselves. And as VOA’s Julie Taboh reports, his wooden cameras, and the unique photographs he takes with them, are attracting buyers from around the world.

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