Tag Archives: Negotiations

Exclusive: China backtracked on almost all aspects of U.S. trade deal – sources

FILE PHOTO: Chinese Vice Premier Liu He, right, looks as U.S. Treasury Secretary Steven Mnuchin, center, swaps places with his Trade Representative Robert Lighthizer during a photograph session before they proceed to their meeting at the Diaoyutai State Guesthouse in Beijing, Wednesday, May 1, 2019. Andy Wong/Pool via REUTERS

By David Lawder, Jeff Mason and Michael Martina

WASHINGTON/BEIJING (Reuters) – The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks.

The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

U.S. President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 percent on Friday. timed to land in the middle of a scheduled visit by China’s Vice Premier Liu He to Washington to continue trade talks.

The United States said on Wednesday the higher tariffs would go into effect on Friday, according to a notice posted on the Federal Register.

Trump said on Wednesday that China is mistaken if it hopes to negotiate trade later with a Democratic presidential administration.

“The reason for the China pullback attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats,” Trump tweeted. Trump also said he would be happy to keep tariffs on Chinese imports in place.

The stripping of binding legal language from the draft struck directly at the highest priority of U.S. Trade Representative Robert Lighthizer – who views changes to Chinese laws as essential to verifying compliance after years of what U.S. officials have called empty reform promises.

Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions such as those imposed on North Korea or Iran than a typical trade deal.

“This undermines the core architecture of the deal,” said a Washington-based source with knowledge of the talks.

‘PROCESS OF NEGOTIATION’

Spokespeople for the White House, the U.S. Trade Representative and the U.S. Treasury Department did not immediately respond to requests for comment.

Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a “process of negotiation” and that China was not “avoiding problems”.

Geng referred specific questions on the trade talks to the Commerce Ministry, which did not respond immediately to faxed questions from Reuters.

Lighthizer and U.S. Treasury Secretary Steven Mnuchin were taken aback at the extent of the changes in the draft. The two cabinet officials on Monday told reporters that Chinese backtracking had prompted Trump’s tariff order but did not provide details on the depth and breadth of the revisions.

Liu last week told Lighthizer and Mnuchin that they needed to trust China to fulfill its pledges through administrative and regulatory changes, two of the sources said. Both Mnuchin and Lighthizer considered that unacceptable, given China’s history of failing to fulfill reform pledges.

One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because “China got greedy.”

“China reneged on a dozen things, if not more … The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.

“After 20 years of having their way with the U.S., China still appears to be miscalculating with this administration.”

FURTHER TALKS THIS WEEK

The rapid deterioration of negotiations rattled global stock markets, bonds and commodities this week. Until Sunday, markets had priced in the expectation that officials from the two countries were close to striking a deal.

Investors and analysts questioned whether Trump’s tweet was a negotiating ploy to wring more concessions from China. The sources told Reuters the extent of the setbacks in the revised text were serious and that Trump’s response was not merely a negotiating strategy.

On Wednesday morning, U.S. stock market indexes were mostly weaker again, pointing to a third straight day of losses on Wall Street. The S&P 500 has fallen more than 2 percent so far this week. Yields on benchmark U.S. Treasury securities fell to the lowest in more than a month.

Chinese negotiators said they couldn’t touch the laws, said one of the government sources, calling the changes “major.”

Changing any law in China requires a unique set of processes that can’t be navigated quickly, said a Chinese official familiar with the talks. The official disputed the assertion that China was backtracking on its promises, adding that U.S. demands were becoming more “harsh” and the path to a deal more “narrow” as the negotiations drag on.

Liu is set to arrive in Washington on Thursday for two days of talks that just last week were widely seen as pivotal; a possible last round before a historic trade deal. Now, U.S. officials have little hope that Liu will come bearing any offer that can get talks back on track, said two of the sources.

To avert escalation, some of the sources said, Liu would have to scrap China’s proposed text changes and agree to make new laws. China would also have to move further toward the U.S. position on other sticking points, such as demands for curbs on Chinese industrial subsidies and a streamlined approval process for genetically engineered U.S. crops.

The U.S. administration said the latest tariff escalation would take effect at 12:01 a.m. Friday (0401 GMT), hiking levees on Chinese products such as internet modems and routers, printed circuit boards, vacuum cleaners and furniture.

The Chinese reversal may give China hawks in the Trump administration, including Lighthizer, an opening to take a harder stance.

Mnuchin, who has been more open to a deal with improved market access, and at times clashed with Lighthizer, appeared in sync with Lighthizer in describing the changes to reporters on Monday, while still leaving open the possibility new tariffs could be averted with a deal.

Trump’s tweets left no room for backing down, and Lighthizer made it clear that, despite continuing talks, “come Friday, there will be tariffs in place.”

(Additional reporting by Chris Prentice and Dan Burns in NEW YORK, and Jing Xu and Ben Blanchard in BEIJING; Editing by Simon Webb, Brian Thevenot and Paul Simao)

Trump says U.S.-China trade deal may be reached in four weeks

U.S. President Donald Trump talks with with China's Vice Premier Liu He in the Oval Office of the White House in Washington, U.S., April 4, 2019. REUTERS/Jonathan Ernst

By Jeff Mason and David Lawder

WASHINGTON (Reuters) – U.S. President Donald Trump said on Thursday the United States and China were close to a trade deal that could be announced within four weeks, while warning Beijing that it would be difficult to allow trade to continue without a pact.

The two countries are engaged in intense negotiations to end a months-long trade war that has rattled global markets, but hopes of a resolution soared after both sides expressed optimism following talks in Beijing last week.

Speaking to reporters at the White House at the start of a meeting with Chinese Vice Premier Liu He, Trump said some of the tougher points of a deal had been agreed but there were still differences to be bridged.

“We’re getting very close to making a deal. That doesn’t mean a deal is made, because it’s not, but we’re certainly getting a lot closer,” Trump said in the Oval Office.

“And I would think with, oh, within the next four weeks or maybe less, maybe more, whatever it takes, something very monumental could be announced.”

Trump said he would hold a summit with Chinese President Xi Jinping if there were a deal.

Xi assured Trump that text of the China-U.S. trade could be finalized soon, in a message conveyed by Liu He.

According to state-run news agency Xinhua, Liu He told Trump that Xi believed under his and Trump’s leadership, China-U.S. relations will make new and greater progress.

Xi said that in the past month or more, the two sides’ trade teams had maintained close contact and “achieved new and substantive progress on issues in the text of two countries’ trade agreement”.

“I hope the two sides’ trade teams can continue working in the spirit of mutual respect, equality, and mutual benefit to resolve each other’s concerns, and finish negotiations on the text of the China-U.S. trade agreement soon,” Xi said to Trump through Liu.

KEEPING LEVERAGE

Trump declined to say what would happen to U.S. tariffs on $250 billion worth of goods as part of a deal. China wants the tariffs lifted, while U.S. officials are wary of giving up that leverage, at least for now.

Asked about the benefits of an agreement for China, Trump said: “It’s going to be great for China, in that China will continue to trade with the United States. I mean, otherwise, it would be very tough for us to allow that to happen.”

Goods trade between the United States and China, the world’s two largest economies, totaled $660 billion last year, according to U.S. Census Bureau data, consisting of imports of $540 billion from China and $120 billion in exports to China.

On China’s behalf, Liu cited “great progress” in the talks because of Trump’s direct involvement and expressed hope that the talks would lead to “a good result.”

U.S. SEEKS SWEEPING CHANGES

Trump has previously threatened to impose punitive tariffs on all imports from China, more than a half-trillion dollars worth of products.

U.S. Trade Representative Robert Lighthizer, who is leading the talks for the Trump administration, said there were still some “major, major issues” to resolve and praised Liu’s commitment to reform in China.

Asked about the remaining sticking points, Trump mentioned tariffs and intellectual property theft. He said he would discuss tariffs with Liu in their meeting.

“Some of the toughest things have been agreed to,” Trump said. He later said that an enforcement plan for a deal remained a sticking point as well.

“We have to make sure there’s enforcement. I think we’ll get that done. We’ve discussed it at length,” he said.

Lighthizer and Treasury Secretary Steven Mnuchin are holding talks in Washington with a Chinese delegation this week after meeting together in Beijing last week. The current round of talks is scheduled to go through Friday and possibly longer.

Hopes that the talks were moving in a positive direction have cheered financial markets in recent weeks. But U.S. stocks were mixed on Thursday as investors waited for more developments in the trade negotiations, with the Dow Jones industrial Average slightly higher, and the S&P 500 and Nasdaq Composite slightly lower. [.N]

The United States is seeking reforms to Chinese practices that it says result in the theft of U.S. intellectual property and the forced transfer of technology from U.S. companies to Chinese firms.

Administration officials initially envisioned a summit between Trump and Xi potentially taking place in March, but some U.S. lawmakers and lobbying groups have said recently they were told that the administration was now aiming for a deal in late April.

OUTSTANDING ISSUES

White House economic adviser Larry Kudlow said last week that the talks were “not time-dependent” and could be extended for weeks or even months longer.

While some reform pledges by Beijing are largely set, including an agreement to avoid currency manipulation, an enforcement mechanism to ensure that China keeps its pledges and the status of U.S. tariffs on $250 billion worth of Chinese goods must be resolved.

“China has been very clear, publicly and privately, that they would like to see all the tariffs removed,” U.S. Chamber of Commerce international affairs chief Myron Brilliant told reporters on Tuesday.

“The (Trump) administration has been equally clear that they want to keep some of the tariffs in place as a way to have leverage over China fulfilling its obligations under whatever final package is reached.”

(Reporting by Jeff Mason and David Lawder; Additional reporting by Chris Prentice and Michael Martina in BEIJING; Editing by Peter Cooney, Simon Cameron-Moore and Michael Perry)

U.S.-China trade talks continue, Trump not expected to announce summit: official

FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping arrive for a state dinner at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Jonathan Ernst/File Photo

WASHINGTON (Reuters) – The White House is not expected to announce a date on Thursday for a trade summit between U.S. President Donald Trump and Chinese President Xi Jinping, a senior administration official said, as negotiators for the two sides launch another day of talks.

China and the United States are in the middle of intense negotiations to end a months-long trade war that has rattled global markets.

After meetings in Beijing last week, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are holding talks with a Chinese delegation in Washington this week.

Trump is slated to meet with China’s top trade negotiator, Liu He, at 4:30 p.m. (2030 GMT) at the White House. The Wall Street Journal and the New York Times reported that he was expected to announce a date for a summit at that time, but a senior administration official told Reuters that was incorrect.

“The White House is not expected to announce a date for a meeting,” the official said.

Trump administration officials have cited progress in the talks on tricky aspects, including reforming practices that Washington objects to by Beijing such as the intellectual property theft and forced transfer of technology from U.S. companies doing business in China.

Hopes that the talks were moving in a positive direction have cheered investors.

Administration officials initially envisioned a summit between Trump and Xi potentially taking place in March, but that period passed while talks continued.

How to enforce a deal as well as when and whether to lift tariffs on billions of dollars of goods have been sticking points in what appear to be the final stages of the talks.

(Reporting by Jeff Mason; Editing by Susan Thomas)

Brexit delayed? PM May requests three-month extension, EU pushes back

Britain's Prime Minister Theresa May answers questions in the Parliament in London, Britain, March 20, 2019 in this screen grab taken from video. Reuters TV via REUTERS

By Elizabeth Piper, Kylie MacLellan and William James

LONDON (Reuters) – Prime Minister Theresa May asked for a three-month delay to Brexit on Wednesday to buy time to get her twice-rejected departure deal though parliament, but the request faced immediate resistance from the European Commission.

May’s initiative came just nine days before Britain is formally due to leave the European Union and marked the latest twist in more than two years of negotiations that have left British politics in chaos and the prime minister’s authority in tatters.

After the defeats in parliament opened up the possibility of Britain leaving the EU without a deal and a smooth transition, May said she remained committed to leaving “in an orderly manner” and wanted to postpone Brexit until June 30.

Her announcement prompted uproar in parliament, where the opposition Labour Party accused her of “blackmail, bullying and bribery” in her attempts to push her deal through, and one prominent pro-Brexit supporter in her own Conservative Party said seeking a delay was “betraying the British people”.

Britain voted in 2016 to leave the EU by 52 to 48 percent, but the decision has split the country, opening up divisive debates over the future of the economy, the nation’s place in the world and the nature of Britishness itself.

Some European capitals have welcomed May’s extension plan, with Germany saying a disorderly British departure would be in nobody’s interest.

But a European Commission document seen by Reuters said the delay should either be several weeks shorter, to avoid a clash with European elections in May, or extend at least until the end of the year, which would oblige Britain to take part in the elections.

The pound fell sharply as May requested her extension. [GBP=D3]

BREXIT CRISIS

Nearly three years after the United Kingdom voted to leave the European Union, British politicians are still arguing over how, when or even if the world’s fifth largest economy should leave the bloc it first joined in 1973.

When May set the March 29 exit date two years ago by serving the formal Article 50 divorce papers, she declared there would be “no turning back” but parliament’s refusal to ratify the withdrawal deal she agreed with the EU has thrust her government into crisis.

On Wednesday, May wrote to European Council President Donald Tusk to ask for a delay.

“As prime minister I am not prepared to delay Brexit any further than the 30th of June,” May told a rowdy session of parliament.

“I have therefore this morning written to President Tusk, the president of the European Council, informing him that the UK seeks an extension to the Article 50 period until the 30th June,” she said.

She said she planned to ask parliament to vote a third time on her departure deal, which lawmakers have voted down twice. She did not say when the vote would happen.

But May did say delaying Brexit did not rule out the possibility that Britain could leave without a deal.

The Labour Party said by choosing a short delay May was forcing British lawmakers to decide between accepting a deal they have already rejected or leaving without a deal.

Many pro-Brexit members of May’s Conservative Party are opposed to a longer delay because they fear it could mean Brexit might never happen. They argue Britain can do well outside the European Union even though an abrupt departure would cause short-term pain.

EU PUSHES BACK

“Any extension offered to the United Kingdom should either last until 23 May 2019 or should be significantly longer and require European elections,” the EU document said.

“This is the only way of protecting the functioning of the EU institutions and their ability to take decisions.”

May said it was not in Britain’s interests to take part in European elections.

Britain must decide by April 11 if it will participate in the May 23 European election, creating an effective deadline for parliament to pass May’s deal for an orderly Brexit.

The document also said the EU should offer Britain just one extension as multiple delays would leave the bloc in limbo.

European Commission President Jean-Claude Juncker had warned May against requesting a Brexit delay beyond the European elections, unless Britain takes part, an EU spokeswoman said.

While the United Kingdom remains divided over Brexit, most agree it will shape the economic future of generations to come and, if it goes badly, could undermine the West and threaten London’s position as the dominant global financial capital.

The loss of Britain for the EU is the biggest blow yet to more than 60 years of effort to forge European unity after two world wars, though the 27 other members of the bloc have shown surprising unity during the tortuous negotiations.

EU leaders are expected to decide on May’s request for a Brexit delay at a summit in Brussels on Thursday. But some diplomats said the final decision could be pushed into next week.

(Additional reporting by by Kate Holton and Alistair Smout in London and Alastair MacDonald in Brussels; Writing by by Guy Faulconbridge and Giles Elgood; Editing by Janet Lawrence)

Wall Street gains as U.S.-China trade talks advance

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 13, 2019. REUTERS/Brendan McDermid

By Amy Caren Daniel

(Reuters) – U.S. stocks gained on Friday, led by a bounce in shares of financials, as investors were optimistic about the ongoing trade talks to resolve a bruising tariff dispute between the United States and China.

Talks between the world’s largest economies will continue next week in Washington, with both sides saying this week’s negotiations in Beijing made good progress.

“Trade talks have been completed in Beijing and the good news is that they are planning on having another round of negotiations in Washington next week,” said Art Hogan, chief market strategist at National Securities in New York.

“The market is predicated on a positive outcome from the trade negotiations.”

Hopes of a trade deal ahead of a March 1 deadline has helped the trade-sensitive industrial sector gain more than 16 percent so far this year, making it the best performing S&P sector.

The sector rose 0.97 percent boosted by bellwethers Boeing Co and Caterpillar Inc.

Leading the gains among the 11 major S&P sectors trading higher were financial companies up 1.66 percent, after a more than 1 percent fall in the prior session.

The sector was hit by a fall in U.S. treasury yields on Thursday after bleak retail sales data in December suggested a sharp slowdown in economic activity at the end of 2018.

Another concern for markets was a threat by President Donald Trump to declare a national emergency in an attempt to fund his U.S.-Mexico border wall without congressional approval.

Still, he agreed to sign the bill that lacked money for his wall, but prevents another damaging government shutdown.

At 9:53 a.m. EDT the Dow Jones Industrial Average was up 275.89 points, or 1.08 percent, at 25,715.28, the S&P 500 was up 22.19 points, or 0.81 percent, at 2,767.92 and the Nasdaq Composite was up 21.83 points, or 0.29 percent, at 7,448.79.

PepsiCo Inc shares rose 2.6 percent after the soda maker forecast an increase in revenue growth. Nvidia Corp rose 2.0 percent and helped push the technology sector 0.29 percent higher, after the chipmaker forecast sales for its current fiscal year above expectations.

Advancing issues outnumbered decliners by a 3.76-to-1 ratio on the NYSE and a 2.69-to-1 ratio on the Nasdaq.

The S&P index recorded 38 new 52-week highs and no new lows, while the Nasdaq recorded 43 new highs and 10 new lows.

(Reporting by Amy Caren Daniel and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur)

Talks collapse on border deal as U.S. government shutdown looms

FILE PHOTO: Construction fencing surrounds part of the U.S. Capitol building in Washington, U.S. November 2, 2018. REUTERS/Jonathan Ernst/File Photo

By Richard Cowan and Doina Chiacu

WASHINGTON (Reuters) – Talks on border security funding collapsed after Democratic and Republican lawmakers clashed over immigrant detention policy as they worked to avert another U.S. government shutdown, a Republican senator said on Sunday.

“The talks are stalled right now,” Republican Senator Richard Shelby told “Fox News Sunday.” He said the impasse was over Democrats’ desire to cap the number of beds in detention facilities for people who enter the country illegally.

Efforts to resolve the dispute over border security funding extended into the weekend as a special congressional negotiating panel aimed to reach a deal by Monday, lawmakers and aides said.

Democratic Senator Jon Tester played down any breakdown in talks. “It is a negotiation. Negotiations seldom go smooth all the way through,” he told the Fox program. Tester, one of 17 negotiators, said he was hopeful a deal could be reached.

But Shelby put the chances of reaching a deal by Monday at 50-50. No further talks were scheduled, a source told Reuters on condition of anonymity.

The lawmakers hoped to have an agreement by Monday to allow time for the legislation to pass the U.S. House of Representatives and Senate and get signed by President Donald Trump by Friday when funding for the Department of Homeland Security and other federal agencies expires.

Trump agreed on Jan. 25 to end a 35-day partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a wall along the border with Mexico, handing a political victory to Democrats.

Instead, a three-week spending deal was reached with congressional leaders to give lawmakers time to resolve their disagreements about how to address security along the border.

One sticking point has been the Democrats’ demand for funding fewer detention beds for people arrested by U.S. Immigration and Customs Enforcement (ICE) agents. Republicans want to increase the number as part of their drive to speed immigrant deportations.

Since he ran for president in 2016, Trump has pledged to stop the influx of undocumented immigrants by building a wall on the border and crack down on immigrants living in the United States illegally by aggressively conducting more deportations.

‘DESPERATELY NEEDED’

Democrats proposed lowering the cap on detention beds to 35,520 from the current 40,520 in return for giving Republicans some of the money they want for physical barriers, the source familiar with negotiations said.

But Democrats would create a limit within that cap of 16,500 beds at detention facilities for undocumented immigrants apprehended in the interior of the country. The remainder would be at border detention centers.

By having the interior cap, ICE agents would be forced to focus on arresting and deporting serious criminals, not law-abiding immigrants, a House Democratic aide said on Sunday.

Republicans balked at the Democrats’ sub-cap offer, the source said.

Trump weighed in Sunday, saying the Democratic proposal would protect felons. “They are offering very little money for the desperately needed Border Wall & now, out of the blue, want a cap on convicted violent felons to be held in detention!” Trump said on Twitter.

“Claims that this proposal would allow violent criminals to be released are false,” the Democratic aide said.

Republican Senator Lindsey Graham, who is close to Trump, warned against limiting beds. “Donald Trump is not going to sign any legislation that reduces the bed spaces. You can take that to the bank,” he said on Fox News’ “Sunday Morning Futures.”

Lawmakers working on a border deal also have not yet nailed down the amount of money to go for physical barriers along the southern U.S. border, the source said.

While a growing number of Republicans in Congress have made it clear they would not embrace another shutdown, White House budget director Mick Mulvaney said he could not rule it out.

“You absolutely cannot,” Mulvaney, who is also Trump’s acting chief of staff, told NBC’s “Meet the Press” on Sunday. “Is a shutdown entirely off the table? The answer is no.”

Lawmakers, however, were working to avoid it.

On Friday, some of the negotiators said that if Congress could not pass a border security bill by Friday, they would move to pass another stop-gap funding bill to avert a shutdown and allow more time to reach a border deal.

(Reporting by Richard Cowan, Doina Chiacu, Howard Schneider; Editing by Jeffrey Benkoe)

China upbeat on U.S. trade talks, but South China Sea tensions weigh

The head of the U.S. trade delegation Jeffrey Gerrish arrives at a hotel after talks with Chinese officials in Beijing, China, February 11, 2019. REUTERS/Thomas Peter

BEIJING (Reuters) – China struck an upbeat note on Monday as trade talks resumed with the United States, but also expressed anger at a U.S. Navy mission through the disputed South China Sea, casting a shadow over the prospect for improved Beijing-Washington ties.

White House senior counselor Kellyanne Conway on Monday also expressed confidence in a possible deal. Asked if the two countries were getting close to a trade agreement, she told Fox News in an interview, “It looks that way, absolutely.”

The United States is expected to keep pressing China on longstanding demands that it reform how it treats American companies’ intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports.

The latest talks kick off with working level discussions on Monday before high-level discussions later in the week. Negotiations in Washington last month ended without a deal and with the top U.S. negotiator declaring work was needed.

“We, of course, hope, and the people of the world want to see, a good result,” Chinese Foreign Ministry spokeswoman Hua Chunying said at a news briefing in Beijing.

The two sides are trying to hammer out a deal before the March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

Trump said last week he did not plan to meet with Chinese President Xi Jinping before that deadline, dampening hopes that a trade pact could be reached quickly. But the White House’s Conway said a meeting was still possible soon.

Escalating tensions between the United States and China have cost both countries billions of dollars and disrupted global trade and business flows, roiling financial markets.

The same day the latest talks began, two U.S. warships sailed near islands claimed by China in the disputed South China Sea, a U.S. official told Reuters.

Asked if the ships’ passage would impact trade talks, Hua said that “a series of U.S. tricks” showed what Washington was thinking. But Hua added that China believed resolving trade frictions through dialogue was in the interests of both countries’ people, and of global economic growth.

China claims a large part of the South China Sea, and has built artificial islands and air bases there, prompting concern around the region and in Washington.

(Reporting by Michael Martina and Ben Blanchard in Beijing, and additional reporting by Susan Heavey in Washington; Editing by Kim Coghill and Nick Zieminski)

Top U.S. lawmakers to resume border talks, avert shutdown

The personalized gavel of House Appropriations Committee Chairwoman Nita Lowey (D-NY), serving as the Chairwoman of a bipartisan group of U.S. lawmakers from both the U.S. Senate and U.S. House of Representatives, is seen at the start of their first public negotiating session over the U.S. federal government shutdown and border security on Capitol Hill in Washington, U.S. January 30, 2019. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – The top four Democratic and Republican negotiators in the U.S. Congress on border security funding plan to meet on Monday in an attempt to reach a deal that would avert another partial government shutdown by a Friday deadline.

House of Representatives Appropriations Committee Chairwoman Nita Lowey, a Democrat, Senate Appropriations Committee Chairman Richard Shelby, a Republican, and two other senior lawmakers will attend the meeting, according to a congressional aide.

Negotiations broke down during the weekend over funding for immigrant detention beds and physical barriers that would be funded along the U.S.-Mexico border.

The lawmakers hope to reach an agreement on Monday to allow time for the legislation to pass the House and Senate and get signed by Republican President Donald Trump by Friday, when funding for the Department of Homeland Security and several other federal agencies expires.

Trump agreed on Jan. 25 to end a 35-day partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a long-promised wall along the border with Mexico. Democrats oppose a wall, calling it ineffective, expensive and immoral.

Instead, a three-week spending deal was reached with congressional leaders to give lawmakers time to resolve their disagreements about how to address border security.

(Reporting by Richard Cowan; Editing by Jeffrey Benkoe and Will Dunham)

‘A very uncivil war’: Britain’s Conservatives on the brink over Brexit

A cyclist displaying Unioin Flags passes the Houses of Parliament, in Westminster, central London, Britain December 11, 2018. REUTERS/Henry Nicholls

By Elizabeth Piper

LONDON (Reuters) – The divorce deal British Prime Minister Theresa May agreed with the European Union after months of tortuous negotiations was meant to unite her ruling Conservative Party over Brexit.

But a month later, rifts over Europe run so deep lawmakers have triggered a leadership contest that some members fear could tear apart a centuries-old institution that has produced prime ministers such as Winston Churchill and Margaret Thatcher.

Divisions over how close Britain should be tied to Europe contributed to the downfall of May’s three predecessors: David Cameron, John Major and Thatcher. May will become the next victim if a simple majority of her lawmakers move against her in a confidence vote on her leadership on Wednesday evening.

While a party split may still seem a distant option, former Conservative party leader William Hague and former attorney general Dominic Grieve have both raised the specter of an end to the Conservative Party in its current form.

With her job on the line, May too appealed on Wednesday for an end to the bitter Conservative infighting.

“Weeks spent tearing ourselves apart will only create more division just as we should be standing together to serve our country,” she said outside her Downing Street office.

As the scheduled date for Britain’s departure from the European Union on March 29 draws near, Brexit supporters are doing little to hide their disdain for the government or their pro-EU colleagues – and vice versa.

May and her team are often now described in brutally harsh terms, with some lawmakers feeling betrayed by what one calls the “sophistry” of using soundbites and “clever language” to cloud what they say is her soft position towards the EU.

“A very uncivil war has broken out,” one Conservative lawmaker said on condition of anonymity.

He said he had broken a long tradition of having breakfast in the parliament canteen because it had become a “toxic place”. He now eats in a nearby cafe.

TRENCHANT OPPOSITION

More worrying for May is the lack of trust she now inspires in her so-called backbenchers, the lawmakers she needs to get any legislation, including the Brexit deal, through parliament.

“So many MPs were opposed to the prime minister, and so trenchantly, that it is hard to see them coming to a consensus,” Hague wrote in pro-Conservative The Telegraph newspaper.

“If they fail to do so, they will have to brace themselves for the divisions among them to be exacerbated by a party leadership election, or a general election, or another referendum campaign or all of those one after the other.”

The Conservative Party, which returned to power in 2010 after more than a decade of Labour Party rule, has been divided over the EU for decades but the 2016 referendum Cameron called to settle the rows for good have only worsened the schisms.

Since the text of a divorce deal was agreed on Nov. 13 setting out the terms on which the country would leave on March 29, positions have hardened among Conservatives.

Pro-Brexit campaigners accuse May of trying to keep Britain too closely aligned with the EU even after the country leaves when they want a clean break with Brussels.

May’s decision to delay a parliamentary vote on the deal this week provoked anger among members because ministers had promised until the very last minute it would go ahead. One had confirmed Britain must push ahead with the debate just hours before May’s U-turn.

“Theresa May’s plan would bring down the government if carried forward. But our party will rightly not tolerate it,” pro-Brexit campaigners Jacob Rees-Mogg and Steve Baker said in a statement. “In the national interest, she must go.”

‘FEEDING THIS MONSTER’

Pro-EU Conservatives were equally entrenched with the future of Britain’s $2.8 trillion economy at stake in the country’s most significant political decision since World War Two.

“I think this is a disgraceful move by a small group of people who are engaging in their ideologically driven self-interest,” Conservative lawmaker Anna Soubry said on Wednesday after the leadership challenge was announced.

“Unfortunately, Theresa has been feeding this monster that now has turned on her to try and, in turn, eat her … If she doesn’t sort these people out, then our party is doomed.”

For many Brexit supporters, trust in the government has long been undermined. They felt May had taken on their Brexit platform of leaving the EU’s single market and customs union when she launched the negotiations to leave.

But that confidence has been whittled away since she lost the party’s majority in an election she need not have called in June 2017, with one Brexit supporter saying: “Since the election … it’s been downhill all the way.”

The Labour Party is now pressing for an election, something several Conservative lawmakers say the squabbling party is far from prepared for. But Labour also is deeply divided over Brexit and some in its ranks say it too would suffer under the spotlight of an election.

Still, the Conservative Party has been disciplined in its pursuit of power, and some say that while the atmosphere is bad at the moment, it may pass when Brexit is over.

“There are some people who disagree profoundly with other people,” one Conservative lawmaker said. “You might get one of two disaffected people swanning off, but I don’t think it will amount to a split.”

(Reporting by Elizabeth Piper; additional reporting by William James; editing by David Clarke)

North Korea’s Kim inspects newly developed ‘tactical’ weapon, releases U.S. prisoner

North Korean leader Kim Jong Un inspects a constructions site of Yangdeok, in this undated photo released on October 31, 2018 by North Korea's Korean Central News Agency (KCNA). KCNA/via REUTERS/File Photo

By Joyce Lee and Josh Smith

SEOUL (Reuters) – North Korea’s leader publicly inspected a new weapon for the first time in nearly a year, state media reported on Friday, while it also decided to release a U.S. prisoner, sending conflicting signals at a time of sensitive negotiations.

Kim Jong Un’s visit to the test site of a new “tactical weapon” threatened to sour the diplomatic atmosphere as negotiations between his country and the United States appear to have stalled.

“This result today is a justification of the party’s policy focused on defense science and technology, another display of our rapidly growing defense capabilities to the whole region, and a groundbreaking change in strengthening our military’s combat capabilities,” Kim said.

In Washington, in response to the North Korean announcement, a U.S. State Department spokesman said, “We remain confident that the promises made by President Trump and Chairman Kim will be fulfilled.”

The official was referring to an unprecedented summit in June between U.S. President Donald Trump and Kim in Singapore, where they agreed to work toward denuclearization and peace on the Korean peninsula and establish new relations.

But the agreement was short on specifics, and negotiations have made little headway since.

In a possibly conciliatory gesture, however, North Korea also announced on Friday it was releasing an American citizen detained since October after “illegally” entering North Korea from China.

North Korea has often held previous American detainees for more extended periods.

‘STEEL WALL’

The military test was successful and the weapon could protect North Korea like a “steel wall”, its KCNA news agency said, adding that Kim had observed “the power of the tactical weapon”.

The only picture released by state media showed Kim standing on a beach surrounded by officials in military uniforms, but no weapons were visible.

International weapons experts said the officials around Kim included a leader of the artillery corps of the Korean People’s Army.

South Korea’s defense ministry said it did not have an immediate comment but was analyzing the North Korean weapon test.

Friday’s understated announcement was more likely aimed at reassuring the North Korean military rather than trying to torpedo diplomatic talks, however, said Choi Kang, vice president of the Asan Institute for Policy Studies in Seoul.

“North Korea is trying to show its soldiers that they are becoming high-tech and keeping a certain level of military capability while trying to eliminate dissatisfaction and worries inside its military,” he added.

The test may also have been a response to recent joint military drills by the United States and South Korea, which North Korea said violated recent pacts to halt to “all hostile acts”, said Yang Uk, an analyst at the Korea Defence and Security Forum.

Kim said the weapons system tested was one in which his father, Kim Jong Il, had taken a special interest during his life, personally leading its development.

Kim’s last publicized military inspection was the launch of the Hwasong-15 intercontinental ballistic missile (ICBM) on Nov. 29 last year, though he engaged in at least eight other military-related activities this year, the South’s Unification Ministry said.

STALLED TALKS

Kim this year declared his nuclear force “complete” and said he would focus on economic development.

North Korea has continued to showcase its conventional military capabilities, including at a large military parade in its capital, Pyongyang, on Sept. 9.

But any testing of new weapons threatens to raise tension with Washington, which has said there will be no easing in international sanctions until North Korea takes more concrete steps to abandon its nuclear weapons or long-range missiles.

North Korea has increasingly expressed frustration at Washington’s refusal to ease sanctions and recently threatened to restart development of its nuclear weapons if more concessions were not made.

“They’re trying to signal that they are willing to walk away from talks and restart weapons testing,” said Adam Mount of the Federation of American Scientists. “It is the most explicit in a series of escalating statements designed to send this message.”

A meeting in New York planned this month between U.S. Secretary of State Mike Pompeo and North Korea’s Kim Yong Chol, a senior aide to Kim, was postponed.

On Thursday, U.S. Vice President Mike Pence said Trump planned to meet Kim again in 2019 and will push for a concrete plan outlining Pyongyang’s moves to end its arms programs.

(Reporting by Joyce Lee and Josh Smith; Additional reporting by Jeongmin Kim in Seoul, and Matt Spetalnick and David Brunnstrom in WASHINGTON; Editing by Sonya Hepinstall and Clarence Fernandez)