Tag Archives: Trade

Trump asked South Korea officials to show flexibility in trade talks: Seoul

FILE PHOTO: U.S. President Donald Trump and South Korea's President Moon Jae-in hold a joint press conference at the presidential Blue House in Seoul, South Korea, November 7, 2017. REUTERS/Jung Yeon-Je/Pool

SEOUL (Reuters) – U.S. President Donald Trump asked South Korean officials to show flexibility in trade negotiations with the United States in a phone call with South Korean President Moon Jae-in, the Blue House said in a statement on Friday.

South Korea and the United States were scheduled to hold a third round of talks for amendments to an existing bilateral free trade agreement this week in Washington. Trump has repeatedly said the free trade deal with South Korea is “unfair” and has threatened to scrap it altogether on multiple occasions.

(Reporting by Christine Kim; Editing by Janet Lawrence)

An economy in ruins leaves Gazans with hard choices

Palestinians stand at their house in the northern Gaza Strip February 12, 2018. REUTERS/Mohammed Salem

By Nidal al-Mughrabi

GAZA (Reuters) – The man who makes crisps, chocolate and vanilla snacks for Gaza had just finished explaining how his business was going through the worst economic crisis of his life when the lights went out, shutting down his factory. Again.

Wael Al-Wadiya has been running his food manufacturing business since 1985 – in a Gaza Strip that was very different from the one in which he and two million other Palestinians now live.

Back then Israeli settlers were still in Gaza, the Islamist militant group Hamas did not yet exist, and Palestinians were still two years away from the first of the uprisings against Israeli military occupation that introduced the word ‘Intifada’ to the world.

Sitting in a slowly declining industrial estate near the fortified border with Israel, the 51-year-old confectioner says that Gaza has been brought to a near-standstill by a decade of Israeli-led blockades, and internal Palestinian divisions.

“The situation is very miserable. People’s ability to buy has fallen to a minimum, therefore our businesses and businesses in Gaza are suffering as never before,” said Wadiya.

Palestinians work at Wael Al-Wadiya's snacks and chips factory, east of Gaza City February 19, 2018. REUTERS/Mohammed Salem

Palestinians work at Wael Al-Wadiya’s snacks and chips factory, east of Gaza City February 19, 2018. REUTERS/Mohammed Salem

He has cut production by 70 percent and wages by 30 percent. Employees who used to work each day now may work one day in three. “Unless a miracle happens, factories and companies will close down and it will be the real death of the economy,” he said.

There has long been poverty in Gaza, but with unemployment now at 43.6 percent, according to the Palestinian Bureau of Statistics, even once-wealthy merchants are defaulting on debts, causing other businesses to collapse, like dominoes.

Many in Gaza blame Israel for the hardships, accusing it of placing an economic blockade on the enclave that has drastically reduced the movement of people and goods.

But Gazans also fault their own leaders, complaining of a power struggle between Hamas, the armed group that seized military power in Gaza in 2007, and Fatah, the secular party of Western-backed Palestinian President Mahmoud Abbas.

Both Hamas and Fatah levy taxes. Both run competing bureaucracies. And even electricity has become a tool of political power – until recently the blackouts that plagued Wadiya’s factory were exacerbated by Abbas cutting money for Israeli current for Gaza.

Fatah says Hamas exploits money it collects from electricity consumers for its own purposes.

Israel, which pulled its settlers and soldiers out of Gaza in 2005, says it has been forced to control access to and from the territory to stop Hamas sending out gunmen and bombers, and from smuggling in weapons or material to make them.

The Israeli military says that it carries out “constant calculated risk management” between allowing humanitarian aid through to Gazans, while contending with Hamas, which “attempts to exploit the aid intended for Gaza’s civilian residents”.

 

POVERTY AND SECURITY

A combination of war, isolation, and internal rivalries has left Gaza in its current state.

Last year Abbas cut the salaries of 60,000 government employees in Gaza by 30 per cent, leaving them with little to spend in shops and markets after paying off bank loans. The sums of bounced checks in Gaza nearly doubled from $37 million to $62 million between 2015 and 2016, and then again to $112 million in 2017, according to the Palestinian Monetary Authority.

This lack of buying power contributed to a drop in imports through the one remaining commercial crossing with Israel, with just 350 truckloads per day compared with 800 in the last quarter of 2017.

Palestinian children play as a girl held by her mother looks out of the window of house in the northern Gaza Strip February 12, 2018. REUTERS/Mohammed Salem

Palestinian children play as a girl held by her mother looks out of the window of house in the northern Gaza Strip February 12, 2018. REUTERS/Mohammed Salem

Some merchants took a religious initiative in December in which they offered to write off customers’ debts using the hashtag ‘Sameh Toajar’ – ‘Forgive, and Be rewarded (by God).’

It was supported by Hamas and other factions, but the scale of the debts was too great for such a small-scale remedy.

“Gaza has gone into clinical death and is in need of root solutions, real and sustainable, and not temporary or short-lived solutions,” said Maher al-Tabba, a Gaza economist.

At the other end of the economic scale from the merchants are Suhaib, Shadi and Ahmed al-Waloud, who scavenge through garbage near their home in northern Gaza searching for plastic to sell to recycling plants.

Their father was one of the Gazans who lost their jobs in Israel more than a decade ago when Israel closed the door to thousands of Palestinian workers following Hamas’s seizure of control.

“I have been used to doing this job since I was a child,” said Suhaib, 19, from Beit Lahiya. But they now earn just enough to “stay alive,” he said, because the price paid for second-hand plastic has fallen by 80 per cent. “Nowadays there is not much work. People are not throwing away a lot of plastic.”

The question that dominates Gaza is whether hard times will make Palestinians more inclined to support attacks on Israel, or less so, because they fear reprisals.

 

Ali al-Hayek, the chairman of the Palestinian Businessmen Association in Gaza, said that total collapse of the economy would lead to instability that would be in nobody’s interests.

“Gaza is living through a real humanitarian crisis,” he said. “An economic collapse will lead to a security collapse that will cause trouble for the international community and for Israel.”

(Reporting by Nidal al-Mughrabi Writing by Stephen Farrell, Editing by William Maclean)

Trump says to address trade, immigration in State of the Union speech

U.S. President Donald Trump speaks while participating in the swearing-in ceremony for the Secretary of the Department of Health and Human Services (HHS) Alex Azar at the White House in Washington, U.S., January 29, 2018.

WASHINGTON (Reuters) – President Donald Trump said on Monday he will address his proposed immigration overhaul in his State of the Union speech on Tuesday and will seek Democratic support for it.

Speaking to reporters after a swearing-in ceremony for new Health and Human Services Secretary Alex Azar, Trump said his immigration overhaul will have to be bipartisan “because the Republicans don’t really have the votes to get it done in any other way.”

Trump also said his speech will cover his efforts to lower trade barriers around the world for American exports. “We have to have reciprocal trade. It’s not a one-way deal anymore,” he said.

(Reporting By Steve HollandEditing by Chizu Nomiyama)

As NAFTA talks drag, Mexico suggests timeline could be extended

Flags are pictured during the fifth round of NAFTA talks involving the United States, Mexico and Canada, in Mexico City, Mexico, November 19, 2017.

By David Ljunggren and Allison Lampert

MONTREAL (Reuters) – A senior Mexican official on Friday suggested talks to modernize the North American Free Trade Agreement could be extended to give officials more time to address major disagreements threatening to undermine the $1.2 trillion trade pact.

Officials are planning an extra round of negotiations in Mexico at the end of February, according to sources close to the negotiations.

Teams from the United States, Canada and Mexico are in Montreal for the sixth of seven planned rounds on how to modernize NAFTA but progress is slow. Washington wants major changes to the 1994 pact and addressing various U.S. demands has eaten up time, officials said.

Although the process was initially scheduled to finish by the end of March to avoid clashing with Mexican presidential elections in July, Economy Minister Ildefonso Guajardo said the timeline could be extended.

“This negotiation has a window of opportunity to reach a deal between February and the end of July,” he told Reuters.

Canada, which this week presented a series of suggestions on how to unfreeze the talks, quickly welcomed the idea.

“Canada does not believe that we need put an arbitrary deadline on these negotiations at the cost of a good deal for all three countries. ‎We are happy to continue negotiating,” said a government source.

U.S. chief negotiator John Melle, asked about a possible extension, told Reuters, “I have nothing to say on that. We are pushing ahead.”

A Mexican source briefed on the talks said once the election campaign has started, negotiators could still continue their work but without holding formal rounds.

The three nations are now looking at an extra week of talks in Mexico, possibly starting Feb. 26, ahead of the last round in Washington at the end of March, said the sources.

Whether more talks can help forge an agreement is unclear, given the gulf between the United States and its two partners.

U.S. President Donald Trump’s administration, which blames NAFTA for hurting U.S. manufacturing, wants the North American content of autos to be raised.

Canada responded by suggesting that content would be higher if the value of software and other high-tech materials made by the three nations were taken into account.

An auto industry source said U.S. and Mexican negotiators found the idea interesting but gave no details. Canadian chief negotiator Steve Verheul said on Thursday “there is a lot more thinking” to do about the idea.

Mexico and Canada have dismissed a separate U.S. demand that 50 percent of all autos produced in NAFTA nations must have American-made content. They also object to the idea of a subset case that would allow one party to pull out of the treaty after five years.

(Additional reporting by Dave Graham in Mexico City; Editing by Jeffrey Benkoe)

Netanyahu says Israel, India both face threat from radical Islam

Israeli Prime Minister Benjamin Netanyahu speaks as his Indian counterpart Narendra Modi looks on during a signing of agreements ceremony at Hyderabad House in New Delhi, India January 15, 2018.

By Sanjeev Miglani

NEW DELHI (Reuters) – Israeli Prime Minister Benjamin Netanyahu said on Tuesday he was discussing with India ways to strengthen security cooperation against the menace of from Islamist extremism that both democracies faced.

Netanyahu spoke while on a six-day tour of India, the first by an Israeli premier for 15 years, and is being feted by Indian counterpart Narendra Modi, whose Hindu nationalist party has long admired Israel for its tough posture against terrorism.

India, wary of upsetting Arab nations on which it was dependent for oil, and heeding the sentiments of its own large Muslim minority, kept a distance from Israel for decades. But under Modi, the two sides have embraced a closer relationship based on security and economics.

The right-wing Netanyahu told a security conference that India and Israel were two democracies with a natural affinity, but their open and liberal societies faced risks.

“Our way of life is being challenged, most notably, the quest for modernity, the quest for innovation (are) being challenged by radical Islam and its terrorist offshoots from a variety of corners,” he said.

Both Israel and India have long sought to counter militant Islamists – in Israel’s case, mainly from Gaza and Egypt’s Sinai region and, in India’s case, mainly from Pakistan. Away from the public eye, India and Israel have been cooperating against the threat through, in part, intelligence sharing, officials say.

“We’ve discussed in this visit how we can strengthen our two nations in the civilian areas, in security areas, in every area,” Netanyahu told the conference.

His trip to India comes just six months after Modi made the first trip by an Indian prime minister to Israel, during which he did not go to Ramallah, seat of the self-ruling Palestinian Authority and a customary stop for leaders visiting the region.

Netanyahu toured the Taj Mahal on Tuesday and will also visit Modi’s home state of Gujarat and India’s financial capital Mumbai.

He will join an 11-year-old Israeli boy, Moshe Holtzberg, whose parents were murdered by Pakistan-based militants in Mumbai in 2008, for a memorial event at the Indian financial hub’s Jewish center where the attack took place.

The boy, who lives with his grandparents in Israel, arrived on Tuesday as a guest of Modi.

(Additional reporting by Neha Dasgupta; editing by Mark Heinrich)

Wall Street kicks off 2018 on a strong note

The trading floor is seen on the final day of trading for the year at the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., December 29, 2017

By Sruthi Shankar

(Reuters) – Wall Street’s main indexes were higher on Tuesday, the first trading day of the year, buoyed by gains in technology and consumer discretionary stocks.

Major stock indexes closed out 2017 with their best performance since 2013, powered by a combination of strong economic growth, solid corporate earnings, low interest rates and hopes of corporate tax cuts.

“The first week of trading usually suggests the overall trend of the markets which we expect to be positive,” Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note.

Oil prices hovered near their mid-2015 highs on Tuesday amid large anti-government rallies in major exporter Iran and ongoing supply cuts led by OPEC and Russia.

Gold and copper prices continued their upward march, but the greenback began the year on the back foot, with the dollar index slipping to its weakest level since September.

“While we don’t expect the Iranian unrest to reach a full blown political situation just yet, the protest will add to an already positive uptrend in oil and gold prices,” Cardillo said.

December payrolls report, data on manufacturing and service sectors are among leading indicators expected during the week, and will be scrutinized for signs of improving economic health and the number of interest rate hikes this year.

Minutes from the Federal Reserve’s December meeting, when the central bank raised rates for the fourth time since the 2008 financial crisis, will be issued on Wednesday.

At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was up 112.06 points, or 0.45 percent, at 24,831.28 and the S&P 500 was up 9.49 points, or 0.35 percent, at 2,683.1. The Nasdaq Composite was up 21.51 points, or 0.31 percent, at 6,924.90.

Six of the 11 major S&P sectors were higher, led by gains in technology and consumer discretionary stocks.

Shares of Walt Disney rose 1.6 percent, giving the biggest boost to the Dow, after brokerage Macquire upgraded the company’s stock to “outperform”.

Netflix and Discovery Communications also rose on positive recommendations from Macquire.

Shares of casino operators Wynn resorts, Las Vegas Sands and Melco Resorts Entertainment were down after a report showed lower-than-expected rise in Macau gambling revenue in December.

Abbott Labs jumped 2.6 percent after JPMorgan and Morgan Stanley upgraded the healthcare company’s stock to “overweight”.

Advancing issues outnumbered decliners on the NYSE by 1,938 to 652. On the Nasdaq, 1,678 issues rose and 743 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

China halts oil product exports to North Korea in November as sanctions bite

A North Korean iron ore mine, near the North Korean town of Musan is seen in this general view taken May 11, 2013.

By Ryan Woo and Muyu Xu

BEIJING (Reuters) – China exported no oil products to North Korea in November, Chinese customs data showed, apparently going above and beyond sanctions imposed earlier this year by the United Nations in a bid to limit petroleum shipments to the isolated country.

Tensions have flared anew over North Korea’s ongoing nuclear and missile programmes, pursued in defiance of years of U.N. resolutions. Last week, the U.N. Security Council imposed new caps on trade with North Korea, including limiting oil product shipments to just 500,000 barrels a year.

Beijing also imported no iron ore, coal or lead from North Korea in November, the second full month of the latest trade sanctions imposed by U.N.

China, the main source of North Korea’s fuel, did not export any gasoline, jet fuel, diesel or fuel oil to its isolated neighbour last month, data from the General Administration of Customs showed on Tuesday.

November was the second straight month China exported no diesel or gasoline to North Korea. The last time China’s jet fuel shipments to Pyongyang were at zero was in February 2015.

“This is a natural outcome of the tightening of the various sanctions against North Korea,” said Cai Jian, an expert on North Korea at Fudan University in Shanghai.

The tightening “reflects China’s stance”, he said.

Chinese Foreign Ministry spokeswoman Hua Chunying said she didn’t know any details about the oil products export situation.

“As a principle, China has consistently fully, correctly, conscientiously and strictly enforced relevant U.N. Security Council resolutions on North Korea. We have already established a set of effective operating mechanisms and methods,” she said at a regular briefing on Tuesday, without elaborating.

Since June, state-run China National Petroleum Corp (CNPC) [CNPET.UL] has suspended sales of gasoline and diesel to North Korea, concerned that it would not get paid for its goods, Reuters previously reported.

Beijing’s move to turn off the taps completely is rare.

In March 2003, China suspended oil supplies to North Korea for three days after Pyongyang fired a missile into waters between the Korean Peninsula and Japan.

It is unknown if China still sells crude oil to Pyongyang. Beijing has not disclosed its crude exports to North Korea for several years.

Industry sources say China still supplies about 520,000 tonnes, or 3.8 million barrels, of crude a year to North Korea via an aging pipeline. That is a little more than 10,000 barrels a day, and worth about $200 million a year at current prices.

North Korea also sources some of its oil from Russia.

TOTAL TRADE LESS THAN $400 MILLION

Chinese exports of corn to North Korean in November also slumped, down 82 percent from a year earlier to 100 tonnes, the lowest since January. Exports of rice plunged 64 percent to 672 tonnes, the lowest since March.

Trade between North Korea and China has slowed through the year, particularly after China banned coal purchases in February. In November, China’s trade with North Korea totalled $388 million, one of the lowest monthly volumes this year.

China has renewed its call on all countries to make constructive efforts to ease tensions on the Korean peninsula, urging the use of peaceful means to resolve issues.

But tensions flared again after North Korea on Nov. 29 said it had tested a new intercontinental ballistic missile that put the U.S. mainland within range of its nuclear weapons.

Meanwhile Chinese exports of liquefied petroleum gas to North Korea, used for cooking, rose 58 percent in November from a year earlier to 99 tonnes. Exports of ethanol, which can be turned into a biofuel, gained 82 percent to 3,428 cubic metres.

 

(Reporting by Muyu Xu and Ryan Woo; Additional reporting by Meng Meng, Hallie Gu, Christian Shepherd and Ben Blanchard; Editing by Kenneth Maxwell and Tom Hogue)

Britain and EU clinch Brexit ‘breakthrough’ with move to trade talks

Britain and EU clinch Brexit 'breakthrough' with move to trade talks

By Alastair Macdonald and Gabriela Baczynska

BRUSSELS (Reuters) – Britain and the European Union struck a divorce deal on Friday that paves the way for arduous trade talks, easing immediate pressure on Prime Minister Theresa May and boosting hopes of an orderly Brexit.

May rushed to Brussels before dawn to seal European Commission agreement that “sufficient progress” had been made to begin talks about trade and a two-year Brexit transition period that will start when Britain leaves the EU on March 29, 2019.

Negotiators in London, Brussels and Dublin worked through the night before breaking an impasse over the status of the Irish border, the last major obstacle to the opening of trade talks which EU leaders are due to bless at summit on Dec. 14-15.

Speaking before sunrise at the EU’s executive headquarters in Brussels after a hurried flight on a Royal Air Force plane, May said opening up trade talks would bring certainty for citizens and businesses about Britain’s future after quitting the EU.

“The most difficult challenge is still ahead,” European Council President Donald Tusk cautioned. “We all know that breaking up is hard. But breaking up and building a new relationship is much harder.”

May, looking weary after just a couple of hours sleep, spoke after European Commission President Jean-Claude Juncker announced the breakthrough first in English and then in German and French.

The move to trade talks 18 months after the United Kingdom’s shock vote to exit the EU allayed some fears of a disorderly Brexit that could disrupt trade between the world’s biggest trading bloc and its sixth-largest national economy.

Sterling climbed to a six-month high against the euro <EURGBP=D3> on Friday before it fell back around midday to sit broadly flat, with one euro worth 87.4 pence, while bond yields across the euro zone rose. Against the U.S. dollar <GBP=D3> the pound also weakened.

BREXIT DIVORCE?

Facing 27 other members of the bloc, May largely conceded to the EU on structure, timetable and substance of the negotiations.

Moving to talks about trade and a Brexit transition was crucial for May’s own future after her premiership was thrown into doubt when she lost the ruling Conservative Party its majority in a snap election in June, unwisely called.

“I very much welcome the prospect of moving ahead,” said May, a 61-year-old Anglican vicar’s daughter who herself voted to stay in the EU in a referendum in June 2016 but has repeatedly insisted Britain will make a success of Brexit.

One senior British banker said the deal signaled that May would stay in power for now and that Britain was heading towards a much closer post-Brexit relationship with the EU than many had feared.

Draft guidelines showed the transition period, which would start on March 29, 2019, would last around two years. During that time, Britain will remain part of the customs union and single market but will no longer take part in EU institutions or have a vote.

It will also still be subject to EU law.

Pro-Brexit Conservative lawmakers rallied around her after the overnight deal, a possible signal that the party – which has been split over EU membership for generations – was not preparing to ditch her immediately despite the June election fiasco.

British Foreign Secretary Boris Johnson, who spearheaded the Brexit campaign, congratulated May, adding that Britain would now take back control of its laws, money and borders.

Supporters of a radical Brexit were tougher.

Brexit campaigner Nigel Farage struck a jarring note saying it was extraordinary a British premier had conceded so much in the middle of the night, agreeing to all the demands of Juncker, Tusk and EU negotiator Michel Barnier.

“The British prime minister has to fly through the middle of the night to go and meet three unelected people, who condescendingly say: ‘Now jolly well done May, you’ve met every single one of our demands, thank you very much, we can now move on to the next stage’.”

“BREAKTHROUGH”

The EU had insisted it would only move to trade talks if there was enough progress on three key issues: the money Britain must pay to the EU; rights for EU citizens in Britain and British citizens in the EU; and how to avoid a hard border with Ireland.

“I believe we have now made the breakthrough we needed,” Juncker said.

The EU’s chief Brexit negotiator Michel Barnier said it was not possible to put a concrete figure on the amount of money Britain will have to pay. Britain has said the divorce bill will cost it between 35 and 39 billion pounds.

On citizens rights, London and Brussels agreed to offer equal treatment on social security, health care, employment and education and that Britain will enable its judges to ask the European Court of Justice to weigh in when necessary for eight years after Brexit.

But the crucial breakthrough was on the future of the 310-mile (500 kms) UK-EU land border on the island of Ireland. The Northern Irish party which props up May’s minority government vetoed a draft deal on Monday.

May worked through most of the night, grabbing just a couple of hours sleep, as she worked the phones from Downing Street to secure agreement from Dublin, Brussels and the Democratic Unionist Party for her deal on the border.

They agreed to avoid a hard border which might upset the peace established after decades of violence, but said the details would be agreed as part of talks about the future relationship, according to a 15-page negotiators report.

In the text, Britain agreed that should London and Brussels fail to agree a final Brexit deal, the United Kingdom will maintain “full alignment” with those rules of the internal market and customs union that help protect north-south cooperation in Ireland.

“In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market,” it said. .

The Democratic Unionist Party gave only a conditional endorsement of the new terms, four days after 11th-hour objections from Belfast scuppered May’s attempt to sign off on an accord over the Irish border.

“We cautioned the Prime Minister about proceeding with this agreement in its present form given the issues which still need to be resolved,” Democratic Unionist Party (DUP) leader Arlene Foster said.

“Nothing is agreed until everything is agreed and how we vote on the final deal will depend on its contents.”

(Writing by Guy Faulconbridge and Kate Holton in London; Additional reporting by Alistair Smout, William James, Costas Pitas and Andrew MacAskill in London, Padraic Halpin in Dublin, and; Editing by Richard Balmforth)

Trump meets Japan, Australia leaders over trade, North Korea threat

U.S. President Donald Trump holds a trilateral meeting with Japan's Prime Minister Shinzo Abe and Australia's Prime Minister Malcolm Turnbull alongside the ASEAN Summit in Manila, Philippines November 13, 2017.

MANILA (Reuters) – U.S. President Donald Trump raised North Korea’s missile tests during talks on Monday with the prime ministers of Japan and Australia, and said “a lot” of progress had been made in negotiations on trade.

On the sidelines of a summit of East and Southeast Asian leaders in Manila, Trump met with Japan’s Shinzo Abe and Australia’s Malcolm Turnbull, and said discussions at the meeting would include tensions on the Korean Peninsula and trade.

In brief remarks prior to news media being ushered out of the meeting, Turnbull said North Korea’s “recklessness” needed to be stopped, while Abe said the most immediate challenge was to ensure regional peace and stability.

Following the meeting, the White House said “the three leaders reaffirmed their commitment to maintaining maximum pressure on North Korea in the effort to denuclearize the Korean Peninsula.”

“They also discussed expanded security cooperation for enhanced deterrence and defense against North Korean aggression,” the White House said in a statement.

The three men also discussed the need for “free and open” trade in the Indo-Pacific region and “the need to pursue fair and reciprocal trade,” the White House added.

Trump, who campaigned heavily on U.S. trade issues, made pulling out of the Trans-Pacific Partnership (TPP) Asian trade deal one of his first acts in office. His administration has instead pledged to reach bilateral pacts with individual nations.

Countries remaining in the pact have said the deal is advancing without the United States.

 

(Reporting by Steve Holland; Writing by Martin Petty and Susan HeaveyEditing by Raju Gopalakrishnan and Jonathan Oatis)

 

Trans-Pacific trade deal advances without United States

Trans-Pacific trade deal advances without United States

By Kiyoshi Takenaka and Mai Nguyen

DANANG, Vietnam (Reuters) – Countries in the Trans Pacific Partnership (TPP) trade deal have agreed on the core elements to move ahead without the United States, officials said on Saturday, after last-minute resistance from Canada raised new doubts about its survival.

Taking the agreement forward is a boost for the principle of multilateral trade pacts after U.S. President Donald Trump ditched the TPP early this year in favor of an “America First” policy he believes would save U.S. jobs.

Talks – often heated – have been held on the sidelines of an Asia-Pacific Economic Cooperation (APEC) summit in the Vietnamese resort of Danang, where Trump and other leaders held their main meeting on Saturday.

“We have overcome the hardest part,” Vietnam’s trade minister, Tran Tuan Anh, told a news conference.

The agreement, which still needs to be finalised, would now be called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), he said.

Japanese Economy Minister Toshimitsu Motegi said he hoped that moving ahead with the deal would be a step towards bringing back the United States.

Partly to counter China’s growing dominance in Asia, Japan had been lobbying hard for the TPP pact, which aims to eliminate tariffs on industrial and farm products across the 11-nation bloc whose trade totaled $356 billion last year.

Some 20 provisions of the original agreement were suspended. Those included some related to protecting labor rights and the environment, although most were related to intellectual property – one of the main sticking points after the U.S. withdrawal.

“The overall impact on most firms is quite modest,” said Deborah Elms of the Asian Trade Center think-tank, adding that the new version was “essentially identical to the original document”.

DOUBTS

Any kind of deal looked doubtful on Friday, when a summit of TPP leaders was called off after Canadian Prime Minister Justin Trudeau did not attend. Canada’s trade minister later blamed Trudeau’s absence on “a misunderstanding about the schedule”.

Canada, which has the second-biggest economy among remaining TPP countries after Japan, had said it wanted to ensure an agreement that would protect jobs.

Canada’s position has been further complicated by the fact that it is simultaneously renegotiating the North American Free Trade Agreement (NAFTA) with the Trump administration.

Speaking to reporters on Saturday, Trudeau said though Canada was pleased with the progress made on TPP, there was “still more important work to be done.”

Trudeau said Canada will always be “extremely closely linked to the American economy” but there was a need to diversify trade through other deals.

NAFTA talks with the United States were not affecting Canada’s stance on TPP negotiations, he said.

In a speech in Danang, Trump sent out a strong message that he was only interested in bilateral deals in Asia that would not disadvantage the United States.

Chinese President Xi Jinping used the same forum to stress multilateralism and said globalisation was an irreversible trend.

China had noted that the 11 TPP countries had made some progress on the deal, but it “hasn’t paid too much attention” because it is focused on APEC work during the meeting, Zhang Jun, Director General of the Department of International Economic Affairs of China’s Foreign Ministry, told reporters.

He said all trade arrangements in the region should promote openness and inclusiveness, with no “exclusive clubs”.

Zhang said the Beijing-backed Regional Comprehensive Economic Partnership (RCEP) trade pact will not be impacted by TPP, to which China is not party. The two trade deals are not mutually exclusive, and some countries would be members of both.

‘RAPID, COMPLEX CHANGES’

The APEC leaders met in closed sessions on Saturday, pausing for the traditional “family photograph”, taken above the South China Sea.

At the start of the meeting, Vietnamese President Tran Dai Quang noted APEC’s success in removing barriers to trade – as well as the new uncertainty in the world.

“We have witnessed changes more rapid and complex than we expect,” he said in opening remarks.

APEC trade and foreign ministers released a joint statement on Saturday, three days later than planned because of wrangling over customary language the United States wanted to change.

The statement still refers to free and open trade, but it also refers to fair trade and to members “improving adherence to rules agreed upon”.

A reference to strengthening the multilateral trading system was dropped. The ministers also said they would work to improve the functioning of the World Trade Organization – which Trump criticized in Friday’s speech.

Later, leaders of the 21 APEC economies agreed to address “unfair trade practices” and called for the removal of “market distorting subsidies,” in contrast to communiques they have issued in the past.

(Additional reporting by Michael Martina and A. Ananthalakshmi in DANANG, David Ljunggren in OTTAWA; Writing by Matthew Tostevin; Editing by Stephen Coates and Ros Russell)