Month: April 2017

The election of Donald Trump as U.S. president last year raised the specter of economic recession in Mexico, sent the country’s peso into a tailspin, and threatened local industry such as car making.

But four months on, Mexican automobile output is accelerating fast, unemployment is at a nine-year low, and the peso has been one of the world’s best-performing currencies in 2017.

Since diplomatic ties reached a nadir in January with the cancellation of Mexican President Enrique Pena Nieto’s planned meeting with Trump, business confidence has slowly returned.

Fears that Trump could tear up the NAFTA trade treaty have subsided, and so far the hit to foreign investment has been slight, said Gilberto Fimbres, head of Mexican employers’ federation Coparmex in the northern border city of Tijuana.

“The storm of the great talker, the big negotiator, descended on us,” he said. “Then it turns out that all these great things, the great threat, weren’t so great in the end.”

Instead, Mexican auto production leapt 36 percent in March, capping the strongest start to any year since 2011. The same month, growth in new manufacturing orders was the highest in six months, the Markit Purchasing Managers’ Index showed.

As a result, areas most exposed to the threat of a trade war are now looking ahead with cautious optimism.

Baja California, a major draw for manufacturers supplying the U.S. market, expects to book $2.7 billion in foreign direct investment (FDI) this year, up from about $2.5 billion in 2016, said Carlo Bonfante, the border state’s economy minister.

Companies investing in the state this year include China’s Kunshan Eson Precision Engineering, Korea-based electronic components maker INZI DISPLAY, and U.S. drinks company Constellation Brands although its plans are facing opposition from local farmers worried about water supply.

In Guanajuato state in central Mexico, a car making hub, the industry is likely to create some 20,000 new jobs this year, an increase of about 10 percent from 2016, said Alfredo Arzola, director of the local automotive cluster.

Arzola declined to give specific examples, saying that “absolutely all” the auto sector companies in Guanajuato, which include General Motors, Honda and Volkswagen, were adding jobs.

Broader surveys present a similar picture.

A poll of 868 foreign and domestic executives by consultancy KPMG showed 58 percent planned to expand operations in Mexico in the next three years, up three percentage points from a year earlier. Though published in March, the survey was conducted November-December at the height of uncertainty over Trump.

Maurizio Rosa, chief executive of Codan Rubber Mexico, a maker of hoses for the automotive industry, said his worries about Trump began to fade when U.S. clients persuaded him that Mexico was indispensable to their business.

“If you take away the low-cost parts the U.S. buys from Mexico, it’s going to be very difficult for them,” said Rosa, who expects Codan’s sales to rise around 30 percent this year.

Rosa declined to name his clients, but said they included parts suppliers to global automakers including Nissan, Fiat Chrysler and Ford.

Risks to economic growth still loom, including government spending cuts, rising interest rates, low oil production, and lingering fears over Trump’s plan to renegotiate the North American Free Trade Agreement (NAFTA) between Mexico, the United States and Canada.

Trump’s threats to slap import tariffs on Mexican-made cars in the weeks after his victory pummeled the peso. However, the currency’s slump helped spur a revival in exports and tourism.

Concern about NAFTA still clouds investment, and on March 31 the government cut its 2017 growth forecast by 0.7 points to around 1.8 percent.

Still, private sector economists who cut growth forecasts last year on fears Trump could choke the economy are starting to revise up estimates, citing stronger data and a softer tone from U.S. officials over trade in recent weeks.

Much depends on consumer sentiment, which hit a record low when Trump took office in January, the same month the government ushered in an inflation-boosting gasoline price hike.

But the more conciliatory U.S. tone, a drop in unemployment to its lowest rate since December 2007, and the peso’s appreciation over the past 2 1/2 months have helped confidence rebound.

 
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The sculptor of Wall Street’s “Charging Bull” says New York City is violating his legal rights by forcing his bronze beast to face off against the “Fearless Girl.”

Artist Arturo Di Modica said Wednesday that the new neighboring statue changes his bull into something negative.

He says the bull’s message is supposed to be “freedom in the world, peace, strength, power and love.”

His lawyers say “Fearless Girl” exploits the bull for commercial purposes. They want it moved and are hoping for an amicable solution.

Artist Kristen Visbal’s statue of a girl with her hands on her hips was placed on the traffic island on March 7.

Mayor Bill de Blasio says men who don’t like women taking up space “are exactly why we need ‘Fearless Girl.'”

 
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United Airlines Chief Executive Officer Oscar Munoz took to the airwaves Wednesday in an attempt to quell the outrage over Sunday’s forced removal of a passenger, vowing that kind of incident “will never happen again.”

Facing mounting pressure, Munoz was much more contrite in an interview with ABC News, apologizing profusely to Dr. David Dao and promising that security officers will no longer be used to remove passengers. “We can’t do that,” he said.

The tone of Munoz’s remarks contrasted sharply with some of his previous statements, which many critics viewed as perfunctory, even calling Dao “belligerent and disruptive.”

The statements further fueled the controversy, which began when Dao was videotaped being dragged from an overbooked United Airlines flight Sunday at Chicago O’Hare International Airport.

Dao was one of four passengers bumped from the flight to accommodate four airline employees after the airline failed to get passengers to voluntarily take a later flight.

Dao repeatedly refused to leave his seat, prompting Chicago aviation security officers to pull him from it and drag him down the aisle on his back and off the plane. Fellow passengers recorded the incident on their cellphones and video of the incident quickly went viral.

Dao was hospitalized Tuesday in Chicago for injuries he sustained while being removed, according to Thomas Demetrio, a Chicago personal injury lawyer Dao has retained.

The backlash from the incident spread worldwide, with calls for a boycott of the airline and Munoz’s resignation. As of Wednesday morning, an online petition demanding he step down had more than 40,000 signatures.

Reaction to the incident was particularly intense among Asian-Americans and in Vietnam. The website of the medical board in the southern state of Kentucky, where Dao is licensed to practice medicine, shows he graduated in 1974 from the University of Medicine of Ho Chi Minh City in Vietnam.

Reports that he was convicted in 2004 of felony charges related to his medical practice were generally dismissed in Vietnam as a likely smear campaign.

“Dr. Dao didn’t do anything wrong on that flight and that’s the main thing,” Clarence Dung Taylor wrote on Facebook, the most popular social media platform in Vietnam.

After surrendering his medical license and a five-year probationary period, the state licensing board allowed him to practice medicine again in 2015.

The security officer who dragged Dao from the plane remains on leave “pending a thorough review of the situation,” the Chicago Department of Aviation said.

The U.S. Department of Transportation is investigating the incident, and several legislators have called for new rules to curb the airline industry’s practice of overbooking flights.

United’s share price, meanwhile, has rebounded. It opened at $71.65 Wednesday in New York after plunging to an intra-day low of $68.36 the previous day.
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President Donald Trump told a group of chief executives Tuesday that his administration was revamping the Wall Street reform law known as Dodd-Frank and might eliminate the rules and replace them with “something else.”

At the beginning of his administration, Trump ordered reviews of the major banking rules that were put in place after the 2008 financial crisis, and last week he said officials were planning a “major haircut” for them.

“For the bankers in the room, they’ll be very happy because we’re really doing a major streamlining and, perhaps, elimination, and replacing it with something else,” Trump said Tuesday.

“That will be the minimum. But we’re doing a major elimination of the horrendous Dodd-Frank regulations, keeping some obviously, but getting rid of many,” he said.

The many provisions of the Dodd-Frank measure were aimed at decreasing risks in the U.S. financial system. The White House is not unilaterally able to upend Dodd-Frank’s rules, almost all of which are implemented by independent regulatory agencies like the Securities and Exchange Commission and the Federal Reserve.

A sweeping change to the law would require congressional action, though in some cases regulators may also have wiggle room to make changes through a formal rule-making process.

Report on regulations

In February, Trump issued an executive order requiring Treasury Secretary Steve Mnuchin to consult with U.S. regulators and submit a report outlining a proposal for possible regulatory and legislative changes that will help fuel economic growth and promote American business interests.

That report, due to be released in June, will most likely serve as a blueprint for possible changes down the road. However, congressional action on a Wall Street bill is not expected in the near term, as Congress focuses primarily on health care and tax reform.

Participants in the Tuesday meeting included Rich Lesser, chief executive of Boston Consulting Group; Doug McMillon, chief executive of Wal-Mart Stores; Indra Nooyi, chief executive of PepsiCo; Jim McNerney, former chief executive of Boeing; Ginni Rometty, chief executive of IBM; and Jack Welch, former chairman of General Electric.

The business leaders are part of Trump’s “Strategy and Policy Forum” that last met with him in February.

Trump also reiterated his criticism of the North American Free Trade Agreement between the United States, Canada and Mexico.

“NAFTA is a disaster. It’s been a disaster from the day it was devised. And we’re going to have some very pleasant surprises for you on NAFTA, that I can tell you,” he said.
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United Airlines saw its stock price decline by 4 percent or more after a viral video showing a passenger being dragged off a flight and injured sparked outrage in the U.S. and several nations. One airline analyst says he has never seen such a “parade of incompetence.”
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South Asian migrants powering the construction boom in oil-rich Gulf countries are often illegally made to pay for their own recruitment, adding to hardships of poor working conditions and wages, according to an investigation released Tuesday.

Millions of migrants seeking a way out of poverty by working in Gulf nations from Qatar to the United Arab Emirates must routinely pay fees that can equal a year’s salary, U.S. researchers said in a report.

“Recruitment is not free,” said report co-author David Segall of New York University’s Stern Center for Business and Human Rights. “Somebody does have to bear these costs, but that of course should be the employing company.”

The findings came as conditions for construction workers from India, Nepal and Bangladesh in the 2022 FIFA World Cup host, Qatar, have drawn scrutiny from rights groups who say migrants live in squalor and work without proper access to water and shelter.

In five fact-finding missions to the Gulf and South Asia, the researchers found workers are typically made to pay for their airfare from South Asia and their work visa, often at inflated prices.

Selling visas for profit is illegal in the six Gulf countries the researchers investigated — Saudi Arabia, Kuwait, Qatar, Oman, the United Arab Emirates and Bahrain. But violations rarely lead to prosecution and punishment, the report said.

Fees highest for Bangladeshis

Bangladeshi workers paid as much as $5,200 in recruitment fees, according to the study, the highest price among other South Asian construction workers, who number some 10 million people in the Gulf.

In rare cases, construction companies took on expenditures to recruit their workers, the study found. The fees had the effect of pushing already destitute migrants further into poverty by tying them to high-interest loans.

“These are people who are already desperate enough that they feel that they need to undertake this journey, leave their families in order to just achieve the possibility of economic success,” Segall told the Thomson Reuters Foundation. “For them to be in debt before they even start this journey is really an injustice.”

Reports of abuse of migrant domestic workers have prompted countries such as Kenya, Ethiopia, Uganda and Indonesia to ban their citizens in recent years from seeking jobs in the Middle East.

The New York University report expanded on the findings of an investigation conducted in Qatar and released last week, which concluded hundreds of Asian workers had paid recruitment fees.
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“No one should ever be treated this way,” reads part of a new public statement issued Tuesday by United Airlines CEO Oscar Munoz, following Sunday’s incident when a passenger was bloodied after being dragged off an overbooked United airliner at Chicago’s O’Hare Airport.

“I continue to be disturbed by what happened on this flight,” the Munoz statement also says.

The incident has gone viral through social media after being captured on other passengers’ cell phones.

Munoz added that the company will conduct a review of how the airline handles overbooking situations and how it interacts with airport authorities and law enforcement. He said the company will release the results of its review April 30.

Munoz released two earlier statements staunchly supporting the crew, saying in a statement late Monday that United attendants “followed established procedures” when the passenger was forcibly removed.

White House spokesman Sean Spicer said President Donald Trump has seen what Spicer describes as the “troubling” video recorded on the United Airlines flight. Besides the global social media firestorm, the incident also has stirred up threats of a boycott.

Spicer told reporters at a White House briefing Tuesday the incident was “unfortunate” but does “not necessarily need a federal response,” adding there are “plenty” of law enforcement agencies available to conduct an investigation.

Because the Chicago to Louisville flight was overbooked, the crew asked passengers to voluntarily take another flight in exchange for financial compensation. According to media reports, the airline needed to make room for four of its employees.

No one volunteered, so the airline randomly selected four people, one of whom refused to leave – resulting in his forced removal by three men who were identified as Chicago aviation security officers.

Video showing the man, who appeared to be of Chinese descent, being dragged from the plane and later returning with a bloodied face was widely circulated on social media, drawing angry reactions. One passenger, Audra Bridges, who posted video of the incident, said the passenger was very upset when he was chosen and explained he was a physician who needed to get home in order to see patients the next morning. Bridges said the man appeared disoriented when he ran back onto the aircraft moments later.

Crew members eventually ordered everyone off the plane and did not let them return until the injured passenger was removed again on a stretcher.

Bridges said the passengers were “shocked and appalled” at the incident, which prompted threats of a boycott as the busy summer travel season begins.

The online backlash intensified when CEO Munoz used the euphemism “re-accommodate” in a Twitter posting Monday to describe the forcible removal of the passenger. Munoz. However, he also said the airline was reaching out to the passenger “to talk directly to him and further address and resolve this situation.”

In the letter to employees, Munoz said the passenger “raised his voice and refused to comply” when he was initially asked to leave, and became “more disruptive and belligerent” in response to subsequent requests.

Crew members had “no choice” except to call Chicago Aviation Security officers to help remove the passenger, Munoz wrote.

In a statement late Monday, the Chicago Department of Aviation said the incident was “not in accordance with our standard operating procedure and the actions of the aviation security officers are obviously not condoned by the department.”

The statement added one officer involved has been placed on administrative leave, pending a review of the incident.

Munoz admitted to employees that the airline could learn from the incident but reiterated on his support of his employees’ actions. “I emphatically stand behind all of you,” he wrote.

Sunday’s incident follows another controversial occurrence in late March in which two girls, one estimated to be about 10 years old, were prevented from boarding a flight in Denver because they were wearing leggings, a violation of the airline’s dress code under a program for United employees.

The negative publicity may be adversely affecting the value of the airline. United’s stock price dropped nearly 4 percent during late morning trading Tuesday in New York, but by the close of the market it had dropped only about 1.1 percent.

For United Airlines, a global carrier that launched nonstop service to China in 1986, and bills itself as offering “more nonstop U.S.-China flights” to more cities in China “than any other airline,” comments on China’s lively social media were just one more problem Tuesday.

One commentator said: “Reading the news of the United Airlines’ violent removal of a passenger reminds me of three nightmarish trips with United Airlines. [It] provides the world’s worst service ever, not just one of the worst.”

Another commented: “I would like to give the passenger thumbs up. Although lots of American Chinese are discriminated against, they are afraid of speaking out due to [losing] face.”

Tourists’ remarks

VOA’s Mandarin service interviewed some Chinese tourists visiting Washington.

“I feel very angry. I feel this shouldn’t have happened in the U.S.,” said Xiaotian Liu. “It happened to be an Asian-American. I do not think they had a target.”

“I hope [United Airlines] can improve its service after this incident,” said Liu. “We will probably choose different airlines next time.”

“We happened to fly [United Airlines] on this trip,” said Xuhai Lu. “We flew a Chinese airline last time. Chinese airlines provide better service than American ones.”

VOA’s Mandarin service contributed to this report.
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China Southern Airlines has flown its inaugural Guangzhou to Mexico City flight, via Vancouver, the first route operated by a domestic Chinese carrier to the Latin American nation, the Mexican government said on Tuesday.

China’s interest in Mexico, including tourism and investment, has been on the rise in recent years. In 2016, 74,300 Chinese tourists visited Mexico, up 33.5 percent from a year earlier.

Mexican authorities expect over 100,000 Chinese tourists to visit this year.

China and Mexico recently pledged to deepen ties at a meeting between their top diplomats following the U.S. presidential election victory of Donald Trump, who has tested Washington’s relationship with both countries.

 
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The Senate’s top Democrat said Tuesday that President Donald Trump’s refusal to release his tax returns is going to make this year’s promised overhaul of the tax code “much harder.”

Sen. Chuck Schumer says Trump is opening himself to second guessing about his motives for supporting different policies and that the average American will think he’s making changes because “it’s good for him.”

Schumer, D-N.Y., said voters are “going to say, ‘Oh, he’s not doing that because it’s good for me, he’s doing it because it’s good for him.’ So for his own good, he ought to make them public. And the big mystery is why he hasn’t.”

Trump, a billionaire real estate magnate, is the first presidential candidate in decades who has refused to release his tax returns. Critics say Trump’s lack of transparency means the public doesn’t have enough information to determine whether his moves as president could represent a conflict of interest.

“I think he just has an obligation to come clean. When you clean up the swamp, it’s not keeping things secret and it applies to yourself,” Schumer said.

White House Press secretary Sean Spicer said Monday that Trump’s financial disclosures are more revealing than his tax returns and that middle class people are more concerned with their own tax bills than with seeing Trump’s taxes.

Trump has promised to cut taxes for middle income workers. His administration is grappling with how to handle the tax issue in the wake of last month’s failure to deliver on promises to repeal and replace President Barack Obama’s health care law.
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