Day: May 16, 2017

Greek seamen and journalists walked off the job Tuesday, a day before a nationwide general strike to protest new austerity measures the government is legislating for in return for more bailout funds.

The seamen’s union announced Tuesday afternoon they would extend their strike, originally planned to last 48 hours, for a further two days, leaving ferries servicing Greece’s islands tied up in port until midnight Friday night.

The Panhellenic Seamen’s Federation said it was asking “for the understanding and full support of both the traveling public and all Greek workers,” adding that the new measures would lead seamen “to poverty and destitution.”

Journalists were holding a 24-hour strike Tuesday, pulling news broadcasts off the air from 6 a.m. (0300 GMT). News websites were not being updated, and no Wednesday newspapers would be printed. Public bus company employees were also holding work stoppages during the day.

Wednesday’s general strike is expected to affect services across the country, from schools and hospitals to public transport. Air traffic controllers have declared participation with a four-hour work stoppage, leading to the rescheduling of 99 flights and the cancellation of a further nine by Greece’s Aegean and Olympic Air. Another airline, Sky Express, announced the rescheduling of 41 domestic flights between Athens and the Greek islands.

Protest marches have been scheduled for central Athens in the morning.

Workers are protesting a new deal with Greece’s international creditors that impose a raft of new tax hikes and spending cuts beyond the end of the country’s third bailout in 2018. The measures, which are to be voted on in parliament at midnight Thursday, will include additional pension cuts in 2019 and higher income tax in 2020.

Without the agreement with its creditors, Greece faced the prospect of running out of cash to service its debts this summer, which could have seen it have another brush with bankruptcy.

Greece is currently in its third international bailout, which is due to end in mid-2018. It has been dependent on rescue loans from its creditors — mainly other European countries that use the euro, and the International Monetary Fund — since its first bailout in 2010.

In return for the funds, successive governments have had to impose repeated waves of reforms, which have included tax hikes and salary and pension cuts. While the country’s finances have improved under the bailouts and the strict supervision they imposed, the belt-tightening has led to spiraling poverty and unemployment rates.

Although the jobless rate has been falling from a high of above 27 percent, it still hovers at around 23 percent.
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American industry expanded production last month at the fastest pace in more than three years as manufacturers and mines recovered from a March downturn.

The Federal Reserve said Tuesday that industrial production at U.S. factories, mines and utilities shot up 1 percent in April from March, biggest gain since February 2014 and the third straight monthly gain. The increase was more than twice what economists had expected.

Factory production rose 1 percent after declining 0.4 percent in March. Mine production increased 1.2 percent after falling 0.4 percent in March. And utility output rose 0.7 percent after surging 8.2 percent in March.

Factory production has risen three of four months this year. Manufacturing has recovered from a rough patch in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods costlier in foreign markets.

The overall U.S. economy grew at a lackluster 0.7 percent annual pace from January through March. But economists expect growth to pick up the rest of the year as consumers ramp up spending.

A healthy job market bolsters consumer confidence. Employers last month added 211,000 jobs and unemployment fell to 4.4 percent, lowest in a decade.

 
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The new U.S.-China trade deal, which includes 10 initial agreements on agricultural trade, financial services, investment and energy, is drawing mixed reviews.

The agreement is being panned by some as a poor deal for the United States that does not address fundamental issues concerning the Chinese market. But others say the agreement represents incremental progress.

Robert Atkinson, president of the Information Technology and Innovation Foundation, argued the deal has failed to address issues facing advanced industries that are critical to the U.S. economic future.

In a statement, he said the plan, which opens up Chinese markets for mostly commodity-based and finance industries, has in return given, “China free rein to use its massive foreign reserves to buy up American companies in advanced industries.”

Atkinson urged the Trump administration’s simple focus on the trade deficit be shifted to two-way trade and demand real changes in Chinese policies related to America’s advanced, knowledge and technology-based industries.

Deal means nothing

Derek Scissors, a resident scholar at the American Enterprise Institute, argued that the deal, by itself, means almost nothing since the increase in market access that China now promises has been promised before.

“Even if they are fully implemented, [the increase in market access] can be easily undone,” Scissors wrote in an emailed reply to VOA, adding that he doesn’t foresee the U.S. trade deficit with China being reduced this year.

Scissors urged the United States to prioritize its negotiations with China on reduction of subsidies to Chinese state-owned enterprise, which he believes will improve foreign firms’ market access in China.

“It should also prioritize reducing Chinese complicity in theft of intellectual property [IP]. The IP goal should be accompanied by the threat of sanctions,” Scissors said, adding both steps would allow the emergence of the American competitive edge.

Incremental progress

Agreeing that it isn’t a major deal, Christopher Balding, a professor at Peking University HSBC Business School, however, said the agreement is a step forward for the Trump administration.

“If the agreement is actually implemented, it would represent, I think, a solid step forward for U.S. market access to China. And it needs to be viewed in that context, though, that it is one step further from where we were before,” Balding told VOA, disagreeing that President Trump got played or out-maneuvered.

Balding agreed China has employed what others called a “delay-and-diversion’ strategy and waited for years to honor its commitments, some of which dated back to China’s accession to the World Trade Organization in 2000.

Yet, the diplomatic reality is that, as an advanced economy, the United States doesn’t have a lot of leverage over China to open its market, the professor added.

However, China now appears to respond to embarrassment, triggered by Trump’s earlier angry tweets, which the professor said may provide some unconventional leverage in pushing China.

“If the Trump administration keeps public pressure on China, I do think it would be very likely that you could see additional incremental progress in various specific markets or industries,” Balding added.

While it’s urgent for the United States to demand full market access in China, C.Y. Huang, a partner of FCC Partners, warned U.S. companies are losing their edge in competing with their fast-growing Chinese rivals.

“China is no longer afraid of opening up its market and competition from the United States. Many U.S. companies can hardly compete with their Chinese counterparts in China,” Huang told VOA.

Gigantic steps

Washington heralded last week’s deal as “a Herculean accomplishment.”

According to U.S. Commerce Secretary Wilbur Ross, China will open its market to U.S. beef by mid-July while, in return the United States will issue a proposed rule to allow Chinese cooked poultry to enter U.S. markets by the same deadline.

Beijing will also allow U.S.-owned firms in China to provide credit rating and electronic payment services, the latter of which is already dominated by China’s UnionPay.

Ross said the deal, part of the 100-day plan after the meeting between U.S. President Donald Trump and Chinese President Xi Jinping last month, aims to reduce the U.S. trade deficit with China, which reached $347 billion last year.

“This is more than has been done in the whole history of U.S.-China relations on trade,” Ross told a news briefing at the White House, adding the deal takes three “gigantic” step to chip away at the country’s crippling trade deficit.
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