Author: Uponbiz

Democrats in the U.S. House of Representatives gave a cool reception to the replacement for the North American Free Trade Agreement on Wednesday as the top U.S. trade negotiator opened a  campaign to win broad support for the accord in Congress.

Several Democrats said a closed-door meeting between United States Trade Representative Robert Lighthizer and their caucus failed to ease their concerns about the new U.S.-Mexico-Canada Agreement’s (USMCA) provisions on labor, biologic drugs and some other issues.

A USTR spokeswoman declined to comment on the meeting.

The support of Democrats, who control the House, is considered important to passage of the USMCA, and Wednesday’s meeting at the U.S. Capitol signaled that the Trump administration has a lot of work to do to address the party’s concerns.

Democrats questioned whether new labor standards aimed at ensuring workers have the right to organize can be adequately enforced, as this depends partly on Mexico passing new labor laws.

“What you’re hearing is that a lot of people don’t think it’s good enough,” Representative Pramila Jayapal said of USMCA after the meeting, adding that she was concerned the new pact would not solve the biggest shortcoming of NAFTA, which allowed Mexican wages to stagnate.

“We know that when you don’t have strong enforcement provisions, you are essentially facilitating the outsourcing of jobs and bad worker protections and undercutting of U.S. workers,” said Jayapal.

NAFTA dealt with labor provisions in an unenforceable side-letter, allowing unions in Mexico to remain weak and wages low, drawing factories from the United States and Canada.

While USMCA’s labor chapter is part of the trade agreement itself and requires Mexico to adhere to International Labor Organization standards, Democrats questioned whether this could be adequately enforced through a state-to-state dispute settlement mechanism.

The Mexican government expects its Congress to pass a labor bill by the end of April that it says will strengthen the rights of unionized workers and fulfill its commitments under USMCA. Mexico “could say they passed the laws, but the laws could be very weak,” said Representative Judy Chu, a Democrat on the House Ways and Means Committee.

She said Lighthizer told Democrats that he believed that Mexico’s labor law would meet the terms of the agreement and that any enforcement issues could be resolved through a subsequent agreement following ratification. Jayapal added that Lighthizer said this could be addressed through implementing legislation.

Some Democrats said that Lighthizer listened closely to their concerns and that he would work to address them. 

“He understands the concerns of our caucus and he knows we’re not there yet,” said Representative Bill Pascrell.

Other Democrats raised concerns about the prospect for higher drug prices resulting from the USMCA’s provision for 10 years of data exclusivity for biologic drugs. The United States allows 12 years currently and negotiated a five-year exclusivity period in the Trans-Pacific Partnership trade deal, which President Donald Trump declined to join in 2017.

Representative Rosa DeLauro, a Democrat who opposed several previous trade deals, called this an “absolutely unbelievable giveaway to the pharmaceutical industry.”

House Ways and Means Committee Chairman Richard Neal, whose panel will handle the USMCA legislation, said the meeting did not provide any further clarity on the timing of the Trump administration’s submission of implementing legislation to Congress, or when a vote might occur.
…

Spotify has filed a complaint with European Union antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service. 

Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple’s control of its App Store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015. 

Central to Spotify’s complaint, filed with the European Commission on Monday, is what it says is a 30 percent fee Apple charges content-based service providers to use Apple’s in-app purchase system (IAP). 

Forced to raise price

Horacio Gutierrez, Spotify’s general counsel, said the company was pressured into using the billing system in 2014, but then was forced to raise the monthly fee of its premium service from 9.99 to 12.99 euros, just as Apple Music launched at Spotify’s initial 9.99 price. 

Spotify then ceased use of Apple’s IAP system, meaning Spotify customers could only upgrade to the fee-based package indirectly, such as on a laptop. 

Under App Store rules, Spotify said, content-based apps could not include buttons or external links to pages with production information, discounts or promotions and faced difficulties fixing bugs. Such restrictions do not apply to Android phones, it said. 

“Promotions are essential to our business. This is how we convert our free customers to premium,” Gutierrez said. 

Voice recognition system Siri would not hook iPhone users up to Spotify, and Apple declined to let Spotify launch an app on its Apple Watch, Spotify said. 

Spotify declined to say what economic damage it believed it had suffered. 

“We feel confident in the economic analysis we have submitted to the commission that we could have done better than we have done so far,” Gutierrez said. 
…

The United States is working on a plan to lift tariffs from Mexican and Canadian steel and aluminum but preserve the gains that domestic producers have received from the duties so far, U.S. Trade Representative Robert Lighthizer said on Tuesday.

“What I’m trying to do is a have a practical solution to a real problem … get rid of tariffs on these two, let them maintain their historic access to the U.S. market which I think will allow us to still maintain the benefit of the steel and aluminum program,” he told the U.S. Senate Finance Committee at a hearing about the World Trade Organization.

The United States imposed the “Section 232” tariffs on steel and aluminum nearly a year ago to protect domestic producers on national security grounds. A plan to lift tariffs on the metals from Canada and Mexico was once linked to the renegotiation of the North American Free Trade Agreement but ultimately was excluded from that deal.

Since then, a number of U.S. lawmakers have said they did not believe the new U.S.-Mexico-Canada Agreement (USMCA) could win approval in Congress if the metals tariffs — along with and retaliatory duties on U.S. farm and other products — were left in place.

Members of the New Democrat Coalition in the House of Representatives echoed a similar message in a meeting with Lighthizer later on Tuesday.

“Some of us impressed the need to resolve 232 before we have a chance to move forward” on consideration of USMCA, said Representative Ron Kind, a pro-trade Democrat from Wisconsin.

Kind added that Lighthizer expected to meet with Mexican and Canadian counterparts on the issue this week.

A spokeswoman for the U.S. Trade Representative’s office declined to comment, saying there were no scheduling announcements on the 232 issue.

The United States has sought quotas on steel and aluminum in lieu of tariffs, but Canada and Mexico have resisted such restrictions, arguing that they pose no threat to U.S. national security.

A Mexican official said talks were continuing.

“Our position is that we should not have tariffs or quotas.

We have to help the U.S. construct the narrative of why exclusion for Mexico is valid,” added the official, who was not authorized to speak publicly on the matter and requested anonymity.

Kind cautioned that the Trump administration would need to submit the USMCA enabling legislation soon to Congress so it could be considered before the August recess. After that, it could become caught up in another border wall funding fight in the fall and later the 2020 presidential election campaign, which would diminish its approval chances.

“There’s a lot of work and the clock’s ticking,” Kind added.
…

Mexican President Andres Manuel Lopez Obrador on Tuesday denied any delay to a flagship refinery project in his home state after the deputy finance minister was quoted as saying $2.5 billion for its construction will be moved to state oil firm Pemex.

The planned investment for the Dos Bocas refinery “can go to exploration and production” for Pemex, Arturo Herrera told the Financial Times in an interview during a trip to London for meetings with investors.

However, Lopez Obrador stood by his plan to build the refinery within three years, saying the tender could be unveiled next week. In answer to a question about whether the $2.5 billion would be spent this year on the refinery, said “Yes.”

The president’s plans to fast-track construction of the new refinery in Tabasco, his home state, have concerned investors that it would take away much-needed resources from Pemex, which is creaking under $106 billion of debt.

His energy minister, Rocio Nahle, said she understood Herrera’s budget concerns but said the project was on track.

“The faster we do this project, the cheaper it will be,” she said on Mexican radio.

The conflicting statements appeared to confuse investors.

Mexico’s benchmark stock index reversed gains and weakened 0.7 percent after Lopez Obrador’s rebuttal of Herrera’s comments, while the peso pared gains.

“Contradictions within the federal government do not help financial markets,” said James Salazar, an economist at bank CI Banco.

The government is under growing pressure to dispel doubts Pemex can successfully manage more than $16 billion of debt payments due by the end of next year, halt the firm’s extended oil output slide and avert a threatened credit rating downgrade to “junk.”

Finance minister Carlos Urzua said last week the government would announce new measures to support the ailing company, after unveiling a $3.9 billion bailout in February that failed to impress ratings agencies.

Herrera said the government was in talks with the International Monetary Fund and other multilateral organizations about structuring a fresh capital injection for Pemex, though he noted that those discussions were technical and no borrowing was involved, according to the Financial Times.

Lopez Obrador said it was very likely the government would make an announcement about tenders for the refinery on March 18, a national holiday that celebrates the 1938 nationalization of Mexico’s oil industry.

He also predicted Pemex would reverse its output decline by next year, with “new wells” coming on line by December under a production plan that allows Pemex to hire service companies to help explore mature fields.

He repeated that the refinery would cost between $6 billion and $8 billion, and said that work for now was focused on preparing the ground at the refinery site and readying the framework for the tender.

The refinery has already hit obstacles after the proposed construction site was cleared of protected mangrove without the correct environmental permits. The government has yet to present an environmental impact assessment for the wildlife-rich site.

Herrera said the tender framework was being prepared, but said the finance ministry needed to see a solid financial plan before releasing funds.

“We will not authorize (construction) until we have a final figure that is not very different from the original $8 billion,” said Herrera.

($1 = 19.3083 Mexican pesos)
…

The United States is preparing to impose “very significant” Venezuela-related sanctions against financial institutions in the coming days, U.S. special envoy Elliott Abrams said on Tuesday.

Abrams did not elaborate on the fresh measures but his warning came a day after the U.S. Treasury imposed sanctions on Russian bank Evrofinance Mosnarbank for helping Venezuelan state oil firm PDVSA evade U.S. financial restrictions.

Abrams said Washington was also preparing to withdraw more U.S. visas from Venezuelans with close ties to President Nicolas Maduro.

Washington has taken the lead in recognizing opposition leader Juan Guaido as Venezuela’s rightful president after the 35-year-old Congress chief declared Maduro’s 2018 re-election a fraud and announced an interim presidency in January. Most countries in Europe and Latin America have followed suit.

Abrams’ comments came as Venezuela ordered American diplomats to leave the country within 72 hours.

Washington said it had decided to withdraw the remaining diplomats due to deteriorating conditions in Venezuela, which has been plunged into its worst blackout on record.

Abrams emphasized that the withdrawal of diplomats was not a change in U.S. policy.

“This does not represent any change in U.S. policy toward Venezuela, nor does it represent any reduction in the commitment we have to the people of Venezuela and to their struggle for democracy,” he said, adding that the U.S. intended to keep up pressure on Maduro through sanctions.

“You will see very soon a significant number of additional visa revocations. You will see in the coming days some very significant additional sanctions,” Abrams added.

He said the United States was in talks with other countries that could act as its “protecting power” in Venezuela to ensure the safety of the U.S. embassy’s premises and provide assistance to Americans in trouble.

A “protecting power” is a country that represents another in cases where two countries have broken off diplomatic relations.

Washington, for example, has appointed Switzerland as its “protecting power” in Iran.

“We are trying to decide on a protecting power,” Abrams said.

He said the safety of U.S. diplomats was a key factor in the withdrawal decision reached by U.S. Secretary of State Mike Pompeo in the late hours of Monday night.
…

Carmen Perry decided to rent rather than buy immediately after she divorced her husband and sold the family home. The 67-year-old realtor sees definite advantages to living in a space owned by someone else.

“If something breaks or something needs to be replaced, water heater or whatever, I just call the company who does the management for the owner and they come and fix it for me,” Perry says. “And that is great, especially when I lived in a very large house with a lot of maintenance. Now, I don’t have any of those responsibilities, and I like that.”

Perry is not alone among older Americans who are opting out of buying. The number of renters over the age of 60 jumped 43 percent in large American cities between 2000 and 2017, according to an analysis of U.S. Census data.

By contrast, the number of renters between the ages of 35 and 59 grew just 17 percent during the same time period, and the number of renters under the age of 34 increased 7 percent, according to apartment search website RENTCafe, which conducted the analysis focusing on cities with populations of at least 100,000.

RENTCafe finds renting is gaining popularity among older Americans for a variety of reasons.

“They might have to do with empty-nesters finding themselves in a big home that they no longer need nor are able to maintain,” RENTCafe researcher Florentina Sarac told VOA via email. “Seniors also appreciate having the possibility to pack their bags and relocate whenever they want or need to in order to be closer to family.”

The American population is aging. Every day for the next decade, 10,000 Americans are expected to turn 65 years old. This 60-plus group is growing so fast that it helped push the national median age to 38.1 in 2017, the oldest it has ever been.

And many rental communities are ready to cater to this older age group. 

“From 24-hour-available maintenance, to social activities and attractive amenities geared toward a healthy and active lifestyle,” says Sarac. “Along with free access to gyms and social clubs, renting also offers security with many properties being gated.”

However, Perry isn’t completely sold on renting despite the advice she recently received from a financial advisor.

“I am divided,” she says. “Maybe because of my age I should not buy anymore is what he advised me. I am personally not convinced that is the best option.”

Perry misses being able to customize her living space, such as choosing her own appliances and fixtures. She also wonders whether she is wasting money.

She says money paid to a landlord provides shelter, but paying a mortgage loan on a property you will own gives you shelter, as well as an investment that often makes money for the homeowner.

While Perry isn’t sure she’ll be in rental housing long-term, RENTCafe believes the older-renter trend will continue, and projects that seniors will make up 31 percent of the total number of renters by 2035.

Those numbers suggest the rental market might have to make adjustments to meet the needs of this older demographic in terms of amenities and affordability.

“Above everything else, safety must take center stage when designing these rental communities and all homes should allow older renters to have an independent life for as long as possible,” says Sarac. “Moreover, renters of all ages would appreciate being within walking distance of entertainment spots, such as restaurants, supermarkets, and shopping centers.”
…

U.S. Trade Representative Robert Lighthizer said Tuesday that the United States and China are possibly nearing an agreement on a new trade deal, but stopped short of predicting a successful outcome of their lengthy negotiations.

“Our hope is that we are in the final weeks of having an agreement,” Lighthizer told the Senate Finance Committee. But he said there are still significant issues that need to be resolved.

“We can’t predict success at this point, but we are working hard,” he said.

He added the U.S. would insist that any new trade pact include enforcement provisions allowing Washington to reimpose tariffs if China violated terms of the agreement.

“We are going to have an enforceable agreement, or [President Donald Trump] won’t agree to the agreement,” Lighthizer said.

Trump said last Friday he was confident the U.S. could strike a deal with China, but added, “If this isn’t a great deal, I won’t make a deal.”

A new deal could possibly end hefty tariffs both countries have imposed on each other during the last eight months. The U.S. has taxed $250 billion of Chinese imports while China has imposed levies on about $110 billion of U.S. goods.

Lighthizer declined to say whether the U.S. would lift its tariffs if a deal is reached.

“We have to maintain the right to be able to — whatever happens to the current tariffs — to raise tariffs in situations where there’s violations of the agreement,” he said.

“That’s the core. If we don’t do that, then none of it makes any difference,” he said.

The U.S. is demanding wide changes to Chinese industrial policy, including an end to large-scale state intervention in markets, subsidies for various industries and the alleged theft of American technology.

Trump has said he would like to have a signing ceremony at his Mar-a-Lago estate in Florida, but the White House said no date has been set.
…

North Korean leader Kim Jong Un may not be able to achieve his economic development goals given the divergent ideas over denuclearization exhibited by Washington and Pyongyang after the Hanoi summit, said experts.

After the Hanoi summit broke down last month over discussions of Washington’s demand on denuclearization and Pyongyang’s demand on sanctions relief, Kim made a first public statement emphasizing economic development, a goal he set for this year during his New Year’s Day speech.

If the sanctions are not lifted, North Korea and its citizens will likely to face tougher economic conditions this year.

North Korea’s main state media outlet, Korea Central News Agency (KCNA), reported on Saturday that Kim stressed last week “the need to concentrate all efforts of information and motivation on accelerating socialist economic construction.” KCNA added that Kim emphasized the [North] Korean people should “further display their might in the spirit of self-reliance.”

Ahead of the report, U.S. National Security Advisor John Bolton told Fox Business Network last week the U.S. is looking to increase sanctions if Pyongyang is not willing to denuclearize.

“They’re not going to get relief from the crushing economic sanctions that have been imposed on them,” Bolton said. “We’ll look at ramping those sanctions up in fact.”

A State Department official said on Thursday that the U.S. is not looking to provide exemptions to South Korea to resume joint economic projects with North Korea, which Seoul has been pushing for since the first inter-Korean summit in April.

Missile sites

Based on commercial satellite imagery, North Korea appeared to be rebuilding the Sohae Satellite Launching Station at Tongchang-ri last week. Pyongyang began to dismantle the largest missile engine test site in the country after the first summit with the U.S.in Singapore in June.

Movements around the Samundong facility near Pyongyang were also detected last week, suggesting North Korea might be preparing for a missile launch.

Built in 2012, the Samundong facility’s mission is the development of long-range missiles and space-launch vehicles, such as the Hwasong-15 intercontinental ballistic missile, which analysts agree is capable of reaching the U.S. mainland. 

Experts said Kim will not be able to develop North Korea’s economy, one of the world’s most opaque, without a sanctions lift from the U.S.

According to South Korea’s central bank, North Korea’s economy shrank 3.5 percent in 2017, a year after the United Nations Security Council imposed sanctions banning North Korea’s key exports including coal, textiles and fisheries and limited its imports of oil. Without the income derived from selling those export commodities, the North Korean economy is likely to face limits on its growth. 

“Sanctions are really serious obstacles to the prospects for North Korea to fully develop its economy,” said Scott Snyder, director of the U.S.-Korea policy program at the Council of Foreign Relations. 

Robert Manning, a senior fellow at the Atlantic Council, said the North Korean economy is likely to dwindle as the result of sanctions. 

“Kim’s economy is in difficult shape, squeezed by sanctions,” Manning said. “Some think it is likely to contract in 2019.”

Snyder said North Korea will likely continue to look for ways to bypass sanctions, and turn to Russia and China, which have been willing partners in that effort in the past. But, he thinks that Pyongyang is unlikely to get very far with Moscow and Beijing. 

Since the U.S.-North Korean summit process started in June, Snyder said China has eased off enforcing sanctions in the past two months.

“But I believe that China is willing to continue to apply sanctions up to a point, and that the level of relaxation on the part of China is not going to be sufficient to meet North Korea’s desire toward its needs,” he added.

Joshua Stanton, a Washington-based attorney who helped draft the North Korea Sanctions Act in 2016, thinks the consequence of sanctions are not rigorous enough at the current level to deter evasions by North Korea.

“So far, they are not,” Stanton said. “You need to go out to Chinese banks that continue to launder money for North Korea. And although the Trump administration threatened that, it hasn’t followed through with that threat.” 

US legislation

A day before the Hanoi summit that took place Feb. 27-28, Congressman Brendan Boyle, a Democrat from Pennsylvania, introduced a bill calling for the prohibition of lifting sanctions on North Korea. 

Stanton said Congress will likely look for ways to make sanctions stronger now that North Korea has demonstrated its unwillingness at the Hanoi summit to agree to U.S. demands on denuclearization. 

Ken Gause, director of the International Affairs Group at the Center for Naval Analyses, said North Korea is most likely to turn to South Korea for concessions and look to resume inter-Korean projects, such as the Kaesong Industrial Complex and Mount Kumgang tourism, which South Korea has been planning to discuss with the U.S. prior to beginning preparatory work because of potential sanctions violations.

​The Kaesong Industrial Complex that opened in 2004 included factories where South Korean manufacturers could employ North Korean workers for low wages. It was shut down in 2016 following a North Korean nuclear test. South Korean tours to the venerated Mount Kumgang ended in 2008 after a South Korean tourist was shot by a North Korean guard. 

Gause said, “It will definitely make it more difficult for [South Korean President Moon Jae-in] to just provide concessions to North Korea with the United States taking a hardline following Hanoi.”

Snyder thinks “the inter-Korean projects cannot go ahead under current circumstance because they would pursue contrary to the sanctions efforts,” and if South Korea tries to resume the projects with North Korea, “it would definitely create tension.” 

“So I believe South Korea is going to get essentially a red light on the idea of large-scale economic cooperation,” he added. 

Gause, on the other hand, thinks inter-Korean economic projects could help U.S. negotiate denuclearization with North Korea.

“If the South Koreans were able to get some sanctions relief and provide North Korea with some resources, maybe reopening the Kaesong Industrial Complex or Mount Kumgang, that could actually lay the path for better negotiations with the United States down the line than if we just take a hard line against North Korea, and they go into a shell,” said Gause. 

After the Hanoi summit, Snyder said North Korea is looking for a way to boost its leverage over the U.S. position by making a preparation to resume testing. 

“One leverage that North Korea can use to push back on the U.S. position is the idea of making preparations for possible resumption of testing,” he said. “It’s kind of logical move for North Korea to make as a means by which to send the signal that the North Koreans also have some leverage and they’re not just going to roll over.” 
…

U.N. experts say they are investigating possible violations of United Nations sanctions on North Korea in about 20 countries, from alleged clandestine nuclear procurement in China to arms brokering in Syria and military cooperation with Iran, Libya and Sudan.

The expert panel’s 66-page report to the Security Council, obtained Monday by The Associated Press, also detailed the appearance in North Korea of a Rolls-Royce Phantom, Mercedes-Benz limousines and Lexus LX 570 all-wheel drive luxury vehicles in violation of a ban on luxury goods.

And it noted a trend in North Korea’s evasion of financial sanctions “of using cyberattacks to illegally force the transfer of funds from financial institutions and cryptocurrency exchanges.”

The report’s executive summary, which was obtained in early February, said North Korea’s nuclear and missile programs “remain intact” and its leaders are dispersing missile assembly and testing facilities to prevent “decapitation” strikes.

The full report said “the Yongbyon nuclear complex remained active,” noting that satellite imagery through November showed excavation of water channels and construction of a new building near the reactors’ water discharge facilities. Satellite imagery also “indicates possible operation of the radiochemical laboratory and associated steam plant,” it said.

The panel said it continues monitoring uranium concentration plants and mining sites in the country.

It also has “surveyed, confirmed and reported ballistic missile activity sites and found evidence of a consistent trend” by North Korea “to disperse its assembly, storage and testing locations,” the report said.

In addition to using civilian facilities, the panel said North Korea is using “previously idle or sprawling military-industrial sites as launch locations” — some close to, and some up to 10 kilometers (6 miles) from the assembly or storage sites.

As examples of this trend, it cited the test launch of Hwasong-14 intercontinental ballistic missiles from the Panghyon aircraft factory on July 4, 2017, and a launch from Mupyong-ni 24 days after that. It said Pyongyang’s Sunan International Airport, the country’s largest civil-military airfield, was used to launch Hwasong-12 missiles on Aug. 29 and Sept. 15 of that year.

As for trade sanctions, the experts said they continue to investigate two Chinese companies on the U.N. sanctions blacklist — Namchogang Trading Corp. and Namhung Trading Corp. — and associated front companies and their representatives “for nuclear procurement activities.”

The panel said it is also currently surveying the world’s manufacturers of nuclear “choke point” items such as “pressure transducers,” focusing on their end-use delivery verification methods.

The experts said they also were continuing “multiple investigations into prohibited activities” between North Korea and the Syrian government of President Bashar Assad.

These include Syrian nationals reported to be engaged in arms brokering on behalf of North Korea “to a range of Middle Eastern and African states, reportedly offering conventional arms and, in some cases, ballistic missiles, to armed groups in Yemen and Libya,” the panel said. They also include North Koreans working for sanctioned “entities” and for Syrian defense factories, it said.

The experts said a country, which they didn’t identify, had informed them that Iran “was one of the two most lucrative markets” for North Korean military cooperation and that both the Korea Mining Development Trading Corp. and Green Pine Associated Corp. offices in the country “are active.” The unnamed country also indicated that North Koreans in Iran were being used as cash couriers, the report said.

The Iranian government replied to the panel that the only North Koreans in the country were diplomats, and they have not violated U.N. sanctions, the report said.

The panel said it is continuing investigations into “multiple attempts at military cooperation” between North Korea and various Libyan authorities and sanctioned “entities” and foreign nationals working on their behalf.

The experts said they are also continuing investigations into military cooperation projects between North Korea and Sudan, including information on activities involving a Syrian arms trafficker and technology for “anti-tank and man-portable air defense systems.”
…

The United States told international carriers on Monday that the Boeing 737 Max 8 is airworthy as regulators scrutinize two fatal crashes of the new model of aircraft since October, but said it will mandate forthcoming “design changes” from Boeing by April.

An Ethiopian Airlines 737 Max 8 bound for Nairobi crashed minutes after take-off Sunday, killing all 157 aboard and raising questions about the safety of the new variant of the industry workhorse, one of which also crashed in Indonesia in October, killing 189 people.

In a notice, the Federal Aviation Administration said it planned to require design changes by Boeing no later than April.

Boeing is working to complete “flight control system enhancements, which provide reduced reliance on procedures associated with required pilot memory items,” the FAA said.

The FAA also said Boeing “plans to update training requirements and flight crew manuals to go with the design change” to an automated protection system called the Maneuvering Characteristics Augmentation System or MCAS. The changes also include MCAS activation and angle of attack signal enhancements.

The FAA said in the notice made public that external reports are drawing similarities between the crashes in Ethiopia and Indonesia.

“However, this investigation has just begun and to date we have not been provided data to draw any conclusions or take any actions,” according to the Continued Airworthiness Notification to the International Community for Boeing 737 Max 8 operators.

U.S. Transportation Secretary Elaine Chao told reporters that regulators would not hesitate to act if they find a safety issue.

“If the FAA identifies an issue that affects safety, the department will take immediate and appropriate action,” Chao told reporters. “I want people to be assured that we take these incidents, these accidents very seriously.”

Boeing’s top executive told employees on Monday he was confident in the safety of the U.S. manufacturer’s top-selling 737 Max aircraft.

Reuters and other media outlets have reported that Boeing has for months planned design changes after the Lion Air crash in Indonesia, but the FAA notice is the first public confirmation.

Canada’s transport minister also said he will not hesitate to act once the cause of the crash is known.

FAA chief Dan Elwell on Monday said the notification basically “informs the international community where we are and [gives] sort of … one answer to the whole community.”

Some Boeing jets grounded

Senator Dianne Feinstein, a California Democrat, and Paul Hudson, the president of FlyersRights.org and a member of the FAA Aviation Rulemaking Advisory Committee, on Monday both said the plane should be grounded.

“The FAA’s ‘wait and see’ attitude risks lives as well as the safety reputation of the U.S. aviation industry,” Hudson said in a statement.

The National Transportation Safety Board and the FAA are both at the crash site in Ethiopia, Chao said.

Boeing’s shares fell as much as 10 percent on the prospect that two such crashes in such a short time could reveal flaws in its new plane. Boeing, whose shares closed down 5.3 percent at $400.01 in the heaviest trading trade since July 2013, did not immediately comment Monday on the FAA notification, but said it was sending a team to Ethiopia to aid investigators.

The 737 line, which has flown for more than 50 years, is the world’s best-selling modern passenger aircraft and viewed as one of the industry’s most reliable.

China ordered its airlines to ground the jet, a move followed by Indonesia and Ethiopia. Other airlines, from North America to the Middle East, kept flying the 737 Max 8 on Monday after Boeing said it was safe.

Boeing’s 737 Max is the newest version of a jet that has been a fixture of passenger travel for decades and the cash cow of the world’s largest aircraft maker, competing against Airbus SE’s A320neo family of single-aisle jetliners. The 737 family is considered one of the industry’s most reliable aircraft.

The Max has a bigger and more efficient engine compared to earlier 737 models.

Boeing rolled out the fuel-efficient Max 8 in 2017 as an update to the already redesigned 50-year-old 737, and had delivered 350 Max jets out of the total order tally of 5,011 aircraft by the end of January.
…

Venezuela’s state-run oil firm PDVSA has been unable to resume crude exports from its primary port since last week’s massive power outage, essentially crippling the OPEC nation’s principal industry, people familiar with the matter said on Monday.

Power remained patchy in most of the country after a blackout on Thursday that the government of President Nicolas Maduro claimed was a U.S.-backed act of “sabotage” on the country’s principal hydroelectric dam.

His critics insist it is the result of more than a decade of corruption and mismanagement.

Authorities have given few explanations about why the blackout occurred and how long it might take to resolve, spurring fears it could be indefinite.

PDVSA has launched a contingency plan to restore power to the Jose port, according to one source. The state of Anzoategui, where the port is located, has had only intermittent electricity since Friday, the source added.

The port has its own generator, but depends on the grid for 65 percent of its power, a PDVSA source said. The generator is not currently working and efforts are underway to restart it in order to maintain a minimum level of operation.

“It has been totally halted since the blackout. It has affected all of Jose’s oil installations,” another source said, adding that a restart would be costly and require power lines to be replaced.

PDVSA did not immediately reply to a request for comment.

No oil export tankers have left Jose since March 7, according to Refinitiv Eikon data. There were a few shipments between domestic ports on Saturday, when power briefly returned, but another outage that lasted through Sunday halted operations again, according to the data.

The power outage also affected the Puerto la Cruz refinery in Anzoategui, which was already operating at minimum levels.

Rationing

Blackouts are not unusual in Venezuela.

Incidents stemming from problems at the Guri hydroelectric dam have briefly disrupted oil activities at fields that depend on the grid, which are mainly located in western Zulia State, rather than the Orinoco belt. Many fields, refineries and ports generate their own power.

The country’s crude upgraders, which can convert up to 700,000 barrels per day of Orinoco Belt heavy oil into exportable grades, also operated at minimum levels due to the lack of power, the sources said.

But the current outage has been much more widespread and prolonged than those in the past. The status of the generators that PDVSA and its private partners use in upstream activities was unclear, though the PDVSA source said many were “re-circulating” the same product to avoid having to shut down.

The source added that the government had decided to ration what little electricity was available until the grid was back operating at 100 percent, in order to allow the Jose terminal – which includes the port and the Pequiven petrochemical complex – to consume the power it needed from the grid.

“Shipments of crude, sulfur and Pequiven are all paralyzed,” the PDVSA source said.

Even as PDVSA struggles to restart exports, it is having trouble delivering shipments it has already dispatched from its ports due to U.S. sanctions slapped on the company in January in an effort to reduce Venezuela’s government’s cash flow and drive Maduro from power.

The top U.S. buyers of Venezuelan oil are trying to return millions of barrels of crude they need but cannot accept due to the sanctions, leaving the barrels in limbo as demurrage fees accumulate, according to an internal PDVSA document seen by Reuters.

The blackout has also hit domestic fuel supply. PDVSA has said it has activated a contingency plan for its gas stations that do not have their own power generation, but has not provided a general update on domestic fuel supply.
…

Eurozone ministers on Monday held back granting Greece debt relief because the government failed to implement reforms promised during the massive bailout that ended last year, officials said.

Greece exited its third and final international bailout in August, a turning point in its progress out of the catastrophe that engulfed the country during the financial crisis.

The Greek government has still failed to complete housing insolvency rules that have raised fears in Greece for families threatened with foreclosure on their homes.

European officials, however, played down the delay, not wanting to rekindle memories of the eurozone debt crisis that nearly destroyed Europe’s single currency.

“It’s too early to decide formally on the disbursement today,” said EU Economics Affairs Commissioner Pierre Moscovici ahead of a Eurogroup meeting of eurozone finance ministers.

“The signal given to the markets is decisive, the message of today’s Eurogroup will be and must be positive,” he added.

The debt relief measures are mainly profits made by the European Central Bank (ECB) and other EU central banks on Greek government bonds during the bailout period.

Greece could receive just short of one billion euros from its eurozone partners in the debt relief scheme.

The delay comes days after Greece issued a 10-year bond, the country’s first since its 2010 debt crisis.

The bond was hailed as a major milestone marking Greece’s return to normalcy after almost a decade of being avoided by the markets.

The country hopes to raise a total of around nine billion euros in the markets this year to boost investor confidence in the Greek economy.

Growth is expected to reach 2.4 percent in 2019 after an estimated 2.1 percent in 2018, according to the latest International Monetary Fund (IMF) projections.
…

President Donald Trump plans to seek another $8.6 billion for a border wall in his new budget to be released Monday, White House officials say.

This new request would be on top of the nearly $7 billion Trump has ordered to be used to build a wall under his state of emergency declaration.

The budget also calls for a big boost for the Pentagon and a 5 percent cut in nonmilitary programs.

Trump’s third budget proposal during his presidency, for the year starting in October, is expected to draw wide opposition from Democratic lawmakers and some Republicans, setting off months of debate just weeks after a record 35-day government shutdown over government spending in the current year was ended.

“It will be a tough budget,” White House economic adviser Larry Kudlow told Fox Television Sunday. “We’re going to do our own (spending) caps this year and I think it’s long overdue. … Some of these recent budget deals have not been favorable towards spending. So, I think it’s exactly the right prescription.”

House Speaker Nancy Pelosi and the Senate Democratic leader Chuck Schumer said in a joint statement Sunday they hoped the president had “learned his lesson” from the shutdown, caused partly by Congress’ refusal in December to pay $5 billion toward Trump’s border wall.

​Trump “hurt millions of Americans and caused widespread chaos when he recklessly shut down the government to try to get his expensive and ineffective wall,” the joint statement said. “Congress refused to fund his wall and he was forced to admit defeat and reopen the government. The same thing will repeat itself if he tries this again. We hope he learned his lesson.”

Kudlow said he expects a new fight over border wall funding.

But he contends Trump has justified his call for the wall’s construction, even though polls show a majority of voters oppose it.

“I would just say that the whole issue of the wall, of border security, is of paramount importance,” Kudlow said. “We have a crisis down there. I think the president has made that case effectively. It’s a crisis of economics, it’s a crisis of crime and drugs, it’s a crisis of humanity.”

The White House will release Trump’s budget the same week the Senate will likely vote to throw out his emergency declaration. The House already voted it down. Trump has said he will veto the legislation if it reaches his desk.

U.S. presidents and Congress have traditionally squabbled over budgets, which spell out how to spend taxpayer dollars and the size of annual deficits.

The current budget is more than $4.4 trillion, with a deficit of about $1 trillion expected, largely because of Trump’s 2017 tax cuts.

There are signs the U.S. economy, which grew at a 2.9 percent pace last year, is slowing.

But Kudlow said he was not worried by some predictions the American economy will only advance a little more than 2 percent this year.

“I’m not going to score it just yet,” Kudlow said. “I’ll take the over on that forecast. As long as we keep our policies intact, low tax rates for individuals and businesses, across the board deregulation, lighten the paperwork, let small businesses breathe and get a good rate of return. … Our policies are strong and I think the growth rate this coming year will exceed these estimates just as they have last year.”

Kudlow said the U.S. is “making good progress” in ongoing trade talks with China, although an agreement has not yet been reached.

“As the president said, across the board, the deal has to be good for the United States, for our workers and our farmers, and our manufacturers, got to be good,” Kudlow said. “It’s got be fair and reciprocal. It has to be enforceable. That’s an important point.”
…

One of the biggest concerns for university graduates in Iraq is finding a job. Young graduates often seek the government’s help to find employment, but in the city of Sulaymaniyah in Iraq’s Kurdish region there’s another alternative. An organization called 5-1 Labs helps train and fund young graduates who want to start a small business. VOA’s Rebaz Majeed attended the organization’s first seminar and filed this report narrated by Bezhan Hamdard.
…

White House economic adviser Larry Kudlow says that President Donald Trump will call for a 5 percent “across the board” cut in domestic government spending in 2020 when he proposes his new budget on Monday.

“It will be a tough budget,” Kudlow told the Fox News Sunday show. “We’re going to do our own caps this year and I think it’s long overdue.”

Kudlow said that “some of these recent budget deals have not been favorable towards spending. So, I think it’s exactly the right prescription.”

Trump’s third budget proposal during his presidency, for the year starting in October, is expected to draw wide opposition from Democratic lawmakers and some Republicans, setting off months of debate just weeks after a record 35-day government shutdown over government spending in the current year was ended.

The recent dispute centered on Trump’s demand for more than $5 billion for construction of a wall along the U.S.-Mexican border to thwart illegal immigration. When Congress rejected Trump’s request, he declared a national emergency to bypass congressional authorization to tap money allocated for other projects to build the wall. Congress is now considering whether to revoke the emergency declaration and 16 states have sued to overturn it.

U.S. news outlets reported Trump will seek at least another $8.6 billion in new wall funding in the 2020 budget. The reports said the budget cuts will not affect popular programs providing health care funding and pensions for older Americans, but will pare other funding for domestic programs while boosting defense outlays.

Kudlow said he expects a new fight over border wall funding.

But he contended that Trump has justified his call for the wall’s construction even though surveys in the U.S. show that a majority of voters oppose it.

“I would just say that the whole issue of the wall and border security is a paramount of importance,” Kudlow said. “We have a crisis down there. I think the president has made that case effectively. It’s a crisis of economics, it’s a crisis of crime and drugs, it’s a crisis of just of humanity.”

For years, U.S. presidents and Congress have squabbled over the budgets, what to spend taxpayer dollars on and the size of the annual deficits, often hundreds of billions of dollars that add to the country’s long-term debt of more than $22 trillion. The current budget is more than $4.4 trillion, with a deficit of about $1 trillion expected, largely because of tax cuts Congress approved a year ago at Trump’s behest.

There are signs the U.S. economy, which grew at a 2.9 percent pace last year, is slowing, but Kudlow said he was not worried by some predictions that say the American economy, the world’s largest, will only advance between 1 and 2 percent in the first three months of the year and that the overall advance for 2019 will be just above 2 percent.

“I’m not going to score it just yet,” Kudlow said. “I’ll take the over on that forecast. As long as we keep our policies intact, low tax rates for individuals and businesses, across the board deregulation, lighten the paperwork, let small businesses breathe and get a good rate of return. The president has ended the war on business. The president has provided incentives for economic growth. we’ve opened up the energy sector. Our policies are strong and I think the growth rate this coming year will exceed these estimates just as they have last year.”

He added, “If the markets were overwhelmingly worried about our budgets and our spending and our deficits, you would see that interest rate rise and be a greater penalty. I don’t see it right now. Long run, we do want to reduce the burden of spending and borrowing, absolutely.”

The U.S. added just 20,000 new jobs in February, but Kudlow described the figure as “a very fluky number,” attributing the weak hiring to the partial government shutdown that ended in late January.

Kudlow said the U.S. is “making good progress” in ongoing trade talks with China although an agreement has not yet been reached.

“As the president said,  across the board, the deal has to be good for the United States, for our workers and our farmers and our manufacturers, got to be good,” Kudlow said. “It’s got be fair and reciprocal. It has to be enforceable. That’s an important point.”
…

After months of Brexit deadlock, this is it: decision time. At least for now.

With Britain scheduled to leave the European Union in less than three weeks, U.K. lawmakers are poised to choose the country’s immediate direction from among three starkly different choices: deal, no deal or delay.

A look at what might happen:

Deal deja vu

The House of Commons has a second vote scheduled Tuesday on a deal laying out the terms of Britain’s orderly departure from the EU. Prime Minister Theresa May and EU officials agreed to the agreement in December, but U.K. lawmakers voted 432-202 in January to reject it. To get it approved by March 29, the day set for Brexit, May needs to persuade 116 of them to change their minds — a tough task.

Opposition to the deal in Parliament centers on a section that is designed to ensure there are no customs checks or border posts between EU member Ireland and the U.K.’s Northern Ireland. Pro-Brexit lawmakers dislike that the border “backstop” keeps the U.K. entwined with EU trade rules. May has been seeking changes to reassure them the situation would be temporary, but the EU refuses to reopen the withdrawal agreement.

Around 100 hard-core Brexit supporters in May’s Conservative Party look set to oppose the deal unless the backstop is altered. To offset them, May has courted the opposition Labour Party with promises of money for urban regeneration.

Oliver Patel, a research associate at the European Institute at University College London, says “it’s highly unlikely the deal will be passed. The big question is, what will the margin be?”

If, against the odds, lawmakers approve the deal, a short delay to Brexit may be needed so Parliament can translate the agreement’s terms into British law. But the U.K. would be on course to leave the EU in the next few months, with a long transition period built in to help people and businesses get used to the new relationship.

May will have delivered on her promise of an orderly Brexit — and snatched an astonishing political victory from the jaws of widely predicted defeat.

Destination no-deal

If the deal is rejected, lawmakers expect to vote Wednesday on whether to abandon efforts to secure an agreement and leave the EU as planned on March 29 without a deal.

That idea is backed by a phalanx of pro-Brexit politicians, who say it would cut Britain free of EU rules and red tape, allowing the country to forge an independent global trade policy.

But economists and businesses fear a so-called “no-deal Brexit” would hammer the economy as tariffs and other trade barriers go up between Britain and the EU, its biggest trading partner.

In the short term, there could be gridlock at British ports and shortages of fresh produce. In the long run, the government says a no-deal scenario would leave the economy 6 percent to 9 percent smaller over 15 years than remaining in the EU.

Last month, Parliament passed a non-binding amendment ruling out a “no-deal” Brexit, so lawmakers are unlikely to go with it now.

Delay, delay, delay 

If lawmakers reject leaving the EU without an agreement, they have one choice left: seek more time. A vote scheduled for Thursday would decide whether to ask the EU to delay Britain’s departure by up to three months.

This is likely to pass, since politicians on both sides of the debate fear time is running out to secure an orderly Brexit by March 29.

An extension requires approval from all 27 remaining EU member countries. They will probably agree, possibly at a March 21-22 summit in Brussels. But they are reluctant to grant a delay that stretches past elections for the EU’s legislature, the European Parliament, in late May.

Crisis deferred

Whatever the U.K. Parliament decides, this week will not bring an end to Britain’s Brexit crisis. Both lawmakers and the public remain split between backers of a clean break from the EU and those who favor continuing a close relationship — either through a post-Brexit trade deal or by reversing the decision to leave.

May is unwilling to abandon her hard-won Brexit agreement and might try to put it to Parliament a third time, especially if she loses by a small margin on Tuesday. But some lawmakers want her to have Parliament consider different forms of Brexit to see if there is a majority for any course of action.

Maddy Thimont-Jack, a researcher at the Institute for Government think tank, said this week’s votes could force the famously stubborn May to compromise.

“If she loses the vote by quite a significant margin again, it really suggests that what she has done is just not going to fly,” Thimont-Jack said. “In which case she will be under a lot of pressure to follow what Parliament wants.”

Some think the only way forward is a snap election that could rearrange the forces in Parliament and break the political deadlock. May has ruled that out, but could come to see it as her only option.

And anti-Brexit campaigners haven’t abandoned efforts to secure a new referendum on whether to remain in the EU. The government opposes the idea, which at the moment also lacks majority support in Parliament.

But that could change if the political paralysis drags on. The Labour Party has said it would support a second referendum if other options were exhausted.

It all means more twists are coming in the Brexit drama.

“No one really believes this is the last chance saloon,” Patel said.

 
…

Federal Reserve Chairman Jerome Powell said Friday that the healthy U.S. economy and low inflation are allowing the central bank to take a “patient, wait-and-see approach” on interest rates.

Speaking at Stanford University, Powell said the Fed is well along in its effort to normalize Fed operations by scaling back the extraordinary efforts it employed to support the economy’s recovery from the Great Recession.

The Fed is trimming its sizable holdings of Treasury bonds and mortgage-backed securities. Officials are discussing a plan for wrapping up the efforts to reduce the central bank’s balance sheet later this year, Powell said, adding that the plan’s details should be announced soon.

The Fed’s moves to reduce its balance sheet, which hit a peak of $4.5 trillion, are being watched closely by investors.

Slimming its balance sheet

The Fed started in October 2017 reducing the balance sheet by allowing some bonds to run off as they matured. The balance sheet is now around $4 trillion but some investors have worried that the Fed could end up driving long-term interest rates higher and harming the economy by going too far in reducing its holdings.

Some analysts have projected the Fed’s balance sheet will end up being around $3.5 trillion, which would be significantly higher than the less than $1 trillion it held before the financial crisis hit in 2008.

Powell said the size of the holdings will “prove ample” to meet the Fed’s needs of supplying reserves to the banking system and he said “we could be near that level later this year.”

“As we feel our way cautiously to this goal, we will move transparently and predictably in order to minimize needless market disruption,” Powell said.

Updating procedures

The Fed is conducting a yearlong review of its procedures as part of its effort to update its operations in areas such as the way it communicates with the public, Powell said.

One area being examined is whether the Fed should consider altering its inflation target, which is currently a goal of annual price increases of 2 percent, to allow inflation to go above that goal for a time.

Powell did not specifically discuss the course of rate hikes other than to repeat the “patient” pledge the Fed began using in January to signal that it was planning a prolonged pause in hiking rates this year after boosting them four times in 2018.

Some analysts believe the Fed could leave its policy rate unchanged for the entire year and could possibly start cutting rates in 2020 if the economy slows significantly as the effects of the Trump administration tax cuts and a boost in government spending fade.

The rate hikes last year prompted strong criticism from President Donald Trump who charged that the rate increases were driving down the stock market.

In his remarks, Powell said, “We live in a time of intense scrutiny and declining trust in public institutions around the world. At the Fed, we are committed to working hard to build and sustain the public’s trust.”
…

Hiring tumbled in February, with U.S. employers adding just 20,000 jobs, the smallest monthly gain in nearly a year and a half. The slowdown in hiring, though, might have been depressed by harsh winter weather and the partial shutdown of the government.

Last month’s weak gain came after employers had added a blockbuster 311,000 jobs in January, the most in nearly a year. Over the past three months, job growth has averaged a solid 186,000, enough to lower the unemployment rate over time.

And despite the tepid pace of hiring in February, the government’s monthly jobs report Friday included some positive signs: Average hourly pay last month rose 3.4 percent from a year earlier _ the sharpest year-over-year increase in a decade. The unemployment rate also fell to 3.8 percent, near the lowest level in five decades, from 4 percent in January.

Unseasonably cold weather, which affects such industries as construction and restaurants, afflicted some areas of the country in February. And the 35-day government shutdown that ended in late January likely affected the calculation of job growth.

Still, the hiring pullback comes amid signs that growth is slowing because of a weaker global economy, a trade war between the United States and China and signs of caution among consumers. Those factors have led many economists to forecast weaker growth in the first three months of this year.

Sluggish hiring and job cuts in February were widespread across industries. Construction cut 31,000 jobs, the most in more than five years. Manufacturing added just 4,000 jobs. Retailers cut 6,100. Job growth in a category that includes mostly restaurants and hotels were unchanged last month after adding a huge 89,000 gain in January.

Most analysts expect businesses to keep hiring and growth to rebound in the April-June quarter. It will be harder than usual, though, to get a precise read on the economy because many data reports are still delayed by the partial shutdown of the government.

In the meantime, there are cautionary signs. Consumer confidence fell sharply in January, held back by the shutdown and by a steep fall in stock prices in December. And Americans spent less over the winter holidays, with consumer spending falling in December by the most in five years.

Home sales fell last year and price gains are slowing after the average rate on a 30-year mortgage reached nearly 5 percent last year. Sales of new homes also cratered late last year before picking up in December. And U.S. businesses have cut their orders for equipment and machinery for the past two months, a sign that they are uncertain about their customer demand.

The economy is forecast to be slowing to an annual growth rate of just 1 percent in the first three months of this year, down from 2.6 percent in the October-December quarter. Growth reached nearly 3 percent for all of last year, the strongest pace since 2015.

Still, economists expect a rebound in the April-June quarter, and there are already signs of one: Consumer confidence rose in February along with the stock market.

And more Americans signed contracts to buy homes in January, propelled by lower mortgage rates. Analysts have forecast that annual growth will top 2 percent next quarter.

 
…