Business

PARIS — France's finance minister said on Monday that "very difficult" negotiations with Washington to settle a dispute over a tax on multinational tech giants were "far from being a done deal" as a self-imposed deadline loomed.

"We are willing to take steps towards the United States — we have proposed a few," Bruno Le Maire told the LCI broadcaster.

While he was still hopeful of a deal by Wednesday, the minister said: "I do not hide the fact that it is very difficult, it is one of the most difficult negotiations that I have conducted, it is far from being a done deal."

On January 7, Paris and Washington set a two-week deadline to end a row over a French tax on giants such as Google, Apple, Facebook, Netflix and Amazon that was met with a US threat of sky-high retaliatory duties on $2.4 billion of French products from wines cheese to leather handbags.

The negotiating deadline coincided with a scheduled meeting on the topic at the World Economic Forum meeting in Davos from Tuesday to Friday this week.

The US sanctions "would be a terrible blow for French viticulture", said Le Maire, adding he had spent most of the weekend in negotiations and was due to meet US Treasury Secretary Steven Mnuchin again on Monday evening.

The minister said France would "certainly not" give in to pressure to reduce to "nearly nothing" the 3 per cent tax France imposed on multinational tech giants' turnover from January 1 last year, pending the adoption of an international tax regime under the Organisation for Economic Cooperation and Development (OECD).

"What I am trying to make our American friends understand is that the fight is not between France and the United States or between Europe and the United States, the fight is to put in place a fair tax on digital activities," insisted Le Maire.

After blocking the tech tax talks at the OECD for several years, Washington relaunched them last year only to make proposals in December which France rejected before going ahead with its tax.

GENEVA — Hundreds of climate activists, young and old, embarked on a three-day march on Sunday to the make their voices heard at the 50th World Economic Forum (WEF) in the Swiss town of Davos.

The group, brandishing banners warning “Climate crisis: A world economic failure” and “there is no Planet B”, urged political and business leaders to take responsibility for averting environmental catastrophe as they set off from the small town of Landquart some 50 kilometres from Davos.

“The climate question is the number one issue and it should simply be topic number one at Davos too and participants should recognise that; it is essential they go in this direction,” Katherine, a Zurich-based pensioner, told AFP.

Local authorities have only authorised the first two days of the activists’ march as far as the swanky ski resort of Klosters but the group say they plan to follow narrow footpaths to make it as near the summit as possible.

“Here we are with 700 people hiking to Davos. It is amazing, it is incredible solidarity for people in a country that is very worthy, that is not dealing with the same kind of issues. But they understand the immorality of Davos, the immorality of a billionaire class that meets every year to celebrate their excesses,” said Kenyan eco-campaigner Njoki Njoroge Njehu. 

Njehu made a speech at a similar gathering on Friday in Lausanne which was attended by teenage Swedish campaigner Greta Thunberg. She was not in Landquart but is expected to show in Davos and address the forum after US President Donald Trump. 

The atmosphere was festive as the group set off around 1:30pm (12:30 GMT), several serenading their fellow marchers with Alpine horns.

The January 21-24 WEF forum has stressed that climate change is a key topic at this year’s summit. The forum is inviting some 2,800 invited participants, including major businesses and some 50 heads of state and government, to set a net-zero carbon emissions target for 2050.

“All companies coming to Davos have been asked to commit to achieving net zero carbon emissions by 2050 or earlier,” organisers have stated.

NEW YORK, United States — Toyota on Friday said it was moving assembly operations for its popular Tacoma pickups from the United States to Mexico but pledged that no US jobs would be affected.

The announcement came a day after the US Senate approved the new US-Mexico Canada Agreement on trade, which importantly revamps the rules for manufacturing and cross-border trade in autos.

Since 2010, the Tacoma has been produced at a plant in San Antonio, Texas that employs 3,200 workers with an annual capacity of 208,000 vehicles.

But this will come to an end in 2021, the company said in a statement, and all production will then take place at a factory in Baja California, Mexico.

Beginning in 2022, the San Antonio plant will switch to producing the Toyota Sequoia SUV, which had previously rolled off the assembly line in Princeton, Indiana.

It was unclear how US President Donald Trump would take the news. In an angry tweet, Trump in 2017 had blasted Toyota's decision to send production of the Corolla sedan to Mexico and the company ultimately continued production in the United States.

Trump had long blasted USMCA's predecessor, the 1994 North American Free Trade Agreement, saying it promoted offshoring of jobs.

US officials say the USMCA, which has yet to take effect, will promote investment in the domestic auto sector.

Toyota said on Friday that moving the Tacoma to Mexico was part of a restructuring effort that involves $13 billion in US investments through 2021.

The company has already invested $7.1 billion, including $1.6 billion at an Alabama auto plant it shares with fellow Japanese automaker Mazda.

FRANKFURT AM MAIN — European Central Bank (ECB) policymakers highlighted potential "side effects" of ultra-loose money at their December meeting, an account published on Thursday showed, but remained in wait-and-see mode on any changes.

"Some members highlighted the need to be attentive to the possible side effects of the present monetary policy measures," the ECB said on its website.

In September, the institution's governing council restarted its 2.6-trillion-euro ($2.9 trillion) "quantitative easing" mass bond buying scheme, at 20 billion euros per month, and lowered interest rates on banks' deposits in Frankfurt to -0.5 per cent.

The moves were an attempt to boost economic activity and, in turn, lift still-sluggish inflation towards the bank's just-below 2 per cent goal.

Most members agreed in December the stance was "fully appropriate", offering "substantial support to growth and inflation".

However, the easy money environment could impact markets for assets like "equities, housing and real estate", some warned, while banks passing negative rates on to their customers might alter households' savings and spending behaviour.

Citing data from the ECB-linked European Systemic Risk Board, German lender Commerzbank this week warned of risks of bubbles in a "Lehman-like property boom", referring to the US bank's collapse that helped trigger the 2008 financial crisis.

For now, "confidence was expressed that policy rates hat not yet reached the so-called reversal rate", a theoretical level at which negative rates do more harm than good to the economy, the account showed.

While the latest loosening of monetary policy prompted sharp divisions under former ECB president Mario Draghi, new boss Christine Lagarde's efforts to restore unity appeared to be holding for now.

"Members widely agreed... to keep the monetary policy stance unchanged," the account read.

Meanwhile, there was a rare mention of climate change in the document.

“There was a need to step up efforts to understand the economic consequences of climate change," and the "impact on growth and inflation" of governments' moves to counter it, some governing council members argued.

Lagarde had raised eyebrows with calls to make climate change a "central and high priority" before she took office, but has scaled back her ambitions, telling European Parliament lawmakers in December "the ECB's mandate is not climate change".

The account offered no hints on the scope of a planned "strategic review", the ECB's first since 2003, which Lagarde is expected to launch at a press conference next week.

LONDON — Business chiefs on Wednesday insisted they are not waiting on bickering governments to fight climate change, after Wall Street titan BlackRock joined a campaign pressuring companies to do more in the buildup to a week of networking in Davos.

Prior to the new decade’s first conclave of global decisionmakers, the World Economic Forum (WEF) released a survey that it portrayed as a call to arms, after devastating wildfires in Australia and an inconclusive climate summit in Madrid.

The window to agree on decisive cuts to carbon emissions risks closing in the 2020s and if the world fails to act, “we will be faced with a situation where we are moving the deckchairs around on the Titanic”, WEF President Borge Brende told a news conference.

In recent years, climate change and its dismal consequences have emerged as dominant concerns shadowing the WEF’s A-list gathering of government and business leaders in the Swiss Alps, along with economic risks.

This time, the WEF’s “Global Risks Perception Survey” found the top five categories of concern for the next 10 years were all environmental — headlined by extreme weather events and failure of governments and businesses to forestall climate change.

For 2020 alone, economic confrontations and domestic political polarisation were among the shorter-term drivers of anxiety among the more than 750 executives and industry experts surveyed.

The world’s most powerful climate denier, US President Donald Trump, will attend Davos next week, after agreeing a deal to defuse a trade war he started with China.

Also returning to Davos will be 17-year-old Swedish eco-activist Greta Thunberg, who called in British newspaper The Guardian for an end to the “madness” of investing in fossil fuels.

BlackRock, the world’s biggest asset manager with nearly $7 trillion invested, said on Tuesday it was divesting holdings in companies that earn more than a quarter of their sales from production of electricity-generating coal.

In his annual letter to US company leaders, BlackRock chief executive Larry Fink said markets had been slow to reflect the risk of climate change to business models.

“But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance,” wrote Fink, who will be among the VIPs in Davos.

Private jets 

John Drzik, chairman of the business consultancy Marsh and McLennan Insights, said as a result of another BlackRock announcement last week, money managers holding more than $40 trillion now back a corporate initiative called Climate Action 100+.

While stressing the need for a unified response by governments, the campaign says its member companies account for two-thirds of annual global industrial emissions.

“Others will now have to respond to what BlackRock did,” Drzik told AFP at the WEF report’s launch.

“Seven trillion dollar alone is meaningful but I think the scale and visibility and reputation of BlackRock just adds to the money.” 

German industrial group Siemens has bucked the corporate trend by pressing ahead with its involvement in a vast coal mine in Australia. And for Extinction Rebellion, BlackRock itself “remains waist-deep in fossil fuel investments”.

Still, the needle appears to be shifting in boardrooms as CEOs factor in the likely impact of climate change on their bottom lines and come under pressure from customers, investors and regulators.

“You don’t want to be stuck with technologies and industries that are obsolete. You want to find the winners of the new economy,” Peter Giger, chief risk officer at Zurich Insurance Group, said at the WEF event.

“That’s just good business practice if you run a sustainable business with a long-term perspective,” he said.

The WEF remains vulnerable to charges of double-standards given that many of the Davos elite use private planes to facilitate a week of deal-making and schmoozing. 

The organisation said it was offsetting the carbon belched by such flights, encouraging their pilots to use biofuels, and offering discounted train tickets for those heading to Switzerland.

“It is something we take really seriously. There’s nothing worse than an organisation identifying a risk and failing to do anything about it,” WEF Managing Director Adrian Monck said.

Greenpeace climate finance campaigner Paul Morozzo commented: “The banks and financial institutions jetting into Davos next week have made trillions pumping money into climate-crashing fuels like oil, gas and coal.”

“It’s time to stop funding the crisis and start backing the solutions. That means immediately ending support for fossil fuels we cannot afford to burn,” he said.