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Europeans, IMF tell Trump to step back from trade war

By - Mar 07,2018 - Last updated at Mar 07,2018

Labourers fill orders of machine grade steel to be shipped throughout the Pacific Northwest at the Pacific Machinery & Tool Steel Company in Portland, Oregon, on Tuesday (AFP photo)

LONDON — Europe and the International Monetary Fund (IMF) urged Donald Trump on Wednesday to step back from the brink of a trade war, after the resignation of his top economic adviser emboldened those encouraging him to push ahead with tariffs on imported steel and aluminium.

The departure of Gary Cohn, seen as a bulwark against Trump's economic nationalism, hit shares, oil and the dollar on Wednesday, as investors saw an increased likelihood of tit-for-tat trade measures that would depress global growth. 

Trump plans to impose a duty of 25 per cent on steel and 10 per cent on aluminium to counter cheap imports, especially from China, that he says undermine US industry and jobs. 

But the move risks retaliatory measures against US exports and further complicates efforts to save the North American Free Trade Area (NAFTA).

"In a so-called trade war... nobody wins, one generally finds losers on both sides," IMF chief Christine Lagarde said on Wednesday.

The IMF head said Canada — the largest supplier of steel and aluminium to the United States — and Europe — whose car exports Trump has threatened to target — are both likely to impose retaliatory tariffs on US goods.

"If world trade were jeopardised by such measures, they would become a vector for lower growth and a slowdown of commerce. The impact on growth would be a formidable," Lagarde said.

On Tuesday Trump appeared ready for a trade war.

"When we're behind on every single country, trade wars aren't so bad," he said at a news conference with Swedish Prime Minister Stefan Lofven who responded by saying: "I am convinced that increased tariffs hurt us all in the long run."

The European Union has drawn up a list of US products — from bourbon to Harley Davidson motorbikes — on which to apply tariffs if Trump goes ahead.

"A trade war has no winners and if it does not happen, for the better, then we can work with our American friends and other allies on the core issue of this problem, overcapacity," European Commissioner for Trade Cecilia Malmstrom said.

"But if it does happen, we will have to take measures to protect European jobs," she added, after a meeting in Brussels to discuss the retaliation strategy.

For those who fear a trade war, the candidates to replace Cohn as Trump's adviser do not bode well: Peter Navarro, the White House National Trade Council head who wrote a book called "Death by China: Confronting the Dragon — A Global Call to Action", and conservative commentator Larry Kudlow.

German Economy Minister Brigitte Zypries said: "I hope Trump changes his mind ... It's very important that there are advocates for this in the White House. That's why I'm worried about the latest signals coming from the USA."

Britain, keen to foster global trade relations as it prepares to leave the EU, said it was "very disappointed" by Trump's plan. 

EU offers UK limited trade deal, no special access for banks

By - Mar 07,2018 - Last updated at Mar 07,2018

European Council President Donald Tusk takes part in a joint news conference with Luxembourg's Prime Minister Xavier Bettel in Senningen, Luxembourg March 7, 2018. (REUTERS)

BRUSSELS - The European Union on Wednesday offered Britain a free trade agreement for their post-Brexit relationship that fell well short of ambitions set out by Prime Minister Theresa May last week, notably for the key financial sector.

A draft position of the remaining 27 EU members said the bloc was determined to foster a close partnership with Britain, but its depth would be limited by Britain’s own wish to leave the EU’s single market and customs union.

“Because of Brexit, we will be drifting apart,” the chairman of EU leaders Donald Tusk told a news conference, delivering a message that contrasted sharply with May’s call for future trade to be “frictionless as possible”.

“In fact, this will be the first free-trade agreement in history that loosens economic ties instead of strengthening them. Our agreement will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated and costly than today for all of us,” he said.

Crucially, the bloc said Britain would be treated like any other third country when it came to financial services - which London had pressed to be included in a future free-trade deal.

Financial services generate more than 10 percent of Britain’s output and are the only area in which Britain has a trade surplus with the EU, making London very keen to preserve its banks’ current access to continental Europe.

But the text said in the future, Britain’s financial firms would only be allowed to operate in the EU “under host state rules” and be treated according to “the fact that the UK will become a third country and the Union and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework.”

LIMITED ACCESS FOR BANKS

British finance minister Philip Hammond will say later on Wednesday that the EU must drop its tough stance and allow Britain’s giant financial services sector to be part of a post-Brexit trade deal, according to speech extracts.

Hammond will argue that Brussels originally aimed to include financial services in a free trade deal with Canada which in the end failed to provide much new access for banks. The EU had also wanted to include the sector in now-stalled trade talks with the United States.

In the end, the “CETA” EU-Canada trade deal has only a minimal section on financial services. If a Canadian financial firm wants to do business in the EU it must set up a presence inside the bloc and comply with EU regulations.

The draft EU guidelines, which will be worked on by EU diplomats to be approved by the bloc’s 27 national leaders in late March, say services will indeed be part of the deal, but spell out clear limits of what can be on offer.

“Such an agreement cannot offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof,” the text read.

“Like other free trade agreements, it (the trade agreement) should address services,” Tusk said. “(But) No Member State is free to pick only those sectors of the Single Market it likes, nor to accept the role of the ECJ only when it suits their interest,” he said.

“By the same token, a pick-and-mix approach for a non-member state is out of the question. We are not going to sacrifice these principles. It’s simply not in our interest,” he said.

Last December the Bank of England proposed allowing EU banks in Britain to continue as branches in London after Brexit – on condition of some form of reciprocity from Brussels – to avoid lenders having to find extra capital to become fully fledged subsidiaries.

Instead, the EU proposal sticks with the bloc’s traditional approach to dealing with banks from non-EU or third countries.

“This means double regulation. You operate in London under UK rules and some elements would be under their rules for cross-border services,” Barney Reynolds, a partner at law firm Shearman & Sterling said.

 

Tokyo stocks open higher after Wall St. rebound

By - Mar 06,2018 - Last updated at Mar 06,2018

Pedestrians walk past at an electronics stock indicator showing a share prices of the Tokyo Stock Exchange in Tokyo on Tuesday (AFP photo)

TOKYO — Tokyo stocks opened sharply higher on Tuesday after four days of losses, boosted by a rebound on Wall Street and the yen’s fall against the dollar.

The benchmark Nikkei 225 index rose 1.92 per cent or 403.32 points to 21,445.41 in early trade while the broader Topix index was up 1.60 per cent or 27.15 points at 1,721.94.

“Buybacks are expected to lead following a sharp rebound in US stocks and a breather in the yen’s strength,” Yoshihiro Ito, chief strategist at Okasan Online Securities said in a commentary.

All three major indices on Wall Street rose on Monday, with investors seemingly persuaded President Donald Trump’s recent threats to launch a trade war were actually a bargaining tactic.

The president on Monday indicated he might consider exempting Canada and Mexico from steel and aluminium import tariffs if he likes the outcome of pending trade talks.

The yen fell with the dollar trading at 106.36 yen on Tuesday against 106.18 yen in New York on Monday afternoon and the 105-yen range in Tokyo earlier.

A lower yen is positive for Japanese exporters as it makes exported goods cheaper and inflates overseas profits when repatriated.

Carmakers were broadly higher. Honda jumped 2.77 per cent to 3,709 yen and Toyota rose 2.05 per cent to 6,954 yen.

Steelmakers also bounced back with Nippon Steel and Sumitomo Metal rising 2.06 per cent to 2,425.5 yen.

Kobe Steel was up 0.72 per cent at 1,117 yen after media reports said its Chief Executive Hiroya Kawasaki would step down to take responsibility for a quality data-faking scandal.

Oil rises after Korea talks feed risk appetite

By - Mar 06,2018 - Last updated at Mar 06,2018

LONDON - Oil rose on Tuesday, paring earlier losses after South Korea said it would hold a summit with North Korea for the first time in more than a decade, which investors took as a cue to sell the U.S. dollar and buy risk-sensitive assets such as commodities.

The prospect of OPEC and other producers, including Russia, maintaining crude output cuts in the face of a boom in U.S. shale production has helped to push oil back above $65 a barrel this week.

Brent crude futures LCOc1 were up 12 cents on the day at $65.66 a barrel by 1504 GMT, having risen from a session low of $65.30, while U.S. West Texas Intermediate futures CLc1 were up 3 cents at $62.60, off an earlier high of $63.28 a barrel.

The dollar fell to its lowest in more than a week against a basket of currencies after a senior delegation from South Korea returned from a visit to the north, which said there was no need to keep its nuclear program as long as there was no military threat against it and the safety of its regime was secured.

“The comments on North Korea denuclearization have caught the market a bit off-guard and so the dollar has weakened and commodities have received a boost,” said Saxo Bank senior manager Ole Hansen.

“Oil seems to be more driven by outside macro forces than what is happening within the sector.”

The price had eased closer to $65 in earlier trading, pressured by the International Energy Agency’s (IEA) warning on Monday that U.S. oil output is set to surge over the coming five years.

U.S. crude production has risen to more than 10 million barrels per day (bpd), overtaking top exporter Saudi Arabia. Output hit a record 10.057 million bpd in November, according to the U.S. Department of Energy.

“If the production growth in Brazil, Canada and Norway is factored into the equation, these four countries will even exceed demand growth,” Commerzbank analysts said in a note.

“According to the IEA, the call on OPEC is therefore set to decline to 31.8 million barrels per day in 2019, thereby falling below OPEC’s current production level. It is thus an illusion for OPEC to think about abandoning the agreement to cut production.”

Weekly U.S. crude inventory data is expected to show a second consecutive weekly rise in the week to March 2, according to a Reuters poll.

The American Petroleum Institute (API) will release its weekly inventory data at 4.30 p.m. EST (2130 GMT) on Tuesday, and the U.S. Energy Department’s Energy Information Administration (EIA) reports its data at 10.30 a.m. EST (1530 GMT) on Wednesday.

Accord signed to increase business between Jordanian, Indian private sectors

By - Mar 05,2018 - Last updated at Mar 05,2018

AMMAN — The Jordan Chamber of Commerce and the Federation of Indian Chambers of Commerce and Industry have recently signed an agreement that will work to increase economic cooperation between the enterprises of the two countries’ private sectors.

The agreement, signed on the sidelines of the Jordan- India business forum that was held in New Delhi last week, seeks to increase joint trade and  investments,  the Jordan News Agency, Petra, reported on Monday.

The agreement stipulates establishing a Jordanian-Indian business council, according to Petra.

China sets 2018 GDP target at ‘around 6.5%’

By - Mar 05,2018 - Last updated at Mar 05,2018

A Chinese employee sorts hot red steel at a steel plant in Zouping in China’s eastern Shandong province on Monday (AFP photo)

BEIJING — China set its 2018 economic growth target at “around 6.5 per cent” on Monday, in line with expectations but lower than the 6.9 per cent increase registered last year.

The target, which is the same as last year, was presented by Premier Li Keqiang in a report for Monday’s opening session of the annual National People’s Congress, the rubber-stamp parliament.

The figure, along with an inflation target of 3 per cent, is “fitting given the fact that China’s economy is transitioning from a phase of rapid growth to a stage of high-quality development” and will allow the country to “achieve relatively full employment”, the report said.

China beat forecasts in 2017 as the world’s second largest economy grew by 6.9 per cent, picking up steam for the first time since 2010 despite a battle against massive debt and polluting factories.

Beijing has largely relied on debt-fuelled investment and exports to drive its tremendous economic growth of the past four decades, but it is now seeking to move to more sustainable consumption-based growth.

In its report, the country vowed to “cut overcapacity, reduce excess inventory, deleverage, lower costs and strengthen areas of weakness”.

China will cut steel capacity by 30 million tonnes and coal by 150 million tonnes in 2018, according to the report.

The country is also facing pressure to prevent a credit crisis, with local government debt growing 7.5 per cent last year to $2.56 trillion, according to figures in January.

“China’s economic and financial risks are on the whole manageable,” the report said.

But it pledged to “see that internal risk controls are tightened in financial institutions”, adding that Beijing plans to crack down on the kinds of financial shenanigans that have seen some of the country’s largest corporations teetering on the brink of collapse in recent months.

“There will be a serious crackdown on activities that violate the law like illegal fundraising and financial fraud,” it said.

China has moved aggressively over the past year to slam the brakes on companies like private insurer Anbang, which ran up gargantuan debts to fund pricey overseas acquisitions.

Late last month, Beijing took over heavily leveraged Anbang, confirming some analysts’ fears about the toxic levels of debt plaguing China’s economy.

The looming danger is just one of many strong headwinds the country faces as it attempts to achieve its GDP target this year.

The country is also facing a potential trade war with the US, which levied tariffs on steel and aluminium imports last week and has been considering taking direct measures against Chinese products.

US President Donald Trump is determined to change the balance of trade between the two countries.

China’s trade surplus with the US swelled 10 per cent to $275.8 billion last year, a record high.

“China doesn’t want a trade war with the United States,” Zhang Yesui, spokesman for the National People’s Congress, told a news conference on Sunday.

“But if the US takes actions that hurt Chinese interests, China will not sit idly by,” he warned.

‘Jordan to explore business prospects in Africa’

By - Mar 04,2018 - Last updated at Mar 04,2018

AMMAN — Yarub Qudah, minister of industry, trade and supply, on Sunday said the country is working to establish stronger trade relations with African countries, especially Nigeria. 

The minister made the remark during a meeting with a delegation of the Abuja Chamber of Commerce and Industry that is currently visiting the country.

Qudah called for more trade and investment cooperation between the two countries, suggesting the signing of a joint cooperation agreement. 

Nigeria can serve as a gate that can help penetrate into other African markets, the minister told the delegation at the meeting that was held at the Amman Chamber of Commerce. 

Moreover, Jordan can serve as gateway to reach regional and world countries, he said, urging Nigeria to benefit from this advantage, according to the Jordan News Agency, Petra.

During the meeting that was attended by Nigerian Ambassador to Jordan Haruna Ungogo, Qudah said representatives of Jordan’s public and private sectors plan to visit Nigeria in May to boost joint trade and explore investment opportunities.

Furthermore, Qudah mentioned that he will contact concerned parties regarding the launch of direct flights between the two countries so that more tourists can come to Jordan from Nigeria, and make use of therapeutic tourism, in particular. 

Issa Murad, president of the Amman Chamber of Commerce,  stressed the importance of the Nigerian market, especially as the Kingdom imports natural gas from Nigeria. 

Profits, doubts in equal measure at Geneva motor show

By - Mar 04,2018 - Last updated at Mar 04,2018

The photo taken, on March 7, 2017 in Geneva, shows a general view during the first press day of the 87th Geneva International Motor Show (AFP photo )

GENEVA — This year's Geneva Motor Show comes at a curious time for an auto world enjoying record profits; yet, also gripped by doubt midway through the grand transition from diesel to electric and self-driving vehicles.

"Geneva really ought to have been a lovely salon," says, with heavy irony, Ferdinand Dudenhoeffer, director of German-based Centre Automotive Research of Europe's first major car show of the year running from March 8 to 18.

"The luxury car makers continue to present their new models and worldwide sales set new records in 2017.” 

"But behind the glamour and the finery are plenty of worry wrinkles."

Adding to the worries is a new threat by US President Donald Trump to tax imported European cars "which freely pour into the US", if Brussels retaliates in response to his announced plans for tariffs on imported steel and aluminium. 

Number one over-riding concern, though, is the increasing slide in diesel sales, a blow for European constructors who had essentially sought to bet the house on diesel as they strove for years to cut CO2 emissions with the support of public authorities.

The emissions cheating scandal, which blew up at Volkswagen in 2015, has heaped discredit on a technology criticised for belching out nitrogen oxide and harmful particulates.

Major cities including Paris have announced their intention to ban diesel progressively while a top German court last month opened the way to banning older diesel cars from the streets on air quality grounds.

Diesel's fall from grace has pushed constructors to turn their attention to production of more-in-demand models running either on petrol, dubbed "dinosaur juice", or else make the jump to electric or at least hybrid.

 

 Are future friends electric? 

 

The top global constructors have earmarked investments worth tens of billions of euros (dollars) over the past few years to accelerate their push to electric. Yet, the commercial upshot of the strategy remains unclear.

This year's Geneva show, the 88th edition, will see the unveiling of several new electric models and concepts at Tuesday and Wednesday's media days, before opening its doors to the general public on Thursday.

Among new potential star turns are Jaguar's first all-electric model, the production version of the I-Pace, as well as Hyundai's Kona, advertised as the world's first fully electric sub-compact SUV.

Constructors also have to contend with the fact that where fuel engines are concerned, their greater emissions of CO2 will render a tough challenge compliance with future European norms.

They will have to cut CO2 emissions to an average 95 grammes per kilometre across the board by 2021 from 130 grammes in 2015, or face swinging fines.

Automakers are bound to continue investing, furthermore, to ensure improved performance of their combustion engines as these still make up the bulk of sales. Yet, they will prove progressively less of an earner as volumes inexorably fall off.

Traditional constructors also have a wary eye on sector newcomers, led by those in the electric vanguard such as Tesla, as well as high-tech giants Apple or Google and would-be Chinese rivals all seeking their slice of a "smart car" cake.

The future belongs to those whose vehicles enjoy ever more autonomy through increasing recourse to artificial intelligence and telecommunications.

Such qualities are not the preserve of the traditional automobile constructor.

 

Square circle 

 

The last few weeks have seen a slew of carmakers post record profits — but the question is the degree to which that will act as a springboard to paying for the switch to a new auto-tech world.

Eric Kirstetter of the Roland Berger consultancy told AFP that, currently, some constructors are doing "very well", yet their "future is very complicated".

They must "reduce costs in such a way as to make savings allowing them to achieve their R&D plans", said Kirstetter, adding this will involve surmounting "a problem of squaring the financial circle".

That, he says, is "an equation extremely difficult to resolve in order to make the necessary investments to develop new generations of vehicles while continuing to invest massively in improving the combustion engine" in the shorter term.

The task may be more readily surmountable for pioneers in the development of alternatives to diesel, including the Renault-Nissan alliance, with both leaders in the move towards electrification, while Toyota has an early jump on the hybrid market.

However, the future of a metamorphosing industry ultimately pans out, the 700,000 Salon visitors expected to descend on Geneva's Palexpo in the coming days will be able to cast their eyes over some 900 vehicles.

Monday will see the car of the year unveiled from seven finalists for the accolade.

The contenders are the Alfa Romeo Stelvio, Audi A8, BMW series 5, Citroen C3 Aircross, Kia Stinger, Seat Ibiza and Volvo XC40.

Libyan El Sharara oilfield in shutdown from pollution protest

By - Mar 04,2018 - Last updated at Mar 04,2018

Libya’s giant El Sharara oilfield.

TRIPOLI/BENGHAZI, Libya - Libya’s giant El Sharara oilfield has been shut down because a landlord closed a valve in protest against pollution near a pipeline crossing his land, he told Reuters.

The closure, which was confirmed by an oilfield engineer and a separate Libyan oil source, is a major blow to the North African country a little more than a week after the nearby El Feel oilfield was closed by a protest.

“I closed the pipeline that crosses my land. The land is six hectares and it has become wasteland,” said Hassan Mohamed al-Hadi, the landowner in the western Zintan area.

“We closed the pipeline last year for the same reason. A number of mediators had intervened to persuade me to reopen it within 20 days for cleaning the land, but unfortunately the same thing has returned.”

Flows from El Sharara in the south of the country were not getting through to the Mediterranean port of Zawiya, an oilfield engineer said, confirming the closure.

The El Sharara field has closed several times because of protests by security guards over pay, as well as protests by other groups, part of turmoil gripping Libya since the toppling of Muammar Gaddafi in 2011

The field has capacity of 340,000 barrels per day (bpd) but an oil source had put output at 308,000 bpd last week. National Oil Corporation (NOC) operates Sharara in partnership with Repsol, Total, OMV and Statoil.

Repeated and long shutdowns cause pressure in the oilfield’s wells to drop, reducing production capacity.

Boosting capacity at the field requires much-needed investment that NOC has been struggling to secure.

In addition, NOC and the state in general have cut back on many services as oil revenues have dropped.

“The National Oil Corporation does not stand to its responsibility and clean the land as happened before 2011,” said Hadi, the landowner.

In addition to being one of Libya’s main export grades, Sharara also feeds the 120,000 bpd Zawiya oil refinery in the west of the country, currently the largest operating refinery.

A week ago NOC declared force majeure on the 70,000 bpd El Feel after a protest by guards closed the field, which is operated by a joint venture between state-owned NOC and Italy’s Eni.

Crude from El Feel is blended with condensate from the Wafa field to form the Mellitah blend, which is exported from the Mellitah terminal.

 

Amman, Abuja to increase business cooperation

By - Mar 04,2018 - Last updated at Mar 04,2018

AMMAN — The Amman Chamber of Commerce and its Abuja counterpart have signed a memorandum of understanding (MoU) in a bid to increase economic cooperation between the two countries, the Jordan News Agency, Petra, reported on Saturday.

Under the MoU, the two sides will exchange commercial and investment related-information and figures, besides exhibitions and visits to learn more about the opportunities available in both countries. 

During a meeting with representatives of the Abuja Chamber of Commerce and Industry (ACCI), Issa Murad, president of the Amman Chamber of Commerce stressed the importance of the Nigerian market to the Kingdom, highlighting the need for joint efforts to develop trade cooperation.

Listing sectors that the two countries can cooperate in, he mentioned energy, mining, pharmaceuticals, health, education, transport, telecommunications and information technology, besides tourism.

Still below the desired level, the joint commercial exchange volume is tilted in Nigeria’s favour, mainly because Jordan imports natural gas from the African country, Petra indicated. 

Murad urged the Nigerian side to promote Jordanian products and investment opportunities in the Kingdom, highlighting the country’s favourable business environment.

Al Mujtaba Abubakar, ACCI first deputy president, said Jordan has been working to enhance trade and investment ties with Africa, underlining promising sectors, including tourism, and religious tourism, in particular.

Nigerian Ambassador to Jordan Haruna Ungogo said the signing of the MoU ushers the beginning of serious cooperation to foster economic, trade and investment ties.

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