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Mexico and Canada on Wednesday dismissed U.S. President Donald Trump’s threat to scrap NAFTA, describing it as a negotiating tactic designed to gain an advantage during talks to update one of the world’s biggest trading blocs.

In comments that initially pushed Mexico’s peso currency down by more than 1 percent, Trump on Tuesday reiterated his threats to terminate the North American Free Trade Agreement. Trump has long called the 1994 treaty a bad deal that hurt American workers, saying it should be re-negotiated or ended.

Initial talks between Mexico, the United States and Canada to update NAFTA ended in Washington over the weekend with no sign of a breakthrough, and further discussions are due in Mexico City in September.

Mexican Foreign Minister Luis Videgaray sought to brush off Trump’s threat, saying his remarks were simply a tactic and Mexico would keep negotiating. The comments were not a surprise, nor would they scare Mexico, he added.

“He’s negotiating in his own particular style,” he told local television.

The peso later recovered all its losses. NAFTA’s fate is important to Mexico and Canada, which both send most of their exports to the United States.

A Canadian official said Ottawa would not be deterred by Trump’s threat, given the government had been bracing for moments of turbulence.

“This was always a card we knew the president would likely play … it may have been a bit earlier than expected,” said the official, who declined to be identified given the sensitivity of the situation.

“It’s not going to cause us to waver at all in our position … (we) won’t really be deterred by these statements,” the official added.

Separately, the office of Foreign Minister Chrystia Freeland issued a statement saying Canada would work hard to modernize NAFTA and noted trade talks often had moments of heated rhetoric.

Mexico’s currency fell to record lows following Trump’s victory in the U.S. presidential election last November, with investors scared he could hurt Mexican exports and cause a recession south of the border.

However, the peso has recovered since then, as many of investors’ worst fears seemed to subside.

In recent months, peso traders increasingly appeared to pay little heed to some of Trump’s comments, helping a recovery in the currency.

But Trump’s remarks showed traders remain skittish about the future of NAFTA, and highlighted the complexity of the talks.

 
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President Donald Trump’s recent decision to launch an investigation into concerns about market access in China and the theft of American intellectual property, either through hacking or opaque policies and regulations that force companies to hand over trade secrets, has Beijing warning of a possible trade war.

Others, however, say it is about time China got a wakeup call.

For years, intellectual property theft and policies regarding market access in China have been a point of concern, not only for the United States, but for other foreign companies investing there.

“It’s clear that in many areas Chinese policy is violating the spirit if not the letter of the WTO … and the Chinese government doesn’t show any signs of backing down or changing their behavior,” says Robert Atkinson, president of the Washington D.C.-based Information Technology and Innovation Foundation.  “This is hurting not only American companies and the American economy, but it is hurting the global economy as well because when you do that (engage in theft or force the hand over of it) there is less innovation.”

Trump administration officials estimate theft of intellectual property could be as much as $600 billion.  But when you take Europe and other countries into account, the losses are even bigger, Atkinson added.

And while it is still too early to tell how the investigation will play out, the announcement has Beijing on edge.  Chinese State media has warned of a possible trade war the investigation could trigger, and Chinese authorities have pledged to take all “appropriate measures” to protect its rights and interests if needed.

On Tuesday, a statement from China’s Commerce Ministry called the move to launch a Section 301 investigation “irresponsible,” arguing it sends the wrong signal to the world.  Beijing also predicted the move would be widely condemned.

“The United States’ disregard of World Trade Organization rules and use of domestic law to initiate a trade investigation against China is irresponsible, and its criticism of China is not objective,” said a statement from an unnamed ministry spokesman posted online.

Prior to the establishment of the WTO, the United States used Section 301 of the Trade Act of 1974 to help open foreign markets.  Such investigations were used frequently against Japan in the 1980s, but since the establishment of the WTO it has largely been set aside.  The United States has launched investigations since then, but has not used the powers it gives the president to unilaterally impose tariffs or other restrictions to protect American companies.

How President Trump will use the results of the investigation is unclear.  While most, including China, have focused on the possibility that he could ignore the WTO, that is not his only choice. 

The investigation could also be used as leverage in negotiations or the United States could join with other like-minded countries in trying to address China’s market restrictions, analysts say.

Liao Qun, chief economist at China CITIC Bank International said while it will take a while to see the results of the investigation and the impact it might have on U.S.-bound Chinese exports, he thinks the push could eventually fail.

“This (the use of Section 301) is something that is controversial, even in the United States, and the Trump administration is facing many challenges,” Liao said.  “Many of his policies have been blocked or overturned.”

Liao added that if the United States does take action, it is likely to trigger a trade war.

But that is something that began a long time ago, some analysts argue.

“There is a trade war going on right now and the Chinese are fighting it and we’re losing.  This notion that there is not a trade war (is false), said Robert Atkinson.  “There is a trade war and a trade war has been going on essentially since China joined the World Trade Organization.” 

Beijing appears to already have taken some steps to limit the potential impact of any action the United States could take.

This year, China’s State Council has twice announced new measures to reduce access restrictions for foreign investments.  It’s most recent announcement calls for draft road maps and timetables.

Recently, China announced new reductions in its list of areas where investment is banned.  That list has been getting shorter, but many barriers remain.

China’s recent approval of market access for Visa and Mastercard is one good example of just how difficult the Chinese market is to crack, said Christopher Balding, an associate professor at Peking University’s HSBC Business School.

“As part of the WTO agreement, they (Visa & Mastercard) were supposed to be let into the Chinese market,” he said.  “The WTO agreement was in 2000 and they are still trying to get into the Chinese market.”  

As for the investigation, a public hearing is scheduled for October and the investigation could take months before any official response is announced.

 
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Jordan has opened its first job center inside a refugee camp, unlocking work opportunities across the country for thousands living in the world’s largest Syrian refugee camp, the U.N. labor agency said Tuesday.

So far, more than 800 refugees in the Zaatari camp in Jordan, which borders Syria and is home to nearly 80,000 people, have registered for work permits at the job center, the International Labor Organization said.

“Refugee workers now have a clear address to resort to when searching for jobs and applying for work permits, where they can receive all necessary information and benefit from expert support,” Maha Kattaa, ILO response coordinator in Jordan, said in a statement.

The Jordanian government says the country is home to 1.4 million Syrians, of whom more than 660,000 are registered with the U.N. refugee agency UNHCR.

Allowing refugees to work in host countries relieves pressure on social services, boosts the local economy and gives refugees the financial security to re-establish their lives, said UNHCR, which manages work permits and the flows in and out of the Zaatari camp.

“I am confident that having an increased number of Syrians entering the labor market will positively impact the local economy and bring stability to refugee families,” said Stefano Severe, a UNHCR spokesman in Jordan.

Earlier this month, Jordan became the first Arab country to issue Syrian refugees with a new type of work permit that opens up the growing construction sector.

The center, launched by the Jordanian government, will run job fairs and employment matching services with businesses across the country.

There are also plans to open a second center in a nearby camp in Azraq, ILO said.
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Argentina’s main labor unions took to the streets of the capital on Tuesday demanding more jobs and protesting center-right President Mauricio Macri’s economic policies.

Tens of thousands of workers gathered in the historic Plaza de Mayo criticizing Macri, who is trying to lower labor costs to attract investment and jump-start an economy that emerged from recession in the second half of last year.

“If some retrograde [in the government] thinks that lowering wages, precarious living conditions and destroying trade unions is going to line up investments … we say that is very wrong,” said Juan Carlos Schmid, a leader of Argentina’s largest umbrella union, the CGT.

Standing on a podium at the protest, he said the CGT would meet in late September to discuss a potential strike.

Macri told Reuters in an interview this month his government was negotiating labor agreements sector by sector rather than trying to pass a comprehensive labor reform like the one approved in neighboring Brazil.

Unions fear more drastic changes could be coming after mid-term legislative elections in October, however, especially after a primary vote on Aug. 13 pointed to strong support for Macri’s coalition.

Macri is trying to open Argentina’s long protected economy and focus on competitive industries like oil and agriculture, but has seen some manufacturing jobs lost in the meantime.

The most recent employment data showed the jobless rate rose to 9.2 percent in the first quarter of the year from 7.6 percent in the fourth quarter of last year.
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For Nel Jayaraman, the realization that hybrid seeds, chemical fertilizers and pesticides were making farmers more vulnerable to extreme weather came slowly.

In fields near the town of Thiruthuraipoondi in the southern state of Tamil Nadu, Jayaraman saw yields falling and farmers’ debt rising as their reliance on modern seeds and pesticides grew, even as the rains became increasingly fickle.

Fifteen years ago, Jayaraman gave up both, returning to traditional varieties and organic farming methods that had become nearly extinct in the Cauvery river delta region where his family had lived for generations.

Since then, he has revived about 150 indigenous varieties of rice, and become an evangelist for traditional seeds and organic farming, which he sees as key to combating the impact of climate change and protecting harvests and farmers’ incomes.

“Hybrid varieties need more water, fertilizers and pesticides. They are just not sustainable in this region,” he argued in his small office as a steady stream of farmers walked in and out to talk to him or buy seeds. “We should go back to traditional varieties that are suited to this soil, that can withstand these conditions. It is the only way farmers can make a decent living.”

That is particularly crucial as Tamil Nadu faces its worst drought in more than a century, after the monsoon rains failed last year, he said.

Green Revolution

As India’s population expanded quickly after its independence from colonial rule in 1947, the government backed a program to increase food production to meet rising demand.

The Green Revolution, launched in the 1960s, increased harvests with improved technology, including high-yielding varieties of wheat and rice developed by scientists, and greater use of chemical fertilizers.

While productivity rose, there has been criticism that the benefits were overstated, that the cultivation methods damaged the land and drained groundwater, and that the gene pool for staple crops narrowed, leaving farmers fewer options when faced with disease and drought.

Several organizations in southern India have since launched efforts to revive traditional cultivation and rice varieties.

The Center for Indian Knowledge Systems (CIKS), for example, has revived dozens of traditional rice varieties that are resistant to pests and disease, capable of dealing with floods and drought, and that have valuable medicinal properties.

“Particularly for coastal regions such as this, you need varieties that can handle the higher salinity of the soil and groundwater, and are resistant to drought,” said Subhashini Sridhar at CIKS in neighboring Nagapattinam district.

“You need a large and diverse genetic pool to preserve these qualities,” she said, citing the example of the aftermath of the 2004 Indian Ocean tsunami, which hit Nagapattinam hard.

Afterward, only some traditional varieties could be successfully grown because salinity in the soil and groundwater was higher than normal.

Less damage

About 60 percent of India’s population depends on land to make a living.

But while agriculture made up more than two-thirds of a farm family’s income in the 1980s, its share is less than a third today as commodity prices have fallen but the costs of seed, fertilizer and pesticides have risen.

Rising debt — in part from harvests slashed by drought and uneven rainfall — has triggered tens of thousands of farmer suicides, including in Tamil Nadu.

Jayaraman and Sridhar see traditional seeds as a solution.

Farmers do not need to buy seed every year as they have to with hybrids — instead they simply save part of their harvest to replant — and the older varieties often need less water and do not need chemical fertilizers and pesticides, Jayaraman said.

A move to more healthful eating in India’s cities has also sparked demand for traditional grains and organic fruits and vegetables, for which consumers are willing to pay more, he said.

About 37,000 farmers in the delta region are now cultivating traditional rice varieties, said Jayaraman.

Irregular rainfall and extreme weather, including drought in the Cauvery delta over the past decade, have convinced more farmers of their merits, he said.

“But it can be hard to switch, as the government subsidizes fertilizers and pesticides and gives cheap loans to farmers, leading them deeper into debt when crops fail or prices fall,” he told the Thomson Reuters Foundation.

“Instead, they should subsidize organic farming and promote it better,” he said.

100,000 varieties

India was once home to about 100,000 varieties of indigenous rice, but the Green Revolution wiped out most of them, and consumers began to prefer eating the fine-grained, polished white hybrid varieties that were promoted by the government.

Government support for reviving traditional grains and for organic farming has been uneven.

The northeastern state of Sikkim became the first organic state in January 2016. Nine other states, including Tamil Nadu, Kerala and Karnataka, have an organic farming policy.

Separately, organic farming is also drawing an unlikely enthusiast: city-dwelling professionals.

They include Senthil Kumar, a former software engineer who quit his job a year ago to focus on his seven-acre (three-hectare) organic farm, a two-hour drive from the southern city of Chennai where he lives.

“When I realized the impact of chemicals and pesticides on my health and the environment, I started looking at the organic alternative,” said Kumar, who then set up a nonprofit to train farmers and urban enthusiasts with some help from Jayaraman.

“We have such a wealth of traditional grains, pulses and native cattle that benefited farmers for centuries. They are too valuable to lose,” he said.
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The U.S. Air Force has awarded Boeing and Northrop Grumman separate contracts to continue work on the replacement of the aging Minuteman III intercontinental ballistic missile system, the Pentagon said on Friday.

Though the award for the new Ground-Based Strategic Deterrent (GBSD) comes amid rising tensions with North Korea, the Air Force had asked the defense industry last summer for proposals to replace the aging ICBM system and its nuclear cruise missiles as the military moved ahead with a costly modernization of its aging atomic weapons systems.

“The Minuteman III is 45 years old. It is time to upgrade,” Air Force Chief of Staff General David Goldfein said in a statement on Monday.

Northrop Grumman was awarded $328 million, and Boeing $349 million over the three-year contract.

A milestone contract

The relatively small award is a milestone that would allow Boeing and Northrop to continue parallel detailed development and prototyping for the Minuteman replacement. The Pentagon’s office of Cost Assessment and Program Evaluation (CAPE) has said the total could cost the United States $85 billion. The Air Force has estimated $62 billion.

Lockheed Martin Corp, Northrop and Boeing were all competing for the contract which is needed to perform the three-year technology maturation and risk reduction (TMRR) phase of Minuteman replacement.

A Lockheed representative said the company was “disappointed” and looked “forward to a debrief about the selection.”

Boeing’s Strategic Deterrence Systems Director, Frank McCall, said in a statement, “Since the first Minuteman launch in 1961, the U.S. Air Force has relied on our technologies for a safe, secure and reliable ICBM force.” Boeing provided the Minuteman III missile for the current ground-based nuclear ICBM system.

Northrop Grumman’s chief Wes Bush said in a statement, “We look forward to the opportunity to provide the nation with a modern strategic deterrent system that is secure, resilient and affordable.”

‘Moving forward’

Secretary of the Air Force Heather Wilson said, “We are moving forward with modernization of the ground-based leg of the nuclear triad.”

Modernization of the U.S. nuclear force was expected to cost more than $350 billion over the next decade. The United States plans to replace its aging systems, including bombs, nuclear bombers, missiles and submarines. Some analysts estimated the cost at $1 trillion over 30 years.

“Our missiles were built in the 1970s. Things just wear out, and it becomes more expensive to maintain them than to replace them,” Wilson said.

 
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Senate Majority Leader Mitch McConnell says there is “zero chance” Congress will allow the country to default on its debts by voting to not increase the borrowing limit.

McConnell’s comments came Monday during a joint appearance in his home state of Kentucky with U.S. Treasury Secretary Steven Mnuchin. It was one of McConnell’s first public appearances since President Donald Trump publicly criticized him for failing to pass a repeal and replacement of former President Barack Obama’s health care law.

McConnell did not mention Trump in his remarks, and he did not take questions from reporters after the event. But in response to a question about where he gets his news, McConnell said he reads a variety of sources, including The New York Times.

“My view is most news is not fake,” McConnell said, which appeared to be a subtle rebuke of one of Trump’s favorite phrases. “I try not to fall in love with any particular source.”

The government has enough money to pay its bills until Sept. 29. After that, Congress would have to give permission for the government to borrow more money to meet its obligations, including Social Security and interest payments.

McConnell sought to calm a crowd of nervous business leaders by interjecting at the end of Mnuchin’s answer to a question about what would happen if lawmakers did not increase the borrowing limit.

“Let me just add, there is zero chance, no chance, we won’t raise the debt ceiling,” McConnell said. “America is not going to default.”

Addressing the country’s borrowing limit will be the most pressing issue when lawmakers return to Washington following their August recess. After that, Republicans will likely turn their attention to overhauling the nation’s tax code.

McConnell said Congress is unlikely to repeal a pair of Obama-era laws most hated by conservatives. While negotiations about health care are ongoing, McConnell said the path forward is “somewhat murky.” And he said it would be “challenging” to lift the restrictions placed on banks following the 2008 financial crisis, known as “Dodd-Frank.”

On tax reform, McConnell said the only thing lawmakers won’t consider eliminating are deductions on mortgage interest and charitable deductions.
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Wisconsin Assembly Democratic Leader Peter Barca was branded as failing “on all accounts” by a fellow Democrat who was “incredibly frustrated and concerned” with his actions after Barca joined Republicans in voting for a $3 billion tax incentive package for Foxconn Technology Group.

Emails obtained by The Associated Press show that Democratic state Rep. Lisa Subeck of Madison spelled out her grievances to Barca on Friday, the day after the Assembly passed the incentive package backed by Republicans designed to attract Foxconn to build a massive display panel factory in the state.

Barca was one of three Democrats to vote for the measure Thursday, with 28 Democrats against. Barca, of Kenosha, and the other Democrats who voted for it represent southeast Wisconsin, near where Foxconn plans to build a factory that could employ thousands. Reps. Cory Mason of Racine and Tod Ohnstad of Kenosha joined Barca and 56 Republicans in voting for the bill; two Republicans joined all other Democrats in opposition.

Most Democrats were outspoken in their opposition to the measure, branding it as a corporate welfare giveaway that also puts Wisconsin’s environment in jeopardy because of requirements that would be waived to speed construction of the plant that could open as soon as 2020.

Barca tried to walk a line, criticizing the process of quickly acting on the bill and saying that more improvements could be made to protect taxpayers, Wisconsin businesses and the environment. But ultimately he said he supported the incentive package because of the backing it has from people in his district.

Subeck, in an email sent to all Assembly Democrats obtained by the AP, accused Barca of failing “on all accounts” to differentiate his views on Foxconn with that of the rest of Democrats who voted against the measure. She was particularly upset with Barca for holding an impromptu news conference in the Assembly parlor, right around the corner from his office, shortly after the evening vote Thursday.

“I am also concerned that the message you conveyed,” Subeck wrote. “It seems you were trying to justify your own vote rather than share the caucus perspective consistent with our agreed upon message.”

She said that Barca’s public comments “have not been consistent with the majority position of the caucus and have served counter to our interest.”

Barca wrote in response that he hadn’t planned to have a news conference but after the Thursday vote “we had one outlet in particular that was very aggressive and several others that wanted to talk.” Barca said his staff asked the reporters to move to the nearby parlor, where he and Assistant Majority Leader Dianne Hesselbein of Middleton and Rep. Mark Spreitzer of Beloit answered questions.

Barca did not address her concerns about what he actually said.

Barca spokeswoman Olivia Hwang said in an email that it was known Democrats had different opinions on the Foxconn bill and he supports efforts to oppose legislation they believe is wrong for their district or the state.

Barca does not plan to testify at a public hearing Tuesday in Racine on the bill, she said. Subeck raised concerns in her email about Barca testifying at the hearing scheduled for near where the plant may locate.
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