Month: March 2019

Sharp differences have emerged between the United States and Britain over farming standards and practices in any post-Brexit trade deal.

 

The trans-Atlantic allies have already begun exploratory talks on a trade agreement after Britain’s EU exit, which is scheduled for March 29. Britain, however, is resisting U.S. demands to open its markets to agricultural products currently banned under EU law.

 

The most widely-cited example is Europe’s import ban on American “chlorinated chicken” — carcasses that have been washed using chlorine to remove harmful bacteria like E. coli and salmonella. Europe says an over-reliance on chlorine lowers overall production and hygiene standards in poultry farming, a claim the United States disputes.

 

The EU has also banned the import of beef from American cattle that have been treated with artificial growth hormones. The bloc says that one commonly used hormone may cause cancer and concludes there is not enough scientific data on the other hormones to approve their use for public consumption.

Washington has made it clear any trade deal with Britain after Brexit must see these measures dropped.

 

U.S. President Donald Trump’s pick to lead the U.S. Trade and Development Agency, former Republican Congressman Darrell Issa, said recently that the millions of Britons visiting the United States every year enjoy perfectly safe food.

 

“We’d like to have that arrangement being one in which in Britain you can choose to have American chicken, American beef, or other agricultural products just as you could when you come to the United States,” he told VOA. “It is a key lynchpin of an agreement. Financial, manufacturing and agriculture has to be free and fair.”

 

Issa added that President Trump is committed to sealing a trade deal with Britain after Brexit, and that it could “be the next NAFTA”, referring to the North American Free Trade Agreement between the U.S., Canada and Mexico.

 

Writing in Britain’s The Telegraph newspaper Saturday, America’s ambassador to Britain, Woody Johnson, attacked what he called “myths” over U.S. farming and alleged they are part of a protectionist agenda.

 

Britain has repeatedly pledged that it will not lower food standards after Brexit. Responding to Ambassador Johnson’s comments, Britain’s international trade minister, Liam Fox, said London would hold its ground.

 

“Will we accept things that we believe are against the interests of our consumers or our producers? No we won’t. It’s a negotiation,” Fox told the BBC’s Andrew Marr show Sunday.

 

The dispute over American beef and poultry is also influencing debate over the Irish border, a key stumbling block in Britain’s attempt to secure an EU exit deal.

 

Britain and Europe want to avoid border checks between Northern Ireland, which is part of the United Kingdom, and the Republic of Ireland, an EU member state. Ireland’s prime minister, Leo Varadkar, recently expressed fears that the border could open a back door into the EU.

 

“If at some point in the future the United Kingdom were to allow chlorinated chicken or beef with hormones into their markets, we wouldn’t want that coming into our markets or the European Union as well,” Varadkar told reporters.

 

The United States says a trade deal would deliver huge benefits in sectors like financial services. Britain, meanwhile, is keen to bolster its post-Brexit credentials as a global trading power.

 

Far away from the skyscrapers of New York or London, it is farming that could prove the biggest barrier to any agreement.

 
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London and Washington are beginning exploratory talks over a trade deal after Britain leaves the European Union – which both sides say could deliver huge economic benefits. But already sharp differences have emerged over what might be included, as Britain resists U.S. demands to open its markets to agricultural products currently banned under EU law. Henry Ridgwell reports from London.
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The Trump administration is preparing to tighten the six-decade trade embargo on Cuba on Monday by allowing some lawsuits against foreign companies using properties confiscated by the Cuban government after its 1959 revolution, U.S. officials say.

Every president since Bill Clinton has suspended a section of the 1996 Helms-Burton act that would allow such lawsuits because they would snarl companies from U.S.-allied countries in years of complicated litigation that could prompt international trade claims against the United States.

Major investors in Cuba include British tobacco giant Imperial Brands, which runs a joint venture with the Cuban government making premium cigars; Spanish hoteliers Iberostar and Melia, who run dozens of hotels across the island; and French beverage-maker Pernod-Ricard, which makes Havana Club rum with a Cuban state distiller.

U.S. officials told The Associated Press that Trump would allow Title III of Helms-Burton to go into effect in a limited fashion that exempts many potential targets from litigation. The measure is being presented as retaliation for Cuba’s support of Venezuelan President Nicolas Maduro, who the U.S. is trying to oust in favor of opposition leader Juan Guaido.

Allowing a limited number of lawsuits could make investment in Cuba more burdensome for companies thinking of entering the market, who will now have to do additional research into their legal liability, but it is unlikely to be a major blow against the Cuban economy.

After nearly 60 years of trade embargo, the Cuban economy is in a period of consistently low growth of about 1 percent a year, with foreign investment at roughly $2 billion, far below what it needs to spur more prosperity. But tourism, remittances and subsidized oil from Venezuela have allowed the government to maintain basic services and a degree of stability that appears unshaken by the Trump administration’s recent moves against Cuba and its major remaining allies in Latin America — Venezuela and Nicaragua.
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The S&P 500 and the Dow Jones industrial average snapped a three-day run of losses on Friday as optimism about the prospects for a U.S.-China trade agreement countered downbeat U.S. and China manufacturing data. 

The Nasdaq, meanwhile, marked its longest streak of weekly gains since late 1999. 

Following President Donald Trump’s announcement last weekend of a delay in higher tariffs on Chinese imports, Bloomberg reported late Thursday that a summit between Trump and his Chinese counterpart, Xi Jinping, to sign a final trade deal could happen as soon as mid-March.

“The optimism over trade resolution is outweighing the weakening economic data,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, N.C. 

A private survey showed China’s factory activity contracted for a third straight month in February, though at a slower pace, indicating a marginal improvement in domestic demand as a flurry of policy stimulus kicked in from late last year. 

ISM data also showed U.S. manufacturing activity for February dropped to its lowest since November 2016, and the University of Michigan survey showed consumer sentiment fell short of expectations in the month. 

Detrick said that while the data were weak, investors hoped a U.S.-China trade deal would improve global growth prospects. 

The Dow Jones industrial average rose 110.32 points, or 0.43 percent, to 26,026.32; the S&P 500 gained 19.2 points, or 0.69 percent, to 2,803.69; and the Nasdaq Composite added 62.82 points, or 0.83 percent, to 7,595.35. 

Good sign

Friday marked the first close above 2,800 for the S&P since Nov. 8. Nate Thooft, global head of asset allocation for Manulife Asset Management in Boston, said technical investors would see a close above that level “as a good omen.” 

The index closed 4.2 percent under its September record closing high. It has risen 11.8 percent so far this year, bolstered by trade hopes and the Federal Reserve’s cautious stance on interest rates. 

For the week, the S&P rose 0.4 percent while the Dow fell 0.02 percent and the Nasdaq rose 0.9 percent. 

Of the 11 major S&P 500 sectors, eight were gainers on the day. The health care sector rose 1.4 percent, providing the biggest boost and supported by gains in companies including health insurer UnitedHealth Group which bounced back after falling for much of the week. 

The consumer discretionary sector rose 0.9 percent, with the biggest lift from Amazon.com. 

Foot Locker shares rose 5.9 percent after the retailer beat quarterly same-store sales estimates and helped drive a 1.9 percent gain in shares of Nike Inc., the second-biggest boost to the sector. 

Gap Inc. surged 16 percent, making it the biggest percentage gainer in the S&P, after it said it would separate its better-performing Old Navy brand and close about 230 Gap stores. 

The energy sector rose 1.8 percent despite a decline in oil prices. 

A U.S. Commerce Department report showed inflation pressures remaining tame, which along with slowing domestic and global economic growth gave more credence to the Federal Reserve’s “patient” stance toward raising interest rates further this year. 

Advancing issues outnumbered declining ones on the NYSE by a 1.79-to-1 ratio; on Nasdaq, a 1.86-to-1 ratio favored advancers. 

The S&P 500 posted 54 new 52-week highs and no new lows; the Nasdaq Composite recorded 92 new highs and 29 new lows. 

Volume on U.S. exchanges was 7.95 billion shares, compared with the 7.27 billion average for the last 20 trading days. 
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U.S. consumer spending tumbled 0.5 percent in December, the biggest decline in nine years, as the holiday shopping season ended in disappointment. Meanwhile, incomes rose sharply in December but edged down in January.

The fall in consumer spending followed sizable gains of 0.7 percent in October and 0.6 percent in November, the Commerce Department reported Friday. December’s result means that spending for the quarter decelerated significantly, a primary factor in the slowing of overall economy in the final three months of the year. Gross domestic product recorded a growth rate of 2.6 percent after a 3.4 percent gain in the third quarter.

Incomes jumped 1 percent in December, though slipped 0.1 percent in January. The government did not release spending data for January because of delays stemming from the government shutdown.

The big fall in spending reflected sizable declines in purchases of durable goods such as autos, as well as nondurable goods such as clothing during the all-important holiday shopping season. The result shows that consumer spending, which accounts for 70 percent of economic growth, was showing significant weakness heading into the current quarter.

Many economists believe that GDP growth will slow further during the current January-March period, with some expecting GDP to drop to a growth rate of 2 percent or lower.

Inflation, as measured by a gauge preferred by the Federal Reserve, was up 1.7 percent for the past 12 months ending in December. That’s the slowest 12-month pace since a similar 12-month gain for the period ending in October 2017 and is below the Fed’s 2 percent target for annual price increases.

Federal Reserve Chairman Jerome Powell told Congress this week that with a number of economic risks facing the country and with inflation so low, the central bank intends to be “patient” in deciding when to change interest rates again.

The move to a prolonged pause in further rate hikes, which the Fed had announced at its January meeting, has cheered financial markets which had been worried that the central bank, which hiked its benchmark rate four times last year, could move rates up too quickly, raising the risks of an economic downturn.

The spending and income report showed that the saving rate jumped to 7.6 percent of after-tax income in December, compared to 6.1 percent in November. That was the highest saving rate since January 2016.
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Oregon Gov. Kate Brown signed the nation’s first statewide mandatory rent control measure on Thursday, giving a victory to housing advocates who say spiraling rent costs in the economically booming state have fueled widespread homelessness and housing insecurity.  

  

Brown, a Democrat, said the legislation will provide “some immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market.” 

 

Landlords are now limited to increases once per year that cannot exceed 7 percent plus the change in the consumer price index, which is used to calculate inflation. 

 

The law prohibits them from serving no-cause evictions after a tenant’s first year of occupancy, a provision designed to protect those who are living paycheck to paycheck and who affordable housing advocates say are often most vulnerable to sudden rent hikes and abrupt lease terminations. 

 

New York has a statewide rent control law, but cities can choose whether to participate. California restricts the ability of cities to impose rent control. Last November, voters defeated a ballot initiative that would have overturned that law. 

Emergency measure

 

The Oregon law takes effect immediately. Democrats who control the Legislature say the state’s housing crisis justified passing the bill as an emergency measure. 

 

In hearings for the bill passed, tenants testified that they have struggled to keep up with skyrocketing rents, with many said they’ve been forced from their homes. Kori Sparks, a resident of the fast-growing city of Bend, said she relies on disability and has “to deal with the stress of losing an accessible home on short notice.” 

 

She said rent control will protect vulnerable people from “a predatory system where profit comes before people and denies them of a basic human right.”  

  

Builders in Oregon have not been able to construct enough houses and apartments to meet the demands of the thousands of people moving to the state for jobs and, in some cases, for a lower cost of living. Many people move to the state from California. 

 

A state report estimated that a renter would need to work 77 hours a week at minimum wage to afford a two-bedroom apartment. One in three renters in Oregon pays more than 50 percent of his or her income for rent, far higher than the congressionally set definition of housing affordability, which suggests setting aside 30 percent toward rent.   

  

In the Portland metropolitan area, rent began to plateau in 2017 after four consecutive years of rent hikes averaging 5 percent or more. The average rental unit costs about $1,400 a month, according to data released by the city.  

Many are homeless

  

Oregon is also suffering from a lack of affordable housing and has one of the highest rates of homelessness in the country. 

 

Landlords and developers argued that rent control would make the housing crisis worse, saying investors will now be less willing to build or maintain properties.  

  

“History has shown that rent control exacerbates shortages, makes it harder for apartment owners to make upgrades and disproportionately benefits higher-income households,” said Doug Bibby, president of the National Multifamily Housing Council, a national association representing apartment building owners. 

 

The governor acknowledged that rent control alone isn’t enough, and that the state needs an “all hands on deck” solution. Brown has proposed a $400 million investment in affordable housing solutions in her two-year budget proposal. 

 

“It will take much more to ensure that every Oregonian, in communities large and small, has access to housing choices that allow them and their families to thrive,” she said. 
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Tesla says it is now taking orders for the long-awaited $35,000 Model 3, will close stores and move to online orders.

Tesla says it is now taking orders for the long-awaited $35,000 Model 3, a car for the masses that is essential for the company to survive.

The company says to reach the lower price, it’s shifting all sales worldwide from stores to online only. Some high-traffic stores, however, will remain open.

The company will offer the standard base model, which can go 220 miles (350 kilometers) per charge. It also will offer a $37,000 version with a premium interior that accelerates faster and can go 240 miles (385 kilometers) per charge.

Tesla started taking orders for the Model 3 in March of 2016, but until now hasn’t been able to cut costs enough to sell them for $35,000 and make a profit.

The cheapest one that could be ordered until Thursday started at $42,900.

 

 
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