Business

European Trade Commissioner Cecilia Malmstrom said on Thursday that Europe should be more ambitious on issues such as climate change as a way to unite the bloc around a single vision.

“We need a great debate on the future of Europe,” she said in a wide-ranging debate at the World Economic Forum in Davos on the state of the continent and the rise of populism. Europeans vote for a new European parliament in May, at a time when citizens in many countries are backing populist parties.

Italy’s Foreign Minister Enzo Moavero Milanesi said the European Union had become like an archipelago of separate islands. “There is no real European vision at the moment, such as the vision which moved the founders. We need to find things that mobilize people, that make the heart beat faster, not just the wallet.”

 
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The European Union on Wednesday warned countries running lucrative schemes granting passports and visas to rich foreigners to toughen checks on applicants amid concern they could be flouting security, money laundering and tax laws.

EU countries have welcomed in more than 6,000 new citizens and close to 100,000 new residents through golden passport and visa schemes over the past decade, attracting around 25 billion euros ($28 billion) in foreign direct investment, according to anti-corruption watchdogs Transparency International and Global Witness.

 

In a first-ever report on the schemes, the EU Commission said that such documents issued in one country can open a back door to citizenship or residency in all 28 states.

 

Justice Commissioner Vera Jurova said golden visas are the equivalent of “opening the golden gate to Europe for some privileged people.”

 

“We want more guarantees related to security and anti-money laundering. We expect more transparency,” she told reporters in Brussels.

 

Bulgaria, Cyprus and Malta offer passports to investors without any real connections to the countries or even the obligation to live there by paying between 800,000 and 2 million euros ($909,000 to $2.3 million).

 

Twenty EU states offer visas in exchange for investment: Britain, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, France, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia and Spain.

 

 Investment can range from 13,500 euros to over 5 million euros ($15,350 to $5.7 million) in the form of capital and property investments, buying government bonds, one-time payments to the national budget or certain donations to charity.

 

Cyprus toughened up vetting procedures last year after it was accused of running a “passports-for-cash” scheme. It said passport numbers would be capped at 700 a year.

 

The Mediterranean island introduced the scheme in the wake of a 2013 financial crisis that brought the country to the brink of bankruptcy and forced it to accept a multibillion-euro rescue program from creditors. One Cyprus lawmaker has estimated that the scheme generated around 4.8 billion euros ($5.4 billion) between 2013 and 2016.

 

In compiling the report, Commission researchers struggled to obtain clear information about how the schemes are run, the number of applicants and where they come from, as well as how many are granted or refused visas. They noted that EU countries exchange little or no information about the applicants.

 

But the report did find that the security checks run on applicants are insufficient, and it recommends that EU computer databases like the one controlling Europe’s passport-free travel area be used routinely. Tougher “due diligence” controls are also needed to ensure that money laundering rules are not circumvented, while more monitoring and reporting could help tackle tax evasion.

 

Migration Commissioner Dimitris Avramopoulos said the Commission “will monitor full compliance with EU law.”

 

“The work we have done together over the past years in terms of increasing security, strengthening our borders and closing information gaps should not be jeopardized,” he warned.

 

The Commission proposed setting up a working group with EU member countries to study the schemes by year’s end.

 

The report angered Cyprus President Nicos Anastasiades, who underlined that, over the past five years, the number of citizenships granted by Cyprus under its scheme amounts to 0.3 percent of the EU’s total.

 

He said that Cyprus has the toughest citizenship criteria among all 20 countries, “and despite this, Cyprus is being targeted.”

 

“These double standards must finally come to an end and I want to be strict about this,” Anastasiades said.

 

Malta welcomed the Commission report, but said it has “reservations on a few issues,” notably that people it accepts under the schemes undergo far more rigorous checks than others granted residency or citizenship. It also underlined that physical presence in Malta is mandatory.

 
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The hottest job of the future might be app developer. All you have to do is look at what you’re holding in the palm of your hand to figure out why.

“All of us use our cellphones probably more than we should be every day, and that is what is driving the demand for app developers,” said Stacy Rapacon, online editor at personal finance website Kiplinger.com, which has identified the best jobs for the future. “More apps mean more people to develop them.”

The median salary for app developers is $100,000, and the industry is expected to grow by 30 percent over the next decade, according to Kiplinger.

Nurse practitioner is the next best job on Kiplinger’s list. The median income for nurse practitioners is $103,000, and the field is expected to grow 35 percent between now and 2027.

“The field, in general, is booming because of the aging population,” Rapacon said. “Physical therapists, for example, have plenty of patients to work with, especially as people are growing older and health care treatments are improving. Older people who suffer from heart attacks or strokes or other ailments are able to survive those issues and then may need physical therapy or occupational therapy to continue being able to live independently.”

Half of the jobs in the Top 10 — including physician, physician assistant, health services manager and physical therapist — are in the health care field.

That’s likely because, for the first time in history, older people are going to outnumber children in the United States. By 2035, 78 million Americans will be over the age of 65, according to the U.S. Census Bureau.

Other occupations on the Top 10 Best Jobs of the Future list include financial manager; marketing research analyst (beneficiaries of the big-data boom); computer systems manager (most businesses use computers); and information security analyst (company computers need to be protected from hackers and others).

On the opposite end of the spectrum are the professions that are dying. These include watch repairer (fewer people are wearing time pieces); builder of prefab homes (a shrinking segment of the U.S. housing market); and textile machine operator — but there is an alternative for those currently working in manufacturing.

“What’s disappearing are the low-skill jobs,” Rapacon said. “So, if there’s a way you can apply more of a human touch to your work, if there’s a way in manufacturing to learn to manage some of the technology that is being put in place in these production processes, then you can still work in those industries and find opportunities.”

Other worst jobs for the future include fabric mender (replaced by technology); shoe machine operator (replaced by technology); and movie projectionist (fewer theaters and less demand for people to work in them).

Kiplinger used available data to develop its lists of the best and worst jobs of the future. However, the job market is changing rapidly and the available data on new and emerging industries is limited.

It’s always possible that the hottest jobs of the next decade haven’t even been invented.
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The annual World Economic Forum opened today in Switzerland against a backdrop of anxieties over trade disputes, Brexit and a growth slowdown that some fear could tip the world economy. VOA’s Mariama Diallo reports.
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The White House on Tuesday said high-level trade talks with Beijing were proceeding uninterrupted, quickly rebutting media reports that progress toward resolving their trade war had faltered.

Chinese Vice Premier Liu He is to meet his U.S. counterparts in Washington next week as the two sides work to resolve their trade disagreements by March 1, when a 90-day truce is due to expire, allowing U.S. import duties on Chinese goods to increase sharply.

Washington and Beijing imposed tit-for-tat tariffs on more than $360 billion worth of goods in two-way trade last year.

Trump initiated the trade war because of complaints over unfair Chinese trade practices — concerns shared by the European Union, Japan and others.

The Financial Times and CNBC both reported Tuesday afternoon that Washington had canceled a preliminary meeting set for this week ahead of Liu’s visit.

American officials had reportedly cited a lack of progress on the most difficult issues in the trade dispute — including allegedly forced technology transfers and far-reaching structural reforms to China’s economy.

The reports sent Wall Street even further into the red. U.S. stocks had already opened lower on downgraded forecasts for global economic growth.

But, shortly before the close of trading in New York, top White House economic aide Larry Kudlow flatly denied the reports during an appearance on CNBC.

“With respect, the story is not true,” Kudlow said. “There was never a planned meeting that was canceled.”

Stock prices recovered some of their losses following his remarks but still finished substantially lower for the day.

Kudlow said the United States continued to press the Chinese on the subject of intellectual property and state intervention in markets, among other matters.

He also said American officials were insisting that any agreement have teeth to ensure Beijing’s compliance.

“Enforcement is absolutely crucial to the success of these talks,” Kudlow said.

“Will it be solved at the end of the month? I don’t know. I wouldn’t dare predict and want to make sure people understand how important that is to put it on the table.”

If both sides fail to reach a resolution to the trade war, U.S. duty rates on $200 billion in Chinese goods are due to rise to 25 percent from their current 10 percent, a prospect that has shaken markets in recent months.

Last year, the Chinese economy posted its slowest annual growth in nearly three decades, according to official figures published Monday in Beijing, underscoring concerns the trade conflict with the United States could sap the strength of the world’s second-largest economy and harm global growth in the process.
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Nigeria is to send a bill recommending a national minimum monthly wage rise of 50 percent to 27,000 naira ($88) to lawmakers in the national assembly, the labor minister said on Tuesday.

Cost of living is a major campaign issue ahead of a presidential election on 16 February and unions want the minimum wage to be raised from 18,000 naira.

Inflation stood at a seven-month high of 11.44 percent in December.

Disagreements over the minimum wage saw labor unions striking across Nigeria in September. President Muhammadu Buhari said in January that he would increase the minimum wage, but did not specify by how much.

“The 27,000 naira minimum wage is the benchmark,” Labor Minister Chris Ngige told reporters in Abuja on Tuesday. Ngige said some government workers could receive a higher salary of 30,000 naira a month.

The minister did not say when the bill would be sent to lawmakers. Any change would need to be signed into law by Buhari. ($1 = 306.3000 naira)
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Brazilian President Jair Bolsonaro will headline the first full day of the World Economic Forum in Davos, Switzerland, with a speech to political and business leaders.

 

The nationalist leader is attending an event that has long represented business’s interest in increasing ties across borders. But globalism is in retreat as populist leaders around the world put a focus back on nation states, even if that means limiting trade and migration.

 

After Bolsonaro’s speech on Tuesday, German Chancellor Angela and Japanese Prime Minister Shinzo Abe will address the gathering on Wednesday.

 

But several key leaders are not attending to handle big issues at home: U.S. President Donald Trump amid the government shutdown, British Prime Minister Theresa May to grapple with Brexit talks, and France’s Emmanuel Macron to face popular protests.

 

 
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Economists warn that political uncertainties and trade tensions could undermine global economic growth. Rights groups warn of the dangers of growing economic inequality. About 3,000 political and economic leaders have gathered in the Swiss resort town of Davos to discuss global business and economic trends at an annual economic forum. VOA’s Zlatica Hoke reports.
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The United Nations is forecasting that the global economy will grow by around 3 percent in 2019 and 2020, but says waning support for multilateralism, escalating trade disputes, increasing debt and rising climate risks are clouding prospects

The United Nations is forecasting that the global economy will grow by around 3 percent in 2019 and 2020, but says waning support for multilateralism, escalating trade disputes, increasing debt and rising climate risks are clouding prospects.

The U.N.’s report on the World Economic Situation and Prospects 2019 also stresses that economic growth is uneven and often doesn’t reach countries that need it most.

Per capital income is expected to stagnate or see only marginal growth this year in parts of Africa, western Asia, Latin America and the Caribbean.

U.N. Secretary-General Antonio Guterres says in the forward of the report launched Monday that while economic indicators remain “largely favorable,” the report “raises concerns over the sustainability of global economic growth in the face of rising financial, social and environmental challenges.”   
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Prime Minister Theresa May was set to unveil her new plan to break Britain’s Brexit deadlock on Monday — one expected to look a lot like the old plan that was decisively rejected by Parliament last week.

May was scheduled to brief the House of Commons on how she intends to proceed. There were few signs she planned to make radical changes to her deal, though she may seek alterations to its most contentious section, an insurance policy known as the “backstop” that is intended to guarantee there are no customs checks along the border between EU member Ireland and the U.K.’s Northern Ireland after Brexit.

 

The EU insists it will not renegotiate the withdrawal agreement, and says the backstop is an integral part of the deal.

 

“This is the text we all invested ourselves in,” Austrian Foreign Minister Karin Kneissl said as she arrived for a meeting of EU ministers in Brussels.

 

British lawmakers are due to vote on May’s “Plan B,” and possible amendments, on Jan. 29, two months before Britain is due to leave the EU.

 

Britain and the EU sealed a divorce deal in November after months of tense negotiations. But the agreement has been rejected by both sides of Britain’s divide over Europe. Brexit-backing lawmakers say it will leave the U.K. tethered to the bloc’s rules and unable to forge an independent trade policy. Pro-Europeans argue it is inferior to the frictionless economic relationship Britain currently enjoys as an EU member.

 

After her deal was thrown out last week by a crushing 432-202 vote in Parliament, May said she would consult with lawmakers from all parties to find a new way forward.

 

But Labour Party leader Jeremy Corbyn called the cross-party meetings a “stunt,” and other opposition leaders said the prime minister did not heed their entreaties to rule out a “no-deal” Brexit and retain close economic ties with the EU.

 

Instead, May looks set to try to win over pro-Brexit Conservatives and her party’s Northern Irish ally, the Democratic Unionist Party. Both groups say they will not back the deal unless the border backstop is removed.

 

May’s spokesman James Slack said May’s talks with opposition lawmakers were “genuine,” and that a “significant number” had expressed concerns about the backstop.

 

He said it was clear “we’re going to have to come forward with something that is different” to get Parliament’s approval.

 

Britain’s political impasse over Brexit is fueling concerns that the country may crash out of the EU on March 29 with no agreement in place to cushion the shock. That could see tariffs imposed on goods moving between Britain and the EU, sparking logjams at ports and shortages of essential supplies.

 

Labour Party Brexit spokesman Keir Starmer said Sunday that a no-deal Brexit would be “catastrophic,” and it was “inevitable” Britain will have to ask the EU to extend the two-year countdown to exit.

 

Several groups of lawmakers are trying to use parliamentary rules and amendments to May’s plan to block the possibility of Britain leaving the EU without a deal.

 

One of those legislators, Labour’s Yvette Cooper, said May was shirking her responsibility to the country by refusing to take “no deal” off the table.

 

“I think she knows that she should rule out ‘no deal’ in the national interest because it would be so damaging,” Cooper told the BBC. “She’s refusing to do so, and I think she’s hoping that Parliament will do this for her. That is not leadership.”

 

EU leaders, meanwhile, expressed frustration with British indecision.

 

“We now know what they don’t want in London,” German Foreign Minister Heiko Maas said. “Now we must at last find out what they want.”

 

Chief EU Brexit negotiator Michel Barnier said that while the EU would not amend the legally binding withdrawal agreement, it was ready to adjust the political declaration — a non-binding statement on future relations that forms the second part of the divorce deal.

 

Spanish Foreign Affairs Minister Josep Borrell said it was crucial to find out what type of deal Britain’s Parliament would support.

 

“We cannot keep negotiating something this way and when everything is negotiated, the U.K. Parliament refuses,” he said in Brussels. “We have to have the guarantee that the proposal has the parliamentary support not to be refused again.”

 

 

 

 
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The International Monetary Fund has cut its forecast for world economic growth this year, citing heightened trade tensions and rising U.S. interest rates.

The IMF said Monday that it expects global growth this year of 3.5 percent, down from 3.7 percent in 2018 and from the 3.7 percent it had forecast for 2019 back in October.

 

“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” said IMF Managing Director Christine Lagarde as she presented the new forecasts at the World Economic Forum in Davos, Switzerland.

 

The fund left its prediction for U.S. growth this year unchanged at 2.5 percent — though a continuation of the partial 31-day shutdown of the federal government poses a risk. The IMF trimmed the outlook for the 19 countries that use the euro currency to 1.6 percent from 1.8 percent.

 

Growth in emerging-market countries is forecast to slow to 4.5 percent from 4.6 percent in 2018. The IMF expects the Chinese economy — the world’s second biggest — to grow 6.2 percent this year, down from 6.6 percent in 2018 and slowest since 1990.

 

The World Bank and the Organization for Economic Cooperation and Development have also downgraded their world growth forecasts.

 

Britain’s messy divorce from the European Union and Italy’s ongoing financial struggles pose threats to growth in Europe.

 

And rising trade tensions pose a major risk to the wider world economy. Under President Donald Trump the United States has imposed import taxes on steel, aluminum and hundreds of Chinese products, drawing retaliation from China and other U.S. trading partners.

 

“Higher trade uncertainty will further dampen investment and disrupt global supply chains,” said IMF chief economist Gita Gopinath.

 

Rising interest rates in the U.S. and elsewhere are also pinching emerging-market governments and companies that borrowed heavily when rates were ultra-low in the aftermath of the 2007-2009 Great Recession.

 

As the debts roll over, those borrowers have to refinance at higher rates. A rising dollar is also making things harder for emerging-market borrowers who took out loans denominated in the U.S. currency.

 

 
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At the Gaba landing site in Kampala, fishermen dock their boats filled with both tilapia and Nile perch.

Waiting along the shores, donning white gum boots and white coats, fish traders wait to offload the Nile perch that has turned profitable for many traders.

The fish’s commodity, known as a swim bladder, is used as an aphrodisiac in China and is now being recognized by the Ugandan government as water gold, but fishermen at the forefront say they are being exploited.

A study by the Lake Victoria Fisheries Organization has shown that a growing appetite in Asia has seen the former waste by-product becoming a multi-million-dollar export.

Idrisa Walusimbi began working as a fisherman 20 years ago. Now, he has his own boat and is chairman of the fish protection unit. He says in the early 1990s, Nile perch fish maw would be fried and eaten by locals. But lately, the Chinese market has made it more lucrative, especially for the exporter.

“You find that from the lowest fisherman, as you know, that he gains, but not so much. Then you find the middleman gains more, and the trader above gains even more, the levels keep increasing and the ones that profit the most are the final local buyer and exporter,” Walusimbi said.

Uganda, Kenya, and Tanzania collectively earn $86 million from trading the commodity. Uganda alone earned $40 million in 2017 as the largest exporter of the Nile perch swim bladder to China.

Vincent Ssempijja, Uganda’s minister for agriculture, animal industry and fisheries, says fish maw is a new item that needs to be regulated.

“That’s why we want to regulate it, so that our fish farmers and of course the fish mongers and the fisheries sector really, benefit from this very lucrative business. Yes, it’s certainly a new type of gold, so we need to look at it more critically,” Ssempijja said.

International prices for dry maw range between $450 and $1,000 per kilogram, depending on the size, quality and market strength. Fish sold to locals have the swim bladders taken out and sold for between $107 to $214 per kilogram.

At the Gaba landing site, fish processing companies have trucks loaded with the Nile Perch fish maw left intact.

The Lake Victoria Fish Organization in its report advises that the fish maw be recognized as a separate commodity from fish. Walugembe George, a fisherman, says he wishes there was a standard price so they too could benefit.

“We have always known that it’s a saleable commodity, but we sell it at low prices. So, we have been exploited. Why do the prices hike and then slump?” he asked.

The Ugandan government is currently consulting and discussing a fisheries and aquaculture bill that calls for the fish maw to be one of the products that should be regulated.

 

 
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The sale of Nile Perch fish maw in Uganda has become a lucrative business, especially for distributors. The fish maw – or dried swim bladder – is used as an aphrodisiac in China. But Ugandan fishermen bringing in the perch say they are being exploited while others are reaping the profits. Halima Athumani reports from Kampala.
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U.S. President Donald Trump said on Saturday progress is being made toward a trade deal with China and denied that he was considering lifting tariffs on Chinese products.

“Things are going very well with China and with trade,” he told reporters, adding that he had seen some “false reports” indicating that U.S. tariffs on Chinese products would be lifted.

“If we make a deal certainly we would not have sanctions and if we don’t make a deal we will,” Trump said. “We’ve really had a very extraordinary number of meetings and a deal could very

well happen with China. It’s going well. I would say about as well as it could possibly go.”
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World stock indexes jumped on Friday, with Wall Street posting a fourth straight week of gains, and the dollar had its first positive week since mid-December as optimism increased that an end is in sight to the U.S.-China trade conflict.

Stocks were boosted by a Bloomberg report that said China sought to raise its annual goods imports from the United States by more than $1 trillion in order to reduce its trade surplus to zero by 2024.    

That followed a report on Thursday that U.S. Treasury Secretary Steven Mnuchin was considering lifting some or all tariffs imposed on Chinese imports. The Treasury denied Mnuchin had made any such recommendation.

Progress in trade talks

While the equity rally lifted all major sectors, trade-sensitive industrials posted among the biggest S&P 500 sector gains, up 1.9 percent on the day. The Philadelphia SE semiconductor index rose more than 2 percent and Germany’s exporter-heavy DAX was up 2.6 percent.    

“There seems to be some progress going in the trade negotiations,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

While that was the biggest influence, “we’ve still got momentum since the first of the year,” he said. “Some of the money that came out of the market at year-end, whether it was high frequency traders or tax-loss selling, is coming back in.”

Adding to strength in equities and supporting U.S. Treasury yields was data that showed U.S. manufacturing output increased the most in 10 months in December. 

Some strategists said relatively light equity trading volume this week indicated that some investors were still waiting on the sidelines.    

The Dow Jones Industrial Average rose 336.25 points, or 1.38 percent, to 24,706.35, the S&P 500 gained 34.75 points, or 1.32 percent, to 2,670.71 and the Nasdaq Composite added 72.77 points, or 1.03 percent, to 7,157.23.

The S&P 500 registered its biggest four-week percentage gain since October 2011. The index is now 8.9 percent below its Sept. 20 record close after dropping 19.8 percent below that level — near the 20-percent threshold commonly considered to confirm a bear market — on Christmas Eve.

STOXX 600 index is up

The pan-European STOXX 600 index rose 1.80 percent and MSCI’s gauge of stocks across the globe gained 1.23 percent.

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for another round of talks aimed at resolving the trade dispute between the world’s two largest economies.

Recent indicators show signs that the Chinese economy is losing momentum.

The trade optimism boosted the dollar against other major currencies.

The dollar index rose 0.31 percent, with the euro down 0.26 percent to $1.1365.

U.S. Treasury yields rose to three-week highs as investors piled back into Wall Street.  

Oil prices jump

Benchmark 10-year notes last fell 12/32 in price to yield 2.7878 percent, compared with 2.747 percent late on Thursday.

Oil prices jumped about 3 percent, rising after OPEC detailed specifics on its production-cut activity to ease global oversupply.   

Brent crude gained $1.52 to settle at $62.70 a barrel, or 2.48 percent higher. U.S. WTI crude futures added $1.73 to settle at $53.80 a barrel, or 3.32 percent up.

 
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U.S. consumer sentiment tumbled in early January to its lowest level since President Donald Trump was elected more than two years ago as a partial shutdown of the federal government and financial market

volatility stoked fears of a sharp deceleration in economic growth.

The drop in confidence reported by the University of Michigan on Friday was the clearest sign yet that the impasse in Washington over Trump’s demands for $5.7 billion to help build a wall on the U.S. border with Mexico was negatively affecting the economy.

Trump has touted high consumer confidence as an indication of the good job he is doing on the economy. While consumer sentiment remains relatively high, the gathering clouds over the economy could make households

more cautious about spending, leading to slower growth. Consumer spending accounts for more than two-thirds of the U.S. economy.

“This report on consumer sentiment is the first concrete evidence that the economy is going to fall and fall hard if Washington does not end the shutdown,” said Chris Rupkey, chief economist at MUFG in New York. “It is going to be hard to see real GDP growth of more than 1 to 1½ percent in the first quarter if the consumer goes on a buying strike.”

The longest government shutdown in U.S. history has left 800,000 government workers without paychecks. Private contractors working for many government agencies are also without wages.

The University of Michigan said its consumer sentiment index fell 7.7 percent to a reading of 90.7 this month, the lowest reading since October 2016 and the steepest drop since September 2015. Economists had forecast a reading of a 97.0.

The survey’s measure of current economic conditions decreased to 110.0 from a reading of 116.1 in December. Its measure of consumer expectations tumbled to a reading of 78.3, the lowest since October 2016, from 87.0 in late December.

Several factors

The University of Michigan attributed the decline in sentiment to “a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies.”

It said that half of the survey’s respondents “believed that these events would have a negative impact on Trump’s ability to focus on economic growth.”

Economists estimate the partial shutdown of the government, which started Dec. 22, is subtracting as much as two-tenths of a percentage point from quarterly GDP growth every week.

Other surveys have also shown an ebb in business sentiment.

“Sentiment among both households and businesses has been coming off the sugar highs, which were caused by tax cut hopes at the beginning of the Trump presidency,” said Harm Bandholz, chief U.S. economist at UniCredit in New York.

U.S. financial markets shrugged off the fall in sentiment, with investors focusing on another report Friday that showed manufacturing output had surged by the most in 10 months in December, and on hopes for progress in the U.S.-China trade row.

Stocks on Wall Street rallied, while the dollar rose against a basket of currencies and U.S. Treasury prices fell.

Factory activity

The broad-based jump in manufacturing output in December reported by the Federal Reserve could allay fears of a sharp slowdown in factory activity.

Manufacturing activity, which accounts for about 12 percent of the economy, is slowing as some of the boost to capital spending from last year’s $1.5 trillion tax cut package fades.

In addition, a strong dollar and cooling growth in Europe and China are hurting exports. Lower oil prices are also slowing purchases of equipment for oil and gas well drilling.

Production at factories increased at a 2.3 percent annualized rate in the fourth quarter after expanding at a 3.7 percent pace in the July-September period. It increased 2.4 percent in 2018, the largest gain since 2012, after advancing 1.2 percent in 2017.

“While the manufacturing strength in December is a favorable signal for the economy, we should keep in mind that it came after soft results in earlier months,” said Daniel Silver, an economist at JPMorgan in New York. “A broad range of manufacturing surveys also have been weakening lately, so the strength in the manufacturing output in December may prove to be short-lived.”

Last month, motor vehicle production surged 4.7 percent after gaining 0.2 percent in November. Excluding motor vehicles and parts, manufacturing advanced a solid 0.8 percent last month after gaining 0.1 percent in November.

December’s surge in manufacturing output, together with a rise in mining production, offset a weather-related drop in utilities, leading to a 0.3 percent increase in industrial production. Industrial output rose 0.4 percent in November. It increased at a 3.8 percent rate in the fourth quarter after

notching a 4.7 percent gain in the third quarter.
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The European Union insisted Friday that agriculture be kept out of the EU-U.S. trade negotiations, despite Washington’s wishes to include the vast sector, and said any overall deal will be limited in scope.

The EU Commission announced its pro posals for a negotiating mandate from the 28 member states and said that the EU negotiations will be “strictly focused on the removal of tariffs on industrial goods, excluding agricultural products.”

EU Trade Chief Cecilia Malmstrom also said that she is preparing a target list of American products it will hit with punitive tariffs if the Trump administration goes through with its threat to impose duties on European auto imports.

Last July, during a period of heightened tensions over trade, U.S. President Donald Trump and EU Commission President Jean-Claude Juncker agreed to start talks meant to achieve “zero tariffs” and “zero subsidies” on non-automotive industrial goods.

With the U.S. criticizing the Europeans for allegedly dragging their feet in the talks, Malmstrom said “the EU is committed to upholding its side of the agreement reached by the two Presidents.”

Any agreement would fall well short of the scope of the free trade deal that had been discussed in recent years — but paused in 2016 after Trump slammed such wide-ranging international deals as unfair to the U.S.

Instead, Malmstrom said, the deal both sides are now looking at could be concluded “quite quickly. We could finalize this and it would be beneficial to all of us.”

 
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An array of crises will keep several world leaders away from the annual World Economic Forum (WEF) in Davos next week, which takes place against a backdrop of deepening gloom over the global economic and political outlook.

Anxieties over trade disputes, fractious international relations, Brexit and a growth slowdown that some fear could tip the world economy into recession are set to dominate the Jan. 22-25 Alpine meeting.

The WEF’s own Global Risks Report set the tone this week with a stark warning of looming economic headwinds, in part because of geopolitical tensions among major powers.

​No Trump, Macron or May

Some 3,000 business, government and civil society figures are scheduled to gather in the snow-blanketed ski resort, but among them are only three leaders of the Group of Seven most industrialized countries: Japanese Prime Minister Shinzo Abe, German Chancellor Angela Merkel and Italian Premier Giuseppe Conte.

Donald Trump, who stole the Davos limelight last year with a rare appearance by a sitting U.S. president, pulled out of this year’s event as he grapples with a partial U.S. government shutdown.

On Thursday, the White House said Trump had also canceled his delegation’s trip to Davos because of the shutdown, now in its 27th day. Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo had been expected to lead the U.S. team, according to two senior administration officials.

French President Emmanuel Macron is also skipping the meeting as he seeks to respond to the “yellow vest” protests, while British Prime Minister Theresa May battles to find a consensus on Brexit.

​No Xi, either

Outside the G7, the leaders of Russia and India are shunning Davos, while China —whose president, Xi Jinping, was the first Chinese leader to attend the elite gathering in 2017 to offer a vigorous defense of free trade — is sending Xi’s deputy instead.

That will leave the likes of British Finance Minister Philip Hammond, Chinese Vice President Wang Qishan and a host of central bankers with the task of trying to reassure business chiefs.

“Davos will be dominated by a high level of anxiety about stock markets, a slowdown in growth and international politics,” said Nariman Behravesh, chief economist at IHS Markit. “The leadership presence is lower than last year but those who are going … will be seeking to impart a sense of confidence and calm business and investors’ nerves.”

​Forum still has its glitz

Before the U.S. cancellation, a Trump administration official had said the U.S. delegation would also discuss the importance of reforming institutions such as the World Trade Organization, the International Monetary Fund and the World Bank.

Trump has harshly criticized globalization and questioned U.S. participation in multilateral institutions such as the WTO, calling for a revamp of international trade rules.

Davos watchers said the absence of so many top leaders this year did not mean the glitzy forum had lost its status as a global stage for top politicians to present their agendas.

“Abe is going to Davos not just as Japanese prime minister but also as chair of the G20. It will be a perfect opportunity to lay the groundwork of upcoming G20 meetings,” said a Japanese government source familiar with international affairs.

“Of course there may be inconveniences such as missing opportunities to hold bilateral meetings, but that won’t undermine the importance of Davos,” he said.

A Chinese official who has attended Davos regularly but will not go this year said China had never expected to make progress at the meeting on the trade dispute with the United States. 

“It’s just an occasion for making a policy statement,” he said.

​Networking opportunities

The low turnout among major Western leaders may also give more prominence to political personalities who may otherwise be upstaged. Davos will be the first major international outing for Brazilian President Jair Bolsonaro, elected on a wave of anti-establishment and conservative nationalism also seen elsewhere.

He said on Twitter he would present “a different Brazil, free of ideological ties and widespread corruption.”

For business chiefs, the value of Davos lies not so much in the public sessions but in the networking and deal-making opportunities on the sidelines of the main conference.

“It’s the best place to pitch for ideas, build connections and get your brand known,” said Chen Linchevski, chief executive of Precognize, an Israel-based start-up developing software that prevents technical or quality failures at manufacturing plants.

“It’s the kind of place where in a few days you meet people you wouldn’t easily meet otherwise,” said Linchevski, who is paying 50,000 Swiss francs ($50,495) to attend the event.
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U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30, the Wall Street Journal reported Thursday, citing people familiar with the internal deliberations.

But Trade Representative Robert Lighthizer has resisted the idea, and the proposal had not yet been introduced to President Donald Trump, according to the Journal.

U.S. stocks advanced on the news even as a Treasury spokesman working with the administration’s trade team denied the report.

“Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China,” the spokesman said.

“This an ongoing process with the Chinese that is nowhere near completion.”

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the latest round of trade talks aimed at resolving a bitter trade dispute between the world’s two largest economies.

In December, Washington and Beijing agreed to a 90-day truce in a trade war that has disrupted the flow of hundreds of billions of dollars of goods.

Mid-level U.S. and Chinese officials met in Beijing last week to discuss China’s offers to address U.S. complaints about intellectual property theft and increase purchases of U.S. goods and services.

Lighthizer did not see any progress made on structural issues during those talks, Republican U.S. Senator Chuck Grassley said earlier this week.

The Trump administration is scheduled to increase tariffs March 2 on $200 billion worth of Chinese goods to 25 percent from 10 percent.

The timeline is seen as ambitious, but the resumption of face-to-face negotiations has bolstered hopes of a deal.

China has repeatedly played down complaints about intellectual property abuses, and has rejected accusations that foreign companies face forced technology transfers.

Industrial stocks, which have been sensitive to trade developments, jumped 1.4 percent after the Wall Street Journal report.
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Indonesian President Joko Widodo has accused his election rival of allowing corrupt candidates on his legislative ticket and failing to include women in senior positions.

Widodo and former General Prabowo Subianto, along with their running mates, faced off Thursday in the first of five debates before the April 17 election. The debate focused on terrorism, human rights, corruption, and law and order.

Opinion polls show Widodo commanding 52 percent to 54 percent popular support and Subianto 30 percent to 35 percent. About 10 percent of voters are undecided and another 15 percent are considered swing voters, meaning the race has the potential to tighten.

Subianto, making his second bid for president after being narrowly defeated by Widodo in 2014, waffled when asked why his party has the highest number of candidates with corruption records.

“Maybe the corruption they did was not huge, maybe he or she just, what I mean is, the theft was indeed wrong, but the most important thing to be eradicated was a corrupter who stole trillions of rupiah (hundreds of millions of dollars) of state money, of people’s money,” he said.

Questioning Subianto’s opening statement of a commitment to empowering women, Widodo said he has nine women in important Cabinet positions but there are few women in the leadership of Subianto’s Gerindra party.

Subianto said his party has many female candidates and criticized the quality of decision making by Widodo’s women ministers.

Widodo, the first Indonesian president from outside the country’s Jakarta elite, has made upgrading Indonesia’s infrastructure the signature policy of his five year-term.

In debating human rights, none of the candidates addressed Subianto’s involvement in human rights abuses during the dictator Suharto’s regime that ended two decades ago.

 

 
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