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Parties to a new global treaty to combat the illicit sale of tobacco products have taken the first steps toward cracking down on this multi-billion dollar trade.  At a three-day meeting at the headquarters of the World Health Organization in Geneva they have outlined a plan to shut down the lucrative black market trade in tobacco.

A global tobacco treaty (Protocol to Eliminate Illicit Trade in Tobacco Products) entered into force on September 25, with 48 countries joining the new protocol, which is part of the WHO Framework Convention for Tobacco Control (FCTC).  Two-thirds of the parties have enacted or strengthened national legislation aimed at tackling illicit trade in tobacco products.

Parties attending the meeting have set up a working group to create a monitoring system to track and trace the movement of tobacco products. They hope this global information sharing system will be up and running by 2023.  

Head of the FCTC Secretariat, Vera da Costa e Silva, says illicit trade accounts for one in 10 cigarettes consumed.  She says these cigarettes are low-priced and more affordable for young people and vulnerable populations.  She says this results in increased consumption of the toxic product by these groups.

She told VOA the black market in tobacco thrives in both rich and poor countries, but it is a much bigger problem in developing countries.

“In the streets of developing countries, you can see all over the world sales of illicit trade of tobacco products.  They are openly in their markets…. When it comes to the distribution, this is linked to street sales, to bootlegging as well through borders and even to sales to and by minors.  That is a real problem of illicit trade in tobacco products,” she said.

Da Costa e Silva said this flourishing illegal trade undermines tobacco control policies and public health.  She said it also fuels organized crime and increases tobacco profits through tax evasion, resulting in substantial losses in governments’ revenues.   

She said studies show governments lose $31 billion in taxes annually from the illegal trafficking in tobacco products.  

The World Health Organization reports seven million people die prematurely every year from tobacco-related causes.

 
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One of Donald Trump’s top economic advisers says the president is not trying to improperly influence the U.S. central bank.

The director of the National Economic Council, Larry Kudlow, spoke to the television network CNBC a day after Trump said the U.S. Federal Reserve is “loco” (crazy) for raising interest rates. On Thursday, Trump continued his attacks on the central bank, calling the Fed “out of control,” but denied he has plans to fire Fed Chair Jay Powell. 

Kudlow said, “We all know the Fed is independent. The president is not dictating policy to the Fed.”  

The Federal Reserve slashed the benchmark interest rate nearly to zero in an emergency, temporary effort to boost economic growth hurt by a severe recession 10 years ago. Since then, the economy has stopped shrinking and resumed growth, unemployment has fallen to historic lows, and wages and inflation have begun to rise modestly.  

Low interest rates boost growth by making it cheaper for businesses and families to borrow money to build factories or buy homes.  Economists warn that keeping interest rates too low for too long could spark strong inflation that pushes up prices and wages so sharply that they damage the economy.  

To fend off inflation, the Fed has been slowly raising rates a quarter of a percentage point at a time. They are expected to continue this effort to gradually return rates to their historic averages.

A common conflict grows out of the fact that incumbent elected politicians get the blame if the economy is not growing strongly. That gives presidents and others a political incentive to keep interest rates low, regardless of the consequences.  

That is why central banks in the United States and elsewhere are often set up to insulate them from political pressure so they can make decisions on their economic merit rather than potential popularity.

When the independence of a central bank is seriously questioned, markets and currencies can fall because investors lose confidence in the economic management of a nation.

U.S. stock markets fell sharply Wednesday amid worries about rising interest rates, growing tensions over trade and other issues.  Some Asian and European markets took losses Thursday.  In Thursday’s U.S. trading, some key markets stabilized, and one recovered some ground. 
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The world’s longest commercial flight, a 19-hour journey from Singapore to New York, took off Thursday from Changi Airport.

The Singapore Airlines Airbus A350-900ULR will touch down at Newark Liberty International Airport early Friday after traveling 15,350 kilometers.

Singapore Airlines previously flew the same route, but abandoned it in 2013 due to high oil prices and the gas-guzzling four-engine aircraft used. 

Singapore Airlines is offering no coach seats, instead stocking the plane with 67 business-class spots and 94 premium economy. Shortly before takeoff, premium economy tickets were going for more than $2,100.

The Airbus A350-900ULR (“Ultra Long Range”) is a new two-engine plane with far greater range and fuel capacity than other commercial airliners. In addition, it has several features that aid passenger comfort during the trip, like hospital-grade air filters, improved pressurization and humidity, and customizable lighting that eases the transition between time zones. 

Singapore Airlines says it plans to add several flights from Singapore to Los Angeles in November, bringing the total number of weekly flights to the United States to 53.
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Mat Beren and his friends used to drive by the vast greenhouses of southern British Columbia and joke about how much weed they could grow there.

Years later, it’s no joke. The tomato and pepper plants that once filled some of those greenhouses have been replaced with a new cash crop: marijuana. Beren and other formerly illicit growers are helping cultivate it. The buyers no longer are unlawful dealers or dubious medical dispensaries; it’s the Canadian government.

On Oct. 17, Canada becomes the second and largest country with a legal national marijuana marketplace. Uruguay launched legal sales last year, after several years of planning.

It’s a profound social shift promised by Canadian Prime Minister Justin Trudeau and fueled by a desire to bring the black market into a regulated, taxed system after nearly a century of prohibition.

It also stands in contrast to the United States, where the federal government outlaws marijuana while most states allow medical or recreational use for people 21 and older. Canada’s national approach has allowed for unfettered industry banking, inter-province shipments of cannabis, online ordering, postal delivery and billions of dollars in investment; national prohibition in the U.S. has stifled greater industry expansion there.

Hannah Hetzer, who tracks international marijuana policy for the New York-based Drug Policy Alliance, called Canada’s move “extremely significant,” given that about 25 countries have already legalized the medical use of marijuana or decriminalized possession of small amounts of pot. A few, including Mexico, have expressed an interest in regulating recreational use.

“It’s going to change the global debate on drug policy,” she said. “There’s no other country immediately considering legalizing the nonmedical use of cannabis, but I think Canada will provide almost the permission for other countries to move forward.”

At least 109 legal pot shops are expected to open across the nation of 37 million people next Wednesday, with many more to come, according to an Associated Press survey of the provinces. For now, they’ll offer dried flower, capsules, tinctures and seeds, with sales of marijuana-infused foods and concentrates expected to begin next year.

Overseeing distribution

The provinces are tasked with overseeing marijuana distribution. For some, including British Columbia and Alberta, that means buying cannabis from licensed producers, storing it in warehouses and then shipping it to retail shops and online customers. Others, like Newfoundland, are having growers ship directly to stores or through the mail.

Federal taxes will total $1 per gram or 10 percent, whichever is more. The feds will keep one-fourth of that and return the rest to the provinces, which can add their own markups. Consumers also will pay local sales taxes.

Some provinces have chosen to operate their own stores, like state-run liquor stores in the U.S., while others have OK’d private outlets. Most are letting residents grow up to four plants at home.

Canada’s most populous province, Ontario, won’t have any stores open until next April, after the new conservative government scrapped a plan for state-owned stores in favor of privately run shops. Until then, the only legal option for Ontario residents will be mail delivery — a prospect that didn’t sit well with longtime pot fan Ryan Bose, 48, a Lyft driver.

“Potheads are notoriously very impatient. When they want their weed, they want their weed,” he said after buying a half-ounce at an illicit medical marijuana dispensary in Toronto. “Waiting one or two three days for it by mail, I’m not sure how many will want to do that.”

British Columbia, home of the “B.C. Bud” long cherished by American pot connoisseurs, has had a prevalent marijuana culture since the 1970s, after U.S. draft-dodgers from the Vietnam War settled on Vancouver Island and in the province’s southeastern mountains. But a change in government last year slowed cannabis distribution plans there, too, and it will have just one store ready next Wednesday: a state-run shop in Kamloops, a few hours’ drive northeast of Vancouver. By contrast, Alberta expects to open 17 next week and 250 within a year.

Unlawful operations

No immediate crackdown is expected for the dozens of illicit-but-tolerated medical marijuana dispensaries operating in British Columbia, though officials eventually plan to close any without a license. Many are expected to apply for private retail licenses, and some have sued, saying they have a right to remain open.

British Columbia’s ministry of public safety is forming a team of 44 inspectors to root out unlawful operations, seize product and issue fines. They’ll have responsibility for a province of 4.7 million people and an area twice as large as California, where the black market still dwarfs the legal market that arrived in January.

Chris Clay, a longtime Canadian medical marijuana activist, runs Warmland Centre dispensary in an old shopping mall in Mill Bay, on Vancouver Island. He is closing the store Monday until he gets a license; he feared continuing to operate post-legalization would jeopardize his chances. Some of his eight staff members will likely have to file for unemployment benefits in the meantime.

“That will be frustrating, but overall I’m thrilled,” Clay said. “I’ve been waiting decades for this.”

Licensed growers

The federal government has licensed 120 growers, some of them enormous. Canopy Growth, which recently received an investment of $4 billion from Constellation Brands, whose holdings include Corona beer, Robert Mondavi wines and Black Velvet whiskey, is approved for 5.6 million square feet (520,000 square meters) of production space across Canada. Its two biggest greenhouses are near the U.S. border in British Columbia.

Beren, a 23-year cannabis grower, is a Canopy consultant.

“We used to joke around all the time when we’d go to Vancouver and drive by the big greenhouses on the highway,” he said. “Like, ‘Oh man, someday. It’d be so awesome if we could grow cannabis in one of these greenhouses.’ We drive by now, and we’re like, ‘Oh, we’re here.”‘

Next to Canopy’s greenhouse in Delta is another huge facility, Pure Sunfarms, a joint venture between a longtime tomato grower, Village Farms International, and a licensed medical marijuana producer, Emerald Health Therapeutics. Workers pulled out the remaining tomato plants last winter and got to work renovating the greenhouse as a marijuana farm, installing equipment that includes lights and accordion-shaped charcoal vents to control the plant’s odor. By 2020, the venture expects to move more than 165,000 pounds (75,000 kg) of bud per year.

Some longtime illegal growers who operate on a much smaller scale worry they won’t get licensed or will get steamrolled by much larger producers. Provinces can issue “micro-producer” licenses. But in British Columbia, where small-time pot growers helped sustain rural economies as the mining and forestry industries cratered, the application period hasn’t opened yet.

Sarah Campbell of the Craft Cannabis Association of BC said many small operators envision a day when they can host visitors who can tour their operations and sample the product, as wineries do.

Officials say they intend to accommodate craft growers but first need to ensure there is enough cannabis to meet demand when legalization arrives. Hiccups are inevitable, they say, and tweaks will be needed.

“Leaving it to each province to decide what’s best for their communities and their citizens is something that’s good,” said Gene Makowsky, the Saskatchewan minister who oversees the province’s Liquor and Gaming Authority. “We’ll be able to see if each law is successful or where we can do better in certain areas.”

British Columbia safety minister Mike Farnworth said he learned two primary lessons by visiting Oregon and Washington, U.S. states with recreational marijuana. One was not to look at the industry as an immediate cash cow, as it will take time to displace the black market. The other was to start with relatively strict regulations and then loosen them as needed, because it’s much harder to tighten them after the fact.

Legalization will be a process more than a date, Farnworth said.

“Oct. 17th is actually not going to look much different than it does today,” he said.
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U.S. stocks posted their worst loss since February on Wednesday, the Dow Jones industrial average finishing the day down more than 800 points.

The losses were widespread as bond yields remained high after steep increases last week. Companies that have been the biggest winners on the market the last few years, including technology companies and retailers, suffered steep declines.

The Dow gave up nearly 828 points, or 3.15 percent, to 25,600. The Nasdaq composite, which has a high concentration of technology stocks, tumbled 316 points, or 4.1 percent, to 7,422.

The S&P 500 index sank 95 points, or 3.3 percent, to 2,786, its fifth straight drop. That hasn’t happened since right before the 2016 presidential election. Every one of the 11 S&P 500 sectors finished down for the day.

Microsoft dropped 5.4 percent to $106.16. Amazon skidded 6.2 percent to $1,755.25. Industrial and internet companies also fell hard. Boeing lost 4.7 percent to $367.47 and Alphabet, Google’s parent company, gave up 5 percent to $1,081.22.

After a long stretch of relative calm, the stock market has suffered sharp losses over the last week as bond yields surged.

Squeezed margins

Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors are concerned about the big increase in yields, which makes it more expensive to borrow money. She said they also fear that company profit margins will be squeezed by rising costs, including the price of oil.

Paint and coatings maker PPG gave a weak third-quarter forecast Monday, while earlier, Pepsi and Conagra’s quarterly reports reflected increased expenses.

“Both companies highlighted rising costs, not only input costs but increasing operating expenses [and] marketing expenses,” she said.

Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 mph. Berkshire Hathaway dipped 4.8 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

Luxury retailers tumbled. Tiffany plunged 10.2 percent to $110.38 and Ralph Lauren fell 8.4 percent to $116.96.

The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy. Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks. 

The 10-year Treasury yield rose to 3.22 percent from 3.20 percent late Tuesday after earlier touching 3.24 percent. It was at just 3.05 percent early last week.

Technology and internet-based companies are known for their high profit margins, and many have reported explosive growth in recent years, with corresponding gains in their stock prices. Adams, of Bloomberg Intelligence, said investors have concerns about their future profitability, too.

That’s helped make technology stocks more volatile in the last few months.

“As stocks go up, tech goes up more than the stock market. As stocks go down, tech goes down more than the stock market,” she said.
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The Treasury Department has issued new rules on foreign investments into American companies that will give the government more power to block foreign transactions on national security grounds.

The rules represent the latest escalation in an intensifying economic conflict between the United States and China. It will implement a program for tougher reviews of foreign acquisitions that Congress approved this summer.

The new regulations will require foreign investors to alert a Treasury-led interagency committee to all deals that would give the foreign investors access to critical technology covering 27 industries, including semiconductors, telecommunications and defense.

Treasury Secretary Steven Mnuchin says the new rules will “address specific risks to U.S. critical technology.”
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Dark, dirty and slow, Zimbabwe’s trains, like much else in the impoverished southern African country, have seen better days.

Once the preferred mode of transport for most Zimbabweans, the state-run rail service mirrors the decline in the country’s economic fortunes during the last two decades under the leadership of former President Robert Mugabe.

Gilbert Mthinzima Ndlovu, a veteran of Zimbabwe’s 1970s independence war and a security guard at the National Railways of Zimbabwe (NRZ) for 35 years, yearns for the old days when trains were full and arrived on time.

“Times are different now as we have few passengers,” the off-duty Ndlovu told Reuters as he rested in a badly lit first class cabin during the journey from the capital Harare to his home in Bulawayo, Zimbabwe’s second city.

Now the 10-hour journey can take 16 hours, he said.

Not surprising, then, that many Zimbabweans prefer to make the 440 km (273 mile) journey by bus or public taxi in around five hours than have to endure a cold overnight train ride – even if at $10 the train ride costs only half as much.

The train carriages often lack lighting and water, and the toilets are filthy. The signalling and information systems are often vandalized and some tracks overgrown with grass and weeds because they have not been used in years.

NRZ is now trying to improve its fortunes.

Last year South African logistics group Transnet won a $400 million joint bid to recapitalize NRZ and fix some of the problems, including acquiring and refurbishing carriages.

But for now passengers have to make do with a broken train service.

“Today you can’t even buy food from the train and all the coaches are filthy, with no water and the lights are not working,” said one passenger who declined to give his name.
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