Month: June 2018

As the United States and China teeter on the brink of an all out trade war and tit-for-tat tariffs loom, a European businesses lobby is urging Beijing to stop dragging its feet on reforms and using unfair trade policies to pamper Chinese companies.

Each year, foreign trade groups in China roll out a laundry list of concerns about market access, regulatory hurdles and other policies that tilt the playing field in the world’s second largest economy.

This year, for the first time ever, the European Chamber of Commerce’s annual survey of the business climate found that 61 percent of its 532 company members saw their Chinese counterparts as equally or more innovative.

Increased spending on research and development, targeted acquisitions of foreign high-tech firms and growing demand for innovative products from consumers were helping driving that shift, the chamber said.

The high response is significant. Policies linked to innovation and competition are a key part of the intensifying US — China trade debate and concerns of foreign companies operating here.

European Chamber President Mats Harborn said that as Chinese companies become stronger and more competitive, it is time for Beijing to “remove the training wheels.”

“It’s time for China to lift or reduce the pampering of its own enterprises and expose them to even more open and fair competition for them to develop into the champions that China wants them to be,” Harborn said.

Currently, Chinese companies account for 115 of the Fortune 500 list of global enterprises. The Chinese government claims that of the world’s 260 “unicorns” — start up companies valued at more than a billion dollars — more than 160 are from China.

Since Chinese President Xi Jinping delivered an address at the World Economic Forum in Davos early last year, China has repeatedly pledged to further open up the country’s economy.

According to the group’s survey of its members 52 % said that the government’s promises of opening up had yet to be realized. And looking forward, 46 percent said they thought the number of regulatory obstacles would increase over the next five years.

Harborn said that time is running out for China and 2018 has to be the year that it delivers on its promises.

“Dragging the feet on delivering on promises that have been made in China will cause reactions around the world,” Harborn said.

The United States response to that has led to reactions such as the $50 billion, and more recently $200 billion, in possible tariffs that Washington could levy on Chinese goods.

“We don’t agree with that action but it is the result of what we have warned about earlier,” he said.

Washington and European companies alike have long voiced concern about trade policies in China that protect domestic companies and State Owned Enterprises through subsidies, regulatory barriers and unequal treatment.

The Trump administration has alleged that Beijing is stealing American intellectual property and forcing technology transfers. Beijing denies that is the case.

Still, the European chamber’s survey found that about one in five of its companies “felt compelled to hand over technology in exchange for market access,” despite Chinese government assurances to the contrary.

According to the survey, 19 percent said they felt compelled to transfer technology.

Harborn said that while the percentage may seem small, the value it represents is much larger. Numbers were even higher among companies in the aerospace and aviation sector (36 percent), civil engineering and construction (33 percent) and automakers (27 percent).

 “And no foreign company going to Europe has to even consider the issue of giving up technology for market access,” Harborn said.

Reciprocal treatment is a key concern from companies in China, regardless of whether they are from Europe and America. It is also a key aim of Washington’s trade dispute with Beijing and effort to make trade fairer.

But as the rhetoric in the U.S.-China trade dispute has heated up, some analysts argue that the focus has shifted too heavily to reciprocal and damaging tariffs. Actions that risk hurting not only the United States and China, but the global economy as well.

Harborn said confrontation through tariffs is not the most efficient way to get reforms and opening up that companies have been asking China to deliver.

“We are afraid that when you are exerting pressure this way [through threats of tariffs] that China keeps its aces up its sleeve and is presenting what is needed to defuse the tension at the time and is not is not addressing the fundamental and broader issues,” Harborn said.

Besides, he add, reforms are not only important for foreign companies but China’s own economic development as well.

 
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Despite opposition in Congress, Turkey will receive its first F-35 Joint Strike fighter jet this week, Pentagon and aviation industry officials tell VOA.

Lockheed Martin, maker of the F-35, will hold a ceremony Thursday in Fort Worth, Texas, for Turkey’s new jets, according to a company spokesperson.

Both House and Senate versions of the National Defense Authorization Act (NDAA) contain restrictions on Turkey’s participation in the F-35 program.

U.S. lawmakers are concerned about Ankara’s imprisonment of an American pastor and its plans to buy the Russian S-400 air defense system, which they say would “degrade the general security” of the NATO alliance and be incompatible with systems used by Turkey’s NATO allies.

The NDAA, and any language therein, would not become law until the House and Senate pass a final, joint version of the bill.

“As always, Lockheed Martin will comply with any official guidance from the United States government,” the company said.

After the rollout ceremony on Thursday, Turkey’s two jets will travel to Luke Air Force Base in Arizona at a later date so that Turkish pilots can learn how to use them, Air Force Lt. Col. Mike Andrews, a Pentagon spokesman, told VOA.

“Turkish F-35 pilots and maintainers have arrived at Luke Air Force Base, and will begin flight academics soon,” Andrews added.

A defense official noted the U.S. government could likely still be in custody of the aircraft when the newest NDAA is passed.

“After aircraft production of F-35 jets are complete, the U.S. government maintains custody of the aircraft until custody is transferred to the partner. This normally occurs after the lengthy process of foreign partner training is complete in about one to two years,” the official told VOA.

Turkey is a NATO ally and has been an international participant with the U.S.-made F-35 program since 2002.
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Laura was barely 18 when a palm reader told her she could make $180 a month working in beetroot farms in Russia — an attractive sum for a girl struggling to make a living in the town of Drochia, in Moldova’s impoverished north.

That she had no passport, the fortune teller said, was not a problem. Her future employers would help her cross the border.

“They gave me a [fake] birth certificate stating I was 14,” Laura, who declined to give her real name, told Reuters in an interview.

That was enough to get her through border controls as she traveled by bus with a smuggler posing as one of her parents.

It was the beginning of a long tale of exploitation for Laura — one of many such stories in Moldova in eastern Europe, which aims to become the first country in the world to pilot blockchain to tackle decades of widespread human trafficking.

Trafficking generates illegal profits of $150 billion a year globally, with about 40 million people estimated to be trapped as modern-day slaves — mostly women and girls — in forced labor and forced marriages, according to leading anti-slavery groups.

The digital tool behind the cryptocurrency bitcoin is increasingly being tested for social causes, from Coca-Cola creating a workers’ registry to fight forced labor to tracking supply chains, such as cobalt which is often mined by children.

Moldova has one of the highest rates of human trafficking in Europe as widespread poverty and unemployment drive many young people, mostly women, to look for work overseas, according to the United Nations migration agency (IOM).

Due to the hidden nature of trafficking and the stigma attached, it is unknown how many people in the former Soviet country have been trafficked abroad but IOM has helped some 3,400 victims — 10 percent of whom were children — since 2001.

In Russia, Laura was forced to toil long hours, beaten and never paid. After ending up in hospital, she was rescued by a doctor, only to be trafficked again a few years later when an abusive partner sold her into prostitution.

She now lives with her daughter in a rehabilitation center in the northern village of Palaria with help from the charity CCF Moldova.

“I had a lot of suffering,” the 36-year-old said. “I am very afraid of being sold again, afraid about my child.”

​Scans and bribes

Moldova plans to launch a pilot of its digital identity project this year, working with the Brooklyn-based software company ConsenSys, which won a U.N. competition in March to design an identity system to combat child trafficking.

Undocumented children are easy prey for traffickers using fake documents to transport them across borders to work in brothels or to sell their organs, experts say.

More than 40,000 Moldovan children have been left behind by parents who have migrated abroad for work, often with little supervision, according to IOM.

“A lot of children are staying just with their grandfathers or grandmas, spending [more] time in the streets,” said Lilian Levandovschi, head of Moldova’s anti-trafficking police unit.

Moldova, with a population of 3.5 million, is among the poorest countries in Europe with an average monthly disposable income of 2,250 Moldovan Leu ($135), government data shows.

ConsenSys aims to create a secure, digital identity on a blockchain — or decentralized digital ledger shared by a network of computers — for Moldovan children, linking their personal identities with other family members.

Moldova has strengthened its anti-trafficking laws since Laura’s ordeal and children now need to carry a passport and be accompanied by a parent, or an adult carrying a letter of permission signed by a guardian, to exit the country.

With the blockchain system, children attempting to cross the border would be asked to scan their eyes or fingerprints.

A phone alert would notify their legal guardians, requiring at least two to approve the crossing, said Robert Greenfield who is managing the ConsenSys project.

Any attempt to take a child abroad without their guardians’ permission would be permanently recorded on the database, which would detect patterns of behavior to help catch traffickers and could be used as evidence in court.

“Nobody can bribe someone to delete that information,” said Mariana Dahan, co-founder of World Identity Network (WIN), an initiative promoting digital identities and a partner in the blockchain competition.

Corruption and official complicity in trafficking are significant problems in Moldova, according to the U.S. State Department, which last year downgraded it to Tier 2 in a watchlist of those not doing enough to fight modern day slavery.

Moldova is eager to prove that it is taking action, as a further demotion could block access to U.S. aid and loans.

​Tricked

Many details have yet to be agreed before the blockchain project starts, including funding, populations targeted, the type of biometrical data collected, and where it will be stored.

But the scheme is facing resistance from some anti-trafficking groups who say it will not help the majority of victims — children trafficked within Moldova’s borders and adults who are tricked when they travel abroad seeking work.

“As long as we don’t have job opportunities … trafficking will still remain a problem for Moldova,” said IOM’s Irina Arap.

Minors made up less than 20 percent of 249 domestic and international trafficking victims identified in 2017, said Ecaterina Berejan, head of Moldova’s anti-trafficking agency.

“For Moldova, this is not a very big problem,” she said, referring to cross-border child trafficking, adding that child victims may travel with valid documents as their families are in cahoots with traffickers in some cases.

But supporters of the blockchain initiative say low official trafficking figures do not account for undetected cases, and they have a duty to attempt to stay ahead of the criminals.

“Many times, authorities are late in using latest technologies,” said Mihail Beregoi, state secretary for Moldova’s internal affairs ministry. “Usually organized crime uses them first and more successfully. … Any effort [to] secure at least one child is already worth trying.”
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Christine Lagarde, the head of the International Monetary Fund, welcomed on Tuesday the adoption by Ukraine’s parliament of a law to create an anti-corruption court, but said lawmakers needed to amend it to guarantee the court’s effectiveness.

Creating an independent and trustworthy court dedicated to handling corruption cases is one of the key conditions for Ukraine to receive further funding under its $17.5 billion aid-for-reforms program from the IMF.

Earlier in June, parliament passed the law after months of delay, but the draft contained an amendment that activists said would undermine the reform by allowing appeals on existing cases to be handled by the current courts system.

In the Fund’s first direct comments on the law, Lagarde said she had spoken with President Petro Poroshenko and said she was encouraged by the adoption of the legislation.

“We agreed that it is now important for parliament to quickly approve … the necessary amendments to restore the requirement that the HACC (anti-corruption court) will adjudicate all cases under its jurisdiction,” she said in a statement.

The law is meant to ring-fence court decisions from political pressure or bribery in Ukraine, where entrenched corruption remains a deterrent to foreign investors and knocks two percentage points off Ukraine’s economic growth each year, according to the IMF.

Establishing the court, adjusting gas prices and honouring budget commitments are key conditions to unlock the next loan tranche under the IMF program, which expires next year.

Lagarde said she and Poroshenko had “also agreed to work closely together, including with the government, toward the timely implementation of this and other actions, notably related to gas prices and the budget.”
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Chancellor Angela Merkel coolly rebuffed U.S. President Donald Trump’s assertion that migrants were behind a surge in crime in Germany, pointing to statistics that showed crime was in fact down.

“My answer is that the interior minister presented the crime statistics a short while ago and they speak for themselves,” Merkel told a news conference with French President Emmanuel Macron when asked about a recent flurry of tweets from Trump.

“We are seeing a slight positive development. We must always do more to fight criminiality. But they were very encouraging numbers,” she added.

Statistics published last month showed that overall crime fell 9.6 percent in Germany in 2017.

A government-sponsored study published in January showed that violent crime had risen about 10 percent in 2015 and 2016, attributing more than 90 percent of the rise to young male asylum seekers.

Merkel has faced opposition at home for a decision in 2015 to open Germany’s borders to hundreds of thousands of migrants, mostly Middle Eastern asylum seekers who crossed by sea from Turkey to Greece and overland through the Balkans. That route has since been closed under a 2016 deal Turkey-EU deal.

In a tweet on Monday, Trump said that the people of Germany were turning against their leadership because of loose migration policies.

“Crime is way up. Big mistake made all over Europe in allowing millions of people in who have so strongly and violently changed their culture,” Trump said.

He followed that up with a tweet on Tuesday that said: “Crime in Germany is up 10% plus [officials do not want to report these crimes] since migrants were accepted. Others countries are even worse. Be smart America!”

His tweets come amid a storm of criticism from Democrats and some Republicans for his administration’s policy of detaining immigrant children separated from their parents at the U.S.-Mexico border.

European Commission President Jean-Claude Juncker said it was “not the American president’s role to speculate —  as he did yesterday — that the German people would march towards the chancellery to remove Mrs. Merkel.”

“Mr. Trump may govern the USA, he doesn’t govern Europe,” Juncker added.
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Italy’s new right-wing interior minister Matteo Salvini said his department has to look into “the Roma question” in Italy — a comment the opposition said reminds them of Italian fascism.

Salvini said Monday he wants to take a census of Italy’s Roma population.

“Unfortunately, we will have to keep the Italian Roma because we can’t expel them,” Salvini told Telelombardia television.

Center-left politicians immediately jumped on Salvini’s comments, likening it to ethnic cleansing.

“You can work for security and respect for rules without becoming fascistic,” lawmaker Ettore Rosato tweeted. “The announced census of Roma is vulgar and demagogical.”

But Salvini said he wants to help the Roma, an itinerant ethnic group. He said he wants to know who they are and where they live, and protect Roma children, whose parents he said did not want them to integrate into society.

“We are aiming primarily to care for the children who aren’t allowed to go to school regularly because they prefer to introduce them to a life of crime,” he said.

The interior minister said he has no desire to take fingerprints of the Roma or keep index cards of individuals. He also said he wants to see how European Union funds earmarked to help the Roma are spent.

Many Roma live in camps on the outskirts of Italian cities. They complain of lifelong discrimination, being denied job and educational opportunities.

But officials say many Roma are responsible for petty crimes, such as pickpocketing and theft.

Salvini’s comments about the Roma came a week after Italy refused to let a shipload of migrants dock at an Italian port. Spain gave permission for the ship to dock in its country Sunday.
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France’s finance minister promised to cut red tape on companies, open up more financing for them and create incentives for employee profit-sharing under a new bill presented on Monday.

The proposed law is part of President Emmanuel Macron’s pro-business reform drive that has already eased labour laws and cut companies’ and entrepreneurs’ taxes.

“The law’s ultimate objective is more growth and the creation of a new French economic growth model,” Finance Minister Bruno Le Maire told reporters.

Le Maire said that by 2025 the overhaul of French corporate law was expected to boost overall gross domestic product by one percent over the long term.

The new law aims to address one long-standing complaint from business owners about a complex system that imposes new charges in multiple stages as companies increase their workforce.

The bill would simplify the system, Le Maire said, by halving the number of those stages to three — bringing in new charges and obligations when a company has 11, 50 and then 250 employees.

It would also make it easier, cheaper and faster to register a company, giving entrepreneurs a single online platform to replace the current round of seven administrative bodies.

Liquidation of insolvent companies will be sped up so business owners can move on and bankruptcy law will give more power to creditors who have a stake in seeing the firm survive, the minister added.

The government aims to boost the more than 220 billion euros French people currently hold in long-term retirement savings, which it hopes will make more funds available to be invested in companies’ capital.

To do that, employees’ voluntary contributions will largely be made tax-deductible for all types of savings products and they will be able to transfer savings from one money manager to another at no cost, potentially boosting competition, according to a statement on the bill.

The government aims to make profit-sharing much more common in small companies by scrapping charges employers currently have to make on payouts to employees.

Largely because of that measure, the new law is expected to cost the government 1.2 billion euros annually, which Le Maire said would be paid for by planned cuts in subsidies to companies.

The law also sets the stage for several large privatizations with the proceeds already earmarked for a new 10 billion euro innovation fund.

It will in particular lift legal restraints on selling down stakes in airport operator ADP and energy group Engie while allowing the national lottery FDA to be privatized.

While some left-wing and far-right politicians have said the sales amounted to selling the family jewels, Macron’s party has a sufficiently large parliamentary majority to pass the bill with little trouble early next year.
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The remains of fascist dictator Francisco Franco could soon be removed from a state-funded mausoleum under a plan by Spain’s new socialist government to transform the monument into a place to remember the civil war rather than glorify the dictatorship.

This would be the latest of a raft of high-profile measures launched by Spain’s new Prime Minister Pedro Sanchez to cement his power and lure left-wing voters ahead of a general election due by mid-2020.

Sanchez, who toppled his conservative predecessor Mariano Rajoy in a confidence vote last month, controls less than a quarter of the seats in parliament.

“The decision about exhuming Franco’s remains is quite clear,” Oscar Puente, a senior member of the socialist party who is close to Sanchez, told a news conference.

The civil war still casts a shadow over the country nearly eight decades after its end. Lack of accountability for the war has left wounds unhealed, and pressure has grown to turn the site into a memorial honoring those who died on both sides.

Puente said the government’s plans were to transform the state-funded Valley of the Fallen mausoleum into “a place of recognition and memory of all Spaniards.”

The 150-meter cross of the monument, built by prisoners of war, towers over the Guadarrama Sierra, a mountain range just outside Madrid.

Opened by Franco himself in 1959, the Valley houses a Catholic basilica set into a hillside, where the founder of Spain’s fascist Falange party, Jose Antonio Primo de Rivera, is also interred. It has long been a site of pilgrimage for far-right groups in Spain.

The conservative People’s Party has opposed attempts to exhume Franco’s body when they were in power, saying it would only stir up painful memories more than four decades after his death and nearly 80 years after the end of the war.

The Spanish parliament, however, passed a motion last year to remove Franco’s remains as well as those of tens of thousands of other people buried at the mausoleum.

Many of those interred there fought for the losing Republican side and were moved to the monument under Franco’s dictatorship without their families’ permission.
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Discarded life jackets on a beach in Greece inspired an artwork by a teenager who wanted to learn more about the refugee crisis. Seventeen-year-old Achilleas Souras hopes his project, called SOS – Save Our Souls, inspires others to learn more about their plight. Mike O’Sullivan reports from Los Angeles.
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The International Federation of Red Cross and Red Crescent Societies (IFRC) says thousands of migrants trekking through the Balkans are “in desperate need of basic humanitarian services and support.”

IFRC said Monday, “More than 5,600 people have reached Bosnia and Herzegovina since the beginning of January, compared with just 754 across the whole of 2017.”

“We are concerned that people are not receiving the assistance they need,” said Simon Missiri, IFRC regional director for Europe. “People are keen to keep moving and are reluctant to access state services for fear of being detained.”

Missiri said, “Red Cross Societies in the Balkans are doing what they can to reach and help people migrating through their territories, but the scale and complexity of this operation is such that more assistance is needed.”

The Red Cross said 100 of its volunteers in northwestern Bosnia and Herzegovina are serving hundreds of hot meals everyday at an abandoned university campus where they are also distributing sleeping bags, clothes and hygiene kits and are providing medical assistance to people who have been “sleeping in the open.”

Bosnia and Herzegovina, the statement says, “is the most mine contaminated country in Europe” and “some mine fields are still active in the areas where people are trying to cross the border.” Red Cross volunteers are distributing flyers to warn the migrants about the danger.

“These people are extremely vulnerable,” said Missouri. “Regardless of their migration status, they, like everyone, should be able to access basic services, and should be protected from harm.”

 
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German authorities have arrested the chief executive of Volkswagen’s Audi division, Rupert Stadler.

He was arrested Monday as part of an investigation about cars Audi sold in Europe that are believed to have been equipped with software that turned emissions controls off during regular driving.

Last week, Munich prosecutors raided Stadler’s home on suspicion of fraud and improprieties of documents.

Volkswagen Audi said “the presumption of innocence remains in place for Mr. Stadler.”

Volkswagen has pleaded guilty to emissions test cheating in the United States.

CEO Martin Winterkorn was charged in the United States, but he will unlikely face those charges since Germany does not extradite its nationals to countries outside the European Union.
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