US Auto Parts Firms Urge NAFTA Compromise to Cover Engineering Work

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A trade group representing U.S. auto parts makers on Monday urged the Trump administration to adopt NAFTA automotive rules that cover research, engineering, design and software development work as part of North American regional value content goals.

The proposal from the Motor and Equipment Manufacturers Association (MEMA) was sent to U.S. Trade Representative Robert Lighthizer as a sixth round of negotiations to revise the North American Free Trade Agreement began in Montreal.

U.S. demands for sweeping changes to automotive content rules are among the most contentious issues in the NAFTA talks, including a requirement that half the value of all North American vehicles come from the United States and a far higher content requirement of 85 percent from North America.

Canada and Mexico have said the U.S. targets are unworkable, but have not responded with counter-proposals.

They are expected to do so at the Montreal talks ending Jan 29. Lack of progress in bridging the gap on autos could jeopardize the negotiations and increase the chances that President Donald Trump follows through on his threat to seek a U.S. withdrawal from NAFTA.

The U.S. auto industry, including MEMA and trade groups representing Detroit and foreign-brand automakers, have largely sided with Canada and Mexico in arguing that the U.S. proposals would hurt the industry’s competitiveness.

The MEMA letter to Lighthizer makes no mention of the proposed U.S. and regional content targets, and focuses instead on recommendations that its members believe will help retain and grow automotive jobs in the United States.

“We think it lines up very well with the president’s initiatives and his stated goals for NAFTA and other free trade agreements,” Ann Wilson, MEMA’s senior vice president of government affairs, told Reuters. “What we have been trying to do is find other ways of getting to the president’s objectives without getting to a 50 percent domestic requirement.”

Counting the well-paid engineering, design, research and software development as part of a vehicle’s value content would provide an incentive for companies to retain jobs doing this work now largely done in the United States.

The proposal also urges the Trump administration to preserve “tariff-shifting” for automotive parts as a means to retain the higher value-added work being done on sophisticated automotive electronics and other systems.

Currently, companies that import components and materials into North America and convert them into automotive parts can “shift,” or apply, NAFTA tariff-free benefits to such inputs.

For example, off-the-shelf electronics parts from Asia such as lidar and radar units, cameras, sensors and circuit boards currently gain this benefit as they are assembled into vehicle crash avoidance systems. Steel tubing converted to fuel injectors also can gain such benefits.

But the current USTR autos proposal would require that virtually all components be subject to a “tracing list” to verify their North American origin so they can count toward regional value targets.

The tracing list would be expanded to steel, glass, plastic resins and other materials, under the proposal.

Industry executives have argued that these requirements are likely to push auto and parts companies to source more products outside the region and simply pay the low 2.5 percent U.S. tariffs on many parts.

MEMA also urged Lighthizer to negotiate an agreement that provides incentives to U.S. companies to train and expand the U.S. workforce, as parts companies struggle to fill open positions amid rising retirements. The group also urged that aftermarket parts be subject to the same NAFTA rules as original equipment parts.

China Invites Latin America to Take Part in ‘One Belt, One Road’

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China invited Latin American and Caribbean countries to join its “One Belt, One Road” initiative on Monday, as part of an agreement to deepen economic and political cooperation in a region where U.S. influence is historically strong.

Chinese Foreign Minister Wang Yi said the region was a natural fit for the initiative, which China has leveraged to deepen economic and financial cooperation with developing nations.

“China will always stay committed to the path of peaceful development and the win-win strategy of opening up and stands ready to share development dividends with all countries,” Wang said at a meeting between China and 33 members of the Community of Latin American and Caribbean States (CELAC).

Representatives from China and CELAC signed a broad agreement to expand ties in the second time China has met with CELAC – a bloc formed in Venezuela in 2011 that does not include the United States or Canada.

Though it had few specific details, the agreement is part of an evolving and more aggressive Chinese foreign policy in Latin America as the United States, under President Donald Trump, has taken a more protectionist stance.

The “One Belt, One Road” initiative, proposed in 2013 by Chinese President Xi Jinping, promotes expanding links between Asia, Africa and Europe, with billions of dollars in infrastructure investment.

Wang emphasized projects to improve connectivity between land and sea, and cited the need to jointly build “logistic, electricity and information pathways.”

The so-called Santiago declaration, signed by China and CELAC delegates, also calls for bolstering trade and taking action on climate change.

Chile Foreign Minister Heraldo Munoz, who has criticized Trump in the past, said the agreement marked an “historic” new era of dialogue between the region and China.

“China said something that is very important, that it wants to be our must trustworthy partner in Latin America and the Caribbean and we greatly value that,” said Munoz. “This meeting represents a categoric repudiation of protectionism and unilateralism.”

China has sought a bigger role overseas since Trump was elected, presenting its Regional Comprehensive Economic Partnership trade agreement as an alternative to the Trans-Pacific Partnership, which the United States has abandoned.

The country is already testing U.S. dominance in Latin America, offering the region $250 billion in investment over the next decade. It is the top trading partner of many countries in the region, including Brazil, Chile and Argentina.

Still, Wang played down the idea of a race for influence.

“It has nothing to do with geopolitical competition. It follows the principle of achieving shared growth through discussion and collaboration,” Wang said in his remarks. “It is nothing like a zero sum game.”

In recent years, Chinese companies have moved away from merely buying Latin American raw materials and are diversifying into sectors such as auto manufacturing, e-commerce and even

technology businesses such as car-hailing services.

“Our relations with China are very broad, this (CELAC) is one more pathway for Brazil to work with China. Together we identified more areas of cooperation,” said Brazil’s Vice Foreign Minister Marcos Galvao.

Social Media Has Mixed Effect on Democracies, Says Facebook

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Facebook took a hard look in the mirror with a post Monday questioning the impact of social media on democracies worldwide and saying it has a “moral duty” to understand how it is being used.

Over the past 18 months, the company has faced growing criticism for its limited understanding of how misinformation campaigns and governments are using its service to suppress democracy and make people afraid to speak out.

“I wish I could guarantee that the positives are destined to outweigh the negatives, but I can’t,” wrote Samidh Chakrabarti, Facebook’s product manager of civic engagement.

Since the 2016 U.S. presidential election, Facebook has been looking more critically at how it is being used. Some of what it found raises questions about company’s long-standing position that social media is a force for good in people’s lives.

In December, in a post titled “Is Spending Time on Social Media Bad for Us?” the company wrote about its potential negative effects on people.

The self-criticism campaign extended to Facebook CEO Mark Zuckerberg’s personal goals. Each year he publicly resolves to reach one personal goal, which in the past included learning Mandarin, reading more books and running a mile every day.

This year, Zuckerberg said his goal is to fix some of the tough issues facing Facebook, including “defending against interference by nation states.”

Foreign Interference

During the 2016 U.S. election, Russian-based organizations were able to reach 126 million people in the U.S. with 80,000 posts, essentially using social media as “an information weapon,” wrote Chakrabarti. The company made a series of changes to make politics on its site more transparent, he wrote.

False News

Facebook is trying to combat misinformation campaigns by making it easier to report fake news and to provide more context to the news sources people see on Facebook.

“Even with these countermeasures, the battle will never end,” Chakrabarti wrote.

One of the harder problems to tackle, he said, are so-called “filter bubbles,” people only seeing news and opinion pieces from one point of view. Critics say some social media sites show people only stories they are likely to agree with, which polarizes public opinion.

One obvious solution – showing people the opposite point of view – doesn’t necessarily work, he wrote. Seeing contrarian articles makes people dig in even more to their point of view and create more polarizations, according to many social scientists, Chakrabarti said.

A different approach is showing people additional articles related to the one they are reading.

Reaction to Facebook’s introspection was mixed with some praising the company for looking at its blind spots. But not everyone applauded.

“Facebook is seriously asking this question years too late,” tweeted Jillian York, director for international freedom of expression for the Electronic Frontier Foundation.

EU Mulls New Link Between Budget, Civic Rights

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The EU’s justice commissioner is working on a proposal that could oblige member states such as Poland, which has clashed with Brussels over reforms to its courts, to pass tests on the independence of their judicial systems before receiving funding.

Vera Jourova said there was agreement within the executive European Commission to work on ideas to encourage strong judiciaries in planning for the new budget from 2021.

“One way could be to insist that independent justice systems are necessary for effective control of the use of EU funds,” she said. “I would like to propose that link.”

Seven-year budget plan

A Commission spokesman said on Monday the work by Jourova was part of broader preparations for a new, seven-year EU budget plan, due to be published in May, and was in line with policy outlines the EU executive has put forward since last year.

The remarks by Jourova, the Commission’s Czech member, come as the EU executive is challenging Poland, a major recipient of Union funds, to amend judicial reforms which Brussels says will hurt democracy and its oversight of EU trading rules.

Facing the prospect of filling a hole left in the budget by Britain’s exit from the EU, and irritated by Poland and other governments in the ex-communist east on a range of issues, some wealthy Western governments have pushed for a clearer link between getting subsidies and abiding by EU standards.

Warning for Poland

The German commissioner in charge of the budget, Guenther Oettinger, warned Poland this month that it could lose some of its 7 billion euros annual funding if it fails to heed Brussels’ complaints about undermining the rule of law.

More broadly, Jourova is also hoping for a review of EU policy on judicial standards in the second half of this year. EU officials say that might, for example, include regular reviews of the performance of national justice systems, along the lines of existing biennial reviews of government economic policies, which are meant to promote “convergence” toward EU-wide goals.

‘Cohesion’ policy

As a former national official handling the regional funding that is a key part of EU efforts to bring poor regions closer to the prosperity of others, Jourova stressed that she saw any new rules applying to all EU funding for all states, not just to so-called “cohesion” policy. She also said it should not be seen as a punitive measure but designed to encourage good practice.

She also said discussion on the proposals could be used to help simplify some of the hurdles to applying for EU funds.

Any Commission proposal seen as too radical by governments risk being killed off by member states. 



Amazon Opens Store With No Cashiers, Lines or Registers

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No cashiers, no lines, no registers — this is how Amazon sees the future of in-store shopping.

The online retailer opened its Amazon Go concept store to the public Monday, selling milk, potato chips and other items typically found at a convenience shop. Amazon employees have been testing the store, which is at the bottom floor of the company’s Seattle headquarters, for about a year.

The public opening is another sign that Amazon is serious about expanding its physical presence. It has opened more than a dozen bookstores, taken over space in some Kohl’s department stores and bought Whole Foods last year, giving it 470 grocery stores.

But Amazon Go is unlike its other stores. Shoppers enter by scanning the Amazon Go smartphone app at a turnstile. When they pull an item of the shelf, it’s added to their virtual cart. If the item is placed back on the shelf, it is removed from the virtual cart. Shoppers are charged when they leave the store.

The company says it uses computer vision, machine learning algorithms and sensors to figure out what people are grabbing off its store shelves.

Amazon says families can shop together with just one phone scanning everyone in. Anything they grab from the shelf will also be added to the tab of the person who signed them in. But don’t help out strangers: Amazon warns that grabbing an item from the shelf for someone else means you’ll be charged for it.

At about 1,800 square feet, the store will also sell ready-to-eat breakfasts, lunches and dinners. Items from the Whole Foods 365 brand are also stocked, such as cookies, popcorn and dried fruit.

The company had announced the Amazon Go store in December 2016 and said it would open by early 2017, but it delayed the debut while it worked on the technology and company employees tested it out.

IMF: Global Economic Growth Getting Stronger, Risks Remain

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The International Monetary Fund says the global economy grew at a faster than expected 3.7 percent pace in 2017 and will do better this year and next.

IMF Managing Director Christine Lagarde called predictions of strengthening growth “very welcome news.” She spoke Monday in Davos, Switzerland, at the annual World Economic Forum.

IMF experts say 120 nations, representing three-quarters of the global economy, saw growth last year. IMF experts said tax cuts in the United States will have a positive but “short term” impact on the economy.

Lagarde urged political and economic leaders to take advantage of good times to make reforms that will soften the impact of the next, inevitable, economic downturn.

She said there is “significant” uncertainty in the year ahead, where a long period of low interest rates may have inflated the value of stocks and other assets to unsustainable levels. She also says a rise in debt levels is a concern.

Growth must be more inclusive, she added. She also said more efforts to retrain people displaced by automation, create opportunities for young people and bring more women into the labor force will all help.

Lagarde is only one of many leaders expected to speak at the Davos gathering. U.S. President Donald Trump is scheduled to address fellow heads of state and others later this week, but White House officials say Washington’s current political impasse that has shut down many normal functions of government make that trip “not very likely.”

Solar Industry on Edge as Trump Weighs Tariffs on Panels

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Some in the U.S. solar-power industry are hoping a decision this week by President Donald Trump doesn’t bring on an eclipse.

Companies that install solar-power systems for homeowners and utilities are bracing for Trump’s call on whether to slap tariffs on imported panels.

The solar business in the U.S. has boomed in recent years, driven by falling prices for panels, thanks in part to cheap imports. That has made solar power more competitive with electricity generated from coal and natural gas.

A green-technology research firm estimates that tariffs could cost up to 88,000 U.S. jobs related to installing solar-power systems.

On the other side are two U.S. subsidiaries of foreign companies that argue the domestic manufacturing of solar cells and modules has been decimated by a flood of imports, mostly from Chinese companies with operations throughout Asia.

The four members of the U.S. International Trade Commission – two Republicans and two Democrats – unanimously ruled in October that imported panels are hurting American manufacturers, although they differed on exactly how the U.S. should respond. Trump has until Friday to act on the agency’s recommendations for tariffs of up to 35 percent.

Trump has wide leeway – he can reject the recommendations, accept them, or go beyond them and impose tougher tariffs. Congress has no authority to review or veto his action. Countries harmed by his decision could appeal to the World Trade Organization.

The trade case grew out of a complaint by Suniva Inc., a Georgia-based subsidiary of a Chinese company, which declared bankruptcy last April. Suniva was joined by SolarWorld Americas, the U.S. subsidiary of a German company. Both blame their difficulties on a surge of cheap imports, mostly from Asia. Suniva wants higher tariffs than those recommended by the trade commission.

The U.S. Commerce Department imposed stiff anti-dumping duties on imported panels made from Chinese solar cells in 2012. Tim Brightbill, SolarWorld Americas’ lawyer, said Chinese companies have gotten around those sanctions by assembling panels from modules produced in other Asian countries such as Malaysia and Vietnam. That makes the current trade case even more important, he said.

“It is a global case. It addresses the global import surge,” Brightbill said. “We need the strongest possible remedies from President Trump to maintain solar manufacturing here in the United States.”

A consultant for SolarWorld said tariffs on imports could create at least 12,000 jobs and up to 45,000 depending on capacity growth, and that installer jobs would also increase.

While U.S. solar manufacturing has shriveled, installations – from home rooftops to utility-scale operations – have boomed. Installations have soared more than tenfold since 2010, with the biggest jump coming in 2016, after prices for solar panels collapsed.

The Solar Energy Industries Association, a trade group for U.S. installers, says tariffs would drive up the cost of installing solar-power systems, leading to a drop in demand.

“We are selling energy that can be created by wind, by natural gas, by hydro, by coal, by nukes. When you raise the price of what we are selling, we can’t compete,” said Abigail Ross Hopper, the group’s president.

Jim Petersen, CEO of PetersenDean, a California company that installs solar rooftop panels mostly for residential customers, once favored tariffs on imported panels, which he found to be of inferior quality. He has changed his mind.

Petersen said tariffs could stunt his business by raising the cost of a job, which ranges from $6,000 to $60,000 or more. He said he might be forced to lay off up to 25 percent of his 3,200 installers.

“This is bad for American jobs, bad for the consumer,” he said.

In the New Mexico desert, Albuquerque-based Affordable Solar is working on a $45 million solar farm to help power a massive new data center for Facebook. The company’s president, Kevin Bassalleck, said tariffs would hurt homegrown companies that make racks, tracking systems and electronics that are part of a power system. He said jobs at those companies are hard to outsource.

“If you ever set foot in a solar module assembly factory, most of what you see are robots. There are very few people,” he said. “But if go out on to any one of our project sites like the Facebook project, you would see a small army of people working and installing things.”

U.S. Sen. Martin Heinrich, a New Mexico Democrat and advocate for renewable energy, says his state could lose more than 1,500 jobs by 2020 if tariffs are imposed, and tariffs won’t revive U.S. solar manufacturing.

“The jobs that have been lost because of cheaper solar cells have already been lost,” Heinrich said in an interview. “These tariffs are then going to take the very rapidly growing, successful, good jobs that we have built in manufacturing of the other equipment, in installing, and reduce those jobs to a fraction of what they should be.”

The conventional wisdom is that Trump will impose sanctions. Developers anticipating tariffs began flooding foreign manufacturers with orders last fall, driving up prices.

Brightbill, the lawyer for SolarWorld Americas, sounded confident.

“This administration’s focus is on U.S. manufacturing and U.S. jobs and getting tough on China for the trade deficit,” he said, “so we think the administration’s goals are very well-aligned with saving U.S. solar manufacturing.”

Maldives Ex-Leader: Chinese Projects Akin to Land Grab

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The exiled former leader of the Maldives said Monday that this year’s presidential election could be the last chance to extricate his country from increasing Chinese influence, which he described as a land grab in the guise of investments in island development.


Mohamed Nasheed told reporters in Sri Lanka’s capital that current President Yameen Abdul Gayoom has opened the doors to Chinese investment without any regard for procedure or transparency.


“A large emerging power is busy buying up the Maldives,” Nasheed said, explaining that he was referring to China.


China is “buying up our lands, buying up our key infrastructure and effectively buying up our sovereignty,” he said.


China considers Maldives to be key cog in the Indian Ocean in its “One Belt One Road” project along ancient trade routes through the Indian Ocean and Central Asia. The initiative is Chinese President Xi Jinping’s signature project and envisages building ports, railways and roads to expand trade in a vast arc of countries across Asia, Africa and Europe.


Nasheed is disqualified from contesting the presidency this year due to a prison sentence. He is now living in exile in Britain after going there for medical treatment while in prison.


Nasheed said he is awaiting a decision from the U.N. Human Rights Committee, which he hopes will ask the Maldivian government to allow him to run in the election. His trial on terrorism charges and 13-year prison sentence in 2015 drew widespread international criticism for an alleged lack of due process.


The U.N. working group on arbitrary detention said Nasheed’s sentencing was unlawful.


Nasheed became the archipelago state’s first democratically elected president 10 years ago, ending a 30-year autocratic rule. However, he resigned in 2012 after public protests for ordering the arrest of a senior judge.


He lost the 2013 presidential election to Gayoom.


Maldives’ democratic gains have largely diminished under Gayoom’s presidency, with all of his potential election opponents either jailed or in exile. Nasheed says the opposition parties are in discussion to field a common candidate if he is unable to run.


“President Yameen wants a coronation; not an election. We won’t let that happen,” he said.


There was no immediate comment from the government.

US Tests Nuclear Power System to Sustain Astronauts on Mars

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Initial tests in Nevada on a compact nuclear power system designed to sustain a long-duration NASA human mission on the inhospitable surface of Mars have been successful and a full-power run is scheduled for March, officials said on Thursday.

National Aeronautics and Space Administration and U.S. Department of Energy officials, at a Las Vegas news conference, detailed the development of the nuclear fission system under NASA’s Kilopower project.

Months-long testing began in November at the energy department’s Nevada National Security Site, with an eye toward providing energy for future astronaut and robotic missions in space and on the surface of Mars, the moon or other solar system destinations.

A key hurdle for any long-term colony on the surface of a planet or moon, as opposed to NASA’s six short lunar surface visits from 1969 to 1972, is possessing a power source strong enough to sustain a base but small and light enough to allow for transport through space.

“Mars is a very difficult environment for power systems, with less sunlight than Earth or the moon, very cold nighttime temperatures, very interesting dust storms that can last weeks and months that engulf the entire planet,” said Steve Jurczyk, associate administrator of NASA’s Space Technology Mission Directorate.

“So Kilopower’s compact size and robustness allows us to deliver multiple units on a single lander to the surface that provides tens of kilowatts of power,” Jurczyk added.

Testing on components of the system, dubbed KRUSTY, has been “greatly successful — the models have predicted very well what has happened, and operations have gone smoothly,” said Dave Poston, chief reactor designer at the Los Alamos National Laboratory.

Officials said a full-power test will be conducted near the middle or end of March, a bit later than originally planned.

NASA’s prototype power system uses a uranium-235 reactor core roughly the size of a paper towel roll.

President Donald Trump in December signed a directive intended to pave the way for a return to the moon, with an eye toward an eventual Mars mission.

Lee Mason, NASA’s principal technologist for power and energy storage, said Mars has been the project’s main focus, noting that a human mission likely would require 40 to 50 kilowatts of power.

The technology could power habitats and life-support systems, enable astronauts to mine resources, recharge rovers and run processing equipment to transform resources such as ice on the planet into oxygen, water and fuel. It could also potentially augment electrically powered spacecraft propulsion systems on missions to the outer planets.