NAFTA Nations Plan Talks Progress Under Barrage of Trump Threats

Trade negotiators plan to take small steps forward in a second round of talks to rework the North American Free Trade Agreement (NAFTA) this weekend, trying to ignore daily threats from U.S. President Donald Trump

to tear it up if he does not get his way.

Trump has used Twitter, press conferences and speeches to attack NAFTA in recent days, a ploy Mexican and Canadian officials regard as a negotiating strategy to wring concessions, but which has heightened uncertainty over the accord.

“Hopefully we can renegotiate it, but if we can’t, we’ll terminate it and we’ll start all over again with a real deal,” Trump told cheering workers at a factory in Missouri on Wednesday, as Mexico’s foreign and trade ministers met their U.S. counterparts in Washington to keep relations on track.

Away from the diplomatic noise, trade experts from the three NAFTA nations hope to advance the revamp during the five days of talks in Mexico that start on Friday by working through areas of greater consensus before turning to trickier issues.

“We want to see positive signs of progress at the

negotiating tables,” said Moises Kalach, head of the

international negotiating arm of Mexico’s CCE business lobby, which is leading the private sector in the talks. “Hopefully we’ll get it, even if it doesn’t have to be stated publicly. Hopefully we’ll start getting closure on some issues.”

Overall, the Mexican round, which follows talks two weeks ago in Washington, is expected to define more clearly the priorities of each nation rather than yield major breakthroughs.

The emergence of detailed positions on the tougher points looks less likely in this round, officials said.

Kalach and one Mexican negotiator, who spoke on condition of anonymity, saw broad agreement between the NAFTA members on how to improve conditions for small businesses, as well as in salvaging elements of the Trans-Pacific Partnership (TPP) trade accord that Trump ditched after taking office.

Some agreement but hurdles remain

Some consensus was forged between the three countries when the TPP was finalized in 2015 on issues including the environment, anti-corruption, labor rules and digital trade.

More divisive issues that could enter the talks range from exploring the scope to raise NAFTA content requirements for autos to the contested U.S. demand to scrap the so-called Chapter 19 dispute settlement mechanism for resolving complaints about illegal subsidies and dumping, officials say.

A key plank of the U.S. strategy is how to reduce its trade deficit with Mexico, which has sent negotiators scrambling for creative ways to rebalance trade, Kalach said.

One hope is that Mexico’s incipient oil and gas sector opening will result in more imports and infrastructure investment from U.S. companies, some of which have already entered the market, such as Exxon Mobil Corp and Chevron Corp.

Folding that reform into NAFTA in a way that would make any attempt to unwind it politically costly for a future Mexican government would give U.S. and Canadian investors more security, Kalach and the Mexican negotiator said.

The risk the reform will stall has preoccupied officials in the region because the current front-runner for Mexico’s July 2018 presidential election, Andres Manuel Lopez Obrador, opposed the opening of the energy industry.

“The best thing [the United States and Canada] can do is protect NAFTA because this essentially protects their investments,” said Kalach.

Throwing words around

Trump has accused Mexico and Canada of being “very difficult”, and officials from both countries say his words come as little surprise given his confrontational negotiating style.

Still, Mexico’s government has touted a back-up plan, seeing a “high risk” that NAFTA could unravel.

Canada’s Prime Minister Justin Trudeau on Tuesday shrugged off the threats and Canadian officials close to the process said they remained fully focused on the talks.

“There are always going to be words thrown about here and there but … we will continue to work seriously and respectfully to improve NAFTA to benefit not just Canadians but our American and Mexican friends as well,” Trudeau said.

A spokeswoman for U.S. Trade Representative (USTR) Robert Lighthizer declined to comment directly on how Trump’s comments would affect the talks. However, trade experts say they are unlikely to foster a spirit of cooperation.

“I think his tweets and statements are just complicating what’s already a difficult negotiation,” said Wendy Cutler, a former deputy USTR and lead U.S. negotiator for the TPP. “I think it will embolden the naysayers in Canada and Mexico who don’t want to move in certain areas by telling the negotiators, ‘don’t move on these issues because the president has already said he probably won’t sign off on this deal’.”

Hosting

more

French Labor Reform Gives Firms Flexibility

The French government said on Thursday it would cap unfair dismissal payouts and give companies more flexibility to adapt pay and working hours to market conditions in a labor reform France’s biggest union said was disappointing.

The reform, President Emmanuel Macron’s first major policy step since his election in May, is also the first big test of his plans to reform the euro zone’s second-biggest economy.

For decades governments of the left and right have tried to reform France’s strict labor rules, but have always diluted them in the face of street protests.

The government said in a document presenting the reform that it will make it possible to adapt work time, remuneration and workplace mobility to market conditions based on agreements reached by simplified majority between employers and workers.

Workers compensation for dismissal judged in a labor court to be unfair would be set at three months of wages for two-years in the company with the amount rising progressively depending on how long a worker was with the firm, unions said.

However, normal severance pay would be increased from 20 percent of wages for each year in a company to 25 percent, Liberation reported.

The government consulted with unions for weeks as it drafted the reform, and only the hardline CGT union, the country’s second biggest, said from the start that it would hold a protest, set for Sept. 12.

France’s biggest union, the reformist CFDT, said that it would not call a strike against the reform but described the reform as a missed opportunity to improve labor relations.

“CFDT disappointed,” the union’s leader Laurent Berger told reporters after a meeting with the government, but he added: “Taking to the streets is not the only mode of action for unions.”

Hosting

more

Trump’s Immigrant Crackdown Could Slow Houston Rebuilding

In the coming weeks, as Houston turns its attention to rebuilding areas devastated by Tropical Storm Harvey, people like Jay De Leon are likely to play an outsized role — if they stay around.

De Leon, 47, owns a small construction business in Houston, and he and his 10 employees do exactly the kind of demolition and refurbishing the city will need. But like a large number of construction workers in Texas, De Leon and most of his workers live in the United States illegally, and that could make things complicated.

The Pew Research Center estimated last year that 28 percent of Texas’s construction workforce is undocumented, while other studies have put the number as high as 50 percent. Construction employed 23 percent of working undocumented adults in Texas at the end of 2014, higher than any other sector, according to the Migration Policy Institute.

Undocumented immigrants nervous

However, undocumented immigrants are growing increasingly nervous in Texas because of an immigration crackdown by the Trump administration that has cast a wide net.

In addition, a new Texas law that would have taken effect later this week bars cities from embracing so-called sanctuary policies, where they offer safe harbor to illegal immigrants, and allows local police to inquire about a person’s immigration status. A federal judge Wednesday temporarily blocked most of the law from taking effect.

De Leon, who has lived in the country for 20 years and has two citizen children, says the changes have spooked the city’s migrant workforce. In recent weeks, he said, one of his employees left the state and another returned to Mexico. Both feared that if they stayed they risked arrest.

Departing workers, he says, pose a problem for Houston in the wake of Harvey, which has caused flood damage to commercial buildings, houses, roads and bridges expected to run into tens of billions of dollars.

“The situation that Houston is going through now with the hurricane is going to be the trial by fire for the Republicans and the governor that approved these radical laws,” De Leon said. “They will need our migrant labor to rebuild the city. I believe that without us it will be impossible.”

Undocumented workers perform a wide range of construction jobs, from framing and dry-walling to plumbing and wiring.

Shortage of U.S. trained workers

Stan Marek, chief executive of Marek Construction in Texas, said his company doesn’t hire undocumented immigrants and has long had difficulty finding enough trained U.S. workers.

“It’s a crisis,” Marek said. “We are looking at several thousand homes that have flood damage. There is no way the existing (legal) workforce can make a dent in it.”

Marek would like to see the federal government grant emergency work authorization for undocumented workers in the rebuilding effort, he said. Otherwise, those immigrants are likely to be hired by firms that do not pay payroll taxes or provide benefits like workers’ compensation and legally mandated overtime.

It isn’t yet possible to estimate how many construction jobs will be added in Texas as it rebuilds, but in the 12 months after Hurricane Katrina hit in 2005, Louisiana added 14,800 jobs in the sector, U.S. government data shows.

About 25 percent of the construction workers involved in the cleanup of New Orleans were undocumented, according to a study by researchers at Tulane and UC Berkeley universities. Those without papers were “especially at risk of exploitation,” the study found.

Worker exodus

The labor shortages are likely to grow worse, many builders warn. Earlier this year, a group of Hispanic contractors sent a letter to Texas Governor Greg Abbott warning that the pending ban on sanctuary city policies would make it “difficult to find and retain experienced workers.”

Javier Arrias, chairman of the Hispanic Contractors Association de Tejas and one of the letter’s signers, told Reuters that “many construction workers are already moving to other states.”

Abbott’s office did not respond to a request for comment about the role undocumented workers might play in the recovery.

Elizabeth Theiss, president of Houston-based anti-immigration group Stop the Magnet, sees another option besides looking to workers in the country illegally. She says the rebuilding effort should be used to help train U.S. veterans and other citizens who need jobs.

Theiss acknowledged that reconstruction might proceed more slowly, at least initially, if immigrants without work documents are not part of the effort, but she noted that rebuilding would be slow under any scenario.

Personal hardships

Whatever role undocumented people play in rebuilding Houston, they could face hardships rebuilding their own lives.

While the Federal Emergency Management Agency provides emergency food, water and medicine to anyone, regardless of immigration status, cash assistance and other longer term aid is only available to citizens and immigrants in households where at least one family member has legal status.

Immigrant advocates are launching private fundraising drives to help fill the void.

“It is deeply tragic and un-American that so many of those working men and women who will be rebuilding Houston and the rest of the state will be doing so while facing tragedy in their own lives,” said Jose Garza, executive director of the Workers Defense Project.

De Leon said his family was lucky and did not suffer flood damage. He is now busy rounding up supplies for immigrant families stuck at shelters who are afraid to seek out more help from authorities.

In the end, he says, President Donald Trump has to know “it’s going to be impossible to rebuild Houston without the labor force of immigrants. It is illogical, what he says with his words and what really has to happen.”

Hosting

more

Change in US Policy Makes It Harder to Rebuild for Future Floods

Two weeks before Harvey’s floodwaters engulfed much of Houston, President Donald Trump quietly rolled back an order by his predecessor that would have made it easier for storm-ravaged communities to use federal emergency aid to rebuild bridges, roads and other structures so they can better withstand future disasters.

Now, with much of the nation’s fourth-largest city under water, Trump’s move has new resonance. Critics note the president’s order could force Houston and other cities to rebuild hospitals and highways in the same way and in the same flood-prone areas.

“Rebuilding while ignoring future flood events is like treating someone for lung cancer and then giving him a carton of cigarettes on the way out the door,” said Michael Gerrard, a professor of environmental and climate change law at Columbia University. “If you’re going to rebuild after a bad event, you don’t want to expose yourself to the same thing all over again.”

Trump’s action is one of several ways the president, who has called climate change a hoax, has tried to wipe away former President Barack Obama’s efforts to make the United States more resilient to threats posed by the changing climate.

Consideration of climate predictions

The order Trump revoked would have permitted the rebuilding to take into account climate scientists’ predictions of stronger storms and more frequent flooding.

Bridges and highways, for example, could be rebuilt higher, or with better drainage. The foundation of a new fire station or hospital might be elevated an extra 3 feet (1 meter).

While scientists caution against blaming specific weather events like Harvey on climate change, warmer air and warmer water linked to global warming have long been projected to make such storms wetter and more intense. Houston, for example, has experienced three floods in three years that statistically were once considered 1-in-500-year events.

The government was still in the process of implementing Obama’s 2015 order when it was rescinded. That means the old standard — rebuilding storm-ravaged facilities in the same way they had been built before — is still in place.

Trump revoked Obama’s order as part of an executive order of his own that he touted at an August 15 news conference at Trump Tower. That news conference was supposed to focus on infrastructure, but it was dominated by Trump’s comments on the previous weekend’s violence in Charlottesville, Virginia.

Trump didn’t specifically mention the revocation, but he said he was making the federal permitting process for the construction of transportation and other infrastructure projects faster and more cost-efficient without harming the environment.

“It’s going to be quick, it’s going to be a very streamlined process,” Trump said.

Asked about the revocation, the White House said in a statement that Obama’s order didn’t consider potential impacts on the economy and was “applied broadly to the whole country, leaving little room or flexibility for designers to exercise professional judgment or incorporate the particular context” of a project’s location.

Construction curbs

Obama’s now-defunct order also revamped Federal Flood Risk Management Standards, calling for tighter restrictions on new construction in flood-prone areas. Republicans, including Senator John Cornyn of Texas, opposed the measure, saying it would impede land development and economic growth.

Revoking that order was only the latest step by Trump to undo Obama’s actions on climate change.

In March, Trump rescinded a 2013 order that directed federal agencies to encourage states and local communities to build new infrastructure and facilities “smarter and stronger” in anticipation of more frequent extreme weather.

Trump revoked a 2015 Obama memo directing agencies developing national security policies to consider the potential impact of climate change.

The president also disbanded two advisory groups created by Obama: the interagency Council on Climate Preparedness and Resilience and the State, Local and Tribal Leaders Task Force on Climate Preparedness and Resilience.

Obama’s 2015 order was prompted in part by concerns raised by Colorado Governor John Hickenlooper after severe flooding in his state two years earlier. Hickenlooper was dismayed to learn that federal disaster aid rules were preventing state officials from rebuilding “better and smarter than what we had built before.”

The “requirements essentially said you had to build it back exactly the way it was, that you couldn’t take into consideration improvements in resiliency,” Hickenlooper, a Democrat, said Tuesday. “We want to be more prepared for the next event, not less prepared.”

Bud Wright, the Federal Highway Administration’s executive director during George W. Bush’s administration, said this has long been a concern of federal officials.

He recalled a South Dakota road that was “almost perpetually flooded” but was repeatedly rebuilt to the same standard using federal aid because the state didn’t have the extra money to pay for enhancements.

“It seemed a little ridiculous that we kept doing that,” said Wright, now the American Association of State Highway and Transportation Officials’ executive director.

Big federal ‘checkbook’

But Kirk Steudle, director of Michigan’s Department of Transportation, said states can build more resilient infrastructure than what they had before a disaster by using state or nonemergency federal funds to make up the cost difference.

“That makes sense, otherwise FEMA would be the big checkbook,” he said, referring to the Federal Emergency Management Agency. “Everybody would be hoping for some disaster so FEMA could come in and build them a brand-new road to the 2020 standard instead of the 1970 standard.”

Even though Obama’s order has been revoked, federal officials have some wiggle room that might allow them to rebuild to higher standards, said Jessica Grannis, who manages the adaptation program at the Georgetown Climate Center.

If local building codes in place before the storm call for new construction to be more resilient to flooding, then federal money can still be used to pay the additional costs.

For example, in Houston regulations require structures to be rebuilt 1 foot (30 centimeters) above the level designated for a 1-in-100-year storm. And in the wake of prior disasters, FEMA has moved to remap floodplains, setting the line for the 1-in-100-year flood higher than it was before.

Hosting

more

IMF Says Transport, Food Costs Are Up in Qatar After Rift

The International Monetary Fund said Wednesday that transportation and food costs in Qatar had “edged up” because of a diplomatic rift that led four Arab countries to cut ties with the small Gulf state.

An IMF team visited the capital, Doha, this week, saying in a statement that Qatar’s government was able to soften the immediate impact of trade disruptions, but that some costs had gone up as a result of delays caused by rerouting trade. Non-oil growth is projected to shrink to 4.6 percent this year, down 1 percentage point.

In June, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport links with Qatar. Saudi Arabia also sealed Qatar’s only land border, a major conduit for imports.

Qatar turned to other exporters like Turkey, Iran and Morocco to fill gaps in its food imports and the construction material needed to build infrastructure for soccer’s World Cup in 2022, set to take place there. Qatar also rerouted its shipments through ports in Oman after the UAE blocked Qatar-bound shipments from using its national waters.

The IMF said Qatar’s banking sector remained sound and that the impact of the severed ties was mitigated by liquidity injections by the Qatar Central Bank and increased public sector deposits. The international lender said Qatar was prepared for any withdrawal of nonresident deposits.

The four countries accused Qatar of sponsoring terrorism and backing extremist groups. Qatar denied the accusations and said the moves were aimed at pressuring the country to fall in lockstep with policies formulated in Riyadh and Abu Dhabi.

The IMF warned the rift could have a wider impact across the Gulf Cooperation Council, which consists of Qatar, Saudi Arabia, the UAE, Bahrain, Kuwait and Oman.

“Over the longer term, the diplomatic rift could weaken confidence and reduce investment and growth, both in Qatar and possibly in other GCC countries as well,” the statement said.

Hosting

more

Waiting, Watching: Business Owners Worry About Harvey Damage

With the animals sent to safety before Harvey hit, the owners of CityVet in Houston kept watch on their empty practice by security camera, hoping not to see floodwaters rush in.

But they lost the video stream Monday morning, apparently when power to the building near Houston’s Galleria failed. So, it was impossible to assess if any damage was occurring, said Paul Kline, a veterinarian based in and watching from Dallas. To his relief, the video came back Tuesday and “we could see cars going by on the street outside — a good sign,” Kline said. By Wednesday, with the rains gone, he could see the practice had escaped the flooding in the area.

Plenty of small-business owners spent a long five days, waiting to see if the rainfall that totaled more than 50 inches in some places would flood their businesses. Harvey’s winds and rains damaged or destroyed many small businesses in the storm’s path along the Gulf Coast.

It was a tornado spawned by Harvey that destroyed the office of Kenneth Bryant’s used-car dealership in Katy, Texas, just west of Houston. The winds Saturday morning picked up the office and slammed it into the building next door.

“I lost everything in there: titles to vehicles, keys, paperwork, computers,” said Bryant, whose business was not insured. Two of the 10 cars in his inventory were destroyed.

There was more bad news Wednesday: The remaining cars had been flooded. Bryant won’t know how severely they were damaged until he is able to unlock them.

“Where do we go from here? I don’t know. It’s going to be such a long road ahead,” Bryant said.

Lost sales, revenue, profits

For many companies, damage to their premises was just the start. Some lost inventory that would cost them future sales. Workers were stranded or dealing with the devastation of their homes. Companies that couldn’t operate were losing revenue and profits every day.

Fiyyaz Pirani estimates that his Houston-based company, Medology, lost $100,000 in new business. It’s been operating with six staffers instead of its usual 60 since the storm began, and accommodating only existing customers.

“We had a couple of employees who sustained a lot of damage to their homes, and some people are in shelters,” he said.

The company, which helps patients get low-cost lab tests and other services, moved back to its regular location Tuesday from temporary quarters, with generator power but no air conditioning. Staffers were working around some puddles of water at their top-floor office.

Eleanor Rem had several inches of water in her Houston home, which also houses her business. Rem, who helps children with dyslexia learn to read, opted not to try what might have been a difficult evacuation with an 88-year-old relative.

The rains that flooded her street, backyard and driveway on Monday began creeping into her home. She and her husband got their first-floor furniture upstairs, but the carpet was soaked. Rem said she was constantly checking to see how bad the damage was.

“We’re pretty exhausted. You’re kind of nervous to go to sleep,” she said Wednesday. She expects she won’t be able to work for several weeks, in part because her students may not be able to get to her home.

‘Cross your fingers and hope for the best’

Other business owners who tried to keep an eye on their companies by watching the video from surveillance cameras ran into the same problems as the veterinary practice.

With all three of Clint Hall’s Beef Jerky Outlet stores near Houston in danger of flooding, he watched from his home in Cypress. The Galveston Island store got a foot of water as the rains continued Monday and Tuesday, but he could see the Tomball location was safe. The League City shop lost power and its cameras Saturday, so Hall had to rely on the owner of a nearby pizzeria for periodic updates. When the rains finally stopped, it had suffered one minor leak.

It was a hard five days. As Hall watched his cameras, he said, “we’re doing as well as we can.” He planned to open at least two of the stores Wednesday.

Lindsey Rose King spent five days not knowing whether the inventory for Mostess, her home decor gift box company, was safe. The warehouse where it’s all stored — cloth napkins and tablecloths, bottles of spices and cocktail mixes and other items — is in the Galleria section. The warehouse owners had to evacuate their home and couldn’t monitor the situation.

“It’s nerve-wracking. If that inventory gets wet, that’s my whole business,” King said. But Wednesday morning, the email came: Although the building did get some water, King’s merchandise was safe and dry.

Merin Guthrie worried about the possibility that water had seeped into the old loft building near downtown Houston that houses Kit, her clothing design business. Her studio is on the second floor, but friends in similar buildings said they had water coming in through their windows. Even if her fabric, samples and sewing equipment were dry, there was a threat of mold.

She got into the building Wednesday morning, found that water had indeed gotten in, but that her supplies and equipment were OK.

“You have to cross your fingers and hope for the best,” Guthrie said.

Hosting

more

Alexa, Cortana Talk to Each Other in Amazon-Microsoft Deal

Microsoft and Amazon are pairing their voice assistants together in a collaboration announced Wednesday.

Both companies say later this fall, users will be able to access Alexa using Cortana on Windows 10 computers and on Android and Apple devices. They’ll also be able to access Cortana on Alexa-enabled devices such as the Amazon Echo.

Microsoft says the tie-up will allow Alexa customers to get access to Cortana features such as for booking meetings or accessing work calendars. Cortana users, in turn, can ask Alexa to switch on smart home devices or shop on Amazon’s website.

The use of voice assistants is growing. Google and Amazon already have smart speakers on the market. Apple has HomePod coming with its Siri assistant, while Samsung plans one with Microsoft’s Cortana.

Amazon has little to lose from the partnership, and Microsoft’s Cortana — which has been largely limited to laptops — might get discovered by more users because of it, said Carolina Milanesi, a mobile technology analyst at Creative Strategies.

“Cortana might get a little bit more out of it because it gets Cortana out of the PC,” she said. “For Cortana to really get to be more important, it needs to be consistently used every day for different tasks.”

Milanesi said that for Amazon especially, which wants more people to consider Alexa as their first choice, the partnership also might be designed to send a message to customers and rivals.

“They both get something out of it, which is mainly showing Apple and Google that they’re willing to work together to get stronger,” Milanesi said.

Hosting

more