US President Trump’s tariffs set to dominate final day of NAFTA talks

Above, group of workers, disguised as US President Donald Trump and Mexican President Enrique Pena Nieto, protest against Trump’s economic policies and the North American Free Trade Agreement in Mexico City. (AFP)
Updated 05 March 2018
0

US President Trump’s tariffs set to dominate final day of NAFTA talks

MEXICO CITY: Ministers from the US, Canada and Mexico meet on Monday to wrap up the latest round of NAFTA talks under the shadow of US President Donald Trump’s proposed steep tariffs on steel and aluminum imports.
Trump is expected to finalize the tariffs — 25 percent on steel and 10 percent on aluminum — later in the week, posing a tough challenge for US Trade Representative Robert Lighthizer, Canada’s Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo.
The Mexican and Canadian ministers are likely to press Trump’s trade envoy on whether their countries will be excluded from the blanket tariffs.
“I expect it to be front and center” at the meeting, said Kevin Brady, the Republican chairman of the US House of Representatives Ways and Means Committee, which oversees US trade policy.
Officials have so far been evasive when asked how the three nations can continue trying to update the North American Free Trade Agreement at a time when the US president is about to take a highly protectionist measure.
Brady led a delegation of US lawmakers to Mexico City to press officials on the need to conclude the talks, which have unnerved financial markets worried about the possibility that the North American supply chain could be disrupted.
Speaking on Sunday, Brady said all fairly-traded steel should be excluded from the tariffs. US stocks fell sharply on Thursday on fears of a looming trade war after Trump, a Republican, announced the planned tariffs.
The NAFTA talks are going slowly and the Mexico City round — the seventh of eight planned sets of negotiations — produced little of substance.
Eight days of talks in Mexico’s capital failed to make headway on new rules governing the content of products made in North America, which has been one of the most contentious issues in the talks.
The US negotiator charged with overseeing the so-called rules of origin unexpectedly returned to Washington for consultations early on and did not return. Talks on the matter will be rescheduled before the expected next proper NAFTA round in Washington in early April.
Still, Brady said he was impressed with the progress made during the week, emphasizing it was important to finish negotiating a modern, pro-growth agreement that would boost manufacturing and jobs.
US Representative Roger Marshall, a Republican who traveled with Brady to Mexico, said meetings during the week had closed chapters related to chemicals, communications and anti-corruption efforts.
“I am very optimistic,” Marshall told reporters after briefings from US trade officials.
Canada’s chief negotiator Steve Verheul said: “For the week we do have successes we can point (to), but we still have got a bit more to do.”
Dave Solverson, a former president of the Canadian Cattlemen’s Association, said the NAFTA region could not afford a trade war, especially when attempting to renegotiate the 24-year-old trade deal.


Malaysia reviews China infrastructure plans

Malaysia’s former PM Najib Razak (AFP)
Updated 18 June 2018
0

Malaysia reviews China infrastructure plans

  • Malaysia's scandal-mired former PM Najib Razak signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.
  • New Prime Minister Mahathir Mohamad has announced a planned high-speed rail link between Kuala Lumpur and neighboring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.

KUALA LUMPUR: Malaysia has been a loyal partner in China’s globe-spanning infrastructure drive, but its new government is to review Beijing-backed projects, threatening key links in the much-vaunted initiative.

Kuala Lumpur’s previous regime, led by scandal-mired Najib Razak, had warm ties with China, and signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.

But the long-ruling coalition was unexpectedly voted out last month by an electorate alienated by allegations of corruption and rising living costs.

Critics have said that many agreements lacked transparency, fueling suspicions they were struck in exchange for help to pay off debts from the financial scandal which ultimately helped bring down Najib’s regime.

The new government, led by political heavyweight Mahathir Mohammed, has pledged to review Chinese deals seen as dubious, calling into question Malaysia’s status as one of Beijing’s most cooperative partners in its infrastructure push.

China launched its initiative to revive ancient Silk Road trading routes with a global network of ports, roads and railways — dubbed “One Belt, One Road” —  in 2013.

Malaysia and Beijing ally Cambodia were seen as bright spots in Southeast Asia, with projects in other countries often facing problems, from land acquisition to drawn-out negotiations with governments.

“Malaysia under Najib moved quickly to approve and implement projects,” Murray Hiebert, a senior associate from think-tank the Center for Strategic and International Studies, told AFP.

Chinese foreign direct investment into Malaysia stood at just 0.8 percent of total net FDI inflows in 2008, but that figure had risen to 14.4 percent by 2016, according to a study from Singapore’s ISEAS-Yusof Ishak Institute.

However, Hiebert said it was “widely assumed” that Malaysia was striking quick deals with China in the hope of getting help to cover debts from sovereign wealth fund 1MDB.

Najib and his associates were accused of stealing huge sums of public money from the investment vehicle in a massive fraud. Public disgust at the allegations — denied by Najib and 1MDB — helped topple his government.

Malaysia’s first change of government in six decades has left Najib facing a potential jail term.

New Prime Minister Mahathir Mohamad has announced a planned high-speed rail link between Kuala Lumpur and neighboring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.

The project was in its early stages and had not yet received any Chinese funding as part of “One Belt, One Road.” But Chinese companies were favorites to build part of the line, which would have constituted a link in a high-speed route from China’s Yunnan province to trading hub Singapore, along which Chinese goods could have been transported for export.

Work has already started in Malaysia on another line seen as part of that route, with Chinese funding — the $14-billion East Coast Rail Link, running from close to the Thai border to a port near Kuala Lumpur.

Mahathir has said that agreement is now being renegotiated.

Other Chinese-funded initiatives include a deep-sea port in Malacca, near important shipping routes, and an enormous industrial park.

It is not clear yet which projects will be amended but experts believe axing some will be positive.

Alex Holmes, Asia economist for Capital Economics, backed canceling some initiatives, citing “Malaysia’s weak fiscal position and that some of the projects are of dubious economic value.”

The Chinese foreign ministry did not respond to request for comment.

Decoder

What is the "One Belt, One Road" initiative?

The “One Belt, One Road” initiative, started in 2013, has come to define the economic agenda of President Xi Jinping. It aims to revive ancient Silk Road trading routes with a network of ports, roads and railways.