<img class="gwt-Image" src="/photo/51828199.cms" /><keyword id="6355261" type="POSITION" weightage="60" keywordseo="Finance-minister">Finance Minister</keyword> <a href="http://www.businessinsider.in/searchresult.cms?query=Arun+Jaitley&amp;sortorder=effectivedate">Arun Jaitley</a> has called the <keyword id="61274" type="UNKNOWN" weightage="20" keywordseo="US-Visa">US Visa</keyword> fee hike discriminatory at a bilateral meeting with US Trade Representative Ambassador <keyword id="126957" type="PERSON" weightage="40" keywordseo="Michael-Froman">Michael Froman</keyword>,<br />
<br />
<a href="http://www.businessinsider.in/searchresult.cms?query=Arun+Jaitley&amp;sortorder=effectivedate">Jaitley</a> spoke about ‘India's concern over the hike in the H-1B and L1 visa fee, which is discriminatory and in effect is largely targeted at Indian IT companies.’<br />
<br />
Last year, the US imposed a special fee of up to $ 4,500 on H-1B and L-1 visas, popular among Indian IT companies to fund a 9/11 healthcare Act and biometric tracking system.<br />
<br />
<a href="http://www.businessinsider.in/searchresult.cms?query=Arun+Jaitley&amp;sortorder=effectivedate">Jaitley</a> expressed India's keenness in early conclusion of a Totalization Agreement with the United States, a <keyword id="47209" type="ORGANIZATION" weightage="100" keywordseo="Finance-Ministry">finance ministry</keyword> statement quoting him said.<br />
<br />
As per Industry estimates, Indian professionals contributed over $25 billion to the US Social Security during the last decade, without being able to retrieve their contributions.<br />
<br />
Image credit: Indiatimes<br />


FM
Arun Jaitley says US Visa fee hike discriminatory

<img class="gwt-Image" src="/photo/48113972.cms" /><br /> India will build the next <keyword id="42406" type="UNKNOWN" weightage="80" keywordseo="aircraft-carrier">aircraft carrier</keyword> and the <keyword id="104855" type="ORGANIZATION" weightage="80" keywordseo="Light-Combat-Aircraft">Light Combat Aircraft</keyword> jet engine with the help of US technology, reported the Economic Times. <br /><br /> The decision came after the visit of US <keyword id="193102" type="POSITION" weightage="80" keywordseo="defence-secretary">Defence Secretary</keyword> <keyword id="1721187" type="PERSON" weightage="80" keywordseo="Ash-Carter">Ash Carter</keyword>. As both countries prepare for a September round of dialogue in Washington DC, India is going to send a team to the US to speed up the process on manufacturing the aircraft carrier and the Light Combat Aircraft jet engine. <br /><br />

	The agenda has been set in the two summits held in September and January, but the key will be checking off the ambitious bucket list of projects.
<br /><br /> This will be the first strategic dialogue to be held in the new 2+2 format, including the foreign and commerce ministers. From the US side, it will be <keyword id="112421" type="PERSON" weightage="60" keywordseo="John-Kerry">John Kerry</keyword> and <keyword id="946090" type="PERSON" weightage="80" keywordseo="Penny-Pritzker">Penny Pritzker</keyword>, commerce secretary, rather than <keyword id="126957" type="PERSON" weightage="80" keywordseo="Michael-Froman">Michael Froman</keyword> their chief trade negotiator, who is generally believed to take a dim view of India and its trade practices. <br /><br />

	The US and India are also expected to take forward earlier agreements on smart cities, which is likely to get priority.
<br /><br /> Moreover, India-US relations will be tested this year over climate change as the Paris climate change summit, COP 21 looms. India will be under unprecedented pressure to declare ambitious emission targets. Climate change is a legacy issue for <keyword id="15962" type="PERSON" weightage="80" keywordseo="Barack-Obama">Barack Obama</keyword> and he's expected to push hard. <br /><br />

	India is also scheduled to enter the US' Global Entry program, which is a pre-approval of immigration procedures for travelers to the US. This was agreed during the Indian prime minister’s visit to the US last year. However, the Indian system is yet to collate criminal data records digitally and online, which is a pre-requisite for entering such a programme.
<br /><br />

	With the NDA government prioritizing "ease of doing business" rules, sources say they are spending a lot of time with investors and private sector to get a better idea of how to simplify processes in India, which are one of the biggest impediments to domestic and foreign business.
<br /><br />

	But the two countries continue to struggle to find common ground on IPR issues where India is expected to continue to take a diplomatic beating. <br />
	<br />
	(Image: Indiatimes)


Boost to Indo-US ties! India to apply US technology to manufacture aircraft carrier

<img class="gwt-Image" src="/photo/46986190.cms" />This is one big reason to cheer for all Indian professionals settled in the US. India's demand for <keyword id="6379493" type="ORGANIZATION" weightage="80" keywordseo="Social-Security">social security</keyword> cover for its professionals in the US could be realised soon with <keyword id="6354998" type="COMPANY" weightage="80" keywordseo="Washington">Washington</keyword> agreeing to resume talks on the matter as early as May. The development signals an improvement in Indo-US economic ties since <keyword id="71" type="POSITION" weightage="80" keywordseo="Prime-Minister">prime minister</keyword> <keyword id="6354477" type="PERSON" weightage="80" keywordseo="Narendra-Modi">Narendra Modi</keyword> travelled to the US in September and US president <keyword id="15962" type="PERSON" weightage="80" keywordseo="Barack-Obama">Barack Obama</keyword>'s New Delhi visit on Republic Day.<br />
<br />
A totalisation pact, which ensures that workers don't lose out on social security benefits, has been India's key demand in bilateral talks. Indian professionals contribute more than $1 billion each year to the US social security system without getting any benefits in return.<br />
<br />
"The US has agreed to take up our demand for a totalisation pact and in all probability there is going to be a bilateral meeting on this in May. There were no discussions on this for the last five years, so this is clearly a move forward," said a government official.<br />
<br />
India announced a slew of universal pension and social security schemes in the budgin February, including Atal Pension Yojana and Universal Social Security scheme, which will help strengthen India's negotiating position for the bilateral pact. This is the first time India is proposing to extend a universal social security scheme.<br />
<br />
"The budget announcement of pension scheme will definitely give weight to our talks," said the official.<br />
<br />
India has argued that the US social security policy discriminates against Indian workers in the US as they end up losing their social security contributions due to a discrepancy in the visa and social security regimes. While work visas are issued for a maximum of six years, eligibility for social security benefits in the US requires residence of over 10 years.<br />
<br />
The contribution by Indian professionals to the US social security programme is estimated at more than $25 billion during the past decade.<br />
<br />
Four rounds of talks on totalisation took place till 2010, which discontinued thereafter.<br />
<br />
"There was a lull on the matter for the past five years. But now we will be picking up threads from where we left and take the talks forward. The issue directly impacts our trade in services," said the official. The talks will be led by the Ministry of Overseas Indian Affairs from the Indian side.<br />
<br />
The US social security programme constitutes 37% of government expenditure and 7% of GDP.<br />
<br /> The matter had been taken up during the trade policy forum meeting in November last year, which took place after a gap of four years and saw comprehensive discussions on all aspects of bilateral trade and investment. It was co-chaired by commerce and industry minister <keyword id="129243" type="PERSON" weightage="80" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> and her US counterpart <keyword id="126957" type="PERSON" weightage="80" keywordseo="Michael-Froman">Michael Froman</keyword>.<br />
<br />
The trade policy forum is the principal trade dialogue body between the two countries, with five focus groups - agriculture, investment, innovation and creativity, services and tariff and non-tariff barriers.<br />
<br />
At present, bilateral trade is about $100 billion.<br />
<br />
The US has entered into totalisation pacts with 24 nations.<br />
<br />
"Both India and the US have entered into similar agreements with countries like Denmark, Belgium, Germany and Canada and there is no reason why such an agreement cannot be concluded between India and the US," said the official.



Indian's working in US could soon get social security cover

<ul class="summary-list"><li>The Group of Seven has agreed in principal to provide Ukraine with a $50 billion loan.</li><li>Profits from Russian frozen funds are to be used as collateral to back the loan.</li></ul><p>The Group of Seven has finally moved the dial on a contentious idea to provide funding to Ukraine by using Russian funds.</p><p>After months of headbutting, leaders have reached a compromise that offers Kyiv a major financial lifeline. As collateral, the G7 will tap profits generated by <a target="_blank" href="https://www.businessinsider.com/repo-global-task-force-freeze-330-billion-russia-oligarch-assets-2022-6">Russian reserves that were first frozen</a> in 2022.</p><p>"This week, the G7 signed a plan to finalize and unlock $50 billion from the proceeds of those frozen assets — to put that money to work for Ukraine, another reminder to Putin that we're not backing down," President Joe Biden said in a speech during the G7's June meeting.</p><p><strong>What is the deal about?</strong></p><p>Roughly $322 billion in funds were frozen after Moscow invaded Ukraine and have sat untouched for over two years. During that time, the assets have continued to accumulate interest and profits.</p><p>With Ukraine's <a target="_blank" href="https://www.businessinsider.com/russia-finally-serious-about-its-war-spelling-trouble-for-ukraine-2024-5">situation growing dimmer</a>, the US has pushed to completely confiscate the assets, and <a target="_blank" href="https://www.congress.gov/bill/118th-congress/house-bill/815">has even given Biden the ability to take control</a> of Russian funds held by the US.</p><p>Yet some $280 billion is actually frozen in Europe, which has been less keen to seize the funds. At most, the European Commission has agreed to transfer around $3 billion of the generated <a target="_blank" href="https://uk.news.yahoo.com/eu-ukraine-3-billion-euros-194615740.html">profits to Kyiv annually</a>.</p><p>The G7's agreement is a meeting in the middle, and uses about 20 years' worth of the interest to back the $50 billion figure.</p><p>"This is a pretty meaningful step in terms of bridging the gap that exists between the US and Europe," Council of Foreign Relations president Michael Froman <a target="_blank" href="https://www.youtube.com/watch?v=I2--HDfxmak">told CNBC</a>. "It sort of sends a signal that there will be funding available for reconstruction, we're helping Ukraine build up its military industrial capability."</p><p><strong>What's Russia's response?</strong></p><p>While it will take weeks to finalize details of the loan, concerns are already cropping up.</p><p>One question is how the loan will be repaid if, for instance, the funds become unfrozen, or interest accrued on the assets fluctuates.</p><p>Another issue concerns the plan's survivability amid shifting G7 leadership.</p><p>While Biden is a staunch supporter, the loan will likely take until the end of the year to materialize. By then, the US election may put Republican candidate Donald Trump in charge, who has <a target="_blank" href="https://www.cnn.com/2024/06/14/politics/donald-trump-return-inspires-g7/index.html">opposed aid to Ukraine.</a></p><p>But the biggest worry lies in how the Kremlin will react, given that Moscow warned against touching its assets. Already, President Vladimir Putin has called the G7's plan "theft" and promised punishment.</p><p>That could mean Moscow taps Western funds in the country and punishes any Western companies that have remained in Russia. The Center for European Policy Analysis has warned that those firms could lose access to assets ranging from securities to real estate. </p><p><strong>Is $50 billion enough?</strong></p><p>"Fifty billion dollars is over half of Ukraine's total expenditures in 2023—a game-changing amount," the Atlantic Council's Charles Lichfield <a target="_blank" href="https://www.atlanticcouncil.org/blogs/new-atlanticist/experts-react-ukraine-gets-50-billion-from-russian-assets-and-a-us-security-deal-at-the-g7-summit/#lichfield">wrote</a>, adding: "We should appreciate how elegantly today's compromise navigated the red lines of France, Germany, and other EU member states, while still providing a substantial amount."</p><p>But others only consider it just a first step, as the pact is inadequate to address all of Ukraine's needs.</p><p>According to Chatham House's Timothy Ash, the package is enough to cover only six months of Ukraine's funding needs and is just one-third of what Kyiv requires to jumpstart a military offensive.</p><p>Instead, seizing control of the reserves would be simpler. In his view, geopolitical and economic risks are overstated, and there is strong legal backing to do so, he <a target="_blank" href="https://cepa.org/article/g7-cant-beat-russia-on-the-cheap/">wrote</a> for CEPA.</p><p>Politicians are also coming on board.</p><p>On Tuesday, a group of Western legislators published a <a target="_blank" href="https://www.ft.com/content/8f64a167-b645-4b10-abc1-2144c0d04c24">letter in the Financial Times</a> that argued for a major policy step up, noting that Russia's war has already done 500 billion euros worth of infrastructure damage. </p><p>"If we confiscate the entire €300bn in accordance with international law, we affirm the legal right to take countermeasures when a state like Russia grossly violates international law with its aggression," they said.</p>

'We're not backing down:' How the West plans to use Russia's frozen funds, and why some say it's still not enough to help Ukraine

<ul class="summary-list"><li>Chinese manufacturers' profits fell last month, but carmakers reported significant gains in the first quarter.</li><li>Weak domestic demand is causing Chinese companies to sell products en masse overseas.</li></ul><p>Big Chinese manufacturers' profits fell last month, but carmakers posted a significant gain in the first quarter — one of the sectors worrying US officials.</p><p>The National Bureau of Statistics reported on Saturday that large-scale manufacturers' profits dipped 3.5% in March compared with a year earlier. For the first three months of the year, profits were up 4.3% to 1.51 trillion yuan, or about $208 billion.</p><p>The new data highlights how weak domestic demand is eating into Chinese manufacturers' profits, causing companies to <a target="_blank" href="https://www.businessinsider.com/china-economy-overcapacity-dumping-manufacturing-exports-economic-woes-world-yellen-2024-4">sell products en masse overseas</a>. Janet Yellen, the US treasury secretary, and Antony Blinken, the secretary of state, visited China in the past month, where they warned of Chinese companies undercutting other manufacturers.</p><p>Blinken said at a Friday press conference that he talked with Chinese officials about overcapacity in key industries, including solar panels, electric vehicles, and batteries.</p><p>"China alone is producing more than 100% of global demand for these products, flooding markets, undermining competition, and putting at risk livelihoods and businesses around the world," Blinken said.</p><h2><strong>'A real train wreck coming'</strong></h2><p>One major area of concern for the US is <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">protecting domestic car production</a>. Even though Chinese car companies don't sell cars in many large markets, such as the US, Chinese automakers' overall profit jumped 32% in the first quarter, year on year, according to the NBS.</p><p>China needs to expand into new markets for many goods because domestic appetite has risen much slower than manufacturing output. Last year, China and Japan were neck and neck for the title of the world's largest auto exporter, and the Chinese EV maker BYD outsold Tesla.</p><p><a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-02/us-europe-gripes-on-china-overcapacity-aren-t-all-backed-by-data?srnd=all">Bloomberg</a> found earlier this month that so far, increased EV production hadn't led to a big uptick in inventory — the kind of overproduction hurting other industries.</p><p>And cars weren't the only bright spot in the first quarter: Electronic industry profits were up 82.5% year on year, according to data from the NBS.</p><p>Michael Froman, the US trade representative during the Obama administration, told <a target="_blank" href="https://www.cnbc.com/video/2024/04/25/cfrs-michael-froman-on-trade-conflict-with-china-theres-a-real-train-wreck-coming-here.html">CNBC</a> on Thursday that China's export-led growth had come just as international markets were closing to the country. China has publicly written off US warnings about overproduction as posturing ahead of the presidential election.</p><p>"There's a real train wreck coming here where this is the next generation of trade conflict," said Froman, who's now the president of the Council on Foreign Relations. "This is broader than election-year activity."</p><p>The NBS analyst Yu Weining wrote in a statement accompanying Saturday's data release that China was focused on boosting domestic demand and improving business confidence. Overall, domestic demand is depressed as the country faces a faltering GDP and a roiling <a target="_blank" href="https://www.businessinsider.com/evergrande-ordered-liquidate-china-real-estate-property-crisis-winners-assets-2024-1">property market</a>.</p>

China's big factories had a terrible March, even as automakers roar to new highs

<ul class="summary-list"><li>Disney shareholders will vote for the company's board at its annual meeting on Wednesday.</li><li>The vote will bring to an end a long proxy <a target="_blank" href="https://www.businessinsider.com/disney-bob-iger-nelson-peltz-trian-proxy-fight-continues-2024-2">fight between CEO Bob Iger and Trian's Nelson Peltz</a>. </li></ul><p>The <a target="_blank" href="https://markets.businessinsider.com/news/stocks/nelson-peltz-disney-bob-iger-activist-investor-stock-market-analysis-2023-12">battle between Disney CEO Bob Iger and activist investor Nelson Peltz's Trian Partners</a> will come to a head on Wednesday when House of Mouse shareholders finally have a chance to weigh in on the proxy fight that's been going on for more than a year.</p><p>The <a target="_blank" href="https://www.businessinsider.com/disney-shareholders-could-cash-in-investors-bid-for-proxy-votes-2024-3">shareholders' decisions</a> at the annual meeting will serve as a referendum on the future of Disney.</p><p>A vote for the Disney's slate of board members will show support for <a target="_blank" href="https://www.businessinsider.com/bob-iger-disney-strong-earnings-taylor-swift-espn-streaming-fortnite-2024-2">Iger's performance</a> as CEO since he returned to lead the company in November 2022.</p><p>A vote for self-described <a target="_blank" href="https://www.businessinsider.com/disney-activist-investor-nelson-peltz-bully-billionaire-2024-3">"bully billionaire" Peltz</a> and former Disney CFO Jay Rasulo — and for removing Disney directors Maria Elena Lagomasino and Michael Froman from the board — will be seen as a rebuke of management's strategy.</p><p>It's the culmination of months of tussling between Disney and Peltz, who has been waging war against Disney's board since January last year. Trian's argument centers on Disney's share price — down about 40% from a March 2021 peak of about $202, debt following its $71 billion acquisition of 21st Century Fox, losses in its streaming division, and its botched succession plan.</p><p>Disney, in turn, has forged ahead with its strategy under Iger, announcing results that beat Wall Street's expectations in February alongside a $1.5 billion investment in Epic Games, the company behind "Fortnite," to cater to younger generations like Gen Z and Gen Alpha.</p><p>Choosing to back "Peltz's slate of directors would be a vote for shaking things up," Jason Schloetzer, a professor at Georgetown University's McDonough School of Business, told Business Insider. "It's saying that the strategy is either OK or needs to be tweaked, and that acceleration and implementation need to speed up."</p><p>But ahead of the shareholder meeting, it looks like Disney's current board will pull through, though <a target="_blank" href="https://www.businessinsider.com/nelson-peltz-proxy-fight-disney-may-hinge-3-investors-2024-4">the final decision could hinge on how Vanguard</a>, the company's largest shareholder with about 8% of the company, votes.</p><p>On Monday, <a target="_blank" href="https://www.wsj.com/finance/disney-winning-proxy-fight-against-trian-with-more-than-half-of-votes-cast-bf1874a1?st=9rs5t09tu79u67g&amp;reflink=desktopwebshare_permalink">The Wall Street Journal</a> reported that BlackRock and T. Rowe Price, the former of which is Disney's second-largest investor with about 4.2% of shares, were throwing their votes behind Iger. Other prominent shareholders, including investment firm ValueAct Capital, Walt and Roy Disney's heirs, Laurene Powell Jobs, and <a target="_blank" href="https://www.businessinsider.com/starwars-george-lucas-disney-bob-iger-proxy-fight-nelson-peltz-2024-3">Star Wars creator George Lucas,</a> have also come out in support of the company's management.</p><p>"Creating magic is not for amateurs," Lucas said in a statement last month. "When I sold Lucasfilm just over a decade ago, I was delighted to become a Disney shareholder because of my long-time admiration for its iconic brand and Bob Iger's leadership."</p><p>Still, the <a target="_blank" href="https://www.businessinsider.com/disney-proxy-vote-spending-bob-iger-hedge-fund-nelson-peltz-2024-4">battle has been closer than Disney would like</a>, as evidenced by the $40 million it has reportedly spent appealing for votes — particularly those of retail investors, who hold about 40% of Disney's shares, according to the New York Times.</p><p><a target="_blank" href="https://www.businessinsider.com/disney-stock-pinocchio-iger-peltz-trian-activist-investing-proxy-fight-2024-3">Disney has run extensive ad campaigns</a> featuring characters like Pinocchio and Donald Duck's uncle, Ludwig Von Drake. Iger and other executives have spent weeks meeting with and calling major shareholders.</p><p>"If Disney wasn't concerned about losing one or two board seats here, they wouldn't be as aggressive and public about pushing back," Schloetzer said.</p><p>Trian, too, has spent eight figures on its campaign, publishing white papers and taking to social media with satirical animations of Disney's cast of characters.</p><p>That's been paying off. On Monday, institutional investors Neuberger Berman and the California Public Employees' Retirement System threw their support behind Trian, which controls about 1.8% of Disney shares, most of them belonging to disgruntled former <a target="_blank" href="https://www.businessinsider.com/reclusive-rich-billionaires-list-secretive-perlmutter-anschultz-mars-barclay-wertheimer-2023-8">Marvel chairman Ike Perlmutter</a>. And proxy advisory firm Institutional Shareholder Service recommended shareholders vote for Peltz, though not Rasulo.</p><p><a target="_blank" href="https://markets.businessinsider.com/news/stocks/nelson-peltz-disney-proxy-fight-150-million-profit-trian-iger-2023-2">Peltz first waged war against Disney's board</a> in January 2023, though he halted his bid for a seat a month later when the company agreed to cut costs and lay off 7,000 employees.</p><p>"We wish the very best to Bob, this management team, and the board," Peltz said on <a target="_blank" rel=" nofollow" href="https://www.cnbc.com/2023/02/09/activist-investor-nelson-peltz-declares-disney-proxy-fight-is-over-after-iger-unveils-restructuring.html"><u>CNBC</u></a> at the time. "We will be watching. We will be rooting."</p><p>By November, he'd reversed course, launching a sequel to his original bid for seats and <a target="_blank" href="https://www.businessinsider.com/disney-bob-iger-nelson-peltz-trian-proxy-fight-continues-2024-2">continuing to fight even after Disney's stock jumped in February</a>.</p><p>"It's déjà vu all over again. We saw this movie last year and we didn't like the ending," Peltz said at the time.</p><p>If Peltz and Rasulo do get board seats, it's not entirely clear how much sway they will have. Trian has said its main priorities are to improve streaming margins to match those of Netflix and devise a CEO succession plan. Some have suggested he may <a target="_blank" href="https://www.businessinsider.com/disney-bob-iger-break-up-pressure-nelson-peltz-increase-stake-2023-10">carve up Disney's assets</a> — ABC, ESPN, the theme parks — and Peltz has said he wants to make changes to its movie strategy.</p><p>"Why do I have to have a Marvel that's all women?" he said in a <a target="_blank" href="https://www.ft.com/content/0a182c97-6af7-42a6-ad9f-ae980562bb45">Financial Times interview</a> last month. "Not that I have anything against women, but why do I have to do that? Why can't I have Marvels that are both? Why do I need an all-Black cast?"</p><p>In the face of all of this, Iger has remained outwardly confident — particularly after strong first-quarter earnings seemed to restore his signature swagger.</p><p>"The last thing that we need right now is to be distracted in terms of our time, our energy, by an activist or activists that, frankly, have a completely different agenda and don't understand our company, its assets, even the essence of the Disney brand," he told CNBC at the time.</p><p>But if Peltz does pull an upset, Schloetzer said, "that's when it gets interesting."</p>

Disney's fight with Nelson Peltz is about to come to a head. Here's where things stand.

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5631c34e9dd7cc1b008c5a5a-3531-2648/rtx1tpe1.jpg" alt="Pumpkin Jack O' Lanterns carved as the skeletons are displayed on the grounds of the historic Van Cortlandt Manor House and Museum during the " data-mce-source="REUTERS/Mike Segar" data-mce-caption="Pumpkin Jack O' Lanterns carved as the skeletons are displayed on the grounds of the historic Van Cortlandt Manor House and Museum during the " /><p class="source"><span>REUTERS/Mike Segar</span></p><p class="caption">Pumpkin Jack O' Lanterns carved as the skeletons are displayed on the grounds of the historic Van Cortlandt Manor House and Museum during the </p></div><p></p></div></div>Good morning! Here are the 10 most important stories in markets this Thursday morning.</p><p><strong>Drugmakers Pfizer and Allergan are considering combining in what could be the biggest merger in the healthcare industry in an already busy year, the Wall Street Journal reports. </strong><a href="http://uk.businessinsider.com/r-drugmakers-pfizer-allergan-considering-a-combination-wsj-2015-10">Pfizer recently approached botox-maker Allergan about a deal</a>, the Journal said, citing people familiar with the matter.</p><p><strong>US stock markets enjoyed a bumpy session but ended up with gains after the US Federal Reserve held interest rates unchanged as expected.</strong> <a href="http://uk.businessinsider.com/closing-bell-october-28-2015-10">The Dow closed up 1.13%, the S&amp;P 500 ended 1.18% higher, and the Nasdaq closed up 1.30%.</a></p><p><strong>Asian stock markets are mixed.</strong> Japan's Nikkei is 0.17% higher at time of writing (6.25 a.m. BST/2.25 a.m. EST), Hong Kong's Hang Seng is down 0.43%, and the Shanghai Composite is up 0.60%.</p><p><strong>The United States is not keen on pursuing a separate free trade deal with Britain if it leaves the European Union, US Trade Representative Michael Froman said on Wednesday.</strong> "I think it's absolutely clear that Britain has a greater voice at the trade table being part of the EU, being part of a larger economic entity," <a href="http://www.businessinsider.com/r-exclusive-us-trade-czar-says-britain-would-lose-on-trade-outside-the-eu-2015-10">Froman told Reuters in an interview</a>, adding that EU membership gives Britain more leverage in negotiations.</p><p><strong>Germany's Deutsche Bank will not pay dividends in 2015 and 2016 as it seeks to cut costs as part of a major business and management restructuring.</strong> <a href="http://www.businessinsider.com/afp-deutsche-bank-to-suspend-dividends-for-two-years-2015-10">The Frankfurt-based lender said it hoped to resume paying dividends in 2017.</a> It has paid a dividend every year since Germany's postwar reconstruction, including throughout the 2008-2009 financial crisis.</p><p><strong>Crude futures rallied by up to 5% and climbed to as high as $45.25 (£29.67) per barrel overnight in New York.</strong> It came as <a href="http://uk.businessinsider.com/crude-oil-price-october-28-2015-10">the US Energy Information Administration reported US crude oil inventories rose by 3.38 million barrels last week</a>, less than the expected.</p><p><strong>Nintendo shares dived more than 10% after it pushed back the launch of its videogame service for smartphones to March 2016.</strong> <a href="http://www.businessinsider.com/r-nintendo-delays-launch-of-smartphone-videogame-shares-plunge-2015-10">The company had previously planned to introduce its first smartphone games by the end of the year.</a></p><p><strong>China has signed a contract to buy 100 A320 aircraft from European manufacturer Airbus, worth $9.7 billion (£6.4 billion) at list prices.</strong> The deal, signed as German Chancellor Angela Merkel visited Beijing on Thursday, <a href="http://www.businessinsider.com/afp-china-signs-deal-for-100-airbus-a320s-manufacturer-2015-10">also includes the confirmation of 30 previously announced options for twin-aisle A330s</a>, a spokesman told AFP.</p><p><strong>Samsung on Thursday posted its first year-on-year profit gain in eight quarters, buoyed by strong chip sales and a modest pickup for its smartphone business. </strong>The world's No.1 memory chip and smartphone maker said <a href="http://www.businessinsider.com/r-samsung-electronics-says-third-quarter-profit-up-82-percent-versus-year-earlier-2015-10">third-quarter operating profit leapt 82% to 7.4 trillion won (£4.24 billion/$6.46 billion)</a>, compared with its guidance for 7.3 trillion won in early October and 4.1 trillion won a year earlier. Revenue rose 8.9 percent to 51.7 trillion won.</p><p><strong>General Motors has promised the United Auto Workers union it will invest an additional $1.9 billion (£1.25 billion) in its US factories to secure 3,300 union jobs, and pay higher wages and bonuses under a proposed four-year contract. </strong>GM will also pay bonuses of up to $8,000 (£5,244) to nearly 53,000 UAW workers once they ratify the agreement, <a href="http://www.businessinsider.com/r-gm-promises-additional-us-investment-to-secure-3300-jobs-2015-10">according to details of the GM-UAW contract released Wednesday</a>.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/most-interesting-men-world-watches-rolex-breitling-jorg-gray-2015-8">These are the watches worn by the smartest and most powerful men in the world</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="N3NGJ0djpb_DdQzkXVopAvbq5AmmiuOx" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'N3NGJ0djpb_DdQzkXVopAvbq5AmmiuOx',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

10 things you need to know in markets today

<p><span style="line-height: 1.5em;"><div class="KonaFilter image-container float_right"><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/546798f16da8112e30f48bc7-290-381/02acc4663b8098a73d090f65f4cbcae6.png?maxX=600" border="0" alt="Economist pacific trade infographic" width="600"><p class="source"><span>The Economist</span></p></img></div><p></p></div>Japan tried to negotiate the first trans-Pacific trade agreement exactly 400 years ago. It sent a robed samurai, Hasekura Tsunenaga, to Europe via Acapulco to request the right to trade directly with New Spain (today's Mexico). </span></p>
<p><span style="line-height: 1.5em;">Among other things, he needed permission from the pope. But because the shogun was slaughtering Catholics at the time, he did not get it.</span></p>
<p>Only in the past decade have such agreements finally started to flourish. But they are still dominated by interests that go beyond the nuts and bolts of trade and into the realm of geopolitics. America and China are pursuing three separate tracks towards trade pacts that would help define the future of trans-Pacific commerce. One of the three does not include China, another excludes the United States. The third is still pie in the sky.</p>
<p>All three involve unwieldy acronyms, though whichever wins could one day become as familiar as NAFTA (the North American Free-Trade Agreement). The furthest advanced is the American-led Trans-Pacific Partnership (TPP), in which China plays no part. On a parallel track, though further behind, is the Regional Comprehensive Economic Partnership (RCEP), which covers only Asian countries and includes China, plus several countries that are also negotiating the TPP.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54678bb169bedd7c6a2919d9-1200-600/tpp.jpg" border="0" alt="TPP"><p class="source"><span>Kevin Lamarque/Reuters</span></p><p class="caption">U.S. President Barack Obama (C) meets with the leaders of the Trans-Pacific Partnership (TPP) countries in Beijing November 10, 2014. </p></img></div><p></p></div></div><span style="line-height: 1.5em;">The distant dream is the Free-Trade Area of the Asia-Pacific (FTAAP), which would include both America and China, and possibly cobble together elements of both TPP and RCEP. China pushed the FTAAP ahead of the 21-country APEC summit in Beijing in November, giving a new lease of life to an old idea.</span></p>
<p>Peter Petri and Ali Abdul-Raheem write in a new paper for the Pacific Economic Co-operation Council: "Nearly 50 years after it was first proposed, it is gaining traction due to the emergence of RCEP and TPP initiatives and the continuing stalemate in global trade negotiations."</p>
<p><span style="line-height: 1.5em;">As trade experts see it, the TPP is the most ambitious in the short term. It is dominated by America and Japan and also includes Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Together these countries account for about 40% of global GDP, making it one of America's biggest potential free-trade agreements (FTAs). The Obama administration hopes that it would be complemented by an even more ambitious agreement with the EU.</span></p>
<p>America, which already has FTAs with six other TPP countries, sees opening up Japan as the big prize. But the TPP is not just aimed at dismantling tariff barriers. It is also meant to tackle tough issues such as intellectual property, services, government procurement, labour and environmental standards. Since its members include economies such as Vietnam and Malaysia whose supply chains depend on cheap labour, negotiations were always likely to be tricky.</p>
<p><span style="line-height: 1.5em;"><div class="KonaFilter image-container"><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54678a7f6bb3f7220dda334d-600-375/free%20trade.jpg" border="0" alt="free trade" width="800"><p class="source"><span>Goh Chai Hin/Pool/Reuters</span></p><p class="caption">China's President Xi Jinping arrives for a news conference for the Asia Pacific Economic Cooperation (APEC) Summit at the International Conference Center in Yanqi Lake, north of Beijing, November 11, 2014.</p></img></div><p></p></div>When Japan, which likes to spoil its farmers, joined in 2013, they became even trickier. But after 19 rounds of negotiations, considerable progress has been made. There is a strong push to finish it by the end of this year, though a similar deadline last year was missed.</span></p>
<p>RCEP, which is led by ASEAN, has the unenviable task of bringing China and Japan to the same table. It is more focused than TPP on market access and on smoothing the way for supply chains. But it includes foot-dragging India, and may suffer from ASEAN's softly-softly way of negotiating by consensus.</p>
<h3>Aim higher</h3>
<p>Michael Froman, America's trade representative, says the TPP is about ensuring high labour standards, exposing state-owned enterprises to level competition with private enterprises and including digital activity "to ensure a free and open internet". When he held informal talks with TPP counterparts at a get-together in Myanmar in August, he asked them about RCEP and was not impressed by what he heard. Whereas the TPP was aiming to eliminate almost all tariffs, India was asking RCEP to keep the figure as low as 40%. China was somewhere in between, apparently waiting to see where everyone else ended up.</p>
<p>Predictably, in the run-up to the 21-country APEC summit in Beijing this month, America and China have also been at odds over the FTAAP plan being promoted by the Chinese. Wang Shouwen, China's deputy trade minister, has memorably described the TPP and the RCEP as "two wheels of a bicycle", and the Obama administration has been heartened to find that the Chinese government no longer dismisses the TPP as an anti-China ploy.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54678cd46bb3f7e91bda3349-1200-858/apec.jpg" border="0" alt="apec"><p class="source"><span>Kim Kyung-Hoon/Reuters</span></p><p class="caption">U.S. President Barack Obama (front L) gestures next to China's President Xi Jinping (front R) in front of (back row L-R) Japan's Prime Minister Shinzo Abe, Australia's Prime Minister Tony Abbott and Malaysia's Prime Minister Najib Razak as they attend a photo shoot at the Asia Pacific Economic Cooperation (APEC) </p></img></div><p></p></div></div><span style="line-height: 1.5em;">But APEC insiders say that American officials have opposed China's plan for an FTAAP feasibility study, and they disagree over timing. As one official says, America is "dead set on achieving a breakthrough on TPP" and does not want to be distracted by FTAAP.</span></p>
<p>They also differ over which should be the FTAAP's main building block. Eventually America would like to bring China into the TPP and use that as the basis for a highly sophisticated trans-Pacific FTA. But China will be reluctant to accept American rules on things like state-owned enterprises and internet access. Going down an RCEP route would give it more say.</p>
<p>Messrs Petri and Abdul-Raheem think that a trade agreement between America and China would bring big gains, whatever the route. But they reckon that a more rigorous TPP-style model would bring economic benefits worth almost $1 trillion more than one based on RCEP, though it would be much harder to persuade China to go along with it.</p>
<h3>Crossing the Ts</h3>
<p>Yet the TPP itself still has huge hurdles to overcome, mainly political rather than technical. The Obama administration's main headache--some say self-inflicted--is another acronym, Trade Promotion Authority (TPA). This enables the American government to negotiate free-trade agreements without having them picked apart afterwards; Congress can only validate or reject en bloc what has been negotiated.</p>
<p>Once called "fast track", TPA lapsed for new trade agreements in 2007. Since 2012 the White House has been seeking renewal, but even its own Democrats on Capitol Hill have stonewalled.</p>
<p>Japan's obstacles are more elegiac than TPA, but just as stubbornly entrenched. They have to do with rice and other "sacred" products of the land, such as wheat, beef and pork, dairy and sugar. Japanese farmers are few and far between, and most of them are getting on in years, but as guardians of the nation's most cherished harvests they yield to no one.</p>
<p><span style="line-height: 1.5em;"><div class="KonaFilter image-container float_left"><div class="image"><img src="https://static-ssl.businessinsider.com/image/5467995c6da8119435f48bbd-290-263/40ecd27ec307dab4a830f7a8d9af1544.png" border="0" alt="pacific trade chart " width="600"><p class="source"><span>The Economist</span></p></img></div><p></p></div>Backed by JA, a vast Tokyo-based farm lobby, they have spent their lives resisting efforts to lower tariffs on such products. Richard Katz, an economist, says that their rural toils produce just 0.8% of Japan's GDP, yet they match America's Congress in holding TPP hostage.</span></p>
<p>In September, just days after Mr Abe reiterated in America that TPP was crucial for raising Japan's agricultural competitiveness and helping it adjust to an ageing society, TPP talks between the two countries abruptly broke down. Each side blamed the other, though Americans continue to suspect that the problem is not Mr Abe's own commitment but the weight the farmers carry with his bureaucrats. The Japanese, for their part, realise that their best offer may never be good enough for Congress, so without TPA there is unlikely to be TPP.</p>
<p>Mr Froman, the trade tsar, puts TPP into a dauntingly ambitious context. He calls it central to America's pivot to Asia, a chance to show the country's commitment to creating institutions that moderate territorial disputes, and an opportunity to show emerging economies (meaning China) what economic rules the global economy should follow. "</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54678e466bb3f71c1dda3348-1200-800/rtr4bp8f.jpg" border="0" alt="michael froman"><p class="source"><span>Jason Reed/Reuters</span></p><p class="caption">U.S. Trade Representative Michael Froman (L) speaks at a press conference during the Trans Pacific Partnership (TPP) meeting of trade representatives in Sydney October 27, 2014</p></img></div><p></p></div></div></p>
<p>At a time when there is uncertainty about the direction of the global trading system, TPP can play a central role in setting rules of the road for a critical region in flux," he says. The flipside of this is that failure becomes an even bigger risk, which Mr Froman acknowledges. Perhaps in an effort to prod a somnolent, introspective Congress into action, he makes the dramatic claim that failure could mean America "would forfeit its seat at the centre of the global economy".</p>
<p><span style="line-height: 1.5em;">Many pundits in Washington agree that American leadership in Asia is on the table. Michael Green of the Centre for Strategic and International Studies says TPP failure would "undermine the impression of the United States as a Pacific power and look like an abdication of leadership". It would also take pressure off Japan and China to reform their economies. Mireya Solís, a Japan expert at the Brookings Institution, says it would be a "devastating blow to the United States' credibility".</span></p>
<p>Those views are echoed in East Asia. Mr Tay in Singapore says TPP failure would be a disaster: "If the domestic issues of these two countries cannot be resolved, there is no sense that the US-Japan alliance can provide any kind of steerage for the region." Deborah Elms, head of the Singapore-based Asian Trade Centre, suggests that so far the American pivot has manifested itself mainly as an extra 1,000 marines stationed in Australia. "Without TPP, all the pivot amounts to is a few extra boots on the ground in Darwin," she says.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/54678de3ecad04412cda3349-1200-858/rtr4dbjn.jpg" border="0" alt="TPP protester" style="color: #000000;"><p class="source"><span>David Gray/Reuters</span></p><p class="caption">A protester holds up a sign in front of the Sydney Opera House during a demonstration against the Trans-Pacific Partnership (TPP) trade agreement November 8, 2014. </p></img></div><p></p></div></div></p>
<p>Even members of America's armed forces are worried. As one senior serving officer in the Pacific puts it, "the TPP unites countries that are committed to a trade-based future, transparency and the rule of law. It is the model that the United States and Europe have advanced versus that advanced by China. It is an opportunity to move the arc of Chinese development, or identify it as a non-participant."</p>
<p>Yet when Mr Obama mentions TPP, he talks mostly about protecting American jobs rather than safeguarding America's place in the world. The president has never fully put his back into forcing a congressional vote on TPA. There is still time for him and Mr Abe to rescue the trade talks. But unless Mr Obama leads from the front, America's own leadership in the Pacific will seem less convincing than he has repeatedly promised.</p>
<p>Click <a href="https://subscriptions.economist.com/nwcd">here</a> to subscribe to The Economist</p>
<p><img class="nc_pixel" src="https://pixel.newscred.com/px.gif?key=YXJ0aWNsZT0wNmM1NmMxNzg3YmIyY2IyZjQ4MmE0YzhiZGYxODU0NCZwdWJsaXNoZXI9NzMwZWI4NmFiNTlmMGQ0MTkyNmFjNjViMDFmODNlMmY=" border="0" alt="" width="1" height="1" /></p>
<p> </p>

Free-Trade: America's Big Bet

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/56a2696f58c3238d008b4664-2267-1700/rtx21n5c.jpg" alt="RTX21N5C" data-mce-source="Reuters/Kacper Pempel" data-mce-caption="People gather during an anti-government demonstration in Warsaw, Poland, in January." /><p class="source"><span>Reuters/Kacper Pempel</span></p><p class="caption">People gather during an anti-government demonstration in Warsaw, Poland, in January.</p></div><p></p></div></div></p><p>There is "deep concern" about the direction Poland is heading in, one policy expert says.</p><p>Piotr Buras, <a href="http://www.ecfr.eu/profile/C236">head of the</a> European Council on Foreign Relations' Warsaw office, told Business Insider Poland "is going in a quite worrying direction" after a few changes intended at centralizing power with the recently elected ruling party.</p><p>The country has been under scrutiny since the European Union launched an unprecedented rule-of-law investigation into sweeping changes across Poland, such as the limiting of its highest constitutional court's power and its insertion of a government proxy to head the nation's public media.</p><p>There have been many recent protests in Warsaw and throughout the country over the changes, but Buras and others agree that it's highly unlikely the European Commission, the group leading the investigation, would levy any sanctions against Poland - such as suspending its vote - since a unanimous decision would have to be reached to do so.</p><p>"But it means the conflict between the EC and Poland will exacerbate in the upcoming weeks or months and it will be very difficult to be resolved," he said. "I don't see the Polish government stepping back or backtracking on this, especially on the issue of the constitutional court."</p><p>The two options the council can pursue are to either push forward or freeze the investigation, which will essentially mean the council accepts the decision-making of the Polish government. Buras said that could backfire and push Poland into an even greater Euro-skeptic position.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="http://www.businessinsider.com/poland-eu-investigation-violations-2016-1"><img src="https://static-ssl.businessinsider.com/image/56a2696158c3239d078b460c-3214-2411/rtx2335q.jpg" alt="RTX2335Q" data-mce-source="Reuters/Vincent Kessler" data-mce-caption="Poland's Prime Minister Beata Szydlo attends a debate on the state of the rule of law and restrictions to press freedom in Poland, at the European Parliament in Strasbourg, France, January 19, 2016." /></a><p class="source"><span>Reuters/Vincent Kessler</span></p><p class="caption">Poland's Prime Minister Beata Szydlo attends a debate on the state of the rule of law and restrictions to press freedom in Poland, at the European Parliament in Strasbourg, France, January 19, 2016.</p></div><p></p></div></div></p><p><span>Of the recent changes made by the ruling Law and Justice party, which took power in October, Buras said the most important, and dangerous, one was the limiting of the constitutional court's power. The role of the court is to rule on the legality of legislation being passed by the government, and the strains put upon the court by the ruling party render it "inoperable," he said.</span></p><p><span>"[It's] maybe the most important reason to be concerned about Poland," he said. "But this is accompanied by certain policy steps, or certain reforms which may not even be unconstitutional or illegal, but they do change the way how the public institutions function."</span></p><p><span>"They have a common denominator, which is that they're deeply illiberal," he added. "Which tries to, in the first place, strengthen the power of the executive and give it much more control of all other sectors of power and of public institutions."</span></p><p><span>He said that some of the other changes, such as those involving public media, aren't quite as alarming as some would believe when examined on their own. It's when everything is added up that it becomes a worrying situation.</span></p><p><span>"If you take them altogether and within two months, six or seven completely new laws changing the institutional setup of the country with one particular aim, to strengthen the power of the executive and its control functions," he said. "It cannot be an accident and it is not an accident."</span></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5639f9275afbd3a0178b4567-800-507/polish-election-winner-may-present-new-government-on-saturday.jpg" alt="The leader of Poland's main opposition party Law and Justice (PiS) Jaroslaw Kaczynski and the candidate for prime minister Beata Szydlo celebrate after the exit poll results are announced in Warsaw, Poland October 25, 2015.  REUTERS/Pawel Kopczynski " data-mce-source="Thomson Reuters" data-mce-caption="The leader of Poland's main opposition party Law and Justice Kaczynski and the candidate for prime minister Szydlo celebrate after the exit poll results are announced in Warsaw" /><p class="source"><span>Thomson Reuters</span></p><p class="caption">The leader of Poland's main opposition party Law and Justice Kaczynski and Prime Minister Beata Szydlo celebrate after the exit poll results are announced in Warsaw.</p></div><p></p></div></div></p><p><a href="http://www.businessinsider.com/poland-eu-investigation-violations-2016-1">Earlier this month</a>, Polish Prime Minister Beata Szydlo said her country has been wrongly accused of violations.</p><p>"It's not true. It's slander. Democracy in Poland is doing well," she said, <a href="http://www.wsj.com/articles/eu-places-polands-rule-of-law-under-increased-scrutiny-1452690539">according to The Wall Street Journal</a>. "The best proof that democracy is doing well are protests organized by some groups against the government and the changes we're introducing."</p><p>She also said she doesn't think sanctions will be imposed, but did admit the party could've gone about some of the changes in a different way.</p><p><span>"I am not saying that we made no mistakes," Szydlo <a href="http://www.businessinsider.com/ap-polands-pm-no-risk-of-eu-sanctions-against-poland-2016-1">told TVN24</a>.</span></p><p>The driving force behind those changes in Poland isn't Szydlo or the new president, <span>Andrzej Duda, but the head of the Law and Justice party, Jaroslaw Kaczynski. The head of the ruling party is arguably the most powerful position in the Polish government, according to <a href="http://www.nytimes.com/2016/01/12/world/europe/head-of-polands-governing-party-leads-a-shift-rightward.html">The New York Times</a>.</span></p><p><span><span><span>"No pressure and hollering, no words ... will turn us from this path," <span>Kaczynski </span></span><span>told supporters earlier this month, per the Times. "We will continue moving forward."</span></span></span></p><p><span><span><span>A January public opinion poll found<a href="http://www.thenews.pl/1/9/Artykul/237421,Poll-36-percent-support-Polish-government"> just 36%</a> of Poles supported the government, which won election about three months prior.</span></span></span></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5696b0b4c08a8036008b952e-3500-2333/rtx21n5n.jpg" alt="Poland protests" data-mce-source="Reuters/Kacper Pempel" data-mce-caption="People gather during an anti-government demonstration for free media in Warsaw, January 9.  A banner shows Law and Justice leader Jaroslaw Kaczynski." /><p class="source"><span>Reuters/Kacper Pempel</span></p><p class="caption">People gather during an anti-government demonstration for free media in Warsaw, January 9, 2016.  A banner shows Law and Justice leader Jaroslaw Kaczynski.</p></div><p></p></div></div>An issue at the heart of the current state of Polish <keyword id="6358883" type="PERSON" weightage="100" keywordseo="Politics">politics</keyword> is the growing rift between Germany, viewed as the model of a "liberal" Europe, and the Polish government, which is embracing more "eastern" values, he said. The border between the countries is becoming a de-facto East-West divide, with a prominent issue being the question of what to do with the influx of refugees into Europe.</p><p>"There is certain pressure on the Polish government to improve its relationship with Germany, or at least not to escalate it anymore," he said. "There has been very harsh rhetoric."</p><p>High-level US officials, such as US trade czar Michael Froman, have visited Poland and expressed concerns, Buras said. Recently, Standard &amp; Poor's cut Poland's credit rating somewhat unexpectedly, <a href="http://news.yahoo.com/u-says-following-events-poland-very-closely-eu-145056082.html">Reuters reported</a>.</p><p id="yui_3_18_1_1_1453733670807_2211">"As a fellow democracy we do follow developments here very closely," Froman told reporters during a visit to the Google Campus in Warsaw on Sunday. "We certainly do follow it. As a democracy, we want to make sure that Poland's democracy continues to address the issues."</p><p>A recent opinion piece in <a href="http://foreignpolicy.com/2016/01/21/obama-is-polands-only-hope/">Foreign Policy Magazine said</a> the crisis is "escalating at breakneck speed" and that President Obama should use the "bully pulpit" to make a bold statement by not attending the upcoming NATO summit in Warsaw this summer. That would show Europe that NATO is willing to stand up for democracy, the article argued.</p><p id="yui_3_18_1_1_1453733670807_1677">However, Buras said accusations <a href="http://www.bbc.com/news/world-europe-35362972">made by European Parliament President Martin Schulz</a> that the changes being made in Poland are a part of a "dangerous Putinization" are "completely bulls---"</p><p>"Of course we don't have any Putinization of Poland," he said. "This kind of criticism is very counterproductive."  </p>

A series of sweeping government changes has one expert saying Poland is going in a 'worrying direction'

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/586d62c9f10a9acc1c8b6791-1256/undefined" alt="Donald Trump" data-mce-source="Steve Pope/Getty Images" data-mce-caption="Donald Trump." /><p class="source"><span>Steve Pope/Getty Images</span></p><p class="caption">Donald Trump.</p></div><p></p></div></div></p><p>President-elect Donald Trump this week filled his lone remaining top trade post with yet another China hawk - much to the delight of trade reformers.</p><p>Trump on Tuesday tapped Robert Lighthizer as his choice for US Trade Representative. Lighthizer was the deputy USTR under President Ronald Reagan and has been a longtime critic of Chinese trade practices.</p><p>The soon-to-be chief US trade negotiator, Lighthizer worked to curb Japanese imports in the 1980s using threats of quotas and tariffs, similar to Trump's threats against American companies looking to import products from China and Mexico. He has spent decades as a lawyer representing US steelmakers and other companies in cases that led to a large reduction in Chinese steel imports.</p><p>Lighthizer's appointment joins him with two other prominent China hawks among Trump's team of trade advisers. It signals "a return to the Reagan era of unilateral trade policy," Columbia University political economics professor Sharyn O'Halloran told Business Insider in an email.</p><p>In 2010, <a href="http://www.businessinsider.com/r-trump-to-nominate-lighthizer-as-us-trade-representative-statement-2017-1" target="_blank">Lighthizer wrote</a> in testimony to Congress's US-China Economic and Security Review Commission that the trade deficit between the US and China was at the point where it "is widely recognized as a major threat to our economy."</p><p>Lighthizer joints <a href="http://www.businessinsider.com/trump-peter-navarro-china-national-trade-council-2016-12" target="_blank">Peter Navarro</a>, an economic adviser to his campaign and a fellow outspoken China hawk. Trump tapped him to lead a newly formed White House National Trade Council.</p><p>Navarro has authored books such as "Death by China" and "Crouching Tiger: What China's Militarism Means for the World." He too has advocated a more aggressive stance in what he has warned is an economic war with China.</p><p>In his release on Lighthizer's appointment, the Trump transition team wrote that Lighthizer, Navarro, and Commerce Secretary nominee Wilbur Ross - who went to war against Chinese steelmakers in the early 2000s but is not as hawkish as the other two - will be working in "close coordination" on trade policy.</p><p>Of course, the get-tough-on-China message originates at the top, as Trump has accused China of "<a href="http://www.cnn.com/2016/05/01/politics/donald-trump-china-rape/" target="_blank">raping our country</a>" and being at the head of <span>the greatest "jobs theft" in history.</span> </p><p>Trade reformers praised Trump's latest move, with Michael Stumo, the CEO of the Coalition for a Prosperous America, calling Lighthizer and "excellent choice" to replace current USTR Michael Froman.</p><p>The head of Trump's trade <a href="http://www.businessinsider.com/trump-trade-representative-boustany-2016-12" target="_blank">transition team</a>, Nucor CEO <a href="http://www.businessinsider.com/donald-trump-trade-agenda-2016-11" target="_blank">Dan DiMicco</a><span>, is on the board of CPA.</span></p><p>"He understands that international trade is a strategic game of conflicting national interests and a competition for good jobs and industries," Stumo said in a statement. "America must move past the failed and simplistic Econ 101 trade policy of the past because the results have been an economic carpet bombing of the non-urban areas of the US."</p><p>"We are confident that the combination of Lighthizer, Peter Navarro and Wilbur Ross will be effective in working to balance trade, achieving net creation of good jobs, and growing a diverse manufacturing supply chains here," he continued.</p><p><span>Lori Wallach, the director and founder of Public Citizen's Global Trade Watch, additionally praised Lighthizer's appointment.</span></p><p>"Lighthizer is very knowledgeable about both technical trade policy and the ways of Washington, but what sets him aside among high-level Republican trade experts is that for decades his views have been shaped by the pragmatic outcomes of trade agreements and policies rather than fealty to any particular ideology or theory," she said in a statement.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/586294b2ee14b6aa5c8b4d54-2000" alt="china xi jinping" data-mce-source="Reuters/Fred Dufour" data-mce-caption="Chinese President Xi Jinping speaks to Gabon's President Ali Bongo Ondimba (not pictured) during a meeting in the Great Hall of the People in Beijing, China December 7, 2016." /><p class="source"><span>Reuters/Fred Dufour</span></p><p class="caption">Chinese President Xi Jinping speaks to Gabon's President Ali Bongo Ondimba (not pictured) during a meeting in the Great Hall of the People in Beijing, China December 7, 2016.</p></div><p></p></div></div></p><p>Even Democratic Sen. Sherrod Brown of Ohio, one of the more liberal members of the legislative body and fellow trade-reform advocate, said he looked forward to hearing how Lighthizer will pull through on Trump's trade agenda. </p><p>"President-elect Trump campaigned on the promise that he would rewrite US trade policy and create more manufacturing jobs," he said in a statement. "I look forward to hearing from Mr. Lighthizer how he will accomplish these goals, including withdrawing from the Trans-Pacific Partnership, renegotiating NAFTA, and resetting the US-China trade relationship."</p><p>The core combination of Lighthizer, Navarro, and Ross view trade as being a "zero-sum game about winners and losers," said Joshua Meltzer, a senior fellow at the Brookings Institute.</p><p>He said it remains to be seen how the ideology plays out in governance, but added he expects "a fairly aggressive trade policy coming out of the Trump administration, at least in the beginning."</p><p>"Until, you know, some of the economic hardships can become clearer," he said.</p><p>In Beijing, Meltzer said views are mixed as to how Trump and his top trade team will affect relations between the two countries, which, he added, is the case in many nations at the moment. </p><p>"I think on the one hand there's been a view in Beijing for a while now that Trump's a businessman who does deals and that this will open up opportunities to make progress in some areas that are important to Beijing," he said. "That may not have been possible under a [Hillary] Clinton presidency. I think they see Trump as very transactional."</p><p>But "at the same time now there is a growing appreciation that the Trump administration is going to present a whole range of challenges to China, from currency through to investment and market access and the like," he continued. "So I think they are trying to assess how bad this is going to get, how far he's willing to take this."</p><p>And if Trump and his team begin deploying tariffs against countries like China, Meltzer said the retaliatory effect will be "harmful" on multiple fronts.</p><p>"Not alone because of the market access for US exporters, but simply because raising prices on a whole range of imports is going to be very costly for businesses and consumers," he said. "The net effect for the US economy and global economy on that front is going to be negative."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/stratfor-releases-annual-report-predictions-china-russia-europe-economy-terrorism-trump-us-2017-2016-12">These are Stratfor's chilling predictions for 2017</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="B3cmRtODE6AVvM2Q_w6SvkCHd1DxId92" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'B3cmRtODE6AVvM2Q_w6SvkCHd1DxId92',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

Trump has filled his vaunted trade team with China hawks - and his allies love it

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5776b12288e4a779638b53ae-2400/gettyimages-543431020.jpg" alt="Donald Trump" data-mce-source="Jeff Swensen/Getty Images" data-mce-caption="Donald Trump." /><p class="source"><span>Jeff Swensen/Getty Images</span></p><p class="caption">Donald Trump.</p></div><p></p></div></div></p><p>Donald Trump launched an all-out assault on America's free trade agreements this week - hitting a peak in his anti-trade message that's swept him through the primary season and into the general election.</p><p><span>And in doing so, he's breaking completely with decades of Republican orthodoxy, staring down party leaders and some of their top messengers over an issue that has helped define the GOP.</span></p><p><span>During <a href="https://assets.donaldjtrump.com/DJT_DeclaringAmericanEconomicIndependence.pdf" target="_blank">a speech</a> titled "Declaring American Economic Independence" earlier this week, Trump called for pulling out of the North American Free Trade Agreement and for Congress to refuse to ratify the landmark Trans-Pacific Partnership. He also demanded that presumptive Democratic nominee Hillary Clinton pledge to withdraw from TPP on her first day in office should she be elected.</span></p><p><span>He called NAFTA the "greatest jobs theft in history" during his Tuesday speech from just outside of Pittsburgh, and <a href="http://www.mediaite.com/online/trump-tpp-trade-deal-is-a-rape-of-our-country/" target="_blank">later said during a rally in Southeast Ohio that night</a> that TPP is "a</span>nother disaster done and pushed by special interests who just want to rape our country."</p><p>"A continuing rape of our country," he said. "That's what it is, too. It's a harsh word. It's a rape of our country."</p><p>Trump's tough stance on trade aligns him much closer with the liberal left than it does with the traditional Republicans. As Trump was blasting trade in a series of speeches and events this week, Vermont Sen. Bernie Sanders called for ensuring that TPP doesn't get a vote before Congress. Even p<span>resumptive Democratic nominee Hillary Clinton, the candidate most aligned with the Obama administration, having served in it as secretary of state, has come out against TPP as it's currently structured.</span></p><p><span>"Democrats must do all they can to defeat the TPP. #StopTPP," Sanders wrote<a href="https://twitter.com/BernieSanders/status/748510126424756224" target="_blank"> in a tweet</a>.</span></p><p><span>But no one's anti-trade message has been as hard-lined as Trump's, who places the blame for economic hardships at home squarely on increased globalization.</span></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5776b13d88e4a7b32e8b55ec-2400/gettyimages-543431024.jpg" alt="Donald Trump" data-mce-source="Jeff Swensen/Getty Images" data-mce-caption="Donald Trump." /><p class="source"><span>Jeff Swensen/Getty Images</span></p></div><p></p></div></div>GOP Sen. Jeff Flake of Arizona, a fierce critic of Trump, told Business Insider in an interview this week that the Manhattan billionaire's message of "economic independence" is simply a code for "Fortress America." </p><p>"Anybody who believes that we're going to grow economically and deal with the huge fiscal problems that we have from shutting ourselves off from the rest of the world is just certainly not what I'd call a Republican," he said. "I mean we believe in free trade. We still do. NAFTA is not a dirty word."</p><p>Trump, who's clothing line is produced overseas, has made an anti-trade argument that is "easier to identify," Flake said. He added that defending trade is much more difficult to properly explain than it is to show employees who've lost their jobs because a factory closed or relocated.</p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/57766cf288e4a78c148b5590-1418/ap_697015875852.jpg" alt="Jeff Flake" data-mce-source="AP Photo/Ross D. Franklin" data-mce-caption="Jeff Flake" /><p class="source"><span>AP Photo/Ross D. Franklin</span></p><p class="caption">Jeff Flake.</p></div><p></p></div></div>"But it's more difficult to identify on the net, companies that have benefited from exports, cheaper goods," he said. "Not just cheaper goods but cheaper inputs. So, takes a lot longer than a 30 second soundbite. It's incumbent on us who have six-year terms to be talking about this and I mean in an election campaign, you certainly prioritize what you play up and play down but boy, to play into the rhetoric and not challenge it that is going on is inexcusable I think."</p><p>He said Congress needs to "suck up" and ratify TPP because "it has to be done."</p><p>"I do still think there are enough people that realize we've got to do it," he said.</p><p>Tony Fratto, the deputy press secretary in the Bush administration who is now a managing partner at Hamilton Place Strategies, was heavily involved in the administration's international trade policy. He<a href="http://www.businessinsider.com/obama-trade-asia-donald-trump-tpp-2016-5"> told Business Insider</a> in May that an "<span>overwhelming majority of our job loss, especially in manufacturing, has nothing to do with trade at all."</span></p><p>"It has to do with the application of technology," he continued. "It's productivity and management and technology that is being applied to a lot of complex manufacturing that is reducing the need for workers. That is not going to change."</p><p>"There are lots of presidential candidates who have opposed trade - there are no presidents who have opposed trade," he added. "In the postwar period, there have been no anti-trade presidents. Every president has been pro-trade. Even if they hadn't been as presidential candidates." </p><p>The sentiment about technology, and not trade, being the reason for so many jobs becoming obsolete was exactly what Obama expressed in his State of the Union address earlier this year. But the argument has fallen mostly on deaf ears.</p><p>During this week's North American Leaders Summit in Ottawa, the subject of trade was front-and-center as Obama stood on stage and answered questions next to his Canadian and Mexican counterparts - Justin Trudeau and Enrique Peña Nieto.</p><p>Feeling the growing tide of anti-trade and anti-NAFTA sentiment brewing back home, Obama said people with concerns over trade "have a legitimate gripe about globalization."</p><p>"As the global economy is integrated, what we've seen are trend lines across the advanced economies of growing inequality and stagnant wages, and a smaller and smaller share of overall productivity and growth going to workers, and a larger portion going to the top 1 percent," he said. "And that's a real problem."</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5774390f4321f1362f8b487a-2400/rtx2ixsl.jpg" alt="Barack Obama" data-mce-source="REUTERS/Kevin Lamarque" data-mce-caption="Barack Obama speaks at a news conference during the North American Leaders' Summit in Ottawa, Canada June 29, 2016." /><p class="source"><span>REUTERS/Kevin Lamarque</span></p><p class="caption">Barack Obama.</p></div><p></p></div></div>If the trend continues, the "social cohesion" and "political consensus needed for liberal market economies starts breaking down."</p><p>Such sentiment helped, in part, to put the "Leave" vote over the top in Brexit, an earth-shattering decision that will lead to the United Kingdom abandoning the European Union.</p><p>To address the issue, Obama called for investments in education, rebuilding infrastructure, and having "fair" tax policies.</p><p>"And what is absolutely true is, is that too many folks who have been in charge around the world have neglected that side of the equation," he said. "So we're going to keep on pushing hard to shape an international order that works for our people. But we're not going to be able to do that by cutting off trade, because that's going to make all of us poor."</p><p>He later added a line that has been all-too-common along the trail with Trump: "Free trade also has to be fair trade."</p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5755ec3c52bcd066018c74a9-1476/ap_471790397805.jpg" alt="Bruce Andrews" data-mce-source="AP Photo/Andreea Alexandru, Mediafax" data-mce-caption="Bruce Andrews." /><p class="source"><span>AP Photo/Andreea Alexandru, Mediafax</span></p><p class="caption">Bruce Andrews.</p></div><p></p></div></div>Bruce Andrews, the deputy secretary of commerce in the Obama administration, didn't place the blame for "job disruption" on America's trade agreements during a recent interview with Business Insider.</p><p>He said the job loss that has come as a result of globalization has "happened without any trade agreements."</p><p>The deputy secretary also called out people - without naming any specific names - who "cite competition with China" as an example of such a reason to oppose a trade deal such as TPP because "we don't have a free trade agreement with China."</p><p>"Globalization is going to take place whether we do these trade agreements or not," he said. "The question is, do we want to write the rules, do we want to make sure that American companies have the same access that companies from other countries are going to have."</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5776b0ab4321f10d038b5914-2400/gettyimages-543431004.jpg" alt="Donald Trump" data-mce-source="Jeff Swensen/Getty Images" data-mce-caption="Donald Trump." /><p class="source"><span>Jeff Swensen/Getty Images</span></p></div><p></p></div></div></p><p>Along with Mexico, the chief reason he is in opposition to NAFTA, Trump has used China as a punching-bag for his anti-trade message.</p><p>During <a href="https://www.washingtonpost.com/opinions/the-dangers-of-a-trade-war/2016/05/23/ac977b80-2120-11e6-9e7f-57890b612299_story.html">an event in New Jersey</a> in May, Trump insinuated that trade deals led to the US being "viewed as the stupid country," shrugging off the potential consequences of a trade war with other countries.</p><p>"These dummies say, 'Oh, that's a trade war,'" he said. "Trade war? We're losing $500 billion in trade with China. Who the hell cares if there's a trade war?"</p><p>Andrews cited various reasons to stand behind TPP: he considers it a renegotiation of NAFTA with Mexico and Canada, raising standards with the two countries, it cuts thousands of tariff lines, which he called "essentially a tax cut" for Americans, and it opens up a much larger portion of the global markets to unrestricted access for American corporations. </p><p>He, like Obama, emphasized that the US has to do a better job of training people for the jobs that are available.</p><p>"We can't turn the clock back on globalization," he said. "Globalization is going to happen whether we like it or not. What we can do is prepare the United States to be competitive, create the technologies of the future, invest in research and development, make sure they're manufactured here, making sure our workers have the skills to do them, then give the products access to other markets through trade deals."</p><p>The argument that trade deals provide cheaper goods to all Americans, a point that's made by both Republicans and Democrats who support TPP, was ripped by Trump. <a href="https://www.youtube.com/watch?v=d7IqQqZuYkE">During a speech in New Hampshire Thursday</a>, he said "we're better off paying a little bit more and having jobs."</p><p>"It's a much better system, the way it used to be," he said. "We manufacture goods, and sell them to other countries. And a lot of people say the goods will come in and they'll be cheaper, yeah, but we lost all our jobs. So we're better off if the goods aren't quite as cheap but we keep our jobs. And the goods will be of a higher quality because we do a higher quality good. And we're known for that. But all of a sudden the jobs are gone." </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5776c6d14321f11a008b59f4-2400/gettyimages-508234816.jpg" alt="Michael Froman" data-mce-source="Fiona Goodall/Getty Images" data-mce-caption="Michael Froman." /><p class="source"><span>Fiona Goodall/Getty Images</span></p><p class="caption">Michael Froman.</p></div><p></p></div></div></p><p>In a recent interview with Business Insider, US Trade Representative Michael Froman said the anti-trade message from the campaign - the message championed by Trump - is simple. </p><p>"The fact is, you don't get to vote on automation," he said. "You don't get to vote on whether the next generation of computers or robots are going to be brought into your workplace. You don't really get to vote on globalization. It's a force. It's a fact. It's a reflection of the containerization of shipping, the spread of broadband, the integration of countries like China and Eastern Europe that used to be closed to the global economy are now part of the global economy."</p><p>"Trade agreements become the vessel into which people pour quite legitimate economic insecurities," he continued. "And you do get to vote on trade agreements, and they do get to become a scapegoat for a lot of the other concerns, legitimate concerns."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/list-things-donald-trump-taken-credit-2016-6">These are some of the things Donald Trump has taken credit for</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="p2Z3Y2NDE65kDsBs6O44mCGhkGpwNNlT" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'p2Z3Y2NDE65kDsBs6O44mCGhkGpwNNlT',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

Donald Trump is staring down decades of Republican Party orthodoxy on a signature issue

<p><div class="KonaFilter image-container float_right"><div class="image"><img src="http://static1.businessinsider.com/image/52f4b12469beddfc5f24c453-1200-924/harry-reid-52.jpg?maxX=480" border="0" alt="Harry Reid" width="480" /><p class="source"><span>AP</span></p></div><p></p></div>IN HIS state-of-the-union address Barack Obama asked Congress to give him "fast-track" authority to negotiate trade deals. Shortly afterwards his most important ally on Capitol Hill hinted that he might block it. As Senate majority leader, Harry Reid can do just that: no bill gets a vote without his say-so. But would he really stiff Mr Obama? Much depends on the answer.</p>
<p>Studies suggest that proposed deals with Asia and Europe could generate global gains of $600 billion a year, with $200 billion of that going to America. And that understates the benefits, since the deals would spur competition in the market for services, which make up most of rich countries' output but are seldom traded across borders. Opening industries like finance and transport to greater competition could bring great savings to consumers.</p>
<p>Mr Obama has never been an ardent free-trader, yet his second term got off to a promising start. The Trans-Pacific Partnership, a deal with large Pacific-rim economies, is close to completion; America and Japan are hammering out the rules for farm goods. European and American trade wonks continue to meet regularly, hoping to wrap up a "next-generation" trade agreement as early as next year.</p>
<p>To make all this happen Mr Obama needs "trade promotion authority" (usually known as "fast-track"), which would let him negotiate deals and then present them to Congress for a simple yes-or-no vote, with no chance for lawmakers to rewrite the details. Without such authority, America's trading partners cannot take the White House seriously as a negotiator. Fast-track was last granted to George W. Bush in 2002 and expired in 2007. Since Republicans are generally pro-trade and Democrats are generally loyal to Mr Obama, most people in Washington at first assumed that Congress would give it to him without a fuss.</p>
<p>But with elections looming and lawmakers in a populist mood, that is far from certain. Late last year roughly half the members of the House wrote to Mr Obama declaring their opposition to fast-track; most were from his own party. In early January a bipartisan group of senators introduced a fast-track bill. Mr Obama spoke up for it in his state-of-the-union address, but only in passing and in mercantilist terms. The aim is "to protect our workers, protect our environment and open new markets to new goods stamped 'Made in the USA'," he said; without mentioning that cheap imports raise living standards.</p>
<p>Barely had he left the podium when Mr Reid mugged him. Answering questions from reporters, he reiterated his opposition to fast-track and advised its backers "not [to] push this right now". Insiders doubt that Mr Reid would kill the bill outright. Haggling in the Senate may yield a new version with enough about labour standards and the environment to satisfy the protectionists. If so, Mr Reid will probably allow a vote, and the bill should pass. The White House remains publicly optimistic.</p>
<p>Yet damage is already being done. Michael Froman, Mr Obama's trade representative, says negotiations have not been affected by the politicking in Washington. However, even if Mr Reid's rebellion was partly for show (his seat is at risk in 2016), it still worries America's trade partners. Shinzo Abe, Japan's prime minister, may be reluctant to offend voters at home for the sake of a trade deal that America's legislators might promptly torpedo. Similarly, the French, who have been a constant pain in talks between America and Europe, could argue that since America's leaders seem determined to attach conditions to a fast-track bill, France's demands for carve-outs deserve consideration, too.</p>
<p>At home meanwhile, Democratic opposition could harden. Some lawmakers may see an opportunity to put daylight between themselves and their Republican foes ahead of November's elections. With corporate profits looking healthy and wages still stagnant almost five years into the recovery, some may be tempted to portray Republican backing for free trade as support for fat-cat corporations.</p>
<p>Mr Reid's surprise rebuke suggests that Mr Obama needs to communicate better with his allies. And if he wishes to prevent two of the most promising trade deals in a decade from unravelling, he will need to make a far more full-throated case for the benefits of free exchange.</p>
<p>Click <a href="https://subscriptions.economist.com/nwcd">here</a> to subscribe to The Economist</p>
<p><img class="nc_pixel" src="http://pixel.newscred.com/px.gif?key=YXJ0aWNsZT1mZTQ4ZmRjYzliNmI3OGIwMTBlZThiMDMwM2JlM2M4ZCZub25jZT00Zjk0NjFmOS1jYTExLTQ0YWItYmY5MC1hMGE0ZjEwOGNjYjMmcHVibGlzaGVyPThjMDBmYmVlNjFkNWJjZjBjNjA5MmQ4YjkyZWJiY2Ex" border="0" alt="" width="1" height="1" /></p>

Harry Reid Threatens To Impoverish The World By At Least $600 Billion A Year

<p><div class="image-container" style="width:800px"><div class="image"><img src="http://static4.businessinsider.com/image/51f3d25ceab8ea7c74000000-1200-924/san-diego-mayor-bob-filner.jpg?maxX=800" border="0" alt="San Diego Mayor Bob Filner" width="800" /><p class="source">REUTERS / Fred Greaves</p><p class="caption">Two weeks of therapy will teach me to keep my feelings to myself.</p></div></div>SAN DIEGO (Reuters) - Embattled San Diego Mayor <keyword id="1771473" type="UNKNOWN" weightage="60" keywordseo="Bob-Filner">Bob Filner</keyword> on Friday defied calls to resign over a hail of sexual harassment allegations, but apologized to the women he offended and said he would take a two-week leave of absence to undergo intensive therapy.</p>
<p>A day after the San Diego County Democratic Central Committee urged him to step down, the 70-year-old Democrat and former congressman said he would enter a counseling clinic on August 5, while keeping an eye on the affairs of California's second largest city.</p>
<p>"The behavior I have engaged in over many years is wrong," Filner told a news conference. "My failure to respect women and the intimidating conduct I engaged in at times is inexcusable. It has undermined what I have spent my entire professional life working on - fighting for equality and justice for all people."</p>
<p>Seven women have publicly accused Filner of groping and making other unwanted sexual advances toward them, including four who came forward in a group interview aired late Thursday on public television station KPBS.</p>
<p>Among them were retired U.S. Navy Rear Admiral Veronica "Ronnie" Froman and Joyce Gattas, dean of the College of Professional Studies and Fine arts at San Diego State University.</p>
<p>Their TV appearance came as the county Democratic Central Committee, a council of local party bosses and elected officials, voted 34-6 to approve a non-binding resolution demanding that Filner leave office.</p>
<p>The committee said in a statement on Friday that it stood by its position that Filner should go. But some experts said the mayor seemed determined to try to hang on to his job at almost all costs.</p>
<p>"He's not only hunkered down in the bunker, he's taken the hinges off the door and welded it shut," said Carl Luna, a political science professor at San Diego Mesa College.</p>
<p>During his two-week leave, Filner said he would be in counseling at the clinic full-time but would be briefed on city activities every morning and evening until his planned return to regular duties on August 19.</p>
<p>"I must become a better person, and my hope is that by becoming a better person, I put myself in a position to someday be forgiven," he added. He began his remarks by offering apologies to his staff and San Diego's citizens, adding, "Most of all, I apologize to the women that I have offended."</p>
<p>RESIGNATION DEMANDS</p>
<p>Filner spoke from his office at City Hall just 30 minutes after organizers of a recall effort held their own news conference to highlight their campaign and to present a letter to the mayor's office demanding his resignation by 5 p.m.</p>
<p>Numerous prominent local Democrats already had called for Filner to step down. One of them, Todd Gloria, who is president of the City Council and would become interim mayor if Filner were to resign, said his latest move to address the issue did not go far enough.</p>
<p>"Filner's announcement prolongs the pain when San Diegans are calling for an end to this civic nightmare," Gloria said in a Twitter message.</p>
<p>During her weekly news conference in Washington on Thursday, U.S. House Minority Leader Nancy Pelosi said Filner should seek private counseling and compared his behavior to the conduct of another ex-congressman engulfed in a sex scandal since he turned to mayoral <keyword id="6358883" type="PERSON" weightage="100" keywordseo="Politics">politics</keyword> - Democrat Anthony Weiner of New York.</p>
<p>Weiner faces calls to withdraw from the New York City mayor's race after admitting he sent lewd online messages to women since he resigned from Capitol Hill over such behavior two years ago.</p>
<p>"The conduct of some of these people that we are talking about here is reprehensible. It is so disrespectful of women. And what is really stunning about it is they don't even realize it. You know, they don't have a clue," she said.</p>
<p>The clamor for Filner's ouster intensified after his former press secretary, Irene McCormack Jackson, filed a sexual harassment lawsuit against the mayor and the city on Monday, accusing him of unwanted physical contact and suggestive comments.</p>
<p>Jackson's lawyer, Gloria Allred, dismissed Filner's "decision to seek therapy as a ploy to stay in power and to try to gain sympathy."</p>
<p>"It is ridiculous to think that he needs therapy in order to understand that women deserve respect and should not be treated like pieces of meat."</p>
<p>On Friday, the City Attorney's Office served Filner with a subpoena in the civil suit, demanding that he submit to a deposition on August 9, about 10 days before the mayor is due to finish his therapy.</p>
<p>"Testifying under oath is part of due process. We expect Mayor Filner to attend absent a court order to the contrary," Assistant City Attorney Paul Cooper said.</p>
<p>The City Attorney's Office has said that Filner has retained a private attorney to handle his legal matters stemming the scandal, and spokesman Michael Giorgino added on Friday, "We don't see a basis for the city paying for private therapy."</p>
<p>Filner was elected mayor of the normally conservative-leaning city last year after a 20-year career in the U.S. House of Representatives.</p>
<p>Republicans, for whom his current troubles pose a chance to seize back the city's top-elected post, have called for his resignation since allegations against him first surfaced on July 11, even before any of the alleged victims went public.</p>
<p>"Two weeks of therapy will not end decades of bad behavior," Republican City Councilman Kevin Faulconer said. "He needs to resign and seek long-term treatment as a private citizen."</p>
<p>(Additional reporting by Alex Dobuzinskis in Los Angeles; Writing by Steve Gorman; Editing by Dina Kyriakidou and Andre Grenon)</p>

San Diego Mayor Off To Therapy To Learn That It's Not Okay To Kiss Staffers And Pat Their Butts

<p class="p1"><span style="line-height: 1.5em;"><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/547541ae69beddc7763ab541-579-434/brics-brazil-2014-1.jpeg" alt="brics brazil 2014" border="0"><p class="source"><span><a href="http://commons.wikimedia.org/wiki/File:BRICS_leaders_in_Brazil.jpeg">Wikimedia</a></span></p></img></div><p></p></div></div>Of all the fast-growing BRIC countries, only India stands strong right now. Its economy seems perfectly structured to handle our delicate, and dangerous, global market.</span></p>
<p class="p1"><span style="line-height: 1.5em;">A year and a half ago, emerging markets fell into chaos when the Federal Reserve signaled that the American economy had improved enough to end its asset-buying program, and investors began pulling out of foreign markets. </span></p>
<p class="p3"><span class="s1">India was in a vulnerable place then - its current account deficit had been at 6.9% in late 2012, and outflows hit the economy hard. Plus, inflation was on the rise and growth was stagnating.</span></p>
<p class="p3"><span class="s1">But today, while much of the world is in dark place economically - Brazil is embroiled in a <a href="http://www.businessinsider.com/r-morgan-stanley-sees-petrobras-scandal-write-offs-of-as-much-as-81-billion-2014-11">corruption scandal,</a> <a href="http://www.businessinsider.com/afp-russia-to-lose-some-40-bn-a-year-due-to-sanctions-minister-2014-11">sanctions</a> continue to constrain Russia's economy, China is slowing down, and <a href="http://www.businessinsider.com/europes-policies-are-failing-the-unemployed-2014-11">unemployment persists</a> in the EU - India stands out as a star performer: the one emerging market perfectly positioned for growth.</span><span style="line-height: 1.5em;"><br /></span></p>
<p class="p3"><span class="s1">So how did massive, decentralized India - home to 1.3 billion people, five major religions, and more than 20 official languages - get to this point? </span><span style="line-height: 1.5em;"> </span></p>
<p class="p3"><span class="s1"><strong><em><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5474c5a5eab8ead829222db9-1200-924/modi-victory.jpg" alt="Modi victory" border="0"><p class="source"><span><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C04WNM7H46BE&amp;SMLS=1&amp;RW=1194&amp;RH=855">Toru Hanai/Reuters</a></span></p></img></div><p></p></div></div></em></strong></span></p>
<p class="p3"><span class="s1"><strong>Let's start with Modi.</strong> </span></p>
<p class="p3"><span class="s1">In May's general election, Narendra Modi shot to power with a 52 percent majority for his Bharatiya Janata Party (India's first majority government in 30 years) and some serious promises to whip the economy into shape.</span></p>
<p class="p3"><span class="s1">He'd campaigned as a pro-business candidate who turned his home state, Gujarat, into a flourishing investment destination. So, with a comfortable cabinet majority, everyone hoped he could pull off reforms at the national level too.</span><span style="line-height: 1.5em;"> </span></p>
<p class="p3"><span class="s1">One early challenge was the budget, which came out in July. With it, Finance Minister Arun Jaitley announced plans to reduce the fiscal deficit, cut subsidies, invest in infrastructure, boost domestic savings and investment, and introduce a GST. </span></p>
<p class="p3"><span class="s1">The new administration also cut down the number of cabinet members to reduce inefficiencies and began <a href="http://www.businessinsider.com/r-big-brother-modi-is-watching-indias-bureaucrats-2014-10" target="_blank">tracking public employees' attendance</a> at work with a video surveillance system.<br /></span></p>
<p class="p3"><span class="s1">Six months into power, Modi's government has made important strides toward economic growth, and it has already started to <a href="http://www.businessinsider.com/world-market-rally-continues-2014-11">boost investor confidence</a>:</span><span style="line-height: 1.5em;"> </span></p>
<p class="p3"><span style="line-height: 1.5em;"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5474df43eab8ea291f222db7-636-387/screen shot 2014-11-25 at 2.57.19 pm.png" alt="Screen Shot 2014 11 25 at 2.57.19 PM" border="0"><p class="source"><span>dshort.com</span></p><p class="caption">Check out India's main stock index (in brown) compared to everyone else</p></img></div><p></p></div></div></span></p>
<p class="p3"><span style="line-height: 1.5em;"><strong>But Modi is not the only reason investors are so confident.</strong><br /></span></p>
<p class="p3"><span class="s1">India is also one of the least-exposed emerging markets to China, which is now facing</span><span style="line-height: 1.5em;"> <span>mounting deflation fears,</span> <span>a collapsing housing market</span>, and an economy growing at its <a href="http://www.bloomberg.com/news/2014-11-08/china-exports-bolster-economy-as-external-demand-strengthens.html">slowest rate in decades</a>.</span></p>
<p class="p3"><span class="s1"><span><div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5475f94a6da811bc496eb7ab-518-430/screen shot 2014-11-25 at 3.06.18 pm.jpeg" alt="India external exposure" border="0"><p class="source"><span>Credit Suisse</span></p></img></div><p></p></div></div>Though China and India share a 2520-mile border, they have never been great friends, and now that strained relationship is helping India. </span></span></p>
<p class="p3"><span style="font-size: 15px; line-height: 1.5em;">Researchers predict India will focus increasingly on import substitution and domestic demand-led growth going forward. It's better-suited to do this than most countries, because its reliance on external demand is already so low. </span></p>
<p class="p3"><span class="s1">Favorable demographics also help the picture: India's dependency ratio is declining and almost 30 percent of the population is <a href="http://www.businessinsider.com/8-charts-that-show-how-indias-prime-minister-plans-to-copy-chinas-growth-boom-2014-9">under the age of 14</a>. Those people will make up the country's consumers, employers, workers, and taxpayers in the decades to come.</span><span style="line-height: 1.5em;"> </span></p>
<p class="p3"><span class="s1">Think of how different that is from China's <a href="http://uk.businessinsider.com/the-one-terrifying-chart-that-shows-a-massive-chinese-slowdown-is-totally-unavoidable-2014-11">demographic future</a> where an aging population will eventually make for a high dependency ratio.<br /></span></p>
<p class="p3"><strong><span class="s1">Not bad, India. </span></strong><span style="line-height: 1.5em;"><strong>Here's what else is going on:</strong><br /></span></p>
<ul>
<li><span style="line-height: 1.5em;">Consumer confidence is growing: auto sales grew at 20 percent in September and October and mobile phone subscriptions grew at more than 10 percent YOY last month (India doesn't release retail sales data<em>)</em><br /></span></li>
<li><span style="line-height: 1.5em;"><span>The rupee has been on a steady decline, making it super-competitive in the region: <span style="line-height: 1.5em;">right now it's trading at <span style="word-break: break-all;">0.016</span> to the dollar</span></span></span></li>
<li><span style="color: #222222; line-height: 1.5em;">Industrial output is on the up and up</span></li>
<ul>
<li><span style="color: #222222; line-height: 1.5em;">? Last month, India was the only country in Asia with positive PMI growth, <span style="color: #222222; line-height: 1.5em;">at </span><span style="color: #222222; line-height: 1.5em;">51.6, up  <br>  from 51.0 in September</br></span><br /></span></li>
<li><span style="color: #222222; line-height: 1.5em;">? In September, industrial production surpassed expectations: factory output jumped <br>  <span style="color: #222222; line-height: 1.5em;">to 2.5 percent YOY</span>, up from 0.5 percent YOY in August<br /></br></span></li>
</ul>
<li><span style="line-height: 1.5em;"><span><span>I</span><span>nflation is dropping: a<span>t 5.5 percent in October, <span style="line-height: 1.5em;">down from 6.5 percent in September, </span></span>CPI was well below the government's 2016 target</span></span></span></li>
</ul>
<p class="p3"><span>India has made more progress than any other emerging market in lowering its current account deficit <span class="s1">- </span>and vulnerability to outflows <span class="s1">-</span> since the Fed shocked the markets last year by threatening to stop its bond-buying program. Right now the deficit is just 1 percent of GDP.<br /></span></p>
<p class="p2"><strong style="line-height: 1.5em;"><em><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5474d483eab8ea626e222dba-905-294/screen shot 2014-11-25 at 2.11.18 pm.png" alt="INdia CAD" border="0"><p class="source"><span>Morgan Stanley</span></p></img></div><p></p></div></div></em></strong></p>
<p class="p3"><span class="s1">With the recent drop in global oil and <span>gold</span> prices - which, together, make up 45 percent of India's imports - <span>researchers at Capital Economics predict </span>India could be running a current account <em>surplus</em> over the coming months<span>.</span></span></p>
<p class="p3"><span class="s1">The Modi government has taken big steps toward reducing debt - cutting diesel subsidies by half, increasing taxes on diesel and petrol, and marketing its stakes in Coal India and the Oil and Natural Gas Corporation.</span></p>
<p class="p2"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/53e549786bb3f7e671c99644-1200-924/oil-india-bicycle-gas-station.jpg" alt="oil india bicycle gas station" border="0"><p class="source"><span>REUTERS/Mukesh Gupta </span></p></img></div><p></p></div></div></p>
<p class="p3"><span class="s1">Despite these efforts, India will probably miss its fiscal target (of 4.1 percent in F2015). That's due in part to a high base-line left behind by the previous administration.</span></p>
<p class="p3"><span class="s1">But, according to researchers at Lombard Street Research, it might not be such a bad thing. The economy is running below capacity right now, and a little extra spending could help give it a boost.</span></p>
<p class="p2"><strong><span style="line-height: 1.5em;">So basically India's looking pretty good... b</span><span style="line-height: 1.5em;">ut Modi's administration does have its critics. </span></strong></p>
<p class="p3"><span class="s1">The new debt-reducing policies are definitely unpopular: in June, protestors around the country <a href="http://www.theguardian.com/world/2014/jul/07/india-railway-fare-rises-spark-protests">took to the streets</a> when the government raised train fares by 14.2 percent. Freight fares jumped 6.5 percent.</span><span style="line-height: 1.5em;"> </span></p>
<p class="p3"><span style="line-height: 1.5em; background-color: #ffffff;">(Riots are old news for the 64-year-old Prime Minister, who faced criticism as chief minister of Gujarat for allegedly condoning anti-Muslim violence in 2002. The U.S, UK, and EU boycotted him for a while, and today he's still widely regarded as a Hindu nationalist.)</span></p>
<p><span style="line-height: 1.5em;"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5474e28eeab8ea6623222db9-1200-924/india-fare-hike-protest.jpg" alt="India fare hike protest" border="0"><p class="source"><span><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C04WNM7CATEF&amp;SMLS=1&amp;RW=1194&amp;RH=855">Rupak De Chowdhuri/Reuters</a></span></p></img></div><p></p></div></div></span><span class="s1">Now, Modi maintains a steady focus on the economy, which is not yet in the clear.<br /></span></p>
<p><span class="s1">GDP growth is sliding. Exports were down 5 percent YOY in October and GDP growth weakened to 5.3 percent last quarter from 5.7 percent in Q2. </span></p>
<p><span class="s1">That's partly a result of slow global demand (hence wanting to boost domestic demand) and partly due to supply-side constraints, like a <a href="http://articles.economictimes.indiatimes.com/2014-07-14/news/51484976_1_coal-mines-power-minister-piyush-goyal-india">tight supply of coal</a>. </span><span style="line-height: 1.5em;"><br /></span></p>
<p class="p3"><span class="s1">Structural reforms are needed, but in the world's largest democracy, that will take time. Nobody's holding out for a big bang or sudden change.</span></p>
<p class="p3"><strong><span class="s1">But Modi supporters say he's got this.</span></strong></p>
<p class="p3"><span class="s1">The winter parliamentary session kicked off this week, and reforms in <a href="http://firstbiz.firstpost.com/economy/rbi-ready-to-give-banks-flexibility-to-restructure-stressed-loans-110130.html">finance</a>, <a href="http://firstbiz.firstpost.com/corporate/govt-plans-double-coal-india-production-2019-110124.html">infrastructure</a>, taxation, labor, and land acquisition will be top of the agenda.</span></p>
<p class="p2"><span style="line-height: 1.5em;">Also this week, U.S. Trade Representative </span><span style="line-height: 1.5em;">Michael Froman</span><span style="line-height: 1.5em;"> flew to Delhi for trade talks, and in January, P</span><span style="line-height: 1.5em;">resident <a href="http://articles.economictimes.indiatimes.com/2014-11-23/news/56385217_1_pm-modi-strong-message-republic-day">Obama will come to visit</a> for India's Republic Day celebrations.</span></p>
<p class="p2"><span style="line-height: 1.5em;"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5474e637eab8ea9833222dbb-1200-924/modi-obama.jpg" alt="Modi Obama" border="0"><p class="source"><span><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C04WNM7CCJJL&amp;SMLS=1&amp;RW=1194&amp;RH=855">Larry Downing/Reuters</a></span></p></img></div><p></p></div></div>It's a bit of a change since 2002, when the U.S. denied Modi entry after his alleged involvement in the Gujarat riots. But as other countries face economic woes, India is becoming an increasingly important business partner for America.<br /></span></p>
<p class="p2"><span style="line-height: 1.5em;">Meanwhile, for India, weak export demand could be the biggest obstacle to economic ascent, so the U.S., a major buyer of India's goods, would play an important role in the country's success. </span></p>
<p class="p2"><span style="line-height: 1.5em;">So even if dreary global demand <em>does</em> pull India down, it very likely won't fall as far as everyone else. </span></p>
<p class="p2"><span style="line-height: 1.5em;">That would still be a victory.<br /></span></p>

You Searched For "Michael Froman" and got 14 results

FM Arun Jaitley says US Visa fee hike discriminatory

BI India Bureau

Boost to Indo-US ties! India to apply US technology to manufacture aircraft carrier

BI India Bureau

Indian's working in US could soon get social security cover

BI India Bureau

'We're not backing down:' How the West plans to use Russia's frozen funds, and why some say it's still not enough to help Ukraine

Filip De Mott

China's big factories had a terrible March, even as automakers roar to new highs

Meghan Morris

Disney's fight with Nelson Peltz is about to come to a head. Here's where things stand.

Madeline Berg

10 things you need to know in markets today

Oscar Williams-Grut

Free-Trade: America's Big Bet

The Economist

A series of sweeping government changes has one expert saying Poland is going in a 'worrying direction'

Allan Smith

Trump has filled his vaunted trade team with China hawks - and his allies love it

Allan Smith

Donald Trump is staring down decades of Republican Party orthodoxy on a signature issue

Allan Smith

Harry Reid Threatens To Impoverish The World By At Least $600 Billion A Year

The Economist

San Diego Mayor Off To Therapy To Learn That It's Not Okay To Kiss Staffers And Pat Their Butts

Marty Graham, Reuters

India Is The Last BRIC Standing

Portia Crowe