Friday, February 28, 2020

BBC News - UK nears acid test in trade talks with EU

prime ministerImage copyrightGETTY IMAGES
The government will decide in June whether to abandon talks with the EU and prepare for no trade deal on World Trade Organization terms.
The decision will be made if insufficient ground has been covered in talks with the EU.
The acid test will be if what it calls "good progress" has not been made on areas such as financial services and data, which the government sees as the easiest areas to negotiate.
The approach was revealed in the publication of its negotiating mandate for the talks, which begin next week.
It echoes the EU approach to sequencing negotiations in the first phase of Brexit talks, seeking to settle issues of significant importance to the UK early, over which the EU has unilateral power.
The EU has so far refused, for example, to negotiate its power to determine whether UK financial services have "equivalent" standards for its trade with the EU, or whether UK's data regulations are adequate in terms of the flow of electronic information.

Canada model

The government has also played down the prospect of doing an immediate numerical economic assessment of the introduction of new trading arrangements with the EU, although a public consultation will begin in the spring, after the formal start of negotiations.
The UK mandate emphasises the government's wish for a trading relationship with the EU based on its existing precedents with Canada, Japan and South Korea.
It allows no jurisdiction for EU law or the European Court of Justice in the UK.
"The government will work hard to agree arrangements on these lines," the document says.
"However if it is not possible to negotiate a satisfactory outcome, then the trading relationship with the EU will rest on the 2019 Withdrawal Agreement and will look similar to Australia's."
The mandate seeks a suite of different agreements on fisheries, aviation, energy and migration, unlike the EU mandate, which seeks one whole agreement covering everything.
The document also says that it hopes the broad outline of an agreement should be clear by June, and capable of being "rapidly finalised" by September.
In the meantime, the government will push on for preparations for the reintroduction of customs and regulatory formalities on trade with the EU in January 2021, and expects businesses to follow suit.

Thursday, February 27, 2020

BBC News - Coronavirus: Gulf states suspend more flights

People wear face masks in TehranImage copyrightANADOLU AGENCY
Gulf states have imposed more flight restrictions in an effort to try to slow the spread of the coronavirus outbreak.
The United Arab Emirates (UAE) has suspended all flights to and from Iran apart from Tehran.
Bahrain has suspended all flights to and from Dubai and Sharjah in the UAE until further notice.
Oman, Jordan, Kuwait, Iraq and Saudi Arabia have already suspended flights to Iran after cases there.
Airlines around the world have been forced to reduce flights as countries try to stop the spread of the potentially deadly disease.
On Tuesday, Dubai's airport authority said that it had suspended all flights to and from Iran with the exception of the capital Tehran.
Passengers arriving from Tehran will be screened, it said. Customers have been urged to contact their airlines if they need to rebook flights.
In addition, the Kingdom of Bahrain has suspended all scheduled passenger flights to and from Dubai until further notice, the airport authority said.
On Monday, Iraq, Afghanistan, Kuwait, Oman and Bahrain reported their first cases of coronavirus, all involving people who had travelled from Iran.
On the same day Iran denied a cover-up over how many there had died from the disease.
To try to prevent the spread of the virus, Iranian authorities have ordered the nationwide cancellation of concerts, football matches, and closures of schools and universities in many provinces, as a precaution.
The global airline industry body, the International Air Transport Association (IATA), warned on Friday that airlines stand to lose $29.3bn (£23.7bn) of revenue this year due to the effects of the virus.
IATA predicted that demand for air travel would fall for the first time in more than a decade.
Last week, airlines Qantas and Air France-KLM warned that their earnings would be hit as a result of the coronavirus dampening demand in Asia.

Analysis:

By Sameer Hashmi, BBC Middle East business correspondent
Members of Iraqi medical team check passengers upon arrival from Iran at Baghdad international airportImage copyrightEPA
Bahrain's decision to suspend all flights to and from Dubai might seem dramatic but it is also a sign of fear that has gripped governments in the Middle East.
Cases of the coronavirus emerging in the last few days in the United Arab Emirates, Oman, Bahrain, Kuwait, Lebanon and Iraq are all linked to Iran, which has emerged as the epicentre of the virus in the region.
More than 400,000 Iranians are estimated to be based in Dubai. The city is the main business hub between Iran and the rest of the Middle East.
Kuwait - where the number of confirmed cases has risen to eight - suspended all national day public celebrations on Tuesday and has also banned sports activities in the country for the next two weeks.
The outbreak of the epidemic in Iran is a blow for the country's economic health, which is already being strangled by sanctions.

Coronavirus effects

Stock markets plunged around the world on Monday after fresh coronavirus cases renewed fears about a global economic slowdown. Shares in airlines and travel companies were hit particularly hard.
Oil prices have also fallen sharply on fears that the slowdown in economic activity - particularly in China - will affect demand.
A number of firms have warned of the effects of coronavirus on their trade.
On Tuesday, Dutch consumer and health electronics firm Philips warned that the outbreak was affecting demand its goods in China, and was also hitting its global supply chain.
Apple said last week that its revenues would fall short of forecasts, with iPhone supplies "temporarily constrained" worldwide due to disruption in China from the coronaviru

Wednesday, February 26, 2020

Reuters News - Germany 'heading for epidemic' as virus spreads faster outside China

SHANGHAI/SEOUL (Reuters) - Germany said on Wednesday that it was heading for a coronavirus epidemic and could no longer trace all cases, as the number of new infections inside China - the source of the outbreak - was for the first time overtaken by those elsewhere.
Asia reported hundreds of new cases, Brazil confirmed Latin America’s first infection and the new disease - COVID-19 - also hit Pakistan, Greece and Algeria. Global food conglomerate Nestle suspended all business travel until March 15.
Stock markets across the world lost $3.3 trillion of value in four days of trading, as measured by the MSCI all-country index .MIWD00000PUS, but on Wednesday Wall Street led something of a rebound. [MKTS/GLOB]
U.S. health authorities, managing 59 cases so far, have said a global pandemic is likely, but President Donald Trump accused two cable TV channels that frequently criticise him of “doing everything possible to make (the coronavirus) look as bad as possible, including panicking markets”.
The disease is believed to have originated in a market selling wildlife in the central Chinese city of Wuhan late last year and has infected about 80,000 people and killed more than 2,700, the vast majority in China.
While radical quarantining measures have helped to slow the rate of transmission in China, elsewhere it is accelerating.
Germany, which has around 20 cases, said it was already impossible to trace all chains of infection, and Health Minister Jens Spahn urged regional authorities, hospitals and employers to review their pandemic planning.
“Large numbers of people have had contact with the patients, and that is a big change to the 16 patients we had until now where the chain could be traced back to the origin in China,” he said.
The U.S. Centers for Disease Control and Prevention had also spoken on Tuesday of a nascent pandemic. “It’s not a question of ‘if’. It’s a question of ‘when’ and how many people will be infected,” said its principal deputy director, Anne Schuchat.
‘PANDEMIC’ - OR NOT?
The World Health Organization (WHO) said China had reported 411 new cases on Tuesday - against the 427 logged in 37 other countries.
However, WHO chief Tedros Adhanom Ghebreyesus advised diplomats in Geneva on Wednesday against speaking of a pandemic.
“Using the word pandemic carelessly has no tangible benefit, but it does have significant risk in terms of amplifying unnecessary and unjustified fear and stigma, and paralysing systems,” he said.
“It may also signal that we can no longer contain the virus, which is not true.”
Dr Bruce Aylward, head of a joint WHO-Chinese mission on the outbreak, told reporters on his return to Geneva:
“Think the virus is going to show up tomorrow. If you don’t think that way, you’re not going to be ready ... This a rapidly escalating epidemic in different places that we have got to tackle super-fast to prevent a pandemic.”
Trump tweeted that he would attend a briefing on Wednesday. But the White House denied a report by the Politico outlet that it was considering appointing a “coronavirus czar”.
The WHO says the outbreak peaked in China around Feb. 2, after measures that included isolating Hubei province.
China’s National Health Commission reported 406 new infections on Wednesday, down from 508 a day earlier and bringing the total confirmed cases in mainland China to 78,064. Its death toll rose by 52 to 2,715.
The WHO said only 10 new cases were reported in China on Tuesday outside Hubei.

FEARS FOR OLYMPICS

South Korea, which with 1,261 cases has the most outside China, reported 284 new ones including a U.S. soldier, as authorities prepared to test more than 200,000 members of a Christian church at the centre of the outbreak.
Brazil reported the first case in Latin America, a source said on Wednesday - a 61-year-old who had visited Italy.
In Japan, Prime Minister Shinzo Abe called for sports and cultural events to be scrapped or curtailed for two weeks to stem the virus as concern mounted for the 2020 Tokyo Olympics.
Japan has nearly 170 cases, besides the 691 linked to a cruise ship that was quarantined off its coast this month. Six people have died there, including four from the ship.
There have been nearly 50 deaths outside China, including 12 in Italy and 19 in Iran, according to a Reuters tally.
While Iran has reported only 139 cases, epidemiologists say the death rate of around 2% seen elsewhere suggest that the true number of cases in Iran must be many times higher, and cases linked to Iran have been reported across the Middle East.
In Europe, Italy has become a front line in the global outbreak with 322 cases. Italians or people who had recently visited Italy have tested positive in Algeria, Austria, Croatia, Romania, Spain and Switzerland.
Two hotels, one in Austria and one on Tenerife in Spain’s Canary Islands, were locked down over cases linked to Italy.
Authorities said the more than 700 guests at Tenerife’s four-star Costa Adeje Palace could leave their rooms after a day of confinement but would have to stay in the hotel for 14 days.
“It’s very scary because everyone is out, in the pool, spreading the virus,” said 45-year-old Briton Lara Pennington, fearing for her two young sons and her elderly in-laws.
(Interactive graphic tracking global spread of coronavirus here)
Reporting by Julie Steenhuysen and Susan Heavey in Washington, Diane Bartz in Chicago, Gavin Jones, Francesca Piscioneri and Crispian Balmer in Rome, Ryan Woo, Yilei Sun and Lusha Zhang in Beijing, Kate Kelland in London, Hyonhee Shin and Josh Smith in Seoul, Geert De Clercq in Paris, Paresi Hafezi and Alexander Cornwell in Dubai and Stephanie Nebehay and Michael Shields in Geneva; Writing by Michael Perry, Nick Macfie and Kevin Liffey; Editing by Pravin Char and John Stonestreet

Tuesday, February 25, 2020

BBC News - Brexit: Emmanuel Macron 'not sure' of UK-EU trade deal by end of year

French President Emmanuel MacronImage copyrightAFP
Image captionFrench President Emmanuel Macron says negotiating a UK-EU trade deal will be "tense"
French President Emmanuel Macron has said he is "not sure" a UK-EU trade deal will be struck by 31 December, the end of the Brexit transition period.
Mr Macron said negotiations starting in March will be "tense", with fishing rights a key point of contention.
It comes as the UK government signalled it would publish its mandate for the trade deal later this week.
In the document, ministers are expected to reiterate their desire for a Canada-style deal with few tariffs on goods.
While a trade deal is hammered out with the EU, the UK is following the majority of the bloc's rules.
The UK is in this transition period until 31 December following its departure from the EU on 31 January.
"I am not sure that an agreement will be reached between now and the end of the year," Mr Macron said at a meeting with fishermen in Paris on Saturday.
"Anyway, it is going to become more tense because [the British] are very hard."
Mr Macron also said fishing rights could be a sticking point in negotiations.
The UK has said it will consider a deal on fisheries but it must be based on the notion that "British fishing grounds are first and foremost for British boats".
Mr Macron's comments come as the UK government signalled it would publish detailed demands for a trade deal.
The mandate is due to be signed off on Tuesday and will be published online and in Parliament on Thursday, the BBC's Jonathan Blake said.
Prime Minister Boris Johnson's chief Brexit negotiator, David Frost, called for a "Canada-Free Trade Agreement-type relationship" with the EU in a speech in Brussels earlier this month - and the mandate will repeat these demands.
Michel BarnierImage copyrightEPA
Image captionMichel Barnier says the UK cannot have the same EU trade deal as Canada has
Mr Barnier said the EU was ready to offer an "ambitious partnership" with the UK post-Brexit, but its "particular proximity" meant it would be different.
Under Canada's agreement with the EU, which took seven years to negotiate, import tariffs on most goods have been eliminated between the two countries, though there are still customs and VAT checks.
The EU has repeatedly warned that the UK cannot expect to enjoy continued "high-quality" market access if it insists on diverging from EU social and environmental standards.
UK-EU trade negotiations, led by Mr Barnier and Mr Frost, are due to begin in Brussels on 2 March.

Monday, February 24, 2020

Reuters News - Dow sheds 800 points as pandemic fears grip Wall Street

(Reuters) - The Dow Jones Industrials shed 800 points on Monday as investors scurried to safer assets after a sharp rise in coronavirus cases outside China fueled fears of a bigger impact to global growth.

Gold rose to a seven-year high and the inversion between the 3-month and 10-year U.S. Treasury yields deepened as a rise in cases in Iran, Italy and South Korea over the weekend fanned fears of a pandemic. An inversion of the curve is a classic recession signal. [US/]
All of the Dow’s 30 blue-chip members, as well as the 11 major S&P sectors were in the red. Technology stocks dropped 3.1% and were the biggest drag on the benchmark index. Defensive utilities and real estate posted the smallest declines.
Apple Inc slid 3.5% as data showed sales of smartphones in China tumbled by more than a third in January.
Last week, Wall Street’s main indexes notched record highs, partly on optimism that the global economy would be able to snap back after an initial hit, supported by central banks.
“Some people are re-assessing the extent to which China is being damaged by the spread of the virus and, more broadly, whether other parts of world will get contagion effects of that,” said Nitesh Shah, director of research at WisdomTree.
Chipmakers, which heavily rely on China for revenue, were among the worst performers, with the Philadelphia SE Semiconductor index down 4.2%.
Interest rate-sensitive banks shed 2.7%, while the CBOE Volatility Index, a barometer of expected near-term market volatility, jumped to a six-month high.
At 9:55 a.m. ET, the Dow Jones Industrial Average was down 764.01 points, or 2.64%, at 28,228.40, the S&P 500 was down 83.88 points, or 2.51%, at 3,253.87. The Nasdaq Composite was down 280.96 points, or 2.93%, at 9,295.63.
Health insurers such as UnitedHealth Group Inc, CVS Health Corp and Cigna Corp dropped between 3% and 4.8% as Bernie Sanders, who supports the elimination of private health insurance, strengthened his position for the Democratic presidential nomination with a decisive victory in the Nevada caucuses.
In a rare bright spot, Gilead Sciences Inc, whose antiviral remdesivir has shown promise in monkeys infected by a related coronavirus, rose 5.8%.
Declining issues outnumbered advancers for a 8.29-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 9.47-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and 17 new lows, while the Nasdaq recorded nine new highs and 112 new lows.
Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur

Friday, February 21, 2020

BBC News - Brexit complicates EU budget plans


EU flagImage copyrightGETTY IMAGES
EU leaders are meeting in Brussels this week to discuss the bloc's future budget plans.
These negotiations are always challenging, tending to pit net payers against net beneficiaries.
There are proposals from the European Commission and the Parliament that some countries think involve spending too much.
This time, the talks are further complicated by the departure of the UK, which was a large net contributor.
The talks are about the EU's long term budget or financial framework. It will set out the total spending level and the amount to be spent on particular areas over the next seven years.
The current framework runs to the end of this year, so the new one will cover the period up to 2027.

Tough talks

It is always a tough negotiating challenge. The countries which put in more than is spent by the EU within their own borders tend to want restraint. There's a group seeking that known as the frugal four: the Netherlands, Austria, Sweden and Denmark.
But countries in Central and Eastern Europe and the South want to protect spending on agriculture and what is called 'cohesion', money intended help to the EU's poorer regions.
These could well face cuts, as there are also proposals for the new framework which involve increases in other areas. Poland is an important voice in this group, sometimes known as the 'friends of cohesion'.
The biggest contributor of all is Germany and it shares the frugal four's desire to restrain spending. The next biggest payer is France which has a strong farmers' lobby pulling in the opposite direction.
EU spending is quite small compared to the budgets of national governments. In the current seven year period it was fixed at 1% of the EU economy, its GDP.
By contrast, what member countries spend on themselves compared to their national economies is much higher, more than 50% for several of them.
Even so, the size of the EU budget matters a lot to EU leaders, financially and also politically.
They want to be able to claim to the audience at home that they have achieved their aims and looked after their national financial interests.

Brexit pressures

So the negotiations are tough, as they were back in 2013 when the British Prime Minster David Cameron claimed a great success in curbing the EU's spending limits for the next seven year period.
This time the same pressures are there, with the added complication of the UK's departure.
The UK's total contribution in 2018 was £17.4bn but that was before the UK rebate, which is paid by other member states, and spending on EU programmes in the UK.
Neither of those will feature in the future financial framework, and deducting them leaves a hole of £9bn to be filled.
That is less than 0.1% of the GDP in 2018 of the remaining 27 EU countries, but it is still enough to be a problem.
The Austrian leader, Chancellor Sebastian Kurz, writing in the Financial Times on behalf of the frugal four, referred to the UK's departure as a reason for financial restraint: "Now that we have a smaller union of 27 member states, we simply have to cut our coat according to our cloth".

Spending changes

EU spending priorities have changed and that will probably continue.
Agriculture does not dominate the budget in the way it used to. It was more than 70% of total spending in 1986 and is now less than 40%. That decline is likely to continue.
The European Commission proposal for the next seven years for example takes it down to below 30%, including spending on fisheries.
That proposal includes spending more in the future on security, student exchanges in the form the Erasmus programme, the external border, digital issues, and the environment, including climate change.
Even when the leaders do agree at this summit or a future one, they will still have to seek approval from the European Parliament which wants to increase spending.
One indication that this could be a challenging summit is in the invitation to leaders sent by the President of the European Council, Charles Michel, who will chair it.
He wrote that the summit would begin on 20 February. That's all he had to say on the timing; no indication of when it would finish. And his published schedule for the week has nothing for Friday. It could be a very long night.