A torrid summer and devastating fires across central Chile’s wine belt have forced an earlier harvest this year, but there are no signs that volume or flavor will be affected, local industry experts said on Thursday.

High temperatures can lead to excessive sugar and alcohol in the grapes and the harvest needed to take place as soon as the right level was reached, they said.

Climate change is contributing to record droughts, heat and wildfires in Chile, the world’s No. 4 exporter of wine by volume and the biggest among New World producers, threatening crops and spurring growers to move south to cooler climes.

In December, temperatures in central Chile hit their highest level in a century. The hot, dry conditions sparked the biggest wildfires in the country’s modern history, burning homes and forests and blanketing the entire region in thick smoke.

Most vines had escaped the flames and the bigger worry was the effect of the smoke on the flavor of the grapes, said Angelica Valenzuela, commercial director of industry body Wines of Chile.

“The number of vines burnt was low. But there could be an effect from the smoke which we will see when the harvest is done,” she said in an interview at the Undurraga vineyard near Talagante, 22 miles (35 kilometers) southwest of the capital of Santiago. “For now, the first results are not showing signs of any problems.”

Close to where some of the worst fires raged, Undurraga produces around 2 million cases a year, some 70 percent of which is exported.

The hot conditions in the southern hemisphere summer had forced growers like Undurraga to bring forward the harvest by about a month, with the first varieties picked as early as January, company spokesman Fernando Anania said.

That earlier-than-usual harvest was a challenge to Chile’s winegrowers in logistics terms, but should not have a major effect on volumes or taste, said Anania in an interview.

Exports of Chilean wine grew 0.9 percent in 2016 by volume and 3.5 percent by value, according to Wines of Chile. Last year, for the first time, China overtook the United States to become the industry’s top export destination.
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Serbian President-elect Aleksandar Vucic likes to use the past to explain the future.

In 1947, as Josip Broz Tito was consolidating Yugoslavia, he built a railway through Bosnia that linked Serbs, Croats and Muslim Bosniaks, friend and foe after World War II.

“Tito wasn’t stupid,” Vucic told Reuters. “People had to work together, build together, then travel together, live together. That’s what we need — connecting.”

Together again

Yugoslavia broke up in war 26 years ago, spawning seven states. Now, the European Union has taken up a project put forward by Vucic that would see five of them — plus Albania — joined once more, this time in a common market.

It would abolish all remaining tariff barriers, lift obstacles to the free movement of people, commodities and services and introduce standard regulations across the region.

The EU wants an outline agreed to in July, seizing on the idea as a way to re-engage with Balkan states unnerved by the bloc’s evaporating enthusiasm for further enlargement and exposed to the growing influence of Russia.

But it has received a mixed reception.

Some apprehensions

Kosovo, for one, fears being roped back into a Serbian-dominated union of the kind it fought to leave; others worry it will only slow their accession to the EU, or worse still replace it.

The EU has delegated development of the plan to the Regional Cooperation Council. Its head, Goran Svilanovic, told Reuters Balkan leaders were “increasingly realistic” about the reduced appetite in Brussels for EU enlargement.

“They see what’s up in the EU,” he said.

But they will work together on the Balkan market plan and with the EU “when it comes to something they see is … bringing change to their daily lives.”

Market of 20 million

For years, the prospect of EU accession has stabilized relations and driven reform in a turbulent and impoverished region. But since Croatia followed ex-Yugoslav Slovenia in joining in 2013, the EU has been beset by problems of migration, Brexit and right-wing populism.

A year later, European Commission President Jean-Claude Juncker ruled out any further expansion until at least 2020.

Stability and democracy in the Balkans have suffered.

Juncker was stating a fact, a senior EU official told Reuters, but in hindsight he had made “a huge mistake.”

“A lot of things that were in progress just stopped,” the official said. Another EU diplomat said Brussels had “dropped the ball” and was trying to re-engage.

Start with market, trade

One of the results is the Western Balkans Common Market, which would build on the Central European Free Trade Area, CEFTA. All six countries are members of CEFTA, but the pact has struggled to stimulate trade within the region and some barriers remain.

Backers of the plan say a single economic space with a market of 20 million people would be more attractive to investors than six small states each with their own red tape.

“Investors would be banging down our doors,” said Vucic, Serbia’s prime minister who was elected president Sunday.

The EU says it would mark a step toward membership, not an alternative.

But it did not go unnoticed that enlargement had no place in a March document by Juncker that set out the options for the EU after Britain leaves in 2019.

“Create your own common market [because you are not joining ours],” was the headline of an opinion piece last month by Kosovo analyst Besa Shahini on the Pristina Insight website.

Kosovo threw off Belgrade’s repressive rule in a 1998-99 war, and is wary of Serbia as the biggest country in the region and a friend of Russia.

“We don’t want to see a Serbia that behaves in the style of Russia, trying to politically dominate the region,” Kosovo Foreign Minister Enver Hoxhaj said of the initiative Tuesday.

Prime Minister Isa Mustafa took to Facebook: “We share different experiences of the past,” he wrote. “We do not want that past to return, repackaged.”

Sokol Havolli, an adviser to Mustafa, told Reuters the project risked slowing the region’s EU integration.

Alternative narratives

Asked if a common market may become a substitute for EU enlargement, Vucic said that “should not and must not” happen but said he had heard, unofficially, of such fears in Montenegro.

The office of Montenegrin Prime Minister Dusko Markovic told Reuters Podgorica had yet to receive a detailed proposal, but that it supported greater regional cooperation.

An Albanian official, who spoke on condition of anonymity, said Tirana was “skeptical.”

Kristof Bender, deputy chairman of the European Stability Initiative, a Brussels-based research group, said he would be surprised if creating a club of poor economies would do much to address the region’s woes.

Nor could it be a “credible alternative” to the narrative of prosperity and stability inside the EU.

“If this narrative evaporates, Balkan politicians will need to look for other narratives,” Bender told Reuters. “Given recent history, this is dangerous.”

Railroad holds lessons

Today, the railway Tito built speaks less of the future than the folly of the past: as trains cross between Bosnia’s two ethnically-based regions, different crews take over, reflecting how power was divided up in order to end the 1992-95 war. Part of the line is no longer used.

Vucic said critics of his idea argued they simply wanted to leave the Balkans behind and join the EU.

So does Serbia, he said. “But does that mean we should lose the next three, four, five years when we know we’re not going to become a member?”
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President Donald Trump on Friday chose Kevin Hassett, an economics adviser to past Republican presidential candidates, to be chair of the White House Council of Economic Advisers. Hassett will play a critical role in analyzing the performance of the economy and impact of policy changes.

Hassett is the research director for domestic policy at the American Enterprise Institute, a conservative think tank that he joined in 1997. He has provided economic advice to the presidential campaigns of John McCain, George W. Bush and Mitt Romney. With a doctorate in economics from the University of Pennsylvania, Hassett has worked as a senior economist at the Federal Reserve and taught at Columbia University’s business school.

Jason Furman, the CEA chair under former President Barack Obama, hailed Hassett as an “excellent pick” on Twitter.

“He is serious about substance, committed to dialogue, & knows how to navigate DC,” Furman wrote.

An expert on taxes and budget policy, Hassett also co-wrote a paper challenging the National Football League conclusions about the New England Patriots using underinflated footballs to gain an advantage against the Indianapolis Colts in a 2015 playoff game.

Not all of Hassett’s analysis has been prescient. He has faced criticism for co-writing the 1999 book “Dow 36,000,” which predicted a rising stock market shortly before the tech bubble burst and the Dow Jones industrial average tumbled.

The CEA has routinely been filled by leading academic economists and was among the most prominent vacant posts during the early months of the Trump presidency.

Formed in 1946, the CEA is responsible for giving the president economic guidance on domestic and international policy. The post has also been a launching pad for leading monetary policy at the Fed. Previous CEA chairs — Janet Yellen, Ben Bernanke and Alan Greenspan — have served as the past three Fed chairs.
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The U.S. economy had a net gain of 98,000 jobs in March, which is much weaker job growth than most economists expected.

Payroll growth was slowed by stormy weather in March after unusually good weather helped growth in January and February, according to economist Jed Kolko, of the job web site “Indeed.”

Friday’s report from the Labor Department also said the unemployment rate fell two-tenths of a percent, to 4.5 percent. Government data show that is the lowest level since April, 2007.  The unemployment rate has been five percent or lower for well over a year.

The slight decline in the jobless rate is due to 145,000 people entering the workforce and nearly half a million Americans finding jobs, according to S&P Global Rating’s economist Beth Ann Bovino. She says this is the latest in a series of mostly positive reports on the job market.   

PNC Bank economist Gus Faucher says the job market “is getting tighter and business are finding it more difficult to hire.”  That may force employers to raise wages to attract and keep workers.  

Job gains were found in professional and business services and mining, while retail continued to lose positions.  Faucher also said problems in retail may reflect a shift from traditional stores to on-line commerce.  That shift is evident in the announcement that several major retail chains are closing a large number of stories, according to economist Dean Baker of the Center for Economic and Policy Research.

While the report shows that the total number of unemployed Americans fell by over 300,000, there are still 7.2 million people out of work across the country.  

 
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U.S. Commerce Secretary Wilbur Ross held out hope Thursday that the Trump administration will revive the U.S. Export-Import bank’s full lending powers, saying the institution is part of its “trade toolbox” to boost exports.

The U.S. government trade lender has been hobbled for the better part of two years by conservative Republicans in Congress who tried to shut it down in 2015 by revoking its charter, and then limited its lending powers last year by blocking nominations to its board of directors.

Big loans impossible

With only two active members on its five-seat board, the bank cannot make or guarantee loans of more than $10 million, preventing it from financing large exports such as U.S.-built commercial aircraft, nuclear reactors or petrochemical plants.

Thus far, Trump administration officials have not said publicly whether they support reviving EXIM’s full lending powers, but some members of Congress say that Trump has told them privately that he supports the institution.

“The bank is part of a domestically focused trade toolbox that this administration will continue to focus on in the coming months,” Ross said in brief video remarks to EXIM’s annual conference in Washington. “We will use that toolbox to rebalance our trade policy in order to put American workers first.”

Ross did not provide details of how EXIM will be used in his trade strategy or whether the administration has specific plans to nominate new board members.

Trump appears to be an ally

He urged hundreds of U.S. manufacturers, lenders and foreign government and company officials attending the meeting to work toward increasing U.S. exports to create jobs.

U.S. Representative Chris Collins of New York, a Republican Trump ally who headed a small manufacturer that used EXIM working capital loan guarantees in the past, told the conference that Trump told him February 16 at a White House meeting that he was “all in” on supporting EXIM.

“We asked him very directly about the five board seats,” Collins said. “The president looked to his right and to his left and said ‘Can you get me some names? I’m all in.’ There was no hesitation whatsoever.”

Reviving EXIM, however, would anger conservative groups backed by the Koch brothers, the influential billionaire Republican donors. The groups have waged a campaign that has painted EXIM as unnecessary corporate welfare even though it is self-funding through the interest and fees it charges borrowers.
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When the U.S. president hosts a foreign leader at his home, it can be seen as a sign of hospitality, an indicator of warm relations, and a chance to put American culture on display.

President Franklin Delano Roosevelt famously hosted the king and queen of England at his Hyde Park estate, where he served hot dogs for dinner. President Ronald Reagan hosted Britain’s Prime Minister Margaret Thatcher and Soviet leader Mikhail Gorbachev at his California ranch. President George H.W. Bush hosted a string of international leaders at the family compound in Kennebunkport, Maine, and his son President George W. Bush did the same at his family home in Crawford, Texas.

With so many precedents, why would anyone point fingers at President Donald Trump for hosting foreign dignitaries at Mar-a-Lago, his Palm Beach, Florida, estate?

The answer is money. Mar-a-Lago functions as a vacation home for the Trumps, but it also serves as a resort for paying members — which has not been true of any of the aforementioned properties that played host to presidential guests. It is not clear how much access paying guests have to the visiting diplomats, but during a visit by Japanese Prime Minister Shinzo Abe to Mar-a-Lago earlier this year, Abe and Trump carried on some of their discussions over dinner in a restaurant on the property, in full view of other guests.

Having presidential guests stay at Mar-a-Lago — a commercial property owned by the president — raises questions about whether other guests at the property have extraordinary access to the president and his guests by virtue of their club membership — a membership whose price doubled after Trump was elected to the presidency. Critics refer to the situation as “pay to play” — where money buys access to power.

On the other hand, Mar-a-Lago — with its proximity to the beach, a spa, tennis courts and golf courses — seems an ideal place to host foreign dignitaries, as it can be a more relaxed atmosphere than Washington, D.C. The setting also implies a close, personal relationship between the president and his visitor.

Abe visit ‘well received’ in Japan

“The Mar-a-Lago meeting between Trump and Chinese President Xi Jinping offers a great opportunity for the two leaders to get to know each other in a more relaxed atmosphere,” said Zhiqun Zhu, professor of political science and international relations, and director of The China Institute at Bucknell University in Pennsylvania.

He said Abe’s visit to the Florida estate “was well received in Japan because many Japanese liked the fact that Abe was the first Asian leader to be invited by the Trump administration to the U.S., and Trump and Abe spent several intimate hours playing golf together, highlighting the close alliance between the U.S. and Japan and the strong personal ties between Trump and Abe.”

The Xi meeting, however, lacks one important component of that visit: Xi does not play golf. His government frowns on the sport.

Ely Ratner, a senior fellow in China studies at the Council on Foreign Relations, told The Boston Globe that the Xi visit to Mar-a-Lago provides a “controlled media environment,” a situation prized by the Trump administration and difficult to arrange in Washington. But it also implies a favorable relationship that, in Ratner’s mind, has yet to be achieved.

“They should have had the opening meeting in Washington and said ‘we can do the Mar-a-Lago meeting, but you have to earn it,'” he said.

Property once government-owned

Mar-a-Lago — built in the 1920s by heiress and socialite Marjorie Merriweather Post — was actually planned as a presidential retreat. Post bequeathed the estate to the federal government upon her death in 1973. But then-President Richard Nixon preferred using his own Florida vacation home in Key Biscayne, and successive presidents Gerald Ford and Jimmy Carter were not interested in the estate, either.

Carter preferred the official presidential retreat, Camp David, not far from the nation’s capital and owned by the U.S. military, where he arranged the historic Camp David Accords between the leaders of Israel and Egypt.

In 1980, the government returned Mar-a-Lago to the Post family.

Trump bought the resort five years later, after threatening to buy the land between the home and the beach, spoiling the view and driving down the sales price. When Trump began struggling financially, he converted part of the property into a private club. The initiation fee for Mar-a-Lago membership is $200,000. Yearly dues are $14,000. Overnight guests pay up to $2,000 per night.

Critics say it’s not only the “pay-to-play” problem that worries them. It’s also the cost of the Trump visits and the impact on the community, where roads must be closed when the president is in town, and local law enforcement works overtime to help with security.

Democratic lawmakers are pushing legislation that would mandate that Mar-a-Lago keep a public log of its visitors.

As for the high-security Camp David, hidden in the Maryland mountains, Trump has called the property “very rustic.” He recently told a German reporter, “It’s nice, you’d like it. You know how long you’d like it? For about 30 minutes.”
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Conservative activist groups that generally support Republicans but oppose a pro-export, anti-import Republican tax proposal released a study on Thursday estimating its impact on individual U.S. states, underscoring the party’s division over taxes.

The two activist groups, backed by billionaire industrialists Charles and David Koch, reported that seven states won by President Donald Trump in November’s election would be among the 10 hardest hit by the proposal.

Freedom Partners and Americans for Prosperity, both based in the Washington area, said the “border adjustment tax,” or BAT, would harm all 50 states, but that those heavily dependent on imports could suffer most.

The report predicted economic harm to Georgia, Kentucky, Louisiana, Michigan, South Carolina, Tennessee and Texas — all states Trump won in the 2016 presidential election. The list of hard-hit states also includes California, New Jersey and Illinois, which Democrat Hillary Clinton carried.

House Ways and Means Committee Chairman Kevin Brady, a Texas Republican who intends to include the BAT in tax reform legislation this spring, sharply criticized the study.

‘Fantasy figures’

“That so-called study will be easily discredited and probably fits the definition of fake news,” Brady told reporters. “It takes one provision, pretends the economy freezes … applies it in our current tax code and comes up with fantasy figures.”

BAT, billed as a way to boost U.S. manufacturing, would exempt export revenues from federal tax, while ending the deductibility of import costs by corporations, making imports for production or resale costlier.

The plan is part of a tax reform blueprint supported by House Speaker Paul Ryan. Trump is also working on a tax plan.

The proposal is also opposed by a number of Senate Republicans who could prevent its passage, should the House approve a tax reform bill that contains it.

Koch organizations, including the brothers’ privately held conglomerate, Koch Industries, have warned that BAT could devastate the U.S. economy by raising prices on consumer goods, including gasoline. Refineries owned by Koch Industries rely on oil imports from Canada.

The Koch groups say they support tax reform but oppose BAT.
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