The EU’s justice commissioner is working on a proposal that could oblige member states such as Poland, which has clashed with Brussels over reforms to its courts, to pass tests on the independence of their judicial systems before receiving funding.

Vera Jourova said there was agreement within the executive European Commission to work on ideas to encourage strong judiciaries in planning for the new budget from 2021.

“One way could be to insist that independent justice systems are necessary for effective control of the use of EU funds,” she said. “I would like to propose that link.”

Seven-year budget plan

A Commission spokesman said on Monday the work by Jourova was part of broader preparations for a new, seven-year EU budget plan, due to be published in May, and was in line with policy outlines the EU executive has put forward since last year.

The remarks by Jourova, the Commission’s Czech member, come as the EU executive is challenging Poland, a major recipient of Union funds, to amend judicial reforms which Brussels says will hurt democracy and its oversight of EU trading rules.

Facing the prospect of filling a hole left in the budget by Britain’s exit from the EU, and irritated by Poland and other governments in the ex-communist east on a range of issues, some wealthy Western governments have pushed for a clearer link between getting subsidies and abiding by EU standards.

Warning for Poland

The German commissioner in charge of the budget, Guenther Oettinger, warned Poland this month that it could lose some of its 7 billion euros annual funding if it fails to heed Brussels’ complaints about undermining the rule of law.

More broadly, Jourova is also hoping for a review of EU policy on judicial standards in the second half of this year. EU officials say that might, for example, include regular reviews of the performance of national justice systems, along the lines of existing biennial reviews of government economic policies, which are meant to promote “convergence” toward EU-wide goals.

‘Cohesion’ policy

As a former national official handling the regional funding that is a key part of EU efforts to bring poor regions closer to the prosperity of others, Jourova stressed that she saw any new rules applying to all EU funding for all states, not just to so-called “cohesion” policy. She also said it should not be seen as a punitive measure but designed to encourage good practice.

She also said discussion on the proposals could be used to help simplify some of the hurdles to applying for EU funds.

Any Commission proposal seen as too radical by governments risk being killed off by member states. 

 

 
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The global unemployment rate is stabilizing after years in a slump due to a faltering economy, the International Labor Organization reports in “World Employment and Social Outlook: Trends 2018.”

However, unemployment — which the ILO says stands at more than 192 million people globally — is expected remain persistently high in many parts of the world.

The ILO reports that unemployment in wealthier countries is expected to drop to 5.5 percent this year, the lowest rate since 2007.

The labor situation has improved in emerging and developing economies, as well. However, the report warns that employment growth in these countries will not keep pace with the increased numbers of people entering the labor market.

ILO Director-General Guy Ryder expressed concern that low-quality employment is on the rise. He says nearly 1.4 billion people are in vulnerable jobs, meaning they work in difficult conditions for low wages with little security, and that three out of four workers in developing countries are holding down such jobs.

“Very much more effort needs to be made to improve the quality of jobs,” he said. “Despite the uptick in economic and employment growth, which is welcome, working conditions are failing to improve for a very large share of the global workforce. In addition, the projected employment growth in the service sector can be expected to make only a limited contribution to the improvement of job quality.” 

The report notes that working poverty — defined as having income below the poverty line — is falling in emerging countries, but in developing nations, progress in this area is too slow to keep up with the expanding labor force. It says the number of people living in extreme poverty — at less than $3 a day — is expected to remain at more than 114 million for the coming years.

The report’s authors say the gender gap remains wide, with women more likely to have lower-quality jobs and lower salaries than men.
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The NAFTA trade agreement’s future hangs in the balance this week as negotiators from the United States, Canada and Mexico try to settle major differences over revamping a pact that President Donald Trump has threatened to abandon.

Senior officials from the three nations will meet in Montreal for a week starting on Tuesday in the sixth and penultimate round of talks to modernize the 1994 North American Free Trade Agreement.

Trump, who entered office last year pledging to undo what he described as disastrous trade deals, has portrayed NAFTA as grossly unfair to the United States and its workers.

Canada and Mexico, which initially dismissed most of Washington’s demands as unworkable, now say there is room to maneuver. But that still may not be enough to satisfy Trump and impatient U.S. officials.

U.S. threats to walk away from NAFTA, which underpins much of the more than $1 trillion in annual trilateral trade among the three nations, have put markets on edge. The talks are supposed to wrap up by the end of March to avoid clashing with Mexico’s general elections in July.

Trump, who blames NAFTA for killing off hundreds of thousands of U.S. manufacturing jobs and says it has led to a large U.S. trade deficit with Mexico, tweeted last Thursday that “NAFTA is a bad joke!”

Over the last 10 days the Republican president has generated confusion by indicating that he might extend the deadline for talks while saying that walking away from the table would be the best idea.

A council advising Canadian Foreign Minister Chrystia Freeland on NAFTA has concluded that Washington is most likely to announce that it wants out of the pact. It met with Freeland, who says a positive result is still quite possible, last week.

“There is still a shred of optimism, but I have to say the consensus around the room … felt like it’s not if, it’s when he’s going to pull the plug,” Rona Ambrose, a council member and former Canadian minister, told CTV television.

Canadian Trade Minister Francois-Philippe Champagne stressed that Ottawa will not compromise its economic interests.

“Canada will not accept proposals that would be harmful to our economy and to Canadians,” he said in a speech in Montreal on Monday.

Nevertheless, a large majority of economists polled by Reuters are betting the treaty will be renegotiated successfully with only marginal changes.

Freeland met Mexican Economy Minister Ildefonso Guajardo in Toronto on Monday to iron out details of the negotiations, and they agreed it will be critical to tackle some of the most complicated issues, Mexico’s Economy Ministry said in a statement.

Cautious Optimism

Canada and Mexico initially said they would not even discuss U.S. demands to set minimum levels of North American content for the auto sector, a clause that would terminate the deal if it is not renegotiated every five years, and to end the so-called Chapter 19 dispute mechanism.

Sources close to the talks say Canada and Mexico will now be more flexible on the auto content and dispute resolution issues.

“We have got areas we are going to fight for, obviously, but that doesn’t mean we can’t be creative, nimble, clever,” said one Canadian source familiar with Ottawa’s strategy.

“There can be very strong lines (in the sand) … it’s not to say you don’t talk around them. Sometimes you find creative ways without necessarily compromising,” said the source, who requested anonymity given the sensitivity of the situation.

In Mexico, some of the pessimism palpable in late December has given way to cautious optimism that progress towards a deal is possible in Montreal if the Trump administration is prepared to give ground on its toughest proposals.

Jaime Zabludovsky, one of the Mexican negotiators of the original NAFTA accord and an adviser to the private sector on the current talks, said the negotiations in Montreal would be a decisive test of the countries’ ability to make progress.

“I think we’re at a make-or-break moment,” he said in an interview.

One Mexican source familiar with the process said he expected further talks through March and mentioned the possibility that final discussions could, if necessary, be postponed until after the Mexican elections.
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In Davos this week, participants can experience “a day in the life of a refugee.” Or hear about ways to uphold the Paris climate accord and promote free trade. Or rub elbows with any number of leaders of African countries.

 

Enter Donald Trump.

 

The World Economic Forum in Davos, Switzerland, is meant — pretentiously perhaps — to be a place for the world’s decision-makers to put their power to good use. The theme this year is “Creating a Shared Future in Fractured World,” an ambition not likely to turn up on the U.S. president’s Twitter feed.

Instead, Trump will bring his zero-sum message of “America First,” and will speak last among the parade of world leaders — from places like India, France and Canada — who are gathering from Tuesday to Friday in the Swiss snows.

 

As with most things Trump, there are stark contrasts between how attendees view his visit. Some are happy and hope for dialogue. Others unabashedly say they wish he would stay away and accuse him of a lack of compassion and vision for the world that are out of place in Davos.

 

“I find it quite sad he’s coming to the WEF, but I imagine nothing can be done about it,” said Buddhist monk Matthieu Ricard, a longtime disciple of the Dalai Lama.

 

While his trip — which was still on schedule despite the U.S. government shutdown — may seem incongruous, unwelcome or unexpected, he will be sticking to one key aspect of the WEF’s original ambition in starting the annual forum in Davos 47 years ago: Business. An array of Cabinet officials is also due to tag along, suggesting the U.S. is preparing a big economic and diplomatic push.

Some have suggested it’s ironic that Trump, a self-styled populist despite his penchant for the penthouse, is attending the elite Alpine event. Others speculated he could have felt a need to regain the Davos spotlight for the United States a year after Chinese President Xi Jinping stole the show by casting China as a champion of free trade and stability — and many companies responded by turning greater attention toward it.

 

An administration official said Trump is expected to tout the booming U.S. economy and measures like his recent tax overhaul, while again criticizing trade practices that he sees as unfair toward the U.S. The official, who spoke only on condition of anonymity to discuss internal plans, said Trump made the decision to go because he thinks he has a positive economic message.

 

With Wall Street surging, Trump has some cheerleaders on the economic front — even if they hope he’ll be more accommodating.

 

“I think it’s really good that he’s going,” said Bill Thomas, chairman of business services KPMG International. “The American economy is dependent on global engagement, and I think he’s in Davos because he knows that.”

 

Some wonder whether Trump can win over the Davos set, or whether they might succeed in turning his ear — and give him a chance to reboot his administration’s image abroad.

 

“Corporate America, in terms of economic policies, is very pleased with the way the administration is going,” said Andy Baldwin, a regional managing partner for financial services firm EY. But he acknowledged that Trump controversies elsewhere had “overshadowed some of the policies.”

 

Outside of business, though — whether among human rights advocates, environmentalists, peaceniks or free-trade proponents — Trump is shunned.

 

“Despite its formal name, Davos is about more than economics,” said Kenneth Roth, executive director of Human Rights Watch, in an e-mail. “So while Trump undoubtedly intends to trumpet U.S. economic progress, many Davos participants will question his racist, misogynistic, and xenophobic rhetoric and policies.”

 

“Unless he plans an unexpected apology and reversal, he will face a far colder reception than he probably anticipates,” he said.

 

Parts of the jet-set have it in for Trump. Elton John, whose song title “Rocket Man” Trump used to deride North Korean leader Kim Jong Un, will be in Davos, as will actress Cate Blanchett, who shaped chewing gum into a phallus on late-night TV to mock Trump just days after he took office. So will several African leaders whose countries Trump allegedly dismissed with a vulgarity earlier this month.

 

Small protests have started, and others are expected in Zurich on Tuesday and possibly in Davos on Thursday. A Swiss anti-Trump petition has garnered more than 16,000 supporters online, calling on him to stay away. Authorities are boosting security for only the second visit by a serving U.S. president to Davos, after Bill Clinton in 2000.

 

Some might even see a snub in French President Emmanuel Macron’s decision to not stick around to see Trump even though the White House initially had announced a face-to-face meeting in Davos.

 

In his speech Wednesday, Macron is expected to offer a “lucid” diagnosis about globalization, and raise environmental concerns, an adviser said. Macron’s speech could shape up as a counter narrative, and though he wasn’t expected to mention Trump by name “you can read between the lines,” the adviser said, on condition of anonymity because he was not authorized to speak publicly about the matter.

 

“It’s good to have the president here, if the snow conditions and the situation in Washington allow us,” WEF founder Klaus Schwab told The Associated Press on Monday, alluding to the U.S. government shutdown that could spoil Trump’s plans to attend. The White House has said it’s monitoring the situation day to day, and Schwab said: “At the moment we cannot make a comment on that [Trump’s attendance].”

 

Trump has, in a way, already been on hand in Davos. During last year’s event, which coincided with his inauguration, many attendees gawked at TV sets as Trump declared “America First” from the Capitol steps.

 

When he arrives this year, discretion may be the order of the day: Zurich airport, the closest big hub, has announced a lockdown on press access for the arrival of Air Force One.

 

Switzerland’s Young Socialists party is revving up to protest to register pent-up anger about how Trump lost the popular vote in 2016, but won the election, and suspicions of Russian meddling in that contest.

 

“He’s sexist, he’s racist,” said Tamara Funiciello, the group’s president. “And I don’t think it’s responsible to speak with him.”

 

 

 
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Australia has filed a formal complaint with the World Trade Organization that accuses Canada of placing “discriminatory” rules on the sales of imported wine.

Canada is Australia’s fourth-biggest wine market. Officials in Canberra say rules in Canada unfairly discriminate against overseas wine.

An official protest has been lodged with the World Trade Organization (WTO) against regulations in the Canadian province of British Columbia, where wine produced locally can be sold in grocery stores but imports must be sold in a “store within a store” with a separate cash register.

Canberra’s objection also targets policies in other provinces, including Ontario, Quebec and Nova Scotia, as well as federal practices in Canada, which could breach a WTO agreement. They mean higher prices for foreign wines, as well as other barriers to sale, according to the Australian complaint.

“Australia is seeing its market share and that market erode. That concerns me, it concerns wine exporters,” said Australian trade minister Steve Ciobo. “Potentially this could cost Australian jobs, so I want to make sure we are on the front foot about protecting Australia’s interests.”

Australia’s complaint to the WTO is similar to one made by the United States, which has accused Canada of placing unfair limits on the sale of imported wine.

In October, the U.S. said British Columbia was favoring local vineyards by giving their wine an exclusive retail outlet in grocery store shelves and cutting out U.S. competition.

A spokesman for Canada’s international trade minister said the federal government works to ensure its liquor policies “are consistent with our international trade commitments”.

Under WTO rules, Canada has 60 days to settle the dispute with Australia.

After that, Canberra could ask the WTO to adjudicate, which could result in Canada being forced to change its laws or risk trade sanctions.

 

 

 

 
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Iran’s supreme leader has ordered the Revolutionary Guard to loosen its hold on the economy, the country’s defense minister says, raising the possibility that the paramilitary organization might privatize some of its vast holdings.

The comments this weekend by Defense Minister Gen. Amir Hatami appear to be a trial balloon to test the reaction of the idea, long pushed by Iran’s President Hassan Rouhani, a relative moderate. Protests over the country’s poor economy last month escalated into demonstrations directly challenging the government.

 

But whether the Guard would agree remains unclear, as the organization is estimated to hold around a third of the country’s entire economy.

 

Hatami, the first non-Guard-affiliated military officer to be made defense minister in nearly 25 years, made the comments in an interview published Saturday by the state-run IRAN newspaper. He said Supreme Leader Ayatollah Ali Khamenei ordered both the country’s regular military and the Guard to get out of businesses not directly affiliated to their work.

 

“Our success depends on market conditions,” the newspaper quoted Hatami as saying.

 

He did not name the companies that would be privatized. The Guard did not immediately acknowledge the supreme leader’s orders in their own publications, nor did Khamenei’s office.

 

The Guard formed out of Iran’s 1979 Islamic Revolution as a force meant to protect its political system, which is overseen by Shiite clerics. It operated parallel to the country’s regular armed forces, growing in prominence and power during the country’s long and ruinous war with Iraq in the 1980s. It runs Iran’s ballistic missile program, as well its own intelligence operations and expeditionary force.

 

In the aftermath of the 1980s war, authorities allowed the Guard to expand into private enterprise.

 

Today, it runs a massive construction company called Khatam al-Anbia, with 135,000 employees handling civil development, the oil industry and defense issues. Guard firms build roads, man ports, run telecommunication networks and even conduct laser eye surgery.

 

The exact scope of all its business holdings remains unclear, though analysts say they are sizeable. The Washington-based Foundation for Defense of Democracies, which long has been critical of Iran and the nuclear deal it struck with world powers, suggests the Guard controls “between 20 and 40 percent of the economy” of Iran through significant influence in at least 229 companies.

 

In his comments, Hatami specifically mentioned Khatam al-Anbia, but didn’t say whether that too would be considered by the supreme leader as necessary to privatize. The Guard and its supporters have criticized other business deals attempting to cut into their piece of the economy since the nuclear deal.
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