U.S. stocks are higher Monday as technology and industrial companies, banks and retailers all make modest gains. Drugmakers and other health care companies are trading lower. Companies that make opioid pain medications are down sharply after the government released a much higher estimate of the costs of the ongoing addiction crisis.

Keeping score

The Standard & Poor’s 500 index picked up 5 points, or 0.2 percent, to 2,584 as of 2:15 p.m. Eastern time. The Dow Jones industrial average gained 94 points, or 0.4 percent, to 23,452. The Nasdaq composite advanced 7 points, or 0.1 percent, to 6,789. The Russell 2000 index of smaller-company stocks edged up 6 points, or 0.4 percent, to 1,499.

Tech tie-up

Chipmaker Marvell Technology Group said it will buy competitor Cavium for $6 billion in the latest deal in the semiconductor industry. Cavium climbed $7.48, or 9.9 percent, to $83.31 and it is up 22 percent over the last two weeks on reports Marvell would make a bid. Marvell rose $1.02, or 5 percent, to $21.31.

Other technology companies climbed as well. IBM added $2.01, or 1.3 percent, to $150.98 and Applied Materials picked up $1.12, or 2 percent, to $57.61. Cisco Systems gained 55 cents, or 1.5 percent, to $36.45.

Retail rising again

Retailers continued to move higher. They climbed last week following solid quarterly reports from Wal-Mart, Gap and Ross Stores. That’s given investors hope that shoppers are ready to spend more money. Home improvement retailer Home Depot rose $2.68, or 1.6 percent, to $170.42 and clothing company PVH rose $2.90, or 2.2 percent, to $136.02. Sporting goods retailer Hibbett Sports, after a 15-percent surge Friday, added $1.85, or 10.8 percent, to $18.95.

General electric slide

Industrial companies rose, as 3M gained $2.56, or 1.1 percent, to $231.92 and Boeing added $2.39 to $264.65.

General Electric missed out on those gains as investors continued to wonder about the company’s direction. On Sunday, the Wall Street Journal said that directors with energy and financial backgrounds, as well as GE’s two longest-tenured directors, are likely to leave the board as it shifts its focus away from those industries. The company said earlier this month that it will reduce the number of directors to 12 from the current 18.

GE lost 24 cents, or 1.3 percent, to $17.97.

Drugmaker downturn

A White House group said the opioid drug epidemic cost the U.S. $504 billion in 2016, far larger than other recent estimates, and companies that make those pain medications traded sharply lower.

Last year a separate estimate said the crisis cost the country $78.5 billion in 2013, including lost productivity and health care and criminal justice spending. The Council of Economic Advisers said the new figure reflects the worsening crisis and that earlier figures didn’t calculate deaths or include the use of illegal drugs.

Teva Pharmaceutical Industries fell 77 cents, or 5.6 percent, to $13.07 and Allergan gave up $3.78, or 2.2 percent, to $171.10. Endo International lost 26 cents, or 3.5 percent, to $7.28. Insys Therapeutics shed 20 cents, or 3.6 percent, to $6.18. Executives including Insys’ founder and its former CEO have been charged with offering kickbacks to doctors to get them to prescribe its fentanyl spray Subsys. Its stock traded above $40 in mid-2015.

Merck-y future?

Merck stumbled after Genentech, a unit of Swiss drugmaker Roche, reported positive results from a study of its drug Tecentriq as a primary treatment for lung cancer. Genentech said patients who were given Tecentriq as part of their treatment regimen were less likely to die or see their cancer get worse.

The results could affect sales of Merck’s drug Keytruda and Bristol-Myers Squibb’s Opdivo. Merck fell $1.10, or 2 percent, to $54.10 and Bristol-Myers Squibb lost 66 cents, or 1.1 percent, to $60.63.

Energy

Benchmark U.S. crude fell 50 cents to $56.05 a barrel in New York. Brent crude, which is used to price international oils, dropped 67 cents, or 1.1 percent, to $62.05 a barrel in London.

Currencies

The dollar rose to 112.64 yen from 112.13 yen late Friday. The euro slipped to $1.1737 from $1.1796 after a group of German political parties couldn’t agree to form a government, which might mean new elections are on the way. A weaker euro is good for companies that export a lot of products, and the German DAX was up 0.7 percent while France’s CAC 40 rose 0.5 percent. The FTSE 100 in Britain added 0.2 percent. In Japan, the Nikkei 225 index lost 0.6 percent and South Korea’s Kospi shed 0.3 percent. Hong Kong’s Hang Seng index added 0.2 percent.

Bonds

Bond prices edged lower. The yield on the 10-year Treasury note rose to 2.37 percent from 2.35 percent.

Metals

Gold slumped $21.20, or 1.6 percent, to $1,275.30 an ounce. Silver sank 53 cents, or 3.1 percent, to $16.84 an ounce. Copper gained 3 cents to $3.09 a pound.
…

Fed Chair Janet Yellen says she will leave the U.S. central bank’s board when her successor is sworn in early next year.

Jerome Powell was chosen by President Donald Trump to head the Federal Reserve when Yellen’s term expires. Powell must be confirmed by the U.S. Senate before he can take office, but analysts say his approach to managing interest rates is similar to Yellen’s. She is credited with managing the economy in ways that boosted recovery from the 2007 recession and cut unemployment in half.

In her resignation letter to Trump, Yellen said she is “gratified that the financial system is much stronger than a decade ago.” She also noted “substantial improvement in the economy since the crisis.”

Yellen is the first woman to lead the Fed, and was a member of its board of governors before taking the leadership role. Her term on the board does not officially expire until 2024, and she could have stayed on if she wished to do so.

Candidate Trump criticized Yellen during his campaign, but praised her work after he became president.

Yellen has served as vice chair of the Fed, president of the Federal Reserve Bank of San Francisco, and head of President Bill Clinton’s Council of Economic Advisers. She has researched and taught economics at the University of California at Berkeley.
…

The European Union went back to its roots Monday by picking cities from two of its founding nations — France and the Netherlands — to host key agencies that will have move once Britain leaves the bloc in 2019.

During voting so tight they were both decided by a lucky draw, EU members except Britain chose Amsterdam over Italy’s Milan as the new home of the European Medicines Agency and Paris over Dublin to host the European Banking Authority. Both currently are located in London.

“We needed to draw lots in both cases,” Estonian EU Affairs Minister Matti Maasikas, who chaired the meeting and in both cases made the decisive selection from a big transparent bowl.

Frankfurt, home of the European Central Bank, surprisingly failed to become one of the two finalists competing for the banking agency.

The relocations made necessary by the referendum to take Britain out of the EU are expected to cost the country over 1,000 jobs directly and more in secondary employment.

The outcomes of the votes also left newer EU member states in eastern and southern Europe with some bitterness. Several had hoped to be tapped for a lucrative prize that would be a sign the bloc was truly committed to outreach.

Some 890 top jobs will leave Britain for Amsterdam with the European Medicines Agency, giving the Dutch a welcome economic boost and more prestige. The EMA is responsible for the evaluation, supervision and monitoring of medicines. The Paris-bound European Banking Authority, which has around 180 staff members, monitors the regulation and supervision of Europe’s banking sector.

After a heated battle for the medicines agency, Amsterdam and Milan both had 13 votes Monday. That left Estonia, which currently holds the rotating EU presidency, to break the tie with a draw from the bowl. Copenhagen finished third, ahead of Slovakian capital Bratislava in the vote involving EU nations excluding Britain. One country abstained in the vote.

“A solid bid that was defeated only by a draw. What a mockery,” Italian Prime Minister Paolo Gentiloni said on Twitter.

Dutch Foreign Minister Halbe Zijlstra was elated.

“It is a fantastic result,” he said. “It shows that we can deal with the impact of Brexit”

The European Medicines Agency has less than 17 months to complete the move, but Amsterdam was considered ideally suited because of its location, the building it had on offer and other facilities.

Even though rules were set up to make it a fair decision, the process turned into a deeply political contest.

Zijlstra said that “in the end, it is a very strategic game of chess.”
…

Opioid drug abuse, which has ravaged parts of the United States in recent years, cost the economy as much as $504 billion in 2015, White House economists said in a report made public on Sunday.

The White House Council of Economic Advisers (CEA) said the toll from the opioid crisis represented 2.8 percent of gross domestic product that year.

President Donald Trump last month declared the opioid crisis a public health emergency. While Republican lawmakers said that was an important step in fighting opioid abuse, some critics, including Democrats, said the move was meaningless without additional funding.

The report could be used by the Trump White House to urge Republicans in Congress – who historically have opposed increasing government spending – to provide more funding for fighting the opioid crisis by arguing that the economic losses far outweigh the cost of additional government funding.

Using a combination of statistical models, the CEA said the lost economic output stemming from 33,000 opioid-related deaths in 2015 could be between $221 billion and $431 billion, depending on the methodology used.

In addition, the report looked at the cost of non-fatal opioid usage, estimating a total of $72 billion for 2.4 million people with opioid addictions in 2015. Those costs included medical treatment, criminal justice system expenses and the decreased economic productivity of addicts.

The CEA said its estimate was larger than those of some prior studies because it took a broad look at the value of lives lost to overdoses. The CEA also said its methodology incorporated an adjustment to reflect the fact that opioids were underreported on death certificates.

“The crisis has worsened, especially in terms of overdose deaths which have doubled in the past ten years,” the CEA said.

“While previous studies have focused exclusively on prescription opioids, we consider illicit opioids including heroin as well.”

Opioids, primarily prescription painkillers, heroin and fentanyl, are fueling the drug overdoses. More than 100 Americans die daily from related overdoses, according to the U.S. Centers for Disease Control and Prevention.
…

Talks to update the North American Free Trade Agreement appeared to be in danger of grinding toward a stalemate amid complaints of U.S. negotiators’ inflexibility, people familiar with the process said on Sunday.

The United States, Canada and Mexico are holding the fifth of seven planned rounds of talks to modernize NAFTA, which U.S. President Donald Trump blames for job losses and big trade deficits for his country.

Time is running short to reach a deal before the March 2018 start of Mexico’s presidential elections, and lack of progress in the current round could put the schedule at risk.

“The talks are really not going anywhere,” Jerry Dias, president of Unifor, the largest Canadian private-sector union, told reporters after meeting with Canada’s chief negotiator on Sunday. “As long as the United States is taking the position they are, this is a colossal waste of time,” said Dias, who is advising the government and regularly meets the Canadian team.

Hanging over the negotiations is the very real threat that Trump could make good on a threat to scrap NAFTA.

Canada and Mexico object to a number of demands the U.S. side unveiled during the fourth round last month, including for a five-year sunset clause that would force frequent renegotiation of the trade pact, far more stringent automotive content rules and radical changes to dispute settlement mechanisms.

Calls for greater US flexibility

“Our internal view as of this morning is that if any progress is to be made, the United States needs to show some flexibility and a willingness to do a deal,” said a Canadian source with knowledge of the talks.

“We are seeing no signs of flexibility now,” added the source, who requested anonymity given the sensitivity of the situation. However, a NAFTA country official familiar with the talks said Canada had not yet submitted any counterproposals to the U.S. demands.

Dias said the United States was showing some signs of flexibility over its sunset clause proposal after Mexican officials floated a plan for a “rigorous evaluation” of the trade pact, but without an automatic expiration.

U.S. negotiating objectives that were updated on Friday appeared to accommodate the Mexican proposal, saying the revised NAFTA should “provide a mechanism for ensuring that the Parties assess the benefits of the Agreement on a periodic basis.”

Canada and Mexico are also unhappy about U.S. demands that half the content of North American-built autos come from the United States, coupled with a much higher 85 percent North American content threshold. Officials are due to discuss the issue from Sunday through the end of the fifth round on Tuesday, Flavio Volpe, president of the Canada’s Automotive Parts Manufacturers’ Association, said there was little chance of making substantial progress on autos in Mexico City, as the U.S. demands were still not fully understood.

“I don’t expect a heavy negotiation here,” he said in an interview on the sidelines of the talks.
…

Britain will submit its proposals on how to settle its financial obligations to the European Union before an EU Council meeting next month, finance minister Philip Hammond said on Sunday.

British Prime Minister Theresa May was told on Friday that there was more work to be done to unlock Brexit talks, as the European Union repeated an early December deadline for her to move on the divorce bill.

“We will make our proposals to the European Union in time for the council,” Hammond told the BBC.

Last week, May met fellow leaders on the sidelines of an EU summit in Gothenburg, Sweden, to try to break the deadlock over how much Britain will pay on leaving the bloc in 16 months.

She signaled again that she would increase an initial offer that is estimated at some 20 billion euros ($24 billion), about a third of what Brussels wants.
…

Brexit is still well over year away but two European cities on Monday will already be celebrating Britain’s departure from the European Union.

Two major EU agencies now in London — the European Medicines Agency and the European Banking Authority — must move to a new EU city because Britain is leaving the bloc. The two prizes are being hotly fought over by most of the EU’s other 27 nations.

Despite all the rigid rules and conditions the bloc imposed to try to make it a fair, objective decision, the process has turned into a deeply political beauty contest — part Olympic host city bidding, part Eurovision Song Contest.

It will culminate in a secret vote Monday at EU headquarters in Brussels that some say could be tainted by vote trading.

The move involves tens of millions in annual funding, about 1,000 top jobs with many more indirectly linked, prestige around the world and plenty of bragging rights for whichever leader can bring home the agencies.

“I will throw my full weight behind this,” French President Emmanuel Macron said when he visited Lille, which is seeking to host the EMA once Britain leaves in the EU in March 2019. “Now is the final rush.”

At an EU summit Friday in Goteborg, Sweden, leaders were lobbying each other to get support for their bids.

The EMA is responsible for the scientific evaluation, supervision and safety monitoring of medicines in the EU. It has around 890 staff and hosts more than 500 scientific meetings every year, attracting about 36,000 experts.

The EBA, which has around 180 staff, monitors the regulation and supervision of Europe’s banking sector.

With bids coming in from everywhere — from the newest member states to the EU’s founding nations — who gets what agency will also give an indication of EU’s future outlook.

The EU was created as club of six founding nations some 60 years ago, so it’s logical that a great many key EU institutions are still in nations like Germany, France and Belgium. But as the bloc kept expanded east and south into the 21st century, these new member states see a prime opportunity now to claim one of these cherished EU headquarters, which cover everything from food safety to judicial cooperation to fisheries policy.

Romania and Bulgaria were the last to join the EU in 2007 and have no headquarters. Both now want the EMA — as does the tiny island nation of Malta.

“We deserve this. Because as we all know, Romania is an EU member with rights and obligations equal with all the rest of the member states,” said Rodica Nassar of Romania’s Healthcare Ministry.

But personnel at the EMA and EBA are highly skilled professionals, and many could be reluctant to move their careers and families from London to less prestigious locations.

“You have to imagine, for example, for the banking authority, which relies on basically 200 very high-level experts in banking regulatory matters to move to another place,” said Karel Lannoo of the CEPS think tank. “First of all, to motivate these people to move elsewhere. And then if you don’t manage to motivate these people, to find competent experts in another city.”

As the vote nears, Milan and Bratislava are the favorites to win the EMA, with Frankfurt, and perhaps Dublin, leading the way for the EBA.

 
…

When the heaviest rain of tropical storm Harvey had passed, Kathryn Clark’s west Houston neighborhood had escaped the worst. Then the dams were opened — a decision by the U.S. Army Corps of Engineers to prevent upstream flooding and potential dam failures by releasing water into Buffalo Bayou, just a few hundred feet from the end of Clark’s street.

When she and her husband returned to survey the damage later that week, they entered their two-story home by kayak in roughly three feet of water. In the kitchen, a snake slithered past.

Nothing like that had happened in the nearly 11 years the Clarks have lived there; it got Kathryn thinking about their long-term plans, including whether to rebuild.

“What if they decide to open the dams again?” she asked. “But if you don’t rebuild, you just walk away, and that is a big loss.”

The Clarks ultimately opted to reconstruct, a process that will take another half-year before they can move back in. Elsewhere in the city, the waiting will be longer.

​A sprawling concrete jungle

In early November, Texas Governor Greg Abbott told reporters that Texas will need more than $61 billion in federal aid, to help fund a reconstruction plan that he said would curtail damage from future coastal storms. However, he added, there will be more requests: “This is not a closed book.”

Hurricane Harvey, the costliest storm in U.S. history, will affect Houston for months, and years. Apart from tens of thousands of ongoing home rebuilding projects, civil construction is in the evaluation phase.

“With Katrina, it actually took them 12 years before FEMA [Federal Emergency Management Agency] made their final payment to the city of New Orleans,” said Jeff Nielsen, executive vice president of the Houston Contractors Association. “That’s how long it takes to really test and figure out where all the repairs and where all the damage occurred.”

Houston covers a landmass of 1,600 square kilometers, compared to New Orleans’ 900, and is much more densely populated. The impermeable concrete jungle experienced major runoff during the storm, and that translates to high civil construction costs in roads, bridges, water, sewage and utility lines that are difficult to determine.

WATCH: Post-Harvey Houston: Years Until Recovery, Unknown Costs

Nielsen explains to VOA the immensity of the task. 

“You may be driving down the road one day and, all of a sudden — boom — there is a 10-foot sinkhole underneath the road because there is a water line or a sewer line or a storm sewer line that runs underneath that road.

“There is no way to tell that that’s happening without going through and testing each and every line,” Nielsen said.

​Waiting, waiting

Rob Hellyer, owner of Premier Remodeling & Construction, says Houston has seen an uptick in inquiries for both flood and nonflood-related projects — good for business, but a challenge for clients.

“A lot of those people come to the realization that ‘If we want to get our project done in the next two or three years, we better get somebody lined up quick,’” Hellyer told VOA.

But industrywide, much of the workforce is dealing with flooding issues of their own, while simultaneously attempting to earn a living.

“It really has disbursed that labor pool that we have been using for all these years,” Hellyer said.

Labor shortages in construction-related jobs have long been a challenge despite competitive wages, according to Nielsen, who describes his field — civil construction — as less-than-glamorous.

“Outside, it’s hot. What could be more fun than pouring hot asphalt on a road?” he asked.

Networking barriers

With construction costs up and waiting periods long, the hands-on rebuilding effort is typically attractive for some lower-wage immigrant communities.

Among the city’s sizable Vietnamese population, though, that’s not exactly the case, said Jannette Diep, executive director of Boat People SOS Houston office (BPSOS), a community organization serving the area’s diaspora population.

“[Vietnamese construction workers] face not only a language barrier but that networking piece, because they’re not intertwined with a lot of the rules and regulations,” Diep said. “‘Well, how do I do the bid; what’s the process?’”

Overwhelmed with paperwork and often discouraged by limited communication skills in English, Diep says many within the industry opt to work only from within their own communities, despite more widespread opportunities across Greater Houston.

The same barriers apply to the Asian diaspora’s individual post-recovery efforts. BPSOS-Houston, according to Diep, remains focused on short-term needs — food, clothing, cleaning supplies — and expects the longer-term recovery to take two to three years, particularly in lower-income neighborhoods.

Love thy neighbor

Loc Ngo, a mother of seven and grandmother from Vietnam, has lived in Houston for 40 years, but speaks little English. In Fatima Village, a tightly knit single-street community of mobile homes — comprising 33 Vietnamese families — she hardly has to.

“They came to fix the home and it cost $11,000, but they’re not finished yet,” she explained, through her son’s translation. “The washer, dryer and refrigerator — I still haven’t bought them yet, and two beds!”

Across the street, the three-generation Le family levels heaps of dirt across a barren lot that’s lined by spare pipes and cinderblocks. They plan to install a new mobile home.

At the front end of the road is the village’s single-story church, baby blue and white, like the sky — the site of services, weddings, funerals and community gatherings.

Victor Ngo, a hardwood floor installer, typically organizes church events. But for now, his attention is turned to completing reconstruction of the altar and securing donations to replace 30 ruined benches.

“At first I had to spend two months to fix up my house, and now I finished my house, and I [have started] to fix up this church,” Ngo said. “So basically, I don’t go out there to work and make money. Not yet.”

In the village, made up largely of elders, Ngo stresses the importance of staying close to home to help with rebuilding, translation, and paperwork, at least for a while longer.

“We stick together as a community to survive,” he said.
…

Pro-trade Republicans in the U.S. Congress are growing worried that U.S. President Donald Trump may try to quit the NAFTA free trade deal entirely rather than negotiate a compromise that preserves its core benefits.

As a fifth round of talks to modernize the North American Free Trade Agreement kicked off in Mexico on Friday, several Republicans interviewed by Reuters expressed concerns that tough U.S. demands, including a five-year sunset clause and a U.S.-specific content rule, will sink the talks and lead to the deal’s collapse.

Business groups have warned of dire economic consequences, including millions of jobs lost as Mexican and Canadian tariffs snap back to their early 1990s levels.

“I think the administration is playing a pretty dangerous game with this sunset provision,” said Representative Charlie Dent, a moderate Republican from eastern Pennsylvania.

He said putting NAFTA under threat of extinction every five years would make it difficult for companies in his district, ranging from chocolate giant Hershey Co to small family owned manufacturing firms, to invest in supply chains and manage global operations.

Hershey operates candy plants in Monterrey and Guadalajara, Mexico.

Lawmakers’ letter

Nearly 75 House of Representatives members signed a letter this week opposing U.S. proposals on automotive rules of origin, which would require 50 percent U.S. content in NAFTA-built vehicles and 85 percent regional content.

They warned that this would “eliminate the competitive advantages” that NAFTA brings to U.S. automakers or lead to a collapse of the trade pact.

Representative Pete Sessions, a Texas Republican who has long been a supporter of free trade deals, said he disagreed with the Trump approach of “trying to beat someone” in the NAFTA talks. Texas is the largest U.S. exporting state with nearly half of its $231 billion in exports last year headed to Mexico and Canada, according to Commerce Department data.

“We need to offer Mexico a fair deal. If we want them to take our cattle, we need to take their avocados,” Sessions said.

Still, congressional apprehension about Trump’s stance is far from unanimous. The signers were largely Republicans, with no Democrats from auto-intensive states such as Michigan and Ohio signing.

Democratic support

Some pro-labor Democrats have actually expressed support for U.S. Trade Representative Robert Lighthizer’s tough approach.

“Some of those demands are in tune,” said Representative Bill Pascrell of New Jersey, the top Democrat on the House Ways and Means trade subcommittee.

“We don’t want to blow it up, Republicans don’t want to blow it up. But we want substantial changes in the labor, the environmental, the currency, on how you come to an agreement when there’s a dispute, and on problems of origin.”

Farm state Republicans are especially concerned that a collapse of NAFTA would lead to the loss of crucial export markets in Mexico and Canada for corn, beef and other products.

Senator Chuck Grassley of Iowa said Lighthizer in a recent meeting agreed that a withdrawal from NAFTA would be hard on U.S. agriculture, which has largely benefited from the trade pact.

U.S. agricultural exports to Canada and Mexico quintupled to about $41 billion in 2016 from about $9 billion in 1993, the year before NAFTA went into effect, according to U.S. Commerce Department data.

Grassley said, however, that Lighthizer’s approach was “taking everybody to the brink on these talks.”

Other Republicans are taking a wait-and-see approach to the talks.

Representative Frank Lucas of Oklahoma said he was willing to give Trump “the benefit of the doubt” on NAFTA talks, adding that farmers and ranchers in his rural district were strong Trump supporters in the 2016 election.

“The president’s a practical fellow. When push comes to shove, he understands the base,” Lucas said.
…

The head of Canada’s biggest private-sector union headed to Mexico’s Senate on Friday, promising to fight at the NAFTA trade pact talks for improved Mexican wages and free collective bargaining as a way of benefiting workers across North America.

The issue of tougher labor standards has emerged as a key sticking point in the talks to update the North American Free Trade Agreement, and has brought disparate groups of workers from across the region closer to U.S. populists.

“There will not be an agreement” until the Mexican team agrees to free collective bargaining, the elimination of so-called yellow unions that are dominated by employers, and fair wages for Mexican workers, Unifor President Jerry Dias said.

The event held in a side chamber of the Senate was organized by the umbrella organization Better Without Free Trade Agreements, which represents dozens of social organizations and unions.

Dias argued that low wages have not only hurt Mexican workers but have also prompted manufacturing jobs in Canada and the United States to leave for Mexico.

By including much tougher labor standards in an updated NAFTA, the issue could be dealt with head on, he said. “When you start talking about low wages, we can deal with that under the dispute mechanism as an unfair subsidy.”

The fifth round of talks NAFTA is being held in the upscale Camino Real hotel in Mexico City.

“What Mexico offers in this negotiation and to the rest of the world is cheap labor. That’s what Mexico puts on the table and how it presents itself as an attractive place for investments,” Senator Mario Delgado of the leftist Party of the Democratic Revolution told Reuters.

“It is a shame and it is unsustainable for Mexico. … Our salary policy is putting at risk the existence of the treaty,” said Delgado.

Mexican business leaders argue that integrating Mexico into North American supply chains has made the entire region more competitive. Recent studies have shown, however, that wages in Mexico have experienced significant downward pressure.

Given Mexico’s higher inflation rates, wages are now lower there in real terms than when NAFTA took effect, according to a report published in August by credit rating agency Moody’s.

While formally employed workers earn significantly more, the statutory minimum wage is a mere 80 pesos ($4.23) a day.
…

From $7 for a Rohingya refugee to $750 for a North Korean “slave wife,” human rights activists have voiced concerns that it is becoming increasingly easy to enslave another human being as the cost plummets.

The average modern-day slave is sold for $90-100 compared to the equivalent of $40,000 some 200 years ago, said Kevin Bales, Professor of Contemporary Slavery at Britain’s University of Nottingham.

“There has been a collapse in the price of slaves over the last 50 years,” he told the Thomson Reuters Foundation’s annual Trust Conference in London, which focuses on women’s empowerment and modern slavery.

‘Beasts of burden’

Pointing to a photo of boys hauling rocks in Nepal “like beasts of burden,” he said their parents would have sold them for $5-$10. Children are so cheap that if they get injured or fall in a ravine their slave master abandons them, Bales said.

“They understand it’s less expensive to acquire a new child than to call a doctor,” he added.

Bales attributed the fall in price to the population explosion which had “glutted the world with potentially enslavable people.”

40 million people trapped

Worldwide, about 40 million people were estimated to be trapped as slaves in 2016, mostly women and girls, in forced labor, sexual exploitation and forced marriages, with global trafficking estimated to raise $150 billion in profits a year.

North Korean defector Jihyun Park told how she was trafficked to China where she was sold for 5000 yuan ($750) to an alcoholic, violent farmer.

“He said I’ve paid for you so you must work. I spent six years as his slave,” Park said.

Thousands of North Korean women are believed to have been trafficked as wives and sex workers inside China where the one-child policy has skewed the gender ratio.

Natural disasters force issue

 In Bangladesh, Asif Saleh, of development agency BRAC, said Rohingya refugee women fleeing Myanmar and arriving in Bangladesh were being sold for as little as 5 pounds ($6.60).

Aid agencies say traffickers often exploit crises to prey on vulnerable people separated from their families and communities.

Nepalese nun and kung fu teacher Jigme Wangchuk Lhamo, who helps families displaced by the country’s 2015 earthquake, told the conference that people were selling their daughters, sisters and mothers to traffickers after the disaster in order to rebuild their homes.

“Some men just see girls as a bunch of money,” she said.

In northern Kenya’s pastoralist region, lawyer Fatuma Abdulkadir Adan said child brides as young as nine were sold for eight cows or eight camels — worth about $800.

“Girls become commodities and they have no voice, no one asks what the girl wants,” said Adan, who uses football to help tackle child marriage and female genital mutilation.

But it is not just rich countries where girls are sold off.

Sarah, forced into prostitution as a child in Britain, said the gang who groomed her said she would have to have sex every day until she had paid off a “debt” of 75,000 pounds.

“They told me I belonged to them and until my debt was cleared I had to work for them,” she said.
…

Puerto Rico could face more than a decade of further economic stagnation and a steep drop in population as a result of Hurricane Maria, experts say.

The stark estimates were presented this wee to members of a federal control board overseeing finances of a U.S. territory that is already in the 11th year of a recession.

“The situation is dire to say the least, with destroyed infrastructure, lack of power and water, and an accelerated pace of migration,” economist Heidie Calero said.

She estimated that the hurricane caused $115 billion in damage, even without counting business losses.

“We believe that is very conservative,” she said.

The administration of Governor Ricardo Rossello said earlier in the week that it was seeking $94 billion in federal aid for an island where power generation remains at 40 percent and where nearly 10 percent of people are still without water almost two months after the storm. More than 20 of Puerto Rico’s 78 municipalities remain completely without power.

So far, Congress has approved nearly $5 billion in aid for Puerto Rico.

Twin shocks

Economist Juan Lara told board members that the local economy could contract anywhere between 8 percent and 15 percent in fiscal 2018, depending on the restoration of power, with overall revenues falling by 30 percent.

“We are undergoing both a demand and supply shock,” he said, saying that 5,000 businesses could close permanently, representing 10 percent of membership of the island’s National Retail Federation.

Businesses that have reopened have been forced to reduce their hours or depend on costly generators.

“We need electric power to be back and to be reliable,” Lara said. “We need roads to be cleared. We need supermarkets to be able to replenish their inventories. … We need to restore basic operating infrastructure.”

Lack of power remains the biggest obstacle, with the island’s electric company struggling to maintain the 50 percent power generation it had reached Wednesday just as a major blackout occurred for the second time in a week.

Rossello has said the company will reach 80 percent generation by end of November and 95 percent by mid-December, goals that many have called ambitious. In contrast, the U.S. Corps of Engineers has said it expects 75 percent generation by end of January.

More migration

Before Hurricane Maria hit, Puerto Rico was trying to restructure a portion of its $73 billion public debt load amid a deep economic crisis that has prompted an exodus of nearly half a million people in the past decade. That migration will only accelerate because of post-hurricane conditions, with an estimated population of 2.8 million people by 2030, compared with the current 3.4 million, said economist Jose Villamil.

“What Maria has done in some ways is to exacerbate that situation, made it more intense,” he said.

The drop in population, coupled with a majority of young, talented people leaving, will hit Puerto Rico’s economy even harder, experts said.

Two more meetings remain as the board continues to gather information to revise a fiscal plan to adjust for the hurricane’s impact. It is unclear how much money, if any, will be set aside in the plan to pay off the island’s debt load.
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Radioactive waste continues to pour from Exelon’s Illinois nuclear power plants more than a decade after the discovery of chronic leaks led to national outrage, a $1.2 million government settlement and a company vow to guard against future accidents, an investigation by a government watchdog group found.

Since 2007, there have been at least 35 reported leaks, spills or other accidental releases in Illinois of water contaminated with radioactive tritium, a byproduct of nuclear power production and a carcinogen at high levels, a Better Government Association review of federal and state records shows.

No fines were issued for the accidents, all of which were self-reported by the company.

The most recent leak of 35,000 gallons (132,000 liters) occurred over two weeks in May and June at Exelon’s Braidwood plant, southwest of Chicago. The same facility was the focus of a community panic in the mid-2000s after a series of accidents stirred debate over the safety of aging nuclear plants.

A 2014 incident at Exelon’s Dresden facility in Grundy County involved the release of about 500,000 gallons (1,900,000 liters) of highly radioactive water. Contamination was later found in the plant’s sewer lines and miles away in the Morris, Illinois, sewage treatment plant.

Another leak was discovered in 2007 at the Quad Cities plant in Cordova. It took eight months to plug and led to groundwater radiation readings up to 375 times of that allowed under federal safe drinking water standards.

Exelon had threatened to close the Quad Cities plant, but relented last year after Gov. Bruce Rauner signed bailout legislation authorizing big rate hikes.

Representatives of Exelon and its government overseers — the U.S. Nuclear Regulatory Commission, the Illinois Emergency Management Agency and the Illinois Environmental Protection Agency — say the leaks posed no public danger and did not contaminate drinking water. Exelon said to prevent leaks it has spent $100 million over the last decade on upgrades at all of its U.S. plants.

Michael Pacilio, chief operating officer of the power generating arm of Exelon, said no one in or around the plants was harmed by radioactivity from the leaks, which he described as minor compared with everyday exposures.

“We live in a radioactive world,” Pacilio said.

Critics say that’s little cause for relief.

“Best that we can tell, that’s more luck than skill,” said David Lochbaum, an analyst with the nonprofit Union of Concerned Scientists. “Leaks aren’t supposed to happen. Workers and the public could be harmed. There is a hazard there.”

Among the 61 nuclear power plants operating in the U.S., more than half have reactors that are at or near the end of their originally expected lifespans — including the Dresden and Quad Cities plants.

Industry watchdogs and government whistleblowers contend oversight is compromised by a cozy relationship between companies and the NRC.

Government regulators concede they must balance the safety needs of aging plants, which require more maintenance, versus ordering cost-prohibitive upgrades at facilities that inherently are just a slip-up away from catastrophe.

No player in the nuclear industry is bigger than Exelon, the Chicago-based energy company that last year reported $31 billion in revenue and operates 14 nuclear plants in Illinois, New York, New Jersey, Pennsylvania and Maryland.

Five of the six Illinois plants reported leaks over the last decade, records show. Clinton, in DeWitt County, had no leaks and Byron, in Ogle County, reported only one that contained low levels of radioactivity.

The accidents included in the BGA analysis are separate from government-approved releases into large bodies of water. The state allows Exelon to discharge controlled amounts of tritium into rivers and lakes, where radioactive material gets diluted.

Other releases of tritium, however, can be illegal and subject to fines and government lawsuits — though no accidents from the past decade resulted in either. Government officials say small amounts of tritium — a radioactive form of hydrogen and a potential marker for more dangerous nuclear contaminants — are not harmful to humans but exposure to higher levels may increase the risk of cancer.

At least seven of the 35 documented accidents since 2007 involved contamination of groundwater. Other contamination was found in sewers and other water systems where it isn’t supposed to be.

The recent leaks echo the controversy in 2006 when it was revealed that leaks at Braidwood over many years spilled 6 million gallons (23 million liters) of radioactive water, some of which found its way onto private properties and at least one private drinking well.

At the time, Exelon and state regulators assured the public radioactivity levels in the private well were far below limits deemed a danger. Neighbors of the Braidwood plant were skeptical then and remain so.

“The NRC gets all its numbers from the nuclear plant. How can NRC trust the numbers?” asked Monica Mack, who lives in Braceville near the Braidwood plant.

The BGA investigation also found:

• Of the 35 documented incidents, 27 occurred at Dresden. Following the big 2014 leak, which emanated from an aboveground storage tank, Exelon asked a state inspector whether the public would have access to the incident report under open records laws, a state report showed.

• An NRC report on the 2007 Quad Cities leak noted radiation levels went “well beyond that seen anywhere else in the industry” and that plant staff estimated the leak had been active for years before it was discovered.

• In 2010, Exelon’s Marseilles generating plant in LaSalle County reported a spill from a storage tank, initially estimated at more than 150 gallons (570 liters) but later classified as “unknown.” Groundwater tritium tests later showed levels 59 times the EPA’s drinking water limit. Exelon said no tritium left the plant’s boundaries, but records show plant workers continued to monitor a body of highly contaminated groundwater sitting on plant property at least five years after the accident.

• In 2009, Dresden reported another hole in a storage tank led to a leak of as much as 272,000 gallons (1 million liters) of radioactive water. Onsite groundwater testing showed levels of tritium 160 times higher than allowed under federal standards for drinking water.

This story was provided to The Associated Press by the nonprofit, nonpartisan Better Government Association of Chicago: www.bettergov.org
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Zimbabwe’s economy has been hammered by political unrest, soaring inflation, a shortage of foreign cash, a trade deficit and many other problems. Residents say the economic turbulence has driven thousands of people out of the country and makes daily life challenging. But an economic analyst says Zimbabwe has an educated workforce and a battered-but-functional infrastructure that could boost agricultural production and manufacturing, and eventually bring recovery. VOA’s Jim Randle reports.
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Airbus announced on Wednesday that it will sell 430 airplanes to U.S. firm Indigo Partners for $49.5 billion in the European firm’s biggest deal ever.

The announcement came at the Dubai Air Show and the deal includes 273 A320neos and 157 A321neos. The airlines that use the aircraft will include Frontier Airlines, JetSMART of Chile, Volaris of Mexico and Wizz Air of Hungary.

A320neos list for $108.4 million apiece and A321neos at $127 million. Airlines and manufacturers often negotiate lower prices for big deals like these.

Indigo Partners is a Phoenix-based private equity firm. It owns Denver-based Frontier Airlines and owns part of Mexico’s Volaris. It’s managed by William Franke, a pioneer of the cheap tickets and high fees airline business that has spread overseas and is growing in the United States.

Airbus’ previous biggest-ever sale came in August 2015, when it sold 250 A320neos to Indian budget airline IndiGo, a deal estimated to be worth $26 billion at list prices. IndiGo and Indigo Partners are separate firms with separate management.

Until Wednesday, the only major deal announced at the Dubai Air Show came on Sunday, when long-haul carrier Emirates purchased 40 Boeing 787-10 Dreamliners in a $15.1 billion deal.

Airbus, which is based in Toulouse, France, has pinned hopes of continuing production of its A380 double-decker jumbo jet on Emirates, the world’s largest operator of the aircraft. Reports circulated before the air show that a major A380 sale would be coming.

Airbus employees even filled a news conference on Sunday, expecting the A380 sale, instead to find state-owned Emirates making the deal with Boeing in front of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum.

Emirates now relies solely on the Airbus 380 and the Boeing 777 for its flights, making it the largest operator of both. It has 165 Boeing 777s in its fleet today and took possession of its 100th A380 earlier this month.

The Emirates’ snub even came up at the news conference Wednesday, when a reporter asked Airbus if another deal could be coming.

“I think you’ve got to walk over to the chalet with Emirates on the door and ask them,” said John Leahy, Airbus’ chief operating officer.
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Recent accusations of sexual misconduct by Hollywood movie mogul Harvey Weinstein is impacting the upper echelons of the business world. The “Weinstein Effect” has men in powerful positions facing similar accusations. It is also increasing awareness about where the line is between friendly banter to more uncomfortable, and sometimes criminal motives. VOA’s Carolyn Presutti takes us to a class that teaches how to intervene when witnessing sexual harassment.
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Papa John’s apologized Tuesday night for comments made by CEO John Schnatter blaming sluggish pizza sales on NFL players kneeling during the national anthem.

The company is a major NFL sponsor and advertiser, and Schnatter said on an earnings call Nov. 1 that “NFL leadership has hurt Papa John’s shareholders” and that the protests “should have been nipped in the bud a year and a half ago.”

The company tweeted a statement offering to “work with the players and league to find a positive way forward.”

“The statements made on our earnings call were describing the factors that impact our business and we sincerely apologize to anyone that thought they were divisive,” it said. “That definitely was not our intention.

“We believe in the right to protest inequality and support the players’ movement to create a new platform for change. We also believe, as Americans, we should honor our anthem. There is a way to do both.”

The movement was started last year by former San Francisco 49ers quarterback Colin Kaepernick, who kneeled to protest what he said was police mistreatment of blacks. More players began kneeling after President Donald Trump said at an Alabama rally last month that team owners should get rid of players who protest during the anthem.

Papa John’s added that it is “open to ideas from all. Except neo-nazis.” It has previously tried to distance itself from white supremacists who praised Schnatter’s comments, saying it does not want those groups to buy its pizza.

The company’s stock has fallen by nearly 13 percent since Schnatter’s comments.
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Venezuela’s cash-strapped government on Tuesday vowed it was making debt payments responsibly, even as two ratings agencies declared partial default on a crippling debt load that has fueled hunger and disease.

President Nicolas Maduro’s government left investors scratching their heads on Monday after a debt negotiation meeting that offered no specifics on plans to avoid default or execute an unlikely restructuring plan.

Despite optimism that payment will continue in the short-term, investors believe the country will at some point be unable to service some $60 billion in junk bonds — potentially triggering messy lawsuits and worsening an already difficult economic situation.

“Today we have initiated payment of interest on Venezuela’s foreign debt,” said Information Minister Jorge Rodriguez in a televised speech, apparently referring to delayed payment of $200 million on several Venezuelan bonds.

Debt renegotiation

Government officials describe Monday’s meeting as the start of a debt renegotiation process that Maduro announced earlier this month.

Venezuela’s Constituent Assembly, an all-powerful legislature created in August despite condemnation by the opposition and the international community, on Tuesday approved a resolution “to support and accompany the refinancing process.”

But investors say that no such process in fact exists. They say Maduro’s government has presented no coherent financial plan, and that any such plan would likely be made impossible by U.S. sanctions.

Bonds downgraded

Ratings agency Fitch on Tuesday downgraded Venezuelan bonds to “selective default,” citing delays in paying interest on bonds maturing in 2019 and 2024. The decision followed a similar one by S&P on Monday and by Fitch on debt from state oil company PDVSA.

“Selective default” means that a ratings agency believe that a borrower has defaulted on some of its obligations but will likely continue to make timely payments on others.

In response, Venezuela and PDVSA bonds tumbled on Tuesday, wiping out most of a rally from last week that had been driven by investor confidence that payment would continue.

In a sign it may be gearing up for a legal dispute, Venezuela has appointed lawyer David Syed to advise it, working alongside a team at global law firm Dentons, according to IFR, a Thomson Reuters news service.

Routine delays

Investors nonetheless appear to remain broadly comfortable with a wait-and-see approach, with no clear signs of creditors preparing to file legal claims in response to payment delays.

That approach is encouraged by the staggering investment return on Venezuelan bonds, which Tuesday were paying an average of 50 percentage points more than comparable U.S. securities.

Delays have become routine since October, when Venezuela and PDVSA starting using 30-day grace periods to stretch out limited cash-flow. Investors broadly shrug them off, and some take advantage of associated market jitters to buy them on the cheap.

U.S. citizens blocked

Sanctions by the government of U.S. President Donald Trump, in response to accusations that Maduro’s government has undermined democracy and systematically violated human rights, block U.S. citizens from buying newly issued Venezuelan debt.

That makes it effectively impossible for the country to refinance, because such operations rely on swaps in which investors exchange outstanding bonds for new ones.

The measures also bar any dealings with dozens of blacklisted officials, including Vice President Tareck El Aissami and Economy Minister Simon Zerpa — the two main leaders of the debt negotiation commission.

Venezuela has dismissed U.S. accusations of drug-dealing and corruption by its officials as politically motivated fabrications by Washington to tarnish the country’s reputation, and describes the sanctions as a colonial exercise by the Trump government.

Venezuelans hit hard

Four years of recession in the South American nation, fueled by failing socialist economics and a plunge in global oil prices, have hit Venezuelans hard. Many skip meals or suffer from malnutrition and preventable diseases.

With some $9 billion in payments looming for 2018, a default would be a short-term relief for the government, enabling Maduro to spend on desperately-needed food and medicine imports ahead of next year’s presidential election.

But that strategy could also backfire if it sparks aggressive legal challenges from abroad, including moves to seize assets of PDVSA.
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U.S. airline Alaska Airlines on Tuesday said it would discontinue a daily flight between Los Angeles and Havana, Cuba, after Jan. 22, due to the recent changes in Cuba travel policies by the U.S. government.

The U.S. government made it tougher last week for Americans to visit Cuba and do business in the country, making good on a pledge by President Donald Trump to roll back his Democratic predecessor’s move toward warmer ties with Havana.

The regulations include a ban on Americans doing business with some 180 Cuban government entities, holding companies, and tourism companies.

The airline which started the Los Angeles-Havana flight in January this year, said it will redeploy the aircraft to other markets with stronger demand.

Passengers who have tickets booked to Havana after January 22 will be rebooked on another airline at no additional cost or a full refund, the company said.
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Sudan is taking steps to close the gap between its official and unofficial currency rates and scrap subsidies by end-2019 to win foreign investment after U.S. sanctions ended, Minister of State for Finance Magdi Hassan Yassin told Reuters on Tuesday.

Washington last month suspended 20-year sanctions and lifted a trade embargo because it decided that Sudan had made progress on counterterrorism cooperation and on internal conflicts such as one in Darfur. It also unfroze assets and removed financial restrictions.

Sudan is hoping the measures will help the import-dependent country get back on its feet after years of hardship caused partly when the south seceded in 2011 and it lost three-quarters of its oil output, its main source of foreign currency.

“We will gradually lift subsidies in accordance with the five-year plan by the end of 2019. … Most of the things that hinder foreign investment are being addressed and there are reforms to investment and company laws,” Yassin said.

Sudan last November cut fuel and electricity subsidies and announced import restrictions to save scarce foreign currency.

Sudan’s year-on-year inflation decreased in October to 33.08 percent from 35.13 percent in September on the back of lower food and beverage prices, a report from Sudan’s central statistics agency said Tuesday.

Sudan’s central bank has held the official exchange rate at 6.7 pounds to the dollar but currency is largely unavailable at that price. The pound currently hovers around 23 pounds to the dollar, according to currency traders.

“The 2018 budget, which will start in January, will be the first budget after the U.S. ended the economic sanctions. … The central bank will set policies to unify the exchange rate,” Yassin said.

But “there are no directions to float the pound,” he added.

Analysts and officials say Sudan must conduct tough reforms such as floating its currency if it hopes to benefit from sanctions relief and begin to attract new investment.
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General Electric’s new Chief Executive John Flannery on Monday outlined steps that will turn the biggest U.S. industrial conglomerate into a smaller, more focused company, surprising some investors who sold the company’s shares to a five-year low.

Flannery’s plan to shrink GE’s multi-industry array of businesses was a reversal of the deal-driven empire building of his predecessors, Jeff Immelt and Jack Welch, and potentially a milestone in the decline of the conglomerate as a business strategy.

Other companies that once emulated the GE model of spreading bets among diverse industries are now unwinding their portfolios as well, something Immelt also did throughout his 16 years as CEO, even as he made acquisitions.

Flannery said he will pare GE down to three core businesses: power, aviation and healthcare. He will keep Immelt’s strategy of building software to complement GE’s machinery, albeit with a narrower focus and reduced budget.

For investors, Flannery’s decision to cut both the dividend and the 2018 earnings forecast by half added up to a whole that was less than they judged GE be worth last week.

GE shares fell to their lowest level in more than five years as investors worried the years-long overhaul would not pare down enough expenses or generate as much cash as they hoped. They closed off the day’s lows, down 7.2 percent to $19.02.

“They need to cut more cost,” said Scott Davis, an analyst at Melius Research. “GE is still a bloated company with duplicate costs up and down the organization.”

GE stock has effectively been dead money since September 2001, when Immelt took over, posting a negative total return even after reinvesting its juicy dividends. Once the most valuable U.S. publicly traded company, GE now has a market value of $168 billion, less than a fifth of Apple.

“You have pessimism around its portfolio of businesses mixed with a pretty harsh cut in the dividend,” said John Augustine, chief investment officer at Huntington Private Bank. “It took them years to get into this mess and it will take them several years to right the ship and get back into a stronger position.”

‘Soul of the Company’

Flannery, who took over as CEO on Aug. 1, said he was “looking for the soul of the company again” and would focus on “restoring the oxygen of cash and earnings to the company.”

He will cut its board to 12 from 18 members, and bring on three new directors early next year.

GE said it already has shed 25 percent of its corporate staff, meaning 1,500 jobs around the world, including some at its Boston headquarters. It is aiming to reduce overhead cost by $2 billion next year, half of that at its troubled power unit that sells electrical generation equipment.

The transition includes GE getting rid of at least $20 billion of assets through sales, spin-offs or other means.

GE will jettison businesses with “a very dispassionate eye,” Flannery said, keeping only units that offer growth, a leading market position and a large installed base.

GE said it would exit its lighting, transportation, industrial solutions and electrical grid businesses, all of which were widely expected, closing factories around the globe.

But it was vague about other disposals.

It plans to get rid of its 62.5-percent stake in oilfield services company Baker Hughes, only months after making the multi-billion dollar investment. Baker Hughes shares lost 3.2 percent.

Flannery offered no quick fixes for investors. He said power, one of the businesses GE would focus on, was “challenged,” but could be turned around in one to two years.

GE’s Digital unit, on which Immelt bet billions of dollars, would focus on selling apps to customers in its core businesses, Flannery said. He confirmed that the shift meant sales staff were being let go, as Reuters reported last week.

GE also will cut spending on the digital unit to $1.1 billion in 2018 from $1.5 billion in 2017. GE had previously said it would invest $2.1 billion in its digital unit in 2017, but that tally included money not tied to Predix, GE’s industrial-internet platform, GE said.

Flannery said there is “no retreat on the idea” of GE providing both applications and the Predix platform to connect industrial equipment to computers that can make machines run better. However, getting one of its key applications to run on Predix could take two more years.

Flannery added that some of its healthcare IT business, such as software for imaging and hospital staff scheduling, were still critical to the company and not likely to be divested.

Dividend Cut

The dividend cut, to 48 cents from 96 cents next year, is only the third in the company’s 125-year history and the first not during a broader financial crisis. It is expected to save about $4 billion in cash annually.

“This dividend cut will be a major disappointment to GE’s (roughly 40 percent) retail shareholder base,” said RBC Capital Markets analyst Deane Dray.

The cut will be the eighth-biggest dividend cut in history among S&P 500 companies, according to Howard Silverblatt, senior index analyst of S&P Dow Jones Indices. GE also had the biggest cut when it slashed its dividend by $8.87 billion in 2009, Silverblatt said.

GE forecast 2018 adjusted earnings of $1 to $1.07 a share, compared with its earlier estimate of $2 per share. Wall Street was expecting $1.16, according to Thomson Reuters I/B/E/S.

Industrial free cash flow will total just $6 billion to $7 billion next year, up from an estimated $3 billion in 2017, but far below earlier targets of $12 billion for 2017.

GE said the weak power business had largely prompted the dividend cut and lowered earnings forecast. Demand for new power plants will remain slow through 2019, Flannery predicted.

But GE also was to blame, he said.

“We did not manage the (power) business well,” he said. “That’s a fundamental change we need to make and that’s going to take some time. This is not a magic wand.”
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Mexico’s government is preparing a macroeconomic response in case U.S. President Donald Trump makes good on threats to quit the North American Free Trade Agreement (NAFTA), an event which could wreak havoc on the Mexican economy and hurt the peso.

Mexico’s Foreign Minister Luis Videgaray said on Monday the government and central bank were preparing a plan to address the possibility of a future without NAFTA, but gave few details.

The government has said it is examining how it could adjust Mexican legislation to give investors certainty about their investments if the almost 24-year-old NAFTA collapses.

Underpinning some $1.3 trillion in annual trade between the United States, Canada and Mexico, NAFTA has been a central pillar of recent Mexican economic development. Nearly 80 percent of Mexican exports are shipped to the United States.

Trade negotiators from the United States, Mexico and Canada meet in Mexico City this week to continue talks on overhauling the accord, and Videgaray reiterated the government’s position that the expectation was that talks would ultimately succeed.

Mexico would continue to work on diversifying trade, protect foreign investment, review possible changes to tariff barriers, and prepare a macro-economic response from the finance ministry and the central bank, Videgaray added.

“These are the four lines a plan B must include,” he told Mexican radio. “We have to be prepared for all the scenarios and one of the scenarios is that the United States leaves the treaty, and as we have said, that is not the end of the world, the Mexican economy is much bigger than NAFTA.”

Separately, the International Monetary Fund said in a report on Monday that ending NAFTA would bring back World Trade Organization “most-favored nation” tariffs, which would disrupt Mexican-U.S. trade, and could crimp economic growth, dampen capital inflows and raise risk premia.

The IMF suggested that among various policy responses at Mexico’s disposal, “temporary foreign exchange interventions and liquidity provision could help smooth extreme volatility.”

Concerns that Trump could follow through on his threats to dump NAFTA have battered the Mexican peso in recent weeks.

Additionally, Mexico should continue to implement its structural reforms and boost efforts to diversify trading relationships, which would increase competitiveness and help economic growth over the medium-term, the IMF said.

The IMF sees Mexico’s economy growing 1.9 percent next year after projected expansion of 2.1 percent in 2017.
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Promoted as needed relief for the middle class, the Senate Republican tax overhaul would increase taxes for some 13.8 million moderate-income American households, a bipartisan analysis showed Monday.

The assessment by Congress’ nonpartisan Joint Committee on Taxation emerged as the Senate’s tax-writing committee began wading through the measure, working toward the first major revamp of the tax system in some 30 years.

Barging into the carefully calibrated work that House and Senate Republicans have done, President Donald Trump called for a steeper tax cut for wealthy Americans and pressed GOP leaders to add a contentious health care change to the already complex mix.

Trump’s latest tweet injected a dose of uncertainty into the process as the Republicans try to deliver on his top legislative priority. He commended GOP leaders for getting the tax legislation closer to passage in recent weeks and then said, “Cut top rate to 35% w/all of the rest going to middle income cuts?”

That puts him at odds with the House legislation that leaves the top rate at 39.6 percent and the Senate bill as written, with the top rate at 38.5 percent.

Trump also said, “Now how about ending the unfair & highly unpopular individual mandate in (Obama)care and reducing taxes even further?”

Overall, the legislation would deeply cut corporate taxes, double the standard deduction used by most Americans, and limit or repeal completely the federal deduction for state and local property, income and sales taxes. It carries high political stakes for Trump and Republican leaders in Congress, who view passage of tax cuts as critical to the GOP preserving its majorities at the polls next year.

With few votes to spare, Republicans leaders hope to finalize a tax overhaul by Christmas and send the legislation to Trump for his signature.

The key House leader on the effort, Rep. Kevin Brady, said he’s “very confident” that Republicans “do and will have the votes to pass” the measure this week.

Brady, chairman of the House Ways and Means Committee, said he doesn’t expect major changes to the bill as it moves to a final vote in the House. Still, he said Trump’s call for removing the requirement to have health insurance as part of the tax agreement “remains under consideration.”

Trump and the Republicans have promoted the legislation as a boon to the middle class, bringing tax relief to people with moderate incomes and boosting the economy to create new jobs.

“This bill is not a massive tax cut for the wealthy. … This is not a big giveaway to corporations,” Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, insisted as the panel had its first day of debate on the Senate measure.

Hatch also downplayed the analysis by congressional tax experts showing a tax increase for several million U.S. households under the Senate proposal. Hatch said “a relatively small minority of taxpayers could see a slight increase in their taxes.”

The committee’s senior Democrat, Sen. Ron Wyden of Oregon, said the legislation has become “a massive handout to multinational corporations and a bonanza for tax cheats and powerful political donors.”

Tax increase for some

The analysis found that the Senate measure would increase taxes in 2019 for 13.8 million households earning less than $200,000 a year. That group, about 10 percent of all taxpayers, would face tax increases of $100 to $500 in 2019. There also would be increases greater than $500 for a number of taxpayers, especially those with incomes between $75,000 and $200,000. By 2025, 21.4 million households would have steeper tax bills.

The analysts previously found a similar magnitude of tax increases under the House bill.

A group of more than 400 millionaires and billionaires, including prominent figures such as Ben and Jerry’s founders Ben Cohen and Jerry Greenfield, designer Eileen Fisher and financier George Soros, asked Congress to reject the GOP tax plan and not give cuts to the super-wealthy like themselves.

“We urge you to oppose any legislation that further exacerbates inequality,” they said in a letter made public Monday.

Neither bill includes a repeal of the so-called individual mandate of Barack Obama’s Affordable Care Act, the requirement that Americans get health insurance or face a penalty. Several top Republicans have warned that including the provision would draw opposition and make passage tougher.

Among the biggest differences in the two bills that have emerged: The House bill allows homeowners to deduct up to $10,000 in property taxes while the Senate proposal unveiled by GOP leaders last week eliminates the entire deduction. Both versions would eliminate deductions for state and local income taxes and sales taxes.

Senate Majority Leader Mitch McConnell, R-Ky., asked whether the Senate’s proposed repeal of the property tax deduction could bring higher taxes for some middle-class Americans, acknowledged there would be some taxpayers who end up with higher tax bills.

“Any way you cut it, there is a possibility that some taxpayers would get a higher rate,” McConnell told reporters after a forum in Louisville, Kentucky, with local business owners and employees. “You can’t craft any tax bill that guarantees that every single taxpayer in America gets a tax break. What I’m telling you is the overall majority of taxpayers in every bracket would get relief.”
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The European Union has approved economic sanctions, including an arms embargo on Venezuela.

EU foreign ministers meeting in Brussels announced the measures on Monday in response to regional elections last month, which they say worsened the country’s crisis.

The weapons ban is intended to prevent the government of President Nicolas Maduro from purchasing military equipment that could be used for repression or surveillance.

The sanctions also include setting up a system for asset freezes and travel restriction on some past and present Venezuelan officials close to Maduro.

Spain has long pushed for sanctions on those close to Maduro, but the EU has been divided over whom to target.

In Monday’s statement, ministers said they would focus on security forces, government ministers and institutions accused of human rights violations, and the disrespect of democratic principles or the rule of law.

Last Thursday, the U.S. imposed financial sanctions on 10 current and former Venezuelan officials because of corruption and abuse of power allegations related to Maduro’s crackdown on the opposition.

The EU also stressed that it would not recognize Venezuela’s pro-Maduro Constituent Assembly, whose 545 members took office in August and sidelined the opposition-led National Assembly. The EU said its creation has only served to “further erode democratic and independent institutions.”
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