Posts Tagged ‘retailing’

Philippines, Japan sign $6B worth of business deals

October 31, 2017
Philippine President Rodrigo Duterte, left, and Japanese Prime Minister Shinzo Abe stand between the countries’ flags as they review a guard of honor at Abe’s official residence in Tokyo Monday, Oct. 30, 2017. Duterte is on a two-day visit to Japan. Nicolas Datiche/Pool Photo via AP
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TOKYO — At least 18 business deals that will yield $6 billion worth of new investments were signed here Monday by Philippine and Japanese firms in a development that officials said affirmed investor confidence in the Philippines.
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President Rodrigo Duterte witnessed the signing of the agreements, which are expected to pour in Japanese investments in manufacturing, shipbuilding, iron and steel, agribusiness, power, renewable energy, transportation, infrastructure, mineral processing, retailing, information and communication technology, and business process management.
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“President Rodrigo Roa Duterte met several Japanese companies and witnessed several B-B MOUs (business-to-business memoranda of understanding) and letters of intent on Investment plans, joint ventures and expansion of operations in the Philippines,” Trade Secretary Ramon Lopez said in a statement.
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“Total new investments (are expected to reach) $6 billion,” he added.
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A list of companies that signed the agreement was not available as of Monday but incoming presidential spokesman Harry Roque said the deals would be undertaken by “big multinational” and “Filipino giant” corporations.
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“If I’m not mistaken, there were at least 25 agreements that were witnessed by the president today,” Roque said in a chance interview here.
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“I think it’s because there is number one, commercial predictability, number two there is peace and order in the Philippines and there is conducive business environment where businesses are safe from unjust taking,” he added.
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Roque said the signing of business deals also highlighted the “very strong” relations between the Philippines and Japan.
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“It also proves that Japan continues to be one of our most active trading partners,” the incoming presidential spokesman said.
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Among the companies that signed business deals are the Steel Asia Manufacturing Corp. and Metro Pacific Investments, which forged agreements with Hitachi and Itochu. The group of businessman Manuel V. Pangilinan was also scheduled to meet with Japanese firms NTT, Rakuten, Itochu, Mitsui, Marubeni, Densan and Hitachi.
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Lopez said he also met with his Japanese counterpart Hiroshige Seko to discuss ways to improve market access and lowering tariff of Philippine agricultural products like banana, pineapple and mango.
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Asked about the Japanese trade minister’s reaction to his request to lower the tariff for Philippine agricultural exports, Lopez replied: “They took note of that and to be discussed in detail in the technical working groups under JPEPA (Japan-Philippines Economic Partnership Agreement).”
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JPEPA is the bilateral trade agreement between the Philippines and Japan.
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It was signed by former President Gloria Macapagal-Arroyo and then Japanese Prime Minister Junichiro Koizumi in Helsinki, Finland, in September 2006.
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The agreement assures zero duties for more than 90 percent of Philippine exports to Japan and is expected to enhance the access of Filipino service workers to the Japanese market. It also requires the removal of tariffs by both Japan and the Philippines on almost all industrial goods within 10 years from the date of its implementation.
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Lopez said he and Seko also discussed Japan’s support to reach a substantial conclusion of the Regional Comprehensive Economic Partnership.
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The two trade chiefs also tackled the Industrial Cooperation Dialogue and ways to improve the supply chain for Japanese companies to benefit Philippine small and medium enterprises.
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U.S. fails to reassure Europe, Japan over ‘Trumponomics’

May 14, 2017

Reuters

Sat May 13, 2017 | 2:23pm EDT

By David Lawder and William Schomberg | BARI, ITALY

The United States said on Saturday the world’s other rich economies were getting used to the policy plans of President Donald Trump, but Europe and Japan showed they remained worried about Washington’s shift.

Officials from the Group of Seven nations met in southern Italy hoping to hear more about Trump’s plans which they fear will revive protectionism and set back the global approach to issues such as banking reform and climate change.

U.S. Treasury Secretary Steven Mnuchin said the United States reserved the right to be protectionist if it thought trade was not free or fair.

“We do not want to be protectionist but we reserve our right to be protectionist to the extent that we believe trade is not free and fair… Our approach is for more balanced trade, and people have heard that,” Mnuchin told reporters at the end of the two-day meeting.

U.S. Secretary of the Treasury Steven Mnuchin attends a news conference during a G7 for Financial ministers, in the southern Italian city of Bari, Italy May 13, 2017. REUTERS/Alessandro Bianchi

“And as I say, people are more comfortable today, now that they’ve had the opportunity to spend time with me and listen to the president and hear our economic message.”

Other ministers from the G7 countries made it clear they did not share his view.

“All the six others … said explicitly, and sometimes very directly, to the representatives of the U.S. administration that it is absolutely necessary to continue with the same spirit of international cooperation,” French Finance Minister Michel Sapin told reporters.

Bank of France Governor Francois Villeroy de Galhau said there was a “light breeze” of optimism within the G7 about the recovering global economy after years of sluggish growth following the financial crisis that began nearly a decade ago.

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But he said the continued uncertainty about the direction of U.S. policy represented a risk, echoing comments made on Friday by Japanese Finance Minister Taro Aso.

“We must not backpedal on free trade as it has contributed to economic prosperity,” Aso said.

European G7 officials complain that no-one knows what the United States understands by “fair trade” and that the only way to establish fairness was by sticking to the rules of the World Trade Organization – a multilateral framework.

They also say the U.S. demand to balance trade bilaterally was not economically sound, because trade deficits and surpluses could only be analyzed in a global context.

A senior Japanese finance ministry official said on Saturday uncertainties remained over how quickly the U.S. Federal Reserve would raise interest rates, but the biggest question mark was over possible U.S. tax cuts that could fire up an already recovering U.S. economy.

Trump has proposed slashing the U.S. corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought back home.

He dropped, however, a controversial proposal of a “border-adjustment” tax on imports as a way to offset revenue losses resulting from tax cuts.

The tax reform plans were also questioned by some European officials. “I am not so sure that with an economy already at full employment and working at full speed a fiscal stimulus would add a lot,” European Commissioner for Economic and Financial Affairs Pierre Moscovici told reporters.

“(But) we avoided some discussions which would have been more damaging, like the border adjustment tax, which is no longer on the table at this moment,” he said.

(Writing by Jan Strupczewski)

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Donald Trump’s Ability To “Make America Great Again” In Serious Doubt

May 13, 2017

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The impulsiveness and shallowness of America’s president threaten the economy as well as the rule of law

The Economist Print edition | Leaders
May 13th 2017
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DONALD TRUMP rules over Washington as if he were a king and the White House his court. His displays of dominance, his need to be the centre of attention and his impetuousness have a whiff of Henry VIII about them.
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Fortified by his belief that his extraordinary route to power is proof of the collective mediocrity of Congress, the bureaucracy and the media, he attacks any person and any idea standing in his way.Just how much trouble that can cause was on sensational display this week, with his sacking of James Comey—only the second director of the FBI to have been kicked out.
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Mr Comey has made mistakes and Mr Trump was within his rights. But the president has succeeded only in drawing attention to questions about his links to Russia and his contempt for the norms designed to hold would-be kings in check.
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Just as dangerous, and no less important to ordinary Americans, however, is Mr Trump’s plan for the economy. It treats orthodoxy, accuracy and consistency as if they were simply to be negotiated away in a series of earth-shattering deals. Although Trumponomics could stoke a mini-boom, it, too, poses dangers to America and the world.

Trumponomics 101

In an interview with this newspaper, the president gave his most extensive description yet of what he wants for the economy (see article). His target is to ensure that more Americans have well-paid jobs by raising the growth rate. His advisers talk of 3% GDP growth—a full percentage point higher than what most economists believe is today’s sustainable pace.


In Mr Trump’s mind the most important path to better jobs and faster growth is through fairer trade deals. Though he claims he is a free-trader, provided the rules are fair, his outlook is squarely that of an economic nationalist.
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Trade is fair when trade flows are balanced. Firms should be rewarded for investing at home and punished for investing abroad.The second and third strands of Trumponomics, tax cuts and deregulation, will encourage that domestic investment.
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Lower taxes and fewer rules will fire up entrepreneurs, leading to faster growth and better jobs. This is standard supply-side economics, but to see Trumponomics as a rehash of Republican orthodoxy is a mistake—and not only because its economic nationalism is a departure for a party that has championed free trade.
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The real difference is that Trumponomics (unlike, say, Reaganomics) is not an economic doctrine at all. It is best seen as a set of proposals put together by businessmen courtiers for their king. Mr Trump has listened to scores of executives, but there are barely any economists in the White House. His approach to the economy is born of a mindset where deals have winners and losers and where canny negotiators confound abstract principles. Call it boardroom capitalism.

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That Trumponomics is a business wishlist helps explain why critics on the left have laid into its poor distributional consequences, fiscal indiscipline and potential cronyism. And it makes clear why businessmen and investors have been enthusiastic, seeing it as a shot in the arm for those who take risks and seek profits. Stockmarkets are close to record highs and indices of business confidence have soared.

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In the short term that confidence could prove self-fulfilling. America can bully Canada and Mexico into renegotiating NAFTA. For all their sermons about fiscal prudence, Republicans in Congress are unlikely to deny Mr Trump a tax cut. Stimulus and rule-slashing may lead to faster growth. And with inflation still quiescent, the Federal Reserve might not choke that growth with sharply higher interest rates.

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Unleashing pent-up energy would be welcome, but Mr Trump’s agenda comes with two dangers. The economic assumptions implicit in it are internally inconsistent. And they are based on a picture of America’s economy that is decades out of date.

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Contrary to the Trump team’s assertions, there is little evidence that either the global trading system or individual trade deals have been systematically biased against America (see article). Instead, America’s trade deficit—Mr Trump’s main gauge of the unfairness of trade deals—is better understood as the gap between how much Americans save and how much they invest (see article). The fine print of trade deals is all but irrelevant.

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Textbooks predict that Mr Trump’s plans to boost domestic investment will probably lead to larger trade deficits, as it did in the Reagan boom of the 1980s. If so, Mr Trump will either need to abandon his measure of fair trade or, more damagingly, try to curb deficits by using protectionist tariffs that will hurt growth and sow mistrust around the world.
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A deeper problem is that Trumponomics draws on a blinkered view of America’s economy. Mr Trump and his advisers are obsessed with the effect of trade on manufacturing jobs, even though manufacturing employs only 8.5% of America’s workers and accounts for only 12% of GDP.
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Service industries barely seem to register. This blinds Trumponomics to today’s biggest economic worry: the turbulence being created by new technologies.
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Yet technology, not trade, is ravaging American retailing, an industry that employs more people than manufacturing (see article). And economic nationalism will speed automation: firms unable to outsource jobs to Mexico will stay competitive by investing in machines at home. Productivity and profits may rise, but this may not help the less-skilled factory workers who Mr Trump claims are his priority.

The bite behind the bark

Trumponomics is a poor recipe for long-term prosperity. America will end up more indebted and more unequal. It will neglect the real issues, such as how to retrain hardworking people whose skills are becoming redundant. Worse, when the contradictions become apparent, Mr Trump’s economic nationalism may become fiercer, leading to backlashes in other countries—further stoking anger in America. Even if it produces a short-lived burst of growth, Trumponomics offers no lasting remedy for America’s economic ills. It may yet pave the way for something worse.

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A complete transcript of The Economist’s interview with Mr Trump is available here:  http://www.economist.com/Trumptranscript

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This article appeared in the Leaders section of the print edition under the headline “Courting trouble”

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