13 de dezembro de 2017


FED. December 13, 2017. 
Federal Reserve issues FOMC statement

Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. On a 12-month basis, both overall inflation and inflation for items other than food and energy have declined this year and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Hurricane-related disruptions and rebuilding have affected economic activity, employment, and inflation in recent months but have not materially altered the outlook for the national economy. Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Inflation on a 12‑month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/4 to 1‑1/2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

Voting for the FOMC monetary policy action were Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Patrick Harker; Robert S. Kaplan; Jerome H. Powell; and Randal K. Quarles. Voting against the action were Charles L. Evans and Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate.

Implementation Note issued December 13, 2017

Decisions Regarding Monetary Policy Implementation
The Federal Reserve has made the following decisions to implement the monetary policy stance announced by the Federal Open Market Committee in its statement on December 13, 2017:
  • The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on required and excess reserve balances to 1.50 percent, effective December 14, 2017.
  • As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:
    "Effective December 14, 2017, the Federal Open Market Committee directs the Desk to undertake open market operations as necessary to maintain the federal funds rate in a target range of 1-1/4 to 1-1/2 percent, including overnight reverse repurchase operations (and reverse repurchase operations with maturities of more than one day when necessary to accommodate weekend, holiday, or similar trading conventions) at an offering rate of 1.25 percent, in amounts limited only by the value of Treasury securities held outright in the System Open Market Account that are available for such operations and by a per-counterparty limit of $30 billion per day.
    The Committee directs the Desk to continue rolling over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing during December that exceeds $6 billion, and to continue reinvesting in agency mortgage-backed securities the amount of principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities received during December that exceeds $4 billion. Effective in January, the Committee directs the Desk to roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing during each calendar month that exceeds $12 billion, and to reinvest in agency mortgage-backed securities the amount of principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities received during each calendar month that exceeds $8 billion. Small deviations from these amounts for operational reasons are acceptable.
    The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency mortgage-backed securities transactions."
  • In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve a 1/4 percentage point increase in the primary credit rate to 2.00 percent, effective December 14, 2017. In taking this action, the Board approved requests to establish that rate submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Kansas City, Dallas, and San Francisco.
This information will be updated as appropriate to reflect decisions of the Federal Open Market Committee or the Board of Governors regarding details of the Federal Reserve's operational tools and approach used to implement monetary policy.


FED. December 13, 2017. Federal Reserve Board and Federal Open Market Committee release economic projections from the December 12-13 FOMC meeting

The attached table and charts released on Wednesday summarize the economic projections and the target federal funds rate projections made by Federal Open Market Committee participants for the December 12-13 meeting.

The table will be incorporated into a summary of economic projections released with the minutes of the December 12-13 meeting. Summaries of economic projections are released quarterly.


FED. REUTERS. DECEMBER 13, 2017. Fed raises interest rates, keeps 2018 policy outlook unchanged
Howard Schneider, Lindsay Dunsmuir

WASHINGTON (Reuters) - The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, as anticipated, but left its rate outlook for the coming years unchanged even as policymakers projected a short-term acceleration in U.S. economic growth.

The move, coming at the final policy meeting of 2017 and on the heels of a flurry of relatively bullish economic data, represented a victory for a central bank that has vowed to continue a gradual tightening of monetary policy.

Having raised its benchmark overnight lending rate three times this year, the Fed projected three more hikes in each of 2018 and 2019 before a long-run level of 2.8 percent is reached. That is unchanged from the last round of forecasts in September.

“Economic activity has been rising at a solid rate ... job gains have been solid,” the Fed’s policy-setting committee said in a statement announcing the federal funds rate had been lifted to a target range of 1.25 percent to 1.50 percent.

U.S. stocks extended their gains after the release of the policy statement, while Treasury yields dropped to session lows.

Fed Chair Janet Yellen is due to hold a press conference at 2:30 p.m. ET (1930 GMT).


Fed officials acknowledged in their latest forecasts that the economy had gained steam in 2017 by raising their economic growth forecasts and lowering the expected unemployment rate for the coming years.

Gross domestic product is expected to grow 2.5 percent in 2018, up from the 2.1 percent forecast in September, while the unemployment rate is seen falling to 3.9 percent next year, compared to 4.1 percent in the last set of projections.

But inflation is projected to remain shy of the Fed’s 2 percent goal for another year, with weakness on that front remaining enough of a concern that policymakers saw no reason to accelerate the expected pace of rate increases.

That means that the Trump administration’s tax overhaul, if passed by Congress, would take effect without the central bank having flagged any likely response in the form of higher rates or concerns of a jump in inflation.

“It shows at least some members of the Fed don’t see any reason to keep hiking rates in an environment where the economy is growing more strongly but certainly not overheating and where inflation hasn’t become a problem and doesn’t look like it is going to be one,” said Kate Warne, investment strategist at Edward Jones.

Policymakers do see the federal funds rate rising to 3.1 percent in 2020, slightly above the 2.8 percent “neutral” rate they expect to maintain in the long run. That indicates possible concerns about a rise in inflation pressures over time.

As it stands, inflation is expected to remain below the Fed’s target in the near term and is being monitored “closely” by policymakers.

Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari dissented in the policy statement on Wednesday.

The Fed also said that, as of January, it would raise the amount of Treasury bonds and mortgage-backed securities that it would not reinvest on a monthly basis to $12 billion and $8 billion, respectively. That is consistent with its balance sheet reduction plan.

Reporting by Howard Schneider; Editing by David Chance and Paul Simao

BLOOMBERG. 13 December 2017. Fed Raises Rates, Eyes Three 2018 Hikes as Yellen Era Nears End
By Christopher Condon  and Craig Torres

  • Central bank expects labor market to ‘remain strong’
  • Kashkari, Evans dissent, preferring to leave rates unchanged
  • Fed Raises Rates and Still Sees Three Hikes in 2018

Federal Reserve officials followed through on an expected interest-rate increase and raised their forecast for economic growth in 2018, even as they stuck with a projection for three hikes in the coming year.

“This change highlights that the committee expects the labor market to remain strong, with sustained job creation, ample opportunities for workers and rising wages,” Chair Janet Yellen told reporters Wednesday in Washington following the decision. In her final scheduled press conference before before stepping down on Feb. 3, Yellen also said she would do her utmost to ensure a smooth transition to her nominated successor, Jerome Powell.

In a key change to its statement announcing the decision, the Federal Open Market Committee omitted prior language saying it expected the labor market would strengthen further. Instead, Wednesday’s missive said monetary policy would help the labor market “remain strong.” That suggests Fed officials expect improvement in the job market to slow.

The yield on 10-year U.S. Treasury notes fell after the Fed announcement, as did the Bloomberg Dollar Spot Index. Trading at record highs recently, stocks jumped after the Fed’s announcement before paring gains. Asked during a press conference about rising asset prices, Yellen said the high valuations don’t necessarily mean that they’re overvalued and that she’s not seeing a worrisome buildup of leverage or credit.

The 7-2 vote for the rate move, the Fed’s third this year, raises the benchmark lending rate by a quarter percentage point to a target range of 1.25 percent to 1.5 percent. In another move that could tighten monetary conditions, the Fed confirmed that it would step up the monthly pace of shrinking its balance sheet, as scheduled, to $20 billion beginning in January from $10 billion.

Through the policy adjustments and the statement, the Fed continued to seek a delicate balance between responding to positive news on growth and unemployment that encouraged gradual tightening, while signaling caution due to persistently weak inflation readings that have befuddled policy makers.

That puzzle continued earlier Wednesday when Labor Department data showed consumer inflation, excluding food and energy, was lower than expected at 1.7 percent in the 12 months through November.

Inflation Developments

“Hurricane-related disruptions and rebuilding have affected economic activity, employment and inflation in recent months but have not materially altered the outlook for the national economy,” the Fed said. Repeating language used since June, the FOMC said that “near-term risks to the economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely.”

In the latest set of quarterly forecasts released Wednesday, the median estimate for economic growth next year jumped to 2.5 percent from 2.1 percent. It wasn’t immediately clear how much of the change reflected confidence that the tax-cut legislation moving through Congress will boost growth, or other factors such as pickups in business spending and global growth.

At the same time, the committee’s median forecast for long-run expansion was unchanged at 1.8 percent, suggesting officials aren’t yet convinced the tax package will significantly affect the economy’s capacity for growth.

Minneapolis Fed President Neel Kashkari and the Chicago Fed’s Charles Evans both dissented against the interest-rate decision, preferring to leave them unchanged. It was the first meeting with more than one dissent since November 2016; Kashkari’s dissent was his third this year. Evans dissented for the first time since 2011.


“The most important takeaway from the December FOMC meeting is that even though policy makers are becoming more bullish on economic prospects, they are not shifting to a more hawkish policy stance. An extended inflation soft patch is giving the Powell-Fed a free pass to continue along Janet Yellen’s gradualist path toward policy normalization.”

-- Carl Riccadonna and Yelena Shulyatyeva, Bloomberg Economics.

That follows a solid rebound for the expansion since a disappointing start to 2017. Gross domestic product grew at more than a 3 percent annualized pace in both the second and third quarters, and is on track to expand in the fourth quarter by 2.9 percent, according to the Atlanta Fed’s GDPNow tracking estimate.

Rate Path

Despite the upgrade in near-term growth expectations, policy makers left the number of hikes projected for 2018 effectively unchanged. The median forecast pegged the federal funds rate at 2.1 percent at the end of next year.

That could, in part, reflect lingering concerns over sluggish wage and price gains. The Fed’s preferred gauge of inflation, based on consumer spending, gained just 1.6 percent in the year through October.

Weighed against unemployment, which has dropped to a 16-year low at 4.1 percent, that weakness has puzzled economists and made some policy makers declare the Fed should hold off on additional rate increases until prices respond more briskly.

The committee lowered its median estimate for the unemployment rate, expecting it to hit 3.9 percent by the end of 2018, compared with a September projection of 4.1 percent.

The committee left its median estimate for the lowest sustainable level of long-run unemployment at 4.6 percent, suggesting that officials still expect the drop in joblessness to eventually boost inflation. Forecasts showed little change in the inflation outlook over the next three years.

Yellen is expected to chair the committee’s next meeting on Jan. 30-31 for what will be her last FOMC gathering of her time on the committee spanning three decades as chair, vice chair, San Francisco Fed president and governor.

Other Details of Projections

  • Median estimate for 2019 federal funds rate held at 2.7 percent; 2020 projection rose to 3.1 percent from 2.9 percent, while long-run rate remained at 2.8 percent
  • Median inflation forecasts all unchanged except for 2017 headline PCE forecast, which rose to 1.7 percent from 1.6 percent
  • 2019 median economic-growth forecast rose to 2.1 percent from 2 percent; 2020 projection moved to 2 percent from 1.8 percent
  • Median 2019 unemployment-rate projection fell to 3.9 percent from 4.1 percent; 2020 estimate declined to 4 percent from 4.2 percent

— With assistance by Matthew Boesler, Jeanna Smialek, and Steve Matthews




Global Affairs Canada. 2017-12-13. Canada plays leadership role on Trade and Women’s Economic Empowerment at WTO

Canada is championing a more progressive approach in all of our trade agreements, including at the World Trade Organization (WTO).

Gender equality and the empowerment of women and girls is a top priority of the Government of Canada and we believe there is growing recognition that the benefits of trade have not been equally shared.

In order to effectively diversify into new markets, everyone must be included and everyone must be given a fair chance to succeed.  The gap in women’s participation in trade and the economy is an untapped resource that cannot be denied. Dismissing entire parts of the population is not an option.

The Canadian people are, after all, what gives the Canadian economy its might.

Today, the Honourable François-Philippe Champagne, Minister of International Trade, was pleased to announce that a majority of members endorsed the Joint Declaration on Trade and Women’s Economic Empowerment. Canada has been a key leader in the drafting and the promotion of this initiative. The Declaration adapts Canada’s free trade agreement gender chapter to a multilateral context by establishing commitments for action and collaboration within the WTO.

Canada’s position is that trade should be a march to the top not a race to the bottom. This joint declaration demonstrates a will to improve the terms of trade and ensure the rules-based system on which we depend, works for everyone.


“I am very proud of the leadership role Canada is playing in advancing this Joint Declaration on Trade and Women’s Economic Empowerment. In today’s competitive global economy, leveraging the best and brightest entrepreneurs – both women and men – is a win-win situation for all.  It is not only the right thing to do, it just makes economic sense.”

- François-Philippe Champagne, Minister of International Trade

Quick Facts

  • A 2015 study by McKinsey Global Institute found that advancing women’s equality could add $12 trillion to the global gross domestic product by 2025.
  • A 2017 study, also by the McKinsey Global Institute, found that by closing its gender gap Canada could add $150 billion to annual GDP growth by 2026.
  • Eliminating barriers that discriminate against women working in some sectors could increase labour productivity by as much as 25%.

Joint Declaration on Trade and Women’s Economic Empowerment:
Canada and the World Trade Organization:
World Trade Organization:

Global Affairs Canada. December 12, 2017. Canada supports agricultural trade at WTO. Statements

Ottawa, Ontario

Ensuring a predictable and progressive global trade environment helps Canada’s agricultural exporters remain competitive in today’s economy and creates opportunities for middle-class Canadians. To advance this priority, Canada is working with World Trade Organization (WTO) members in support of balanced global trade governance at the 11th WTO Ministerial Conference in Buenos Aires, Argentina.

Today, the Honourable François-Philippe Champagne, Minister of International Trade, and the Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food, are pleased to announce that Canada signed the Joint Ministerial Statement on Trade in Food and Agricultural Products. The statement re-affirms the central importance of science and risk analysis to protect public health while enabling the safe use of pesticides.

Canada continues to support efforts to ensure that the global trade community makes decisions based on science. Doing so improves market predictability for Canada’s farmers and processors, and provides stability for Canadian consumers.


“Canada advocates for science-based and evidence-based decision-making. Canada believes it is crucial to work collaboratively to reduce and eliminate unjustified non-tariff measures, particularly in the agricultural sector, and reaffirm our commitment towards science-based and evidence-based decision making at the WTO. 

- François-Philippe Champagne, Minister of International Trade

“The Government of Canada supports an effective, transparent and science-based trade environment for Canadian farmers and processors. Canada’s agricultural exports are a key driver of the Canadian economy, and our Government is working hard to ensure predictability for trade, which will help increase innovation and productivity, while strengthening the middle-class.‎”

- Lawrence MacAulay, Minister of Agriculture and Agri-Food

Quick facts

  • Canada's agriculture and agri-food industry is a powerful driver of Canada economy, providing 1 in 8 jobs to Canadians.
  • In 2016, Canada’s agriculture and food exports set a new record of over $60 billion.

Agro-food trade issues:

REUTERS. DECEMBER 13, 2017. WTO to end meeting with no deals after U.S. rebukes
Luc Cohen

BUENOS AIRES (Reuters) - Trade ministers looked set to wrap up their biennial World Trade Organization (WTO) meeting on Wednesday without any new agreements after criticism of the agency by the United States, once the WTO’s driving force.

Ministers gathered in Buenos Aires were never expected to agree on major trade reforms, but even relatively minor proposals on e-commerce and fishing subsidy curbs ran aground.

“Members cannot even agree to stop subsidizing illegal fishing. Horrendous,” European Union Trade Commissioner Cecilia Malmstrom wrote on Twitter on Wednesday.

“Destructive behavior by several large countries made results impossible,” Malmstrom added without naming them.

Instead, ministers were focusing on the WTO’s post-conference work programs, such as efforts to improve market efficiency and curb excess industrial capacity, WTO spokesman Ken Rockwell told reporters.

“While there is disappointment that we couldn’t get a little further in terms of concrete outcomes, being able to nail down an effective work program is very important,” Rockwell told reporters.

U.S. Trade Representative Robert Lighthizer set an acrimonious tone at the start of the conference with sharp criticisms of the WTO. The 23-year-old trade body requires unanimity among all 164 WTO member countries to reach any agreement.

Lighthizer told WTO ministers on Monday that it was impossible to negotiate new rules while many of the current rules were not being followed, and that the WTO was losing its focus and becoming too litigation-focused.

Even the perfunctory joint ministerial statement looked in doubt at the conference, known as MC11.


Driven by President Donald Trump’s “America First” strategy and a preference for bilateral deals, the United States had already blocked ambassadors from drafting a ministerial text in Geneva that included references to the centrality of the global trading system and to trade as a driver of development.

USTR spokeswoman Emily Davis denied that the United States was the problem in the lack of negotiated outcomes, saying the Obama administration had raised similar WTO grievances.

“The United States has remained engaged throughout MC11 to achieve progress where possible,” Davis said in an emailed statement. “Under these circumstances, it’s nonsense for anyone to think that MC11 could be adrift over Ambassador Lighthizer’s honest remarks on issues the United States has been raising for years.”

Lighthizer left Buenos Aires for Washington on Tuesday night, missing the final day of the conference.

The failure to reach any major deals meant that negotiations on the same topics will continue into 2018, with no deadline and no heavyweight ministerial momentum to get agreement.

Many trade experts disagree with the U.S. view toward the WTO and are dismayed that the United States is vetoing new judicial appointments at the WTO, which is threatening to halt the settlement of trade disputes.

Ministers who followed Lighthizer onto the podium offered widespread support for the global trading system, with the WTO at its heart.

But on Tuesday, the European Union and Japan joined the United States in vowing to combat market-distorting policies, such as those pervasive in China that have fueled excess industrial capacity, including subsidies for state-owned enterprises and technology transfer requirements.

An EU source familiar with negotiations over the statement said it was instigated by Japan, partly as a means to coax Washington into working multilaterally to solve such problems rather than resorting to unilateral trade restrictions.

Additional reporting by David Lawder; Writing by Tom Miles and David Lawder; Editing by Raissa Kasolowsky and Andrew Hay


THE GLOBE AND MAIL. THE CANADIAN PRESS. DECEMBER 13, 2017. Bombardier unions expect protracted trade dispute with Boeing over C Series

The largest unions in Canada and Britain anticipate Bombardier and Boeing are in for a protracted trade battle as they prepare for the U.S. Commerce Department to confirm massive duties on imports of the C Series aircraft.

Following a meeting with Bombardier management Wednesday, Unifor and Unite the Union said the chances are slim that the U.S. will lower or cancel the 300 per cent import duties applied in a preliminary ruling.

Washington is expected to vote Monday on the preliminary and anti-dumping countervailing duties announced in the fall.

"There's no question this is going to end up in front of the WTO (World Trade Organization)," Unifor National President Jerry Dias told reporters.

"You can't depend on the kangaroo courts in the U.S. to rule in favour of (Bombardier)."

A battle before the international trade tribunal would likely take months or years to resolve. Canada can also challenge the ruling under NAFTA.

Unifor and Unite also expressed serious doubts that the U.S. International Trade Commission will conclude in February that Boeing wasn't harmed by the C Series.

Boeing alleges the Quebec aircraft manufacturer sold C Series aircraft to Delta Airlines at an unfairly low price thanks to financial support from the federal, provincial and British governments.

Dias, Unifor's Quebec director Renaud Gagne and Steve Turner, assistant secretary general of Unite, representing workers in Northern Ireland, met for about an hour with Bombardier CEO Alain Bellemare.

The unions from both sides of the Atlantic are meeting to come up with a common strategy to protect jobs as the U.S. is to decide whether the punitive duties will come into effect.

Dias and Turner are also expected to be in Washington in the next few days to meet with U.S. government and elected officials about Bombardier.

Unifor represents nearly 10,000 aerospace workers in Canada, including several thousand from C Series subcontractors.

"We have no confidence that the current U.S. administration will look at this in a rational way," Turner said when asked about his expectations for the decision Monday.

"We are not dealing with a rational president and we're not dealing with an administration that is really looking at the long-term interests of the United States."

Unite, which has 1.42 million members in the United Kingdom, represents about 3,000 of the roughly 4,200 Bombardier workers in Northern Ireland where the C Series wings are made.

The union representatives noted that more than half of C Series components are made in the United States, generating some 22,000 jobs south of the border.

The union leaders said they were reassured in the meeting that the arrival of Airbus as the majority shareholder of the C Series program would stabilize the short– and medium-term future of Bombardier's largest aircraft.

Although Unifor isn't pleased with a proposed second C Series assembly line at Airbus' facility in Alabama, Dias said it was the price to pay for the C Series to take off.

Airbus and Bombardier believe that this initiative will allow planes to be delivered to American customers without punitive duties.

"Of course, our concerns were going to be the impact that the Alabama assembly line was going to have on Quebec," Dias added.

"But based on the amount of opportunities, the fact that the largest market (for the plane) is outside of the U.S. if you take a look at the Asian market, Bombardier is quite confident that it's not going to have a negative impact on the Quebec facility."

REUTERS. DECEMBER 13, 2017. Airbus leadership under fire as crisis deepens
Tim Hepher, Cyril Altmeyer

TOULOUSE/PARIS (Reuters) - Airbus is engulfed in a fresh bout of speculation over the future of senior managers as corruption probes rattle the aerospace company and add fuel to a long-running clash of egos at the top, people familiar with the group said.

Board directors meeting on Thursday are seeking to contain damage from multiple international fraud investigations over commercial and military sales, while getting a grip on what could become a chain reaction of departures, insiders said.

“You can’t rule out a change of governance before the end of the year,” a senior source close to the company said.

Others are more cautious, pointing to 2018 as the pivotal period for a company enjoying a record share price but struggling to maintain its sales position against rival Boeing.

So far, investors have been sanguine about the impact of investigations and a loss of sales momentum, but coupled with senior retirements, the sense of uncertainty is deepening.

“You won’t recognize the company within 12-18 months,” a person who deals closely with Airbus said.

Chief Executive Tom Enders has indicated he will not stay beyond his current term which ends in 2019, Le Figaro reported on Tuesday, reversing a position taken in April.

Enders, who is seen as increasingly isolated after losing a top aide last week and facing a backlash over compliance reforms, has said his future is up to him and the board.

“Reports of my demise are premature and exaggerated,” he told Reuters on the sidelines of an aircraft delivery ceremony in Toulouse on Wednesday.

In a move first reported by Reuters in October, the board has appointed head-hunters to examine fresh options for top posts, though the company insists this is a normal planning exercise.


Industry sources have said Enders is expected to give up on a third term for a mixture of personal reasons and a recognition the board is looking for a fresh start to ease the chances of a settlement of corruption allegations.

The more pressing question, some company watchers say, is whether Enders will complete his current mandate and stay through 2018.

Enders, who turns 59 this month, has said he is focused solely on his mandate to 2019. He recently won the board’s backing amid a flurry of negative press reports.

That in turn has raised speculation whether his deputy and long-time internal rival Fabrice Bregier will ride out the storm and fulfill a long-held ambition to succeed Enders.

Only a handful of people expect Bregier, who is in charge of delivering on a record order backlog that underpins the share price, to stay for long if it becomes clear he is no longer Enders’ automatic heir.

He has been occasionally linked with energy firm Engie. But so far he has appeared strongly committed to Airbus and one person who has known both executives for years said Bregier was still expected to succeed Enders.

La Tribune newspaper reported Bregier had agreed to leave in February next year, but in a statement issued from Asia where he is visiting customers, Bregier dismissed such speculation.

“I am surprised by information reported by the press about my imminent departure,” Bregier said. “I only have one priority: to meet Airbus targets (including) the delivery of more than 700 aircraft this year.”

Festering animosity between Bregier and Enders boiled over earlier this year in a row over who should control the powerful jet sales department - a spat first disclosed by Reuters.

The two are now locked in a battle for survival which could leave both of them vulnerable, insiders said.

Both have told visitors they expect the other to go, but sources disagree whether Enders is maneuvering for Bregier’s early departure as their power battle intensifies.

“The question is who goes and in what order,” a source close to the company said.

A person close to Enders denied speculation of a management crisis, adding “we are taking all the necessary decisions, the company is running well, we are active in the (aircraft) market and we are delivering on our targets.”

Succession plans and operational priorities will be discussed by the board on Thursday, but a source familiar with the agenda said it would not likely be a decisive session.

Editing by Mark Potter

BLOOMBERG. 13 December 2017. Bombardier Bills Marquee Jet as U.S.-Made in Boeing Trade Fight
By John McCormick , Andrew Mayeda , and Frederic Tomesco

  • Canadian company marshalls U.S. political support for C Series
  • Key hearing in dispute is scheduled for Dec. 18 in Washington

Bombardier Inc., a crown jewel of Canadian manufacturing, is billing itself as a major U.S. employer in a bitter trade fight with Boeing Co. that has profits, diplomatic ties and the future of a fledgling aircraft on the line.

The maker of the narrow-body jet at the heart of the dispute has assembled an influential group of U.S. politicians, vendors and customers to back its side in a case brought by Boeing, which reaches a critical hearing next week in Washington. Bombardier says more than half its all-new C Series aircraft is made in U.S. factories even though final assembly takes place near Montreal.

The U.S. International Trade Commission is slated to hear arguments Dec. 18 on whether American industry was harmed by Bombardier’s sale of its jet to Delta Air Lines Inc. at what Boeing calls an unfairly low price -- enabled in part by subsidies in Canada. The U.S. Commerce Department sided with Boeing in a preliminary ruling in October and ordered tariffs of about 300 percent. Delta has vowed not to pay.

While President Donald Trump likely won’t intervene directly in the case, the dispute is a test of his pledge to enforce U.S. trade laws more strictly while also encouraging foreign investment.

Companies in other industries will be watching closely. A U.S. solar-panel maker is pushing for import tariffs, while steel producers are calling for a crackdown on shipments from China. The U.S. must also decide on washing-machine tariffs after a complaint brought by Whirlpool Corp. against Samsung Electronics Co. and LG Electronics Inc.

‘Bitterly Disappointed’

The Bombardier case has already bruised U.S. relations with Canada and heightened tensions in the talks to overhaul the North American Free Trade Agreement. Canadian Prime Minister Justin Trudeau, who has aggressively defended Bombardier and discussed the matter with Trump, dropped the planned purchase of 18 Boeing fighter jets because of the dispute.

The British government warned Boeing it could lose defense contracts. Prime Minister Theresa May said she was “bitterly disappointed” by the tariffs, which threaten about 1,000 jobs in Northern Ireland.

For Montreal-based Bombardier, a loss would make other U.S. carriers hesitant about buying the C Series and could potentially prompt Delta to drop the order, said Addison Schonland, a partner at consultant AirInsight.

The ITC ruling, expected in late January, is also critical to the company’s medium-term profitability as it prepares to deliver planes to Delta. In April 2016, the No. 2 U.S. airline ordered 75 of Bombardier’s CS100 jets, which carry fewer passengers than Boeing’s smallest aircraft, and secured options for 50 more C Series planes.

The order has a list value of $5.6 billion before customary discounts. Bombardier hasn’t disclosed the price agreed to with Delta, nor has it revealed its unit costs in building the C Series.

U.S. Suppliers

Bombardier will need all the help it can get in challenging the world’s largest aerospace company, which has developed a strong relationship with Trump. Bombardier argues that more than half of the aircraft’s content is sourced from U.S.-based suppliers, including engine maker United Technologies Corp. Bombardier employs about 7,000 in 17 American states, while Chicago-based Boeing has 142,000 workers in all 50 states.

The nationality of the C Series got even more complex after Boeing filed its complaint in April. That’s because its chief rival, Europe’s Airbus SE, announced plans in October to acquire a controlling stake in the program, throw its marketing heft behind the program and eventually open a second assembly line in Alabama.

“It’s a huge victory for President Trump and all that he has been trying to do to bring more foreign investment and jobs to America,” said Representative Bradley Byrne, whose Alabama district stands to gain 400 to 500 Bombardier jobs. “This is not anti-Boeing. It’s pro-American.”

Boeing, a major campaign donor, has plenty of friends of its own in Congress. It also spent $13 million to lobby in Washington during the first three quarters of 2017, compared with $1.1 million by Bombardier, according to data compiled by Bloomberg Government.

‘Enduring Commitment’

Still, Bombardier has won plenty of support from politicians who have company employees in their states or districts. Letters shared with Bloomberg show members of Congress from both parties have written to the ITC, as has the governor of West Virginia and various airlines.

“Bombardier has demonstrated an enduring commitment to the U.S., and its operations have had an unquestioned positive impact on our economy,” Arizona’s senators, John McCain and Jeff Flake, wrote in a Sept. 28 letter. The company has operations in Phoenix and Tucson.

Bombardier Chief Executive Officer Alain Bellemare and other top executives will likely discuss the trade dispute Thursday during a presentation to investors in New York.

Bombardier has argued the C Series isn’t a comparable product to Boeing’s 737 and notes that Boeing didn’t formally take part in the competition that led to Bombardier’s sale to Delta. In a statement, Bombardier said Boeing is demonstrating “hypocrisy on launch pricing” by complaining about a tradition in the industry of giving major discounts to early buyers of a new aircraft.

Boeing disputes the view that the C Series isn’t a direct competitor. The seating capacity of the CS300, the biggest model, is comparable to that of the smallest 737 jets. In its own statement, Boeing said Bombardier has “willfully broken U.S. and international trade law by illegally dumping its government subsidized C Series jets, which pose a direct threat to the Boeing 737-700 and 737 Max 7.”

Besides bad blood between competitors, the case also threatens the very nature of aviation industry’s global supply chain, aerospace observers say.

“If this gets carried to its fullest conclusion and if there is retaliation, then you are damaging the idea that jetliners are an asset that everyone wants to finance, like New York real estate with wings,” said Richard Aboulafia, an analyst at Teal Group. “This is a global industry and the idea of trade barriers is almost quaintly obsolete.”


The Globe and Mail. 13 Dec 2017. AVIATION. EDITORIAL. Our incurable case of jet lag

At this point in Canadian history, it has become a real challenge to put one’s faith in Ottawa’s ability to purchase modern fighter jets. Our air force has an aging fleet of CF-18s purchased in the 1980s, and of which about 80 are still operational. That may or may not be adequate for fulfilling all of our military obligations, depending on whom you ask.
The Conservative government of Stephen Harper wanted to replace the CF-18s with 65 Lockheed Martin F-35 Lightning IIs, but its sole-source procurement process was so botched that the cost ballooned from $9-billion to $45-billion, and Ottawa had to start over again.
The Trudeau government came to power with the promise of a new and better competitive bidding process. It also said it would fill interim operational gaps by purchasing 18 Boeing Super Hornets, a sole-source contract worth $6.4-billion.
Then, in April, Boeing launched a (so far) successful trade dispute against Bombardier. So Ottawa said on Tuesday that it is cancelling the Hornet deal in retaliation and instead will buy used F-18s from Australia for at least $500-million.
The government also said it will formally launch its bidding process in 2019, with the goal of awarding a contract in 2022 and getting planes delivered by 2025. One caveat: The contract will not go to a company “that is responsible for harm to Canada’s economic interest” [cough cough Boeing].
So that’s where we are. If the Conservatives hadn’t made a mess of things, we’d have brand new fighter jets in the air by now. Instead, our aging fleet will be bolstered by Australian leftovers – not necessarily a bad thing, but far from ideal. We’ll finally get new planes in 2025, nine years after the last new ones were supposed to have been uncrated.
That’s the theory, anyway. With a four-year timeline for finalizing a contract, anything can happen. A new government could scrap the plan. Or our over-politicized procurement process could again go off the rails and we could end up buying more planes off the international used-jet sales lot.
History tells us that it is impossible to know how this will turn out, which makes it impossible to evaluate the government’s new plan. The most that can be said is that Ottawa didn’t do anything particularly dumb on Tuesday. It’s a start.

The Globe and Mail. 13 Dec 2017. Ottawa to link ‘economic interests’ in contract bids. Jets: Boeing to review policy before deciding. New test follows Boeing dispute to ensure foreign firms provide overall positive impact

The federal government is vowing to make it harder for companies that harm Canada’s “economic interests” to win major contracts, starting with the $26-billion competition to provide 88 new fighter jets to the Canadian Armed Forces.
The new requirement will be fleshed out in coming months, with Procurement Minister Carla Qualtrough acknowledging that it will include a mix of “objective and subjective elements.” Officially, the new “economic impact test” will apply to all bidders in major competitions, with Ms. Qualtrough and Innovation Minister Navdeep Bains insisting the requirement complies with Canadian and international law.
Still, the new test was quickly dubbed the “Boeing clause” as it comes in response to U.S.-based Boeing Co.’s unresolved trade dispute with Canada’s Bombardier Inc. Boeing said last April that the Canadian plane maker used unfair government subsidies to clinch an important contract for 75 CS 100 planes to Atlanta-based Delta Air Lines at “absurdly low” sale prices.
Prime Minister Justin Trudeau has said the trade dispute will affect Boeing’s future dealings with the government, which is now giving itself leverage to fight back in disputes with foreign companies.
“Anyone can apply, but we’ve been very clear with this new policy: If there is economic harm to Canada, if there’s an impact on Canadian jobs, if there’s an impact to some of the key sectors in the Canadian economy, you will be at a distinct disadvantage,” Mr. Bains said at a news conference.
The test was announced as Ottawa confirmed it cancelled plans to buy 18 new Super Hornet fighter jets from Boeing. It is buying second-hand Australian fighter jets as an “interim” measure to help Canada’s fleet of CF-18s to meet international obligations.
Defence analyst David Perry said the economic impact test stands to create a new layer of complexity in military procurements that are already beset by delays. “If this is not a superficial, political assessment about whether or not the government of Canada likes this company or not, this will require bureaucratic time and effort to come up with a detailed assessment that will pass legal review.”
Mr. Perry, a senior analyst at the Canadian Global Affairs Institute, added that companies such as Boeing, which do billions of dollars of business and provide thousands of jobs in Canada, will be hard to box in specific categories.
“Just coming down with some neat, clean assessment that says, on balance, this company is providing economic harm to Canada will be really difficult,” Mr. Perry said.
Boeing said that it is awaiting further details on the new economic impact test before deciding how to proceed on the upcoming competition for new jets. “We will review the Future Fighter Capability Project requirements for 88 jets, including the ‘Boeing Clause,’ and make a decision at the appropriate time,” company spokesman Scott Day said.
The federal government announced new details on the competition to replace Canada’s fleet of CF-18s on Tuesday.
A formal request for proposals is scheduled to be unveiled in spring, 2019, with a winning bidder announced in 2022. In addition to Boeing, other potential bidders include Lockheed Martin (F-35), Saab (Gripen), Dassault (Rafale) and Eurofighter (Typhoon).
The opposition focused its attacks on the fact the government will be buying second-hand planes at an unspecified price instead of quickly launching a competition for new fighter jets.
“We know these eighties-era jets are rusted out because a 2012 Australian report said corrosion was so bad that the number of active flying days had to be cut. This is not a bucket of bolts; this is a bucket of rusted-out bolts,” Conservative MP Tony Clement said during Question Period.
The government responded by blaming the Harper government for its failed attempt to buy F-35s without going to tenders.
General Jonathan Vance, the Chief of the Defence Staff, said the requirements for the full fleet of new fighter jets have been redrawn since the days in which only the F-35 could qualify.

THE GLOBE AND MAIL. REUTERS. DECEMBER 13, 2017. Boeing dispute could give Lockheed Martin edge in race to supply Canadian jets

The US Lockheed Martin F-35 Lightning II performs his demonstration flight at Paris Air Show, in Le Bourget, east of Paris, France, Tuesday, June 20, 2017 in Paris.

Canada's decision to make it harder for Boeing Co to win a major jet order hands rival plane maker Lockheed Martin Corp an advantage in capturing the contract, defense experts said on Wednesday.

That would mark a reversal in Lockheed's fortunes after Liberal leader Justin Trudeau campaigned in 2015 on a promise not to buy the firm's F-35 stealth fighter.

Trudeau's government on Tuesday scrapped plans to buy 18 Boeing Super Hornets and made clear the company would not win a contract for 88 jets unless it dropped a trade challenge against Canadian planemaker Bombardier Inc.

Government officials estimate the cost of the jets at between $15-billion and $19-billion and say it is the biggest investment in the air force in 30 years.

Last week Boeing issued a statement making clear it would not back down in its fight against Bombardier, which it accuses of trying to dump airliners on the U.S. market.

The firm may not even launch a bid for the 88 jets, the first of which are due to be delivered in 2025.

That leaves the F-35, a new aircraft, up against two European rivals which first flew in the 1990s: the Eurofighter Typhoon and Dassault Aviation SA's Rafale.

"The longer this process plays out, the narrower the government's options become, and the prospects for a European jet become even dimmer," said one defense source, who declined to be identified given the sensitivity of the situation.

A second defense source said Boeing now had little chance of winning the 88-plane contract and noted Canada's air force had long sought an American jet so it could operate easily with the U.S. military.

Neither source works for a company which might make a bid.

Lockheed Martin said in a statement it was confident the F-35 was superior to older competitors.

Boeing spokesman Scott Day described the Super Hornet as "the low-risk, low-cost approach" which could serve Canada's needs well into the future.

Canada is part of the nine-nation consortium that helped fund development of the F-35, which has been hit by years of delays and cost overruns.

Trudeau initially opposed the F-35 on the grounds that it was too costly but Ottawa has since softened its line. Officials insist the competition will be open and say no company will be excluded.

Yet in a clear swipe at Boeing, federal ministers on Tuesday said any bidder deemed to have harmed Canada's economy would be at a distinct disadvantage.

"Can Canada get away with this? The answer is probably ... when procurement for the military is involved, governments have wide latitude," U.S. trade expert Bill Perry said by email.

Boeing accuses Bombardier of imitating Airbus by trying to muscle into the U.S. market. People familiar with Boeing say the strategic importance of defending its core passenger jet business outweighs the fighter dispute.

Jerry Dias, president of the Unifor union, said in a phone interview he did not think Boeing would react by cutting jobs. Unifor represents 1,300 workers at a Boeing plant in Winnipeg.

Boeing says its operations support 17,500 Canadian jobs.

REUTERS. DECEMBER 12, 2017. Canada to Boeing: back down or lose chance of big fighter order
David Ljunggren, Andrea Hopkins

OTTAWA (Reuters) - Canada on Tuesday scrapped plans to buy 18 Boeing Co BA.N jets and made clear the company had little chance of winning a much larger contract unless it dropped a trade challenge against Canadian planemaker Bombardier Inc BBDb.TO.

The announcement marks a new low in relations between the Liberal government and Boeing and casts into doubt the future of defense cooperation with the U.S. aerospace company, which says it supports more than 17,500 jobs in Canada.

Ottawa announced last year it wanted to buy the Boeing jets as a stopgap measure while Canada runs a competition for 88 jets to replace its aging 77 CF-18s fighters.

Instead Ottawa will buy a second-hand fleet of 18 Australian F-18s, the same planes Canada already operates. The value of the deal will be around C$500 million ($388 million).

In a clear reference to Boeing, Carla Qualtrough, public works and procurement minister, told a news conference that “bidders responsible for harming Canada’s economic interests will be at a distinct disadvantage” compared to other companies participating in the competition for the 88 jets.

Reuters reported last week that the Liberals would walk away from the 18 Boeing jets after Boeing opened a trade challenge against Bombardier, accusing Bombardier of dumping airliners on the American market.

Qualtrough said the competition would be open and no companies would be excluded.

Innovation Minister Navdeep Bains did not respond directly when asked at the news conference whether Boeing could improve its chances of winning the order for 88 jets by bowing to a Canadian government demand to drop the trade challenge.

Bains and other ministers said they wanted to deal with “a trusted partner”. In recent months, Canadian officials have said they do not consider Boeing a trusted partner.

In a statement, Boeing said it would decide at the appropriate time whether to take part in the competition. Rival Lockheed Martin Corp LMT.N issued a statement describing itself as “a trusted partner”.

If Boeing is excluded, other potential winners include Dassault Aviation SA AVMD.PA and Airbus SE AIR.PA.

The issue has become a political problem for Prime Minister Justin Trudeau. Andrew Scheer, leader of the official opposition Conservative Party, on Tuesday mocked him for buying old jets.

“If the Prime Minister is so keen on buying fixer-uppers, will he come over, because I have an old minivan I would love to show him,” Scheer said to laughter in the House of Commons.

The cost of the 88 jets is estimated at C$15 billion to C$19 billion.

The air force has long preferred a U.S. jet, according to Canadian defense sources. Canada is part of the consortium that helped develop Lockheed Martin’s F-35 stealth fighter and the previous Conservative government announced in 2010 it would buy 65 of the planes.

It later backtracked and during the 2015 election campaign Trudeau vowed not to buy the fighter on the grounds it was too expensive. After he took power, the government subsequently softened its tone.

($1 = 1.2873 Canadian dollars)

Reporting by David Ljunggren and Andrea Hopkins; Editing by Susan Thomas, Jeffrey Benkoe and Grant McCool

BLOOMBERG. 12 December 2017. Trudeau Snubs Boeing, Unveils Plan to Buy Used Australian Jets
By Josh Wingrove  and Greg Quinn

  • Canada officially scraps purchase of 18 new Super Hornets
  • Country will launch bidding for full fleet replacement in 2019

F/A-18F Super Hornet fighter jets, manufactured by Boeing Co. Photographer: Carla Gottgens/Bloomberg

The Trudeau government is escalating a trade fight with Boeing Co., ditching plans to buy 18 Super Hornets while launching a search for new fighter jets under parameters that could hamper future bids from the U.S. plane maker.

Canada said Tuesday it would instead pursue plans to buy 18 used Australian F-18 fighter jets to supplement its aging fleet, and launched the process to buy 88 new jets as a long-term replacement. Officials didn’t specify a purchase price or maintenance cost for the Australian jets. The purchase needs approval from the U.S. government.

It’s the latest development in a dispute between the U.S. and Canada as Boeing pursues a trade challenge against Montreal-based Bombardier Inc. -- and comes with a potential new wrinkle for the U.S. company. Canada created a new procurement step, saying companies that hurt the country’s economy would be hard pressed to win any contracts, including the lucrative 88-jet order.

“Bidders responsible for harming Canada’s economic interests will be at a distinct disadvantage,” Procurement Minister Carla Qualtrough said at a press conference. “The assessment criteria will be used in future procurements.”

‘Hard Place’

Chicago-based Boeing launched a challenge against Bombardier over commercial planes. President Donald Trump has so far rejected calls to intervene from Prime Minister Justin Trudeau, who ruled out buying new F-18 Super Hornets in September unless Boeing dropped its challenge. Theresa May has also lobbied Trump on the issue, defending Bombardier jobs in Belfast.

The prime minister campaigned in 2015 on not buying Lockheed Martin Corp.’s F-35 fighters due to the cost. Canada will now instead move to buy used jets, something its defense minister ruled out just 10 months ago. The Australian planes are of similar design and vintage to Canada’s aging CF-18s, and Canada expects the first supplemental planes to be ready for service in the early 2020s.

“Looks like Canada is between a rock and a hard place,” said George Ferguson, senior aerospace defense analyst for Bloomberg Intelligence. “They canned the joint strike fighter because it was too expensive,” he said, referring to the F-35. “Now they are going for used rather than new F-18s. Seems like they will need to keep buying used until the memory of this fades.”

Industry Day

Canada said it would engage with stakeholders through 2018 and 2019 as it considers its permanent replacement fleet, holding a fighter plane industry day next month to provide manufacturers with information. It expects to award a contract in 2022 and forecasts delivery of its first permanent replacement plane in 2025.

Boeing “respects the Canadian government’s decision,” Scott Day, a spokesman, said by email, adding the company will “continue to support all efforts to build an environment of free and fair competition marked by compliance with agreed upon rules.”

Ferguson doesn’t expect the U.S. planemaker to drop its Bombardier challenge to appease Canada. "Boeing is not going to back down," he said.

Bombardier Spokesman Simon Letendre said in an email the government’s decision “should come as no surprise given Boeing’s unprincipled opportunistic attack on the Canadian aerospace industry.”

New Jets

The cost of the planned air force equipment purchases including the fighter jet replacement has been estimated at C$26.4 billion ($20.5 billion) over 20 years.

The jet purchase comes in a politically charged environment. Canada and the U.S. are sparring over aerospace and softwood lumber, while also renegotiating the North American Free Trade Agreement. That list now includes approval of the Australian sale.

Transfers to a third party of military equipment originally provided via foreign military sales require U.S. authorization, a U.S. State Department official said, speaking on condition of anonymity ahead of Tuesday’s announcement. The official didn’t indicate whether Canada’s purchase would be approved.

The State Department reviews and approves all proposed transfers of U.S. military equipment, and doesn’t comment on the status of pending sales or transfers until it has completed all necessary consultations, according to a spokesperson for the U.S. Embassy in Ottawa.

‘On Track’

Canada will consider the F-35 as its permanent replacement, Qualtrough told CTV in November. Defense Minister Harjit Sajjan said in February he “will not be buying used aircraft for our air force,” a pledge jettisoned by Tuesday’s announcement.

Ferguson said Canada could buy Dassault Aviation SA’s Rafale or the Eurofighter Typhoon -- produced by a consortium including BAE Systems Plc, Airbus Group SE and Leonardo SpA -- but they would cost as much as F-18s, and would lack commonality with U.S. forces and with the current fleet. “Then I bet they are back for F-18s or F-35s if they’re more concerned with future air combat capabilities,” he said.

The F-35 will be adopted by the U.S. and its allies at an accelerating rate in the coming years, and commonality is key, according to Douglas Rothacker, an analyst at Bloomberg Intelligence. If Canada’s decision to buy the Australian jets eliminates Boeing’s F-18 as an option for the country’s long-term fighter solution, that’s “positive for Lockheed’s F-35 potential in Canada,” said Rothacker, adding Canada is a key manufacturing partner and its tentative 65 F-35 orders are still considered within the program of record.

— With assistance by Anthony Capaccio, Roxana Tiron, and Frederic Tomesco


StatCan. 2017-12-13. Canada's international investment position, third quarter 2017

Canada's net foreign asset position fell by $27.9 billion to $298.3 billion in the third quarter, following four consecutive quarterly increases.

The reduction mainly reflected the effect (-$79.8 billion) of an appreciating Canadian dollar, which lowered the value of foreign currency-denominated assets and liabilities when converted to Canadian dollars. In the third quarter, 96% of Canada's international assets were denominated in foreign currencies, compared with 37% for international liabilities.

The stronger performance of foreign stock markets relative to the Canadian stock market moderated the overall decline in the net foreign asset position in the quarter.

Chart 1: Canada's net international investment position

Chart 1: Canada's net international investment position

Over the third quarter of 2017, the Canadian dollar gained 4.0% against the US dollar, 0.5% against the euro, 0.9% against the British pound and 4.2% against the Japanese yen. The Canadian stock market rose by 3.0%, compared with gains of 4.0% in the United States and 4.4% in the European stock markets (as measured by the Standard and Poor's 500 and the EuroStoxx).

Chart 2: Contributors to the change in the net international investment position

Chart 2: Contributors to the change in the net international investment position

Canada's international assets down on a stronger Canadian dollar

Canada's international financial assets were down $19.6 billion to $4,458.6 billion at the end of the third quarter. The decrease mainly resulted from a downward revaluation effect of $130.3 billion due to the appreciation of the Canadian dollar against major foreign currencies. The growth of foreign stock markets moderated the overall decrease.

On an instrument type basis, Canadian holdings of foreign equity instruments increased by $26.7 billion to $3,182.4 billion in the third quarter. In addition to higher foreign stock prices, investment by Canadian direct investors in foreign affiliates contributed to the growth.

Meanwhile, Canadian holdings of foreign debt instruments were down by $46.3 billion to $1,276.2 billion. Currency and deposits held abroad by Canadians declined by $28.0 billion to $346.9 billion. At the end of the third quarter, 85% of Canada's international assets in currency and deposits were denominated in foreign currencies.

Chart 3: International assets and liabilities

Chart 3: International assets and liabilities

Canada's international liabilities edge up

Canada's international liabilities edged up $8.3 billion to $4,160.4 billion in the third quarter. The stronger Canadian dollar reduced the value of liabilities by $50.5 billion over the quarter. This change was more than offset by foreign acquisitions and higher Canadian equity prices.

Canadian equity instruments held by foreign direct and portfolio investors increased by $57.6 billion to $1,829.7 billion at the end of the quarter, led by higher equity prices. Foreign portfolio investors held $654.0 billion of Canadian equity and investment fund shares, up $22.2 billion from the second quarter, with most of the growth in shares from the trade and transportation sector.

Foreign holdings of Canadian debt instruments, also referred to as Canada's gross external debt, were down by $49.3 billion to $2,330.7 billion in the third quarter. The decline was mainly in the banking sector, on lower currency and deposits held by non-residents. Higher foreign holdings of Canadian bonds moderated the overall decline in liabilities due to strong acquisition activity in the quarter. Nearly two-thirds of Canada's gross external debt were denominated in foreign currencies at the end of the third quarter.

Canada's international assets are more exposed to currency fluctuations than liabilities

The currency composition of Canada's international financial assets differs from the composition of its international liabilities, as a higher proportion of the assets are denominated in foreign currencies than the liabilities.

At the end of the third quarter, 62% or $2,746.9 billion of Canada's total international assets were denominated in US dollars, followed by the euro (10%), British pound (6%) and Canadian dollar (4%).

On the other hand, 63% of the country's international liabilities were denominated in Canadian dollars in the third quarter. International liabilities denominated in US dollars represented 29% of all liabilities, followed by the euro at less than 4%.

As a result, fluctuations of the Canadian dollar against foreign currencies have a more important impact on the value of Canada's international financial assets compared with its international liabilities.




DoL. BLS. December 13, 2017. CONSUMER PRICE INDEX – NOVEMBER 2017

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in 
November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics 
reported today. Over the last 12 months, the all items index rose 2.2 percent.

The energy index rose 3.9 percent and accounted for about three-fourths of the 
all items increase. The gasoline index increased 7.3 percent, and the other 
energy component indexes also rose. The food index was unchanged in November, 
with the index for food at home declining slightly.

The index for all items less food and energy increased 0.1 percent in November. 
The shelter index continued to rise, and the indexes for motor vehicle insurance,
used cars and trucks, and new vehicles also increased. The indexes for apparel,
airline fares, and household furnishings and operations all declined in November.

The all items index rose 2.2 percent for the 12 months ending November. The index
for all items less food and energy rose 1.7 percent, a slight decline from the
1.8-percent increase for the period ending October. The energy index rose 9.4
percent over the last 12 months, and the food index rose 1.4 percent.

Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
                                  Seasonally adjusted changes from             
                                          preceding month                      
                              May   June  July  Aug.  Sep.  Oct.  Nov.   ended 
                              2017  2017  2017  2017  2017  2017  2017   Nov.  
 All items..................   -.1    .0    .1    .4    .5    .1    .4      2.2
  Food......................    .2    .0    .2    .1    .1    .0    .0      1.4
   Food at home.............    .1   -.1    .2   -.2    .0    .0   -.1       .6
   Food away from home (1)..    .2    .0    .2    .3    .3    .1    .2      2.4
  Energy....................  -2.7  -1.6   -.1   2.8   6.1  -1.0   3.9      9.4
   Energy commodities.......  -6.2  -2.7    .0   6.1  12.6  -2.3   7.1     16.4
    Gasoline (all types)....  -6.4  -2.8    .0   6.3  13.1  -2.4   7.3     16.5
    Fuel oil (1)............  -2.8  -3.7  -2.0   2.9   8.2   2.3   5.0     18.6
   Energy services..........    .7   -.5   -.2   -.1   -.2    .4    .6      2.8
    Electricity.............    .3   -.6    .4    .0    .0    .5    .5      2.5
    Utility (piped) gas                                                        
       service..............   1.9   -.2  -2.3   -.5   -.8    .3    .6      3.6
  All items less food and                                                      
     energy.................    .1    .1    .1    .2    .1    .2    .1      1.7
   Commodities less food and                                                   
      energy commodities....   -.3   -.1   -.1   -.1   -.2    .1   -.1      -.9
    New vehicles............   -.2   -.3   -.5    .0   -.4   -.2    .3     -1.1
    Used cars and trucks....   -.2   -.7   -.5   -.2   -.2    .7   1.0     -2.1
    Apparel.................   -.8   -.1    .3    .1   -.1   -.1  -1.3     -1.6
    Medical care commodities    .4    .7   1.0   -.1   -.8    .0    .6      1.8
   Services less energy                                                        
      services..............    .2    .2    .2    .4    .2    .3    .2      2.5
    Shelter.................    .2    .2    .1    .5    .3    .3    .2      3.2
    Transportation services     .3    .2    .2    .4    .3    .2    .1      3.8
    Medical care services...   -.1    .3    .3    .2    .1    .3   -.1      1.6

   1 Not seasonally adjusted.


The food index remained unchanged in November. The index for food at home
declined 0.1 percent, with four of the six major grocery store food group indexes
falling. The index for nonalcoholic beverages, which was unchanged in October,
fell 0.6 percent in November. The fruits and vegetables index declined 0.5
percent in November after being unchanged in October. The index for meats,
poultry, fish, and eggs fell 0.3 percent, and the cereals and bakery products
index declined 0.2 percent.

The index for other food at home rose in November, increasing 0.4 percent. The
index for dairy and related products, which declined 0.3 percent in October,
increased 0.3 percent in November. The index for food away from home also
increased in November, rising 0.2 percent.

The food at home index increased 0.6 percent over the last 12 months. The index
for meat, poultry, fish, and eggs rose 1.4 percent over the span, the largest
increase among the six groups. The indexes for dairy and related products and
for nonalcoholic beverages were unchanged over the last 12 months, and the
index for cereals and bakery products declined 0.8 percent. The index for food
away from home rose 2.4 percent over the last 12 months. 


The energy index rose 3.9 percent in November after falling 1.0 percent the prior
month. The gasoline index rose 7.3 percent in November after declining in October.
(Before seasonal adjustment, gasoline prices rose 2.6 percent in November.)The
other major energy component indexes also increased, with the electricity index
increasing 0.5 percent and the index for natural gas rising 0.6 percent.

The energy index increased 9.4 percent over the past 12 months, with all of the
major component indexes rising over the span. The fuel oil index rose 18.6
percent and the gasoline index increased 16.5 percent. The index for natural gas
advanced 3.6 percent, and the electricity index rose 2.5 percent.

All items less food and energy

The index for all items less food and energy increased 0.1 percent in November
after rising 0.2 percent in October. The shelter index rose 0.2 percent, with the
rent index increasing 0.3 percent and the index for owners' equivalent rent
rising 0.2 percent. The index for lodging away from home fell 1.3 percent in
November after rising in each of the three prior months. 

The index for used cars and trucks increased 1.0 percent in November, and the
index for motor vehicle insurance rose 0.8 percent. The index for new vehicles,
which declined in September and October, rose 0.3 percent in November. The
indexes for wireless phones services, alcoholic beverages, and tobacco also
increased in November.

The index for medical care was unchanged in November, with the index for
prescription drugs increasing 0.6 percent and the hospital services index rising
0.1 percent, but the physicians' services index declining 0.8 percent. The
indexes for recreation and for personal care were also both unchanged in November.

The apparel index fell in November; its 1.3-percent decline was its largest
decrease since September 1998. The index for airline fares fell 2.4 percent in
November after rising the prior month. The index for household furnishings and
operations also declined, falling 0.1 percent.

The index for all items less food and energy increased 1.7 percent over the last
12 months. The 12-month change in the shelter index remained at 3.2 percent, and
the index for motor vehicle insurance rose 8.0 percent over the span. The indexes
for used cars and trucks, apparel, new vehicles, and airline fares all declined
over the past year.

BEA. December 13, 2017. Travel and Tourism Spending Accelerated in the Third Quarter 2017

Real spending (output) on travel and tourism accelerated in the third quarter of 2017, growing at an annual rate of 6.6 percent after increasing 6.0 percent (revised) in the second quarter, according to new statistics released by the Bureau of Economic Analysis. Real gross domestic product (GDP) for the nation also accelerated, increasing 3.3 percent in the third quarter (second estimate) after increasing 3.1 percent in the second quarter of 2017.

The leading contributors to the acceleration in real spending were traveler accommodations and food and beverage services. Traveler accommodations accelerated, growing 13.5 percent in the third quarter after increasing 3.8 percent (revised) in the second quarter. Food and beverage services increased 0.6 percent after decreasing 1.4 percent (revised) in the previous quarter.

Chart 1. Quarterly Growth in Real Tourism Spending

Chart 1. Quarterly Growth in Real Tourism Spending

Tourism Prices. Prices for travel and tourism goods and services decreased 1.1 percent in the third quarter of 2017. This was a smaller decrease than the 3.2 percent (revised) decline in the second quarter. The decrease was largely attributable to the prices of traveler accommodations and passenger air transportation.

Prices for traveler accommodations decreased 9.9 percent in the third quarter, a larger decline than the 0.3 percent (revised) decrease in the previous quarter. In the third quarter, passenger air transportation prices decreased 6.7 percent after decreasing 3.4 percent (revised) in the second quarter of 2017.

Transportation-related commodity prices increased in the third quarter. This price, which includes gasoline, increased 7.4 percent in the third quarter after decreasing 11.2 percent (revised) in the previous quarter.

Chart 2. Tourism Prices

Chart 2. Tourism Prices

Tourism Employment. Employment in the travel and tourism industries decelerated, growing 1.2 percent in the third quarter of 2017 after increasing 2.1 percent (revised) in the previous quarter. Overall U.S. employment growth remained steady, increasing 1.3 percent in the third quarter after increasing 1.3 percent in the second quarter.

Traveler accommodations was the leading contributor to the deceleration, losing approximately 800 employees in the third quarter of 2017 after adding 6,400 employees in the second quarter.
Food and beverage services also contributed to the deceleration, adding approximately 5,600 employees in this quarter after adding 11,800 employees in the previous quarter of 2017.

Chart 3. Tourism Employment

Chart 3. Tourism Employment

Total Tourism-Related Output was $1.6 trillion in the third quarter of 2017, comprising $945 billion (58 percent) of direct tourism spending and $682 billion (42 percent) of indirect tourism-related spending.

Total Tourism-Related Employment was 7.9 million jobs in the third quarter of 2017, comprising 5.5 million (70 percent) direct tourism jobs and 2.4 million (30 percent) indirect tourism-related jobs.

These statistics are from BEA’s Travel and Tourism Satellite Accounts (TTSAs), which are supported by funding from the Office of Travel and Tourism Industries, International Trade Administration, U.S. Department of Commerce. The current-price statistics of direct tourism output were derived from BEA’s annual TTSAs and from current-price quarterly statistics of personal consumption expenditures from the National Income and Product Accounts (NIPAs). The real statistics of direct tourism output were developed using price indexes from the Bureau of Labor Statistics (BLS) and real quarterly statistics of personal consumption expenditures from the NIPAs. The statistics of direct tourism employment were derived from the annual TTSAs from BEA, the Quarterly Census of Employment and Wages (QCEW), and Current Employment Statistics (CES) from BLS.


DoS. December 12, 2017. Department Press Briefing. Heather Nauert, Spokesperson. Washington, DC

MS NAUERT: Good afternoon. Good to see you all. A couple announcements I have to make. And the first -- you may recall the visa restrictions that were put on the country of Gambia earlier this year. We have an announcement to make on that.

On September 30, 2017, the Department of Homeland Security notified the Department of State that Gambia denied or unreasonably delayed the return of its nationals the United States ordered removed from the United States. Since then, the Government of Gambia has worked diligently toward addressing our concerns. We are pleased to announce that on December 8th, the Secretary certified that Gambia had met its international obligations concerning the repatriation of its citizens, and the United States has now ended visa restrictions and has resumed normal visa processing in all visa categories, effective December the 12th. Ensuring the countries facilitate the removal of their nationals who are subject to a final order of removal is a high priority for the Department of State and this administration, and we are pleased that The Gambia took proactive steps to address our concerns. So that’s a little update for you.

Secondly, something I’d like to mention on Yemen. The United States Government announced an additional $130 million in emergency food assistance to Yemen through USAID today. This now brings the total U.S. contribution in humanitarian aid for the people of Yemen to nearly $768 million since Fiscal Year 2016. The funding announced today will support the United Nations World Food Program to distribute food aid to Yemen’s most vulnerable populations. The United States remains gravely concerned about the worsening humanitarian situation in Yemen. We continue to call on the Saudi-led coalition to facilitate the free flow of humanitarian aid and commercial imports, especially fuel, through all Yemeni ports and on Houthi-led militias to allow unfettered access for food and humanitarian aid to reach all areas inside Yemen. Finally, we call on all parties to protect the civilians, including humanitarian aid workers, who work at great personal risk to deliver life-saving assistance to the people of Yemen.

And finally, many of you, I think, in the past have met Ambassador John Bass, or at least have heard of him. One, I’m pleased to announce today that Ambassador Bass has now arrived in Afghanistan over the weekend. Today he presented his credentials to Afghan President Ashraf Ghani today in Kabul. Ambassador Bass is a career Foreign Service officer with close to three decades of diplomatic service at the State Department. He most recently served as our U.S. ambassador to Turkey, which may be the reason his name is familiar to many of you. He’s also served as our ambassador to Georgia as well.

The U.S. mission in Afghanistan is one of our largest in the world, and I can’t think of a better person to serve and be the face of the United States in Afghanistan than Ambassador Bass. His continued economic and political development – he will continue to push that, including support for the rule of law in combating all forms of corruption in that country. A main focus of his tenure will be on efforts to bring peace, security, and stability to the country and the region as part of the U.S. South Asia strategy. And so we look forward to having him serving there in Afghanistan.

With that, I’d be happy to take your questions. Where would you like to start today?




QUESTION: Just to follow up on that, he said that there would be no office closures. Does – is he saying now that there will be no closures of consulates in countries in Europe as part of this shift in resources?

MS NAUERT: I don’t think so. I think – and we’ve spoken about this in the past. I think he’s just looking at it, saying, hey, look. Look at Paris. Look at London, where – I don’t know what the numbers are, and you know we don’t announce those numbers anyway. But they’re – it’s a huge staff in some of these places. And if you look at that and compare it to – and this is just me saying this – if you compare it to a place like Pakistan, they might need more people in Pakistan. They might need more people in Venezuela. They might need more people elsewhere than they have in these beautiful postings like Paris.


MS NAUERT: And so I think it’s just taking a look at the numbers and reconfiguring that.

QUESTION: But is he – was he making a commitment they’re not to close any consulates?

MS NAUERT: I know that – I know that that is a question that you all have asked before. I’m not aware of any consulates that we are looking at closing. Okay?

QUESTION: One of the embassies mentioned – oh, I’m sorry.

QUESTION: Okay, but he’s not – he’s not saying – because he said there will be no office closures. So --

MS NAUERT: If he says there will be no office closures, then I would take him at his word. Yeah? Hi.


QUESTION: Quickly, thank you. A couple weeks ago from here you called on the Venezuelan Government to release Josh Holt, an American held in Venezuela for more than a year now, on humanitarian grounds. Since then – I believe yesterday – audio purportedly of him has been released indicating he is not well. Have you heard that audio tape and are there any developments on securing his release?

MS NAUERT: Here’s what I can say: Josh Holt, an American citizen, has now been detained in Venezuela for nearly 18 months. He has never formally been charged with a crime. We have consistently called on the Government of Venezuela to release Josh Holt on humanitarian grounds due to his ongoing health concerns. I am certainly aware of that tape. I know that some of my colleagues have listened to a tape. We can’t independently verify that that is his voice. However, we have no reason to believe that it was not his voice. For those who have heard the audio recording, it certainly describes his dire medical condition. We believe that he is in extremely poor health, which is why we continue to call on the government to release him.

He had preliminary hearings in Venezuela, and as many of you know, some of those hearings had been delayed. Some hearings have not been held at all. He had hearings on October the 10th and October the 24th. He has a hearing that is set to take place sometime today in Venezuela. We’ve had a representative at the previous two hearings – excuse me, is there something you need right now?


U.S. Department of State. December 12, 2017Secretary's Remarks: On "Meeting the Foreign Policy Challenges of 2017 and Beyond". Rex W. Tillerson, Secretary of State. The 2017 Atlantic Council-Korea Foundation Forum. Washington, DC

SECRETARY TILLERSON: Well, thank you so much, Stephen, for that warm welcome. And we’ve known each other for a long time as well, and in my old life would often share perspectives on what I was seeing around the world and try to get some advice on whether I was leaning the correct way to the left or the right. And the advice was always sound and very appreciated. Thank you.
I also want to thank Ambassador Cho for his introduction and welcome, as well. And I do appreciate the opportunity to speak at the 2017 Atlantic Council-Korea Foundation Forum, and I’m really going to use this as an opportunity to reflect on the past 11 months. And so I’m going to take a bit of a walk through the year. I’m going to touch on a number of issues, some geographies, and I hope in doing so and laying out what the President’s priorities have been in the foreign policy arena that some of the – a lot of the intersections of these policies will become evident to you. I think, as was just stated by Steve Hadley, the world has become so interconnected that no part of the world can actually isolate itself or compartmentalize its foreign policy issues, because they all tend to touch one another at some point.

So it may come as a surprise to some, although it should not, that underlying all of our policies, our strategies, that it – and our tactics is a clear recognition that one of the advantages the U.S. takes into all of our various foreign policy arenas are that we have many, many allies. Many allies born of shared sacrifice, born of shared values, and none any more so than the Republic of Korea. Through our shared sacrifice on the peninsula and the shared values that have led to a vibrant, prosperous South Korea that we see today. And as President Trump highlighted in his remarks to the general assembly in Seoul in his recent trip to the Asia arena, what a stark difference when one goes to the DMZ and looks just across the DMZ a few miles to see what a difference the values that have been adopted by the Republic of Korea and what that has created in terms of the quality of life for Korean citizens, and also the contributions to the global quality of life as well compared to the choices that have been made by North Korea.

These large numbers of allies, which are a great strength of U.S. policy around the world, are not matched by any of our adversaries. None of our adversaries have such an advantage. So what I’m going to do is, I’m not going to walk because it’ll be – if I walk, it’ll take too long, but I’m going to jog a bit around the world. And I am going to touch on, obviously, the situation with the DPRK and our relations with China, but I’m going to touch on the efforts to defeat ISIS and, in particular, our efforts in Iraq and Syria; the broader counterterrorism policies that we are executing through the Middle East, many of which emerge from the President’s historic Riyadh summit. But how counterterrorism is playing out in other parts of the world – in the Sahel in Africa and Libya, but also we see it even in Asia in the region in Philippines and Mindanao.

I’m going to touch on South Asia and the President’s policy on Afghanistan, Pakistan, and India; the EU-NATO relationship; Russia and our efforts to re-establish relations with Russia; and then I’m going to just pick very quickly at a few of the issues we’re dealing with in the Western Hemisphere. But I think it is not lost – and I think the point was made, and I’m not – will not be the last to appreciate the irony of the Atlantic Council hosting an event on U.S. partnership with South Korea, and I think that point’s been made. But in my view, it does make perfect sense because as you have seen, it takes unity and strong partnerships, those that span the Atlantic and Pacific, to counter the prospect of a nuclear-armed North Korea.

From his first day in office, this was the first policy President Trump asked the State Department to develop and put in place, and clear recognition that he was going to take this threat seriously, and he was not going to leave it unaddressed and was not going to accept the status quo. It does represent, and did represent then, the most immediate threat to our country, and that we would end the era of strategic patience and begin an era of strategic accountability. The threat is simply too large to ignore any longer.

Our policy with respect to the DPRK is really quite clear, and that is the complete and verifiable denuclearization of the Korean Peninsula. It is a policy that is shared by others in the region; in fact, that is China’s policy as well. And Russia has stated it is also its policy. So it is – while it is commonly held, our tactics for implementing the policy may differ a bit among parties in the region. Our approach, as you’ve seen, is to impose ever greater penalties and ever greater pressure on the regime in North Korea to persuade them to halt their current nuclear weapons development program and their systems by which they can deliver these weapons, and to change that course and choose a different course.

We have put in place now over the past many months the most comprehensive set of economic sanctions that I think have ever been assembled through two very comprehensive UN Security Council resolutions with the support, notably, of both China and Russia, clearly indications of how they view the seriousness of the threat as well.

These sanctions now have banned all coal exports from the North – from North Korea. They have ended their textile exports. They have put limits and will bring to an end the export of forced labor. They have also limited the imports of fuel and reduced all imports, each – with each action increasing the pressure on North Korea.

We do know that these are having effects on the North. This is evidence in terms of what we see happening with fuel prices for North Korean citizens, which initially jumped 90 percent. They’re now back to where they’re up only 50 percent. We also know there are shortages beginning to appear, and there’s also, though appearing on the shelves of North Koreans, products which previously had been exported. So now they have to be consumed internally.

These are combined with diplomatic sanctions where we have called on nations the world over to not just fully implement the UN Security Council economic sanctions, but where they have a sense and a desire to do so, to also isolate the North Korean regime further by recalling their diplomats, closing their offices, and letting North Korea know that with each one of these provocative tests, they only become more and more isolated.

More than 22 countries have sent North Korea’s diplomats back home. And for some, it may not seem significant, but for small countries that may not have a lot of economic influence, it is yet another important signal. So from nations like Peru to Spain to Italy to Portugal have cut off the diplomacy ties as well. And we know the regime notices when that ambassador comes home because they’re not representing that office elsewhere, further isolating them from their contact with the rest of the world.

These are all very important steps, again, to reinforce to the regime that with each step you take, you only isolate yourself further and you do not improve your security, but you degrade your own security. Important to the success of all of this is the very strong trilateral relationship that exists between the United States, the Republic of Korea, and Japan. This is a basis for the security structure of the region and it is one that we continue in place and we continue to exercise together so that we are ready for any possible military response that might be required.

The enforcement of these sanctions have also gone beyond the direct entities, but we’ve also sanctioned individuals and other entities, including banks – some banks within China and elsewhere – who are facilitating violations of these sanctions by North Korea. So anywhere we see North Korea attempting to exploit loopholes or attempting to exploit other avenues to skirt these sanctions, we attempt to close those off as well.

Time is marching on and with each additional test, North Korea does demonstrate the advancement of its program. The most recent intercontinental ballistic missile test, I think, demonstrates they certainly have capability to continue to advance their program, and we would expect they’re doing the same on other elements of an integrated nuclear weapons system. So we need the DPRK to come to the – come to the table for talks. We’re ready to talk anytime they’d like to talk, but they have to come to the table and they have to come to the table with a view that they do want to make a different choice.

In the meantime, our military preparedness is strong. Because of the situation, the President has ordered our military planners to have a full range of contingencies available, and they are ready. As I’ve told people many times, I will continue our diplomatic efforts until the first bomb drops. I’m going to be confident that we’re going to be successful, but I’m also confident Secretary Mattis will be successful if it ends up being his turn.

With respect to China, North Korea really represented our first engagement of this new administration with China. It was – the first trip I made overseas was to Japan, South Korea, and China to begin the first articulations of this policy on North Korea’s nuclear program, the end of the strategic patience. In many ways, this, I think, was fortuitous because it allowed this administration in its first engagements with China to find something that we could work together on. And when we understood that our policies were identical and our objectives were the same, then that gave us a platform from which to engage on a positive way from the outset.

The history, as all of you know, of U.S.-China relations has been defined since the historic opening of the relationship with Nixon’s visit. And that served the U.S. and the Chinese well and it served the rest of the world well. But times have changed. China has risen its economic power. And in many ways, the successful Beijing Olympics was perhaps the coming-out of China to the rest of the world with a new sense of confidence and a new sense of a way forward.

I think both of us, the U.S. and China, are now searching for what will define the U.S.-China relationship for the next 50 years, because that relationship that was defined by the “one China” policy and the three joint communiques has served everyone well. China has risen as an economic force in the world. And while they like to continue to describe themselves as a developing nation because they have hundreds of millions who still need to move out of poverty, they are not a developing nation in the traditional sense. They have an economy that is very large, and it certainly has its influence on global markets. But as China has risen, a number of disparities have now occurred between the U.S. and China trade relations and China and other nations in trade relations as well which have to be addressed.

So in engaging with China in the first summit with President Xi coming to Mar-a-Lago, we worked with the Chinese to find a way to begin an exchange of understanding in views at a much higher level than had previously been conducted. As many of you know, there were many, many dialogue mechanisms with China over the past several years. I think when we – when I got to State Department, we had 26 different dialogues at various levels. Our view was we needed to elevate these dialogues to a much higher level within our respective governments, closer to the ultimate decision makers.

So we created four significant high-level dialogues with representation from our side and from the Chinese side that is very close to President Trump and very close to President Xi. The four dialogues are led by cabinet-level secretaries on our side and equivalents on the Chinese side. This diplomatic and strategic Dialogue is chaired by Secretary Mattis and myself, and this dialogue is really to explore areas that we can work together and explore areas where we have differences, and in this exploratory process create results that will over time hopefully allow us to define what this new relationship will be. The other dialogues are economic and trade, law enforcement and cyber, and social people-to-people dialogues. All four of the dialogues met throughout the last year, and they are designed to be results-driven, and the results of those were reported out at President Trump’s summit in Beijing, his state visit plus.

So I think with respect to our relationship with China, we now have a very active mechanism in which we can put complex issues on the table. And we have differences, such as the South China Sea and China’s building of structures, militarization of these structures, and how that affects our allies in the region as well in terms of free and open trade. As we’ve said to the Chinese, we hope we can find a way to freeze this particular activity. Whether we can reverse it remains to seen. But it is not an acceptable – it’s not acceptable to us that these islands continue to be developed, and certainly not for military purposes.

In Southeast Asia, we had a – we put forth a policy here not too long ago of a free and open Indo-Pacific, and this was built on the back of some of our views about China’s One Belt, One Road policy. China’s One Belt, One Road, we understand, is a policy they have to continue their economic development, and our policies do not seek to contain China’s economic development. But China’s economic development, in our view, should take place in the system of international rules and norms, and One Belt, One Road seems to want to define its own rules and norms. I like to quote Secretary Mattis’ comment on One Belt, One Road. For China, he said: Well, the U.S. and the rest of the world has many belts and many roads, and no one country gets to decide what they are. So a free and open Indo-Pacific means all countries have access to continue their economic development and free access for trade through the region.

As part of the free and open Indo-Pacific, we have elevated our engagement with India. We’ve long had a trilateral relationship in the Indo-Pacific between Japan, Australia, and the U.S., and we’re now working towards whether this will become a quad relationship to include India because of the importance of India’s rising economy as well and I think shared national security concerns that we have with India.

In moving to the defeat ISIS campaign quickly, in Iraq and Syria, as the President entered office, he took a significant policy shift in the war to defeat ISIS in Iraq and Syria and ordered aggressive new strategies and empowered our military commanders on the ground to carry out battlefield decisions in a way that would win the war on the battlefield. After fully activating the DOD approach of buy, with, and through others, with his authorities the military has, in fact, begun to make significant gains. And as we know today, Prime Minister Abadi recently declared ISIS defeated in Iraq. We are still defeating ISIS in Syria, but significant progress has been made.

As a result of the military success, we in the State Department have really had to run fast to catch up with the military success with the diplomatic plans as to what comes after the defeat of ISIS, and we’ve executed much of this through the Coalition to Defeat ISIS, a coalition of 74 members, 68 countries and including organizations such as NATO, INTERPOL, EU, and others.

Seven and a half million people have now been freed of ISIS’ clutches in Iraq and Syria; 95 percent of territory previously controlled by their caliphate has now been liberated. Our efforts now are to stabilize these areas after liberation to avoid a re-emergence of ISIS but also to avoid a re-emergence of local conflicts between various groups.

So our work with the DOD is to deconflict the battlefield and to stabilize areas, and we’ve had success working with Jordan and with Russia in Syria to create de-escalation zones that prevent the re-emergence of a civil war – all directed towards moving the talks in Syria to Geneva to fully implement UN Security Council Resolution 2254, which calls for a new Syrian constitution and elections be overseen by the United Nations in which all Syrian diaspora will vote. So this includes the voting of Syrians who have been displaced because of the fighting, whether it be due to the civil war or subsequently due to ISIS’ emergence.

A very important joint statement was issued by President Trump and President Putin on the margins of APEC in Danang, Vietnam, in which both leaders affirmed their commitment to this process as the way forward to ensure a unified, whole, democratic, and free Syria. Talks have begun in Geneva again with a reformed opposition representation. And we have asked Russia to ensure the regime participates in these talks, and the regime has been present at the talks. And now, we need to keep everyone at the table. We will continue to work with Russia in areas where we can and Syria to continue to promote a de-escalation of the violence, stabilization of the areas, and a resolution for Syria that will be a product of the Geneva process.

In Iraq, the liberation of all areas is now complete, and in both the campaigns we’ve now recaptured the caliphate’s capitals of Mosul in Iraq and Raqqa in Syria. I think the early engagement in Iraq with Arab neighbors has been important to the future of Iraq also being sustained with its democratic government and sustaining Iraq as a unified country. Having Arab neighbors engage early as the war to defeat ISIS progressed, importantly with the historic visit because it’s been more than three decades since the Arab world had relationships with Baghdad, the Saudis were the first to engage and have created now economic talks and consultative committees. They’ve reopened two border crossings, they’re resuming flights between Baghdad and between Riyadh, sending an important message to all Iraqis that – and reminding them that Iraqis are Arab, and you should re-engage and reunite with the Arab world.

There have been consultative councils set up with the Saudis and Iraqis, and there will be a second reconstruction conference hosted by the Kuwaitis in January – all intended to ensure that the government in Baghdad and Iraqis understand you have friends to the south who want to support your reconstruction and your re-establishment of your country.

Importantly, we also – the policy has always been a unified Iraq. And as you know, the independence referendum which was undertaken by the Kurdish Regional Authorities a few months back was disruptive to that unity. We’re working through that process now between Baghdad and Erbil to ensure the two parties remain unified, and we are supporting both deconfliction and we’re supporting a re-engagement around the Iraqi constitution which was never fully implemented. And we will stand and we have said we’ll stand with the Kurds to support them in the full implementation of the Iraqi constitution when – which, when it is fully implemented, will address a number of grievances that the Kurdish people have had for some time and we hope will lead to that unified Iraq.

In counterterrorism more broadly, again, I would take you back to the President’s historic summit in Riyadh, Saudi Arabia, where he convened 68 leaders of Muslim countries around the world, making the case to them that the voices of violent extremism are a problem only you can solve. The United States cannot solve this. We can help you solve this, but this has to be something that Muslim leaders the world over address.

So out of that summit were two very important commitments: to create a center to counter violent extremism in Saudi Arabia and to create a center to disrupt counterterrorism financing networks. Both of those centers have now been established, and they are getting underway with work to not just defeat counterterrorism on the battlefield, as we say, or defeat terrorism on the battlefield, but to counter it in cyber space. The center for violent extremism has a large bank of individuals who monitor social media for messaging to disrupt the messaging, but also to develop counter-messaging to counter these messages of violent extremism.

This is also important – and we’ve had these conversations with the Saudis – that they must get these messages into the mosque, they must get these messages into the madrasas, and they must get these messages into the educational materials that are put into the schools. The Saudis are publishing new materials now. They are recalling materials. But we have a lot of work to do to overcome these messages of violent extremism.

The center to counter terrorism financing is also a big establishment to help with the Treasury Department, and it is linking up with other sources of information around the world to be able to track how funds are moved about to support terrorist activities the world over. Again, we can win on the battlefield, but if we don’t win in the cyber space and we don’t disrupt the networks’ abilities to re-establish themselves, we know they will appear elsewhere, as we have seen them appear in Libya, we’ve seen them appear in Mindanao, we see them appear in the Sahel.

The global effort to defeat ISIS and the global effort to defeat terrorism is one of the President’s top priorities, and that takes us to the South Asia policy and Afghanistan, Pakistan, and India. And the approach to this policy really was a regional approach. The President made a decision and announced the policy that we would remain in Afghanistan, we would remain engaged in the fight to defeat the Taliban, and that the time and effort would be conditions-based. He didn’t – he said it’s not a blank check. It’s not forever, so the Government of Afghanistan needs to understand they must continue their reform journey and they must continue to create conditions that will be inclusive to all ethnic groups within Afghanistan, including a place for the Taliban to participate in a legitimate government when the Taliban is ready to renounce terrorism, renounce the fight, and come to the table.

So the conditions-based approach is to ensure the Taliban know, you will never win a battlefield victory, and the way forward is going to be by engaging in a reconciliation process and ultimately joining a government in Afghanistan.

An important part of the regional approach is our relationship with Pakistan. The U.S. and Pakistan have had a long history of good relations, but that relationship has really deteriorated over the past decade and so now we’re engaged with Pakistan in a conversation to ensure our expectations of them are clear, that our concern is really about Pakistan’s stability. Pakistan has allowed so many terrorist organizations to find safe haven within its territories, and these organizations are growing in size and influence, that at some point I have said to the leadership of Pakistan, you may be the target, and they turn their attention from Kabul and decide they like Islamabad as a target better.

We want to work with Pakistan to stamp out terrorism within their boundaries as well, but Pakistan has to begin the process of changing its relationship with the Haqqani Network and with others. I understand that this is a relationship that has emerged probably for, in their view, good reasons a decade ago, but now that relationship has to be altered because they – if they’re not careful, Pakistan is going to lose control of their own country. We want to work with them in a positive way. We’re willing to share information with them and we want them to be successful. But we cannot continue with the status quo, where terrorist organizations are allowed to find safe haven inside of Pakistan.

I want to touch a bit on the NATO and Europe relationship quickly, and this was an early trip of the President’s as well. And I think the important thing is that the Atlantic alliance is as strong as ever, notwithstanding what people may describe or want to write. And I just came back from a full week in Europe, two days in Brussels and NATO, and meetings with the EU member countries. I was in Vienna for the OSCE meetings, and then a full day in Paris. Everywhere that I went this past week and in every engagement, there are still very strong ties between the U.S. and all of our partners and allies within Europe. And there is great unity around issues of importance to both of us, which are security issues, economic and trade issues.

We have a lot that we have to work through, and the President’s message to our European allies has been, we’re there for you. We will be there for you. But at NATO in particular – and we will meet that Article 5 commitment – but to our NATO partners and member countries, you cannot ask the American people to care more about the security of your citizens than you care yourself.

And so the President has been very demanding on burden-sharing, that the American people simply cannot carry a disproportionate share of this burden for years to come, and everyone has to be willing to take their share of this. There are agreements in NATO for all countries to achieve a 2 percent of GDP defense spending, and the President is putting a lot of pressure on countries to meet that.

A number of countries have stepped up. NATO’s receipts and spending are up about 8 percent this year, and others have put in commitments and plans to increase their defense spending. This will give NATO a stronger defense posture to deal with threats from the south, which is an area we’ve asked NATO to focus on, counterterrorism, because European countries are – feel the greatest effects of the transmigration that has occurred as a result of ISIS, and also threats from the east, from Russia, which brings me to Russia.

I think the President has been quite clear that he views it as extremely important that the United States and Russia have a working relationship. Today we do not. And I’ve touched on areas where we are cooperating, in Syria. But Russia’s invasion of Ukraine is something that we cannot accept. As I’ve indicated to others in Europe last week, it’s one thing for countries to choose sides in conflicts. Russia wanted to choose the side of Bashar al-Assad; we chose not to. But when you invade another country and take their territory, we cannot – that cannot be left to stand. And that is the basis for the very stringent sanctions regime that the U.S. and Europe imposed on Russia as a result of that invasion, and that regime will not change until Russia’s invasion of Ukraine is resolved and Ukraine’s territorial integrity is returned.

We are engaged in attempting to break the logjam for east Ukraine to implement the Minsk accords. These talks were frozen when the President took office. In our first meetings – in my first meeting with President Putin, he asked if we would appoint someone to work directly to – with him, with the Kremlin to see if we could restart these talks or restart some movement. I appointed former NATO Ambassador Kurt Volker to take that task on. The task we’re working on immediately is – and we’re focused on east Ukraine because the violence in east Ukraine continues. But we have higher incidents of civilian casualties and deaths in 2017 than we had in 2016, incidents of ceasefire violations are up 60 percent, and we must get the violence down in east Ukraine. And so our priority is to end the violence, stop the killing that’s going on in east Ukraine, and we are working with Russia to see if we can come to some agreement on the mandate for a UN peacekeeping force that will bring this violence to an end. Then we can turn to the other elements that have to be implemented.

The government in Kyiv has much to do to continue their own reforms and to meet their obligations under Minsk. Russia has to use its influence on the rebel forces it is supporting in east Ukraine to end this violence and move us back towards progress under the Minsk accords. We will return to the issue of Crimea. I know that President Putin’s made it clear that that’s not on the table for discussion. It will be at some point. But today, we want to stop the violence in east Ukraine and let’s see if we can solve that one.

In other areas with Russia, we are looking for possible cooperations where we have joint counterterrorism interest. We know we’re going to have to continue to deal with Russia’s hybrid warfare. We felt it in our elections and we now have reports from many European countries that they’re seeing the same effects. It is something I do not understand about why Russia thinks it’s in its interest to disrupt the free and fair elections of other countries. What do you hope to achieve? I don’t understand it and no one’s been able to answer that question for me. But we make it clear that we see it, it needs to end, it needs to stop, and it too stands in the way of renormalizing our relationships.

We maintain a very active dialogue with our Russian counterparts, very strong mil-to-mil dialogue, very strong diplomatic dialogue. And so we’re going to keep that dialogue underway, but as we’ve said to our Russian counterparts, we need some good news. We need something good to happen in this relationship, and today we can’t point to anything. We’re waiting. We’re waiting.

So lastly, in the Western Hemisphere, the things that we’ve been concerned with are obviously migration from Central America, from Mexico, transcriminal organizations, the narcotics trade in particular, which also supports human trafficking trade. But we do see many other opportunities with Central and South America. We have developed strong transcriminal organization dialogues with Mexico. We’re hosting another round this week at the ministerial level. We co-hosted an event in Miami this year to – on Central American security and prosperity. And we are working together on the situation in Venezuela, both through the OAS and through the Lima Group.

I could touch on Cuba and some other areas, but I’m not going to spend a lot of time there. I’m happy to take those in a question. And in Africa, our concentration has really been on two primary arenas: addressing the emergence of potential terrorism organizations in Africa, but also addressing the humanitarian crisis that we’re facing in the Sudan and other regions of Africa.

So it’s been a really busy year. It’s interesting to me that some people seem to want to observe that there’s nothing happening at the State Department because I’m walking through this hollowed-out building and listening to the echoes of the heels of my shoes as I walk down the halls. (Laughter.) I had a great town hall this morning with the State Department, all of our State Department colleagues. We talked about the year in review. We talked about the redesign of the State Department. And yes, I have a lot of open positions. I have nominees for them. I’d love to get them in place. It makes a big difference.

But I want to tell you the quality of the individuals and the career people at the State Department, the career Foreign Service officers, the people that have served in ambassadorial roles – they’re dedicated to the mission and they’re stepping up into these roles. They may be in an acting role. They own it. They dive right into these issues. They have been nothing but supportive of the President’s policies, the pivots that had to be made. And I know this is not easy for many of them because they’ve been executing a policy under the prior administration. We now are going to go a different direction. But I want to tell you, their ability and their nimbleness to quickly get behind and understand what the President’s objectives and priorities are – and then we will work hard to deliver on that mission – that’s something everyone at the State Department understands, and we talked a lot about it this morning. I couldn’t be more proud of their accomplishments. All these issues I just touched with – I went through and touched on with you – there has been some bureau over there working on this throughout this year to reposition the President’s policies and to execute against those. I feel very, very confident with the team we have in place now, and it’s only going to get stronger as we add some more people to it.

But I’m going to stop there and sit down with Stephen Hadley, my old friend, and we’ll have a conversation about what he wants to talk about, which may be more what you wanted to talk about. But I think the important thing I would say – and as I made that quick walk-around – I can take almost any two or three of those and we could put them on a whiteboard, and every one of them touches the other. And so a lot of people – it’s interesting when I have conversations with people about, well, what are you getting done in a particular arena, is to compartmentalize. And this is not a world that lends itself to compartmentalization any longer. There’s too many interconnections, there’s too many intersections, and recognizing those is important if you’re really going to solve some of these and solve them once and for all.

So it takes a little longer. It’s hard work. But that is the nature of diplomacy today in this very complicated world we find ourselves in, which has far too much conflict going on. Our mission in life is to calm down and put an end to some of these conflicts. As I tell people at the State Department, I’ve told others, the first question I ask myself every morning when I get up: How can I save a life today? Because we’ve got too many lives being lost in too many conflicts. Thank you. (Applause.)

MR HADLEY: Well, that was terrific.

SECRETARY TILLERSON: It was a jog. (Laughter.)

MR HADLEY: It was terrific, and it’s good to see you on a stage explaining the policies of this administration. I travel a lot around the country and around the world, and it’s the questions on everybody’s lips: What is the Trump administration on – policy on X, Y, and Z? And you’ve set it out in a very convincing way, and I must say, without the burden of a prepared text, which really shows your mastery of the issues. So congratulations, and it’s good to see you out communicating more. The country and the world wants to hear it and nobody can do it better than you.

I also want to point out that I think you’ve put a stake in the heart of this notion this is – administration does not believe in alliances. That’s been plaguing the administration for a while, and I think you made it very clear that you recognize that alliances are a unique resource for this country and something that you intend to use very actively in your diplomacy.


MR HADLEY: The record on ISIS is obviously an impressive one. We have about 15 minutes before the Secretary has to leave, which is not a lot of time, and there are a number of questions that’s come in. So I’m going to try to group some of these questions together --


MR HADLEY: -- maybe get three or four of them, and let you go on your way.

Since this is a conference focused on South Korea and Asia, we should probably start with North Korea. I have probably 10 questions on that subject. They center on two things which I’d like to cover with you: One, how optimistic are you about being able to achieve denuclearization through diplomacy? And if you’re optimistic, then when do we start the diplomacy? There’s a view out among some that in fact the administration is and should be letting the pressure build on North Korea – ramping up the sanctions, putting pressure on China to put more pressure on North Korea, getting Russia into the tent so they don’t substitute for what China might be cutting off. And that may be the right approach, but in your view, when do we get to the negotiations? And is there any precondition? And the one, of course, people are concerned about: North Korea says they will not come to the table to talk about denuclearization; our position is that’s the only thing worth talking about.

How do you get over that? So can you talk about how the diplomatic process might unfold?

SECRETARY TILLERSON: Well, first I would say the diplomacy is underway. It has been underway. In fact, the entire sanctions regime, the pressure campaign, that is a piece of diplomacy, is – it is how to create an understanding on the part of the North Koreans that the world does not accept this, so that they understand that if they continue, the isolation just continues. So that in and of itself is diplomacy, and it was – and was a very deliberate decision taken at the outset of the policy itself, is that simply picking up the phone and calling Kim Jong-un back in February when – and March when we first were developing this and saying, “Hey, we really don’t like those nuclear tests you’re doing. Can we sit down and talk,” probably was not going to get anyone to the table.

So I think we took the view and we looked at the past efforts and talks, and the President has touched on this many times, that others – we’ve looked at what others tried and failed, and the North Koreans have been masters at always gaming those talks. And they have never proven to be a reliable counterparty. So we decided we were going to undertake this very intensive campaign of sanctions this time, but it was only going to be successful if first we built up very broad international participation. So this wasn’t just about the United States and a few other countries, but it was very broad-based in its participation, and it had to have the active engagement of China and Russia in a very serious way. And this really was the beginning of discussions with China, and much of the decision to go forward hinged on China’s telling us they would participate. And I will tell you, in our judgment, they have participated; they are fully implementing the sanctions. That’s why it is having an effect.

The President would like to see China cut the oil off. The last time the North Koreans came to the table, it was because China cut the oil off. Three days later, the North Koreans were at the table talking. And the President feels we’re really at that stage. So he’s putting a lot of pressure on the Chinese to do more with respect to oil.

When do the talks begin? We’ve said from the diplomatic side we’re ready to talk anytime North Korea would like to talk, and we’re ready to have the first meeting without precondition. Let’s just meet and let’s – we can talk about the weather if you want. We can talk about whether it’s going to be a square table or a round table if that’s what you’re excited about. But can we at least sit down and see each other face to face? And then we can begin to lay out a map, a roadmap of what we might be willing to work towards. I don’t think – it’s not realistic to say we’re only going to talk if you come to the table ready to give up your program. They have too much invested in it. And the President is very realistic about that as well.

And so it’s really about how do you even begin the process of engagement, because we’re dealing with a new leader in North Korea that no one’s ever engaged with. And he clearly is not like his father nor is he like his grandfather, and we don’t know a whole lot about what it will be like to engage with him. And that’s why I think my expectations of how to start are really framed around, first, I have to know who my counterpart is. I have to know something about them. I have to understand how do they process, how do they think. Because getting to an agreement, as all of us know, in negotiations means a willingness to talk about a lot of things. Let’s just put a lot of things on the table. And what do you want to put on the table? And we’ll tell you what we want to put on the table. And the important thing is that we get started.

The only – if there was any condition at all to this, it’s that, look, it’s going to be tough to talk if in the middle of our talks, you decide to test another device. It’s going to be difficult to talk if in the middle of our talks, you decide to fire another one off. So I think they clearly understand that if we’re going to talk, we have to have a period of quiet. We’ve got to have a period of quiet or it’s going to be very difficult to have productive discussions.

And so we continue to indicate to them we need a period of quiet. You need to tell us you want to talk. The door is open. But we’ll show up when you tell us you’re ready to talk.

MR HADLEY: Right. Let me ask you a second question. There is a lot of talk about use of force. Some people have said the likelihood of a use of force in a conflict on the peninsula is at 40 percent. I sometimes puckishly say to people, well, that’s an indication – that people are talking in that way is an indication of the success of the President’s policies, because he’s really convinced people that solving this problem is really important and it is part of the way of getting attention of both North Korea and China. On the other hand, there are a lot of people who have written risks and concerns, and a concern, for example, with someone like Kim Jong-un, who we do not know and who’s been pretty isolated, that he might at some point think the United States is coming for him militarily and then preempt.

So how do you look at this issue of the likelihood of military force when we hear from administration folk – spokesmen that there are military options? What are they talking about?

SECRETARY TILLERSON: Well, I think any successful diplomatic effort of this nature has to be backed up with some type of a military alternative, and it can’t just be a threat. It has to be a credible alternative. And the President also requested that from the outset, that the threat of a nuclear-armed North Korea – now, I know many people have asked the question of, well, why can’t you live with a containment strategy? You lived with it with Russia; you lived with it with China; you lived with it with others. And the difference is that the past behavior of North Korea, it’s clear to us that they would not just use the possession of nuclear weapons as a deterrent. This would become a commercial activity for them. Because we already see elements of it in the commercial marketplace. And in a world we live in today where our greatest threats are non-state actors, we simply cannot accept that. We can’t accept a nation that has no established record of abiding by any kind of international norms. That certainly was not the case with the Soviet Union. It’s certainly not the case with China. It’s certainly not the case with other nuclear countries that possess nuclear weapons. These are countries that have a history of abiding by certain international norms. North Korea has no such record. In fact, their record is quite contrary to that. And that’s the reason the President and I agree with his assessment that we simply cannot accept a nuclear-armed North Korea, and I think that’s why it is the policy of the neighborhood as well.

So it is important that the diplomatic effort be backed up by a very credible military alternative. And yes, there are – there are multiple military options that have been developed to deal with a failure on my part. That’s why I say we’re going to work hard to not fail. And the President wants that, and he has encouraged our diplomatic efforts. But I think he also takes his responsibilities to protect the U.S. and our allies from this kind of a threat seriously, and he intends to ensure that they do not have a deliverable nuclear weapon to the shores of the United States.

MR HADLEY: We’re running out of time and a lot of subjects we could cover. I’m going to stay on this one to try to cover it intensively and give you two things to respond to, and then we’ll wrap it up. One is respect to China. A number of people say that China is concerned that if it puts too much pressure on North Korea, the regime will collapse. That means refugees going across the border, and maybe the United States and South Korean forces moving into North Korean territory. And there have been a lot of people who have talked about the need for a strategic conversation at high levels with China to get an understanding about what would happen and not happen on the part of China and the United States in the event of those contingencies.

You’ve been public about some noes that I think have been reassuring. What are the prospects? Is the U.S.-China relationship – and I’m not asking you to go into any details – but is the U.S.-China relationship at a point where that kind of discussion is possible? And secondly, we haven’t talked about Russia because the more pressure China puts on North Korea and cuts off resources, it’s a potential that Russia would come in and fill those. Is Russia on side in this effort? And can you talk a little bit about the diplomacy with Russia regarding North Korea?

SECRETARY TILLERSON: Well, let me address the Chinese question first. And one of the real values of these new high-level dialogues and the diplomatic and strategic dialogue that Secretary Mattis and I chair with our counterparts, and we actually have included Joint Chief of Staff Chairman Dunford, General Dunford, and his counterparts from China as well. These are the subjects of these dialogues, and to try – for us to gain an understanding of, first, how credible do we think the Chinese concern is about a mass flow of refugees across the border in the event of a regime collapse. China is taking steps to prepare for such an eventuality. I think it is something that they can manage. I don’t think the threat is as significant as perhaps others view it. I don’t want to be dismissive of it, but it’s not an unmanageable situation. And they already are taking preparatory actions for such an event.

We also have to – have had conversations about in the event that something happened – it could happen internal to North Korea; it might be nothing that we from the outside initiate – that if that unleashed some kind of instability, the most important thing to us would be securing those nuclear weapons they’ve already developed and ensuring that they – that nothing falls into the hands of people we would not want to have it. We’ve had conversations with the Chinese about how might that be done.

The four noes that I articulated in that first trip to Asia were intentional: that we do not seek regime change; we do not seek regime collapse; we do not seek an accelerated unification of the Korean Peninsula; we do not seek a reason to send our own military forces north of the demilitarized zone. We have had conversations that if something happened and we had to go across a line, we have given the Chinese assurances we would go back and retreat back to the south of the 38th parallel when whatever the conditions that caused that to happen. That is our commitment we made to them.

Our only objective is to denuclearize the Korean Peninsula, and that is all. And out of that and out of these discussions, perhaps we can create a different future for the North Korean people because the one they have right now is pretty dismal.

As to Russia’s participation, Russia has been very supportive of the UN Security Council resolutions. They could have vetoed them. They could have blocked them, but they didn't. I think on the sanctions implementation, it’s not as clear to us how fully those are being implemented. We know there are some violations. They’re not hard to see. We see what they are, and we, in particular, have had – I’ve had many conversations with Foreign Minister Lavrov about specific issues that we see that we would ask that they close those off. Forced labor is one in particular. There are a large number – something around 35,000 – North Koreans working in Russia to date. Russia has a labor shortage. They have economic development in the east in particular that they’re undertaking. So I understand why they have an economic stake in this. But it is also undermining the effectiveness of the sanctions. So we do talk very specifically with our Russian counterparts about what we ask that they do.

By and large at the Security Council, again, they’ve been very supportive of the sanctions. They voiced their view of how effective they think those may be. But we do need Russia’s support. And when we get to the point that we’re actually going to start solving this problem, we’re going to need everyone in the neighborhood, I call it. And it’s going to be important, obviously, first and foremost, to our allies in the Republic of Korea, but it’s going to be important to Japan, Russia, China, everyone is there to help ensure success around a diplomatic talk – around diplomatic talks.

MR HADLEY: We’ve come to the end of our program. I want to thank our Korean participants and partner, the Korea Foundation, and the Atlantic Council, of course. And a special – especially Dr. Miyeon Oh for her brilliant work in setting all this up today. I want to thank you all for coming, and please join me in thanking Secretary Tillerson for being with us. (Applause.)

DoC. USITC. 12/13/2017. U.S. Department of Commerce Issues Affirmative Preliminary Countervailing Duty Determination on Cast Iron Soil Pipe Fittings from the People's Republic of China

Today, U.S. Secretary of Commerce Wilbur Ross announced the affirmative preliminary determination in the countervailing duty (CVD) investigation of imports of cast iron soil pipe fittings from China.

“The Trump Administration will not sit back and watch as American companies and workers are harmed by unfair government subsidies,” said Secretary Ross. “The United States is committed to free, fair and reciprocal trade, and will continue to validate the information provided to us that brought us to this decision.”

The Commerce Department preliminarily determined that exporters from China received countervailable subsidies of 8.66 to 102.31 percent.

As a result of today’s decision, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits from importers of cast iron soil pipe fittings from China based on these preliminary rates.

In 2016, imports of cast iron soil pipe fittings from China were valued at an estimated $8.6 million.

The petitioner is the Cast Iron Soil Pipe Institute (IL), the members of which are AB&I Foundry (CA), Charlotte Pipe & Foundry (NC), and Tyler Pipe (TX).  

Enforcement of U.S. trade law is a prime focus of the Trump administration. From January 20, 2017, through December 11, 2017, Commerce has initiated 79 antidumping and countervailing duty investigations – a 52 percent increase from 52 initiations in the previous year.

The CVD law provides U.S. businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of foreign government unfair subsidization of imports into the United States. Commerce currently maintains 412 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade. 

Commerce is currently scheduled to announce its final CVD determination on or about April 24, 2018.  If Commerce makes an affirmative final determination and the U.S. International Trade Commission (ITC) makes an affirmative final injury determination, Commerce will issue a CVD order. If Commerce makes a negative final determination or the ITC makes a negative final determination of injury, the investigation will be terminated and no order will be issued. 

The U.S. Department of Commerce’s Enforcement and Compliance unit within the International Trade Administration is responsible for vigorously enforcing U.S. trade laws and does so through an impartial, transparent process that abides by international law and is based solely on factual evidence.

Imports from companies that receive unfair subsidies from their governments in the form of grants, loans, equity infusions, tax breaks, and production inputs are subject to “countervailing duties” aimed at directly countering those subsidies.

Fact sheet:

FED. REUTERS. 13 DE DEZEMBRO DE 2017. Com expectativa de alta de juros, Fed pode dar indicações de efeitos de reforma tributária nos EUA
Por Howard Schneider

WASHINGTON (Reuters) - O Federal Reserve deve elevar a taxa de juros nesta quarta-feira, porém, mais do que isso, deve dar a mais forte indicação sobre como a reforma tributária da administração Trump pode afetar a economia dos Estados Unidos.

Os investidores vão observar com atenção como o banco central norte-americano buscará pesar um impulso econômico alimentado por estímulo diante da inflação e do crescimento do salário fracos que tem contido o apetite de algumas autoridades por juros mais altos.

O comunicado de política monetária do Fed e suas projeções serão divulgados às 17h (horário de Brasília), após dois dias de reuniões. A chair do Fed, Janet Yellen, dará entrevista à imprensa meia hora depois, sua última antes do final de seu mandato no início do próximo ano.

O sucessor dela, o diretor do Fed Jerome Powell, afirmou em sua recente audiência de confirmação no Senado que não tem a “sensação de uma economia superaquecida”, em um sinal de que pode não querer acelerar o ritmo de altas de juros até que haja evidências de uma aceleração da inflação e do aumento dos salários.

O Fed aumentou os juros duas vezes em 2017 e a expectativa atual é de mais três altas no próximo ano.

Grande parte do mandato de Yellen à frente do Fed foi marcada por um desejo de manter a política monetária frouxa por mais tempo possível na expectativa de que o desemprego continuasse a cair, que o trabalhadores voltassem à força de trabalho e que os salários subissem.

Powell, que trabalhou próximo a Yellen, disse sentir que esse processo ainda tem espaço.

Dados altistas recentes, como ganhos sólidos de emprego e um salto no crescimento econômico, levaram alguns analistas a especular que as novas projeções do banco central refletirão uma expectativa de quatro altas dos juros no próximo ano.

Também há sinais de que a inflação pode estar se firmando após uma longa fraqueza, após a alta dos preços terem permanecido persistentemente abaixo da meta do banco central de 2 por cento apesar da força do mercado de trabalho.

O plano tributário proposto pelo presidente Donald Trump, incluindo a redução no imposto corporativo, pode ajudar mais a economia dos EUA se for aprovado no Congresso, o que parece provável.



IMF. December 13, 2017. Propping Up the Chinese Economy: Credit versus Fiscal Stimulus
By Sophia Chen and Lev Ratnovski

Credit booms are addictive. Credit supports growth and the perception of wealth. Yet credit booms are risky, and are often followed by financial busts and economic slowdowns. The challenge is taming credit without hurting growth.

Mainland China is experiencing a major credit boom. As of end-2016, total social financing—a broad measure of credit—exceeded 200 percent of GDP. The credit-to-GDP gap—a measure of financial vulnerability—is the second highest among 44 economies covered by BIS (after Hong Kong SAR).

How did credit growth contribute to output growth in China? Has credit allocation worsened as the economy became saturated with credit? Can output growth be supported by other means, such as fiscal stimulus?

These questions are critical for effective policy making in China today. But answering them rigorously is difficult. This is because credit and fiscal stance not only affect output growth but are also affected by it. Consequently, simple statistical methods may over- or under-estimate the true causal effects of credit or fiscal stance on output.

Recent IMF research deals with this challenge using an “instrumental variables” approach. The idea is based on the observation that provincial leaders tend to use more credit and fiscal stimulus later in their tenure independently of local economic conditions—possibly because higher growth outcomes increase the chances of their retention and/or promotion. The results are striking.

The paper estimates that, historically, credit indeed supported output growth in China. In 2001-2008, GDP increased by 2 percent in response to a 10-percentage point change in the ratio of credit to initial GDP. However, by 2010-2015, the effect of credit on output growth fell to almost zero. This might be the consequence of the economy becoming saturated with credit, with new credit being allocated inefficiently—for example to overheated housing markets , inefficient state-owned enterprises , or local government financing vehicles . The results suggest that, at present, credit cannot effectively support further growth of the Chinese economy.

In contrast, the paper finds that fiscal stimulus may be powerful, assuming it is done correctly. The fiscal multiplier for on-budget expenditure was 1.4 in 2010-2015. In other words, GDP increased by 1.4 percent in response to a 1-percentage point change in the ratio of on-budget expenditure to initial GDP. This multiplier is high in international comparison, and is also higher than the historic 0.7 multiplier in China in 2001-2008. Therefore, fiscal policy can effectively support growth in the face of possible shocks, including those caused by lower credit growth .

There are three caveats to our analysis. First, the off-budget expenditure fiscal multiplier is likely lower than the on-budget expenditure fiscal multiplier that we estimate. Consequently, the fiscal multiplier for a mix of on- and off-budget expenditure is also lower than our estimates. Future fiscal policy should be on-budget to be most effective.

Second, fiscal priorities matter. Historically, much of fiscal stimulus targeted infrastructure and manufacturing-related spending. As the IMF recently suggested , future fiscal stimulus should prioritize social expenditure and transfers, to foster the continued rebalancing of the Chinese economy towards services.

Third, credit allocation matters. While the overall effect of credit on growth appears very low, prudent credit to efficient firms remains desirable and growth-supporting.

Overall, the results of our analysis support the Chinese authorities' recent efforts toward addressing financial sector risks. These efforts, as well as the potential additional policies aimed at strengthening them, are reviewed in the recently completed IMF's Financial System Stability Assessment for China.


THE WORLD BANK. December 12, 2017. World Bank Group Announcements at One Planet Summit

Paris, 12 December, 2017 - At the One Planet Summit convened by President Emmanuel Macron of France, United Nations Secretary General Antonio Guterres, and World Bank Group President Jim Yong Kim, the World Bank Group made a number of new announcements in line with its ongoing support to developing countries for the effective implementation of the Paris Agreement’s goals.

1. WBG and upstream oil and gas

As a global multilateral development institution, the World Bank Group is continuing to transform its own operations in recognition of a rapidly changing world.  To align its support to countries to meet their Paris goals:

The World Bank Group will no longer finance upstream oil and gas, after 2019. 

(In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.)

2. Ramping up WBG climate ambition through its Climate Change Action Plan

The WBG is on track to meet its target of 28% of its lending going to climate action by 2020 and to meeting the goals of its Climate Change Action Plan - developed following the Paris Agreement. 

In line with countries submitting updated and potentially more ambitious Nationally Determined Contributions (NDCs), the World Bank Group will present a stock-take of its Climate Change Action Plan and announce new commitments and targets beyond 2020 at COP24 in Poland in 2018.

3. Transparency and disclosure to drive our own decarbonization

The World Bank Group is working hard to ensure that climate accountability is mainstreamed throughout its operations. In addition to measures already in place:

I) Starting next year, the World Bank Group will report greenhouse gas emissions from the investment projects it finances in key emissions-producing sectors, such as energy. The results will be published in late 2018, and annually thereafter.

II) The World Bank will be applying a shadow price on carbon in the economic analysis of all IBRD/IDA projects in key high-emitting sectors where design has begun since July 2017.  IFC started using carbon pricing in key sectors in January 2017 and will mainstream the same starting January 2018"

4. Mobilizing Finance for transformation in mitigation and climate resilience

To accelerate the mobilization of finance:

I) IFC will invest up to $325 million in the Green Cornerstone Bond Fund, a partnership with Amundi, to create the largest ever green-bond fund dedicated to emerging markets. This is a $2 billion initiative aiming to deepen local capital markets, and expand and unlock private funding for climate-related projects.  The fund is already subscribed at over $1 billion.

II) Last week, the World Bank and the Government of Egypt signed a $1.15 billion development policy loan aimed at reducing fossil fuel subsidies and creating the environment for low-carbon energy development.

III) The World Bank Group will continue to support investments highlighted at the One Planet Summit which demonstrate opportunities to crowd in different kinds of finance in transformational areas. This includes accelerating energy efficiency in India; scaling up solar energy in Ethiopia, Pakistan and Senegal among other countries; establishing a West Africa Coastal Areas investment platform to build resilience for coastlines of West African countries (partnering with WAEMU, NDF, GEF, GFDRR, AFD, AfDB); and introducing the City Resilience Platform (partnering with the Global Covenant of Mayors) so that up to 500 cities will have access to finance for resilience to climate change.

IV) The World Bank Group will continue to work with the United Nations and other partners on the implementation of the Invest4Climate platform, which will systematically crowd in multiple sources of finance, with a major event showcasing investment opportunities planned for May 2018 at the Innovate4Climate conference in Frankfurt.

V) IFC will work to set a single unifying global standard on green bonds, similar to the Equator Principles, as a means to facilitate the development of the green bond market to crowd in private finance into climate business. And to stimulate the greening of the financial sector, the World Bank Group will partner with the Sustainable Banking Network (SBN) to provide technical support to develop and implement national Roadmaps for Sustainable Finance in six countries. These roadmaps are based on a framework developed jointly with UN Environment.

VI)   AXA Managed Co-Lending Portfolio Program (MCPP) will allocate a substantial portion of projects to climate-smart infrastructure investments.  IFC and Finland launched the Finland-IFC Climate Change Program, a €114 million returnable capital contribution to spur private sector financing for climate-change solutions,targeting low-income countries focused on investments in renewable energy, energy efficiency, green buildings, climate-smart agriculture, and forestry.

5. Working in partnership

To further accelerate climate action, the World Bank Group will be working with various partners to deepen climate action:

I) For the first time, all the Multilateral Development Banks and all International Development Finance Club Members issued a joint statement aligning their finance with the Paris Agreement and identifying areas where they will work together to advance climate-smart development.

II) Canada and the World Bank will work together to accelerate the energy transition in developing countries and, together with the International Trade Union Confederation, will provide analysis to support efforts towards a just transition away from coal.

III) Working with France’s AFD and the Kingdom of Morocco, the World Bank will work to accelerate adaptation in agriculture for Africa.

IV) The World Bank will support a unique partnership between Caribbean leaders and people, multilateral organizations, and local and international private sector to define a vision for the world’s first climate-smart zone. The key priority areas for action include renewable energy, resilient infrastructure, innovative financing, and capacity building.

V) The World Bank Group will support, through the Carbon Pricing Leadership Coalition, the proposed Carbon Markets of the Americas initiative.

VI) Together with Ethiopia, Fiji, Germany, the United Kingdom and other government, NGO and private sector partners so far, the World Bank will support the new InsuResilience Global Partnership with the goal  of significantly scaling up climate risk finance and insurance solutions in developing countries, with a focus on poor and vulnerable people. It will stimulate the creation of effective climate risk insurance markets and the smart use of insurance-related schemes to protect lives and livelihoods from the impacts of disasters. More than $125million has been committed to the initiative so far. It is built on strong G20 and V20 support and has 40 members so far.

VII) The Principles on Blended Concessional Finance, first published in 2013, have been recently enhanced with more detailed guidelines developed by a working group (chaired by IFC) representing Development Finance Initiatives (DFIs) that annually invest more than $35 billion a year in private sector solutions. These principles include promoting commercially sustainable solutions so that the use of scarce public concessional finance is minimized; and state the need for high social, environmental, and governance standards.




BACEN. Apresentação do Presidente  do Banco Central, Ilan Goldfajn, na coletiva Um Ano de BC+, no Edifício Sede do Banco Central em Brasília.


BACEN. REUTERS. 13 DE DEZEMBRO DE 2017. Economia brasileira tem vários colchões disponíveis para volatilidade com eleições, diz Ilan
Por Marcela Ayres

BRASÍLIA (Reuters) - A economia brasileira está se recuperando e tem vários colchões disponíveis para atravessar qualquer volatilidade futura por conta das eleições, avaliou nesta quarta-feira o presidente do Banco Central, Ilan Goldfajn, defendendo ainda os benefícios para a economia de uma inflação possivelmente abaixo do piso da meta neste ano.

Bastante questionado sobre as eleições presidenciais de 2018, Ilan citou conforto com os atuais níveis da inflação, das reservas internacionais e dos swaps cambiais.

“Começar o ano com inflação abaixo da meta é um colchão. Começar o ano com expectativas ancoradas para todos os anos é um colchão”, disse ele, afirmando que não faria comentários sobre a eleição porque a contribuição do BC é de “instituição técnica e neutra”.

A respeito da possibilidade de a inflação fechar o ano abaixo de 3 por cento, Ilan defendeu o lado positivo do legado. No último encontro de política monetária, o BC reduziu a projeção de inflação pelo cenário de mercado a 2,9 por cento em 2017, abaixo do piso da meta oficial deste ano --de 4,5 por cento pelo IPCA, com margem de 1,5 ponto percentual para mais ou menos.

“Considero que a inflação ter chegado a 2,9, 2,8 por cento é um grande ativo para a sociedade brasileira. O poder de compra aumentou. Em conjunto, permitiu a queda da taxa de juros a níveis mínimos históricos e contribuiu para a recuperação da economia”, disse ele.

Na mais recente pesquisa Focus, feita pelo BC junto a uma centena de economistas, a expectativa para o IPCA neste ano caiu a 2,88 por cento. Se o índice terminar 2017 abaixo de 3 por cento, será a primeira vez desde a criação do regime de metas que a inflação fica abaixo do piso e Ilan terá de justificar o resultado em carta aberta.

O presidente do BC voltou a pontuar que a inflação mais baixa neste ano teve relação com o choque deflacionário dos preços dos alimentos e que a política monetária não deve reagir diretamente ao movimento.

“Não se tenta combater queda de preços de itens que o BC não tem controle tentando subir o preço daqueles que o BC tem controle”, afirmou.

Ele também enfatizou que os ajustes e reformas do governo, em particular a da Previdência, são fundamentais para o equilíbrio da economia. A continuidade desse cenário, afirmou Ilan, garantirá trajetória de juros mais baixos.

No início do mês, o BC cortou a Selic em 0,5 ponto percentual, à mínima histórica de 7 por cento ao ano, deixando a porta aberta para nova redução adiante, mas ressalvando que encarará a investida com “cautela”.

Isso porque o BC deixou claro que os passos seguintes estão mais sensíveis a eventuais mudanças no cenário de riscos o que, para analistas, foi uma sinalização sobre como será o desfecho da reforma da Previdência.

Durante a coletiva, Ilan fez um balanço da atuação do BC em 2017, que considerou um ano “proveitoso” em termos macroeconômicos. Dentre as ações já divulgadas e que ainda não foram endereçadas pela autoridade monetária, Ilan afirmou que o BC segue estudando projeto para sua autonomia operacional.

Para ele, essa é uma investida que tende a reduzir o prêmio de risco da economia “com custo fiscal nenhum”.

Ilan também afirmou que o BC irá trabalhar para diminuir o custo do cartão de débito e fazer estudo sobre níveis estruturais de compulsórios, ambas novidades em relação às medidas apresentadas até então na Agenda BC+.

Reportagem adicional de Bruno Federowski

Previdência é fundamental para equilíbrio da economia, diz Ilan

BRASÍLIA (Reuters) - O presidente do Banco Central, Ilan Goldfajn, afirmou nesta quarta-feira que os ajustes e reformas do governo, em particular a da Previdência, são fundamentais para o equilíbrio da economia.

Em coletiva de imprensa, Ilan fez um balanço das ações do BC em 2017, que considerou um ano proveitoso em termos macroeconômicos. Sobre ações da agenda do BC que ainda não foram endereçadas, Ilan afirmou que a autoridade monetária segue estudando projeto para sua autonomia operacional.

Ele também pontuou que o BC irá trabalhar para reduzir o custo do cartão de débito e fazer estudo sobre níveis estruturais de compulsórios, ambas novidades em relação às medidas apresentadas até então.

IBGE. 13/12/2017. Em outubro, vendas no varejo recuam 0,9%

Em outubro de 2017, o comércio varejista nacional caiu (-0,9%) frente ao mês imediatamente anterior, na série livre de influências sazonais, após acréscimo de 0,3% em setembro último. Com isso, a média móvel trimestral para o volume de vendas no varejo recuou de -0,1% (trimestre encerrado em setembro de 2017) para -0,4% (trimestre encerrado em outubro de 2017).

Na série sem ajuste sazonal, no confronto com igual mês do ano anterior, o total do comércio varejista cresceu 2,5% em outubro de 2017, sétima taxa positiva seguida, porém em menor magnitude que a registrada em setembro (6,2%). O volume de vendas acumulado no ano foi de 1,4% e o acumulado nos últimos 12 meses teve variação de 0,3% em outubro, registrando o primeiro resultado positivo desde abril de 2015 (0,2%).

O comércio varejista ampliado (inclui veículos, motos, partes e peças e de Material de construção) recuou (-1,4%) em relação a setembro de 2017, após crescer por quatro meses consecutivos, período em que o varejo ampliado acumulou ganho de 3,5%, na série com ajuste sazonal. Frente a outubro de 2016, o varejo ampliado avançou 7,5%, sexta taxa positiva consecutiva, e com isso acumulando de janeiro-outubro 3,2%. O acumulado nos últimos 12 meses teve a primeira alta (1,4%) desde agosto de 2014 (0,6%).

Varejo Ampliado
Volume de vendas
Receita nominal
Volume de vendas
Receita nominal
Outubro / Setembro*
Média móvel trimestral*
Outubro 2017 / Outubro 2016
Acumulado 2017
Acumulado 12 meses

Cinco das oito atividades pesquisadas recuam de setembro para outubro

O recuo no volume de vendas do comércio varejista (-0,9%) na passagem de setembro para outubro de 2017 mostrou predomínio de resultados negativos, que alcançaram cinco das oito atividades pesquisadas.

Os maiores recuos foram em: Outros artigos de uso pessoal e doméstico (-3,5%), Tecidos, vestuário e calçados (-2,7%) e Móveis e eletrodomésticos (-2,3%). Hipermercados, supermercados, produtos alimentícios, bebidas e fumo, com variação 0,3%, recua após sequência de seis taxas positivas, período que acumulou ganho de 5,3% e Artigos farmacêuticos, médicos, ortopédicos, de perfumaria e cosméticos (-0,7%), após avanço de 3,3% em setembro.

Com avanço nas vendas frente a setembro de 2017, estão os seguintes setores: Equipamentos e material para escritório, informática e comunicação (3,4%) e Combustíveis e lubrificantes e Livros, jornais, revistas e papelaria, ambos com aumento de 2,4%.

O comportamento de queda do comércio varejista ampliado (-1,4%) em relação a setembro de 2017 também foi observado nas vendas de Veículos, motos, partes e peças (-1,9%) e Material de construção (-1,0%).

Na comparação com outubro de 2016, o volume do varejo avançou 2,5%, com seis das oito atividades registrando aumento nas vendas. Móveis e eletrodomésticos (10,1%), Hipermercados, supermercados, produtos alimentícios, bebidas e fumo (1,5%) e Artigos farmacêuticos, médicos, ortopédicos, de perfumaria e cosméticos (6,2%) exerceram, nessa ordem, as principais contribuições positivas para o resultado global.

Taxa de Variação (%)Taxa de Variação (%)Taxa de Variação (%) 
COMÉRCIO VAREJISTA (2)-0,50,3-0,93,66,22,51,40,3 
1 - Combustíveis e lubrificantes-3,2-0,72,4-2,9-4,1-0,9-3,0-3,6 
2 - Hiper, supermercados, prods.  alimentícios, bebidas e fumo0,31,0-0,31,75,81,50,50,0 
       2.1 - Super e hipermercados0,20,90,01,46,02,20,80,1 
3 - Tecidos, vest. e calçados-3,30,7-2,79,412,54,77,63,3 
4 - Móveis e eletrodomésticos1,1-1,2-2,316,516,610,19,05,2 
4.1 - Móveis---11,410,58,3-4,6-5,3 
4.2 - Eletrodomésticos---18,018,310,09,65,6 
5 - Artigos farmaceuticos, med., ortop. e de perfumaria-1,13,3-0,74,37,06,21,40,3 
6 - Livros, jornais, rev. e papelaria-3,3-3,82,4-4,4-6,5-2,8-3,6-5,3 
7 - Equip. e mat. para escritório, informatica e comunicação-9,92,13,4-2,7-3,05,2-0,6-1,4 
8 - Outros arts. de uso pessoal e doméstico-0,32,6-3,56,410,72,71,80,7 
COMÉRCIO VAREJISTA AMPLIADO (3)0,20,7-1,47,79,27,53,21,4 
9 - Veículos e motos, partes e peças3,0-0,4-1,914,110,713,61,7-0,8 
10- Material de construção2,10,5-1,013,015,518,68,66,6 
Fonte: IBGE, Diretoria de Pesquisas, Coordenação de Serviços e Comércio.       
(1) Séries com ajuste sazonal. 
(2) O indicador do comércio varejista é composto pelos resultados das atividades numeradas de 1 a 8.
(3) O indicador do comércio varejista ampliado é composto pelos resultados das atividades numeradas de 1 a 10

Equipamentos e material para escritório, informática e comunicação (5,2%), Tecidos, vestuário e calçados (4,7%) e Outros artigos de uso pessoal e doméstico (2,7%) também pressionaram positivamente o resultado global. Combustíveis e lubrificantes (-0,9%) e Livros, jornais, revistas e papelaria (-2,8%) permaneceram influenciando negativamente.

O segmento de Móveis e eletrodomésticos, com crescimento de 10,1 % no volume de vendas em relação a outubro do ano passado, foi responsável pelo maior impacto positivo na no total do varejo de outubro de 2017. Em termos acumulados, os avanços foram de 9,0% de janeiro-outubro e de 5,2 % nos últimos 12 meses. A redução da taxa de juros no crédito à pessoa física, além do impacto positivo da melhora observada no mercado de trabalho influenciaram o comportamento positivo deste setor.

O setor de Hipermercados, supermercados, produtos alimentícios, bebidas e fumo, com avanço de 1,5% frente a outubro de 2016, exerceu o segundo maior impacto positivo. O desempenho desta atividade vem sendo beneficiado pelo crescimento da massa de rendimento real habitualmente recebida e pela deflação do preço dos alimentos em domicílio. A taxa acumulada no ano ficou em 0,5% e o acumulado em 12 meses, com variação nula, interrompeu 30 meses seguidos de taxas negativas.

A atividade de Artigos farmacêuticos, médicos, ortopédicos e de perfumaria, com aumento de 6,2%, foi a terceira maior contribuição na taxa global do varejo. No acumulado janeiro-outubro a taxa foi de 1,4%, enquanto o indicador acumulado nos últimos 12 meses, com variação de 0,3%, interrompeu 14 meses de taxas negativas.

Taxa de variação (%)Composição absoluta da taxa (p.p.)Taxa de variação (%)Composição absoluta da taxa (p.p.)  
Taxa Global2,52,57,57,5 
1 - Combustíveis e lubrificantes-0,9-0,2-0,90,0 
2 - Hiper, supermercados, prods.  alimentícios, bebidas e fumo1,50,81,50,7 
3 - Tecidos, vest. e calçados4,70,34,70,4 
4 - Móveis e eletrodomésticos10,10,910,10,8 
5 - Artigos farmaceuticos, med., ortop. e de perfumaria6,20,56,20,5 
6 - Livros, jornais, rev. e papelaria-2,8-0,1-2,80,0 
7 - Equip. e mat. para escritório informatica e comunicação5,20,05,20,2 
8 - Outros arts. de uso pessoal e doméstico2,70,32,70,4 
9 - Veículos e motos, partes e peças    13,62,8 
10- Material de construção18,61,7 
Fonte: IBGE, Diretoria de Pesquisas, Coordenação de Serviços e Comércio.    
Nota: A composição da taxa mensal corresponde à participação dos resultados setoriais na formação da taxa global. 

A atividade Outros artigos de uso pessoal e doméstico, que engloba segmentos como lojas de departamentos, ótica, joalheria, artigos esportivos, brinquedos, etc., com aumento de 2,7% em relação a outubro de 2016, exerceu a quarta maior contribuição positiva. O acumulado de janeiro a outubro foi de 1,8% e acumulado nos últimos 12 meses (0,7%) voltou a mostrar resultado positivo, após 22 meses de variações negativas seguidas.

O setor de Tecidos, vestuário e calçados, com variação de 4,7% em relação a outubro do ano passado, foi também a quarta maior contribuição na composição da taxa geral do varejo. O acumulado no ano foi de 7,6% e nos últimos 12 meses, 3,3%. Com o aumento da massa de salário real e os preços de vestuário abaixo da média geral de preços, o desempenho da atividade permanece acima da média geral do varejo.

O segmento de Equipamentos e material para escritório, informática e comunicação avançou 5,2% sobre igual mês do ano anterior. As taxas acumuladas ficaram em -0,6% no ano e -1,4% nos últimos 12 meses.

Combustíveis e lubrificantes, com recuo de -0,9% no volume de vendas em relação a outubro de 2016, exerceu maior contribuição negativa no total do varejo. Em termos acumulados, as taxas da atividade foram de -3,0% para os dez primeiros meses do ano e de -3,6% para os últimos 12 meses. A elevação dos preços de combustíveis acima da variação média de preços, é fator relevante que vem influenciando negativamente o desempenho do setor.

A atividade de Livros, jornais, revistas e papelaria apresentou variação no volume de vendas de -2,8% sobre outubro de 2016, com taxas acumuladas de -3,6% nos dez primeiros meses do ano e de -5,3% nos últimos 12 meses. A trajetória de recuo desta atividade vem sendo influenciada pela perda gradual de espaço do impresso para o eletrônico, além do impacto da elevação dos preços acima da inflação.

Com avanço de 7,5% frente a outubro de 2016, o comércio varejista ampliado registrou a sexta taxa positiva, acumulando de janeiro a outubro aumento de 3,2% nas vendas. Já a taxa acumulada nos últimos 12 meses ficou em 1,4%. Esse desempenho refletiu, sobretudo, o comportamento das vendas de Veículos, motos, partes e peças, que apresentaram avanço de 13,6% sobre outubro de 2016, exercendo a principal contribuição para o resultado geral do varejo ampliado e acumulando variação de 1,7% de janeiro a outubro e -0,8% nos últimos 12 meses. A segunda maior contribuição veio do segmento de Material de construção, com variação de 18,6% em relação a outubro de 2016. Em termos acumulados, as taxas ficaram em 8,6% nos dez primeiros meses e 6,6% nos últimos 12 meses.

Entre setembro e outubro, vendas caem em 22 das 27 unidades da federação

De setembro para outubro de 2017, na série com ajuste sazonal, o comércio varejista registrou recuo em 22 das 27 Unidades da Federação, Roraima (-5,2%), Alagoas (-4,5%) e Mato Grosso (-3,3%) registraram as menores taxas em termos de magnitude. Já Minas Gerais (2,1%) se destacou entre os estados que registraram variações positivas.

Em comparação a outubro de 2016, os resultados das vendas no varejo foram positivos em todas as 27 Unidades da Federação, com destaque, em termos de magnitude, para Rondônia (14,4%), Santa Catarina (13,7%) e Mato Grosso do Sul (11,9%). Quanto à participação na composição da taxa do varejo, destacaram-se, por ordem de influência: Santa Catarina (13,7%) e Rio Grande do Sul (9,6%).

No comércio varejista ampliado, todas as 27 Unidades da Federação também apresentaram variações positivas na comparação com o mesmo período do ano anterior, com destaque, em termos de volume de vendas, para Tocantins (26,0%); Amazonas (18,8%); e Mato Grosso (17,9%). Quanto à participação na composição da taxa do varejo ampliado, destacaram-se São Paulo (6,6%) e Rio Grande do Sul (17,8%).

Comércio varia 0,3% em 12 meses e reverte tendência de queda

O comércio varejista reverteu, em outubro, a tendência de queda registrada desde abril de 2015, no acumulado em 12 meses. Esse indicador variou 0,3%, influenciado pelas vendas de artigos farmacêuticos (0,3%) e outros artigos de uso pessoal e doméstico (0,7%), que contemplam vendas online de lojas de departamento.

As informações são da Pesquisa Mensal de Comércio (PMC), divulgada hoje pelo IBGE. A PMC destacou ainda que, se por um lado o comércio varejista caiu 0,9% frente a setembro, por outro, cresceu 2,5% diante de outubro de 2016, a sétima taxa positiva consecutiva.

Gráfico da Pesquisa Mensal do Comércio

#praCegoVer Gráfico da Pesquisa Mensal do Comércio

De acordo com a gerente da pesquisa, Isabella Nunes, esses resultados permitem identificar uma recuperação mais nítida no comércio varejista, apesar da queda na comparação com setembro: “Uma explicação possível é os consumidores terem postergado suas compras, uma vez que outubro antecede um mês marcado pelas promoções”.

O varejo ampliado, que inclui veículos, motos, partes e peças e materiais de construção, também reverteu um longo período de queda no acumulado em 12 meses, com crescimento de 1,4%, o primeiro resultado positivo desde junho de 2014.

Isabella ressalta que as vendas de materiais de construção e de veículos estão crescendo dois dígitos desde agosto: “É uma melhora motivada pelo ganho de renda das famílias, que podem fazer reformas em seus domicílios. Enquanto a alta na venda de veículos é decorrência de melhores condições de financiamento para esse produto”.

Texto: Pedro Renaux
Imagem: Imprensa GPA/Flickr
Arte: Helga Szpiz


IPEA. 12/12/2017. Inflação dos mais pobres ficou menor em novembro. Indicador Ipea de Inflação por Faixa de Renda registra no mês 0,07% para a classe de renda mais baixa e 0,34%% na faixa mais alta

O Indicador Ipea de Inflação por Faixa de Renda de novembro de 2017 aponta que as parcelas da população de renda mais baixa foram as que apresentaram as menores taxas de inflação. Enquanto a inflação da população de renda muito baixa registrou alta de 0,07%, nas famílias de renda alta o crescimento foi de 0,34%. No ano, a inflação dos mais pobres acumula uma alta de 1,8%, inferior à registrada pela classe de renda mais alta (elevação de 3,2%).

“De fato, a significativa desaceleração no preço dos alimentos ao longo do ano se constitui no principal foco de alívio inflacionário em 2017, especialmente para as classes de menor poder aquisitivo”, explica Maria Andreia Parente Lameiras, pesquisadora do Grupo de Conjuntura do Instituto de Pesquisa Econômica Aplicada. Os alimentos são o item com maior peso nos gastos totais das famílias mais pobres. A deflação dos alimentos contribuiu para diminuir em 0,16 p.p. a inflação dos mais pobres, ao passo que, para a classe mais alta, a ajuda foi de 0,05 p.p.

Em menor intensidade, os transportes também influenciaram, com a queda nas tarifas dos ônibus urbanos (0,6%) e interestaduais (1,6%), itens de grande peso na inflação dos mais pobres. Em contrapartida, nas classes mais ricas, para as quais o gasto com combustíveis é bem maior, a alta de 2,9% no preço da gasolina fez com que a contribuição do grupo transportes fosse positiva.

Entre os itens que tiveram impacto maior sobre as famílias menos abastadas, os reajustes das tarifas de energia elétrica (4,2%) e do gás de botijão (1,6%) significaram um aumento de 0,29 p.p. na inflação dos mais pobres – e de 0,11 p.p na dos mais ricos. Nos últimos meses, de acordo com a análise, a desaceleração da trajetória inflacionária ocorreu de modo significativo em todas as faixas de renda.

Indicador Ipea de Inflação por Faixa de Renda:

MAPA. PORTAL G1. REUTERS. 12/12/2017. Ministro diz que Brasil está perto de retomar envio de carne in natura aos EUA. EUA decidiram suspender as compras de carne do Brasil em junho, menos de um ano após abrir o mercado ao país.

O Brasil está "muito próximo" de retomar as exportações de carne bovina in natura para os Estados Unidos, o que deve ocorrer no início do próximo ano, disse nesta terça-feira (12) o ministro da Agricultura, Blairo Maggi.
Ele disse ter falado com representantes dos EUA para que sejam "claros" se haveria "problemas políticos" que atrapalhariam essa retomada.
"Obviamente, eles não aceitaram essa argumentação. Nós vamos continuar a mandar carne para lá e, por razões técnicas, estamos muito próximos de resolver essas questões também", declarou Blairo a jornalistas.
"Todos os quesitos que foram pedidos pelos órgãos fitosssanitário dos Estados Unidos, nós conseguimos resolver e estamos prontos para mandar as plantas para lá. Já reabilitamos as plantas para a carne processada, agora queremos voltar a carne fresca", afirmou.
Os EUA decidiram suspender as compras de carne do Brasil em junho, menos de um ano após abrir o mercado ao país.
Autoridades dos EUA disseram que inspeções de carregamentos que chegavam ao país revelaram problemas na carne como abscessos e tecidos proibidos.

MAPA. REUTERS. 13 DE DEZEMBRO DE 2017. ABPA diz que reabertura do mercado russo à carne suína do Brasil é iminente

SÃO PAULO (Reuters) - A reabertura do mercado russo à carne suína brasileira é iminente, disse nesta quarta-feira o presidente da Associação Brasileira de Proteína Animal (ABPA), Francisco Turra, durante uma conferência de imprensa em São Paulo.

A Rússia suspendeu temporariamente as compras de carnes bovina e suína do Brasil no fim de novembro, após encontrar vestígicios do aditivo alimentar ractopamina em alguns lotes importados.

A Rússia é o principal destino das exportações brasileiras de carne suína.

A iminente reabertura desse mercado foi relatada à ABPA na terça-feira pelo ministro da Agricultura, Blairo Maggi, disse Turra.

Por Ana Mano

MAPA. CANAL RURAL. 13 de Dezembro de 2017. COMERCIO EXTERIOR. Exportação de gado vivo sobe 30% em 2017. De acordo com o Ministério da Indústria, Comércio Exterior e Serviço, os principais destinos dos animais foram a Turquia, Egito, Jordânia e Bolívia

O Brasil exportou 33,87 mil cabeças de bovinos vivos em novembro, de acordo com o Ministério da
Indústria, Comércio Exterior e Serviços (MDIC). O faturamento no mês chegou em um total de US$
20,62 milhões.
Na comparação com o mês de outubro, os embarques caíram 41,5%, no entanto, quando comparado
ao mesmo período do ano passado, as exportações subiram 4,5%. Os principais destinos dos animais
foram a Turquia, Egito, Jordânia e Bolívia.
De janeiro a novembro deste ano o Brasil exportou 340,34 mil bovinos vivos, uma alta de 31,5%,
frente a igual período de 2016. Do total exportado até então, 47,5% foram enviados para a Turquia,
principal comprador do Brasil em 2017.

TOTAL. REUTERS. 13 DE DEZEMBRO DE 2017. ENERGIA. Total diz que exportação de gás de campo no Mar do Norte ficará interrompida até janeiro
Por Susanna Twidale e Amanda Cooper

LONDRES (Reuters) - As exportações de gás natural de um dos principais campos do Mar do Norte ficarão interrompidas por pelo menos três semanas, até o início de janeiro, após o fechamento do maior oleoduto do Reino Unido, disse a Total, operadora da área, nesta quarta-feira.

A empresa de produtos químicos INEOS, que possui o Forties Pipeline System, afirmou nesta quarta-feira que ainda não tomou uma decisão sobre o conserto de rachaduras encontradas na estrutura durante uma inspeção de rotina na semana passada.

O oleoduto bombeia cerca de 450 mil barris por dia (bpd) de petróleo Forties, equivalente a cerca de um quarto de toda a produção diária da bacia do Mar do Norte, e é responsável por um terço da produção total de gás offshore do Reino Unido.

“Uma série de opções de reparo está sendo considerada, e estamos avançando”, disse o INEOS. “Por ora, ainda é cedo demais para dizer o quão rapidamente o reparo será realizado, mas espera-se que seja uma questão de semanas e não de dias.”

O INEOS disse aos clientes na terça-feira que esperava que qualquer trabalho de reparação durasse pelo menos duas semanas. A Total disse em um aviso ao mercado que espera que suas exportações de gás da plataforma Elgin-Franklin fiquem paradas até 2 de janeiro.

OPEP. REUTERS. 13 DE DEZEMBRO DE 2017. ENERGIA. Opep vê mercado de petróleo equilibrado até o fim de 2018 com cortes reduzindo excesso

LONDRES (Reuters) - A Organização dos Países Exportadores de Petróleo (Opep) espera que o mercado mundial de petróleo fique equilibrado até o fim de 2018, em meio ao acordo com outros produtores para cortar a oferta e reduzir o excesso de estoque, mesmo com os Estados Unidos e outros produtores que não participam do acordo elevando a produção.

A Opep informou em um relatório mensal que reduziu sua estimativa para 2018 da demanda global por seu petróleo bruto em 270 mil barris por dia (bpd), para 33,15 milhões de bpd, em parte devido à maior oferta dos EUA.

Mas o grupo de produtores de 14 países disse que a sua produção de petróleo em novembro, avaliada por fontes secundárias, ficou em 32,45 milhões de bpd, uma queda de cerca de 133 mil bpd ante outubro e abaixo da previsão da demanda de 2018.

Por Alex Lawler

OMC. REUTERS. 13 DE DEZEMBRO DE 2017. OMC luta para aprimorar visão comercial global após pressões dos EUA
Por Luc Cohen

BUENOS AIRES (Reuters) - Os ministros do Comércio estavam prestes a encerrar sua reunião bianual na Organização Mundial do Comércio (OMC) sem ter chegado a um único acordo nesta quarta-feira, ainda sofrendo com críticas trazidas pelos Estados Unidos, que já foram a força-motriz da OMC.

Não havia expectativas de que os ministros que se reuniram em Buenos Aires concordariam em grandes reformas, com propostas relativamente menores e sem relação na mesa, incluindo discussões sobre subsídios à pesca e comércio eletrônico.

Uma intervenção discordante feita pelo representante comercial dos EUA, Robert Lighthizer, na primeira manhã, deixou a conferência efetivamente à deriva, uma vez que a OMC exige consenso --unanimidade entre todos os 164 membros-- para chegar a um acordo.

Mesmo a superficial declaração ministerial conjunta parecia incerta.

Guiados pela estratégia de “EUA em primeiro lugar” do presidente Donald Trump e uma preferência por acordos bilaterais, os EUA já impediram que os embaixadores fizessem um esboço em Genebra rejeitando referências ao papel central da OMC no sistema de comércio global e no comércio como diretriz do desenvolvimento.

O porta-voz da OMC, Keith Rockwell, disse a repórteres que a chair da conferência, a ex-ministra de Relações Exteriores da Argentina, Susana Malcorra, ainda esperava que os ministros concordassem em um texto mais tarde nesta quarta-feira.

“Ainda parece haver lacunas significativas. Se eles conseguirão encontrar as palavras que preencherão estas lacunas, eu não sei”, disse Rockwell.

O fracasso em chegar a grandes acordos significa que as negociações sobre os mesmos tópicos continuarão em 2018, sem prazo e sem força ministerial para chegar a um acordo.

MERCOSUL-UE. REUTERS. 12 DE DEZEMBRO DE 2017. Acordo de comércio entre UE e Mercosul não deve sair este ano, diz fonte

BUENOS AIRES (Reuters) - A União Europeia e o Mercosul provavelmente não vão atingir um acordo comercial neste ano porque os negociadores europeus querem esperar até o próximo ano para discutir ofertas melhoradas, afirmou uma fonte próxima dos negociadores sul-americanos, nesta terça-feira.

A fonte afirmou que novas ofertas foram trocadas nesta terça-feira, durante negociações da Organização Mundial do Comércio (OMC) em Buenos Aires. Apesar disso, as propostas não incluíram melhoria de ofertas da UE sobre carne e etanol cobradas pelo Mercosul.

“A UE afirmou que não está em posição para fazer uma recíproca e que terá melhor condições de responder no próximo ano”, afirmou a fonte.

Por Luc Cohen

União Europeia e Mercosul se aproximam de acordo durante reunião da OMC

BUENOS AIRES (Reuters) - As negociações comerciais entre a União Europeia e o bloco Mercosul, da América do Sul, estão perto de um acordo, paralelamente à reunião ministerial da Organização Mundial do Comércio (OMC) em Buenos Aires, disseram negociadores de ambos os lados.

O acordo pode acontecer no início do novo ano, disse Cecilia Malmstrom, comissária de comércio europeia, a repórteres.

“Nós fizemos bons avanços, mas ainda há levantamentos hoje”, disse Malmstrom. “Nós vemos o fim disso.”

O ministro das Relações Exteriores do Brasil, Aloysio Nunes, disse a repórteres mais tarde que o Mercosul e a União Europeia trocaram notas sobre o quão disposto está cada lado a ceder para alcançar um acordo de livre comércio.

“Eles nos perguntaram quão longe poderíamos ir em sua direção e nós perguntamos o mesmo. Estamos esperando por sua reação à nossa proposta para ver se conseguimos concluir a parte mais difícil das negociações, que é o acesso mercado”, disse.

O chanceler afirmou ainda que o Mercosul se compromete a retirar tarifas de 90 por cento de seu comércio com a UE.

A resistência de alguns Estados membros da UE, como Irlanda e França, às importações agrícolas tem atrasado as negociações do acordo comercial que busca liberalizar o comércio e o investimento, os serviços e o acesso aos contratos públicos.

Os membros do Mercosul Brazil, Argentina, Paraguai e Uruguai têm se esforçado por uma melhora na oferta da UE de importações livres de tarifa para 70 mil toneladas de carne bovina por ano e 600 mil toneladas de etanol por ano.

Por Eliana Raszewski, Luc Cohen e Anthony Boadle

MERCOSUL-UE. PORTAL G1. FRANCE PRESSE. 13/12/2017. Acordo entre União Europeia e Mercosul é adiado para 2018. Bloco formado por Brasil, Argentina, Paraguai e Uruguai esperava anunciar em Buenos Aires um acordo sobre as negociações, mas Bruxelas pediu mais tempo.

A União Europeia e o Mercosul vão continuar a tentar, em 2018, chegar a um acordo de livre-comércio, após as reuniões em Buenos Aires, disse o secretário Comércio Exterior da França.
"Não há acordo em Buenos Aires. Há trabalho a ser feito", afirmou à imprensa Jean Baptiste Lemoyne, nesta quarta-feira (13).
Por que 20 anos não foram suficientes para que Mercosul e UE concluíssem tratado
"A negociação vai continuar em janeiro", acrescentou Lemoyne, que encabeçou a delegação francesa na conferência ministerial da OMC em Buenos Aires.
O Mercosul esperava anunciar ali um acordo político sobre as negociações, mas Bruxelas pediu mais tempo para avaliar uma oferta apresentada pelos latinos.
O bloco sul-americano, formado por Brasil, Argentina, Paraguai e Uruguai, esperava que a UE se abrisse mais em rubricas que considera cruciais, como carne bovina e etanol.
O Uruguai disse que a UE não melhorou suas ofertas para essas categorias, mas disse que espera que os europeus façam isso em breve.
"Continuamos com a expectativa de que melhorem sua oferta, como o Mercosul melhorou a sua", indicou o chanceler uruguaio, Rodolfo Nin Novoa, que participou das negociações.
Lemoyne disse que a UE já chegou a 92% da abertura de seu comércio e o Mercosul a 90%.
Em Buenos Aires, o Mercosul apresentou uma oferta revisada sobre vários itens, entre eles a Indicação Geográfica de produtos e os refrigerantes. As propostas agora serão avaliadas em Bruxelas.
"Foram registrados avanços" nas negociações, segundo Lemoyne, mas "restam progressos a fazer em matéria de normas sanitárias".