Republican presidential candidate, former U.N. Ambassador Nikki Haley speaks at the American Enterprise Institute on June 27, 2023 in Washington, DC. Haley’s remarks focused on the future of U.S.-China relations and her foreign policy views.
Drew Angerer | Getty Images
American companies should be ready to stop treating China as an economic competitor and start viewing it as a national security threat, Nikki Haley, a Republican presidential candidate and former ambassador to the United Nations, said Monday.
“I think China’s an enemy. I think we have to take them incredibly seriously. And the problem is, you can look at dollars and cents or you can look at a threat to America,” Haley said on CNBC’s “Squawk Box.”
“Companies and people have said for too long, ‘We’ll deal with China tomorrow.’ But China is dealing with us today. We’ve got to address this,” she added.
Haley said “every company needs to have a Plan B” in the event that China decides to “pull the rug out from under us.” She called Beijing “the biggest threat we’ve had since Pearl Harbor.”
The former governor of South Carolina also criticized Treasury Secretary Janet Yellen, who recently said the U.S. relationship with China need not be a “winner take all” contest.
“To even say that means you don’t understand China,” Haley said of Yellen.
Haley’s latest remarks build on the hawkish position she laid out last month in a Wall Street Journal op-ed, in which she vowed to push U.S. businesses “to leave China as completely as possible.”
She also urged businesses to forge stronger ties with U.S. allies, such as India, Japan and South Korea, to become less dependent on China.
Haley pointed to a series of actions taken by China’s communist leadership in recent years that she said pose a multi-layered economic and security threat to the United States. They include buying hundreds of thousands of acres of U.S. farmland, purchasing the country’s largest pork producer, floating spy balloons over America, spreading propaganda in universities, lobbying Congress through “front companies,” rapidly building up a massive naval fleet, stealing U.S. intellectual property and developing new weapons.
The Chinese Embassy in Washington, D.C., did not immediately comment on Haley’s remarks. Chinese government officials frequently insist that Beijing merely seeks a mutually beneficial, “win-win” relationship with the United States. But American diplomats privately joke that “win-win” here means China wins twice.
Haley also suggested that China’s role in the U.S. fentanyl crisis raises questions about the future of the bilateral trade relationship.
Many of the precursor chemicals that make up fentanyl originate in China before being illegally diverted to Mexico, where they are processed by cartels to create the deadly synthetic opioid. The Department of Justice has said fentanyl overdoses are the leading cause of death for Americans ages 18 to 49.
Firefighters help an overdose victim on July 14, 2017 in Rockford, Illinois.
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“I think if it means us ending normal trade relations, you go to China and say, ‘We’ll end normal trade relations until you stop killing Americans,’” she said.
Haley’s alarm-ringing on China comes as she seeks to distinguish herself in the Republican presidential primary, which has so far been dominated by former President Donald Trump.
Only one of Trump’s competitors, Florida Gov. Ron DeSantis, has consistently garnered double-digit support in national polls of the primary race. The rest of the field, including Haley, has struggled to gain traction with voters.
Haley took aim at DeSantis over his ongoing feud with Disney, which stemmed from the entertainment giant’s opposition to a controversial classroom bill in Florida. While she disagrees with Disney’s stance, “I also don’t think that governors should spend taxpayers dollars suing companies.”
Still, it is difficult to predict how forcefully criticizing China will help to set Haley, or any candidate, apart from the pack in the 2024 election cycle.
This is in large part because polls consistently show that a hawkish attitude toward Beijing is one of the few policy positions that enjoys broad support among both Democrats and Republicans.
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As President Joe Biden mounts a reelection campaign, his administration is taking a hard line against China that bears a strong similarity to those of Republicans like Haley.
FBI Director Christopher Wray testified this month that no other country presents a “more comprehensive threat to our ideas, our innovation [and] our economic security.”
Asked about the state of the Republican primary, Haley described it as a marathon, “not a sprint.”
She also said that she would support Trump if he is the eventual Republican nominee. “I’m not going to have a President Kamala Harris,” she said, a reference to the view held by many Republican voters that Biden, who turned 80 last year, is too old to be president.
The pictures posted on the Chinese company’s website show a tall, Caucasian man with a crew cut and flattened nose inspecting body armor at its factory.
“This spring, one of our customers came to our company to confirm the style and quantity of bulletproof vests, and carefully tested the quality of our vests,” Shanghai H Win, a manufacturer of military-grade protective gear, proudly reported on its website in March. The customer “immediately directly confirmed the order quantity of bulletproof vests and subsequent purchase intention.”
The identity of the smiling customer isn’t clear, but there’s a fair chance he was Russian: According to customs records obtained by POLITICO, Russian buyers have declared orders for hundreds of thousands of bulletproof vests and helmets made by Shanghai H Win — the items listed in the documents match those in the company’s online catalog.
Evidence of this kind shows that China, despite Beijing’s calls for peace, is pushing right up to a red line in delivering enough nonlethal, but militarily useful, equipment to Russia to have a material impact on President Vladimir Putin’s 17-month-old war on Ukraine. The protective gear would be sufficient to equip many of the men mobilized by Russia since the invasion. Then there are drones that can be used to direct artillery fire or drop grenades, and thermal optical sights to target the enemy at night.
These shipments point to a China-sized loophole in the West’s attempts to hobble Putin’s war machine. The sale of so-called dual-use technology that can have both civilian and military uses leaves just enough deniability for Western authorities looking for reasons not to confront a huge economic power like Beijing.
The wartime strength of China’s exports of dual-use products to Russia is confirmed by customs data. And, while Ukraine is a customer of China too, its imports of most of the equipment covered in this story have fallen sharply, the figures show.
Russia has imported more than $100 million-worth of drones from China so far this year — 30 times more than Ukraine. And Chinese exports of ceramics, a component used in body armor, increased by 69 percent to Russia to more than $225 million, while dropping by 61 percent to Ukraine to a mere $5 million, Chinese and Ukrainian customs data show.
“What is very clear is that China, for all its claims that it is a neutral actor, is in fact supporting Russia’s positions in this war,” said Helena Legarda, a lead analyst specializing in Chinese defense and foreign policy at the Mercator Institute for China Studies, a Berlin think tank.
Were China to cross the red line and sell weapons or military equipment to Russia, Legarda said she would expect the EU to enforce secondary sanctions targeting enablers of Putin’s war of aggression.
But, she added, equipment like body armor, thermal imaging, and even commercial drones that can be used in offensive frontline operations are unlikely to trigger a response.
“Then there’s this situation that we’re in at the moment — all these dual-use components or equipment and how you handle those,” Legarda explained. “I would not expect the EU to be able to agree to sanctions on that.”
Disappearing customer
Shanghai H Win, like other Chinese companies producing dual-use equipment, has enjoyed a surge in business since Russia’s full-scale invasion of Ukraine.
According to customs records obtained by POLITICO, Russia has ordered hundreds of thousands of bulletproof vests and helmets made by Shanghai H Win | Genya Savilov/AFP via Getty Images
“Because of the war, a lot of trading companies are looking for us and ask: ‘Are you making this kind of vest?’ We received a lot of inquiries,” a sales representative told POLITICO over the phone.
At first, the representative said Shanghai H Win wasn’t allowed to export directly to Russia unless the Chinese military issues a certificate and it can provide documentary proof of its final customer.
Yet when asked who the man in the pictures was, and where he was from, the representative denied that he was even a customer — even though the website said so.
“He is our customer’s customer. We cannot ask him directly, ‘Where are you from?’ But I guess maybe he is from Europe — maybe Ukraine, maybe Poland, even maybe from Russia. I’m not sure.”
Shortly after the call, Shanghai H Win took down the post featuring the mystery shopper from its website.
Who are the buyers?
So, who exactly are those customers? Evidence of deals — importers, suppliers, and product descriptions — can be found in a registry of declarations of conformity by anyone with access to the Russian internet who is familiar with international customs classifications.
In an earlier story, POLITICO searched these filings and found evidence that sniper bullets made in the United States were reaching Russia, where they were freely available on the black market.
The declarations enable the final buyer to certify that the products are genuine and, in effect, make it possible to import goods without the express consent of the maker. If goods are traded through an intermediary, the maker may not even be aware that its goods are going to Russia. The registry is, however, searchable so it’s still easy to find the ultimate buyers of the Chinese kit.
One is Silva, a company headquartered in the remote Eastern Siberian region of Buryatia. It filed declarations in January of this year detailing orders for 100,000 bulletproof vests and 100,000 helmets. The manufacturer? Shanghai H Win.
Such importers often bear the hallmarks of “one-day” firms, as shell companies are known in Russia, set up by actors who want to conceal their dealings. They tend to be new, listed at obscure residential addresses, and have few staff or assets. Their financial statements often don’t report the levels of turnover that the filings would imply.
According to public records, Silva was registered only last September. It reported zero revenues for 2022. A Google Street View search of its address in Ulan-Ude, the capital of Buryatia, takes visitors to a dilapidated apartment block.
POLITICO tried to contact Silva but the phone number given on its filings rang off the hook and a message sent to its email address bounced.
The sale of so-called dual-use technology that can have both civilian and military uses leaves enough deniability for Western authorities looking for reasons not to confront China | STR/AFP via Getty Images
Another Russian company called Rika declared a smaller shipment of body armor from Shanghai H Win in March. Before that, in January, Rika declared a consignment of helmets from a company called Deekon Shanghai, which shares an address with Shanghai H Win. The two companies are affiliated, another Shanghai H Win representative said.
A woman who answered the phone at Rika said: “We buy in Russia, not in China.” The company didn’t reply to a follow-up email from POLITICO.
The denial is hardly plausible: In addition to the protective gear, a search of declarations by Rika threw up hits for deals for thermal optical equipment from China. That was corroborated by customs data accessed by POLITICO, which revealed more than 220 shipments, worth $11 million, for thermal optics and protective equipment since the outbreak of the war. Rika advertises Chinese-made night sights right at the top of its website.
Another Russian company called Legittelekom, whose homepage reveals it to be a Moscow freight forwarding company, also appears as a buyer of 100,000 items of headgear and 100,000 suits of outerwear from Deekon Shanghai, according to filings dated last November 24.
A man who answered a call to Legittelekom declined to comment on POLITICO’s findings and would not say whether the company supplied the Russian military.
“This is a commercial activity and we do not disclose our commercial activities,” the man said in response to both questions.
Bigger deal
Then there’s Pozitron, a company based in Rostov-on-Don, the southern city briefly captured by warlord Yevgeny Prigozhin’s Wagner mercenaries in their failed uprising last month. It imported more than $60 million-worth of “airsoft helmets,” “miscellaneous ceramics,” and other items from Chinese firm Beijing KRNatural in November and December 2022, according to customs data shared by ImportGenius.
These flows check out with Pozitron’s own declarations of conformity between late October and December 2022, for a total of 100,000 helmets. The declarations also reveal that Pozitron acquired a range of drones from Chinese multinational SZ DJI Technology Co., Ltd last December.
Although the quantity is unclear, the models specified include ones known to have been used in the Ukrainian theater of war, like DJI’s Mavic 2 Enterprise Advanced quadcopter or the Mini 2 lightweight drone.
At first sight, the product descriptions in the declarations and customs records appear harmless enough — the “airsoft helmets,” for example, are said to be for use in paintball games and “not for military use, not for dual use.”
Sanctions and defense experts say, however, that it’s common practice to mislabel dual-use goods as being for civilian purposes when they’re in fact destined for the battlefield.
At any rate, Pozitron, which was only founded in March 2021, is having a very good war: Its revenues exploded from 31 million rubles — around $400,000 — in 2021 to 20 billion rubles — almost $300 million — in 2022, according to its financial statement.
Reached by email, Pozitron’s general director, Andrey Vitkovsky, said that his company has “never imported drones and similar products” from the People’s Republic of China.
“The main activity of Pozitron LLC is the purchase and sale of consumer goods, sporting goods, and fabrics, both produced in the Russian Federation and imported from China,” Vitkovsky added, saying that his company’s activities were “exclusively peaceful in nature, in compliance with all rules and restrictions.”
The denial is typical — Russian companies have good reason to fear Western sanctions if they are implicated in trade that supports the Kremlin’s war effort. After POLITICO reported in March that a company called Tekhkrim was importing Chinese assault weapons, and declaring them as “hunting rifles,” the firm was sanctioned by the United States.
Pozitron is on the West’s radar, said one sanctions expert, who was granted anonymity as they are not authorized to speak publicly.
As for Beijing KRNatural, POLITICO was able to trace a company with a similar name at the address given in the Pozitron filings. The company, Beijing Natural Hanhua International Trade Co., Ltd, is listed as a “small and micro enterprise.” It was founded in April 2022, a few months before the Pozitron deals. Nobody answered when POLITICO called.
Heavenly mechanics
In contrast to the bulk consignments of protective gear that appear intended to equip a large fighting force, the orders for drones found by POLITICO are more dispersed among different buyers — both companies and individuals.
In addition to Pozitron, buyers of drones from DJI and its subsidiaries include firms called Gigantshina and Vozdukh — neither of which responded to emailed requests for comment. Another is Nebesnaya Mekhanika (“Heavenly Mechanics”), which before the war was the Chinese company’s official distributor in Russia.
A DJI spokesperson said that the company and its subsidiaries had voluntarily stopped all shipments to, and operations in, Russia and Ukraine on April 26, 2022 — two months after the war broke out.
“We stand alone as the only drone company to clearly denounce and actively discourage use of products in combat,” the spokesperson said in comments emailed to POLITICO.
DJI said it had also broken off its relationship with Nebesnaya Mekhanika, although the Russian company filed further declarations for shipments of the Chinese company’s drones last September 15 and on March 27 of this year.
The spokesperson said that DJI was not in any way involved in the drafting of the declarations of conformity found by POLITICO: “These documents would have been filled out by Russian parties, and they do not indicate in any shape or form who ex- or imported the products that are being declared conform.”
“We have seen media reports and other documents that appear to show how our products are being transported to Russia and Ukraine from other countries where they can be bought off-the-shelf,” the spokesperson added. “However, it is not in our power to influence how our products are being used once they leave our control.”
Still, a search of ImportGenius shows that a Chinese company called Iflight has continued to ship DJI drones to Nebesnaya Mechnika via Hong Kong, care of a local company called Lotos. The most recent consignment was delivered last October 10. In an apparent anomaly, Russia is stated as the country of origin for the shipments.
Nebesnaya Mekhanika, which still advertises DJI drones on its website, did not respond to a request for comment.
Political will
The trafficking of low-tech body armor to high-tech drones and thermal optics highlights a vulnerability in the Western sanctions regime. The ambiguity surrounding the dual-use status of this equipment, coupled with the fact that a significant portion of it is manufactured in China, seems, at least for now, to have placed the possibility of the West taking meaningful action beyond reach.
Then there is the flow of technology through China that may include components made in the West that could be of direct military use.
Russia is fully aware of the China loophole and is using it to buy Western technology to fight its war against Ukraine, according to a recent analysis by the KSE Institute, a think tank affiliated to the Kyiv School of Economics. More than 60 percent of imported critical components in Russian weapons found on the battlefield came from U.S. companies, the researchers found.
It’s an issue that U.S. Secretary of State Antony Blinken brought up on a visit to Beijing last month — the first by Washington’s top diplomat in five years. He told reporters that China had given assurances that “it is not and will not provide lethal assistance to Russia for use in Ukraine.” Blinken, however, expressed “ongoing concerns” that Chinese firms may be providing technology that Russia can use to advance its aggression in Ukraine. “And we have asked the Chinese government to be very vigilant about that.”
U.S. Secretary of State Antony Blinken told reporters that China had given assurances that “it is not and will not provide lethal assistance to Russia for use in Ukraine” during a visit to Beijing last month | Pool photo by Leah Millis/AFP via Getty Images
France is also concerned that China is delivering dual-use equipment to Russia. “There are indications that they are doing things we would prefer them not to do,” Emmanuel Bonne, President Emmanuel Macron’s top diplomatic adviser, told the recent Aspen Security Forum. Pressed on whether China was supplying weapons, Bonne said: “Well, kind of military equipment … as far as we know they are not delivering massively military capacities to Russia but (we need there to be) no delivery.”
Yet there’s little the West can do to twist Beijing’s arm into halting flows of dual-use products into Russia. Only the United States would have the real power to impose an outright ban on dollar-denominated transactions — as Washington did when it sanctioned Iran over its secret nuclear program.
The EU, however, lacks such a strong sanctions weapon because the euro is far less ubiquitous on global markets. It’s also been hesitant to act. In its latest package of Russia sanctions last month, the EU compiled a list of seven Chinese companies that shouldn’t be allowed to trade with the bloc. But, after lobbying by Beijing, Brussels dropped four companies from the blacklist.
Elina Ribakova, one of the authors of the KSE Institute report, said indirect shipments via China pose challenges in terms of both the scope and enforcement of Western sanctions. Secondary sanctions may not be sufficient, she said. She called for manufacturers to be forced to take responsibility for where their products end up — just as banks were required by regulators to step up customer oversight and anti-money laundering operations in the wake of the 2008 financial crisis.
“What we can do differently is to create the same infrastructure for the corporates,” explained Ribakova, who is director of the international program at the Kyiv School of Economics. “We have to threaten them with serious fines.”
Maxim Mironov, a sanctions expert and assistant professor of finance at the IE Business School in Madrid, reckons that the West, despite expanding sanctions to punish Putin’s helpers, lacks the political conviction to enforce them against Beijing.
“Do politicians have enough will to put sanctions on China? Basically, the answer is no,” said Mironov.
“China signals: You can try, but I don’t care what you are trying to do,” Mironov added. “And the European Union is like: If you don’t like it, we are not going to do it. And if the Chinese see that, they are just going to continue doing what they think is in their best interest.”
The European Commission, the U.S. National Security Council and the Chinese Mission to the EU did not respond to requests for comment.
Stuart Lau contributed reporting.
Sarah Anne Aarup, Sergey Panov and Douglas Busvine
Cajibio (CNN) — On a recent Friday morning, about 200 coca and marijuana farmers gathered in the small town of Cajibio, southwestern Colombia, to hear the government out.
Colombian’s government was still licking its wounds after an initiative to legalize recreational marijuana had sunk in Congress less than 10 days before.
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TEWKSBURY — The Tewksbury Planning Board met on Monday, July 17, 2023, at town hall to review several applications for proposed retail marijuana sites. The three proponents, all of whom attended the Select Board’s first round of licensing hearings, were the last remaining of initial eight applicants to receive approval from the Planning Board.
The number of retail marijuana licenses was calculated at 20 percent of the number of the town’s off-premises liquor licenses; with seven off-premises liquor licenses, the number rounds up to three marijuana licenses. Changes to the town’s zoning bylaw and general bylaw at Town Meeting last October allowed for the sale of retail marijuana with the Select Board as the permit-granting authority.
The state allows municipalities to impose a maximum three percent tax on retail marijuana sales; revenues generated from the tax would go to the town’s general fund. The zoning bylaw allows retail operations in four zones within the town: the General Business District (Lowell Line-655 Main St.), South Village Business District (1900 Main St. – Wilmington Line), Industrial 2 (Rockland/Hillman/Washington streets and East/Carter streets), and the Interstate Overlay District (Interchanges of Rt. 495 & 93).
The board revisited a discussion on a site plan review and land…
African leaders have long been reluctant to criticize Russia and now that President Vladimir Putin has killed off a deal to allow Ukraine to export grain, they know they are more dependent than ever on Moscow’s largesse to feed millions of people at risk of going hungry.
Having canceled the pact on Monday, Moscow unleashed four nights of attacks on the Ukrainian ports of Odesa and Chornomorsk — two vital export facilities — damaging the infrastructure of global and Ukrainian traders and destroying 60,000 tons of grain. In the latest assault, on Thursday night, a barrage of Kalibr missiles hit the granaries of an agricultural enterprise in Odesa.
“The decision by Russia to exit the Black Sea Grain Initiative is a stab [in] the back,” tweeted Abraham Korir Sing’Oei, a senior foreign ministry official from Kenya, one of the African countries that has received donations of Russian fertilizer in recent months.
The resulting rise in global food prices “disproportionately impacts countries in the Horn of Africa already impacted by drought,” he added.
Sing’Oei’s was a solitary voice, however. Rather than reproaching Moscow, African leaders have remained largely silent as they prepare to attend a summit hosted by Putin in St Petersburg next week. This follows an African mission led by South African President Cyril Ramaphosa last month to Kyiv and St Petersburg in a bid to broker peace.
The diplomatic stakes could hardly be higher.
Putin had been due to make a return visit to Africa next month to attend a summit of the BRICS emerging economies in Johannesburg. That trip has been called off, however, “by mutual agreement” to avoid exposing the Kremlin chief to the risk of arrest under an indictment for war crimes issued by the International Criminal Court in The Hague.
Without the Black Sea Grain Initiative, a deal brokered a year ago by the United Nations and Turkey that enabled Ukraine to export 33 million metric tons of grains and oilseeds, many African governments now have nowhere else to turn to but Russia.
“It’s going to be based on political alignments,” said Samuel Ramani, an Oxford-based academic and author of a book on Russia’s resurgent influence in Africa.
Comparing Russia’s tactics to blackmail, Ramani added: “They’re going to be offering free grain to some, they’re going to be selling to others. It’s full-fledged grain diplomacy.”
No deal
Russia said on Monday it would no longer guarantee the safety of ships passing through a transit corridor as it announced its official withdrawal from the deal, declaring the northwestern Black Sea to be once again “temporarily dangerous.” It followed up by threatening to fire on all ships going across the Black Sea to Ukrainian ports, sparking a tit-for-tat warning from Kyiv that it would do the same to all vessels sailing to Russian-controlled Black Sea ports.
Over the 12 months it functioned, the grain deal helped bring down global food prices by as much as 20 percent from the peak set in the aftermath of Russia’s full-scale invasion in February 2022. It also provided aid agencies with vital supplies.
Russia repeatedly claimed it has not seen the benefits of the three-times extended agreement, however.
Although Western sanctions carve out exemptions for food and fertilizer the Kremlin argues that sanctions targeting Russian individuals and its state agriculture bank are hindering its own exports, thus contravening a second deal agreed last July under which the U.N. committed to facilitating these exports for a three-year period.
The Kremlin said Wednesday that it would resume talks on the Black Sea grain deal only if the U.N. implements this part of the deal within the next three months.
Propaganda war
Another of Moscow’s criticisms is that cargoes of Ukrainian grain have headed mostly to rich countries; not to those in Africa and Asia bearing the brunt of the global food crisis.
Over the last year, a quarter of all the grain and oilseeds shipped under the initiative have headed to China, the largest recipient, while some 18 percent went to Spain and 10 percent to Turkey, according to U.N. data.
This is not the whole story, however. Trade data from the World Bank shows that much of the wheat exported to Turkey is processed and re-exported, as flour, pasta and other products, to Africa and the Middle East.
Most importantly, all grain that flows onto global markets reduces prices, wherever it ends up, counter the U.N. and others.
Russia has canceled the Black Sea deal and unleashed attacks on the Ukrainian ports of Odesa and Chornomorsk | Chris McGrath/Getty Images
“It is not a question of where the Black Sea food actually goes; it is a question of it [bringing] international prices down, so whether you are a rich country or poor country, you can benefit,” said Arif Husain, the U.N. World Food Programme’s chief economist, speaking at an event on the Black Sea Grain Initiative in Rome recently.
These arguments have been at the center of a months-long propaganda battle between Moscow and Kyiv over who can rightly claim to be feeding the world and who is responsible for soaring food prices.
In the aftermath of Russia’s invasion of Ukraine last year, the Kremlin’s narrative — that western sanctions are to blame — was quick to take hold in many parts of Africa.
Ukraine sought to counter this with a humanitarian food program, Grain from Ukraine, launched in November 2022, but shiploads of fertilizer donated to countries, including Malawi and Kenya, served to sweeten the Kremlin’s message.
“A true friend knows no weather. A true friend comes to the rescue when you need them the most. And you just demonstrated that to us,” Malawi’s Agriculture Minister Sam Dalitso Kawale said upon receiving a fertilizer gift from Russian firm Uralchem in March.
Feeling the pinch
Now, countries like Malawi need friends in Moscow more than ever. Not only does the end of the grain deal cut them off from flows of Ukrainian grain, leaving them dependent on Russian supplies, but it also pushes up prices.
Moscow’s withdrawal from the agreement is unlikely to have the same impact on prices as its full-scale invasion in February 2022. Over the last year, Ukraine has opened up alternative export routes and a slowdown in shipments moving under the initiative also meant commodity markets had been expecting Moscow to quit the deal.
While Ukraine can continue to export grain through alternative routes, these come with extra logistical and transport costs, squeezing prices for Ukrainian farmers, at one end, and pushing up costs for buyers, at the other.
For food-insecure countries in the Horn of Africa even a small increase in prices could spell disaster, said Shashwat Saraf, emergency director in East Africa for the International Rescue Committee (IRC).
Domestic production has dropped amid conflict and severe drought, leaving the region increasingly reliant on food imports and food aid. As such, higher food prices will hit hard, he said, adding that traders already report “feeling the pinch.”
With the cost of food rising, the IRC and other humanitarian organizations will be forced to either reduce the number of people they provide cash transfers or reduce the value of these themselves — and this at a time when the number of food insecure people is rising, said Saraf. “When we should be expanding our coverage, we will be actually reducing [it].”
Slap in the face
African leaders attending Putin’s summit next week will be silent on such issues, predicted Christopher Fomunyoh, African regional director at the U.S. National Democratic Institute for International Affairs and one of the Grain from Ukraine ambassadors appointed by Kyiv.
But they must not return empty-handed again, he said. Russia’s discontinuation of the grain deal, following the South African-led visit to St Petersburg, is a “slap in the face,” Fomunyoh told POLITICO. “Their own credibility is now at stake. And my hope is that they will have to speak out in order to not further lose credibility with their own populations.”
In 2022, Russia’s narrative was dominant in Africa, but that has slowly changed through the course of this year, he explained, adding that Africans were starting to see through Moscow’s propaganda.
“There is always a time delay,” said Fomunyoh. “But my sense is that in the days and weeks to come, people are going to see very clearly [that] the destruction of infrastructure in Odessa, the destruction of stock, wheat, and grain in Chornomorsk is contributing to scarcity and the inflation in prices.”
Lionel Barber is former editor of the Financial Times (2005-20) and Brussels bureau chief (1992-98)
Nobody does “No” better than the French. Charles De Gaulle said “Non” twice to Britain’s bid to join the European Economic Community; Jacques Chirac said “Non” to the Iraq war; and Emmanuel Macron this week gave a thumbs down to Fiona Scott Morton, the American Yale academic selected for the post of top economist at the EU’s powerful competition directorate in Brussels.
L’affaire Scott Morton may seem trivial in comparison to the (still unresolved) debate over Britain’s place in Europe or armed conflict in the Middle East, but the French veto of the first foreigner to take up the post says an awful lot about the European Union’s current paranoia about America’s influence and power.
As Macron has pushed a vision of Europe that stands up to the U.S., resisting pressure to become “America’s followers,” as he put it in April, such thinking has strengthened in Brussels.
The Scott Morton fiasco brings back memories of a lunch in Brussels exactly 30 years ago when some officials suspected the U.S. was engaged in an Anglo-Saxon plot to sabotage their plans for economic and monetary union. “Remember James Jesus Angleton,” said a stone-faced Belgian bureaucrat, invoking the name of the legendary, obsessive CIA counterintelligence officer at the height of the Cold War.
Professor Scott Morton was selected as the best candidate in open competition. She enjoyed the backing of Margrethe Vestager, the Danish EU competition commissioner often described as the most powerful antitrust regulator in the world. She also had support from Ursula von der Leyen, German president of the European Commission, whose leadership during the Ukraine war and the COVID pandemic has won widespread praise on both sides of the Atlantic.
All this counted for naught. Despite her distinguished academic pedigree, Scott Morton, a former Obama administration antitrust official, worked for Apple, Amazon and Microsoft in competition cases in the U.S. The notion her background somehow disqualified her for the job shows George W. Bush was wrong when he complained the French had no word for “entrepreneur.” Today’s problem is that Paris has no understanding of the term “poacher turned gamekeeper.”
As Carl Bildt, former Swedish prime minister, tweeted: “Regrettable that narrow-minded opposition in some EU countries has led to this. She was reportedly the most competent candidate, and a knowledge of the U.S. and its antitrust policies should certainly not have been a disadvantage.”
Now, President Macron’s opposition to the appointment has attracted a good deal of support in the Commission, in the European Parliament and among European trade unions. Cristiano Sebastiani, head of Renouveau & Démocratie, a trade union representing EU employees, said senior EU officials should “be invested, believe and contribute towards the European project. The very logic of our statute is that an EU official can never go back to being an ordinary citizen.”
France’s veto of Professor Scott Morton is de facto a veto of Vestager, who was almost untouchable during her first term as competition commissioner between 2014-19. She won kudos for investigating, fining and bringing lawsuits against major multinationals including Google, Apple, Amazon, Facebook, Qualcomm, and Gazprom. More controversially, at least in Paris and Berlin, she vetoed the planned merger between Alstom and Siemens, two industrial giants intent on creating a European champion.
Vestager’s second term has been a different story. She has suffered reverses in the courts which overturned punitive fines against Apple and Qualcomm. Then, although she ranks as a vice-president of the Commission, Vestager found herself challenged by a nominal underling in the shape of Thierry Breton, a former top French industrialist put in charge of the EU’s internal market.
Both have battled over the policing of the EU’s Digital Markets Act and over policy on artificial intelligence, a proxy fight for influence overall in Brussels.
Vestager and Breton have battled over the policing of the EU’s Digital Markets Act and over policy on artificial intelligence | Olivier Hoslet/EPA/AFP via Getty Images
Breton favors the so-called AI Pact, an effort to bring forward parts of the EU’s draft Artificial Intelligence Act. This would ban some AI cases, curb “high-risk” applications, and impose checks on how Google, Microsoft and others develop the emerging technology.
By contrast, Vestager favors a voluntary code of conduct focused on generative AI such as ChatGPT. This could be developed at a global level, in partnership with the U.S., rather than waiting for the two years it will take to secure legislative passage of Breton’s AI Pact.
So what’s the solution? If Europe is to have any chance of prevailing, so the argument goes, member states must take a far harder-nosed attitude to competition policy. This leads in turn to the creation of national or pan-European champions at the expense of crackdowns on subsidies and other anti-competitive behavior. In short, the very liberal policies designed to protect the single market’s level playing field and embodied by the fighting Viking.
For those who occasionally wonder how power has shifted inside the EU since Brexit took the U.K. out of the equation, it is proof indeed that “liberal Europe” is on a losing streak.
TEWKSBURY — The Tewksbury Planning Board met on Monday, June 26, 2023, at town hall. Members Jim Duffy and Vinny Fratalia were absent.
Town Planner Alex Lowder reported that Tree House Brewing Company plans to seek changes to its site plan review application in order to use a parking lot across the street. She noted that the taproom is open; food trucks have been on site for several weeks.
Lowder also added that the Select Board held retail marijuana licensing hearings throughout the month of June, and expects to revisit the issue at the board’s July 18 meeting.
The board reviewed and endorsed the town’s 2023-2027 Housing Production Plan draft.
The board endorsed an approval not required plan for 1167, 1177, and 1187 Main St. The proponents sought to combine the three lots, then split them into two parcels; an existing building will be moved and other buildings will be removed.
Anthony Catalno requested a continuance for a family suite special permit application to the board’s July 17 meeting.
Pure Tewksbury LLC, a retail marijuana applicant, requested withdrawal without prejudice of a site plan review application at 1699 Shawsheen St. to July 17.
A sign special permit application for 1438 Main St LLC was continued to the July 17 meeting.
Tree House Brewing Company requested a continuance for a site plan review and land…
Secretary of State for International Trade and President of the Board of Trade, Minister for Women and Equalities Kemi Badenoch leaves 10 Downing Street.
LONDON — Britain’s Kemi Badenoch, the business and trade secretary, formally signed a treaty confirming accession to the vast Indo-Pacific CPTPP bloc, the country’s largest post-Brexit trade deal to date.
Signed Sunday in New Zealand, the deal will now receive parliamentary scrutiny in the U.K., while other CPTPP nations will also complete their own legislative processes. More than 99% of the current U.K. goods that are exported to CPTPP countries will soon be eligible for zero tariffs, the U.K. government said.
The 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership includes Canada, Mexico, Japan, Australia, Vietnam, Singapore and Malaysia, among others. The U.K. would be the first European nation to join the bloc, which the government says would unlock trade to a region with a total GDP of £12 trillion ($15.7 trillion).
It remains to be seen how much the deal actually benefits Britain’s growth prospects. Based on the government’s own estimates, the deal will raise long-term domestic GDP by just 0.08%, which will have little impact to offset European trade losses as a result of Brexit. The U.K. officially left the EU on Jan. 31, 2020.
Badenoch said Sunday that Britain was using its status as an independent trading nation to join an “exciting, growing, forward-looking trade bloc.”
“[It] will help grow the U.K. economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country,” she said in a statement. One in every 100 workers in Britain was employed by a business headquartered in a CPTPP nation, according to the government citing 2019 data.
Badenoch added that the deal would “open up huge opportunities and unparalleled access to a market of over 500 million people.”
The trade pact evolved out of the now-defunct Trans-Pacific Partnership, or TPP, that originated in the United States but fell apart after former President Donald Trump scrapped U.S. involvement.
TEWKSBURY — On June 12, the Tewksbury Select Board kicked off the first of three nights of hearings to review adult retail marijuana license applications for several companies vying for one of the town’s three retail marijuana licenses and a host community agreement with the town.
“The issue here is about the qualifications and the background of each of the applicants,” said chair Todd Johnson.
Sundaze, owned by Brad Tosto, Peter Wilson, and Stephen Doherty, presented a proposal for 2504 Main St. in the South Village District. The applicant highlighted their experience in business operations, financial accounting, and regulatory compliance. The company held community outreach meetings in late 2022.
The company submitted a business plan to the board, outlining its mission and community engagement strategy. The proponents highlighted plans to hire local employees and create an elegant storefront, along with a security and diversion plan that calls for a full-time security director. Tosto noted that the town has been trying to fill vacant storefronts. A traffic study found no significant impacts for the location.
Lazy River Products, owned by William Cassotis, Mark Leal, and Kevin Platt, presented a proposal for 553 Main St. in the Ocean State Job Lot plaza. The company held a community outreach meeting in fall of 2022.
The EU finalized an agreement with Tunisia on Sunday to boost trade relations and stem migrant departures from the African country to Europe.
Under the deal, which the European Commission had been struggling to push over the line, the EU is to provide cash to Tunis in exchange for stronger border controls.
Exact financial details of the agreement were not given in the EU statement on Sunday. But Commission President Ursula Von der Leyen said last month that the EU was ready to provide Tunisia with more than €1 billion in areas including trade, investment and energy cooperation.
The statement said the agreement covers five pillars: migration, macro-economic stability, trade and investment, green energy transition, and people-to-people contacts.
On economic development, von der Leyen told a press conference in Tunis that the EU is “ready to support Tunisia by mobilizing macro-financial assistance as soon as the necessary conditions are met.” She added that as a “bridging step, we are ready to provide immediate budget support.”
While she didn’t give details on Sunday, von der Leyen said in June that the Commission was considering up to €900 million in macro-financial aid, plus “up to €150 million in budget support” directly.
Von der Leyen traveled to Tunisia on Sunday along with Italian Prime Minister Giorgia Meloni and Dutch Prime Minister Mark Rutte to meet again with Tunisian President Kais Saied. A similar meeting last month had failed to propel the talks to conclusion before a late June EU leaders’ summit as had been hoped.
“Migration is a significant element of the agreement we have signed today,” Rutte told the press conference on Sunday. “It is essential to gain more control of irregular migration.”
Von der Leyen said that under the agreement, the EU will provide Tunisia with €100 million to improve border management, search and rescue, anti-smuggling measures and other initiatives to address the migration issue.
“The tragic shipwreck a few weeks ago, in which many people lost their lives, was yet another call for action,” von der Leyen said. “We need to crack down on criminal networks of smugglers and traffickers.”
The ghosts of colonial history returned to haunt European and Latin American leaders at their summit in Brussels.
For the guests, four hundred years of European colonial rule, economic exploitation and slavery was front of mind. For the hosts, it was Russia’s war on Ukraine in the here and now.
The divergence in views was so profound that the two sides struggled to align their thinking at their first summit in eight years — especially to find words to condemn Russia’s war of aggression in their closing communiqué.
That made the two-day gathering frustrating for all concerned — but especially for leaders of the EU’s newest member states from Eastern Europe, which have their own bitter memories of Soviet imperial rule and Russian aggression.
“It is actually a war of colonization,” Latvian Prime Minister Krišjānis Kariņš said of the 16-month-old Ukraine conflict.
“There is a former colonizer, Russia, and a former colony, Ukraine. And the former overlord is trying to take back their one-time possession. I think that many countries around the world can relate to that.”
Despite the pre-summit rhetoric highlighting the two continents’ shared values, EU leaders struggled to persuade the Community of Latin American and Caribbean States (CELAC) — which includes traditional allies of Moscow such as Nicaragua, Cuba and Venezuela — to clearly condemn Russia’s war.
Ukrainian President Volodymyr Zelenskyy — a regular guest in Brussels — wasn’t invited this time. Wrangling over the wording in their joint declaration delayed the end of the meeting by hours as leaders sought to bridge the gaps. In the end, only Nicaragua dissented.
“No one intends to lecture anyone,” said European Council President Charles Michel, seeking to placate his guests. “This is not how it works, we have a lot of respect for those countries, for the traditions, for the culture, and the idea is always to engage in a spirit of mutual respect.”
Four hundred years
Spain, which holds the rotating presidency of the Council of the EU, has its eyes on Latin America and likes to emphasize the close cultural and linguistic ties between the two.
But those links hark back to Spain — and Europe’s — colonial past. The Spanish kingdom colonized much of Latin America starting in 1493 and, over the next 400 years, acquired vast wealth by exploiting its lands and people. The European slave trade also forcibly transported millions of Africans into slavery in Latin America and the Caribbean.
While European leaders hoped to ease geopolitical tensions, their Latin American counterparts came to the table with a clear message: Defining relations today means addressing and rectifying past injustices — especially as the EU looks once again to the resource-rich region, this time to power its green transition.
Saint Vincent and the Grenadines’ Prime Minister Ralph Gonsalves | Jean-Christophe Verhaegen/AFP via Getty Images
The prime minister of Saint Vincent and the Grenadines — a small island state that heads up the 33-nation group — called for talks on economic reparations for colonization and enslavement.
“Resources from the slave trade and from slavery helped to fuel the industrial revolution that has laid the basis for a lot of the wealth within Western Europe,” Ralph Gonsalves told a small group of reporters on Tuesday.
This was part of his argument for a plan to “to repair the historical legacies of underdevelopment resulting from native genocide and the enslavement of African bodies,” as he said on Monday ahead of the summit.
Trade tensions
Trade talks between the EU and Mercosur — which groups four of Latin America’s big economies — also reflected the broader tensions over what it really means for Europe to start afresh in a relationship of equals.
Beyond a cursory mention of a Mercosur deal in the final statement, talks with Brazil, Argentina, Uruguay and Paraguay were kept on the sidelinesdespite previous hopes that the summit could inject new energy into negotiations on wrapping up a trade deal.
European Commission President Ursula von der Leyen did, however, say after the summit that “our ambition is to … conclude [at] the latest by the end of this year.”
Industry and civil society have fundamentally different interpretations around how much — or how little — the deal would help put the countries on equal footing with their European partners.
For businesses, the deal needs to happen to ensure the region remains on the EU’s political and economic map.
“For us, the [trade] agreements are important. We need stability and don’t want to be at the mercy of political changes,” said Luisa Santos of the industry lobby group BusinessEurope.
But NGOs don’t see it that way. “Any proposal that leaves the region as a mere provider of natural resources for the benefit of the one percent in the region, big corporations and rich countries is business as usual,” said Hernán Saenz from the NGO Oxfam.
Resource craze
Sealing the Mercosur deal has gained importance for the EU, which is banking on the resource-rich region to power the wind turbines and electric vehicles it needs to meet its climate targets.
Brazil is the largest exporter of strategic raw materials to the EU by volume, while the “lithium triangle” spanning Chile, Argentina and Bolivia hosts about half of the world’s lithium reserves. As part of the summit, Brussels and Chile signed a new memorandum of understanding on raw materials.
Brazilian President Luiz Inácio Lula da Silva (left) and European Commission President Ursula von der Leyen (right) in Brussels | Dati Bendo/EC
But the EU’s new appetite for those metals and minerals evoques those dark memories of Spanish conquistadors who set out to dominate large parts of South America — in the name of god, glory and, not least, gold, fueling an economic boom back home while stripping Latin America of its riches.
While von der Leyen on Monday announced Brussels will pump over €45 billion into the region through its Global Gateway program — for infrastructure projects that, at least in part, will also benefit the EU’s private sector — Europe is coming late to the party in a region where China has already expanded its influence.
And raw materials partnerships today, the region’s countries emphasized, cannot be based on a model where resource-rich countries mine the valuable resources — often under poor environmental and working conditions — only for them to be shipped abroad for processing and manufacturing, making them reliant on imports for finished products.
“This was the first time that we had the opportunity to discuss in such clear terms a mechanism that would take us away from extractivism in Latin America,” Argentina’s President Alberto Fernández said after the summit.
“It took five centuries, but we managed it — I’m saying that half in jest, but we have at last succeeded.”
Camille Gijs and Barbara Moens contributed reporting.
The dollar value of China exports are expected to decline 9.5% in June from a year earlier, according to a Reuters poll, deepening a 7.5% annual decline in May.
Nurphoto | Nurphoto | Getty Images
China’s exports contracted in June at the fastest pace since the start of the Covid-19 pandemic, as high inflation in key developed markets and geopolitics hit global demand.
Thursday’s trade data release is yet another fresh indication that China’s leaders will not be able to count on external factors in reviving the faltering growth momentum. The decline in June imports was also more severe than expectations, suggesting local demand is also waning.
The dollar value of China’s exports plunged 12.4% in June from a year ago, customs data showed Thursday. This is a far bigger drop than expectations for a 9.5% decline in a Reuters poll and the 7.5% annual decline in May. The percentage decline was the biggest that the world’s second-largest economy has recorded since February 2020.
Imports declined 6.8%, in June from a year ago, also worse than expectations for a 4% decline and the 4.5% annual decline in May.
China’s trade still faces rather great pressure in the second half of the year, partly due to high inflation in developed countries and geopolitics, Lu Daliang, a spokesperson for China’s customs bureau, said at a press conference Thursday.
This is breaking news. Please check back for more updates.
Montana will soon crack down on synthetic marijuana and intoxicating hemp products that have proliferated through regulatory loopholes despite concerns they pose a health risk to children.
The Cannabis Control Division, the marijuana regulatory arm of the Montana Department of Revenue, said Tuesday eradicating synthetic products will be the “biggest lift” for the agency between now and the 2025 Legislature.
“Most of these businesses that we will be inspecting will be glass shops, gas stations, vape shops,” division administrator Kristan Barbour told the committee. “We’re just going in and making sure they know that any synthetic cannabinoid or hemp intoxicating product is no longer carried.”
The substances were identified by the agency in January as the likely culprit in a rash of youth hospitalizations raised by local health officials after the first year of marijuana legalization in Montana.
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House Bill 948, carried by Republican Rep. Steve Galloway of Great Falls, established a statewide prohibition on the manufacturing and sale of synthetic marijuana and intoxicating hemp products. Such substances previously fell outside of purview of the Cannabis Control…
Summer… it’s startin’ to drag a bit, no? Don’t get me wrong: I love having my bean home with me. But by the end of a week, where I’m not only trying to work from home but give him a great summer, saying “I’m pooped” is the understatement of the year!
I’ve stumbled upon a few good ideas of fun things to do this summer that you haven’t thought of… they’ll keep your kids busy, active, and away from screens (and out of your hair). If you’re starting to loathe summer, these ideas should help…
The reading caterpillar. I wanted to ensure my son kept up on his book and reading time this summer. So, in addition to getting him his very own library card at the start of summer and scheduling weekly trips there, we created a caterpillar on his bedroom door. I cut out a little paper head and taped it to the top of his door, as well as a whole bunch of coloured circles for his body – each time he reads a book he gets to add a circle. He’s loving the challenge of seeing how long he can make the caterpillar (and getting in tons of book time too!).
STEM building activities. STEM learning is a curriculum based on the idea of educating students in four specific disciplines — science, technology, engineering and mathematics — in an interdisciplinary and applied approach. In other words, finding new, creative ways to teach our children to learn. My most recent fave STEM activity: a container of toothpicks and either Playdoh or mini marshmallows. By using the little marshmallows or small blobs of rolled up Playdoh, and affixing them to the toothpick ends, you can build and make all sorts of cool structures.
Dinosaur egg excavation. Why is it that kids are obsessed with eggs? Toys that come in eggs, chocolate eggs, etc. So I put a few dinosaurs into some regular-sized balloons, filled them with water and froze them. Then, I cut away the balloon and TA DA: dinosaur eggs. Now arm your kid with a mallet or hammer and protective eye gear, and see if they can get the dinosaurs out!
LEGO challenge. Make a list of some inspiring LEGO ideas (build a catapult, build a zipline, build your initials/name, build a robot) and gave em a bin of LEGOS. You’re welcome.
Water droplet races. Roll out some wax paper and give your kids some eye droppers, a straw and a small bowl of coloured water each. Have them put a droplet of water on the wax paper and then “move it” by blowing at it through the straw. You can give each child a different colour of water and they can race.
Make bubble wands using pipe cleaners. Configure all kinds of shapes. Decorate the handles with beads.
Make magic wands. Buy short wooden dowels at the dollar store and decorate with Washi tape, coloured electrical tape, stickers, paint, markers, glitter and more. Affix long strands of ribbon from the end to make it “magical.”
Create your own comic books. Gather up those spare comic books, old reading books, magazines, newspapers, stickers, etc. and have your kid turn them into his/her own comic book. Have the siblings work on one together.
Make your own dream-catchers. Take a paper plate and use a hole puncher to punch a circular pattern around the interior of the plate. Have your child thread yarn through in his/her own pattern. Use feathers, beads and other decorations to personalize it.
Water pistol painting. Fill a few dollar store water guns with coloured water, and have them blast away at paper or a canvas.
A full-time work-from-home mom, Jennifer Cox (our “Supermom in Training”) loves dabbling in healthy cooking, craft projects, family outings, and more, sharing with readers everything she knows about being an (almost) superhero mommy.
I think it’s finally safe to say: summer is here and it’s HOT BABY!
We all know what can happen to overtired, overheated kids (and parents): we get cranky, frustrated and downright nasty. So, if you’re looking for a few ways to beat the heat this summer, we hope these suggestions will keep you cool, calm and collected.
Go to a movie. During the summer many theatres provide cheaper matinees, or they play older movies for reduced ticket prices. Theatres are always air conditioned and offer a great reprieve from the summer sun.
Visit a pet store. Again, these are air conditioned, and it can be lots of fun to see all the different animals and explore a pet store. Create a scavenger hunt in the store where the kids have to find certain critters or pet items (brown mouse, blue dog ball, etc.).
Make icy treats. Did you know that all you need to make ice cream right in your backyard is some ice, baggies, cream, sugar, vanilla, and rock salt? Or make up your own popsicle flavours (the dollar store has lots of fun moulds to make it in).
Find some water play. Neighbourhoods across the island of Montreal and beyond always offer public pools or splash pads for kids. These can be great places to bring a lunch or snack, and cool off with some fun water play. In fact, you can find lots of fun ways to use your hose in the backyard to cool down as well: drape your hose over a tree branch and create a shower effect, connect the oscillating sprinkler, fill up some water balloons, or use your hose to fashion your own water feature out of a pool noodle or a PVC pipe with holes drilled in it. You can also put holes into a two-litre soda bottle and connect the hose to that.
Put on a show. Why not challenge the family to a talent show? All of the rehearsals and performing can be done within the comfort of the (cooler) indoors. Make puppets and have everyone put on an entertaining show.
Go out early or stay out later. It’s always cooler in the morning hours and as it starts to get dark, so these are the optimal times to venture out on a bike ride or to head to the park.
Germany’s trade surplus fell unexpectedly on month in May, as exports declined marginally and imports rose, a sign that domestic demand could be improving despite a global economic slowdown, as the country’s economy tries to shake off the recession it suffered in the winter.
The country’s adjusted trade surplus–the balance of exports and imports of goods–dipped to 14.4 billion euros ($15.72 billion) in May, compared with a revised EUR16.5 billion in April, data from the country’s statistics office Destatis showed Tuesday.
In May, exports ticked down 0.1% on month on a calendar and seasonally adjusted basis to EUR130.5 billion, suggesting global demand for German manufacturing goods receded somewhat.
Economists polled by The Wall Street Journal expected the trade balance at EUR17.6 billion and exports to rise by 0.5%.
However, imports increased 1.7% to EUR116.1 billion, a sign that domestic demand could be growing. Domestic consumption slumped in Germany over the winter as the economy suffered a recession, contracting by 0.5% in the fourth quarter of 2022 and 0.3% in the first of this year.
Outside the European Union, the country receiving the most German exports in May was the U.S., though exports there declined by 3.6% on month, Destatis said. Exports to China increased 1.6%, while they rose by 5.8% to the U.K., it added.
A union representing port workers in Western Canada officially began striking, an action that could have ripple effects reaching beyond the U.S.’s northern neighbor.
The International Longshore & Warehouse Union Canada’s Longshore Division announced its labor strike began in a Saturday Facebook post signed by union president Rob Ashton. More than 99% of members of the union, who support West Coast ports such as Vancouver and Prince Rupert, voted to approve the strike last month. Notice of the strike came Wednesday.
“The ILWU Canada Longshore Division has not taken this decision lightly, but for the future of our workforce we had to take this step,” Ashton said in the post. “We are still hopeful a settlement will be reached through FREE Collective Bargaining!”
The union has been open to bargaining since February with the British Columbia Maritime Employers Association, which represents port owners, and remains ready to continue working on a contract, Ashton added.
The employers association, known as the BCMEA, said in a statement it has worked to “advance proposals and positions in good faith, with the objective of achieving a fair deal at the table.” It noted the role of federal mediators and said it was open to “any” solution that can get the parties to a balanced agreement, including a mediated arbitration process.
Cruises remain able to sail and bulk grain is moving, but containerized grain is not. Canadian labor minister Seamus O’Regan Jr. tweeted seemingly in support of continued negotiations between the two groups, noting that “the best deals for both parties are reached at the table.”
The two parties are at odds over issues including automation, the use of contract work and the cost of living for workers. Two mediators appointed by the Canadian government oversaw discussions that ran through the end of May. Those discussions were followed by a so-called cooling-off period between the two groups.
A strike in the western ports occurring around holidays in both the U.S. and Canada could result in impacts on the American economy, industry followers say. The Port of Vancouver and Port of Prince Rupert are popular destinations for U.S. trade because these ports are among the major ports of call for goods arriving from Asia. Some logistics managers have told CNBC that rail service out of those ports is a lot faster than going through the port of Seattle or Tacoma.
The International Longshoremen’s Association said it won’t take diverted cargo from ports with striking workers, while the head of the International Longshore and Warehouse Union, which represents West Coast port workers in the U.S., made a statement of solidarity with the Canadian union but did not mention any specific action.
The strike could lead to congestion in these ports with longshoremen unable to unload vessels. Congestion can turn into backlogs and lead to delayed pickups from terminals, which can then lead to late fees that are often passed on to consumers — a situation similar to what occurred during the pandemic.
“With the Canadian holiday and July Fourth holidays, the volume of containers moving are lighter than normal but now vessels are not being worked because of the strike,” said Paul Brashire, vice president of drayage and intermodal at ITS Logistics. “If this strike continues into the middle of next week, it will impact congestion in the coming weeks at Chicago and Detroit rail terminals because of the amount of containers that would have built up and eventually moved to those rail terminals.”
The Canadian ports handle nearly $225 billion in cargo each year, according to estimates, with items spanning industries such as home goods, electronics and apparel transported by rail. Approximately 15% of consumer trade going through the Port of Vancouver is headed to or coming from the U.S., according to port authority data. Around two-thirds of containerized import volume going to the Port of Prince Rupert are headed to the U.S., port data shows.
Three Class 1 railways operate at these ports: CN, Canadian Pacific and BNSF, a subsidiary of Berkshire Hathaway. In an email to CNBC, BNSF said it had no comment on a strike impact. CN could not be immediately reached for comment.
In a CPKC customer advisory issued Wednesday, the railway said: “The work stoppage related to this notice could impact port operations in British Columbia. At this time, we do not anticipate any significant service interruptions to result from this work stoppage and, as such, CPKC has not initiated embargoes related to a potential service interruption but we are closely monitoring developments to evaluate any impact to shipments on CPKC’s network. We will provide updates as necessary.”
Steve Lamar, CEO of the American Apparel and Footwear Association, told CNBC that the “fragile and recovering supply chains cannot tolerate a strike,” while urging the Canadian government to help keep parties at the table.
BRUSSELS — EU countries are bickering over granting billions in new funds to deal with migration as asylum applications soar and backlogs pile up at the Continent’s borders.
Germany, which received a quarter of all EU asylum applications in 2022, specifically wants to “revitalize” the EU’s ties with neighboring Turkey, according to a senior German official — a nod to the last time the bloc faced such levels of migration.
Then, in 2016, the EU offered Turkey billions in exchange for the country housing thousands of Syrian refugees fleeing civil war. Now, there is a push to authorize up to €10.5 billion in new money for not just Turkey, but also countries like Libya or Tunisia, hoping it would help them prevent people from entering the EU without permission.
The debate has jumped onto the agenda of an EU leaders’ summit in Brussels on Thursday and Friday. And countries are sparring over whether to reference a monetary request in the meeting’s final conclusions, according to five diplomats and officials from four different countries.
The behind-the-scenes fight illustrates how much migration has come to dominate the political agenda. Organizers for the summit had hoped to keep the divisive migration talk to a minimum in favor of discussions on Russia, China and economic security. But with high-profile disasters like the recent migrant shipwreck near Greece and arrival figures continuing their steep climb, the heated issue is becoming increasingly hard to avoid.
Notably, draft conclusions for the summit, dated Wednesday evening and seen by POLITICO, still had two indirect references to the fresh migration funds: The €10.5 billion pot and another €2 billion for “managing migration” within the EU’s own borders.
Whether that language survives until Friday is another question.
Germany: Let’s talk Turkey, not money
Germany, as always, is one of the key players in the debate — and in this instance, it is making arguments for both sides.
On one side, Berlin wants to renew the EU’s relationship with Turkey, hoping it can take in more asylum seekers and help cut down on unauthorized border crossings. In return, the Germans want the EU to improve trade ties with the country.
On the other side, however, Berlin is fiercely opposing the attempt to explicitly mention money in the summit conclusions. The logic: Committing to fresh billions now would imperil upcoming talks over whether to add €66 billion to its budget. Germany wants to discuss the whole package at once, instead of approving parts of it in advance.
As of Wednesday night, the summit conclusions draft still contained an indirect endorsement of the money.
Germany, as always, is one of the key players in the debate — and in this instance, it is making arguments for both sides | David Gannon/AFP via Getty Images
The document mentions “financing mechanisms” — seen as a reference to the €10.5 billion — for “the external aspects of migration.” That money would go to countries like Turkey, Libya and Tunisia, which migrants often traverse on their way to Europe.
There’s also an indirect reference to the €2 billion for internal EU migration management. The text calls for “support for displaced persons,” particularly from Ukraine, via “adequate and flexible financial assistance to the member states who carry the largest burden of medical, education and living costs of refugees.” Translated, that would mean more money for countries that host the bulk of Ukrainian refugees, like Poland and Germany.
Yet during a meeting of EU ambassadors on Wednesday, German officials urged their counterparts to cut or massively reduce both passages, according to the five diplomats and officials, who, like other officials in this story, were granted anonymity because they are not allowed to publicly discuss the talks.
As of Wednesday night, that appeal had failed. But German Chancellor Olaf Scholz may take up the issue himself with his counterparts on Thursday.
The German argument is that including the figures would mean EU leaders are essentially making a big step toward endorsing the full budget package — which the European Commission requested just last week — before even discussing it, two of the officials said.
Nevertheless, Commission President Ursula von der Leyen is expected to briefly present her €66 billion budget plan during the gathering of EU leaders on Thursday, meaning there will likely be an initial debate about the money, the officials said.
Von der Leyen’s plans are expected to run into resistance from a number of countries, particularly the so-called “frugal” countries, including Austria, Denmark, the Netherlands and Sweden.
Speaking to a briefing for reporters in Berlin on Wednesday, a senior German official also voiced caution about von der Leyen’s plan.
“One of the questions is: Is the Commission’s assessment of the situation convincing?” said the senior official, who could not be named due to the rules under which the briefing was organized.
Time to work with Erdoğan again?
At the same time, the senior German official stressed Berlin’s interest in renewing the EU relationship with Turkey.
“[Turkish President Recep Tayyip] Erdoğan has been re-elected, and this must be an opportunity for the EU to take another broad look at its relationship with Turkey,” the official said.
Turkish President Recep Tayyip Erdoğan | Adem Altan/AFP via Getty Images
“For us, it’s a matter of putting EU-Turkey relations once again on the agenda … to possibly revitalize them, if all sides want to commit to this,” the official continued, adding that the European Commission and EU foreign policy chief Josep Borrell should “come back in the fall with proposals.”
One idea could be an update of the EU’s trade rules with Turkey — a thorny issue, though, as talks between Brussels and Ankara have failed to make progress on modernizing the so-called EU-Turkey customs union for several years.
Germany’s Scholz held a phone call with Erdoğan on Wednesday during which both leaders discussed how “to cooperate further and deepen exchanges on various cooperation issues,” according to Steffen Hebestreit, Scholz’s spokesperson.
Any progress in EU-Turkey relations would also require the agreement of the EU countries perpetually at odds with Turkey — Greece and Cyprus.
At least in that sense, there seems to be progress: “We agreed to include a paragraph on Turkey and the future relations,” a Greek diplomat said.
The latest draft conclusions from Wednesday evening ask Borrell and the Commission “submit a report” on EU-Turkey relations “with a view to proceeding in a strategic and forward-looking manner.”
Barbara Moens, Jakob Hanke Vela, Lili Bayer, Jacopo Barigazzi and Gregorio Sorgi contributed reporting.
Pet Adoption Special: 8 a.m.-5 p.m. weekdays and 10 a.m.-4 p.m. Saturdays, through Sept. 30, Burlington Animal Services, 221 Stone Quarry Road, Burlington. All dogs weighing more than 20 pounds and all cat adoptions are reduced to $20. Adoptions include…
