Pacific trade pact ministers agree on tariff elimination rule on final day

October 07, 2013

Ministers of the 12 countries in the Trans-Pacific Partnership Agreement (TPPA) free trade negotiations agreed yesterday to uphold a basic rule of total tariff elimination in wrapping up their three-day meeting on the Indonesian island of Bali, with the goal of reaching a deal by  year-end.

During their efforts to compile work plans for advancing talks on contentious areas, the ministers discussed market access that covers tariff elimination rules and intellectual property rights among others, despite each country having its own sensitivities.

On Japan's sensitive items, a ruling party lawmaker in charge told reporters after the meeting that Prime Minister Shinzo Abe's Liberal Democratic Party now plans to study the possibility of eliminating tariffs on the items that have been considered untouchable, including rice.

 "We need to consider whether we can take them out or not" from the exceptional items in Japan's negotiation policy – adopted in line with the party's proposal, said Koya Nishikawa, head of the LDP's TPP committee. He added that it does not necessarily mean the party has removal in mind.

"If it doesn't hurt (Japan's agriculture), it would be up to the government to negotiate" and decide policies, Nishikawa said.

The Japanese government faces strong domestic pressure to retain tariffs on imports of rice, wheat, beef, pork, dairy products and sugar to protect domestic agriculture, but challenges are expected in its attempt to protect them from cheaper foreign products.

To speed up the talks that are already over three years old, the member countries are now planning to arrange a ministerial meeting in December.

"The ministerial meeting is expected to be held toward the end as we aim to conclude a deal within this year," said Japan's TPPA minister Akira Amari after the meeting, adding that Japan will work to facilitate talks to meet the year-end target.

The ministers will submit a report on the outcome of their latest meeting to the leaders arriving for a TPPA summit to be held tomorrow as scheduled despite US President Barack Obama's cancellation of his trip to Bali due to the partial shutdown of the federal government over a budget impasse, officials said.

Before the day's meeting began in the morning, Amari told reporters TPPA members are making progress in the talks and Obama's absence will not affect their aim of reaching a deal this year.

"We were shocked that President Obama couldn't make it, but we quickly decided that we'll maintain the momentum" of the negotiations, Amari said.

But Malaysian Prime Minister Datuk Seri Najib Razak said at a press conference it will take longer to conclude the TPPA than its initial year-end timeline, Malaysian media reported.

"We will have our discussions in Bali and we will have a sense of whether that timetable is feasible," he said, adding, "But our sense is that (the TPPA conclusion) may take longer than the time horizon of the end of the year," according to the report.

The ministerial meeting began Thursday and was also held Friday. The meeting, together with the preceding meeting of chief negotiators and the summit, is being held on the margins of the Asia-Pacific Economic Cooperation forum.

After receiving the ministers' report, the leaders are expected to announce that the members' work on the TPPA is close to a finish, according to negotiation sources.

The report will be announced together with the leaders' statement at the end of the TPPA summit.

The 12 TPPA countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – have been aiming to reach a broad agreement in October. - Kyodo, October 7, 2013.

Malaysian Insider

Time for Gates to go, some top Microsoft investors tell board

Published: Tuesday, 1 Oct 2013 | 9:50 PM ET

Reuters

Adam Jeffery | CNBC

Bill Gates

 

Three of the top 20 investors in Microsoft are lobbying the board to press for Bill Gates to step down as chairman of the software company he co-founded 38 years ago, according to people familiar with matter.
While Microsoft Chief Executive Steve Ballmer has been under pressure for years to improve the company's performance and share price, this appears to be the first time that major shareholders are taking aim at Gates, who remains one of the most respected and influential figures in technology.

A representative for Microsoft declined to comment on Tuesday.
(Read more: Ballmer goes out punching at last Microsoft meeting)

There is no indication that Microsoft's board would heed the wishes of the three investors, who collectively hold more than 5 percent of the company's stock, according to the sources. They requested the identity of the investors be kept anonymous because the discussions are private.

Who's on the list to head Microsoft?

Ford CEO Alan Mulally may be in the running to take Steve Ballmer's job at MIcrosoft but she's not the only one, says Kara Swisher, All Things Digital.

Gates owns about 4.5 percent of the $277 billion company and is its largest individual shareholder. 

The three investors are concerned that Gates' presence on the board effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes. In particular, they point to Gates' role on the special committee searching for Ballmer's successor. 

They are also worried that Gates - who spends most of his time on his philanthropic foundation - wields power out of proportion to his declining shareholding. 

Gates, who owned 49 percent of Microsoft before it went public in 1986, sells about 80 million Microsoft shares a year under a pre-set plan, which if continued would leave him with no financial stake in the company by 2018. 

(Read more: Cramer: Microsoft's dividend is a move of desperation)

Gates lowered his profile at Microsoft after he handed the CEO role to Ballmer in 2000, giving up his day-to-day work there in 2008 to focus on the $38 billion Bill & Melinda Gates Foundation.

In August, Ballmer said he would retire within 12 months, amid pressure from activist fund manager ValueAct Capital Management. 

Microsoft is now looking for a new CEO, though its board has said Ballmer's strategy will go forward. He has focused on making devices, such as the Surface tablet and Xbox gaming console, and turning key software into services provided over the Internet. Some investors say that a new chief should not be bound by that strategy.

(Read more: Can Bill Gates save Microsoft?)

Microsoft is still one of the world's most valuable technology companies, making a net profit of $22 billion last fiscal year. But its core Windows computing operating system, and to a lesser extent the Office software suite, are under pressure from the decline in personal computers as smartphones and tablets grow more popular. 

Shares of Microsoft have been essentially static for a decade, and the company has lost ground to Apple and Google in the move toward mobile computing. 

One of the sources said Gates was one of the technology industry's greatest pioneers, but the investors felt he was more effective as chief executive than as chairman

Malaysia should ditch Pacific trade pact – it will hurt trade with China, UN economist warns

BY TRINNA LEONG
October 03, 2013

Jomo says Malaysian negotiators are inexperienced to deal with complex issues in the TPPA. – Pic courtesy UN RadioA 12-nation Pacific free trade pact pushed by the United States will not benefit Malaysia as it is meant to isolate fast-growing economic giant China, United Nations economist Jomo Kwame Sundaram said last night

Malaysia is currently in talks to ratify the Trans Pacific Partnership Agreement (TPPA) but there has been growing opposition to the deal due to its impact on procurement, medicines and business regulations in the country.

“The purpose of the TPP is to isolate China and you don’t want to do that to your main trading partner,” the prominent Malaysian economist said at the launch of his latest book in Kuala Lumpur.

The former University Malaya academic has worked as the United Nations Assistant Secretary-General for Economic Development in the United Nations Department of Economic and Social Affairs (DESA) since 2005.

Jomo said the trade agreement’s main purpose to isolate China became meaningless after the US narrowed its deficit against the Asian giant.

“The US dollar has devalued the last few years so the huge US deficit with China has closed,” he said after launching his book Malaysia@50 in Universiti Malaya.

“So now it’s yesterday’s problem. Why should we get stuck in such a policy and an agreement which was hatched up earlier?” he added.

The trade pact has been viewed as the US’s entry point into market dominance within Asia, which China sees as an attempt by Washington to overstep on the Chinese’ backyard.

The Wall Street Journal had quoted the former World Bank chief for China, Yukon Huang as saying the pact discouraged and complicated shipping of parts to and from Asian countries.

He pointed out the implication would affect China’s role as the final assembly point for electronic items whose parts are usually from other nations.

Jomo believed that instead of getting into trouble, the Malaysian government should be aware of the potential trade agreement between the US and the European Union.

“The bigger problem now is that the US and EU will come up with an economic NATO that’s going to weaken the WTO,” he said, referring to the North Atlantic Treaty Organisation defence pact and the World Trade Organisation.

Jomo expressed concern that a trade pact between Western nations would affect Malaysia’s exports, in particular palm oil which competes with other vegetable oils including the popular soya oil in the US.

“That’s why we need to keep multilateral agreements,” the economist said, explaining that such agreements allow Malaysia to have more control over negotiating the terms.

He also reasoned that Malaysia’s trade negotiators are inexperienced to deal with such a complex agreement, placing the country at a losing end at the bargaining table.

At the centre of the protests against the TPPA is concern that it would destroy the local and smaller enterprises. The agreement has appeared more favourable to foreign established firms that would have the technology and skills to receive tenders. While the awarding of contracts appear merit based, many are worried that Malaysia got the worst end of the deal.

“If this was an APEC deal, we have partners that are negotiable,” said Jomo, referring to the 21-member Asia-Pacific Economic Cooperation.

“But with bilateral agreements, what power does Malaysia have against other countries?” he added.

Apart from the TPPA, Malaysia is also involved in the negotiations for Regional Comprehensive Economic Partnership, another trade pact that includes China. It is between Southeast Asian nations, China, India, Australia, Japan, South Korea and New Zealand. - October 3, 2013

Obama warns Wall Street over fiscal crisis

October 03, 2013

President Barack Obama (pic) sent Wall Street a blunt warning Wednesday that it should be very worried about a political crisis that has shut down the government and could trigger a US debt default.

Obama said he was "exasperated" by the budget impasse in Congress, in an interview with CNBC apparently designed to pressure Republicans by targeting the financial community moments after markets closed.

The president then met Republican and Democratic leaders for their first talks since the US government money's ran out and it slumped into a shutdown now well into its second day.

 But few informed observers held out much hope for a sudden breakthrough.

Obama was asked in the interview whether Washington was simply gripped by just the latest in a series of political and fiscal crises which reliably get solved at the last minute.

In unusually frank comments on issues that could sway markets, Obama warned that investors should be worried.

"This time's different. I think they should be concerned," Obama said, in comments which may roil global markets.

"When you have a situation in which a faction is willing potentially to default on US government obligations, then we are in trouble," Obama said.

Obama said he would not negotiate with Republicans on budget matters until House lawmakers pass a temporary financing bill to reopen federal operations and raised the $16.7 trillion (RM54 trillion) dollar debt ceiling.

If the borrowing limit is not lifted by the middle of the month, the US government could default on its debts for the first time in history.

"If and when... that vote takes place and the government reopens, and if and when they vote to make sure Congress pays our bills on time so America does not default on costs it's already accrued, then I am prepared to have a reasonable, civil negotiation around a whole slew of issues," Obama said.

The president said he had "bent over backwards" to accommodate Republicans — a statement his foes would dispute — but warned it would set a terrible precedent to allow lawmakers of any party to hold a White House to ransom over raising the debt ceiling.

"Absolutely I am exasperated, because this is entirely unnecessary," Obama said.

The government shutdown has sent 800,000 federal workers home, closed museums, national parks and monuments and crippled government services.

Obama wants a straightforward temporary spending bill to end the first shutdown in 17 years, while Tea Party Republicans have repeatedly tied the measure to a dismantling or delay of his signature health care law.

With neither side willing to budge, hopes of an early exit to the shutdown are fading.

"Most of the time you can see an end game," Republican Senator Johnny Isakson told MSNBC. "Right now there's no end game in sight."

Some signs of incremental movement emerged, with Democrats pledging to appoint negotiators to thrash out a long-term budget — provided that the Republicans agree to an immediate six-week federal spending measure with no anti-Obamacare provisions. — Reuters, October 3, 2013.