US would lose out in trade war against the world: ECB

US would lose out in trade war against the world: ECB
source: AFP
 

AFP/File / Fabrice COFFRINI ECB President Mario Draghi and World Trade Organization chief Roberto Azevedo have warned of protectionism's rising threat to the world economy under Donald Trump's "America First" policies

Economic activity in the United States could fall more than two percent within a year if Washington launched a trade war on a wide front, European Central Bank researchers suggested Wednesday.

The forecast comes as officials like ECB President Mario Draghi and World Trade Organization chief Roberto Azevedo warn of protectionism's rising threat to the world economy under Donald Trump's "America First" policies.

To test the US-against-all global trade war scenario, the Frankfurt-based experts fed a set of assumptions into economic models produced by the ECB and the International Monetary Fund (IMF).

They simulated Washington hitting all imports with 10-percent tariffs and America's trade partners responding in kind -- a far more drastic scenario than Trump has so far toyed with.

As well as the tariffs' direct effects on trade, the economists tried to capture the effect on public and financial market confidence by simulating a jump in government borrowing costs and a slump in global stock markets -- as large as 16 percent for the US.

Under that combined scenario, "real economic activity in the United States could be more than two percent lower than the baseline in the first year alone," they said.

They further predict that after three years, GDP would still be one percent below its starting level.

- 'Clearly worse off' -

"An economy imposing a tariff which prompts retaliation by other countries is clearly worse off," the economists concluded.

"Its living standards fall and jobs are lost."

In trade, while US consumers and firms might gradually switch to buying American in response to more expensive imports, the effect is at first outweighed by the drop in exports as the country's trade partners buy less.

Companies are also expected to invest less and hire fewer workers, amplifying the braking effect on the economy.

Meanwhile, China is expected to win out in the early stages of the simulated trade war.

With tariffs only affecting trade with the US, other countries could switch to buying Chinese rather than American exports, more than making up for reduced sales to the US.

More broadly, the blow to confidence from a general trade war would produce "a significant and more wide-ranging impact on output across countries," the economists found, shrinking the global economy 0.75 percent in the first year.

A near-3.0-percent contraction in overall trade would also weigh on world output.

"The scenario of a global trade war will have a dramatic effect," WTO boss Azevedo told German business leaders in Berlin Tuesday, warning that Washington was offering a "challenge to basic principles" of international exchange.

THE NEWS: Erdogan, Merkel to meet amid tensions, protests

Erdogan, Merkel to meet amid tensions, protests
source: AFP

AFP/File / John MACDOUGALL German Chancellor Angela Merkel will meet Turkish President Recep Tayyip Erdogan after a series of sharp exchanges between the two countries

Turkish President Recep Tayyip Erdogan will pay a state visit to Germany this week as the two countries seek to rebuild ties after a series of sharp spats but the controversial trip is likely to be overshadowed by protests.

It will be Erdogan's first official visit to Germany since becoming president in 2014, and follows a prolonged bout of tensions sparked by Berlin's criticism of his crackdown on opponents in the wake of a failed 2016 coup.

"The main goal of this visit is to completely leave behind this period (of tensions)," Erdogan told Turkish media.

The Turkish leader, seen as an increasingly authoritarian ruler by detractors, will land in Berlin Thursday and hold talks with Chancellor Angela Merkel over the following two days.

German President Frank-Walter Steinmeier will welcome him with military honours and a state dinner at Bellevue Palace on Friday -- which several opposition politicians have vowed to boycott. Merkel too will be notably absent.

On Saturday, Erdogan will travel to Cologne to open one of Europe's largest mosques, commissioned by the Turkish-controlled Ditib organisation.

Commentators have been quick to point out that Erdogan's push for a fresh start comes as the Turkish economy is struggling and relations with the United States have worsened.

- Euro 2024 rivals -

Thousands of Erdogan critics have vowed to take to the streets across Germany to protest everything from Turkey's record on human rights and press freedom to its offensive against Kurdish militia in Syria.

Some 10,000 people are expected to rally under the motto "Erdogan Not Welcome" in Berlin on Friday alone.

With no shortage of political and economic issues hanging over the visit, the shadow of football also looms large.

Turkey and Germany are locked in a bitter race to host the Euro 2024 tournament, with the winner to be announced the day Erdogan arrives.

Germany's bid has been clouded by Turkish-origin player Mesut Ozil's resignation from the national team over perceived racism -- a move praised by Erdogan.

"Ozil's comment that he is 'German when I win, an immigrant when I lose' perfectly captures the discrimination in Germany," Erdogan told the Funke Mediengruppe newspaper group.

- 'Too soon' -

Relations between the two NATO countries plummeted after Turkish authorities arrested tens of thousands of people in a mass purge over the attempted putsch against Erdogan, including some who were also German nationals.

But a gradual rapprochement began after German-Turkish journalist Deniz Yucel was freed earlier this year, while journalist Mesale Tolu was allowed to return to Germany last month. Both still face terror-related charges in Turkey.

Merkel, whose country is home to a three-million-strong Turkish community, has repeatedly stressed the importance of good relations with Ankara, a partner she relies on to help stem the flow of migrants arriving on European shores.

But Germany's best-selling Bild daily said it was too soon to roll out the red carpet for Erdogan, who just 18 months ago accused Berlin of "Nazi practices" for blocking rallies supporting him ahead of a referendum that gave him sweeping new powers.

"This is too much pomp and ceremony for Erdogan. We're not there yet," it said in an editorial.

- Big rail project? -

Erdogan said he would use the visit to press Germany for "more efficiency" in the fight against "terrorist groups" like the Kurdistan Workers' Party (PKK) and the movement of Muslim cleric Fethullah Gulen, whom Ankara blames for the coup.

Other topics on the agenda will likely be Turkey's stalled EU membership bid and its role in the conflict in Syria.

To help smooth over the diplomatic reset, Erdogan could dangle the promise of a major project to modernise Turkey's rail infrastructure.

Der Spiegel weekly reported that German giant Siemens was in talks to lead the potential 35-billion-euro deal ($40 billion), but it was unclear whether Berlin would help finance it.

In a sign of the contentious nature of his visit, Erdogan is not scheduled to make any big public speeches in Germany.

Die Welt reporter Yucel, who spent over a year behind Turkish bars, slammed Berlin for "inviting a criminal to a banquet".

"The German government is betraying all those in Turkey who long for a free, democratic and secular society."

THE NEWS Pope calls on Chinese Catholics to reconcile after bishop deal

Pope calls on Chinese Catholics to reconcile after bishop deal
source: AFP

AFP / Tiziana FABI Pope Francis has sought to improve relations with China since he took office in 2013, but previous attempts foundered over Beijing's insistence that the Vatican give up recognition of Taiwan

Pope Francis called Wednesday for all Chinese Catholics to reconcile, while admitting that a historic deal with Beijing on nominating bishops may have caused "confusion".

"I now invite all Chinese Catholics to work towards reconciliation," the pope wrote in a message to Roman Catholics in the world's most populous country.

Saturday's deal has paved the way for rapprochement between the Vatican and the Communist country, despite the fears of some in the persecuted underground Church.

"Some feel doubt and perplexity, while others sense themselves somehow abandoned by the Holy See," the pope wrote.

"I am aware that this flurry of thoughts and opinions may have caused a certain confusion and prompted different reactions in the hearts of many."

Shortly after the deal, Francis recognised seven clergy appointed by Beijing, which has not had ties with the Vatican since 1951.

On Wednesday he called on the bishops to publicly reunite with the Vatican.

"Regrettably, as we know, the recent history of the Catholic Church in China has been marked by deep and painful tensions, hurts and divisions, centred especially on the figure of the bishop," he wrote.

"I ask them to express with concrete and visible gestures their restored unity with the Apostolic See."

- 'Wounds of the past' -


 AFP/File / GREG BAKER A poster of the pope in a church in China, where some there has been a recent clampdown on Catholic material


There are an estimated 12 million Catholics in China, divided between a government-run association whose clergy are chosen by the Communist Party and the unofficial church which swears allegiance to the Vatican.

Pope Francis has sought to improve relations with China since he took office in 2013, but previous attempts foundered over Beijing's insistence that the Vatican give up recognition of Taiwan and promise not to interfere in domestic religious issues.

The Holy See is one of only 17 countries that recognise Taiwan, officially known as the Republic of China, instead of having diplomatic ties with Beijing.

"I hope that a new phase can be opened in China, which helps to heal the wounds of the past," the pope wrote.

The agreement's aim is "to reestablish and preserve the full and visible unity of the Catholic community in China."

The deal was signed as churches have been destroyed in some Chinese regions in recent months, and there has been a clampdown on Bible sales.

Crosses have been removed from church tops, printed religious materials and holy items confiscated, and church-run kindergartens closed.

The Vatican cut ties with Beijing two years after the founding of the communist People's Republic.

- 'Vatican ready to abandon Taiwan' -


 AFP / Anthony WALLACE Cardinal Joseph Zen, former Bishop of Hong Kong, has consistently spoken out against any agreement between the Catholic Church and China

Some have warned that China could use the accord to further crack down on Catholic faithful, and Hong Kong's firebrand Cardinal Joseph Zen warned on Wednesday that the Vatican would abandon official ties with Taiwan.

Zen, the former Bishop of Hong Kong, is well-known for his vocal opposition to political suppression and his support for democratic reform.

"The Holy See, the Vatican, is ready to abandon Taiwan," he told reporters in Hong Kong.

Taiwan officials say the Vatican has assured them the agreement will not affect diplomatic ties as Beijing makes a concerted effort to poach their dwindling allies.

Zen added the deal had also caused "spiritual suffering" in China's underground church.

"They fear that the Holy See is betraying the faith and that they want them to join this betrayal," he said.

The Chinese Communist Party is officially atheist and religious groups are tightly controlled by the state.

Asked for more information about the agreement on Wednesday, the Chinese foreign ministry said it had "no future details" beyond what was set out in a statement on Saturday.

"China is sincere about wanting to improve our relations with the Vatican and we have taken steps to achieve this," the ministry's spokesman Geng Shuang said at a regular press briefing.

"We will continue to maintain friendly dialogue with the Vatican to boost mutual understanding, lower mistrust and continue to move forward the improvement of our relations."

THE NEWS: Trump takes anti-Iran campaign to UN Security Council

Trump takes anti-Iran campaign to UN Security Council
source: AFP

AFP / Don EMMERT US President Donald Trump, seen here conferring with US ambassador Nikki Haley, chaired a UN Security Council meeting on counter-proliferation, using it to attack Iran

US President Donald Trump took his campaign to isolate Iran to the UN Security Council Wednesday, accusing Tehran of spreading chaos at a meeting that laid bare divisions between Washington and key allies.

As chairman of a session of the top UN body, Trump denounced the "horrible, one-sided" nuclear deal with Iran that he ditched in May, to the dismay of European allies.

A gavel-wielding Trump vowed that re-imposed sanctions will be "in full force" and urged world powers to work with the United States to "ensure the Iranian regime changes its behavior and never acquires a nuclear bomb."

Addressing the council afer Trump, French President Emmanuel Macron hit back, declaring that concerns about Iran cannot be reduced to "a policy of sanctions and containment" that was in place for years before the landmark deal.

"We need to build together a long-term strategy to manage the crisis that cannot be reduced to a policy of sanctions and containment of Iran," said Macron.

The United States has moved to reimpose sanctions that had been lifted under the 2015 deal to curb Iran's nuclear program and has vowed to punish foreign firms that do business with Iran.

On North Korea, Trump called for sanctions to be strictly enforced against Pyongyang -- a message directed at Russia and China which are pushing for an easing of punitive measures to reward North Korean leader Kim Jong Un.

Without naming countries, the US president noted that "some nations are already violating UN sanctions" including illegal ship-to-ship transfers of oil and said compliance was "very, very important."

Trump also accused China of working against his Republican Party in upcoming elections, saying Beijing did "not want me or us to win" because of his hard line on trade.

His toughest words were directed at Iran, however.

"In the years since the deal was signed, Iran's aggression only increased," Trump said.

"The regime used new funds from the deal to support terrorism, build nuclear capable missiles and foment chaos."

Trump assailed Russia and Iran for backing President Bashar al-Assad in his brutal war in Syria, saying: "The Syrian regime's butchery is enabled by Russia and Iran."

- US at odds with Europeans over Iran -

Wednesday's meeting highlighted a rift between the United States and its European allies over the Iran nuclear deal.


 AFP / Don EMMERT Iranian President Hassan Rouhani, in an address to the UN General Assembly, denounced a Security Council meeting called over US proliferation concerns "preposterous and abnormal"


On Monday, the five remaining parties to the agreement -- Britain, China, France, Germany and Russia -- defiantly announced that they would set up a special payment system to continue trade and business ties with Iran.

Heading into the council meeting, Sweden's Foreign Minister Margot Wallstrom said European Union governments will "stand up" for the nuclear deal and suggested the US approach would fail.

"We have tried sanctions over the years, decades. We tried isolation and it only gave the most conservative forces in Iran more power," she told reporters.

During his address to the General Assembly on Tuesday, Trump assailed Iran's leaders, accusing them of sowing "chaos, death and destruction" and calling on world governments to isolate Tehran.

Iranian President Hassan Rouhani shot back in his speech, denouncing leaders who have "xenophobic tendencies resembling a Nazi disposition" and slamming the planned council meeting as a "preposterous and abnormal act."

Trump's national security advisor John Bolton warned Tehran of "hell to pay" if it threatens the US or its allies.

"Let my message today be clear: we are watching, and we will come after you."

It was only the third time in UN history that a US president chaired a Security Council meeting. Barack Obama presided over two meetings in 2009 and 2014.

The United States had initially said the meeting chaired by Trump would focus on Iran, but later broadened the agenda under the theme of nuclear non-proliferation and weapons of mass destruction.

Iran has not requested to speak at the council meeting, diplomats confirmed Tuesday although Rouhani will hold a press conference soon after it is due to end.


AFP / Angela Weiss French President Emmanuel Macron, reflecting divisions with Washington, warns at a UN Security Council meeting that Iran policy cannot be reduced to sanctions and containment

THE NEWS: Trump says 'all options' on the table with Venezuela

Trump says 'all options' on the table with Venezuela
source: AFP

 AFP / Angela Weiss President Donald Trump arrives at the UN Security Council for a counterproliferation briefing on the second day of the 2018 United Nations General Assembly meeting

US President Donald Trump on Wednesday hinted at a military response to Venezuela, vowing to take action against the leftist-ruled country whose economy has gone into a tailspin.

Trump's threat -- immediately denounced by Venezuela as an incitement to a "military uprising" -- comes as the United States already piles economic pressure on President Nicolas Maduro's inner circle amid an economic crisis that has led two million Venezuelans to emigrate.

"What's happening in Venezuela is a disgrace," Trump told reporters in New York where he is attending the annual United Nations General Assembly.

"I just want to see Venezuela straightened out. I want the people to be safe. We're going to take care of Venezuela.

"All options are on the table, every one, -- strong ones and the less than strong ones -- and you know what I mean by strong," he added.

His comments follow a report earlier this month in The New York Times that officials from Trump's administration met three times with Venezuelan military officers to discuss plans to oust Maduro.

A military option mulled by Trump could entail supporting a coup to oust Maduro rather than a full-fledged invasion by US forces.

Earlier in the week, Trump spoke disparagingly about the security situation in Venezuela, saying that he believed Maduro could be toppled "very quickly" by the military.

Maduro was apparently targeted by exploding drones during a military parade in Caracas on August 4.

- Swift response -

Trump's remarks drew a swift reaction from Venezuela, which since the time of Maduro's firebrand predecessor Hugo Chavez has lashed out at the United States over its history of interference in Latin America and has frequently justified policies by alleging that Washington was plotting to oust the leftist government.

"Venezuela expresses its strongest rejection of the warmongering and interventionist statements issued by the president of the United States ... aimed at promoting a military uprising in the country," the foreign ministry in Caracas said in a statement.

After the US Treasury Department on Tuesday slapped sanctions on his wife, Cilia Adela Flores de Maduro, the Venezuelan leader praised her as a "fierce woman."

"Don't mess with Cilia. Don't mess with family. Don't be cowards!" Maduro fumed during a televised event.

Attending the UN General Assembly session, Venezuelan Foreign Minister Jorge Arreaza charged that Trump was targeting his country to drum up support among exiles ahead of tough congressional elections on November 6 and distract from domestic scandals.

"To attack Venezuela or Cuba is to get votes to win Florida and win Congress in the November elections and then to work on re-election," Arreaza told reporters.

"How sad it is to attack countries for electoral reasons!" he said.

- Economic crisis -

Venezuela's economy has gone into free-fall over the past several years as the price of oil, the country's critical export, tumbled and the government printed money to try to maintain spending.

Venezuela's inflation rate is expected to reach one million percent by the end of the year, pushing food, medicine and other necessities out of reach for many Venezuelans.

The country's crude oil production has also slipped markedly. Venezuela has tried to make up for the crisis in part by borrowing some $50 billion the past decade from China, repaying debt through oil shipments.

Colombia's new right-leaning president, Ivan Duque, used the UN General Assembly to call for a tougher approach to change the "dictatorship" of Venezuela as he sought international assistance for neighboring countries to accommodate the migrants.

THE NEWS: Antibody therapy suppresses HIV for weeks at a time: study

Antibody therapy suppresses HIV for weeks at a time: study
source: AFP

AFP / Sajjad HUSSAIN The UN says nearly 37 million people worldwide are infected with HIV which, if left untreated, can lead to AIDS

Scientists in the US said Wednesday they have discovered a way to suppress HIV in patients for months at a time using a twin dose of antibodies that could revolutionise how the disease is treated.

Globally, a record number of people receive antiretroviral drugs to manage HIV, but they must follow strict medical regimes to stay healthy, typically taking pills every day for the rest of their lives.

Now researchers say a combination of two proteins known to counteract the effects of HIV were able to suppress the virus in patients for up to 30 weeks at a time, providing hope that an alternative treatment to daily drug dosing may be on the horizon.

"A safe, reliable, antibody-based treatment regimen would open new possibilities for people living with HIV," said Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases in the US state of Maryland.

"This represents an important, early step towards that goal."

In twin studies published Wednesday in the journals Nature and Nature Medicine, researchers recruited 15 volunteers who had been treating their HIV with antiretroviral drugs.

After stopping their medication, they received infusions of two antibodies found naturally in people whose bodies can control HIV without medication.

The antibodies target proteins on the outside of the virus and use the patient's own immune system to combat infection.

The proteins were administered in tandem to prevent the HIV developing immunity -- something that had hampered previous antibody-based studies.

The trial patients received further infusions after three weeks, and again after six.

Scientists found that the volunteers maintained "safe" suppressed levels of HIV for an average of 15 weeks -- and two patients managed as many as 30 weeks.

"This has been tried in the past with antibodies that were far less potent and it did not work," Michel Nussenzweig, professor of molecular immunology at Rochester University, told AFP.

"Our idea is to modify them to make them even longer lasting so that people can receive therapy a couple of times a year instead of pills every day."

- 'Drugs holiday' -

The UN says nearly 37 million people worldwide are infected with HIV which, if left untreated, can lead to AIDS.

Advances in antiretroviral therapy (ART), which limits the virus but does not kill it, mean that more people than ever are able to live full lives despite being HIV-positive.

But while ART works almost perfectly in the lab, in real life patients sometimes neglect to take their meds, or lose access to health coverage.

When they don't keep up with their medication, the virus is uncontrolled, and the risk of passing it on to other people increases.

Many ARTs also come with unpleasant side effects.

Nancy Haigwood, from the Oregon Health and Science University which did not take part in the study, told AFP that the biggest potential benefit of the new treatment would be to provide HIV-positive patients a "drugs holiday" from ART.

"Antibodies can be used as a safe, new treatment to allow people to go 'off' of drugs for several months," she said.

Researchers say while the results of Wednesday's study are encouraging, more trials are needed to lengthen the amount of time the antibodies remain effective.

Although AIDS-related deaths have fallen by roughly half in the last decade, UN data shows that 1.8 million people contracted HIV in 2017.

The year saw 940,000 deaths from the virus.