German Merkel: We won’t let ourselves be ripped off again and again

    German Chancellor Angela Merkel said in a TV interview that “the withdrawal, so to speak, via tweet is of course … sobering and a bit depressing.” But she maintained that EU is preparing counter-measures against US steel and aluminum tariffs and added “So we won’t let ourselves be ripped off again and again. Instead, we act then too.” Regarding the upcoming automobile tariffs, Merkel said “we’ll try and see if we can prevent this… and then hope that the EU will respond again in the same unity.”

    German Foreign Minister Heiko Maas said “in a matter of seconds, you can destroy trust with 280 Twitter characters.” Mass added that “we have to keep a cool head now and draw the right conclusions” and “Europe united is the answer to America First.”

    Trump also singled out Germany in his twitter attacks.

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    Trump continued his ad hominem attacks on Canada Trudeau

      Trump continued his spat with Canada after his abrupt after-the-fact withdrawal from G7 statement. He called Canadian Prime Minister Justin Trudeau “very dishonest and weak” earlier. And he went further twitting today:

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      Canadian Foreign Minister Chrystia Freeland said yesterday that “Canada does not conduct its diplomacy through ad hominem attacks … and we refrain particularly from ad hominem attacks when it comes to a close ally.” And she reiterated that the retaliation to US steel tariffs is on the way in measured and reciprocal way.

      She added that “the position of our European allies, including Japan, is the same as ours. We coordinated very closely with the European Union, with Mexico, on our list of retaliatory measures and actions.”

      Euro higher as Italy Tria rules out Euro exit

        Euro open the week higher as lifted by comments from Italian Economy Minister Giovanni Tria as he ruled out Euro exit.

        Tria said in interview by Corriere della Sera newspaper that “the position of the government is clear and unanimous” and “there is no question of leaving the euro.” And, “the government is determined to prevent in any way the market conditions that would lead to an exit materializing”.

        He added that “it’s not just that we do not want to leave, we will act in such a way that the conditions do not get anywhere near to a position where they might challenge our presence in the euro.”

        Regarding economic fiscal policies, Tria said “our goal is growth and employment. But we do not plan on reviving growth through deficit spending.” And he emphasized that “these will be fully coherent with the objective of continuing on the path of lowering the debt/GDP ratio.”

        Trump’s after the fact withdrawal from G7 communique endorsement

          On his way to Singapore, after leaving the G7 summit early, Trump ordered his rep NOT to endorse the G7 communique because Canadian Prime Minister Justin Trudeau said something in the press conference. Reuters quoted an unnamed European official saying that “we stick to the communique as agreed by all participants.”

          Trudeau talked about the retaliation measures on US steel and aluminum tariffs and emphasized that “Canadians, we’re polite, we’re reasonable but we also will not be pushed around.”

          So, was the communique “agreed by all participants” before it’s released? So Trump made and about turn and deny what he and others agreed to, just because one member said something he doesn’t like? Why didn’t he bring that out face-to-face to others during the meetings?

          Reacting to Trump’s tweets, Trudeau’s office said: “We are focused on everything we accomplished here at the summit. The Prime Minister said nothing he hasn’t said before – both in public, and in private conversations with the President.”

          This is Trump’s tweet.

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          And one more question. Are the steel and aluminum tariffs, and the possible automobile tariffs, based on “national security”? Or are the “in response” to Canada’s tariffs on dairy?

          Confusions usually mean there is dishonesty!

           

          The Charlevoix G7 Summit Communique

            Finally, there is still an official G7 communique released. Here are the paragraphs on trade.

            We acknowledge that free, fair and mutually beneficial trade and investment, while creating reciprocal benefits, are key engines for growth and job creation. We recommit to the conclusions on trade of the Hamburg G20 Summit, in particular, we underline the crucial role of a rules-based international trading system and continue to fight protectionism. We note the importance of bilateral, regional and plurilateral agreements being open, transparent, inclusive and WTO-consistent, and commit to working to ensure they complement the multilateral trade agreements. We commit to modernize the WTO to make it more fair as soon as possible. We strive to reduce tariff barriers, non-tariff barriers and subsidies.

            We will work together to enforce existing international rules and develop new rules where needed to foster a truly level playing field, addressing in particular non-market oriented policies and practices, and inadequate protection of intellectual property rights, such as forced technology transfer or cyber-enabled theft. We call for the start of negotiations – this year – to develop stronger international rules on market-distorting industrial subsidies and trade-distorting actions by state-owned enterprises. We also call on all members of the Global Forum on Steel Excess Capacity to fully and promptly implement its recommendations. We stress the urgent need to avoid excess capacity in other sectors such as aluminum and high technology. We call on the International Working Group on Export Credits to develop a new set of guidelines for government-supported export credits, as soon as possible in 2019.

            Full communique below, or at their website.

            The Charlevoix G7 Summit Communique

            1. We, the Leaders of the G7, have come together in Charlevoix, Quebec, Canada on June 8–9, 2018, guided by our shared values of freedom, democracy, the rule of law and respect for human rights and our commitment to promote a rules-based international order. As advanced economies and leading democracies, we share a fundamental commitment to investing in our citizens and meeting their needs and to responding to global challenges. We collectively affirm our strong determination to achieve a clean environment, clean air and clean water. We are resolved to work together in creating a healthy, prosperous, sustainable and fair future for all.

            Investing in Growth that Works for Everyone

            1. We share the responsibility of working together to stimulate sustainable economic growth that benefits everyone and, in particular, those most at risk of being left behind. We welcome the contribution of technological change and global integration to global economic recovery and increased job creation. The global economic outlook continues to improve, but too few citizens have benefited from that economic growth. While resilience against risk has improved among emerging market economies, recent market movements remind us of potential vulnerabilities. We will continue monitoring market developments and using all policy tools to support strong, sustainable, balanced and inclusive growth that generates widespread prosperity. We reaffirm our existing exchange rate commitments. We commit to promoting smart, sustainable and high-quality investments, such as in infrastructure, to boost growth and productivity and create quality jobs. Economic growth is fundamental to raising living standards. We also recognize that economic output alone is insufficient for measuring success and acknowledge the importance of monitoring other societal and economic indicators that measure prosperity and well-being. We are committed to removing the barriers that keep our citizens, including women and marginalized individuals, from participating fully in the global economy. We endorse the Charlevoix Commitment on Equality and Economic Growth, which reinforces our commitment to eradicate poverty, advance gender equality, foster income equality, ensure better access to financial resources and create decent work and quality of life for all.
            2. In order to ensure that everyone pays their fair share, we will exchange approaches and support international efforts to deliver fair, progressive, effective and efficient tax systems. We will continue to fight tax evasion and avoidance by promoting the global implementation of international standards and addressing base erosion and profit shifting. The impacts of the digitalization of the economy on the international tax system remain key outstanding issues. We welcome the OECD interim report analyzing the impact of digitalization of the economy on the international tax system. We are committed to work together to seek a consensus-based solution by 2020.
            3. We acknowledge that free, fair and mutually beneficial trade and investment, while creating reciprocal benefits, are key engines for growth and job creation. We recommit to the conclusions on trade of the Hamburg G20 Summit, in particular, we underline the crucial role of a rules-based international trading system and continue to fight protectionism. We note the importance of bilateral, regional and plurilateral agreements being open, transparent, inclusive and WTO-consistent, and commit to working to ensure they complement the multilateral trade agreements. We commit to modernize the WTO to make it more fair as soon as possible. We strive to reduce tariff barriers, non-tariff barriers and subsidies.
            4. We will work together to enforce existing international rules and develop new rules where needed to foster a truly level playing field, addressing in particular non-market oriented policies and practices, and inadequate protection of intellectual property rights, such as forced technology transfer or cyber-enabled theft. We call for the start of negotiations – this year – to develop stronger international rules on market-distorting industrial subsidies and trade-distorting actions by state-owned enterprises. We also call on all members of the Global Forum on Steel Excess Capacity to fully and promptly implement its recommendations. We stress the urgent need to avoid excess capacity in other sectors such as aluminum and high technology. We call on the International Working Group on Export Credits to develop a new set of guidelines for government-supported export credits, as soon as possible in 2019.
            5. To support growth and equal participation that benefits everyone, and ensure our citizens lead healthy and productive lives, we commit to supporting strong, sustainable health systems that promote access to quality and affordable healthcare and to bringing greater attention to mental health. We support efforts to promote and protect women’s and adolescents’ health and well-being through evidence-based healthcare and health information. We recognize the World Health Organization’s vital role in health emergencies, including through the Contingency Fund for Emergencies and the World Bank’s Pandemic Emergency Financing Facility, and emphasize their need for further development and continued and sustainable financing. We recommit to support our 76 partners to strengthen their implementation of the International Health Regulations, including through their development of costed national action plans and the use of diverse sources of financing and multi-stakeholder resources. We will prioritize and coordinate our global efforts to fight against antimicrobial resistance, in a “one health” approach. We will accelerate our efforts to end tuberculosis, and its resistant forms. We reconfirm our resolve to work with partners to eradicate polio and effectively manage the post-polio transition. We affirm our support for a successful replenishment of the Global Fund in 2019.
            6. Public finance, including official development assistance and domestic resource mobilization, is necessary to work towards the achievement of the Sustainable Development Goals of the 2030 Agenda, but alone is insufficient to support the economic growth and sustainable development necessary to lift all populations from poverty. As a result, we have committed to the Charlevoix Commitment on Innovative Financing for Development to promote economic growth in developing economies and foster greater equality of opportunity within and between countries. We will continue to invest in quality infrastructure with open access. Given rising debt levels in low income countries and the importance of debt sustainability, we call for greater debt transparency not only from low income debtor countries, but also emerging sovereign lenders and private creditors. We support the ongoing work of the Paris Club, as the principal international forum for restructuring official bilateral debt, towards the broader inclusion of emerging creditors. We recognize the value in development and humanitarian assistance that promotes greater equality of opportunity, and gender equality, and prioritizes the most vulnerable, and will continue to work to develop innovative financing models to ensure that no one is left behind.

            Preparing for Jobs of the Future

            1. We are resolved to ensure that all workers have access to the skills and education necessary to adapt and prosper in the new world of work brought by innovation through emerging technologies. We will promote innovation through a culture of lifelong learning among current and future generations of workers. We will expand market-driven training and education, particularly for girls and women in the science, technology, engineering and mathematics (STEM) fields. We recognize the need to remove barriers to women’s leadership and equal opportunity to participate in all aspects of the labour market, including by eliminating violence, discrimination and harassment within and beyond the workplace. We will explore innovative new approaches to apprenticeship and vocational learning, as well as opportunities to engage employers and improve access to workplace training.
            2. We highlight the importance of working towards making social protection more effective and efficient and creating quality work environments for workers, including those in non-standard forms of work. Expanding communication and collaboration between governments and businesses, social partners, educational institutions and other relevant stakeholders will be essential for preparing workers to adapt and thrive in the new world of work. To realize the benefits of artificial intelligence (AI), we endorse the Charlevoix Common Vision for the Future of Artificial Intelligence. We recognize that a human-centric approach to AI has the potential to introduce new sources of economic growth, bring significant benefits to our societies and help address some of our most pressing challenges.

            Advancing Gender Equality and Women’s Empowerment

            1. We recognize that gender equality is fundamental for the fulfillment of human rights and is a social and economic imperative. However, gender inequality persists despite decades of international commitments to eliminate these differences. We will continue to work to remove barriers to women’s participation and decision-making in social, economic and political spheres as well as increase the opportunities for all to participate equally in all aspects of the labour market. Our path forward will promote women’s full economic participation through working to reduce the gender wage gap, supporting women business leaders and entrepreneurs and recognizing the value of unpaid care work.
            2. Equal access to quality education is vital to achieve the empowerment and equal opportunity of girls and women, especially in developing contexts and countries struggling with conflict. Through the Charlevoix Declaration on Quality Education for Girls, Adolescent Girls and Women in Developing Countries, we demonstrate our commitment to increase opportunities for at least 12 years of safe and quality education for all and to dismantle the barriers to girls’ and women’s quality education, particularly in emergencies and in conflict-affected and fragile states. We recognize that marginalized girls, such as those with a disability, face additional barriers in attaining access to education.
            3. Advancing gender equality and ending violence against girls and women benefits all and is a shared responsibility in which everyone, including men and boys, has a critical role to play. We endorse the Charlevoix Commitment to End Sexual and Gender-Based Violence, Abuse and Harassment in Digital Contexts, and are resolved to end all forms of sexual and gender-based violence. We strive for a future where individuals’ human rights are equally protected both offline and online; and where everyone has equal opportunity to participate in political, social, economic and cultural endeavors.

            Building a More Peaceful and Secure World

            1. We share a responsibility to build a more peaceful and secure world, recognizing that respect for human rights, the rule of law and equality of opportunity are necessary for lasting security and to enable economic growth that works for everyone. The global security threats we face are complex and evolving and we commit to working together to counter terrorism. We welcome the outcome of the international conference on the fight against terrorist financing, held in Paris April 25-26, 2018. Foreign terrorist fighters must be held accountable for their actions. We are committed to addressing the use of the internet for terrorist purposes, including as a tool for recruitment, training, propaganda and financing, and by working with partners such as the Global Internet Forum to Counter Terrorism. We underscore the importance of taking concrete measures to eradicate trafficking in persons, forced labour, child labour and all forms of slavery, including modern slavery.
            2. Recognizing that countries that are more equal are also more stable, more peaceful and more democratic, we are resolved to strengthen the implementation of the Women, Peace and Security (WPS) agenda. Gender-sensitive measures that include women’s participation and perspectives to prevent and eradicate terrorism are vital to effective and sustainable results, protection from sexual and gender-based violence, and preventing other human rights abuses and violations.
            3. We commit to take concerted action in responding to foreign actors who seek to undermine our democratic societies and institutions, our electoral processes, our sovereignty and our security as outlined in the Charlevoix Commitment on Defending Democracy from Foreign Threats. We recognize that such threats, particularly those originating from state actors, are not just threats to G7 nations, but to international peace and security and the rules-based international order. We call on others to join us in addressing these growing threats by increasing the resilience and security of our institutions, economies and societies, and by taking concerted action to identify and hold to account those who would do us harm.
            4. We continue to call on North Korea to completely, verifiably and irreversibly dismantle all of its weapons of mass destruction (WMD) and ballistic missiles as well as its related programs and facilities. We acknowledge recent developments, including North Korea’s announcement of a moratorium on nuclear testing and ballistic missile launches, a commitment to denuclearization made in the April 27 Panmunjom Declaration – assuming full implementation – and the apparent closure of the Punggye-ri nuclear test site on May 24; but we reiterate the importance of full denuclearization. The dismantlement of all of its WMD and ballistic missiles will lead to a more positive future for all people on the Korean Peninsula and a chance of prosperity for the people of North Korea, who have suffered for too long. However, more must be done and we call on all states to maintain strong pressure, including through the full implementation of relevant UNSCRs, to urge North Korea to change its course and take decisive and irreversible steps. In this context, we once again call upon North Korea to respect the human rights of its people and resolve the abductions issue immediately
            5. We urge Russia to cease its destabilizing behaviour to undermine democratic systems and its support of the Syrian regime. We condemn the attack using a military-grade nerve agent in Salisbury, United Kingdom. We share and agree with the United Kingdom’s assessment that it is highly likely that the Russian Federation was responsible for the attack, and that there is no plausible alternative explanation. We urge Russia to live up to its international obligations, as well as its responsibilities as a permanent member of the UN Security Council, to uphold international peace and security. Notwithstanding, we will continue to engage with Russia on addressing regional crises and global challenges, where it is in our interests. We reiterate our condemnation of the illegal annexation of Crimea and reaffirm our enduring support for Ukrainian sovereignty, independence and territorial integrity within its internationally-recognized borders. We maintain our commitment to assisting Ukraine in implementing its ambitious and necessary reform agenda. We recall that the continuation of sanctions is clearly linked to Russia’s failure to demonstrate complete implementation of its commitments in the Minsk Agreements and respect for Ukraine’s sovereignty and we fully support the efforts within the Normandy Format and of the Organization for Security and Cooperation in Europe for a solution to the conflict in Eastern Ukraine. Should its actions so require, we also stand ready to take further restrictive measures in order to increase costs on Russia. We remain committed to support Russian civil society and to engage and invest in people-to-people contact.
            6. We strongly condemn the murderous brutality of Daesh and its oppression of civilian populations under its control. As an international community, we remain committed to the eradication of Daesh and its hateful ideology. In Syria, we also condemn the repeated and morally reprehensible use of chemical weapons by the Syrian regime and by Daesh. We call on the supporters of the regime to ensure compliance with its obligation to declare and dismantle remaining chemical weapons. We deplore the fact that Syria assumed the presidency of the Conference on Disarmament in May, given its consistent and flagrant disregard of international non-proliferation norms and agreements. We reaffirm our collective commitment to the Chemical Weapons Convention and call on all states to support the upcoming Organisation for the Prohibition of Chemical Weapons (OPCW) Special Conference of States Parties and to work together to strengthen the ability of the OPCW to promote the implementation of the Convention. We call upon those who have yet to do so to join the International Partnership Against Impunity for the Use of Chemical Weapons. We call for credible, inclusive and non-sectarian governance in Syria, facilitated by free and fair elections held to the highest international standards of transparency and accountability, with all Syrians, including members of the diaspora, eligible to participate.
            7. We remain concerned about the situation in the East and South China Seas and reiterate our strong opposition to any unilateral actions that could escalate tensions and undermine regional stability and the international rules-based order. We urge all parties to pursue demilitarization of disputed features. We are committed to taking a strong stance against human rights abuse, human trafficking and corruption across the globe, especially as it impacts vulnerable populations, and we call upon the international community to take strong action against these abuses all over the world. We welcome the recent commitments made by Myanmar and we pledge to coordinate efforts to build lasting peace and support democratic transition in Myanmar, particularly in the context of the ongoing Rohingya crisis, to allow safe and unhindered humanitarian access and the safe, voluntary and dignified return of refugees and displaced people. We are deeply concerned about the lack of respect for human rights and basic democratic principles in Venezuela, as well as the spiraling economic crisis and its humanitarian repercussions. We express our concern at the continuous deterioration of the situation in Yemen and renew our call for all parties to fully comply with international humanitarian law and human rights law.
            8. Recognizing the threat Iran’s ballistic missile program poses to international peace and security, we call upon Iran to refrain from launches of ballistic missiles and all other activities which are inconsistent with UNSCR 2231 – including all annexes – and destabilizing for the region, and cease proliferation of missile technology. We are committed to permanently ensuring that Iran’s nuclear program remains peaceful, in line with its international obligations and commitments to never seek, develop or acquire a nuclear weapon. We condemn all financial support of terrorism including terrorist groups sponsored by Iran. We also call upon Iran to play a constructive role by contributing to efforts to counter terrorism and achieve political solutions, reconciliation and peace in the region.
            9. We remain concerned about the Israeli-Palestinian conflict, especially in the light of recent events. We support the resumption without delay of substantive peace talks between Israelis and Palestinians aimed at achieving a negotiated solution that ensures the peace and security for both parties. We stress the importance of addressing as soon as possible the dire and deteriorating humanitarian and security situation in the Gaza strip.
            10. Africa’s security, stability, and sustainable development are high priorities for us, and we reiterate our support for African-led initiatives, including at a regional level. We reiterate our commitment to work in partnership with the African continent, supporting the African Union Agenda 2063 in order to realize Africa’s potential. We will promote African capabilities to better prevent, respond to, and manage crisis and conflicts; and to strengthen democratic institutions. We reiterate our commitment to the stabilization, unity and democracy of Libya, which is key for the stability of the Mediterranean region and of Europe. We support the efforts of the Special Representative of the Secretary-General Salamé in pursuing an inclusive political process founded on his Action Plan and we encourage all Libyan and regional actors to uphold their constructive engagement as outlined in the June 6, 2018 statement of the President of the Security Council on Libya. We support the efforts of the Presidency Council for Libya and the Libyan Government of National Accord to consolidate State institutions.

            Working Together on Climate Change, Oceans and Clean Energy

            1. A healthy planet and sustainable economic growth are mutually beneficial, and therefore, we are pursuing global efforts towards a sustainable and resilient future that creates jobs for our citizens. We firmly support the broad participation and leadership of young people, girls and women in promoting sustainable development. We collectively affirm our strong determination to achieve a clean environment, clean air, clean water and healthy soil. We commit to ongoing action to strengthen our collective energy security and demonstrate leadership in ensuring that our energy systems continue to drive sustainable economic growth. We recognise that each country may chart its own path to achieving a low-emission future. We look forward to adopting a common set of guidelines at UNFCCC COP 24.
            2. Canada, France, Germany, Italy, Japan, the United Kingdom and the European Union reaffirm their strong commitment to implement the Paris Agreement, through ambitious climate action; in particular through reducing emissions while stimulating innovation, enhancing adaptive capacity, strengthening and financing resilience and reducing vulnerability; as well as ensuring a just transition, including increasing efforts to mobilize climate finance from a wide variety of sources. We discussed the key role of energy transitions through the development of market based clean energy technologies and the importance of carbon pricing, technology collaboration and innovation to continue advancing economic growth and protect the environment as part of sustainable, resilient and low-carbon energy systems; as well as financing adaptive capacity. We reaffirm the commitment that we have made to our citizens to reduce air and water pollution and our greenhouse gas emissions to reach a global carbon-neutral economy over the course of the second half of the century. We welcome the adoption by the UN General Assembly of a resolution titled Towards a Global Pact for the Environment and look forward to the presentation of a report by the Secretary General in the next General Assembly.
            3. Canada, France, Germany, Italy, Japan, the United Kingdom and the European Union will promote the fight against climate change through collaborative partnerships and work with all relevant partners, in particular all levels of government; local, Indigenous, remote coastal and small island communities; as well as with the private sector, international organizations and civil society to identify and assess policy gaps, needs and best practices. We recognize the contribution of the One Planet conferences to this collective effort.
            4. The United States believes sustainable economic growth and development depends on universal access to affordable and reliable energy resources. It commits to ongoing action to strengthen the world’s collective energy security, including through policies that facilitates open, diverse, transparent, liquid and secure global markets for all energy sources. The United States will continue to promote energy security and economic growth in a manner that improves the health of the world’s oceans and environment, while increasing public-private investments in energy infrastructure and technology that advances the ability of countries to produce, transport, and use all available energy sources based on each country’s national circumstances. The United States will endeavour to work closely with other countries to help them access and use fossil fuels more cleanly and efficiently and help deploy renewable and other clean energy sources, given the importance of energy access and security in their Nationally Determined Contributions. The United States believes in the key role of energy transitions through the development of market-based clean energy technologies and the importance of technology collaboration and innovation to continue advancing economic growth and protect the environment as part of sustainable, resilient, and clean energy systems. The United States reiterates its commitment to advancing sustainable economic growth, and underscores the importance of continued action to reduce air and water pollution.
            5. Recognizing that healthy oceans and seas directly support the livelihoods, food security and economic prosperity of billions of people, we met with the heads of state or government of the Argentina, Bangladesh, Haiti, Jamaica, Kenya, Marshall Islands, Norway, Rwanda (Chair of the African Union), Senegal, Seychelles, South Africa, Vietnam, and the heads of the United Nations, the IMF, the World Bank and the OECD, to discuss concrete actions to protect the health of marine environments and ensure a sustainable use of marine resources as part of a renewed agenda to increase global biodiversity protection. We endorse the Charlevoix Blueprint for Healthy Oceans, Seas and Resilient Coastal Communities, and will improve oceans knowledge, promote sustainable oceans and fisheries, support resilient coasts and coastal communities and address ocean plastic waste and marine litter. Recognizing that plastics play an important role in our economy and daily lives but that the current approach to producing, using, managing and disposing of plastics and poses a significant threat to the marine environment, to livelihoods and potentially to human health, we the Leaders of Canada, France, Germany, Italy, the United Kingdom and the European Union endorse the G7 Ocean Plastics Charter.

            Conclusion

            1. We share the responsibility of working together to stimulate sustainable economic growth that benefits everyone, in particular, those most at risk of being left behind. We would like to thank our citizens, civil society, the Gender Equality Advisory Council, the Formal G7 Engagement Groups and other partners for their meaningful input to Canada’s presidency. We welcome the offer of the President of France to host our next Summit in 2019 and his pledge to continue G7 leadership on our common agenda.

            G7 Canada wrap and press conference

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              Press conference starts at around 33:30.

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              Day 1 of G7 in Charlevoix in 60s

                 

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                EU Barnier: Backstop cannot be extended to whole UK

                  EU Brexit negotiator Michel Barnier criticized UK’s backstop proposal regarding Irish border. He said that “our backstop cannot be extended to the whole UK. Why? Because it has been designed for the specific situation of Northern Ireland.” And he emphasized that “what is feasible for a territory the size of Northern Ireland is not necessarily feasible for the whole UK.”

                  On the other hand, UK spokesman for PM May said that UK will never accept a customs border between Northern Ireland and the rest of the UK. And he countered-criticized that European Commission’s proposals do not achieve maintaining the integrity of UK. And that’s the reason why May put forward its own backstop solutions for customs in Brexit talks.

                  UK published document on temporary Brexit customs arrangements earlier this week.

                  UK Hammond: Collaborative approach is generally more productive than a confrontational approach

                    UK Chancellor of Exchequer Philip Hammond said today that a “collaborative approach… is generally more productive than a confrontational approach, in dealing with Germans French and Italians. And, for a better Brexit deal, Hammond said it’s important to engage the partners. He added that “finding a mutually beneficial outcome is the only way forward. That is the firm intention of my government. Theresa May, the prime minister, has said so very clearly.”

                    That was in response to a recording of Foreign Minister Boris Johnson on Brexit approach, published by Buzzfeed. Johnson said “imagine Trump doing Brexit,” “there’d be all sorts of breakdowns, all sorts of chaos. Everyone would think he’d gone mad. But actually you might get somewhere. It’s a very, very good thought.”

                    Prime Minister Theresa May’s spokesman said that May “of course” still have confidence in John. And, “the PM believes that her cabinet and her government are working hard to deliver on the will of the people and working hard to take back control of our money, laws and our borders.”

                    Trump said to straighten out unfair trade at G6+1

                      Trump continues to “sound” agressive ahead of the G6+1 meeting in Canada. But hold on for a minute, didn’t he plan to leave early? So did he expect to accomplish what he said so quickly? Or he expects to fail before doing it, and yells some empty protest slogan?

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                      Btw, he blasts Canada again with isolated information.

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                      Japan automakers slam Trump’s tariffs as Abe kept silence

                        Japan Prime Minister Shinzo Abe has been so far very quiet regarding trade tensions with the US. Abe and his cabinet members have repeatedly said that they do not want bilateral trade agreements. But Trump is insisting to force Japan into it. And that’s not to mention that Japan was the only close ally that was not even given a temporary exemption on the steel and aluminum tariffs. It’s even unsure what retaliation they’ll take. The meeting between Abe and Trump ahead of G6+1 submit also produced no progress on trade.

                        But back in his homeland, Abe is facing increasing pressure on him to take a stance. The Japan Automobile Manufacturers Association issued a statement today slamming the US probe of automobile imports using national security as excuse again. In the statement, JAMA expressed “gravely concerned” of the investigation. It emphasized that “automobiles are sold to consumers on the basis of their own choices, and it is consumers themselves who would be penalized, through increased vehicle prices and reduced model options”. Additionally, “business plans of automobile and auto parts manufacturers as well as imported vehicle dealers could be seriously disrupted, with potentially adverse impacts on the U.S. economy and jobs.”

                        JAMA also pointed to “facts” that their member companies operate “24 manufacturing plants and 44 R&D/design centers in 19 U.S. states and in 2017, nearly 3.8 million vehicles were produced by American workers at those facilities.” “Of that total, over 420,000 units were exported to countries around the world, further underscoring our contributions to employment and economic growth in the United States.”

                        JAMA concluded that “free and fair trade and a competitive climate in line with global rules benefit consumers in the United States and strengthen the sustainable growth of the U.S. auto industry and its economy. We will continue to monitor this situation closely and to uphold the vital importance of free trade worldwide.”

                        Full statement here.

                        China YTD trade surplus with EU narrowed to USD 45.2B, with US widened to USD 104.9B

                          China’s trade surplus narrowed to USD 24.9B in May, below expectation of USD 32.5B. Exports rose 12.6% yoy to USD 212.8B while imports rose 26.0% yoy to USD 187.9B. in CNY terms, Exports rose 3.2% to CNY 1341B while imports rose 15.6% to CNY 1185B. Trade surplus narrowed to CNY 157B, below expectation of CNY 192B.

                          From January to May, exports to US rose 13.6% yoy to USD 175.17B while imports from the US grew 11.9% yoy to USD 70.32B. Trade surplus to the US was at USD 104.85B, widened from 2017 same period of USD 92.9B. Total trade with the US grew 13.1% to USD 245.50B.

                          For the same period, exports to EU rose 12.0% yoy to USD 155.39B while imports from EU rose 19.9% yoy to USD 110.21B. Trade surplus to EU was at USD 45.18B, narrowed from 2017 same period of USD 47.9B. Total trade with EU rose 15.1% yoy to USD 265.60B.

                          2018 May trade data here

                          USDJPY rebound completed as US yield reverses

                            US treasury yields had a wild session overnight. 10 year yield hit as high as 2.992 but closed sharply lower at 2.933, down -0.042.

                            There was no apparent major reason for the ride. Reasons cited include slump in emerging market currencies, fat finger trade as well as technical resistance at 3% handle.

                            Net effect in the forex market is also no too clear, except that USD/JPY is dragged down. Judging from 6H action bias chart, the rebound from 108.10 is likely over.

                            CBI expects BoE hikes in Q3 2018, Q1 2019 and Q4 2019

                              The Confederation of British Industry projects UK growth to lag well behind peers in 2018 and 2019. UK real GDP growth is forecast to be at 1.4% in 2018 and 1.3% in 2019 only. Eurozone growth is forecast to be at 2.2% in 2019 and 1.7% in 2019. US growth is forecast to be at 2.% in 2018 and 2.3% in 2019.

                              Though, UK would still be better than Japan at 1.1% growth in both 2018 and 2019. India is projected to stay strong with 7.3% growth in 2018 and 7.1% in 2019. China’s growth is expected to slow notably to 6.3% in 2018 and 5.8% in 2019.

                              On monetary policy, CBI expects 25bps BoE hike in Q3 2018, Q1 2019 and Q4 2019. Inflation is projected to slow to 2.1% at the end of 2019.

                              CBI Chief Economist Rain Newton-Smith said that there is no disguising that UK is in “slow lane” for growth. And, “productivity weakness is a structural challenge for the UK economy and a drag on living standards.” She also urged firms to work with the Government to “nurture a pro-enterprise environment to drive growth and create wealth.” Also, “business and government must work together to drive competitiveness at home so firms can make the most of opportunities overseas” after Brexit.

                              Full release here.

                              French Macron: We don’t mind being six, if needs be

                                French President Emmanuel Macron urged to remain polite and productive in the G6+1 summit in Canada. But he also warned that “no leader is forever”.

                                Macron added that “maybe the American president doesn’t care about being isolated today, but we don’t mind being six, if needs be.”

                                And, “because these six represent values, represent an economic market, and more than anything, represent a real force at the international level today.”

                                Trump blasts allies again, to escape from G6+1 summit early

                                  The White House announced yesterday that Trump will leave the G6+1 summit in Canada earlier than anticipated, right after Saturday’s morning session, on June 9. Then he will fly straight to Singapore for the highly anticipated Kim-Trump summit on June 12. G7 Sherpa and Deputy Assistant to the President for International Economic Affairs Everett Eissenstat will stay for the remaining session.

                                  Ahead of the expected confrontation with other G7 members, Trump continued to blast Canada and EU with his tweets.

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                                  UK published document on temporary Brexit customs arrangements

                                    The UK government released a document titled Technical note: temporary customs arrangement on Brexit today. That’s is the so-called backstop plan to avoid a hard Irish border if the UK cannot come to an agreement with EU on the issue. Here is a summary for the key points.

                                    It’s in the document that “the UK expects the future arrangement to be in place by the end of December 2021 at the latest”. In other words, the transition arrangement could last a year longer than previously planned. The current agreed 21-month transition period will start from March 29, 2019 and end on December 31, 2020.

                                    During the period, UK will be outside the Common Commercial Policy. That is, “the UK able to negotiate, sign and ratify free trade agreements (FTAs) with rest of world partners and implement those elements that do not affect the functioning of the temporary customs arrangement.”

                                    The backstop solution will cover the whole of UK, not just North Ireland. And, there would be an ongoing role for European Court of Justice during the period. The document added that “if as part of the future partnership, parliament passes an identical law to an EU law, it may make sense for UK courts to look at the appropriate ECJ judgments.”

                                    Here is the full document.

                                    US initial jobless claims dropped -1k to 222k in the week ended June 2

                                      US initial jobless claims dropped -1k to 222k in the week ended June 2, below expectation of 225k. The four week moving average rose 2.75k to 225.5k.

                                      Continuing claims dropped -6k to 1.72m in the week ended May 26. Four week moving average of continuing claims dropped -13.25k to 1.72875m, lowest since December 8, 1973.

                                      Bristish Pound dives as Brexit comes back to spotlight, EURGBP upside breakout

                                        Entering into US session, Swiss Franc and Euro remain the strongest one for today. However, Sterling is starting to lag behind.

                                        Indeed, the Pound is suffering some heavy selling on Brexit under certainties. UK Prime Minster Theresa May is yet to unify his cabinet on the backstop plan over Irish border. Ahead of their meeting today, it’s widely reported that May is at odds with Brexit secretary David Davis, who threatened to quit.

                                        EUR/GBP is showing some strength by breaking 0.8808 resistance. H and 6H action bias have both turned upside blue. But they can be force signal in ranging consolidation markets.

                                        Hence, we’d wait for a firm break of 0.8844 resistance to confirm resumption of rise from 0.8620 to go long. Target is 0.8967 key resistance level.

                                        UK May had constructive talks with Davis over backstop plan

                                          UK Prime Minister Theresa May and her ministers will meet today to try to conclude on a “backstop” plan for Irish border after Brexit. The current proposal is believed to tie UK to EU customs union after a transition period.

                                          But it’s widely reported that Brexit minister David Davis is at odds with May over the the proposal because of the lack of end date. Davis also threatened to quit over the disagreement. May’s spokeswoman said today that May and Davis had “constructive talks”. And it’s rumored that nobody will resign from the UK government today over Brexit.

                                          Looking ahead, June 28-29 EU summit is an important deadline by which UK has to give an agreeable answer to EU regarding the Irish border. For now, it’s highly unlikely for this to be met. Instead, the decision could be delayed to October 17-18 EU summit. But at the same time, October is the deadline for agreement the divorce bill and terms. So, tough time ahead for May for sure.