Overseas Headlines – April 24, 2017


U.S. Chamber of Commerce chief expects basic NAFTA deal by mid-2018
The United States, Mexico and Canada are likely to reach a basic accord over reworking the North American Free Trade Agreement (NAFTA) by the middle of next year, the head of the biggest U.S. business lobby group said on Sunday. The future of the deal binding the three nations has been in doubt since Donald Trump won the U.S. presidency in November pledging to ditch it if he could not rework terms in favor of the United States, clouding the outlook for Mexico in particular. However, Thomas Donohue, president and chief executive officer of the U.S. Chamber of Commerce, said that he believed business leaders and policymakers were increasingly aware of the need to get a new deal and move on without disrupting business. "We’re not going to be fooling around with this deal in 2018," he said in an interview with Reuters on a visit to Mexico City where he will meet policymakers and make the case for free trade. Trump contends that Mexico’s growth as a manufacturing power since NAFTA took effect in 1994 has cost jobs in the United States. However, defenders of the deal say it has benefited all three nations and helped American firms compete globally.

German business morale near 6-year high, defies political uncertainty
German business morale brightened more than expected in April, hitting its highest in nearly six years, suggesting Europe’s largest economy is set to carry its robust upswing into the second quarter despite political risks. The surprisingly strong data, published by the Munich-based Ifo institute on Monday, added to signs that the German economy is firing on all cylinders as the European Central Bank’s loose monetary policy supports a vibrant domestic economy and a rise in foreign demand helps exporters. Ifo’s business climate index, based on a monthly survey of some 7,000 firms, rose to 112.9 from an upwardly revised 112.4 in March. The reading, the highest since July 2011, came in stronger than a Reuters consensus forecast for a value of 112.5. "The German economy is growing strongly," Ifo chief Clemens Fuest said in a statement. Ifo economist Klaus Wohlrabe told Reuters that the German economy was not being influenced by political uncertainties such as the threat of rising protectionism, major elections in Europe and the course of Brexit negotiations.


China policymakers bullish on economy, cite strong first-quarter GDP, stable yuan
Policymakers in China are pushing a bullish message on the world’s second-biggest economy after a solid first quarter, pointing to a slow down in capital outflows and a stable yuan after a selloff last year stoked fears of instability. Speaking at a G20 summit meeting of the world’s top economies in Washington last week, finance minister Xiao Jie said an increasing number of positive signs were seen in the Chinese economy in the first quarter gross domestic product report. China is confident of reaching the government’s 6.5 percent GDP growth target this year, Xiao said in a notice published on the Ministry of Finance’s website on Saturday. Separately, People’s Bank of China (PBOC) adviser Sheng Songcheng said the improving economy has been matched by a stable yuan, with signs that capital is starting to return to China.