Economy & business
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US Proposes NAFTA Sunset Clause, Raising Tensions in Talks

Washington has increased tensions in talks to renew the North American Free Trade Agreement by insisting that any new deal be allowed to expire after five years, two officials familiar with the negotiations said on Thursday.

Canada and Mexico both strongly oppose the concept of a so-called sunset clause, a provision that had been floated earlier.

But the officials, who asked not to be identified because the talks are confidential, said the U.S. side formally proposed it late on Wednesday during the fourth of seven scheduled rounds to update the rules governing one of the world’s biggest trade blocs.

The Trump administration says the clause, causing NAFTA to expire every five years unless all three countries agree it should continue, is to ensure the pact stays up to date.

But Mexico and Canada insist there is no point updating the pact with such a threat hanging over it, arguing the clause would stunt investment by sowing too much uncertainty about the future of the agreement.

“It’s a source of total uncertainty,” said one of the NAFTA government officials familiar with details of the negotiations.

U.S. President Donald Trump says NAFTA, originally signed in 1994, has been a disaster for the United States and has frequently threatened to scrap it unless major changes are made.

Business and farm groups say abandoning the 23-year-old pact would wreak economic havoc, disrupting cross-border manufacturing supply chains and slapping high tariffs on agricultural products.

Trade between the United States, Canada and Mexico has quadrupled under NAFTA, now topping $1.2 trillion a year. As well as the sunset clause, the United States wants to boost how much North American content autos must contain to qualify for tax-free status and eliminate a dispute settlement mechanisms that Canada insists must stay.

Some trade observers said it is difficult to see how negotiators could reach an agreement given U.S. demands that many see as nonstarters.

The head of Unifor, Canada’s largest private sector labor union, said it was clear the United States did not want a deal.

“NAFTA is not going anywhere. This thing is going into the toilet,” Jerry Dias told reporters on Thursday.

Despite clear signs of impatience from Canada in particular, U.S. negotiators have yet to submit their proposal on rules of origin for the auto sector. That looked unlikely to come before Friday, another official familiar with the talks said.

Trump on Wednesday repeated his warnings that he might terminate the pact and said he was open to doing a bilateral deal with either Canada or Mexico if three-way negotiations fail.

He was speaking at the White House with Canadian Prime Minister Justin Trudeau, who said Canada was “braced” for Trump’s unpredictability but taking a serious approach to the NAFTA talks.

Negotiators were also set to cover the difficult issue of government procurement on Thursday.

Canada and Mexico want their companies to be able to bid on more U.S. federal and state government contracts, but this is at odds with Trump’s “Buy American” agenda. U.S. negotiators have countered with a proposal that would effectively grant the other countries less access, people familiar with the talks say.

On automotive rules of origin, NAFTA negotiators face tough new U.S. demands to increase regional vehicle content to 85 percent from 62.5 percent, with 50 percent required from the United States, according to people briefed on the plan.

The rules of origin demands are among several conditions that the U.S. Chamber of Commerce has labeled “poison pill proposals” that threaten to torpedo the talks.

U.S. Commerce Secretary Wilbur Ross said on Wednesday that he believed higher percentages for automotive content would be achieved, and “car companies will adapt themselves to it.”

However, a study released on Thursday by the Motor Equipment Manufacturers Association, which represents U.S. auto parts makers, showed the higher content requirements would lead to the loss of up to 24,000 U.S. jobs, as some companies would forgo NAFTA’s tariff-free benefits and ship in more components from other countries.

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Arts & Entertainment
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Bruno Mars Leads American Music Awards Nominations With 8

Bruno Mars topped the field of American Music Awards nominations announced Thursday, receiving eight nods, while The Chainsmokers, Drake, Kendrick Lamar, Ed Sheeran and The Weeknd received five nominations apiece.

Mars, The Chainsmokers, Drake, Lamar and Sheeran received nominations for the artist of the year award, the top AMA prize.

Justin Bieber, Daddy Yankee and Luis Fonsi received four nominations each, including favorite pop/rock song for their hit collaboration Despacito. The video for Despacito, which set the record for most-watched clip on YouTube with more than 3 billion views, was also nominated for video of the year.

Keith Urban led country artists with three nominations. Nominees for the new artist of the year were James Arthur, Niall Horan, Julia Michaels, Post Malone and Rae Sremmurd.

Alessia Cara, Lady Gaga and Rihanna were nominated for the favorite female pop/rock artist award.

The awards show will air live from the Microsoft Theater in Los Angeles on November 19 at 8 p.m. EST on ABC. The AMA winners are determined by a vote of fans.

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Silicon Valley & Technology
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Richard Branson Takes Another Bet on Future with Hyperloop One

British billionaire Richard Branson on Thursday placed another bet on the future with an investment in Hyperloop One, which is developing super high-speed transportation systems.

Hyperloop One said Branson’s Virgin Group would take the company global and rebrand itself as Virgin Hyperloop One in the near future.

Branson has joined the board of Hyperloop One, which aims to develop pods that will transport passenger and mixed-use cargo at speeds of 250 miles per hour (402 km per hour).

The pod lifts above a track using magnetic levitation and glides at airline speeds for long distances due to low aerodynamic drag.

The company did not disclose the size of the investment.

Hyperloop One was originally conceptualized by Elon Musk. In July, Musk said he had received verbal approval to start building the systems that would link New York and Washington, cutting travel time to about half an hour.

Last month, Hyperloop One raised $85 million in new funding, bringing the total financing raised to $245 million since it was founded in 2014.

Hyperloop One’s co-founders, executive chairman Shervin Pishevar and president of engineering Josh Giegel, have previously worked at Virgin Galactic.

Virgin Galactic is Branson’s space company, which in 2016, was granted an operating license to fly its passenger rocket ship with the world’s first paying space tourists once final safety tests are completed.

“Virgin Hyperloop One will be all-electric and the team is working on ensuing it is a responsible and sustainable form of transport,” Virgin Group said in a statement.

Hyperloop One is also working on projects in the Middle East, Europe, India and Canada, according to the statement.

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Arts & Entertainment
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US World Cup Absence Could Have Wide-ranging Effects

The 2018 World Cup will be a unique test of soccer’s appeal in the United States.

Will Americans still watch if their national team isn’t there? Fox certainly is hoping so.

The U.S. failed to qualify for next year’s World Cup in Russia when it lost at Trinidad and Tobago on Tuesday night, and the effects of that defeat may be felt for quite some time. The team, and indeed the whole U.S. Soccer Federation, faces a period of soul searching – but broadcasters, sponsors and tournament organizers also could feel the impact of the Americans’ absence.

Fox, which broadcasts next year’s World Cup, offered only a brief statement Wednesday – which did provide some insight as to how the network likely will promote a World Cup without the U.S.

 

“Last night’s World Cup qualifying results do not change FOX Sports’ passion for the world’s biggest sporting event,” the statement said. “While the U.S. was eliminated, the biggest stars in the world from Lionel Messi to Cristiano Ronaldo stamped their tickets to Russia on the same day, and will battle teams ranging from Mexico to England that have massive fan bases in America.”

 

Fans in the U.S. are familiar with stars like Messi, Ronaldo and Neymar. Top European club teams now have American followings, which suggests that soccer in the U.S. can withstand a short-term slump for the national team.

 

An estimated 26.5 million people in the U.S. watched Germany’s victory over Argentina in the 2014 World Cup final in Brazil, and the 2018 final figures to be a major draw as well. But a U.S.-Portugal match in the group stage of the 2014 tournament had 24.7 million viewers – and that’s the type of interest that might be absent from earlier games in 2018.

 

“It’s going to hurt a little bit,” said Austin Karp, an assistant managing editor of SportsBusiness Daily. “You’re not going to have any buildup there toward the summer, with the U.S. team playing either friendlies – or talk about how the U.S. team is going to do, promotion of the U.S. team on Fox properties like baseball or other spring stuff they might have. … The U.S. matches were some of the strongest audiences for ESPN-ABC the last couple of iterations of the tournament. The final will still be OK.”

 

Fox broadcast the Women’s World Cup in 2015, but next year will be its first time carrying the men’s tournament since winning U.S. English-language World Cup rights back in 2011. Now Fox’s 2018 tournament won’t have the Americans, and ratings for the 2022 event in Qatar could be affected by the fact that it is set to be held in November and December to avoid the searing summer desert heat, instead of its usual calendar spot midway through the year.

 

The U.S. team’s failure to qualify for 2018 dented shares of Twenty-First Century Fox Inc. on Wednesday. The stock fell 66 cents, or 2.5 percent, to $26.11. But concerns over Fox’s outlook may be overblown, according to a report from Pivotal Research Group. According to the group’s study, the U.S. team accounted for about 20 percent of ESPN’s total viewing for the 2014 tournament – a significant figure but not an overwhelming one. Fox certainly will miss having the Americans in 2018, but the U.S. played only four games in Brazil last time.

 

“While it might make a difference for the lay viewer who is only going to watch the U.S. games, that’s just a small subset of the total viewing,” said Brian Wieser, a senior research analyst for Pivotal Research Group.

 

So the show must go on for broadcasters – and sponsors are trying to make the best of the situation as well.

 

“Like all American soccer fans, we are disappointed the team will not be participating in the World Cup, but still recognize the huge growth opportunity for soccer in the U.S.,” said Ricardo Marques, a vice president of marketing for Budweiser. “As the official beer of the World Cup and a longtime FIFA partner, Budweiser will continue to tap into our fans’ passion for soccer here and globally.”

Over in Russia, meanwhile, the reaction to the U.S. ouster was muted. American fans have attended the World Cup in droves recently – more than 200,000 tickets for games in Brazil were purchased by U.S. residents. FIFA said Tuesday that the U.S. was among the top 10 countries for ticket applications so far for 2018, along with other non-qualifiers like China and Israel. Some applications by U.S. residents are likely to have been made by supporters of other teams, such as Mexico.

 

Still, many in Russia focused instead on the failure to qualify of neighboring Ukraine, which occasionally had threatened to boycott the tournament over Russia’s backing for separatist groups in eastern Ukraine. Vyacheslav Koloskov, the Russian Football Union honorary president, said the United States’ absence was a missed opportunity to improve Russia-U.S. relations.

 

“The non-participation of the U.S. reduces the chances of players, and indirectly of American fans, to see the transformations taking place in our country,” he told Russian agency R-Sport.

 

Koloskov added that the U.S. team was “nothing special” and so its absence “won’t have any effect on our World Cup in a sporting sense.”

 

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Silicon Valley & Technology
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Facebook Chief Absolutely’ Supports Releasing Russia-linked Advertisements

Facebook Chief Operating Officer Sheryl Sandberg said Thursday she “absolutely” supports the public release of all advertisements produced by a Russia-linked organization during the 2016 presidential election.

Sandberg said the company is “working on transparency” following the revelation last month that a group with alleged ties to the Russian government ran $100,000 worth of ads on Facebook promoting “divisive” causes like Black Lives Matter.

“Things happened on our platform that shouldn’t have happened,” she said during the interview with Axios’s Mike Allen.

Later Thursday, Sandberg is set to meet with Congressional investigators who are looking into what role the advertisements which began running in 2015 and continued through this year may have played in the 2016 presidential election.

The $100,000 worth of ads represent a very small fraction of the total $2.3 billion spent by, and on behalf of, President Donald Trump and losing-candidate Hillary Clinton’s campaigns during the election.

Multiple congressional investigations have been launched, seeking to determine what effect alleged Russian meddling may have played in the election.

In addition, Robert Mueller, a former director of the Federal Bureau of Investigation, is conducting a criminal probe, including whether President Trump’s campaign colluded with Russian operatives during the election season. Trump has denied working with the Russians.

Facebook had previously agreed to disclose the thousands of Facebook ads to congress. Sandberg said Thursday she thinks “it’s important that [the investigators] get the whole picture and explain that to the American people.”

In response to the Russian ad buys, Sandberg said Facebook is hiring 4,000 new employees to oversee ads and content. She said the company is also using “machine learning and automation” to target fake accounts that spread fake news.

She defined fake news as “things that are false hoaxes” and said Facebook is working to stamp out the bad information by teaming up with third-party fact checkers and warning users before they share news deemed fake by Facebook.

She said it is important to be cautious when going after fake news because “a lot of what we allow on Facebook is people expressing themselves” and “when you cut off speech for one person, you cut off speech for all people.”

“We don’t check the information posted on Facebook before people post it, and I don’t think people should want us to,” she said.

Hundreds of fake accounts were used to distribute the Russia-linked advertisements, Sandberg said. But had those ads been posted by legitimate users, “we would have let them run,” she said.

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Arts & Entertainment
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World Cup Bribery Case Opened Against PSG President, Valcke

The Qatari president of one of Europe’s most glamorous soccer clubs, Paris Saint-Germain, is under investigation by Swiss prosecutors for suspected bribery of a top FIFA executive to get World Cup broadcasting rights.

 

Criminal proceedings against Nasser Al-Khelaifi, PSG president and CEO of Qatar-owned BeIN Media Group, former FIFA secretary general Jerome Valcke, and an unnamed “businessman in the sports rights sector” was announced by the office of Switzerland’s attorney general on Thursday.

 

The case involves the award of broadcast rights for the next four World Cups from 2018 through 2030.

 

The proceeding against Al-Khelaifi is one of the first direct links to Qatar in sweeping investigations by federal law enforcement authorities in Switzerland, the United States, and France of FIFA, international soccer, and the 2018-2022 World Cup bidding contests.

 

The Paris offices of BeIN Sports were searched by two magistrates from the French financial prosecutor’s office, the federal agency said. They were assisted by investigators from an anti-corruption unit.

 

Properties were also searched in Greece, Italy, and Spain while Valcke was questioned in Switzerland, the Swiss federal prosecution office said. It cited cooperation from a European Union criminal investigation agency.

 

“Multiple premises were searched, assets were seized and interviews were conducted as a result of this joint operation,” the EU body known as Eurojust said in a statement.

 

PSG declined to comment.

 

No suspect was detained on Thursday, said Swiss prosecutors whose work investigating FIFA and suspected money laundering linked to World Cup hosting bids began in November 2014.

 

Then, FIFA gave the Swiss federal office a report and evidence from its then-ethics prosecutor – former U.S. Attorney Michael Garcia – into the dual World Cup bidding contest won by Russia and Qatar.  

 

Al-Khelaifi is alleged to have offered “undue advantages” to Valcke – FIFA’s CEO-like secretary general from 2007 until his firing in January 2016 – for the award of media rights in “certain countries” for the 2026 and 2030 World Cup.

 

Al-Khelaifi and Valcke previously negotiated a deal for the 2018 and 2022 rights weeks after Qatar won the 2022 hosting vote. In January 2011, FIFA announced that Al Jazeera Sports – which later became BeIN – secured the rights for 23 territories across the Middle East and North Africa, including Saudi Arabia.

FIFA has never announced if BeIN also secured any 2026 and 2030 World Cup rights.

 

Swiss prosecutors also allege Valcke received “undue advantages” from a businessman who was not identified to award certain media rights for four World Cups from 2018 through 2030.

 

The criminal proceeding was opened on March 20, but announced only on Thursday, the Swiss federal office said.

 

Al-Khelaifi’s profile has risen in recent weeks as PSG pursued and sealed a world record transfer of Brazil star Neymar from Barcelona for 222 million euros ($260 million).

 

Since FIFA’s much-discredited executive committee picked Russia and Qatar in December 2010, the gas-rich emirate has bought up PSG with sovereign wealth and installed Al-Khelaifi as president. BeIN has also acquired a broad portfolio of rights including from European soccer body UEFA for the Champions League and national team matches.

 

The latest case stemming from the wider investigation of FIFA’s business also saw criminal proceedings opened against Valcke in March 2016.

 

Valcke was the right-hand man to then-FIFA president Sepp Blatter for more than eight years until a swathe of senior executives at soccer’s world body were removed from office in fallout from a U.S. Department of Justice indictment revealed in May 2015.

 

Valcke, a French former TV presenter, was in Switzerland on Wednesday to testify at the Court of Arbitration for Sport in his appeal hearing against a 10-year ban by FIFA for financial wrongdoing and abuse of expenses.

 

FIFA said on Thursday it “fully supports the investigation” by Swiss and other authorities.

 

“FIFA has constituted itself as a damaged party in this investigation,” the Zurich-based organization said.

FIFA is seeking a share of more than $200 million held by the U.S. Department of Justice which secured forfeits from soccer and marketing officials in its ongoing investigation. The DoJ has indicted or secured guilty pleas from more than 40 people.

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Economy & business
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EU Says Little Progress Made in Brexit Talks With Britain

The European Union’s Brexit negotiator said Thursday that that little progress was made with the U.K. in a fifth round of talks on the country’s departure from the EU in 2019, and that he cannot yet recommend broadening negotiations to include trade.

 

Michel Barnier said that despite the “constructive spirit” shown in this week’s negotiations in Brussels, “we haven’t made any great steps forward.” On the question of how much Britain has to pay to settle its financial commitments, he said: “We have reached a state of deadlock, which is disturbing.”

 

Barnier said he would not be able to recommend to EU leaders meeting next week that “sufficient progress” has been made to broaden the talks to future EU-British relations like trade.

 

The leaders meet in Brussels on Oct. 19-20, and it had been hoped they would agree to widen the talks.

 

The EU says this can only happen when there has been progress on the issues of the financial settlement, the rights of citizens affected by Brexit and the status of the Northern Ireland-Ireland border.

 

But Britain says these issues are closely intertwined with their future relations like trade and must be discussed together.

 

“I hope the member states will see the progress we have made and take a step forward” next week, British Brexit envoy David Davis told reporters.

 

“We would like them to give Michel the means to broaden the negotiations. It’s up to them whether they do it. Clearly I think it’s in the interests of the United Kingdom and the European Union that they do,” Davis said.

 

Barnier said the two sides would work to achieve “sufficient progress” in time for a subsequent meeting of EU leaders in December.

 

Britain must leave the EU on March 29, 2019, but the negotiations must be completed within about a year to leave time for EU states’ national parliaments to ratify the Brexit agreement.

 

Barnier reaffirmed that parting with “no deal will be a very bad deal.”

 

“To be clear, on our side, we will be ready to face any eventualities, and all the eventualities,” he said.

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Science & Health
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Trump Turns to Executive Order to Lower Health Insurance Costs

Frustrated by failures in Congress, President Donald Trump will try to put his own stamp on health care with an executive order Thursday that aims to make lower-premium plans more widely available.

But the president’s move is likely to encounter opposition from medical associations, consumer groups and perhaps even some insurers — the same coalition that so far has blocked congressional Republicans from repealing and replacing former President Barack Obama’s Affordable Care Act. Critics say the White House approach would raise costs for the sick and the lower-premium coverage provided to healthy people would come with significant gaps.

Administration officials say one of the main ideas is to ease the way for groups and associations to sponsor coverage that can be marketed across the land, reflecting Trump’s longstanding belief that interstate competition will lead to lower premiums for consumers who buy their own health insurance policies, as well as for small businesses.

Less cost, but less coverage

Those “association health plans” could be shielded from state and federal requirements such as mandates for coverage of certain standard benefits, equal pricing regardless of a customer’s health status, and no dollar limits on how much the insurer would pay out.

Other elements of the White House proposal may include:

Easing current restrictions on short-term policies that last less than a year, an option for people making a life transition, from recent college graduates to early retirees.
Allowing employers to set aside pre-tax dollars so workers can use the money to buy an individual health policy.

No impact on 2018

Democrats are bracing for another effort by Trump to dismantle Obamacare, this time relying on the rule-making powers of the executive branch. Staffers at the departments of Health and Human Services, Labor and Treasury have been working on the options since shortly after the president took office.

But as Trump himself once said, health care is complicated and working his will won’t be as easy as signing a presidential order. Some parts of the plan will have to go through the agency rule-making process, which involves notice and comment, and can take months. State attorneys general and state insurance regulators may try to block the White House in court, seeing the plan as a challenge to their traditional authority.

Experts say Trump’s plan probably wouldn’t have much impact on premiums for 2018, which are expected to be sharply higher in many states for people buying their own policies.

Sponsors would have to be found to offer and market the new style association plans, and insurers would have to step up to design and administer them. For insurers, this would come at a time when much of the industry seems to have embraced the consumer protections required by the Obama health law.

​Markets less viable

Depending on the scope of the order, some experts say the new plans created by the White House would draw healthy people away from Obamacare insurance markets, making them less viable for consumers and insurers alike. This could start happening as early as 2019. Premiums for those in the health law’s markets would keep rising, and so would taxpayer costs for subsidizing coverage.

“If the order is as expansive as it sounds, association plans could create insurance products that would siphon off healthy people with lower premiums and skinnier benefits, leading more insurers to exit the ACA marketplace or raise premiums significantly,” Larry Levitt of the nonpartisan Kaiser Family Foundation said recently.

“Healthy middle-class people not now eligible for subsidies could get cheaper insurance, but people with pre-existing conditions could be priced out of the market altogether,” he added.

Nonetheless conservatives such as Sen. Rand Paul, R-Ky., believe the federal government has overstepped its bounds in regulating the private health insurance market. They argue that loosening federal rules would allow insurers to design plans that, although they may not cover as much, work perfectly well for many people.

17 million buy policies

About 17 million people now buy individual health insurance policies.

Nearly 9 million consumers receive tax credits under the Affordable Care Act and are protected from higher premiums.

But those who get no subsidies are exposed to the full brunt of cost increases that could reach well into the double digits in many states next year.

Many in this latter group are solid middle-class, including self-employed business people and early retirees. Cutting their premiums has been a longstanding political promise for Republicans.

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