Rouhani sees Iran, Iraq expanding trade despite U.S. sanctions

DUBAI (Reuters) – Iran and Iraq could raise their annual bilateral trade to $20 billion from the current level of $12 billion, President Hassan Rouhani said on Saturday, amid concerns in Tehran over the economic impact of renewed U.S. sanctions.

Rouhani’s remarks, made after a meeting with visiting Iraqi President Barham Salih, came about two weeks after the United States restored sanctions targeting Iran’s key oil industry as well as its banking and transportation sectors.

“… through bilateral efforts, we can raise this figure (for bilateral trade) to $20 billion in the near future,” Rouhani said in comments broadcast live on Iranian state television.

“We held talks on trade in electricity, gas, petroleum products and activities … in the field of oil exploration and extraction,” Rouhani said.

Iraqi officials told Reuters last week that Iraq had agreed to trade Iraqi food items in return for Iranian gas and energy supplies.

Baghdad is seeking U.S. approval to allow it to import Iranian gas for its power stations. Iraqi officials say they needs more time to find an alternative source than a 45-day waiver granted to it by the United States.

“It will be important to create free trade zones at our shared border and to connect the two countries’ railways,” Salih said.

“We will not forget your support for the Iraqi people in the fight against (Iraqi dictator) Saddam (Hussein). Neither do we forget Iran’s stand in the recent fight against terrorism,” added Salih, an Iraqi Kurd.

Iran wields wide influence in Iraq, its smaller Arab neighbor, where its Revolutionary Guards played a key role in training and arming the mainly Shi’ite militias that helped defeat Islamic State.

Iraq imports a wide range of goods from Iran, including food, agricultural products, home appliances, air conditioners and spare car parts. The goods element of Iranian imports to Iraq was worth about $6 billion in the 12 months ending March 2018, or about 15 percent of Iraq’s total imports for 2017.

Energy contracts also contribute to the total volume of bilateral trade.

Iraqi central bank officials said in August that their country’s economy was closely linked to non-Arab Iran, which is engaged in several proxy wars with Saudi Arabia in the region.

Reporting by Dubai newsroom; Editing by Andrew Heavens and Gareth Jones

French protesters block roads over higher fuel taxes, one dead in accident

PARIS (Reuters) – A motorist accidentally hit and killed a protester taking part in a campaign of road blockades across France on Saturday, as thousands gathered on motorways in a backlash against higher fuel taxes.

The demonstrators, part of a grassroots movement dubbed the “yellow vests”, caused logjams on highways and blocked roundabouts as they railed against the fuel tax hikes introduced by President Emmanuel Macron.

The protests, largely orchestrated on social media and which aimed to prevent road access to some fuel depots and airports, have also drawn broader support from some voters dissatisfied with Macron’s economic reforms and his governing style.

At a blockade on a road in the southeastern department of Savoie, a driver panicked when protesters surrounded her car and she accelerated, hitting and killing a woman demonstrator, French Interior Minister Christophe Castaner said in televised comments.

Sixteen people were lightly injured in other accidents across the country, and a person run over by a car in northern France was in a critical state, according to the interior ministry, which estimated some 50,000 demonstrators were participating in Saturday’s protests.

Some incidents occurred as drivers not taking part tried to get around the blockades, police sources said.

FLASHPOINTS

Protesters gathered at sensitive flashpoints including the entry to a tunnel under the Mont-Blanc mountain in the Alps, and traffic was backed up on several highways.

Demonstrators were also on the march in cities, including Marseille where around 100 people, wearing the high visibility vests drivers keep in their cars, blocked roads around its port.

The backlash is the latest confrontation between Macron and voters, mostly based in the countryside and provincial towns and cities, who view the former investment banker as the representative of a remote urban elite.

During his 18 months in power, Macron, 40, has often pushed through reforms, including an overhaul of indebted state rail operator SNCF, in the face of opposition from labor unions.

But the “yellow vest” movement has snowballed swiftly over the past month, catching Macron and even opposition parties off guard. It has already prompted a rare concession from the government, which announced last Wednesday fresh funds to help motorists on the lowest incomes.

The higher fuel taxes were approved in late 2017 but started to bite as oil prices surged in October, even though they have since eased off somewhat.

The diesel tax increases are designed to encourage drivers to switch to more environmentally-friendly cars.

Reporting by Sarah White, Caroline Pailliez, Pierre Savary and Jean-Francois Rosnoblet; Editing by Gareth Jones

China reports new outbreaks of African swine fever in Jiangxi, Yunnan, Sichuan and Shanghai

SHANGHAI (Reuters) – Four new outbreaks of African swine fever have been reported in China’s provinces of Jiangxi, Yunnan and Sichuan as well as the municipality of Shanghai, the agriculture ministry said on Saturday.

Ten pigs had died from the disease and 10 others had fallen ill on a farm with 150 hogs in the southeastern province of Jiangxi, the ministry said on its website. Another 348 pigs will be slaughtered in Yunnan province in the southwest, it added.

A farm with 314 pigs in the Jinshan district of Shanghai was affected, the ministry reported. Eleven of the hogs had died while another 50 were infected, it said.

Reporting by Brenda Goh; Editing by Andrew Heavens

Argentine Navy submarine found a year after disappearing with 44 aboard

BUENOS AIRES (Reuters) – The Argentine Navy submarine that went missing a year ago off the country’s Atlantic Coast was found by a private company involved in what had been a massive search for the vessel and its 44-member crew, the Navy announced by tweet on Saturday.

The submarine ARA San Juan had a seven-day supply of air when it last reported its position on Nov. 15, 2017. It was found some 800 meters (2,625 feet) below the ocean’s surface by a marine tracking contractor Ocean Infinity.

The disappearance gripped the nation’s attention as the government struggled to provide information about the tragedy.

At the time of the disappearance, the Navy said water that had entered the submarine’s snorkel caused its battery to short-circuit. Naval officials said international organizations helping to search for the missing vessel a year ago detected a noise that could have been the submarine imploding.

Hopes of rescuing survivors faded about two weeks after the submarine went missing. The navy said it searched for double the amount of time the submarine would have had oxygen.

The first anniversary of the submarine’s disappearance was marked with an event at the Mar del Plata naval base on Nov. 15, with President Mauricio Macri in attendance.

The crew had been ordered to return to Mar del Plata on the country’s east coast. But the vessel was never heard from again.

Ocean Infinity, a U.S. company that can search and map the seabed, was hired by Argentina following the failure of a international operation to find the vessel after it went missing in the South Atlantic.

The San Juan was some 430 km (270 miles) off Argentina’s Patagonian coast when it sent its last signal.

The disaster spurred soul-searching over the state of the military in Argentina, which – after a series of financial crises – has one of Latin America’s smallest defense budgets relative to the size of its economy.

Subs are used to patrol sovereign maritime areas throughout South America and can transform themselves into a lethal threat to potential adversaries.

Argentina learned a harsh lesson of submarines’ military value during the 1982 Falklands War, when a British sub sank the ARA General Belgrano cruiser. It was the only major ship Argentina lost in the war over the disputed Falkland Islands, which Argentina calls the Malvinas.

Reporting by Jorge Otaola and Maximilian Heath; Writing by Anthony Esposito; Editing by Tom Hogue and Ros Russell

Junior partner says to stay in Bulgarian coalition after resignation

SOFIA (Reuters) – The junior partner in Bulgaria’s ruling center-right coalition reaffirmed its support on Saturday for Prime Minister Boyko Borissov’s 18-month-old government despite the resignation of one of its leaders.

Deputy Prime Minister Valeri Simeonov, one of the leaders of the United Patriots, an alliance of nationalist parties, resigned on Friday after several weeks of street protests over remarks he made about disabled rights activists.

“Valeri Simeonov has quit in a personal capacity, it is not the party that has quit the coalition,” Krasimir Karakachanov, also a deputy prime minister and co-leader of the United Patriots, told Nova TV.

“No turmoil is expected in either the “small” (nationalist alliance) or the “big” (ruling) coalition,” he said.

Last month Simeonov, who oversaw economic and demographic policy, dismissed a group of protesters demanding an overhaul of Bulgaria’s social care system as “shrill women” and accused them of using their disabled children as a political tool.

Borissov rebuked Simeonov but said he was unable to sack the minister due to a delicate balance of power in the coalition.

The nationalist alliance is expected to nominate Simeonov’s replacement as deputy prime minister next week.

The deputy leader of Borissov’s GERB party, Tsvetan Tsvetanov, said the resignation would “calm the situation” and that the government would emerge stronger as a consequence.

Disabled rights activists welcomed Simeonov’s resignation but said the government needed to do more to soothe social tensions.

Opposition parties have stepped up pressure on the government ahead of elections for the European Parliament and local elections next year.

Bulgaria, the poorest member state in the European Union, faces more protests this weekend over higher fuel prices and tax increases for older, more polluting cars, though political analysts say they are unlikely to unseat Borissov’s government.

Responding to the discontent, the anti-monopoly regulator has said it will examine whether there has been any breach of competition rules in the fuel sector.

Street protests against low living standards and corruption toppled a previous coalition government led by Borissov in 2013.

(This story corrects paragraph 11 to say taxes on old cars have increased, not on pensions)

Reporting by Angel Krasimirov; Editing by Gareth Jones

Pence vows no end to tariffs until China bows

PORT MORESBY (Reuters) – The United States will not back down from its trade dispute with China, and might even double its tariffs, unless Beijing bows to U.S. demands, Vice President Mike Pence said on Saturday.

In a bluntly worded speech at an Asia Pacific Economic Co-operation (APEC) summit in Papua New Guinea, Pence threw down the gauntlet to China on trade and security in the region.

“We have taken decisive action to address our imbalance with China,” Pence declared. “We put tariffs on $250 billion in Chinese goods, and we could more than double that number.”

“The United States, though, will not change course until China changes its ways.”

The stark warning will likely be unwelcome news to financial markets which had hoped for a thaw in the Sino-U.S. dispute and perhaps even some sort of deal at a G20 meeting later this month in Argentina.

U.S. President Donald Trump, who is not attending the APEC meeting, is due to meet Chinese President Xi Jinping in Argentina.

Pence’s warning on Saturday contrasted with remarks made by Trump on Friday, when he said he may not impose more tariffs after China sent the United States a list of measures it was willing to take to resolve trade tensions.

Trump has imposed tariffs on $250 billion worth of Chinese imports to force concessions on a list of demands that would change the terms of trade between the two countries. China has responded with import tariffs on U.S. goods.

Washington is demanding Beijing improve market access and intellectual property protections for U.S. companies, cut industrial subsidies and slash a $375 billion trade gap.

There was no hint of compromise from Pence.

“China has taken advantage of the United States for many years. Those days are over,” he told delegates gathered on a cruise liner docked in Port Moresby’s Fairfax Harbour.

He also took aim at China’s territorial ambitions in the Pacific and, particularly, Xi’s Belt and Road Initiative to expand land and sea links between Asia, Africa and Europe with billions of dollars in infrastructure investment.

“We don’t offer constricting belts or a one-way road,” said Pence.

While not referring directly to Chinese claims over various disputed waters in the region, Pence said the United States would work to help protect maritime rights.

“We will continue to fly and sail where ever international law allows and our interests demand. Harassment will only strengthen our resolve.”

Just minutes earlier, Xi had spoken at length about his initiative and the need for free trade across the region.

“It is not an exclusive club closed to non-members, nor is it a trap as some people have labeled it,” Xi said of his brainchild project.

He also called protectionism a “shortsighted approach” that was “doomed to fail”.

“History has shown that confrontation, whether in the form of a Cold War, hot war, or trade war will produce no winners,” said Xi.

Reporting by Jonathan Barrett, Tom Westbrook, Charlotte Greenfield, Philip Wen; writing by Wayne Cole and Swati Pandey; Editing by Robert Birsel

Pence met with Taiwan’s APEC envoy

PORT MORESBY (Reuters) – U.S. Vice President Mike Pence met with Taiwan’s envoy to the APEC summit, Morris Chang, on the sidelines of a business forum on Saturday in Port Moresby, according to a media report.

The report, from a journalist attending the summit with Pence, did not provide any details.

Despite Taiwan’s lack of diplomatic recognition by the vast majority of countries, APEC allows the island to participate as a separate economic, rather than political, entity.

The United States has no formal relations with Taiwan, but is bound by law to provide the island with the means to defend itself and is its strongest international backer.

Reporting by Philip Wen; Editing by Himani Sarkar

U.S.-China divisions take center stage at APEC summit

PORT MORESBY (Reuters) – The United States and China swapped barbs over trade, investment and regional security at an Asia Pacific Economic Co-operation (APEC) summit on Saturday, as growing fault lines among members suggested little prospect of consensus at the weekend meeting.

Speaking in the Papua New Guinean capital, U.S. Vice President Mike Pence said there would be no end to American tariffs until China changed its ways, after its president, Xi Jinping, warned that the shadow of protectionism and unilateralism was hanging over global growth.

Pence took direct aim at Xi’s flagship Belt and Road program, which China has been promoting to Pacific nations at APEC, saying countries should not accept debt that compromised their sovereignty.

“We do not a offer constricting belt or a one-way road,” Pence told a summit of APEC chief executives, a precursor to the official leaders’ meeting.

China’s efforts to win friends in the resource-rich Pacific have been watched warily by the traditionally influential powers in the region – Australia and the United States.

Xi stoked Western concern when he held a private meeting with Pacific island leaders on Friday, where he pitched the Belt and Road initiative.

Speaking before Pence, Xi said there was no geopolitical agenda behind the Belt and Road plan, which was unveiled in 2013 and aims to bolster a sprawling network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

“It does not exclude anyone. It is not an exclusive club closed to non-members, nor is it a trap as some people have labeled it.”

There have been concerns that small countries that sign up for infrastructure projects will be left with debt burdens they cannot service, something Pence highlighted.

“Do not accept foreign debt that could compromise your sovereignty. Protect your interest. Preserve your independence. And just like America, always put your country first,” he said, adding that the United States was a better investment partner.

DOUBLE TARIFFS?

Sri Lanka formally handed over commercial activities in its main southern port in the town of Hambantota to a Chinese company last December as part of a plan to convert $6 billion of loans that Sri Lanka owed China into equity.

U.S. President Donald Trump is not attending the APEC meeting, nor is Russia’s president, Vladimir Putin.

Trump and Xi are due to meet at a G20 meeting in Argentina late this month, raising some hope that trade tension could ease.

“Global growth is shadowed by protectionism and unilateralism,” Xi told delegates, saying that erecting barriers and cutting ties was a short-sighted approach doomed to fail.

But Pence made it clear that the United States would not back down.

“The United States though will not change course until China changes its ways,” he told delegates gathered on a cruise liner tethered in Port Moresby’s Fairfax Harbour.

Slideshow (4 Images)

“We put tariffs on $250 billion in Chinese goods, and we could more than double that number.”

Trump is pressing China to reduce its huge bilateral trade surplus and make sweeping changes to its policies on trade, technology transfers and high-tech industrial subsidies.

China has denied that U.S. companies are forced to transfer technology and sees U.S. demands on rolling back its industrial policies as an attempt to contain China’s economic rise.

Reporting by Tom Westbrook and Charlotte Greenfield; Writing by Colin Packham and Wayne Cole; Editing by Himani Sarkar, Robert Birsel

U.S. joins Australian plan to develop new Pacific naval base

PORT MORESBY (Reuters) – The United States will join Pacific ally Australia to build a naval base on Papua New Guinea’s Manus Island, U.S. Vice President Mike Pence said, amid a push by regional powers to lock in alliances and secure access to key infrastructure.

The plan, which comes on the heels of China’s emergence as a possible developer of the deep-water site, was unveiled on Saturday at a Asia-Pacific forum hosted by Papua New Guinea (PNG) where world leaders voiced competing visions on how trade should be conducted in the region.

Analysts say a Chinese presence on Manus Island could impact the West’s ability to navigate the Pacific while offering Beijing close access to U.S. bases in Guam.

Manus Island was a major U.S. naval base during the Second World War, playing a key role in Washington’s Pacific strategy. Recently, it has hosted one of Australia’s two controversial offshore immigration detention centres.

Pence said the United States would partner with Australia and PNG on the Manus Island port project.

“We will work with these nations to protect the sovereignty and maritime rights of Pacific islands as well,” Pence said.

“And you can be confident, the U.S. will continue to uphold the freedom of the seas and the skies.”

Australia, a staunch U.S. ally, has for decades enjoyed largely unrivalled influence in the Pacific until China recently turned its attention to the region.

The United States has had a long-running dispute with China over maritime routes in the South China Sea. That has extended to the Pacific over concerns Beijing may use its increased influence, backed by its emerging status as a major bilateral lender to island economies, to secure access to infrastructure that could be used for military purposes, including deep-water ports and wharfs.

Australian Prime Minister Scott Morrison announced on Nov. 1 that his country would fund development of the base on Manus Island with the support of the PNG government.

But neither party has sought support from local residents, Manus Island Governor Charlie Benjamin has said. Communities in sprawling, resources-rich PNG have at times opposed decisions made by the central government.

Manus Island is PNG’s smallest province with a population of about 50,000 people.

Australian and PNG government representatives did not respond to requests for comment.

PNG’s navy is made up largely of patrol boats, mostly donated by Australia, and landing craft.

Morrison has previously said that Australia’s navy would make visits to the new base on Manus Island.

Reporting by Jonathan Barrett; Editing by Himani Sarkar

CIA believes Saudi crown prince ordered journalist’s killing: sources

WASHINGTON (Reuters) – The CIA believes Saudi Crown Prince Mohammed bin Salman ordered the killing of journalist Jamal Khashoggi in Istanbul, sources familiar with the matter said on Friday, complicating President Donald Trump’s efforts to preserve ties with a key U.S. ally.

The sources said the CIA had briefed other parts of the U.S. government, including Congress, on its assessment, which contradicts Saudi government assertions that Prince Mohammed was not involved.

The CIA’s finding, first reported by the Washington Post, is the most definitive U.S. assessment to date tying Saudi Arabia’s de facto ruler directly to the killing.

Both the White House and the State Department declined to comment.

“The claims in this purported assessment is false,” a spokeswoman for the Saudi Embassy in Washington said in a statement. “We have and continue to hear various theories without seeing the primary basis for these speculations.”

Trump and top officials of his administration have said Saudi Arabia must be held to account for any involvement in Khashoggi’s death, but they have also stressed the importance of the U.S.-Saudi alliance.

U.S. officials have said Saudi Arabia, a major oil supplier, plays an important part in countering what they see as Iran’s malign role in the region, and Trump has repeatedly said he does not want to imperil U.S. arms sales to the kingdom.

While the Trump administration on Thursday imposed sanctions on 17 Saudis for their role in Khashoggi’s killing, many lawmakers think the United States should take a tougher stance, and the CIA’s findings are likely to embolden that view.

Khashoggi, a critic of the Saudi government and a columnist for the Washington Post, was killed at the Saudi consulate in Istanbul on Oct. 2 when he went there to pick up documents he needed for his planned marriage to a Turkish woman.

Khashoggi had resisted pressure from Riyadh for him to return home. Saudi officials have said a team of 15 Saudi nationals were sent to confront Khashoggi at the consulate and that he was accidentally killed in a chokehold by men who were trying to force him to return to the kingdom.

Turkish officials have said the killing was intentional and have been pressuring Saudi Arabia to extradite those responsible to stand trial. An adviser to Turkish President Tayyip Erdogan on Thursday accused Saudi Arabia of trying to cover up the murder.

Saudi Arabia’s public prosecutor said on Thursday that he was seeking the death penalty for five suspects charged in the killing. The prosecutor, Shalaan al-Shalaan, told reporters the crown prince knew nothing of the operation, in which Khashoggi’s body was dismembered and removed from the consulate.

U.S. officials have been skeptical that Prince Mohammed would not have known about plans to kill Khashoggi, given his control over Saudi Arabia.

The Post, citing people familiar with the matter, said the CIA’s assessment was based in part on a phone call the crown prince’s brother, Prince Khaled bin Salman, the Saudi ambassador to the United States, had with Khashoggi.

Prince Khaled told Khashoggi he should go to the Saudi consulate in Istanbul to retrieve the documents and gave him assurances that it would be safe to do so, the Post said.

The newspaper, citing people familiar with the call, said it was not clear if the prince knew Khashoggi would be killed but that he made the call at his brother’s direction.

The prince said in a Twitter post on Friday that the last contact he had with Khashoggi was via text on Oct. 26, 2017, nearly a year before the journalist’s death.

“I never talked to him by phone and certainly never suggested he go to Turkey for any reason. I ask the US government to release any information regarding this claim,” Prince Khaled said.

The Post said the CIA also examined a call from inside the Saudi consulate in Istanbul after Khashoggi’s killing.

Maher Mutreb, a security official who has often been seen at the crown prince’s side, made the call to Saud al-Qahtani, a top aide to Prince Mohammed, to inform him the operation had been completed, the Post said, citing people familiar with the call.

Reporting by Mark Hosenball; Additional reporting by David Alexander and Jeff Mason; Editing by Tim Ahmann, Sonya Hepinstall and Tom Hogue