INTERNATIONAL

 

Oct 11 - 17, 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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US CONGRESS AGREES NEW TAX BREAKS

The US Congress has agreed in principle a huge corporate tax bill providing tax breaks for manufacturers in return for repealing export subsidies.
The bill could end a long-running dispute with the European Union over $5bn(2.8bn) worth of export subsidies which the WTO has said are illegal.
The EU slapped tariffs of up to 12% on 1,600 US goods in March in response.
In order to win support for the repeal, legislators have offered $130bn in tax breaks for manufacturers.

 

 

 

 

Among those who will benefit from the package will be construction, engineering and shipping industries.

However, tax relief is also being offered for tackle box makers, producers of bows and arrows and fan importers, which has led critics of the bill to claim that it does little to benefit ordinary taxpayers.

Legislators hope the House of Representatives and Senate will both pass the bill when the two chambers adjourn ahead of next month Presidential elections.

"There are a lot of things in this bill that are very popular with senators of both parties," said Republican Senator Mitch McConnell.

The bill's provisions include a controversial one year tax relief enabling US multinational firms to repatriate earnings at 5.25% instead of the normal 35% rate.

Critics of the measure, which include Treasury Secretary John Snow, have argued that it will encourage firms to move jobs overseas.

IMF FAILING TO AGREE ON DEBT PLAN

The world's leading finance officials and ministers appear to have failed to reach agreement on debt relief for the poorest nations.

Wrapping up a weekend of International Monetary Fund (IMF) and World Bank talks in Washington, no agreement seems to have been secured.

While UK Chancellor Gordon Brown has put forward a specific 100% debt relief programme, others are more cautious.

So far the IMF members have not been able to agree on a concrete plan.

All the IMF's policymaking arm International Monetary and Financial Committee could agree to on Saturday was to reaffirm its pledge to ease the debt burden of the world's most impoverished nations.

In a statement it said it "looks forward to further consideration of outstanding issues in the proposed framework for debt sustainability, before it is made fully operational, and of further debt relief, including its financing."

The failure to reach agreement appears to have come despite the best possible efforts of Mr Brown.

Earlier he had reiterated the UK government's pledge to write off its share of debt owed to the World Bank and the African Development Bank by poor countries and called on other nations to do the same.

"Many countries are still being forced to choose between servicing their debts and making investments in health, education and infrastructure," said Mr Brown.

"There's a growing consensus that multilateral debt relief has to be dealt with as soon as possible." The IMF left the issue for later consideration.

US PLUTONIUM REACHES FRENCH PLANT

A controversial shipment of US weapons-grade plutonium has reached a processing plant in southern France.

Several dozen anti-nuclear protesters met the convoy on arrival at the plant in Cadarache. They said the plutonium was vulnerable to terrorist attack.

The 125kg consignment was heavily guarded on its journey across France.

The state-owned firm which will reprocess it Areva insists it is safe and will be converted into fuel to generate electricity commercially.

The treatment is part of a post-Cold War agreement between the United States and Russia to get rid of plutonium from excess nuclear warheads.

WINTER FUEL BILLS TO RISE IN US

US households are facing higher fuel bills this winter as a result of the surge in oil prices to record highs.

Heating costs are set to rise sharply between October and March although the impact will not be felt until after November's presidential election.

Residential oil bills could jump about 28% while natural gas costs will rise 15%, the US Energy Department said.

With lower temperatures than normal forecast across parts of America this winter, fuel demand is set to rise.

The rise in US crude oil prices, which are 55% higher than at the start of the year, will filter through to household fuel bills, the US government said.

The average household in the north-east of the country will pay about $1,220(687) in oil bills over the winter, three times as much as in 2001.

Natural gas customers in the Midwest will pay an estimated $1,000(563) over the winter months, up from $870 last year.

CHINA WARNS OF MORE POWER CUTS

China has warned that several of its key regions face more power shortages this winter and spring.

China suffered shortages in the summer, as temperatures soared and air conditioning units used up energy.

 

 

While cooler weather has temporarily helped, the need for heating and maintenance will soon mean facilities cannot meet demand, officials said.

China's current power generation capacity is struggling to keep up with the country's rapid economic growth.

Cheng Guangjie, vice president of the East China Power Grid, said the eastern provinces of Jiangsu, Zhejiang, Anhui and Fujian, and the city of Shanghai, are all likely to be hit by power shortages in the coming months.

DENMARK HOPES TO CLAIM NORTH POLE

Denmark hopes to claim the North Pole and search for oil in high Arctic regions, the Science Ministry has said.

It announced that the country would send a team to try to prove that the seabed beneath the North Pole was a natural continuation of Greenland.

The world's largest island is a semi-independent Danish territory whose northern tip is around 725km (450 miles) from the Pole.

Possible claimants to the area with the Pole also include Russia and Canada.

Danish scientists hope to prove through hi-tech measurements that Greenland's continental socket is attached to a huge ridge beneath the floating Arctic ice, the Associated Press reports.

The country has allocated 150 million kroner ($25m) for the project on the Lomonosov Ridge and four other potential claim areas around Greenland, reports say.

KENYAN ECOLOGIST WINS NOBEL PRIZE

Kenyan environmentalist and human rights campaigner Wangari Maathai has won the Nobel Peace Prize.

She is the first African woman to be awarded the peace prize since it was created in 1901.

A surprised Mrs Maathai broke the news to reporters minutes before the official announcement. 

BUSH DEFENDS ACTION AGAINST IRAQ

US President George W. Bush has said he was right to invade Iraq, despite confirmation that Saddam Hussein did not have weapons of mass destruction.

"I believe... America is safer today with Saddam Hussein in prison," he told reporters in Washington.

And Mr Bush insisted that the former Iraqi leader retained the "intent" to produce WMD.

A report by the Iraq Survey Group has fuelled the debate about justification for last year's invasion.

SALES SLUMP HITS FRENCH PRESS

The French newspaper industry is facing cuts and job losses as circulation figures plummet and major publications report financial difficulties.

Leading titles including Le Monde, France-Soir and Le Parisien have recently disclosed losses running into millions of euros. Le Monde has announced plans to lay off up to 100 staff.

Meanwhile, journalists at France's leading conservative daily Le Figaro have voted on a resolution warning the paper's new owner against interfering in news coverage.

UK INTEREST RATES REMAIN AT 4.75%

UK interest rates have been kept on hold at 4.75% following the latest meeting of the Bank of England's rate-setting committee.

The move was widely expected after recent figures showed a fall in factory output and a cooling housing market.

The Bank has raised rates five times since November 2003, most recently in August, in a bid to rein in the UK property market and consumer spending.

HALLIBURTON MAY SELL TROUBLED KBR

Halliburton said it will restructure and may even sell its Kellogg, Brown and Root subsidiary, the business at the root of recent controversy.

KBR, an engineering and construction business, has come under scrutiny over contracts in Iraq and employee corruption in Nigeria.

Halliburton will decide on the future of KBR once it has settled the unit's $4.2bn (3.2bn) asbestos claims bill. It will favour a sale if the overhaul fails to boost the share price.

NEWS CORP SOOTHES US MOVE CRITICS

Australia's News Corp has adopted corporate reforms aimed at soothing critics of its planned move to the US.

The media giant, owner of Fox TV in the US, and the Times and Sun newspapers in the UK, promised not to issue new shares with extra voting rights.

US TAKES AIRBUS DISPUTE TO WTO

The US government is to take the European Union to the World Trade Organisation (WTO) in an effort to stop member states "subsidising" Airbus.

Robert Zoellick, the US trade representative, said Airbus was now bigger than its US rival Boeing and continued public funding was unfair.

"This is about fair competition and a level playing field," Mr Zoellick said.

The EU said its relationship with Airbus was legal and it planned counter action over US support for Boeing.

CHINA OPENS UP TO ELECTRONIC ARTS

Electronic Arts, the world's biggest computer games firm, is setting up a development studio in China.

The firm said it hopes to have 500 staff at the Chinese arm, which should help it capitalise on the massive demand in Asia for online gaming.

EA, best known for sports and strategy titles, is settling the plan's details with the Chinese authorities.

Encouraging more online gaming would give firms like EA a way around the software piracy prevalent in China.

COCOA DELAYS HITTING IVORY COAST

The start of the new cocoa harvesting season in Ivory Coast has been delayed due to a dispute over how many levies farmers must pay to industry bodies.

Ivory Coast is the world's biggest cocoa producer and with growers protesting on the streets, President Laurent Gbagbo has promised to act.

According to the BBC's James Copnall in Abidjan, the growers do not trust the three main trade bodies and vice versa. President Gbagbo proposes the creation of a central government body for cocoa.

ECB KEEPS EUROZONE RATES ON HOLD

The European Central Bank has kept eurozone interest rates unchanged at 2% for the sixteenth consecutive month last week.

The decision, widely expected by economists, had little impact on the financial markets.

It came amid signs of a slowdown in the tentative economic recovery in the 12-nation eurozone.

Economists believe the ECB is likely to wait until the economic impact of soaring oil prices is clearer before adjusting interest rates.

AT&T TO CUT A FURTHER 7,000 JOBS

American telecoms giant AT and T has announced that it plans to cut its workforce by 20% this year, or by just over 12,000 jobs.

 

 

This means that nearly 7,000 more jobs are being lost than was first indicated by the company earlier this year.

HOUSE PRICES SHOW RENEWED VIGOUR

UK house prices rose by 1.4% in September from August, says Halifax, the UK's biggest mortgage lender.

This reversed the previous month's small fall and casts doubt on whether the housing market is cooling.

The bank said the surge in prices was not out of the ordinary for the time of year and that the market had lost some momentum.

GERMAN UNEMPLOYMENT RISES AGAIN

Unemployment rose sharply in Germany in September, a sign that the economy remains weak, official data has shown.

The number of workers without jobs, adjusted for seasonal factors, rose by 27,000 on the month to 4.4 million, the Federal Labour Office said.

The increase was double that expected by economists, and marked the eight consecutive monthly rise in the adjusted jobless total.

CHINA HOLDS FIRM OVER YUAN REFORM

China has dashed hopes of a rapid revision upwards in the value of its currency, the yuan.

At present, the government in Beijing fixes the yuan against the US dollar.

The US, among other states, says the rate at which it is fixed is too low, giving Chinese companies unfair trading advantages.

But in Washington, Chinese officials rebuffed suggestions of an early shift to letting the financial markets set the rate.