Strong Dollar Batters Earnings for U.S. Tech Firms

By

Don Clark,

Jan. 31, 2016 7:50 p.m. ET

Many multinationals have suffered from the impact of a strong dollar, but few as severely as U.S. technology companies. There is little sign the pain will ease soon.

‘When the currencies move to that degree for that period of time, it’s meaningful to us,’ said Apple CEO Tim Cook. Apple said last week that the strong dollar had cost it nearly $5 billion in revenue in the quarter ended in December. 
‘When the currencies move to that degree for that period of time, it’s meaningful to us,’ said Apple CEO Tim Cook. Apple said last week that the strong dollar had cost it nearly $5 billion in revenue in the quarter ended in December. Photo: Jeff Chiu/Asscoiated Press

Currency headwinds for more than a year have dogged the biggest names in the sector—including Apple Inc., AAPL 0.01 % Microsoft Corp. MSFT -0.24 % and International Business Machines Corp. IBM -2.32 % —and once again loomed large in the current quarterly earnings season. The problem, which is increasingly defying traditional solutions, is also expected to weigh down the numbers expected Monday from Google’s parent Alphabet Inc.

Silicon Valley is suffering disproportionately because of its unusual success in hawking hardware, software and services abroad. S&P Dow Jones Indices estimates that U.S. information technology companies generated 59% of sales overseas in 2014, the latest annual numbers available, compared with 48% for companies in the broader S&P 500 index.

“I would expect the technology sector to continue to be the most affected of any sector,” said Howard Silverblatt, an S&P Dow Jones analyst. “These companies have enormous presence abroad.”

Currency headaches are becoming more pronounced as tech companies run into economic weakness and other issues that are slowing demand for their products.

Apple provided a striking example last week. The consumer electronics company, which gets 66% of its revenue from outside the U.S., said last week that the strong dollar had cost it nearly $5 billion in revenue in the quarter ended in December. Apple, if currency moves were excluded, said it would have generated $80.8 billion in revenue in the most recent quarter versus its reported $75.9 billion, knocking an 8% increase down to 2%.

Besides taking customary hedging actions to counter the dollar’s rise, the company said it had been forced to protect its profit margins by raising prices on products like iPhones in Russia, Brazil and Turkey and other countries.

Tim Cook, Apple’s chief executive, said extreme measures were necessary given the unprecedented scope of an issue that ordinarily affects a few countries at once. This time, he said in an interview, the dollar is “incredibly strong nearly everywhere.”

Since September 2014, Apple estimated, the Russian ruble’s value has fallen more than 50% and the Brazilian real more than 40%, while Canadian and Australian dollars, Mexican peso and Turkish lira are all down by 20% or more. What was $100 in overseas revenue for Apple in September 2014 translated to $85 in December 2015, the company estimated.

“When the currencies move to that degree for that period of time, it’s meaningful to us,” said Mr. Cook, who told analysts that the combination of currency shifts and slowing economies has caused a “melee in virtually every country in the world.”

Other tech companies also blamed currency woes for suboptimal results in their most recent quarter. Microsoft reported last week that the strong dollar had reduced its revenue by about $1.9 billion in the period ended in December. IBM put the fourth-quarter impact of currency translation at about $1.5 billion. Software maker Oracle Corp. ORCL -1.46 % in December said exchange rates reduced revenue by about $540 million in the quarter ended in November.

Wall Street Journal Article: Turning African Phones Into Wallets

By Alexandra Wexler
Updated Nov. 18, 2015 10:23 p.m. ET
7 COMMENTS

JOHANNESBURG—A 30-person startup in an artsy corner of this city’s gritty core is making it easier for millions of Africans to send and receive money across borders by using their phones.

Founded in 2009, MFS Africa has pioneered a mobile payment platform embraced by the continent’s biggest telecommunications operators, which count about 500 million customers combined.

Mobile phones are emerging as an essential payment device for Africans who increasingly trek across the continent and beyond seeking work. As they earn more money, they are looking for ways to move their cash quickly and easily.

The World Bank estimates that remittances to sub-Saharan Africa—or money foreign workers send home—increased 2.2% to $32.9 billion in 2014 from a year earlier. That is about twice the average growth rate of the two previous years, and the World Bank expects them to grow an average of 2.7% between 2015 and 2017.

MFS Africa’s payment system doesn’t require high-end smartphones, in a continent where no-frills feature phones are still prevalent. All users need is to set up a mobile payment account with their operator—MFS Africa’s partners include African giant MTN Group Ltd. , subsidiaries of London-based Vodafone Group PLC, Indian telecommunications company Bharti Airtel Ltd. and many others. They can transfer money to the mobile account of any other customers of these operators who are signed up to the system by texting the equivalent of a money order straight to their phone numbers, and confirming the transaction with a PIN.

MFS Africa also enables transfers from brick-and-mortar money-transfer operators in Europe to mobile phones in Africa.
MFS Africa connects 55 million people in 17 African countries, up from 20 million a year ago. By the middle of next year, the company expects to have 100 million subscribers connected on the continent. Of those subscribers, about 15% are active users, defined as making roughly two transactions a month.

The company pockets around 30 cents a transaction; the average transaction is about $80. Many of them require a foreign-exchange conversion, and some mobile operators apply a foreign-exchange spread that MFS Africa sometimes gets a share of. The company expects to be profitable next year.

MFS Africa leads a pack of companies scrambling to help migrant workers across the continent send money home, transfers that are easier and cheaper thanks to technological innovations like mobile payments, according to the Groupe Speciale Mobile Association, which represents mobile operators world-wide.

Nicolas Vonthron, GSMA’s senior manager for mobile money, said MFS Africa’s closest competitor is global payment hub HomeSend, a joint venture between MasterCard Inc., BICS, a wholesale communications service provider, and mobile financial services provider eServGlobal Ltd.

“[MFS Africa] may be not as robust, but they’re probably also more agile,” Mr. Vonthron said.

MFS Africa’s success is also accelerating South Africa’s emergence as a hub for mobile payment innovation across the continent. In 2011, Visa Inc. bought Cape Town-based mobile financial services provider Fundamo to expand the payment services it offers in developing markets like Rwanda. South Africa’s MTN signed a deal with Vodafone this year to connect their mobile money operations in several East and Central African countries—an agreement facilitated by MFS Africa.

Sub-Saharan Africa accounted for more than half of the 255 live mobile money services across the globe in 2014, with monthly mobile money transactions in the region topping $10 billion in late 2014, according to GSMA.

The company continues to look for new ways to apply their technology. MFS Africa’s payment platform, which requires all users to confirm transactions with a pin, “could be used for voting across sub-Saharan Africa,” Mr. Okoudjou said. “We got a lot of things to work on.”

MFS founder and chief executive Dare Okoudjou, who made his name almost a decade ago by developing MTN’s mobile payment strategy and implementing it across Africa and the Middle East, says the group is poised to grow rapidly.

“There is an insane amount of money that goes into paying money,” said Mr. Okoudjou, himself a migrant worker who was born in Benin.

The cost of sending remittances to sub-Saharan Africa is 12% of the amount transferred, well above the global average of 8%, according to the World Bank.

Serigne Dioum, MTN’s head of mobile financial services, says mobile-to-mobile partnerships enabled by MFS Africa’s hub will cut fees for cross-border transfers to 3% or less of a transaction’s value. Mr. Dioum said MTN has already achieved that fee level in a pilot partnership last year with Airtel Burkina Faso in that country and neighboring Ivory Coast, where MTN dominates. Mobile operators and MFS Africa hope lower fees will increase the number and volume of transfers that subscribers make.

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MFS Africa’s big break came with its contract with MTN. After that deal, MFS Africa signed up French telecom giant Orange SA . “We had the advantage of being African and speaking French,” Mr. Okoudjou said. Airtel came next, and then “Vodafone almost came by themselves.” Basically, “Whenever we got the chance we made sure we didn’t screw it [up],” he said.

The company continues to look for new ways to apply their technology. MFS Africa’s payment platform, which requires all users to confirm transactions with a pin, “could be used for voting across sub-Saharan Africa,” Mr. Okoudjou said. “We got a lot of things to work on.”

Wall Street Journal Article: Saudi Women to Vote, Run for First Time

By Margherita Stancati and Ahmed Al Omran

Updated Dec. 10, 2015 9:21 p.m. ET
45 COMMENTS

RIYADH—Saudi women can’t marry, enroll at university or travel abroad without permission from a male relative. But on Saturday, they will vote and run in a nationwide election for the first time.

Critics say the change is mostly for foreign consumption and will have little impact on the status of women in the kingdom. But many female voters see the vote for municipal councils as a milestone in turning this ultraconservative Gulf monarchy into a slightly more democratic place.

“It’s a first step. It’s the start of us becoming more active citizens,” said Salma al-Rashid, who works for Al Nahda Society, a group that launched a countrywide campaign to get out the female vote.

Saudi women are gradually taking a more prominent role in public life. The government is introducing a series of socially delicate reforms, including bringing more women into the workplace. Several have taken up senior positions in the private sector.

So far, there has been surprisingly little opposition to female voting in a country where women aren’t even allowed to drive. One video on social media shows a man slashing the campaign poster of a female candidate. Another says: “We cannot accept this.”

Saudi Arabia is an absolute monarchy with no elected legislature and limited space for political participation. The first municipal elections were only held in 2005.

Six years later, the country’s late monarch, King Abdullah, said that women, too, would soon be allowed to vote. The announcement was hailed as a breakthrough for women’s rights in the kingdom, and it is regarded as one of Abdullah’s most important legacies.

King Abdullah also brought women onto the Shura Council, an appointed body which advises the government on policy and serves as a quasi-parliament with limited legislative powers. Women make up a fifth of the council.

Women who registered ahead of this municipal election represent only a small portion of the electorate. They make up around 130,000 out of the country’s 1.49 million registered voters.

The issues range from opening of new day-care centers to fixing potholes and promoting healthier eating.

The number of registered voters is a fraction of the population of about 31 million, roughly a third of whom are migrant workers and not eligible to vote. Fewer than half-a-million new voters registered this time around.

There are roughly 980 female candidates out of a total of more than 6,900 and few, if any, are expected to actually win a seat.

“This is to prove that we are citizens—and that is more important than winning,” said one candidate, a Riyadh-based doctor. She didn’t want to be named because Saudi election rules prohibit candidates from giving interviews in the two weeks before the vote.

That is one of several restrictions that have contributed to making the election unusually quiet, at least compared with countries like the U.S.

Saudi candidates are barred from displaying their own photos on any campaign material. And, in keeping with the kingdom’s strict policy of gender segregation, they are not allowed to directly interact with potential voters of the opposite sex.

Since the overwhelming majority of registered voters are men, this rule has posed a bigger obstacle to female candidates. Some had to rely on male proxies to do the talking for them. Others communicated to potential male voters through screens or with the help of electronic devices.

At her campaign headquarters in a high-end Riyadh hotel, one candidate set up a audio connection to talk to men sitting in a nearby room. For many of the candidates, most campaigning happened online, through social media and websites rich in visual content that detailed their program.

Despite these efforts, the single biggest challenge candidates have faced is apathy.

“I don’t see what the point is,” said Mahassen Bilal, a Riyadh resident, as she strolled with her husband. He too said he would not vote.

To encourage participation, the government lowered the voting age from 21 to 18, and launched its own campaign.

Jedaia al-Qahtany, who heads Saudi Arabia’s election commission, said he is satisfied with the numbers.

“It’s a new experience,” he said.

Candidates are competing for about 2,100 seats in local councils, which have some power to approve budgets and to oversee the maintenance of public facilities such as roads and schools. Two thirds of 3,159 seats in total are elected, while the rest are appointed by the minister of municipal and rural affairs.

But some women see the election as a distraction from other, more vexing problems, such as the issue of male guardianship or inequality of rights in divorce, custody and inheritance cases. Or the fact that they still aren’t allowed to drive.

“It’s not about the right to vote, as much as getting basic civil rights,” said Al Hanouf al-Dahash, a 27-year-old banker.

 

WSJ Article: A Costly Quest to Lure India’s Online Shoppers

MADURAI, India — The future of India’s booming e-commerce market is in the hands of small-time customers like 27-year-old Gayathri Rajamansingh.

Each Sunday, the owner of a small hair salon browses the Shopclues website from her home, hunting for bargains. Recently, she fixed on a floral-print sari, a traditional Indian one-piece garment, and clicked “Buy Now.”

Ms. Rajamansingh’s impulse purchase of the 199 rupee ($3.06) sari, set in motion a logistical operation that is complex and costly. Delivering the item involved a three-day, roughly 1,200-mile journey from Surat, in the western state of Gujarat, to her home in Madurai, in the southern state of Tamil Nadu. More than 30 people moved the package, through two overnight truck journeys, a long-haul flight and, finally, a motorbike to her doorstep.

It cost Shopclues 45 rupees to deliver the sari to Ms. Rajamansingh, or about a quarter of the item’s price.

Many Indian e-commerce startups spend as much as 30% of their net sales on logistics, according to New Delhi-based consulting firm Technopak, way more than the 11.7% Amazon.com Inc. spent delivering packages in the U.S. last year. In China, market leader Alibaba Group Holding Ltd. doesn’t shoulder any shipping costs, which are split between merchants and buyers.

Indian e-commerce firms must figure out how to turn a profit in a country fraught with logistical obstacles — including bad roads, shoddy trucks, monsoon floods, corrupt state-border officials, overcrowded airports and complicated tax rules. Shopclues made money on Ms. Rajamansingh’s sari — 33.40 rupees — but overall, it doesn’t make enough to cover wages for employees or rent for its offices. Like its competitors, Shopclues relies on investors to stay afloat.

Most have deep pockets thanks to a flood of cash from venture capitalists looking to build the Indian equivalent of Alibaba.

With over $3 billion in the bank and a $15 billion valuation, Flipkart Internet Pvt., the country’s biggest e-commerce player, is the world’s most valuable shopping startup. Jasper Infotech Pvt.’s Snapdeal has raised $1.5 billion and is valued at $5 billion, according to Dow Jones VentureSource. Amazon plans to invest $2 billion to expand its India operations.

Jostling for position, these players offer steep discounts on everything from smartphones to refrigerators. They are prepared to risk losses on deliveries to far-flung patrons like Ms. Rajamansingh in the hope they will become loyal customers.

India is a few years away from an e-commerce boom like the one that took place in China, according to Credit Suisse Group AG. China’s market exploded to $458 billion in sales last year from $7 billion in 2007. India’s e-commerce market is currently worth $4 billion, Credit Suisse reckons.

But India faces a greater challenge getting people hooked up to the Internet. More than one billion people — almost 85% of the population — were still without Web access as of 2013, according to a report by McKinsey & Co.

Delivering cheap saris across the country on airplanes in a few days’ time doesn’t make economic sense, said Mohit Tandon, head of strategy at Delhivery, a logistics company that transports roughly one-fifth of all packages ordered online in India. Though more expensive than trucks, air shipping is popular with e-commerce firms eager to get a hold on India’s potentially vast market.

“The wall of cash can make people do irrational things,” said Shopclues Chief Executive Sanjay Sethi. Shopclues tries to keep a tight control on its costs and doesn’t sell most items at a loss, in part because it has raised only $130 million, Mr. Sethi said.

The torrent of investment cash has started to slow and some backers are beginning to ask e-commerce companies to show they are working on profitability, said Avnish Bajaj, managing director of India operations for U.S.-based Matrix Partners.

Indian e-commerce startups aren’t expected to turn a profit immediately. After all, Amazon only began to flirt with profitability after 20 years.

Shopclues says it is focused on achieving profitability in the next year. It makes roughly 10 rupees in gross profit for every 100 rupees in sales, Mr. Sethi said.

Flipkart has said it wants to be profitable by 2017, and Snapdeal is aiming to reach profitability in the next two to three years. Neither company has detailed their plans to achieve this. Flipkart and Snapdeal wouldn’t comment on logistical costs.

Investors say Indian e-commerce companies must make more money off customers.

Shopclues is nevertheless modeling its business on shoppers like Ms. Rajamansingh.

“Our price-point play is the masses,” said Mr. Sethi.

Raising prices or delivery costs may turn away shoppers like Ms. Rajamansingh, so Delhivery believes e-commerce players will end up ditching air travel for trucks.

“People have to move to that model,” said Delhivery’s Mr. Tandon. “Right now, it’s just who blinks first.”

Wall Street Journal Article

U.S. News: Historic Trade Pact Sealed
By David Kesmodel, William Mauldin and Jonathan D. Rockoff
916 words
6 October 2015
The Wall Street Journal

Copyright © 2015, Dow Jones & Company, Inc.

U.S. industries as diverse as aerospace, agriculture and apparel lauded a historic 12-nation Pacific trade deal struck Monday, while pharmaceutical makers, tobacco companies and others criticized the pact as falling short in key areas.

Completion of the Trans-Pacific Partnership, the biggest trade deal in a generation, marks a victory for President Barack Obama, who said it would open new markets to American products and set high standards for protecting workers and the environment.

The pact among the U.S., Japan, Australia, Vietnam and eight other countries around the Pacific — though not China — lowers trade barriers for goods and services ranging from poultry to building materials, and sets commercial rules for two-fifths of the global economy.

But the president now faces an arduous challenge of winning approval for the agreement in a divided Congress during a heated presidential campaign and amid upheaval in the Republican ranks.

The congressional debate could be influenced in part by diverting views from industry, as well as continued criticism of the pact from labor, consumer and environmental groups.

Several prominent pro-trade Republicans — whose support could be vital to moving the trade agreement through Congress — offered chilly appraisals of the final product.

“While the details are still emerging, unfortunately I am afraid this deal appears to fall woefully short,” said Sen. Orrin Hatch of Utah, chairman of the Senate Finance Committee. Rep. Paul Ryan of Wisconsin, chairman of the House committee that oversees trade, said he had “concerns surrounding the most recent aspects of the agreement” and was “reserving judgment” until he could study the details.

Within the business world, some of the broadest support came from the farm sector. The TPP would eliminate trade partners’ import taxes of as high as 40% on U.S. poultry products and fruit and 35% on soybeans, while seeking to minimize unpredictable export bans that can upend business for agricultural firms.

Cargill Inc., a giant grain exporter and meat processor, urged lawmakers to support the pact, saying it could set a new standard for international trade and help improve food security in developing countries.

Congress will have at least 90 days to review the deal, meaning it won’t come to a vote until January at the earliest — right as the 2016 presidential race begins in earnest.

Some top presidential candidates panned the pact. Republican front-runner Donald Trump said in a tweet that “TPP is a terrible deal.” Democratic candidate and Vermont Sen. Bernie Sanders called it “disastrous” and a victory for “Wall Street and other big corporations.”

The House is all but certain to pose the biggest challenge in winning final approval. On Monday, a number of liberal critics of the deal said it did little to protect vulnerable industries or promote job creation.

Some big U.S. manufacturers seconded those worries. Ford Motor Co., which has been outspoken in its concern about stipulations preventing currency manipulation, urged Congress to reject the current deal. But Detroit auto makers don’t have as much to complain about as some had feared when Japan joined the talks. A senior administration official said U.S. tariffs that protect the domestic car industry won’t be eliminated for 25 years, with truck tariffs ended only after 30 years.

Other big industry groups were more positive. The National Association of Manufacturers applauded the pact, which the White House said would eliminate import duties of up to 59% on U.S. machinery shipped to TPP partners.

Boeing Co., the largest U.S. exporter by value, said the deal would help it compete overseas, where it gets 70% of its commercial airplane revenue, while computer-chip giant Intel Corp. said it could bolster U.S. tech companies through “critical” intellectual property protections and encryption standards.

In apparel, the pact could enlarge foreign-market access while also helping U.S. giants like Nike Inc. ship goods home from overseas factories. The company said Monday the agreement “will allow us to innovate, expand our business and drive economic growth.”

Michael Penner, chief executive of Peds Legwear Inc., called TPP “a big deal.” For now, the company’s Hildebran, N.C., plant is producing socks almost entirely for North America, but he hopes the accord eventually will help him export to Japan and elsewhere.

Big drug companies’ main trade group, Pharmaceutical Research and Manufacturers of America or PhRMA, pointed to a provision that seems to protect biotech drugs from lower-priced competition for at least five years plus potentially more. The industry sought the 12 years of intellectual-property protection that biotech drugs receive in the U.S., and the duration was a sticking point until the end of the talks.

Tobacco companies are among losers in the pact. The agreement is the one of the first in the world to allow countries to prevent the tobacco industry from suing foreign governments over antismoking measures in special arbitration panels.

Philip Morris International Inc. on Monday said the provision “undermines the core principle of equality.”

Wall Street Journal Article: Globalization: Battered but Not Beaten by Stephen Fidler

World Economic Forum — Analysis: Globalization: Battered but Not Beaten — Ever-More Interconnected World Delivers Economic Gains to Many, While Pace of Change Stokes Unease, Political Tension

By Stephen Fidler

21 January 2015

(Copyright (c) 2015, Dow Jones & Company, Inc.)

The perils of forecasting: 12 months ago, as World Economic Forum delegates gathered in Davos, nobody predicted Russia would, within months, annex part of a neighboring state, and anyone anticipating a halving of oil prices would have been guided to a darkened room and told to lie down.

But other developments were more foreseeable: Low growth and low inflation in the eurozone were to hold back Europe’s ability to emerge from its debt crisis and reduce high unemployment. Partly as a result, the political mainstream in many European countries weakened, and nationalist parties grew in strength. Governments elsewhere struggled to cope with the powerful currents buffeting their nations.

In one way or another, most of these developments — foreseen or not — now risk further erosion of the fabric of our internationalized, interconnected world economy.

“Globalization has helped raise hundreds of millions out of poverty,” says Robin Niblett, director of the Chatham House think tank in London. But, he says, it’s moving faster than people and states can adapt to, politically, socially and institutionally. As a result, “levels of trust between governments and citizens are fraying.”

Trust among governments has also been a casualty, he argues. Russia’s annexation of Crimea and its backing for separatist rebels in Ukraine undermined the assumption that countries are all moving at a faster or slower pace to market-based democracies. China worries that the U.S. will try to contain it; while the West worries that rising powers — such as China and India — may not uphold the rules of the global game.

The collapse of oil prices will have widespread ramifications for the world economy, redistributing global income from energy producers — Russia, Venezuela and countries in the Middle East — to energy consumers, which include most of the world’s developed economies.

That should help global growth. Indeed, on the evidence of car sales and other indicators, Americans are already spending their windfall, making the U.S. perhaps the only major engine driving the world economy.

World oil production has been rising thanks in part to the development of nonconventional energy supplies, like shale oil, which has pushed the U.S. toward self-sufficiency. Saudi Arabia, meanwhile, has kept open the spigots with the apparent strategic aim of curbing further investment in the nonconventional sources.

But faltering demand also appears to be a factor, and to the extent the oil price betrays a weakening world economy — and evidence of a Chinese slowdown — it isn’t good news. Slowing demand has already hit other commodities, hurting the economies of raw-materials producers in Africa and Latin America.

Another worry is that falling energy prices might flip low-growth, low-inflation Europe into a deflationary mind-set that would lead people to postpone spending decisions, further inhibiting growth.

“If I were discussing issues in Davos, I think that the prospects of European deflation and a sudden stop in growth in China are the two things I’d be most worried about,” says Lant Pritchett, an economist at Harvard University’s Kennedy School.

Europe’s economic uncertainties are feeding through into its politics. A strong reaction against established political parties isn’t limited to Europe but is taking hold there. People see themselves as losing control over their lives, and blame government elites.

One reason for that is that the trends associated with globalization — rapid technological change, outsourcing and world finance — appear to be responsible for growing wealth disparities. Billions of people around the world are richer because of globalization but inside many nations it has resulted in growing inequalities in income and wealth.

The policy debate about how — or whether — to tackle national inequalities has intensified thanks in part to French economist Thomas Piketty, whose data-heavy tome “Capital in the Twenty-First Century” was published in English last year. Mr. Piketty proposed greater international cooperation on taxation, a move now being explored within the European Union for another reason: to curb rampant corporate tax avoidance.

In Europe, many people view the EU as being responsible for their discomfort with the globalized economy and for encouraging unwanted immigration.

Indeed, immigration is also held responsible by some of those struggling with one of the dark faces of globalization: Islamist terrorism. A few fanatics have the capacity to convulse nations, as shown by this month’s attacks in France. Terrorist atrocities meanwhile have taken the lives of thousands of people in Africa, the Middle East and Asia.

“I’m afraid that is the future,” says Mr. Niblett of Chatham House. But, he adds, “I don’t see the globalized economy being in retreat for the simple reason that everybody has seen the benefits. I think the world will hang together.”

Dow Jones & Company, Inc

How a U.S. Textile Maker Came to Embrace Free Trade

By Bob Davis

May 4, 2015 10:40 p.m. ET

SPARTANBURG, S.C.—Milliken & Co., one of the largest U.S. textile makers, has been on the front lines of nearly every recent battle to defeat free-trade legislation. It has financed activists, backed like-minded lawmakers and helped build a coalition of right and left-wing opponents of free trade.

With Congress now gearing up for another trade fight, this time over whether to give President Barack Obama authority to negotiate sweeping trade deals in Asia and Europe, Milliken is in an unfamiliar place. Its executives are urging lawmakers to support the free-trade measure.

The about-face by the family-owned company followed the 2010 death of Roger Millken, its chairman and former chief executive, at age 95. Mr. Milliken, who set the strategy for nearly everything at the company, had railed for years against what he considered China’s pernicious trade practices.

Read More:http://www.wsj.com/articles/how-a-u-s-textile-maker-came-to-embrace-free-trade-1430793654

Total Taps Chinese Banks to Fund Russian Project

By Brian Spegele and Andrew Peaple

Updated March 23, 2015 7:50 p.m. ET

BEIJING—Total SA TOT 2.39 % is pushing ahead with a $27 billion natural-gas project in the Russian Arctic, but it will seek a big chunk of the financing—as much as $15 billion worth—through Chinese banks in local currency and euros.

The decision comes amid worry that Western sanctions against Russia could complicate the sort of dollar-based fundraising that is more typical for big energy projects.

Total’s Arctic project—years in the planning—doesn’t run afoul of sanctions itself. But one of Total’s partners in the Yamal liquid natural gas venture is Russian energy firm OAO Novatek, NVTK -1.88 % in which Total has a minority stake. Another big Novatek shareholder is Gennady Timchenko, who has been specifically targeted by U.S. sanctions.

The U.S. and Europe have slapped a series of economic sanctions on Moscow in recent months amid a standoff over Ukraine and Crimea. Under the sanctions regime, rules limit the transfer to Russian firms of technology related to some unconventional drilling techniques, including shale-oil recovery methods and some Arctic and offshore oil projects. But Yamal, a natural-gas project, isn’t specifically affected.

Read More:http://www.wsj.com/articles/total-seeks-10-billion-to-15-billion-in-chinese-financing-for-russian-project-1427093833

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