Bristis Chancellor of the Exchequer Gordon Brown © chats with Prime Minister of Luxembourg Jean-Claude Juncker (l) and Finance Minister of Germany Caio Koch-Weser at the informal ECOFIN council meeting in Manchester on Saturday. (AFP Photo)

MANCHESTER, England, Sept. 10--European governments urged oil companies on Friday to invest more of their profits in exploration and long-neglected refining capacity as soaring fuel prices hit households, business and economic growth, Reuters reported.
“The oil sector players have a particular responsibility in this domain because they are making exceptionally big profits,“ Jean-Claude Juncker said after talks among European finance ministers that were dominated by record oil prices.
“We want them to invest more in exploration, production and refining, where they have been reticent in recent years,“ said Juncker, who is Luxembourg’s prime minister and chaired talks among the eurozone’s 12 finance ministers.
Total, one of the world’s oil giants, made profits of about 1.5 million euros per hour in the first six months of this year while home-heating fuel and petrol is in many places 30 percent dearer than a year ago.
Other giants like Exxon, BP and Shell are also making bumper profits on oil which is fetching close to $70 a barrel, not far from twice the price of a year ago.
French Finance Minister Thierry Breton called a meeting with oil companies for next week and saying he may be forced to slap a tax on them if no better response to the problem could be found.
EU finance ministers at the two-day gathering in the northern English city of Manchester will issue a statement summing up their position on oil, said British finance minister Gordon Brown, overall chairman of the meeting.
“Clearly the doubling of oil prices has an impact.“
Ministers said they had agreed to try to coordinate their response to dearer oil by helping poor families while trying to avoid giving big tax breaks to specific sectors of industry, as pressure mounts from truckers and taxi drivers.
“European ministers again agree that it’s not a question of lowering prices by adjusting excise duties but probably of helping poorer families with compensation measures,“ said Italian Economy Minister Domenico Siniscalco.
As the ministers met, Belgium announced plans to refund the 21 percent value-added tax normally paid on domestic heating oil. France too has said it will give many households a $75 euro cheque.

WASHINGTON,
Sept. 10--The economic losses from Hurricane Katrina and its floods are likely to top $125 billion, an economic consulting firm said Friday, revising upward its earlier estimate, AFP reported.
Risk Management Solutions, which last week estimated the impact at around $100 billion, said it made the revision based on “an extensive analysis“ of the insured and uninsured losses.
Most of the increase comes from the losses from flooding, which will add 15 to 25 billion dollars in private sector insured losses.
RMS said private sector insurance payouts are likely to be between 40 and 60 billion dollars, far in excess of prior estimates.
The firm noted that although standard private insurance companies exclude flood damage--requiring property owners to purchase coverage from the government’s National Flood Insurance Program (NFIP)--some insurers offer coverage in excess of the limits provided by the NFIP, and this is commonly purchased for high-value commercial properties or homes.
RMS said there could be a number of disputes on whether private insurers must make payouts, because it may not be possible to tell whether the damage was from wind or flood.
“Distinguishing the portion of damage attributable to wind or flood will be difficult in many areas that were impacted by winds in excess of 100 miles (160 kilometers) per hour,“ it said.
“The final insured loss from Hurricane Katrina will depend on how flood claims are apportioned among the NFIP, private insurers, and individuals. “Insurers can also expect deterioration losses in houses that are abandoned for a long period of time, and losses from fires and looting in the flooded city.“
Overall, RMS said, there is little precedent to assess the economic impact, which will come from wind, flooding and environmental contamination.
“This is the first urban flood that has affected such a vast and industrialized region.
“Without benchmarks, authorities have little experience to inform them of the levels of contamination to expect once the waters recede, or how long it will take before the region can be inhabited again,“ said RMS vice president Laurie Johnson.

A South Korean farmer shouts slogans as he raises a bundle of paddy during a rally against the government in Seoul on Saturday. (Reuters Photo)

SEOUL, South Korea, Sept. 10--Thousands of angry farmers rallied here Saturday near parliament, urging the National Assembly not to ratify an international deal to increase rice imports, AFP reported.
South Korea last year agreed to double rice imports to extend a World Trade Organization (WTO) accord that allows Seoul a grace period until 2014 before having to open its market.
The government attempted to present the deal to parliament for ratification in June but had to shelve the move amid strong opposition from farmers.
It seeks to introduce the deal again to the parliament which opened on September 1 for a 100-day regular session.
A crowd of some 5,000 farmers, wearing red headbands, gathered at a paved public square near the National Assembly, waving banners and chanting slogans.
“No to WTO, protect food sovereignty,“ they shouted. They also called for the cancellation of the deal reached with rice exporting countries last year, including China, the United States, Thailand and six other producing countries.
They planned a half-mile, candle-lit march toward the National Assembly later Saturday.
“We will send a large group of protestors to Hong Kong in December,“ the national association of farmers, Junnong, said on its official website.
US Trade Representative Rob Portman said Thursday there was little time left for WTO members to unblock talks on agriculture and other sensitive areas before a crucial ministerial gathering in Hong Kong in December.
The Hong Kong conference is meant to set the seal on four years of talks launched in the Qatari capital Doha that aim to deliver a comprehensive treaty for free trade by 2006.
However, the talks among the 148 WTO members have already missed one deadline for completion with agriculture and services emerging as major sticking points.
South Korea agreed in December last year to increase its rice import quotas from the current 4 percent of total domestic consumption to 7.96 percent until 2014.
In return, South Korea can renew a 1994 agreement, which had allowed Seoul to delay opening its rice market until 2004, for another 10 years.

WASHINGTON,
Sept. 10--The United States and Saudi Arabia signed a bilateral agreement on Friday paving the way for the world’s largest oil producer and leading OPEC member to join the World Trade Organization by the end of the year, the US trade representative’s office said, Reuters reported.
“This represents progress for Saudi Arabia, the United States and the WTO,“ US Trade Representative Rob Portman said in a statement after a private signing ceremony. “As a result of negotiations on its accession to the WTO, we will see greater openness, further development of the rule of law, and political and economic reform in Saudi Arabia. We have also increased our cooperation on bilateral and multilateral issues,“ Portman said.
As part of the deal, Saudi Arabia has promised not to enforce aspects of the Arab League boycott of Israel that apply to US firms doing business with Israel, USTR said. Riyadh also has pledged to abide by WTO rules in its trade with all 148 members of the WTO, including Israel, USTR said.
An influential pro-Israel group criticized the pact, which it said fails to end Riyadh’s direct boycott of Israel.
“The United States should not be extending trade preferences to countries that are undermining our policies in the Middle East and contravene the basic principles of the World Trade Organization,“ said Josh Block, a spokesman for the American Israel Public Affairs Committee.
But Mary Irace, vice president of the National Foreign Trade Council, which represents US multinational companies, defended the agreement as addressing the boycott issue in “a very serious and constructive manner.“
The United States is the last WTO member to reach a bilateral market access deal with Saudi Arabia. Riyadh must still finish work on multilateral agreement bringing its overall trade regime into line with WTO rules.
Earlier this year, a bipartisan group of 47 lawmakers in the US House of Representatives urged the Bush administration not to sign a WTO accession deal with the kingdom until it made progress on the boycott issue and did a better job of protecting human and religious rights.
The bilateral pact requires Saudi Arabia to open its markets to imports of more US farm and manufactured goods, as well as service companies in sectors including banking, telecommunications, energy, express delivery, transportation and hotel and restaurant management.

HARARE, Zimbabwe, Sept. 10--Zimbabwe on Saturday hailed a decision by the International Monetary Fund to postpone Harare’s possible expulsion for up to six months and said it was working hard towards repaying its debt arrears.
“We are happy with this decision,“ Finance Minister Herbert Murerwa told AFP, following the IMF board’s announcement on Friday.
“Zimbabwe is making steady progress in addressing its economic challenges and we will continue to improve our record on paying back the arrears and also on the policy side,“ Murerwa said.
The IMF decision came after Zimbabwe last week paid back $120 million (96 million euros) of its debt to the Washington-based body, bringing to $131 million its total repayments since February.
Harare’s remaining debt to the IMF now stands at around $175 million. The country has been in continuous arrears to the organization since 2001.
The IMF said in a statement Friday that its decision was made “taking into account Zimbabwe’s increased payments to the IMF and its initial policy steps since the last review in February 2005.“
The board said the recent payments had “resulted in a significant decline in the country’s arrears.“ The IMF will reexamine the possibility of expelling Zimbabwe “within six months“, it said.
As well as repay its debt, the IMF has been demanding that Zimbabwe cut public expenditure and reduce fiscal deficit to set the economy, burdened by triple-digit inflation and high unemployment, back on the rails.
Murerwa said, “We have had a full discussion with the IMF and they fully understand our economic position and our new policies which are aimed at bringing stabilization to the macro-economic situation.“
To avoid expulsion, Zimbabwe will have to garner more than 15 percent of the vote when the issue comes up for discussion.
If expelled, Zimbabwe would be the second country to be kicked out of the IMF since the former Czechoslovakia in 1954.
Zimbabwe’s economy has shrunk by 30 percent since 2000, when the government began seizing about 4,500 white-owned commercial farms, sending agricultural production plummeting.
President Robert Mugabe’s government has blamed drought and sanctions by the European Union and the United States for the country’s economic decline.

LONDON, Sept. 10--Britain’s trade in goods deficit rose to 5.067 billion pounds (7.5 billion euros, $9.3 billion) in July, compared with a downwardly revised 4.167 billion pounds in June, official data showed Friday, AFP reported.
Analysts’ consensus forecast was for a shortfall of 4.7 billion pounds.
June’s deficit had originally been put at 4.277 billion pounds, distorted by adjustments to take account of tax fraud.
The deficit with the EU narrowed in July to 2.555 billion pounds from 2.757 billion the previous month, data from the office for National Statistics showed.
However, the deficit with non-EU countries ballooned to 2.521 billion pounds, compared with 1.41 billion in June.
The sharp fluctuation between July and June was mainly owing to the effects of tax fraud and seasonal adjustments, National Statistics said.
Global Insight analyst Howard Archer noted,“ This is a significantly bigger trade deficit than expected, but there was always likely to be some payback from the much improved June performance.“
“Indeed, it is clear that the UK trade data has to be treated with a pinch of salt at the moment due to a number of potentially distorting problems.“

MILAN, Italy, Sept. 10--Italian car maker Fiat and US giant Ford plan to combine production of their leading small car brands Cinquecento and Ka, the head of marketing at Fiat Auto, Lapo Elkann, said on Friday, AFP reported.
“With Ford, we are going to form an alliance for small cars,“ he said during an interview on Italian radio station Radio 24 following press reports to this effect.
The companies intend to use a Fiat factory in Poland to manufacture the new Cinquecento (Fiat 500) model, set for release in 2007, and Ford’s Ka, which is due to hit the road in 2008, according to press reports.
A spokesman for Fiat said that both sides had already signed a memorandum of understanding, confirming their commitment to the project.
The deal shows Fiat’s willingness to team up with a US partner only seven months after the end of an ill-fated joint-venture with General Motors.
The heavily indebted, loss-making Italian manufacturer has a strategy to find targeted alliances with industrial partners and already cooperates with French group PSA Peugeot Citroen and Suzuki in Japan to develop new models.
The acrimonious break up of the partnership between General Motors and Fiat was finally settled out of court in February when GM agreed to pay Fiat 1.55 billion euros (two billion dollars) to unwind the alliance. “The synergies from the project under consideration would result in cost savings in development, factory equipment and materials,“ said a spokesman for Fiat.
“This would also allow both companies to offer their products at more competitive prices.“