EU Plans Workaround for U.S. Sanctions on Iran: GBF Update

(Bloomberg) -- World leaders and corporate executives gathered in New York on Wednesday for the Bloomberg Global Business Forum. Scheduled participants include U.K. Prime Minister Theresa May, Malaysian Prime Minister Mahathir Mohamad, IBM Corp. CEO Ginni Rometty and Uber Technologies Inc. CEO Dara Khosrowshahi.

The Global Business Forum is hosted by Michael R. Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News. He has told the New York Times that he’s considering a campaign for president as a Democrat.

EU Plans Workaround for U.S. Sanctions on Iran (1:40 p.m.)

European Union foreign policy chief Federica Mogherini said Europe is determined to create a mechanism that would let countries and companies bypass U.S. sanctions on Iran after President Donald Trump withdrew from the deal freezing the Islamic Republic’s nuclear program.

“We cannot accept as Europeans that others, even our closest allies and friends, determine who we can do business with,” Mogherini said.

“The dollar is not the only currency on earth,” she added.

European leaders are attempting to develop a financial agreement that would help to preserve the 2015 Iran nuclear accord despite the Trump administration’s threat of significant new sanctions set to hit in November. European companies including Daimler AG and Total SA have halted activity or backtracked on investment plans to avoid U.S. punishment, but France and Germany have repeatedly said that they support the Iran deal and want business with Iran to continue.

Mogherini said “having economic relations is an integral part” of maintaining the deal. She said India or other countries would be able to use the mechanism to purchase Iranian oil as well.

Asked about the sanctions the U.S. has threatened to impose on European companies that used the planned workaround, Mogherini said she wouldn’t “speculate on what happens” to the U.S.-Europe relationship if the Trump administration followed through. But, Mogherini said, Europe could not “accept the extraterritorial effect of the sanctions.”

Still, she said, "our friendship with the United States is strong."

Rivals Uber and Lyft Teaming Up on Traffic Jams (1 p.m.)

Ride-sharing rivals Uber and Lyft announced they’re joining forces for a common cause: cutting down on street-choking traffic.

Dara Khosrowshahi and John Zimmer, the heads of Uber Technologies Inc. and Lyft Inc., said they planned to share data on street congestion, vehicle speeds and other information in the name of improving traffic flow, preventing crashes and reducing pollution.

Ford Motor Co. also will participate in the venture with the National Association of City Transportation Officials, the Open Transport Partnership and Bloomberg Philanthropies.

The ride-sharing companies have been blamed by critics for adding to traffic congestion in New York and other major cities.

Financial Firms See Cyber-Risks From Third Parties (12:25 p.m.)

The biggest financial firms see significant risk from cyber attacks, even if their companies aren’t the ones being targeted, said BlackRock Inc. Chief Executive Officer Larry Fink.

While banks and asset managers have spent billions on cybersecurity, they still remain vulnerable from attacks on other sectors, such as state governments that possess individuals’ Social Security numbers, Fink said.

“If there are going to be cyber attacks, it is probably going to be organizations that have underspent on technology,” he said. While “the financial sector has been under such scrutiny because of the financial crisis, it is one of the sectors that is doing as much as it can.”

David Solomon, the incoming CEO of Goldman Sachs Group Inc., said cyber attacks are on his list of “things that can really go wrong” as he takes the top job next week.

“It’s a big issue that probably doesn’t get as much attention as it deserves, even though I say it gets a lot of attention,” Solomon said.

Google to Map Climate Data From Cars, Buildings (12:02 p.m.)

Alphabet Inc.’s Google will for the first time use its mapping technology to chart climate data from cars, buildings and other pollution sources to calculate the carbon dioxide output of thousands of cities around the world, said Rebecca Moore, the director of Google Earth.

The “Innovate4Cities” tool -- a partnership with Bloomberg Philanthropies and the Global Covenant of Mayors for Climate & Energy -- will show where carbon emissions are coming from and how fast they’re growing.

“This is the power of enabling these mayors with the data they need to make data-driven climate actions decisions,” Moore said.

More than 9,000 cities have taken a pledge for climate action, but most of them have not been able to get started, said European Commission Vice President Maros Sefcovic.

Separately, the commission announced it’s proposing to dedicate more than 45 billion euros a year to fight climate change from 2021 to 2027.

Citadel’s Griffin Sees 18-to-24 Months in Cycle (11:59 a.m.)

Ken Griffin, chief executive officer of hedge fund firm Citadel, said that at least 18-to-24 months remain in the market cycle, thanks to the “giant adrenaline shot” of the U.S. tax overhaul.

Griffin also cautioned that he’s managing his fund for the next economic downturn.

"We are in this debt-fueled buying binge," he said. That’s laying the seeds of the next financial crisis, Griffin said.

Uber Says Technology Will Disrupt Real Estate (11:30 a.m.)

New transportation technologies could dramatically disrupt real estate prices and increase prosperity for under-served populations living outside city centers, top executives of Uber Technologies Inc. and Virgin Hyperloop One said.

Reducing commute time is one of the best ways to extend “access to opportunity,” Uber Chief Executive Officer Dara Khosrowshahi said at an event sponsored by the MISK Global Forum. Khosrowshahi said his company’s rideshare service and others like it provide critical transportation to people in areas without public transportation or regular taxi access.

“Making it ubiquitous, making it affordable for everybody, is an incredible issue,” he said.

Khosrowshahi said he wasn’t concerned that new technologies might also render jobs obsolete, ultimately compounding issues faced by under-served populations. He said drivers for his service “know our system better than I do” and that he believed melding human and artificial intelligence would provide the best product.

Virgin Hyperloop One co-founder Josh Giegel said his company would allow specialty centers like hospitals to be built in areas outside a downtown core and still remain easily accessible.

Lagarde Says Technology Will Kill 26 Million Jobs (10:00 a.m.)

International Monetary Fund Managing Director Christine Lagarde said technological advancements will probably eliminate about 26 million jobs and disproportionately hurt women, citing a forthcoming IMF study.

The study analyzed the impact of artificial intelligence, biotechnology and robotics on nations in the Organization for Economic Cooperation and Development, Lagarde said during a discussion with Robin Li, chief executive officer of Beijing-based Baidu, which runs a search engine.

“That’s just one side of the coin,” Li said, adding that technology will enhance human endeavors. He noted that it will be “quite a few years” before computers can replace drivers, for example. Li said new jobs will be created, such as the need for humans to manage and label the data that computers would use in artificial intelligence applications.

“You don’t want to replace us,” Lagarde said.

EU Anti-Trust Chief Warns Tech Giants About ‘Misuse’ (9:55 a.m.)

European Commissioner for Competition Margrethe Vestager said regulators need to "stay alert" to ensure tech giants like Alphabet Inc.’s Google and Inc. don’t "misuse" their power.

Vestager explained the European Commission’s preliminary examination of Amazon as an exploration of the "dual functions" the company plays. While Amazon enables "little guy" sellers to access e-commerce through its platform, the website is also a major retailer itself, she said.

"They of course get all the data from the little guy and we want to understand how the data is being used," she said in an interview with Bloomberg Editor-in-Chief John Micklethwait.

Vestager first acknowledged the preliminary look at Amazon last week, saying her office had not yet launched a formal action against the e-commerce giant. The European Commission fined Google $5 billion over its mobile phone operating system.

The commissioner argued that Europe wasn’t hostile to American or Asian technology firms, saying that Europe was only concerned with "respect for the citizen" and ensuring transparency.

"It’s about your competitive spirit," she said.

May Predicts ‘Intense Weeks’ to Come in Brexit Talks (9:45 a.m.)

U.K. Prime Minister Theresa May urged the assembled business leaders to keep their faith in Britain despite the turmoil and unpredictability of Brexit.

While acknowledging some “intense weeks” to come, she gave her strongest emphasis to a pledge to make corporate tax rates in the U.K. the lowest in the G-20. It’s not a new commitment, but it was one likelier to please the business executives in New York than the European Commission in Brussels.

May’s reassuring tone made for a stark contrast with her alarming speech from Downing Street last week, where she said talks were at “an impasse,” language that spooked traders and sent the pound tumbling.

After her remarks, May sat down for a conversation with IBM CEO Ginni Rometty. The single question taken from the audience came from Blackstone Group CEO Stephen Schwarzman, who asked how businesses should cope with the uncertainty of Brexit.

She told him that in the end she’s sure a good deal with the European Union will result.

Hackett Says Trump Tariffs Cost Ford Over $1 Billion (9:30 a.m.)

Ford Motor Co. Chief Executive Officer Jim Hackett said trade disputes and escalating tariffs have left his company “kind of frozen,” adding that the duties on metals have already cost the carmaker more than $1 billion in profit.

“A lot of businesses aren’t sure” about how the trade situation will be resolved, Hackett said. “And that’s not good.”

“The metals tariffs were very negative to us,” Hackett said. “As you’re building infrastructure now in your countries you’d be wise not to cut-and-paste the old system.”

Bloomberg Calls for Government-Business Cooperation (8:50 a.m.)

Michael R. Bloomberg opened the forum by asking world leaders to cooperate with business leaders and use free trade to promote economic growth.

The former New York City mayor said the summit was an opportunity for government leaders gathered for the United Nations General Assembly in New York to meet with corporate executives to discuss "inclusive, sustainable, and fair" economic growth.

"We can accomplish so much more working together than apart," Bloomberg told the audience.

Bloomberg said in an interview ahead of the summit on Bloomberg Television that he was concerned the U.S. would be hurt by President Donald Trump’s trade actions, including tariffs targeted at Chinese goods.

“China is so big that anything you do to China has a minimal impact on the country," he said.

Bloomberg, a UN envoy on climate issues, said he also hoped to use the day’s events to continue a discussion about ways corporations and countries could combat climate change.

May to Pledge Low Corporate Taxes Post-Brexit (8:30 a.m.)

Prime Minister Theresa May plans to assure investors the U.K. will keep corporate tax rates down after Britain has left the European Union.

“’Whatever your business, investing in a post-Brexit Britain will give you the lowest rate of corporation tax in the G-20,’’ the prime minister will tell the Global Business Forum, according to her office. “You will access service industries and a financial center in London that are the envy of the world, the best universities, strong institutions, a sound approach to public finance and a consistent and dependable approach to high standards but intelligent regulation.’’

Globalization Has More Friends Than Foes, Poll Shows (8:30 a.m.)

A new poll finds 36 percent of Americans say globalization has mostly helped the U.S., while 30 percent say it has mostly hurt. The remaining 34 percent didn’t know or had no opinion in the survey conducted by Morning Consult in conjunction with the Bloomberg Global Business Forum.

While 46 percent of Americans surveyed said free trade has helped the U.S., 25 percent said it has hurt. The poll taken from Sept. 20-24 among a national sample of 2,201 adults had a margin of error of plus or minus 2 percentage points.

What to Watch for in New York:

  • The Global Business Forum will be followed by the One Planet Summit, which will discuss ways to accelerate implementation of the Paris climate accord and engage both public and private involvement.
  • U.S. President Donald Trump leads a session Wednesday at the United Nations, where the topic is officially billed as nonproliferation but he tweeted last week that “I will chair the United Nations Security Council meeting on Iran.” He’s also scheduled to hold a news conference at 5 p.m. New York time.
  • The day’s scheduled speakers before the UN General Assembly include U.K. Prime Minister Theresa May, South Korea’s President Moon Jae-in, Italian PM Giuseppe Conte and Venezuelan President Nicolas Maduro.

Here’s What Happened This Week:

  • Trump reasserted his “America First” views in his speech Tuesday at the UN, calling on the rest of the world to isolate Iran’s regime and boasting that his overtures toward Kim Jong Un have led to a breakthrough in ending the North Korean nuclear threat.
  • UN Secretary General Antonio Guterres said the world has reached a “pivotal moment” in its efforts to curb climate change while warning about what he said was a rise of authoritarianism around the world.

©2018 Bloomberg L.P.