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Obama says this is not the time to reopen NAFTA

3U.S. President Barack Obama walks out of the West Wing to speak on the state of the U.S. economy in the Rose Garden of the White House in Washington, August 7, 2009.

Obama says this is not the time to reopen NAFTA

WASHINGTON (Reuters) – President Barack Obama said on Friday that given the weakened state of the U.S., Mexican and Canadian economies, this is not the time to reopen the NAFTA treaty for negotiations.

Ahead of a summit in Guadalajara, Mexico, with Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper, Obama said it was important to stabilize each country’s economy.

Obama as a presidential candidate last year expressed a desire to reopen the North American Free Trade Agreement to include enforceable labor and environmental standards in the pact.

Speaking to Hispanic reporters, Obama said he still believed side agreements on labor and environmental protections should be incorporated into the core of the agreement.

“But I will be honest with you: at a time when the economy has been shrinking drastically and trade has been shrinking around the world, at a time when Mexico has suffered a double-digit blow because not only of a declining economy but because of the effects of H1N1 on tourism, we probably want to make the economy more stabilized in the coming months before we have a long discussion around further trade negotiations.”

Obama, who departs on Sunday for Mexico for talks Sunday night and Monday, said his top priority at the moment is to make sure the economies of all three nations are strong.

“In terms of refining some of our agreements, that is not where everyone’s focus is right now because we are in the middle of a very difficult economic situation,” Obama said, while adding that he was still interested in learning where the treaty can be improved.

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Mercedes-Benz must pay $482,000 for ‘LEMON’

A judge has ordered Mercedes-Benz USA LLC to pay $482,000 in damages and legal fees to a Wisconsin customer who was sold a defective car and not given a refund on time.

Vince Megna, a Milwaukee lawyer who represents the customer, said he believes the judgment is the largest involving a single car under a state “lemon law,” which protect consumers who are sold junk cars. The judge is expected to sign the final order as early as Friday.

Mercedes-Benz spokeswoman Donna Boland said the company, a unit of the German car maker Daimler AG, is disappointed the judge overturned an earlier verdict in favor of the company. The spat over the 2005 Mercedes-Benz E 320 has already dragged on more than four years, and the company’s lawyer on Friday asked the court to put the judgment on hold pending an appeal.

While states have a variety of lemon laws, Wisconsin’s is one of the strongest. It allows customers who buy cars that don’t run or can’t be repaired to demand a replacement or refund. Manufacturers have 30 days to respond and can be ordered to pay double the purchase price plus legal fees for violating the law.

Bob Silverman, a prominent lemon law attorney in Ambler, Pa. who was not involved in the case, agreed it was one of the largest judgments for a car he’s seen and was an important victory for consumers.

“This one result is very important to the entire auto industry,” Silverman said. “It teaches them a lesson they ought to comply with the law promptly or they are going to have to pay in the end.”

‘A complete nightmare’
Despite the pending judgment, customer Marco Marquez, a 37-year-old businessman from Waukesha, called the case “a complete nightmare” and said he was still waiting for his money back. Once a big fan of Mercedes-Benz who has owned several of its cars, he now says he’ll never buy another.

It all started when Marquez, who owns Mexican restaurants in Waukesha and Janesville, purchased the E 320 for $56,000 from a Milwaukee dealership in 2005.

Almost immediately, the car often would not start. The battery was replaced multiple times, but the problem continued. After several repair attempts, the dealership said the problem could not be fixed.

Marquez hired Megna, who sent the company a refund demand in October 2005. After a few weeks, an employee tried to talk Marquez into taking a replacement instead. He declined and again asked for a refund. At one point, the employee said he should fire his lawyer and deal with them on his own.

The company finally agreed to the refund, but failed to provide one within 30 days. On the 31st day, Megna filed the lawsuit on behalf of Marquez seeking double damages and attorneys’ fees.

Mercedes-Benz has acknowledged the car was defective, but for years has accused Marquez of acting in bad faith.

The company says an employee asked Marquez for information about his auto loan on the 30th day so the refund could be granted, but Marquez failed to follow through. Megna said Mercedes-Benz had the information it needed for the refund but was stalling.

Ruling overturned
A judge ruled in Marquez’s favor in 2007, awarding $202,000 in damages and legal fees. But an appeals court in 2008 overturned that decision and ordered additional proceedings, saying a jury should decide whether Marquez intentionally prevented the company from giving the refund on time.

A jury sided with the company last year, agreeing Marquez acted in bad faith. But in a rare move, Waukesha County Circuit Judge Michael Bohren overturned the verdict, saying it was not backed up by evidence. He ruled in Marquez’s favor, citing a clear “lack of urgency” by Mercedes-Benz to refund his money.

A series of rulings by Bohren have calculated the damages for Marquez at roughly $168,000 (double the purchase price plus interest), plus $314,000 in costs and legal fees for Megna and other lawyers.

In the meantime, Marquez has continued to drive the vehicle in question, which now has 56,000 miles. He said it was back in the shop for repairs twice last year but has been “working fine” lately. Still, he can barely contain his anger at the company he once admired.

“Frustrated is really an understatement,” he said. “You put that much faith in a car company and you give your hard-earned money to that company and then you are basically let down. You drop $50,000 for a car that doesn’t work.”

China secrets laws leave Rio few options


China secrets laws leave Rio few options

BEIJING – The options for Australian miner Rio Tinto, or indeed anyone, to help four employees detained in a Chinese state secrets investigation are limited, lawyers say, as laws leave great latitude to investigators and prosecutors.

Under China’s sweeping laws, the health and even the birthdays of the current leadership are considered state secrets.

Almost anything else can be classed as secret, especially economic data, as China moves from a system where everything once belonged to the state to the current free-for-all where everyone scrambles for any advantage they can get.

Stern Hu, an Australian citizen, and three Chinese colleagues were detained this month for stealing state secrets to aid Rio in price negotiations for iron ore, which is used in steelmaking. At least one Chinese steel executive is also detained and the probe has reached many of the largest mills.

The murkiness of state secret laws puts foreign investors potentially at risk when dealing with state-owned entities and potentially sensitive economic information.

Australia’s Prime Minister Kevin Rudd said on Wednesday the world was watching the case and warned significant economic interests are at stake.

The case has also raised concerns about rights under China’s legal system that are more commonly heard from human rights activists than from businessmen.

“This case makes as clear as any does that business people also have human rights,” said Jerome Cohen, a professor at New York University School of Law. “They ignore at their peril what are perceived as purely human rights cases, since, as this case illustrates, they can be next.”


Chinese diplomatic protocol prevents Australian consular official from asking Hu about anything other than his physical welfare. After their first visit last Friday, Beijing is not required to allow another visit for one month.

During investigations, neither the defendant nor the lawyer have access to documents on which a case in based, and lawyers cannot challenge the “secret” designation, Cohen said.

Lawyers are often not allowed to see their clients until the state security apparatus has concluded the investigation and formally handed the suspect over for prosecution. That can take months, or even more than a year.

Defence lawyers in such cases themselves have a legal “obligation to guard secrets,” said lawyer Guan Anping, who took on state secrets cases in the past.

Trials involving state secrets are held behind closed doors, and family members of defendants are barred.

The diplomatic fuss could benefit Hu in areas where Chinese authorities exercise discretion, for instance in allowing earlier access for his lawyer or increased privacy in consultations.

His three Chinese subordinates, and any Chinese executives caught up in the investigation, have far less protection. Rio could hire a lawyer for its Chinese employees, but not much else.

Article 111 of the Chinese code, which refers to illegally providing state secrets or intelligence to organisations or people outside the country, leaves a lot of room for interpretation. Sentences can vary from six months to death, and some foreigners have been expelled after conviction in the past.

“Intelligence” could include information that may be public in China, but considered embarrassing if aired abroad.

Exiled Uighur businesswoman Rebiya Kadeer, who China says was the mastermind behind ethnic riots in Xinjiang, was jailed for mailing newspaper clippings to her husband.


Chinese-born foreign nationals are particularly vulnerable. Their language and cultural skills mean they navigate the Chinese system well but their loyalty is supposed to be to China first.

That poses a problem for the many multinationals who rely on Chinese employees to advise and carry out operations in China, recognising their ability to bridge foreign and Chinese cultures.

The Chinese business culture is additionally confusing because of the hybrid form of many state-owned companies, which are listed entities but also integral to a state-directed economic model that China adopted from the Soviet Union.

One legacy of the system is that a “state secret” can be in the hands of a commercial enterprise, and the cost of a raw material — such as iron ore — can become of national interest.

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