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‘Historic’ deal with China will be good for global growth: Steven Mnuchin

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Treasury Secretary Steven Mnuchin speaks to the news media after giving a television interview at the White House in Washington, December 3, 2018.

Leah Millis | Reuters

The “historic” phase one trade agreement reached Friday between the U.S. and China will boost global growth, according to U.S. Treasury Secretary Steven Mnuchin.

Speaking to CNBC’s Hadley Gamble at the Doha Forum on Saturday, Mnuchin said the partial deal would address a host of issues central to Washington’s trade agenda.

“This deals with intellectual property, this deals with technology transfer, it deals with structural agricultural issues, financial services are opening up, currency understandings, as well as a commitment to purchase U.S. agriculture and U.S. goods,” he said.

Mnuchin also dismissed the notion that the U.S. was pushing back on the rules-based trading system, arguing that a level playing field with China would benefit the global economy.

“For a very long period of time the U.S. was open to China, China was not open to the U.S. There were very strong restrictions and for the first and second largest economy in the world, there should be more trading back and forth and that’s what we’ve been working on, and I think these agreements will not only be good for the U.S., but will be very good for global growth,” he added.

Global stocks surged Friday as Washington and Beijing announced that the partial accord had been reached, averting the next round of U.S. tariffs after a bruising 18-month trade war.

U.S. and Chinese negotiators will now work toward setting a timescale to sign the agreement, which is still subject to legal procedures, with U.S. Trade Representative Robert Lighthizer telling reporters Friday that the two sides would aim to ink the deal in January in Washington.

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ECB policy review an opportunity to ‘reconnect with citizens’

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Christine Lagarde, President of the European Central Bank (ECB), addresses the media during a news conference following the meeting of the governing council of the ECB in Frankfurt am Main, western Germany, on December 12, 2019.

Daniel Roland | AFP | Getty Images

A new policy review launched Thursday will help the European Central Bank (ECB) to reconnect with the public, according to ECB Governing Council member and Dutch central bank President Klaas Knot.

At its first policy meeting of 2020, the central bank left interest rates unchanged but kickstarted its first monetary policy review since 2003, in a bid to greater understand why inflation remains consistently below its target of close to 2%.

The review will assess how the ECB looks at price stability, along with its monetary policy toolkit, economic and monetary analyses and communication practices. Financial stability, employment and environmental sustainability will also be in the spotlight.

Euro zone inflation was confirmed at 1.3% year-on-year in December, but Knot told CNBC at the World Economic Forum in Davos on Friday that the Dutch public estimated that it sat at 9% in a recent domestic poll. He suggested that there was a gap in perception due to the ECB’s inflation measure omitting owner-occupied housing costs.

While southern European central bankers have tended to deviate in their monetary policy tone from their northern counterparts, Knot denied a rift among the Governing Council.

“We all agree that inflation has been below our aim, and we want to know why this has been the case, why controllability of inflation has fallen short of our expectations, why there is so much fundamental uncertainty, and also of course a question like ‘do we measure inflation correctly?'” he said.

“In and of itself, that is a technocratic question. That is not a question of east versus west or north versus south, I think we just want to get the right answer, and perception of our citizens is important.”

Knot added that while the central bank has worked to perfect its communication with the markets, it had “underestimated” the importance of the 330 million citizens impacted by its policy decisions. He suggested that the review is “an opportunity to reconnect with our citizens.”

Fiscal spending role

In a press conference following the ECB’s decision, President Christine Lagarde reiterated her call for “other policy areas” to “contribute more decisively” in order for the euro zone economy to capitalize on the central bank’s accommodative monetary measures.

Calls for governments to be more amenable to fiscal spending echo those of her predecessor Mario Draghi, and Lagarde added that the “implementation of structural policies in euro area countries needs to be substantially stepped up” to boost productivity and growth potential.

Speaking to CNBC on Friday, Portuguese Finance Minister and Eurogroup President Mario Centeno said European governments were already launching public investment programs in order to respond both to regional challenges such as the manufacturing slowdown, and global issues like climate change.

He also dismissed concerns that a potential change to how the ECB calculates or measures inflation could have a destabilizing effect on the euro zone economy.

“It is quite important to make all strands of policy action in Europe coherent. This means fiscal, this means monetary policy, this means competition, climate action,” Centeno told CNBC’s Karen Tso.

He added that he expects the review process to look to “optimize the extent to which monetary policy can have a positive impact in our economies.”

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Lagarde and Mnuchin clash over energy transition plan

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From left to right, Zhu Min, deputy managing director of the International Monetary Fund (IMF), Haruhiko Kuroda, governor of the Bank of Japan (BOJ), Christine Lagarde, president of the European Central Bank (ECB), Steven Mnuchin, U.S. Treasury secretary, Olaf Scholz, Germany’s finance minister, and Kristalina Georgieva, managing director of the International Monetary Fund (IMF), attend a panel session on the closing day of the World Economic Forum (WEF) in Davos, Switzerland, on Friday, Jan. 24, 2020.

Bloomberg

The president of the European Central Bank, Christine Lagarde, and the U.S. Treasury Secretary Steven Mnuchin laid bare their stark differences over how the world should transition to cleaner energy sources.

The corporate world’s role in protecting the environment has been a central theme of this year’s World Economic Forum in Davos, Switzerland.

Speaking on a panel Friday as the event drew to a close, Lagarde told the audience that central banks needed to lead the economic modeling of how changes to the environment should be costed and mitigated.

Lagarde said banks, accountants, companies and ratings agencies would need to move away from quarterly and medium-term forecasts and start thinking in terms of thirty years out.

Responding to the new ECB president directly, Mnuchin said he didn’t think forecasting the cost of protecting the environment was possible.

“Christine, I think you can have a lot of people and model it, but I just don’t want to kid ourselves. I think there is no way we can possibly model what these risks are over the next 30 years with a level of certainty, given what I think is the changes in technology along the way,” he said.

Lagarde responded directly, suggesting that long-term modeling would help press firms to understand the cost and process of switching to new, and less carbon-intensive, energy sources.

“If we can push companies into the direction of actually anticipating the transition, pricing it, and making sure that they move to cleaner and cleaner energy uses, then it helps,” she said.

Interpreting that as a direct cost to a business, Mnuchin responded sharply.

“I don’t think we know how to price these things,” he said, adding that the current pricing of future greener energy sources was being inflated.

“So, I think we are overestimating the cost. So, if you want to put a tax on people, go ahead and put a carbon tax. That is a tax on hard working people. I personally think the costs are going to be much lower 10 years from now — because of technology — than we think they are today,” he said.

Earlier, Mnuchin argued that the U.S. had become much more efficient through carbon technology and the use of energy, but named China and India as countries which needed to offer “significant improvement in terms of environmental issues.”

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Police to roll out live facial recognition cameras in London

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Daniel Leal-Olivas/AFP/Getty Images

British police are to start operational use of live facial recognition (LFR) cameras in London, despite warnings over privacy from rights groups and concerns expressed by the government’s own surveillance watchdog.

First used in the capital at the Notting Hill carnival in 2016, the cameras will alert police when they spot anyone on “wanted” lists.

“The use of live facial recognition technology will be intelligence-led and deployed to specific locations in London,” the city’s Metropolitan Police said in a statement on Friday.

“This is an important development for the Met and one which is vital in assisting us in bearing down on violence.”

The cameras will be clearly signposted and officers will hand out leaflets about what is happening.

Facial recognition cameras have been deployed in other British cities and shopping centers but their use has prompted privacy concerns and opponents have questioned the accuracy of the technology.

Last year, a Cardiff man took South Wales Police to the High Court, arguing that his human rights had been breached by officers using automated facial recognition without his knowledge when he was shopping.

The court ruled that using the technology was lawful but civil rights group Liberty are appealing the decision.

Responding to the ruling last September, the government’s Surveillance Camera Commissioner, Tony Porter, said that police should not see it as a “green light” for generic deployment of automated facial recognition.

“It is an intrusive tool with human rights and public confidence implications which have to be considered,” Porter said.

The EU is considering banning the technology in public places for up to five years to give it time to work out how to prevent abuses.

Metropolitan Police Assistant Commissioner Nick Ephgrave said in a statement: “We are using a tried-and-tested technology, and have taken a considered and transparent approach in order to arrive at this point.

“This is an important development for the Met and one which is vital in assisting us in bearing down on violence.”

He said police will begin operationally deploying LFR in places where intelligence suggests they are most likely to locate serious offenders.

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