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Mandelson seeks backing in farm subsidies row
Brussels: Peter Mandelson, Europe's trade chief, apparently will seek the backing of EU member states over accusations that he exceeded his mandate when he made an offer to cut EU farm subsidies in response to an US offer.

France, which has called for an emergency meeting of all 25 countries, repeated its claims yesterday that Mandelson should have consulted member states. It now appears that French diplomats will seek an assurance that Mandelson will consult before making any new offers to the US in the run-up to crucial world trade talks in Hong Kong in December.

Yesterday, Mandelson told Le Monde newspaper: "We remained fully within the mandate, in particular with respect to the Common Agricultural Policy as reformed in June 2003. All attempts to weaken the unity, which is our force, are counter-productive. I was surprised that comments were made criticising me when we were in the heat of negotiations last week."

France was infuriated when within hours of a US offer to cut farm subsidies to try to kick-start the stalled trade talks, Mandelson responded with a reciprocal pledge.

Christine Lagarde, the French trade minister, said yesterday that Mandelson's negotiating tactics were "lacking in transparency and prior consultation".
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GM and UAW in a deal to cut health benefits
Detroit: General Motors announce on Monday a tentative agreement with the United Automobile Workers union to cut US$1bn in annual health care benefits for more than 750,000 blue-collar workers, retirees and their families as part of its ongoing attempt to climb out of a financial crisis.

"This is a very big step forward that we will build on," said Rick Wagoner, G.M.'s chairman and chief executive. He called it "the single biggest cost reduction that we've probably been able to announce in a single day in the history of G.M."

Even as it disclosed the breakthrough deal with UAW, G.M. reported a US$1.6bn third-quarter loss, its largest quarterly loss in more than a decade. The company has lost nearly US$4bn so far this year, and also said it would seek to sell a majority stake in the General Motors Acceptance Corporation, the financial services division that is G.M.'s most steady profit center.

The Ford Motor Company and Chrysler, now a division of DaimlerChrysler, are already discussing health care cost cuts with the union and will seek similar concessions, since all three Detroit-based companies negotiate labor contracts in tandem.

The health care agreement would trim about US$15bn from G.M.'s future retiree health care liability, which is US$61bn for hourly retirees and US$77bn including salaried retirees. It will also cut G.M.'s annual health care expenses by $3 billion before taxes, and save it about US$1bn a year of cash, out of a nearly US$6bn annual medical bill.

In a significant concession to the union, G.M. agreed to make US$3bn in contributions by 2011 to a special fund set up to offset the benefits cuts.

G.M., which insures 1.1 million Americans, spends about US$1,500 per car produced in the United States on health care, more than it spends on steel and believed to be about US$1,000 more than Toyota spends per car.
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Refco may sell futures broker to buy-out firm
New York: Refco Inc., the beleaguered commodity futures broker is in advanced talks to sell part of the company to a group led by New York buyout firm J.C. Flowers & Co.

Flowers, run by former Goldman Sachs Group Inc. partner Christopher Flowers is negotiating to buy Refco's futures brokerage and Refco expects an agreement to be reached.

A deal for Refco, the largest independent U.S. futures broker will ease concern about the impact of a collapse on financial markets. The New York-based company began shutting two of its three units after stunning clients and investors Oct. 10 with the revelation that former Chief Executive Phillip R. Bennett hid US$430mn in bad debts.
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China receives boost on credit rating
Hong Kong: China has received a credit rating boost from credit rating agency Fitch due to its strong balance of payments and improving financial health.

The rating is now in line with that of Moody's Investors Service and above the equivalent rating from Standard & Poor's.

The combined growth and external sector strengths allow Chinese policy makers to better address the country's structural economic challenges, and they have been taking the opportunity to do so according to the credit rating agency.
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