Islamic State links to Philippine militants ‘very strong’: minister

Philippine Defence Secretary

By Martin Petty and Manuel Mogato

MANILA (Reuters) – The Philippines is certain of “very strong” links between Islamic State and home-grown militants and is concerned about regional repercussions from tension between China and the new U.S. administration, Manila’s defense minister said on Thursday.

Intelligence from various sources had shown Muslim rebels in the southern Philippines had been communicating with Islamic State, and funds were being transferred via mechanisms commonly used by Filipino workers in the Middle East, Defense Secretary Delfin Lorenzana told Reuters.

“Before, what we suspected was the ISIS group would come here but now we are certain that the connections are very strong between home-grown terrorists here and ISIS in the Middle East,” he said in an interview, referring to Islamic State.

“Also there’s quite an amount of money being sent here from the Middle East.”

He said communications via social media, telephone and text messages had been intercepted and funds were being transferred that were difficult to detect due to the large numbers of Filipinos who regularly remit income from places like Saudi Arabia and the smaller Gulf states.

He said there was no indication governments of those countries were involved.

The Philippines did not consider ties with longtime ally the United States to be strained, he said, despite President Rodrigo Duterte’s fierce rebukes of Washington.

Some statements about China by advisers to U.S. President Donald Trump were “very troubling”, he said, adding that an Enhanced Defense Cooperation Agreement (EDCA) with the United States would make U.S. troops based temporarily in the Philippines “magnets for retaliation” if things turned hostile.

CAUGHT IN THE MIDDLE

“We are concerned if war breaks out and it is near us we will be involved whether we like it or not,” he said, adding that if a conflict looked likely, the Philippines would consider scrapping the EDCA, to avoid a repeat of World War Two, when his country was badly affected.

There were no signs of any new Chinese reclamation in the Spratly Islands in the South China Sea, he said, and he had been given assurances repeatedly by China’s ambassador that it would not do any dredging in the disputed Scarborough Shoal.

Despite warming ties with Beijing, the Philippines still “would like to know more the thinking of China” regarding its end-game in building artificial islands equipped with military hardware, he said.

The Philippines was in no rush to pressure China to abide by last year’s ruling by the Permanent Court of Arbitration, which largely rejected Beijing’s claims in the South China Sea.

After the Philippines won the award, the United States had wanted it to push China to comply, Lorenzana said, but it had offered no guarantees of support.

“If we assert our right, our award, it was never going to do any good for us,” he said. “Would the Americans have backed us?”

He said internal security threats were growing and his ministry would next year request a doubling of its budget, or more, to address them.

The army’s involvement in Duterte’s war on drugs, following his decision to suspend police from the campaign, would be limited to assisting the Philippine Drug Enforcement Agency (PDEA) on a case-by-case basis in hostile situations.

“They go there if they are asked by PDEA and they need firepower, then we will assist, that’s our job, that’s all,” he said.

(Editing by Robert Birsel)

China says United States should ‘brush up on’ South China Sea history

Chinese vessels in South China Sea

BEIJING (Reuters) – The United States needs to brush up on its history about the South China Sea, as World War Two-related agreements mandated that all Chinese territories taken by Japan had to be returned to China, Chinese Foreign Minister Wang Yi said in Australia.

China has been upset by previous comments from the new U.S. administration about the disputed waterway.

In his Senate confirmation hearing, Secretary of State Rex Tillerson said China should not be allowed access to islands it has built there. The White House also vowed to defend “international territories” in the strategic waterway.

However, last week U.S. Defense Secretary Jim Mattis suggested that diplomacy should be the priority in the South China Sea.

In comments carried on the foreign ministry’s website late on Tuesday, Wang said he had a “suggestion” for this American friends. “Brush up on the history of World War Two,” Wang was quoted as saying during a visit to Canberra, Australia.

The 1943 Cairo Declaration and 1945 Potsdam Declaration clearly state that Japan had to return to China all Chinese territory taken by Japan, Wang said.

“This includes the Nansha Islands,” he added, using China’s name for the Spratly Islands.

“In 1946, the then-Chinese government with help from the United States openly and in accordance with the law took back the Nansha Islands and reefs that Japan had occupied, and resumed exercising sovereignty,” Wang said.

“Afterwards, certain countries around China used illegal methods to occupy some of the Nansha islands and reefs, and it’s this that created the so-called South China Sea dispute.”

China is committed to having talks with the parties directly involved, and in accordance with historical facts and international law to peacefully resolve the issue, and that position will not change, Wang said.

Countries outside the region should support the efforts of China and others in the region to maintain the peace and stability of the South China Sea, and not do the opposite, he added.

China sets great store on Mattis’ comments stressing diplomatic efforts in the South China Sea, as this is not only the position set by China and Southeast Asia but also the “correct choice” for countries outside the region, Wang said.

China claims most of the South China Sea, while Taiwan, Malaysia, Vietnam, the Philippines and Brunei claim parts of the waters that command strategic sea lanes and have rich fishing grounds along with oil and gas deposits.

(Reporting by Ben Blanchard; Editing by Michael Perry)

Iran leader rebuffs Trump’s warning on missiles

Iran's Supreme Leader

By Bozorgmehr Sharafedin

DUBAI (Reuters) – Ayatollah Ali Khamenei dismissed Donald Trump’s warning to Iran to stop its missile tests, saying the new U.S. president had shown the “real face” of American corruption.

In his first speech since Trump’s inauguration, Iran’s supreme leader called on Iranians to respond to Trump’s “threats” on Feb. 10, the anniversary of Iran’s 1979 Islamic revolution. Trump had tried but failed to frighten Iranians, Khamenei said.

“We are thankful to (Trump) for making our life easy as he showed the real face of America,” Khamenei told a meeting of military commanders in Tehran, according to his website.

The White House has said the last week’s missile test was not a direct breach of Iran’s 2015 nuclear pact with six world powers, but that it “violates the spirit of that”..

In remarks published on Tuesday, Iranian Foreign Minister Mohammad Javad Zarif said Tehran would not agree to renegotiate its nuclear agreement.

“I believe Trump will push for renegotiation. But Iran and European countries will not accept that,” Mohammad Javad Zarif told Ettelaat newspaper. “We will have difficult days ahead.”

On the campaign trail, Trump repeatedly promised to tear up the nuclear deal. While his Secretary of State, Rex Tillerson, has not called for an outright rejection of the accord, he has suggested a “full review” of it.

The supreme leader, Iran’s top authority, also said Trump has “confirmed what we have been saying for more than 30 years about the political, economic, moral and social corruption in the U.S. ruling system.”

Trump responded to a Jan. 29 Iranian missile test by saying “Iran is playing with fire” and slapping fresh sanctions on individuals and entities, some of them linked to Iran’s elite Revolutionary Guards.

“No enemy can paralyze the Iranian nation,” Khamenei said. “(Trump) says ‘you should be afraid of me’. No! The Iranian people will respond to his words on Feb. 10 and will show their stance against such threats.”

A U.N. Security Council resolution underpinning the pact urges Iran to refrain from testing missiles designed to be able to carry nuclear warheads, but imposes no obligation.

Under the accord, Iran agreed to curb its nuclear program in exchange for relief from some U.S., European and U.N. economic sanctions. Critics of Iran said the deal emboldened Tehran to increase its involvement in wars in Arab countries, a charge Tehran denies.

President Hassan Rouhani said on Tuesday that, in contrast to Trump’s view, the nuclear deal was a “win-win” accord, and could be used as a stepping stone to defuse tension in the region.

(Reporting by Bozorgmehr Sharafedin; Writing by William Maclean; Editing by Robin Pomeroy and Raissa Kasolowsky)

Merkel urges Putin to help end violence in eastern Ukraine

Tanks seen in Ukraine

BERLIN (Reuters) – German leader Angela Merkel urged Russia’s Vladimir Putin in a telephone call on Tuesday to use his influence on separatists in eastern Ukraine to stop the violence there, and the two agreed on the need for new ceasefire efforts, a German government spokesman said.

Ukrainian forces and pro-Russian separatists have both blamed each other for the latest flare-up in a conflict that has killed some 10,000 people since April 2014.

“The German Chancellor and the Russian President agreed that new efforts must be made to secure a ceasefire and asked foreign ministers and their advisers to remain in close contact,” government spokesman Steffen Seibert said.

Merkel and French President Francois Hollande have long tried to broker an end to the conflict but the two-year-old Minsk peace deal has merely locked the two sides in a stalemate.

The United States and European Union have imposed sanctions on Russia. Ukraine and NATO accuse the Kremlin of fuelling the conflict by supporting separatists with troops and weapons – a charge it denies.

The Kremlin, in its description of the Merkel-Putin call, said “serious concerns were expressed in connection with the escalation of the armed conflict resulting in human losses”.

Kiev is nervous that U.S. President Donald Trump will shift the political balance in Russia’s favour and that he may consider lifting sanctions against Moscow.

The fighting in eastern Ukraine broke out a month after Russia annexed the Crimean peninsula from Ukraine in March 2014. The statement from Merkel’s spokesman made no mention of Crimea, although the Chancellor does regularly repeat sharp criticism of the annexation.

(Reporting by Madeline Chambers; Editing by Paul Carrel and Mark Trevelyan)

China, United States cannot afford conflict: Chinese foreign minister

Chinese Foreign minister speaking on how U.S. and China need to work together

By Colin Packham

SYDNEY (Reuters) – There would be no winner from conflict between China and the United States, Chinese Foreign Minister Wang Yi warned on Tuesday, seeking to dampen tension between the two nations that flared after the election of U.S. President Donald Trump.

Relations between China and United States have soured after Trump upset Beijing in December by taking a telephone call from Taiwan President Tsai Ing-wen and threatened to impose tariffs on Chinese imports.

China considers Taiwan a wayward province, with no right to formal diplomatic relations with any other country.

But China is committed to peace, Wang said, after meeting Australia’s Foreign Minister Julia Bishop.

“There cannot be conflict between China and the United States, as both sides will lose and both sides cannot afford that,” he told reporters in the Australian capital of Canberra.

While seeking to reduce tension, Wang called on global leaders to reject protectionism, which Trump has backed with his “America First” economic plans.

“It is important to firmly commit to an open world economy,” Wang added. “It is important to steer economic globalisation towards greater inclusiveness, broader shared benefit in a more sustainable way.”

Just days ahead of Trump taking office, Chinese President Xi Jinping was in Switzerland as the keynote speaker at the World Economic Forum in Davos, offering a vigorous defence of globalisation and signalling Beijing’s desire to play a bigger role on the world stage.

Wang said that China does not want to lead or replace anyone, and that as its national strength is still limited it must focus on its own development, according to comments carried on the Chinese Foreign Ministry’s website.

“We must remain clear headed about the various comments demanding China play a ‘leadership role’,” Wang said.

While Trump’s trade policies have spurred concern the United States is entering a period of economic protectionism, China has previously accused Australia of adopting a similar practice by blocking the sale of major assets to Chinese interests.

Bishop urged China to consider joining a pan-Pacific trade pact abandoned last month by Trump, who has said he prefers bilateral deals.

“I want to encourage China to consider the agreement,” Bishop said, referring to the Trans-Pacific Partnership.

As China called on nations to be open to offshore investment, Wang said Beijing would link its “One Belt, One Road” (OBOR) policy with Australia’s plan to develop its remote northern region.

The programme announced by Xi in 2013 envisages investments by China in infrastructure projects, including railways and power grids in central, west and southern Asia, as well as Africa and Europe.

Australia has ambitious plans to develop its Northern Territory, a frontier region with little infrastructure, but efforts have largely stalled for lack of investment.

(This story has been refiled to replace “influence” with “national strength” in ninth paragraph, adds dropped word in first paragraph.)

(Additional reporting by Ben Blanchard in Beijing; Editing by Clarence Fernandez and Pritha Sarkar)

Iran’s missile test ‘not a message’ to Trump

Iran's president

DUBAI (Reuters) – Iran said on Monday a recent missile trial launch was not intended to send a message to new U.S. President Donald Trump and to test him, since after a series of policy statements Iranian officials already “know him quite well”.

Iran test-fired a new ballistic missile last week, prompting Washington to impose some new sanctions on Tehran. Trump tweeted that Tehran, which has cut back its nuclear program under a 2015 deal with world powers easing economic sanctions, was “playing with fire”.

Iranian Foreign Ministry spokesman Bahram Qasemi was quoted by Tasnim news agency as saying: “Iran’s missile test was not a message to the new U.S. government.

“There is no need to test Mr Trump as we have heard his views on different issues in recent days… We know him quite well.”

Iran has test-fired several ballistic missiles since the 2015 deal, but the latest test on January 29 was the first since Trump entered the White House. Trump said during his election campaign that he would stop Iran’s missile program.

Qasemi said The U.S. government was “still in an unstable stage” and Trump’s comments were “contradictory”.

“We are waiting to see how the U.S. government will act in different international issues to evaluate their approach.”

Despite heated words between Tehran and Washington, U.S. Defense Secretary Jim Mattis said on Saturday he was not considering strengthening U.S. forces in the Middle East to address Iran’s “misbehavior”.

Hamid Aboutalebi, deputy chief of staff of Iran’s President Hassan Rouhani, tweeted on Monday that the U.S. government “should de-escalate regional tension not adding to it”, and Washington should “interact with Iran” rather than challenging it.

Iran announced on Saturday that it will issue visas for a U.S. wrestling team to attend the Freestyle World Cup competition, reversing a decision to ban visas for the team in retaliation for an executive order by Trump banning visas for Iranians.

(Reporting by Bozorgmehr Sharafedin; editing by Ralph Boulton)

The Art of the Deal: Why Putin needs one more than Trump

woman passes billboard of Trump and Putin together

By Andrew Osborn

MOSCOW (Reuters) – In his book, ‘Art of the Deal,’ Donald Trump said the best deals were ones where both sides got something they wanted. His credo, applied to a potential U.S.-Russia deal, flags an awkward truth for Vladimir Putin: He wants more from Trump than vice versa.

As aides try to set up a first meeting between the two presidents, the mismatched nature of their respective wish lists gives Trump the edge, and means that a deal, if one is done, may be more limited and longer in the making than the Kremlin hopes.

“What the two countries can offer each another is strikingly different,” said Konstantin von Eggert, a commentator for TV Rain, a Moscow TV station sometimes critical of the Kremlin.

“The U.S. has a stronger hand. In biblical terms, the U.S. is the three kings bearing gold, while Russia is the shepherds with little apart from their good faith.”

Appetite for a deal in Moscow, where parliament applauded Trump’s election win, is palpable. The Kremlin blames Barack Obama for wrecking U.S.-Russia ties, which slid to a post-Cold War low on his watch, and with the economy struggling to emerge from two years of recession, craves a new start.

Trump’s intentions toward Moscow are harder to discern, but seem to be more about what he does not want — having Russia as a time-consuming geopolitical foe — than his so far vague desire to team up with the Kremlin to fight Islamic State.

Trump has hinted he may also push for a nuclear arms deal.

Putin’s wish list, by contrast, is detailed, long and the items on it, such as getting U.S. sanctions imposed over Moscow’s actions in Ukraine eased, are potentially significant for his own political future.

He is looking to be given a free hand in the post-Soviet space, which he regards as Russia’s back yard.

Specifically, he would like Trump to formally or tacitly recognize Crimea, annexed from Ukraine in 2014, as Russian territory, and pressure Kiev into implementing a deal over eastern Ukraine which many Ukrainians view as unpalatable.

The icing on the cake for him would be for Trump to back a Moscow-brokered Syrian peace deal allowing President Bashar al-Assad, a staunch Moscow ally, to stay in power for now, while crushing Islamic State and delivering regional autonomy.

For Putin, described in leaked U.S. diplomatic cables as an “alpha-dog,” the wider prize would be respect. In his eyes, a deal would confer legitimacy and show Russia was a great power.

But, like a couple where one side is more interested than the other, the expectational imbalance is starting to show.

Trump spoke by phone to five world leaders before talking to Putin on Jan. 28 as part of a bundle of calls. The White House readout of the Putin call was vague and four sentences long; the Kremlin’s was effusive and fifteen sentences long.

Nor does Trump seem to be in a rush to meet. Dmitry Peskov, Putin’s spokesman, said the two might only meet before a G20 summit due to take place in July.

Trump has good reason not to rush.

‘A HUGE BONUS’

With U.S. intelligence agencies accusing Moscow of having sponsored computer hacking to help Trump win office, a deal would hand fresh political ammunition to Trump’s opponents, who say he has long been too complimentary to the Russian leader.

A delay would have the added advantage of postponing a chorus of disapproval from foreign allies and Congress, where there is bipartisan determination to block sanctions relief.

For Putin though, in his 17th year of dominating the Russian political landscape, a deal, or even an early symbolic concession such as easing minor sanctions, matters.

Expected to contest a presidential election next year that could extend his time in the Kremlin to 2024, he needs sanctions relief to help lift the economy out of recession.

U.S. and EU financial sector sanctions have cut Russia’s access to Western capital markets and know-how, scared off foreign investors, and — coupled with low global oil prices — have exacerbated an economic crisis that has cut real incomes and fueled inflation, making life harder for millions.

Since Putin’s 2012 election, consumer prices have risen by 50 percent, while a fall in the value of the rouble against the dollar after the annexation of Crimea means average salaries fell by 36 percent from 2012-2016 in dollar terms.

Official data puts inflation at 5.4 percent, but consumers say the real figure is much higher, and fear of inflation regularly ranks among Russians’ greatest worries in surveys.

An easing of U.S. sanctions could spur more foreign investment, helping create a feel-good factor.

“It would be a huge bonus if it happened,” said Chris Weafer, senior partner at economic and political consultancy Macro-Advisory Ltd, who said he thought Putin wanted to put rebuilding the economy at the heart of his next term.

The economy matters to Putin because, in the absence of any more land grabs like Crimea, greater prosperity is one of the few levers he has to get voters to come out and support him.

With state TV affording him blanket and favorable coverage and with the liberal opposition still weak, few doubt Putin would genuinely win another presidential term if, as expected, he decided to run.

But for the win to be politically durable and for Putin to be able to confidently contemplate serving out another full six-year term, he would need to win big on a respectable turnout.

That, an election showed last year, is not a given.

Around 4 million fewer Russians voted for the pro-Putin United Russia party in a September parliamentary vote compared to 2011, the last time a similar election was held.

Although the economic benefits of a Trump deal might take a while to trickle down to voters, its symbolism could boost turnout, helping Putin prolong a system based on himself.

“It would be presented to the Russian people as a huge victory by Putin,” said von Eggert. “It would be described as a validation of his strategy to go to war in Ukraine regardless of the consequences and to turn the country into Fortress Russia.”

(Additional reporting by Andrey Ostroukh; Editing by Peter Graff)

Trump’s defense chief heads to Asia, eying China, North Korea threat

President Trump with Defense Secretary Mattis

By Phil Stewart and Nobuhiro Kubo

WASHINGTON/TOKYO (Reuters) – President Donald Trump’s defense secretary is expected to underscore U.S. security commitments to key allies South Korea and Japan on his debut trip to Asia this week as concerns mount over North Korea’s missile program and tensions with China.

The trip is the first for retired Marine General James Mattis since becoming Trump’s Pentagon chief and is also the first foreign trip by any of Trump’s cabinet secretaries.

Officials say the fact that Mattis is first heading to Asia – as opposed to perhaps visiting troops in Iraq or Afghanistan – is meant to reaffirm ties with two Asian allies hosting nearly 80,000 American troops and the importance of the region overall.

That U.S. reaffirmation could be critical after Trump appeared to question the cost of such U.S. alliances during the election campaign. He also jolted the region by pulling Washington out of an Asia-Pacific trade deal that Japan had championed.

“It’s a reassurance message,” said one Trump administration official, speaking on condition of anonymity.

“This is for all of the people who were concerned during the campaign that then-candidate, now-president, Trump was skeptical of our alliances and was somehow going to retreat from our traditional leadership role in the region.”

Trump himself has spoken with the leaders of both Japan and South Korea in recent days and will host Japanese Prime Minister Shinzo Abe in Washington on Feb. 10.

Mattis leaves the United States on Feb. 1, heading first to Seoul before continuing to Tokyo on Feb. 3.

DEFENSE SPENDING

Trump singled out both South Korea and Japan on the campaign trail, suggesting they were benefiting from the U.S. security umbrella without sharing enough of the costs.

In one 2016 television interview, Trump said of the 28,500 U.S. troops deployed to South Korea: “We get practically nothing compared to the cost of this. Why are we doing this?”

Mattis, in his confirmation hearing, appeared to play down those remarks, noting that there was a long history of U.S. presidents and even defense secretaries calling on allies to pay their fair share of defense costs.

But his visit to the region comes amid concerns North Korea may be readying to test a new ballistic missile, in what could be an early challenge for Trump’s administration.

Speaking with South Korean Defense Minister Han Min-koo ahead of his trip, Mattis reaffirmed a U.S. commitment to defend the country and “provide extended deterrence using the full range of U.S. capabilities.”

Analysts expect Mattis to seek an update on South Korea’s early moves to host a Terminal High Altitude Area Defense (THAAD) system, which, once in place sometime in 2017, would defend against North Korea’s nuclear and ballistic capabilities.

Still, a South Korean military official played down expectations of any big announcements during the trip, saying Mattis’ first visit would likely be “an ice-breaking session” for both countries.

In Tokyo, Mattis is to meet Defense Minister Tomomi Inada, who has repeatedly said Japan is bearing its fair share of the costs for U.S. troops stationed there and has stressed that the alliance is good for both nations.

Japan’s defense spending remains around 1 percent of GDP, far behind China, which is locked in a dispute with Japan over a group of East China Sea islets 220 km (140 miles) northeast of Taiwan known as the Senkakus in Tokyo and the Diaoyus in Beijing.

The trip also comes amid growing concern about China’s military moves in the South China Sea. Tension with Beijing escalated last week when Trump’s White House vowed to defend “international territories” there.

China responded by saying it had “irrefutable” sovereignty over disputed islands in the strategic waterway.

“What U.S. military people say is that considering the pace of China’s military build-up such as anti-ship missiles and fighters, there are worries about Japan’s capabilities,” said a senior Japanese defense ministry official, speaking on condition of anonymity.

(Reporting by Phil Stewart; Additional reporting by Linda Sieg in Tokyo, Matt Spetalnick and David Brunnstrom in Washington, and Ju-min Park in Seoul; Editing by Dan Grebler)

U.S.-Mexico crisis deepens as Trump aide floats border tax idea

boy watches as U.S. workers build wall between U.S. and Mexico

By Steve Holland and Miguel Gutierrez

PHILADELPHIA/MEXICO CITY (Reuters) – The White House on Thursday floated the idea of imposing a 20 percent tax on goods from Mexico to pay for a wall at the southern U.S. border, sending the peso tumbling and deepening a crisis between the two neighbors.

Mexican President Enrique Pena Nieto announced on Twitter around midday on Thursday that he was scrapping a planned trip to meet with U.S. President Donald Trump, who has repeatedly demanded that Mexico pay for a wall on the U.S. border.

Later in the day, White House spokesman Sean Spicer sent the Mexican peso falling to its low for the day when he told reporters that Trump wanted a 20 percent tax on Mexican imports to pay for construction of the wall.

Spicer gave few details, but his comments resembled an existing idea, known as a border adjustment tax, that the Republican-led U.S. House of Representatives is considering as part of a broad tax overhaul.

The White House said later its proposal was in the early stages. Asked if Trump favored a border adjustment tax, White House Chief of Staff Reince Priebus said such a tax would be “one way” of paying for the border wall.

“It’s a buffet of options,” he said.

The plan being weighed by House Republicans would exempt export revenues from taxation but impose a 20 percent tax on imported goods, a significant change from current U.S. policy.

“If you tax exports from Mexico into the United States, you’re going to make things ranging from avocados to appliances to flat-screen tvs, you’re going to make them more expensive,” Mexican Foreign Minister Luis Videgaray told reporters at the Mexican Embassy in Washington on Thursday night.

Countries like Mexico would not pay such taxes directly. Companies would face the tax if they import products made there into the United States, potentially raising prices for American consumers.

The idea is unpopular with retailers and businesses that sell imported goods in the United States. It also has met opposition from some lawmakers worried about the impact on U.S. consumers.

Trump himself appeared to pan the idea in a Wall Street Journal interview last week, saying the House border adjustment provision was “too complicated.”

Even after Trump’s comments, congressional Republicans have continued to discuss the issue with White House officials in an effort to bring them on board with the idea.

RIFT WITH MEXICO

Trump, who visited Republican lawmakers at their policy retreat in Philadelphia, told them he would use tax reform legislation to pay for the border wall.

“We’re working on a tax reform bill that will reduce our trade deficits, increase American exports and will generate revenue from Mexico that will pay for the wall if we decide to go that route,” he said.

Trump, who took office last week, views the wall, a major promise during his election campaign, as part of a package of measures to curb illegal immigration. Mexico has long insisted it will not heed Trump’s demands to pay for the construction project.

He signed an executive order for construction of the wall on Wednesday. The move provoked outrage in Mexico. A planned meeting between Videgaray and U.S. Homeland Security Secretary John Kelly was canceled, a department spokeswoman said.

Videgaray said Mexico would work with Trump but that paying for the wall was out of the question.

“There are things that go beyond negotiation,” he said. “This is about our dignity and our pride.”

Pena Nieto, who had been under pressure to cancel the summit, tweeted on Thursday: “We have informed the White House that I will not attend the working meeting planned for next Tuesday with @POTUS.”

Trump had tweeted earlier that it would be better for the Mexican leader not to come if Mexico would not pay for the wall. He said later the meeting was canceled by mutual agreement.

Relations have been frayed since Trump launched his presidential campaign in 2015, characterizing Mexican immigrants as murderers and rapists. His trade rhetoric has hit the Mexican economy, causing consumers to rein in spending and foreign businesses to wait on new investments, according to the International Monetary Fund.

Trump has vowed to renegotiate the North American Free Trade Agreement with Mexico and Canada and slap high tariffs on American companies that have moved jobs south of the border.

Mexico ships 80 percent of its exports to the United States, and about half of Mexico’s foreign direct investment has come from its northern neighbor over the past two decades.

The United States runs a $58.8 billion trade deficit with Mexico, according to the latest U.S. government figures. But Mexico is also the United States’ second-largest export market.

(Additional reporting by Roberta Rampton and Ayesha Rascoe in Washington, David Morgan in Philadelphia and Frank Jack Daniel, Dave Graham and Christine Murray in Mexico City; Writing by Emily Stephenson; Editing by Alistair Bell and Peter Cooney)

Jihadists in Syria launch assault on rebels attending peace talks

hotel hosting Syria peace talks

By Tom Perry

BEIRUT (Reuters) – A jihadist group launched a major assault on Free Syrian Army factions in Syria as they attended peace talks in Kazakhstan, rebel officials said on Tuesday, igniting a new conflict among insurgents that could further strengthen the government’s hand.

The attack by jihadist group Jabhat Fateh al-Sham targeted FSA groups in northwestern Syria in an area representing the rebellion’s main territorial foothold after the opposition’s defeat in Aleppo last month.

Fateh al-Sham could not immediately be reached for comment. The group was previously known as the Nusra Front, and changed its name after announcing it was cutting ties with al Qaeda last year.

Tensions have been building between Fateh al-Sham and more moderate rebels since government forces backed by Russian air power and Iranian-backed Shi’ite militias drove the rebels out of Aleppo, a major victory for President Bashar al-Assad.

Fateh al-Sham is not covered by a shaky truce between the government and rebels brokered by Russia and Turkey, one of the main backers of the FSA groups. The aim of the meeting in Astana, organized by Russia, Turkey and Iran, is to shore up the ceasefire that came into effect on Dec. 30.

The commander of one of the FSA groups, Jaish al-Mujahideen, told Reuters the “extremely fierce” Fateh al-Sham attack aimed to “eliminate the revolution and turn it black”, a reference to the black flag flown by the jihadists in Syria.

He said the group had seized “some positions”, though these were far from its headquarters. “A comprehensive war has now started against the Golani gang,” he added, a reference to Abu Mohamad al-Golani, the leader of Fateh al-Sham.

In a statement, Jaish al-Mujahideen called for other factions to “stand as if they are one man” against the group.

DEFEATING “THE FSA IN THE NORTH”

Fateh al-Sham has a history of crushing FSA groups in the conflict that began in 2011. One of the single biggest groups in the insurgency, Fateh al-Sham has been targeted in a spate of U.S. air strikes in the northwest since the new year.

One of these killed dozens of its fighters at a training camp in Idlib last week. The Pentagon said that attack was carried out by a B-52 bomber and killed more than 100 al Qaeda fighters.

The Fateh al-Sham assault was focused in rebel-held areas to the west of Aleppo, and adjoining areas of Idlib province, which is almost entirely in insurgent hands. Tensions have also flared in that area between Fateh al-Sham and Ahrar al-Sham, a large Islamist group widely believed to be backed by Turkey.

An official in a second FSA group, Jabha Shamiya, told Reuters the attack began overnight, describing it as a large assault in several areas. The official said it was the first time Fateh al-Sham had attacked the FSA groups in that area.

“What they are doing serves Iran and the regime – so there is no FSA left in the north – particularly with the factions’ delegation now in Astana where the regime offered nothing with regards to the ceasefire,” said the Jabha Shamiya official.

The FSA groups now needed to coordinate their efforts to repel the attack, he said.

(Reporting by Tom Perry; Editing by Hugh Lawson and Dominic Evans)