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Europe Warns Of An Upcoming “Trade Apocalypse”

June 25, 2018

Europe Warns Of An Upcoming “Trade Apocalypse”

As European officials struggle to do everything they can to save the WTO, which appears headed for an all-but-certain demise thanks to President Trump’s aggressive trade policies, EU leaders have apparently circulated an “internal memo” drafted by the European Commission that accuses the US of deliberately instigating the collapse of the global trade order, and warns of an upcoming “trade apocalypse.” In short, if this document is any guide, the trade war is about to get worse – as if Trump’s threat to impose 20% tariffs on all cars coming into the US last week wasn’t bad enough.

EU

According to Bloomberg, the EU warned that the “rules-based system of international commerce” could revert to an trade environment where “the strong impose their will upon the weak,” the memo said.

Our world will go back “to a trading environment where rules are only enforced where convenient and where strength replaces rules as the basis for trade relations,” according to the memo.

The flirtations with a return to an environment of “mercantilist deals” have intensified as President Trump has been determined to narrow the trade deficit at any cost – even if the price is the collapse of the multilateral trade order.

Specifically, the memo, which was obtained by Bloomberg, spells out three complaints raised by the EU:

  • Gaps in the rulebook of global trade “leading to distortions, many of which associated with non-market policies and practices in major trading nations, that the WTO does not seem able to address adequately”
  • Aggressive unilateral actions by the US targeting allies and foes alike with punitive tariffs
  • The US’s decision to block appointments of members to the World Trade Organization’s Appellate Body that serves as the final arbiter in trade disputes.

The EU also complained about the US’s practice of blocking appointments to the appellate body that would help render a judgment in a WTO trade dispute.

…click on the above link to read the rest of the article…

China, South Korea Vow Retaliation In Trump Trade War

January 23, 2018

China, South Korea Vow Retaliation In Trump Trade War

When we reported earlier today  that President Trump lobbed the first real shot in the global (but mostly Asian) trade war when the White House announced it would slap imported solar cells and washing machines with up to 50% tariffs – Trump’s most significant trade action to date, taking direct aim at China and South Korea (full details here)- we said that “we now await China’s (or South Korea’s) response…”

We didn’t have long to wait.

South Korea stormed out of the gate, with Reuters reporting that it will complain with the WTO against the U.S. for imposing anti-dumping duties on Korean washing machine and solar panel makers, a decision Trade Minister Kim Hyun-chong called “excessive” and “regrettable.” Kim warned that the US safeguard decision is “excessive” and violates WTO provisions.

As a reminder, the United States will impose a 20 percent tariff on the first 1.2 million imported large residential washers in the first year, and a 50% tariff on machines above that number. The tariffs decline to 16% and 40% respectively in the third year.

“The United States has opted for measures that put political considerations ahead of international standards,” Kim said in a meeting with industry officials on Tuesday. “The government will actively respond to the spread of protectionist measures to defend national interests,” he said.

South Korea will also consider discussing steps jointly with other countries subject to the imposition, the trade ministry said, meanwhile the South Korean government said it would help Samsung and LG in finding alternative markets for the sale of washing machines.

Additionally, Bloomberg reports that South Korea will also seek to retaliate in kind by reinstating tariffs on the U.S. in what has been dubbed the “Washing Machine” row. To do that, South Korea asked the World Trade Organization to approve suspension of trade concessions, the trade ministry says in an emailed statement.

…click on the above link to read the rest of the article…

 

Why Free Trade is Officially Dead

March 27, 2017

WHY FREE TRADE IS OFFICIALLY DEAD

G20 Finance ministers meeting in Baden Baden last weekend agreed, on America’s insistence, to drop the long-standing commitment to free trade from the final communiqué.

It is hard to know to what extent America’s position is driven by her autarkic view on world trade, or to what extent it is an acknowledgement of the fruitlessness of paying lip-service to an ideal which is never delivered. Doubtless, it’s a bit of both.

It is certainly true that finance ministers in the advanced nations have always shown a protectionist attitude towards international trade, protectionism that has intensified through attacks on American international corporations, which to a large extent can choose where to pay their taxes. The thrust of research by international NGOs, particularly the Paris-based OECD, has been to decry tax competition; however, even though it has bullied tax-havens to supply tax-related information to revenue-hungry states, it has failed to stop multinationals, armed with teams of tax lawyers, from complying with their statist demands.

Therefore, the reasons for anti-globalisation in high-spending governments so far have been based on job protection and maximising taxes. But with President Trump, it’s different. He wants to tilt the odds firmly in favour of American business, and he appears to believe that the World Trade Organisation is little more than an obstructive repository for anti-business bureaucrats. This view is misinformed, because over the years WTO officials have successfully managed to get their members to reduce tariffs to historically low levels.

The threat to this progress is not new. America has in the past often ignored WTO rules, banning or imposing tariffs on imports on overtly protectionist grounds. As always, vested interests and protectionism prove difficult for politicians to resist. However, Trump is different in one respect: he appears to be an old-fashioned mercantilist, seeing America as one gigantic commercial enterprise needing direction.

…click on the above link to read the rest of the article…

World Trade Collapses Most Since Crisis

February 26, 2016

World Trade Collapses Most Since Crisis

One question now dominates the global macro discussion: has subdued global growth and trade become the norm in the post-crisis world?

That is, have lackluster growth and trade become structural and endemic rather than transient and cyclical?

Those are the burning questions that keep central bankers (not to mention sellside economists) up at night and they are front and center at the G-20 in Shanghai.

Warning signs abound. The Baltic Dry is in a veritable free fall. Germany’s manufacturing juggernaut is showing signs of faltering. The BRICS have ceased to be a reliable driver of global growth. US freight volumes are falling for the first time in years. And the list goes on.

“We have seen this burst of globalization, and now we’re at a point of consolidation, maybe retrenchment,” WTO chief economist Robert Koopman said last autumn. “It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should.”

As we noted earlier this month, to the extent Maersk is a bellwether, things are looking pretty grim. Maersk Line – the company’s golden goose and the world’s largest container operator – racked up $182 million in red ink last quarter and the outlook for 2016 isn’t pretty either. The company now sees demand for seaborne container transportation rising a meager 1-3% for the year.

On Thursday we got the latest evidence that the wheels are falling off. According to new data from the Netherlands Bureau of Economic Policy Analysis’s World Trade Monitor, global trade (defined as the value of goods that crossed international borders) plunged nearly 14% in 2015.

That’s the first contraction since 2009.

“The new data released on Thursday represent the first snapshot of global trade for 2015,” FT notes. “But the figures also come amid growing concerns that 2016 is already shaping up to be more fraught with dangers for the global economy than previously expected.”

…click on the above link to read the rest of the article…

GMOs and the Neoliberal Apologists

June 16, 2015

GMOs and the Neoliberal Apologists

Ignoring Reality, Subverting Morality
Monsanto is often called one of the most ‘evil’ companies on the planet. It has a history of knowingly contaminating the environment and food with various poisons, cover ups and criminality (see this, outlining the company’s appalling history). In recent times, there has been much focus on its promotion and patenting of GMOs, the deleterious impacts of its glyphosate-based herbicide Roundup and how GMOs pose a threat to human and animal health, ecology and the environment (see this, for example).

Campaigners and activists have described how global agribusiness players like Monsanto are threatening food security and food democracy. Monsanto and others have been able to capture or unduly influence government regulatory/policy agendas, important trade deals and global trade policies via the WTO. Monsanto is a major player and wields enormous political influence and receives significant political support.

Little wonder then that we now have campaigns specifically targeting Monsanto. While it is laudable and correct to highlight the actions of Monsanto and indeed its partners like The Gates Foundation, we should not be side tracked from developing a wider analysis to understand the underlying forces that drive companies like Monsanto.

A recent piece by Christina Sarich shows that any shares held by Gates or the individuals at the top of the Monsanto corporate structure like CEO High Grant or CTO Robb Fraley are dwarfed by those held by institutional shareholders, such as Vanguard, Capital Research and State Street.

 

…click on the above link to read the rest of the article…

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