Tag Archives: WTO

China, Economic, European Union, Government, Politics, Society, United States

Trump’s trade war is a risk to the global economy

GLOBAL TRADE WAR

AN escalating trade war between China, the US and Europe could plunge the global economy into turmoil, international experts have warned.

The World Trade Organisation (WTO) said the battle of wills between President Donald Trump and rivals in China and the European Union has put “economic recovery in jeopardy”.

In a major report on the 20 largest economies – known as the G20 – WTO economists warn that angry rhetoric and rising tariffs on all sides are a severe threat.

The WTO said that G20 countries slapped £52.6billion of sanctions on trade between October and May. A total of 39 new restrictive measures were introduced to block goods from competitors – double the number in the previous report.

The WTO said: “The G20 economies must use all means at their disposal to de-escalate the situation and promote further trade recovery.”

President Trump vowed on the campaign trail to protect US jobs and industries from globalisation. He has imposed aluminium and steel tariffs on China and the EU, and hit the Chinese with extra duties on everything from bulldozers to touchscreens.

Beijing responded in kind, hitting key US exports such as its important soya bean trade. Meanwhile, Brussels has slapped tariffs on American goods, including motorcycles and bourbon whiskey.

The President is now threatening to act against Europe’s prized car manufacturers. Last week, he said: “The EU is possibly as bad as China, only smaller. They send a Mercedes in, we can’t send our cars in.”

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Britain, Economic, European Union, Government, Politics, United States

Britain dismayed at US trade war

US TRADE TARIFFS

THE Prime Minister Theresa May has attacked Donald Trump’s “unjustified” trade tariffs amid fears that Britain’s automotive industry could be hit next.

Mrs May said she was “deeply disappointed” with the US President’s decision to impose higher import taxes on steel and aluminium from Britain and the EU.

The EU has signalled that it is prepared to hit back, making a complaint to the World Trade Organisation (WTO) and finalising a list of American products it will target with tariffs of its own.

There are fears, however, that this could spark a spiralling trade war, with Mr Trump responding to any retaliation by imposing additional import levies on cars from the UK and EU.

That possibility will concern the more than 169,000 employees in the UK motor vehicle industry, on top of existing fears for Britain’s 31,000 steel workers.

International Trade Secretary Dr Liam Fox suggested that the UK may not fully support the EU’s retaliatory measures, instead saying Britain only backs the complaint to the WTO.

He said it would “take some time” for EU member states to agree their collective response, and urged the bloc to pursue compromise with the White House in the interim – even though British diplomats have previously offered their support to measures drawn up in Brussels.

Dr Fox said it would be “very, very unfortunate if we get into this tit-for-tat position, especially with one of our closest allies.”

He added: “Nobody wins in a trade war, there are only casualties. We very much regret that these tariffs were put in place.

“We think it’s of dubious legality and we will be with the EU 100 per cent in taking this to a dispute at the WTO.”

The deepening row comes just before a G7 meeting of world leaders in Quebec this week, where European leaders will air their grievances to the US President. French president Emmanuel Macron has already told Mr Trump his new tariffs on EU goods was a “mistake” and “illegal”.

Mrs May’s language was more measured, but she said: “I am deeply disappointed at the unjustified decision by the United States to apply tariffs to EU steel and aluminium imports.

“The US, EU and UK are close allies and have always promoted values of open and fair trade across the world. Our steel and aluminium industries are highly important to the UK, but they also contribute to US industry, including defence projects which bolster US national security.

“The EU and UK should be permanently exempted from tariffs and we will continue to work together to protect and safeguard our workers and industries.”

Although it is said that the Prime Minister has additional concerns over US trade tariffs, it is believed she has not expressed these in public as she hopes to tie up a comprehensive post-Brexit trade deal with the White House and does not want to inflame the situation.

The EU, which handles trade matters on behalf of the UK, has been finalising its response to the US, with measures affecting thousands of US imports to the EU worth £2.5billion, including Levi’s jeans and Jack Daniel’s bourbon, hit with tariffs of up to 25 per cent.

Cecilia Malmstrom, the EU’s trade chief, admitted the bloc was “anxious” that Mr Trump would follow through on earlier threats to impose tariffs on European cars.

She said: “This would create enormous damage, not only to the European economy but also to the US.” The US levies of 25 per cent on steel and 10 per cent on aluminium imports follow promises made by Mr Trump under his America First programme.

Earlier this year, he said: “If the EU wants to increase their already massive tariffs and barriers on US companies doing business there, we will apply a tax on their cars, which freely pour into the US.”

EU cars sold in the US face a levy of 2.5 per cent, compared to a 10 per cent tax on US vehicles brought into Europe.

How the US raised the stakes:

. Donald Trump announced in March that the EU and countries including Mexico, Canada and Brazil would be hit by increased steel and aluminium tariffs to protect US firms against imports from China, which has flooded the market with cut-price steel.

. The EU, which negotiates trade on behalf of Britain, was granted a temporary exemption while Theresa May and other leaders lobbied for a permanent reprieve.

. The UK is concerned about the effect of the measures on its resurgent £1.6billion steel industry, which employs some 31,000.

. Britain exported 350,000 tonnes of steel worth £376million to the US last year – 7 per cent of its output.

. If the EU hits back, as it has threatened to do, Britain fears that Mr Trump will retaliate by raising tariffs on cars, in a blow to the UK car industry, which employs around 169,000.

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Business, Economic, Government, Politics, Society

Thesis: ‘Globalisation’…

GLOBALISATION: ‘PROBLEM & SOLUTION’

1. THE CRITICS’ VIEW

DEFINITION – Globalisation is defined as the ever-increasing integration of national economies into the global economy through trade and investment rules and privatisation, aided by technological advances. These reduce barriers to trade and investment and in the process reduce democratic controls by nation states and their communities over their economic affairs. The process is driven by the theory of comparative advantage, the goal of international competitiveness and the growth model. It is occurring increasingly at the expense of social, environmental and labour improvements and rising inequality for most of the world.

Or more bluntly:

Globalisation n.1. the process by which governments sign away the rights of their citizens in favour of speculative investors and transnational corporations. 2. The erosion of wages, social welfare standards and environmental regulations for the sake of international trade. 3. the imposition worldwide of a consumer monoculture. Widely but falsely believed to be irreversible. – See also financial meltdown, casino economy, Third World debt and race to the bottom (16th century: from colonialism, via development).

2. THE OFFICIAL VIEW

The former UK Minister for Trade, Richard Caborn, previously said:

…The government remains firmly behind a comprehensive new round of negotiations in the WTO as the best way forward for the UK, for developing countries in particular, and for the world economy as a whole. We are working for a more transparent WTO which promotes sustainable development and fosters the rule of law in international trade. [Richard Caborn MP (1999) Letters to the Editor, The Guardian, 11 October]

WTO = World Trade Organisation

In extracts of a letter to Alan Simpson MP, dated 19 February 1999, Brian Wilson MP, a former minister of trade, wrote:

Trade liberalisation is not the cause of the problem of the world’s economies, but the answer to them.

“By securing better access to overseas markets for producers, by reducing trade barriers, and maintaining and improving the supply of competitively priced goods and services to consumers, trade liberalisation brings widespread welfare benefits and helps to improve the efficiency with which the world’s resources are used. That is why the Government supports the EU’s call for a comprehensive new Round of trade liberalisation, which has already met with support from a number of developed and developing countries.”

Trade and environment:

“Our overall aim is to work towards sustainable development in accordance with the principles set out in the Rio Declaration adopted in 1992. The Government will work to ensure that trade liberalisation contributes to this aim, including action to safeguard the environment and the interests of developing countries. By enabling developing countries to derive more benefits from increased access to overseas markets and to inward investment, we can help them to increase prosperity which in turn has the potential to enable them to raise their standards of environmental and social protection.

…The Government believes that the evidence shows strongly that trade liberalisation is in the best interests of developing countries as well as developed countries. The OECD has found that in the last decade countries which have been more open to trade and investment have achieved twice the average annual growth of more closed economies. This is of particular importance to those countries which need to grow faster to deal with their greater infrastructure and capacity weaknesses.” [Brian Wilson MP, former Minister of Trade]

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