Behold the power of Google Maps:
“The red dots indicate people who live in Manhattan (and so clearly are neither hurting for money nor tilling the soil on the family farm) but receive agricultural subsidies from the federal government. The larger red blobs mark people receiving more than a quarter of a million dollars in farm subsidies annually.” – Yuval Levin
[HT: Norberg]
Only a suppliers’ advocate would refer to sugar as “among the worst performing commodities this year” due to its low price. Consumers will consider sugar to be one of the year’s best commodities. Americans would too, if they were able to enjoy the low prices.
Only a suppliers’ advocate would refer to sugar as “among the worst performing commodities this year” due to its low price. Consumers will consider sugar to be one of the year’s best commodities. Americans would too, if they were able to enjoy the low prices.
Only a suppliers’ advocate would refer to sugar as “among the worst performing commodities this year” due to its low price. Consumers will consider sugar to be one of the year’s best commodities. Americans would too, if they were able to enjoy the low prices.
The Newsday editorial board describes what’s on the line in the Antigua gambling case:
The organization’s credibility is on the line. It can’t risk the rap that it aggressively enforces trade rules against small nations but timidly allows the world’s economic powerhouse to skate. The integrity of the United States is also at issue. This country can’t respect trade rules that benefit us and ignore those that don’t without undermining valuable free trade agreements.
Greg Rushford criticizes Japan’s pursuit of preferential trade in the WSJ:
Japan’s FTAs (like those of Americans and Europeans) talk free trade but practice protectionism. All of Tokyo’s trade bilaterals exclude Japanese rice, where tariffs remain in the stratosphere… The WTO’s Doha Round with its pressures for genuine market opening are conveniently ignored.
The FTA between Japan and Indonesia runs to 938 pages containing rules of origin, exclusions for politically sensitive products, and protectionist specifications for 40% of local content on “sensitive” — read, politically sensitive — products. There are special rules and various product exclusions for vegetables, sugar, various dairy products, fruits, tobacco and much else. Japan won’t cut tariffs for any kind of pineapples from Malaysia, Brunei or Singapore, but will gradually reduce duties for some fresh and dried pineapples from Thailand and the Philippines. But while tariffs on Thai dried pineapples are at 6% in the first year, and will be phased out entirely in six years, the Philippines’ dried pineapples will be taxed at 7.2% at first, and won’t be duty free until year 11.
This is special-interest politics, not sound economics. The Japanese boast that their FTAs give them preferential access to oil from Brunei, natural gas from Indonesia, and export platforms for Japanese manufacturers in smaller Asian economies. To readers of a certain age, this has a familiar ring.
While it’s premature to hit the panic button, it’s sure time to sound the alarms. It’s simply wrong for the world’s leading economies to act as if they want Fortresses Asia, Europe and America. It’s truly a cause for concern that while the WTO’s Doha Round gets lip service, FTAs get done.
Greg Rushford criticizes Japan’s pursuit of preferential trade in the WSJ:
Japan’s FTAs (like those of Americans and Europeans) talk free trade but practice protectionism. All of Tokyo’s trade bilaterals exclude Japanese rice, where tariffs remain in the stratosphere… The WTO’s Doha Round with its pressures for genuine market opening are conveniently ignored.
The FTA between Japan and Indonesia runs to 938 pages containing rules of origin, exclusions for politically sensitive products, and protectionist specifications for 40% of local content on “sensitive” — read, politically sensitive — products. There are special rules and various product exclusions for vegetables, sugar, various dairy products, fruits, tobacco and much else. Japan won’t cut tariffs for any kind of pineapples from Malaysia, Brunei or Singapore, but will gradually reduce duties for some fresh and dried pineapples from Thailand and the Philippines. But while tariffs on Thai dried pineapples are at 6% in the first year, and will be phased out entirely in six years, the Philippines’ dried pineapples will be taxed at 7.2% at first, and won’t be duty free until year 11.
This is special-interest politics, not sound economics. The Japanese boast that their FTAs give them preferential access to oil from Brunei, natural gas from Indonesia, and export platforms for Japanese manufacturers in smaller Asian economies. To readers of a certain age, this has a familiar ring.
While it’s premature to hit the panic button, it’s sure time to sound the alarms. It’s simply wrong for the world’s leading economies to act as if they want Fortresses Asia, Europe and America. It’s truly a cause for concern that while the WTO’s Doha Round gets lip service, FTAs get done.
Greg Rushford criticizes Japan’s pursuit of preferential trade in the WSJ:
Japan’s FTAs (like those of Americans and Europeans) talk free trade but practice protectionism. All of Tokyo’s trade bilaterals exclude Japanese rice, where tariffs remain in the stratosphere… The WTO’s Doha Round with its pressures for genuine market opening are conveniently ignored.
The FTA between Japan and Indonesia runs to 938 pages containing rules of origin, exclusions for politically sensitive products, and protectionist specifications for 40% of local content on “sensitive” — read, politically sensitive — products. There are special rules and various product exclusions for vegetables, sugar, various dairy products, fruits, tobacco and much else. Japan won’t cut tariffs for any kind of pineapples from Malaysia, Brunei or Singapore, but will gradually reduce duties for some fresh and dried pineapples from Thailand and the Philippines. But while tariffs on Thai dried pineapples are at 6% in the first year, and will be phased out entirely in six years, the Philippines’ dried pineapples will be taxed at 7.2% at first, and won’t be duty free until year 11.
This is special-interest politics, not sound economics. The Japanese boast that their FTAs give them preferential access to oil from Brunei, natural gas from Indonesia, and export platforms for Japanese manufacturers in smaller Asian economies. To readers of a certain age, this has a familiar ring.
While it’s premature to hit the panic button, it’s sure time to sound the alarms. It’s simply wrong for the world’s leading economies to act as if they want Fortresses Asia, Europe and America. It’s truly a cause for concern that while the WTO’s Doha Round gets lip service, FTAs get done.
Marcus Noland says that the Middle East is a “demographic time-bomb” due to add 150 million people over the next decade or so. It needs faster job growth to keep up and prevent an “employment crisis” (pdf). Unfortunately, US trade policy is doing little to help:
The third component could be preferential trade agreements… [but] the way that the United States has been negotiating these agreements is effectively creating a “hub-and-spoke” system in which individual Arab governments have strong bilateral agreements with the United States but weak or nonexistent agreements among themselves. In part this reflects differences in both capacity and orientation across the Arab governments, and in the specific cases of the militarily vulnerable Gulf oil exporters, a particular interest in deepening ties with a strategic partner. If it were just an issue of variable speed geometry to borrow a European phrase, that would be one thing. The bilateral agreements themselves contain mutual inconsistencies, however, which make incorporating them into a single region-wide accord difficult. The problem is exacerbated by the fact that the rules in the agreements the United States and the European Union reach with the Arab countries are inconsistent. It would be desirable to increase the internal consistency of these arrangements to facilitate integrating them in the future.
For more thoughts on this subject, see Against MEFTA.
Marvin Goodfriend and Eswar Prasad rethink the renminbi debate at VoxEU:
[U]ntil recently, the rise in the US trade deficit with China was matched by the decline in the deficit with the rest of Asia, leaving the US deficit with all of Asia unchanged. China’s accession to the WTO in 2001 opened up US markets to Chinese imports and more Asian trade is now routed through China in order to take advantage of cheaper labour there to process and package goods in their final stages of production. So the bilateral US (or EU) trade deficit with China is not in itself very meaningful.
Moreover, the renminbi has been maintained at a stable rate relative to the US dollar for over a decade now, even during the Asian crisis when the Chinese were under pressure to devalue the renminbi. So to argue that the fixed exchange rate reflects a new and deliberate policy of undervaluation is disingenuous.
Nevertheless, economic fundamentals — such as the rapid productivity growth in China — clearly point to strong pressures for the renminbi to appreciate in value…
This debate has so far been framed in a way that largely misses the key point. What is essential for China is to have an independent monetary policy oriented to domestic objectives. China’s monetary policy has hitherto been hamstrung by the tightly managed exchange rate regime. This regime prevents the People’s Bank of China (PBC) from raising interest rates to manage domestic demand since such a move could spur further capital inflows and increase pressure on the exchange rate. Giving the PBC room to raise interest rates by freeing it from having to target a particular exchange rate would help rein in credit growth and deter reckless investment, reducing the risk of boom-bust cycles. A key point here is that an independent monetary policy requires a flexible exchange rate, not a one-off revaluation.
Read the full piece to learn about their (daring?) policy prescription: inflation targetting.
Trade Diversion 