Globalization: Are You In or Are You Out?

This article reminded me that trade is fragile and impacted by a number of other factors. This article is about the adverse affect THAAD is having on Chinese-South Korean relations. China is angry about the missile system, as we discussed, and is taking retaliatory actions against South Korea, including music and television boycotts. So far, South Korea has lodged a complaint with the WTO but China has declined to meet with them directly to work out their disputes.

“It would be up to South Korea to follow up on its complaint to the WTO for any action to take place, analysts say, either by continuing to raise its concerns and spelling out what China is doing wrong, or by launching a trade dispute.”

There is a new head of the World Bank – Kristalina Georgieva from Bulgaria. Georgieva is a proponent for world trade and tried to make some points for why it’s a good thing, even giving credit to China while suggesting that it increase domestic competition. Bonus in this article: an interview with John McCain about TPP.

http://www.cbsnews.com/news/new-world-bank-chief-stumps-for-global-trade/

According to a recent UN humanitarian report, over two-thirds of the population in Democratic People’s Republic of Korea (DPRK) is affected by a humanitarian crisis worsened by natural disasters and political tensions. More than 18 million people in North Korea lack access to food security and basic services. The report states that $114 million is needed to provide crucial humanitarian needs.

The crisis in DPRK has been largely overlooked and ignored despite some efforts by the international community to provide humanitarian aid. Six UN agencies and seven NGOs are among several partner agencies collaborating on relief efforts, but they lack the necessary funding to provide nationwide assistance. The report also notes that international sanctions enacted on DPRK have indirectly affected the current humanitarian situation. Efforts have been hindered by blocked funding, limited donations, and difficulties in transporting and delivering aid supplies to vulnerable populations. The adverse effects of the sanctions reveal some of the problems of global governance, leading us to wonder – are the sanctions doing more harm than good? They seem to be, at least from a humanitarian standpoint.

The article points out two facts:

1. Trump is prioritizing America’s dealings with big powers like Russia and China over its security commitments to small nations.
2. In addition to the point above, Trump’s promotion of nationalism, skepticism of free trade, criticism of traditional US allies… contributes to a new consequential dynamic in international affairs: the slow-motion fraying of US-Europeans relations.

It also leads to European nations distrust to the new US administration. The author predicts that they are going to find a new way to protect themselves without strong support from the US.

https://www.theatlantic.com/international/archive/2017/03/trump-tillerson-nato/520254/

Last month, Trump vowed his support for NATO, which might be a little relief for some European countries. However, he still strongly pushes other NATO members to compromise on “allied responsibility-sharing”. Specifically, this article mentions Germany, which Trump tweeting that it owes “vast sums of money to NATO”.

https://www.bloomberg.com/politics/articles/2017-03-22/trump-to-visit-brussels-in-may-to-meet-with-nato-leaders

There are many ways to reduce our carbon footprint to keep the Earth’s temperature under 2 degrees celsius per the Paris Climate Agreement, but we often talk about reducing emissions through energy sources like transitioning away from coal and gas to renewables.

In good news for the U.S., even as the current administration is poised to gut the EPA and roll back emissions levels set by the Obama administration, the U.S. population has cut 591 megatons of carbon by eating 19% less beef over the past 10 years. This is the equivalent of cutting emissions from 39 million cars. Cows are huge methane gas producers and methane traps 25 times more heat in the atmosphere than carbon.

Many countries are addressing the connection between food and climate change. India has been on the forefront of working with livestock to do so. India has bred dwarf cows that are drought resistant, while creating feed that limits the amount of gas cows produce.  These cows produce one tenth of methane gas emissions, while being able to withstand extreme heat and drought conditions that are already happening in India due to climate change.

Monday morning (this morning) the House Intelligence Committee holds its first public hearing in its investigation into Russian interference–meddling sounds far too friendly–in the 2016 presidential election. While the questions of who, how and why the Russians hacked the campaign–and how we stop it from happening again–are critical to national security, the big news today will be what FBI director James Comey says when asked about President Trump’s ‘Obama-wiretapped-me’ claim. That delusion isn’t only undermining the President’s credibility at home, it is doing serious damage to his, and this country’s, credibility abroad. And Trump can’t seem to stop. His spokesman, Sean Spicer, claimed for a while that the Brits were in on it–infuriating Mr. Trump’s only pal out there, British PM May. And then POTUS made a joke about how he and German Chancellor Angela Merkel had something in common: they were both wiretapped by Obama. Beyond the obvious–this man has nuclear weapons and sounds unhinged–problem, wiretapping is a hyper-sensitive issue for Merkel, who grew up in East Germany.

For background on the hearings, and whether we can realistically expect to learn anything from them given the partisan leanings of this Congress, you can read this piece I wrote this past weekend in The American Interest. And if you are wondering about the term ‘gaslighting’ in the lede, it refers to a great Ingrid Bergman movie in which she is being driven slowly crazy by her husband who, among other things, keep turning the (gas) lights up and down. We all feel that way these days, no?

This article helps clarify important terminology about trade. A “surplus” isn’t necessarily good and a “deficit” isn’t necessarily bad. Talking about trade that way is simplistic. In fact, trade deficits are historically a sign of a stronger economy.

If the goods and services available to the American people are greater as a result of international trade, then Americans are wealthier, not poorer, regardless of whether there is a “deficit” or “surplus” in the international balance of trade.

– Thomas Sowell, 2015. Basic Economics, 5th Edition, p. 476-477

http://www.reuters.com/article/us-g20-germany-idUSKBN16Q09D

“Acquiescing to an increasingly protectionist United States after a two-day meeting in the German town of Baden-Baden, the finance ministers and central bank governors of the 20 biggest economies dropped a pledge to keep global trade free and open.”

This was a blow-back to Germany which is a major exporting country. We’ve been talking in class about how Germany might assume the role of leadership since the US is no longer reliable. But what happens if their economy starts failing because of anti-globalization movements?

THE VAST stores of digital information generated by everyday lives communications data, credit-card records and much more are now yielding invaluable clues about the terrorist attacks in Paris and are helping guide the hunt for the surviving plotters. But prevention is better than cure. The attacks have highlighted the failure of the authorities to share information across borders and agencies. How can this be improved?

Each government sets different rules for what data may be looked at, by whom and with what authority. This is partly due to politics (Belgium has numerous squabbling police forces); and partly because of legal restrictions as the European Parliament takes privacy extremely seriously, as does the German government. Many Europeans fear that any data shared with America will be snooped on by spy agencies. The attacks also reignited a long-running debate about encryption encoding messages such as e-mails, in ways that even government intelligence agencies cannot break (it is easy to make a code, even with an ordinary computer, and much harder to break it).

Breaking down barriers to information-sharing is a much better idea. Terrorists and criminals cross national borders easily. Law-enforcement should be able to do the same. The police should have access to databases such as passenger name records on internal European flights, and the fingerprints of people who have arrived claiming refugee status. Interior ministers are already pushing strongly for this. Public worries about privacy and abuse of power are reasonable, but the answer to that is good intelligence oversight. Britain for example, is making reforms which would require the spy agencies to have judicial authorisation before they bug individuals, rather than just doing on a politicians say-so.

 

Source : The Economist (Online)