This is the sentence that makes me feel most uncomfortable: Voters are likely to be less hostile to foreign investment if they think that the government is preserving a well-balanced economy.Extract from We are pledged to real reform | The Australian Most of the Abbott statements about manufacturing assistance, transaction costs and “economic diversity” that […]
OK, so I read World Bank documents for the pictures. It’s true…I’m not ashamed to admit it. The prose in these tomes is often glutinous but the graphs are great! The chart shows why there’s much less interest, now, in tariff bindings, the currency of WTO agreements. The last big recession (2007–9), unlike those of […]
The strongest argument for completing the WTO’s barely enduring Doha round of trade negotiations is that it will further narrow the legal right of WTO members to adopt higher protective trade barriers in the future. But that argument doesn’t seem to sway anyone much: certainly not businesses who have largely lost interest in the WTO’s […]
Retailer Gerry Harvey had to eat crow earlier this year when his angry customers (and scornful competitors) trashed his campaign to eliminate the GST concession on imports purchased on-line. Now, if you read only the report in today’s Australian newspaper, it seems that the Productivity Commission may be giving comfort to Harvey’s attack on household […]
When an economy has trade leverage, the threat of discriminatory duties need not be simple protectionism.
“The US can help China make the necessary adjustments toward a reduction in imbalances by adopting a uniform tariff of 10 per cent on all Chinese imports, based on their values when they enter the US. Six months after the establishment of this tariff, the rate would increase by one percentage point a month until the Chinese trade surplus with the US declines to $5bn a month.” Extract from FT.com / Comment / Opinion — Tariffs can persuade Beijing to free the renminbi
But who, other than China, would loose if this idea worked and the Renminbi was revalued? Most of the rest of the world. Especially economies with a comparative advantage in agricultural production (Australia, New Zealand, Latin America) for whom imported Chinese deflation of manufactures prices offsets the EU’s depression of agricultural prices (and inflation of manufactures prices).
In principle, too, everyone would loose from another U.S. defection from the core multilateral trade rules. But perhaps you could make the case that this kind of extraordinary action (like the 1980’s Nixon Administration ‘shocku’ blow against Japan) doesn’t really impact the rules.
It’s not economic policy (or even necessity) as much as the political economy that drives trade policies.
“The relationship between the overall tariff policy (considering all product groups together) and the socio-economic variables is even more diffuse, and no strong relationship emerges between tariff policy clusters and the socio-economic context. Consequently, we can conclude that trade policy is not over-determined by economic considerations: the decision-making process defining a precise trade policy is the result of more complex interactions.” Extract from Mapping the Tariff Waters by Diakantoni and Escaith (WTO Economic Research Division)
A plausible, even unexciting, conclusion. But an interesting mapping of global tariff data.
In a speech in the U.S. yesterday, Tung Chee-hwa, vice-chairman of the Chinese People’s Political Consultative Conference (CPPCC) hit out at plans for carbon tariffs in the Democrats’ bill for emission controls
“A top adviser to the Chinese government on Tuesday warned that a proposed US border tax on carbon sensitive materials ‘smells of protectionism’ and could spark retaliation from developing countries.” Extract from a report in the Financial Times
Tung, the former Chief Executive of Hong Kong, was talking about the Waxman-Markey bill that provides for ‘border adjustments’ should cap-and-trade costs for energy-intensive industries not be fully offset by U.S. government subsidies. China has been campaigning against this draft legislation since it’s introduction.
They are obviously troubled by the apparent decision of the Obama Administration not to oppose the use of carbon tariffs.