Tag Archives: EU

Trade wars won’t fix globalization. Here’s why


The Trump Administration’s announcement in February of new steel and aluminium tariffs on national security grounds, including on imports from allies like the EU, have set the stage for escalating trade tensions. The EU recently imposed retaliatory tariffs on products ranging from bourbon whiskey to motorcycles. The US President hit back with a tweet threatening a 20% import tariff on autos and auto parts, telling manufacturers: “Build them here!”

A number of US-based firms have voiced concerns over supply chain disruptions from trade wars. Harley Davidson stated that it would be shifting production aimed at the EU market outside the US to avoid the additional tariff burden, exemplifying the unintended consequences of this approach.

Earlier this month, the US announced a 25% duty on around $50 billion worth of Chinese imports on the grounds that they utilize intellectual property obtained from US firms through forced technology transfers or theft. China’s Made in China 2025 plan was named and scrutinised in the report. UNCTAD estimates that, like China, more than 100 countries have formal industrial policy strategies, many of which involve joining and benefitting from global value chains (GVCs). Tariff wars undermine growth models that rely on the benefits and efficiencies of globalization.

We asked policy experts and business leaders: how can countries really reap the economic and social benefits of GVCs, while avoiding inequality and environmental damage?

Don’t neglect services : Much of the recent talk of bilateral trade deficits has overlooked the importance of services to the global and national economies. Factors affecting services competitiveness have become important for economic growth and development more generally. Investment in human capital, digital infrastructure (including reliable mobile broadband), efficient and flexible domestic regulation and connectedness with international markets (including open cross-border flow of data, visa facilitation and mutual recognition agreements) are key. The services sector has strong inclusiveness dimensions: it is more SME-intensive than the goods sector is and has more women workers, owners and managers.

Co-operate on competition policy : Various anti-competitive activities by firms impede the efficient operation of value chains. Today, there are over 100 jurisdictions administering competition law. In the absence of global rules on competition, each jurisdiction applies its own system. Firms can find themselves facing conflicting decisions from different authorities with respect to the same merger or other activity. This leads to the most interventionist ruling of a major economy being enforced. In the case of digital products, questions of jurisdiction and enforcement are all the more challenging. Greater cooperation between agencies would improve clarity and reduce gaps in enforcement.

Prioritise tax certainty over incentives : In an attempt to attract GVC-linked foreign direct investment (FDI), many countries engage in harmful tax competition to woo multinational enterprises (MNEs). However, for the most part, FDI tends to be more sensitive to tax certainty than to tax incentives. Enhanced consistency in tax rules, interpretation and enforcement across economies and better cooperation between authorities help foster certainty. That being said, tax credits for education and training could help build a workforce suited for high-demand tasks through public-private partnerships. These and other programmes would need to be designed and monitored carefully to avoid tax evasion or aggressive tax planning by MNEs.

Incentivise sustainability : MNEs play a key role in coordinating activities and actors along the value chain. They set private standards that suppliers and affiliates have to meet. An increasing number (over 550) of these standards are sustainability-related. As these can be difficult for small producers to navigate and meet, coherent standards and simplified procedures are needed. Many big, consumer-facing brands are seeing greater demand for sustainably-sourced products from their customers. Others are finding ways to raise capital by tapping into investor appetite for sustainable business operations.

Implement doing-business reforms : Since MNEs play such an important role in GVCs, creating an enabling environment that attracts and sustains FDI is crucial. This involves reforms that cut red tape and corruption, improve infrastructure, provide quality education to the workforce to enable them to work in modern production chains and ensure that companies operating in the country have access to foreign exchange so that they can pay suppliers and repatriate profits.

So far, the tariff war has been just that: a tariff war, limited to the use of import duties on goods. Soon, though, the US is expected to release details of how it plans to restrict Chinese investment in US companies where it deems it a threat to national security. Meanwhile, the Chinese government could make things difficult for US companies operating in China – by imposing regulatory burdens or encouraging consumer boycotts. It could choose to block mergers , such as the one proposed between the US firm Qualcomm and Dutch firm NPX. The EU could consider retaliating against US banking and insurance companies and taxing digital services, hurting US tech companies.

Short-sighted, protectionist measures ignore and erode the opportunities that GVCs provide for driving inclusive and sustainable growth and do nothing to optimize outcomes.

SOURCE: World Economic Forum

By Aditi Verghese and Sean Doherty

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Dollar drops as Trump tariff decision looms


“It’s been a relatively mixed start to trading in Europe on Friday and the US is on course to post small losses at the open, as the focus shifts from central banks back to trade,” noted Craig Erlamsenior market analyst at Oanda trading group.

Trump was Friday due to unveil a final list of Chinese imports that would face punishing tariffs, fanning fears of a trade war as Beijing warned that it could swiftly strike back.

The EU on Thursday meanwhile approved a raft of tariffs targeting US goods.

In Friday trading, the single currency recovered versus the dollar, one day after it was hammered by the ECB’s announcement that was accompanied by a cut in the central bank’s eurozone growth outlook, citing rising protectionism and global trade fears.

Confirmation that the ECB would end its crisis-era bond-buying stimulus provided only little support as that announcement had been widely expected.

The Federal Reserve had on Wednesday said that it would likely hike US rates twice more this year and four times in 2019, highlighting an increasing divergence between the two central banks.

Bank of Japan head Haruhiko Kuroda meanwhile on Friday defended its decision to press ahead with the country’s ultra-loose monetary policy.

After a two-day meeting, the BoJ said it would retain its current framework, pointing to a disappointing lack of progress towards its longstanding 2.0 percent inflation target.

In Europe, the euro had dived to $1.1580 Thursday from above $1.1800 — but recovered to above $1.16 at one point Friday.

The single currency’s slump Thursday had sent European stocks rallying the same day as a cheaper euro boosts the bloc’s exporters.

And while the Nasdaq hit another record on Wall Street overnight, US stocks were generally choppy as fears grow that Trump will announce tariffs on billions of dollars worth of Chinese imports.

Those worries filtered through to Asia and Europe, where stock markets were fluctuating ahead of the weekend.

In London, shares in British engines maker Rolls-Royce soared 9.27 percent to 964.60 pence.

Fresh from announcing 4,600 job cuts, Rolls said it was now “well placed” to beat its cash flow target of £1.0 billion ($1.3 billion, 1.14 billion euros) by 2020.

Shares in supermarket Tesco, Britain’s biggest retailer, meanwhile jumped 1.9 percent to 254.50 pence after the company reported solid first-quarter sales.

– Key figures around 1000 GMT – London – FTSE 100: DOWN 0.7 percent at 7,709.56 points

Paris – CAC 40: UP 0.3 percent at 5,546

Frankfurt – DAX 30: DOWN 0.1 percent at 13,093.94

EURO STOXX 50: FLAT at 3,528.60

Tokyo – Nikkei 225: UP 0.5 percent at 22,851.75 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 30,309.49 (close)

Shanghai – Composite: DOWN 0.7 percent at 3,021.90 (close)

New York – Dow Jones: DOWN 0.1 percent at 25,175.31 (close)

Euro/dollar: UP at $1.1597 from $1.1580 at 2100 GMT

Pound/dollar: UP at $1.3277 from $1.3270

Dollar/yen: DOWN at 110.56 yen from 110.64 yen

Oil – Brent Crude: DOWN 89 cents at $75.05 per barrel

Oil – West Texas Intermediate: DOWN 20 cents at $66.69

By AFP

Meet the Kenyan goat herders suing the EU


A family of Kenyan goat herders are part of an eclectic group of people from across the world who are taking the European Union (EU) to court for failing to protect them from climate change threats to their homes and livelihoods.

The Guyo family, one of dozens of plaintiffs, live in northern Kenya, near the Ethiopian border.

They told AFP news agency that heatwaves have become more frequent and extreme, affecting the health and education of their five children.

“We face more and more extreme heat in our region. This threatens our lives on several levels,” said Roba Guyo, the father of the family, told AFP.

“Water is missing for herding and drinking — most importantly my children’s health is in danger.”

Temperatures in the area frequently soars above 40 degrees Celsius (104 degrees Fahrenheit), they say, making it hard for the oldest children to walk to school.

AFP News

​Ekweremadu, Dep Senate President petitions EU, US Congress over forgery allegations


Nigerian Deputy Senate President, Ike Ekweremadu » , has petitioned the European Union, US Congress and other foreign missions over his trial for allegedly forging Senate standing rules.

In a recent report by Nation Newspaper, the Deputy Senate President wrote the foreign missions on Tuesday, June 28, 2016.

Other foreign missions copied in the petition include the United Nations, European Union Parliament, Governments of United States and United Kingdom.

ALSO READ: Senate President, Ekweremadu arrive court for forgery trial »

The report further revealed that Ekweremadu was moved to petition the foreign missions over what he described as attempt to truncate Nigeria’s democracy and “silence him as the leader and highest ranking member of the opposition in the country, all in the name of prosecuting an alleged forgery case.”

Ekweremadu pointed out that he wrote the international community, to decide whether or not the trial was justified, or just an act of political vendetta after it might have been perused.

The two-page petition, entitled: “Re: Trumped up charges against the presiding officers of the 8th Senate: Nigerian Democracy is in Grave Danger,” also had the PDP Senator attaching copies of the court summons and other relevant documents relating to the matter to his letter.

The Deputy Senate President also insisted that neither his name nor that of the president of the Senate, Bukola Saraki, featured in the petition filed by the aggrieved members of the Senate Unity Forum (SUF) or during the investigation of the petition by the police.

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  • Source: Pulse

David Cameron Resigns As Prime Minister After UK Votes To Leave EU


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David Cameron has resigned as prime minister after Britain voted to leave the European Union.
The prime minister, who backed a Remain vote, said Britain required “fresh leadership” to negotiate the country’s exit from the EU.
“I do not think it would be right for me to be the captain that steers our country to its next destination,” he said in a statement outside Downing Street.
He promised to “steady the ship” over the coming months before stepping down in October.
Mr Cameron, flanked by his wife Samantha, said the result was the “will of the British people” which was an “instruction, which must be delivered”.
Close to tears and with his voice breaking, Mr Cameron said: “I love this country and I feel honoured to have served it and I will do everything I can in future to help this great country succeed.”
The referendum, called by Mr Cameron, delivered a shock victory for the Leave campaign.
The Brexit vote immediately sent the pound tumbling and sparked calls for his resignation.
Mr Cameron’s resignation speech in full:
Good morning everyone, the country has just taken part in a giant democratic exercise, perhaps the biggest in our history.
Over 33 million people from England, Scotland, Wales, Northern Ireland and Gibraltar have all had their say.
We should be proud of the fact that in these islands we trust the people for these big decisions.
We not only have a parliamentary democracy, but on questions about the arrangements for how we’ve governed there are times when it is right to ask the people themselves and that is what we have done.
The British people have voted to leave the European Union and their will must be respected.
I want to thank everyone who took part in the campaign on my side of the argument, including all those who put aside party differences to speak in what they believe was the national interest and let me congratulate all those who took part in the Leave campaign for the spirited and passionate case that they made.
The will of the British people is an instruction that must be delivered.
It was not a decision that was taken lightly, not least because so many things were said by so many different organisations about the significance of this decision.
So there can be no doubt about the result.
Across the world people have been watching the choice that Britain has made.
I would reassure those markets and investors that Britain’s economy is fundamentally strong and I would also reassure Britons living in European countries and European citizens living here there will be no immediate changes in your circumstances.
There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold.
We must now prepare for a negotiation with the European Union.
This will need to involve the full engagement of the Scottish, Welsh and Northern Ireland governments to ensure that the interests of all parts of our United Kingdom are protected and advanced.
But above all this will require strong, determined and committed leadership.
I’m very proud and very honoured to have been Prime Minister of this country for six years.
I believe we’ve made great steps, with more people in work than ever before in our history, with reforms to welfare and education, increasing people’s life chances, building a bigger and stronger society, keeping our promises to the poorest people in the world and enabling those who love each other to get married whatever their sexuality, but above all restoring Britain’s economic strength.

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Source:  AIT

Over 250 African migrants bound for EU arrested in Tripoli, Libya


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More than 250 African migrants were arrested
in the hours of Friday, March 18 in Tajoura
suburb, Tripoli in Libya, as they were about to
set sail to EU. Six African migrants also
drowned same day when the boat they were
traveling on capsized. Pictured is the rescue
team recovering bodies of the drowned
victims…

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Published By IkemDanielBlog