Monday, 30 July 2018

TRADE

     With over a score of factors needed to create, to employ, and to monitor it, trade in goods and services is essential for the mutual benefit of all parties, but, in the human world, how do we ensure that it is fair?
      International trade improves the standard of living for the entire world, supporting, for example, 41 million jobs in the US and 31 million in the European Union. It fosters goodwill in peaceful and mutually-beneficial ways, yet it is under serious attack while enjoying serious support.
      Fair trade is much too complex and too infiltrated with self interests to be adequately understood by any one of us, but we cannot let that handicap deter us from trying. For instance, we are justified in being bewildered and angry at Donald Trump’s erratic and environmentally-harmful actions, so much so that we dismiss the times when he is right, such as not ostracizing and imposing trade sanctions on Russia for annexing Crimea which, after all, is part of historic Russia. We spend so much time being anti-Putin that we overlook such atrocities as the Iraq invasion, the slaughter in Yemen, ethic cleansing in Palestine and Myanmar, and so on.
     Counter reactions in Canada, the EU, and China to Donald Trump’s isolationist tariffs and sanctions, that rely on overwhelming military force, are in contrast to much praise, and many suspicions, of Xi Jinping’s global $900 billion Chinese investment in rebuilding the 7,000-mile-long land and sea Silk Roads/Routes with promises of $8 trillion in infrastructure loans to 68 countries. This predicts major positive changes, but includes worries about the problems of repayment and what are China’s real motives? China had loaned Sri Lanka money it could never repay to build the port of Hambantota, so in 2017 it with 69 square kilometres were ceded to China. The same fate is feared for newly proposed ports that could increase the Chinese empire in its competition with the US empire that has lost much of its democracy in that an oligarchy of 1% of the population have amassed as much wealth as the remaining 99%.
     Also included is the feared demise of the US dollar as the world’s trading currency, thus preventing the US from forever printing new money and face up to its $21.5 trillion debt ($65,172 per person) which has grown from $9 trillion in 2007. It now costs about $300 billion just to pay the annual interest, forecast to be $965 billion by 2028. The US spends $610 billion a year on its military, more than China, Russia, Saudi Arabia, India, France, UK, and Japan combined. It pressures its reluctant allies to share this ‘burden’ by doubling their military spending, thus further enriching US military businesses.  So, how do we govern trade to ensure that it benefits humanity and the environment? First a little history:
Travel: Long distance trade started along river routes where the need for irrigation prompted the concentrations of people with various skills. The Tigris and Euphrates, the Nile, and the Hwang Ho became busy highways. That was some 5,000 years ago when barges and boats enabled water travel. Large scale land trade waited the domestication of the camel in Arabia some 3,000 years ago. Yet, horses permitted the trade of Chinese goods from the Pacific Beijing-Shanghai area to arrive as far away as Egypt and Germany before then.
Crusades:  Trade, along with religious animosities and a need to unite a quarrelsome Europe against a common foe, was a reason for the 8 crusades, 1096-1291, that killed an estimated 1,732,051 people. Much more advanced, and less cruel, Islamic cultures had control of of trade with the Far East and had blocked European access. Even though they lost in the end Crusaders did bring exotic goods and knowledge back to Europe, sparking new trade and the Renaissance.
Guilds: Supervise the practices of associations of artisans or merchants in particular areas. The Romans had guilds that did not survive their collapse. Guilds proliferated in Europe in the Middle Ages, arriving in England with the 1066 Norman conquest. Members progressed through 5 stages: apprentice, craftsman, journeyman, master, and grandmaster.
Hanseatic League (Hansa):  As Germans spread throughout the Baltic area their merchants sought acception, alliances, and security as well as profits. Hansa was founded in 1358 in Lubeck by German Duke Henry the Lion, granting duty-free trade, protection, and freedom among competing merchants while embracing mutual trust. The league grew to 200 cities in what are now 7 countries. For 300-400 years, before the rise of the nation states, it was the dominant trading block in Europe, with posts stretching from London to Novgorod. It did become too powerful, imposing its will with blockades and with wars with the Danes, but it did do much to unify and it still remains a club.
Current World Trading Blocs include:
AFTA (Association of Southeast Asian Nations Free Trade Area): was founded in 1992 in Singapore by Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Cambodia, Laos, Myanmar, and Vietnam joined later for a total of 10 countries. It has eliminated 90% of tariffs with China and other countries.
BRICS: Brazil, Russia, India, China, and South Africa at their summit meeting in Johannesburg 26 July 2018 declared themselves to be a multilateral bloc in opposition to Donald Trump’s unilateral approach. Formed in 2008, they created in 2014, with HQ in Shanghai, the New Development Bank and the BRICS Contingency Reserve Arrangement as an alternate to the International Monetary Fund.
CETA: (Canada - EU free trade), signed Sep 2017. Most tariffs removed, all to be gone in 7 years.
EAEU: (Eurasian Economic Union): Signed in 2014 by Belarus, Kazakhstan, and Russia. Armenia and Kyrgyzstan joined in 2015 to create a trading bloc of 183 million people with a GDP of over 4 trillion US dollars.
EPA: (Economic Partnership Agreement): EU-Japan free trade deal finalized in 2017 after 4 years of negotiations.
EU: (European Union): 28 Countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Rep, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom which plans to leave in July 2019 in spite of strong opposition from Scotland, Ireland and much of England and Wales.  Albania, Macedonia, Montenegro, Serbia, Turkey are working towards membership.
COMESA (Common Market of Eastern and Southern Africa), has 19 countries: Burundi, Comoros, Congo (DemRep), Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe. It is still working towards a common free market.
MERCOSUR:  is a Latin America free trade vision still to be agreed upon.
NAFTA: (North American Free Trade Agreement, Canada, Mexico, United States) formed in January 1994.  Tariffs were fully gone by 2008, with trilateral trade over $1.1 trillion. In the US it supports 140,000 businesses and 14 million jobs. In Canada it added 4.7 million new jobs. It is under attack by the Trump administration.
TPP: (Trans Pacific Partnership): Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. An original member, the United States, left in 2018.
EU + TPP = a trading block of 39 countries from Estonia to Australia with 40% of the world’s GDP. It puts Canada in an ideal position to co-ordinate and lead.
WTO: (World Trade Organization) a successor to GATT (General Agreement on Tariffs and Trade) that was founded in 1947 in Geneva with 23 members) has 164 members founded 01 Jan 1995 with HQ in Geneva to regulate trade in goods, services, and intellectual property. It has a staff of 600 including 7 judges. It has a budget of 197 million Swiss francs (US $209 million).
      Here are just a few of the enormous number of facts that reveal the value and dangers of trade:
1. Canada - United States Trade, at $1.9 billion per day, is the world’s largest 2-nation trade with 9 million US jobs dependent on it. Many social and economic activities are integrated. Over 500,000 Canadians winter in the southern Unites States. During the Vietnam war, 30,000 US citizens fled to Canada to avoid the draft while an equal number of neutral Canadians joined US forces to fight there. After the 1776 American Revolution 40,000 United Empire Loyalists, persecuted for siding with Britain, fled to Canada making the country bilingual and joining the French and Natives in defeating several US invasions resulting in a 4,000-mile undefended border.  It does mutual damage to impose tariffs such as the current US tariff on Canadian aluminum and steel when US produced aluminum covers only 33% of US demand. The US subsidizes its dairy interests $22 billion a year but fights Canada charging 270% on imported dairy products. This year the US border patrol boarded 10 Canadian fishing vessels in disputed waters looking for illegal immigrants. All this has united Canada in an unwanted ‘Stand up to the bully’ reaction by imposing, in an equal dollar amount, tariffs on imported US goods and by reducing travel to the US.
     This trade dispute hurts both countries and could escalate. Canada has long resented US dominance with its overwhelming media, with its huge corporations buying up Canadian enterprises, and with its lack of recognition of major Canadian achievements. Past attempts to divert more of its trade elsewhere have retreated to increased trade with the US, partially due to a continued strong liking for the US, its people, and its values when they are unaffected by Greed. Canadians need to modestly recognize that, with 36 million diverse, and talented, people in the world’s second largest land mass, they are a major player in the quest for a just, peaceful, and prosperous humanity. But Canadian complicity is echoed in such books as Linda McQaig’s 2007 Holding The Bully’s Coat.
       We all need to take a concerned look in the mirror.
2. China - United States Trade: Annoyed at a $375 billion trade deficit with China, Donald Trump, on 06 July 2018, imposed $34 billion in tariffs. This prompted a Tesla deal to build a plant in Shanghai to build 500,000 electric cars annually in 2-3 yrs. The tariffs also hurt Lei Jun, founder of Xiaomi (Apple of the East), now in over 70 countries with over 190 million using its smart phone. China also contests the US sanctions placed on those trading with Iran and North Korea.
3. Palm Oil: Trade in palm oil surged with the Industrial Revolution in Britain. Plants from West Africa were introduced into southeast Asia. Today exports amount to 60 million tonnes annually, causing widespread deforestation that devastates biodiversity, such as Indonesia losing forests the size of Germany, increases global warming, drives species towards extinction such as the 105,000 orangutan deaths, that enslaves people including children, resulting in many deaths. But, palm oil production is less destructive than other vegetable oils. Companies, including Pepsico, Uniliver, Nestlé, McDonalds, Kelloggs, Mars, Proctor & Gamble, are all accused by the Rainforest Action Network (RAN) of being too lax in their promise to abide by government rules in Sumatra by not policing their sources sufficiently to bar illegal clearings as it could add 10% to their costs.
4. Pirates: Always a hazard to trade, pirates captured Julius Caesar. Sir Francis Drake, who circumnavigated the world 1577-80, was Elizabeth I’s official pirate authorized to attack Spanish ships trading with the Americas. We even had women pirates such as Anne Bonny and Mary Read. Recently, Somali pirates forced an international array of naval ships to protect Arabian Gulf ships that were being captured in retaliation for foreign ships over fishing and dumping toxic wastes in Somali waters.
5. Recyclables: In spite of resorting by US recycling companies people are too careless in what they throw in their recycling bins so the bales, exported for $60 a bale, remain 15% contaminated so the main importer, China, is enforcing strict qualifications resulting in thousands of unsaleable bales to accumulate at home. It will take 5 years to build the necessary recycling mills in the United States.
6. Stock Markets: Of the world’s stock exchanges, 19 have a capitalization of over $1 US trillion and account for 87% of world trade. They are: USA 2, China 2, India 2, and one each (in order of capitalization) for Japan, EU, UK, Hong Kong, Germany, Canada, South Korea, Switzerland, Sweden, Australia, South Africa, Taiwan, and Brazil.
7. US Trade Jobs: In 2016 US employed 10.7 million jobs in goods and services trade, 6.3 million in goods only.
8. World Trade Center, New York: The 26 Feb 1993 attack, led by Ramzi Yousef and Eyad Ismoil, killed 6 people and did $500 million damage. Ismoil was a Jordanian student on a visa to study engineering, recruited by Yousef. After the attack he returned to Jordan where he was arrested and returned to the USA to be sentenced to 240 years in the Florence, Colorado, prison. The 11 September 2001 attack on the 110-storey twin towers and pentagon killed 2,996, wounded 6,000, and
did over $10 billion in damage. The attack involved the hijacking by 19 members of al-Qaeda, which was led by Osama bin Laden, of four commercial aircraft, 2 of which crashed into the towers, a third into the Pentagon, and the fourth into a Pennsylvania field after passengers overpowered the hijackers. The Afghan Taliban government refused to extradite bin Laden, so the US invaded Afghanistan, helped by Canada and the UK, later joined by 40 countries including all of NATO. Some 110,000 Afghans have been killed and 1,700 US Troops.
     While revenge against the United States may not have been meant to be attacks on trade, its symbols were attacked harshly and trade was hurt by the widespread retaliation and protective actions taken.
Ye Olde Scribe
www.yeoldescribe.com

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