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The Agenda of G20 Summit 2017

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Amid clashes between police and protesters, the top advanced nations known as Group of 20, or simply ‘G-20’ summit is getting underway on 7-8 July in the German port city of Hamburg with terrorism, global trade and climate change among the major issues on the agenda. From Paris Climate Accord to North Korean Nuclear threat, US-Russian ties to Indo-China strain, this G20 summit will witness the global superpowers in their worst, trying to make their best.

Germany’s G20 Presidency with three main focuses: Ensuring stability; improving viability for the future and Accepting responsibility.

 The city of Hamburg has boosted its police with reinforcements from around the country and has 20,000police officers on hand to patrol Hamburg’s streets, skies and waterways. The meeting follows skirmishes between police and protesters elsewhere in Germany’s second-biggest city. Police said that at least 76 officers were hurt, one of whom had to be taken to a hospital with an eye injury after a firework exploded in front of him. On Friday morning, dozens of protesters attempted to block cars from accessing the summit, being held at the trade fair grounds in downtown Hamburg, but they were quickly thwarted by police. Further away in the city’s Altona district, police said people set several parked cars alight and attacked a police station, though the situation quickly calmed down.

 The G-20 comprises Argentina, Australia, Brazil, China, Germany, France, Britain, India, Indonesia, Italy, Japan, Canada, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United States and the European Union. Also attending the summit are the Netherlands, Norway, Spain, Guinea, Senegal, Singapore and Vietnam.

 The G20 is the main forum for international cooperation among the 20 leading industrialized nations and emerging economies in the fields of finance and economics. The G20 nations are together home to almost two thirds of the world’s population, as well as generating more than four fifths of global GDP, and accounting for three quarters of global trade.

 The host, German Chancellor Angela Merkel, says she hopes to find “compromises and answers” on a range of issues at the two-day meeting of leading industrial and developing nations. The G20 finance ministers will be focusing on achieving progress on the stricter regulation of financial markets, especially in the field of shadow banking.

In the run up to the G20 summit, numerous line minister meetings were held, in order to explore individual G20 issues in greater depth. Between January and May 2017, ministers responsible for finance, foreign affairs, labor affairs, health, agriculture and digital policy met. As was the case during the G7 Presidency, Angela Merkel met with representatives of civil society between March and June 2017; several dialogues took place, including events for the business community (Business20), non-governmental organisations (Civil20), trade unions (Labour20), the science and research community (Science20), think tanks (Think20), women (Women20) and youth (Youth20). The civil society organisations themselves are responsible for these meeting as well as for recommendations for Presidency, which will pick up on relevant G20 issues.

The G20 Summit, being hosted this year on July 7 and July 8 in Germany, which will see the coming together of 20 of the World’s biggest economies to discuss, debate and resolve various issue of global and continental importance. Many of the G20 nations have developed differences ranging from environmental issues to prevailing tensions or war-like situations, and are expected to use this platform to at least find a resolution acceptable to all.

While main issues to focus, given the global-political scenario, can be broadly divided into two general categories, primarily as Environmental and Political, here we will look at these in a bit detailed fashion. While the G20 Summit in its definition aims to strengthen the resilience of the global financial system and proper regulation of all financial markets, it also organizes bilateral talks among the members to discuss and if needed resolve differences, at the disposal of the two nations involved. The first meeting was hosted by Germany as well after the formation of the group in 1999.

Among the nations which are expected to directly take part in this metaphorical intervention of President Trump are British Prime Minister Theresa May and German Chancellor Angela Merkel. While May will reportedly express Britain’s full commitment towards the Paris agreement and in her one-on-one talks with him will stress how the accord should not be renegotiated, Chancellor Merkel who said that the US’s withdrawal from the agreement was ‘extraordinarily regrettable’ said that her sentiments will remain similar to what it was during her last meet with Trump.

The decision to exit the European Union is irreversible now and it has been accepted by all, citizens of Britain and the European Union alike. Given that this decision to exit the Union by Britain, popularly called BREXIT, will have obvious impact upon the economical set-up and future of both Britain and the Union, G20, which is primarily an economic platform might resolve a few issues which they may encounter. While it is true that the main focus might not be upon the BREXIT phenomenon, but ignoring the economic decisions might not be possible for either of the parties here.

 Top Issues likely to dominate Geopolitics at Hamburg would be as follows:

Stability of the global economy

Germany is happy to assume the G20 Presidency as of 1 December, and to host the G20 summit in July, declared Chancellor Angela Merkel in a video podcast on the German G20 Presidency. She cited the stability of the global economy as the “top issue”. a number of issues “related to development” will be given a very high profile, in particular fighting pandemics.

Ensuring stable and resilient national economies

The first pillar involves strengthening stable environments for the global economy and the financial system, but also promoting dynamic economic growth. Structural reforms are the lynchpin here. Germany’s G20 Presidency will continue cooperation on international financial and fiscal issues, employment, and trade and investment. The aim is to strengthen free and fair trade around the globe. The German government will also be working for sustainable global supply chains.

Fit for the future

Germany not only aims to ensure the stability of the global economy, but also, and this is the second pillar, to make it more fit for the future. One main concern is to make progress on realising the goals of the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change.

It is every bit as important to discuss viable energy and climate strategies for the future. And the growing importance of digitalization for the global economy will play a prominent part in the discussions of the G20. To be fit for the future will also mean improving health care. The worldwide fight against antimicrobial resistance is part of this, as are efforts to put in place the mechanisms to prevent the outbreak of pandemics. And empowering women in the economy, in particular improving the quality of women’s jobs, is on the agenda. Angela Merkel will be working to give women in developing countries easier access to information and communication technologies.

Accepting responsibility – especially for Africa

Germany also intends to strengthen the G20 as a community of responsibility – and that is the third pillar. A priority concern is to achieve sustainable economic progress in Africa. German Presidency aims to take concrete steps to improve people’s living conditions in the long term and to put in place a stable environment for investment. And it aims to promote infrastructure development on the African continent. In June a separate conference entitled “Partnership with Africa” will be held in Berlin. The G20 also aims to accept responsibility in other fields. Migration and refugee movements, the fight against terrorism, money laundering and corruption will also be addressed during Germany’s G20 Presidency.

The beef over Syria, North Korea and climate

 The issues which we can expect the nations to touch upon in this meet are the US pulling out of the Paris Climate Accord, Britain’s drift from the European Union, Syria, North Korea nuclear tensions and although off the table, but possible mentions of the rising tension between India and China.

 The long standing issue of Syria and its future, threatened by, on one hand the Assad regime and its alleged atrocities on the people and the rebels on the other, and worsened by the presence of the Islamic State terrorists. While primarily it has been speculated and confirmed by US Secretary of State Rex Tillerson that US President Trump and Russian President Vladimir Putin will seek to find a common ground over Syria, the most important decision both countries may arrive could be regarding establishing no-fly zones and on the ground ceasefire norms.

The G20 and world at large looked at the decision of US President Donald Trump with an expression of predictable horror, when he declared that the USA will no longer be part of the Paris Climate agreement. While his decision was censured by citizens of the US and other nations alike, this G20 platform will be reportedly used by a couple of nations to show President Trump that in this issue, the USA is isolated from the rest and as Greenpeace Director Jennifer Morgan would say,’ The only game in town.’

Indian Hindutva agenda of anti-beef issue would not even be mentioned in the summit although such grave issues that are detrimental to normalcy and prosperity of a nation need to be debated and such nations promoting fanaticism as their key ploy as policy should be warned against the dangerous drama just for majority votes. . 

Will G20 achieve anything?

Like UN, the G20 and other such forums only promote multilateral trade and do not think about the future of poor nations and poor populations in real terms. World Bank and IMF impose economic measures to weaken the poor people. They and all governments promote ah and help  the rich and MNCs, corporate lords and their  wealthy trade outfits.

With the global political dynamics changing over the period of one year severely and more so in the last few months, perhaps the Summit is well-timed to resolve the differences which have visibly surfaced within several members and non-members of the G20 nations.

No one is sure about the outcomes as the US led Syria war is in the minds of every leader attending the summit.  While there’s little disagreement on fighting terrorism, prospects of finding common ground on climate change and trade look uncertain.

The illegal war in Syria led by USA and joined by Russia must be stopped and the remaining Syrians must be saved as the first action priority of G20 and UNSC.  Israel and India must be brought to negotiating tables to discuss the burning issue of reestablishment of Palestine and Kashmir as soverign nations as they had existed before.

Remaining Palestinians and Kashmiris must be saved. Only Big powers can make the genuine dreams of Palestinians and Kashmiris a reality as quickly as possible. 

However, since the veto powers control everything including the UN and G20, no one is yet sure if the communique that would be drafted at G20 would sternly warn the colonialist and imperialist powers destroying peace in the world, destroying climate, destroying poor people in every country, destroying nations and people; These should be warned against the crimes they perpetrate against humanity by attacking and killing the native people living in them.  Apart from helping the poor and weak nation in economy and development programs, the G20 should also make suitable recommendations to arrest the climatic change taking place globally that would make many island nations disappear from the face of our earth.

Looking forward to the best possible outcomes from the G20 summit in Germany!

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Key elements of the EU-Japan Economic Partnership Agreement

MD Staff

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The EU-Japan Economic Partnership Agreement will boost trade in goods and services as well as create opportunities for investment.

The agreement will further improve the position of EU exporters and investors on Japan’s large market, while including strong guarantees for the protection of EU standards and values. It will help cement Europe’s leadership in setting global trade rules and send a powerful signal that cooperation, not protectionism, is the way to tackle global challenges.

This Agreement, as other agreements concluded recently by the EU, goes beyond trade issues only. It represents a significant strengthening of our partnership with Japan, as reflected in the name of the agreement.

What is the Economic Partnership Agreement about?

Elimination of customs duties – more than 90% of the EU’s exports to Japan will be duty free at entry into force of the agreement. Once the agreement is fully implemented, Japan will have scrapped customs duties on 97% of goods imported from the EU (in tariff lines), with the remaining tariff lines being subject to partial liberalisation through tariff rate quotas or tariff reductions. This, in turn, will save EU exporters around €1 billion in customs duties per year.

Agriculture and food products – Japan is a highly valuable export market for European farmers and food producers. With annual exports worth over €5.7 billion, Japan is already the EU’s fourth biggest market for agricultural exports. Over time around 85% of EU agri- food products (in tariff lines) will be allowed to enter Japan entirely duty-free. This corresponds to 87% of current agri-food exports by value.

The agreement will eliminate or sharply reduce duties on agricultural products in which the EU has a major export interest, such as pork, the EU’s main agricultural export to Japan, ensuring duty-free trade with processed pork meat and almost duty-free trade for fresh pork meat exports. Tariffs on beef will be cut from 38.5% to 9% over 15 years for a significant volume of beef products.

EU wine exports to Japan are already worth around €1 billion and represent the EU’s second biggest agricultural export to Japan by value. The 15% tariff on wine will be scrapped from day one, as will tariffs for other alcoholic drinks.

As regards cheese exports, where the EU is already the main player on the Japanese market, high duties on many hard cheeses such as Gouda and Cheddar (which currently are at 29.8%) will be eliminated, and a duty-free quota will be established for fresh cheeses such as Mozzarella. The EU-Japan agreement will also scrap today’s customs duties (with a transitional period) for processed agricultural products such as pasta, chocolates, cocoa powder, candies, confectionary, biscuits, starch derivatives, prepared tomatoes and tomato sauce. There will also be significant quotas for EU exports (duty-free or with reduced duty) of malt, potato starch, skimmed milk powder, butter and whey.

Geographical Indications – the EU-Japan agreement recognises the special status and offers protection on the Japanese market to more than 200 European agricultural products from a specific European geographical origin, known as Geographical Indications (GIs) – for instance Roquefort, Aceto Balsamico di Modena, Prosecco, Jambon d’Ardenne, Tiroler Speck, Polska Wódka, Queso Manchego, Lübecker Marzipan and Irish Whiskey. These products will be given the same level of protection in Japan as they experience in the EU today.

Industrial products – tariffs on industrial products will be fully abolished, for instance in sectors where the EU is very competitive, such as chemicals, plastics, cosmetics as well as textiles and clothing. For leather and shoes, the existing quota system that has been significantly hampering EU exports will be abolished at the agreement’s entry into force. Tariffs on shoes will go down from 30% to 21% at entry into force, with the rest of the duties being eliminated over 10 years. Tariffs on EU exports of leather products, such as handbags, will go down to zero over 10 years, as will be those on products that are traditionally highly protected by Japan, such as sports shoes and ski boots.

Fisheries – import quotas will no longer be applied and all tariffs will be eliminated on both sides, meaning better prices for EU consumers and big export opportunities for EU industry.

Forestry – tariffs on all wood products will be fully eliminated, with seven years staging for the most important priorities. Most tariffs on wood products will be dropped immediately, with some less important tariff lines being scrapped after 10 years.

Non-tariff barriers – The EU-Japan negotiations addressed many non-tariff measures that had constituted a concern for EU companies, as some Japanese technical requirements and certification procedures often make it difficult to export safe European products to Japan. The agreement will make it easier for EU companies to access the highly regulated Japanese market. Examples of such barriers addressed include:

Motor vehicles – the agreement ensures that both Japan and the EU will fully align themselves to the same international standards on product safety and the protection of the environment, meaning that European cars will be subject to the same requirements in the EU and Japan, and will not need to be tested and certified again when exported to Japan. With Japan now committing itself to international car standards, EU exports of cars to Japan will become significantly simpler. This also paves the way for even stronger cooperation between the EU and Japan in international standard setting fora. It includes an accelerated dispute settlement between the two sides specifically for motor vehicles, similar to the one agreed under the EU-South Korea trade agreement. It also includes a safeguard and a clause allowing the EU to reintroduce tariffs in the event that Japan would (re)introduce non-tariff barriers to EU exports of vehicles. The agreement will also mean that hydrogen-fuelled cars that approved in the EU can be exported to Japan without further alterations.

Medical devices – In November 2014, Japan adopted the international standard on quality management systems (QMS), on which the EU QMS system for medical devices is based. This reduces the costs of certification of European products exported to Japan considerably.

Textiles labelling – In March 2015, Japan adopted the international textiles labelling system similar to the one used in the EU. Textiles labels therefore do no longer need to be changed on every single garment exported to Japan, as was the case before.

“Quasi drugs”, medical devices and cosmetics – a complicated and duplicative notification system that hampered the marketing of many European pharmaceuticals, medical devices and cosmetics in Japan was finally abolished on 1 January 2016.

Beer – From 2018 onwards, European beers can be exported as beers and not as “alcoholic soft drinks”. This will also lead to similar taxation, thus doing away with differences between different beers.

In addition, the Economic Partnership Agreement also contains general rules on certain types of non-tariff barriers, which will help level the playing field for European products exported to Japan, and increase transparency and predictability:

Technical barriers to trade – the agreement puts the focus on Japan and the EU’s mutual commitment to ensure that their standards and technical regulations are based on international standards to the greatest possible extent. Combined with the provisions on non-tariff measures, this is good news for European exporters of electronics, pharmaceuticals, textiles and chemicals. For instance, reliance on international standards will be helpful for easier and less costly compliance of food products with Japanese labelling rules.

Sanitary and phytosanitary measures – the agreement creates a more predictable regulatory environment for EU products exported to Japan. The EU and Japan have agreed to simplify approval and clearance processes and that import procedures are completed without undue delays, making sure that undue bureaucracy does not put a spanner in the works for exporters. The agreement will not lower safety standards or require parties to change their domestic policy choices on matters such as the use of hormones or genetically modified organisms (GMOs).

Trade in services

The EU exports some €28 billion of services to Japan each year. The agreement will make it easier for EU firms to provide services on the highly lucrative Japanese market. The agreement contains a number of provisions that apply horizontally to all trade in services, such as a provision to reaffirm the Parties’ right to regulate. It maintains the right of EU Member States’ authorities to keep public services public and it will not force governments to privatise or deregulate any public service at national or local level. Likewise, Member States’ authorities retain the right to bring back to the public sector any privately provided services. Europeans will continue to decide for themselves how they want, for example, their healthcare, education and water delivered.

Postal and courier services – the agreement includes provisions on universal service obligations, border procedures, licences and the independence of the regulators. The agreement will also ensure a level-playing field between EU suppliers of postal and courier services and their Japanese competitors, such as Japan Post.

Telecommunications – the agreement includes provisions focused on establishing a level playing field for telecommunications services providers and on issues such as universal service obligations, number portability, mobile roaming and confidentiality of communications.

International maritime transport services – the agreement contains obligations to maintain open and non-discriminatory access to international maritime services (transport and related services) as well as access to ports and port services.

Financial services – the agreement contains specific definitions, exceptions and disciplines on new financial services, self-regulating organisations, payment and clearing systems and transparency, and rules on insurance services provided by postal entities. Many of these are based on rules developed under the World Trade Organisation, while addressing specificities of the financial services sector.

Temporary movement of company personnel – the agreement includes the most advanced provisions on movement of people for business purposes (otherwise known as “mode 4”) that the EU has negotiated so far. They cover all traditional categories such as intra-corporate transferees, business visitors for investment purposes, contractual service suppliers, and independent professionals, as well as newer categories such as short-term business visitors and investors. The EU and Japan have also agreed to allow spouses and children to accompany those who are either service suppliers or who work for a service supplier (covered by “mode 4” provisions). This will, in turn, support investment in both directions.

State owned enterprises – state-owned enterprises will not be allowed to treat EU companies, services or products differently to their Japanese counterparts when buying and selling on commercial markets.

Public procurement – EU companies will be able to participate on an equal footing with Japanese companies in bids for procurement tenders in the 54 so-called ‘core cities’ of Japan (i.e. cities with around 300.000 to 500.00 inhabitants or more). The agreement also removes existing obstacles to procurement in the railway sector.

Investment – The agreement aims to promote investment between the EU and Japan. At the same time, the text explicitly reaffirms the right of each party to regulate to pursue legitimate policy objectives, highlighted in a non- exhaustive list. The agreement does not cover the protection of investment, on which negotiations are ongoing between the two sides for a potential agreement on the protection of investments. The EU has also tabled to Japan its reformed proposal on the Investment Court System. For the EU, it is clear that there can be no return to the old-style Investor to State Dispute Settlement System (ISDS).

Intellectual Property Rights (IPR) – the agreement builds on and reinforces the commitments that both sides have taken in the World Trade Organization (WTO), in line with the EU’s own rules. The agreement sets out provisions on protection of trade secrets, trademarks, copyright protection, patents, minimum common rules for regulatory test data protection for pharmaceuticals, and civil enforcement provisions.

Data protection – Data protection is a fundamental right in the European Union and is not up for negotiation. Privacy is not a commodity to be traded. Since January 2017, the European Union and Japan engaged in a dialogue to facilitate the transfers of personal data for commercial exchanges, while ensuring the highest level of data protection. With the EU General Data Protection Regulation that entered into force last year and the new Japanese privacy law that entered into force in May, the EU and Japan have modernised and strengthened their respective data protection regimes. In July 2018, the Commission and the Japanese government reached a satisfactory conclusion on the robustness each other’s data protection rules, and hence they intend to move forward with the adoption of a so-called “mutual adequacy” arrangement, which will create the world’s largest area of safe transfers of data based on a high level of protection for personal data.

Sustainable development – the agreement includes all the key elements of the EU approach on sustainable development and is in line with other recent EU trade agreements. The EU and Japan commit themselves to implementing the core labour standards of the International Labour Organisation (ILO) and international environmental agreements, including the UN Framework Convention on Climate Change, as well as the Paris climate agreement. The EU and Japan commit not to lower domestic labour and environmental laws to attract trade and investment. The parties also commit to the conservation and sustainable management of natural resources, and to addressing biodiversity, forestry, and fisheries issues. The parties agree to promote Corporate Social Responsibility and other trade and investment practices supporting sustainable development. The agreement sets up mechanisms for giving civil society oversight over commitments taken in the field of Trade and Sustainable Development. The agreement will have a dedicated, binding mechanism for resolving disputes in this area, which includes governmental consultations and recourse to an independent panel of experts.

Whaling and illegal logging – The EU has banned all imports of whale products for more than 35 years, and this will not change with the Economic Partnership Agreement. The EU and its Member States are committed to the conservation and protection of whales and have consistently expressed strong reservations about whaling for scientific purposes. Whales receive special protection under EU law and the EU strictly enforces the ban on trade under the Convention on Trade in Endangered Species (CITES). The EU addresses whaling by all third countries, including Japan, both in bilateral relations and in the international fora that are best suited to deal with this issue – for example, at the International Whaling Commission, where we work with like-minded partners to address whaling with Japan. The sustainable development chapter of the EU-Japan economic partnership agreement will provide an additional platform to foster dialogue and joint work between the EU and Japan on environmental issues of relevance in a trade context.

The EU and Japan share a common commitment to combat illegal logging and related trade. Trade in illegal timber is not an issue between the EU and Japan. The EU has a very clear legislation on illegal logging, just like Japan, which applies to imports from any country of origin. Both partners have surveillance and certification systems in place to prevent the import of illegal timber. The two partners also work closely with third countries to support them in setting up efficient mechanisms to address the problem. The agreement includes a legal provision committing both partners to the prevention of illegal logging and related trade.

Corporate governance – for the first time in an EU trade agreement, there will be a specific chapter on corporate governance. It is based on the G20/OECD’s Principles on Corporate Governance and reflects the EU’s and Japan’s best practices and rules in this area. The EU and Japan commit themselves to adhere to key principles and objectives, such as transparency and disclosure of information on publicly listed companies; accountability of the management towards shareholders; responsible decision-making based on an objective and independent standpoint; effective and fair exercise of shareholders’ rights; and transparency and fairness in takeover transactions.

Competition – the agreement contains important principles that ensure that both sides commit themselves to maintaining comprehensive competition rules and implementing these rules in a transparent and non-discriminatory manner.

State-to-State dispute settlement mechanism – the agreement ensures that rights and obligations under the agreement are fully observed. It provides an effective, efficient and transparent mechanism with a pre-established list of qualified and experienced panellists for avoiding and solving disputes between the EU and Japan.

Anti-Fraud – The EU and Japan will include an anti-fraud clause in the economic partnership agreement. The anti-fraud clause is a condition for the EU to grant tariff preferences to any third country. It makes it possible for the EU to withdraw tariff preferences in cases of fraud and refusal to co-operate, while ensuring that legitimate traders are not adversely affected. The aim is to prevent abuse of preferential tariff treatment.

At the same time, negotiations with Japan continue on investment protection standards and investment protection dispute resolution.

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Success of G-20 Summit 2018

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G-20 Summit 2018, was termed as successful and hope for better world order. In fact, recently the tension between US and China & Russia was growing and world peace and stability was at stake. Since January 2018, when President Trump, addressed house of union, expressed anti-China and Russia sentiments. Later on imposition of traffic on Chinese products and several other action were aimed to curtail China’s growth countering Russian threats. APEC summit at Papua New Guinea has also given negative signals. Under this scenario, whole world has focused on the out-come of G-20 Summit 2018, held in Buenos Aires, Argentina, on 30 November-1 December 2018.

Chinese wisdom brought fruits finally, as a result of meeting between President Trump and President Xi, in Buenos Aires on 1 December 2018, where US president agreed to not to put additional tariffs on Chinese goods.  Since beginning of 2018, starting from the President Trump’s address to state of Union, anti-China sentiments were very much obvious. Putting tariff to Chinese goods by US Dollars 200 Billion, APEC summit at Papua New Guinea etc were the moments of worry for not only China but also for the whole world.

As, US is the largest and China as second largest economy of the World. These two economies were dominating the global economy. Any disturbance to US or Chinese economy may disturb the whole world’s economy and destabilize world trade. Any such chaos may lead to political instability globally. There were clouds of destabilization due to ongoing Trade War between the two big economies and all other nations were worried about the future of their own economies.

China is an ancient civilization and has passed many ups and downs throughout the history and have become much matured nation. Chinese policy of “Peace and Development” is beauty of its century old wisdom. By nature, Chinese people wanted a smooth and frictionless society. Since the beginning of confrontation or trade war, Chinese side observed patience and always struggling to find a solution by talk or negotiation. Even China was not eager to impose any tariff on US goods, but lately reciprocated as a last option.

President Xi’s speech at summit was very comprehensive and very clear spelling out the responsibilities and consequences of any destabilization of global economy. He urged that on trade issues, the world should firstly stick to openness and free trade, maintain and further expand an open market, and realize win-win cooperation through mutual exchanges and complementarity. China is stick to opening its doors to rest of world and believe in globalization and follow the WTO as guidelines. Secondly, G20 should stick to inclusiveness, and bring the benefits of international trade and economic globalization to people of all countries and all classes, including the under developed, developing nations and especially the poor states. Thirdly, G20 should uphold rules-oriented spirit and nurture a stable and expectable institutional environment for the healthy development of international trade.

President Trump was also positive and cooperative. Finally China and the United States have agreed to halt additional tariffs as both countries engage in new trade negotiations with the goal of reaching an agreement within 90 days. The breakthrough came after a dinner meeting between President Donald Trump and Chinese leader Xi Jinping. Trump agreed not to boost tariffs on $200bn of Chinese goods to 25 percent on January 1 as previously announced, while Beijing agreed to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, the White House said in a statement.

Overall, G-20 final communique said the members reaffirm ‘commitment to further strengthening the global financial safety net with a strong, quota-based, and adequately resourced IMF at its centre’. Further added that international trade and investment are important engines of growth, productivity, innovation, job creation and development. Also note on current trade issues, reaffirms pledge to use all policy tools to achieve strong, sustainable, balanced and inclusive growth. The communique said the group will safeguard against downside risks, by stepping up our dialogue and actions to enhance confidence.

Overall the Summit was termed as a very successful one and hopes for stability in the global economy is obvious. Especially the developing countries and poor economies felt sigh a relief. Pakistan is also passing through its worst hit era of economic crisis and was struggling to revive its ill-economy. As the international environment may improve and there may exist a space for Pakistan to play smartly and re-gain its position in the global economies. Although, Pakistan possess a huge potential for rapid growth, because of its natural edge over its rich agriculture and tremendous natural resources in the form of Minerals and mines. Pakistan work force is also a positive factor with 70% of its population under the age of 40, are well qualified. The hindrance is only, corruption, nepotism and poor management. It is responsibility of Government to introduce reforms, friendly incentive based policies, and strict-merit based implementation.

It is believed that China-Pakistan economic Corridor (CPEC) will also prosper and will achieve its desired results. The cooperation between China and Pakistan will grow further in all walk of life and benefits the common people of both sides.

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The Myth of Capitalism-Book Review

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Many people have labeled communism as but a myth: an unattainable fantasy.  Jonathan Tepper and Denise Hearn (T&H) have, by contrast, written a new book called The myth of capitalism: Monopolies and the death of competition.  It contains a series of liberal and conservative critiques of the economic system of the US in particular and the West more generally.

T&H chronicle the decline of competitiveness in almost every sector of the US economy.  Most people in the mainstream media are drooling over the record highs being recorded on the stock market, but the book notes,  “Between 1996-2016, the number of stocks in the US fell by roughly 50%, from more than 7300 to fewer than 3600, while rising 50% in other developed nations.”  As T&H painstakingly explain by citing studies and charts, the US economy has been stagnant by most truly relevant metrics since the Reaganomics of the 1980s, such as R&D spending, company longevity, competitive consumer product prices and the number of annual startups.

The superficiality of the recent Wall St gains is enabled via trickery such as stock buybacks, oligopolistic mergers & lobbyist-sponsored deregulation and tax exemptions.  Such corruption used to be illegal, in pre- Reagan and Buckley v. Valeo America.  Teddy and Franklin Roosevelt both cracked down on monopolies like Standard Oil and the New York Central Railroad by enforcing the Sherman and Clayton Antitrust Acts.  Every president since Teddy, both Democrat and Republican, cracked down on potential monopolies until Reagan.  This helped prevent a market crash akin to those of 1907 and 1929, which were the direct result of laissez-faire capitalism.

Wide-scale mergers started occurring during the Reagan Administration and have only picked up steam ever since. Concerning our last president, T&H note that, “Obama talked tough on big business and Wall Street, but he raised as much money from them as possible and was arguably even more pro-merger than Bush.  His DOJ approved all the airline mergers, creating an oligopoly of four airlines… He allowed Google’s major acquisitions that vertically integrated parts of the ad industry… The FTC prevented Comcast from buying Time Warner in 2015 and AT&T from acquiring T-Mobile in 2011.  These were the only notable mergers Obama’s DOJ blocked.”

The book lists all of the industries that have effectively become oligopolies or even monopolies: search engines, beer, beverages, glasses, weapons, banks, telecommunications, social media, cell phone manufacturing, agriculture, airlines, pharmaceuticals, credit rating, tobacco, railroads, etc.  The consolidation of market share to a handful of billion-dollar companies has throttled the entry of new companies in our so-called Age of the Startup.  T&H write how Facebook has (after buying out Instagram) been able to devastate upstart platform Snapchat by mimicking all of Snapchat’s features.  Such treachery, combined with Facebook’s 2B+ user base, ensured Snapchat would end up in the financial spiral that’s it’s currently in.   This is but one example of how the post-merger era has sabotaged fresh competition.  The book relays this sobering stat: “In 1995, the top 100 companies accounted for 53% of all income from publicly traded firms, but by 2015, they captured a whopping 84% of all profits.”  After decades of decline, the number of new firm entries fell below the number of firm exits in 2013.  This decline in the number of startup innovators inevitably ends up hurting technological innovations.

The merger bonanza may be great for Wall St, but it’s horrible for Middle America.  For instance, T&H write, “When workers have fewer employers to choose from in their line of work, their bargaining power disappears.  Corporate giants can squeeze their suppliers, but the main thing companies buy is labor, and they have been squeezing workers.”  Thus, wages have struggled to keep up with inflation for decades.  Benefits are cut, while stock buybacks soar.  Unhappy workers in all but 3 states can be shackled to soul-sucking jobs via non-compete clauses.  Furthermore, “56% of private sector non-unionized workers are forced into mandatory arbitration and of those, 23% were also denied any access to class-action lawsuits. This means that nearly a quarter of working Americans in the private sector don’t have the basic right to sue their employer.”

Mergers aren’t good for consumers either, despite what the corporatist rhetoric will tell you.  T&Hgive countless examples of how industries became less innovative after drinking the Oligopoly Kool-Aid.  The lack of competition this environment leads to complacency and, thus, a lack of product innovation or even concern for customer service.  The book also reports that, “in mergers that led to 6 or fewer significant competitors, prices rose in nearly 95% of cases… On average, post-merger prices increased 4.3%.”  Industries from beer to pharmaceuticals are infamous for fixing prices, due to high barriers of entry for startups and tacit (and sometimes explicit) collusion.  According to the book’s data, the average specialty pharmaceutical medication cost jumped 217% from 2011-2015.  Unsurprising, when you consider that, “In 2017, drug makers paid for 882 lobbyists and spent more than $171.5M in an effort to oppose lower prescription drug prices.”

Ironically, lobbyists will argue that mergers lead to lower prices and greater innovation.  They make the dishonest argument that the goal of the antitrust acts was solely to help consumers.  In fact, the legislation never even mentioned consumer efficiency; the bills were all about breaking up the power of the trusts.  People like Teddy Roosevelt and Woodrow Wilson saw how monopolies exceeded government authority in many cases; a lack of government enforcement of industry ultimately led to the Great Depression and the resulting New Deal reformations.

In the era of the Too-Big-to-Fail banks and corporations, the lessons of The myth of capitalism are more important than ever. They expose the façade of the post-recession “economic recovery” for what it is: stock buybacks and mergers puffing up the economy.  Everyone and everything from workers, consumers, people with medical conditions, startups and the IRS suffer from the corruption of American capitalism.  Tepper and Hearn frame their central thesis with liberal ideals and arguments (protecting the consumer, income inequality, maintaining government independence from corporate influence), as well as conservative (market competitiveness, cutting red tape for small business, low consumer prices).  A lot is written about the thoughts of Hayek and Friedman, but also leftists like FDR and Marx.  The final chapter offers some solutions to the problems of our times, but they’re pretty predictable if you’ve been reading along the whole way.  Page after page of charts succinctly illustrate the points T&H make about trust-busting, the corrosiveness of the lobbyist class, the benefits of competitive markets, and livings standards for people on Main Street.  The myth of capitalism is a very readable, even-handed and informative primer for anyone questioning whether or not they’re being gas lighted by the nonstop barrage of praise for the economy by the oligopolistic mainstream media.

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