Category Archives: Globalization

Is the TransPacific Partnership Being Brought Back From the Dead?

With a new Republican Congress, and Obama himself a Republican who occasionally wears Democratic clothing, the Administration is making noise that the TransPacific Partnership and its ugly sister, the Transatlantic Trade and Investment Partnership, are moving forward in a serious way.

But the Administration tried that sort of messaging last year to keep up a sense of inevitability about these regulation-gutting, mislabeleed trade deals, when reality was very different. So where do things stand?

Bill Black: Obama’s Vain Search for a TPP “Legacy”

Yves here. This post confirms what readers know all to well, that Obama will use every opportunity to sell out the middle class to corporate interests.

One thing to bear in mind is that opposition to the Trans-Pacific Partnership, and its ugly sister, the Transatlantic Trade and Investment Partnership, do not split on simply party lines. This fall, when Obama was unable to get enough votes to get “fast track” approval, which the Executive Branch uses to force an up-down vote on a final trade deal, denying Congress the opportunity to influence its contents, whip counts showed that nearly 40 Republicans in the House were prepared to join Democrats in opposing it. How the numbers would break now is an open question, but that means it is worth your time and effort to call your Congressman and let them know you are firmly opposed to these toxic trade deals.

Free Markets: Yellow Brick Road to War

Yves here. I’m a believer in synchronicity, and this post will allow readers to continue the discussion we’ve been having over the last few days about the forces for war versus peace in industrial and post industrial economies.

The author John Weeks does himself a disservice by letting his considerable frustration with how economics treats topics like trade and war descend into spurts of hyperventilation. However, I believe you’ll find his argument though-provoking. Some of his points include that analysis of trade assumes that countries, as opposed to companies, are the locus of activity, and that trade creates incentives for peace, when in fact trade just as often (if not more often) creates incentives for war, for instance, via competition for resources.

Ilargi: The Year 2014 in 5 Narratives

What’s real about the narratives of 2014, versus what we’re being told they are about.

Yanis Varoufakis: The Euro’s First Inkling – A Piece in Lieu of Best Wishes for 2015

Lambert here: How about that DeGaulle! And “exorbitant privilege” has a nice ring, doesn’t it? By Yanis Varoufakis, a professor of economics at the University of Athens. Originally published at his website. As 2015 is approaching, seemingly pregnant with crucial challenges for Europe, the euro and all those who have to live with it, I […]

Don Quijones: How the Trade in Services Agreement Lets Big Brother Go Global

A new leak shows that the even-more-secret-than-the-TTP-and-TTIP Trade in Services Agreement is worse than you imagined.

Michael Pettis: Is China Really Turning Away from the Dollar?

Yves here. This important post by Michael Pettis addresses whether the efforts of the Chinese to diversify their foreign investments away from the dollar will be a negative for the US. Pettis is skeptical of that thesis, and some of his reasons are intriguing. Like quite a few experts, he doubts that China’s role in sponsoring an infrastructure bank will be a game changer, and he also points out, as we have regularly, that the Chinese cannot deploy their foreign exchange reserves domestically without driving the renminbi to the moon (via selling foreign currencies to buy RMB), which is the last thing they want to have happen. A more surprising, but well argued thesis is that reduced Chinese purchases of US bonds would be a net plus for the US.

Get a cup of coffee. This is a meaty, important article.

Pepe Escobar: How China’s Eurasia Maneuvers Beat Obama’s Pivot to Asia

Yves here. We’ve commented occasionally on Obama’s failed pivot to Asia, which is clearly an effort to contain China. The centerpiece, the TransPacific Partnership, appears to be going nowhere. A meeting between Communist party chief Xi and Japan’s Abe trumped America’s presence at the ASEAN conference; our Japanese press-watcher Clive says that Putin garnered as much media coverage as did the US president. But you’d get perilous little sense of how China is outmaneuvering the US in Asia, despite considerable worries among its neighbors about its aggressive territorial claims.

This article by Pepe Escobar gives a fine overview of the measures China is taking to create greater economic integration with its Eurasian and European trade partners, to the detriment of US influence. And Washington appears to have been caught flat-footed.

Yanis Varoufakis: How the United States Rolls (Post-Global Minotaur) – by Slavov Žižek

By Yanis Varoufakis, a professor of economics at the University of Athens. Originally published at his website. In this article, aptly subtitled It’s lonely being the global policeman, Slavoj evokes a parallelism between the age of extremes that began as the British Empire was losing its grip with the present moment in history. Now that the […]

Economic Development and the Effectiveness of Foreign Aid: A Historical Perspective

Yves here. Ebola is serving as a reminder that the fate of members of advanced economies isn’t necessarily divorced from those of citizens of poor, developing nations. And it isn’t as if those countries are completely neglected. They are simultaneously the recipients of foreign aid, while at the same time being de facto capital exporters. So while this study below is informative, it ignores the elephant in the room, which is the degree to which looting simply overwhelms the amount of funding provided by foreign aid.

As Nicholas Shaxson wrote in Treasure Islands (p. 157):

Global Financial Integrity (GFI) in Washington authored a study on illicit financial flows out of Africa (March 2010). Between 1970 and 2008, it concluded:

Total illicit financial outflows from Africa, conservatively estimated, were approximately $854 billion. total illicit outflows may be as high as $1.8 trillion… The GFI estimate – equivalent to just over 9 per cent of its $51 billion in oil and diamond exports during that time – simply has to be a gross underestimate of the looting. Many billions have disappeared offshore through opaque oil-backed loans channeled outside normal state budgets, many of them routed through two special trusts operating out of London.

Michael Hudson, Other Experts Discuss America, China and Russia Jockeying in G20 and APEC Summits

Yves here. This is an intriguing exchange among Michael Hudson, John Weeks, professor emeritus of development economics at the University of Long and Colin Bradford of Brookings. The points of difference between Hudson and Bradford are sharp, with Bradford admitting to giving a Washington point of view that Obama scored important gains at the APEC summit, with Hudson contending that both confabs exposed America’s declining role and lack of foreign buy-in for its neoliberal economic policies.

John Helmer: Leaky Russian Sanctions, or the Difference Between an Oligarch and a Crony

Yves here. This post focuses on the considerable gap between rhetoric and action as far as sanctions against Russia are concerned. John Helmer describes who is exempted from sanctions against Russia and why.

What Makes Japan Bother With the TransPacific Partnership?

Yves here. We’ve been giving regular updates, with the considerable help of our man in Japan Clive, on how the the prospects for Japan signing up for the TransPacific Partnership look extremely slim. Mind you, “extremely slim” is not impossible, but the reason we deem the probability to be that low is that the Administration appears unwilling to bargain at all, let alone offer Japan some critical and large concessions that it requires to sign up. And since Japan is a linchpin to the entire deal, if Japan is a no-go, you can kiss the TransPacific Partnership goodbye.

These TransPacific Partnership discussions have also given yours truly, and even more so our real expert Clive, the opportunity to do some cross-cultural translating, which I personally enjoy. The Japanese are a sufficiently alien culture that you are forced to suspend or retrain your assumptions about how things work. So to watch the US Trade Representative, which along with the State Department, ought to be a US agency particularly attuned to how Japan needs special handling, instead do the equivalent of repeatedly step on a rake and get smacked in the face, is entertaining in a perverse way. How can they NOT know that what they are doing is counterproductive? And how can they NOT course correct when it should be obvious that what they are doing isn’t working?

However, even though, as we have discussed, the USTR has acted in a way almost guaranteed to offend the Japanese, the government has reasons for being cool on the TransPacific Partnership yet having to feign otherwise. And they aren’t terribly mysterious either, even though they do vary with US baseline assumptions.

Michael Hudson: Putin’s Pivot to Asia

Yves here. Understandably, US reporting on the just-finished APEC summit focused on Obama’s objectives and supposed achievements. Russia has historically not been a major force in the region and thus received less coverage here. It was therefore surprising to see our man in Japan Clive tell us that Japanese media coverage of Putin at APEC was on a par with the column-inches given to Obama.

On Real News Network, Michael Hudson describes how Putin is shifting Russia’s export focus and economic alliances towards Asia, particularly China. Putin did better at the APEC summit than most Western sources acknowledge, and that could have longer-term ramifications for the US.