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13 December 2019   Leave a comment

The US is claiming that it has reached a “Phase 1” trade agreement with China. It is not, however, clear what the agreement actually covers. The US will not implement the tariff increases President Trump had threatened to impose on 15 December. Additionally, the 15% tariffs will be reduced to 7.5% but the 25% tariffs will remain in place. Finally, there are promises that China will increase its agricultural imports to $50 billion a year, a level never before attained in any year in the past. According to Al Jazeera:

“The United States Trade Representative’s (USTR) office said in a statement that Washington will maintain 25 percent tariffs on about $250bn worth of Chinese imports and reduce tariffs imposed on $120bn worth Chinese goods to 7.5 percent.

“The USTR added that the deal requires structural reforms to China’s economic and trade regime and covers contentious areas including intellectual property and Beijing’s practice of forcing US firms to transfer technological know-how to Chinese partners. Agriculture, financial services, currency and foreign exchange are also covered.”

But the news reports do not specify any particular actions the Chinese are actually obliged to take in Phase 1. According to Global Times, a media outlet that is regarded as close to the Chinese government:

“In response to the US tariff rollback, China will consider not imposing tariffs on more than 3,300 types of US goods, including auto parts and chemicals due on December 15, Chinese officials disclosed.

“China will also expand agricultural imports from the US, including soybeans, poultry and pork to fill up vacancies in China’s domestic market.

“The text of the phase one deal includes nine chapters ranging from intellectual property rights, technology transfers to the exchange rate and agriculture. More detailed terms and data will be released later.”

I suspect that the Phase 1 agreement was designed to give the US a graceful way to not impose the 15 December tariffs and is not really a concrete proposal. We will have to wait for more details, but at this point I suspect that the US has been played by the Chinese.

Algeria has experienced protests against the government for over a year. A seeming breakthrough was achieved last April with the ouster of President Abdelaziz Bouteflika who was seeking a fifth term despite being seriously ill. Since April there have been protests by those who did not wish anyone associated with the Bouteflika regime to be installed in his place. But an election held on Thursday gave a Bouteflika associate, Abdelmadjid Tebboune, the position with 58% of the vote. The protesters believe that army chief Gen Ahmed Gaid Salah is the real power broker in the country and that Tebboune is simply Salah’s puppet. The underlying concern is the degree of corruption in Algerian politics and the absence of any meaningful changes since Bouteflika stepped down. According to Reuters:

“Aside from the months-long political crisis, he will also face Algeria’s most difficult economic situation in decades, with declining energy revenues and bitter cuts to state spending.

“Energy exports, the source of 95% of state revenue, fell 12.5% this year. The government has burnt through more than half its foreign reserves since energy prices began dropping in 2014, and has approved a 9% cut in public spending next year, while keeping politically sensitive subsidies untouched.”

The election does not appear to have resolved anything and we will have to watch to see if further changes are required to bring political stability to the country.

Posted December 13, 2019 by vferraro1971 in World Politics

12 December 2019   Leave a comment

The US National Oceanic and Atmospheric Agency (NOAA) has released is annual Arctic Report. Up to this point the Arctic has been a place where climate change has been documented by things such as melting sea ice or disappearing glaciers. But now we have evidence that the Arctic may be contributing to climate change by releasing methane from melting permafrost. According to the report:

  • Northern permafrost region soils contain 1,460-1,600 billion metric tons of organic carbon, about twice as much as currently contained in the atmosphere.
  • This pool of organic carbon is climate-sensitive. Warming conditions promote microbial conversion of permafrost carbon into the greenhouse gases carbon dioxide and methane that are released to the atmosphere in an accelerating feedback to climate warming.
  • New regional and winter season measurements of ecosystem carbon dioxide flux independently indicate that permafrost region ecosystems are releasing net carbon (potentially 0.3 to 0.6 Pg C per year) [petagram (Pg) of Carbon – one Pg =1015 grams=one billion metric tonnes] to the atmosphere. These observations signify that the feedback to accelerating climate change may already be underway.

If that amount of permafrost is melting, it would greatly increase the rate of global warming:

“A 2014 study in Environmental Research Letters estimated that thawing permafrost could release around 120 gigatons of carbon into the atmosphere by 2100, resulting in 0.29°C of additional warming (give or take 0.21°C). By 2300, another study in Nature Geoscience concluded, the melting permafrost and its resulting carbon feedback loops could contribute to 1.69°C of warming. (That’s on the high end. It could be as low as 0.13°C.)

“The logic here is simple: The more warming, the greater the risk of kickstarting this feedback loop. A study published in Nature Climate Change in 2017 predicted that 1.5 million square miles of permafrost would disappear with every additional 1°C of warming.

In addition, there are other problems associated with melting permafrost, including the release of once frozen pathogens or toxic materials such as mercury. This train may be unstoppable.

Exit polls suggest that British Prime Minister Boris Johnson and his Conservative Party have won a convincing victory in the British national election. The New York Times reports:

“According to the exit poll, the Conservatives are projected to win 368 seats in the House of Commons, versus 191 for the Labour Party. That would give the Conservatives an 86-seat majority, enough to empower Mr. Johnson to pull Britain out of the bloc at the end of January, as he had promised.”

The election will no doubt assure that Johnson will pursue Brexit with great vigor. He will have to negotiate an agreement with the European Union, but the election assures that the EU will have to take his decision as a done deal. Johnson’s opponent in the election, Jeremy Corbyn and the Labour Party, ran on a platform of a second referendum on Brexit. Johnson will undoubtedly consider the outcome as a firm endorsement of Brexit. But we should also consider the possibility that the British people were more concerned with assuring that Labour could not form a government. We will know final results of the election tomorrow and will be better able to assess the significance of the election then.

Posted December 12, 2019 by vferraro1971 in World Politics

11 December 2019   Leave a comment

The World Trade Organization’s appellate court has ceased to function because the US has refused to nominate judges. The court is supposed to have 7 judges, but is now down to one. There are currently 14 trade disputes before the court which cannot be resolved because a minimum of three judges are required to decide cases. According to the Nikkei Asian Review:

“Appointments of new judges to replace those whose terms have expired generally require unanimous approval from WTO members. But the U.S. has vetoed nominations since 2017, in keeping with the protectionism embraced by President Donald Trump, claiming that the WTO’s appellate body oversteps its authority by interpreting American laws.

The World Trade Organization was created in 1995, replacing the General Agreements on Tariffs and Trade (GATT) which lacked the ability to arbitrate effectively trade disputes. The WTO was created in order to establish a set of rules by which trade disputes could be settled according to principles that are shared by all members. US President Trump has claimed that the US has lost most of the cases brought before the WTO:

Trump, Oct. 25: The WTO, World Trade Organization, was set up for the benefit for everybody but us. They have taken advantage of this country like you wouldn’t believe.

“And I say to my people, you tell them, like as an example, we lose the lawsuits, almost all of the lawsuits in the WTO — within the WTO. Because we have fewer judges than other countries. It’s set up as you can’t win. In other words, the panels are set up so that we don’t have majorities. It was set up for the benefit of taking advantage of the United States.”

In fact, when the US has brought cases against other states before the WTO, it has won 91% of the cases. But it has lost most of the cases brought against the US by other states. Dan Ikenson of the Cato Institute makes an important point:

“The WTO doesn’t target any member’s policies, laws, regulations, or actions. The “WTO” doesn’t file complaints at the WTO. WTO members do. And they do so when they are aggrieved and when they are as close as possible to 100% certain that they will prevail if the matter goes all the way through dispute settlement. As a result, complainants prevail almost all of the time — on 90% of adjudicated issues. When the United States has been a complainant (as it has in 114 of 522 WTO disputes over 22 years — more than any other WTO member) it has prevailed on 91% of adjudicated issues. When the United States is a respondent (as it has been in 129 cases — more than any other WTO member), it has lost on 89% of adjudicated issues.

If an agreement about the judges cannot be formed, then the WTO cannot fulfill its primary responsibility. Trade disputes will therefore be settled by power and not the rule of law. The US has effectively dismantled an important part of the liberal world order. Perhaps the WTO should fade away, but the rule of the jungle is hardly a good substitute.

India’s Parliament has passed legislation that grants citizenship to specific minorities facing discrimination in three neighboring countries. Unfortunately, the legislation does not cover Muslims who are persecuted in the same countries. According to Al Jazeera:

“The bill brings sweeping changes to India’s 64-year-old citizenship law by giving citizenship to ‘persecuted’ minorities – Hindus, Sikhs, Buddhists, Jains, Parsis and Christians – from Bangladesh, Afghanistan and Pakistan.

“But critics say the legislation put forward by the Hindu nationalist ruling Bharatiya Janata Party (BJP) undermines the country’s secular constitution, with opposition parties, minority groups, academics and a US federal panel calling it discriminatory against Muslims.”

The bill also does not apply to Tamils from Sri Lanka, Rohingya from Myanmar and Tibetans and Uighurs from China. But it is the Muslims living in India who are most concerned. There have been a series of anti-Muslim measures in India since the election of Modi and the BJP:

“Many Muslims in India say they have been made to feel like second-class citizens since Modi came to power in 2014.

“Several cities perceived to have Islamic-sounding names have been renamed, while some school textbooks have been altered to downplay Muslims’ contributions to India.

“In August, Modi’s administration rescinded the partial autonomy of Jammu and Kashmir, India’s only Muslim-majority state, and split it into two union territories.

“A citizens’ register in Assam finalised earlier this year left 1.9 million people, many of them Muslims, facing possible statelessness, detention camps and even deportation.

There were protests against the bill in specific areas of India. Some in the country believe that the bill violates India’s historic commitment to secularism.

Posted December 11, 2019 by vferraro1971 in World Politics

9 December 2019   Leave a comment

The Washington Post has published an extraordinary article on the information passed on by the US government on the war in Afghanistan which began in October 2001 and which still continues. The article is based upon 2,000 pages based upon interviews with 400 officials connected to the war. These interviews were conducted by the Office of the Special Inspector General for Afghanistan Reconstruction, a US government office established in 2008. The documents chronicle the clear sense by most government officials that the war in Afghanistan was not attaining any of the stated goals of the US justifying the war. Despite this clear understanding, the war continued with “more than 775,000 U.S. troops deployed to Afghanistan, many repeatedly. Of those, 2,300 died there and 20,589 were wounded in action, according to Defense Department figures.” In addition, more than 43,000 Afghan citizens were killed, more than 64,000 Afghan security forces were killed, more than 42,000 insurgents were killed, more than 1100 NATO forces were killed, and US contractors, humanitarian aid workers, and journalists were killed. And the killing goes on, despite the evidence that the war is accomplishing little.

These documents resonate strongly with an earlier release of documents–known as the Pentagon Papers–on the conduct of the Vietnam War. Those documents also testified to false and misleading statements by by US government officials on the successes in attaining the objectives of the war in Vietnam. Unfortunately, the war in Afghanistan has not generated an antiwar movement as strong as that which grew up in the Vietnam War. But in terms of the honesty of those officials sending men and women to kill in the name of the American people it appears as if nothing has changed. The Washington Post article is long but well worth the effort to read.

Greg Sargent has written an op-ed for the Washington Post on the growing income inequality in the US. Many have criticized early studies of income inequality because those studies did not include transfers of income–subsidies toward food costs, health insurance, and other government benefits–to the poorer members of US society. To those critics, these transfers redistribute money in a way that mitigates the inequality. Sargent indicates that the transfers do not in fact reduce the growing inequality in any substantial way:

“As they demonstrate, the effective tax rate (federal, state, local and other taxes) paid by top earners has steadily declined since the 1950s and 1960s, when the tax code really was quite progressive, to a point where the highest income groups pay barely more, percentage wise, than the bottom.

“Indeed, in 2018, the top 400 earners for the first time paid a lower effective overall tax rate than working-class Americans. There are many reasons for this radical decline in progressivity, including domestic and international tax avoidance, the whittling away of the estate and corporate taxes, and the repeated downsizing of top marginal rates.”

We should keep this data in mind when the government cuts food stamps to the poor because tax revenues are insufficient to reduce the budget deficit.

Posted December 9, 2019 by vferraro1971 in World Politics

8 December 2019   Leave a comment

After the election on 24 November in which pro-democracy candidates for the city council won overwhelmingly, there was an expectation that support for the protests in Hong Kong would somewhat abate. That does not seem to be the case as about 800,000 people gathered in Hong Kong to demonstrate against the control of Beijing over political affairs. The protests were also surprising given that the Hong Kong economy seems to be suffering greatly from the protests. The government describes the downturn:

“‘The Hong Kong economy saw an abrupt deterioration in the third quarter of 2019, as the local social incidents dealt a very severe blow to an economy already weakened by a synchronized global economic slowdown and US-Mainland trade tensions,’ the government said in a statement. ‘As the impacts of the local social incidents have yet to show signs of abating, consumption and investment demand will likely remain in the doldrums for the rest of the year.’”

There was a sense that economic concerns would erode support for the protests, which are largely supported by young people in the city. Apparently, that has yet to be the case.

The turmoil in Hong Kong has elicited strong support from the US Congress which has passed several laws in defense of human rights in the city. These laws will make a trade deal with China much more difficult.

I try not to comment on the partisan comments about the impeachment proceedings, but the recent statements by Sen. Kennedy (R-LA) and Sen. Cruz (R-TX) asserting that Ukraine meddled in the 2016 US national election raises serious concerns about how effective Russian propaganda has become. The argument has been completely refuted by US intelligence agencies, but persists among the most ardent defenders of President Trump. Former National Security Council official Fiona Hill made this clear in her testimony to the House Committee on Intelligence:

“Based on questions and statements I have heard, some of you on this committee appear to believe that Russia and its Security Services did not conduct a campaign against our country and that perhaps, somehow for some reason, Ukraine did. This is a fictional narrative that has been perpetrated and propagated by the Russian Security Services themselves. The unfortunate truth is that Russia was the foreign power that systematically attacked our democratic institutions in 2016. This is the public conclusion of our intelligence agencies confirmed in bipartisan congressional reports. It is beyond dispute, even if some of the underlying details must remain classified.”

That US Senators would be so willing to do the work of the Russian intelligence services defies belief. Even though there is no evidence that Vladimir Lenin ever used the phrase “useful idiots”, I have no hesitation whatsoever in labeling those who suggest that Ukraine intervened in the 2016 national election “useful idiots”.

Posted December 8, 2019 by vferraro1971 in World Politics

7 December 2019   Leave a comment

One of the criticisms of the science behind the debate about climate change is that computer models cannot accurately predict the extraordinary complexity of the earth’s climate. But a new study which examined the computer models over the last 50 years indicates that the computer simulations have been on target. According to a report in Science:

“The researchers compared annual average surface temperatures across the globe to the surface temperatures predicted in 17 forecasts. Those predictions were drawn from 14 separate computer models released between 1970 and 2001. In some cases, the studies and their computer codes were so old that the team had to extract data published in papers, using special software to gauge the exact numbers represented by points on a printed graph.

“Most of the models accurately predicted recent global surface temperatures, which have risen approximately 0.9°C since 1970. For 10 forecasts, there was no statistically significant difference between their output and historic observations, the team reports today in Geophysical Research Letters.

I suspect, however, that those who deny that climate change is occurring because of human activity will be swayed by additional scientific evidence.

North Korea’s ambassador to the United Nations, Kim Song, poured cold water on the US-North Korean denuclearization talks by saying that “We do not need to have lengthy talks with the US now and the denuclearization is already gone out of the negotiation table.” The statement could be simply a negotiating ploy, but it has become increasingly clear that North Korea has become frustrated with the lack of progress in the talks. North Korean leader Kim has said that he is considering offering the US a surprise by Christmas which could suggest another ballistic missile launch or even a nuclear bomb test. Both of those possibilities could pose a serious challenge to US President Trump. For his part, Trump seems to downplay the seriousness of the situation:

“U.S. President Donald Trump sought to play down a recent surge in tensions with North Korea, stressing what he said was his good relationship with its leader Kim Jong Un and saying he thought Kim wanted a deal, not to interfere in next year’s U.S. presidential election.

“’We’ll see about North Korea. I’d be surprised if North Korea acted hostilely,’ Trump told reporters at the White House before leaving for Florida.

“’He knows I have an election coming up. I don’t think he wants to interfere with that, but we’ll have to see … I think he’d like to see something happen. The relationship is very good, but you know, there is certain hostility, there’s no question about it.’”

It is interesting that President Trump places the North Korean decision within the context of the Presidential election in the US. I strongly suspect that worrying about Mr. Trump’s chances in the next election is on the minds of the North Koreans. The North Koreans have raised the level of personal rhetoric in recent weeks:

“But the bonhomie has been tested this week, with Mr Trump reviving his derisive “Rocket Man” nickname for Mr Kim and again threatening to use military force against North Korea.

“One of Pyongyang’s top nuclear envoys, who once praised the ‘mysteriously wonderful’ chemistry between the leaders, slammed Mr Trump for using words that had prompted ‘waves of hatred’ among the North Korean people.

“She also dusted off an old insult the state has used for Mr Trump.

“‘If any language and expressions stoking the atmosphere of confrontation are used once again on purpose at a crucial moment as now, that must really be diagnosed as the relapse of the dotage of a dotard,’ said Ms Choe Son Hui, first vice-minister of foreign affairs, as quoted by the state’s official Korean Central News Agency on Thursday.”

It is difficult to find a more seriously flawed negotiating process than the one we have witnessed between the two states over the last three years. There is precious little to show by way of progress–indeed, the situation has clearly deteriorated while the two sides have been talking.

Posted December 7, 2019 by vferraro1971 in World Politics

5 December 2019   Leave a comment

A coalition of 30 labor unions in France have launched a nation-wide strike to protest the government’s plans to reduce pension benefits. National Public Radio suggests that the strike also reflects dissatisfaction with the overall policies of President Macron:

“France’s official retirement age is 62, having risen from 60 in the past decade. But the government hopes to install a new universal points-based pension system, which would change how pensions are calculated and effectively give full pension benefits only to workers who retire at age 64.

“But beyond the push to preserve current pension terms, the protests also reflect ‘an anger and a dislike of Macron in society,’ Beardsley [NPR’s Eleanor Beardsley] says, noting the criticisms the president has faced in the wake of the Yellow Vest cost-of-living protests of last autumn.”

The Guardian estimates that about 800,000 people are participating in the strike which is scheduled to last until Monday. The newspaper quotes a protester’s views of the situation:

“Isabelle Jarrivet, 52, who had worked as an administrator in a town hall north of Paris for 20 years, said: ‘It’s a question of life or death for the French social system, which Macron is dismantling. We’re being taken back to a time before 1945, where we risk losing the social safety net. Private pension funds are waiting in the wings to benefit.’

She added: ‘The gilets jaunes protests got people thinking and talking more about politics and people determined not to let things pass. You can feel a defiant mood in the air.’”

The strike has affected train, bus, and airline travel, and hospital workers, firefighters, and teachers are also participating in the strike.

The US is accusing Iran of sending short-range ballistic missiles into Iraq. The charge, if true, suggests that Iran is taking advantage of the political turmoil in Iraq, despite the fact that much of the discontent comes from those opposed to Iranian influence in Iraqi politics. The missiles could pose a threat to both Israel and Saudi Arabia, as well as to US troops stationed in the Middle East. According to the New York Times: ” Intelligence officials would not discuss the precise model of ballistic missile Iran has sneaked into Iraq. But short-range missiles have a range of just over 600 miles, meaning that one fired from the outskirts of Baghdad could strike Jerusalem.” The missiles could pose a threat to global oil supplies as the attack by two cruise missiles–allegedly by Houthi rebels in Yemen–last summer proved. Those attacks reduced oil supplies by 5% globally for a brief period of time. Iran is clearly trying to leverage its position in the region in order to increase pressure on US allies to reduce the US sanctions on Iran. But we should view this report with caution. There are many reasons why the US wants to portray Iran as an aggressive power in the region. And we should remember that it was the US that broke the Iranian nuclear agreement and that US sanctions on Iran are not sanctioned by any international agreement or organization.

Posted December 5, 2019 by vferraro1971 in World Politics

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