Free Trade Under the Microscope - November/December 2008

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The Sound and The Fury: Why Opponents of the US-Colombia FTA Miss the Point

During a time of immense economic uncertainty, the free trade agreement (FTA) between the U.S. and Colombia, one of America’s staunchest Latin American political allies, may prove the most contentious trade vote put to Congress this year.The worldwide pursuit of regional trade agreements, which knock down trade barriers faster than their complicated multilateral cousins, has been a high priority for the United States Trade Representative (USTR) during the Bush Administration. In light of this agenda, the US-Colombia FTA was ‘fast-tracked’ in 2003 as part of regional Andean negotiations including Peru, Ecuador, and Bolivia. The bilateral agreement is considered to be particularly attractive to the US given Colombia’s roughly $463 billion GDP.

December 18, 2008
Jaclyn Selby
Free Trade Under the Microscope - November/December 2008

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Re-thinking the U.S.-Syria Trade Relationship

During and after his campaign, President-elect Barack Obama promised to engage early in the Israeli-Palestinian peace process. If he keeps his word, one crucial piece in the puzzle will be Syria, which the Bush administration invited to the Annapolis conference–a Middle East peace conference held in November–much to the delight of certain senior foreign policy experts. Any U.S. effort to broker a regional peace agreement will require the Obama administration to re-evaluate its trade relationship with Syria. Though neither country is the other’s top trade partner, reconsideration of sanctions at a time when Syria is undergoing major market reforms may have a positive cascading effect that advances Washington’s regional interests.

December 18, 2008
Marc Sorel
Free Trade Under the Microscope - November/December 2008

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Is Free Trade in the West in Danger?

As the global community deals with a financial crisis of astronomic proportions, the casualties continue to mount. The latest endangered institution isfree trade. The level of protectionist rhetoric sounded by politicians, particularly in the U.S., has risen significantly, reflecting the current mood of the country. In this year's Pew 'Global Attitudes' survey, only 53% of Americans surveyed view trade as beneficial to the country. This number contrasts starkly with the European general attitude towards trade. Europeans questioned in the survey hold a far more favorable view of trade. While these figures may appear surprising on the face of things – both sides of the Atlantic are feeling the pains of the economic downturn, and in some cases are firmly entrenched in recessions – Europe stands to lose a lot more than the U.S. if free trade is scaled back.

December 18, 2008
Efe Izilein
Free Trade Under the Microscope - November/December 2008

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Obama and the China Syndrome

President-elect Barack Obama already has considerable reason to worry about America's trade relationship with China. In November, China ran up a record-breaking $40 billion USD monthly trade surplus, and the country's top economic planning agency reported that this year's annual trade surplus of USD 280 billion is set to surpass last year's record. These staggering figures, however, mask the fact that China's trade numbers have fallen steeply, raising substantial concern about the Chinese economy's viability. On December 13th, Central bank governor Zhou Xiaochuan and other top economists told a forum that China may well be slipping into deflation. China, which relies on exports for as much as 40% of gross domestic product (GDP), must preserve its export regime, either through subsidizing industries or devaluing its currency, if it is to maintain the 8% annual GDP growth its leaders believe is necessary to preserve social stability. But if it either protects its export industries or devalues its currency, the world risks a trade war. Some export companies have already received value-added tax breaks and others may be expected.

December 18, 2008
John Berthelsen
Free Trade Under the Microscope - November/December 2008

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Was There Good News from Africa in 2008?

Headlines from Africa in 2008 recounted brutal riots in Kenya, a war in the Democratic Republic of Congo, and election-driven chaos in Zimbabwe. But there was also good news. The International Monitory Fund has estimates economic growth for sub-Saharan Africa in 2008 at 6%, compared to global growth rates of 3 or 4%—a good sign given global food and fuel price shocks in the last year. Relative peace in former conflict zones like Cote D’Ivoire, Mozambique, Rwanda is noteworthy. In fact, President Bush announced the reopening of the Peace Corps in Rwanda this February, 14 years after the genocide forced the offices to close.

December 18, 2008
Olivier Kamanda
Free Trade Under the Microscope - November/December 2008