Despite obstacles, the White House continues to push preferential trade deals in Asia and Europe. But neither can reverse the erosion of U.S. innovation and in Asia Pacific the proposed pact is more likely to divide than unify the region.
With trade deals on the horizon, President Obama has asked Congress to grant him trade promotional authority, also called fast track, to ‘‘write the rules for the world’s economy.’’ This measure would allow the President to pass sweeping trade partnerships without the input of the American people through their elected representatives in the normal process.
Protectionist U.S. Congressmen are proposing a series of amendments that would enforce currency disciplines for China-U.S. cross-border trading. Rather than protecting import-sensitive sectors with that would penalize developing country producers, Congress and global policymakers would be better off updating the fraying architecture of the international monetary system.
South China Sea territorial claims — at least in Reed Bank — is really about energy. If all sides recast dangerous nationalistic posturing to more hard-headed economic calculation, it opens the way for more rational, mutual gain negotiations. These could center upon joint development of South China Sea resources. This, as an alternative to war.
China’s monetary goals call for increased consideration of market supply and the exchange rates of basket currencies, guidance of market expectations, and maintenance of a stable renminbi exchange rate. The IMF recently said the RMB is now “fairly valued”, which bodes well for the inclusion of the RMB into the Special Drawing Rights currency basket of the IMF before the end of 2015.
Chinese Premier Li Keqiang promised $50 billion in funding for a trans-oceanic railroad from Peru to Brazil, which politicians in Latin America have been dreaming to build for decades. However, an unforgiving geography and political disputes could prove challenging.
The Trans-Pacific Partnership (TPP), with congressional approval, is primed to have “fast track” status to avoid public debate. The TPP would provide new incentives to send jobs abroad, increase corporate earnings, remove protections from both overseas and U.S. environments and workers; supporters argue that it is necessary to “outflank” China.
Philippine efforts to revisit the historical value of the Manila-Acapulco Galleon Trade (MAGT) and China’s revival of the Maritime Silk Road (MSR) can be seen as national projects aimed at rekindling a deep historical relationship with the sea. Growing Sino-Latin American trade may encourage an extension of the MSR across the Pacific and also reignite the importance of MAGT.
Comparing the world’s two largest economies by “who’s on top” analysis is the wrong way view U.S. and Chinese leadership, and can even be a barrier to sensible policy, like IMF quota reform. The rules of the game now require a larger and more equal share in the governance of the international institutions.
AIIB is redefining global relationships in finance, in an attempt to break through the profit-driven nature of capital and meet more needs for infrastructure investment, writes Zhang Monan.
Financial engineering largely benefits the wealthiest class; monetary easing has failed to spur meaningful recovery in post-crisis economies, threatening to keep the global economy trapped in a continuous series of crises. As Chinese Premier Li Keqiang stressed, the answer is a commitment to structural reform – a strategic focus of China’s that, he noted, is not shared by others.
As China grows more prosperous and consumer-oriented, so will its e-waste stream, much of which will inevitably be exported to West Africa. The U.S. only recycles about 15 percent of its e-waste, and China, 30 percent. West Africans ought to persuade both major powers to prohibit the export of e-waste.
Under Xi, China has moved to a proactive posture to shape its external security environment, using trade and investment to expand its sphere of strategic influence while simultaneously asserting territorial and maritime claims against its neighbors. The Maritime Silk Road project is driven by his belief that the maritime domain holds the key to China achieving preeminence in Asia.
To some extent, the structures of the Asian Development Bank, World Bank, and International Monetary Fund are obsolete: they can no longer meet the needs of new emerging economies and don’t reflect today’s global economy. The AIIB could serve to invigorate the other banks to become more competitive and efficient.
China’s investment in Central Asian energy and transportation is impressively promoting regional integration. There is still a degree of fear and caution from Central Asian leadership due to incomprehension of Beijing’s foreign policy goals, a historical legacy of confrontation, and the sensitivity of Moscow to recognize the importance of Beijing’s role.