US EU Free Trade: For Better or Worse?

On Tuesday February 12, 2013 US President Barack Obama announced in his State of the Union address that the United States and European Union were going to start negotiations on a comprehensive free-trade agreement called the Transatlantic Trade and Investment Partnership. Such a partnership would provide significant economic benefits for both the United States and the European Union but does face a number of obstacles.

While the idea of such a close partnership between two of the world’s largest economies may seem daunting, the US and EU already have the world’s most integrated economic relationship. US investments in the EU are three times higher than the US investments in Asia. With over 645 billion US dollars in imports and exports between the US and EU is the EU is America’s largest trade partner and tariffs between the US and EU are significantly lower then between their other trade partners.

The current trade relationship between the US and the EU may sound pretty good already but there are still many obstacles that limit the trade between the two partners. These obstacles lie primarily in “non-tariff barriers” which are created by the differences in the regulatory systems used by the US and the EU.

The US and EU have very different regulatory systems especially in the area of food and agriculture. The differences in the systems are often due to culture differences in how European and Americans view health risks and food safety. A compromise in the systems would have to be found if the free trade agreement is to be realized. However, a solution can be found and with the potential of economic growth that could add 0.5% to Europe’s GDP and 0.4% to the US GDP, the benefits of such an agreement are clear.

DC

Sources:

http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/united-states/

http://www.census.gov/foreign-trade/statistics/highlights/top/top1212yr.html

http://trade.ec.europa.eu/doclib/press/index.cfm?id=869

http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weorept.aspx

US/EU: Bilateral Trade Deal is Promising, Distant Goal. United Kingdom: Oxford Analytica Ltd, 2013.

Where the Money Goes: The World of Global Finance

The WB, the WTO, the GATT, the IMF. Four acronyms that together hold more power than most governments on earth. Together, they have represented the face of international finance and Western/American financial interests for the last 70 years. But what are these organizations? What is global finance, and what does it do? And most importantly, why does it matter to you?

Let’s start with a bit of history. Our story begins with the fall of Berlin and the end of World War II. Eastern Europe was a wreck, after having spent most of their accrued wealth recovering from the first World War only to be obliterated once again. They were in desperate need of loans to assist in the development of infrastructure, and with most of the world either financially crippled, physically destroyed or both, the United States emerged as the only country with an economy capable of supporting the necessary loans. This led to the creation of GATT, or the General Agreement on Tariffs and Trade in 1948, and the International Monetary Fund (IMF) in 1944. 

These institutions had very different purposes at the time; the GATT, negotiated by the UN, was to regulate the trade between countries and protect countries from exploitation, both preventing and punishing. The IMF on the other hand, was a collaboration of 44 countries who each contributed to a central fund which could be used for loans to developing and recovering countries. It also oversaw a countries ability to repay loans and could help to stabilize fluctuating currencies and aid in economic growth, generally through the provision of loans. This led to an enormous amount of debt being held by recovering countries and, later on, developing countries.

So why does this matter to you? Keep reading to understand what’s up with Global Finance!

           

WE

Sources: http://www.wto.org/english/docs_e/legal_e/06-gatt_e.htm

www.wto.org

http://www.cepr.net/documents/publications/imf-2009-10.pdf

http://www.imf.org/external/index.htm

Fire From the Sky: What Israel's Syrian Strike Means to the World; Part 2

The bombing has become one of the most discussed events lately, as the first instance of foreign military intervention within the civil war. Every group seems to have their own opinion on what happened and what it means. On the ground, the view of the situation is grim.  Citizens have stated that they believe the Israeli government and the Assad regime are in fact in collaboration, trying to sway the people’s aggression away from Assad. Whether or not this is true, the strategy is clearly not working, as the people have remained as hostile as ever.

On the other hand, Israel has expressed the opinion that it is operating as the final line of defense between terror organization Hezbollah and the rest of the world. Syria has in the past openly supported Hezbollah, arming them with Russian made weapons and supporting them in other logistical manners. The primary fear is that Hezbollah will be supplied with chemical weapons, and there is some significant possibility that they have already acquired and used chemical weapons on a small scale, according to some citizen accounts.

The international community has responded with a dizzying array of reactions, from Russia and Iran’s anger and calls for accountability to the U.S. statement in support of the Israeli decision. While it seems currently unlikely that there will be any sort of a violent reaction, this event may be the catalyst for international intervention in the Syrian civil war. The event has brought renewed calls to aid the Free Syrian Army and for the establishment of a no fly zone, which were previously thought to be too dangerous.

Whatever the final impacts, it is clear that the civil war is coming to a turn. The international community has been paying careful attention, and seems to be coming to the edge of an ultimatum.

WE

Sources: http://www.bbc.co.uk/news/world-middle-east-21275289

http://www.guardian.co.uk/world/2013/jan/31/israel-air-strike-syria-repercussions

http://www.un.org/en/peacekeeping/missions/undof/index.shtml

http://www.jpost.com/Israel/Article.aspx?id=167762

http://www.rusi.org/analysis/commentary/ref:C510BA41831C79/#.URKjMaVpeSo

http://www.tehrantimes.com/component/content/article/105441

http://www.epictimesnews.com/2013/01/strike-at-dawn.html

Fire From the Sky: What Israel's Syrian Strike Means to the World

The Israeli government has long been one of the boldest and most proactive in the world. Surrounded by countries that are ideologically their opposites, and frequently opposed to the very existence of the Israel state, it is easy to understand their tension. Their most recent military activity, however, has fallen under a different sort of scrutiny than the usual. On Wednesday, January 30^th, Israeli fighter jets roared over Syrian airspace and launched rockets at a target. What exactly that target was is now a subject of international debate with Syria claiming it was a research facility and Israel (backed by the United States) claiming it was a shipment of ground to air missiles headed for the Syrian backed terror organization Hezbollah.

                But why should anybody else care what exactly the target was? And what do the people on the ground believe? This will be explored in the following series of articles concerning the impacts of the Israeli Strike.

With Assad feeling extraordinary pressure as the Syrian Free army makes increased progress, it does not seem so far-fetched that Assad would welcome even a violent diversion. He has made calls to the people to rally against Israel, and to put down their anti-government arms. Whether or not this is true, the situation has also revealed much about the Syrian position. Their response has been a protest against the “Zionist – US collaboration”, with promises of support from Iran and Hezbollah. They, Russia and the Arab League are calling it an unprovoked attack and a violation of both Syrian sovereignty and the 1971 disengagement between the two powers (though this has been violated on both sides repeatedly). It does not seem likely, however, at the moment, that there will be a violent reaction to the strike, even with its allies.

WE

Sources: http://www.bbc.co.uk/news/world-middle-east-21275289

http://www.guardian.co.uk/world/2013/jan/31/israel-air-strike-syria-repercussions

http://www.un.org/en/peacekeeping/missions/undof/index.shtml

http://www.jpost.com/Israel/Article.aspx?id=167762

http://www.rusi.org/analysis/commentary/ref:C510BA41831C79/#.URKjMaVpeSo

http://www.tehrantimes.com/component/content/article/105441

http://www.epictimesnews.com/2013/01/strike-at-dawn.html

Immigration Reform: The Silver Bullet, Or Another Dead End?

The issue of immigration is one that has met an extraordinary number of forces on its journey to solution, and it’s not done yet. It does, however, seem to be coming to a checkpoint on the road. One of the greatest roadblocks to progress so far has been the lack of a consensus on what the problem is. Is it more important to stop people getting in? Or to remove those already here? Or to monitor business’ hiring practices? Different states have radically different positions on not only what the largest problem is, but which of these should in fact be illegal.

The dialogue over these issues seems to have finally borne some fruit, in the form of a bill which is to be announced today, around 3. The bill attempts to provide space for increased border security and business oversight, rather like other proposed and failed bills, with two important additions: it provides a significant path to documentation for those workers already in the country, and it has significant GOP support.

                The support from the GOP has seemed to come from their desire to gain leverage with the growing Latino population, who were key parts of the GOP losses in the last election. And while they are certainly making, from the perspective of their past calls for action, a compromise, they are also responding to the rhetoric of people such as Sen. Marco Rubio (FL), who stated that the current system gives “De Facto amnesty”, since the government is in the vast majority of cases not able to respond at all. The public reaction to the bill will soon be known, but according to the details of the bill from the aides who spoke to Bloomberg news, it is believed to represent the desires of both border states and agricultural states far better than previous bills.

Keep Reading for Further Updates!

WE

Sources: http://www.bloomberg.com/news/2013-01-28/republicans-face-party-orthodoxy-on-immigration-proposals.html

http://www.reuters.com/article/2013/01/28/us-usa-immigration-congress-idUSBRE90Q0EV20130128

http://www.latimes.com/news/opinion/opinion-la/la-ol-op-immigration-reform-20130128,0,4900271.story

Egyptian Take Two: The Ins and Outs of the Struggle for a Constitution

Members of Egypt's Constituent Assembly

The Egyptian crisis has reached another turning point, with the second draft of their constitution. The first draft failed to lead the country for more than a few months. This second one however, may be no better than the first. The draft was highly backed by the Islamic Brotherhood, the organization that focuses the immense influence of Islam in Egypt. While the country is predominantly Muslim, the population has become increasingly aware of the pressure under which minorities have been placed. Specifically women and Christians (about 10% of the population), both of whom were highly oppressed under the old regime controlled by the Islamic Brotherhood; and while this draft appears to have gained popular support, it is the support of a drowning man for any air, no matter how stale.

The frustration of the people has become apparent in almost every measurable way. At polling booths across the nation attendance was phenomenally low, from sparse to actually empty at certain times. Upon questioning, the average citizens appear to have resigned themselves to the passage of the draft. Whatever the details, Egypt is decomposing rapidly without a constitution, and the attitude seems to be anything is better then nothing at this point.

The common people are not the only ones to have voiced discontent with the current government trends. Of the original seventeen highest cabinet officials originally elected, seven have resigned, giving a plethora of reasons from discontent with the president and parliament to simply finding politics unfit for their skills. Whatever the reasons, such a national decomposition does not bode well for the Egyptian people, either now or later. The largest question may be however, if the people are not content, will they be able to make their voices heard, or will they once again resort to violent protests?

While Egypt appears to have made significant strides in gaining stability, it is also acting as a model for the other recently liberated country in the region, Libya. For the connection between Egyptian Constitution, Libyan riots, and the American people, keep reading!

WE

Sources:  http://www.reuters.com/article/2012/12/26/us-egypt-politics-idUSBRE8BL03X20121226

http://abcnews.go.com/International/wireStory/egypts-government-sets-priorities-charter-18066325#.UNufWI59nww

http://worldnews.nbcnews.com/_news/2012/11/29/15545841-crisis-tests-egyptians-constitution?lite

And We're Falling Off Which Cliff?

So what about that Fiscal Cliff?

If your anything like the millions of Americans who listen to public radio or can’t seem to tear themselves away from the television, you’ve probably heard the phrase “fiscal cliff” more than a few times, sometimes praised and frequently condemned. But what exactly is the fiscal cliff?

Projected budget analysis graph. Alternate scenario is
with extension of tax cuts and without program cuts.

                The phrase comes from the shape of the graph which shows the government’s net revenue vs. time. The current prediction, with the end of the Bush tax cuts, a planned increase in tax rates, and the beginning of the program reductions detailed in the Budget Control Act of 2011. These reductions are intended to be widely applied but not to cut too deep, with shallow cuts to nearly every department (a few are immune; veterans affairs, medicare, etc.)

                There is much discussion involving whether or not reaching the fiscal cliff is in fact the safest route for the country. This debate stems from the division on economic theory found in Congress, commonly understood through something called Keynesian theory. John Keynes was an economist who in 1936 published The General Theory of Employment, Interest, and Money. Keynesians argue that in times of recession the government should increase spending, taking a deficit in order to stimulate the economy. More projects, more employment, and more benefits will then push the economy more quickly into surplus.

                Non-Keynesian economists argue that recessions are a time for the government to decrease spending. In a more common sense argument, they argue that the government is the structural backbone of the economy, and in lean times should tighten its belt to control the damage of the recession.

                The true right answer to this question is probably a combination of the two. However, which one will be applied in the coming months and years to America’s economy remains to be seen. Democrats, who favor Keynesianism, currently control both the Senate and the White House, while the non-Keynesian Republicans control the House.

WE

Sources: http://www.econlib.org/library/Enc/KeynesianEconomics.html

http://www.washingtonpost.com/politics/gop-republicans-dig-in-on-fiscal-cliff-talks/2012/12/13/019a212e-4537-11e2-8061-253bccfc7532_story.html