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jerryking : protectionism   28

The harsh reality: Canada’s in a near-impossible situation on NAFTA, experts say - The Globe and Mail
BARRIE MCKENNA
PUBLISHED AUGUST 31, 2018
UPDATED 9 HOURS AG

Canadian negotiators faced a grim ultimatum this week – cave to a series of hardline U.S. demands or get hit with steep tariffs on autos that could plunge much of the country into recession....“They don’t believe you can do an agreement where both sides win,” says John Manley, a former trade and finance minister who now heads the Business Council of Canada, which speaks for 150 of the country’s largest companies. “Everything is ‘what I get, you lose.’ That’s a pretty tough starting place.” ...In the end, Mr. Trump’s erratic nature, not Canadian missteps, may be the x-factor that has made a deal so hard to reach......even in the toughest days of negotiating... the original Canada-U.S. FTA ...and.. NAFTA t....Mr. Mulroney knew he could trust presidents Ronald Reagan and George H. W. Bush. “You’re not dealing with a rational character at the other end,” Mr. Burney says of Mr. Trump. “The difference you had in my day is that at least the relationship at the top between the leaders was positive.” ......The U.S. President insisted in leaked off-the-record comments Thursday that he’ll only do a deal with Canada that is “totally on our terms.”..That hard line makes reaching a deal all the more difficult.​
crossborder  negotiations  Donald_Trump  NAFTA  free_trade  international_trade  protectionism  concessions 
september 2018 by jerryking
The AI arms race: the tech fear behind Donald Trump’s trade war with China | Financial Times
Shawn Donnan in Washington YESTERDAY

While the headlines about the Trump administration’s trade war with Beijing often focus on raw materials such as steel, aluminium and soyabeans, the underlying motivation of the new protectionist mood is American anxiety about China’s rapidly growing technological prowess.......
At a time when the US is engaged in a battle for technological pre-eminence with China, the ZGC project is exactly the sort of state-backed Chinese investment that American politicians across the political spectrum view with scepticism.

“China has targeted America’s industries of the future, and President Donald Trump understands better than anyone that if China successfully captures these emerging industries, America will have no economic future,” .....US tariffs on $34bn in imports from China that are due to take effect on Friday as part of a squeeze intended to end what the US says has been years of state-endorsed Chinese intellectual property theft. But it is also part of a broader battle against what the White House has labelled China’s “economic aggression”......Viewed from America, President Xi Jinping’s Made in China 2025 industrial strategy is a state-led effort to establish Chinese leadership in the technologies of the next generation of commerce and military equipment — notably AI, robotics and gene editing.

Many US officials are now questioning one of the basic assumptions about how the American economy operates: its openness to foreign investment....While some technology executives extol the potential for co-operation in areas such as AI, the Washington establishment increasingly sees them as central to a growing geopolitical competition....Many Chinese investors are looking for US companies that they can help move into China. .....Even though Mr Trump’s focus on Chinese technology has strong bipartisan support in Washington, its tactics have been heavily criticised. The biggest blunder, many critics argue, has been the Trump administration’s willingness to wage concurrent trade wars. The IP-driven tariffs push against China has been accompanied by one that has hit allies such as Canada and the EU that might have joined a fight against Beijing.

........“We’re treating the Chinese better than we are treating our friends,” says Derek Scissors, a China expert at the conservative American Enterprise Institute, who sees the tariffs Mr Trump is threatening against European car imports as a similar bit of malpractice.
arms_race  artificial_intelligence  China  CFIUS  Donald_Trump  economic_warfare  economic_aggression  FDI  geopolitics  international_trade  investors  investing  intellectual_property  industrial_policies  protectionism  politicians  robotics  One_Belt_One_Road  security_&_intelligence  Silicon_Valley  SOEs  start_ups  theft  U.S.  venture_capital  Washington_D.C. 
july 2018 by jerryking
NAFTA is dead and Canada should move on
June 2, 2018 | The Globe and Mail | by PETER DONOLO.

So what is our Plan B?

It obviously means seriously and aggressively pursuing markets and investment beyond the U.S. For example, new markets for Canadian resources are now more important than ever. That’s why the government’s decision this week to effectively nationalize the Trans Mountain Pipeline in order to finally get it built and deliver oil to Asia-bound tankers was such an important step. This decision in itself was a significant response to an unreliable American partner, and a signal that we must look farther abroad for greater economic opportunity.

The same goes for the myriad of trade agreements on which our country has embarked – most prominently the Canada-EU trade agreement and the Trans-Pacific Partnership. The GATT and WTO breakthroughs of the 1990s also work in Canada’s favour, providing us with tariffs much lower than existed before NAFTA and the original Canada-U.S. free-trade agreement. If NAFTA were to cease tomorrow, our trade with the U.S. would still operate under the WTO’s rules.

Finally, we need to redouble efforts to attract direct foreign investment into Canada. The government recently launched a new agency, Invest in Canada, to do just that. But there are obstacles. The Business Council of Canada cites the regulatory burden as the biggest challenge. In a globalized economy, tax competitiveness is always an issue. And governments need to walk the walk when it comes to opening up to investors from countries such as China, even when there is domestic political blowback.

The only negotiating stance that works against Donald Trump is the ability and willingness to walk away. Mr. Trump sniffs out weakness or desperation – in a friend or a foe – and he pounces without mercy. A defensive crouch is the wrong position. “Sauve qui peut” is the wrong rallying cry. Negotiating with strength, from strength, is the only approach.
beyondtheU.S.  automotive_industry  crossborder  Donald_Trump  FDI  global_economy  Nafta  negotiations  Plan_B  oil_industry  pipelines  protectionism  tariffs  TPP  Trans_Mountain_Pipeline  walking_away 
june 2018 by jerryking
China Started the Trade War, Not Trump
March 23, 2018 | WSJ | By Greg Ip.

Even free traders and internationalists agree China’s predatory trade practices—which include forcing U.S. business to transfer valuable technology to Chinese firms and restricting access to Chinese markets—are undermining both its partners and the trading system....starting in the 1980s, economists recognized that comparative advantage couldn’t explain success in many industries such as commercial jetliners, microprocessors and software. These industries are difficult for competitors to enter because of steep costs for research and development, previously established technical standards, increasing returns to scale (costs drop the more you sell), and network effects (the more customers use the product, the more valuable it becomes).......In such industries, a handful of firms may reap the lion’s share of the wages and profits (what economists call rents), at the expense of others. China’s efforts are aimed at achieving such dominance in many of these industries by 2025.
China  China_rising  comparative_advantage  Donald_Trump  Greg_Ip  increasing_returns_to_scale  myths  network_effects  predatory_practices  protectionism  tariffs  technical_standards  trade_wars  U.S.-China_relations  winner-take-all  WTO 
march 2018 by jerryking
America v China: How trade wars become real wars
March 11, 2017 | FT | by Gideon Rachman 2 HOURS AGO

Successive American presidents also believed that capitalism would act as a Trojan Horse — undermining one-party rule within China. As former US president George W Bush once said: “Trade freely with China, and time is on our side.” The American establishment believed that a more liberal China would be less likely to challenge the US on the international stage. One of the central tenets of liberal internationalism is that democracies do not wage war with each other.

But political developments in Xi’s China have refuted the expectations of the liberal internationalist worldview that shaped successive American presidencies. China has not become more democratic. Nor is it any longer willing to live quietly within a US-designed and dominated world order.
protectionism  U.S.  Donald_Trump  Xi_Jinping  U.S.-China_relations  trade_wars  free-trade  geopolitics  warfare  international_trade  China_rising 
march 2018 by jerryking
‘Splinternet’ to herald a trade war for the ages
Rana Foroohar | FT| March 5, 2018.

Steel and aluminium tariffs announced by President Trump have, of course, sucked up all the attention in recent days....but the bigger fight will likely be over intellectual property, and who gets what slice of that pie in the coming years. Most corporate wealth is now held in the top 10 per cent of IP rich companies, most of which sit on the West Coast of the US......China, however, is gaining ground in key areas like AI and quantum computing, and has also ringfenced most of the tech sector as a “strategically important” area in which domestic companies are given preference......A more interesting question is whether data and technology will become the subject of broader national defence-related protectionism. In many ways you could make a much easier case for section 232, the “national defence” clause that Mr Trump invoked around steel, in technology. The steel sector in the US has plenty of spare capacity and section 232 also stipulates that national allies could fill any gap, something which the president seems to have overlooked. Technology, meanwhile, is much more proprietary and sensitive — not to mention crucial for every industry and every part of national security.

A tech-based trade war would likely splinter the US, China and Europe into three separate regions. The EU is already going in a very different direction to the US in terms of regulation of the high tech sector, with more stringent privacy rules and limits on how much data can be used by companies for AI, and in what fashion.....Such a Balkanisation, which experts now refer to as “the Splinternet”, would change the functioning of the internet as we know it. It would also represent a trade battle for the ages.
China  crossborder  decoupling  digital_economy  FAANG  intellectual_property  international_trade  NAFTA  new_tech_Cold_War  privacy  protectionism  Rana_Foroohar  tariffs  trade_wars 
march 2018 by jerryking
Open books, open borders
OCTOBER 20, 2017 | FT| Janan Ganesh.

The globalised Booker also confirms this medium-sized country’s knack for cultural decorations — degrees from its universities, air time on the BBC — that are coveted worldwide. The unfakeable emotion from Saunders and Beatty upon receipt of the prize was a larger compliment to Britain and its soft power than a Booker for one of its own would have been.....There is a strategic imperative to open up that goes beyond the aesthetic one. As the gap narrows between the superpower and the rest, it becomes more important for America to understand the outside world. Better foreign news coverage can help, but mere politics is downstream of culture. The real prize is to comprehend another country’s thought patterns, speech rhythms, historic ghosts and unconscious biases — and these seep out from the stories it tells and the way it tells them....Harvard psychologist Steven Pinker cites the spread of literacy as a reason for the long-term decline of human violence. To read another person’s story is to end up with a larger “circle of sympathy”. But even if America’s concern is the narrowest raison d’état, rather than world peace, it would profit from reading beyond its borders.

The minimum return is that more American readers would have more fun. The headiest writing tends to come from places that are ascendant enough to matter but raw enough to retain some measure of dramatic chaos: 19th-century Britain and Russia, mid-20th-century America, and now, perhaps, early 21st-century Asia. It is not just in economics that protectionism stifles.
books  cosmopolitan  cross-cultural  cultural_products  empathy  fiction  George_Saunders  Janan_Ganesh  literature  Man_Booker  middle-powers  national_identity  novels  open_borders  open_mind  parochialism  prizes  protectionism  reading  soft_power  storytelling  United_Kingdom  writers 
november 2017 by jerryking
Canada should prepare for life without NAFTA - The Globe and Mail
LAWRENCE HERMAN
Special to The Globe and Mail
Published Tuesday, Aug. 22, 2017

Canada should be considering a world without the NAFTA or, possibly, without even the Canada-U.S. free-trade agreement. Contingency planning is what trade-policy formulation is all about. Here are some factors to consider.

First, the NAFTA (like the FTA before it) is about preferential treatment. Ending those preferences doesn’t mean Canadian companies would be excluded from the U.S. market. Not in the least. Vast trade relations exist between the United States, China, Japan, Russia and the entire European Union, none of which have a free-trade agreement with the United States.

Second, even without preferential tariff rates for Canada, most have been reduced to zero anyway as a result of the World Trade Organization Agreement, so their NAFTA value is worth much less today than in 1994. On the non-goods side, the WTO Agreement ensures Canadian services and intellectual property rights of non-discriminatory treatment in the U.S. market.

Third, while the binational panel system for reviewing trade cases would disappear, agreement on that system predated the advent of the WTO and its own effective multilateral dispute resolution system, Canada has used the WTO system effectively over the years in dealing with the U.S., including in the ongoing softwood lumber dispute.

None of this diminishes the benefits of a successful outcome in the NAFTA 2.0 exercise for all three countries. But given where we are today, judging from Mr. Trump’s repeated public pronouncements, the vision of North America setting an example to the world has turned into a one-sided Trumpian quest for advantage.

Without the essential ingredient of common purpose, Canadian trade policy has to look beyond the precipice. No deal, as has been oft said, is better than a bad one.
contingency_planning  NAFTA  Donald_Trump  exits  crossborder  renegotiations  say_"no"  national_interests  free-trade  protectionism  beyondtheU.S. 
august 2017 by jerryking
Wilbur Ross brings art of restructuring to Team Trump
JANUARY 21, 2017 | FT| by: Philip Delves Broughton.

“When you start out with your adversary understanding that he or she is going to have to make concessions, that’s a pretty good background to begin.”

So all this stuff about tariffs and walls and protectionism turns out to be pure gamesmanship.......In his career as an investment banker at NM Rothschild and then running his own business, WL Ross & Co, he has shown repeatedly how he can dive into an industrial dung heap and emerge with a fistful of dollars and not a speck on his silk tie......... Working on his own account, Mr Ross’s most famous deal was his purchase of an ailing group of US steelmakers in 2002, shortly before President George W Bush imposed tariffs on imports of steel. Mr Ross used the protection to fix the operations, cut debt and draft new contracts with workers. He was able to take the company public in 2003 and sell it two years later to the Indian steel mogul Lakshmi Mittal.

He has pulled off similar tricks, mostly successfully in coal mining, textiles and banking, immersing himself again and again in new industries and the minutiae of the laws, trade rules and contracts that govern them.

As a student at Harvard Business School, Mr Ross was mentored by Georges Doriot, a pioneering advocate for venture capital, who said: “People who do well in life understand things that other people don’t understand.”
For bothering to understand things that most people don’t, Mr Ross deserves more credit than he gets. He is often easily dismissed as a vulture or someone who buys low and sells high. But what he has done is hard. The devil in restructuring is in the grinding detail of voluminous contracts and difficult, often highly emotional negotiations.
arcane_knowledge  bankruptcy  contracts  detail_oriented  dispassion  emotions  gamesmanship  Georges_Doriot  hard_work  imports  HBS  inequality_of_information  Lakshmi_Mittal  leverage  messiness  minutiae  moguls  negotiations  new_industries  Philip_Delves_Broughton  preparation  protectionism  restructurings  sophisticated  steel  tariffs  thinking_tragically  unsentimental  vulture_investing  Wilbur_Ross 
january 2017 by jerryking
Nokia a lesson for backers of Canada’s nanny state - The Globe and Mail
Oct. 17 2014 | The Globe and Mail | BRIAN LEE CROWLEY.

How did it all go so wrong? And what might Canada learn from Finland’s downfall?

One obvious conclusion is not to put all your eggs in one basket, but it goes well beyond that. There was a time when economic change worked slowly enough that you could get a generation or two’s employment out of an industry before it was overtaken by innovation. Detroit dominated automobile manufacturing for many decades before its own complacency and the innovativeness of European and Asian producers came into play. In a similar vein, Nokia allowed itself to believe in its own infallibility, and Finland meekly followed suit. But the forces of change are now so powerful and lightning fast that sometimes a single product release from a competitor can signal the death knell of a previously healthy company or industry....Canada is rife with industries with their heads stuck in the sand, almost invariably because they believe they can shelter behind a friendly bureaucrat with a rulebook.

Examples abound in fields as diverse as telecoms, dairy, airlines, broadcasting, taxis and transport. Could there have been a bigger farce than the CRTC’s attempt to manhandle online content provider Netflix?...The real lesson of Nokia’s demise was that there is no substitute for being driven by what customers want, which is quality products and service at the lowest possible price...Every deviation from this relentless focus on what customers actually want makes your market a tasty morsel for the disrupters.
concentration_risk  Nokia  Finland  mobile_phones  disruption  Netflix  Uber  CRTC  complacency  accelerated_lifecycles  protectionism  nanny_state  customer_focus  change_agents  Finnish  demand-driven  lessons_learned  automotive_industry  downfall  change  warning_signs  signals  customer-driven  infallibility  overconfidence  hubris  staying_hungry 
october 2014 by jerryking
Fence 'em in
January 25, 2013
If Stephen Harper now thinks that the oil patch is too strategic to be gobbled up by foreigners, what about farmland and gold?

ERIC REGULY
Eric_Reguly  farming  farmland  natural_resources  agriculture  protectionism 
january 2013 by jerryking
China needs West's energy know-how, not resources
November 16, 2012 | Reuters | Christopher Swan.

A change in tactic could smooth China's path. The country has plenty of its own hydrocarbons and lacks only the know-how to extract them. In fact, at about 36 trillion cubic metres, China's shale gas reserves are estimated by the U.S. government to be 50 per cent larger than those of the United States. Acquiring services and technology companies would help increase domestic output.

Targeting a giant like Halliburton might stir the same sort of resistance China experiences now. There are, however, plenty of smaller rivals that probably wouldn't.
China  CNOOC  Halliburton  mergers_&_acquisitions  M&A  nationalism  shale_oil  hydraulic_fracturing  backlash  protectionism  economic_nationalism  knowledge 
december 2012 by jerryking
The milk of human avarice
Jan 16, 2006 | Macleans.ca | ANDREA MANDEL-CAMPBELL |

"The Canadian dairy industry is really no longer about milk. It's about quotas and the No. 1 objective is to protect the value of that asset," says McIlroy. To do that, farmers must keep out cheaper imports that drive prices down. A government-ceded monopoly allows them to fix domestic prices -- at more than double the global price of milk, according to the OECD.
dairy  protectionism  supply_management  exporting  quotas  Canadian 
june 2012 by jerryking
China's 'State Capitalism' Sparks a Global Backlash - WSJ.com
NOVEMBER 16, 2010/WSJ/ By JASON DEAN, ANDREW BROWNE And SHAI
OSTER. Bedeviling U.S.-China relations is a deep issue: China's national
economic strategy is detailed and multifaceted, and it is challenging
the U.S. and other powers on a number of fronts. Central to China's
approach are policies that champion SOEs, seek aggressively to obtain
advanced technology, and manage its exchange rate to benefit exporters.
It leverages state control of the financial sys. to channel low-cost
capital to domestic industries—and to resource-rich foreign nations
whose oil and minerals China needs to maintain rapid growth. ...Charlene
Barshefsky, Clinton's U.S.T.R.. says the rise of powerful state-led
economies like China & Russia is undermining the established
post-World War II trading system...the Chinese state is again ascendant.
...The govt. owns almost all major banks in China, its three major oil
companies, its three telecom carriers and its major media firms.
backlash  China  China_rising  industrial_policies  international_system  mercantilism  multifaceted  protectionism  post-WWII  SOEs  state-as-facilitator  state_capitalism  U.S.-China_relations 
november 2010 by jerryking
Op-Ed Columnist - Taking On China - NYTimes.com
September 30, 2010 | New York Times | By PAUL KRUGMAN.
Serious people, appalled by the specter of Congress legislating for
sanctions against China over its currency policy, might believe that the
U.S. would be better off pursuing quiet diplomacy. Diplomacy on
China’s currency has gone nowhere, and will continue going nowhere
unless backed by the threat of retaliation. The hype about trade war is
unjustified — and, anyway, there are worse things than trade conflict.
In a time of mass unemployment, made worse by China’s predatory currency
policy, the possibility of a few new tariffs should be way down on our
list of worries.
China  currencies  Paul_Krugman  predatory_practices  diplomacy  trade_wars  protectionism 
october 2010 by jerryking
Success Beyond China Seems Unlikely for Its Online Giants - NYTimes.com
March 23, 2010 | New York Times | By DAVID BARBOZA.
Post-Google, China’s Internet market could increasingly resemble a
lucrative, walled-off bazaar, experts say. Those homegrown successes,
however, could have trouble becoming global brands.

“If the Chinese government continues to favor domestic companies, those
companies that reach critical mass could become phenomenally
profitable,” said Gary Rieschel, founder of Qiming Ventures, an American
venture capital firm with investments in China. “But it may be hard for
those companies to become world class without outside competition.”
China  Google  protectionism  censorship  Baidu  Tencent  Alibaba  global_champions 
march 2010 by jerryking
China Toughens Rules for Foreign Companies - WSJ.com
MARCH 17, 2010 | Wall Street Journal | by ANDREW BROWNE And
JASON DEAN. Business Sours on China. Foreign Executives Say Beijing
Creates Fresh Barriers; Broadsides, Patent Rules. China's relationship
with foreign companies is starting to sour, as tougher government
policies and intensifying domestic competition combine to make one of
the world's most important markets less friendly to
multinationals....Signs of nationalism are evident in the grooming of
state-owned companies (SOEs) to dominate their industries as "national
champions," often at the expense of private Chinese companies as well as
foreign firms. From airlines to coal mining to dairy products,
government policies are expanding the state's role.
China  protectionism  multinationals  patent_law  economic_nationalism  SOEs  global_champions  state-as-facilitator 
march 2010 by jerryking
A Looming American Diaspora
February 2009 HBR article by Paul Saffo. While U.S. companies
are worrying about how to recruit talent from abroad in the face of
increasingly stringent immigration rules, a different and far more
significant challenge is quietly building. When young knowledge workers
look for a job today, they seriously consider companies half a world
away. Homegrown American talent is moving abroad, in what could become a
huge shift in the world economic order.
American  Diaspora  emigration  expatriates  globalization  knowledge_workers  policy  protectionism 
february 2009 by jerryking

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