Tag Archives: international trade

Bilateral Trade Wars: farmers v.carmakers

rice paddies japan. image from wikipedia

The Trans-Pacific Partnership (TPP) was supposed to be central to plans by Japan’s prime minister, Shinzo Abe, to pep up the economy. Japanese farming is heavily protected and inefficient. Mr Abe promised big changes when it came to “sacred” areas protected by swingeing import tariffs including rice, wheat, beef, dairy and sugar.

The American side knows Japanese farmers need time to adjust. Still, negotiators have recently been underwhelmed by what was on offer—a refusal by the Japanese side to contemplate big cuts in tariffs. Perhaps the Japanese judged that the Americans needed a deal more. If so, they miscalculated. Piqued, the Americans withdrew an offer to cut tariffs on imported car parts. And that was that. One Japanese policymaker describes it as the most acrimonious episode since the bruising bilateral trade wars of the 1980s….The TPP bus is stalled.

Japan, America and the Trans-Pacific Partnership: Stalemate, Economist, Oct. 4, 2014, at 47

China and Australia: the coal and iron trade

Western Australia iron ore mining. Image from wikipedia

China’s demand for iron and coal has helped to turn it into Australia’s biggest trading partner and to keep Australia more economically robust than most other rich countries. But in some parts of the country the new relationship with China came as a reminder of the unwelcome side-effects of the boom… Chinese trade not only helped Australia survive the global downturn. It has also boosted the currency’s strength, and made it harder for manufacturers to find markets for their exports. The problem is unevenly distributed around the country. South Australia has suffered the greatest pain: in no other state does manufacturing account for such a big share of the economy…. Five years ago, Mitsubishi closed its plant in Adelaide. Australia’s remaining carmakers, Holden, Ford and Toyota, have shed jobs steadily since then. Australians are buying imported cars more cheaply than ever, especially from Japan; their dollar has risen by 26% against the yen since October.  Even wine, South Australia’s third-biggest export, has suffered: exports in fiscal 2012 dropped in value by A$62m ($65m), or 2%. Codan, an electronics company based in Adelaide, has done better. By making many high-tech products in Malaysia, it has been able to protect itself from the strong Aussie dollar.

The Australian dollar: Resources boomerang, Economist, Apr. 20, 2013, at 44

Who is Selling Weapons to Developing Countries? The United States dominance and motivations

Recently, from 2008 to 2011, the United States and Russia have dominated the arms market in the developing world, with both nations either ranking first or second for each of these four years in the value of arms transfer agreements. From 2008 to 2011, the United States made nearly $113 billion in such agreements, 54.5% of all these agreements (expressed in current dollars). Russia made $31.1 billion, 15% of these agreements. During this same period, collectively, the United States and Russia made 69.5% of all arms transfer agreements with developing nations, ($207.3 billion in current dollars) during this four-year period.

In 2011, the United States ranked first in arms transfer agreements with developing nations with over $56.3 billion or 78.7% of these agreements, an extraordinary increase in market share from 2010, when the United States held a 43.6% market share. In second place was Russia with $4.1 billion or 5.7% of such agreements.

In 2011, the United States ranked first in the value of arms deliveries to developing nations at $10.5 billion, or 37.6% of all such deliveries. Russia ranked second in these deliveries at $7.5 billion or 26.8%.

In worldwide arms transfer agreements in 2011—to both developed and developing nations—the United States dominated, ranking first with $66.3 billion in such agreements or 77.7% of all such agreements. This is the highest single year agreements total in the history of the U.S. arms export program. Russia ranked second in worldwide arms transfer agreements in 2011with $4.8 billion in such global agreements or 5.6%. …..

In 2011, Saudi Arabia ranked first in the value of arms transfer agreements among all developing nations weapons purchasers, concluding $33.7 billion in such agreements. The Saudis concluded $33.4 billion of these agreements with the United States (99%). India ranked second with $6.9 billion in such agreements. The United Arab Emirates (U.A.E) ranked third with $4.5 billion…..

Whereas the principal motivation for arms sales by key foreign suppliers in earlier years might have been to support a foreign policy objective, today that motivation may be based as much, if not more, on economic considerations as those of foreign or national security policy.

Excerpt from, Richard F. Grimmett and Paul K. Kerr,  Conventional Arms Transfers to Developing Nations, 2004-2011, (pdf)-