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Why Central Europe Needs Atlanticism Now

A Must Read article in The American Interest by A. Wess Mitchell, President of the Center for European Policy Analysis (CEPA) in Washington DC and Jan Havranek, Director of the Defense Policy and Strategy Division at the Czech Ministry of Defense, who writes in his personal capacity.

Although the piece is specifically addressed to US readers and calls for more American leadership, European students of history (of all ages) should read it, including those government officials and politicians in Germany and elsewhere who claim to think beyond the next four years.

"In short, it isn't just Atlanticism that is in crisis; it is the entire paradigm of post-Cold War Europe. The fact that Central European countries are less Atlanticist has not necessarily made them more Europeanist. On the new European map, economic power resides in the east-central core of the continent, in the nexus of overlapping geopolitical and economic interests between Germany and the states of the Baltic-to-Black Sea corridor. This configuration resembles the Mitteleuropa of Bismarck, stripped of its Prussian military overtones, more than it does the federative European vision of Monnet and Schuman, or the Atlanticist vision of Asmus and Vondra. (...)

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The Next Big Transatlantic Project: A Free Trade Area Plus

The rising economies in Asia and South America have been hyped for many years in the US and European media. Now, finally, there is a renewed focus on transatlantic free trade because the United States and the European Union "remain the anchor of the global economy. Together, they produce more than 50 percent of the world's gross domestic product and account for almost 30 percent of global trade. Europe buys three times more U.S. products than China, and European investment in California alone is greater than all U.S. investment in China and Japan put together."

Stuart E. Eizenstat, a former deputy secretary of the Treasury, and Daniel S. Hamilton of Johns Hopkins University, describe how the new Trans-Atlantic Partnership could look like:

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Shame on us: Germany Boosts Arms Sales to Mideast

"Germany has become a key arms supplier in the Middle East despite stringent export controls that have inhibited weapons sales in the past," writes UPI (via SeidlersSiPo) in a good summary of recent sales. In the current conflict in Libya, weapons manufactured by German defense companies are being used by both sides:

Libyan leader Moammar Gadhafi's forces use tank transporters built by Mercedes Benz, German-made electronic jamming systems and Milan-3 surface-to-air missiles made by the French-German MBDA company. NATO forces employ the twin-engined Eurofighters for their air campaign against Gadhafi's beleaguered regime.

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Kinder Surprise Eggs Banned in the United States

Since it is Easter, CNN writes this:

Kinder Eggs, a popular European chocolate egg that contains a toy inside, is banned from importation into the United States because it contains a "non-nutritive object embedded in it."

With the Easter holiday around the corner, the agency issued the reminder this week, warning that the candy is considered unsafe for children under 3. Last year, Customs and Border Protection seized 25,000 of them in 1,700 incidents.

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Cheese Wars and Strong Coffee

Americans will soon pay more for a precious piece of French Roquefort. The American government has as a last, petty gesture in its trade policy decided to raise tariffs on the product from 100 to 300 percent. This is part of a more general round of retaliatory tariffs in response to the ban the European Union maintains on beef produced with growth hormones. But it is clear that Roquefort has been targeted for political sensitivity, as the Independent writes:
There was a violent reaction in France when import duties were first raised on roquefort cheese 10 years ago. The small farmers' leader José Bové – then a roquefort producer – began his rise to international celebrity by attacking a McDonald's restaurant at Millau, near Roquefort, with mallets and a bulldozer in August 1999.
The main effect this will have is making Roquefort more exclusive. And, perhaps, something of a political statement among Michael Pollan fans and the like. I do hope the French embassy will react appropriately at societal events. If the new administration does not dial this back... Continue reading "Cheese Wars and Strong Coffee"

India on Doha

The new Atlantic Media Network blog has a very useful press roundup on the Doha round collapse, focused on the question who 'did it in'. They quote papers from both sides of the Atlantic on the matter.

The coverage alternates between blaming India and China (India foremost) and choosing the safe, neutral storyline by claiming that they are 'asserting' their newfound power.

One perspective that certainly needs to be added is that of India itself. Here are three stories from the Times of India:

'Do As the Americans Did' is a leader by Arun Maira that focuses on India's need to build up its economy and the associated need for protection. The United States focus as a case study in this matter, as its strongest period of growth (1890-1910) happened at a time when it was protectionist, and Europe was more liberal. Maira claims that 'healthy' free trade must be the end point of an evolutionary process.

'Save Doha' is the paper's editorial. It comes down to the point that India's and China's demands for the threshold for a safeguard mechanism were too protectionist, but that the EU and US could have found a middle point for a compromise. "The world", the paper concludes "can't wait till Indian agriculture is ready to face global competition, of course. But neither can the world ignore India and China's concerns."

'Playing to the Gallery' is another leader, by Narendar Pani. He compares the single-issue focus of the current commerce minister with that of the former, Murasoli Maran, who categorically opposed labour standards at the WTO ministerial in Seattle, 1999. According to Pani, this has led to the BBC arbiting over labour standards instead of the WTO, as western firms are mindful of public pressure. The obstruction back then has turned out to have mainly symbolic consequences and Pani expects similar results from India's current obstruction.

Is the Doha Round No Longer Relevant?

A short commentary on the Doha Round of WTO negotiations:

The talks being held at this time in Geneva are not making enough progress. The latest compromise text that had been drawn up by Pascal Lamy is opposed by India, and the U.S. is also blaming China for going back on earlier promises, as the Associated Press reports.

[Tuesday Update: The talks have now collapsed in what the Telegraph calls a 'blow to globalisation']

One fascinating element of the talks is the emergence of a core group of 7 WTO members who consulted closely on the new deal. Here's an excerpt from the Bridges daily updates:
Seven of the world's largest trading powers emerged front and centre in the struggling talks at the WTO on Wednesday, meeting all afternoon and late into the night in an attempt to find a way out of the impasse in governments' push for breakthrough deals on agricultural and industrial goods trade. [...]

Australia, Brazil, China, the EU, India, Japan, and the US were discussing non-agricultural market access (NAMA), agricultural market access, and trade-distorting farm subsidies, a source said.
This provides a useful mirror for the current balance of power in the world in the trade arena. The absence of Canada is notable. Keep in mind that Russia is not (yet) a WTO member.
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The Impact of the Oil Shock: Trade Networks Shrink

This is a guest blog post by Donald Stadler, an American living and working in London:

Washington Post economics columnist Robert Samuelson recently wrote a piece about the trade impact of the oil shock on the US, quoting economist Jeffrey Rubin of CIBC World Markets, who predicts that oil will go to $225 a barrel/$7 a gallon before this is finished.

Apart from the obvious impact on per-liter fuel prices in Europe (I have heard of diesel prices as high as £1.99 a litre in the UK), there are some interesting side effects on world trade.

The bottom line is that shipping cheap manufactures thousands of miles make much less sense than it has this past decade. Since 2000 the cost of shipping a 40 foot shipping container from East Asia to the US has gone from $3000 to $8000, and if oil prices go to $200 a barrel this will go to $15,000 per container.

Some production will be brought back to the US and Europe, and other production will go from Asia to nearby low-wage countries like Mexico (for the US) and Poland/Bulgaria/Romania, and perhaps Russia and Turkey (for the EU). This may be good news for factory workers in Italy and in depressed areas of Germany and the UK.

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