Monthly Archives: July 2018

Unpacking Disingenuous GOP Complaints About Presidential Trade Anuthority

At midnight on June 30, Fast Track, which delegates Congress’ constitutional trade authority to the president, extended for another three years.


The congressional Democrats, who fought this broad give-away of control over trade agreements even when it was President Barack Obama’s request in 2015, could not even obtain a vote because the procedure is so rigged it automatically extends unless a “non-extension resolution” is passed. But that vote can only occur if the congressional GOP leadership allows it.

And the congressional GOP, most of whom supported the extreme Fast Track procedure but now are cynically howling about undue presidential authority over trade, chose not to take action.

Under the U.S. Constitution, Congress is supposed to write the laws and set trade policy, while the executive branch represents the United States in negotiations with foreign governments. When it came to trade agreements, this arrangement required cooperation between the branches.

For 200 years, these key checks and balances helped ensure that no one branch of government had too much power over trade policy. But, starting with Nixon, presidents have tried to seize those congressional powers using Fast Track.

Fast Track, which supporters renamed Trade Promotion Authority as the procedure became increasingly controversial, empowers the executive branch to unilaterally select partner countries for “trade” pacts, decide the agreements’ contents, and then negotiate, sign and enter into the agreements — all before Congress has a vote on the matter. Normal congressional committee processes are forbidden, meaning that the executive branch is empowered to write lengthy legislation on its own with no review or amendments. And, then the president is guaranteed a vote on the done deal within a set amount of time with no amendments allowed and debate limited.

President Obama — despite his campaign promise to reject Fast Track — requested the authority for the Trans-Pacific Partnership (TPP). A years-long battle ensued, with opposition coming from a majority of the U.S. public, most House Democrats and a sizeable bloc of Republicans, organized labor, environmental groups, public health organizations, family farmers, and many more. Despite the unprecedented strength and diversity of this coalition focused on a trade issue, Fast Track authority was passed by a one-vote margin in June 2015.

This delegation of Fast Track authority was for a three-year period with an automatic renewal for another three years after that. The only way to stop the automatic renewal of Fast Track would have been with a congressional resolution of disapproval.

The AFL-CIO sent a letter to Congress opposing Fast Track renewal in its current form because of its opacity and inadequate labor standards. But the broad coalition in Congress and outside that almost stopped Fast Track in 2015 did not organize a push to end the procedure because the disapproval mechanism is designed to only function if the congressional leadership allows it.

And, it was a telling spectacle to watch Sen. Bob Corker (R-Tenn.) and other GOP senators going ballistic over President Donald Trump’s authority to do anything to stop trade cheating while revealing their disinterest in getting rid of the Fast Track legislative luge run.

Fast Track has been the necessary swamp oil to grease the skids to pass pacts like the North American Free Trade Agreement (NAFTA), and other job-killing deals packed with special corporate protections and rights. The corporate lobby opposes the president having trade authority to combat trade cheating that costs American jobs, but loves Fast-Tracked trade deals that make it easier to outsource additional jobs.

The GOP inaction on Fast Track disapproval made 100 percent clear what is really going on: Team Trade Status Quo is keen to eliminate presidential authority on trade matters that break with their pro-job-outsourcing trade agenda while remaining committed to the current iteration of Fast Track with a view to trying to use it to get more-of-the-same trade deals.

That dynamic makes the current NAFTA renegotiation a moment of truth. The U.S. Trade Representative, Robert Lighthizer, is using this delegation of Fast Track to negotiate a NAFTA replacement that actually has a chance of making things better for working people rather than expanding greater corporate control over our lives.

The renegotiated NAFTA just might eliminate the job outsourcing incentives at NAFTA’s heart, including the system that empowers multinational corporations to attack our laws for taxpayer money before a panel of three corporate lawyers. And the NAFTA replacement may even add labor and environmental standards that could actually help raise wages and improve conditions for people throughout North America.

In the face of this potential game-changer of a trade agreement, congressional Republicans’ inconsistency on Fast Track belies the truth, that for them criticism of presidential trade authority was never about constitutional checks and balances – it was all about making sure their corporate cronies can do whatever they want.

However, the revised NAFTA deal is not done yet. And the GOP’s decision not to act against Fast Track extension suggests that they still think they can get the terrible, TPP-style NAFTA deal that they want.

The diverse coalition that fought Fast Track and that defeated the TPP must remain vigilant and show that a revolutionary new model for NAFTA that puts working people first is the only type of deal that will pass in Congress.

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Will the U.S. and EU Revive the Damaging Pro-corporate, Anti-people TTIP Agenda?

Trump promised a new approach on trade policy that would fix past damage to working people.


But what his administration and European Union officials said this week in their joint statement after European Commission President Jean-Claude Juncker’s visit to the White House sure sounds like a revival of the status-quo, pro-corporate agenda that Trump railed against in his campaign.

It remains unclear what the joint statement ultimately will lead to. However, anyone who cares about the safety standards on which we rely for our food and medicine, the energy and climate policies needed to save our planet, or financial regulations designed to prevent banks from gambling with our money and creating another crisis should be extremely worried.

The statement’s overall tone and specific worrying buzz words reflect the agenda that had been pushed by the largest U.S. and European banks, agribusinesses and other powerful industry groups in the Transatlantic Trade and Investment Partnership (TTIP) talks undertaken during the previous administration. That TTIP agenda had been resoundingly rejected by civil society on both sides of the Atlantic because people in Europe and the United States refuse to allow our fundamental environmental and consumer safeguards to be rewritten behind closed doors.

The statement calls for “zero non-tariff barriers.” “Non-tariff barriers” is trade-speak for any domestic policy or regulation that can affect multinational corporations’ ability to move goods or services across borders. Many consumer, health, or environmental safeguards we rely on to protect people and the environment are considered “non-tariff barriers” by business interests. Given that, does inclusion of this clause mean that the goal of these negotiations will be zero domestic safeguards on either side of the Atlantic – such as European GMO standards or U.S. financial regulations post-crisis – that might inconvenience a multinational corporation? That would be an even more radical pro-corporate plan than what was tried (and failed) in the TTIP negotiations.

Worryingly, the statement calls for “reducing barriers” to “chemicals,” “pharmaceuticals,” and “medical products.” The U.S. chemical industry sought to use TTIP to undermine Europe’s superior Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) policy. This chemical safety regime  is much more robust in protecting the public from unsafe chemicals than the broken U.S. policy.

Meanwhile, European pharmaceutical manufacturers called for the U.S. FDA to relinquish its current responsibility to independently approve the safety of medicines sold in the United States, proposing that the U.S. government automatically accept a European determination that a drug produced in Europe is safe for U.S. consumers. This language suggests that this dangerous industry wish list may be revived.

References to “a dialogue on standards in order to increase trade, reduce bureaucratic obstacles and slash costs” also sound suspiciously like a revival of the problematic and highly undemocratic “regulatory cooperation” agenda from TTIP. While cooperation among regulators is not inherently a bad idea, it IS very dangerous for such cooperation to happen in the context of trade negotiations that have explicitly prioritized reducing costs for businesses over any protection of consumers or the environment. The biggest banks, agribusiness, chemicals and pharma corporations in Europe and the U.S. have made clear what consumer and environmental protections they intend to undermine in the name of such “regulatory cooperation.”

The statement also explicitly calls for increasing exports of liquefied national gas (LNG) from the United States to Europe. This would create more market incentives for LNG companies to increase the environmentally destructive practice of “fracking” across the United States, even when many U.S. states have already or are considering banning the controversial practice altogether. Pushing for the extraction and transatlantic transport of even more fossil fuels takes both the United States and European Union in the categorically opposite direction of what is needed to transition to a low-carbon economy to address climate change.

It may be unsurprising – if tragic – that the Trump administration would pursue this policy, given its shameful withdrawal from the Paris Climate Accords. But that the EU would continue to pursue this is a stark abrogation of its commitment to combat climate change.

Finally, the statement’s call for the immediate creation of an Executive Working Group to move the agenda forward raises alarm bells. What is the scope of its mandate? Will there be any mechanisms to ensure that it is democratically accountable on both sides of the Atlantic? What is the nature of the “negotiations” it is undertaking?

A revival of the TTIP agenda might make some corporate cronies happy, but it would cause tremendous harm to the rest of us on both sides of the Atlantic. And it would be a clear betrayal of Trump’s promises to fix trade policy.

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Trump to offer farmers $12B in trade aid

Agriculture Secretary Sonny Perdue on Tuesday unveiled a three-part, $12 billion plan to ease the sting of retaliatory tariffs on U.S. farmers through a mix of payments, purchases and trade promotion effort



The plan seeks to ensure that U.S. farmers and ranchers — a key constituency for President Donald Trump and Republicans — don’t bear the brunt of an escalating trade fight as the administration pursues an aggressive course to rebalance America’s trade relationships.

Trump’s moves to slap tariffs on imports from some of America‘s largest foreign buyers have prompted retaliation against U.S. farm goods like pork, beef, soybeans, sorghum and a range of fruits.

The administration’s trade aid plan, first reported by POLITICO, is also a bid to shore up support among a slice of the rural electorate ahead of the midterm elections. But the tariffs and subsequent gluts for various farm products have wreaked havoc on farming economies.

“This is obviously a short-term solution that will give President Trump time to work on a long-term trade policy and deal to benefit agriculture as well as all sectors of the American economy,” Perdue said during a call with reporters.

Perdue said the amount is in line with the roughly $11 billion in negative effects that USDA has calculated agricultural producers have suffered as a result of “illegal” retaliatory tariffs imposed by China, Canada, Mexico, the European Union and other major economies.

The End Game in Donald Trump’s Trade War

Like many economists I have been puzzled over the likely end game in the trade war that Donald Trump has initiated with most of our major trading partners. He has escalated his rhetoric and put together a large list of imports to be hit with tariffs. His demands are vague and continually shifting. This doesn’t look like the way to win a trade war.


But then I remembered we are talking about reality TV show host Donald Trump. Winning a trade war for this reality TV show star doesn’t mean winning a trade war in the way that economists might envision.

It’s not a question of forcing concessions from trading partners that will improve our trade balance and the overall health of the economy. It’s a question of being able to hold something up that allows Trump to declare victory. That doesn’t require much.

If it is hard to imagine Trump celebrating concessions that were either never made or agreed to long ago, then just look at what happened at the NATO summit. Our partners in NATO had agreed back in 2014 to gradually increase their military spending to 2 percent of GDP by 2024. Apparently, they are still on this course.

Trump boasted of a huge victory for his leadership, pointing to their $33 billion projected increase in military spending for next year. He touted this increase, which comes to 0.16 percent of our NATO partners’ GDP, as “really amazing.” (Most of this was simply due to inflation.)

This is not the only area in which Trump has invented things out of thin air. He has gotten tens of millions of his followers to become incredibly fearful of being killed by the MS-13 street gang. In reality, most people in this country probably stand a greater risk of death from shark attacks than MS-13, but he used these fears as the basis for his crackdown on immigration.

Donald Trump is a person for whom reality matters little, if at all. Is there any reason that he wouldn’t just proclaim victory over China in the trade war a month or two before the election? He can announce that President Xi has committed the country to allowing most U.S. goods to enter China with little or no tariff, something to which China is already committed to do under the rules of the World Trade Organization.

He can do something similar with Canada. Trump can announce that Justin Trudeau agreed to import over $600 million worth of dairy products tariff free each year, describing the pre-trade war status quo as a great victory.

And, we can expect something similar with the European Union. Maybe he will announce that because of his tough measures the European Union will allow U.S. made cars to enter almost tariff free, something that is already the case.

Is there any reason to think that Trump couldn’t get away with just declaring the pre-trade war status quo a huge victory?  After all, he has Fox News, his quasi-official media outlet, to head up the cheerleading, and no shortage of Twitter followers to get the good news directly from the top.

We also already know what he will say about the sore losers who try to challenge his victory in the Great Trade War with facts. This will all be “FAKE NEWS!”

This scenario seems so obvious that it’s amazing anyone ever thought any other outcome was possible. For a president who invents his own reality, why would he not just invent a victory in trade war that looks likely to turn out badly based on the course he has taken?

Many years ago, George Aiken, a distinguished Republican senator from Vermont, came up with the idea of declaring victory in Vietnam and going home. The proposal was largely in jest, but it stemmed from a reality that we seemed to be mired in an endless war that served no obvious purpose. In that context, a meaningless declaration of victory, coupled with an ending of the war would have been a very good plan.

Half a century later, we are entering a trade war that serves no productive purpose over imaginary wrongs. We can all be happy if Trump ends the war before there is too much damage to the economy and people’s lives. His declaration of victory will be less laudable than Senator’s Aiken’s, but at least this pointless war will have come to an end.

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Trade spat with Mexico speeds U.S. decline as global wheat supplier

Mexican bread, pasta and flour-tortilla makers are seeking alternative suppliers of wheat to reduce their dependence on the United States as trade relations between the two neighbors deteriorate.

abundance agricultural agriculture arm


Mexico, the top importer of U.S. wheat, is increasingly turning to cheaper supplies from Russia, which surpassed the United States as the top global wheat supplier in 2016.

Now the U.S. market share decline is accelerating as Mexico casts about for more alternative suppliers in Latin America and elsewhere to hedge against the risk that U.S. grains will get more expensive if the Mexican government imposes tariffs, according to interviews with three large Mexican millers, international grains traders, the top Mexican government agricultural trade official and government and industry data analyzed by Reuters,

“It’s important to send signals to Mr. Trump,” said Jose Luis Fuente, head of Canimolt, a Mexican trade group which represents 80 percent of Mexican millers. Mexico will keep buying American wheat because of its proximity, he said, but “we can’t continue to have this absolute dependence.”

The shifting supply deals are alarming for the U.S. industry, which has supplied the vast majority of Mexico’s wheat since the 1994 North American Free Trade Agreement (NAFTA) took effect.

U.S. wheat exports to Mexico dropped 38 percent in value, to $285 million, in the first five months of 2018. U.S. wheat exports to all countries, valued at $2.2 billion, dropped 21 percent.

(For a graphic detailing the decline in U.S. wheat exports, see: )

“The Mexico market ought to be just an extension of our domestic market,” said Justin Gilpin, CEO of the Wheat Commission in Kansas, the nation’s biggest wheat-producing state.

Instead, Mexican buyers plan to import as much as 100,000 tonnes from Argentina – worth about $20 million based on current prices – when it harvests wheat later this year, Fuente told Reuters. Mexico imported a test cargo of 33,000 tonnes in late 2017 after the its government financed a trade mission of grain buyers to find alternatives to U.S. wheat in Latin America.

That same mission also resulted in Mexico raising its corn imports from Brazil, at the expense of sales from the United States. Mexico imported 10 times more corn from Brazil in 2017 than the previous year, and is on course to buy more this year.

Shortly after that trip, Mexico finalized pest-and-pathogen import clearances to allow shipments of wheat from Argentina, which until then had been forbidden.

The White House and the U.S. Department of Agriculture did not respond to repeated requests for comment on how the nation’s trade policy might be accelerating the decline of its wheat industry. The Office of the U.S. Trade Representative declined to comment.

The administration of U.S. President Donald Trump signaled its long-term commitment to tariffs this week when it announced that it would tap a Great Depression-era program for up to $12 billion in aid to help U.S. farmers hurt by the trade war that Trump started.


Global grain merchant Bunge (BG.N), which runs one of the largest milling operations in Mexico, booked the Argentine wheat purchase together with seven other buyers – even though it cost $1 or $2 more per tonne than U.S. wheat, Fuente said.

Bunge declined to comment.

The buyers included Grupo Trimex, Harinas Elizondo, Molino Harinero San Blas, Harinera Anahuac, Harinera Los Pirineos, Harinera El Paraiso and Harinera Tlalnepantla. They all wanted to test the quality of the imports, Fuente said.

Grupo Trimex, Harinera Anahuac, Harinera Los Pirineos and Harinera El Paraiso did not respond to requests for comment. Molino Harinero San Blas and Harinera Tlalnepantla declined to comment.

Manuel Iriso, CEO of Harinas Elizondo, which operates three flour mills in central Mexico, said the company was seeking the best quality wheat at the lowest cost, a goal it could achieve with a more diverse list of suppliers.

“We want the biggest number of options,” Iriso told Reuters.


Senior Mexican government officials are planning a trade mission to Argentina this week, timed to coincide with the G20 Agriculture Ministerial Meeting, a source familiar with the planning told Reuters. It will mark the third such grains-focused visit in about a year.

Argentina’s effort to take a piece of the Mexico wheat market remains tentative and faces challenges in competing on price, said David Hughes, president of Argentine wheat industry chamber Argentrigo.

But with the country’s wheat now approved for import and the next crop nearly planted, “We are all set to sell to Mexico,” he said.

Mexico will have its own logistic struggles in weaning itself off U.S. supplies, said Raul Urteaga, the head of international trade for Mexico’s agriculture ministry, who confirmed the nation’s effort to expand supplies from Argentina.

“In the near term, it won’t be quick or easy to substitute the existing logistics or (U.S.) import volumes, which are gigantic,” he said. “All of our infrastructure, both shipping and via trains, has been operating this way over for some 40, 50 years.”

But the need for alternative supplies is becoming more pressing as U.S. farmers are nearly finished gathering their winter-wheat crop, and the spring harvest approaches with no sign that the two countries will come to terms in a volatile renegotiation of NAFTA.

Mexican officials threatened to impose tariffs on U.S. grains last month if the trade conflict escalates. Mexico has already hit U.S. imports of steel, apples and pork in retaliation after Trump imposed tariffs on Mexican metal exports.

If Mexico taxes U.S. wheat imports, Russian and other alternative wheat supplies would be even more attractive for Mexican buyers.

During the first three months of this year, Russian and Ukrainian wheat exports to Mexico totaled 243,000 tonnes – or nine times more than the same period in 2017, according to Canimolt data, making the Black Sea region’s wheat farmers the biggest new source of imports for Mexican millers.


U.S. hard red winter wheat, priced at $240 per tonne or more, is competing with wheat from Russian and the upcoming Argentine harvest – offered at between $202 to $208 per tonne. That more than offsets the higher cost of shipping wheat from great distances.

Unexpected increases in U.S. rail costs have also made shipping wheat to Mexico more expensive.

The Mexican wheat industry “has an agility to exploit opportunities when they arise, whether they come in the form of Russian, Ukrainian, French or Argentine wheat,” said Alejandra Ruiz-Rocha, wheat trading manager in Mexico for Cargill Inc [CARG.UL].

High-protein Canadian wheat is also gaining appeal. Mexican millers often blend Canadian spring wheat with low-protein wheat from the Black Sea region, producing a cost savings over U.S. wheat, said a Canadian grain trader who was not authorized to speak publicly.


The loss of the Mexican market is hurting U.S. farmers in states like Kansas, where a severe drought slashed output this year. In the town of Chapman, in central Kansas, farmer Ken Wood said that prices dropped by 50 to 60 cents per bushel in a week late last month as farmers harvested their crops amid export market uncertainty.

“It’s frustrating. Mexico’s a natural market for us,” he said. “Break-even might be our best hope this year.”

Even if U.S. wheat regains its historic price advantage over more distant countries, some Mexican demand may already be lost.

Ailil Delgado, the owner of Panefilos, an artisanal bread shop in Guadalajara, said she would be willing to pay more for flour free of American wheat. Her customers, too, would accept higher bread prices to express their anger over U.S. trade and immigration policies, she said.

“I would definitely pay a higher price so long as quality standards are met,” Delgado said, “and specifically as a way to teach Trump a lesson.”

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Trump says he’s ‘ready’ to put tariffs on all $505 billion of Chinese goods imported to the US

  • President Donald Trump has indicated he is willing to put tariffs on all $505 billion of Chinese goods the U.S. imports.

  • The rhetoric ramps up the U.S.-China trade war another step, though each country has issued just $34 billion in tariffs so far.


President Donald Trump has indicated that he is willing to slap tariffs on every Chinese good imported to the U.S. should the need arise.

“I’m ready to go to 500,” the president told CNBC’s Joe Kernen in a “Squawk Box” interview aired Friday.

The reference is to the dollar amount of Chinese imports the U.S. accepted in 2017 — $505.5 billion to be exact, compared with the $129.9 billion the U.S. exported to China, according to Census Bureau data.

Thus far in the burgeoning trade war, the U.S. has slapped tariffs on just $34 billion of Chinese products, which China met with retaliatory duties.

By sheer dollar volume, the Chinese won’t be able to come close to the U.S. in a tit-for-tat battle. Trump’s comments point to a willingness to push the envelope as far as the U.S. needs to get Chinese tariff concessions, along with a pledge to stop allegedly stealing American technology.

“I’m not doing this for politics, I’m doing this to do the right thing for our country,” Trump said. “We have been ripped off by China for a long time.”

Trump said the U.S. is “being taken advantage of” on a number of fronts, including trade and monetary policy. Yet he said he has not pushed the tariffs out of any ill will toward China.

“I don’t want them to be scared. I want them to do well,” he said. “I really like President Xi a lot, but it was very unfair.”

Trump also said he was told by unspecified Chinese officials that “nobody would ever complain” from past administrations “until you came along — me. They said, ‘Now you’re more than complaining. We don’t like what you’re doing.'”

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U.S. Trade Deals Mean Justice for Some, Not Justice for All

2017 was another banner year of justice for sale, reveals the United Nations Conference on Trade and Development’s annual review of investor-to-state dispute settlement (ISDS) cases. What’s the report say? It reveals lots of new ways global investors are undermining democracy in private tribunals.


What’s ISDS? It’s a private justice system. ISDS means any investor—usually a corporation, but sometimes an individual, who buys property in a foreign country, from a hectare of land to stocks and bonds—can use this private justice system to sue host countries over laws, regulations and court decisions that may affect the investor’s current or future profits.

ISDS means justice for some, rather than justice for all. Those with the means to become international wheeler-dealers can access ISDS. The rest of us have to rely on public courts—the same ones that investors say are “inadequate” to handle their needs. That’s not fair, and that’s not right.

In 2017, 65 new known cases were filed, for a total of 855 known ISDS cases. Some cases are secret, so we’ll never really know how many cases have been filed.

The U.S. is the most frequently claimed “home state” of investors using the system, which tells us that U.S. trade and investment treaties (such as the North American Free Trade Agreement and the U.S.-Panama Trade Promotion Agreement) are pretty effective at promoting outsourcing to our trading partners (or else there wouldn’t be anything to sue over).

Spain is the third most sued country, and Canada is the sixth most sued, which tells us that ISDS isn’t really about “deficient” justice systems in poor countries—it’s about empowering economic elites to challenge democracies. Of all ISDS cases that have been decided on the merits, the investor wins 61% of the time, winning $504 million on average.

Two of last year’s cases approved the right of Chinese state-owned companies to use ISDS, despite claims by host countries that the Chinese government was actually calling the shots. In two other cases, investors were allowed to pursue their cases even though their original investments were illegal under the laws of Uzbekistan and Peru, the host countries. And in an extremely rare appellate case, one tribunal said it was OK for another tribunal to order a country not to enforce the rulings of its own domestic courts. Since one of the arguments made by those who favor ISDS is that the tribunals can only order monetary damages—rather than tell governments what their laws can be—this result is shameful. And maybe it is just the kick in the pants that governments need to abandon ISDS altogether.

In the NAFTA renegotiations, the U.S. has proposed to nearly (but not quite) eliminate the unfair ISDS system, but Canada and Mexico are saying no. The U.S. proposal would allow countries to opt out of the system entirely, and even if they do opt in, it would place restrictions on the kinds of cases investors could bring. The AFL-CIO supports this U.S. proposal and asks Canada and Mexico, “What are you waiting for?”

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EU and Japan sign one of history’s largest trade deals

Move seen as counterweight to offset US protectionism under Donald Trump


Japan and the European Union have officially agreed one of history’s largest trade deals, in what will be seen as a calculated snub of Donald Trump’s protectionist policies.

Political leaders in Tokyo on Tuesday heralded the Economic Partnership Agreement, which will bind together two trading powerhouses accounting for 30 per cent of the world’s economy.

The deal, which is five years in the making, will virtually scrap import duties on Japanese goods into the EU, including machinery parts, tea and fish, when it takes effect by late 2019. A 10 per cent tariff on passenger cars will be abolished over seven years.

Europe successfully nudged Japan to face down its powerful farm lobby by cutting tariffs on imported wine, pork, cheese, chocolate and other food products. Japan will eliminate tariffs of more than €1 billion on about 94 per cent of European imports into the country before phasing them out almost entirely, said the European Commission.

Donald Tusk, president of the European Council, said the deal was a vote of confidence in the global order of rules-based free trade. “At a time when some are questioning this order, we are sending a clear message that we stand against protectionism.”

In a joint statement, the leaders pledged to defend the world’s trading status quo. “In giving full effect to this agreement, Japan and the EU are sending a powerful message to promote free, fair and rules-based trade, and against protectionism,” it said.

Estimates produced by Japan’s government said the agreement could add about 290,000 jobs and five trillion yen to the Japanese economy – or about 1 per cent of GDP.

President Shinzo Abe called it “historic” at a time when protectionist sentiment is “spreading around the world”. He said it would help offset the impact of Japan’s shrinking domestic market.

Raise a glass

Among the industries celebrating the official signing of the agreement is Irish whiskey, which has long played second fiddle to its better-known, more powerful Scottish rivals.

Sales of Irish whiskey were up nearly 16 per cent in Japan last year, according to the Irish Whiskey Association, and many companies believe there is plenty more room to grow.

William Lavelle, head of the IWA, said: “We see Japan as being a key growth market for Irish whiskey in future years.”

Japan and the EU have been left stunned by US plans for new tariffs on steel and aluminium products and threats to hike tariffs on Japanese cars and auto parts – a key export earner. In May it was reported that Japan was considering retaliatory tariffs of $409 million on US exports.

Speaking in China on Monday, Tusk said it was a “common duty” of Europe and China, the US and Russia, not to destroy the global order but to improve it.

European Commission president Jean-Claude Juncker told reporters on Tuesday that the Japan-EU deal “a landmark moment for global trade” and said it would set the standard for others. “As far as we are concerned, there is no protection in protectionism. We want to rewrite the rule book together, not destroy it.”

The deal must be ratified by both parliaments before it comes into affect. Greenpeace International senior political strategist Shira Stanton said: “The trade deal signed today, and others like it, smack of corporate protectionism at the expense of democracy, social rights, and environmental and climate protection. The EU and Japanese parliaments should reject it. These kinds of trade agreements are not an appropriate response to protectionism. Only enhanced international co-operation that prioritises people and the planet can help solve the pressing problems of our time, like climate change, inequality and conflict.”

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Japan-EU trade deal ‘light in darkness’ amid Trump’s protectionism

Leaders use largest bilateral free trade deal to send clear message to US president


The EU and Japan say approval of the world’s largest bilateral free trade deal shines a “light in the darkness” of global political uncertainty.

Japan’s prime minister, Shinzo Abe, and the EU leaders Donald Tusk and Jean-Claude Juncker sought to establish themselves as the flag-bearers of the free world, in response to Donald Trump’s show of apparent solidarity with Vladimir Putin in Helsinki on Monday.

The leaders promoted the benefits of a free trade deal that is set to eliminate nearly all tariffs on products traded between Japan and the EU.

Tusk, the president of the European council and an outspoken critic of the Trump administration in recent months, was particularly keen to celebrate the shared values of the signatories, not only in terms of trade but also foreign policy.

Coming just 24 hours after Trump backed the Russian president over his own intelligence services at a summit in the Finnish capital, Tusk pointedly highlighted the continued support of Japan and the EU for the territorial integrity of Ukraine, whose Crimean peninsula was illegally annexed by Russia in 2014.

Tusk said Japan and the EU were firm in their support of the Iran nuclear deal, the joint comprehensive plan of action, which lifted economic sanctions on Iran in return for curbs on Tehran’s nuclear expansion. Trump reneged on the deal earlier this year.

Tusk said: “Politically, it’s a light in the increasing darkness of international politics. We are sending a clear message that you can count on us. We are predictable – both Japan and [the] EU – predictable and responsible and will come to the defence of a world order based on rules, freedom and transparency and common sense. And this political dimension is even more visible today, tomorrow, than two months ago and I am absolutely sure you know what I mean.”

He continued: “Let me say that today is a good day not only for all the Japanese and Europeans but for all reasonable people of this world who believe in mutual respect and cooperation …We are putting in place the largest bilateral trade deal ever. This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order.”

Asked how he would respond to concerns that free trade could threaten jobs, Tusk responded: “Political uncertainty, tariff wars, excessive rhetoric, unpredictability, irresponsibility; they are a real risks for our businesses, not trade agreements.”

Trump has been condemned at home and abroad after failing to denounce Russian meddling in the US presidential election during a joint press conference with Putin, during which he appeared to side with the Kremlin over his own intelligence services. The Republican senator John McCain has claimed that “no prior president has ever abased himself more abjectly before a tyrant”.

Abe, an early visitor to Trump’s Mar a Lago resort after his election, did not address the Helsinki summit directly but told reporters that the trade agreement with Brussels “shows the world the unshaken political will of Japan and the EU to lead the world as the champions of free trade at a time when protectionism has spread”.

Juncker, the president of the European commission, added: “As far as we are concerned there is no protection in protectionism, and there is no unity where there is unilateralism.”

The commission has announced that Juncker will visit Washington and meet Trump at the White House next Wednesday to discuss trade.

Once ratified by parliaments on both sides, the EU-Japan trade deal will eliminate about 99% of tariffs on Japanese goods, including on cars, from the eighth year after the deal is implemented, with tariffs scrapped on car parts immediately.

Japanese consumers will enjoy lower prices for European wines, pork, handbags and pharmaceuticals, should it come into force in 2019, as is expected. The two parties also signed an agreement to allow data to flow between the EU and Japan, creating “the world’s largest area of safe data flows”.

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Japan and EU sign trade deal to eliminate nearly all tariffs By ASSOCIATED PRESS

The European Union and Japan signed a landmark deal Tuesday that will eliminate nearly all tariffs on products they trade.


The ambitious pact signed in Tokyo runs counter to President Trump’s moves to hike tariffs on imports from many U.S. trading partners. It covers a third of the global economy and markets of more than 600 million people.


“The EU and Japan showed an undeterred determination to lead the world as flag-bearers for free trade,” Japanese Prime Minister Shinzo Abe said at a joint news conference with European Council President Donald Tusk and European Commission President Jean-Claude Juncker.


Tusk praised the deal as “the largest bilateral trade deal ever.” He said the partnership is being strengthened in various other areas, including defense, climate change and human exchange, and is “sending a clear message” against protectionism.

The leaders did not mention Trump by name, but they did little to mask what was on their minds — highlighting how Europe and Japan have been pushed closer by Trump’s actions.


The agreement was largely reached late last year. The ceremonial signing was delayed from earlier this month because Abe canceled going to Brussels over a disaster in southwestern Japan, caused by extremely heavy rainfall. More than 200 people died from flooding and landslides.


The measures won’t kick in right away and still require legislative approval. But they will bring Japanese consumers lower prices for European wines, pork, handbags and pharmaceuticals. Japanese machinery parts, tea and fish will become cheaper in Europe.

The deal eliminates about 99% of the tariffs on Japanese goods sold to the EU. About 94% of the tariffs on European exports to Japan will be lifted, rising to 99% in the future. The difference reflects exceptions on such products as rice, which enjoys strong political protection from imports in Japan.


Overall, European farmers will benefit, Juncker said, though European consumers will be able to more easily buy luscious Kobe beef and famous Yubari melons.

The EU said the trade liberalization will help raise European exports of chemicals, clothing, cosmetics and beer to Japan. Japanese will get cheaper cheeses, such as Parmesan, Gouda and cheddar, as well as chocolate and biscuits.


The imported wine and cheese could hurt sales by Japanese wineries and dairies, but Japanese consumers have historically coveted such European products.


The major step toward liberalizing trade has been discussed since 2013.

Apart from its deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal. The partnership includes Australia, Mexico, Vietnam and other nations, although the U.S. has withdrawn.


Abe praised the deal with the EU for helping his “Abenomics” policies, designed to wrest the economy out of stagnation despite a shrinking population and cautious spending. Japan’s growth remains heavily dependent on exports.

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