(What’s Left of) Our Economy: Encouraging Brexit Lessons for the United States

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Brexit, China, decoupling, European Union, Eurozone, Financial Times, France, Germany, IMF, International Monetary Fund, United Kingdom, {What's Left of) Our Economy

Some awfully interesting evidence supporting my view (see, e.g., here) that the United States is uniquely positioned in the world to prosper quite nicely from seeking to maximize its already high degree of economic self-sufficiency has just emerged — and from some awfully unlikely sources.

It’s indirect evidence, to be sure, and concerns the United Kingdom’s (UK) economic perfomance since the Brexit referendum of 2016 that mandated its pull-out from the European Union. But it’s relevant to the United States’ situation because the U.S. economy is far more actually and potentially self-sufficient.

The evidence – from the ardently globalist International Monetary Fund (IMF) and from the just-as-ardently anti-Brexit Financial Times – makes clear that since the UK finally left the EU at the end of January, 2020, it’s gross domestic product (GDP – the standard measure of a national economy’s size), has not only risen about as fast as those of the major members of the EU, but that it’s closed the gap that existed pre-withdrawal. And all the while, the UK has reaped a crucial benefit – much more control over its future.

The IMF evidence came in today’s release of its World Economic Outlook – a twice yearly Fund publication that surveys the state of the globe and includes growth forecasts for major countries, geographic regions, and formal groupings of countries like the eurozone (which overlaps pretty thoroughly with the EU).

According to the Fund, last year, the UK economy expanded by 7.4 percent in inflation-adjusted terms (the most closely monitored gauge of growth). The figure for the countries using the euro as their currency? A mere 5.4 percent. And it’s not like the lagging eurozone performance was dragged down by its long-time economic laggards. Germany’s real 2021 growth was a measly 2.8 percent, and France’s much better seven percent still trailed the UK’s.

In other words, a single country that’s cut itself off from all the alleged benefits of economic integration with a much larger market had out-grown the collective members of that market that presumably were enjoying all the economic advantages of such integration.

Moreover, the IMF’s latest projection for this year crowns the UK as a growth winner, too. Its 2022 price-adjusted GDP is forecast to improve by 3.7 percent, versus 2.8 percent for the euro area. The French after-inflation growth rate is expected to top the UK’s slightly (2.9 percent), but Germany’s will be stuck at a lowly 2.1 percent.

The only solace Brexit-haters can take from the IMF analysis is that the UK supposedly will fall way behind growth-wise next year. Its real GDP performance is pegged at a mere 1.2 percent – slower than that of the euro area (2.3 percent), France (a not-so-impressive 1.4 percent), and Germany (a respectable 2.7 percent, but a performance coming off an unusually low baseline). Yet needless to say, it’s much more reasonable to put more stock in near-term predictions and longer-term predictions.

In addition, even with this possible slowdown, the Financial Times graph below (taken from this article) shows that, despite its glass-half-empty title, if the IMF is right about 2022, the UK will have turned itself from a growth laggard in 2019 compared with France and Germany to a growth equal. And although the 2023 projections are tough to see in this graphic, they show near parity among the three.

Two qualifications to these findings need to be made. First, as I’ve repeatedly noted, all economic data for the last few years has been dramatically affected and surely distorted by the CCP Virus pandemic. Second, although the UK left the EU, it still does business with the bloc and its economic ties with the rest of the world stayed the same organizationally.

At the same time, for years after the referendum vote, businesses in the UK had been dealing with major uncertainties and the inevitable short-term costs of the negotiations over Brexit’s precise withdrawal procedures and terms. And the growth figures make obvious that, on the whole, they and the entire economy have managed to navigate them successfully.

And if the UK has so far emerged successfully from its Brexit-style decoupling from the EU, it’s hard to imagine that the much more economically diverse United States can’t emerge from a much more determined decoupling from China – which will promote vital and intertwined economic and national security interests – at least as well.

Glad I Didn’t Say That! Most Productive 8 Hours in Trade Policy History?

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aluminum, Biden administration, Commerce Department, Donald Trump, Gina Raimondo, Glad I Didn't Say That!, metals, steel, tariffs, Trade, trade war, United Kingdom

“U.S. Commerce chief says has nothing to report on [United

Kingdom] steel talks” 

– Reuters, 22 hours ago

 

“New U.S.-U.K. trade deal cuts tariffs on British steel, American

motorcycles, bourbon”

– Reuters, 14 hours ago

 

(Sources: “U.S. Commerce chief says has nothing to report on steel talks.” by David Shephardson, Reuters, March 22, 2022, https://www.reuters.com/business/us-commerce-chief-says-has-nothing-report-steel-talks-2022-03-22/ and “New U.S.-U.K. trade deal cuts tariffs on British steel, American motorcycles, bourbon,” by Andrea Shalal and David Lawder, Reuters, March 22, 2022, https://www.reuters.com/world/uk/uk-us-trade-chiefs-meet-tuesday-steel-tariffs-source-2022-03-22/)

 

Our So-Called Foreign Policy: Biden’s Foreign Policy Pillar is Looking Hollow at Best

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alliances, allies, Beijing Olympics, Biden, China, Emmanuel Macron, European Union, France, Fumio Kishida, Germany, Japan, multilateralism, NATO, Nordstream 2, North Atlantic treaty Organization, Olympic boycott, Our So-Called Foreign Policy, Putin, Russia, sanctions, Southeast Asia, Taiwan, Ukraine, United Kingdom, Winter Olympics

What’s worse than “terrible”? It’s an important question because if that’s a term that accurately describes President Biden’s last week or so in office, then something even stronger is clearly needed for the setbacks suffered recently by multilateralism – the foundation of his foreign policy. And most troublingly, the idea that U.S. foreign policy success requires the cooperation of major allies has been failing most conspicuously when it comes to dealing with America’s two biggest global rivals – Russia and China.

Let’s deal with Russia first, but not because I view it as the biggest threat to the United States – or even much of a threat at all. In fact, I’ve long and repeatedly written that the fate of Ukraine has no importance for America’s national security, and that Washington should accept some form of the kind of spheres of influence-type deal in Eastern Europe that Russian leader Vladimir Putin has proposed.

But the Ukraine crisis is making the most headlines right now, the subject dominated his long press conference last Wednesday, and Mr. Biden is nowhere near taking my advice. Indeed, that presser added powerfully to the evidence that the United States and its allies are deeply divided over how to respond to actual and possible Russian moves against Ukraine.

As the President made clear, “[I]t’s very important that we keep everyone in NATO on the same page.  And that’s what I’m spending a lot of time doing.  And there are differences.  There are differences in NATO as to what countries are willing to do depending on what happens — the degree to which they’re able to go.”

Indeed, that very day, France’s President Emmanuel Macron proposed that the European Union seek separate from U.S. efforts a new security agreement with Russia. Macron did state that “It is good that Europeans and the United States coordinate” but added “it is necessary that Europeans conduct their own dialogue, We must put together a joint proposal, a joint vision, a new security and stability order for Europe.”

Since Europe is a lot closer to Russia and Ukraine that the United States, and will be much more dramatically affected by events in that region, this French position seems entirely legitimate to me. At the same time, it’s tough to believe that Macron would place such importance on a Europe-only effort if he was completely happy with what he knows of American diplomacy so far.

Germany’s views seem even farther from Washington’s. Its new government has not only refused to join some other European countries (notably, the United Kingdom) in supplying defensive weapons to Ukraine. It’s blocked at least one NATO country – Estonia – from sending its own Made in Germany arms to bolster Kiev’s military.

Moreover, trade-dependent Germany, whose trade with Russia in energy and other goods is substantial, doesn’t even seem very keen on deterring or punishing Moscow for invading Ukraine with the kinds of sanctions that are widely viewed as the strongest – cutting Russia off from the global network used by almost all the world’s financial institutions to send money across borders for all the reasons that money is sent across borders. At least Berlin is sounding more open to halting final approval of the Nordstream 2 natural gas pipeline if Ukraine is invaded.    

Asian countries seem more prepared to resist aggression from China, especially the military kind (as opposed to Beijing’s economic efforts at intimidation). Since this post last September reporting on steps they’ve taken to transition from U.S. protectorates to countries more closely resembling genuine allies, some have made even more encouraging moves.

For example, Indonesia reportedly “is preparing itself militarily” to deal with Chinese moves against islands located in its territorial waters and major straits through which much of its (and the world’s commercial shipping) travels. The Philippines – another Southeast Asian country embroiled in maritimes disputes with China, has just bought cruise missiles from India, and reportedly some of its neighbors are interested in these devices, too.

At the same time, despite a virtual summit between President Biden and Japanese Prime Minister Fumio Kishida, Japan’s policy on using its forces to help any U.S. attempt to defend Taiwan from a Chinese attack remains ambivalent at best. South Korea looks more hesistant still.

Nor is Japan backing the United States to the hilt on sanctioning Russia economically following a Ukraine attack, or even close. After the Biden-Kishida session, an anonymous U.S. official said (in a briefing posted on the White House website) that although the Japanese leader “made it clear his country would be ‘fully behind’” Washington on the issue, his response concerning economic responses Tokyo would support was “We did not get into the specifics about possible steps that would be taken in the event that we see these [potential Russian] actions transpire.”

The refusal of so many U.S. allies and others to join the Biden administration’s diplomatic boycott versus the upcoming Winter Olympics in Beijing also casts major doubts on the President’s emphasis on multilateralism. Can any countries declining even to keep their officials alone out of China for the games (as opposed to their athletes) be counted on to push back more concretely and powerfully against future provocations from China?

Athletes and sports fans know well the expression “Change a losing game.”  For all you others, it means that if a strategy or approach is failing, switch to an alternative.  But for the future of American foreign policy, the most important part of it remains unspoken, and the one that the President needs most urgently to heed:  “Change it before you’ve lost.”   

 

Our So-Called Foreign Policy: Biden’s Anti-China Coalition is Flunking an Olympian Test

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allies, Australia, Beijing Olympics, Biden, boycotts, Canada, China, European Union, Germany, Indo-Pacific, Italy, Japan, multilateralism, Our So-Called Foreign Policy, semiconductors, South Korea, Taiwan, United Kingdom, Winter Olympics

One of President Biden’s main foreign policy aims has been to create an international coalition to resist continually mounting belligerence by China, and to curb the massive, decades-long flows of foreign capital and technological knowhow that have done so much to strengthen and enrich the People’s Republic. And whatever promise is held by this anti-China strategy has become vitally important lately because of Beijing’s intensifying intimidation campaign against Taiwan, whose autonomy has become a vital U.S. interest due to its world leadership in semiconductor manufacturing processes.

That’s why it’s so discouraging to report that, as of this morning, so few of the allies on which Mr. Biden is counting have been willing even to take so limited a step as joining the U.S. diplomatic boycott of the Winter Olympics scheduled to be held in China’s capital Beijing in February.

Australia and the United Kingdom signed on this morning. And a bit later, so did Canada. But so far, that’s it. According to this Reuters article, Japan is considering not sending cabinet members to the Games but South Korea isn’t even thinking about this step. The New York Times reports that New Zealand had previously decided not to send any officials to China but cited CCP Virus-related health concerns as the reason; that the European Union’s (EU) European Parliament has passed a resolution backing a boycott barring “verifiable improvement” in China’s human rights situation, but one that’s non-binding; that the EU’s separate policymaking arm has declined to support the U.S. action; EU member France is hiding behind this EU skirt so far; fellow EU member Italy has said it’s not on board; and Olaf Scholz, the new leader of another EU member, Germany, clearly doesn’t want to be.

It’s not that joining the American initiative will produce any meaningful changes in China’s behavior. Indeed, official foreign participation in and attendance at Olympics isn’t exactly the norm.

It’s true, moreover, as The Times mentioned, that many of these countries and the EU collectively have imposed human rights sanctions on China; that some have begun thinking about how to shield their economies from Beijing’s power and influence (see, e.g., here and here); and that some have begun to increase their own defense spending in response to China’s own buildup and provocations (see, e.g., here and here), or become more active militarily in the Indo-Pacific region (see, e.g., here).

At the same time, boosting military budgets and even sending warships on port calls and other East Asian missions is a far cry from credibly pledging to come to the U.S.’ and Taiwan’s aid if China moves against the island. (It’s also important to note that an American military response, or at least a prompt one, is far from certain, either, since the United States is not yet obliged by treaty to come to Taiwan’s defense.)

And if countries are reluctant to take even a symbolic step like diplomatically boycotting the Beijing Olympics, which doesn’t even entail further sanctions, can they really be counted on to enter hostilities against China?

President Biden is fond of saying that “America is back” in its role as free world leader following an alleged Trump administration abdication. But leaders by definition need followers, and when it comes to confronting China meaningfully, it’s not clear right now that he has many that are reliable.

Im-Politic: A Labor Shortage Story Short on the Facts

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Bloomberg.com, Boris Johnson, Brexit, editing, European Union, globalism, Im-Politic, Immigration, Joe Mayes, journalism, labor shortages, media bias, Open Borders, truck drivers, truckers, trucking, United Kingdom

Is Bloomberg.com trying to make yours truly look good? It certainly seems that way. Exactly two days after I wrote that American journalism has long been suffering from an editing crisis (and subjecting readers and viewers to a flood of ineptly reported and reasoned articles, posts, and broadcast segments), this news site ran a piece illustrating perfectly two of this so-called profession’s biggest (and intimately related) flaws: pushing narratives largely by ignoring information that provides crucial context.

The lead paragraph tells you all you need to know where Joe Mayes’ September 22 story was going (and where he and his editors believed it should go): “The red lines of Boris Johnson’s Brexit project are starting to crack as voters face growing shortages of food and fuel, as well as a marked rise in living costs.”

As the second paragraph elaborated, “Despite riding to power on a Brexit campaign that pledged to cut immigration from the European Union, the prime minister [Johnson] and his cabinet are now preparing for what would be a significant and politically damaging U-turn: Tapping those same EU workers to plug the labor shortages crippling parts of the U.K. supply chain.” And “the most immediate and pressing concern”? “A major shortage of truck drivers.”

What could be more revealing – and embarrassing for supporters of the United Kingdom’s 2016 decision to leave the European Union (in large part to gain more national control over immigration inflows)? Immigrants from the same EU are now being recognized even by the Leaver-in-Chief as that country’s last hope for staving off starvation, freezing to death this winter, and raging inflation.

No question Brexit was a landmark decision, and no doubt there were plenty of valid reasons to be skeptical (as the close 2016 referendum results indicate). But this Bloomberg piece plainly suggests that the countries that have decided to remain in the EU literally have truckers to spare the British.

Which insinuates that the Brexiteers deserve to have insult added to injury. Except this story line is a crock. As an internet search that took me mere minutes revealed, there’s lots of info out there making clear that truck driver shortages are a global problem – that is, they’re not limited to countries that left the EU. Indeed, this industry website reports that trucking companies in Europe are expecting a 17 percent driver shortfall this year.

Further, the survey it’s based on found that any number of steps could be taken by trucking companies and governments in shortage-afflicted countries to increase driver supply without importing foreigners. Like raising pay. Like lowering the training age to encourage more young people to replace retiring truckers (a big problem in a sector with an aging workforce). Like creating safer parking areas, which would be especially helpful in attacting more women into the business. (They currently make up only two percent of drivers globally, according to the survey.)

In fact, finding such ;material is so easy that it raises the question of whether the main problem (and all the others I’ve spotlighted on RealityChek – e.g., here) doesn’t reflect simply a competence crisis. It also reflects a bias crisis, with the target being any measures or information that clash with longstanding globalist orthodoxies – in this case, Open Borders- friendly policies on the immigration and labor shortage fronts.

Our So-Called Foreign Policy: Could U.S. Protectorates in Asia Finally Become Real Allies?

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Afghanistan, alliances, allies, Asia, Asia-Pacific, AUKUS, Australia, Biden, China, credibility, Donald Trump, extended deterrence, globalism, Indo-Pacific, Japan, nuclear umbrella, Our So-Called Foreign Policy, semiconductors, South Korea, submarines, Taiwan, transactionalism, United Kingdom, vital interests

Lots of stuff going on lately in security affairs in the Asia-Pacific region (which foreign policy congoscenti have been calling the Indo-Pacific region, reflecting India’s new prominence). And I’m not just talking about the new agreement (which goes by the awkward acronym “AUKUS”) by which Australia will acquire nuclear-powered submarines provided by the United States and the United Kingdom (acing out the furious French in the process), and gain access to lots of advanced militarily-relevant American technology, like artificial intelligence and quantum computing.

I’m also talking about long overdue signs that key U.S. allies in the region are starting to take the threat they face from growing Chinese aggressiveness as seriously as the United States has been taking it. The interesting policy questions are (1) why they seem finally to be waking up and (2) what if anything the United States can or should do to convince Japan, South Korea, and Taiwan in particular to assume more of the burden of defending themselves, thereby enabling America to take a less risky, less costly role in the region.

For the time being, unfortunately, the United States is going to have to stay deeply involved in the defense of these countries, and to keep accepting a degree of nuclear risk that I’ve long described as unacceptable, and still consider unnerving. I’ve changed my mind, however, because the globalist and free trade-happy U.S. foreign policy establishment and the tech companies that write so many of its members’ paychecks boneheadedly let South Korea and especially Taiwan seize global leadership in the manufacture of the world’s most advanced and powerful semiconductors.

These devices are simply too valuable to the American economy as a whole and to its continuing military superiority to take the chance that the relevant Taiwanese and South Korean facilities and knowhow fall into Chinese hands. As for Japan, it continues to produce many of the materials and equipment on which cutting-edge semiconductor production relies, so it’s got to be kept safe from the likeliest threat it faces from China – which is some form of blackmail. (See this recent Biden administration report, and especially pp. 45 ff.)

As a result, until the United States gets its semiconductor act back together, the American nuclear umbrella needs to remain over Japan and South Korea – which means that America could well be sucked into a nuclear war with China and especially North Korea if hostilities break out. And such “extended deterrence” may need to be extended to Taiwan (which Washington is not yet as tightly committed to defend).

That’s why it’s not good that not only the Australians will be getting nuclear-powered (but not – so far – nuclear-armed) submarines. Because of their superior capabilities, these which will add quantitatively and qualitatively to the forces China would need to think about when contemplating, say, moves to increase its sway over the regional sealanes through which so much of the world’s trade flows.

It’s also good that South Korea has decided to build (so far non-nuclear) ballistic missiles that can be launched from its own submarines (in response to North Korea’s progress toward the same capabilities). Deserving of applause as well are Japanese and Taiwanese plans to boost defense spending – and acquire some impressive weapons along the way. Japanese officials are even talking seriously about what steps Tokyo can and should take to help defense Taiwan if the stuff hits the fan with China – although nothing like a clear decision had been made.

Defense spending levels in all three countries are still measly, especially considering what dangerous neighborhoods they live in. And it’s not as if time is necessarily on their side. But something new seems astir, and I’m not convinced that China’s worsened behavior is entirely responsible. Some credit undoubtedly goes to the Trump administration. Since his initial White House campaign, the campaign, the former President insistently asked why Americans should risk their own security for that of allied freeloaders, and foot so much of the bill. And throughout his presidency, he kept so much pressure on that the Asia allies clearly worried that the Uncle Sucker days were over, and that Trump’s complaints reflected much and possibly most American public opinion. (See, e.g., here.)

President Biden deserves some credit here, too – but I would argue in part in spite of himself. Mr. Biden of course is a card-carrying globalist who for the entirety of his long career in public life has agreed wholeheartedly with the need to maintain strong U.S. alliance relationships. Hence it was no surprise that during the 2020 campaign and immediately after his inauguration, he took great pains to assure U.S. allies that the United States would “be back” after years of Trump-ian neglect. And indeed, earlier this year, Mr. Biden showed every sign of coddling continued Asian defense free-riding.

But ironically, the biggest Biden spur to more Asian defense burden-sharing might be his botched withrawal from Afghanistan. In other words, whereas the Asians (and other allies) were worried mainly that Trump would cut them loose because he was unwilling to protect them if they didn’t change their deadbeat ways, it’s entirely possible that they fear Mr. Biden won’t be able to ride to their rescue – at least not in any effective way.

I know that there’s little evidence of such mistrust in official Asian rhetoric so far. And of course, one of the President’s main stated reasons for leaving Afghanistan in the first place was to free up more American energies and resources to focus on China. But some unofficial Asian voices seem less sure, and it would be surprising to see any governments pushing the panic button in almost any circumstances. And could it be a total coincidence that the aforementioned spate of Asian defense decisions came in the wake of the Afghanistan pullout?

I seriously doubt it.  And as a result, if Mr. Biden wants to turn America’s Asian protectorates into genuine allies, he should continue his own strategy of stepping up exports of advanced weapons to them (and to many of their neighbors, depending on each one’s solidarity), signaling his willingness to go even further (as with this excellent decision) and employ some of the Trump-ian “transactionalism” that’s had so many globalists clutching their pearls for so long. 

But instead of threatening American withdrawals if they don’t pony up more defense-wise, the President should promise them more hardware if they do.  Casually floating the idea of OKing the acqusition of nuclear weapons by various allies wouldn’t hurt, either.

And he should stop pretending that none of this activity is directed against China. Not only does such rhetoric signal credibility-shaking skittishness. It contradicts yet another example of transactionalism that should become part of the Biden strategy: Making clear to China that staying on its current belligerent course will be a great way to guarantee that it’s ringed with ever more neighbors that are armed to the teeth.        

Our So-Called Foreign Policy: Biden’s Just Been Fooled Twice by Europe

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alliances, allies, America First, AstraZeneca, Belgium, Biden, CCP Virus, China, coronavirus, COVID 19, EU, European Union, Financial Times, globalism, health security, Northern Ireland, Our So-Called Foreign Policy, supply chains, The New York Times, Trump, United Kingdom, vaccines, Wuhan virus

It’s beginning to look like a pattern: President Biden keeps making clear that he’s determined to repair the vital U.S. alliance relationships he believes Donald Trump disastrously weakened, and the Europeans, anyway, keep flipping him the bird either explicitly or implicitly. And as the old saying goes, shame on anyone who’s been fooled more than once.

The explicit example came before Inauguration Day. The European Union (EU) – whose members were touted by candidate Biden as eager potential partners in a multilateral coalition against a common Chinese economic and national security threat – were on the verge of finalizing an investment treaty with Beijing. A top Biden aide publicly asked the EU to think twice and consult with the United States before proceeding. In response, the Europeans…proceeded. (See here for the details.) 

The implicit example came last week. During the campaign Mr. Biden, as noted here, made clear (except to every American journalist who covered the matter) that his plan to strengthen U.S. supply chains and make sure that the nation would never again be reliant on adversaries like China for crucial medical equipment and other vital products was by no means an “America Only” or even an “America First” proposal. Instead, one of its planks pledged to

“engage with our closest partners so that together we can build stronger, more resilient supply chains and economies in the face of 21st century risks. Just like the United States itself, no U.S. ally should be dependent on critical supplies from countries like China and Russia. That means developing new approaches on supply chain security — both individually and collectively — and updating trade rules to ensure we have strong understandings with our allies on how to best ensure supply chain security for all of us.” (Here’s the full document.)

In principle, this characteristically multilateral Biden approach made sense. Yet the blueprint came out scant months after (as reported here) many of these allies reacted to the outbreak of the CCP Virus by blocking exports of key medical equipment to ensure they could supply themselves.

You’d think that Mr. Biden, therefore, would have learned this lesson and recognized that the United States simply can’t afford to define “Made in America” as “Made in Lots of Other Countries, Too.” But you’d be wrong.

The day after his inauguration, the new President issued an executive order to create “a Sustainable Public Health Supply Chain.” And one of it directives charged various Cabinet and other agencies and senior advisers to study “America’s role in the international public health supply chain, and options for strengthening and better coordinating global supply chain systems in future pandemics….”

Again, therefore, Mr. Biden specified that this “sustainable public health supply chain” would stretch far beyond America’s shores, and that he believed various kinds of these “global supply chain systems” could ensure the nation’s health security in “future pandemics.”

How did the Europeans react? Little more than a week later, the European Union moved to restrict exports of the CCP Virus vaccine made by pharmaceutical giant AstraZeneca because its own supplies were so short. As a top EU official explained, “The protection and safety of our citizens is a priority and the challenges we now face have left us with no choice other than to act.”

The EU almost immediately reversed its decision – but only in part. It agreed to maintain shipments to the United Kingdom (which has recently left the union under a complicated agreement negotiated after the “Brexit” referendu vote of 2015) and to Northern Ireland (which is a part of the UK, but which remains part of the Union’s single market for goods). But the Europeans, according to The New York Times, still intend “to introduce export controls that could prevent any vaccines made in the European Union from being sent to non-E.U. countries, but without involving Northern Ireland….”

For good measure, great potential remains for a big vaccine-related dispute between the United Kingdom and the EU due to differences over which party is contractually entitled to the highest priority when it comes to vaccine shipments.

And the Financial Times reported that “Belgium, a key location for vaccine production in the EU, has notified the Commission of a draft health law that would give it new powers to curb medicines exports. The proposed legislation would allow Belgian authorities to restrict or ban the shipment of critical medicinal products and active ingredients, in case of shortages or potential shortages.”

Vaccines apparently are not included, but how could any responsible leader inside the EU or outside count on Belgium keeping its word during emergencies?  The same goes, incidentally, for the word of a United States led by an adult thinker, as opposed to a globalist determined to return to the pre-Trump days of Uncle Sucker.   

President Biden clearly needs to learn that lesson, too – and also needs to start asking himself whether the Europeans are holding his administration and his allies uber alles globalism up for ransom, and if the price for securing their cooperation on any number of issues is turning out to be dangerously unaffordable.

Following Up: A U.S.-Less Pacific Trade Zone is Still Bogus After All These Years

Tags

Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP, Following Up, globalization, Reuters, TPP, Trade, Trans-Pacific Partnership, United Kingdom

Time to pat myself on the back. It’s on a trade issue that may seem obscure, but that’s actually an important example of how completely dishonestly pre-Trump Presidents, and their enablers in the Mainstream Media, tried to sell offshoring-friendly trade agreements and similar policies.

The agreement in question was the Trans-Pacific Partnership (TPP), pushed hard by former Presidents George W. Bush and Barack Obama, but resisted in Congress through the end of 2016 and nixed by Donald Trump two days after his first White House term began.

Any number of arguments were advanced by globalization cheerleaders in government, business, academe, and journalism alike. Some were economic (e.g., the deal would “compel” the 11 other signatory countries throughout the Pacific Basin region to abide by high standards for respecting worker rights and environment protections that would level the proverbial playing field for U.S.-based companies and workers). Some were strategic (mainly, the TPP would be a great instrument for containing the rise of Chinese power and influence in the economically crucial East Asia-Pacific area). They’ve been parroted conveniently here. 

All were utter baloney. For example, as noted on RealityChek, the labor rights and environment provisions of the deal – and other parts aimed at limiting government subsidization of industries – were completely unenforceable. As for the China containment claims, they ignored the TPP rules that permitted the importation into the new free trade zone of products with lots of Made in China parts, components, and materials – meaning that Beijing would have enjoyed many key benefits of the agreement while incurring exactly none of its obligations.

But arguably the most laughable (but widely swallowed) pro-TPP talking point involved the contention that the agreement would open to U.S. exports markets representing an impressive 40 percent of the entire world’s economic output.

I put the torch to that bit of fakery in this 2015 op-ed, which pointed out that at the time, fully 62 percent of the new trade zone consisted of the U.S. economy, and that without America, the rest of the members combined added up to just slightly over 15 percent of global product.

More fun facts: Another 20 percent of the economies of the proposed free trade area was comprised by Mexico and Canada – which were already linked to the United States via the North American Free Trade Agreement (which has since been updated and improved). So the only way anyone could legitimately call the TPP a potential export bonanza for the United States was if they counted America trading with itself.

And just today, a news report came out showing that I’m still right about the minimal possibilities offered by the TPP to the United States’ domestic economy (that is, companies that make their products state-side and employ Americans). According to Reuters, the United Kingdom (UK) is planning to join the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).” That’s an effort by the other TPP countries to create a version of the former agreement without the United States.

The UK’s top trade official is making some familiar-sounding arguments: “Today we’re announcing our intent to pursue accession to CPTPP, one of the world’s largest free trading areas.” And to some extent, I can’t blame her. After all, the country’s trade opportunities will be significantly diminished by the Brexit decision to leave the European Union. So the UK clearly needs all the partial substitutes it can get.

But as Reuters’ coverage makes clear, the prize is even more underwhelming than when I quantified it five years ago, as the U.S.-less trade area right now represents only 13.5 percent of the global economy.

And by the way, as with the pre-Trump United States, London is bound to be disappointed with its new CPTPP partners in another important way: Most of them rely heavily on growing by racking up trade surpluses. That is, agreement or not, they’re unlikely to display any greater appetite for British products and services as they were for any U.S. counterparts or for any foreign products and services – they can’t create them themselves.

Since the 18^th century, “Rule Britannia” has been one of the most popular British patriotic songs. Joining the CPTPP could well prompt a composer to create a modern version titled “Rue Britannia.”

Im-Politic: The CCP Virus Crisis Has Become Even More of a Nursing Home Crisis

Tags

Canada, CCP Virus, coronavirus, COVID 19, Europe, Following Up, lockdown, nursing homes, reopening, seniors, shutdown, Sweden, The New York Times, United Kingdom, Wuhan virus

About three weeks ago, I posted about the degree to which total U.S. CCP Virus-related deaths were occurring in nursing homes and other special facilities for seniors. And I noted that the answer – “really big” – provided significant evidence for the idea that substantial reopenings of the U.S. economy were much more feasible than widely believed.

The reason: If the virus’ main dangers were so highly concentrated in a single, highly vulnerable, and already confined population, then by definition, such dangers to the rest of the public were considerably less serious than widely believed. Therefore, relatively low-risk populations could be permitted to reengage in normal economic activity sooner rather than later.

Three weeks later, the case for faster, wider reopenings is even stronger – along with the arguments for focusing virus containment measures on seniors, and especially those inside or outside such facilities.

For example, that previous post cited data indicating that about twenty percent of all U.S. virus deaths were taking place in elder care facilities. More recently, a comprehensive New York Times survey pegged the share at 35 percent.

Moreover, data are coming in making clear that this pattern is hardly confined to the United States. In Canada, the share has been reported at 81 percent. Across Europe, national shares are thought to be between 42 percent and 57 percent. In the United Kingdom, it’s estimated at 25 percent.

Possibly the most intriguing findings concern Sweden. That’s because its lockdown was the lightest imposed among the wealthier national economies. The overall Swedish virus death rates, however, have been right in the middle of the pack for Europe.  (See here for the latest numbers.) Yet the Swedish government has also reported that nearly half those deaths have taken place in elder care facilities.

In other words, if Sweden had its nursing home act together, its virus fatalities would have been about 185 per million people – which would have put it well behind the United States, Spain, the United Kingdom, Italy, France, Belgium, the Netherlands, and Switzerland. Sweden’s economy, unfortunately, seems unlikely to escape taking a major virus-related economic hit anyway. But the toll seems largely due to its relatively small size and as a result its relatively heavy reliance on foreign trade – not to its failure to shut down more broadly.

The United States, of course, is much less reliant on foreign trade. In theory, then, if its nursing and similar facilities get the aid they need, America’s economy can continue reopening – and even faster than at present – without running major further health risks. Indeed, as I’ve also noted previously, such reopening per se could well curb other emerging public health dangers. Moreover, as observed by the Washington Post editorial board, moving toward the Swedish model might speed up progress toward creating herd immunity in the United States. This status would mean considerable protection against the second virus wave that might arrive along with cooler weather this fall.

As always, “reopening” doesn’t mean an immediate, complete return to the pre-virus normal. And serious uncertainties continue surrounding the nursing homes data, and indeed all virus-related data. But a pattern visible in so many high income countries can’t be dismissed, either, and it should put ever more pressure on backers of slower reopenings to justify their positions.

Im-Politic: Even Globally, Much of the CCP Virus Story is a New York Story

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CCP Virus, coronavirus, COVID 19, Im-Politic, London, New York City, New York State, San Marino, The New York Times, United Kingdom, Worldometers.info, Wuhan virus

On Saturday, I posted about the astonishing (at least to me) extent that the CCP Virus crisis in the United States is a nursing home story. Today I’m presenting an even more jaw-dropping finding (at least to me): To an at least equally astonishing extent, the U.S. coronvirus crisis is a New York State and New York City crisis. In fact, the world totals are profoundly affected by the New York State and City numbers as well.

It’s not that the New York-centric nature of the outbreak in America has been ignored. But it’s still shocking to find out, for example, that according to the reliable Worldometers.info website, total State virus cases (293,991 as of early this morning – the same as for all the Worldometers data immediately following) account for not only nearly 30 percent of the 988,928 U.S. cases. They represent nearly one in ten reported cases worldwide.

When it comes to deaths, New York State’s 22,275 represents a much higher 40.70 percent of all American fatalities, and more than a tenth of the global total of 207,970.

Put differently, if New York State was a country, its 293,991 total cases would rank second in the world – behind only the 988,928 total U.S. cases. For mortality, if the State was a country, its 22,275 fatalities total would rank fourth behind the United States, Italy, Spain, and France.

Adjusted for total population, though, the State’s role is even more prominent. With 14,985 cases per one million residents, its infection rate would be second, globally – behind the 15,856 figure for the tiny European republic of San Marino (which is completely surrounded by northern Italy, itself a virus hot spot). New York State’s death rate per million (1,135) also trails only San Marino’s (1,208).

New York City’s place in the U.S. and global pictures is more prominent, still. These numbers for the five boroughs come from The New York Times, and they seem to cover a slightly different time-frame than the Worldometers numbers (which don’t provide statistics for major cities). But these differences are marginal at best, and leave the over situation virtually unchanged.

With 158,268 recorded cases, New York City alone contains 16.00 percent of the U.S. total, and its 11,648 deaths come to 21.00 percent of all U.S. deaths.

As for the global comparison, New York City’s cases equal just under 5.25 percent of worldwide infections, and its fatalities are 5.60 percent of the global total.

If New York City alone was a country, however, its case totals would rank fifth worldwide, and its fatalities sixth. When the population adjustments are made, both New York City’s 1,874 cases per million and it 1,380 deaths per million are the world’s worst if the city was a country.

For a final set of statistics showing how outsized New York City’s CCP Virus has become, let’s compare it with London – another huge metropolis that boasts vast, normally jammed subway and bus systems. In fact, their populations are pretty similar – with New York’s at just under 8.4 million and London’s at just under 9 million. (Both totals are the first that came up on Google searches.)  Moreover, like the United States, the United Kingdom has been criticized for its response to the disease.

But New York City’s 158,268 CCP Virus cases are 6.7 times London’s 23,608. And its 11,648 fatalities are 2.53 times London’s 4,606. (See here for the London virus data.) 

One reason for part of the disparity – London (with 18,679 people per square kilometer according to this source) is less than half as densely populated as New York City (38,242 residents per square kilometer). But although London’s lesser degree of crowding seems nicely to explain the fatality gap, it appears to have much less to do with the infection gap – which would seem to be more closely related to density.

Any way you slice it, however, both the U.S. and even global CCP Virus stories are New York stories. That may mean that the recovery story will depend largely on New York as well.