01.09.2016
CLIPPING INTERNACIONAL NEGINT Brasília, 1 de setembro de 2016
Índice
I. OMC ______2 Senegal, Uruguay ratify Trade Facilitation Agreement ______2
US to help India meet climate goals with coal: Elizabeth Sherwood-Randall __ 3
II. NEGOCIAÇÕES REGIONAIS E BILATERAIS ______5 G20 governments endorse trade but tighten controls ______5
Slow-Moving EU 'Solvency' Negotiations Test Patience Of U.S. Insurance Industry ______8
Advocates Spy Opening For Some Republicans To Drop TPP Opposition, Back Deal In Lame-Duck ______11
Austria says will start 'conflict' in EU about Canada trade deal ______14
leftright ______14
The case for a U.S.-U.K. free trade deal ______16
Expert Advice: Free-Trade Benefits Must Be Sold, Not Imposed ______18
Argentina recognizes Brazil's institutional process and president Temer ____ 22
III. OUTROS ______22 Brazilian President Dilma Rousseff ousted in impeachment vote ______22
Brazil’s Economy Shrinks Again ______26
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I. OMC
Senegal, Uruguay ratify Trade Facilitation Agreement
EIN News (Estônia)
Senegal and Uruguay have ratified the WTO’s Trade Facilitation Agreement (TFA). The submission of the instruments of acceptance means that nearly 85 per cent of the ratifications needed to bring the TFA into force have now been received.
Concluded at the WTO’s 2013 Bali Ministerial Conference, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.
Senegal deposited its instrument of ratification on 24 August, becoming the 11th least developed country (LDC) to do so.
Uruguay’s WTO ambassador Gustavo Miguel Vanerio Balbela presented his country’s instrument of ratification to WTO Director-General Roberto Azevêdo on 30 August.
The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement. With the acceptance by Senegal and Uruguay, the number of TFA ratifications now stands at 92.
Senegal submitted its Category A notification to the WTO on 27 October 2014 while Uruguay did so on 31 July 2014, outlining which substantive provisions of the TFA they intend to implement upon entry into force of the Agreement.
In addition to Senegal and Uruguay, the following WTO members have also accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan,
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Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia and Afghanistan.
The TFA broke new ground for developing countries and LDCs in the way it will be implemented. For the first time in WTO history, the requirement to implement the Agreement was directly linked to the capacity of the country to do so. In addition, the Agreement states that assistance and support should be provided to help them achieve that capacity.
A Trade Facilitation Agreement Facility (TFAF) was also created at the request of developing and least-developed country members to help ensure that they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members. Further information on TFAF is available at www.TFAFacility.org.
Implementation of the WTO Trade Facilitation Agreement (TFA) has the potential to increase global merchandise exports by up to $1 trillion per annum, according to the WTO’s flagship World Trade Report released on 26 October 2015. Significantly, the Report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains. The World Trade Report 2015 is available here. More information on the WTO and trade facilitation is available at www.wto.org/tradefacilitation.
US to help India meet climate goals with coal: Elizabeth Sherwood- Randall
The Economic Times (Índia)
The US administration sees a big appointment of an energy official in its embassy in New Delhi, highlighting the importance and opportunities in the sector in India, Elizabeth Sherwood-Randall, Deputy Secretary in the US Department of Energy, said. In an interview with ET's Kaavya Chandrasekaran, she also said the US supports India's renewable energy drive, it also wanted to help India manage the use of coal so that it can meet its climate commitments. Edited excerpts:
What role is the US playing in the development of clean energy in India? The broad contours of our cooperation in clean energy involve work on solar deployment,
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work on bio-fuels and work on building efficiency. Now, because of the agreement between Prime Minister Modi and President Obama last year, a new element of work has begun - on storage batteries and grid integration of renewables, which are crucial to the successful deployment of renewables on the scale that Prime Minister Modi envisions for India.
We are placing a department of energy officer in the US embassy in New Delhi to advance this cooperation. This is very special because we only have a few Department of Energy representatives around the world. The Department of Energy does not have a big diplomatic core, unlike the State Department. But we select countries where we really believe that having a presence on the ground can make a difference and we believe that in these times we have that opportunity in India.
When there is such close cooperation and understanding between the US and India on the issue of increasing deployment of clean energy, why has the US complained to the WTO against the domestic content requirement in India's National Solar Mission?
There is a long story here and I won't go into the details. We are very committed to close cooperation on clean energy deployment. We also have a strong commitment to flourishing trade relations with India. We do have significant concerns about the local content requirement and to be honest, it is our judgement that the local content requirement will raise the cost of deploying the clean energy solutions which Indians need. I will not get into all the negotiating details. We are trying to find a way to go forward with our Indian partners because it is important to us that India succeeds in achieving its goals on the broad deployment of solar energy.
How big a setback is the bankruptcy of the US renewable energy giant SunEdison? It has substantial assets in India, both commissioned and under construction, which are all being sold now. Concerns are being raised about the viability of renewable energy projects, if such a big company could go under.
Businesses rise and fall, but fundamentally we see tremendous growth in clean energy and particularly in the solar sector in the US. The solar sector is growing at about 20 times the rate of the rest of our economy. It's very dynamic, growing a huge number of jobs and opportunities for the American people. It has that potential around the world as
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well.
II. NEGOCIAÇÕES REGIONAIS E BILATERAIS
G20 governments endorse trade but tighten controls
Salon (China)
Leaders of the United States, China and other Group of 20 major economies who meet this weekend say more trade would shore up sluggish global growth but are tightening their own controls on imports.
China hopes its status as G20 host will give it more sway in managing the global economy and has made trade a theme of the meeting in Hangzhou, a scenic lakeside city southwest of Shanghai. Chinese officials say Beijing will propose a plan to promote commerce through cooperation in finance, tax and energy.
Governments also have said they want to discuss climate change, efforts to reduce surplus production capacity in steel and other industries and limits on use of tax havens, though no detailed agreements are expected.
U.S. President Barack Obama, German Chancellor Angela Merkel and other leaders will speak out against protectionism, their governments say. But at the same time, G20 governments are ratcheting up restraints on imports of steel and other goods, prompting concern support for global trade might be eroding.
The summit is the first global event for British Prime Minister Theresa May after her country’s June vote to leave the European Union, a move seen by some political analysts as the start of a possible wave of nations pulling back from economic integration. In the United States, France and elsewhere, politicians are calling for protection for local industry.
“Protectionism is resurfacing,” said a Chinese deputy foreign minister, Li Baodong. “In many parts of the world, we have seen calls for deglobalization.”
This year’s global trade growth is forecast by the World Trade Organization at an anemic 2.8 percent — its fifth straight year below 3 percent. Global economic growth is forecast by the International Monetary Fund at an equally lackluster 3.4 percent.
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Progress on initiatives such as Obama’s Trans-Pacific Partnership and a WTO plan to help poor countries integrate into global markets has stalled. On Sunday, German Economy Minister Sigmar Gabriel said talks on a U.S.-European trade deal “have de facto failed,” though EU officials denied that.
In Hangzhou, Obama will call for an “open, integrated global economy,” according to a senior American official who described the government’s plans on condition of anonymity.
“There are very real concerns about globalization and technology, but the answer cannot be to close ourselves off,” the official said in an email.
Leaders including South Korean President Park Geun-hye say they will call for “inclusive growth” — a reference to spreading economic benefits to millions of people who have been left behind by wrenching change.
Yet despite such endorsements, G20 economies including the United States, Japan and Canada are tightening import controls in response to what they say are unfair foreign tactics — and the trend is accelerating.
The number of restrictions imposed by governments worldwide on imports from machine parts to sugar soared to 150 in the first quarter of this year, according to researchers Simon J. Evenett and Johannes Fritz of the Centre for Economic Policy Research in London. That was up 50 to 100 such measures imposed during the same periods of 2010-15.
The United States has imposed import duties of up to 500 percent on Chinese steel to offset what it says are improper subsidies. Unions for European steelworkers are calling for investigations of low-cost Chinese steel exports they say threaten thousands of jobs. China hit back in April by hiking its own tariffs on European steel.
“In a world where global commerce isn’t growing any more, governments may conclude that securing larger slices of the world market ultimately requires tilting the commercial landscape against foreign firms,” said Evenett and Fritz in a report in July.
That raises the possibility of a “negative feedback loop” of governments responding to weak trade by doing more to protect their companies, further depressing trade, said Evenett and Fritz.
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So far, protectionist measures don’t appear to be to blame for the latest trade slump, said Andrew Kenningham of Capital Economics, which is due mostly to the end of an era of rapid growth driven by China’s integration into the global economy and manufacturing supply chains.
“Admittedly, there has been an increase in the absolute number of trade-distorting measures implemented,” said Kenningham in an email. “However, they have affected only a very small fraction of products traded.”
In May, the EU parliament passed a resolution calling for controls on Chinese imports in the event Beijing is declared a market economy, a status that makes it harder to pursue trade cases.
“Politicians on the right or on the far left are talking about closing our market,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China. “This would be terrible.”
China has massive surplus production capacity in industries including steel, cement and coal that mushroomed in size during the economic boom. That has prompted complaints Beijing is trying to clear a backlog by subsidizing exports.
“While so much attention is focused on tariffs targeting dumped steel, in fact, state incentives to promote steel exports are a far larger systemic problem,” said Evenett and Fritz.
Envoys in Hangzhou plan to discuss how to reduce global production capacity for steel, according to Wally Adeyemo, Obama’s deputy national security adviser for international economics.
Beijing issued plans in February to reduce the size of its steel and coal industries. Plans for other industries including aluminum, glass and solar panels have yet to be announced.
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Slow-Moving EU 'Solvency' Negotiations Test Patience Of U.S. Insurance Industry
Inside U.S. Trade (EUA)
Patience is wearing thin within the United States' insurance industry -- with some companies contemplating the idea of retaliation against Germany -- as bilateral negotiations meant to ensure unfettered access to European Union insurance markets drag on.
Insurance companies and industry groups directed a wave of frustration at the U.S. government this past week and called for the Obama administration to quickly reach an agreement that deems domestic insurance regulationsequivalent to the EU's new Solvency II prudential requirements.
Industry representatives made their critical comments during the National Association of Insurance Commission's summer meeting in San Diego on Aug. 26-29.
Solvency II guidelines require that U.S. insurance regulations be deemed equivalent to the EU's prudential requirements in order for companies to continue operating as they had. Short of a formal equivalency finding, there can be a temporary one for five years, with the option to renew for one year. Neither of those equivalency determinations applies to the United States at this point.
The U.S. and EU are in ongoing negotiations meant to reach a covered agreement to determine equivalency. Negotiating rounds were previously held in May and July, and a third round is scheduled for September.
Property Casualty Insurers Vice President of International Policy David Snyder, who attended the conference, said some companies specifically called for retaliation against Germany if equivalency is not granted soon, citing the mounting market barriers they face across the Atlantic. That could involve curtailing Germany's access to U.S. insurance markets.
State-level solvency regulations in the U.S. require foreign markets to to grant equivalent access.
No one has put a specific timeline on what soon means, Snyder said.
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Germany is requiring certain U.S. companies conducting reinsurance business within its borders to have either a branch or a subsidiary physically located within Germany. This means U.S. companies can no longer access the German market through an existing branch in Paris or London.
Companies also discussed the possibility of a World Trade Organization case, which has also been mentioned by U.S. lawmakers following negotiations.
Such a challenge would focus on the EU giving its own industries “transitional equivalency,” which protects subsidiaries of a European company operating in a non- equivalent market from Solvency II requirements. The U.S. industry believes this unfairly benefits EU companies over their U.S. counterparts and could violate national treatment requirements outlined in Article XVII of the General Agreement on Trade in Services.
Insurance industry sources said they would like to see the U.S. and EU reach a mutual agreement by the end of the year, avoiding a tit-for-tat scenario where both industries are imposing market barriers on the other.
“We believe that mutual recognition is the way to go,” Snyder said. “We're not pushing for any type of retaliation right now, but all the instruments of diplomacy ought to be used. If that fails, other measures may be necessary.”
Part of the problem is the lack of transparency surrounding negotiations, according to U.S. industry sources.
The Office of the U.S. Trade Representative and Treasury Department have not released any details on where talks stand after the two previous negotiations. Any NAIC commissioners participating in the negotiations as an observer also must sign a confidentiality agreement, limiting their ability to communicate with other commissioners.
NAIC President John M. Huff, during his opening remarks at the summer conference on Aug. 26, warned industry members to “be careful what you wish for,” given that secrecy means no one knows what may be included in a final agreement.
Huff cautioned the deal could require changes required by the federal government that preempt state policies -- a touchy subject since the U.S. industry is regulated at the state level.
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“Neither the Treasury Department nor the U.S. Trade Representative have offered to provide any insight on even high-level expectations, let alone negotiating objectives,” Huff said. “To those who have called for a covered agreement to resolve the disparate treatment that European regulators are not imposing on U.S. firms, be careful what you wish for.”
While not explicitly mentioned, that appears to be a reference to a confidentiality close the U.S. and EU have required participants to sign. Even though NAIC does have a small group of insurance commissioners involved in negotiations as “observers,” they cannot gather feedback or consult with other commissioners.
“Perhaps most troubling about the covered agreement negotiations is how little state insurance commissioners, governors, state and federal legislators, consumers or anyone else in this room for that matter, know about them,” Huff said. “There is much speculation about what might be included or resolved, but no actual knowledge or insight except for a select few.”
Huff was critical of European Union member states imposing additional or potentially discriminatory requirements on the United States' industry at the same time U.S. states have made progress in reducing consumer protection collateral requirements for foreign reinsurers.
The NAIC was not alone in its criticism of USTR and Treasury over the secrecy blanketing negotiations. Several insurance industry sources said their groups are also frustrated by the lack of information, especially as more U.S. companies report running in market access barriers in the EU.
Poland is prohibiting U.S. companies from doing business in its reinsurance market, blocking at least six U.S. companies earlier this year.
France has implemented a policy that discourages the purchase of reinsurance from non- equivalent markets by refusing to give French companies credit for reinsurance purchased from companies located in non-equivalent markets.
The United Kingdom also implemented an in-depth waiver process that allows companies to continue operations temporarily
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Phillip Carson, associate general counsel and director of financial regulatory police for the American Insurance Association, said no country has been forced to leave the European market yet, but the changes implemented by EU member states are adding on to the cost of doing business.
The U.S. industry has also been in constant contact with USTR and Treasury in order to share its concerns even though feedback has been limited due to secrecy.
“Due to the lack of transparency, we're just on a wing and a prayer here that our concerns are actually being translated into the negotiating table,” Carson said.
“Most people want the covered agreement to work.”
Advocates Spy Opening For Some Republicans To Drop TPP Opposition, Back Deal In Lame-Duck
Inside U.S. Trade (EUA)
A number of pro-fast track House and Senate Republicans up for re-election this year came out against the Trans-Pacific Partnership after being hounded on the issue by their Democratic challengers, but some sources say those lawmakers left themselves enough wiggle room in their statements of opposition to vote in favor of the deal in a lame-duck session, provided improvements to the trade pact are made.
In highlighting specific issues in their statements of opposition, such as the exclusivity period for biologic drugs and dairy market access, the Republicans have left themselves a path back to supporting TPP if the Obama administration can sufficiently resolve those particular issues before a lame-duck vote.
Still, other sources cautioned that those Republicans could not credibly flip back in support of TPP during a lame-duck because of the quick turn-around between their announcements of opposition to the trade deal, their primary elections and a potential lame-duck vote on TPP.
A strategist working with the Trade Benefits America Coalition told Inside U.S. Trade this week that historically pro-trade Republicans who have come out against TPP amid heated election contests are not necessarily considered to be solid “no votes.” Some sources also
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said it was expected that some Republicans would have to retreat on certain divisive issues, such as trade, during the election season.
Republicans like Sen. Pat Toomey of Pennsylvania, who is locked in a tight race against Democratic challenger Katie McGinty, fit that bill, sources said. Toomey, when coming out against TPP, isolated particular issues that he has with the deal while at the same time touting the benefits of free trade for his state. Some sources maintain that if the Obama administration were to resolve the biologics issue and make inroads on addressing complaints concerning dairy market access, especially as it relates to Canada, Toomey and others could support TPP in the lame-duck.
Another strategist working on trade issues with the business community explained that the Republicans who have come out against TPP this summer have not indicated they are unwilling to discuss the trade deal, which further signals those members could still be corralled back into supporting the agreement. That source also said the business community is urging the administration to work through the specific complaints laid out by those Republicans.
But along those lines, president of the anti-TPP but conservative Americans for Limited Government Rick Manning in a statement last week called on Toomey to explicitly oppose a lame-duck vote on TPP.
“A sure-fire way Toomey could signal that he is serious in his opposition to the TPP is to make an emphatic statement against bringing up the trade deal in the lame duck session of Congress after the election when voters will be unable to hold their representatives and senators accountable,” Manning said.
So far in the Senate, three Republicans who supported TPA -- Toomey and Sens. Rob Portman (R-OH) and Richard Burr (R-NC) -- have come out against TPP in its current form. Those Republicans are locked in tight Senate races. Also, the Democratic vice presidential candidate, Sen. Tim Kaine of Virginia, has come out against TPP despite voting for TPA in the summer of 2015.
Even if those four senators were to remain opposed to TPP in a lame-duck vote, losing those votes alone would not be a nail in the coffin for TPP in the upper chamber where TPA passed 60-38.
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The House, however, represents a bleaker picture, sources say. TPA passed by a margin of 218-208, and between a number of expected Republican defections over the tobacco carveout and more than 10 Republicans who have so far come out against TPP despite voting for TPA, it is far from clear that there is currently sufficient support to push TPP through the House, sources say.
The pro-TPA Republicans who have come out against TPP are: Reps. Ralph Abraham (LA), Mike Bost (IL), Frank Guinta (NH), Candice Miller (MI), Tim Murphy (PA), Tom Reed (NY), Bill Shuster (PA), Elise Stefanik (NY), David Trott (MI), Ed Whitfield (KY), and Ted Yoho (FL).
Of those 11 members, Miller and Whitfield are not running for re-election.
One bright spot in the House that TPP supporters point to is the fact that the 28 Democrats who voted for TPA survived their primaries, although a number ran uncontested. Sources said the success of those Democrats may signal to other members that it is not necessary to oppose TPP in order to shore up the political support necessary to retain their seats.
While sources also expect those 28 Democrats to support TPP if it were to come up in a lame-duck, additional votes would have to be secured to make up for the pro-TPA Republicans who have come out against the trade deal, sources say.
The strategist working on trade issues with the business community said that he is not resigned to only assuming that 28 Democrats will support TPP in the House, noting that there are still a number of members “in play” on both sides of the aisle. That source said he is confident that if TPP comes up in the lame-duck, 218 yes votes could be drawn out of the House. The Trade Benefits America Coalition source said a number of undecided members are “still gettable.”
The source also noted that work done by business groups over the summer recess to explain the benefits of TPP in specific districts and states had allowed a significant number of members to ride out the anti-trade sentiment. Informing constituents of the local benefits brought by trade agreements, such as TPP, is crucial in ensuring members can support the deal if it is voted on in a lame-duck session. Explaining those benefits, both to constituents and members, provides a strong incentive for them to vote in favor the deal, that source said.
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Further, the Trade Benefits America Coalition strategist pointed out that pro-trade lawmakers are still willing to publicly make the case for trade agreements, even as their colleagues come out against TPP. That source highlighted Senate Majority Whip John Cornyn's (R-TX) recent op-ed in the Houston Chronicle, in which he offered a full- throated defense of free trade.
One open question is how the administration will resolve issues raised by Republicans, such as dairy market access and biologics, as well as the lack of disciplines in TPP on currency manipulation. Some sources have speculated that because the dairy complaints for the most part only concern Canada, that issue can be resolved outside of the TPP framework. This would avoid the need to reopen TPP for negotiations, a move that many members of the trade pact have said would be unacceptable.
A solution to the biologics issue remains unclear, as Senate Finance Committee Chairman Orrin Hatch (R-UT) appears to remain committed to his position that TPP must require that countries provide 12 years of protection for biologics. The administration and Hatch have yet to reach a compromise on the issue, while a number of TPP partners such as Australia and Chile have publicly stated that they will not change their domestic laws on the biologics, which currently provide five years of protection in those countries.
There is also a real risk that Senate Majority Leader Mitch McConnell (R-KY) will not bring TPP up for a vote in a lame-duck session, as he has declared in recent comments.
Austria says will start 'conflict' in EU about Canada trade deal leftright
Reuters (EUA)
Austria is ready to confront other European Union members states over its opposition to a free trade.
Austria opposes a proposed free trade deal with the United States, and Kern said the deal with Canada, called the Comprehensive Economic and Trade Agreement (CETA), had many of the same problems.
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"This will be difficult, this will be the next conflict in the EU that Austria will trigger ... We must focus on making sure ... we don't shift the power balance in favor of global enterprises," Kern told broadcaster ORF late on Wednesday.
According to a recording broadcast by ORF radio on Thursday, European Commission head Jean-Claude Juncker told Austria in June to stop its "clownery" around CETA, calling it the best trade agreement reached by the EU.
One diplomat in Brussels, who is in favor of finalizing CETA by the end of the year, said it would have "a disastrous effect on the credibility of the EU's trade policies" if CETA fell through.
"No one would ever again engage in years of negotiations with us to see it all go south the last minute. With all the mess around TTIP, we must deliver CETA," the person said.
Trade ministers from Germany and France have also called for a halt in negotiations on the EU-U.S. deal, the Transatlantic Trade and Investment Partnership (TTIP).
German Foreign Minister Frank-Walter Steinmeier on Tuesday praised CETA.
"We shouldn’t fool ourselves (about TTIP). We are still far away from what we achieved in the CETA in terms of standards and procedures. It will be a yardstick that other trade agreements are measured against," he told over 1,000 diplomats and business executives at a forum hosted by the Foreign Ministry.
Austria's Kern is expected to address issues surrounding TTIP and CETA at a news conference on Friday.
"We will have to see where the weaknesses of (CETA) are. Many are the same as with TTIP," Kern, a social-democrat, said, without elaborating.
Despite the German official support for CETA, activists in Germany on Wednesday lodged a complaint with the Constitutional Court with the aim of scuppering CETA.
There are widespread concerns in Austria that the TTIP could compromise food safety standards. Kern also opposes the idea that the agreement could allow companies to challenge government policies if they feel regulations put them at a disadvantage.
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The European Commission hopes that the governments of the EU states can approve the trade deal before a planned EU-Canada summit at the end of October. The European Parliament would also need to vote to allow it to enter force provisionally next year.
But national, and some regional, parliaments would still need to ratify it.
The case for a U.S.-U.K. free trade deal
Washington Examiner (EUA)
Britain's historic reorientation away from the European Union towards the rest of the world presents the United Kingdom with an historic opportunity, which will be the most challenging British diplomatic task for the half a century. It will require parallel sets of negotiations: an amicable separation from the EU retaining the best of our relationship, commercial and political, with the rest of Europe, and new negotiations to create free trade agreements with other world economies, including the United States.
The new prime minister, Theresa May, has created a ministerial team to deliver this, which balances her down to earth, "no frills" approach, managing risks and mastering the detail, with a foreign secretary, Boris Johnson, whose larger than life personality, boldness and quick wit will make him an impressive ambassador for the United Kingdom on the world stage. Boris will use his celebrity status to help forge Britain's new place in the world, articulating the opportunities, and promoting our shared values of freedom and democracy.
Then there is the new international trade secretary, Liam Fox, who as a long-standing advocate of the centrality of the Atlantic Alliance to the United Kingdom, will surely want to secure a free trade agreement with the United States, the world's largest economy and our largest export market worth $60 billion. Our countries also invest almost $1 trillion in each other's economies, making us each other's largest investors.
The U.S. is a notoriously tough negotiator, unafraid to use large armies of lawyers to argue for the best possible terms. Britain must now build its trade negotiation capacity from scratch, as it is currently outsourced to the European Commission which manages trade policy on behalf of all 28 member states.
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A U.K.-U.S. trade negotiation will test both Britain and the United States. Despite having a competitive and dynamic domestic economy, to the outside world the U.S. is still remarkably protectionist. Members of Congress are susceptible to one narrow interest or lobby group and if that group lobbies hard enough, they can limit the scope or even scupper deals to protect their sectional interest at the expense of the overriding wider national and international interest in free trade and competition.
I would hope that our Republican counterparts hold true to the values shared with British Conservatives of upholding competition and enterprise to widen the free markets required to deliver prosperity.
Across the aisle, I hope that Democrats see the upsides of deepening the United States' trading ties with its most important and constant ally. It's understandable that some Democrats might balk about signing up to free trade agreements with countries where the minimum wage is a dollar an hour, but Britain boasts a minimum wage rising to $13 by 2020.
Unencumbered of the inter-state compromises and special pleading involved in EU negotiations, which has made the EU-U.S. trade talks so difficult and slow, the United Kingdom will be able to move quickly to open trade talks with the United States and enhance our trade and commercial links to the mutual benefit of the American and British peoples.
A U.K.-U.S. bilateral negotiation would provide a different set of negotiating parameters to the existing EU-U.S. Transatlantic Trade and Investment Partnership, permitting, for example, more liberalization in the audio-visual services sector — a sector excluded from TTIP negotiations at the insistence of the French. Indeed, our shared Anglo-Saxon approach to smart regulation should reveal synergies, allowing us to tackle non-tariff barriers across a range of sectors in both manufacturing and services. Doubtless there will need to be compromises on both sides. For instance, British financial services companies will expect better access to the American market or American farmers will want lower tariffs and higher quotas on their produce sold to Britain. But Britain will have a freer hand to design its regulations and tariff schedules in a way that maximizes the trade and investment opportunities for businesses in both our countries.
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Britain and America remain the closest of allies, founded on an old and deep friendship; with the prize of a trade deal possible, I now look forward to taking our bilateral relationship to a new level.
Expert Advice: Free-Trade Benefits Must Be Sold, Not Imposed
Bloomberg (EUA)
By Paula Dwyer
Free trade is broadly positive for the U.S. economy, though not everyone benefits. Economist Tyler Cowen, a Bloomberg View columnist, and Robert Zoellick, a former U.S. trade representative, talk to View editor Paula Dwyer about improving the outlook for future free-trade deals by helping workers left behind. This is a lightly edited summary of the second part of their Aug. 12 conversation. Part 1 considered the effects on Apple and Wal-Mart if Donald Trump's trade policies were in force. The complete transcript is available here.
Dwyer: Is the U.S. really "losing" to other countries because of poorly negotiated trade agreements?
Zoellick: There are many reasons why the world economy is richer today than it was 40 or 50 years ago. But no doubt the expansion of trade and global supply chains, to say nothing of expanded choice, are among them. Americans have gotten used to better goods at reasonable prices. When I grew up we didn't have fresh fruits and vegetables year round. Now we do, partly because of the supply chains that have been set up under trade agreements.
The problem with Trump's notion is this zero-sum idea -- one wins, one loses -- and he thinks the U.S. is losing. In economics, people can grow together. Indiana might sell something to Illinois and Indiana might have a surplus with Illinois. That doesn't really matter to the state or the overall U.S. economy if consumers have more choice and people can produce more and they can be more efficient.
His frame of reference of winners and losers is going to make everybody a loser. We have about 11 million people whose jobs depend on exports. In the farm sector, we have another million people. He's playing with a lot of people's lives.
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Dwyer: What goes through your mind when Trump says the deficit with China is $500 billion (that's high -- in 2015 it was $367 billion) and that the Chinese are eating our lunch?
Cowen: He is poorly informed and doesn't understand economics. There is a genuine issue with some parts of the middle class in this country who have seen lower or negative wage growth because of Chinese imports. I accept that. But it's still been a significant net plus for the American economy as a whole.
Zoellick: What goes through my mind is that Trump is always looking for someone to blame. Trade relationships can be mutually beneficial. Instead of trying to solve a problem, which is how do you help American workers with their education, skills, job relocation, getting them back into jobs or supplementing their wages, he says it's the fault of the Chinese, I'm going to sock them. Well, they may sock you back.
Cowen: Bob, did you ever think it would come to this, where a party's nominee would place the foundations of the world trading order into such question?
Zoellick: No, I never expected this. But I also don't believe he will become president. The problem is, even Hillary Clinton says she's against the Trans-Pacific Partnership, which she once called the gold standard.
An even bigger issue will be the Trump effect. He has undercut Republican support for open markets. Much of the Democratic Party -- the elected ones -- had already moved against free trade.
The Trump effect means we are going to have less Republican support unless people come back and explain how these trade agreements have worked and, as Tyler and I have suggested, help people adjust to change.
A lot of the transformation that we're talking about in the economy is driven as much or more by technology than trade. And the two are clearly interrelated, but I think Trump is lying to people by pretending that raising tariffs or threatening other countries is going to solve the problem. At the same time, I don't think Hillary Clinton's approach is going to be successful, either.
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Let me give you two practical examples. I was always struck that Boeing aerospace workers were against our trade agreements, even though Boeing probably sells 90 to 95 percent of its products abroad.
I talked about this recently with Mike Froman, the current U.S. trade representative. Neither of us could get the two congresswomen from Silicon Valley to vote for trade, and you would think that the technology industry would have some interest in open markets.
So businesses are going to have to explain the effects of trade and open markets. And I think younger people want more choice in where they travel, the food they eat and where they work. The technology industry should use some of its Big Data to understand how to make this case more effectively, because Trump is capitalizing on anxieties that are deep and have infected Clinton and other Democrats.
Dwyer: How long before the U.S. enters into another trade deal?
Cowen: I don't expect America to be signing new trade agreements anytime soon. Maybe 20 years.
Zoellick: It comes down to presidential leadership. I've watched this since the Ford administration. I'm pleased that Obama is fighting for TPP. But for his first five years, he did nothing on this. Last year, when he went to Congress to get trade-negotiating authority, he expected his own party caucus to turn on a dime. To be fair to them, he hadn't been making the case for six years.
So ultimately it's the responsibility of a president to make the case. Clearly, that's not going to be Trump. It doesn't look like it's Clinton, either.
Cowen: Politicians in other countries face their own interest groups. Trade agreements aren't always popular in their countries. They have to do a lot of heavy lifting even to bring one to the table. But they do, because they think there's something at the end of it for them, namely, the U.S. signs the deal and they get some goodies. When we send mixed signals, though, they drag their feet. That's why I say it could be 20 years.
Zoellick: Modern trade agreements are much more than tariffs and quotas and the things we're talking about. They're for intellectual-property rights, access for service industries and better transparency to fight corruption. Not surprisingly, because the U.S.
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is a more advanced economy, it has usually been on the cutting edge in trying to get high quality rules for its producers.
Take the TPP. It includes 12 economies. Six of them we already have free-trade agreements with. So we're building on top of it. The big addition really is Japan. But you also have Vietnam, Malaysia, New Zealand and Brunei. One of the real questions, and Prime Minister Lee of Singapore made this point in his recent visit to the U.S., is whether the U.S. wants to make the rules for these new areas, or wants to let somebody else do that.
In the case of East Asia, that's going to be China. There will be security implications to that, too. And that's the case that the president has tried to make. So it doesn't have to be hostile to China. There are people in China who also want better rules for investment and other things.
Dwyer: A lot of the commentary today concerns research showing the communities that suffered the most when China entered the WTO in 2000 haven't recovered. What can be done to make trade deals go down with a spoonful of sugar?
Cowen: I'm typically willing to do whatever it takes. What actually works is people leaving distressed areas. That's a tough political sell, but that's more effective than retraining or phasing things in or all the other ideas you hear. It's a fig-leaf issue. What you need to do to sell the trade agreement, within reason, is figure out the cheapest way to do it.
Zoellick: If you want an open economy that adapts to change -- whether that change is driven by technology or trade -- it's good policy and good politics to have a range of activities that help people make that adjustment.
Part of the problem is that we've had a bunch of programs but we haven't done what most business or academic researchers would do, which is to have pilot programs and measure effectiveness.
The most important thing is to help people get back into the workforce. I would be comfortable with ideas to offer a wage subsidy for a certain period of time to those who get a new job but take a pay cut. Or use the Earned Income Tax Credit to get people back in the workforce and supplement their income, because work is part of dignity and probably the best way to learn additional skills. It's an economy-wide responsibility.
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Argentina recognizes Brazil's institutional process and president Temer
MercoPress (Uruguai)
The Argentine government expressed on Wednesday respect for Brazil's institutional process and iterated its willingness to continue advancing toward a real and effective integration based on respect for human rights, democratic institutions and International law.
The foreign ministry release referred to current events in Brazil where the Senate impeached and removed suspended president Dilma Rousseff, and took the oath of office to her vice president and interim president Michel Temer, who will now rule until 2018 completing the original mandate.
The release also renews its commitment to continue working with Brazil on mutual interest issues and the strengthening of Mercosur.
“Given today's events in Brazil, the Argentine government expresses its respect for the institutional process verified in the brother country, and reaffirms its willingness to continue on the path of a real and effective integration in the framework of absolute respect for Human rights, democratic institutions and International Law.
To that respect, ”Argentina renews its wishes to continue working with the government of Brazil for the resolution of issues of mutual interest from the bilateral, regional and multilateral agendas, as well as the strengthening of Mercosur”.
III. OUTROS
Brazilian President Dilma Rousseff ousted in impeachment vote
The Washington Post (EUA)
President Dilma Rousseff was stripped of her office Wednesday in the culmination of a political crisis that has left Latin America’s largest nation adrift, with an economy in deep recession and a public sharply divided over the country’s future.
Rousseff was impeached on arcane charges having to do with violating budget laws. But she was swept up in a tide of revulsion against Brazil’s political class as the once-
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flourishing economy contracted and political parties were tarred by a massive corruption scandal.
Wednesday’s 61-to-20 Senate vote closed out an extraordinary 13-year rule by the leftist Workers’ Party, which boasted of lifting tens of millions of Brazilians out of poverty before the economy began to nosedive and its political fortunes soured.
Rousseff was replaced by her former vice president and coalition partner, Michel Temer, who has been running Brazil as interim president since she was suspended to face the impeachment trial in May. He belongs to the more conservative Brazilian Democratic Movement Party, or PMDB, and is trying to introduce austerity measures to right the economy.
But Temer is as unpopular as Rousseff, and whether he can muster the political support for such changes was unclear.
Still, some Brazilians felt a sense of relief that the country had at last reached a decision on an impeachment process it began eight months ago.
“The impeachment does not in any way resolve the political or economic crisis, but it gives us some hope, because for the first time in a long time, we will have a plan,” said Lucas de Aragão, director of Arko Advice, a political analysis firm in Brasilia.
Rousseff’s removal marked the latest setback for Latin America’s left, which had been on the ascendancy just a few years ago in Argentina, Venezuela and other countries but has increasingly struggled amid a continent-wide economic slowdown and a series of corruption scandals.
The leftist governments of Ecuador, Venezuela and Bolivia recalled their ambassadors from Brazil on Wednesday after the vote, denouncing “a coup” by its Senate.
Indeed, many Brazilians believe Rousseff was removed not so much for her misdeeds as for her plunging popularity ratings. The impeachment trial may leave a legacy of distrust in Brazil’s political system, particularly among Workers’ Party supporters. There were demonstrations in cities across Brazil protesting the impeachment on Wednesday.
The trial ended with a series of emotional speeches in which the sympathizers of Brazil’s first female president made clear they felt the process was unjust.
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“Scoundrels!” Sen. Lindbergh Farias, a member of her Workers’ Party, roared at one point.
“Coup mongers! History won’t forgive you!” Rousseff’s supporters chanted at another point. She was not present in the Senate for the vote.
Brazil’s highly respected former chief justice, Joaquim Barbosa, attacked the impeachment process.
“It is highly embarrassing. All of a sudden highly conservative forces took over all of Brazil,” he tweeted.
For her part, Rousseff responded by calling the Senate ruling the second coup she had faced in her life — after a military takeover decades ago. “The second [coup], delivered by way of a judicial farce, took me down from a role the people elected me to,” she said in a speech delivered to supporters and former colleagues.
Rousseff came to power in January 2011 at a time when the country was booming and the Workers’ Party — led by her predecessor and political mentor, Luiz Inácio Lula da Silva, known as Lula — was widely popular. She was reelected in 2014. But slumping oil prices and what many called inept political management dragged down the economy, which shrunk nearly 4 percent last year while inflation and unemployment surged. The country lost its precious investment grade rating.
Meanwhile, millions of Brazilians took to the streets to protest an enormous corruption scandal at state-run oil company Petrobras that has ensnared politicians from Rousseff’s party and its allies.
Since Temer became interim leader in May, there have been signs of a recovery of economic confidence, such as a reduction in credit default swap numbers. That indicates a drop in the level of risk that investors see in Brazil, said Armando Castelar, a professor of economics at the Federal University of Rio de Janeiro.
Temer is regarded as a wily political operator and has extensive congressional experience.
“I think he can put Brazil back on some kind of track,” said Heron do Carmo, a professor of economics at the University of Sao Paulo.
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But there are already cracks showing in his coalition, with some party chiefs threatening to leave the alliance.
On Wednesday, the center-right Brazilian Social Democratic Party warned the new president that he needed to prove he was serious about tough fiscal reforms.
Temer’s party “needs to clearly state the level of its compromise with this government and the agenda of reforms that need to be put before the National Congress immediately,” said Aecio Neves, the party’s president.
Meanwhile, Temer’s popularity has plunged since he became interim president and immediately appointed an all-male cabinet. Within weeks, two of his ministers quit after being secretly recorded apparently plotting to obstruct the popular Petrobras investigation.
Many believe Temer could also still be embroiled in the Petrobras case, which has led to investigations of politicians from his party as well as Rousseff’s for alleged receipt of bribes and kickbacks.
A former Petrobras executive cooperating with the investigation has said that Temer asked for an illicit $400,000 campaign donation in 2012 for his party’s candidate for mayor of Sao Paulo. Temer denied the allegation.
“The problem is if there is a bruising denunciation against Michel Temer,” said Jairo Nicolau, a professor of political science at the Federal University of Rio de Janeiro.
Brazil has now impeached two of the four presidents it has elected since returning to democracy in 1985 after two decades of military dictatorship.
“We had four presidents elected, and two were removed. What democracy is this?” Sen. Jorge Viana of the Workers’ Party asked in a speech during the voting session.
Rousseff was charged with financial irregularities — using government banks to temporarily fund social programs and issuing spending decrees without congressional approval. Her opponents maintained that her actions contributed to the recession, the worst in decades in Brazil.
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Rousseff maintained her innocence, saying she engaged in practices typical for Brazilian politicians. She has accused Temer of being one of the protagonists of the effort to oust her.
During questioning by senators on Monday, she denounced the trial as a “coup” and referred to the torture she suffered as a young Marxist guerrilla imprisoned by Brazil’s military dictatorship in the 1970s.
“I was scared of death, of the marks of torture on my body and my soul,” she said. “Today I only fear the death of democracy.”
Temer shot back at Rousseff at a meeting with ministers Wednesday that was open to journalists, according to O Globo newspaper.
“A coup monger is someone who violates the constitution,” he declared.
Brazil’s Economy Shrinks Again
The Wall Street Journal (EUA)
Brazil’s economy shrank again in the second quarter, as the service and agriculture sectors retreated, in what economists expect might be one of the last such contractions in the country’s current long recession.
Gross domestic product shrank 0.6% from the first quarter, its sixth consecutive decline, and contracted 3.8% from the second quarter of 2015, the Brazilian Institute of Geography and Statistics said Wednesday. That was slightly worse than expected, as the median estimate in a Wall Street Journal survey of eight economists had projected a contraction of 0.5%.
The country’s agricultural sector contracted 2% in the second quarter from the first, and 3.1% from a year earlier, while the service sector shrank 0.8% and 3.3%, respectively. Two bright spots in the report, however: Investment grew 0.4% from the previous quarter, ending 10 consecutive quarters of contractions, while shrinking 8.8% from a year earlier, and industry expanded 0.3% and shrank 3%, respectively.
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Brazil has been beset by a combination of high inflation and borrowing costs, political paralysis and growing government debt and deficits, which have pushed Brazil into its worst economic downturn since at least the Great Depression.
Consumer spending has been hit by rising unemployment, which reached 11.6% in the three-month period ended in July, from 8.6% a year earlier. The travails of former President Dilma Rousseff , who was removed from office Wednesday by a Senate vote that came a few hours after the GDP numbers were reported, sapped business confidence and contributed to a plunge in business investment.
Ms. Rousseff was suspended from office in mid-May to stand trial in the Senate and was replaced by her vice president, Michel Temer, who installed what has been called an economic “dream team” in the finance ministry and central bank. The new direction at the top boosted confidence and helped plant the seeds for what many economists now say isthe start of a weak recovery.
Mr. Temer will now serve out the remaining two years and four months of Ms. Rousseff’s term.
The change in government when Ms. Rousseff was suspended in May was “fundamental” to changing attitudes, said Cristiano Oliveira, chief economist at Banco Fibria in São Paulo. “We could see a positive surprise” in growth in the second half of this year, he added.
Mr. Oliveira’s scenario would be a pleasant change from the negative numbers in recent quarters. Brazil’s GDP shrank 3.8% in 2015, and is forecast to contract 3.2% this year. Industrial production plunged in 2015, and has started to recover only in recent months.
Many executives say they are seeing signs of improvement, too. Steelmaker Gerdau SAreported earlier this month that sales fell 4.7% in the second quarter from a year earlier, but were up 1.6% from the first quarter.
Brazil’s industrial sector “is starting to show signs of the start of a recovery,” said André Gerdau Johannpeter, the company’s chief executive officer, in a conference call with analysts. “The very necessary increase in business confidence is fundamental” to the improvement.
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The signs of recovery are uneven, but still clear, said Hervé Ledky, president of the Americas division of trade show organizer Reed Exhibitions. The company sells space at shows up to a year in advance of their start, which gives some insight into the direction of the economy, he said. Brazil’s automotive, construction and oil and gas sectors are showing the most improvement, in terms of demand at trade shows, he said.
“It’s anemic growth, but at least it’s trending in the right direction,” Mr. Ledky said.
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