Saturday, October 31, 2009

Weekend Quick Hits (Depressing Follow-up Edition!)

A few interesting developments over the last week that support some of my earlier musings:
  • Guess who's slowing progress on a $35 trillion(!) NAFTA-EU Trade Deal?  That's right, the United States: "'The U.S. will lose its leadership position in trade unless it comes up with a new strategy,' says Steven Schrage, a specialist in international business at the Center for Strategic and International Studies (CSIS) in Washington. 'It makes sense to integrate NAFTA with the EU.'... [But] a NAFTA-EU trade deal will likely be met with stiff opposition. 'It will be a difficult sell in the U.S.,' says senior economist Many Grauman with CIBC World Markets in Toronto.... 'The ball is in the Obama administration's court,' says Schrage. 'If they want this to happen, they can move rapidly.'... Failure of the WTO provides an added incentive for the West to forge closer economic ties. However with protectionist sentiment in the U.S. gaining momentum, helped in part by President Obama's controversial Buy-American position, getting the world's biggest economy to expand its free-trade frontier could be an uphill battle. At least for the near term."  All of this sounds eerily, and depressingly, familiar, doesn't it?
  • The United States gets the ol' Brazilian blowoff in its bilateral WTO negotiations: "Brazil has informed that it cannot accept Washington’s requests made during a bilateral meeting in Paris last month.... Though there was enhanced engagement at the bilateral meeting with the US, Brazil said it did not know the core demands of the US. Brazilian envoy Roberto Azevedo said Brasilia also presented some requests to its American counterpart but the reply was negative, maintaining that they were not provided with any reasons. He said there was only a glimmer of hope, suggesting that Brazil would not disengage. He also suggested there was a clear disconnect between political statements and the actual negotiations, trade envoys said."  What a totally unsurprising development.
  • Arguments in favor of artificially weakening the dollar are, well, weak.  Cato's Dan Griswold broadens my earlier questions for those misguided (or ill-intentioned) souls who are desperately clamoring for action to weaken the dollar vs. the Chinese RMB.  This time, he looks at the oft-neglected impact on US consumers:  "[I]t is American consumers who pay the biggest price when the dollars we earn buy less on global markets. We are paying more for oil, which not coincidentally has zoomed toward $80 as the dollar flounders. A weaker dollar means higher prices than we would pay otherwise for a range of goods, from imported shoes and clothing to food, that loom large in the budgets of American families struggling to make ends meet in this difficult economy."
Happy Halloween, everyone.

No comments: