I am worried at the apparent ignorance of the lessons of the Great
Slump 1930-1940 that so many express.
This is about putting obstacles in way of trade. A trade war will
ruin all of us. Obama's crazy lot are making a public dead-set
against China too. The Chinese would rather starve than lose
face. A trade war will cripple the world - nobody wins! The
Americans did this in 1931 and were the last country to come out of
the great slump. It caused Hitler. It's serious.
------------------------------------
And Darling and Milliband have cancelled their trips to Davos!
xxxxxxxxxxxxxx cs
========================
EU OBSERVER 30.1.09
EU wary of US protectionism threat
ANDREW WILLIS
The EU is watching closely to see whether a "Buy American" provision
relating to steel will make it into the final version of the US
stimulus plan bill to be signed by Barack Obama, fearing it will
affect European exports.
The provision forcing contractors to use only US-made steel in
development projects funded by the proposed $825 billion (€630
billion) stimulus plan is contained in a version approved by the
House of Representatives on Wednesday (28 January). The Senate is
currently debating the bill.
Speaking at a daily press briefing on Thursday, spokesperson Peter
Powell said trade commissioner Catherine Ashton was monitoring the
situation.
"We are looking into the situation. ...Before we have the final
text ...it would be premature to take a stance on it," he said.
"However, the one thing we can be absolutely certain about, is if a
bill is passed which prohibits the sale or purchase of European goods
on American territory, that is something we will not stand idly by
and ignore," he continued.
Under the current proposal, foreign steel can only be used for
infrastructure projects funded by the stimulus plan if the head of a
federal department decides that using solely US steel would increase
costs by more than 25 percent.
The European Confederation of Iron and Steel Industries, Eurofer,
demanded that the EU contest the provision in the World Trade
Organization, saying it was clearly in breach of current trade rules.
Speaking at the World Economic Forum in Davos, WTO chief Pascal Lamy
said he was concerned that countries would increasingly turn to
protectionist measures during the economic downturn.
"It is natural in such a crisis that there is a big call for
protection. But that does not mean there should be protectionism," he
said.
He also urged world leaders to use April's G20 meeting in London to
help conclude the Doha round of trade talks.
Fears of increasing protectionism in the face of the global crisis
have also been raised elsewhere.
Earlier this week, a group of 19 states - known as the Cairns Group -
criticised the EU for its recent decision to re-start export
subsidies on dairy products.
"This is not the leadership we require from key economies at this
point in time," said the group, which includes Australia, Brazil,
Canada, South Africa and Indonesia.
The EU dairy sector is currently facing severe difficulties due to
plummeting milk prices.
Agriculture commissioner, Mariann Fischer Boel, warned last week that
many EU farmers were facing bankruptcy.
===========================
TELEGRAPH 30.1.09
Tony Blair cautions leaders against 'beggar-thy-neighbour' policies
World leaders must not be tempted into "beggar-thy-neighbour"
protectionist policies as the world slides into recession, Tony Blair
said.
By Edmund Conway in Davos
The former Prime Minister's call came amid growing tension between
the US and China over their exchange-rate policies and with the World
Trade Organisation's chief acknowledging a real chance that the
embattled Doha Round of talks could be all but finished off by the
new Obama administration.
Mr Blair used his speech at the World Economic Forum to warn
politicians around the world that they risk alienating each other and
sparking geopolitical tensions by pulling up barriers in the face of
the economic crisis.
He said: "One major aspect of crisis is the fact that it's global. In
responding to it we do not want to return to the closed view of the
world. It is true that in an economic crisis people may put the
environment lower on agenda, but why not devote your fiscal stimulus
to energy efficiency? Second, we must understand that the right
response is not beggar-thy-neighbour policies but to get world
leaders to come together and work out a proper world trade deal.
Third, this is not the moment to cut aid to the developing world."
However, in what many will regard as a blow for the stricken Doha
Round of trade talks, former US President Bill Clinton said: "People
are frightened... there is a sense of fear in the economy. Therefore
now is neither the time to enter into new trade agreements, nor the
time to pick new fights."
Doha has struggled because of differences between rich countries and
poor nations over the levels of barriers to trade and international
commerce.
However, many now suspect that the world will suffer a further onset
of 1930s-style protectionism as countries try to support their
national companies.
Speaking on the fringes of the Davos, WTO director-general Pascal
Lamy said: "We have done about 80pc [of Doha] but there are still a
few nuts to crack. Keeping trade open is the simplest way of not
making the situation worse.
"People are not frightened because of trade, they are frightened
because of the economic crisis," he added. "Scapegoating the
foreigner is an easy trick in politics and some politicians will try
to use this [to avoid trade deals]... we have to be vigilant."
========================
TELEGRAPH 30.1.09
Alistair Darling pulls out of World Economic Forum in Davos
Alistair Darling has pulled out of the World Economic Forum, within
hours of being warned that the UK faces a worse recession than any
other major country in the world.
By Edmund Conway, Economics Editor
The Chancellor of the Exchequer cancelled his trip to the summit of
politicians and executives at the last minute, despite the meeting
being attended by a pantheon of leaders from around the world,
including Russia and China.
He is understood to have called off the trip, planned for tonight,
after it transpired that a number of the people he had planned to
meet also cancelled.
However, the move will spark speculation that the Chancellor is
battling a further bout of instability in the financial markets and
the economy.
The foreign minister, David Miliband has also pulled out of the
forum, which has been cast as the most gloomy in recent memory in the
face of the global financial crisis.
The International Monetary Fund warned on Wednesday that the UK will
be at the bottom of the league table of major developed countries
this year, in the weakest year for the global economy since the
Second World War.
The fund said it expected the UK economy to contract by 2.8pc this
year – its worst single-year performance since the Great Depression
of the 1930s. It said Britain would be especially hard-hit by a slump
in the West that would see a 2.5pc contraction in Germany, 2.6pc in
Japan and 1.6pc in the US.
Western leaders have come in for strong criticism at the forum from
their counterparts in Russia and China who have blamed them for
policy failures that led to the current financial collapse.
=======================
POLITICS HOME 30.1 09
Brown at Davos: I want 2009 to be remembered as the year the world
came together
Speaking at the World Economic Forum Gordon Brown urged the
international community to work together to counter the economic
crisis, and warned that doing nothing would result in a retreat from
globalisation.
“Our first priority is the millions of people in all countries of the
world, worried about their jobs, insecure about their livelihoods.
Politicians and business leaders have an urgent responsibility to
rise to the challenge of leadership.
“I want 2009 to be remembered as the year the world came together.
This is a time for action, and for having the confidence to act. This
is a time not just for individual national action, but for the world
to come together.
“There are three priorities that guide us: stage one was to prevent
the collapse of banking. Stage two is a worldwide fiscal and monetary
stimulus. We are seeing the biggest fiscal stimulus the world has
ever seen. I estimate it is even now worth $1.5trillion. Our third
priority - the resumption of lending to the real economy. It is
global where we need action. The thing about protectionism is that in
the end it protects nobody, least of all the poor.”
He went on to call for four changes to the international banking
system: “An early warning to prevent crisis. We need to replace the
patchwork of current regulation. We need to agree international
standards of transparency and disclosure. We need to reform
international institutions.
“The policy of doing nothing will allow this crisis to begin a
retreat from globalisation. It would be shortsighted at this time to
renege on promises we’ve made to the poor, and to renege on our
climate change commitments. In this world of global dependence, the
world will only work best in the future when the world works together.”
=========================
ECONOMIC ‘Shorts’ 28.1.09
TELEGRAPH
=Japanese economy hit by "perfect storm"
The outlook for the Japanese economy is bleaker than ever after
employment, production and retail figures, all posted severe fall
TIMES
= Japan slows down amid record output fall
Manufacturing in the world's second-largest economy plunges by 9.6%
and unemployment hits three-year high
= Honda suspends UK production as profits plunge
British staff will stop work for four months as falling demand for
cars forces company to cut annual forecast by 57%
=John Lewis reports post-Christmas sales fall
Slowdown at the high street bellwether implies shoppers are cutting
back after taking advantage of deep discounts
FINANCIAL TIMES
=Japan’s production falls record 9.6%
Core annual inflation almost evaporated
=Welfare reform under scrutiny
A flagship £1bn government programme to find jobs for people on
sickness benefit is running 73 per cent short of its target – an
unexpectedly bad outcome
Slump 1930-1940 that so many express.
This is about putting obstacles in way of trade. A trade war will
ruin all of us. Obama's crazy lot are making a public dead-set
against China too. The Chinese would rather starve than lose
face. A trade war will cripple the world - nobody wins! The
Americans did this in 1931 and were the last country to come out of
the great slump. It caused Hitler. It's serious.
------------------------------------
And Darling and Milliband have cancelled their trips to Davos!
xxxxxxxxxxxxxx cs
========================
EU OBSERVER 30.1.09
EU wary of US protectionism threat
ANDREW WILLIS
The EU is watching closely to see whether a "Buy American" provision
relating to steel will make it into the final version of the US
stimulus plan bill to be signed by Barack Obama, fearing it will
affect European exports.
The provision forcing contractors to use only US-made steel in
development projects funded by the proposed $825 billion (€630
billion) stimulus plan is contained in a version approved by the
House of Representatives on Wednesday (28 January). The Senate is
currently debating the bill.
Speaking at a daily press briefing on Thursday, spokesperson Peter
Powell said trade commissioner Catherine Ashton was monitoring the
situation.
"We are looking into the situation. ...Before we have the final
text ...it would be premature to take a stance on it," he said.
"However, the one thing we can be absolutely certain about, is if a
bill is passed which prohibits the sale or purchase of European goods
on American territory, that is something we will not stand idly by
and ignore," he continued.
Under the current proposal, foreign steel can only be used for
infrastructure projects funded by the stimulus plan if the head of a
federal department decides that using solely US steel would increase
costs by more than 25 percent.
The European Confederation of Iron and Steel Industries, Eurofer,
demanded that the EU contest the provision in the World Trade
Organization, saying it was clearly in breach of current trade rules.
Speaking at the World Economic Forum in Davos, WTO chief Pascal Lamy
said he was concerned that countries would increasingly turn to
protectionist measures during the economic downturn.
"It is natural in such a crisis that there is a big call for
protection. But that does not mean there should be protectionism," he
said.
He also urged world leaders to use April's G20 meeting in London to
help conclude the Doha round of trade talks.
Fears of increasing protectionism in the face of the global crisis
have also been raised elsewhere.
Earlier this week, a group of 19 states - known as the Cairns Group -
criticised the EU for its recent decision to re-start export
subsidies on dairy products.
"This is not the leadership we require from key economies at this
point in time," said the group, which includes Australia, Brazil,
Canada, South Africa and Indonesia.
The EU dairy sector is currently facing severe difficulties due to
plummeting milk prices.
Agriculture commissioner, Mariann Fischer Boel, warned last week that
many EU farmers were facing bankruptcy.
===========================
TELEGRAPH 30.1.09
Tony Blair cautions leaders against 'beggar-thy-neighbour' policies
World leaders must not be tempted into "beggar-thy-neighbour"
protectionist policies as the world slides into recession, Tony Blair
said.
By Edmund Conway in Davos
The former Prime Minister's call came amid growing tension between
the US and China over their exchange-rate policies and with the World
Trade Organisation's chief acknowledging a real chance that the
embattled Doha Round of talks could be all but finished off by the
new Obama administration.
Mr Blair used his speech at the World Economic Forum to warn
politicians around the world that they risk alienating each other and
sparking geopolitical tensions by pulling up barriers in the face of
the economic crisis.
He said: "One major aspect of crisis is the fact that it's global. In
responding to it we do not want to return to the closed view of the
world. It is true that in an economic crisis people may put the
environment lower on agenda, but why not devote your fiscal stimulus
to energy efficiency? Second, we must understand that the right
response is not beggar-thy-neighbour policies but to get world
leaders to come together and work out a proper world trade deal.
Third, this is not the moment to cut aid to the developing world."
However, in what many will regard as a blow for the stricken Doha
Round of trade talks, former US President Bill Clinton said: "People
are frightened... there is a sense of fear in the economy. Therefore
now is neither the time to enter into new trade agreements, nor the
time to pick new fights."
Doha has struggled because of differences between rich countries and
poor nations over the levels of barriers to trade and international
commerce.
However, many now suspect that the world will suffer a further onset
of 1930s-style protectionism as countries try to support their
national companies.
Speaking on the fringes of the Davos, WTO director-general Pascal
Lamy said: "We have done about 80pc [of Doha] but there are still a
few nuts to crack. Keeping trade open is the simplest way of not
making the situation worse.
"People are not frightened because of trade, they are frightened
because of the economic crisis," he added. "Scapegoating the
foreigner is an easy trick in politics and some politicians will try
to use this [to avoid trade deals]... we have to be vigilant."
========================
TELEGRAPH 30.1.09
Alistair Darling pulls out of World Economic Forum in Davos
Alistair Darling has pulled out of the World Economic Forum, within
hours of being warned that the UK faces a worse recession than any
other major country in the world.
By Edmund Conway, Economics Editor
The Chancellor of the Exchequer cancelled his trip to the summit of
politicians and executives at the last minute, despite the meeting
being attended by a pantheon of leaders from around the world,
including Russia and China.
He is understood to have called off the trip, planned for tonight,
after it transpired that a number of the people he had planned to
meet also cancelled.
However, the move will spark speculation that the Chancellor is
battling a further bout of instability in the financial markets and
the economy.
The foreign minister, David Miliband has also pulled out of the
forum, which has been cast as the most gloomy in recent memory in the
face of the global financial crisis.
The International Monetary Fund warned on Wednesday that the UK will
be at the bottom of the league table of major developed countries
this year, in the weakest year for the global economy since the
Second World War.
The fund said it expected the UK economy to contract by 2.8pc this
year – its worst single-year performance since the Great Depression
of the 1930s. It said Britain would be especially hard-hit by a slump
in the West that would see a 2.5pc contraction in Germany, 2.6pc in
Japan and 1.6pc in the US.
Western leaders have come in for strong criticism at the forum from
their counterparts in Russia and China who have blamed them for
policy failures that led to the current financial collapse.
=======================
POLITICS HOME 30.1 09
Brown at Davos: I want 2009 to be remembered as the year the world
came together
Speaking at the World Economic Forum Gordon Brown urged the
international community to work together to counter the economic
crisis, and warned that doing nothing would result in a retreat from
globalisation.
“Our first priority is the millions of people in all countries of the
world, worried about their jobs, insecure about their livelihoods.
Politicians and business leaders have an urgent responsibility to
rise to the challenge of leadership.
“I want 2009 to be remembered as the year the world came together.
This is a time for action, and for having the confidence to act. This
is a time not just for individual national action, but for the world
to come together.
“There are three priorities that guide us: stage one was to prevent
the collapse of banking. Stage two is a worldwide fiscal and monetary
stimulus. We are seeing the biggest fiscal stimulus the world has
ever seen. I estimate it is even now worth $1.5trillion. Our third
priority - the resumption of lending to the real economy. It is
global where we need action. The thing about protectionism is that in
the end it protects nobody, least of all the poor.”
He went on to call for four changes to the international banking
system: “An early warning to prevent crisis. We need to replace the
patchwork of current regulation. We need to agree international
standards of transparency and disclosure. We need to reform
international institutions.
“The policy of doing nothing will allow this crisis to begin a
retreat from globalisation. It would be shortsighted at this time to
renege on promises we’ve made to the poor, and to renege on our
climate change commitments. In this world of global dependence, the
world will only work best in the future when the world works together.”
=========================
ECONOMIC ‘Shorts’ 28.1.09
TELEGRAPH
=Japanese economy hit by "perfect storm"
The outlook for the Japanese economy is bleaker than ever after
employment, production and retail figures, all posted severe fall
TIMES
= Japan slows down amid record output fall
Manufacturing in the world's second-largest economy plunges by 9.6%
and unemployment hits three-year high
= Honda suspends UK production as profits plunge
British staff will stop work for four months as falling demand for
cars forces company to cut annual forecast by 57%
=John Lewis reports post-Christmas sales fall
Slowdown at the high street bellwether implies shoppers are cutting
back after taking advantage of deep discounts
FINANCIAL TIMES
=Japan’s production falls record 9.6%
Core annual inflation almost evaporated
=Welfare reform under scrutiny
A flagship £1bn government programme to find jobs for people on
sickness benefit is running 73 per cent short of its target – an
unexpectedly bad outcome
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