Democrats Poll Better for Senate, Trump Rethinks TPP

The Washington Monument and United States Capitol seen from the Lincoln Memorial in Washington DC
The Washington Monument and United States Capitol seen from the Lincoln Memorial in Washington DC (Shutterstock/Orhan Cam)

The conventional wisdom in the United States is that Democrats are likely to take control of the House of Representatives in November while Republicans are likely to defend their majority in the Senate.

That’s changing, according to FiveThirtyEight.

Democrats are polling better in Arizona and Tennessee. Ted Cruz is still likely to win reelection in Texas, but Democrat Beto O’Rourke is mounting a serious challenge.

In Florida, it’s the other way around. The candidacy of Republican governor Rick Scott is making Democrat Bill Nelson’s reelection a little less likely.

For more, read my story from February. Read more “Democrats Poll Better for Senate, Trump Rethinks TPP”

Macron Marches On, China Retaliates in Trade War

Austrian chancellor Christian Kern and French president Emmanuel Macron visit Salzburg, August 23, 2017
Austrian chancellor Christian Kern and French president Emmanuel Macron visit Salzburg, August 23, 2017 (BKA/Andy Wenzel)

The moderate French Democratic Confederation of Labor (CFDT) has joined the hardline General Confederation of Labor (CGT) in weekly strikes against a proposed overhaul of the state railway company, yet President Emmanuel Macron shows no sign of budging.

Most French voters support his effort to end generous employment terms for new — not existing — rail workers, including automatic pay rises and early retirement.

That may change as travelers are exposed to frequent disruptions, but, as I argued here the other week, falling popularity is unlikely to keep Macron up at night. He has four years left for his reforms to start bearing fruit and there is no unified opposition against him. Read more “Macron Marches On, China Retaliates in Trade War”

Trump Agrees to Meet Kim, Trans Pacific Partnership Continues Without Him

Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2, 2017
Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2, 2017 (White House/Shealah Craighead)

Donald Trump has accepted an invitation from Kim Jong-un to meet one-on-one. It would be the first time a sitting American president met with the North Korean dictator.

North Korea craves international legitimacy, which the United States have deliberately withheld. Trump’s break with decades of policy is risky — but it’s not if existing policy has worked. North Korea remains a rogue state. It has only continued its ballistic missile and nuclear weapons programs.

The challenge now, as Fred Kaplan writes in Slate, is organizing a careful diplomacy that includes coordinating common negotiating positions with Japan and South Korea.

Unfortunately, Trump has yet to appoint an ambassador to Seoul. The State Department’s top North Korea expert has resigned. None of the three top foreign-policy officials in Trump’s government — Secretary of State Rex Tillerson, Secretary of Defense James Mattis, National Security Adviser H.R. McMaster — have much experience in Asia.

Also read this thread by Robert E. Kelly about why Korea hands are skeptical. Read more “Trump Agrees to Meet Kim, Trans Pacific Partnership Continues Without Him”

Five Stars Eye Coalition, Dutch Form Anti-Macron Pact, Cohn Resigns

The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome
The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome (Shutterstock)

Italy’s Five Star Movement may go into coalition after all. Having placed first in the election on Sunday, the populist movement is reportedly eying an accord with the left.

The Five Stars, center-left Democrats and left-wing Free and Equal would have a majority in the new parliament.

The Five Stars and Free and Equal share views. Free and Equal was formed last year by Democrats critical of Matteo Renzi’s market reforms.

Renzi has come out against a deal, calling the Five Star Movement “anti-European”. But he is on his way out as leader. The rest of the party may be willing to reverse his signature labor reforms in return for staying in power.

For the rest of Europe, a Five Star pact with the left would be better than a Five Star pact with the right. The worst-case outcome would be a government of the Five Stars, (Northern) League and Brothers of Italy — parties that are anti-EU, anti-immigration and pro-Putin. Read more “Five Stars Eye Coalition, Dutch Form Anti-Macron Pact, Cohn Resigns”

Trump Launches Trade War, Berlusconi Confirms Tajani Candidacy

American president Donald Trump speaks with German chancellor Angela Merkel at the G20 summit in Hamburg, July 6, 2017
American president Donald Trump speaks with German chancellor Angela Merkel at the G20 summit in Hamburg, July 6, 2017 (Bundesregierung)

Against the advice of literally all but two of his advisors, American president Donald Trump has announced tariffs on aluminum and steel of 10 and 25 percent, respectively.

The tariffs are not in effect yet, but, citing national-security concerns, the president does have the authority to impose them unilaterally.

The European Commission, which is responsible for EU trade policy, quickly condemned the “blatant intervention to protect US domestic industry” and said it would present countermeasures in a matter of days.

Remember when we were talking about a Transatlantic Trade and Investment Partnership only a few years ago?

Politico has more on the challenge to Europe. Also read my story from July about Trump’s obsession with dying industries at the expense of retail and tech. Read more “Trump Launches Trade War, Berlusconi Confirms Tajani Candidacy”

Nationalism May Be Down, But It’s Not Out

Presidents Recep Tayyip Erdoğan of Turkey and Donald Trump of the United States pose for photos in the Oval Office of the White House in Washington DC, May 16, 2017
Presidents Recep Tayyip Erdoğan of Turkey and Donald Trump of the United States pose for photos in the Oval Office of the White House in Washington DC, May 16, 2017 (Turkish Presidency)

Nationalism may be down, but it’s not out, reports The Wall Street Journal.

The nationalist insurgency is both growing and metamorphosing. It is not just eating away at relations between countries on issues such as free trade; it is also eroding the institutions and norms that prevail within countries.

With economies growing on both sides of the Atlantic, populists now draw on cultural grievances to undermine the stable, rules-based environment businesses crave. Read more “Nationalism May Be Down, But It’s Not Out”

Europe and Japan Finalize Trade Deal

Japan flag
The flag of Japan (Bryan Jones)

The European Union and Japan have finalized a trade agreement that would create the world’s largest open economic zone when it comes into effect in 2019.

The deal cuts tariffs, harmonizes product regulations and liberalizes public procurement for a market of 600 million people.

The EU and Japan account for 28 percent of the world’s economic output.

In a joint statement, European Commission president Jean-Claude Juncker and Japanese prime minister Shinzō Abe said the deal demonstrates their commitment “to keeping the world economy working on the basis of free, open and fair markets with clear and transparent rules.” Read more “Europe and Japan Finalize Trade Deal”

Brexit’s Broken Promises

The British flag flies over the Houses of Parliament in London, England
The British flag flies over the Houses of Parliament in London, England (Unsplash/Matt Milton)

The New Statesman reports that none of Brexit’s promises have come true:

  • Brexiteers said leaving the EU would unleash growth. Instead, growth has stalled and higher inflation has depressed real wages.
  • David Davis, now Brexit secretary, said Britain would be able to create “a free-trade area massively larger than the EU.” So far, no country has expressed an interest in doing a separate trade deal with the United Kingdom.
  • Liam Fox predicted that trade talks with the EU would be “one of the easiest in human history.” But the EU insists on properly negotiating Britain’s exit before even starting trade negotiations.
  • Rather than give Britain an extra £350 million to spend on health care each week, the Office for Budget Responsibility projects that the country will lose the equivalent of £300 million per week because of Brexit.

Little wonder that supporters of leaving the EU have continually lowered expectations. The promise of Brexit has been downgraded from a Singapore on the Thames to not “as apocalyptic as some people like to pretend”.

World Not Waiting for America: Pacific Nations Continue Trade Deal

Prime Ministers Shinzō Abe of Japan and Justin Trudeau of Canada speak in Washington DC, March 31, 2016
Prime Ministers Shinzō Abe of Japan and Justin Trudeau of Canada speak in Washington DC, March 31, 2016 (Flickr/Justin Trudeau)

In another sign that the world isn’t waiting for the United States, eleven countries in Asia and Latin America have announced their intention to keep the Trans Pacific Partnership (TPP) alive.

One of Donald Trump’s first acts as president was to withdraw from the trade pact.

Japan and Mexico stepped into America’s place to salvage it.

Both have also intensified their trade negotiations with the EU, which itself is rushing to defend globalization from a suddenly protectionist America. Read more “World Not Waiting for America: Pacific Nations Continue Trade Deal”

Trump’s Welcome Change of Heart on South Korea Trade Deal

Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2
Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2 (White House/Shealah Craighead)

American president Donald Trump appears to have changed his mind about a trade deal with South Korea.

As recently as a month ago, there were reports Trump was on the verge of withdrawing from the agreement.

Now American and Korean trade negotiators have agreed to amend the treaty in order to make it “fair” and “reciprocal”.

I doubt changes will really make the pact fairer and not more favorable to the United States. But that would still be better than canceling it. Read more “Trump’s Welcome Change of Heart on South Korea Trade Deal”