World Economic News

Bush Asia Trip to Hits Another Brick Wall on Trade Liberalization

U.S. Trade Representative Rob Portman told the Nov. 16 Financial Times of London that he had been unable to persuade members of the Asia Pacific Economic Cooperation (APEC) to "reach a consensus on more detailed proposals to advance trade liberalization." The APEC summit this week in Pusan, South Korea, appears to be headed toward the same failure (for the globalizers) as the Argentina Summit of the Americas. The Bush Administration is playing the Asia trip as a low-key visit, with few results expected, in order to avoid the appearance of failure. For the APEC meeting, the U.S. position is that Europe (and especially France) should be blamed for refusing to liberalize agricultural subsidies, while APEC should lower tariffs on industrial goods and the service sector. No one is biting. But Japan and Korea reject liberalizing agriculture as well, and others are in no mood for new tariff reductions, including China.

After the South American failure of FTAA, everyone acknowledges that APEC must make progress, or the Dec. 13-18 WTO meeting in Hong Kong will be a bust for the free traders. In addition, since Bush's Congressional authority to negotiate free-trade deals runs out in 2007, a deal on the so-called Doha Round of WTO talks must be completed in 2006—which will be impossible if the December meeting fails, as is likely.

South Korean Trade Minister Kim Hyun-chong said, "The Doha Development Agenda negotiations are in dire straits." WTO director Pascal Lamy warned of a spectacular public failure at Hong Kong.

The draft APEC communique notes the "current impasse" in trade talks, with "no progress" on Doha.

Korean and other demonstrators are protesting free trade outside the conference.

Clinton Blasts Bush Economic Policy at World Business Forum

In a speech transmitted Nov. 16 from Bill Clinton's residence in New York to the World Business Forum in Frankfurt, the former President addressed 1,800 business leaders, mostly from Germany.

With some sarcasm, Clinton welcomed the Bush Administration's tax cuts: "For me, the taxes have been cut four times, since 2001. [But] half of all tax cuts are to the benefit of the richest 1% of citizens in my country. At the same time, our deficit is running out of control. I consider this policy as wrong, and I think it is amoral." (Clinton's remarks as reported here are backtranslated from the German of the Stuttgarter Zeitung.)

The U.S. trade deficit being at $319 billion at the end of September, and the total public debt at $8 trillion, Clinton criticized the fact that "every morning, we literally have to borrow money somewhere, to not turn insolvent right away. I don't know how much longer that will work."

Clinton said the USA is heading for a financial catastrophe. "The American people must realize that we are borrowing money from China, Japan, Saudi Arabia, and Korea every day, to finance our wars, Katrina, and our tax presents for the super-rich." The USA is forcing China to lend money at low interest, so that America in turn can buy goods from the Chinese. "What if one day China or Japan are fed up with financing our debt? If Mexico or Brazil acted as we do, their currency would collapse within a week." He added that the funding of the Iraq occupation, at $5 billion every month, is "without precedent in our history. We never before financed wars with money borrowed somewhere else."