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Wasting Time in Belfast

June 17, 2013 in Economics

By Doug Bandow

Doug Bandow

It’s time for another G-something meeting. Is it the G-20? The G-2? The G-47? No, it’s the G-8. Its members are the world’s most important industrialized states. And they gather to discuss the most pressing issues of the day.

This meeting, located in Northern Ireland’s Belfast, is being chaired by British prime minister David Cameron, as his nation holds the group’s presidency this year. The Economist proclaimed that “The British agenda is ambitious.” London’s three main goals are trade, taxation and transparency.

Despite the usual flurry of ponderous public statements and breathless press analyses, the meeting likely will be a waste. Consider the official agenda.

Trade. This is an important issue, especially given the collapse of the World Trade Organization’s Doha round of trade liberalization. However, the G-8 is unlikely to achieve much. One of the main stumbling blocks to Doha was agricultural subsidies by the United States and the European Union. Yet nothing here has changed or will change. To the contrary, Congress is moving forward on an expensive new “Farm Bill,” and the EU maintains the even more expensive Common Agricultural Policy.

America is broke and cannot be expected to forever subsidize its many prosperous and populous allies.”

Proposals for Asia-Pacific and trans-Atlantic trade liberalization remain ever complicated and perhaps impossible. America is pursuing the Trans-Pacific Partnership, but including Japan while excluding China creates significant political complications. France’s objections are reducing the likelihood of reaching a meaningful U.S.-EU pact. Europe is involved in a no-win trade tiff with China.

There would be enormous benefit if the G-8 participants could iron out at least some of their many differences on these issues. But the disputes run deep and the time available is limited. The meeting is more likely to generate more lofty rhetoric about the possibilities of increased commerce than meaningful progress overcoming barriers to trade liberalization.

Taxation. If there is one issue on which politicians of every nation agree, it is the need to squeeze their peoples ever more tightly. Hence the concerted attack on “tax havens” and “aggressive tax planning,” especially by multinational corporations. The European Union issued a press release dryly opining on how “Tax fraud and tax evasion limit the capacity governments to raise money and implement their economic and social policies.”

Of course, the latter usually can be summarized as paying off influential interest groups and turning citizens into dependents. If politicians were not so avaricious and special interests were not so domineering, productive people …read more

Source: OP-EDS

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