You are browsing the archive for 2018 December 11.

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The Fateful Arrest That Could Poison America’s Relationship with China

December 11, 2018 in Economics

By Doug Bandow

Doug Bandow

Amid controversy over a maybe yes/maybe no ceasefire in Donald
Trump’s trade war with China, the United States engineered
the arrest by Canada of a top Chinese executive for allegedly
busting U.S. sanctions on Iran. The detention sparked outrage in
Beijing, which threatened Canada with “grave
consequences” if Meng Wanzhou is not released.

Huawei Technologies Co. is one of China’s international
behemoths, a telecom firm that now sells more smartphones than
Apple. The arrest of Meng, the founder’s daughter and
Huawei’s chief financial officer, was not for committing a
genuine crime against Americans, but rather for allegedly lying
over Huawei’s connection to another firm that did business in
Iran. The Trump administration is determined to dragoon other
nations into its anti-Tehran crusade.

Washington’s use of its economic clout to coerce the rest
of the world reflects extraordinary hubris. Americans would be
outraged if another nation did the same to us.

By busting Meng Wanzhou,
Trump is signaling that he expects to dictate to every nation, no
matter how powerful.

In recent years, the United States has imposed sanctions on
numerous nations, including Cuba, Iran, Iraq, Libya, Myanmar,
Russia, Venezuela, and Yugoslavia. Increasingly Washington insists
that the rest of the world follow America’s lead or else. It
seemed radical when the 1996 Helms-Burton Act targeted foreign
firms trading with Cuba. Since then, secondary sanctions have
become commonplace, the economic weapon of choice against Sudan
(since lifted), North Korea, Syria, and Iran. Against that latter
nation, Washington currently is using U.S.-dominated financial
markets in an attempt to enforce essentially a total embargo.

Obviously, the purpose of secondary penalties is to magnify the
impact of a boycott. In some cases, such as Iraq and North Korea,
Washington has won UN Security Council support for multilateral
penalties. In many instances, however, foreign governments dismiss
what they see as shortsighted, counterproductive
penalties—yet we press ahead anyway.

For instance, only in the U.S. do ethnic Cubans possess
disproportionate political clout, based on Florida’s importance in
determining the outcome of presidential elections. Hence, six
decades after imposing its embargo, Washington continues, alone, to
isolate Cuba economically. Given the politics, the U.S. may still
be doing so 60 years from now.

When international support is lacking, Washington threatens
foreign businesses to expand its bans. Even the slightest error can
lead to huge fines if companies do business in the U.S. Firms
forced to choose between markets in America and much smaller,
isolated states overwhelmingly pick the former, which requires
complying with American restrictions. That turns a secondary
boycott by the U.S. into a global squeeze, if not a full

Commercial restrictions have become all too common, perhaps
because they are easy to apply …read more

Source: OP-EDS

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The Government Must Resist Micro-Managing Our EU Exit

December 11, 2018 in Economics

By Ryan Bourne

Ryan Bourne

Unlike many commentators, I believe that a no-deal Brexit still
very possible.

It is the default as the clock ticks, and parliament must vote
for government-backed legislation to change path.

For all the threats about a second referendum, the Conservatives
would implode if they rowed back on delivering Brexit. And as
regrettable as a no-deal scenario might be, it seems the only way
of achieving a meaningful Brexit.

Yes, adjustment will be
disruptive. It requires an active government to prepare. But
markets respond quickly in the face of necessity.

But Brexiteers who consider this option the best path forward
should admit that it would come with short-term dislocation, and
prepare the country for it.

The effect here would not be “uncertainty”. No-deal
provides clarity relative to the chaos of Theresa May’s
proposed withdrawal agreement or a second referendum.

Rather, the impact would be practical disruptions as we shift
towards a new trading environment.

The visible effect widely discussed is at ports. Critics argue
that delays caused by physical customs, administration, and
regulatory checks will slow down the rate of vehicle pass-through.
This could cause ferry and ship delays, in effect reducing
capacity, mainly between Dover and Calais.

Some at HMRC envisage far less disruption than Downing
Street’s apocalyptic tales, and Tim Morris, chief executive
at the UK Major Ports Group, has rubbished the idea that “the
Dover effect” will occur elsewhere. But it seems reasonable
to expect an early impact.

The government must therefore be clear on what environment for
cross-border trade it envisages — not just on regulations (it
has largely said that it will accept all EU goods as before), but
on tariffs, and whether it will apply a tariff-free environment to
all goods worldwide under WTO law.

This move towards unilateral free trade would helpfully offset
some of the economic costs of more trade barriers with the EU,
mitigating the Brexit trade disruption which politicians and
commentators seem to fear so greatly.

Sadly, rather than focus on these big structural questions,
politicians’ instincts lean towards micro-management. Despite
Treasury efforts, ministers are already discussing rationing space
on ferries to guarantee that “essentials” are

Such hysterical attempts at central planning are misguided.

A no-deal Brexit would be a near-term negative supply shock,
like the disruption caused by sustained adverse weather. Delays
naturally drive up shipping prices, in turn raising prices of
shipped goods while changing relative prices between them.

These rising costs are, of course, not good for the economy. But
markets are remarkably adept and self-correcting, helping to
alleviate queuing and shortages.

Firms which ship goods would have to reassess their willingness
to pay. That helps ration space towards producers which judge that
they can …read more

Source: OP-EDS

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Here's how shark fishing tournaments harm marine conservation efforts

December 11, 2018 in Blogs

By Rick Stafford, Independent Media Institute

Fishing sharks for prize money devalues our respect for nature.

Just over three years ago, I was clinging to a rock in 20 meters of water, trying to stop the current from pulling me out to sea. I peered out into the gloom of the Pacific. Suddenly, three big dark shapes came into view, moving in a jerky, yet somehow smooth and majestic manner. I looked directly into the left eyes of hammerhead sharks as they swam past, maybe 10 meters from me. I could see the gill slits, the brown skin. But most of all, what struck me was just how big these animals are—far from the biggest sharks in the seas, but incredibly powerfully built and solid. These are truly magnificent creatures.

These animals (by which I mean any large shark, not just hammerheads) are at the top of the marine food chain. They are important keystone predators that can help structure marine ecosystems. Their role as predators can even help with carbon dynamics, keeping carbon locked up in marine sediments, or by controlling the amount of respiring biomass in our seas.

The graphic above shows how top predators such as sharks can control marine communities and help prevent climate change. Fewer top predators result in an overall greater biomass of small fish and zooplankton. The respiration of this increased biomass produces more carbon dioxide. (Image provided by the author under a creative commons license, CC BY 4.0)

Sharks have low reproductive rates, making them especially susceptible to overfishing. Many species targeted by shark fishing tournaments (including all thresher sharks, porbeagle and makos, three of the most commonly targeted species) are already classified as vulnerable or threatened by international conservation organizations, meaning they should be protected, not killed, especially for recreation or competition.

Ecological Consequences of Shark Fishing Tournaments

Sharks are fished recreationally and as part of fishing tournaments in many places, including Australia and South Africa. However, it is typically the East Coast of the U.S. …read more