Subscribe to our free, weekly email newsletter!



Resisting Trade Sanctions

By Patrick Burnson, Executive Editor
November 11, 2010

As we noted in yesterday’s posting, the World Bank reports that the easing of regulations has permitted U.S. shippers with greater access to foreign markets. But the organization’s president, Robert Zoellick, has also cautioned against U.S. protectionism.

In a letter originally printed in the Financial Times, he observed that with a new Congress, the U.S. will need to address structural spending and ballooning debt that will tax future growth. President Barack Obama has also spoken of plans to boost competitiveness and revive free-trade agreements.

According to Zoellick, the U.S. and China could agree on specific, mutually reinforcing steps to boost growth.

“Based on this, the two might also agree on a course for renminbi appreciation, or a move to wide bands for exchange rates,” he said. “The U.S., in turn, could commit to resist tit-for-tat trade actions; or better, to advance agreements to open markets.”

Among his other points:

*Major economies, starting with the G7, should agree to forego currency intervention, except in rare circumstances agreed to by others. Other G7 countries may wish to boost confidence by committing to structural growth plans as well.

*These steps would assist emerging economies to adjust to asymmetries in recoveries by relying on flexible exchange rates and independent monetary policies. Some may need tools to cope with short-term hot money flows. The G20 could develop norms to guide these measures.

*The G20 should support growth by focusing on supply-side bottlenecks in developing countries. These economies are already contributing to half of global growth, and their import demand is rising twice as fast as that of advanced economies. The G20 should give special support to infrastructure, agriculture and developing healthy, skilled labor forces. The World Bank Group and the regional development banks could be the instruments of building multiple poles of future growth based on private sector development.

*The G20 should complement this growth recovery program with a plan to build a co-operative monetary system that reflects emerging economic conditions. This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalization and then an open capital account.

And his most thoughtful observation might be this: “with talk of currency wars and disagreements over the US Federal Reserve’s policy of quantitative easing, the summit of the Group of 20 leading economies in Seoul this week is shaping up as the latest test of international co-operation. So we should ask: co-operation to what end?”

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

So far, so good may be the best way to describe the current state of progress in the negotiating process regarding the announcement made last month by FedEx that it plans to acquire Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator for $4.8 billion.

A new study, “Understanding Risk Assessment Practices at Manufacturing Companies,” uncovers complex business risks and disruptors facing manufacturers, and a pressing need for the industry to evolve its risk assessment capabilities.

Led by perennial earnings champ Old Dominion Freight Line, the nation’s LTL carriers as a group are enjoying a particularly strong earnings season—especially when one considers the first quarter usually is the slowest period for trucking in general with harsh winter weather bearing down on earnings.

A mixed bag may be the most appropriate way to characterize the current state of manufacturing based on the most recent edition of the April edition of the Manufacturing Report on Business issued by the Institute for Supply Management today.

The Department of Transportation’s Federal Railroad Administration and Pipeline and Hazardous Materials Safety Administration (FRA) issued its long-awaited Final Rulemaking for “Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains.”

Article Topics

Blogs · Supply Chain · Logistics · Trade · Exports · China · Imports · Sanctions · G7 · World Bank · G20 · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA