IBT News Blog

Educated consumers with sophisticated palates have come to expect their local grocery stores to be stocked all year round with foodstuffs that normally would not be grown during certain times of the year. These consumers have gotten used to the low prices and welcome further price drops; however, cheaper and non-seasonal produce, among other groceries, comes at another price--Pollution. Particularly carbon dioxide emissions from ships and planes, whose fuel for transporting goods, including food, is exempt from taxes, unlike trucks, cars and buses. Proponents of repealing the exemption and implementing a tax say ending these breaks could help ensure that producers and consumers pay the environmental cost of increasingly well-traveled food. While companies are beginning to include carbon "footprints" on the labels of their products, they are far from accepting any type of taxation on transportation enabling them to take advantage of cheaper processing and production costs abroad.

The notion of a repeal of the agreement barring taxes on air and shipping fuel, and the subsequent taxation on the same is a good idea in theory, however, in practice it will not likely work. While many countries would gladly take advantage of the extra tax revenues, those countries choosing not to implement a tax would incur enormous trade advantages, and create an unbalanced, international "patch-work" of taxation. In addition, there are other avenues that can deal with the problem of pollution as a result of transportation. Educating consumers about products' carbon footprints is a good start; with information at hand, people will make conscious decisions when buying goods whose pollution history is easily traceable. The market, having spoken, will govern how companies conduct their respective businesses and give them an ultimatum; either offset your carbon or find new avenues for cost cutting that are less pollutive.

submitted by Michael

By plegding to help the national airline Alitalia financially, and by announcing the grant of a 300 million euros loan, the newly-elected Italian Prime Minister Silvio Berlusconi has entered into a difficult battle with the European Commission. Alitalia was created in 1947. It started facing severe financial hardships in 2001 and the situation just kept worsening. The Italian company is now close to bankruptcy: its debt averages 1,4 billion euros, and its losses total 1 million euros per day.

See the article published in the NY Times:

http://www.nytimes.com/2008/04/24/business/worldbusiness/24alitalia-web.html?_r=1&scp=1&sq=alitalia&st=cse&oref=slogin

State aids in the European Union, an antitrust law notion

As a Member State of the European Union, Italy must abide by European law and legislation, which has prohibited State aids (European law wording for subsidies) since the founding of the European Union in 1957. This prohibition ensures that governmental actions do not distort competition among Member States and intra-European trade. If the loan to Alitalia was to be analized as a “State aid”, it could be struck down by the European Commission, that is the European antitrust authority. And if nevertheless, Italy decided to implement the measure, the European Commission would be entitled to recover the amount of the loan, as a penalty.

A State aid is an advantage in any form whatsoever granted by national public authorities on a selective basis and which favours undertakings (for the complete definition, refer to Article 87 of the Treaty establishing the European Community:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12002E087:EN:HTML )

See also the document “Application of Articles 92 and 93 [currently 87 and 88] of the EC Treaty (…) to State aids in the aviation sector”, which provides for a specific regime of scrutiny:

http://ec.europa.eu/dgs/energy_transport/state_aid/doc/art_92_93_en.pdf

Any aid measure by a Member State must be notified first and exclusively to the European Commission for approval. In the Alitalia case, the European Commission has expressed some doubts about the legal nature of the loan to the airline. Prime Minister Berlusconi argues that the measure would be a “commercial” loan, that is, a loan with the same characteristics and interest rate as any other loan granted on the open market, so that Alitalia would not be treated more favorably than any other economic operator. But the European Commission takes the view that such measure would nevertheless be analysed as a State aid where the creditor knows that advantage is conferred to an insolvent debtor. The interpretation given to the notion of State aid by the European Court of Justice is very broad, both in terms of origins of the subsidy (State or State-controlled entities) and nature of the grant (it may be positive grants of money, or tax exemptions…). Loans with preferential interest rates have already been struck down as amounting to State aids, hence the preference for a “commercial” loan for Alitalia.

Explanations: European Commission strict scrutiny

With respects to subsidies to airlines, the European Commission will scrutinize several points (see “Application”, p.690):

- “whether the loan is made on normal commercial terms” (interest rate charged, security backing the loan sufficiently enough to repay it in the event of default), and

- “whether such loan would have been available from a commercial bank”.

The test used is the “market economy investor” test: if the expenses incurred to invest in the airline would yield structural profits in the future, which would cover expenses, then the loan can be granted (see “Application” p.689). But if the sole effect of the loan is to cover operating losses, than it is sure to be struck down by the European Commission.

Italy has a particular incentive to label the State measure as a “commercial” loan: it has already resorted to subsidies in aid of Alitalia with the consent of the European antitrust authority. The State aids prohibition is not a full-scale one: Articles 87(3) and 87(2) of the Treaty establishing the European Community set forth exceptional situations (called “exemptions”) where aid measures are deemed “compatible to the [European] common market”. In the case of Alitalia, could Italy ground its contention on Article 87(3)(c) and argue that the loan “promote[s] the development of [a] certain economic activit[y]” in a way that preclude airlines market concentration (thus promoting competition on the European territory)?

The reasoning, if used, is not likely to convince the European Commission. The “Application” guidelines set forth a strict scrutiny and a restrictive interpretation of Article 87(3). Insofar as the measure does “not adversely affect trading conditions to an extent contrary to the common interest” (Article 87(3)(c)), the State aid to airlines must be part of a “comprehensive restructuring programme”. In short, the airline should not have received previous State aids, and the aid measure should render it viable structurally, within a reasonable time (for details, see “Application”, p.692 and 693).

But another limit applies: a 10-years buffer period must be left between 2 grants. Italy had already been authorized to grant State aids to Alitalia (1,49 billion euros) from 1997 to 2001. For European Commission Transportation Spokesman Jacques Barrot, any new aid measure should consequently not be granted before 2011.

Suspense

Should this “commercial” loan granted by Italy and designed to save a doomed company and its employees (some 21,000) be upheld? After this overview of European law, the answer by the European Commission is likely to be negative.

On the European Commission and its European trade law policies, see its website:

http://ec.europa.eu/index_en.htm

Submitted by Tina

This article contains comments from the UN and World Bank on the rise of global food prices.

http://www.chinadaily.com.cn/world/2008-04/29/content_6652795.htm

submitted by aurelia

This article discusses the inconsistencies in international air travel and airline regulation and their effects on the flying public. See http://www.iht.com/articles/2008/04/23/business/safety.php

New information suggests that the size of the Japanese workforce is slowly shrinking. See http://news.bbc.co.uk/go/em/fr/-/2/hi/asia-pacific/7360077.stm

This article discusses new attempts by pharmaceutical companies to extend the lives of their patents. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7355527.stm

Phone carrier Vodafone has become one of the most recognized brands according to a new survey. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7357560.stm

On April 17, the WTO released a synthetic analysis of trends in world economy in 2007, and prospects for 2008 on the main aspects of international trade. Not surprisingly, the Organization is quite pessimistic about the near-term. Follow the link to know more: http://www.wto.org/english/news_e/pres08_e/pr520_e.htm Tina Wetchy

A major US grocery store has stopped purchasing Chilean salmon due to concerns over quality after the Chilean salmon stock has been ravaged by a new virus. See http://www.iht.com/articles/2008/04/17/america/17chile.php

This article discusses the impact of the Australian drought on the rising price of rice and decrease in supply. See http://www.iht.com/articles/2008/04/17/business/17warm.php

Interestingly, as the world is in the grip of rising rice prices, Ghana has created a hybrid rice plant that could save its population from starvation or high prices. However, as this article discusses, a key issue in the success of the hybrid rice is the willingness of the Ghanaian population to eat it. See http://news.bbc.co.uk/go/em/fr/-/2/hi/africa/7350856.stm

Indonesia has announced that it will move to reduce its rice exports. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7348865.stm

This article discusses a new oil find made by Brazil. See http://www.iht.com/articles/2008/04/14/business/14oil.php

http://online.wsj.com/article/SB120475150477614511.html

This article, published couple of weeks ago, discusses the ‘unfair’ practice by US Customs who were making shrimp importers post a surety bond as insurance for the antidumping tariff. The article calls the suspicious bond as “a novel accounting trick”. As a result of the bond, many shrimp importers were being run out of business as they had to overextend their credit lines. Nevertheless, the bond has been determined by a WTO panel as inconsistent with America’s WTO obligations. The unfairness is clearly evident, as dumping tariffs are not supposed to be protectionist tool that completely impede any foreign imports.

An interesting aspect of the imposition of the bond is how lobbying groups from shrimp producing States are more powerful in Congress than shrimp importing States. Whenever we have discussed antidumping in class, it is important to always consider the internal politicking that goes on in the halls of Congress between the different States. At the end of the day, the concept of antidumping has been continuously misused as a way to protect local industry rather than create a fair trade system. It seems as if the WTO panel has to constantly be on the watch for this because politicians are looking out for their local constituents more. As we have seen in our case studies, however, WTO has given the member countries’ local authorities considerable leeway in determining antidumping tariffs. However, with the imposition of this bond, the penalty was so great that it was irrefutable that the bond was purely protectionist. The article ends by saying that such measures are not in America’s interest, because they hurt America’s credibility. As we have seen in class, however, that credibility does not seem to be strong already.

submitted by: Mohammad

One aspect of globalization is the expansion of international tourism. This article presents an interesting perspective on the implications of opening areas of cultural and religious significance to tourist trade using the example of the Luang Prabang area of Laos, which has historically been a haven for Buddhist monks and monasteries. See http://www.iht.com/articles/2008/04/13/asia/luang.php

This article discusses the marketing strategy of a Chinese sneaker producer. See http://www.iht.com/articles/2008/04/11/business/WBJOE12.php

This article discusses a recent European High Court of Justice ruling regarding the intellectual property protections affordable to the Adidas stripes. See http://www.iht.com/articles/2008/04/11/business/adidas.php

The Food and Agriculture Organization, a UN group, estimates that food pricing and supply issues are likely to continue. See http://www.iht.com/articles/ap/2008/04/11/europe/EU-GEN-UN-Food-Prices.php

The World Bank has issued a report stating that water supplies in the Middle East and North Africa will be a serious issue unless governments in these areas invest in infrastructural changes. See http://news.bbc.co.uk/go/em/fr/-/2/hi/middle_east/7341977.stm

This article discusses a new forecast for world rice supply. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7341978.stm

"This is not about trade, this is about the guiding principle of the Bush administration, which is arrogance," said Rep. Lloyd Doggett, D-Tex describing the House vote against the Colombia trade agreement. It's payback time...http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/10/MN1L103BP3.DTL

World Bank President Robert Zoellick sought assistance from international governments to help poor countries to offset the rising cost of food prices. His call comes in response to protests, one of which resulted in a death, and in preparation for the upcoming World Bank meeting.

http://www.businessweek.com/globalbiz/content/apr2008/gb20080410_123589.htm?chan=globalbiz_europe+index+page_top+stories

On Tuesday, we briefly looked at issues that arise with respect to establishing a means for engaging in overseas trade. Read this article about Mars' (M&Ms) contract termination troubles in Indonesia.

Here is a link to the Center for International Environmental Law description of the Ayahuasca patent issue mentioned in the article for class today.

This article discusses the joint venture between Gazprom and Eni, an Italian enerfy firm, which would create an oil conduit between Libya and Europe. See http://www.iht.com/articles/2008/04/09/business/pipe.php

This article discusses the potential impact that removing the exception to applying the EU's art levy tax would have on the art market and artists in the UK. See http://www.ft.com/cms/s/0/ddf0bcb8-01d1-11dd-a323-000077b07658,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=f4ebce78-e821-11db-b2c3-000b5df10621,print=no,_i_email=y.html

This article discusses the decision of India to allow a Pakistani movie to be screened in its theatres after decades of bans on showing Pakistani films. See http://news.bbc.co.uk/go/em/fr/-/2/hi/south_asia/7330072.stm

Samsung's corporate leadership is being examined by South Korean authorities over corruption allegations. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7329864.stm

This article discusses the impact of European Union rules and standards on traditional farming practices in Poland, which have been widely regarded as having a positive impact on the environment due to their overall sustainability elements. See http://www.iht.com/articles/2008/04/03/europe/poland.php

This article discusses Chinese development of a new vaccine against the bird flu in humans. How would the marketing and sale of this product - which is estimated to be of vital importance in the likely event that the bird flu becomes transmittable from human to human - fit in with the class discussion of international IP protections? See http://www.iht.com/articles/2008/04/03/business/drug.php

This article discusses the Philippine government's plan to the revitalize mining industry and potential problems with the plan. See http://www.iht.com/articles/2008/04/03/business/mine.php

This article discusses a proposed growth plan for Indonesia. See http://www.iht.com/articles/2008/04/03/business/rupiah.php

Cuba has announced that it will begin leasing unused land in its control to those who wish to use it for agricultural purposes. See http://news.bbc.co.uk/go/em/fr/-/2/hi/americas/7327134.stm

It appears that the Argentine farmers are again halting their strikes. See http://news.bbc.co.uk/go/em/fr/-/2/hi/americas/7327476.stm

In the continuation of a previous post, this article discusses the arguments and counterarguments made by Boeing and the US Air Force in regards to the EADS contract. See http://www.iht.com/articles/2008/04/02/business/02tanker.php

After deadly riots over food costs in the Cote D'Ivoire, the Ivorian government has announced that it will reduce certain customs duties. See http://news.bbc.co.uk/go/em/fr/-/2/hi/africa/7325733.stm

This article discusses the strike at a Nike plant in Vietnam. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7324242.stm

IBM has been banned from attempting to procure contracts with the US government due to accusations of procurement improprieties in 2006. See http://www.iht.com/articles/2008/04/01/business/01IBM.php

This article discusses the Swiss plan to ban trade in cat fur. See http://www.iht.com/articles/2008/04/01/europe/01cats.php

This article discusses the recent conviction of a teenager from New Zealand in an international cyber-crime operation. See http://news.bbc.co.uk/go/em/fr/-/2/hi/asia-pacific/7323733.stm

Dramatic increases in the cost of food have caused the Indian government to stop the export of all rice other than basmati. See http://news.bbc.co.uk/go/em/fr/-/2/hi/south_asia/7323713.stm

A week after allowing Cubans access to cell phones, the Cuban government has announced that it will reduce its rules on Cuban access to certain hotels located within Cuba. See http://news.bbc.co.uk/go/em/fr/-/2/hi/americas/7322739.stm

Vietnam and India have become the latest nations to limit their export of rice in order to ensure that their respective domestic populations' rice demands can be reasonably met. See http://www.iht.com/articles/2008/03/28/business/rice.php

After promises of talks with the government, the striking Argentine farmers has suspended their strikes. See http://news.bbc.co.uk/go/em/fr/-/2/hi/americas/7319903.stm

The Cuban government has just eased its restrictions on citizen access to cell phones, potentially opening up a new market. See http://news.bbc.co.uk/go/em/fr/-/2/hi/americas/7318774.stm

China will pay its rice and wheat farmers more for their ctops in order to stave off potential unrest during the Beijing Olympics. See http://www.iht.com/articles/2008/03/28/business/yuan.php

Japan is developing its first domestic made passenger jet. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7318165.stm

In the wake of growing concerns regarding the presence of dangerous chemicals in its mozzarella, the Italian government has agreed to a recall of the particular products in question, thereby avoiding EU sanctions. See http://news.bbc.co.uk/go/em/fr/-/2/hi/europe/7318391.stm

This article discusses attempts by Air France-KLM to make its proposal to buy Alitalia more attractive to Alitalia and its unions. See http://www.iht.com/articles/2008/03/28/business/28alitalia.php

This article discusses the current and potential impacts of rising rice prices and dwindling rice stocks on various Asian economies and cultures. See http://www.ft.com/cms/s/0/d6f1cd74-fc29-11dc-9229-000077b07658,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=9ff9d7a4-506d-11da-bbd7-0000779e2340,print=no,_i_email=y.html

This article discusses strikes by Argentine farmers who are protesting rising export taxes on their products. See http://news.bbc.co.uk/go/em/fr/-/2/hi/americas/7316170.stm

This article discusses the impact of a salmon illness on Chilean salmon stock and Chilean exports of salmon. See http://www.iht.com/articles/2008/03/26/america/salmon.php

This article discusses Romania's shift from embracing genetically modified crops to becoming weary of the health risks associated with these crops. See http://www.iht.com/articles/2008/03/26/business/organic.php

Recent stories regarding the healthfulness of mozzarella cheese from Naples have caused nations such as Japan to suspend importation of the cheese. See http://news.bbc.co.uk/go/em/fr/-/2/hi/europe/7314244.stm

This article discusses the reluctance of foreign courts to impose US punitive damages awards. See http://www.iht.com/articles/2008/03/26/america/26punitive.php

This article discusses the impact of the US-European Open Skies agreement for aviation, which will take effect next week. See http://www.iht.com/articles/2008/03/25/travel/23pracopenskies.php

In a follow-up to a prior posting, the Philippine government has ordered that rice hoarders in the Philippines be punished in light of increasing supply-side issues for rice in the Philippines. See http://www.iht.com/articles/2008/03/25/asia/phil.php

Following the US' lead, several European states have recently recalled Chinese-made batches of Herparin (a drug commonly used as a blood thinning agent) after evidence of contamination. See http://www.iht.com/articles/2008/03/25/business/drug.php

This article discusses the renewed - and legal - trade in mammoth ivory from Russia and the impact of the ban on elephan ivory trading on the desirabiluty of mammoth ivory. See http://www.iht.com/articles/2008/03/25/europe/mammoth.php

This article discusses the proposed corporate manslaughter laws in the UK, which are essentially aimed at increasing the scope of discovery of corporate information in instances of mass disaster (ie. air and boat accidents). See http://www.ft.com/cms/s/0/f5196b12-f9cd-11dc-9b7c-000077b07658,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=fe95602e-e821-11db-b2c3-000b5df10621,print=no,_i_email=y.html

This article discusses a case filed against Chiquita by the families of five missionaries who were kidnapped and supposedly killed by FARC rebels in Colombia. The basis for suit against Chiquita is the allegation at the company gave money to FARC rebels. How does this fit with the decision in Shell? See http://www.iht.com/articles/2008/03/17/america/rebels.php

This article offers an interesting perspective on the financial highs and lows of the island of Nauru. Beyond Nauru itself, the article offers insights into the ways in which local populations which see a drastic influx of money through globalization can benefit and suffer. See http://news.bbc.co.uk/go/em/fr/-/2/hi/programmes/from_our_own_correspondent/7296832.stm

Air France-KLM's bid to take over Alitalia has just been accepted by Alitalia. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7299203.stm

In a historic decision, France is attempting to expand the champagne region and appellation due to increased consumer demand for champagne products. See http://news.bbc.co.uk/go/em/fr/-/2/hi/europe/7294487.stm

This article discusses the various economic impacts of the current currency and financial market fluctuations on European exporters. See http://www.iht.com/articles/2008/03/14/business/euro.php

Chrysler has announced that it will require all but its most essential employees and plants around the world to take a coordinated summer vacation in an effort to cut costs. See http://www.iht.com/articles/2008/03/13/business/chrysler.php

In 2000, a Concorde flight famously caught fire in Paris, killing all aboard. A prosecutor in Paris is now seeking manslaughter charges against Continental - the owner of the Concorde - for failing to take certain safety measures. What are the potential ramifications of this charge on international trade, especially in terms of air travel and associated products? See http://news.bbc.co.uk/go/em/fr/-/2/hi/europe/7291269.stm

It appears that the US government will act to shut down certain salmon fisheries along the West Coast due to issues involving stock depletion. See http://www.iht.com/articles/2008/03/13/america/salmon.php

This article provides insight into the world of grain trading, which has come under increasing scrutiny given the recent rises in grain prices. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7289278.stm

The EU regulatory body has given its approval to the acquisition of DoubleClick by Google, allowing the transaction to go forward. See http://www.iht.com/articles/2008/03/11/business/google.php

Venezuela has recently allowed foreign oil development firms to return to the country after having thrown them out over a year ago. Interestingly, most US oil companies are stating away from Venezuela (and indeed some, such as Exxon/Mobil are still involving in litigation against Venezuela), however European oil companies have responded favorably to the invitation to return. See http://www.ft.com/cms/s/0/5c4d3202-eef0-11dc-97ec-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=8fa2c9cc-2f77-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article discusses attempts by several Persian Gulf states to develop alternative methods of fuel and energy generation for economic and environmental reasons. See http://www.ft.com/cms/s/0/2e10ac0c-eef5-11dc-97ec-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=728a07a0-53bc-11db-8a2a-0000779e2340,print=no,_i_email=y.html

China has announced that it expects to encounter a serious problem with joblessness in the future. See http://news.bbc.co.uk/go/em/fr/-/2/hi/asia-pacific/7286024.stm

This article discusses an often ignored issue involving rising food prices - the negative impacts on food producers themselves, especially farmers. See http://www.iht.com/articles/2008/03/09/business/crop.php

Newly available information suggests that the recent economic downturn in developed markets - particularly the US - has had the effect of increasing investment in emerging markets. See http://www.ft.com/cms/s/0/1df548e0-ebd1-11dc-9493-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=abb716b0-2f7a-11da-8b51-00000e2511c8,print=no,_i_email=y.html

Recent statements by the head of the UN World Food Program estimate that food prices will cintinue to increase through at least 2010. What does this suggest for future commodification of food and food-related products in the global marketplace? Does this prediction justify more protectionist stances by governments trying to ensure that their populations have enough affordable food? Would such measures fall under the GATT Article III exceptions (ie . for public health and safety)? See http://news.bbc.co.uk/go/em/fr/-/2/hi/in_depth/7281686.stm

This article discusses the pro and anti-whaling forces in international fishing and trade and new attempts to reconcile these differences. See http://news.bbc.co.uk/go/em/fr/-/2/hi/science/nature/7279583.stm

This article discusses a new plan announced by Goldman Sachs to spend $100 million on investing in women's businesses throughout the developing world. See http://www.iht.com/articles/2008/03/05/business/women.php

New data indicates that the European housing market declined in the second quarter of 2007. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7277588.stm

Australia has just raised its interest rates to a 12 year high. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7276367.stm

This article presents the impact of globalization on an already marginalized popoulation in a slightly different light. What do you think of the patent idea raised in the article? Would that be an effective way of continuing trade in these products while still protecting their makers? Are there any other alternatives? See http://news.bbc.co.uk/go/em/fr/-/2/hi/south_asia/7232238.stm

This article highlights the potential impact of the proposed non-domiciliary tax in the UK on London's status as the world's premier financial center. See http://www.ft.com/cms/s/0/c16c119c-e646-11dc-8398-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=34c8a8a6-2f7b-11da-8b51-00000e2511c8,print=no,_i_email=y.html

This article discusses the Indian budget, including provisions for farmer debt relief. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7270361.stm

This article presents an interesting discussion of the impact of gold prices on traditional gift-giving to children in Korea. In a larger context, what do the issues raised in the article suggest about the impact of globalized markets on traditional practices? See http://www.iht.com/articles/2008/02/28/asia/gold.php

This article presents various views on important issues to various portions of Indian business and society in advance of the new Indian budget release. What do the issues raised in this article say about the impact of globalization on emerging economies such as the Indian economy? See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7267656.stm

This article discusses the anticipated benefits of globalization per se on the EU. See http://www.ft.com/cms/s/0/133e5e68-e5f1-11dc-8398-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,print=no,dwp_uuid=abb716b0-2f7a-11da-8b51-00000e2511c8,_i_email=y.html

During the recent conflict in the Democratic Republic of the Congo, minerals - especially diamonds - played a negative role in funding rebel and government forces charged with human rights violations. Interestingly, the DRC is now turning to minerals and mining licenses to provide revenue for the country and its recovery from the war. See http://www.ft.com/cms/s/0/7e103396-e3d6-11dc-8799-0000779fd2ac,noOfParas=2,emailFormat=plainText,storyType=ultralight,dwp_uuid=a99ba554-4d15-11da-ba44-0000779e2340,print=no,_i_email=y.html

The EU has just assessed over a billion dollars in fines against Microsoft from anti-competition actions taken by Microsoft in the EU area. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7266629.stm

This article discusses the recent purchase of a well established French vineyard by a Chinese businessman and, more broadly, the impact of globalized access to wine markets on traditional wine producers. See http://www.iht.com/articles/2008/02/26/europe/journal.php

This article discusses recent statements made by the former Chairman of the Federal Reserve, Alan Greenspan, regarding the US economy and what he sees as the dangers of allowing increased foreign investment in it. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7264135.stm

This article discusses the impact of rising oil and gas prices on the middle-class in Persian Gulf states which export oil. See http://www.iht.com/articles/2008/02/24/business/gulf.php

http://www.economist.com/world/asia/displaystory.cfm?story_id=10566770&CFID=9914703&CFTOKEN=15c79c6e8b1008f-47EAFB6E-B27C-BB00-012BC0DBEB17B3DF

Salty shepherds

This article discusses a dispute concerning whaling in the South Sea. The controversy seems like it is slowly brewing between Australia and Japan. Japan intends to kill 900 minke and 50 fin whales near Antarctica by mid-April for, so called, scientific reasons. Japanese whaling ships, however, have faced substantial protests by anti-whaling groups and the Australian people. What is interesting in this story is that the whaling is taking place in an Australian sanctuary, which is only recognized by only four countries. Even though a court in Australia has ruled against the whaling by Japan, the Prime Minister of Australia, Kevin Rudd, is finding it hard to follow the court. First, there are several other considerations for him before he can pressure Japan. The article mentions a free-trade agreement that is intended to calm Japanese nerves in the face of Chinese influence in the region. Second, of course, could be the fact that Japan does not recognize the sanctuary and considers it international waters.

In class, we have been recently talking about the extent of national jurisdiction and extraterritoriality. It is, therefore, interesting when a court rules against a party that is operating in a disputed or internationally governed region. The waters off Antarctica are probably not as intensely disputed as, for example, Kashmir or Kosovo. The fact remains, however, a foreign entity or corporation can always defend its activities by claiming that the region is disputed and the no national court has a jurisdiction. Therefore, it seems as if a national court would always find it difficult to implement any of its rulings against illegal activities in a disputed region. The Japanese government and its whaling ships, for example, do not consider the Federal Court of Australia as the proper arbitrator for any disputes concerning whaling. The article also mentions that there is distrust between the two countries, which would make things even more complicated. In such a scenario, an international arbitration panel that both countries are signatories to would be the proper venue for dispute resolution. Here, the International Whaling Commission could be approached if Australia is completely willing to implement its court’s ruling and argue that Japan’s whaling is not for scientific purposes.

submitted by: Mohammad Siddiqui

This article discusses the issue of Germany's immigrant population as its first generation faces retirement. It is interesting generally and also discusses some of the social services which are made available to Germans and are often the target of debate regarding the effect of these services on the health and future of the German economy. See http://www.iht.com/articles/2008/02/21/business/wbimmig.php

The Mayor of London recently announced a plan to impose heavy taxes on car usage in the City of London for environmental purposes (ie. lowering pollution). In response, Porsche is threatening to sue the City over the new taxes. What does this suggest about the impact of localities on international trade generally? What would be the likely outcome if a US city decided to impose the same measures and was sued by a company such as Porsche? See http://www.iht.com/articles/reuters/2008/02/19/business/OUKBS-UK-PORSCHE-LONDON.php

A new study indicates that US consumer confidence has fallen in recent months. See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7247300.stm

Despite Apple's phased marketing plan for the iPhone, there is a growing market for iPhones which are smuggled into China, which is the site of production for iPhones. See http://www.iht.com/articles/2008/02/18/technology/iphone.php

This article discusses a specific defense contracting deal between Lockheed and India but it also raises the interrelation of defense contracting on a global level. See http://news.bbc.co.uk/2/hi/business/7250474.stm

This article discusses the actions of the British government to intercede in and investigate an arms transaction between a UK company and Saudi Arabia. Although this happened in the UK, we've read at least one case involving a somewhat similar scenario in the US. What does this say about the role of governments in regulating transactions involving arms and general defense items not only in terms of protecting national economic knowledge but also in terms of protecting national security? Which of the two, if any, seems to be the better argument for this type of government intercession? See http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7244051.stm

On Monday this week, President Bush signed his 2008 economic report. http://www.whitehouse.gov/news

The part in the report relevant to our class is Chapter 3. The Causes and Consequences of Export Growth where it reveals the Executive’s take on the U.S. economic policies and goals with respect to international trade. http://www.whitehouse.gov/cea/2008_erp_ch3.pdf

As stated in the concluding remarks of the chapter, the Bush administration is pushing for further liberalization of trade with countries of various regions through multilateral, regional and bilateral negotiations. It also supports the expansion of multinationals by means of open investment, outsourcing, specialization, and division of labor.

Keeping these economic policies and goals in mind would help us analyze current events more in depth as to the on-going Executive actions with respect to foreign policy as well as in the context of balance of powers with other branches of government.

One thing I personally thought interesting to observe as it currently unfolds is, despite of its scandalous nature, the controversy over the Security and Prosperity Partnership of North America (SPP). http://spp.gov President Bush entered into agreement with the leaders of Canada and Mexico in 2005 to form a joint commitment to the security and prosperity of North America. Because of the vague language and informal nature of the agreement, so to speak, the SPP has brewed many speculations as to the motive of forming such pact among these three countries. One speculation is focused on the likelihood of creating a uniform currency pseudonymously called “Amero.” People who are bought into this speculation base the merit of the argument on the fact that Bush is aggressively seeking open markets for U.S. goods and services. They believe Bush has enough motive to create a uniform currency in North America as a way to form a trinational super FTA (no tariffs, minimal transportation costs, expansion of geographically advantageous markets, and convenience of getting cheap labor) with these countries. The US dollar is no longer competitive in international markets; the EURO is ge