In New Delhi,&nbsp;India signed a trade agreement with <a href="https://x.com/sidhant/status/1766843156589695174?s=20">Iceland</a>, <a href="https://x.com/WIONews/status/1766872117616730415?s=20">Liechtenstein</a>, <a href="https://x.com/sidhant/status/1766804458456162693?s=20">Norway</a>, and <a href="https://x.com/sidhant/status/1766780674844000403?s=20">Switzerland</a> on Sunday that includes a commitment of $100 billion in investment and creating 1 million direct jobs in India in the next 15 years.

Hailed as a 'watershed moment' by Prime Minister Narendra Modi, New Delhi committed to reducing import tariffs on industrial products from the four European countries that comprise the European Free Trade Association, or EFTA.

Also watch |&nbsp;Norway &amp; Liechtenstein Ministers speak on India-EFTA agreement | World News

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India’s Commerce and Industry Minister Piyush Goyal said India for the first time had signed an agreement with an important economic bloc in Europe.

Parmelin, speaking on behalf of the <a href="https://www.wionews.com/india-news/india-seals-free-trade-agreement-with-four-nation-european-bloc-698498">EFTA member states</a>, said that "EFTA countries gain market access to a major growth market. Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs."

Read more in The Capitals this week.

<h2>Berlin, Germany</h2>

The corridors of power in several Western capitals were rocked after a leaked audio tape showed how German military officers discussed&nbsp;deployment scenarios for Taurus missiles in Ukraine. The development occurred after a German military officer used an unsecured phone line at a Singapore hotel to join a conference call that was hacked by Russians and leaked to the public, Germany’s defence minister&nbsp;Boris Pistorius said.

Berlin was left&nbsp;embarrassed after the Allies told it to enhance the security of such crucial calls. But the real fallout was evident in the further deterioration of Berlin-Moscow ties which are already at their lowest since Russia launched an offensive on Ukraine over two years ago.&nbsp;

German Chancellor Olaf Scholz said that delivering those weapons to Ukraine was not an option, adding that he did not want Germany to be drawn into the war directly.

But the Russian foreign ministry in Moscow threatened Berlin with "dire consequences" in connection with the leak.

<h2>Beijing, China</h2>

In Beijing, the legislators of Chinese Communist Party (CCP) vowed to implement several new laws to "modernise China's system and capacity for national security" with a focus on sovereignty.

About 170-member National People's Congress Standing Committee (NPCSC), gathered at the annual meeting of parliament in Beijing earlier this week. The NPSCS pledged to enact laws including an emergency management law and atomic energy law.

They also said they would revise laws on national defence education and cybersecurity.

The annual legislative plan had an increased focus on national security amid China's continuous standoff with India along the Himalayas in Ladakh and increased maritime belligerence across the Taiwan strait.

The NPCSC report also vowed to "strengthen legislation in areas involving foreign affairs and develop a system of laws for extraterritorial application."

"We will use legal means to stand up for our country in the international arena and resolutely safeguard our sovereignty, security and development interests," the NPCSC report said.

<h2>Port-au-Prince, Haiti</h2>

Heavy gunfire sporadically erupted all through this week near Haiti's national palace, escalating the political turmoil that has gripped the nation.

The strife in Haiti reached a critical point last week when the country declared a state of emergency.

The escalation saw armed gangs attacking prisons and inmates breaking free, leading to a wave of violence and chaos.

Over ten thousand people were displaced during the unrest, coinciding with Prime Minister Henry's absence. The PM is in Kenya, where he was negotiating for an international force to combat Haiti's escalating gang wars.

The United States has asked Haiti's prime minister to expedite a political transition as armed gangs actively seek his ouster.&nbsp;

<h2>Madrid, Spain</h2>

A decade ago, Nobel Prize-winning author Gabriel Garcia Marquez passed away in the Mexican capital Mexico City. But this week, Marquez was reborn with his undisclosed work that was published by his sons Gonzalo and Rodrigo Garcia Barcha in Madrid. The&nbsp;novel titled "Until August" was penned by the prolific Colombian-born writer in 2004.

Garcia Marquez, renowned for his masterpieces like "One Hundred Years of Solitude", has left&nbsp;behind a rich literary legacy. The posthumous release of "Until August" offers readers a poignant glimpse into the creative mind of the acclaimed author.

The release of "Until August" coincided with Garcia Marquez's birthday.

The story revolves around Ana Magdalena Bach, who annually embarks on a ferry journey to the island where her mother rests in eternal peace. This ritual transforms into a captivating exploration of self-discovery, as Ana grapples with the temptation to embrace a different persona for one night each year. 
 
The posthumous novel is poised to add another chapter to the enduring legacy of Gabriel Garcia Marquez, a literary luminary whose words continue to resonate with readers across the globe.

In New Delhi, India signed a trade agreement with Iceland, Liechtenstein, Norway, and Switzerland on Sunday that includes a commitment of $100 billion in investment and creating 1 million direct jobs in India in the next 15 years.

In New Delhi, India signed a trade agreement with Iceland, Liechtenstein, Norway, and Switzerland on Sunday that includes a commitment of $100 billion in investment and creating 1 million direct jobs in India in the next 15 years. Hailed as a 'watershed moment' by Prime Minister Narendra Modi, New Delhi committed to reducing import tariffs on industrial products from the four European countries that comprise the European Free Trade Association, or EFTA. Also watch | Norway & Liechtenstein Ministers speak on India-EFTA agreement | World News × India’s Commerce and Industry Minister Piyush Goyal said India for the first time had signed an agreement with an important economic bloc in Europe. Parmelin, speaking on behalf of the EFTA member states, said that "EFTA countries gain market access to a major growth market. Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs." Read more in The Capitals this week. Berlin, Germany The corridors of power in several Western capitals were rocked after a leaked audio tape showed how German military officers discussed deployment scenarios for Taurus missiles in Ukraine. The development occurred after a German military officer used an unsecured phone line at a Singapore hotel to join a conference call that was hacked by Russians and leaked to the public, Germany’s defence minister Boris Pistorius said. Berlin was left embarrassed after the Allies told it to enhance the security of such crucial calls. But the real fallout was evident in the further deterioration of Berlin-Moscow ties which are already at their lowest since Russia launched an offensive on Ukraine over two years ago. German Chancellor Olaf Scholz said that delivering those weapons to Ukraine was not an option, adding that he did not want Germany to be drawn into the war directly. But the Russian foreign ministry in Moscow threatened Berlin with "dire consequences" in connection with the leak. Beijing, China In Beijing, the legislators of Chinese Communist Party (CCP) vowed to implement several new laws to "modernise China's system and capacity for national security" with a focus on sovereignty. About 170-member National People's Congress Standing Committee (NPCSC), gathered at the annual meeting of parliament in Beijing earlier this week. The NPSCS pledged to enact laws including an emergency management law and atomic energy law. They also said they would revise laws on national defence education and cybersecurity. The annual legislative plan had an increased focus on national security amid China's continuous standoff with India along the Himalayas in Ladakh and increased maritime belligerence across the Taiwan strait. The NPCSC report also vowed to "strengthen legislation in areas involving foreign affairs and develop a system of laws for extraterritorial application." "We will use legal means to stand up for our country in the international arena and resolutely safeguard our sovereignty, security and development interests," the NPCSC report said. Port-au-Prince, Haiti Heavy gunfire sporadically erupted all through this week near Haiti's national palace, escalating the political turmoil that has gripped the nation. The strife in Haiti reached a critical point last week when the country declared a state of emergency. The escalation saw armed gangs attacking prisons and inmates breaking free, leading to a wave of violence and chaos. Over ten thousand people were displaced during the unrest, coinciding with Prime Minister Henry's absence. The PM is in Kenya, where he was negotiating for an international force to combat Haiti's escalating gang wars. The United States has asked Haiti's prime minister to expedite a political transition as armed gangs actively seek his ouster. Madrid, Spain A decade ago, Nobel Prize-winning author Gabriel Garcia Marquez passed away in the Mexican capital Mexico City. But this week, Marquez was reborn with his undisclosed work that was published by his sons Gonzalo and Rodrigo Garcia Barcha in Madrid. The novel titled "Until August" was penned by the prolific Colombian-born writer in 2004. Garcia Marquez, renowned for his masterpieces like "One Hundred Years of Solitude", has left behind a rich literary legacy. The posthumous release of "Until August" offers readers a poignant glimpse into the creative mind of the acclaimed author. The release of "Until August" coincided with Garcia Marquez's birthday. The story revolves around Ana Magdalena Bach, who annually embarks on a ferry journey to the island where her mother rests in eternal peace. This ritual transforms into a captivating exploration of self-discovery, as Ana grapples with the temptation to embrace a different persona for one night each year. The posthumous novel is poised to add another chapter to the enduring legacy of Gabriel Garcia Marquez, a literary luminary whose words continue to resonate with readers across the globe.

The Capitals: New Delhi's 'watershed moment' with European EFTA bloc

Every January, the Swiss resort town of Davos becomes the meeting place of global leaders, industry titans, and thought leaders.

Since 1971, the World Economic Forum (WEF) summit has turned the town's name into a by-word for the 'global elite'.

However, the connotation is often negative.

The World Economic Forum has long been the torchbearer of globalisation, arguing that it brought "millions out of poverty".

It has continued to bat for globalisation, despite the idea coming under attack over the last decade.

In fact, even as the world's economic growth slowed in 2023, the WEF pitched for revamping globalisation.

The driving force behind the Forum's globalisation push is its founder, 85-year-old Klaus Schwab.

The German-born economist and professor of business policy has deemed globalisation “a very easy scapegoat”.

When Schwab began the non-profit organisation in 1971, 'globalisation' was a little-known concept.

While the WEF has now become the poster boy of globalisation, its origins were more European. &nbsp;

The European Management Forum, its earlier avatar, brought together European corporates, who wanted to compete with U.S. firms.

Having studied management in the US, Schwab was fascinated by American&nbsp;corporate practices and wanted it replicated in Europe.

Long eclipsed by the US, Europe sought&nbsp;a return to economic glory. Schwab's idea made a mark instantly.

Several hundred top European executives gathered at Davos in January 1971 for a two-week-long symposium.

The idea of a multinational forum was pathbreaking for the 1970s, an era defined by the Cold War.

During the Cold War, the United Nations provided the only common platform for global leaders.

But the geopolitical split between the Capitalist &amp; the Socialist world meant countries rarely agreed on anything.

This is why Davos, a remote location that provides privacy, offered the best platform for divergent views.

At least, that is what the World Economic Forum continues to claim to date.

Schwab's idea of the forum emerged out of the concept of "multi-stakeholder participation".

This approach considers the interests of everybody involved in the production flow and distribution process.

Thus, the owner, shareholders, customers, suppliers, employees as well as the government and interest groups play a role.

Primarily a management concept, Schwab creatively applied it to build the forum, where he brought companies and policymakers together.

But its transformation from a European organisation that put out feelers to the US to a globalisation poster boy was complete&nbsp;by the mid-1980s.

By then, the non-profit organisation got its present name, more trans-Atlantic voices spoke at Davos, and a rising China made its debut.

In fact, Henry Kissinger remarked at the 1980 Davos meeting: "For the first time in history, foreign policy is truly global."

When the Soviet Union dissolved in 1991, it was seen as a win for the democratic, free-market world.

The world became unipolar, with the West-led world order facing no major challenge.

This also meant that WEF was in pole position to expand its idea of globalisation to newer markets.

Globalisation became the buzzword of the 1990s and early 2000s, as the economies of India and China rose rapidly.

Many even attributed the establishment of the WTO to several discussions that took place at Davos summits.

It seemed WEF's motto "Entrepreneurship in the global public interest" was reshaping the new economic order.

The 2008 Global Financial Crisis, however, disrupted the WEF's fairytale-like rise.

As economies collapsed, people began questioning the neo-liberal globalisation that WEF was closely linked to.&nbsp;

Populism rose sharply as those apparently left behind by globalisation emerged as a political force.

As globalisation came under attack, so did its poster boy - the World Economic Forum.

Once a melting pot of ideas, Davos began to be identified as a 'talking shop' of the global elite with minimal real impact.&nbsp;

In fact, many have raised questions about the true intentions of the forum.

Critics have argued it promotes multinational firms and its version of global capitalism under the pretext of "doing good".

Even Schwab has agreed that globalisation in its current form may no longer work, advocating for 'Globalisation 4.0'.

Schwab has left a mark in the annals of global political economy. But only posterity will tell us whether his legacy transcends the WEF.&nbsp;

Every January, the Swiss resort town of Davos becomes the meeting place of global leaders, industry titans, and thought leaders. Since 1971, the World Economic Forum (WEF) summit has turned the town's name into a by-word for the 'global elite'.

Every January, the Swiss resort town of Davos becomes the meeting place of global leaders, industry titans, and thought leaders. Since 1971, the World Economic Forum (WEF) summit has turned the town's name into a by-word for the 'global elite'. However, the connotation is often negative. The World Economic Forum has long been the torchbearer of globalisation, arguing that it brought "millions out of poverty". It has continued to bat for globalisation, despite the idea coming under attack over the last decade. In fact, even as the world's economic growth slowed in 2023, the WEF pitched for revamping globalisation. The driving force behind the Forum's globalisation push is its founder, 85-year-old Klaus Schwab. The German-born economist and professor of business policy has deemed globalisation “a very easy scapegoat”. When Schwab began the non-profit organisation in 1971, 'globalisation' was a little-known concept. While the WEF has now become the poster boy of globalisation, its origins were more European. The European Management Forum, its earlier avatar, brought together European corporates, who wanted to compete with U.S. firms. Having studied management in the US, Schwab was fascinated by American corporate practices and wanted it replicated in Europe. Long eclipsed by the US, Europe sought a return to economic glory. Schwab's idea made a mark instantly. Several hundred top European executives gathered at Davos in January 1971 for a two-week-long symposium. The idea of a multinational forum was pathbreaking for the 1970s, an era defined by the Cold War. During the Cold War, the United Nations provided the only common platform for global leaders. But the geopolitical split between the Capitalist & the Socialist world meant countries rarely agreed on anything. This is why Davos, a remote location that provides privacy, offered the best platform for divergent views. At least, that is what the World Economic Forum continues to claim to date. Schwab's idea of the forum emerged out of the concept of "multi-stakeholder participation". This approach considers the interests of everybody involved in the production flow and distribution process. Thus, the owner, shareholders, customers, suppliers, employees as well as the government and interest groups play a role. Primarily a management concept, Schwab creatively applied it to build the forum, where he brought companies and policymakers together. But its transformation from a European organisation that put out feelers to the US to a globalisation poster boy was complete by the mid-1980s. By then, the non-profit organisation got its present name, more trans-Atlantic voices spoke at Davos, and a rising China made its debut. In fact, Henry Kissinger remarked at the 1980 Davos meeting: "For the first time in history, foreign policy is truly global." When the Soviet Union dissolved in 1991, it was seen as a win for the democratic, free-market world. The world became unipolar, with the West-led world order facing no major challenge. This also meant that WEF was in pole position to expand its idea of globalisation to newer markets. Globalisation became the buzzword of the 1990s and early 2000s, as the economies of India and China rose rapidly. Many even attributed the establishment of the WTO to several discussions that took place at Davos summits. It seemed WEF's motto "Entrepreneurship in the global public interest" was reshaping the new economic order. The 2008 Global Financial Crisis, however, disrupted the WEF's fairytale-like rise. As economies collapsed, people began questioning the neo-liberal globalisation that WEF was closely linked to. Populism rose sharply as those apparently left behind by globalisation emerged as a political force. As globalisation came under attack, so did its poster boy - the World Economic Forum. Once a melting pot of ideas, Davos began to be identified as a 'talking shop' of the global elite with minimal real impact. In fact, many have raised questions about the true intentions of the forum. Critics have argued it promotes multinational firms and its version of global capitalism under the pretext of "doing good". Even Schwab has agreed that globalisation in its current form may no longer work, advocating for 'Globalisation 4.0'. Schwab has left a mark in the annals of global political economy. But only posterity will tell us whether his legacy transcends the WEF.

Flashback Friday: How the World Economic Forum became the poster boy of globalisation 

Trade ministers from the Group of Seven (G-7)&nbsp;have come together to criticise the exploitation of commercial vulnerabilities by certain nations to further their policy objectives, Bloomberg reported.&nbsp;

In a joint statement issued after their two-day gathering in Osaka, Japan, the G-7 pledged to collaborate with developing nations to ensure the resilience of supply chains for crucial items like critical minerals, semiconductors, and batteries. &nbsp;

While refraining from naming specific culprits, the group voiced their disapproval of actions that weaponise economic dependencies, emphasising the need for free, fair, and mutually beneficial economic and trade relationships. They also expressed concern over the increasing frequency of economic intimidation and threats, which they believe interfere with the legitimate actions of governments.&nbsp;

While the statement didn't explicitly single out any countries employing these tactics, China is widely perceived as a target.&nbsp;

China has, in recent years, used tariffs, import bans, and restrictions against nations like Australia and Lithuania in efforts to influence policies it opposes or express dissatisfaction with foreign governments' actions.&nbsp;

The G-7's outreach session also included non-member nations, such as India, Indonesia, Australia, Chile, and Kenya, emphasising the importance of keeping supply chains secure and inclusive.&nbsp;

The COVID-19 pandemic exposed vulnerabilities in supply chains for critical items like semiconductors and medical devices, leading to concerns about overreliance on specific nations for these essential commodities. Geopolitical tensions in various regions have driven governments to employ trade barriers, sanctions, and subsidies to advance their security and diplomatic objectives. As developing nations often face pressure to align with either democratic powers or the camp led by China and Russia, the G-7's outreach to non-members reflects the evolving dynamics in global trade.&nbsp;

The G-7 nations pledged to promote fair competition by discouraging protectionism and market-distorting measures, noting their concern over export control measures on critical minerals.&nbsp;

This indirect criticism is likely aimed at China, which recently imposed export restrictions on elements essential for high-tech goods like semiconductors and electric vehicle batteries. The group called for an immediate end to measures that unnecessarily restrict trade, alluding to Chinese and Russian bans on Japanese seafood imports following the release of treated wastewater from the Fukushima nuclear power plant.&nbsp;

While the G-7 issued appeals for unity and joint action, there were indications of the challenges in achieving consensus, even among developed nations. The European Union's chief trade negotiator, Valdis Dombrovskis, pointed to additional demands from the United States as the reason for the failure to reach an agreement on crucial minerals. The EU and Australia are currently engaged in critical free trade talks in Osaka, with both sides warning that a failure to reach a deal now could result in substantial delays in any potential pact. &nbsp;

(With inputs from Bloomberg)&nbsp;

WATCH WION LIVE HERE

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Trade ministers from the Group of Seven (G-7) have come together to criticise the exploitation of commercial vulnerabilities by certain nations to further their policy objectives, Bloomberg reported.

Trade ministers from the Group of Seven (G-7) have come together to criticise the exploitation of commercial vulnerabilities by certain nations to further their policy objectives, Bloomberg reported. In a joint statement issued after their two-day gathering in Osaka, Japan, the G-7 pledged to collaborate with developing nations to ensure the resilience of supply chains for crucial items like critical minerals, semiconductors, and batteries. While refraining from naming specific culprits, the group voiced their disapproval of actions that weaponise economic dependencies, emphasising the need for free, fair, and mutually beneficial economic and trade relationships. They also expressed concern over the increasing frequency of economic intimidation and threats, which they believe interfere with the legitimate actions of governments. While the statement didn't explicitly single out any countries employing these tactics, China is widely perceived as a target. China has, in recent years, used tariffs, import bans, and restrictions against nations like Australia and Lithuania in efforts to influence policies it opposes or express dissatisfaction with foreign governments' actions. The G-7's outreach session also included non-member nations, such as India, Indonesia, Australia, Chile, and Kenya, emphasising the importance of keeping supply chains secure and inclusive. The COVID-19 pandemic exposed vulnerabilities in supply chains for critical items like semiconductors and medical devices, leading to concerns about overreliance on specific nations for these essential commodities. Geopolitical tensions in various regions have driven governments to employ trade barriers, sanctions, and subsidies to advance their security and diplomatic objectives. As developing nations often face pressure to align with either democratic powers or the camp led by China and Russia, the G-7's outreach to non-members reflects the evolving dynamics in global trade. The G-7 nations pledged to promote fair competition by discouraging protectionism and market-distorting measures, noting their concern over export control measures on critical minerals. This indirect criticism is likely aimed at China, which recently imposed export restrictions on elements essential for high-tech goods like semiconductors and electric vehicle batteries. The group called for an immediate end to measures that unnecessarily restrict trade, alluding to Chinese and Russian bans on Japanese seafood imports following the release of treated wastewater from the Fukushima nuclear power plant. While the G-7 issued appeals for unity and joint action, there were indications of the challenges in achieving consensus, even among developed nations. The European Union's chief trade negotiator, Valdis Dombrovskis, pointed to additional demands from the United States as the reason for the failure to reach an agreement on crucial minerals. The EU and Australia are currently engaged in critical free trade talks in Osaka, with both sides warning that a failure to reach a deal now could result in substantial delays in any potential pact. (With inputs from Bloomberg) WATCH WION LIVE HERE

G-7 trade chiefs condemn weaponisation of economic dependencies: Report  

United Kingdom's Trade Secretary Kemi Badenoch will be in Delhi from today as the 6th round of FTA negotiations between the UK and India begin. Both sides are working on an ambitious trade pact that aims to ease customs duties on goods.

UK trade secretary arrives in Delhi to discuss Free Trade Agreement

Indian PM Narendra Modi and his UAE counterpart are expected to hold virtual talks in the coming week that they will be likely signing a free trade pact and as of now both sides are considering to hold the talks.

'India In Discussion With UAE For Free Trade Pacts': Piyush Goyal

President Xi Jinping pegged China as the pivot point for global free trade Thursday, vowing to keep his "super-sized" economy open and warning against protectionism in a global economy eviscerated by the COVID-19 pandemic.

Buoyed by the signing of the world's largest trade pact over the weekend, Xi said the Asia-Pacific is the "forerunner driving global growth" in a world hit by "multiple challenges" including the coronavirus.

He vowed "openness" to trade and refuted any possibility of the "decoupling" of China's economy — in his only comments nodding to the hostile trade policy of Donald Trump's US administration, which has battered China with tariffs and tech restrictions.

Also read|&nbsp;<a href="https://www.wionews.com/opinions-blogs/subtly-china-pressures-gulf-states-to-reduce-regional-tensions-343832">Subtly, China pressures Gulf states to reduce regional tensions</a>

The Asia-Pacific Economic Cooperation (APEC) forum, held online this year because of the coronavirus pandemic, brings together 21 Pacific Rim countries including the world's two biggest economies, accounting for about 60 per cent of global GDP.

It was not immediately clear if Trump, wounded by his election loss to Joe Biden, would take part in the summit or send a high level delegate in his place.

In a speech that veered into triumphalism over China's economic "resilience and vitality" in coming back from the virus, which first emerged in the central city of Wuhan, Xi warned countries who insist on trade barriers will suffer self-inflicted wounds.

Also read|&nbsp;<a href="https://www.wionews.com/world/how-china-is-stonewalling-reforms-at-united-nations-security-council-343771">How China is stonewalling reforms at United Nations Security Council</a>

"Openness enables a country to move forward while seclusion holds it back," he said.

"China will actively cooperate with all countries, regions and enterprises that want to do so. We will continue to hold high the banner of openness and co-operation."

Trade agenda

The high rhetoric may raise eyebrows in capitals where China has either restricted trade, imposed sudden blocks or used its giant economy as a bargaining chip in wider geopolitical plays.

In the APEC region, Australian exports including beef, wine and barley have been disrupted to their largest market, as diplomatic rumble over the origins of the pandemic as well as alleged antics by each other's spies hammer relations.&nbsp;

The APEC gathering comes a week after China and 14 other Asia-Pacific countries signed the world's largest free-trade deal.

Also read|&nbsp;<a href="https://www.wionews.com/world/taiwan-refuses-to-renew-the-licence-of-china-friendly-news-channel-343923">Taiwan refuses to renew the licence of China-friendly news channel</a>

The Regional Comprehensive Economic Partnership (RCEP), which excludes the US, is viewed as a major coup for China and further evidence that Beijing is setting the agenda for global commerce as Washington retreats.&nbsp;

RCEP's rival was the Trans-Pacific Partnership — championed by former Barack Obama — but Trump pulled out of it and the pact has been replaced by a watered-down alternative that the United States has not joined.

Xi had no direct words for President-elect Biden, whose ascension to office next year — while still clouded by Trump's refusal to concede defeat - is seen as likely to see a more naunced extension of Washington's current China policy.&nbsp;

Biden has been strident on China's human rights record, from the Uighur Muslims in its Xinjiang region to Hong Kong's democracy movement.

While he will he cast a more moderate presence on the global stage, analysts say he will seek deeper alliances to hem in Chinese tech — which the US says provides a back door to Beijing — and trade imbalances.

President Xi Jinping pegged China as the pivot point for global free trade Thursday, vowing to keep his "super-sized" economy open and warning against protectionism in a global economy eviscerated by the COVID-19 pandemic.

President Xi Jinping pegged China as the pivot point for global free trade Thursday, vowing to keep his "super-sized" economy open and warning against protectionism in a global economy eviscerated by the COVID-19 pandemic. Buoyed by the signing of the world's largest trade pact over the weekend, Xi said the Asia-Pacific is the "forerunner driving global growth" in a world hit by "multiple challenges" including the coronavirus. He vowed "openness" to trade and refuted any possibility of the "decoupling" of China's economy — in his only comments nodding to the hostile trade policy of Donald Trump's US administration, which has battered China with tariffs and tech restrictions. Also read| Subtly, China pressures Gulf states to reduce regional tensions The Asia-Pacific Economic Cooperation (APEC) forum, held online this year because of the coronavirus pandemic, brings together 21 Pacific Rim countries including the world's two biggest economies, accounting for about 60 per cent of global GDP. It was not immediately clear if Trump, wounded by his election loss to Joe Biden, would take part in the summit or send a high level delegate in his place. In a speech that veered into triumphalism over China's economic "resilience and vitality" in coming back from the virus, which first emerged in the central city of Wuhan, Xi warned countries who insist on trade barriers will suffer self-inflicted wounds. Also read| How China is stonewalling reforms at United Nations Security Council "Openness enables a country to move forward while seclusion holds it back," he said. "China will actively cooperate with all countries, regions and enterprises that want to do so. We will continue to hold high the banner of openness and co-operation." Trade agenda The high rhetoric may raise eyebrows in capitals where China has either restricted trade, imposed sudden blocks or used its giant economy as a bargaining chip in wider geopolitical plays. In the APEC region, Australian exports including beef, wine and barley have been disrupted to their largest market, as diplomatic rumble over the origins of the pandemic as well as alleged antics by each other's spies hammer relations. The APEC gathering comes a week after China and 14 other Asia-Pacific countries signed the world's largest free-trade deal. Also read| Taiwan refuses to renew the licence of China-friendly news channel The Regional Comprehensive Economic Partnership (RCEP), which excludes the US, is viewed as a major coup for China and further evidence that Beijing is setting the agenda for global commerce as Washington retreats. RCEP's rival was the Trans-Pacific Partnership — championed by former Barack Obama — but Trump pulled out of it and the pact has been replaced by a watered-down alternative that the United States has not joined. Xi had no direct words for President-elect Biden, whose ascension to office next year — while still clouded by Trump's refusal to concede defeat - is seen as likely to see a more naunced extension of Washington's current China policy. Biden has been strident on China's human rights record, from the Uighur Muslims in its Xinjiang region to Hong Kong's democracy movement. While he will he cast a more moderate presence on the global stage, analysts say he will seek deeper alliances to hem in Chinese tech — which the US says provides a back door to Beijing — and trade imbalances.

Xi touts China's huge economy as base of free trade in APEC speech

Even as Indian Prime Minister met over 20 European Parliamentarians who will be going to Jammu and Kashmir, New Delhi has highlighted that it is keen on the India-European Union Free Trade Agreement (India-EU FTA).&nbsp;

PM Narendra Modi, Speaking to European MPs called for "early conclusion of a fair and balanced Bilateral Trade and Investment Agreement (BTIA) " which he called a "priority for the government."

Formal talks were suspended on the proposed FTA in 2013, an FTA which will help both India and Europe in a major way. Since 2013, India, EU has met 9 times informally to talk about the FTA with August 5, 2019, was the last time both sides met to discuss the issue.

Key issues why talks failed were on customs duty on wine, auto manufacturing and labour issues. While India did not want an FTA without investments being part of it, the EU wanted FTA on goods. On European cars, Brussels said it wants to sell full manufactured cars to be sold in India to which New Delhi pointed out to its policy of local manufacturing.

High customs on wine in India was another thorny issue as well as EU raising the issue of labour and human rights issues. EU also wanted to be part of the government procurement, which India is not keen on.

Next year the 15th India-EU summit is expected to happen in Brussels, which can spur the talks on the FTA. The last India EU summit happened in 2017.&nbsp;

The development on EU India FTA comes even as next week could see mega RCEP FTA being inked in Bangkok on the sidelines of East Asia summit. India is keen to be part of RCEP whose part will be China, ASEAN, Australia etc.

Even as Indian Prime Minister met over 20 European Parliamentarians who will be going to Jammu and Kashmir, New Delhi has highlighted that it is keen on the India-European Union Free Trade Agreement (India-EU FTA).

Even as Indian Prime Minister met over 20 European Parliamentarians who will be going to Jammu and Kashmir, New Delhi has highlighted that it is keen on the India-European Union Free Trade Agreement (India-EU FTA). PM Narendra Modi, Speaking to European MPs called for "early conclusion of a fair and balanced Bilateral Trade and Investment Agreement (BTIA) " which he called a "priority for the government." Formal talks were suspended on the proposed FTA in 2013, an FTA which will help both India and Europe in a major way. Since 2013, India, EU has met 9 times informally to talk about the FTA with August 5, 2019, was the last time both sides met to discuss the issue. Key issues why talks failed were on customs duty on wine, auto manufacturing and labour issues. While India did not want an FTA without investments being part of it, the EU wanted FTA on goods. On European cars, Brussels said it wants to sell full manufactured cars to be sold in India to which New Delhi pointed out to its policy of local manufacturing. High customs on wine in India was another thorny issue as well as EU raising the issue of labour and human rights issues. EU also wanted to be part of the government procurement, which India is not keen on. Next year the 15th India-EU summit is expected to happen in Brussels, which can spur the talks on the FTA. The last India EU summit happened in 2017. The development on EU India FTA comes even as next week could see mega RCEP FTA being inked in Bangkok on the sidelines of East Asia summit. India is keen to be part of RCEP whose part will be China, ASEAN, Australia etc.

New Delhi keen for early conclusion of India-European Union free trade agreement

ASEAN foreign ministers held meetings with key dialogue and strategic partners on Thursday in Bangkok during the annual gathering of the 10-member bloc.

Japan, India, Canada FMs meet ASEAN leaders

The European Union and India are "fully committed" to moving forward on the proposed free trade agreement and discussions are on between the two sides on the much-delayed pact, according to an EU official.

The negotiations for the pact, officially dubbed as the Bilateral Trade and Investment Agreement (BTIA), have been held up since May 2013 and have witnessed many hurdles.

"Discussions between European Union and India are going on. Both sides are fully committed to moving this agenda forward and discussions are on," Ambassador of the 28-nation grouping to India Tomasz Kozlowski told PTI when asked about the BTIA talks.

The negotiations for the pact were launched in 2007.

Besides demanding significant duty cuts in automobiles, the EU wants tax reduction on wines, spirits and dairy products, and a strong intellectual property regime.

On the other hand, India is asking it be granted data secure nation status by the EU. The country is among the nations not considered as data secure by the EU.

"The grant of a data secure nation status to India by the EU will provide the country's IT firms enhanced market access to European nations and also improve their business prospects significantly," EAZY ERP Technologies Managing Director Kunal Singhal said.

The two sides have to also iron out differences related to the movement of professionals.

Two-way trade between India and the EU dipped to USD 88.4 billion in 2015-16 from USD 98.5 billion in the previous fiscal.

The European Union and India are "fully committed" to moving forward on the proposed free trade agreement and discussions are on between the two sides on the much-delayed pact, according to an EU official.

The European Union and India are "fully committed" to moving forward on the proposed free trade agreement and discussions are on between the two sides on the much-delayed pact, according to an EU official. The negotiations for the pact, officially dubbed as the Bilateral Trade and Investment Agreement (BTIA), have been held up since May 2013 and have witnessed many hurdles. "Discussions between European Union and India are going on. Both sides are fully committed to moving this agenda forward and discussions are on," Ambassador of the 28-nation grouping to India Tomasz Kozlowski told PTI when asked about the BTIA talks. The negotiations for the pact were launched in 2007. Besides demanding significant duty cuts in automobiles, the EU wants tax reduction on wines, spirits and dairy products, and a strong intellectual property regime. On the other hand, India is asking it be granted data secure nation status by the EU. The country is among the nations not considered as data secure by the EU. "The grant of a data secure nation status to India by the EU will provide the country's IT firms enhanced market access to European nations and also improve their business prospects significantly," EAZY ERP Technologies Managing Director Kunal Singhal said. The two sides have to also iron out differences related to the movement of professionals. Two-way trade between India and the EU dipped to USD 88.4 billion in 2015-16 from USD 98.5 billion in the previous fiscal.

EU-India "fully committed" to move forward on free trade pact: EU official

By:&nbspCharles Hankla*

The latest G-7 summit, held June 8 to 9 in Quebec, was one of the most contentious in years.

That's because Donald Trump and his counterparts from six other industrialised countries have been at loggerheads over the president's aggressive but unstable trade policy. Trump's renunciation of the Iran nuclear deal, his efforts to renegotiate NAFTA and his intransigent stance on climate change are not helping matters. Nor is his proposal to readmit Russia to the G-7 gathering.

But the ink on the G-7 communique wasn't dry before Trump darted to Singapore to meet with North Korean leader Kim Jong Un for nuclear talks, another example of his unpredictable decision-making style. One moment he’s threatening war with the dictator, and the next he’s buttering him up for a summit.

One way to understand Trump's foreign policy decisions is to focus on their inconsistency rather than their content. Let's take trade policy as an example.

I have written a number of times about the economic dangers of the Trump administration's tilt toward protectionism. And I have pointed to the risk that Trump's use of trade policy as a unilateral weapon could undermine the rule-based international order.

I remain worried about these issues, but what has struck me much more deeply in recent days is the seeming inconsistency, indeed instability, of Trump's behavior on trade. It is worth considering its causes and consequences – which extend far beyond trade to his nuclear game of chess with North Korea and Iran.

Trouble in Trump trade land

First, let's review just a few of Trump's recent trade decisions.

At the G7, Trump's belligerent and unpredictable trade policy was the main reason the other leaders – which also include Germany's Angela Merkel, the U.K.'s Theresa May and France's Emmanuel Macron – are so perturbed. Some commentators are even beginning to term the meeting a "G6 plus one" to signify Trump's estrangement from his allies.

Recent events have inflamed tensions significantly. The White House said on May 31 that it would impose steel and aluminum tariffs on the European Union, Canada and Mexico. The three had previously received exemptions from the new tariffs, first imposed in March and justified with a little-used national security provision.

All are now planning retaliatory tariffs against the United States, along with legal action at the World Trade Organisation. Friends indeed.

It's the same story with China, which Trump has not only made subject to the same metals tariffs but has also threatened with US$50 billion of other sanctions if it doesn't meet a series of demands.

Commerce Secretary Wilbur Ross recently traveled to Beijing hoping to negotiate increased Chinese purchases of American goods and a reduction of its trade deficit with the U.S. He was forced to return empty-handed after the Chinese government declared itself unwilling to act without an American promise to drop its tariff threats. An earlier leak that China would purchase an additional $200 million of U.S. exports turned out to be wildly optimistic.

The United States now finds itself isolated, not only from China but from its strongest allies as well. Is this a temporary step in negotiations, or is it the new normal?

Shifting trade winds

Of course, Trump's proclivity for changing his mind is well-known, but all the same there is an understandable tendency among commentators to focus on the content of his policy choices.

This is especially true on trade, where Trump's protectionist rhetoric has been exuberant, to say the least.

And it is true that Trump's actions have been more anti-trade than those of his predecessors, beginning with his withdrawal from the Trans-Pacific Partnership during the first week of his presidency.

Nevertheless, over the last few months, Trump's trade policy has seemed increasingly erratic. He publicly discussed reentering the Pacific trade deal and just as quickly dismissed the idea. He imposed metal tariffs, immediately granted exemptions to most of America’s major exporters and then withdrew those exemptions three months later. He threatened China with new tariffs on $150 billion worth of exports, then suspended them and risked political capital to save the Chinese corporation ZTE. And after pushing for extraordinary trade concessions from China, he had to take a U-turn after it denied that it had agreed to the most important of those demands.

Two schools of thought

There are two schools of thought about what is driving this policy instability.

Supporters of the president tend to see it as a negotiating tactic, the "Art of the Deal" on a grander scale. Trump, they believe, is trying to throw world leaders off-balance so that he can extract more trade concessions from them.

Trump’s detractors, by contrast, see the president as hopelessly adrift, swayed this way and that by the varying opinions of his advisers. When globalists such as Steve Mnuchin and Wilbur Ross, secretaries of the treasury and commerce, respectively, have his ear, the president softens his stance on trade. But when U.S. Trade Representative Robert Lighthizer and White House adviser Peter Navarro, economic nationalists both, are in the room, Trump doubles down on protection.

Master negotiator?

If U.S. observers accept that Trump's shifting policy is part of a broader negotiating strategy, Americans can perhaps hope for a better outcome than what they see now.

Indeed, there is some basis in game theory for "irrational" behavior as a negotiating technique. Nobel laureate Thomas Schelling, in his 1960 classic "The Strategy of Conflict," pointed out that negotiators with a reputation for overreacting when their demands aren't met can be in a stronger position to extract concessions.

If a country can convince its opponent of its willingness to follow through on threats even when they are self-destructive, the country can more effectively compel changes in behavior. Moreover, if an opponent doubts the ability of a country's leaders to understand or carefully consider the consequences of the opponent's threats, the country is, ironically, in a stronger negotiating position. This "irrationality" approach was famously termed the "madman strategy" by Richard Nixon and played a role in motivating his escalation of the Vietnam War during the Paris negotiations.

Perhaps, then, Americans are witnessing the early stages of a negotiating strategy that will ultimately bear fruit.

Or malleable amateur?

Even in this optimistic scenario, however, the president's approach seems too myopic.

After all, international trade negotiations do not play by the same rules as military diplomacy, where much of this theory was developed. Such techniques might have a greater chance of working with Iran and North Korea, but of course, the risks of escalation here are even more severe.

Trade is different because it is mutually beneficial and also because it requires cooperation that is sustained over time. A country's reputation for stable compliance with its agreements is thus put at a premium otherwise, the country risks being shunned by potential partners. To wrest trade concessions from America's partners may be satisfying, but if it is accomplished at the cost of weakening the world trading system, it is hardly worth the price.

The costs of instability

If, on the other hand, Trump's unstable policy is a symptom of indecision in the face of the competing agendas of his aides, the world economy may be in for a bumpy ride. Irrational behavior can be used selectively as a negotiating technique but has a high cost if not applied carefully and strategically. If a country's negotiating partners doubt its willingness or ability to follow through on its promises, cooperation becomes impossible.

In the final analysis, a stable and rule-based trading system is in the United States' long-term interest. Inconsistent and aggressive trade policies, whether produced by a master negotiator or a malleable amateur, risk poisoning the mutual trust necessary to make such a system function.

Some are now saying that President Trump is in the early stages of reconsidering America's membership in the WTO. Hopefully, the president will come to understand what is at stake soon, before it is too late.

(Charles Hankla is an Associate Professor of Political Science, Georgia State University.)

(This article was originally published on <a href="https://theconversation.com/global">The Conversation</a>. Read the original <a href="https://theconversation.com/trump-could-be-using-advanced-game-theory-negotiating-techniques-or-hes-hopelessly-adrift-97836">article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Trump’s renunciation of the Iran nuclear deal, his efforts to renegotiate NAFTA and his intransigent stance on climate change are not helping matters. Nor is his proposal to readmit Russia to the G-7 gathering

By: Charles Hankla* The latest G-7 summit, held June 8 to 9 in Quebec, was one of the most contentious in years. That's because Donald Trump and his counterparts from six other industrialised countries have been at loggerheads over the president's aggressive but unstable trade policy. Trump's renunciation of the Iran nuclear deal, his efforts to renegotiate NAFTA and his intransigent stance on climate change are not helping matters. Nor is his proposal to readmit Russia to the G-7 gathering. But the ink on the G-7 communique wasn't dry before Trump darted to Singapore to meet with North Korean leader Kim Jong Un for nuclear talks, another example of his unpredictable decision-making style. One moment he’s threatening war with the dictator, and the next he’s buttering him up for a summit. One way to understand Trump's foreign policy decisions is to focus on their inconsistency rather than their content. Let's take trade policy as an example. I have written a number of times about the economic dangers of the Trump administration's tilt toward protectionism. And I have pointed to the risk that Trump's use of trade policy as a unilateral weapon could undermine the rule-based international order. I remain worried about these issues, but what has struck me much more deeply in recent days is the seeming inconsistency, indeed instability, of Trump's behavior on trade. It is worth considering its causes and consequences – which extend far beyond trade to his nuclear game of chess with North Korea and Iran. Trouble in Trump trade land First, let's review just a few of Trump's recent trade decisions. At the G7, Trump's belligerent and unpredictable trade policy was the main reason the other leaders – which also include Germany's Angela Merkel, the U.K.'s Theresa May and France's Emmanuel Macron – are so perturbed. Some commentators are even beginning to term the meeting a "G6 plus one" to signify Trump's estrangement from his allies. Recent events have inflamed tensions significantly. The White House said on May 31 that it would impose steel and aluminum tariffs on the European Union, Canada and Mexico. The three had previously received exemptions from the new tariffs, first imposed in March and justified with a little-used national security provision. All are now planning retaliatory tariffs against the United States, along with legal action at the World Trade Organisation. Friends indeed. It's the same story with China, which Trump has not only made subject to the same metals tariffs but has also threatened with US$50 billion of other sanctions if it doesn't meet a series of demands. Commerce Secretary Wilbur Ross recently traveled to Beijing hoping to negotiate increased Chinese purchases of American goods and a reduction of its trade deficit with the U.S. He was forced to return empty-handed after the Chinese government declared itself unwilling to act without an American promise to drop its tariff threats. An earlier leak that China would purchase an additional $200 million of U.S. exports turned out to be wildly optimistic. The United States now finds itself isolated, not only from China but from its strongest allies as well. Is this a temporary step in negotiations, or is it the new normal? Shifting trade winds Of course, Trump's proclivity for changing his mind is well-known, but all the same there is an understandable tendency among commentators to focus on the content of his policy choices. This is especially true on trade, where Trump's protectionist rhetoric has been exuberant, to say the least. And it is true that Trump's actions have been more anti-trade than those of his predecessors, beginning with his withdrawal from the Trans-Pacific Partnership during the first week of his presidency. Nevertheless, over the last few months, Trump's trade policy has seemed increasingly erratic. He publicly discussed reentering the Pacific trade deal and just as quickly dismissed the idea. He imposed metal tariffs, immediately granted exemptions to most of America’s major exporters and then withdrew those exemptions three months later. He threatened China with new tariffs on $150 billion worth of exports, then suspended them and risked political capital to save the Chinese corporation ZTE. And after pushing for extraordinary trade concessions from China, he had to take a U-turn after it denied that it had agreed to the most important of those demands. Two schools of thought There are two schools of thought about what is driving this policy instability. Supporters of the president tend to see it as a negotiating tactic, the "Art of the Deal" on a grander scale. Trump, they believe, is trying to throw world leaders off-balance so that he can extract more trade concessions from them. Trump’s detractors, by contrast, see the president as hopelessly adrift, swayed this way and that by the varying opinions of his advisers. When globalists such as Steve Mnuchin and Wilbur Ross, secretaries of the treasury and commerce, respectively, have his ear, the president softens his stance on trade. But when U.S. Trade Representative Robert Lighthizer and White House adviser Peter Navarro, economic nationalists both, are in the room, Trump doubles down on protection. Master negotiator? If U.S. observers accept that Trump's shifting policy is part of a broader negotiating strategy, Americans can perhaps hope for a better outcome than what they see now. Indeed, there is some basis in game theory for "irrational" behavior as a negotiating technique. Nobel laureate Thomas Schelling, in his 1960 classic "The Strategy of Conflict," pointed out that negotiators with a reputation for overreacting when their demands aren't met can be in a stronger position to extract concessions. If a country can convince its opponent of its willingness to follow through on threats even when they are self-destructive, the country can more effectively compel changes in behavior. Moreover, if an opponent doubts the ability of a country's leaders to understand or carefully consider the consequences of the opponent's threats, the country is, ironically, in a stronger negotiating position. This "irrationality" approach was famously termed the "madman strategy" by Richard Nixon and played a role in motivating his escalation of the Vietnam War during the Paris negotiations. Perhaps, then, Americans are witnessing the early stages of a negotiating strategy that will ultimately bear fruit. Or malleable amateur? Even in this optimistic scenario, however, the president's approach seems too myopic. After all, international trade negotiations do not play by the same rules as military diplomacy, where much of this theory was developed. Such techniques might have a greater chance of working with Iran and North Korea, but of course, the risks of escalation here are even more severe. Trade is different because it is mutually beneficial and also because it requires cooperation that is sustained over time. A country's reputation for stable compliance with its agreements is thus put at a premium otherwise, the country risks being shunned by potential partners. To wrest trade concessions from America's partners may be satisfying, but if it is accomplished at the cost of weakening the world trading system, it is hardly worth the price. The costs of instability If, on the other hand, Trump's unstable policy is a symptom of indecision in the face of the competing agendas of his aides, the world economy may be in for a bumpy ride. Irrational behavior can be used selectively as a negotiating technique but has a high cost if not applied carefully and strategically. If a country's negotiating partners doubt its willingness or ability to follow through on its promises, cooperation becomes impossible. In the final analysis, a stable and rule-based trading system is in the United States' long-term interest. Inconsistent and aggressive trade policies, whether produced by a master negotiator or a malleable amateur, risk poisoning the mutual trust necessary to make such a system function. Some are now saying that President Trump is in the early stages of reconsidering America's membership in the WTO. Hopefully, the president will come to understand what is at stake soon, before it is too late. (Charles Hankla is an Associate Professor of Political Science, Georgia State University.) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Opinion: Understanding Trump's negotiating techniques ahead of meeting with Kim

*By:&nbspRichard Holden

It’s not all that often that the semi-annual report titled “US Treasury Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States” is a hotly anticipated document. But against the backdrop of the Trump administration’s views on trade, it was this week.

The report was prepared by seasoned folks at Treasury, yet it has the fingerprints of the administration and its mercantilist views all over it.

Early on the report states: “The global economy accelerated in 2017 to its fastest pace of growth since the post-crisis rebound in 2011. The broad-based strengthening of growth was led by the United States, where domestic demand growth averaged 3 percent over the last three quarters of the year, and by a synchronized expansion in Europe…Notwithstanding the pick-up in global growth, the U.S. trade deficit widened in 2017…

The Administration remains deeply concerned by the significant trade imbalances in the global economy, and is working actively across a broad range of areas to help ensure that trade expands in a way that is fair and reciprocal.”

“Fair and reciprocal”. Well that sounds nice. But US trade is fair and reciprocal. Imports from China allow the US to allocate its resources to what it does relatively more efficiently – make fewer t-shirts, produce more iMacs, iPhones and Apple watches, for example.

President Trump has long thought – mistakenly, mind you – that trade is a zero-sum game and that bilateral trade deficits are evidence of a “bad deal”. That’s flat-out wrong. But given the president’s famously short attention span, there was some hope those views wouldn’t affect policy too much.

Unfortunately, he appointed Peter Navarro as Director of the White House National Trade Council. Navarro thinks if trade deficits go down, economic output must rise – a conclusion that is false as a matter of logic. It’s distressing that Navarro doesn’t understand the principle of comparative advantage, or even how the national accounts work in that exports add to GDP, but imports leave it unchanged.

As a brief aside, Navarro is a self-described “heterodox economist”. Those folks in Australia who wear that moniker with pride would do well to reflect on how one of their intellectual fellow travellers is complicit in attacking the living standards of not only the poorest people in the US but also in China.

Speaking of China, figures released this week showed that China’s GDP grew a little faster than expected, expanding 6.8 per cent in the first quarter of 2018. This was largely due to strong consumer demand (which accounted for roughly 80 per cent of that growth), but also strong exports and a healthy construction sector. Indeed, Chinese retail sales rose 10.1 per cent for the 12 months to March, exceeding both their recent pace and market expectations.

Given time lags and implementation issues, the recent tit-for-tat tariffs between the US and China have yet to take effect – so next quarter’s numbers will be the really interesting ones to focus on. In fact, Chinese exports to the US were up 14.8 per cent on an annualised basis, suggesting that exporters may have shipped goods early in a bid to beat the tariffs. That “pipeline filling” could result in a significant drop next quarter.

In the US, retail sales figures for March showed positive signs. Commerce Department data showed retail sales up 0.6 per cent in March, a bounce back from previous disappointing monthly figures in 2018. Importantly, bellwether categories like cars and appliances were up strongly – a sign of consumer confidence.

Residential construction in the US was also strong, with housing starts up 1.9 per cent to 1.32 million at an annualised rate, compared to market expectations of 1.27 million. This was driven, however, by so-called “multifamily” construction, which is essentially apartments. As in Australia, that is a volatile category month to month. It was up strongly but had been down 10.2 per cent in February. Single-family construction fell 5.5 per cent, the largest decline in seven years. All in all, a mixed bag.

In Australia, fewer jobs were created in March than expected, with unemployment steady at 5.5 per cent, seasonally adjusted. This is still far too high, and with the participation rate picking up it could head higher, rather than lower.

The RBA released minutes of its most recent board meeting.

The most interesting part was the discussion of the financial stability of Australian households. The minutes noted: “Risks remained from the high level of household debt and the growth of riskier lending in earlier years, but regulatory measures had helped to contain the build-up of risks.”

They added that while household debt had outpaced income in recent years, net household wealth was also growing, with housing and financial assets of Australian households exceeding borrowing.

“Members noted, however, that this was not reflective of the financial positions of all individual households. Nevertheless, measures of household financial stress did not indicate a high level of financial stress at present.” (emphasis added).

It’s that italicised part that is important. Just because on average households might have their noses above water doesn’t mean significant problems don’t loom.

It’s the marginal household or borrower that matters and can drive financial problems. Think sub-prime in the US. Average borrowers in California or Massachusetts or New York were fine. But the marginal borrowers were not, and it was their borrowing behaviour (and the behaviour of those who lent to them) that triggered the financial crisis. Surely the RBA understands that, using this to inform its approach to macroprudential regulation?

*Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW

(This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/vital-signs-the-calm-before-the-storm-in-us-china-trade-95149">original article</a>.)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Given time lags and implementation issues, the recent tit-for-tat tariffs between the US and China have yet to take effect – so next quarter’s numbers will be the really interesting ones to focus on

*By: Richard Holden It’s not all that often that the semi-annual report titled “US Treasury Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States” is a hotly anticipated document. But against the backdrop of the Trump administration’s views on trade, it was this week. The report was prepared by seasoned folks at Treasury, yet it has the fingerprints of the administration and its mercantilist views all over it. Early on the report states: “The global economy accelerated in 2017 to its fastest pace of growth since the post-crisis rebound in 2011. The broad-based strengthening of growth was led by the United States, where domestic demand growth averaged 3 percent over the last three quarters of the year, and by a synchronized expansion in Europe…Notwithstanding the pick-up in global growth, the U.S. trade deficit widened in 2017… The Administration remains deeply concerned by the significant trade imbalances in the global economy, and is working actively across a broad range of areas to help ensure that trade expands in a way that is fair and reciprocal.” “Fair and reciprocal”. Well that sounds nice. But US trade is fair and reciprocal. Imports from China allow the US to allocate its resources to what it does relatively more efficiently – make fewer t-shirts, produce more iMacs, iPhones and Apple watches, for example. President Trump has long thought – mistakenly, mind you – that trade is a zero-sum game and that bilateral trade deficits are evidence of a “bad deal”. That’s flat-out wrong. But given the president’s famously short attention span, there was some hope those views wouldn’t affect policy too much. Unfortunately, he appointed Peter Navarro as Director of the White House National Trade Council. Navarro thinks if trade deficits go down, economic output must rise – a conclusion that is false as a matter of logic. It’s distressing that Navarro doesn’t understand the principle of comparative advantage, or even how the national accounts work in that exports add to GDP, but imports leave it unchanged. As a brief aside, Navarro is a self-described “heterodox economist”. Those folks in Australia who wear that moniker with pride would do well to reflect on how one of their intellectual fellow travellers is complicit in attacking the living standards of not only the poorest people in the US but also in China. Speaking of China, figures released this week showed that China’s GDP grew a little faster than expected, expanding 6.8 per cent in the first quarter of 2018. This was largely due to strong consumer demand (which accounted for roughly 80 per cent of that growth), but also strong exports and a healthy construction sector. Indeed, Chinese retail sales rose 10.1 per cent for the 12 months to March, exceeding both their recent pace and market expectations. Given time lags and implementation issues, the recent tit-for-tat tariffs between the US and China have yet to take effect – so next quarter’s numbers will be the really interesting ones to focus on. In fact, Chinese exports to the US were up 14.8 per cent on an annualised basis, suggesting that exporters may have shipped goods early in a bid to beat the tariffs. That “pipeline filling” could result in a significant drop next quarter. In the US, retail sales figures for March showed positive signs. Commerce Department data showed retail sales up 0.6 per cent in March, a bounce back from previous disappointing monthly figures in 2018. Importantly, bellwether categories like cars and appliances were up strongly – a sign of consumer confidence. Residential construction in the US was also strong, with housing starts up 1.9 per cent to 1.32 million at an annualised rate, compared to market expectations of 1.27 million. This was driven, however, by so-called “multifamily” construction, which is essentially apartments. As in Australia, that is a volatile category month to month. It was up strongly but had been down 10.2 per cent in February. Single-family construction fell 5.5 per cent, the largest decline in seven years. All in all, a mixed bag. In Australia, fewer jobs were created in March than expected, with unemployment steady at 5.5 per cent, seasonally adjusted. This is still far too high, and with the participation rate picking up it could head higher, rather than lower. The RBA released minutes of its most recent board meeting. The most interesting part was the discussion of the financial stability of Australian households. The minutes noted: “Risks remained from the high level of household debt and the growth of riskier lending in earlier years, but regulatory measures had helped to contain the build-up of risks.” They added that while household debt had outpaced income in recent years, net household wealth was also growing, with housing and financial assets of Australian households exceeding borrowing. “Members noted, however, that this was not reflective of the financial positions of all individual households. Nevertheless, measures of household financial stress did not indicate a high level of financial stress at present.” (emphasis added). It’s that italicised part that is important. Just because on average households might have their noses above water doesn’t mean significant problems don’t loom. It’s the marginal household or borrower that matters and can drive financial problems. Think sub-prime in the US. Average borrowers in California or Massachusetts or New York were fine. But the marginal borrowers were not, and it was their borrowing behaviour (and the behaviour of those who lent to them) that triggered the financial crisis. Surely the RBA understands that, using this to inform its approach to macroprudential regulation? *Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW (This article was originally published on The Conversation. Read the original article.) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Opinion: The calm before the storm in US-China trade

Financial leaders of the world&#39;s biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States after a two-day meeting failed to yield a compromise.

Breaking a decade-long tradition of endorsing open trade, G20 finance ministers and central bankers made only a token reference to trade in their communique on Saturday, a clear defeat for host nation Germany, which fought the new US government&#39;s attempts to water down past commitments.

In the new US administration&#39;s biggest clash yet with the international community, G20 finance chiefs also removed from their statement a pledge to finance the fight against climate change, an anticipated outcome after US President Donald Trump called global warming a &quot;hoax&quot;.

In a meeting that some said was at times 19 against one, the US&nbsp;did not yield on key issues, essentially torpedoing earlier agreements as the G20 requires a consensus. Still, the dialogue was friendly and non-confrontational, leaving the door open to a future deal, officials who attended the meeting said.

&quot;This is my first G20, so what was in the past communiqu&eacute; is not necessarily relevant from my standpoint,&quot; US Treasury Secretary Steven Mnuchin said in the German resort town of Baden Baden.

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<h5>We believe in free trade, we are in one of the largest markets in the world, we are one of the largest trading partners in the world, trade has been good for us, it has been good for other people,&quot; US treasury secretary Steven Mnuchin said. &#39;Having said that, we want to re-examine certain agreements&#39;</h5>
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&quot;I understand what the president&#39;s desire is and his policies, and I negotiated them from here,&quot; Mnuchin said. &quot;I couldn&rsquo;t be happier with the outcome.&quot;

Seeking to put &quot;America first&quot;, Trump has already pulled out of a key trade agreement and proposed a new tax on imports, arguing that certain trade relationships need to be reworked to make them fairer for US workers.

&quot;We believe in free trade, we are in one of the largest markets in the world, we are one of the largest trading partners in the world, trade has been good for us, it has been good for other people,&quot; Mnuchin said. &quot;Having said that, we want to re-examine certain agreements.&quot;

International trade makes up almost half of global economic output and officials said the issue could be revisited at a meeting of G20 leaders in July.

While some expressed frustration, like French Finance Minister Michel Sapin, others played down the dispute.

&quot;It is not that we were not united,&quot; German finance minister Wolfgang Schaeuble said. &quot;It was totally undisputed that we are against protectionism. But it is not very clear what (protectionism) means to each (minister).&quot;

He added that some ministers did not have a full mandate to negotiate since they were not fully in charge of trade issues.

Others suggested that the G20 leaders&#39; meeting in Hamburg this July could be the real opportunity to bring the US on board.

&quot;It is not the best meeting we had, but we avoided backtracking,&quot; EU Economic Affairs Commissioner Pierre Moscovici said. &quot;I hope in Hamburg the wording will be different. We need it. It is the raison d&rsquo;etre for the G20,&quot; Moscovici said.

Climate Pledge Dropped

The communique also dropped a reference, used by the G20 last year, on the readiness to finance measures against climate change as agreed in Paris in 2015, because of opposition from the United States and Saudi Arabia.

Trump has suggested global warming was a &quot;hoax&quot; concocted by China to hurt US industry and vowed to scrap the Paris climate accord aimed at curbing greenhouse gas emissions.

Trump&#39;s administration on Thursday proposed a 31 per cent cut to the Environmental Protection Agency&#39;s budget as the White House seeks to eliminate climate change programmes and trim initiatives to protect air and water quality.

Asked about climate change funding, Mick Mulvaney, Trump&#39;s budget director, said on Thursday: &quot;We consider that to be a waste of money.&quot;

The G20 did, however, show continuity in its foreign exchange policies, using past phrases on currency markets.

&quot;We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluations and we will not target our exchange rates for competitive purposes,&quot; the G20 said.

Leaders also upheld their commitments to financial sector regulation, supporting the finalisation of bank rules known as Basel III, provided they do not significantly raise overall capital requirements.

(Reuters)

Their statement -- they were meeting in Germany -- also dropped the pledge to finance the fight against global warming

Financial leaders of the world's biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States after a two-day meeting failed to yield a compromise. Breaking a decade-long tradition of endorsing open trade, G20 finance ministers and central bankers made only a token reference to trade in their communique on Saturday, a clear defeat for host nation Germany, which fought the new US government's attempts to water down past commitments. In the new US administration's biggest clash yet with the international community, G20 finance chiefs also removed from their statement a pledge to finance the fight against climate change, an anticipated outcome after US President Donald Trump called global warming a "hoax". In a meeting that some said was at times 19 against one, the US did not yield on key issues, essentially torpedoing earlier agreements as the G20 requires a consensus. Still, the dialogue was friendly and non-confrontational, leaving the door open to a future deal, officials who attended the meeting said. "This is my first G20, so what was in the past communiqué is not necessarily relevant from my standpoint," US Treasury Secretary Steven Mnuchin said in the German resort town of Baden Baden. We believe in free trade, we are in one of the largest markets in the world, we are one of the largest trading partners in the world, trade has been good for us, it has been good for other people," US treasury secretary Steven Mnuchin said. 'Having said that, we want to re-examine certain agreements' × "I understand what the president's desire is and his policies, and I negotiated them from here," Mnuchin said. "I couldn’t be happier with the outcome." Seeking to put "America first", Trump has already pulled out of a key trade agreement and proposed a new tax on imports, arguing that certain trade relationships need to be reworked to make them fairer for US workers. "We believe in free trade, we are in one of the largest markets in the world, we are one of the largest trading partners in the world, trade has been good for us, it has been good for other people," Mnuchin said. "Having said that, we want to re-examine certain agreements." International trade makes up almost half of global economic output and officials said the issue could be revisited at a meeting of G20 leaders in July. While some expressed frustration, like French Finance Minister Michel Sapin, others played down the dispute. "It is not that we were not united," German finance minister Wolfgang Schaeuble said. "It was totally undisputed that we are against protectionism. But it is not very clear what (protectionism) means to each (minister)." He added that some ministers did not have a full mandate to negotiate since they were not fully in charge of trade issues. Others suggested that the G20 leaders' meeting in Hamburg this July could be the real opportunity to bring the US on board. "It is not the best meeting we had, but we avoided backtracking," EU Economic Affairs Commissioner Pierre Moscovici said. "I hope in Hamburg the wording will be different. We need it. It is the raison d’etre for the G20," Moscovici said. Climate Pledge Dropped The communique also dropped a reference, used by the G20 last year, on the readiness to finance measures against climate change as agreed in Paris in 2015, because of opposition from the United States and Saudi Arabia. Trump has suggested global warming was a "hoax" concocted by China to hurt US industry and vowed to scrap the Paris climate accord aimed at curbing greenhouse gas emissions. Trump's administration on Thursday proposed a 31 per cent cut to the Environmental Protection Agency's budget as the White House seeks to eliminate climate change programmes and trim initiatives to protect air and water quality. Asked about climate change funding, Mick Mulvaney, Trump's budget director, said on Thursday: "We consider that to be a waste of money." The G20 did, however, show continuity in its foreign exchange policies, using past phrases on currency markets. "We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluations and we will not target our exchange rates for competitive purposes," the G20 said. Leaders also upheld their commitments to financial sector regulation, supporting the finalisation of bank rules known as Basel III, provided they do not significantly raise overall capital requirements. (Reuters)

Under US pressure, G20 finance leaders drop pledge to keep trade free & open

French President Francois Hollande on Thursday told Britain it would have to choose between access to the single market and the free movement of people, when it begins its negotiations on leaving the European Union. 
 
The French leader accepted Britain&#39;s right to delay formal exit talks, but described the timing of its departure as &quot;the sooner the better&quot;, following the country&#39;s shock vote to leave last month. 
 
&quot;It&#39;s the most crucial point... Britain will have to choose: stay in the single market and accept free movement or have another status,&quot; he said without elaborating on the latter option. 
 
Speaking after talks in Paris with British Prime Minister Theresa May, Hollande took a tougher line than German chancellor Angela Merkel a day earlier in Berlin. 
 
&quot;The United Kingdom has decided to leave the European Union. It&#39;s their choice, it&#39;s their responsibility and we respect that decision.... There can be no discussions, no pre-negotiation before the negotiation,&quot; Hollande told a joint news conference with May. 
 
On the timing for the talks, Hollande acknowledged that, Britain would need time to prepare a negotiating position. 
 
&quot;There can be preparations for this negotiation,&quot; he said. 
 
&quot;But I repeat. The sooner the better, it&#39;s in the common interest, of Europe, the United Kingdom, and our economies,&quot; he added. 
 
Encouraging resilience 
 
May said she was committed to achieving a deal that reflected the sentiments expressed by most Britons in the June 23 referendum. 
 
&quot;The message the British people gave in their vote for the UK to leave the EU had a very clear message: that we should introduce some controls to the movement of individuals from countries in the European Union into the UK. 
 
&quot;I&#39;m clear the government should deliver and will deliver on that for the British people. 
 
&quot;But we also want to get the right deal on trade in goods and services,&quot; she said, calling it a matter of importance to both Britain and its EU partners. 
 
May arrived in Paris a day after meeting Merkel in Berlin. 
 
The Conservative leader repeated what she told Merkel, namely, that she would not trigger the two-year EU exit process &quot;before the end of the year&quot;. 
 
Brexit aside she and Hollande were at pains to emphasise the entente between their countries. 
 
A week after the massacre in Nice, May said Britain stood &quot;shoulder to shoulder&quot; as &quot;a great ally and friend&quot;, while Hollande said Franco-British ties &quot;will never come undone&quot;. 
 
Britain&#39;s vote to leave the European Union sent shockwaves through the global economy and sparked political turmoil at home. 
 
European Central Bank chief Mario Draghi struck a reassuring tone, however, in remarks following the ECB&#39;s regular policy-setting meeting. 
 
&quot;After the UK referendum, Euro area financial markets have weathered the spike in uncertainty and volatility with encouraging resilience,&quot; Draghi said. 
 
On Wednesday, speaking on her first foreign trip since taking office in the wake of the seismic vote, May told Merkel that her government planned on a &quot;sensible and orderly departure&quot; from the EU. 
 
Merkel, who is expected to play a pivotal role in the Brexit talks along with France, said it was in the interests of all that Britain had a &quot;well-defined position&quot; before the talks began. 
 
The Brexit talks are expected to hinge on Britain&#39;s desire to restrict immigration by EU citizens, but still retain vital access to the EU&#39;s single market. 
 
In the UK, EU immigration was the most hotly-debated issue of the referendum campaign. 
 
Brexit campaigners argued that the hundreds of thousands of EU immigrants arriving in Britain every year have pushed down wages for low-paid Britons and overburdened public services. 
 
Unique concerns 
 
Earlier on Thursday Hollande held talks in Dublin with Irish Prime Minister Enda Kenny. 
 
In a joint statement with Kenny he said there should be &quot;a balance of rights and obligations, including in respect of the four freedoms&quot;, referring to the free movement of goods, services, capital and people in the EU. 
 
Ireland&#39;s concerns revolve mainly around the future of its lucrative exports to Britain, and its border with British-ruled Northern Ireland, which would be the EU&#39;s only land border with Britain once it has left. 
 
&quot;Ireland and France are the UK&#39;s nearest neighbours, with significant and complex economic, human, cultural and historical links,&quot; Kenny and Hollande said. 
 
&quot;In consequence, both countries have specific and indeed unique concerns to be addressed in future negotiations,&quot; they said. 
 
Britain on Wednesday took the first step towards Brexit by announcing it was relinquishing its six-month EU presidency which had been due to start in July 2017 and will be taken up by Estonia instead. 
 
(AFP)

UK will not begin the EU exit operation 'before the end of the year', Prime Minister Theresa May reiterated

French President Francois Hollande on Thursday told Britain it would have to choose between access to the single market and the free movement of people, when it begins its negotiations on leaving the European Union. The French leader accepted Britain's right to delay formal exit talks, but described the timing of its departure as "the sooner the better", following the country's shock vote to leave last month. "It's the most crucial point... Britain will have to choose: stay in the single market and accept free movement or have another status," he said without elaborating on the latter option. Speaking after talks in Paris with British Prime Minister Theresa May, Hollande took a tougher line than German chancellor Angela Merkel a day earlier in Berlin. "The United Kingdom has decided to leave the European Union. It's their choice, it's their responsibility and we respect that decision.... There can be no discussions, no pre-negotiation before the negotiation," Hollande told a joint news conference with May. On the timing for the talks, Hollande acknowledged that, Britain would need time to prepare a negotiating position. "There can be preparations for this negotiation," he said. "But I repeat. The sooner the better, it's in the common interest, of Europe, the United Kingdom, and our economies," he added. Encouraging resilience May said she was committed to achieving a deal that reflected the sentiments expressed by most Britons in the June 23 referendum. "The message the British people gave in their vote for the UK to leave the EU had a very clear message: that we should introduce some controls to the movement of individuals from countries in the European Union into the UK. "I'm clear the government should deliver and will deliver on that for the British people. "But we also want to get the right deal on trade in goods and services," she said, calling it a matter of importance to both Britain and its EU partners. May arrived in Paris a day after meeting Merkel in Berlin. The Conservative leader repeated what she told Merkel, namely, that she would not trigger the two-year EU exit process "before the end of the year". Brexit aside she and Hollande were at pains to emphasise the entente between their countries. A week after the massacre in Nice, May said Britain stood "shoulder to shoulder" as "a great ally and friend", while Hollande said Franco-British ties "will never come undone". Britain's vote to leave the European Union sent shockwaves through the global economy and sparked political turmoil at home. European Central Bank chief Mario Draghi struck a reassuring tone, however, in remarks following the ECB's regular policy-setting meeting. "After the UK referendum, Euro area financial markets have weathered the spike in uncertainty and volatility with encouraging resilience," Draghi said. On Wednesday, speaking on her first foreign trip since taking office in the wake of the seismic vote, May told Merkel that her government planned on a "sensible and orderly departure" from the EU. Merkel, who is expected to play a pivotal role in the Brexit talks along with France, said it was in the interests of all that Britain had a "well-defined position" before the talks began. The Brexit talks are expected to hinge on Britain's desire to restrict immigration by EU citizens, but still retain vital access to the EU's single market. In the UK, EU immigration was the most hotly-debated issue of the referendum campaign. Brexit campaigners argued that the hundreds of thousands of EU immigrants arriving in Britain every year have pushed down wages for low-paid Britons and overburdened public services. Unique concerns Earlier on Thursday Hollande held talks in Dublin with Irish Prime Minister Enda Kenny. In a joint statement with Kenny he said there should be "a balance of rights and obligations, including in respect of the four freedoms", referring to the free movement of goods, services, capital and people in the EU. Ireland's concerns revolve mainly around the future of its lucrative exports to Britain, and its border with British-ruled Northern Ireland, which would be the EU's only land border with Britain once it has left. "Ireland and France are the UK's nearest neighbours, with significant and complex economic, human, cultural and historical links," Kenny and Hollande said. "In consequence, both countries have specific and indeed unique concerns to be addressed in future negotiations," they said. Britain on Wednesday took the first step towards Brexit by announcing it was relinquishing its six-month EU presidency which had been due to start in July 2017 and will be taken up by Estonia instead. (AFP)

Choose free trade or 'another' status, Hollande tells Britain

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