Brexit and trade
Brexit negotiations between the European Union and the United Kingdom were supposed to be concluded at the EU summit on October 17. But the deadline passed with no breakthrough, and no plans for a new meeting. With the clock to a “hard Brexit” ticking down, this could be the salutary shock needed to pave the way for a compromise — or point to a future in which the UK’s diminished weight in international trade encourages a drift toward protectionism.
Opinion: Dilemmas of development aid
Like other areas of public policy, development aid has had its recurrent fads. The pendulum has swung from socialist-style big-push schemes to pro-market reforms and their latest iteration, results-based aid. This micro-oriented approach has recently come under attack for neglecting the wider “macro” environment of states and institutions. Decades after the flaws of the traditional aid model were exposed, economists are still casting about for a better alternative.
Rough waters ahead for Chile’s new government
Chile faces economic uncertainty as global trade alliances are thrown into disarray. The new government in Santiago, led by free-market conservative Sebastian Pinera, has a weak position in the legislature. On top of the daunting challenge of diversifying Chile’s copper-based economy, President Pinera must deal with social unrest at home. This situation calls for first-rate leadership that ventures beyond routine governance.
Brexit scenarios: Toward the endgame
Prime Minister Theresa May has bowed to economic reality and unveiled a Brexit model that would keep the United Kingdom close to the European Union. The move provoked an immediate cabinet crisis and the resignations of leading Brexiters. Fear of a Labour government will probably keep other Conservatives in line, but Ms. May’s survival also hinges on the EU accepting her new strategy. Otherwise, a hard Brexit is plausible.
GIS Dossier: Europe as a global player – the basics
As tensions increase within the transatlantic alliance, Europe has begun to reconsider its own place in the world. With the U.S. continuing a long-term strategic retrenchment, its allies across the Atlantic may need to grow beyond their role as Washington’s junior partners. From the migrant crisis to the Iran nuclear deal, from trade wars to dealing with Vladimir Putin, Europe is being forced to declare itself. Will it act like a great power or an imposter?
Opinion: Ready for the next recession?
Economists enjoy delivering bad news. The current favorite being shared by academics and financial experts is that the world is headed for a recession, in 2020 or 2021 at the latest. But we regard this as unlikely, unless there is a major political accident – such as a trade war or turmoil in China. While a slowdown is always possible, especially in Western Europe, that does not make a recession.
Where the United States and global trade are heading
The U.S. is the world’s largest open economy and pillar of the global trading system. Yet its economic challenges today – government debt, wealth inequality, and labor force participation – cannot be reliably addressed through more open trade. One should therefore expect more U.S. steps to change the terms of trade and pressure leading exporters over the next two years.
Trump’s trade war is poised for a Pyrrhic victory
The flip side of the Trump administration’s drive to reduce the U.S. foreign trade deficit is that it will leave the rest of the world with fewer dollars to finance its budget deficit. President Trump could cut spending drastically or persuade the Federal Reserve to buy more bonds, but neither seems likely. More probably, he will do nothing as domestic rates rise and the dollar strengthens – widening the trade deficit again.
GIS Dossier: The North Korean opening
President Donald Trump’s surprising decision to hold summit talks with Kim Jong-un has triggered a round of high-stakes diplomacy, including repeat meetings between North and South Korean officials and a lightning visit by Mr. Kim to Beijing. There is nothing accidental about Pyongyang’s charm offensive. It is the moment the North Korean leader has been preparing for years.
Increasing oil competition in Asia
The first supertanker bearing U.S. crude oil to Asia after a 40-year export embargo was liftd left the Gulf Coast of Louisiana in February 2018. The event was hailed as the start of a new oil trading era, and possibly the start of a war for market share in Asia between U.S. shale producers and conventional exporters from the Middle East. In fact, of all oil exporters to Asia, the Middle Eastern producers should be the least concerned.