The Washington Outsider

US, EU to Have Free Trade? What About The PIIGS Factor?

7/27/2018

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​On the verge of a full blown trade war sparked by the Trump Administration’s steel and aluminium tariffs, as well as the US President’s controversial style of diplomatic confrontation, the US and the EU have agreed to resolve their trade grieves, focus on the mutual treat that is China, and reform the World Trade Organization.  Hyped and dramatized by Donald Trump’s impulsive need to lob insults and threats at anyone he hopes to pressure into some sort of a “deal” or relationship, the largely counter-productive and unnecessary tensions between the long-time allies appear to be abating.  The real diplomacy can begin.  It is shaping up to be a major win for the trans-international corporate beneficiaries of globalization and free trade that need access to more consumers with greater wealth and disposal income.  Given the economic parities that exist between the US and many of the European economies, domestic workers may well also see meaningful benefits, but negotiators on both sides would be wise to reflect on the influence of the PIIGS economies. 
If Donald Trump and his European contemporaries truly hope to achieve free trade between the US and the many countries of the EU, he would be wise to recognize the woes created by the near economic collapses of Portugal, Italy, Ireland, Greece, and Spain.  While absolute free trade between the US and EU would not be equivalent to the Eurozone, which shares a common currency, the undermining influence on the EU of the PIIGS economies would still be in play.  In comparison to Germany and France, the PIIGS countries are poor and underdeveloped.  To function in an open trade relationship, poorer countries must fuel economic bubbles with debt and wealthier countries must guarantee those liabilities, which is what the Eurozone forced members to do.  Alternatively, the populations of wealthier countries must be willing to disadvantage themselves and sacrifice their jobs/ higher incomes in order to buy more goods from their poorer trade partners while the Peoples of “poorer” countries as the cheaper option must severely limit their income growth and  suppress their living standards to remain competitive, which is the relationship that exists between the US and China as well as the US and Mexico.

Free trade certainly offers benefits for the Peoples of free trade partner nations in terms of greater access to goods, which can be made cheaper by reducing the tariff premium, and increased economic opportunities.  When economies are near economic parity, free trade relationships are mutually beneficial to the governments and Peoples of the partner nations.  The bulk of the benefits from globalized free trade, however, go to trans-international corporations that seek to use a global marketplace to minimize their labor costs, expand their customer bases to a geographically-diverse global “middle class,” and undercut smaller domestic competitors.  China is a problem, because its industries are state-owned monopolies, thus free trade with China would force globalized corporations to compete against China as a massive umbrella company.  Despite the fact Donald Trump campaigned as an “anti-globalist” and has continually touted his “America First” policy platform, his now clarified embrace of a fair, free trade agenda, which seeks to transform a global trade war he initialized into a global trade war against China, threatens the very workers he pledged to champion to the benefit of those special interests he rallied against.
 
There is, however, still a chance for Donald Trump and the leaders of Europe, which has also experienced a populous rejection of free trade as exemplified by the Brexit, to foster the kind of global trade the Peoples, governments, and industries of the world need.  Instead of seeking to simply lower tariffs, which deprives governments of dollars they need to reduce tax burdens on their own Peoples, US and EU leaders need to mirror Trump’s approach to steel and aluminium by agreeing to raise tariff rates across the board then seeking mutually beneficial tariff reductions and exemptions.  They need to implement a bilateral system that will allow the US and its EU partners to maximize benefits in terms of increased access to niche and lower-priced goods while minimizing costs in terms of job loses.  Sometimes, this will mean neutralizing the competitive advantage economic disparities and trade barriers create between global competitors.  This is, of course, were the tough negotiators will take place.  Other times, it will simply mean unilaterally dropping tariffs that limit consumer access to foreign goods they cannot get at home.
 
For its part, the US does have a very useful tool, if it is reformed and tariffs are broadly applied, to achieve its trade interests.  It is called the Miscellaneous Tariff Bill Act.  Although the previous versions of the legislation have not been approved since 2012, the Miscellaneous Tariff Bill Act of 2018 aims to suspense or reduce duties on over 1,500 goods that American producers cannot source inside the United States for a three year period .  National economies must be built on industries that serve the local needs of a people with locally plentiful resources that are as local as possible with excess production being used to participate in the global economy.  Trade is most beneficial when it affords greater access to goods that cannot be sourced locally.  In theory, the Miscellaneous Tariff Bill Act can, therefore, help bolster US manufactures and their workers.  In practice, the legislation exempts fully manufactured products thanks to the undue influence of foreign competitors and a lack of representation for smaller American manufacturing.
 
Reforming how the the International Trade Commission and the US Commerce Department decide what products are included for tariff reductions and exemptions would help US manufacturer and consumers access cheaper goods while securing US industries and jobs.  By embracing a similar approach on a country by country bases, the EU could also better represent and reflect the interests of its partner nations.  Where the US and EU host business competitors, they can, in turn, work toward fair, free trade that allows export businesses to sell their wears and compete on quality and efficiency.  Narrowly tailored trade agreement, which must be periodically recalibrated, are needed to ensure the ever-shifting interests of trade partners are addressed as industries change.  The US and its trade partners in Europe, as well as around the world, can create a global economic environment that better serves the economics interests of debt-heavy governments, consumers, workers, and businesses of all kinds.  They can also work together to address threats that undermine their mutual interests by embracing smarter trade relationships. 
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      • Should the U.S. Government Help Fund Election Campaigns?
      • On Defunding Political Science Research
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      • Justice for All: The Case for Legal, Social, Economic, and Personal Justice
      • Why Hardliner Thinking in the NSA and CIA is Doing Damage
      • On the Baby Boomer’s Self-Centeredness
      • The Case for Personal Responsibility
      • What Modern Day Revolutionaries Need to Learn from Leader's like Mandela
      • Rising Western Acceptance of LGBT Primes Culture Clash
      • The Need for Wisdom Beyond the Numbers
      • Perceptions of the United States
      • How Honesty Relates to the Great Recession
      • Why the Middle Class and Rich Need to Support Their Long-term Interests
      • The Aristocratic Republic of the United States of America
      • Discussing the Need for Community Support
      • Why New Forms of Capitalism and Socialism Will Compliment Each Other
      • The Reason We Need to Understand What it is to Be Poor in America
      • Why the World Needs to Reinvest in America
      • Why Are We Against Terrorism?
      • Why Does Terrorism Exist?
      • US Influence: The Value of American Citizenship Around the World
      • Responding to "the Soldier as Sacrficial Victim"
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      • How comfort defines us as people >
        • Is Suicide a Cowardly Way Out?
      • Defense Against the Dark Arts of Manipulators
      • Defining Abuse >
        • On the Willing Victim of Abuse
        • How to Understand Abuse Victims
        • Recognizing Abuse
      • The Role of Substitution in Decision Making
      • Trying to Understand PTSD and Other Trauma-induced Mental Health Issues
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        • Mental Illness is Not the Cause of Anger and Violence >
          • Trying to Understand the Boston Marathon Bombing and Other Violent Crimes
          • Getting into the Twisted Mind of the Tucson Murder
      • Describing the Mind as Modes of Thought >
        • It’s Just Sex?
      • Relationships, or Arrangement
      • Understanding the Effects of Groupthink in the Workplace
      • Relating Circular, Inductive, and Deductive Reasoning to the Scientific Method and Religion
      • What is a Redneck? Understanding Different Cultures and Thinking
    • Economics >
      • The Need for Greater Economic Leverage >
        • Evaluating NAFTA and TPP
        • Undercutting Logistics with the Underpaid Independent Contractor
        • Unions: Hindrance or Essential to Free Markets
        • Eminent Domain Used Against Banks
        • Haitians Sue the UN for Failure to Help With Cholera
        • Looking at How Corn-based Ethanol and Other Alternative Energy Subsidies Stack Up
      • Empowering the Sovereign Nation-State by Rethinking Trade Policy >
        • Irish Sovereignty Lost Before Bailout
        • Why Sudan's Greatest Long-Term Hurdle is Our Lowest-bidder Economy
        • Reduce US Imports by Buying American Made Products
      • Ending the need for government support and tackling poverty
      • Income inequality: understanding the limitations and psychology of disadvantage
      • Looking at the Future of American Jobs >
        • On Questioning the Need to Address Economic Disparity
        • Minimum Wage is Not the Problem
        • Responding to the "Blip"
        • Why Education Is Not The Civil Rights Issue Of The Twenty-First Century
      • Considering the Impact of the Capital Gains Tax Deduction
      • Embracing a Capitalist Mindset >
        • Capitalism Versus Socialism
        • The Negatives of Socialism
      • Stealing Intellectual Property
      • Changing Business Models: From Enduring Entities to Cash Cows
      • Consumer and Investor Evolution in the Great Recession of 2008-09
      • Dealing with the Issues Surrounding the Patenting of Self-replicating Technologies
      • Is Technology Threatening Jobs?
    • Education >
      • The Role of Education in Creating a More Dynamic Workforce
      • Primary Education in America and the Changing Needs of Society
      • The Greatness of the American Education System
      • Ideas for Improving the United States Education System
      • Are Teachers Treated as Professionals?
      • Is Engaging Parents in Their Children's Education a Major Factor in Turning Around Low-performing Schools?
      • Should Grants Be Awarded to School Districts that Try Innovative Methods to Improve Student Achievement?
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      • On Reading the US Constitution
      • The Senate should not do more to limit the powers of the Judicial Branch
      • On the DOJ Justifying the “targeted Killings” of US Citizens
      • Corporations Do Not Have the Same Rights as US Citizens >
        • Corporate America Pleads the First
      • Discussing the Constitutionality of Per Capita Taxes
      • Was the California Supreme Court Right in Legalizing Gay Marriage?
      • Should the Bible Continue to Be Used for Swearing-in Ceremonies and in Courtrooms?
      • Should Religious Student Clubs Be Allowed in Public Schools?
      • Should the Government Control Talk Radio to Make it More "balanced"?
      • The Second Amendment: Not Outdated >
        • Are We Losing Our Second Amendment Rights
      • Eminent Domain Used Against Banks
      • Should a Woman Have the Right to Choose Abortion? >
        • Should Fathers Be Able to Opt Out of Parenthood?
      • Should Smoking Be Allowed in Public Places?
      • Is Teen Driving a Right or a Privilege?
      • Should US Companies Be Required to Provide Equal Pay to Women and Men?
      • Is eighteen too young to vote?
      • First Amendment Rights: The Priviledge of The Press
      • Do Mandatory Seat Belt Laws Violate Individual Rights?
      • Should cell phone use be banned while driving?
      • Dealing with the link between video game violence and children's behavior
      • Should police have to submit to routine drug and alcohol testing?
      • Public schools should not impose mandatory drug testing on students
      • Are High Taxes on Cigarettes Proper?
      • Should pharmacists be required to violate their religious beliefs and dispense the "Morning After Pill?"
      • Should school counselors uphold patient privacy or report students who become unstable?
  • For the record
    • Ongoing Issues >
      • Red Dawn in Ukraine: Understanding the Actions of Russia >
        • On Russia’s Coercion of Ukraine
        • The Russian Annexation of Crimea in the Eyes of the World
        • Putin Has Overplayed His Hand With Crimea
        • Ukraine in Terms of Resovereignization
        • Avoiding a Conflict Between America and Russia Over Ukraine
        • What Drives the World’s Interest in Russia’s Actions in Ukraine
      • China’s Aggressive Pursuit of Interests Demands a Global Response
      • Iran Makes a Deal: A Start to a Long-term Diplomatic Effort to Denuclearize Iran >
        • On the Future of a Nuclear Negotiations with Iran
      • America's Sphere of Influence: Retaking South-East Asia >
        • Power in Asia: Looking at the Power Shift in Japan
        • The China Paradox: Why America is Worried About China
      • Assessing US Support of Israel >
        • Tread Softly Israel for a Heavy Step May Be Your Undoing
      • Understanding the Dysfunctional Nature of the US-Pakistani Relationship
      • Recognizing the True Threat Behind the Current Unrest in the Middle East >
        • Reacting to the Escalating Crackdown in Syria
      • Assessing the Threat of North Korea >
        • Answering North Korea's Call for Food Aid: Breaking the Vicious Cycle Forced Upon Us by a Warring Nation
        • Dealing with the Restarting of the Korean War
        • North Korea Attacks South Korea
      • Dealing with the Ill-effects of Climate Change
      • Racial Inequality and Oppression Do Truly Exist in Today's Society
      • Should energy independence be a high priority in the US?
      • An overview of world wide Human Rights violations
      • Nuclear Threat from Pakistan
      • Return of The Cold War?
    • World >
      • Coverage of FIFA World Cup is a Chance to Focus on Poverty >
        • The FIFA World Cup Offers Benefits for More Than Brazilian Soccer Fans
        • FIFA Can Bring Brazilians Together as a Nation
      • Being Prepared for Any Potential Dangers at the FIFA World Cup Games
      • Treading Softly on the Politicizing of the 2014 Sochi Olympics Over Gay Rights
      • Why NATO Operations in Libya Lack a Well-defined Mission
      • China Hijacks the Web
      • Lessons from the Great Japanese Earthquake of 2011
      • A Modernizing Cuba Offers an Opportunity for Capitalists
      • The Seeds of Democracy Take Root in the Middle East
      • The Rebirth of Democracy in Tunisia
      • What May Come from the Hurt Revolution in Libya
      • Responding to the Violence of Qaddafi and Other Besieged Leaders
      • Embracing the Rise of a Democratic Egypt
      • Protests in Afghanistan Turn Deadly for Coalition Forces and UN Personnel
      • Haiti: Another Failing Humanitarian Investment
      • What Karzai Can Learn from Calderon
      • START II: A Necessary, Easy Success that Nearly Failed
      • Why Does the U.S. Government Support Independence for the Breakaway Serb Territory of Kosovo but Oppose Independence for the Breakaway Georgian Territories of Abkhazia and South Ossetia?
      • Iraq's Electric Issues: When Human Wants Trump Economic Sense
      • The International Community Reacts to Wikileaks: We May Be Moving Toward a Third World War in Cyberspace
      • On Climate Gate
      • Assessing Obama's Afghanistan War strategy
      • 2009 Iranian Presidential Election: The Fallout
      • Resolving Sri Lankan Conflict through Free Media
      • What are the Global Consequences of Russia's Invasion of Georgia
      • The War in Iraq: an assessment of President Bush's surge strategy
      • Drug War: Actions of Venezuela, Columbia, Ecuador in terms of Resovereignization
      • Is the Iraq Refugee Crisis America's Responsibility?
      • US support for a united Kosovo, Abkhazia, and South Ossetia: why?
      • Should the US withdraw from Iraq?
      • Setting a Timetable for Troop Withdrawal from Iraq is a Terrible Mistake
      • War on Terrorism is needed
    • Law and Order >
      • Rape in the US Military
      • Ethics of Force-feeding Guantanamo Bay Detainees
      • Reacting to the Aftermath of the Tucson Massacre
    • Economy >
      • Affordability Drives Fear of Obamacare and the Individual Mandate
      • Is the Economy Built for a Job's Recovery?
      • Gutting Healthcare Reform of the Individual Mandate
      • Arizona Budget Cuts Lead to Lethal Healthcare Rationing:
      • Shameful Collection Practices of American Banks
      • The Fed Reveals it Actually Undertook an International Bailout
      • Thoughts on French Budgetary Reforms
      • Seniors Start Businesses
      • The Case for Slimming Down the US Military to Make it Better
      • Looking at the Obama Administration's New Approach to Economic Policy
      • Should the Government Regulate the Credit Card Industry?
      • The Big Three's Big Chance
      • The Unhealthy Tone of the Healthcare Reform Debate
      • Should the federal government offer a bailout for home owners?
      • Environmentalists: Do They Do More Good Than More Harm?
      • Responding to Scott Walker's Contribution to the War on Unions
    • US Government >
      • America Needs to Focus on the Impending Fiscal Crisis
      • Reacting to the Bush Era-tax Cut Extension Deal
      • Quitting the Obama Revolution: The Fickle Nature of American Politics
      • John Boehner's Circus
      • Is the Fed Putting Itself in Jeopardy?
      • Wikileaks Goes After the US State Department
      • Discussing the Political Environment Surrounding the 2011 Budget Debate
      • What the Democrats Can Do to Ensure a GOP Year in 2012
      • What the 2010 Midterm Actually Said
      • Congresswoman Kathy Dahlkemper
      • Democrats Minus Nancy Pelosi Equals Opportunity
      • Terrorists Go Postal: The Terrorism Threat Reexamined
      • Victory in the 2008 Election: Reaction to Barack Obama'a Win >
        • Expectations for Barack Obama
      • President Obama's first one hundred days
      • John McCain's Negative Campaign
      • Reasons People did not Elect John Mccain
      • History judges the George W. Bush Administration
      • Should the next US President focus on domestic issues?
      • President Bush, should he resign or be impeached
      • Should the Ban on Government Sponsored Assassinations be Repealed
    • Off Topic >
      • A Face of America’s Greatest Generation
      • A Story About a Man Who Made the World a Better Place
      • Making the World a Better Place
      • The Bipolar Ethical Nature of Google
      • Learning Computer Plays Jeopardy
      • Verifying Medicine is the Real Thing
      • Taking a Practical Step Forward in Optical Computing Using Slow Light
      • Scientists Take a Closer Look at How Lithium Batteries Work
      • Remarking on the First Blizzard of the 2010-2011 Winter Season
      • Driving in the Snow: Acceleration is the Key
      • How People in Northwest PA Are Coping with the Increasing Cost of Oil
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