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The Trade Deficit: The Biggest Obstacle to Full Employment

April 7, 2014 Comments off

The Trade Deficit: The Biggest Obstacle to Full Employment
Source: Center for Economic and Policy Research

Dean Baker argues that taking aim at the persistent trade deficit, through which the United States exports labor demand, would help a great deal in moving the job market toward full employment. Moreover, he argues that trade is a “policy variable,” amenable to interventions that push back against competitors who place a fat thumb on the exchange-rate scale to keep their imports cheap and our exports expensive.

Baker notes various ideas that could counter currency management. First, the US could pass legislation that gave the government the right to treat currency management as a violation of international trading rules, leading to offsetting tariffs. Second, we could also tax foreign holdings of United States Treasuries, making the usual tactic of currency managers more expensive. Third, we could institute reciprocity into the process of currency management: If a country wants to buy our Treasuries, we must be able to buy theirs.

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CRS — Financing the U.S. Trade Deficit (updated)

April 7, 2014 Comments off

Financing the U.S. Trade Deficit (PDF)
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)

The U.S. merchandise trade deficit is a part of the overall U.S. balance of payments, a summary statement of all economic transactions between the residents of the United States and the rest of the world, during a given period of time. Some Members of Congress and other observers have grown concerned over the magnitude of the U.S. merchandise trade deficit and the associated increase in U.S. dollar-denominated assets owned by foreigners. International trade recovered from the global financial crisis of 2008-2009 and the subsequent slowdown in global economic activity that reduced global trade flows and, consequently, reduced the size of the U.S. trade deficit. Now, however, U.S. exporters face new challenges with economies in Europe and Asia confronting increased risks of a second phase of slow growth. This report provides an overview of the U.S. balance of payments, an explanation of the broader role of capital flows in the U.S. economy, an explanation of how the country finances its trade deficit or a trade surplus, and the implications for Congress and the country of the large inflows of capital from abroad.

CRS — Turkey: Background and U.S. Relations (updated)

April 7, 2014 Comments off

Turkey: Background and U.S. Relations (PDF)
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)

Several Turkish domestic and foreign policy issues have significant relevance for U.S. interests, and Congress plays an active role in shaping and overseeing U.S. relations with Turkey. This report provides background information on Turkey and discusses possible policy options for Members of Congress and the Obama Administration. U.S. relations with Turkey—a longtime North Atlantic Treaty Organization (NATO) ally—have evolved over time. Turkey’s economic dynamism and geopolitical importance have increased its influence regionally and globally. Although Turkey still depends on the United States and other NATO allies for political and strategic support, its increased economic and military self-reliance since the Cold War allows Turkey relatively greater opportunity for an assertive role in foreign policy. Greater Turkish independence of action and continuing political transformation appear to have been mutually reinforcing—with both led for more than a decade by Prime Minister Recep Tayyip Erdogan and the Islamist-rooted Justice and Development Party (AKP). However, it remains unclear how Turkey might reconcile majoritarian views favoring Turkish nationalism and Sunni Muslim values with secular governance and protection of individual freedoms and minority rights, including with regard to Turkey’s Kurdish citizens.

USITC — Trade Barriers that U.S. SMEs Perceive as Affecting Exports to the EU

April 4, 2014 Comments off

Trade Barriers that U.S. SMEs Perceive as Affecting Exports to the EU
Source: U.S. International Trade Commission

Standards and a variety of other trade barriers in the European Union disproportionately affect the exports of U.S. small and medium-sized enterprises more than those of large firms, reports the U.S. International Trade Commission (USITC) in its new publication Trade Barriers that U.S. Small and Medium-Sized Enterprises Perceive as Affecting Exports to the European Union.

The USITC, an independent, nonpartisan, factfinding federal agency, completed the report for the U.S. Trade Representative.

As requested, the report catalogs trade-related barriers that U.S. small and medium-sized enterprises (SMEs) and related industry associations reported as limiting their exports to the European Union (EU). Highlights of the report follow.

SMEs explained that many EU trade barriers, particularly those related to standards and regulations, affect their exports. They stated that complying with EU regulations and procedures are costly for all firms, but potentially prohibit SMEs from exporting to the EU because such costs are often the same regardless of a firm’s size or export revenue. Other difficulties that were cited include protection of trade secrets, high patenting costs, and logistics challenges, especially customs requirements, inconsistent Harmonized System classifications, and the EU’s value-added tax system.

  • SMEs and related industry associations described many industry-specific barriers. For example:
  • SMEs in the chemical industry frequently cited the high cost of complying with the EU chemical regulation (Registration, Evaluation, Authorisation and Restriction of Chemicals or REACH).
  • SMEs exporting cosmetics expressed difficulties meeting the EU’s cosmetics directive.
  • SME clothing exporters said that they were disproportionately affected by the recent EU retaliatory additional duties on U.S. exports of women’s denim jeans.
  • SMEs producing machinery, electronic, transportation, and other goods cited a lack of harmonized international standards and mutual recognition for conformity assessment, as well as problems complying with technical regulations and conformity assessment procedures.

A number of barriers reportedly constrain U.S. exports of agricultural products. SMEs and industry groups in the corn, dried fruit, animal feed, cheese, and wheat industries cited high tariffs, stringent and inconsistent EU rules and testing mandates, lack of a science-based regulatory focus (especially for genetically modified traits), lack of harmonization between U.S. and EU standards, and the EU’s protected designations of origin (PDOs). The U.S. poultry and lamb industries reported that they are effectively banned from exporting to the EU.
U.S. services SMEs in the healthcare, engineering, testing, and audiovisual industries highlighted a lack of mutual recognition of licensing, credentials, and standards, as well as issues with broadcasting and film quotas, language dubbing requirements, government subsidies, and safeguarding intellectual property.
In certain industries, SMEs or industry associations also provided suggestions for increasing U.S. SME transatlantic trade with the EU and, at times, stories of successfully exporting to the EU.

FY 2014-2017 Department of State and USAID Strategic Plan

April 4, 2014 Comments off

FY 2014-2017 Department of State and USAID Strategic Plan
Source: U.S. Department of State

The Department of State and U.S. Agency for International Development (USAID) Strategic Plan for Fiscal Years 2014 to 2017 sets forth the Secretary of State’s direction and priorities for both organizations. The Strategic Plan presents how the Department and USAID will implement U.S. foreign policy and development assistance.

New From the GAO

April 3, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. International Financial Reforms: U.S. and Other Jurisdictions’ Efforts to Develop and Implement Reforms. GAO-14-261, April 3.
http://www.gao.gov/products/GAO-14-261
Highlights - http://www.gao.gov/assets/670/662259.pdf

2. Defense Infrastructure: Army Has a Process to Manage Litigation Costs for the Military Housing Privatization Initiative. GAO-14-327, April 3.
http://www.gao.gov/products/GAO-14-327
Highlights - http://www.gao.gov/assets/670/662264.pdf

3. 2020 Census: Prioritized Information Technology Research and Testing Is Needed for Census Design Decisions. GAO-14-389, April 3.
http://www.gao.gov/products/GAO-14-389
Highlights - http://www.gao.gov/assets/670/662279.pdf

Department of State by State

April 2, 2014 Comments off

Department of State by State
Source: U.S. Department of State

For about a 1% investment of the Federal budget, the State Department yields a large return for the American people by protecting U.S. national security, promoting our economic interests, providing services, and reaffirming our country’s exceptional role in the world. The map below represents just some of the direct effects State Department programs have in American communities.

The Prudential Regulation of Financial Institutions: Why Regulatory Responses to the Crisis Might Not Prove Sufficient

April 2, 2014 Comments off

The Prudential Regulation of Financial Institutions: Why Regulatory Responses to the Crisis Might Not Prove Sufficient
Source: Organisation for Economic Co-operation and Development

It is now six years since a devastating financial and economic crisis rocked the global economy. Supported strongly by the G20 process, international regulators led by the Financial Stability Board have been working hard ever since to develop new regulatory standards designed to prevent a recurrence of these events. These international standards are intended to provide guidance for the drawing up of national legislation and regulation, and have already had a pervasive influence around the world. This paper surveys recent international developments concerning the prudential regulation of financial institutions: banks, the shadow banking system and insurance companies. It concludes that, while substantial progress has been made, the global economy nevertheless remains vulnerable to possible future financial instability. This possibility reflects three sets of concerns. First, measures taken to manage the crisis to date have actually made the prevention of future crises more difficult. Second, the continuing active debate over virtually every aspect of the new regulatory guidelines indicates that the analytical foundations of what is being proposed remain highly contestable. Third, implementation of the new proposals could suffer from different practices across regions. Looking forward, the financial sector will undoubtedly continue to innovate in response to competitive pressures and in an attempt to circumvent whatever regulations do come into effect. If we view the financial sector as a complex adaptive system, continuous innovation would only be expected. This perspective also provides a number of insights as to how regulators should respond in turn. Not least, it suggests that attempts to reduce complexity would not be misguided and that complex behavior need not necessarily be accompanied by still more complex regulation. Removing impediments to more effective self-discipline and market discipline in the financial sector would also seem recommended.

State of Global Partnerships

April 2, 2014 Comments off

State of Global Partnerships
Source: U.S. Department of State

The Secretary’s Office of Global Partnerships leveraged approximately $829 million in public and private resources for diplomacy and development since 2009, and worked with over 1,600 partners from around the world.

Globally, countless partnerships have been launched. In this report, we’ve selected a few standout partnerships to illustrate the impact these efforts have had, or will have, in the future.

Bureaucratic Interests and the Outsourcing of Security: The Privatization of Diplomatic Protection in the United States and the United Kingdom

April 2, 2014 Comments off

Bureaucratic Interests and the Outsourcing of Security: The Privatization of Diplomatic Protection in the United States and the United Kingdom (working paper version; PDF)
Source: Armed Forces & Society

In spite of its sensitivity, diplomatic protection has received very sporadic scholarly attention. This article provides a comparative analysis of US and UK diplomatic security policies, focusing on the increasing use of private military and security companies (PMSCs) for the protection of foreign service and development agencies’ personnel. The existing theoretical explanations of the privatization of security tasks cannot explain why countries displaying similar material incentives and similar political and market cultures have outsourced diplomatic protection to different degrees, nor can they account for variance in the use of PMSCs by different agencies within the same country. Our analysis highlights the importance of investigating organizations’ interests in providing a more accurate explanation of the varying propensity to outsource armed protection. In both the United States and the United Kingdom, the outsourcing of diplomatic security was a resultant of foreign policy bureaucracies and military organizations’ preferences.

Total Passengers on U.S Airlines and Foreign Airlines Serving the U.S. Increased 1.3% in 2013 from 2012

April 1, 2014 Comments off

Total Passengers on U.S Airlines and Foreign Airlines Serving the U.S. Increased 1.3% in 2013 from 2012
Source: Bureau of Transportation Statistics

The U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today that U.S. airlines and foreign airlines serving the United States carried 826.0 million systemwide (domestic + international) scheduled service passengers in 2013, 1.3 percent more than in 2012 and the highest total since 2007. The systemwide total was the result of a 0.5 percent increase in the number of domestic passengers (645.6 million) and a 4.0 percent increase in international passengers (180.4 million) (Tables 1, 1A, 5).

New From the GAO

April 1, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Puerto Rico: Information on How Statehood Would Potentially Affect Selected Federal Programs and Revenue Sources. GAO-14-31, March 4.
http://www.gao.gov/products/GAO-14-31
Highlights - http://www.gao.gov/assets/670/661335.pdf

2. Puerto Rico: Informacion Sobre Como la Estatidad Afectaria Determinados Programas y Fuentes de Ingresos Federales. GAO-14-301, March 4.
http://www.gao.gov/products/GAO-14-301
Highlights - http://www.gao.gov/assets/670/661704.pdf

3. National Preparedness: HHS Has Funded Flexible Manufacturing Activities for Medical Countermeasures, but It Is Too Soon to Assess Their Effect. GAO-14-329, March 31.
http://www.gao.gov/products/GAO-14-329
Highlights - http://www.gao.gov/assets/670/662121.pdf

4. Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-14-340SP, March 31.
http://www.gao.gov/products/GAO-14-340SP
Highlights - http://www.gao.gov/assets/670/662183.pdf
Podcast - http://www.gao.gov/multimedia/podcasts/662072

5. Programa Para Mitigar Activos Problemáticos: Es necesario un mayor esfuerzo en el control de préstamos equitativos y en el acceso a los programas de vivienda por parte de personas sin dominio del ingles. GAO-14-457, March 31.
http://www.gao.gov/products/GAO-14-457
Highlights - http://www.gao.gov/assets/670/662186.pdf

6. American Samoa and the Commonwealth of the Northern Mariana Islands: Economic Indicators Since Minimum Wage Increases Began. GAO-14-381, March 31.
http://www.gao.gov/products/GAO-14-381
Highlights - http://www.gao.gov/assets/670/662128.pdf

7. Missile Defense: Mixed Progress in Achieving Acquisition Goals and Improving Accountability. GAO-14-351, April 1.
http://www.gao.gov/products/GAO-14-35
Highlights - http://www.gao.gov/assets/670/662199.pdf

8. Afghanistan: Changes to Updated U.S. Civil-Military Strategic Framework Reflect Evolving U.S. Role. GAO-14-438R, April 1.
http://www.gao.gov/products/GAO-14-438R

CRS — Turkey: Background and U.S. Relations (updated)

March 31, 2014 Comments off

Turkey: Background and U.S. Relations (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Several Turkish domestic and foreign policy issues have significant relevance for U.S. interests, and Congress plays an active role in shaping and overseeing U.S. relations with Turkey. This report provides background information on Turkey and discusses possible policy options for Members of Congress and the Obama Administration. U.S. relations with Turkey—a longtime North Atlantic Treaty Organization (NATO) ally—have evolved over time. Turkey’s economic dynamism and geopolitical importance have increased its influence regionally and globally. Although Turkey still depends on the United States and other NATO allies for political and strategic support, its increased economic and military self-reliance since the Cold War allows Turkey relatively greater opportunity for an assertive role in foreign policy. Greater Turkish independence of action and continuing political transformation appear to have been mutually reinforcing—with both led for more than a decade by Prime Minister Recep Tayyip Erdogan and the Islamist-rooted Justice and Development Party (AKP). However, it remains unclear how Turkey might reconcile majoritarian views favoring Turkish nationalism and Sunni Muslim values with secular governance and protection of individual freedoms and minority rights, including with regard to Turkey’s Kurdish citizens.

CRS — Major U.S. Arms Sales and Grants to Pakistan Since 2001

March 31, 2014 Comments off

Major U.S. Arms Sales and Grants to Pakistan Since 2001 (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Major U.S. arms sales and grants to Pakistan since 2001 have included items useful for counterterrorism and counterinsurgency operations, along with a number of “big ticket” platforms more suited to conventional warfare. In dollar value terms, the bulk of purchases have been made with Pakistani national funds, although U.S. grants have eclipsed these in recent years. The Pentagon reports total Foreign Military Sales agreements with Pakistan worth about $5.2 billion for FY2002-FY2012 (sales of F-16 combat aircraft and related equipment account for about half of this). Congress has appropriated more than $3 billion in Foreign Military Financing (FMF) for Pakistan since 2001, more than $2 billion of which has been disbursed. These funds are used to purchase U.S. military equipment for longer-term modernization efforts. Pakistan has also been granted U.S. defense supplies as Excess Defense Articles (EDA).

CRS — Central Asia: Regional Developments and Implications for U.S. Interests

March 31, 2014 Comments off

Central Asia: Regional Developments and Implications for U.S. Interests (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

U.S. policy toward the Central Asian states has aimed at facilitating their cooperation with U.S. and NATO stabilization efforts in Afghanistan and their efforts to combat terrorism; proliferation; and trafficking in arms, drugs, and persons. Other U.S. objectives have included promoting free markets, democratization, human rights, energy development, and the forging of East-West and Central Asia-South Asia trade links. Successive Administrations have argued that such policies will help the states to become responsible members of the international community rather than to degenerate into xenophobic, extremist, and anti-Western regimes that contribute to wider regional conflict and instability. Soon after the terrorist attacks on the United States on September 11, 2001, all the Central Asian “front-line” states offered over-flight and other support for coalition anti-terrorism operations in Afghanistan. Kyrgyzstan, Tajikistan, and Uzbekistan hosted coalition troops and provided access to airbases. In 2003, Kazakhstan and Uzbekistan also endorsed coalition military action in Iraq. About two dozen Kazakhstani troops served in Iraq until late 2008. Uzbekistan rescinded U.S. basing rights to support operations in Afghanistan in 2005 after the United States criticized the reported killing of civilians in the town of Andijon. The Kyrgyz leadership has notified the United States that it will not extend the basing agreement. U.S. forces will exit the “Manas Transit Center” by mid-2014 and move operations to other locations. In recent years, most of the regional states also have participated in the Northern Distribution Network for the transport of U.S. and NATO supplies into and out of Afghanistan.

CRS — U.S.-Vietnam Nuclear Cooperation Agreement: Issues for Congress

March 31, 2014 Comments off

U.S.-Vietnam Nuclear Cooperation Agreement: Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

U.S.-Vietnamese cooperation on nuclear energy and nonproliferation has grown in recent years along with closer bilateral economic, military, and diplomatic ties. In 2010, the two countries signed a Memorandum of Understanding that Obama Administration officials said would be a “stepping stone” to a bilateral nuclear cooperation agreement. This agreement was signed by the two countries in December 2013.

Under section 123 of the Atomic Energy Act of 1954 (as amended), this agreement is subject to congressional review. The nuclear cooperation agreement is expected to comply with all the terms of the Atomic Energy Act as amended and therefore will be a “non-exempt” agreement. This means that it will enter into force upon the 90th day of continuous session after its submittal to Congress (a period of 30 plus 60 days of review) unless Congress enacts a Joint Resolution disapproving the agreement.

Vietnam would be the first country in Southeast Asia to operate a nuclear power plant. Vietnam has announced a nuclear energy plan that envisions installing several nuclear plants, capable of producing up to 14,800 megawatts of electric power (MWe), by 2030. Nuclear power is projected to provide 20%-30% of the country’s electricity by 2050. Significant work remains, however, to develop Vietnam’s nuclear energy infrastructure and regulatory framework.

CRS — Ukraine: Current Issues and U.S. Policy (updated)

March 28, 2014 Comments off

Ukraine: Current Issues and U.S. Policy (PDF)
Source: Congressional Research Service

After a failed effort to violently disperse pro-European Union protests, the government of President Viktor Yanukovych collapsed on February 21, 2014. He fled from Kyiv, as did many of his supporters, and protestors took over Kyiv. The Ukrainian parliament approved a new proreform, pro-Western government on February 27. The parliament has scheduled new presidential elections for May 25, 2014. Russia has condemned the new government in Kyiv as illegitimate and responded by sending troops to seize Ukraine’s Crimea region. Ignoring U.S. and international condemnation, Russia annexed Crimea on March 18. Ukrainian officials charge that Russia is also trying to stir unrest in eastern and southern Ukraine, where many Russian-speakers live, perhaps in order to provide a pretext for an invasion of those regions.

Ukraine’s new government faces serious economic problems. Ukraine has long-standing problems in attracting foreign investment, in part due to rampant corruption and other shortcomings in the rule of law. In the near term, the government’s dwindling foreign exchange reserves have raised the prospect of a default on sovereign debt later this year, unless the government can secure new loans quickly.

Textbook Diplomacy: Why the State Department Shelved a Study on Incitement in Saudi Education Materials

March 27, 2014 Comments off

Textbook Diplomacy: Why the State Department Shelved a Study on Incitement in Saudi Education Materials (PDF)
Source: Foundation for the Defense of Democracy
From press release:

Though first noted as problematic more than a decade ago by the Department of State, incitement and hatred continues to be taught from government textbooks to students in Saudi Arabia. Today, the Foundation for Defense of Democracies (FDD) released a monograph exploring why a 2011 U.S. government-commissioned study on the subject has been withheld from the public, what is being taught in Saudi schools today, and how official incitement impacts U.S. national security.

Think Tank Review — Special Issue — EU-US Relations

March 27, 2014 Comments off

Think Tank Review — Special Issue — EU-US Relations
Source: European University Institute Library

On the occasion of the EU-US Summit we compiled the first Special Issue of the Think Tank Review, featuring publications on EU-US relations referenced in the Think Tank Reviews since its inception in late 2013. The collection has an obvious focus on the negotiations of the Transatlantic Trade and Investment Partnership (TTIP), however we also found analyses all other recent highlights in transatlantic relations, from security to finance.

AU — The G20: a quick guide

March 26, 2014 Comments off

The G20: a quick guide
Source: Parliamentary Library of Australia

This is a quick guide to basic information about the G20, as well as links to useful summary resources. The G20 background section includes the G20’s history, its members, the hosting system and G20 meeting processes, as well as a brief discussion of selected policy areas. Material on Australia and the G20 includes Australia’s involvement in the G20, Australia’s G20 goals for 2014 and speeches and press releases on the G20. A short list of links provides access to more resources on the G20.

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