اخبار 1

Readers of my last few posts on TPP would have noticed my complete disagreement with one Elizabeth Warren - junior Senator from the Bay State of Massachusetts. In this blogger's humble opinion she is a card carrying member of the loony left. And yet, here is proof that even from the loony left, an occasional wise word may arise (granted this is as rare as a bright sunny day in the great state of Oregon, but ..... !) Her utterance was actually from last year - "The message to every Wall Street banker is loud and clear. If you break the law you are not going to jail", said the good lady. Well, let us pass lightly over the fact that there are no banks on Wall Street and that the New York Stock Exchange is not the same as banks. She has a point, which has been doubly proven in the events of lastweek. It was a familiar story. Six banks agreed to pay $5.6 bn in penalties for manipulating currency markets. Five of the six admitted to the crimes. And yet, there is not a single ba...

One of the biggest criticisms of the TPP in the US has been that the negotiations with other countries have been carried on in secrecy by the US government. US politicians have been falling over to yell themselves hoarse against this. When Wikileaks published confidential negotiation documents in their expose, there was much ballyhoo of how evil the government was. Stuff and Nonsense. (The Queen would appreciate this remark !!) I have not read Wikileaks and the very fact that I, an outsider sitting a million miles away with no access to any negotiating document, is able to write this series should be ample evidence that there is no Fort Knox secrecy. The principles with which the US (and every other country) are negotiating are well known and have been well known for years. None of the contentious issues are any different from what the US has been stating and signing in bilateral agreements for the last 20 years. Neither is any of this different from the positions the countries took in...

In this post I'll tackle the  issues raised against the TPP in the areas of environment and intellectual property. The opposition to the TPP from environmental activists comes from two contradictory positions - one is that any promotion of trade and economic activity leads to degradation of the environment and therefore must be stopped. The second argument is that the TPP does not go far enough to make environmental and climate change issues at the heart of any trade deal. The first argument is not worth debating, for it is a loony left idea that deserves contempt. Denying the opportunity of economic advancement to the world's poor should be treated as a crime; for that is what it is. It would be far better if these activists were to specify how growth can happen with minimum effects on the environment (for eg what energy sources could be acceptable) and what the trade offs and choices should be. This they do not do and simply oppose everything. Such a position is not worth a s...

The opposition from labour unions in the US ( and labour activists everywhere in the world) to the TPP is that it will lead to the loss manufacturing jobs (read in the US) and therefore it is anti labour. I have some sympathy for the view of the labour unions in the US, but absolutely no sympathy for the "global labour activists". In every change of  the status quo, including opening up of trade, there will be winners and losers. When international trade is made more easy, by whatever means, the risk of American manufacturing jobs being lost is real. Labour intensive activity will migrate from higher cost locations to lower cost locations - that's an indisputable fact of economics. Therefore there has to be some sympathy for the US unions' opposition to every trade deal with a foreign country. The balance sheet of wins and losses for the US looks like this. Jobs will be lost, especially in manufacturing. US consumers win in terms of lower costs of products. If intern...

One of the big issues in a trade relationship involving multiple countries is what happens if a country unilaterally decides to ban a product, or raise import duties astronomically, or take a similar form of unilateral action that dramatically affects the viability of a foreign investor's project. This might go against something that the government itself contractually agreed with the investor. What does the investor do. The investor can take the government of that country to court, but in many countries of the world  there is no hope of winning, or it would take years in court. After all a government can simply change laws retrospectively (as India often does) and the courts can do little else but enforce them. It is precisely for this reason that the United States for many years has been insisting on independent forums for resolving Investor-State Disputes (ISDs). The US position has been that the legal system of every country outside the US cannot be trusted and therefore there ...

The Trans-Pacific Partnership (TPP) is a trade deal that 12 countries bordering the Pacific Ocean are negotiating. The countries include the USA, Japan, Australia and Canada, but exclude China. The TPP is being vigorously opposed by a collection of groups - Democrats in the US, environmental groups, labour unions  and even Medicines Sans Frontiers. There is much fear mongering and shrill yelling, especially from US politicians, and this blogger believes a reasoned debate on the real issues would be useful. This series is also in response to this post from my good friend. Firstly, we must clarify what TPP is. It is an attempt at a trade deal between 12 countries. The WTO was (is ?) an attempt to do a trade deal across most of the countries in the world. The TPP is far less ambitious - it attempts to cover only 12 countries, most of whom see eye to eye on many issues. And yet, this is proving to be very difficult to achieve, with much of the noise in opposition emanating from the US. Wh...

The most unlikely of bedfellows can come together in the business world. Consider this rather unusual "marriage". The bride is the city of Detroit. We shouldn't be uncharitable to a bride, but the immediate words that come to mind when you mention Detroit are decay, dilapidated, joblessness,  decline, etc etc. Can any good news come out of Detroit these days ? The groom is Sakthi Group. Sakthi who ? - even my Indian readers are entitled to ask. It's an unknown, small conglomerate from the South of India. They were essentially a sugar company, but have dipped their fingers into a bewildering array of businesses. They are still small by global standards - some $2 bn in size. One of their businesses is Automotive Components - a business in which Indian companies have excelled and are starting to lead the world.  Sakthi announced a $ 31 m investment in a manufacturing facility in Detroit to make aluminium castings. GM and Ford are big customers for them and t...

Just in case you were not following the British elections, a small earthquake happened. The Tories won, the Lib Dems were wiped out, Labour performed poorly, and UKIP performed well but got no rewards. The bigger earthquake happened north of the border where the Scottish Nationalist party (SNP) won all seats bar three in a landslide, essentially running on a plank of Scottish independence. This blog is a politics free zone and this blogger does not comment on political matters although he has (obviously !) strong views on every matter under the sun including Scottish independence :) But he can and will argue a point of view on the economics of the issue of Scotland's secession. Scotland runs a much higher level of expenditure as compared to the income it generates. If it were a separate nation, it will be running a deficit of 8% of GDP, as against the UK's 4%. The SNP is even more to the left than Labour and wants to spend more. In the cuckooland of irresponsibility that all op...

Businesses are often considered as machines without a heart. But even businesses face some gut wrenching ethical issues , where the "right" course of action is by no means obvious.  Take the case of the compassionate care issue face by pharmaceutical companies. Drugs produced by pharmaceutical companies are marketed after years, and sometimes, decades of clinical trials. They have to be approved by a regulating body - in the case of the US, the FDA - before they can be made available for use by doctors and patients. This is a justifiably stringent process. It is therefore obvious that at any point in time, there are a number of experimental drugs which are at various stages of testing or approval. They may or may not finally make it to the market place. But the fact of their existence, their performance in the trials, the stage of FDA approval (relevant since most drugs are discovered in the US) are all fairly common knowledge and often in the public domain. The ethical issue...