Home' Trinidad and Tobago Guardian : February 17th 2015 Contents WASHINGTON---A 21-year-old ghost
haunts President Barack Obama and his
allies as he presses Congress for enhanced
powers to make trade deals with Japan and
Obama says new trade deals will avoid
the shortcomings of Nafta, the 1994 North
America Free Trade Agreement with Mexico
and Canada, which many Americans blame
for big job losses, especially in manufac-
Pro-trade groups say globalism, technol-
ogy and other factors caused many of the
losses. Still, they are scrambling to show
that post-Nafta deals have been better for
US workers, and they say more agreements
Near the heart of every trade argument
lurks Nafta, a breakthrough deal passed
mainly by Republicans in Congress and
signed by a Democratic president, Bill Clin-
ton. Liberals, labour unions and others
denounce Nafta almost daily. They say it s
the blueprint for new proposals being pushed
by Obama and---once again---a mostly
Republican constituency in Congress.
Not true, say Obama and others.
"Past trade deals haven t always lived up
to the hype," Obama acknowledged in last
month s State of the Union speech. "I m
asking both parties to give me trade pro-
motion authority to protect American work-
ers, with strong new trade deals from Asia
to Europe that aren t just free but are also
In a White House meeting last week with
black lawmakers, Obama said trade deals
of the 1990s were flawed, and "any new
trade agreement will not make the same
mistake," said Rep. Hank Johnson, a Demo-
A pro-trade, pro-Democratic think tank,
Third Way, issued a study on showing that
post-Nafta trade deals, on balance, have
benefited the United States. The group
examined the nations post-Nafta trade
deals, which involve 17 nations. Using fed-
eral government data, it studied only goods,
not services, which are a US strength.
The study found that in 13 of the 17
countries, the US balance of trade improved
after free-trade agreements took effect.
Even when the other four nations are
counted, the study said, the average annual
US trade balance improved by US$30 billion
among the 17 nations.
The study averaged the annual US trade
deficit or surplus with each nation for the
decade before its trade deal took effect. It
then made the same calculations for each
year after the deal was in place. It converted
all findings to 2014 dollars, to account for
The brightest spot was Singapore, where
the average US trade balance rose by nearly
US$12 billion a year since their trade deal
began in 2004. The worst was South Korea.
The average US trade deficit expanded by
US$4.8 billion after the Korea Free Trade
Agreement began in March 2012.
"Many policymakers and interest groups
reflexively oppose new trade deals because
of the hangover from Nafta," the Third
Way study said. "But post-Nafta, trade
deals were negotiated with higher stan-
The study s co-author, Jim Kessler, said
the higher standards mostly involved envi-
ronmental and labour safeguards, which
were omitted from Nafta s main document.
He acknowledged that many labour and
environmental groups criticize Obama s
"But at some point you have to make a
deal," Kessler said, and US failure to enact
new trade pacts will cede control to coun-
tries such as China.
Obama and Republican congressional
leaders are pushing two proposals at once.
The Trans-Pacific Partnership, or TPP, is
a pending trade agreement with Japan,
Australia and nine other Pacific Rim
nations. China is not included.
Lawmakers say TPP won t pass unless
Congress first gives Obama trade promotion
authority, known as TPA or "fast track"
power. A TPA bill sets guidelines but lets
the White House send Congress a trade
proposal to adopt or reject, but not amend.
Every president since Franklin Roosevelt
has had some form of enhanced trade-
dealing powers, but Obama still lacks it.
While China is excluded from the TPP,
it s central to many trade debates. The
Obama administration says China is unfairly
subsidizing seven industries and wants the
World Trade Organization to take action.
Nafta shadows Obama's
trade deal efforts
In this February. 19, 2014, file photo, President Barack Obama, left, Mexico's President Enrique Pena Nieto, centre, and the Prime Minister
of Canada, Stephen Harper, shake hands at the end of a news conference concluding the North American Leaders Summit in Toluca,
Mexico. A 21-year-old ghost haunts President Barack Obama and his allies as he presses Congress for enhanced powers to make trade
deals with Japan and other nations. Obama says new trade deals will avoid the shortcomings of the 1994 North America Free Trade
Agreement with Mexico and Canada, which many Americans blame for big job losses, especially in manufacturing. AP PHOTO
Guardian www.guardian.co.tt Tuesday, February 17, 2015
pick up speed
BRUSSELS---Strong growth in Germany helped
the eurozone economy expand faster than expect-
ed in the final three months of 2014, the latest
in a string of indicators showing the region is
picking up steam amid lower oil prices and a
Economic output across what was then the
18-country eurozone was 0.3 per cent higher in
the fourth quarter than the previous three-month
period, the EU s statistics agency said. That
equates to an annualized rate of around 1.2 per
cent, which is still only about half the growth
rate in the US.
The fourth-quarter performance was never-
theless higher than the 0.2 per cent increase antic-
ipated by investors and buoyed European stock
markets on Friday. The Stoxx 50 index of eurozone
shares rose 0.7 per cent to a seven-year high.
A confluence of factors appears to be helping
the eurozone, which now numbers 19 countries
following Lithuania s entry this year. The near
50 per cent fall in oil prices since last summer
should help consumer spending while the fall in
the euro to near decade-lows against the dollar
is a potential boon to exporters. The European
Central Bank s stimulus, which involves buying
around 1 trillion euros (US$1.14 trillion) of bonds,
could also lift growth by keeping borrowing rates
"Survey data are already signaling an upturn
in growth in January, and investors are flooding
into the region in response to the improved eco-
nomic outlook and renewed stimulus from the
ECB---a torrent of investment flows which looks
likely to continue in coming months barring any
escalation of the Greek crisis," said Chris
Williamson, chief economist at financial infor-
mation company Markit.
Germany was the standout performer, growing
by a quarterly rate of 0.7 per cent. Its export-
heavy economy should do particularly well from
the fall in the euro. A lower currency makes
exports cheaper in international markets, and the
euro is currently weighed down by the ECB stim-
France lagged, expanding by only 0.1 per cent
while Italy s economy was stagnant.
Spain also did particularly well, growing by 0.7
per cent, but Greece s economy faltered---declining
by 0.2 per cent---following three straight quarters
The growth figures cap an encouraging week
for the eurozone. As well as the increasingly pos-
itive economic backdrop, hopes have grown that
a potentially damaging Greek exit from the euro
can be avoided as the new government in Athens
appears to be edging toward a compromise deal
over its debts with its creditors in the eurozone.
Meanwhile, a cease-fire agreement Thursday
in Ukraine could ease---if it proves lasting---another
major source of uncertainty for the region.
Still, risks remain. The progress made over
Greece and Ukraine could yet unravel. At the
same time, the region is suffering a bout of falling
consumer prices. If sustained for a long time,
deflation can choke an economy as consumers
delay spending in hopes for bargains down the
line and businesses fail to innovate and invest
amid faltering profits.
The ECB s stimulus, announced last month
and set to take effect next, is designed to help
get inflation back to the target of just below 2
per cent. In the year to January, prices were 0.6
per cent lower.
"Hopes rest largely on the success of the stim-
ulus programme, but the situation is likely to
remain precarious for the foreseeable future," said
Dennis de Jong, managing director at UFX.com.
Near the heart of every trade
argument lurks NAFTA, a
breakthrough deal passed mainly by
Republicans in Congress and signed
by a Democratic president, Bill
Clinton. Liberals, labour unions and
others denounce NAFTA almost daily.
They say it's the blueprint for new
proposals being pushed by Obama
and---once again---a mostly
Republican constituency in Congress.
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