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Free EU-India trade for a much needed boost to global growth

An EU-India Free Trade Agreement would provide a much needed jolt to global growth and could triple bilateral trade to a staggering EUR160 billion by 2015. Alec van Gelder and Phillip Stevens argue in Mint (India) that this mutually beneficial agreement could be an early highlight of the great recovery in 2010. But important obstacles remain.

A lesson in specialisation:

Sri Lankan businesses are finding new ways to carve themselves a niche in markets dominated by cheaper Indian and Chinese products.

A recent article in the New York Times documents the story of Sri Lankan tea producer Merrill Fernando. During the 1970s, Sri Lanka’s old fashioned tea growers struggled to compete against foreign producers who used more efficient and modern production techniques. Facing bankruptcy and aware of Sri Lanka’s comparative disadvantage in mass producing cheap tea, Mr Fernando chose to specialise in providing higher quality teas to more discerning customers.

Chinese Censorship = Protectionsim

Fredrik Erixon and Hosuk Lee-Makiyama have an interesting piece in the Wall Street Journal detailing how China’s heavy handed censorship rules constitute protectionism. As well as coming under fire for violations of free speech, Beijing’s invasive policies could also land them in hot water with the World Trade Organisation:

An unhealthy dose of festive protectionism

While most of us were enjoying our Christmas turkey, Obama, Hu and the EU bureaucrats were busy at work implementing a bit of festive protectionism. They all imposed new- or extended old- tariffs on imported goods over the holiday period.

Spreading Protectionism in today's FT

Good letter from Edin Mujagic in today’s Financial Times highlighting the widespread implementation of protectionist policies in the wake of the global financial crisis;

Krugman vs Free Trade

Writing in today’s Wall Street Journal, Aaron Back is rightly sceptical of Paul Krugman’s latest rant in which he asserts that the so called “victims” of Chinese mercantilism have “little to lose from a trade confrontation.” On the contrary, the U.S., Europe and people all around the world have great deal to lose by precipitating a war on trade with China.

"Taxi...? That'll be twice as much please, mate!"

Philip Stevens’ article in last week’s Sunday Times nicely documents why taxis in London cost twice as much as in other major cities like New York.

Rules restricting the numbers of taxis on the road and archaic training regulations have led to a shortage of “rank and hail” taxis on the roads. The result is increased waiting times and extortionate prices- a consequence of high demand and limited supply. The situation is made worse by meddling local authorities who fix universal fare prices, rather than leaving it up to consumers to decide how much to pay and for what quality of service.

EU ministers fail to give shoe tax the boot

After months of flip-flopping, EU Ministers have today shamefully voted to extend the tariffs of up to 16.5 per cent imposed upon Chinese and Vietnamese shoe imports since 2006. The decision condemns cash-strapped European consumers and struggling retailers to higher footwear prices for a further 15 months.

Green Protectionism is not good for the environment

Fredrik Erixon has a good piece in the European Voice detailing the consequences of succumbing to green protectionism.

Citing the EU’s Renewable Energy Directive as a prime example, Mr Erikon warns us that protectionist measures are not good for environmental policy and are likely to increase the cost of reducing emissions, invoke the condemnation of the WTO and, worst of all, incite tit for tat trade disputes.

The war on trade is starting to hurt.

It emerged today that China is slapping an import tariff on certain steel goods imported from the U.S. and Russia. This is the latest blow for trade in a series of tit for tat disputes between China and the U.S.

While officials in Washington and Beijing continue their petty spat, the real losers are the manufacturers, producers and consumers back at home. As of tomorrow, American companies like Ohio based AK Steel Holding Corp., will incur taxes on their steel exports to China of up to 25 per cent, while Chinese companies will now have to foot the bill for these price hikes. Less than a month ago we were reporting the same story, but the other way around.