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Commentary: The US and China would like nothing more than to end the trade war

NEW HAVEN, Connecticut: For the last two years, the conflict between the United States and China has..

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NEW HAVEN, Connecticut: For the last two years, the conflict between the United States and China has dominated the economic and financial-market debate – with good reason.

After threats and accusations that long predate US President Donald Trumps election, rhetoric has given way to action. Over the past 17 months, the worlds two largest economies have become embroiled in the most serious tariff war since the early 1930s.

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READ: Commentary: Have the gloves come off in latest US-China trade war saga?

And the weaponisation of US trade policy to target perceived company-specific threats such as Huawei has broadened the front in this battle.

A POLITICAL FIGHT WITH ECONOMIC WEAPONS

I am as guilty as anyone of fixating on every twist and turn of this epic struggle between the worlds two economic heavyweights. From the start, it has been a political conflict fought with economic weapons and is likely to remain so for the foreseeable future.

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READ: Commentary: It's only a pause for breath in US-China trade tensions

What that means, of course, is that the economic and financial-market outlook basically hinges on the political dynamic between the United States and China.

In that vein, the so-called phase one “skinny” trade deal announced with great fanfare on Oct 11 may be an important political signal.

READ: Commentary: The problem with a Phase One US-China trade deal

Donald Trump hailed progress in the trade talks with China, saying a deal was 'potentially very close' AFP/Brendan Smialowski

While the deal, if ever consummated, will have next to no material economic impact, it provides a strong hint that Trump has finally had enough of this trade war.

Consumed by domestic political concerns – especially impeachment and the looming 2020 election – it is in Trumps interest to declare victory and attempt to capitalise on it to counter his problems at home.

China, for its part, would also like nothing more than to end the trade war.

Politics is obviously very different in a one-party state, but the Chinese leadership is not about to capitulate on its core principles of sovereignty and its aspirational mid-century goals of rejuvenation, growth and development.

READ: Commentary: Commentary: Chinas rise this time is different

At the same time, there can be no mistaking downward pressures on the economy. But with Chinese policymakers determined to stay the course of their three-year deleveraging campaign – an important self-inflicted source of the current slowdown – they should be all the more eager to address the trade-related pressures brought about by the conflict with the US.

Consequently, the political calculus of both countries is coming into closer alignment, with each looking for some face-saving truce. There is always a risk that other complications will arise — recent events in Hong Kong and revelations of developments in Chinas Xinjiang Province come to mind.

READ: Commentary: Hong Kong poll win will embolden protesters

READ: Commentary: Has China given up on pursuing growth?

But, at least for the time being, the politics of the trade war are now pointing more toward de-escalation rather than a renewed ratcheting up of tensions.

WHAT NEXT AFTER THE TRADE WAR?

If that is the case, and if a phase one accord is reached, it behooves us to ponder what the world will look like after the trade war. Several possibilities are at the top of my list: Deglobalisation, decoupling and trade diversion.

China and the United States are looking to find a deal to end their long-running trade war. (Photo: AFP/Mark RALSTON)

Deglobalisation is unlikely. Like the first wave of globalisation that ended ignominiously between World War I and the Great Depression, the current wave has generated a mounting backlash.

Populism is rearing its ugly head around the world, and tensions over income and wealth inequality – aggravated by fears that technological innovations such as artificial intelligence will undermine job security – are dominating the political discourse.

Yet the climactic event that underscored the demise of the first wave of globalisation was a 60 per cent collapse in world trade in the early 1930s. Notwithstanding the current political dysfunction, the odds of a similar outcome today are extremely low.

Global decoupling is also unlikely. Reflecting the explosive growth in global value chains (GVCs) over the past 25 years, the world is woven together more tightly than ever before.

READ: Commentary: This brewing tech rivalry may create Chinese isolationism

That has transformed global competition away from the country-specific paradigm of the past to a far more fragmented competition between widely distributed platforms of inputs, components, design and assembly functions.

A recent IMF study found that GVCs accounted for fully 73 per cent of the rapid growth in global trade that occurred over the 20-year period from 1993 to 2013.

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Dozens of Palestinians injured in police clashes as Jewish extremists chanting ‘Death to Arabs’ march in Jerusalem

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Clashes between Palestinians from east Jerusalem and Israeli police around the Damascus gate entrance to the Old City erupted in a night of unrest that earlier saw Jewish extremists marching through another city street shouting “Death to Arabs.”

The violence marks a high point so far in a new phase of complex heightened tensions in the city which began a week and half ago around the start of Ramadan, and prompted an unusual statement Friday morning from the US embassy in Jerusalem in which it called on “all responsible voices [to] promote an end to incitement.”
Hundreds of Palestinians gathered in the area around the Damascus gate Thursday evening to protest the closure of the plaza space in front of the gate, a popular place for young Palestinians to hang out, especially during Ramadan.
Glass bottles and rocks were thrown at police, who used stun grenades, rubber bullets and water cannons spraying foul-smelling ‘skunk water,’ in an effort to disperse the crowds.
At one point, a group of young men managed to break down a pole with a security camera mounted on top and set it alight, temporarily creating a barricade.
The Palestinian Red Crescent said 105 Palestinians were injured, of which 22 required treatment in hospital.
Close by, police used barricades of their own to prevent a march by hundreds of supporters of the Jewish extremist ‘Lehava’ movement from reaching the same area.
Videos on social media show hundreds of people marching down one of Jerusalem’s main thoroughfares, Jaffa Street, towards Damascus Gate chanting repeatedly “Death to Arabs.”
Israeli media reports Lehava supporters threw rocks at police, and videos on social media show police water cannon being used to disperse them.
Lehava has been emboldened by the recent election to the Israeli parliament of several extremist-racist politicians, all of whom have been openly courted by Prime Minister Benjamin Netanyahu in his ongoing attempts to form a new government.
Tensions have been heightened further by a number of videos posted to Tik Tok over the last couple of weeks apparently showing acts of assault, including one purporting to show a Palestinian youth slapping two religious Jews riding the city’s light rail tram service
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The violence continued well into Friday morning with incidents reported across the city, including one captured on video apparently showing Palestinian youths repeatedly kicking a Jewish man in east Jerusalem as he lies on the ground attempting to protect his head.

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Spain drafts new foreign policy that incorporates gender perspective

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The Spanish government has updated its guidelines for international relations. A draft of the 2021-2024 Foreign Action Strategy, which the Cabinet is planning to send to parliament on Tuesday, discusses the “opportunity” to improve relations with the United States now that Joe Biden is the new US president. It also emphasizes the need for “a feminist foreign policy” and “humanitarian diplomacy.”

This document will replace the previous foreign policy strategy drafted in 2015. Although it only represents the government’s opinion, other sources were consulted – including regional, provincial and local authorities, and national agencies such as the Council of State, the government’s top advisory body.

The 100-page text draws a somber picture of a fractured global scenario where the concept of multilateralism is in crisis. “We live in an increasingly volatile and fragmented world that tends to generate two opposing trends: an outward force of disunity marked by the rise of populisms and exclusionary nationalisms, and an inward force with inclusive answers to global challenges,” reads the document.

In this context, Spain hopes to gain added relevance in the international arena with a policy based on “reformed and reinforced multilateralism.” The strategy, drafted in the middle of the coronavirus pandemic, holds that the health crisis has accelerated processes that were already underway, but that it is still too soon to know whether we are immersed in “an era of change or in a change of era.”

The following are some of the main points:

United States. The Biden administration “opens up a more optimistic scenario” and “an opportunity that has to be taken.” Spain wants “a broader agenda for bilateral relations in the economic and trade spheres,” and will seek to get “unfair unilateral trade measures lifted,” alluding to tariffs on olive oil and wine. The existing cooperation on defense issues should be maintained, and the Cervantes Institute will open a new branch in Los Angeles, adding to the ones in New York, Chicago and New Mexico.

Europe. Spain will encourage “a more federal European Union” with greater strategic autonomy, competence over more policy areas, and more matters that may be approved through qualified majorities rather than unanimous votes. Spain will play an active role in the Conference on the Future of Europe, which will address necessary reforms for the EU, and encourage the integration process when it holds the six-month rotating EU presidency in the second half of 2023. The document calls for the consolidation of permanent tools of joint debt issue and for Europe to create its own resources, as well as for a harmonized tax system that ends competition within the EU. The United Kingdom’s withdrawal from the EU is described as “a great opportunity for Spain to take on greater leadership towards a more global Europe.”

Feminism. Spain will approve a Feminist Foreign Policy Strategy to incorporate gender issues “in all areas of foreign action” and it will “lead by example” by encouraging a greater presence of women in Spain’s external activities. Women currently represent 28% of diplomats and 20% of mission heads. Spain will also lead initiatives to promote diversity, “particularly LGTBI rights and the rights of all communities that are underprivileged or discriminated against.”

Latin America. Spain will encourage relations between the EU and Latin America and support the completion of an agreement with the Mercosur trade bloc. The king and queen will visit Chile to celebrate the 500th anniversary of the first documented circumnavigation of the globe. Several Central American countries, as well as Peru and Mexico, are also celebrating the bicentennial of their independence. The latter country is also observing the controversial 500th anniversary of Hernán Cortés’ conquest, and Spain will work towards “a constructive dialogue about the celebration of historical milestones.” In Venezuela, “the priority will be restoring the democratic framework and providing support for overcoming the political and humanitarian crisis.” As for Cuba, the country is “updating its political and economic model” and Spain must stimulate this process “through critical yet constructive support.”

Immigration. Spain supports a European System of Immigration and Asylum guided by the principles of solidarity and equally shared responsibility. It wants to see “integral management of borders,” a zero-tolerance policy against smuggling rings, and the creation of “safe, regular and orderly migration channels.”

Health. Spain will support the European Commission’s efforts to create the foundations for “a European health union,” as well as the reform and reinforcement of multilateral global institutions such as the World Health Organization (WHO).

United Nations. Spain will apply to sit on the UN Human Rights Council for the 2025-2027 period. The technological platform for the UN system in Quart de Poblet (Valencia) will be consolidated and expanded.

China. Spain will seek “more balanced relations” with China, especially on economic issues, avoiding “dynamics of confrontation.” It will encourage a strategic relationship through the EU, without ignoring “clear elements of rivalry in terms of values and interests” especially on human rights issues and unfair competition.

Development aid. The document maintains a commitment to earmark 0.5% of Spain’s gross domestic product (GDP) to development aid. A new law on international cooperation for sustainable development will be passed, and the Spanish International Cooperation Agency will undergo reform.

Climate. Spain wants to lead agreements on climate change with a “climate diplomacy.” It will encourage an international coalition on green hydrogen (hydrogen production from water) and will commit to the protection of biodiversity.

Western Sahara. Spain’s priority with regard to its former colony is to “contribute to the UN’s efforts to reach a political solution to the conflicts in the region in accordance with international parameters.”

Gibraltar. Gibraltar is only mentioned in reference to the recent agreement of December 31 laying out the groundwork to incorporate the British Overseas Territory into the Schengen space. Spain will “encourage the negotiation process for an agreement between the EU and the UK with regard to Gibraltar.”

 

Read from source: https://english.elpais.com/politics/2021-01-26/spain-drafts-new-foreign-policy-that-incorporates-gender-perspective.html

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Ukraine nursing home fire: Four arrested after Kharkiv blaze leaves 15 dead

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Ukrainian authorities have arrested four people in connection with a deadly fire at a retirement home in Kharkiv.

15 people were killed after a blaze ripped through the nursing home on Thursday afternoon in the eastern Ukrainian city, according to emergency services.

Nine others were rescued, five of whom have been taken to hospital for treatment.

Pictures from the scene showed blackened rooms and barred windows on the upper floor of the two-storey building, which had been converted into a home for the elderly. 50 firefighters attended the incident to extinguish the flames.

In a statement on Facebook, the country’s attorney general, Iryna Venediktova, said four people have been arrested.

The suspects include those who owned and rented the building, as well as the manager of the retirement home. Authorities say they are investigating if the fire was started by arson or the short circuit of an electrical appliance.

Ukraine’s President Volodymyr Zelensky visited the centre in Kharkiv and has announced a national day of mourning for Saturday.

In an earlier tweet, the President called on local authorities to do “everything possible” to help victims and relatives who had lost loved ones.

 

Read from source: https://www.euronews.com/2021/01/21/ukraine-nursing-home-fire-15-dead-and-five-hospitalised-after-blaze-in-kharkiv

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