Trump – DONALD TRUMP’S ECONOMIC PLAN

Trump – DONALD TRUMP’S ECONOMIC PLAN

Trump piano economico per gli Stati Uniti d America

Author: Lorenzo Giusepponi
December 2017

After a long and bitter campaign for the US presidency, Donald Trump has triumphed over Hillary Clinton . The Republican is now the 45 th American President and his first term is from 2017 to 2021 . His economic plan focuses on ” making America great again .” Trump entered the White House flanked by Republican majorities in both houses of Congress, but his prior clashes with Republican leaders, particularly with House Speaker Paul Ryan, suggest that he may have trouble passing his entire legislative agenda . Democrats, meanwhile, may act to block some of his proposals, despite their Congressional disadvantage . On the one hand, for Trump’s supporters he represents a chance to shake up a system that many Americans feel has increased inequality and squeezed living standards, on the other, for less complacent investors, there are worries Trump’s anti-globalization mantra will spread protectionism around the world, put up trade barriers and curb global economic growth .

Reactions after the news of his victory

Trump was not always clear and consistent about his policies, and when he was, they were often unorthodox enough to have unpredictable consequences . This resulting uncertainty helps explain the market reaction to his win in the early morning of November 9, 2016 . The Dow Johns, S&P 500 and Nasdaq indexes, as well as the European, Japanese and Chinese stock markets, began to fall . Then, except in the case of the Mexican peso, which continued to slump against the dollar, these initial reactions reversed themselves . Here are then, Trump’s plans in the major fields of the economy .

Growth

During the third televised debate, Trump promised to bring GDP from 1 % up to 4 % and even higher, to 6 % annually . Trump believes in supply-side economics, that is the theory that says increased production drives economic growth . Supply – side fiscal policy focuses on businesses . Its tools are tax cuts and deregulation. Companies that benefit from these policies hire more workers . The resultant job growth creates more demand which further boosts growth . But Arthur Laffer, the originator of that theory, says tax rates must be higher than they are today for the strategy to work . Treasury Secretary Steve Mnuchin is less gung – ho, telling Congress that the administration’s target is 3 % or higher . The Tax Foundation is more sanguine about Trump’s prospects . The think tank projected in September that his policies would increase GDP by 6.9 % to 8.2 % over the long term .

Jobs

The Peterson Institute for International Economics ( PIIE ) wrote in September 2016 that it expects Trump’s policies, if implemented, to set off ” a trade war that would plunge the US economy into recession and cost more than 4 million private sector American jobs .” Moody’s is only slightly less pessimistic, arguing that Trump’s policies would result in 3.5 million fewer jobs after four years, with unemployment rising to perhaps 7 % from its current level of 4.9 % . Trump said he wanted to create jobs by eliminating outsourcing and bringing jobs back from Japan, China and Mexico . The problem really exists . The U.S. lost 34 percent of its manufacturing jobs between 1998 and 2010. Many were outsourced by U.S. companies to save money . Others were eliminated by new technology, including robotics, artificial intelligence and bio-engineering . Government – sponsored training for these specialties might create more jobs for U.S. workers than would Trump’s trade war .

Taxes

Here again, Trump has played into frustrations among many Americans over their sense of financial insecurity, inequality and squeezed incomes . Trump, who has faced fierce criticism for appearing to escape paying income tax himself for almost two decades, promised tax cuts for all income groups . He has also said he would “ ensure the rich pay their fair share ”. But analysis by the Tax Foundation has found Trump’s tax plan would disproportionately help the richest Americans, saving them millions . On December 17 House and Senate Republicans released the text of a bill to overhaul the federal tax code, with final votes expected the following week . Among the many things, the bill would retain the current structure of seven individual income tax brackets, but in most cases it would lower the rates . It would end the individual mandate, a provision of the Obamacare that provides tax penalties for individuals who do not obtain health insurance coverage, in 2019 . Also, it would change the measure of inflation and set the corporate tax rate at 21 % .

Trade

On his campaign site Trump promised to ” negotiate fair trade deals that create American jobs, increase American wages, and reduce America’s trade deficit, ” asserting that decades of free-trade policies were responsible for the collapse of the American manufacturing industry .
• Mexico and NAFTA : Mexico has come in for particular criticism ; Trump repeatedly threatened to slap 35 % tariffs on cars imported from Mexico . At $ 74 billion, vehicles were the largest category of imports from Mexico in 2015, according to the U.S. Trade Representative’s website . The U.S. had a $ 67.5 billion trade deficit with Mexico in goods in 2015, but a $ 9.6 billion surplus in services . Trump has also singled out the North American Free Trade Agreement ( NAFTA ), which he called the ” single worst trade deal ever approved in this country “. Trump is expected to call for NAFTA to be renegotiated or to withdraw from it altogether ; he appears to have authority to pull out of the agreement by giving six months’ notice, according to article 2205 of the treaty . Some experts believe he would need Congress’ support, however .
• Trans – Pacific Partnership : The Trans – Pacific Partnership ( TPP ), a trade agreement that the U.S. signed but did not come up for a ratification vote in Congress, would have reduced trade barriers among 12 Pacific Rim nations . The pact’s prospects were already dim before Trump’s election made it a dead letter . On January, Trump signed an order to withdraw from further negotiations on the deal, promising to replace it with a series of bilateral agreements .
• China : The president has also criticized China, claiming that it suppresses the value of its currency, the yuan, in order to gain an export advantage . While China maintained a dollar peg that held the yuan’s value down from 2008 to 2010, the evidence now suggests the government is intervening to lift, rather than lower, the yuan’s value . The country’s foreign currency reserves fell from nearly $ 4 trillion in March 2014 to just over $ 3.1 trillion in October . Even so, Trump promises to declare China a currency manipulator and impose tariffs of up to 45 % on its exports .

Infrastructure

Trump has promised to dramatically increase infrastructure investment . His most notable project is the wall he has promised to build along the border with Mexico. He insists that Mexico will reimburse the U.S. for the cost of the wall, which he has estimated at $ 5 billion to $ 10 billion . Independent estimates and Senate majority leader Mitch McConnell have put the cost as high as $ 25 billion . Beyond the border wall, Trump has made early moves to encourage other infrastructure projects such as improvements to the electrical grid and telecommunications systems, as well as repairs and upgrades to highways, bridges, ports, airports and pipelines .

Healthcare

Trump has promised to repeal and replace the Affordable Care Act, commonly known as Obama care . About 20 million people have insurance thanks to the ACA but the scheme has struggled to run efficiently because it relies on competition between insurers to provide affordable coverage, and that competition has dwindled. In the early days of Trump’s administration, there was little clarity about what would replace Obamacare . Trump had proposed measures during the campaign such as funding Medicaid, allowing insurers to sell across state lines, importing drugs, allowing patients to deduct insurance premiums from their tax returns and allowing them to shop around for the most cost – effective treatments .

Immigration

Trump made immigration a centerpiece of his campaign from the time he announced his candidacy in June 2015 . He proposed changing federal law to prevent those born in the U.S. to undocumented parents from automatically gaining citizenship . He wants immigrants to be selected on the basis of “ their likelihood of success in the US and their ability to be financially self – sufficient ”. After the expiration of the 120 – day travel ban, which prevented all immigrants from 7 Muslim majority countries from entering to the US, Trump is to allow them to enter again, with stricter rules for applicants from 11 ” high risk ” nations . Applicants will be restricted for a 90 – day review period . The Department of Homeland Security will collect more biographical data such as the names of family members and places of employment . Trump also promised to deport the 2 million to 3 million immigrants in the United States illegally who have criminal records and asked Congress to withhold federal funds from ” sanctuary cities . ”

National Debt

Trump repeatedly criticized the growth of the national debt – which stands at nearly $ 20 trillion as of January 30 . Independent analyses, on the other hand, see Trump’s plan to lower taxes and boost spending on infrastructure and defense as adding trillions to the debt .

Energy

Donald Trump has repeatedly called climate change a ” hoax “. In May, Trump said he would renegotiate last year’s Paris Agreement, which saw 195 states pledge to limit average global temperature rises to well below 2 degrees Celsius above pre – industrial levels . The United States is responsible for 20 percent of the world’s carbon emissions . It would be difficult for the other signatories of the Paris Agreement to reach their goal without U.S. participation . Trump said he wanted to negotiate a better deal, but leaders from Germany, France and Italy said the accord is non – negotiable . China and India joined the other leaders in stating they remain committed to the accord . It will take four years to formally withdraw . That means it will become an issue in the next presidential election .

Trump’s plan for the first hundred days included a promise to ” cancel billions in payments to U.N. climate change programs and use the money to fix America’s water and environmental infrastructure . ” On October 2017, the Trump administration announced it would repeal the Clean Power Plan which was designed to lower carbon emissions by 2030 to 32 % below 2005 levels . The repeal would withdraw Obama – era limits on carbon emissions at U.S. power plants . That was part of Trump’s campaign promise to revive the coal industry while remaining committed to clean coal technology . Trump claimed this would raise wages by $ 30 billion over seven years . The chief of the EPA, Scott Pruitt has recently signed a measure to repeal the act, but the proposal will now have to go through a formal public-comment period before being finalized, a process that could take months . Trump also pledged to allow more drilling on federal lands of shale oil and natural gas and there are also worries he will curb investment into renewable energy sources .

Monetary policy

This is not strictly an area for the government, given interest rates are set by the US central bank, the Federal Reserve, widely referred to as the Fed. But there were worries during the presidential race that a win for Trump would undermine its independence . The president – elect has previously accused the Fed of keeping borrowing costs low to help president Obama and has said the central bank’s policies have created a “ false economy ” . In an interview with Fortune magazine, Trump also said he “ absolutely ” backed efforts to diminish the Fed’s power . The Fed has a Congressional mandate to generate maximum employment ( 4.5 % to 5 % unemployment ) and steady prices ( annual core PCE inflation of 2 % ) . Aside from those requirements, however, it is independent, meaning it does not have to seek approval from any branch of government to change monetary policy . Given Trump’s accusations that the Fed is acting politically, some have expressed the worry that Trump will attempt to curtail monetary policy independence, as several past presidents have done .

To date we can see a disconnect between the performance of financial markets and the real. While stock markets continue to reach new highs, the US economy grew at an average rate of just 2 % in the first half of 2017 – slower growth than under President Obama . For the first three months of 2017, 533,000 people have found jobs but that is the lowest March quarter total since 2011. Inflation is low, and corporate profits are soaring . High market valuations that are fuelled by liquidity and irrational exuberance do not reflect economic realities .

Sources:

- www.investopedia.com
- www.thebalance.com
- www.theguardian.com
- www.fortune.com
- www.forbes.com
- www.bbc.com
- www.nytimes.com

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Italy and China Trade Agreement

ITALY AND CHINA

Italia e Cina accordi commerciali

Italy and China Trade Agreement

Author : Matteo Aristei

Translated by : Matteo Aristei

January 2019

In the last summer, the Ministers of Economic Affairs Giovanni Tria went in Beijing, China in order to establish new agreements . Several trade and financial agreements were signed .

Italy and China established their diplomatic missions in 1970 with the Bilateral Relationship .

From the economic point of view and between countries of European Union, Italy is the 5th China ’s trade partner . Italy imports fabric and clothing from China while this last imports mainly industrial machines and pharmaceutical instruments from the Italian peninsula . Between 1979 and 2003, more than 2000 project were developed by Italian companies in China ; furthermore, the two countries signed contracts for the creation of new innovative technologies .

Italy and China are already in cooperation such as the Intergovernmental Committee Italy – China that was established in 2004, it is the organism for the coordination of bilateral relationships between the two countries, it has to connect administration with public and private entities of both countries and to supervise all the projects and economical agreements concerning Italy and China . Between these two countries there is also a military cooperation that was established after the Second World War . In July 1991 they signed an agreement for the research and the pacific use of the space and, year by year, this relation improved . In 2005 there was the first official visit in China by the Italian Chief of Defence Staff, this was requested by the Chinese Chief of Staff .

Moreover, Italy and China signed a cultural, scientific and technical cooperation agreement between the two countries and, regularly, there are cultural exchange every 2 – 4 years .

China is really willing to improve economical and financial agreements with Italy, and for this it has signed important agreements with the country .

From the financial point of view , the yuan ( the official Chinese currency ) will enter in the reserves portfolio of Bank of Italy . This is an investment made by Italy that concerns Chinese government bond . With this, our government helps China with the yuan ’s internationalization; furthermore Italy will be open to foreign financial markets .
There has also been talk about the Belt and Road Initiative, it is created by China for the development and the improvement of the cooperation with Europe and other countries . The Italian ’s gate will be Genoa and Trieste .

There has also been a green light to several trade cooperation : Deposit and Consignment has signed a preliminary agreement of cooperation with Bank of China, for exports and internationalization of Italian companies in China ; Fincantieri and China State Shipbuilding corporation have signed a memorandum for the enlargement of the industrial cooperation ; Snam has signed an agreement with State Grid International Development, creating a memorandum of understanding for new technologies and the reduction of CO2 emissions .

Sources :

- OICS
- China ( Wikipedia )
- Italy ( Wikipedia )
- Panorama
- IlSole24ore

contact IBS by mail

CHINA AFRICA : A new beneficial alliance

CHINA – AFRICA : A new beneficial alliance

cina-africa-il-binomio-perfetto-3

CHINA-AFRICA: A new beneficial alliance

Author: Elisa Mariani
Translated by Martina Paoli
October 2016

After the summit between China and Africa held on November 2006 in Beijing, attended by the African highest authorities, which was the beginning of a solid cooperation, these two countries have come a long way together. In 2014, the parties carried out over $200 billion commercial deals, while, recently, they have made possible an infrastructural development in Africa.

This partnership derives from the China’s interest in African natural resources, especially energy resources. In fact, Chinese imports from Africa consist largely of wood, diamonds, gold, cobalt, platinum, uranium and petroleum. Africa, on the other hand, receives a significant economic, political support from China, one of the most powerful countries in the world, which is investing in the construction of hydroelectric plants, dikes, railways, public buildings, streets and telecommunication networks in the African continent.

For example, China has signed an agreement in order to be able to use Algeria’s oil, in exchange for the construction of different types of buildings, including schools and institutional buildings; while $9 billion have been allocated for the creation of dykes and railways in the Democratic Republic of the Congo, in exchange for the exploitation of the copper and cobalt mines.

During an interview at the Global African Investment Summit, Sindiso Ngwenya, the Secretary- General for the Common Market for Eastern and Southern Africa, reminded the importance of the Chinese support for the infrastructural development in the tripartite free trade area (TFTA), which involves 26 African countries with the aim of creating a unified market based on the industrial, infrastructural growth and the elimination of custom duties and other restrictions to the free movement of goods.

Moreover, according to Ngwenya, the Chinese aid has been important for the integration and trade between African regions, and the improvements in the sectors of energy, agriculture and human resources, which represent only some of the main factors for the achievement of the purposes of Agenda 2063, the plan for the development and the socio-economic transformation of the African continent over the next 50 years.

The China-Africa Summit of 2006 has marked an important turning point for the partnership between these two developing countries.

Taking advantage of the cold relations between Europe and Africa, the President Hu Jintao announced a number of measures to be implemented by 2009, for the prosperity and the well-being of the African countries, including the allocation of $5 billion divided into loans, export credits, and financial subsidies for the creation of a China-Africa Development Fund, in order to increase Chinese investments in the African continent.

China has also declared to be ready to eliminate the debts of the poorest countries, expand the imports of goods from Africa, removing customs barriers, and train 15,000 qualified people in the sectors of agriculture, education, and medicine.

Chinese interest in training qualified personnel and investing in Africa’s agriculture are high due to the need to import from the African continent raw materials such as tobacco and cotton.
In fact, thanks to China, 48 states of the art establishments for agricultural production have been built up in Africa to support local farmers.

Currently, this historic alliance still achieves mutually beneficial results and continues to represent a valid example for other economies, although strongly criticized and feared by USA and EU, which are both potential partners of Africa, but not as competitive and concrete as China. The allocation of $ 60 billion to promote Chinese investments in Africa, announced by the leader Xi Jinping, confirms the success of this partnership.

In fact, in December 2015, at the Summit of the Forum on China-Africa Cooperation (FOCAC), held in Johannesburg, the President declared those funds will be used for the collaboration between the two parties, with the aim of increasing the welfare of the African continent. The financial support includes $40 billion for concessional loans and zero-interest loans, and $150 million to provide food assistance to people affected by El Niño, an extreme climate phenomenon, which devastated the harvest in those areas of Africa.

According to Jacob Zuma, the President of South Africa, thanks to Chinese aid, the country intends to restore the mining industry, which has recently felt the effects of a slowing demand for raw materials and a decrease in products prices.

Furthermore, Huawei, the Chinese multinational company which provides networking products and telecommunication solutions, is significantly expanding its business, managing a turnover of more than $3 billion in Africa, thanks to the creation of a national phone network and other internet networks in Zambia and Nigeria.

SOURCES:

- focac.org
- infoaut.org
- cooperazioneallosviluppo.esteri.it
- repubblica.it

UN

UN – United Nations

ONU Organizzazione delle Nazioni Unite

“ UN FOR THE DAY OF REMEMBRANCE ”

AUTHOR : Giulia Turchetti
TRANSLATED BY : Matteo Aristei

How was born UN ? From the League of Nation to UN

Between the numerous international organisations, UN ( United Nations ) plays a key role and it is decisive on the world stage . It consists in the Union of States and its powers are supranational .

Today UN has finished its half century of life and it owes its existence to the numerous Member States which compose it ( states are increasing now ) and all this has the aim of obtaining independence from former colonies .

The UN organisation’s origin are based on the ash of the old League of Nation which was established after the First World War and lived only a quarter of a century . With the aim of ensuring peace and preventing the horrors that the Great War had created, it could resolve controversy through conciliation, intervening only where it was necessary the use of armed force .
It was able to encourage the international cooperation and for this it obtained great recognition. It obtained positive outcome that had the effect of making it known as the centre of European diplomacy between 1920 and 1932 ; but from the beginning of the half of the 1930 s , this Society started to have a slow but gradual decline . United States were sponsor of its creation but in those years, the President Wilson decreed the withdrawal of the Country from the League of Nation, weakening it significantly . In fact, consequences were the dominance of European nations such as France and England : the League of Nation was too Eurocentric and this caused its own end. Furthermore, a series of events ,such as the German occupation of Rhineland in 1936, made bode the outbreak of an imminent conflict : the one that will have been known as the Second World War .

However, although the League of Nation has proved to be failed, it denoted an important moment of growth for the international administrative system . Therefore UN represents the development of the League of Nation because, between many aspects, it shared the incurrence of peace and the prevention of conflicts of all kinds. Its Carta was signed in 1945 in San Francisco .

UN wants to encourage social progress, to suppress intolerance and to ensure the international security. Sometimes, in order to demand respect of its provisions, it makes use of “ blue berets ”, which are guarantee of the suspension of act of war . It supervise the respect and the violations of human rights in the UN States, informing public opinion on the state of human rights in the world .

However in its long story, although UN was promoter of important matters, such as the the maintenance of peace and security in the world, it didn’t equally prevent the occurrence of atrocious wars that are ongoing .

Specialised institutions

Today UN has numerous specialised institutions, each of which carries out a specific function . These are some examples: Food and Agriculture Organization ( FAO ), United Nations Educational, Scientific and Cultural Organization ( UNESCO ), World Health Organization ( WHO ), United Nations High Commissioner for Refugees ( UNHCR ) and United Nations Children’s Fund ( UNICEF ).

UNICEF and UNHCR are also examples of NGOs, i.e. non-govermental organization, which are characterized by two aspects : the private character and the absence of profit . In fact, receiving an important part of their income from private sources, they undertake for the development of countries that are more back in social and economical point of view .

Day of Remembrance

In 2005 UN has established an international recurrence that is very important : the Day of Remembrance for the memorial of the holocaust’s victims. UN has decreed this, because 27th january 1945 is the date of the liberation of concentration camps . Furthermore, in this day, intolerance, hate and aggressiveness for people and communities for their religious and ethnic differences are condemned without qualification. Especially, it is important to remember because, in order to be aware citizen, the knowledge of the facts and events that are actually happened is a fundamental prerogative . The history tells about a rational and well – organised genocide that had technologies and efficient plants for the extermination of an entire population in the heart of Europe .
UN ’s member states have the duty to transmit to the new generations the “ Holocaust ’s lessons ”, and therefore historically significant places of Shoah that must be protected . UN openly refuses the denial .

For this, today, the Secretary-General of UN, Antonio Guterres addresses to an exhortation that will have a huge impact : “ be unite against standardisation of hate, because every time and everywhere human values are abandoned, we are all in risk . All of us have the responsibility to fight racism and violence with immediacy, clarity and decision . With education and comprehension, we can build our future made by dignity, human rights and pacific coexistence for everyone .

www.un.org/
www.agensir.it
www.unric.org/it

From the Euro-Mediterranean partnership to the ENP

FROM THE EURO-MEDITERRANEAN PARTNERSHIP TO THE ENP

partenariato-euromediterraneo
MEDITERRANEAN NON-MEMBER COUNTRIES ARE SUPPORTED BY THE EU: FROM THE EURO-MEDITERRANEAN PARTNERSHIP TO THE ENP

Writer: Elisa Mariani

Translated by: Giulia Turchetti

In November ’95 the Euro-Mediterranean partnership was established with the Barcelona Declaration. The Euro-Mediterranean partnership stands for a global agreement which involves still today the EU and the Southern Mediterranean countries. The aim: granting to this area political and economic welfare. This can be achievable thanks to useful discussions and collaboration between the parts involved.

Israel, Turkey, Lebanon, Syria, Malta, Morocco, Cyprus, Jordan, Palestine, Algeria, Tunisia and Egypt are the Southern Mediterranean countries, also well-known as Mediterranean Non-member Countries (MNCs), that joined the Euro-Mediterranean partnership. Since Libya and Mauretania are members of the Arab Maghreb Union ( AMU ) together with Morocco, Tunisia and Algeria, have been invited joining the Euro-Mediterranean partnership too. Now Libya holds the observer status.

From a political viewpoint the Euro-Mediterranean association agreements and the discussions between the parties involved have had an important role. Actually, they enabled to create a common criteria for making respectable aspects such as the rule of law and democratic principles, fundamental freedoms, human rights and fight against terrorism as well as the abolishment of mass destruction weapons.

Within the socio-cultural sector the promotion of interreligious dialogue, the fight against illegal migration have been the fields of major innovation, as well as the one concerning the use of mass media as means of intercultural communication and education. This latter is aimed at the respect of different cultural identities.

The economic and trade partnership is another important element to be dealt with. Its purpose is to create a free trade area (FTA) in the Mediterranean zone, in order to abolish trade obstacles and customs barriers. These latter prevent the free movement of goods, agricultural products and services exchange. According to the estimates of the Institut de la Méditerranée, the maritime traffic will increase of about 16 % compared to the regular trend thanks to the FTA. The Euro-Mediterranean partnership sets the ambitious goal of the permanent and sustainable development of the MNCs. Also the EU supports this goal for the growth of the private sector and investments, new technologies and the market economy. It sustains the fight against poverty in the countries involved too.

Moreover with the Barcelona Declaration the EU has pledged for allocating funds in favor of the MNCs through the support of the European Investment Bank.

Promoting small and medium-sized companies, the MNCs regions co-partnership, the abolishment of obstacles against foreign direct investments by MNCs, the environmental sustainability and the woman key-role in economy matters are some other steps worth to be mentioned.

Nevertheless the FTA was thought to be started and completed by 2010. Instead few problems especially due to inactivity and lack of pragmatism and implementation of the Euro-Mediterranean partnership purposes downshifted the achievement of the previous mentioned goals. In 2002 the EU has established the FEMIP, Facility for Euro-Mediterranean Investment and Partnership, in order to give further impetus to what had been promised by the Barcelona Declaration in 1995. In so doing small and medium-sized companies projects can be funded, as well as those of tourism-related companies or of infrastructure in MNCs, that is to say more in general all kinds of projects which focus on social and economic development of the Southern Mediterranean countries. As a consequence of the EU enlargement the Union itself gave birth to the ENP in 2004, which saw the approval of its correlated Action Plans with Israel, Palestine, Tunisia and Morocco in 2005. In 2007 Egypt and Lebanon signed the Action Plans.

In addition to this, the Union for Mediterranean was created always with the same purpose in 2008. One of the novelties that it has delivered concerns the birth of the working Group over the Euro-Mediterranean industrial cooperation. Actually, it involves corporations, associations of enterprise, international bodies and EU institutions. The aim: to enact practical measures suitable for realising what each two years during the meeting between the EU delegates and Industry Ministers of the MNCs is agreed.

In the last few years the relations between the EU and MNCs have changed. The latest geopolitical developments, in part caused by several protests that broke out in the MNCs, have contributed to this.

Since 2012 the negotiations about a possible action plan in Algeria have been started. These latter concern safety, anti-corruption measures and energy of which Algeria is one of the main producers.

The EU has contributed to the foundation of a solid State based on the inclusion principle in Libya, after the end of Gaddafi’s regime and its following Civil war. The EU is succeeding in so doing through the support secured by the UN to the diplomatic action, the implementation of a remit about improving border control in 2013, as well as the availability of allocating funds of the Neighborhood Instrument.

The relation with Tunisia has benefitted from the effects of the Arab Spring. Actually, the EU has supported both economically and politically the democratization process after the Jasmine Revolution in 2011. This process led to a new Constitution and the success of parliamentary and presidential elections in 2014. As a consequence of such events the EU and Tunisia have started a privileged partnership which aims at making the political and economic collaboration between them stronger, through the establishment of the Mobility partnership in March 2014 and the negotiations concerning a global FTA started in 2015.

Egypt has had a different destiny. It was struck by the revolution that dates back to the Arab Springs period in 2011, and it did not have political stability enough in order to meet the requirements set by the EU, which would have supported the achievement of reforms focused on the welfare of Egypt from all viewpoints.

Finally within the ENP sector Morocco has enjoyed the advanced status since 2008, whose purpose is to improve the cooperation between the parts with a major support by the EU as far as the implementation of reforms in policy and economy matters of the country is concerned. The EU-Morocco collaboration gave birth to the Action Plan (ENP) and to the Mobility partnership in 2013. It has been the very first collaboration within the Mediterranean area at starting negotiations concerning the facilitation of issuance of visas and the Free Trade agreement.

SOURCES :

- europarl.europa.eu
- lenius.it
- eur-lex.europa.eu
- capitanata2020.eu
- asbl.unioncamere.net

ECOWAS – CEDEAO and NourDign Project , to ensure dignity to African women

Progetto ECOWAS - CEDEAO e NourDign dignità delle donne in Africa

ECOWAS and NourDign, together to bring dignity to women in Africa

Written by Ms. Maria Luisa Spagnol
Translated by Miss Ilaria Giunti
June 2015

The problem of immigration become more important because of the inundated refugees disembarking. It seems that Europe is not able to properly respond: it is clear that we could not only welcome this unregulated migration unconditionally.

We can respond to the dishonesty of politicians and the dark forces of organised crime for the cormorant management with concrete and effective actions as those for the developments on the ground. There are many international cooperation projects, such as the NourDign, which attracted strong support by the ADA, and the ECOWAS association. ECOWAS is fully managed by IDA, a project which deal with socio-economic problems and aim to preserve the independence and the dignity of the women from African, not turning the project in a banal alms “to come clean” but guaranteeing in any case the opportunities also for the Italian investors. 16 West African States join to ECOWAS, founded in 1964 by the former President of Liberia Mr. William Tubman, who had formulated this project.

To guarantee the success of this project, first of all, it is required a predisposition for a comprehensive and complex strategy to carry out the needs of the local population in order to ameliorate their quality of life. . Subsequently we have to focus on the transfer of knowledge and on the training of workers through coordinate actions and active involvement by the local institutions and active bodies of the society, such as the banks for the credit supply.

A successful cooperation project is not limited to provide an instrument, a material good such as a machinery. The way to success is actually in the transfer of method, knowledge, the mentality of consolidated techniques of the European cooperative which cannot happen unless we bring a local teaching category, whilst respecting local popular traditions and what history has taught. The first pilot projects, in progress in Ivory Coast and in Senegal, are focusing on the transformation process of manioc, mango, cashew, peanut and sunflower without forgetting the development of the breeding industry approach to reduce the dependence of these States from the import of meat and related products.

Nourdign is one of the these pilot projects that envisages supplying machineries and materials, servicing, a specific training path, from teachers to local technicians. Nevertheless, the viability of these projects cannot be conceived without a market analysis, the carrying out of the local population needs, partner search and the choice of the supplier group. The evoked draft provides for an employment promise to two / three women, who will alternate in eight-hours shifts, for all the five production units, in order to guarantee in this way an income which could be used for at least ten / fifteen households.
The cooperation projects, such as that which we are referring, are one of the possible ways to respond to the actual problem of migration.

SOURCES :
- http://www.ecowas.int/
- http://www.nourdign.org/invest_italian-version.html

NOTES :
- ECOWAS – Economic Community of West African States
- CEDEAO (in French) – Communauté économique des États de l’Afrique de l’Ouest

TO JOIN AND FOR MORE INFORMATION ABOUT THE PROJECT CONTACT US

Developing Countries: How to Escape the Poverty Trap?

Paesi in via di sviluppo, Come uscire dalla trappola della povertà

Developing Countries: How to Escape the Poverty Trap?

Author: Pierre Varasi
January 2015

2.5 billion people in the world live under the poverty line, of 2$ per day. 1.3 billion live under the extreme poverty line, which means with less than 1.25$ per day. Sub-Saharan Africa represents alone 46.8% of these (data of 2011). Right after it, we can find South Asia, with 24.5%. Wondering about the origin and the causes of this phenomenon is clearly important, but these are not easy to find: some scholars blame their ‘cultural underdevelopment’, others the European colonization, the remaining blame the climatic and territorial peculiarities. Anyway, theories that are hard to reconcile. As much as we could find arguments in favor of each of them, I think it is more important to understand what to do instead of looking at what caused it.

The developed states have tried for years to help these countries. Since the end of the Second World War, we have witnessed a great acceleration in the growth of institutions, movements and associations for development. However, at almost 70 years from that moment, aids have proved to be almost useless. What is wrong is not the amount of help or its form; but how states delivered it, and what this aid has led to. Specifically, in a great amount of poor areas, the developed countries have not respected the traditions and local culture, while they simply brought tools and western habits too, without taking into consideration the uniqueness of each of the receiving state.

Even more important is to consider that some kind of interest is usually behind the aid: economic, bonded to specific politics or programs, or to the purchase of goods from the country that brought the aid. We can do similar critiques to the Bretton Woods institutions: the World Bank, the International Monetary Fund and the World Trade Organization. The developing countries underline how the world powers control and influence them, and that they dictate only one economic vision, the neo-liberal; they damage the state sovereignty with their impositions; they grant assets, although without taking responsibilities for the workers and the migrants that every economic transformation involve. Last but not least, the developed countries apply the same methods everywhere in the same way.

None of this means that help is not necessary. In a poor country most of the income is devoted to consumption, and this reduces savings. This also means lower investments, funds for technological innovations and so on, which brings low production and a slow rate of growth. This is the poverty trap, called this way as low production will lead again to limited consumption that will represent most of the country’s income. What can change the situation at this point is a foreign investment, which, if well used, can bring to the development of key industrial sectors and of tourism.

From this fact derives the importance of commerce, which increased constantly since the ‘50s, leading to changes and innovations all over the world. We must not forget, then, that there are defenses of the institutions cited before: states are not forced to accept the aids, but even more important, is that really right to leave these countries free to use the money received however they want, considering that they usually have corruption and a lot of political and juridical problems? Moreover, throughout the last century a number of movements that want the relief of these countries from debt were created, meaning that many people have recognized the mistakes they had done in the past, and that this debt has always hold back their economies.

How to lead these countries out of the poverty trap? Using both grants from other states and institutions, managing them in a controlled way without at the same time tidying them to specific provisions, as well as through private investment. Sigrid Kaag, assistant administrator of the UN development program (UNDP), argues that without private investment there will be no significant growth. The private sector would clearly bring advanced knowledge, innovations, and tested models of commerce and of production. Only sharing this knowledge will enable the Third World to develop.

The truth is that as much as we can try, sending money is not enough to improve the life’s conditions of the developing countries. Jim Yong Kim, president of the World Bank, admits that public funds are not sufficient, while giving a greater role to the private sector would bring new jobs. Along with these, even income would increase. This would eventually lead to improvements in the life and health conditions, in the instructions levels and in the creation of infrastructures.

The new companies, which would have just moved, would also mean a new revenue for the government, from taxes; they would be competitive for the markets, and for this reason emulated by those already present in the territory, leading to greater productivity. In the long term, all of this would improve goods’ quality, but at the same time making them cheaper. For example, the lowest segments of population are already a new market for US companies in India and Brazil. Moreover, not only private investment must concentrate in these territories to help them, but to grow as well: since the economic crises of 2008, the growth of the Third World has been an engine for our economies.

SOURCES:

- Worldbank.org
- UNDP.org
- IFC.org
- Baker, “Shaping the Developing World”

The Transatlantic Trade and Investment Partnership (TTIP): earnings in a high price

Trattato Transatlantico commercio estero e investimenti

The Transatlantic Trade and Investment Partnership (TTIP): earnings in a high price

Author: Pierre Varasi
19/03/2015
Translated by Ilaria Oberti

The Transatlantic Trade and Investment Partnership (TTIP) is a free trade agreement between the United States and the European Union. The agreement has been negotiating since 2013 and after years of informal drafts, it should be published within 2015, or at least this is what his supporters hope. Anyway criticism is hard and comes from different sides. The TTIP is officially defined by the EU as a trade and investment deal with the aim to improve trade and investment between EU and United States creating a real transatlantic trade, generating new economic opportunities – such as new job places – and creating growth through a bigger access to the market and a best regulatory compatibility. It will lay the foundations for global laws. In the case that this agreement will be approved, it could be extended to other primary partners of the two, European and American, giants.

Some of his main points are: opening up of the United States and EU markets, cutting off of the administrative burdens for the export companies (custom duties), setting of new rules to make export, import and investments overseas easier and fairer. To sum up, the agreement will open a new free trade zone with easier and better procedures. In economy the commercial policy instruments can be divided into: tariff tools – custom duties on the import and benefits on the export; quantitative tools – maximal quotas and voluntary restriction; non-tariff barriers – production, health standards and so on; dumping – the sale of products below the market value in the foreign markets; retaliatory measures – against unfair operation made by some countries or companies.

The TTIP has the aim to level out the non-tariff barriers, having as result zero custom duties and anti dumping. Even the public invitation to tender will be open to foreign companies. EU, United States and companies want to create new job places and to cut off the costs for the end users at the same time with an increase in the choice of the products. Just in Italy is expected a growth between 0,5% and 4% of the GDP and an increment in employment. In all, it is expected a growth of the export about 28%, in the amount of 187 billion of euros. These effects in this crisis period will surely bring a significant growth and optimistically they could bring to a complete end of the crisis. Moreover, the benefits would be also for the bureaucracy and the administration and even the biggest competition could bring to a bigger innovation.

However, the TTIP has to face hard criticism from some slow food associations, economists, private agencies and citizens. The criticism is based on reasons of any sort. Since the TTIP had been for long time a secret agreement regarding his contents, there was a lack of transparency, at least until January 7th of this year, date when the European Commission published the body copy of the negotiations.
More specific critics are about the standardization of the non-tariff barriers: for instance, in the United States the use of GMO, hormones for the meat and a really high quantity of pesticides is deliberately allowed. The American producers of groceries don’t have to follow the environmental protection or the animal health standards.

Obviously, leveling out the productive standards, the European users will be disadvantaged, seeing the growth of less quality products in their supermarkets due to the introduction of GMO products, which are not allowed in Europe for now. Moreover, the EU has some principles such as “farm to fork” and the precautionary principle. The first one is about a control of every steps of the production, always supervised and traceable. In the United States, instead, just the final products are controlled. The second principle is about another fundamental difference: as in Europe it is possible to pull back a product from the market if exists the risk that it is unhealthy – even if there are no scientific proofs – in the United States, without a clear correlation evidence between the product and the damage, the product remains in the market. In addition, in Europe is the company, that tries to put its product into the market, to have to proof its safety; in the United States is the public authority who has to claim for a harmful evidence, which happens rarely.

Also the economic boom, which is so promoted by the supporters of the agreement, can be attached by some criticism: lots of economists think that the job places will decrease instead of increasing – for instance because there will not be any laws about the national preference in case of an invitation to tender. Mr. Stiglitz, famous economist also for his critics against the IMF, affirms that “the United States, in fact, don’t want a free trade agreement, they want instead a management agreement that encourages some specific economic interests”. The quality controls of the products, in particular food and drugs, are in any case at the core of the thesis of the non-sympathizers of the agreement. The issue is: is it worth sacrificing some regulations and standards, to have a completely opening to the United States markets and to give a boost to both economies?

SOURCES :

- http://ec.europa.eu/index_en.htm (European Commission – Trade)
- ilpost.it “che cos’è il TTIP”
- http://stop-ttip-italia.net/

MERCOSUR: an agreement that have to be renewed

Mercosur

MERCOSUR: an agreement that have to be renewed

Pierre Varasi, 23/04/2015
Translated by Ilaria Oberti

MERCOSUR (or MERCOSUL, Southern Common Market) was established on March 26th 1991 by the Treaty of Asunción between Brazil, Argentina, Uruguay and Paraguay. Four years later came into force bringing various improvement in the economy of these countries. The measures of this Treaty were different and represented an innovation for the Latin American countries. First of all, the free trade of products, services and raw materials between the members. Since 1995 duties and trade restrictions had been removed. This Treaty is similar to the EU’s common market: the members of the MERCOSUR has always stated that the EU was taken as example concerning the economical agreement between states.

Another fundamental issue was the creation of a common tariff towards thirds States. Gradually, entities have been established, which would coordinate the relationship between the member countries – with particular reference to agriculture, industry and everything significant from an economical point of view. These entities gave also advices to the states about which internal changes were needed to let the MERCOSUR grow: in fact the Treaty expected some obligations among which the real common market – this would have provided a free trade of not only money but also workforce. In the end, the member countries should have been democratic and guaranteed the same rights.

Since 1996 new states had joined MERCOSUR, among which Bolivia and Chile. In 2003 Peru joined and in 2004 Colombia and Ecuador. The last one was Venezuela in 2012. It was the entrance of Venezuela that called into question the foundation which this agreement was based on. Venezuela had Hugo Chávez as president from 1992 to 2013. For sure, there had been some boost of the Venezuelan economy, and not only, but Venezuela wasn’t a real and proper democracy. His nickname was “Socialist Dictator”. He died in 2013 and since then the new president of Venezuela has been Nicolas Maduro. Coming back to the MERCOSUR, not only the admittance of Venezuela represented the first exception of the principles of democracy, which are the basis of the agreement, but indeed Chávez worked against the principle of free trade, believing instead that it should have brought the agreement towards new socialist principles. Since 2012 none of the decisions made had been enforced from Venezuela, jeopardizing the efficiency of both the old and the new propositions.

Since Venezuela had joined MERCOSUR, this agreement has been focused more on political and social than economic issues. We still do not know which role would have this area in the future. However there could be support from the EU. In the first years of the agreement, MERCOSUR and EU have tried to collaborate, but since 1999 the collaborations has been interrupted and left in standby. Nowadays there could be the possibility of new collaboration between the two unions, in particular from the Uruguayan President Vazquez and the Brazilian President Dilma Rousseff, which are hoping to get a proposal of dialogue from the EU. If this works out, there will be not only economic consequences for both the Unions, but also MERCOSUR could have a new “lifeblood” for a future modernization. Venezuela seems not so enthusiastic about the idea, but for now it hasn’t big influence and cannot sink the project.

The need of renewal is evident if considered that the goals proposed by the member countries in the ’90 are not yet reached – one for all there is no common tariffs nor policies towards thirds States. Such difficulties are also due to the extreme big differences among the member countries: it is difficult to have same policies when the inflation of one country is 6,7% (Uruguay, 2010) and of another is 27% (Venezuela, 2010). The same spokesmen of this agreement admit that if the principles are effectively implemented, it is due to the willing of the states that are only pursuing their own interests and not due to the willing of pursuing common interests or goals. Moreover, as the Uruguayan Ministry of the Foreign Affairs Rodolfo Nin Novoa said, nowadays MERCOSUR joins just 1% of the main trade made from countries that have chosen a free trade. Anyway, some changes will be needed. In the next future, MERCOSUR should evolve to reach some concrete results and to aim joining new trades.

SOURCES:

The economist
Mercopress.com
Buenosairessherald.com

NAFTA Agreement vs European Union: comparison between agreements

NAFTA e UE Agreement a confronto

NAFTA Agreement vs European Union: comparison between agreements

Author: Pierre Varasi
Translated by Ilaria Oberti
04/04/2015

After years of work and projects and with the previous EEC, European Economic Community, on February 7th 1992 with the Treaty of Maastricht the European Union is official. The first ideas of such an union go back to 1800. Much more decisive for the success of this union was the Ventotene Manifesto, written in the ’40s by Italian Altiero Spinelli, Ernesto Rossi and Eugenio Colorni. Nowadays, EU is composed by 28 countries and it is even spreading: Turkey, Macedonia, Montenegro, Serbia and Albania have expressed the willing of joining the Union. The EU is the biggest free trade area, with a population around 503 million of inhabitants, and a GDP that represents more than 20% of the world GDP.

Even if in recent days it suffers from some economic and political issues, the EU is one of the most powerful union in the world; every single country of the Union, alone, would never have had the same political nor the same economic influence. Canada and United States were taking inspiration from EU when they decided also to sign an agreement between them called NAFTA (North American Free Trade Agreement). On January 1st 1994 also Mexico joined this agreement. Today this agreement is composed by 439 million of inhabitants, almost as EU, and has the biggest GDP of the world – about 17 billion of dollars every year. The big figures don’t assure no critics against NAFTA and many would like its end or at least a change.

Between the two agreements there are a lot of similarities as well as a lot of differences. In a long term period, probably the issue that has had the most of the consequences is the decision of not having a complete economic integration between Canada, United States and Mexico. This mean both no single currency and a limited collaboration and partnership in some industries and branches. For instance, in North America it doesn’t taken into consideration an integration in employment; on the contrary European workers can travel without any kind of problem and the market is only one.

This lack has led to an increment in migration, in particular from Mexico to United States but also a bigger American “fortification” with a bigger number of people working in the border security between the two countries. EU has done the exact opposite: first of all a dissolution of the borders and secondly it gives a big amount of money in form of investments to the countries with some difficulties when they are joining the Union. The investments helped Spain in ’90s, which had a drop in emigration and a growth in immigration.

Since NAFTA had been created, the North-American economic has been grown, but just the United States are having some profits: for instance, Mexico had to suppress its agricultural subsidy system while US could keep theirs. In 2008 the economic growth of Poland, member of EU since 2004, was 5% of GDP, while the Mexican growth was 3%. The main problem was the lack of investment that could have helped Mexico to grow. This issue led to a bigger spread between the GDP of the NAFTA’s members. In 1986 the spread was about $ 17.700 while in the 2004 reached $ 24.100. The same problem happened to the migration issue. In EU the intern migration diminished heavily, while in North America a reduction happened just in the late years – although it cannot be easily linked to the effects of the free trade area.

Nowadays EU cannot be seen as an absolute success, even though temporary difficulties can be easily be passed – keep in mind that the economic crisis of 2007 started in the US and spread over EU. EU and NAFTA are two different entities with different history and aims. Although it is natural thinking that NAFTA can take examples from the experience of EU and it could reach a complete economic integration, with a possibility in reaching and surpassing the economy of EU, having as result the solution of the internal problems and inequalities. In regard EU, decisions about a possible political collaboration will be made soon, which will lead EU as the first experiment in this field – EU was the first attempt in regarding the economic collaboration.

SOURCES :

Caution: Nafta at Work (Massey, 2008)
Advantages Disadvantages And Comparisons EU And NAFTA (lawteacher.net)
www.naftanow.org

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