Tag Archives: Mexico

The Campaign Politics of Immigration

Donald Trump, who is one of fifteen candidates seeking the Republican nomination for the presidency, doubled down on controversial comments he made nearly two weeks ago. In announcing his candidacy, Trump asserted that Mexican immigrants to the United States are disproportionately responsible for drug trafficking, rape, murder, and other crimes, asserting

When Mexico sends its people, they’re not sending their best. They’re not sending you. They’re sending people that have lots of problems, and they’re bringing those problems with us. They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.

Trump’s comments were widely criticized as racist, triggering a wave of backlash. Univision, the largest Spanish-language broadcaster in the United States, cancelled its planned broadcast of Trump’s Miss Universe contest. NBC ended its business relationship with Trump, who had hosted The Apprentice and Celebrity Apprentice for the network. Macy’s cancelled its distribution of Trump’s clothing line. And the Republican Party sought to distance itself from Trump.

Trump’s comments highlight the difficulties posed by immigration from Mexico for the Republican Party. As it seeks to expand its reach into the Latino community, moderate Republicans have sought to develop positions that bring Latinos into the party. But Trump’s comments resonate with the more conservative Republican electorate that vote in the primary elections. Trump’s comments could also present challenges for a future Republican president in dealing with Mexico.

What do you think? How might Trump’s comments affect US-Mexican relations? Why?

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The Rise of China and the Reshuffling of Global Trade

 

A Mexican farmer harvests blue agave, the plant used to distill tequila.

A Mexican farmer harvests blue agave, the plant used to distill tequila.

The Mexican government last week announced it had shipped their first load of high quality blue agave tequila to China. The shipment, comprised of more than 70,000 bottles, should arrive in China next month. China had initially prohibited the sale of fine tequila in the country, citing concerns over high methanol content. But after Chinese President Xi Jinping visited Mexico in June the ban was lifted. Mexican officials hope that China will become the second largest consumer of tequila—behind only the United States—and expect to export some 10 million liters of tequila to China over the next five years.

The expansion of the high-end tequila market in China is just part of a broader shift in consumption patterns by wealthy Chinese. Demand for high quality single-malt scotcha bottle of which can sell for more than a few hundred dollars and the most expensive have sold for more than $38,000has increased sharply in recent years. The consumption of scotch and other high-end beverages plays an important symbolic role. Writing in the British daily The Independent, Russell Lynch observed,

In China, Scotch is seen as the drink for successful people. They tend to drink in a group sitting around the table and share in the occasion, be it for business entertainment or relationship building. There’s a huge element of “face” in putting a bottle of the good stuff on the table and demonstrating that you’re a good host or business partner, which is why they lean toward more expensive drinks. The houses thus lend themselves to the company’s efforts to premiumise the brand, while recruiting a new generation of drinkers from China’s smaller but faster- growing cities as beer drinkers trade up to spirits, buying Johnnie Walker Black Label and Red Label.

While growth in demand has slowed in recent months, increased global demand has nonetheless resulted in sharp price increases, with the price of single malt scotch up more than 190 percent since 2003. But global demand figures obscure regional changes in the distribution of demand. While Chinese demand increased sharply, demand for single malt scotch in France—historically the world’s largest importer—fell by a quarter over the past few years. Demand in Spain declined by twenty percent, while demand in the United States fell by 2 percent. Demand was increasing among emerging economies, particularly in Russia, Latin America, East Asia, and Africa.

The shifting demand for high-end alcohol thus reflects broader changes in the global economy. As  the emergent economies continue to grow, an increasing number of the nouveau riche seek to define their position through consumption of expensive consumer goods, signaling their arrival in “the good life.”

(This story was originally blogged at Global Food Politics and is reprinted here by permission).

 

The Challenge of Dumping

Cotton Production

Cotton Production

In international trade law, dumping is defined as selling goods below the cost of production plus transportation and handling. Under World Trade Organization rules, dumping is illegal. But countries continue to engage in the process, as demonstrated by the large number of cases involving accusations of dumping heard by the WTO’s dispute resolution panels.

Perhaps the most high-profile dispute in recent years has been the dispute between Brazil and the United States over U.S. cotton subsidies. Brazil contends (and the WTO panels have upheld twice, first in 2005 and again in 2008) that U.S. cotton subsidies are illegal under WTO rules because the sale of such subsidized cotton represents dumping. The cotton dispute is one of the key sticking points in current Doha Round of WTO talks, as a number of developing countries, including Brazil, have demanded the elimination of U.S. cotton subsidies which depress global cotton prices. According to a report prepared by the International Centre for Trade and Sustainable Development, global cotton prices would be 6 percent higher absent U.S. subsidies. This represents a significant increase in the livelihoods of poor cotton producers in the global south.

A new study, prepared by Timothy Wise for Woodrow Wilson Center, analyzes the impact of agricultural dumping on Mexican farmers under NAFTA.  Looking at agricultural production and trade from 1997 to 2005,Wise concludes that Mexican producers suffered across a number of agricultural sectors, losing some $1.4 billion per year over the course of the study. According to Wise, this represents more than 10 percent of the value of all Mexican agricultural exports to the United States.  Maize production was particularly hard hit, as maize imports from the United States were priced, on average, 19 percent below production costs, leading to a 66 percent decline in real producer prices for maize during the time under study.  Wise concludes that

Mexico certainly serves as a warning to developing countries considering agricultural trade liberalization. The case also highlights the weakness of international rules for defining and disciplining agricultural dumping. That weakness, and the vulnerability of developing-country farmers to import surges, makes all the more reasonable developing-country demands in the stalled Doha Round negotiations for strong Special Product measures to protect key food crops and effective Special Safeguard Measures to protect against import surges. Until agricultural dumping can be disciplined effectively, developing countries must retain the policy space to defend themselves. Mexico gave up most of its defenses under NAFTA. Farmers are paying a high price.

Dumping—or more generally agricultural subsidies and trade—represents one of the key barriers to the conclusion of the Doha Round of international trade talks. Intended to address some of the major imbalances in international trade, the Doha Round was intended to be the first round of international trade talks focused squarely on international development. But differences between the developed world, led primarily by the European Union, the United Sates, and Japan, and the developing world, led by China, Brazil, India, and South Africa, have paralyzed talks since 2008, and the prospect of rekindling talks appears dim. The major outstanding issues remain:

  • Agriculture, especially agricultural subsidies and dumping: Massive subsidies by the United States, Japan and the European Union continue to depress global agricultural prices, undermining production in the global south.
  • Access to essential medicines: Establishing conditions under which developing countries can reconcile meting public health needs with the strong system of intellectual property protections afforded under World Trade Organization rules.
  • Special and Differential Treatment: Determining if developing countries will be afforded different treatment under some WTO rules.

Wise’s full report, Agricultural Dumping Under NAFTA is available online.

Five Stories You Might Have Missed

Afghan elections took place last week, and both sides are claiming victory at the polls. President Hamid Karzai, who has led Afghanistan since the 2001 invasion which displaced the Taliban government, declared victory on Friday. Meanwhile, his main rival, Abdullah Abdullah, accused Karzai of rigging the poll but said that Karzai would not win enough votes in the first round to avoid an October runoff election. Voter turnout in the election had declined sharply from the previous presidential elections, amid accusations of voter fraud and threats by the Taliban to cut off any fingers marked with the indelible purple ink identifying voters. The election is an important component of President Barack Obama’s strategy in Afghanistan, where the United States has maintained a troop presence for more than seven years. 

In other news from the last week:

1. The Scottish government on Thursday released Abdelbaset Ali Mohamed al-Megrahi from prison, returning him to his native Libya. Al-Megrahi had been extradited from Libya to the United Kingdom in 1999 in exchange for the United Nations agreeing to drop sanctions imposed on Libya. Al-Megrahi was convicted by a Scottish jury of conspiracy for his involvement in the 1988 bombing of Pan-Am flight 103 over Lockerbie, Scotland. Although sentenced to life in prison, al-Megrahi served 8 ½ years before being released on compassionate grounds on Thursday. Al-Megrahi has terminal prostate cancer. The United States condemned al-Megrahi’s release and his welcome by Libya’s President, Muammar Gaddafi.

2. Efforts to protect intellectual property gained a boost in China and the United Kingdom last week. In China, the founders and executives of Tomato Garden, a website which that provided free downloads of Microsoft Windows XP and other programs, were convicted of piracy and sentenced to 3 ½ years in prison and a fine of $146,000 each. According to Microsoft, approximately 90 percent of all software sales in China are counterfeit, costing the company an estimated $6.68 billion in sales annually. The Business Software Alliance, the leading lobbying firm for the software industry, celebrated the decision, noting that “This shows that the government [of China] is really taking action.” In the past, the United States has accused the Chinese government of not doing enough to protect intellectual property rights, going so far as to threaten suit before the World Trade Organization.

Meanwhile, the British government has begun consideration of a number of proposals intended to reduce illegal file sharing in the United Kingdom by 70 percent. The proposals under consideration now could slow the speed of internet connections for people found to be downloading protected content, and access to some sites could be blocked altogether.

3. A prolonged drought in Kenya has resulted in a 50 percent increase in the number of people requiring food aid, according to a report released by the World Food Programme. The report also notes that some regions of the country are suffering from shortages of power and water. Although triggered by the ongoing drought, the country’s weak coalition government faces widespread popular discontent as a result of its inability to carry out much needed political and economic reform.

4. Despite some positive developments over the past several weeks in the United States, Germany, and elsewhere, the global economic crisis continues. On Thursday, the government of Mexico announced the economy shrank by a record 10.3 percent in the second quarter of this year, the fastest rate ever for the country. The global economic crisis has affected Mexico particularly had, as the country has been impacted by the U.S. recession, declining oil revenues, and the H1N1 swine flu virus which decimated the country’s tourism industry.

5. A series of bomb attacks killed almost 100 and wounded almost 500 people in Baghdad on Wednesday. The attacks, which mark the deadliest day since the withdrawal of U.S. troops from the city in June, targeted two central locations and the heavily fortified Green Zone, where the U.S. embassy and many Iraqi government buildings are located. Although no one has claimed responsibility for the attacks, they nevertheless illustrate the challenges facing the Iraqi government.

Five Stories You Might Have Missed

It’s been a week of surprises by the Obama administration. On Saturday, President Barack Obama nominated Jon Huntsman to be the next U.S. ambassador to China. Huntsman was a surprising pick. With his experience as U.S. ambassador to Singapore, his previous tenure as deputy U.S. trade representative and as deputy assistant secretary of commerce, and his fluency in Mandarin, Huntsman appears to be a solid pick. However, Huntsman is a Republican currently serving as governor of Utah, and has widely been viewed as a potential Republican candidate for the presidency in 2012. Obama last week also reversed his previous position in two controversial areas. First, on Friday, Obama announced the U.S. government would revive the military tribunals created by the Bush administration but suspended by Obama in January to try some 20 prisoners currently held at Guantánamo Bay.  Obama also changed position on the release of hundreds of photograps showing U.S. soldiers abusing detainees. Obama had previously promised to release such photos, but on Wednesday said that their release would “not add any additional benefit to our understanding of what was carried out in the past by a small number of individuals” but would further enflame anti-American opinion and…put our troops in further danger.” The reversal was criticized by the American left, and even managed to draw a response from Jon Stewart’s Daily Show.  
 
In other news from the last week:

1. The Congress Party won a decisive victory over its rival Bharatiya Janata Party (BJP) in India’s nation-wide elections Saturday. According to most observers, the election gives the Congress-led United Progressive Alliance, a coalition of center-left parties, a mandate to push ahead with a series of economic reform. Because most Pakistianis view Congress as less hawkish than the Hindu nationalist BJP, the election could also provide an opportunity to improve relations with Pakistan, which have been strained since the terrorist attacks on the Indian city of Mumbai six months ago.

2. Parliamentary elections in Kuwait were also completed on Saturday. The country has been paralyzed by a standoff between conservative Islamists in the parliament and the government which wants to move forward with economic reforms. Kuwaiti elections are unusual insofar as there are no political parties; candidates run as individuals without formal political affiliations. Historically, the parliament has been dominated by religious figures and tribal authorities who oppose the power of the central government. Kuwait formally extended the right to vote to women in 2005, and analysts had hoped that the expansion of the franchise might moderate the parliament. But while women were elected to the national parliament for the first time in the country’s history—some sixteen of the 210 candidates for the 50 seat-assembly were women; and two women were actually elected into the parliament—the overall composition of the parliament changed little. Analysts now fear that the standoff between the government and the parliament will continue into the next legislative term.

3. A political scandal rocked Gordon Brown’s ruling Labour Party in the United Kingdom last week. On Saturday, Labour suspended MP David Chaytor after it was revealed that he claimed £13,000 of taxpayers’ money for a mortgage he had already paid off. Chaytor was the second Labour MP suspended due to allegations of misuse of taxpayer funds. The scandal has also claimed one junior minister, Shahid Malik, who is being investigated by the parliamentary oversight committee for accusations that he violated the ministerial code. David Cameron, leader of the opposition Conservative Party, has tried to seize the initiative, accusing the government of failing to provide sufficient oversight. But with members of his own party also accused of wrongdoing, some analysts believe the only real winners in the scandal are likely to be left-wing Liberal Democrats and the far-right British National Party, neither of which have been implicated in the scandal. With local and euro-elections scheduled for June 4, voters will not have long to wait to express their frustrations.

4. The fuel shortage in Nigeria—one of the world’s leading oil exporters—appears to be drawing to a close. A standoff between Nigeria’s president, Umaru Yar’Adua, and a group of powerful Nigerian business interests had led fuel importers to cut off supplies to the country. Fuel importers receive extensive subsidies from the Nigerian government to keep domestic fuel prices artificially low. However, as the subsidies have become increasingly expensive, the government sought to reduce their levels, sparking a confrontation with fuel importers, who receive approximately $5.5 billion per year from the subsidies. The Nigerian oil industry is the primary source of foreign exchange for the country, but has also been a source of considerable controversy.

5. After announcing plans to seize more than 60 oil-servicing companies last week, Venezuelan President Hugo Chávez continued his efforts to nationalize the country’s food industry last week. On Thursday, Chávez announced that the government would seize control of a pasta factory owned by the U.S. food producer Cargill. In March, the government seized a rice mill owned by Cargill, a Coca-Cola plant, and several other food factories. The government accused the companies of violating price controls aimed at controlling inflation and maintaining a sufficient national food supply. Cargill owns another 22 plants around the country, and the Chávez government warned the country that it could see further nationalizations within 90 days if it continued its “marked non-compliance with the law.” Venezuela currently suffers inflation of almost 30 percent and shortages of key staple foods are becoming increasingly common.

And in a bonus follow-up story this week:

6. Concerns over the H1N1 (swine flu) epidemic appear to be waning, but several important stories nevertheless emerged last week in the wake of the crisis. First, the Mexican tourism industry is trying to encourage visitors to return to Mexico. Concerns over visiting Mexico, the epicenter of the outbreak, had led to a collapse of tourism in the country. The resort destination of Cancún, for example, is losing an estimated $6 million per day as a result of the downturn. To counter the decline, some Mexican resort destinations are now offering flu-free guarantees to lure back visitors.

And even more importantly, the H1N1 outbreak has also rekindled debates over the tradeoffs between intellectual property rights and the right to access essential medicines. The pharmaceutical giant Roche, manufacturer of the Tamiflu antiviral flu drug, has agreed to increase production. Roche currently sells Tamiflu for €12 ($16.30) per treatment for developing countries and€15 in developed countries. However, developing countries have been pushing the World Health Organization (WHO) to classify Tamiflu as an essential medicine, a move which would bypass Roche’s intellectual property claims and allow generic production to address public health concerns in the global South. Roche maintains that it can provide sufficient stockpiles of the drug to make such a move unnecessary. While the WHO has not yet issued its opinion, a leading Indian pharmaceutical company is nevertheless planning on moving forward with its plans to produce a cheap generic version of the patented Tamiflu drug, which its says it can sell for less than half the cost of the patented brand.

Five Stories You Might Have Missed

A new report issued by the International Monetary Fund on Saturday suggests that the globally economy will contract by 1.3 percent in 2009 with a slow recovery beginning in 2010. While the United States has been pushing countries to expand stimulus spending, the IMF said that existing stimulus spending already committed for 2009 should be sufficient to address the crisis. A Friday meeting of the finance ministers of the G7 countries was more cautious, concluding that, “the pace of decline in our economies has slowed and some signs of stabilization are emerging,” but simultaneously warned that “downside risks persist.”

In news outside the global economic crisis from the last week:

1. The outbreak of a new flue strain has raised concern in Mexico, as 68 people have died and more than 1,000 have been infected. The World Health Organization is monitoring the situation to determine if it is likely to reach pandemic status. While the Mexican government is urging people to remain calm, authorities have already canceled more than 500 public events and many residents in Mexico City have opted to stay home rather than travel for shopping and work. Tests have also confirmed the virus has made people in California, Texas, Kansas, and New York ill.

2. Elections in Iceland have produced the country’s first center-left government. The previous government of Iceland had been forced to resign as a result of the devastating impact of the global financial crisis on the country. Preliminary election results give Johanna Sigurdardottir’s Social Democrats 30 percent of the vote. With their coalition partner, the Left Greens’ 22 percent of the vote, the coalition appears well-positioned to drive the political agenda in Iceland. Sigurdardottir becomes the first openly gay person elected head of state in the modern world. The first item on her agenda: Icelandic membership in the European Union.

3. While the Obama administration is hoping to resume the six-party talks with North Korea, the government of North Korea appears to be taking a more hardline stance. Earlier this month it test fired a long-range missile, sparking a confrontation with the UN Security Council. Last week, the government of North Korea last week announced it would put two U.S. reporters on trial, charging them with illegal entry and “hostile acts.” Additionally, after expelling international atomic inspectors two weeks ago, North Korea has announced its intention to resume plutonium extraction. It is widely believed that North Korea already possesses enough plutonium for six to eight nuclear bombs. According to some observers, the deteriorating relations between North Korea and the West may be part of the country’s efforts to force the United States into direct, bilateral negotiations.

4. The sharp upsurge of violence in Iraq, including two suicide attacks that killed 75 people outside a Shia shrine in Baghdad on Friday, have raised concerns that Iraq is sliding back into civil war. Recent attacks raise the concern of sectarian violence, suppressed by a strong U.S. presence over the past year, but never entirely defeated.

5. Reversing a longstanding policy of the Bush administration, Secretary of State Hillary Clinton announced on Thursday that the United States would be willing to work with a Palestinian government backed by Hamas so long as the organization met international demands to renounce violence and recognize Israel’s right to exist.  The Bush administration had refused to work with Hamas, which has effectively controlled the Palestinian government since it defeated its rival, Fatah, in elections in 2007. Meanwhile, Israeli Prime Minister Benjamin Netanyahu is under pressure to engage meaningfully in international diplomacy and to be seen acting.

And because it was such a busy week internationally, here are two bonus stories from this week:

6. The rebel Tamil Tigers in Sri Lanka on Sunday declared a unilateral ceasefire, a move almost immediately rejected by the government. An operation launched by the government last month has effectively confined the Tamil Tigers to a small enclave in the northern part of the country, and the government is expected to announce the defeat of the Tigers any day. But the United Nations has described the situation as a humanitarian disaster, with more than 6,500 civilians already killed and as many as 100,000 refugees created as a result of the fighting.

7. It was announced on Friday that China has become the world’s fifth largest holder of gold reserves, with 1,054 tones of gold. Seen as part of a broader strategy to diversify its nearly $2 trillion in foreign exchange reserves, the government of China has slowly been building its gold reserves over the several years. However, even with the recent purchases, China has a level of gold reserves (as a percent of its total reserves) far below that of the United States and other developed countries.

Five Stories You Might Have Missed

The headlines this week were dominated by the G20 summit in London. The final communiqué produced by the summit committed $1.1 trillion to the International Monetary Fund (little of which was actually new money) and pledged some reforms for the structure of the institution. But the G20 was unable to agree on a new global stimulus package and failed to create an effective system of regulating global finance.

In other news from the last week:

1. Nuclear politics moved in two opposite directions over the weekend.  North Korea on Sunday launched a rocket over Japan and into the Pacific Ocean. The launch, widely viewed as a precursor to the development of an intercontinental ballistic missile system capable of striking the western United States, produced a sharp rebuke from other states, including Japan, South Korea, and the United States. According to a statement issued by the government of North Korea, the rocket successfully delivered into orbit a satellite transmitting revolutionary songs back to the earth.  But according to reports from the Pentagon, the rocket and its payload fell into the Pacific Ocean after the second stage of the rocket failed to properly ignite.  The U.N. Security Council is scheduled to take up the topic on Sunday afternoon.

2. As part of a policy review commissioned by the Obama administration, the United States government is considering a dramatic change in policy vis-à-vis Iran. While the U.S. has maintained its steadfast opposition to Iranian enrichment efforts, Iran has maintained its sovereign right to enrichment of nuclear fuel. The irreconcilability of the two positions has led the administration to consider dropping its opposition to Iran’s uranium enrichment in exchange for increased access by international monitors to Iranian nuclear facilities. It is generally believed that Iran currently maintains approximately 5,500 centrifuges and has amassed a stockpile of 1,000 kg of low-grade uranium, enough to produce one nuclear bomb if the uranium were sufficiently enriched.

3. A meeting of the NATO heads of government produced an agreement to deploy 5,000 additional troops to Afghanistan to monitor upcoming elections and train Afghan soldiers and police. Importantly, the alliance also agreed to appoint Anders Fogh Rasmussen, the Danish prime minister, as its new secretary-general. Rasmussen’s appointment was initially opposed by the Turkish government, whose opposition was driven by the controversy over anti-Muslim cartoons in Danish newspapers last year. Rasmussen was nevertheless appointed to direct the organization, but his position as secretary-general raises concerns about the wisdom of appointing a director whose appointment is regarded by the Muslim world as an affront.

4. A lawsuit filed in U.S. federal courts under the Alien Tort Claims Act against Royal Dutch Shell is moving forward. Shell is being sued for their involvement in the execution of human rights activist Ken Saro-Wiwa by the government of Nigeria in 1995. In bringing the suit, lawyers are hoping to force Shell to disclose their role in human rights violations in the Ogoni district of Nigeria. The case, which is scheduled to commence in New York on May 26, is also widely viewed as a test case to determine if multinational corporations can be sued for damages for their operations abroad.

5. U.S. officials announced on Thursday that it will expand the scope of funding extended to help Mexico’s anti-drug initiatives. Under the Merida Initiative, the U.S. originally committed to providing the Mexican government with $300 million to help in anti-drug efforts. In response to calls by the Calderón government, some now believe that the U.S. may expand the initiative to as much as $1.4 billion.