The move by US President Barack Obama and his Cuban counterpart, Raul Castro, to announce the tentative resumption of diplomatic relations is already prompting talk that the world’s oldest trade embargo may be coming to an end.
Introduced in 1960, the US embargo of Cuba has hit the island economy of 11m people hard over the decades. In its annual report to the United Nations on the subject Cuba in September estimated it lost $3.9bn in foreign trade in 2013 alone because of the embargo. Havana’s running tally for the total economic damage: $116.8bn.
That figure is obviously worth taking with a pinch of salt, as should be any idea that the embargo is going to be lifted soon.
But there is no doubt that a change in US policy would represent a huge economic opportunity for Cuba or that the potential looks alluring to plenty of businesses in the US. Here are some points to keep in mind and some charts worth pondering: Read more
The biggest development story of the last two decades has been the vast reduction in the number of the world’s extreme poor thanks to the rapid growth of China and other developing economies. But how does the US, the world’s richest economy, fit in when you apply the $2/day poverty line the World Bank and others normally use to grade much poorer countries?
In a fascinating new paper, researchers at the Brookings Institution look at exactly that question and come up with some potentially shocking findings, albeit ones that come with plenty of caveats attached. Read more
Could the UK go it alone in the cut-throat world of global trade?
Iain Mansfield, the 30-year-old British diplomat awarded a €100,000 prize by the eurosceptic Institute of Economic Affairs for his plan for a British exit from the EU, certainly thinks so. At the centre of his plan is the case for the UK to go it alone in negotiating trade agreements with big players like China and the US. Read more
Here is an addendum to our post on Friday on what might come next for trade sanctions on Russia. I spent part of the weekend playing with the data on MIT’s brilliant Observatory of Economic Complexity. It is a fabulous place for visualisations of trade data. The underlying data are a few years out of date. But the overall trend still holds true and so these interactive charts on Russia seem worth sharing given the current debate. Read more
Both the US and the EU are stepping up their sanctions against Russia over its annexation of Crimea. So far it has all been very personal; both the US and the EU have focused on making life difficult for key individuals in and around the Kremlin and President Vladimir Putin. But that is unlikely to be the end of it. Both the US and the EU have threatened to impose further, broader, sanctions on the Russian economy. So in terms of trade, what might they target? Read more
Paul Krugman joins the heated debate over the Trans-Pacific Partnership trade negotiations with a column on Friday that argues the economic case just isn’t compelling enough for President Obama to be expending political capital on such a divisive issue in an election year.
But Krugman seems to be missing a big part of what President Obama is after with his ambitious second-term trade agenda. Helpfully two Obama confidantes – Vice-president Joe Biden and former chief of staff Rahm “Rahmbo” Emanuel – have broken cover this week to offer what many analysts have long argued is the real justification for US trade policy these days: the strategic imperative. Read more
Amid all the questions about whether we are seeing a repeat of the 1990s emerging market crises, it is worth asking a simple question: where are big multinationals putting their long-term bets on buying companies and building factories?
The answer is just in from the UN Conference on Trade and Development (UNCTAD) via the latest edition of its Global Investment Trends Monitor. Here are six points from the report worth paying attention to: Read more
Dalian port, China (Getty)
Friday’s GDP data out of China (the economy grew at an annual rate of 7.8 per cent in the third quarter of this year) has illustrated what many economists see as the “new normal”. China is growing slower than it once did. But, given its increasingly outsize role over the past two decades what does that mean for global trade? Together with Valentina Romei from our stats department and the helpful people at the WTO we have been running some of the numbers. Here are a few interesting points to pass on…
China is now the world’s biggest trading nation…
According to Coleman Nee, one of the data gurus at the WTO, China overtook the US as the biggest trader in the world (exports + imports) in the first half of this year. Read more
There’s been a lot written in the FT and elsewhere about the Trans-Pacific Partnership, or TPP. Here are five reasons you should care about this trade pact:
1. This is a big deal.
If, or when, it is finalised the 12-country Pacific Rim deal will cover countries responsible for almost 40 per cent of global GDP and involved in more than a third of global trade.
This chart is taken from a June 2013 report by the US Congressional Research Service. Some $18tn in goods is traded around the world each year these days. The countries in the TPP (The current “TPP 12”: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam) accounted for 36 per cent of that total in 2011.
In honour of the airing in the US on Sunday of the final episode of Breaking Bad, the hit television drama that lifts the lid on the dark world of crystal meth, here are five things worth knowing (and dropping at your next dinner party) regarding the global trade of the illicit drug. (With a deep bow to Wonkblog, the New Yorker, and Slate, all of which have done extensive plot analyses)
1. North America dominates the world of methamphetamine. And those Mexican cartels are indeed hard at work.
According to the UN Office of Drug Control’s 2013 World Drug Report, North America accounted for 54 of the 88 tons of methamphetamine seized worldwide in 2011, the latest figures available. Leading the pack in North America was Mexico, where the cartels have turned mass producing crystal meth into a fine art. Read more