No, tuna-dolphin is not a hybrid fish, but the subject of a long-standing trade dispute between Mexico and the United States arising from a 1990 U.S. law setting out requirements for a “dolphin safe” label for tuna products imported or sold in the U.S. Because Mexican tuna fishermen use different methods for catching tuna than allowed under the labeling requirements, Mexico’s tuna imports to the U.S. have been limited. Mexico challenged that law with the World Trade Organization (WTO) in 2008, resulting in a Dispute Panel’s mixed decision in 2011. In an important decision regarding Mexico’s appeal, an Appellate Body, on May 16, 2012, reversed several of the Dispute Panel’s 2011 findings. In particular, it found that the labeling requirements unfairly restrict Mexico’s tuna trade:
The Appellate Body reasoned, first, that, by excluding most Mexican tuna products from access to the “dolphin-safe” label while granting access to most US tuna products and tuna products from other countries, the measure modifies the conditions of competition in the US market to the detriment of Mexican tuna products.
The U.S. labeling requirements don’t allow tuna to be caught with purse seine nets. However, Mexico had claimed that their fishing techniques met international requirements, which don’t exclude using those nets. In its decision the WTO noted that it wasn’t convinced that other tuna fishing techniques in other waters resulted in less risk to dolphins and found that:
[T]he measure at issue is not even-handed in the manner in which it addresses the risks to dolphins arising from different fishing techniques in different areas of the ocean.
While this particular dispute rose in October 2008, tuna-dolphin issues between Mexico and the U.S. extend back to 1991 under the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT), which brought to the fore issues relating to international trade and the environment. In that decision, GATT gave credence to the acceptability of extra-territorial trade restrictions, particularly when included in multilateral agreements.
This decision is a critical one in the debate over the use of non-tariff barriers to protect domestic industries or to advance environmental goals. (See a 1996 CEI issue brief on how environmental issues were already being used to justify trade restrictions.)
CEI joined with 10 other free-market groups in a letter today urging Congress to take on real reform of agricultural subsidies in the next farm bill and to resist attempts for new entitlements. The letter noted that farm businesses are doing quite even in this recession, with net income at $98 billion. With negotiations on reauthorization of the farm bill underway, it’s essential that Congress review federal agricultural policies that distort market decisions. The letter pointed out some specific areas that deserve attention:
We believe the nearly $30 billion reduction in federal spending on agriculture agreed to in the House Budget Resolution should be the minimum reduction in the Farm Bill. Eliminating direct payments, as the resolution suggests, is long overdue. Making meaningful reforms to the largest Washington-based support for agriculture, federally subsidized crop insurance, is also a must. The Congressional Budget Office estimates this program—which provided $2.2 million in subsidies for just one agricultural producer’s insurance premiums in 2011—will cost more than $90 billion over the next ten years.
Also, we believe Congress must not create any new potentially budget-busting entitlement programs that would increase Washington’s role in farm business decisions, such as efforts to put taxpayers on the hook for “shallow losses” in annual farm business revenue. And Congress should not use the Farm Bill to undo the responsible cuts to biofuels programs the House achieved in last year’s minibus appropriations bill.
The letter noted that, given the strength of the agricultural sector and the “glaring weakness of the federal budget,” it is essential for Congress to reform agricultural policy. And, the letter urged, there must be “full and open legislative debate on Farm Bill reauthorization.”
The Obama administration wasted no time in putting in place – in a home-page video — Richard Cordray as head of the Consumer Financial Protection Bureau (CFPB) the day after the president’s controversial “recess” appointment of Cordray. His appointment, made while the Senate is technically not in recess, set off a storm of criticism for President Obama’s “tyrannical abuse of power.”
The new megalithic agency created under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 itself is under attack for the lack of accountability for its director and its funding, which doesn’t need Congressional authorization. CEI’s John Berlau points out these and other major issues relating to the lack of accountabilityfor CFPB and its head.
It is only if the operators of such aircraft choose to operate a commercial air route arriving at or departing from an airport situated in the EU that they are subject to the emissions trading scheme.
It has been reported that Canada and other countries will continue the battle through other channels, notably the UN’s International Civil Aviation Organization in Montreal.
The U.S. sent a strong letter to the European Union warning them that the EU’s airline emissions trading scheme — set to start in January 2012 — should be halted or postponed. If not, the letter from U.S. Secretary of State Hillary Clinton said, “. . . we will be compelled to take appropriate action.” According to the Financial Times (registration required), 42 other countries, including major economic powerhouses, such as China and Brazil, signed onto the letter, which seemed to be timed just before the EU’s highest court renders its decision.
On Wednesday the EU’s Court of Justice is expected to rule in favor of the EU’s plan to charge airlines — domestic and foreign — for their carbon emissions. The EU scheme would cover aviation in its controversial — and collapsing — cap-and-trade system for reducing carbon emissions. All planes landing or taking off in the EU would be forced to pay for their emissions, whether those were emitted over EU airspace or not.
Expanding the failing carbon trading system during a period of failing economies seems to be an act of self-flagellation on the part of the EU in the name of environmentalism. Or maybe they are hoping to bring other countries down to a “level playing field” of wasting billions of dollars that would flow into their coffers. A 2009 study by Matt Sinclair of the UK’s Taxpayers’ Alliance estimated that from its introduction in 2005 through 2008, the EU’s carbon trading scheme has cost European consumers €93 billion. Just last month The Australian reported that the Swiss bank UBS had issued a study stating:
. . . the European Union’s emissions trading scheme has cost the continent’s consumers $287 billion for “almost zero impact” on cutting carbon emissions, and has warned that the EU’s carbon pricing market is on the verge of a crash next year.
In a damning report to clients, UBS Investment Research said that had the €210bn the European ETS had cost consumers been used in a targeted approach to replace the EU’s dirtiest power plants, emissions could have been reduced by 43 per cent “instead of almost zero impact on the back of emissions trading.”
If the EU stands by its plan to exert control over airlines of other countries and to charge them for emissions, many have argued that it would attack the sovereignty of other countries, destroy the international legal system in place for airlines – the Convention on International Civil Aviation – put onerous economic burdens on airlines, and raise the cost of international travel and delivery services.
Retaliation would seem inevitable, which could plunge the fragile world economy into a destructive trade war.
Anti-smoking advocates were in full throttle in Germany after former Chancellor of West Germany Helmut Schmidt kept puffing on his cigarette during a television interview last Sunday. In the Charlie Rose interview on German public broadcaster ARD, the 92-year-old Schmidt commented on German reunification and recent European history. He also said that smoking lots of cigarettes is responsible for his mental sharpness at his advanced age.
Activists against smoking were incensed – they called his smoking and comments on TV an outrage and charged that ARD was violating the anti-smoking laws and was endangering the health of the TV crew and the audience by allowing Schmidt to smoke.
Smoking supporters now have a new hero — certainly Schmidt’s distinguished looks belie his years, and his comments show he is still sharp. And, he has a full head of hair. Watch below:
David Brooks’ article today in The New York Times belittles the cost of regulation to American businesses and the U.S. economy and praises the Obama administration for its “rigorous cost-benefit analyses” of proposed regulations. While he does note that “the Obama administration has significantly increased the regulatory costs imposed on the economy,” Brooks also says that it’s not clear that those regulations “have had a huge effect on the economy” or indeed on small businesses.
So more and more onerous regulations at higher and higher costs and greater economic uncertainty among businesses don’t have a dampening effect on hiring more workers or on capital investment? As CEI’s Clyde Wayne Crews and Ryan Young noted in a recent article:
There are more than 4,200 new rules at various stages of the federal regulatory pipeline right now. Companies, especially the ones too small to afford a Washington office, don’t know what’s coming next. No wonder they are skittish about making long-term investments, whether in employees or capital.
In a free-trade lesson the U.S. should study, Canada announced that it was eliminating tariffs on imports that Canadian manufacturers use to help spur the economy. Canadian Finance Minister Jim Flaherty noted that tariffs would be cut on about 70 items, the latest in government moves to get rid of all tariffs by 2015. Already Canada has abolished tariffs on more than 1800 items — relief that is expected to provide about $423 million annually.
This strategy contrasts sharply with the U.S. mercantilist approach – exports good, imports bad – and the U.S. focus on trade deficits instead of also looking at the economic benefit of imports, as providing greater choice and lower-cost goods for consumers and critical inputs for manufacturers, who can create jobs.
. . . there seems to be a correlation between large trade deficits and reduced unemployment, as well as a larger economic output. Why? One reason is that a large proportion of U.S. imports are actually manufacturing inputs, used to produce goods in the United States. In fact, the most recent data available from the U.S. Census Bureau (August 2011) shows that 57 percent (US$106 billion worth) of all U.S. imports are capital goods and industrial supplies materials, the basis of the domestic manufacturing sector.
We sometimes forget that “tariffs” and “duties” are really “taxes” on imports; and therefore eliminating or reducing tariffs or duties is the same thing as eliminating or reducing taxes on consumers and businesses buying foreign products. In the same way that “tax cuts” can stimulate economic activity, “tariff cuts” do the same, and that’s the approach being taken in Canada.
That’s a good lesson in what free trade is all about.
Feisty 86-year-old Hank Greenberg, long-time chief executive of AIG, is suing the Treasury Department and the New York Federal Reserve Bank charging that its 80 percent takeover of AIG in 2008 was unconstitutional. The suits, brought by Starr International and other AIG shareholders, say that the takeover violated the Fifth Amendment by taking property from those shareholders and using the company to transfer federal monies provided to AIG to banks that were trading partners of the insurer. The lawsuits seek damages of at least $25 billion. The “takings clause,” widely used to defend against eminent domain appropriation, reads “nor shall private property be taken for public use, without just compensation.”
Greenberg is no stranger to legal controversies. He was the target of former NY State Attorney General Eliot Spitzer’s zeal, and it was widely bruited that Spitzer demanded Greenberg’s dismissal after 36 years at the helm of AIG or he would bring down the company. Greenberg left the company in 2005 and faced charges from Spitzer, the SEC, and the U.S. Justice Department, with the criminal charges subsequently dropped and some civil charges still unresolved.
At long last both the House and the Senate are scheduled to vote on the three free trade agreements (FTAs) that have languished for more than four years. Votes on the trade pacts are scheduled for next Wednesday and will be linked to votes on Trade Adjustment Assistance — a condition that President Obama and Democratic leaders had demanded.
Although there appears to be bipartisan support, the AFL-CIO is still opposed to all of the pending FTAs and brought hundreds of union members to Capitol Hill to tell their congressional cohorts to vote against all three pacts. Their particular focus is on the U.S.-Colombia FTA, even though they demanded — and got — an Action Plan for Colombia to take specific and onerous steps to ostensibly protect union workers in that country.
As CEI has written, trade unions have been largely responsible for holding up the trade pacts, even though the agreements are expected to create many thousands of new jobs. Obviously, appeasing unions by giving in to their demands hasn’t worked.
One can only hope that they won’t have the clout to influence enough Democrats to vote against the pacts.
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