Guaranteed profits—at any price
Last Tuesday, President Barack Obama told beltway bullhorn Chris Matthews that Senator Elizabeth Warren was “wrong” about the Trans-Pacific Partnership (TPP), the largest trade deal in American history, linking United States and Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam in a pervasive and binding treaty. The president was referring to Warren’s claim that the trade treaty will license corporations to sue governments, and her contention that this was, to put it mildly, a bad idea.
Warren isn’t wrong, Obama is. And he knows it. The entire TPP, as understood, is based on a single overarching idea: that regulation must not hinder profiteering. This is a fundamentally anti-democratic concept that—if implemented—would effectively eliminate the power of a demos to make its own law. The final authority on any law’s validity would rest elsewhere, beyond the reach of popular sovereignty. From the TPP point-of-view, democracy is just another barrier to trade, and the corporate forces behind the draft treaty are intent on removing that barrier. Simple as that.
That’s why the entire deal has been negotiated in conclave, deliberately beyond the public purview, since the president and his trade representatives know that exposing the deal to the unforgiving light of popular scrutiny would doom it to failure. That’s why the president, like his mentor President Clinton, has lobbied hard for Trade Promotion Authority, or Fast Track, which reduces the Congressional role in the passage of the bill to a ‘yea’ or ‘nay.’
Cracks have begun to show in the formidable cloak behind which the deal has been structured. A coalition of advocacy groups advanced on the U.S. Trade Representatives office this week. Wikileaks has obtained and released chapters from the draft document. Senator Harry Reid declared his position on Fast Track as “… not only no, but hell no.” Warren has proved to be a persistent thorn in the side of White House efforts to smooth over troubling issues with the deal. But the monied interests that rule the beltway have all pressed for passage. And as a Fast Track draft makes its way through Congress, stakes are high. The TPP is, in the apt estimation of political activist Jim Hightower, a “corporate coup d’état.”
Not for the first time, the president and his Republican enemies are yoked by the bipartisan appeal of privilege against this faltering fence of protest. The marriage of convenience was described in last Friday’s sub-head to a New York Times article on TPP: “G.O.P. Is Allied With President Against His Own Party.”
All The Usual Suspects
Who else supports the TPP? Aside from this odd confection of neoliberals, the corporations that rule the beltway feverishly back the TPP. From the leak of Sony digital data we learn that it and its media peers have enthusiastically pressed for the passage of the deal. Sony is joined by major agricultural beneficiaries (Monsanto), mining companies like Infinito Gold, currently suing Costa Rica to keep an ecology-harming mine pit active, as well as pharmaceutical coalitions negotiating stiff intellectual property rights unpopular even in Congress, and various other technology and consumer goods groups. And don’t forget nicotine kingpins like Philip Morris.
Obama reinforces the corporate line: “We have the opportunity to open even more new markets to goods and services backed by three proud words: Made in America.” Perhaps he isn’t aware that our leading export is the workforce that once took pride in that moniker. We’ve exported five million manufacturing jobs since 1994, largely thanks to NAFTA, the model on which the TPP is built. The TPP will only continue that sad trend. The only jobs not being offshored are the ones that can’t be: bartenders and waitresses and health care assistants. That’s the Obama economy: a surfeit of low-wage service jobs filled by debt-saddled degree holders. As Paul Craig Roberts argued in The Failure of Laissez Faire Capitalism, between 2007 and 2014, some eight million students would graduate from American universities and likely seek jobs in the United States. A mere one million degree-requiring jobs would await them. The irony of Obama’s statement is that the TPP would actually move to strip the use of labels like, “Buy American,” since they unduly advocate for local goods.
In truth, the authors of the treaty already know all this. The bill concedes as much, with Democrats building in some throwaway provisions of unspecified aid to workers whose jobs have been offshored, and a tax credit to ostensibly help those ex-workers purchase health insurance. Cold comfort for the jobless, as they are exhorted by the gutless paladins of globalization to ‘toughen up’ and deal with the harsh realities of a globalized economy. As neoliberal stooge Thomas Friedman has said, companies in the glorious global marketplace never hire before they ask, “Can this person add value every hour, every day — more than a worker in India, a robot or a computer?” Of course, the answer is invariably no, so the job goes to Bangladesh or a robot. No moral equation ever enters the picture. Just market discipline for the vulnerable and ingenious efforts by a captive state to shelter capital from the market dynamics it would force on others.
The Investment Chapter
Despite Obama’s disingenuous clichés about “… fully enforceable protections for workers’ rights, the environment and a free and open Internet,” the trade deal makes it clear that labor law and environmental law are both barriers to profitability. We know this thanks to Wikileaks, which once again proved its inestimable value by acquiring and releasing another chapter from the cloak-and-dagger negotiations. This time it was the investment chapter, in which so much of the treaty’s raison d’etre is expressed.
As Public Citizen points out in its lengthy analysis of the chapter, any domestic policy that infringes on an investor’s “right” to a regulatory framework that conforms to their “expectations,” is grounds for a suit. Namely, the suit may be pressed to “the extent to which the government action interferes with distinct, reasonable investment-backed expectations.”
Here’s what the TPP says about such legislation as it relates to investor expectations:
For greater certainty, whether an investor’s investment-backed expectations are reasonable depends, to the extent relevant, on factors such as whether the government provided the investor with binding written assurances and the nature and extent of governmental regulation or the potential for government regulation in the relevant sector.
Try putting that tax on financial transactions. Forget it. Barrier to a reasonable return. Don’t believe it? Just read the TPP investment protocols that would ban capital controls, which is what a financial tax is considered to be by TPP proponents. Try passing that environmental legislation. Not a chance. Hindrance to maximum shareholder value. Just ask Germany how it felt when a Swiss company sued it for shutting down its nuclear industry after Fukushima. Try enacting that youth safety law banning tobacco advertising. Sorry. Needless barrier to profits. Just ask Australia, which is being sued by Philip Morris for trying to protect kids from tar and nicotine.
Public Citizen has tabulated that, “The TPP would newly empower about 9,000 foreign-owned firms in the United States to launch ISDS cases against the U.S. government, while empowering more than 18,000 additional U.S.-owned firms to launch ISDS cases against other signatory governments.” It found that “foreign investors launched at least 50 ISDS claims each year from 2011 through 2013, and another 42 claims in 2014.” If these numbers seem small, recall that for a crucial piece of labor legislation to be struck down, only one firm need win in arbitration in order to financially hamstring a government and set a precedent that would likely ice the reformist urge of future legislatures.
As noted earlier, the text also appears to suggest to ban the practice of promoting domestic goods over foreign—another hurdle to shareholder value. This would effectively prohibit a country from implementing an import-substitution economy without threat of being sued. Governments would be relieved of tools, like tariffs, historically used to protect fledgling native industries. This is exactly what IMF prescriptions often produce—agricultural reforms, for instance, that wipe out native crop production and substitute for it the production of, say, cheap Arabica coffee beans, for export to the global north. Meanwhile, that producer nation must then accept costly IMF lending regimes to pay to import food it might have grown itself.
Of course, it is rarely mentioned that protectionism is how the United States and Britain both built their industrial economies. Or that removing competitor market protections is how they’ve exploited developing economies ever since. The TPP would effectively lock in globalization. It’s a wedge that forces markets open to foreign trade—the textual equivalent of Commodore Perry sailing his gunships into Tokyo Harbor.
The bill’s backers point to language in which natural resources, human and animal life, and public welfare are all dutifully addressed in the document. The leaked chapter explicitly says that it is not intended to prevent laws relating to these core concerns from being implemented. So then, what’s the problem? The problem is that these tepid inclusions lack the teeth of sanctions or punitive fines. They are mere rhetorical asides designed to help corporate Democrats rationalize their support of the TPP. If lawmakers really cared about the public welfare, they’d move to strip the treaty of its various qualifiers that privilege trade over domestic law. By all means, implement your labor protection, but just ensure “… that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment.”
If lawmakers cared about national sovereignty, they wouldn’t outsource dispute settlement to unelected arbitration panels, more fittingly referred to as, “tribunals.” (Think of scrofulous democracy hunched in the dock, peppered with unanswerable legalese by a corporate lawyer, a surreal twist on the Nuremberg Trials.) Just have a glance at Section B of the investment chapter. Suits will be handled using the Investor-State Dispute Settlement (ISDS) model, itself predicated on the tribunal precedent. And in the event a government lost a suit or settled one, legal costs would be picked up by taxpayers, having been fleeced by an unelected committee whose laws it has no recourse to challenge.
Perhaps investor protections like ISDS were once intended to encourage cross-border investment by affording companies a modicum of reassurance that their investments would be safeguarded by international trade law. But the ISDS has been used for far more than that. The ISDS tribunals have a lovely track record of success (first implemented in a treaty between Germany and Pakistan in 1959). Here’s Public Citizen:
Under U.S. “free trade” agreements (FTAs) alone, foreign firms have already pocketed more than $440 million in taxpayer money via investor-state cases. This includes cases against natural resource policies, environmental protections, health and safety measures and more. ISDS tribunals have ordered more than $3.6 billion in compensation to investors under all U.S. FTAs and Bilateral Investment Treaties (BITs). More than $38 billion remains in pending ISDS claims under these pacts, nearly all of which relate to environmental, energy, financial regulation, public health, land use and transportation policies.
New Era, New Priorities
Now the ISDS is a chisel being used to destroy the regulatory function of governments. All of this is being negotiated by corporate trade representatives and their government lackeys, which appear to have no qualms about the deleterious effects the TPP will have on the general population. But then the corporations these suits represent have long since discarded any sense of patriotic duty to their native nation-states, and with it any obligation to regulate their activities to protect vulnerable citizenries. That loyalty has been replaced by a pitiless commitment to profits. In America, there may have been a time when “what was good for Ford was good for America,” as memorably put by Henry Ford. But not anymore. Now what’s good for shareholders is good for Ford. This was best articulated a couple of years ago by former Exxon CEO Lee Raymond, who bluntly reminded an interviewer, “I’m not a U.S. company, and I don’t make decisions based on what’s good for the U.S.” Those decisions usually include offshoring, liberalizing the labor market, practicing labor arbitrage, relocating production to “business friendly climates” with lax regulatory structures, the most vulpine forms of tax evasion, and so on—all practices that ultimately harm the American worker.
Apple says it feels no obligation to solve America’s problems nor, one would assume, any gratitude to the U.S. taxpayer for funding essential research that Apple brilliantly combined in the iPod and iPhone. Former Labor Secretary Robert Reich finally admits corporations don’t want Americans to make higher wages. The U.S. Chamber of Commerce encourages shipping American jobs abroad. World Bank chiefs point to the economic logic of sending toxic waste to developing nations. Wherever you look, there seems to be little if any concern for citizenry.
The Financial Times refers to ISDS as, “investor protection.” But what it really is, is a profitability guarantee, a legal bulwark against democracy expressed as regulation. Forgive me for thinking that navigating a fluid legislative environment was a standard investment risk. Evidently the champions of free trade can’t be bothered to practice it. Still the White House croons that it has our best interests at heart. If that were true, it would release the full text, launch public charettes to debate its finer points, or perhaps just stage a referendum asking the American people to forfeit their hard-won sovereignty. No such thing will ever happen, of course. As it turns out, democracy is the price of corporate plunder. After all, the greatest risk of all is that the mob might vote the wrong way. And, as the language of the TPP makes explicitly obvious, there are some risks that should be avoided at all costs.
Jason Hirthler can be reached at: email@example.com.
As closed-door negotiations concluded in Singapore on the Trans-Pacific Partnership, opposition begins to build in many countries. At the urging of the United States, Canada and Mexico have joined the nine countries in the talks and now Japan has announced it too wants to be part of this new free trade pact of Pacific rim countries, described by its critics as “NAFTA on steroids”.
Going into its 17th round of negotiations, the Obama administration aims to wrap up an agreement by October, hoping to push ratification through the Senate on a fast- track basis. Called Trade Promotion Authority, fast track would mean an up or down vote without amendments or even hearings on the agreement presented to it. It is a profoundly anti-democratic procedure because it shuts down debate.
But from start to end, TPP has been thoroughly anti-democratic. On the first day of the Singapore talks a broad range of civil society organizations issued an open letter to Congress calling for greater transparency in the proceedings. The agreement is being hammered out in secret discussions among trade ministers. Even Senators have been denied a look at its draft provisions.
However, some 600 transnational corporations are in the inner circle. They are writing the rules for trade in their own interests without any democratic input from the people whose lives will be profoundly affected. If adopted, TPP will deny citizens their democratic rights to shape public policies on a host of domestic issues, conceding those decisions to the large corporations.
Some sections have been leaked. They reveal “an agreement that actually formalizes the priority of corporate power over government,” according to Lori Wallach of Public Citizen’s Global Trade Watch. Only 5 of the 29 chapters have to do with trade. Wallach says the rest of the draft “include[s] new rights for the big pharmaceutical companies to expand, to raise medical prices, expand monopoly patents, limits on Internet freedom, penalties for inadvertent noncommercial copying, sending something to a friend. There are the same rules that promote off-shoring of jobs that were in NAFTA that are more robust that literally give privileges and protections if you leave. There is a ban on ‘buy American’ and ‘buy local’ or ‘green’ or sweat-free procurement. There are limits on domestic financial stability regulations. There are limits on imported food safety standards and product standards. There are limits on how we can regulate energy towards a more green future – all of these things are what they call ‘Behind the Borders’ agenda. And the operating clause of TPP is: ‘Each country shall ensure the conformity of its domestic laws, regulations and administrative procedures with these agreements.’”
Global Class War
Free trade is about more than trade. It is about favoring corporations over the democratic rights of citizens and the sovereignty of nations. As the former Director-General of the WTO, Renato Ruggiero, said in 1995, “We are no longer writing the rules of interaction among separate national economies. We are writing the constitution of a single global economy.”# What is being created is a global governance order in which corporations are the citizens, not flesh and blood humans like you and me. With free trade, corporations are making an end run around democracy.
TPP is the latest offensive in a global class war. For nearly 40 years now, since the mid 1970s, corporations have been rolling back the popular gains of the New Deal era and the 1960s. Democracy has been the target of a class war to restore the class power of capital. And there has been weak resistance, at best, by the popular classes. But the stakes have become increasingly clear to more and more. Indeed, on the issue of free trade, there is now a broad public sentiment against this aspect of the corporate offensive.
The US has become the world advocate of “free trade,” promoting it through trade agreements like NAFTA and other bi-lateral agreements as well as through global governance institutions it has sponsored such as IMF, World Bank and WTO. The US has promoted free trade for much the same reason Great Britain promoted it in the 19th century, viz. the economically strongest country in the world benefits from free trade. It is the weaker countries that seek tariff protection for their infant industries, protection from competition with cheaper and higher quality imports. That protection is what enabled the US to industrialize in the last half of the 19th century. But then when the US became economically strong enough to compete regionally and eventually globally, it became an advocate of free trade and demanded that others abandon protectionism.
The justification for free trade rests on the theory of comparative advantage. This is the view that if countries trade free of government impediments, the market will tend to direct each to export that which they can produce most efficiently and import what can be produced more efficiently and thus more cheaply elsewhere. The invisible hand of the market will guide each to specialize in producing what they have a comparative advantage in. Thus a rational production and trading system will emerge that maximizes efficiency.
Free trade agreements like NAFTA were sold to the US public by appealing to consumer’s interest in having access to cheaper goods imported from Mexico. What was deliberately soft-pedaled was their interest as workers in having jobs. Organized labor opposed NAFTA, fearing it would pit US workers in competition with low wage Mexican workers. Independent presidential candidate Ross Perot warned of “a giant sucking sound” as jobs would be off-shored to Mexico.
But the Clinton administration said US exports to Mexico would create new jobs. And so, ignoring opposition from its traditional base in the unions, new Democrat Clinton pushed ratification of NAFTA through the Senate as his first priority. Perot proved to be correct as US companies shifted production to low wage Mexico – until even lower wage Chinese workers were brought into play when China joined WTO. But Clinton was also right as cheaper consumer goods from abroad filled the shelves of Wal-Mart with bargains welcomed by US workers who found their wages reduced. Free trade proved to be a mixed blessing.
Capital Becomes Global
One important point about free trade that is often overlooked is that it is not only about the free, frictionless movement of goods and services across borders, unrestricted by tariffs, quotas and regulations. It assures the free movement of capital, as corporations are freed to invest abroad. The mobility of investment capital is of utmost importance, with profound economic consequences and consequences for democracy.
Unable to find sufficiently profitable venues for investment in the overdeveloped US economy, large corporations have increasingly moved abroad. They sought not just new outlets to sell their commodities, but low wage workforces that would decrease their production costs and thus boost their profits. Frequently that would involve locating different stages of the productive process in different countries so as to take optimal advantage of local conditions. The assembly lines of US industry were disaggregated and disbursed across the globe.
Global assembly lines emerged. These global production chains have become a signature feature of contemporary capitalism. Components may be manufactured in Singapore, transported to China for subassembly and then shipped to Mexico for final assembly before sale in the United States. Although global assembly lines are geographically dispersed, they overcome the limitations of the fixed assembly lines of the Fordist era in that they no longer have to rely on a fixed labor force that can organize itself to effectively claim a share of the surplus they create.
Instead, the global assembly line gives capital the flexibility to seek out the lowest wage workforce and friendliest business environment available anywhere in the world. This has been made possible by the development of a global computerized network of instant communications via satellite. That and the computerization of banking have made money transfers and the movement of capital both easy and instantaneous. The communications network also allows the decentralization of technological development and design. Technicians can work at points distant from the processes of production to which they address themselves. And the entire process can be coordinated by management located anywhere on the globe. The limitations of space and time have been overcome by digital communications and cheap energy for transporting goods to their ultimate consumers.
For such globalized production to be possible, capital must be able to flow freely across national borders and products have to be able to move with minimum friction across those borders, unhampered by tariffs or quotas or non-uniform standards. In other words, there must be free trade for transnational capital to optimize accumulation.#
But transnational corporations also need legal protection of their investments. They need protection from expropriation of their assets, laws and governments that can ensure their property is secure. A crucial part of free trade agreements is protection of what are called investor rights. This involves more than just protection from expropriation, as happens with revolutions. It also involves protection from governmental actions that might reduce the value of their property or potential profits by environmental and health regulations, labor laws or other such measures even though they might be for the public good. What in US law is called “regulatory takings” are seen as tantamount to expropriation.
When such governmental actions do occur, free trade treaties give the foreign corporation the recourse to sue. The suit is not adjudicated in a national court, but by a transnational body of experts operating in secret. States are expected to enforce its decisions on their own nation’s taxpayers and consumers. This favors investor rights (i.e. the interests of transnational corporations) over the democratic rights of a nation.
As corporations have globalized, morphing into transnational corporations, they have promoted free trade agreements to get national governments to assist them. But when “investor rights” trump the democratic rights of citizens, the transnational corporations become the real citizens of the emerging global order. TPP is a further step in this direction, making an end run around a number of important issues –banking regulation, extension of patent protection, food inspection, environmental protection, food sovereignty, internet freedom, health care, job creation policies, and more, denying voters the opportunity to decide such matters when they impinge on corporate profit making.
Here are a few of the issues around which opposition to TPP is beginning to emerge.
* Doctors Without Borders (Medecins Sans Frontieres, MSF) is concerned that TPP would “enhance patent and data protections for pharmaceutical companies, dismantle public health safeguards enshrined in international law and obstruct price-lowering generic competition for medicines.” The intellectual property provisions would give pharmaceutical companies prolonged monopoly protection for medicines and delay access to cheaper generic versions. This would have disastrous consequences in poorer countries.
* Internet freedom is also in danger. The Council of Canadians and OpenMedia have warned that the TPP would “criminalize some everyday uses of the Internet,” including music downloads, making no distinction between commercial and non-commercial copyright infringement. The TPP imposes a “three strikes” system for copyright infringement, where three violations would result in the termination of a household’s Internet access.
* Japanese farmers are concerned that TPP will force removal of protections from Japan’s agriculture needed to maintain food sovereignty for the country. They are protesting Japan’s decision to enter into TPP negotiations at all.
* Guaranteed compensation for loss of “expected future profits” from health, labor or environmental regulations.
* Corporate performance requirements are banned.
* Capital mobility is to be guaranteed, preventing capital controls in event of a financial crisis. TPP will require countries to let capital flow in and out without restriction, not allow the banning or regulation of risky investments like derivatives and credit-default swaps and will prevent the formation of much-needed public banks
Most fundamentally what is at stake with TPP and existing free trade treaties is the sovereignty of nations and the ability of their peoples to make democratic decisions. This is a concern on both the Left and the Right, suggesting the possibility of a broad coalition opposing TPP, bridging our otherwise polarized politics.
A major NBC News-Wall Street Journal poll from September of 2010 revealed that “the impact of trade and outsourcing is one of the only issues on which Americans of different classes, occupations and political persuasions agree,” with 86% saying that outsourcing jobs by U.S. companies to poor countries was “a top cause of our economic woes,” with 69% thinking that “free trade agreements between the United States and other countries cost the U.S. jobs.” Only 17% of Americans in 2010 felt that “free trade agreements” benefit the U.S., compared to 28% in 2007.
Arthur Stamoulis, executive director of Citizen Trade Campaign said: “If they were to negotiate an agreement that put human rights ahead of corporate profit, creating more just and sustainable social policy, the TPP could be a tool for incredible good. But if you look at who has a seat at the table, with the public shut out and more than 600 corporate lobbyists included, there is nothing to indicate that’s the deal we’re going to get.”
The developing opposition to the corporate coup that the TPP represents has the potential to win. It’s about time for the people to win one victory in the corporate class war. Our first chance in this campaign will be over granting fast track Trade Promotion Authority. And that battle will be followed by the fight over Senate approval of TPP itself. This is one that we can win. The stakes are high. The alternatives are democracy or plutocracy.
Cliff DuRand is a Research Associate at the Center for Global Justice and a contributor to the CIP Americas Program http://www.cipamericas.org. He is co-author and co-editor of Recreating Democracy in a Globalized State (Clarity Press, 2012). Contact him at firstname.lastname@example.org
For More Information:
Public Citizen’s Global Trade Watch http://www.citizen.org/trade
on TPP http://www.citizen.org/TPP
Citizens Trade Campaign www.citizenstrade.org
A coalition of labor, environmental, religious, family farm, and consumer organizations united in the pursuit of socially and environmentally just trade policies.
It’s Our Economy www.itsoureconomy.us
It’s Our Economy seeks to educate, organize and mobilize Americans to shift the power from concentrated capital to the people. http://itsoureconomy.us/occupy-the-tpp-stop-the-global-corporate-coup/
- NAFTA at 20: The New Spin (alethonews.wordpress.com)
A new survey by the Washington, DC-based public opinion pollster Gallup finds that Latin Americans are the most positive people in the world, and Venezuela is tied for second place among all countries measured.
The survey asked citizens of various countries to answer questions including: “Did you feel well-rested yesterday?” “Were you treated with respect?” and “Did you smile or laugh a lot?”
In Venezuela, 84 percent of respondents answered “yes” to those questions, the same amount as in El Salvador, which tied with Venezuela for second place after Panama and Paraguay, which tied for first with 85 percent.
According to Gallup, eight of the top ten most positive countries in the world are in Latin America, with Trinidad and Tobago coming in at number five (with 83 percent), followed by Thailand (83 percent), Guatemala (82 percent), Philippines (82 percent), Ecuador (81 percent), and Costa Rica (81 percent). At the low end, just 46 percent of respondents in Singapore answered “yes” to the questions.
The implications, according to the analysis, are that a country’s overall economic prosperity does not correspond with the amount of positivity felt by its citizens.
The report explains: “These data may surprise analysts and leaders who solely focus on traditional economic indicators. Residents of Panama, which ranks 90th in the world with respect to GDP per capita, are among the most likely to report positive emotions. Residents of Singapore, which ranks fifth in the world in terms of GDP per capita, are the least likely to report positive emotions.”
On average, 73 percent of adults around the world felt enjoyment a lot of the day, and 72 percent felt well-rested. A smaller proportion – 43 percent on average – said they were able to learn or do something interesting.
The report states that, on the whole, the data “reflects a relatively upbeat world.” It concludes that “Despite many global challenges, people worldwide are experiencing many positive emotions.”
Click here to see the full results.
- The Achievements of Hugo Chavez (alethonews.wordpress.com)
- Economic BS in Rich Countries is Reinforced by BS about Venezuela (alethonews.wordpress.com)
The National Bank of Egypt said that the US$200 million loan recently granted by the China Development Bank will arrive in the country within days.
The interest rate due on the loan is up to 3.75 percent above Libor rates, which is the central lending price of British banks for a pay period of eight years, including a three-year grace period.
Sharif Elwi, vice-president of the National Bank, said that the loan marks the beginning of Egyptian cooperation with Asian markets in light of worsening economic conditions in Europe.
China has allocated $20 billion to finance projects in Africa, and the National Bank began loan talks with the China Development Bank five months ago, Elwi explained. He denied that the government had pressured the National Bank to broker the deal due to Egypt’s declining international credit rating.
National Bank leaders plan to visit Singapore, Hong Kong, China and Malaysia this October to present investment opportunities in Egypt to potential backers there.
- African central banks invest in offshore Chinese bonds (ghanabusinessnews.com)
- Xi hopes Morsi visit boosts bilateral ties (todayonline.com)
- There is no clarity over $3b China loan to Ghana (ghanabusinessnews.com)
China and Singapore will receive exemptions from U.S. sanctions scheduled to go into effect Thursday that would have cut off banks in those countries from the U.S. financial system for handling Iranian oil transactions, a source in the office of Sen. Robert Menendez, D-New Jersey, a source in the office of Sen. Robert Menendez (D-N.J.) tells Security Clearance.
Secretary of State Clinton called Senator Menendez earlier today to inform him.
Under legislation signed by President Barack Obama In December, the United States will take action against countries that continue buying large volumes of Iranian oil through Iran’s Central Bank by cutting off financial institutions engaged in those transactions from the U.S. banking system.
– State Department released a statement from Secretary of State Hillary Clinton:
Today I have made the determination that two additional countries, China and Singapore, have significantly reduced their volume of crude oil purchases from Iran. As a result, I will report to the Congress that sanctions pursuant to Section 1245(d)(1) of the National Defense Authorization Act (NDAA) for Fiscal Year 2012 will not apply to their financial institutions for a potentially renewable period of 180 days.
A total of 20 world economies have now qualified for such an exception. Their cumulative actions are a clear demonstration to Iran’s government that Iran’s continued violation of its international nuclear obligations carries an enormous economic cost. According to the International Energy Agency (IEA), Iran’s crude oil exports in 2011 were approximately 2.5 million barrels per day, and have dropped to roughly 1.5 million barrels per day, which in real terms means almost $8 billion in lost revenues every quarter. When the European Union oil embargo goes into effect July 1, Iran’s leaders will understand even more fully the urgency of the choice they face and the unity of the international community.
Today marks an important milestone in the implementation of the NDAA and U.S. sanctions toward Iran. Following the President’s determinations on March 30 and June 11 on the availability of non-Iranian supplies of oil, as of today, any foreign financial institution based in a country that has not received an NDAA exception is subject to U.S. sanctions if it knowingly conducts a significant transaction with the Central Bank of Iran for the sale or purchase of petroleum or petroleum products to or from Iran.
We have been clear all along that there is a path for Iran to fully re-join the global economy. Iran’s leaders have the opportunity to address international concerns by engaging seriously and substantively in negotiations with the P5+1. I urge Iran to demonstrate its willingness to take concrete steps toward resolving the nuclear issue during the expert-level talks scheduled in Istanbul on July 3. Failure to do so will result in continuing pressure and isolation from the international community.
- US Sanctions Policy on a Collision Course against Iran; Increasing Tensions with China (alethonews.wordpress.com)