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Understanding trade balances

08-02-2019

Trade policy discourse on both sides of the Atlantic has recently focused on trade deficits and surpluses. In the United States (US), President Donald Trump has routinely referred to the US trade deficit as a central indicator of the country's economic woes and made its reduction a key objective of US trade policy. In Europe, the world's largest trade surplus, run by Germany, has come under scrutiny. However, focusing on trade balances of exports and imports can be misleading in the trade policy ...

Trade policy discourse on both sides of the Atlantic has recently focused on trade deficits and surpluses. In the United States (US), President Donald Trump has routinely referred to the US trade deficit as a central indicator of the country's economic woes and made its reduction a key objective of US trade policy. In Europe, the world's largest trade surplus, run by Germany, has come under scrutiny. However, focusing on trade balances of exports and imports can be misleading in the trade policy context. Trade balances need to be considered as an integral part of a larger whole, the balance of payments of an economy. The imposition of specific trade policy measures, such as unilateral tariffs, cannot be expected to improve a trade balance significantly.

The US mid-term elections of November 2018

19-10-2018

The forthcoming mid-term elections in the United States, to be held on 6 November 2018, are likely to offer a closely watched political verdict on the first two years of Donald Trump's presidency. They will define not only the composition of the 116th US Congress, to meet from 3 January 2019 to 3 January 2021, but also the power balance both within Congress and between Congress and the President. In US mid-term elections, the entire House of Representatives and one third of the Senate are up for ...

The forthcoming mid-term elections in the United States, to be held on 6 November 2018, are likely to offer a closely watched political verdict on the first two years of Donald Trump's presidency. They will define not only the composition of the 116th US Congress, to meet from 3 January 2019 to 3 January 2021, but also the power balance both within Congress and between Congress and the President. In US mid-term elections, the entire House of Representatives and one third of the Senate are up for election. The Democratic party, currently the minority in both chambers, aims to regain control of the House of Representatives, at least, although the conditions for its winning back the Senate are less favourable. Any shift in power towards the Democrats will result in increased scrutiny and pressure on the sitting President, and might lead to detailed investigations in Congress into the performance of his Administration, and potentially to an impeachment attempt against President Trump personally. By contrast, if the Republicans succeed in retaining control of both chambers, this will consolidate the President’s power-base within his own party, create a more favourable backdrop to his intended run for re-election in 2020, and exacerbate the identity and leadership crises within the Democratic party. This Briefing provides background to the forthcoming mid-term elections, by offering an overview of how the US Congress is elected, by explaining issues such as voter registration, voting methods, the way the primaries work, election security issues and gerrymandering. It goes on to analyse the potential political implications of the mid-term election results.

Consequences of US trade policy on EU-US trade relations and the global trading system

17-10-2018

The Trump Administration’s trade policy is driven by the belief that previous Administrations have let other countries take advantage of the United States for foreign policy reasons, as demonstrated by America’s more open trade regime and its trade deficits. It is determined to end this perceived imbalance by demanding reciprocity instead, and is willing to use tough tactics to achieve this through strict enforcement of its procurement and trade defense law; expansive tax provisions; bringing the ...

The Trump Administration’s trade policy is driven by the belief that previous Administrations have let other countries take advantage of the United States for foreign policy reasons, as demonstrated by America’s more open trade regime and its trade deficits. It is determined to end this perceived imbalance by demanding reciprocity instead, and is willing to use tough tactics to achieve this through strict enforcement of its procurement and trade defense law; expansive tax provisions; bringing the WTO dispute settlement to a halt; withdrawing from and forcing others to renegotiate existing bilateral and multilateral agreements; adopting a novel “national security” argument to justify breaking WTO tariff commitments for steel, aluminum and possibly autos; and enacting punitive tariffs on billions of dollars of imports from China, possibly threatening a trade war. The scenarios for U.S.-EU trade relations as well as the global trading system are anything but rosy. The EU can stand up to the Administration’s “bullying,” or it can take advantage of America’s need for a “re-balancing” to build its own stature by taking simple steps to improve EU-U.S. trade, forging a way forward in the WTO, and providing necessary leadership to address the dangers China’s economic system poses to the global trading order.

Zunanji avtor

Peter CHASE, Peter SPARDING, Yuki MUKAI

Outlook for the meetings of EU Heads of State or Government, 17-18 October 2018

16-10-2018

As has become the norm with European Council meetings, EU Heads of State or Government will convene on 17 and 18 October 2018 in different formats with varying compositions and levels of formality: a regular meeting of the European Council, and an enlarged Euro Summit of 27 Member States on 18 October, preceded by a European Council (Article 50) meeting on the 17 October over dinner. The agenda of the European Council meeting focuses on migration and internal security. Specific foreign policy issues ...

As has become the norm with European Council meetings, EU Heads of State or Government will convene on 17 and 18 October 2018 in different formats with varying compositions and levels of formality: a regular meeting of the European Council, and an enlarged Euro Summit of 27 Member States on 18 October, preceded by a European Council (Article 50) meeting on the 17 October over dinner. The agenda of the European Council meeting focuses on migration and internal security. Specific foreign policy issues might also be addressed at this meeting. The Euro Summit will discuss the state of play of negotiations on the deepening of Economic and Monetary Union (EMU), with a view to the next Euro Summit in December. However, the priority issue for Heads of State or Government will be Brexit. At the European Council (Article 50) meeting, EU-27 leaders are expected to discuss the progress that has been achieved in the negotiations so far, and possibly call for an extraordinary summit in November 2018.

Plenary round-up – Strasbourg, September 2018

14-09-2018

The highlight of September's plenary session was the State of the Union speech by the President of the European Commission, Jean-Claude Juncker, announcing a number of legislative proposals to come by the end of the Commission's mandate. The debate on the Future of Europe continued, this time with the Prime Minister of Greece, Alexis Tsipras. Lebanon's President, Michel Aoun, addressed Parliament as well as the Prime Minister of the former Yugoslav Republic of Macedonia, Zoran Zaev. Parliament approved ...

The highlight of September's plenary session was the State of the Union speech by the President of the European Commission, Jean-Claude Juncker, announcing a number of legislative proposals to come by the end of the Commission's mandate. The debate on the Future of Europe continued, this time with the Prime Minister of Greece, Alexis Tsipras. Lebanon's President, Michel Aoun, addressed Parliament as well as the Prime Minister of the former Yugoslav Republic of Macedonia, Zoran Zaev. Parliament approved, inter alia, proposals on the European Solidarity Corps, Single Digital Gateway, and countering money laundering. Parliament also voted an amended report on copyright in the digital single market which is now ready to be negotiated with the Council.

State of EU-US relations

05-09-2018

Over a year and a half into the presidency of Donald Trump, transatlantic relations continue to adapt to new realities under the 'America First' foreign policy. Its implications have touched several areas, such as climate, defence, sanctions and cooperation within multilateral institutions. EU-US trade relations have deteriorated significantly. However, following a visit by Commission President Jean-Claude Juncker to the US in July, new bilateral trade talks are being prepared. During its September ...

Over a year and a half into the presidency of Donald Trump, transatlantic relations continue to adapt to new realities under the 'America First' foreign policy. Its implications have touched several areas, such as climate, defence, sanctions and cooperation within multilateral institutions. EU-US trade relations have deteriorated significantly. However, following a visit by Commission President Jean-Claude Juncker to the US in July, new bilateral trade talks are being prepared. During its September plenary session, the European Parliament is expected to discuss an own-initiative report addressing these issues.

President Trump's trade and international policies

31-08-2018

US President Donald Trump has pushed ahead in recent months with his controversial policies on trade and defence, which critics say could undermine the global rules-based order and create new uncertainties. The European Union's trade spat with the US eased somewhat following a meeting of European Commission President Jean-Claude Juncker with Trump in July. However, the NATO summit earlier that month and Trump's subsequent meeting with Russian President Vladimir Putin did little to reassure the EU ...

US President Donald Trump has pushed ahead in recent months with his controversial policies on trade and defence, which critics say could undermine the global rules-based order and create new uncertainties. The European Union's trade spat with the US eased somewhat following a meeting of European Commission President Jean-Claude Juncker with Trump in July. However, the NATO summit earlier that month and Trump's subsequent meeting with Russian President Vladimir Putin did little to reassure the EU about the stability of transatlantic relations. This note offers links to recent commentaries and reports published by international think tanks on President Trump's policy moves, focusing on relations with Europe, Russia, China and trade. It does not cover reports on Iran, North Korea and the US domestic situation, which will be topics of future issues of What think tanks are thinking.

2018 NATO summit: A critical time for European defence

10-07-2018

On 11 and 12 July 2018 the NATO Heads of State and Government will meet in Brussels for the 28th NATO summit. The summit comes at a time of tension in transatlantic relations, but also of continuing threats and challenges posed to the alliance. Against this background, leaders will focus on strengthening defence and deterrence, modernising the alliance and enhancing relations with the EU. Burden-sharing among allies is set to be one of the most controversial items on the agenda. In 2018 only eight ...

On 11 and 12 July 2018 the NATO Heads of State and Government will meet in Brussels for the 28th NATO summit. The summit comes at a time of tension in transatlantic relations, but also of continuing threats and challenges posed to the alliance. Against this background, leaders will focus on strengthening defence and deterrence, modernising the alliance and enhancing relations with the EU. Burden-sharing among allies is set to be one of the most controversial items on the agenda. In 2018 only eight out of twenty nine NATO members are estimated to be reaching the 2 % of gross domestic product (GDP) defence spending target. The Brussels summit aims to push forward the agenda, decisions and actions agreed upon at previous summits, notably in Wales (2014) and Warsaw (2016). Yet there are fears that the insistence of US President Donald Trump that the focus be placed on burden sharing and demands that the NATO allies spend more on defence, might lead to the side-lining of other items on the agenda. The situation is aggravated by the current climate in transatlantic relations, which has deteriorated since the most recent G7 summit in Canada. The summit in Brussels will also seek to secure progress on EU-NATO cooperation, aiming to produce a second joint statement, following that agreed upon in Warsaw in 2016. After two years of increased EU action to build up strategic autonomy in defence through initiatives such as PESCO and the European Defence Fund, cooperation with NATO is critical when it comes to taking European defence forward.

NATO Summit and European defence [What Think Tanks are thinking]

10-07-2018

NATO heads of state or government will meet in Brussels on 11 and 12 July for a keenly awaited summit. Some analysts and diplomats fear a tense atmosphere, following US President Donald Trump’s tough treatment of European allies at a recent meeting of the G7 group of developed countries, and his imposition of steep tariffs on imports of steel and aluminium from the EU. President Trump is expected to pressure many NATO members to increase their military spending level to the agreed 2 % of GDP guideline ...

NATO heads of state or government will meet in Brussels on 11 and 12 July for a keenly awaited summit. Some analysts and diplomats fear a tense atmosphere, following US President Donald Trump’s tough treatment of European allies at a recent meeting of the G7 group of developed countries, and his imposition of steep tariffs on imports of steel and aluminium from the EU. President Trump is expected to pressure many NATO members to increase their military spending level to the agreed 2 % of GDP guideline, with particular emphasis on Germany. The NATO summit precedes President Trump’s meeting with Russian President Vladimir Putin on 16 July in Helsinki, where some analysts speculate some rapprochement might take place. President Trump’s unpredictability and his widely criticised attitude towards President Putin is causing unease at home and abroad regarding the potential outcome of this summit. This note offers links to commentaries and studies on NATO and European defence by major international think tanks. Earlier papers on the same topic can be found in a previous edition of 'What Think Tanks are Thinking', published in December 2017.

European Deterrence Initiative: the transatlantic security guarantee

09-07-2018

The illegal annexation of Crimea by Russia in March 2014 marked a crucial moment for European, transatlantic and international security. Acting like a wake-up call, this event redefined strategic and security considerations in individual EU Member States, in the United States and in international organisations such as the European Union (EU) and the North Atlantic Treaty Organisation (NATO). Russia's increasingly assertive military posture is unsettling for its European neighbours. Four years ago ...

The illegal annexation of Crimea by Russia in March 2014 marked a crucial moment for European, transatlantic and international security. Acting like a wake-up call, this event redefined strategic and security considerations in individual EU Member States, in the United States and in international organisations such as the European Union (EU) and the North Atlantic Treaty Organisation (NATO). Russia's increasingly assertive military posture is unsettling for its European neighbours. Four years ago, in June 2014, US President Obama announced what was to become a key security guarantee from America to Europe. The European Reassurance Initiative, as it was called during the first half of its existence, is a military programme supporting the activities of the US military and its allies in Europe. In 2017, it was renamed the European Deterrence Initiative (EDI) to reflect the shift in the international security environment characterised by a prioritisation of deterrence. Activities under the EDI include training of forces, multinational military exercises and development of military equipment and capabilities. They all take place under the umbrella of Operation Atlantic Resolve (OAR) whose core mission is to enhance deterrence. Despite recent turmoil in transatlantic relations, the budget for building up defences in central and eastern Europe through the EDI has seen major increases; even under the Trump administration. The EDI has deepened security and defence cooperation between the US and the main beneficiaries of OAR, namely Bulgaria, Estonia, Latvia, Lithuania, Poland and Romania. The US European Command, which coordinates all EDI and OAR activities, is working to forge enhanced interoperability between different countries' military forces through joint training, staff exchanges and exercises. The Command's leadership also recognises the cyber domain as a pressing area where integration is needed, although the EDI budget for 2019 makes no mention of it. The recent proliferation of EU defence initiatives and the revamp of EU-NATO relations should also contribute to EDI's core mission: to establish a strong deterrence posture able to meet today's security challenges.

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