Category Archives: Trade
A call for building strong productive local and regional communities and new trade systems that fulfil human lives without wasting resources and energy
Today the Financial Times (paywall) reports that the number of foreign investment projects has dropped by 14% to 1,782 in the financial year ending March 2019, since the 2016 Brexit referendum. This is the lowest level in six years, according to a report published on Wednesday by the UK’s Department for International Trade.
As multinational profits continue to fly out of the country and taxes are evaded, we return to the valuable 2017 report by Victor Anderson and Rupert Read entitled ‘Brexit and Trade Moving from Globalisation to Self-reliance’, published and launched by Green MEP Molly Scott Cato.
“This report puts on to the political agenda an option for Brexit which goes with the grain of widespread worries about globalisation, and argues for greater local, regional, and national self-sufficiency, reducing international trade and boosting import substitution”.
Colin Hines comments: It details the need for an environmentally sustainable future involving constraints to trade and the rebuilding of local economies. On page 14, the report calls for ‘Progressive Protectionism’:
“Reducing dependence on international trade implies reducing both imports and exports. It is very different from the traditional protectionism of seeking to limit imports whilst expanding exports. It should therefore meet with less hostility from other countries, as it has a very different aim from simply improving the UK’s balance of payments. It could be described as ‘progressive protectionism’, or ‘green protectionism’“.
The report’s recommendations are summarised under three headings: the environment, globalisation and localisation (below):
- Change trade agreements to allow governments to promote greater national, regional, and local resilience.
- Shift taxes, subsidies, and public expenditure on infrastructure, away from unfairly favouring large and global companies, and redirect them to help build up local economies.
- Link banking directly to local and regional economies rather than to the international financial system.
- Boost the number of places for skills training in sectors where UK production can substitute for imports.
- bring in short-term government subsidies to invest in and develop economic sectors where UK production can be expected to substitute for imports as part of the new strategy. These would not necessarily be ‘infant industries’: they might be old sectors being revived and renewed.
- Introduce or increase tariffs on imports of goods and services, especially those where domestic production is a viable and environmentally sustainable option.
- Democratise English sub-regional devolution arrangements and reform local government finance, so as to provide for effective decentralisation of power.
The globalisation of recent decades has been very one-sided. There have been enormous benefits for large business corporations, financial institutions, and the super-rich. As smaller companies have found it difficult to compete, the multinationals have used a worldwide network of tax havens to escape from taxation and regulation.
‘Brexit and Trade’ sets put a new option for Britain. Instead of removing protective regulations against environmental threats it advocates establishing high Green standards and practical localisation measures. It would address the very real social, economic and environmental problems of globalisation, serving present and future generations well.
Martin Wolf, former senior World Bank economist who left after becoming disillusioned with its policies, reminds readers that a goal of the Paris agreement of 2015 was to limit the global average temperature rise to less than 1.5C above pre-industrial levels. He comments:
“Achieving it means drastic reductions in emissions from now. This is very unlikely to happen. That is no longer because it is technically impossible. It is because it is politically painful.
He refers to the latest report from the Intergovernmental Panel on Climate Change on the implications of warming of just 1.5C, making plain the risks the world runs if this limit is ignored and concluding that life will survive, but not life as we know it, continuing:
“We are the shapers of the planet now. This ought to transform how we think. Unfortunately, it has not”.
Wolf believes that the theoretical and empirical arguments for man-made climate change are overwhelming, supporting this and other points made with graphs in his recent Financial Times article. The rise in average temperatures above the pre-industrial average is already about 1C. That shows how hard it will be to keep the final increase below 1.5C, or even 2C. Under the “nationally determined contributions”, he adds, we are in fact on a track towards warming of 3-4C by 2100.
if we are to have a high chance of keeping the ultimate temperature rise to below 1.5C:
- net global CO2 emissions would need to fall to zero not long after 2040
- and other sources of climate change — emissions of methane and nitrous oxide, for example — would also need to fall from 2030.
Emissions from industry would need to fall by 75-90 per cent by 2050, relative to 2010. This would need a combination of electrification, hydrogen and product substitution. These options are technically proven, but their deployment on a planetary scale is another matter. Emissions reductions by efficiency improvement will be inadequate.
(Ed) One reservation: many will disagree with Wolf’s assertion that generating energy from bio-based feedstocks is necessary and that agriculture will need to shift to production of energy crops on a huge scale.
He calls for planning changes in urban infrastructure and carbon capture and storage on a large scale, shifting the world on to a different investment and growth path right now and commenting, “This is more technically possible than we used to think. But it is politically highly challenging”.
The natural tendencies are either to do nothing, while insisting there is no problem, or to agree there is a problem, while merely pretending to act. It is not clear which form of obfuscation is worse.
Wolf points out that to preserve our planet requires co-operative effort on a planetary scale – a challenge human beings have historically only met in times of war. Climate change involves huge distributional issues between countries that caused the problem and those that did not, and, not least, between people today, who make the decisions, and people tomorrow, who suffer the results.
He warns that the chances of co-operative action seem near zero in today’s nationalistic world . . . Donald Trump has already repudiated the US pledge – other countries may fail, too:
“It is five minutes to midnight on climate change. We will have to alter our trajectory very quickly but appear to be set on running an irreversible bet on our ability to manage the consequences of a far bigger rise even than 2C, risking a world of runaway — and unmanageable — climate chaos.
“Our progeny will see this as a crime”.
Contingency plan for a no-deal Brexit: proposals to ferry in critical supplies – food, medicines and possibly car parts
The FT reports that David Lidington, Mrs May’s de facto deputy, has briefed the cabinet that under a no-deal Brexit, the Dover-Calais route could be running at only 12-25% of its normal capacity for up to six months.
“Whatever we do at our end, the French could cause chaos if they carry out checks at their end,” said one government official. “Dover-Calais would be the obvious pinch point. The French would say they were only applying the rules.” This would force Britain to seek alternative ways of bringing in “critical supplies”.
Chris Grayling, transport secretary, has discussed with government colleagues the possibility of chartering ships, or space in ships, to bring supplies into other British ports, thus avoiding the Dover-Calais bottleneck.
Government officials say they do not expect to have to use legal powers to requisition ships, although with only five months to go until Brexit on March 29, there is little time to charter ships on the open market.
According to the FT’s George Parker and James Blitz this move was greeted with disbelief at a stormy meeting of Theresa May’s cabinet on Tuesday. The prime minister announced there would now be a weekly cabinet discussion on preparations for Brexit, whether under a deal or no-deal scenario. If Britain left the EU under World Trade Organization rules, the UK and EU would be in different customs jurisdictions and would be expected to carry out checks on trade across the English Channel.
Pauline Bastidon (sic), head of European policy at the Freight Transport Association, said: “We are open to all kinds of ideas about how to keep supplies flowing in a no deal Brexit. But it’s hard to see where the extra ships would quickly be found. Nor can I see how other UK ports could possibly handle the huge volumes currently going through the Dover strait.”
The Times adds: Dover handles more than 2.5 million lorries a year and has no capacity to hold trucks waiting for advanced customs clearance. Other UK ports (Ed: see map, right) do have that capacity and could be used to take some Dover traffic. And, reassuringly:
“Ministers say that disruption would also damage EU companies and that there would be political pressure from member states for the European Commission to mitigate the most damaging aspects of a breakdown in talks”.
Though Cammell Laird’s Birkenhead shipyard won two contracts this month, worth a total of £619 million, to provide spares, repairs and do maintenance work for the Royal Fleet Auxiliary over10 years, news of plans to axe about 40% of the workforce (290 jobs) by the end of March 2019, was given to union representatives and workers today (11th October).
The Unite union is demanding that Cammell Laird sets out the business case for cuts which will see the loss of vital skills and ‘backdoor casualisation’ of the workforce. It fears that the proposed job losses will undermine the shipyard’s ability to fulfil new contracts.
Unite’s assistant general secretary for shipbuilding, Steve Turner, said: “The loss of jobs at Cammell Laird would see skills gone for a generation and be a further blow to the UK’s shipbuilding industry . . . it is clear that the government must and can do more to support UK shipbuilding jobs. This must include the government stepping in and supporting the retention of skills and jobs while shipyards like Cammell Laird wait for new contracts to come on stream”.
Instead of ‘offshoring’, the government should be handing contracts to build the Royal Navy’s new fleet solid support vessels and a £1.25bn contract for Type 31e frigates (maritime security-focused platforms) to UK shipyards, using British made steel as part of an industrial strategy that supports jobs and communities across our four nations.
Yesterday it was reported that MPs had urged civil servants (defence officials) to pick a UK company for the £1billion contract for three Fleet Solid Support vessels for the Royal Fleet Auxiliary. Commons Defence Committee chairman and senior Tory MP Julian Lewis feared that foreign firms subsidised by their governments could undercut British rivals.
Penny-wise, pound foolish?
The MoD’s director general for finance told MPs the department’s biggest concern was “what will deliver the greatest value for money”- meaning the lowest bid – a narrow perspective. But as Labour MP John Spellar pointed out, the Treasury would benefit from tax revenue ploughed into public coffers if the work was carried out in the UK – “a significant return” – which would be multiplied by work given to British steel and component manufacturers.
Steve Turner said that a failure to have these ships made in Britain would be ‘a gross betrayal of UK ship workers and regional economies, putting at risk manufacturing skills vital to our country’.
George Monbiot recently pointed out that the Commons report on the Carillion fiasco is one of the most damning assessments of corporate behaviour parliament has ever published. It trounces the company’s executives and board and laments the weakness of the regulators.
But, as Prem Sikka said in his April article, it scarcely touches the structural causes that make gluttony a perennial feature of corporate life.
Both agree that the problem begins with an issue the report does not once mention: the extreme nature of limited liability. Sikka points out that this system, under which executives are only financially accountable for the value of their investment, has also benefited frauds and led to the self-enrichment of executives at the expense of workers, consumers, creditors, pensioners and citizens.
Monbiot adds that the current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion, leaving the 27,000 members of its schemes to be rescued by the state fund (which is financed by a levy on your pension – if you have one). The owners of the company were permitted to walk away from the £2 billion owed to its suppliers and subcontractors. (Left: the former Carillion chief executive Keith Cochrane in Westminster after appearing before the Commons work and pensions select committee)
Monbiot continues: “There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution. Their business models rely on dumping their costs on other people. Were they not protected by the extreme form of limited liability that prevails today, they would be obliged to switch to clean technologies”.
So what is to be done?
Prem Sikka (right) proposes that the bearers of unlimited risks and liabilities should be given rights to control the day-to-day governance and direction of companies.
He advocates including employees and citizen/consumers on company boards – because both ultimately have to bear the financial, health, social and psychological costs associated with environmental damage, pollution, poor products, industrial accidents, loss of jobs, pensions and savings. Through seats on company boards, they could secure a fairer distribution of income, challenge discrimination, curb asset-stripping and influence investment, training and innovation.
Across the 28 European Union countries (plus Norway), most have a statutory requirement for employee representation on company boards – unlike the UK, Belgium, Bulgaria, Cyprus, Estonia, Italy, Latvia, Malta and Romania.
George Monbiot proposes a radical reassessment of limited liability.
He points out that a recent paper by the US law professor Michael Simkovic proposes that companies should pay a fee for this indemnity, calibrated to the level of risk they impose on society. He adds, significantly, that as numerous leaks show, companies tend to be far more aware of the risks they inflict than either governments or the rest of society. Various estimates put the cost that businesses dump on society at somewhere between 4% and 20% of GDP
His own ‘tentative’ and ingenious proposal is that any manager earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors and wider social and environmental performance. This judgement should draw on mandatory social and environmental reporting, assessed by independent auditors.
If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.
Monbiot then says “I know that, at best, they address only part of the problem” and asks, “Are these the right solutions?
- support them,
- oppose them
- or suggest better ideas.
He ends: “Should corporations in their current form exist at all? Is capitalism compatible with life on earth?”
New Fleet Solid Support ships: cash-strapped MoD should look at the total cost-benefit of building in Britain
Jeremy Corbyn is in Glasgow today, where – reversing New Labour policy – he will call for Navy shipbuilding contracts to stay in the UK.
The contract could lead to over 6,500 jobs in the UK, 1,800 of those in shipyards: “Our proposal would both sustain existing shipbuilding and supply chain jobs and create new ones – right here in Scotland and also across the UK.”
The MOD, which is alleged to have ‘lost controls of costs’, hopes for a cheaper option. Its spokesman added: “We are launching a competition for three new Fleet Solid Support ships this year and strongly encourage British yards to take part”.
“Until the new Fleet Solid Support Ships (FSS) arrive, these hardy veterans must stagger on into the mid-2020s”
The three currently supporting ships supply ammunition, food and spares are “antiques built in the late 1970s and saw action in the Falklands War”. Corbyn warns:
“By refusing to help our industry thrive, the Conservatives are continuing their historic trend of hollowing out and closing down British industry. Over the course of the 1980s under the Tories, 75,000 jobs were lost in UK shipyards, leaving just 32,000 remaining.
“Our shipyards used to produce half of all new ships worldwide. Our current market share is now less than half a per cent. The Tories seem hell-bent on accelerating and deepening this industrial decline.”
SNP MSP for Glasgow Anniesland, Bill Kidd, is sceptical, saying: “Workers on the Clyde and people across Scotland haven’t forgotten Labour’s betrayal of the industry in 2014.
USA & Britain accept profitable onscreen violence and pornography but older civilisations are resisting it
Molly Scott Cato counted the costs of many aspects of contemporary life in Britain (2005, access here); now even so-called family newspapers regularly publish material which encourages voyeurism. Digital Spy recently commented on a Daily Mail article – one of its more harmless offerings – and one wonders what is prompting the “tide of sexual harassment allegations rising against British MPs from all parties” reported by the Financial Times and other media.
A loss of moral focus
Ms Scott Cato referred to ‘a loss of moral focus’ evident in the growth of pornography, “now much more prevalent that previously, perhaps because of the anonymity offered by the internet. Morality, if not moralizing, pervades the issues of hard-core pornography and paedophile pornography”.
Over the years a more casual attitude towards sex has developed, increasing rates of prostitution, and sexually transmitted disease – with chlamydia, asymptomatic in many cases, causing women to become infertile without even knowing they had a disease.
She notes that while society is ‘relaxed’ about pornography exploiting women we are in the midst of a moral panic about the apparent massive increase in child pornography so easily accessed via the internet: “According to the NSPCC, ‘between 1988 and the end of 2001 there was a 1,500% increase in the offences of making and taking or possessing child pornography in England and Wales, from 33 in 1988 to 549 in 2001’. The 81 convictions in 2000 for ‘possessing obscene material for gain’ and the 218 for ‘taking or making indecent photographs or pseudo-photographs of children’ are unlikely to reflect the true extent of the problem”.
There is no doubt, Ms Scott Cato concluded, that pornography is big business. ‘The ten bestselling British porn magazines sell about two million copies a month, bringing in a yearly total of about £45 million . . . The newspapers Sport, Sunday Sport and their associated titles are worth close to £500 million.’
As she was writing, India embarked on an anti-porn drive: the Hindustan Times and Reuters articles now only survive on social media. One article related that Indian police stopped the screening of a pornographic movie in the eastern state of Orissa and insisted that the audience do 10 sit-ups each at a public square and then vow not to watch pornography again. Police officer Sanjeev Panda said authorities had attempted to get theatres in district not to show pornography but had failed: “So we decided to crack down on the audience”. Newspapers also reported that police in Orissa planned to adopt these tactics in their general campaign against pornography which is illegal in India, but still screened in many cinemas. The link http://www.nbcnews.com/id/8613157/ was taken down but the article survives on many social media outlets.
The Print Ad titled EXPLOSION was done by Beijing Creative World Advertising advertising agency for product: Violent Network Games Awareness (brand: UNICEF (United Nations International Children’s Emergency Fund)) in China.
This week, China’s media regulators said that PlayerUnknown’s Battlegrounds (PUBG), a smash-hit survival game that has sold over 13 million copies since its release in March, will be unlikely to get a license to be officially launched in China.
The official China Audio-Video Copyright Association has recommended Chinese gaming firms not to develop or distribute such games, and asked domestic live-streaming platforms not to promote the survival genre. It published a notice (link in Chinese) stating that the game contains too much blood and gore. Its online statement said the violently competitive spirit behind them is “against our country’s core socialist values and the Chinese nation’s traditional cultural behaviors and moral principles, and is bad for teenagers’ physical and mental health.”
There is an obvious parallel between the lack of concern shown by the British government for the well-being of vulnerable people most likely to be affected by violent and/or pornographic material and those physically and/or economically vulnerable to their inhumane cuts in welfare payments.
As Anil Sasi (Indian Express) notes: “Inland waterways are a far more efficient mode of transportation than either road or rail, considering that just a single mid-sized barge has the dry-cargo capacity equivalent to 50 trucks or over 10 railcars. As a consequence, transportation of cargo over inland waterways offers the advantage of both lowering carbon dioxide emissions and curbing the rate of road accidents, where India has the dubious distinction of being among the worst in the world”.
The Indian government passed The National Waterways Bill in March. The Statement of Objects and Reasons of the Bill states that while inland waterways are recognised as a fuel efficient, cost effective and environment friendly mode of transport, it has received far less investment than roads and railways. Large rivers and canals across the country have been designated as national waterways, to be developed to enable more movement of goods and passengers.
Britain’s Commercial Boat Operators’ Association (CBOA) agrees with its statement recommending the carriage of bulk goods on waterways. Goods in India travel by congested road and rail networks, which increases the costs of trade logistics by as much as 18% of the country’s GDP. The government statement continues: “Although it is cheaper, more reliable and less polluting than transporting them by road or rail, India has yet to develop this cheaper and greener mode of transportation”. (Read on here: CHS-Sachetan)
In April the World Bank announced a $375 million loan to help the Inland Waterways Authority of India to put in place the infrastructure and navigation services needed to develop National Waterway 1 as an efficient ‘logistics artery’ for northern India. The loan will enable the design and development of a new fleet of low-draft barges capable of carrying up to 2000 tonnes of cargo in these shallower depths.
Section 3 of its 322 page 2016 report: Consolidated Environmental Impact Assessment Report of National Waterways includes an assessment of inland waterway transport’s impact on climate change, concluding that this is the most efficient and environmental friendly mode of transportation, involving least CO2 generation when compared with rail & road. An estimate of the CO2 emissions from different modes of transportation for the same quantity of cargo for a similar distance is that CO2 would be reduced and a net saving of 4.54 million tonnes realised over a period of 30 years (till 2045).
A gradual expansion of waterway freight transport would reduce transport costs, road accidents and urban air pollution.
In both countries manufacturers, the construction industry and agricultural producers would be enabled to use waterway transport to reach markets at home and abroad.
Paul Simons adds to many ‘wakeup calls’ – writing about high temperatures, drought and wildfires.
May and June were also phenomenally hot across Portugal, Italy, the Balkans, Greece and Turkey.
Heat and drought have helped to fuel wildfires in Spain and Italy, and wildfires near the seaside resort of Calampiso in Sicily forced the evacuation by boat of about 700 tourists on Wednesday night. In Greece the heatwave led the culture ministry to close archaeological sites around the country, including the Acropolis in Athens.
Together with a long-running drought, the heat has ravaged much of southern Spain, leading to a devastated wheat and barley harvest. If the arid conditions continue, there are also fears for the olive, walnut, almond and grape harvests and the wellbeing of livestock. Rainfall has been desperately low this year, but the country has been suffering from a lack of rain for five years.
Drought threatens to reduce cereal production in Italy and parts of Spain to its lowest level in at least 20 years, and hit other regional crops. Castile and Leon, the largest cereal growing region in Spain, has been particularly badly affected, with crop losses estimated at around 60 to 70%. While the EU is collectively a major wheat exporter, Spain and Italy both rely on imports from countries including France, Britain and Ukraine.
Deadly heatwaves for much of South Asia – yet many of those living there will have contributed little to climate change
The Guardian adds to the news from Europe: India recorded its hottest ever day in 2016 when the temperature in the city of Phalodi, Rajasthan, hit 51C. Another study led by Prof Elfatih Eltahir, at Massachusetts Institute of Technology in the US, linked the impact of climate change to the suicides of nearly 60,000 Indian farmers.
The analysis, published in the journal PNAS, assesses the impact of climate change on the deadly combination of heat and humidity, measured as the “wet bulb temperature” (WBT). Once this reaches 35C, the human body cannot cool itself by sweating and even fit people sitting in the shade will die within six hours.
Prof Chris Huntingford, at the UK Centre for Ecology and Hydrology, said: “If given just one word to describe climate change, then ‘unfairness’ would be a good candidate. Raised levels of carbon dioxide in the atmosphere are expected to cause deadly heatwaves for much of South Asia. Yet many of those living there will have contributed little to climate change.”
Guardian journalists comment sarcastically, “But fear not: by 2040, no new diesel or petrol vehicles will be sold in the UK
This, apparently, is the appropriate timetable for responding to what a parliamentary committee calls a “public health emergency”. A child born today will be 23 by the time this policy matures – by then the damage to the development of her lungs and brain will have been done”.
According to Professor Eltahir’s study, if emissions are reduced roughly in line with the global Paris climate change agreement there would be no 35C WBT heatwaves and the population affected by the 31C WBT events would fall from 75% to 55%. About 15% are exposed today.
A National Geographic article says most people agree that to curb global warming a variety of measures need to be taken. On a personal level, driving and flying less, recycling, and conservation reduces a person’s “carbon footprint”—the amount of carbon dioxide a person is responsible for putting into the atmosphere.
At present, lorries shifting identical goods in opposite directions pass each other on 2,000-mile journeys. Competing parcel companies ply the same routes, in largely empty vans – a theme explored by MP Caroline Lucas and Colin Hines in 2003 – the Great Trade Swap.
It describes airports as deadly too – yet government and opposition alike are ‘apparently hell-bent’ on expanding Heathrow, exploring airport expansion projects elsewhere and seeking post-Brexit trade deals with distant countries.
To reduce the risk of ever more extreme weather, we must reduce the amount of fossil fuel we are burning – and the measures taken will have other desirable consequences as the following cartoon shows:
Parliament must listen to its Committee on Climate Change – chairman John Gummer. As the East Anglian Times reported in June, its annual progress report calls for “urgent” plans to meet legal targets for carbon cuts by 2032 as greenhouse gases from transport and buildings continue to rise.
The committee advocates action to bridge the gap between existing policies and what is needed to achieve required emissions reductions by the mid-2020s – boosting electric vehicles and cutting greenhouse gas emissions from the heating of homes to help to meet UK climate targets.