Whether you fear or welcome a challenge to the world’s existing power structure, the main focus of attention is on when China will begin to translate its increasing influence into genuine global leadership. And after a period when China has widely been seen as wanting to have power without leadership or responsibility, there are some signs that things are beginning to change.
Australia’s farmers, particularly beef producers, may have celebrated too early when the Japan–Australia Economic Partnership Agreement (JAEPA) took effect on 15 January 2015. The deal may be gazumped by another that is taking shape between Japan and the United States in the Trans-Pacific Partnership (TPP) negotiations. Some elements of the proposed US–Japan agreement are reminiscent of the kind of bilateralism — or US-specific agricultural market concessions — that characterised Japan’s trade policy in earlier decades.
A ceasefire in Ukraine appears to have been reached, and despite some confusion late yesterday, no compromise has been struck over the new Greek government’s demand that it is recognized that the previous agreements are not working. However, that may give a false sense of what is the more intractable problem.
Property in the United States is getting more expensive and demand for real estate is falling even when mortgage rates remain at record lows.
A flurry of indicators suggests that the real estate market in the U.S. is slowing due to steady price gains, while mortgage-refinancing activity is slowing, as interest rates have remained tightly range-bound in the past few years.
The Euro group meeting today and the heads of state meeting tomorrow cannot resolve the standoff with Greece. The logic of each side demands negotiating until the very last minute as the only way to ensure achieving the most. Of course, the nature of the brinksmanship exercise risks a miscalculation that sends both into the abyss. Meanwhile the lack of contagion emboldens the creditors while fresh off the electoral victory and vote of confidence emboldens the new Greek government.
Stocks surged in Europe and the United States as rumors floated about an announcement, maybe tomorrow, regarding an agreement over Greece’s debt.
Equities rose as rumors surfaced that the European Commission will announce a compromise between the European Central Bank, the German Bundesbank, and the Greek government. The EC denied the rumors, acknowledging that “intense contacts” continue between the EC President Jean-Claude Juncker and Greek representatives.
It is official: India and the US will resume negotiations on a high-standard bilateral investment treaty (BIT). In a recent joint statement Prime Minister Narendra Modi and President Barack Obama affirmed their ‘shared commitment to facilitating increased bilateral investment flows and fostering an open and predictable climate for investment’. Since 2008, the two countries have been engaged in sporadic discussions to conclude the treaty. Negotiations on its wording, based on each country’s revised model treaty texts, will begin soon.
Oil prices may fall again by over 50% even as rising geopolitical tensions threaten energy supply chains in Europe. A report by Citigroup suggests that oil can fall to as little as $20 per barrel as a result of historically unprecedented supply storages, a situation exacerbated by record production in Brazil and Russia as the countries seek to make up for falling prices with higher volumes.
Many bilateral FTAs signed to date in Asia have not brought significant commercial or domestic reform or benefits. For one thing, bilateral ‘free trade agreements’ (which are preferential in character) are less likely to deliver substantial trade opening benefits unless the partners to them are a very large part of global trade, like the United States, Europe and China are for example.
The critics were right. Ten years after the Australia–United States free trade agreement (AUSFTA) came into force, new analysis of the data shows that the agreement diverted trade away from the lowest cost sources. Australia and the United States have reduced their trade with rest of the world by US$53 billion and are worse off than they would have been without the agreement.
