Geopolitics, Trade and Foreign Policy — Changing Global Landscape & Growing Uncertainty.

Currency Wars
     A large number of trade and foreign policy issues have arisen the last few weeks. They include among others Chinese investment into the U.S., the revival of Iraqi issues, global tax avoidance of MNC, and the Supreme Court and global debt agreements, and tax incentives for economic development.  The reemergence of geopolitical  considerations as well as continuing financial and tax problems relating to global transactions have taken center stage. They constitute ongoing problems that characterize a growing uncertain and changing global environment. Here are the particulars:
….New $2 billion dollar Chinese investment into Virginia just announced. New paper plant in central Virginia. Foreign direct investment is crucial to Virginia’s economic development. Great success story. “Chinese Investment into Virginia.” Richmond Times-Dispatch (June 20, 2014).
…. The man who brought us the bogus war in Iraq is now blasting Obama, again. The chaos in Iraq is a direct result of the illegal invasion of Iraq by the Bush Administration. Clear and simple. Let’s not forget it. The solution is not to triple  down on the deeply discredited Bush – Cheney doctrine. But to support functioning governments that hold some promise such as in Kurdistan, Jordan, Tunisia, UAE, Turkey and others in the region. This is a civil and religious war that is to be avoided. To make matters worse this is being fought over old colonial borders that made no sense. Our policy should be one of strategic repositioning and containment of terrorist states and entities. This is most realistic. “Cheney and Iraq — The Collapsing Obama Doctrine.” Wall Street Journal (June 18, 2014).
…. Agricultural exports is a bright spot in exports from Virginia especially to China.Agriculture Exports to China from Virginia.” Richmond Times-Dispatch (June 20, 2014).
…. Economic & tax Incentives are increasing among the states as tools of economic development. “Tax-Incentives Arms Race.” Wall Street Journal (June 16, 2014).
…. Supreme Court rules against Argentina in a major case applying U.S. law to global financial bond obligations involving foreign sovereigns. Good for rule of law in global transactions. “Don’t Cry for Argentina.” Wall Street Journal (June 16, 2014).
…. Back to accessing critical national interests in foreign policy and aligning actions pragmatically. ‘American Exceptionalism” and the “New Disorderly World” makes for hard choices. No knee-jerk reactions wanted.For the U.S. — A Disappointing World.” Wall Street Journal (June 13, 2014).
…. New phrase — “Profits, not Sales being Globalized.” But same old story. Profits reported offshore to minimize effective tax rates. Huge sums banked in tax havens. Especially by tech and pharma firms such as Apple, Microsoft, Google, Pfizer, Cisco, Oracle, Merck … Transfer- pricing, bank secrecy, tax havens named as usual suspects. Everyone is now looking including the OECD, G7, the SEC, EU, U.K., WTO and more. Some change possible. Hopefully. But don’t hold your breadth. “Taxing Times Ahead.” Financial Times (June 13, 2014).
…. Nothing like blaming the U.S. Gov’t for tax avoidance by U.S. MNCs and pointing to European tax systems as a model. They are now being investigated by the EU. Don’t shift the blame to the system. What about some corporate responsibility?Lose-Lose Tax Policy.” Wall Street Journal (June 11, 2014).

 

 

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About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (School of Public Policy).
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