tag:theconversation.com,2011:/au/topics/tariffs-14777/articlesTariffs – The Conversation2024-03-10T11:31:59Ztag:theconversation.com,2011:article/2254442024-03-10T11:31:59Z2024-03-10T11:31:59ZHundreds of tariffs to go from July 1 in biggest unilateral tariff cut in decades<p>The Albanese government will abolish almost 500 so-called “nuisance” import tariffs from July 1. </p>
<p>Items set to become tariff-free include toothbrushes, hand tools, fridges, dishwashers, clothing, and menstrual and sanitary products. The tariff on such products is 5%. The cost to the budget has not yet been announced, partly because the plan is subject to consultations.</p>
<p>The decision will be the centrepiece of a speech Treasurer Jim Chalmers will make to a business audience in Sydney on Monday. Later, in another speech this week, Chalmers will set out some directions for the May budget. </p>
<p>The government says this is “the biggest unilateral tariff reform in at least two decades”, hailing it as a gain for productivity. </p>
<p>“It will cut compliance costs, reduce red tape, make it easier to do business, and boost productivity,” the government said in a statement, adding these tariffs do not protect Australian businesses. </p>
<p>The reforms were an important step in simplifying Australian trade, and would particularly assist small and medium-sized firms. </p>
<p>“After successive trade agreements, most goods are now imported duty-free. This means that businesses spend time and money proving their imports are eligible for existing tariff preferences and concessions, a compliance cost they often pass on to consumers, ” the statement said. </p>
<h2>Cheaper toothbrushes, tools and tampons</h2>
<p>Chalmers said: “Tariff reform will also provide a small amount of extra help with the cost-of-living challenge by making everyday items such as toothbrushes, tools, fridges, dishwashers and clothing just a little bit cheaper”.</p>
<p>The changes will scrap 14% of Australia’s total tariffs, streamlining about $8.5 billion worth of annual trade. Businesses will save more than $30 million in compliance costs each year, on the government’s estimate. </p>
<p>A Productivity Commission report in 2020 defined <a href="https://www.pc.gov.au/research/completed/nuisance-tariffs/nuisance-tariffs.pdf">nuisance tariffs</a> as </p>
<blockquote>
<p>tariffs that raise little revenue, have negligible benefits for producers, but impose compliance burdens</p>
</blockquote>
<p>It said the administrative costs of collecting these tariffs amounted to $11 million to $20 million per year.</p>
<p>The government gave the following list of examples of products set to see the removal of the 5% customs duties and what revenue the tariffs currently raise annually:</p>
<ul>
<li><p>Washing machines with annual imports worth over $490 million, raise less than $140,000 in revenue per year</p></li>
<li><p>Fridge-freezers with imports worth over $668 million – less than $28,000 </p></li>
<li><p>Tyres for agricultural vehicles, tractors or other machines with imports worth over $102 million – less than $10,000 </p></li>
<li><p>Protective footwear with imports worth $160 million – less than $112,000 </p></li>
<li><p>Toothbrushes with imports worth over $84 million – less than $22,000</p></li>
<li><p>Menstrual and sanitary products with over $211 million worth of imports – less than $3 million </p></li>
<li><p>X-ray film with over $160,000 in imports – less than $200 </p></li>
<li><p>Chamois leather with $100,000 in imports – less than $1,000</p></li>
<li><p>Pyjamas with almost $108 million in imports – less than $120,000 </p></li>
<li><p>Fishing reels with over $50 million in imports – less than $140,000 </p></li>
<li><p>Rollercoasters with over $16 million in imports – less than $40,000 </p></li>
<li><p>Dodgem cars with over $2 million in imports – less than $15,000 </p></li>
<li><p>Ballpoint pens with imports worth over $57 million – less than $95,000 </p></li>
<li><p>Toasters with imports worth over $49 million – less than $1,000 </p></li>
<li><p>Electric blankets with imports worth over $31 million – less than $5,000 </p></li>
<li><p>Bamboo chopsticks with over $3 million in imports – less than $3,000.</p></li>
</ul>
<p>Removing tariffs on menstrual and sanitary items will align tariff policy settings with changes previously made to the GST. </p>
<p>The government said consultation on the proposed initial reforms is underway, with submissions open on the Treasury website and closing on April 1. </p>
<p>“The tariffs identified have been selected because their abolition will deliver benefits for businesses without adversely impacting Australian industries or constraining Australia in sensitive FTA negotiations,” the government said in its statement. </p>
<p>The full list of abolished tariffs will be finalised and provided in the May budget. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-a-secret-plan-50-years-ago-changed-australias-economy-forever-in-just-one-night-209378">How a secret plan 50 years ago changed Australia's economy forever, in just one night</a>
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<p>Chalmers said:“This is meaningful economic reform that will deliver meaningful benefits to businesses of all sizes around Australia.</p>
<p>"These tariffs impose a regulatory burden on Australian businesses and raise the costs of imported goods but they do little to protect our workers and businesses because they apply to goods that are mostly already eligible for duty-free importation.</p>
<p>"These tariff reforms will be better for businesses, better for consumers and better for the economy.”</p>
<p>Trade Minister Don Farrell said: “With one in four Australian jobs trade-related, and 27% of Australia’s economic output supported by trade, the importance of trade to Australia’s national wellbeing cannot be overstated.</p>
<p>"Trade that is simple, fast, and cost-effective can boost Australia’s international competitiveness, help create jobs, and reduce cost of living pressures.” </p>
<p>The Whitlam government began the journey to cut protection by cutting tariffs 25% across-the-board. The Hawke-Keating governments in the late 1980s and early 1990s undertook comprehensive tariff reductions and the elimination of import quotas.</p>
<p>The Howard government cut most tariffs to no more than 5% and many to zero.</p><img src="https://counter.theconversation.com/content/225444/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Imported hand tools, fridges, dishwashers, clothing, and menstrual and sanitary products to be cheaper from July 1.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2249482024-03-04T22:59:07Z2024-03-04T22:59:07ZWTO conference ends in division and stalemate – does the global trade body have a viable future?<p>The 13th World Trade Organization (WTO) ministerial conference in Abu Dhabi has failed to resolve any issues of significance, raising the inescapable question of whether the global trade body has a future.</p>
<p>The three-day meeting was due to end on February 29. But late into a fourth extra day, the 164 members were struggling to even agree on a declaration, let alone the big issues of agriculture, fisheries and border taxes on electronic commerce.</p>
<p>The <a href="https://www.youtube.com/watch?v=EJdw3ENDQTY">closing ceremony</a> was sombre, and the <a href="https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN24/W12R1.pdf&Open=True">ministerial declaration</a> bland, stripped of the substantive content <a href="https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN24/W12.pdf&Open=True">previously proposed</a>. Outstanding issues were kicked back to the WTO base in Geneva for further discussions, or for the next ministerial conference in 2026.</p>
<p>Briefing journalists in the closing hours, an EU spokesperson noted how hard it would be to pick up the pieces in Geneva after they failed to create momentum at the ministerial conference. She predicted:</p>
<blockquote>
<p>[Trade] will be more and more characterised by power relations than the rule of law, and that will be a problem notably for smaller countries and for developing countries.</p>
</blockquote>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1763459240725791093"}"></div></p>
<h2>Restricted access</h2>
<p>That imbalance is already evident, with power politics characterising the conference from the start. </p>
<p>There were <a href="https://www.reuters.com/world/middle-east/activists-criticise-civil-society-restrictions-wto-meeting-uae-2024-02-28/">accusations of unprecedented restrictions</a> on non-governmental organisations (NGOs) registered to participate in the conference. These bodies are crucial to bringing the WTO’s impacts on farmers, fishers, workers and other communities into the negotiation arena.</p>
<p>A number of NGOs have <a href="https://www.twn.my/title2/wto.info/2024/ti240228.htm">submitted formal complaints</a> over their treatment by conference host the United Arab Emirates. They say they were isolated from delegations, banned from distributing papers, and people were arbitrarily detained for handing out press releases. </p>
<p>Critical negotiations were conducted through controversial “green rooms”. These were where the handpicked “double quad” members – the US, UK, European Union, Canada, China, India, South Africa and Brazil – tried to broker outcomes to present to the rest for “transparency”.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/privilege-or-poisoned-chalice-as-deputy-chair-at-next-weeks-wto-meeting-nz-confronts-an-organisation-in-crisis-223849">Privilege or poisoned chalice? As deputy chair at next week’s WTO meeting, NZ confronts an organisation in crisis</a>
</strong>
</em>
</p>
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<h2>Influence of power politics</h2>
<p>These powerful countries largely determined the outcomes (or lack of them). The US, historically the agenda-setter at WTO ministerial conferences, appeared largely disinterested in the proceedings, with trade representative Katherine Tai leaving early.</p>
<p>The final declaration says nothing about restoring a two-tier dispute body, which has been <a href="https://www.bloomberg.com/news/newsletters/2023-08-30/supply-chains-latest-paralysis-at-wto-appellate-body-hurts-global-trade">paralysed since 2019</a> by the refusal of successive US Republican and Democratic administrations to appoint new judges to the WTO’s <a href="https://www.wto.org/english/tratop_e/dispu_e/appellate_body_e.htm">appellate body</a>.</p>
<p>The EU <a href="https://ec.europa.eu/commission/presscorner/detail/en/statement_24_933">failed to secure progress</a> on improvements to the appeal process. Likely Republican presidential nominee Donald Trump has <a href="https://www.cnbc.com/2024/02/04/trump-floats-more-than-60percent-tariffs-on-chinese-imports.html">already announced</a> he would impose massive WTO-illegal tariffs on China if elected.</p>
<p>China, Japan, the US and EU – all big subsidisers of distant water fishing fleets – blocked an outcome aiming to protect global fish stocks, an issue already deferred from the last ministerial meeting.</p>
<p>The <a href="https://www.reuters.com/world/asia-pacific/fisheries-deal-wto-insufficient-pacific-islands-fiji-says-2024-02-29/">six Pacific Island</a> WTO members lobbied tirelessly for a freeze and eventual reduction in subsidies. But the text was diluted to the point that no deal was better than a bad deal.</p>
<p>The EU, UK, Switzerland and other pharmaceutical producers had already blocked consensus on lifting patents for <a href="https://www.business-standard.com/india-news/india-seeks-5-yr-patent-waiver-for-covid-diagnostics-therapeutics-from-wto-123120600256_1.html">COVID-19 therapeutics</a> and diagnostics, sought by 65 developing countries. A deal brokered in 2021 on COVID vaccines is so complex no country has used it.</p>
<h2>Domestic and global agendas</h2>
<p>India’s equally uncompromising positions also reflected domestic priorities. The 2013 Bali ministerial conference promised developing countries a permanent solution to prevent legal challenges to India’s subsidised stockpiling of food for anti-hunger programmes. </p>
<p>A permanent solution was a red line for India, which faces an election next month and mass protests from farmers concerned at losing subsidies. </p>
<p>Agricultural exporters, including New Zealand, tabled counter-demands to broaden the agriculture negotiations. The public stockpiling issue remains a stalemate, without any real prospect of a breakthrough.</p>
<p><a href="https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN24/29.pdf&Open=True">India</a> and South Africa formally objected to the adoption of an <a href="https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN24/17R1.pdf">unmandated plurilateral</a> agreement on <a href="https://www.wto.org/english/tratop_e/invfac_public_e/invfac_e.htm">investment facilitation</a>. </p>
<p>The concerns were less with the agreement itself and more with the precedent it would create for sub-groups of members to bypass the WTO’s rule book. This would allow powerful states to advance their favoured issues while developing country priorities languish.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-developing-countries-must-unite-to-protect-the-wtos-dispute-settlement-system-224102">Why developing countries must unite to protect the WTO's dispute settlement system</a>
</strong>
</em>
</p>
<hr>
<h2>Crisis and transformation</h2>
<p>The face-saver for the conference was the temporary extension of a highly contested <a href="https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN24/W26.pdf&Open=True">moratorium</a> on the right to levy customs duties at the border on transmissions of digitised content.</p>
<p>Securing that extension (or preferably a permanent ban on e-commerce customs duties) on behalf of Big Tech was the main US goal for the conference. Developing countries opposed its renewal, so they could impose tariffs both for revenue and to support their own digital industrialisation.</p>
<p>The moratorium will now expire in March 2026, so the battle will resume at the next ministerial conference scheduled to be held in Cameroon that year. </p>
<p>But there is every likelihood the current paralysis at the WTO will continue, and the power politics will intensify. As the previously quoted EU spokesperson also mused:</p>
<blockquote>
<p>Perhaps the WTO needed a good crisis, and perhaps this will lead to a realisation that we cannot continue like this.</p>
</blockquote>
<p>Ideally, that would result in a fundamentally different international institution – one that provides real solutions to the 21st century challenges on which the WTO is unable to deliver.</p><img src="https://counter.theconversation.com/content/224948/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jane Kelsey attended the WTO ministerial as a representative of the Pacific Network on Globalisation (PANG), and as an invited Guest of the Chair. She advises a number of developing country governments on these issues. She is not paid by, and this is not written on behalf of, any of them. </span></em></p>The recent World Trade Organization conference in Abu Dhabi has again failed to resolve any of the big issues on the table. Power relations rather than rule-based negotiation will fill the void.Jane Kelsey, Emeritus Professor of Law, University of Auckland, Waipapa Taumata RauLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2185852023-11-29T10:00:24Z2023-11-29T10:00:24ZGhana wants to restrict imports on 22 products – an economist explains how, why and what else must be done<p><em>Ghana’s Ministry of Trade and Industry has <a href="https://www.modernghana.com/news/1275386/licensing-regime-for-import-restrictions-archaic.html">tabled</a> in parliament a proposed ban or restrictions on imports of certain goods, including rice, sugar, poultry, fruit juices and animal intestines (tripe). The proposed legislation empowers the trade minister to issue licences to potential importers of goods. Critics of the policy say it will give too much power to the minister and create room for corruption. The Conversation Africa’s Godfred Akoto Boafo spoke to development economist <a href="https://theconversation.com/profiles/adu-owusu-sarkodie-774216">Adu Owusu Sarkodie</a> about the policy.</em></p>
<h2>What are import restrictions?</h2>
<p>These refer to the various schemes, mechanisms and regulations that a government can impose to restrict or limit the importation of goods and services. They come in different forms.</p>
<p><strong>Tariffs</strong>: These are taxes imposed on imported goods and services. They can be specific taxes (a fixed amount per unit) or ad valorem (a percentage of the value) or both. </p>
<p><strong>Quotas</strong>: This means a direct restriction on the quantity of a particular good that can be imported at a specified period of time. It is enforced by issuing licences to individuals or firms.</p>
<p><strong>Embargos and sanctions</strong>: This involves a ban on the importation of a particular good. Importing a banned good is illegal. </p>
<p><strong>Quality standards and technical barriers</strong>: A country can set stringent requirements that imported goods must meet.</p>
<p><strong>Local content requirements</strong>: In terms of this regulation a specified fraction of a final good must be produced domestically, either in physical units or in value terms.</p>
<p>The choice of a particular form of import restriction depends on the geopolitical, economic and social characteristics of the country.</p>
<h2>What role does it play as an economic strategy?</h2>
<p><strong>Protection of domestic and infant industries</strong>: Restrictions such as tariffs and quotas can raise the prices of imported goods and make domestic goods more <a href="https://corporatefinanceinstitute.com/resources/economics/protectionism/">competitive</a>. This can stimulate local producers to produce more, grow and develop.</p>
<p><strong>Revenue to the government</strong>: Import restrictions such as tariffs are a source of revenue for the government. </p>
<p><strong>Balance of payments and trade deficits management</strong>: Import restrictions help in correcting balance of payment issues and can reduce <a href="https://libertystreeteconomics.newyorkfed.org/2018/08/do-import-tariffs-help-reduce-trade-deficits/">trade deficits</a>. This can help countries achieve <a href="https://libertystreeteconomics.newyorkfed.org/2018/08/do-import-tariffs-help-reduce-trade-deficits/">economic gains</a> needed for long term growth and development.</p>
<p><strong>Environmental and health considerations</strong>: These restrictions can also help address <a href="https://idrc-crdi.ca/en/news/taxation-sugar-sweetened-beverages-win-win-ghanas-public-health-strategy#:%7E:text=The%20tax%20bill%20was%20approved,tea%2C%20sodas%20and%20energy%20drinks">environmental and health concerns</a>. </p>
<p>Excessive import restrictions can backfire, however, if foreign countries retaliate.</p>
<h2>Why is Ghana considering import restrictions?</h2>
<p>A number of reasons have led to this.</p>
<p><strong>Health concerns</strong>: There have been concerns about the <a href="https://www.ghanaweb.com/GhanaHomePage/business/Government-to-restrict-the-importation-of-rice-yemuadie-and-other-products-1884650">quality</a> of some of the imported food items and pharmaceuticals. </p>
<p><strong>Protection of domestic and infant industries</strong>: Cheap imports are leading to the collapse of <a href="https://mpra.ub.uni-muenchen.de/117982/1/Performan">domestic firms</a>. They are suffering from <a href="https://thebftonline.com/2023/11/27/govt-borrowing-risks-choking-private-sector/">high borrowing costs</a> and eroding capital as a result of inflation. The government can protect them by placing restrictions on some of these cheap imports. That will make them competitive, and save foreign exchange.</p>
<p><strong>Trade deficits and balance of payments support</strong>: These restrictions will reduce imports. All else being equal, they will improve the country’s trade balance and balance of payments. The government will have enough foreign exchange reserves and be able to finance its developmental agenda. </p>
<p><strong>Revenue to the government</strong>: One of the International Monetary Fund <a href="https://www.bloomberg.com/news/articles/2023-04-14/imf-director-says-ghana-has-taken-enough-pain-to-unlock-aid?embedded-checkout=true">conditions</a> for financial assistance to Ghana is that government must increase tax revenues. It can do this through tariffs. </p>
<p><strong>Stabilise the currency</strong>: These restrictions will reduce the amount of <a href="https://theconversation.com/ghanas-cedi-is-under-stress-some-long-medium-and-short-term-solutions-178063">foreign currency used for imports</a>. This increases the forex supply and helps to stabilise the currency.</p>
<h2>Have other African countries done this?</h2>
<p>The <a href="https://www.eac.int/">East African Community</a>, comprising Kenya, Rwanda, Burundi, Tanzania, Uganda, South Sudan and the Democractic Republic of Congo, has numerous import restrictions. These countries have a common external tariff on the cost, insurance and freight value of imports. And they ban some goods such as some pharmaceuticals, narcotic drugs, firearms and ammunition, explosives, pornography, genetically modified products and plastic bags.</p>
<p>South Africa, Botswana, Lesotho, Eswatini and Namibia as part of the <a href="https://www.sacu.int/">Southern African Customs Union</a> also administer a common external tariff on imports from other countries. They ban or have quotas on some goods such as narcotics and habit-forming drugs.</p>
<p>Nigeria has its own <a href="https://www.trade.gov/country-commercial-guides/nigeria-prohibited-and-restricted-imports">restrictions</a> on some products. These include rice, pork, beef, live or dead birds including frozen poultry, cocoa butter, spaghetti and some pharmaceuticals.</p>
<h2>What is the way forward?</h2>
<p>In addition to the import restrictions, the following recommendations could assist Ghana.</p>
<p><strong>Diversification of the economy</strong>: Ghana must support industries beyond traditional sectors like agriculture and mining. Investing in technology, innovation and value-added production can contribute to a more resilient economy. </p>
<p><strong>Investment in education and skills development</strong>: This can involve investments in science, technology, engineering and mathematics education to meet the demands of a modern and diverse economy.</p>
<p><strong>Infrastructure development</strong>: Invest in critical infrastructure such as roads, ports and energy to reduce transportation costs, enhance connectivity and attract investment.</p>
<p><strong>Promotion of export-oriented industries</strong>: By focusing on products and services that have demand in the international market, Ghana can boost its export earnings and improve its trade balance.</p>
<p><strong>Trade facilitation and ease of doing business</strong>: Simplify trade processes and make it easier to do business. Streamlining customs procedures, reducing bureaucratic hurdles, and enhancing the overall business environment can attract investments and promote economic growth.</p>
<p><strong>Enhanced agricultural productivity</strong>: Invest in research and development. Promote sustainable farming practices, introduce modern technologies and improve access to markets for farmers.</p>
<p><strong>Corruption mitigation</strong>: An environment of good governance can attract investments and build confidence in the business community.</p>
<p><strong>Continuous policy review</strong>: Economic policies must adapt to changing circumstances. Flexibility and responsiveness to economic conditions are crucial for effective governance.</p>
<p>Inward looking or import substitution strategies have been adopted by many countries at the early stages of their development. The critical question is how much to produce to meet demand, and what quality. All stakeholders must ensure production to meet demand while ensuring quality.</p><img src="https://counter.theconversation.com/content/218585/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adu Owusu Sarkodie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The policy is the latest strategy to grow Ghana’s weak industrial base.Adu Owusu Sarkodie, Lecturer, Department of Economics, University of GhanaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2093782023-07-17T20:03:17Z2023-07-17T20:03:17ZHow a secret plan 50 years ago changed Australia’s economy forever, in just one night<figure><img src="https://images.theconversation.com/files/537211/original/file-20230713-19-5w34v3.png?ixlib=rb-1.1.0&rect=183%2C113%2C864%2C525&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>At a time when governments are timid, keener to announce <a href="https://www.pc.gov.au/inquiries/completed/productivity/report">reviews</a> than decisions, it’s refreshing to remember what happened 50 years ago today – on July 18 1973.</p>
<p>Inflation had surged to <a href="https://www.datawrapper.de/_/vu9by/">14%</a>. Australia’s biggest customer, the United Kingdom, had joined the <a href="http://news.bbc.co.uk/onthisday/hi/dates/stories/january/1/newsid_2459000/2459167.stm">European Economic Community</a>, agreeing to buy products from it rather than Australia. And the newly formed Organisation of Arab Petroleum Exporting Countries had <a href="https://advisor.visualcapitalist.com/historical-oil-prices/">doubled</a> the price of oil.</p>
<p>The tariffs imposed on imported goods to protect Australian manufacturers from competition were extraordinarily high. For clothing, they reached <a href="https://www.pc.gov.au/inquiries/completed/textile-clothing-footwear-1997/59tcf2.pdf">55%</a>; for motor vehicles, <a href="https://ro.uow.edu.au/cgi/viewcontent.cgi?article=1077&context=commwkpapers">45%</a>.</p>
<p>Then, with absolutely <a href="http://andrewleigh.org/pdf/Trade%20liberalisation%20and%20the%20ALP.pdf">no</a> public indication he had been considering anything as drastic, at 7pm on Wednesday July 18, the recently elected prime minister Gough Whitlam made an <a href="https://pmtranscripts.pmc.gov.au/sites/default/files/original/00002971_0.pdf">announcement</a>.</p>
<h2>Every tariff cut by one quarter overnight</h2>
<p>From midnight, all tariffs would be cut by 25%. As Whitlam put it: “each tariff will be reduced by one quarter of what it is now”.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/537215/original/file-20230713-21-4hds6p.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/537215/original/file-20230713-21-4hds6p.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=964&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537215/original/file-20230713-21-4hds6p.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=964&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537215/original/file-20230713-21-4hds6p.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=964&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537215/original/file-20230713-21-4hds6p.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1212&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537215/original/file-20230713-21-4hds6p.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1212&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537215/original/file-20230713-21-4hds6p.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1212&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://pmtranscripts.pmc.gov.au/sites/default/files/original/00002971_0.pdf">Gough Whitlam's statement</a></span>
</figcaption>
</figure>
<p>If Australian businesses (and the Australian public) were caught by surprise, it was because Whitlam had planned the whole thing in secret.</p>
<p>He had given a six-person committee just three weeks to work out the details.</p>
<p>Although the committee was chaired by the head of the Tariff Board, Alf Rattigan, and included an official from Whitlam’s own department, the department of industry and the department of trade, it met in an obscure location in Canberra’s civic centre rather than in public service offices, where the project might be discovered.</p>
<p>Not included in the committee was a representative of the treasury, which its then deputy head John Stone said “<a href="https://cdn.theconversation.com/static_files/files/2744/Stone__The_Inside_Story_of_Gough%E2%80%99s_Tariff_Cut__in_The_Australian__18_July_2003..pdf">knew nothing</a>” about what was unfolding.</p>
<p>But driving the work of the committee were two academic outsiders – Fred Gruen, an economics professor at the Australian National University and adviser to Whitlam, and Brian Brogan, an economics lecturer at Monash University who was advising the trade minister, Jim Cairns.</p>
<h2>Outsiders, not treasury insiders</h2>
<p>As economists rather than bureaucrats, Gruen and Brogan were able to see benefits where others saw entrenched interests. Going to the tariff board and asking for extra tariffs, whenever it looked as if your prices might be undercut by imports, had become a reflex action for Australian businesses. </p>
<p>In the words of <a href="https://esavic.org.au/385/images/2013_GaryBanks.pdf">Gary Banks</a> – later to become head of the successor to the tariff board, the Productivity Commission: “it was not a shameful thing for a conga line of industrialists to be seen wending its way to Canberra”.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/half-a-century-on-its-time-to-reassess-the-whitlam-governments-economic-legacy-195651">Half a century on, it's time to reassess the Whitlam government's economic legacy</a>
</strong>
</em>
</p>
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<p>Tariffs were good for business owners, although bad for their customers, who had to pay much higher prices and often got <a href="https://www.afr.com/opinion/bill-scales-the-rise-and-fall-of-the-australian-car-manufacturing-industry-20171018-gz3ky4">worse goods</a>. They were also good for government – bringing in tax revenue.</p>
<p>Whitlam was more interested in bringing down inflation. His announcement said increased competition would </p>
<blockquote>
<p>have a salutary effect upon those who have taken advantage of shortages by unjustified price increases which have exploited the public. </p>
</blockquote>
<p>Any firm seriously hurt by the extra imports could apply to a newly established tribunal for assistance, but the tribunal </p>
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<p>should not provide relief as a matter of course – that is, simply because the question of relief had been referred to it.</p>
</blockquote>
<p>So Whitlam offered “rationalisation assistance” to encourage firms to refocus their operations, and “compensation for closure” where that couldn’t be done and production had to cease.</p>
<p>For displaced workers, the 7pm announcement offered anyone who lost their job retraining, as well as</p>
<blockquote>
<p>a weekly amount equal to his [sic] average wage in the previous six months until he obtains or is found suitable alternative employment. </p>
</blockquote>
<p>Over the next seven years, manufacturing employment fell by <a href="https://www.bitre.gov.au/sites/default/files/report_136_CHAPTER_6_WEB_FA.pdf">80,000</a>, but few of those job losses were immediate. Fifteen months after the 25% tariff cut, fewer than <a href="https://www.jstor.org/stable/20634782?seq=10">6,000</a> people had claimed the wage replacement offered on the night of the announcement.</p>
<p>When Whitlam went to the polls a year after the cut in the double dissolution election of May 1974, 122 university economists signed an <a href="https://pmtranscripts.pmc.gov.au/release/transcript-3267">open letter</a> of support.</p>
<p>The letter said the general thrust of the government’s policy responses had been in the best interests of the nation as a whole, and added,</p>
<blockquote>
<p>more importantly, we seriously doubt that the previous government would have had the wisdom or the courage to undertake it. It had certainly given no indication of moving in that direction while it was in power, even though the need for such policies had become obvious.</p>
</blockquote>
<p>In its later days in office, the Whitlam government was roundly criticised for its irresponsible public spending. Ironically, in its approach to tariffs in the 1970s, it had taken the first steps in a neoliberal direction that characterised western governments of the 1980s.</p>
<p>By acting boldly after decades of inaction, Whitlam showed what a government could do. It was a lesson his Labor successor Bob Hawke took to heart a decade later, when he floated the dollar, revamped Australia’s tax system and put in place a series of further cuts that reduced tariffs to near zero.</p>
<p>It’s something we see less of today.</p><img src="https://counter.theconversation.com/content/209378/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alex Millmow does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Without warning, at 7pm on July 18 1973, Prime Minister Gough Whitlam slashed every single import tariff at once – starting at midnight. It’s the kind of bold political leadership we rarely see today.Alex Millmow, Senior Fellow, Federation University AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1980722023-01-23T13:24:12Z2023-01-23T13:24:12ZAs US-EU trade tensions rise, conflicting carbon tariffs could undermine climate efforts<figure><img src="https://images.theconversation.com/files/505410/original/file-20230119-5268-omk19c.jpg?ixlib=rb-1.1.0&rect=0%2C8%2C3000%2C1922&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The U.S. and EU are headed in different directions with tariffs, including on steel.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/worker-cuts-through-a-glowing-2-000-degrees-fahrenheit-news-photo/1463835"> David McNew/Getty Images</a></span></figcaption></figure><p>Rising trade tensions between the U.S. and the European Union, two of the most important global leaders when it comes to climate policy, could undermine key climate initiatives of both governments and make it harder for the world to put the brakes on climate change.</p>
<p>The two have clashed over the <a href="https://www.mckinsey.com/industries/public-and-social-sector/our-insights/the-inflation-reduction-act-heres-whats-in-it">2022 Inflation Reduction Act’s</a> requirements that products be made in America to receive certain U.S. subsidies. The EU recently announced plans for <a href="https://www.politico.eu/article/eu-hits-emergency-button-to-save-european-industry/">its own domestic-only</a> clean technology subsidies in response.</p>
<p>The U.S. and EU also now have competing carbon tariff proposals, and these could end up undermining each other.</p>
<p>In December 2022, the EU reached a <a href="https://www.consilium.europa.eu/en/press/press-releases/2022/12/13/eu-climate-action-provisional-agreement-reached-on-carbon-border-adjustment-mechanism-cbam/">provisional agreement</a> on a carbon border adjustment mechanism. It will put carbon-based <a href="https://www.europarl.europa.eu/news/en/press-room/20221212IPR64509/deal-reached-on-new-carbon-leakage-instrument-to-raise-global-climate-ambition">tariffs</a> on steel, aluminum and other industrial imports that aren’t regulated by comparable climate policies in their home countries. The Biden administration, meanwhile, proposed a “<a href="https://www.nytimes.com/2022/12/07/business/economy/steel-tariffs-climate-change.html">green steel club</a>” of nations that would cooperate on reducing emissions by levying tariffs on relatively high-emission imports.</p>
<p>At first glance, the two approaches might seem similar. But the EU and U.S. proposals reflect starkly different and arguably incompatible visions for the intersection of climate and trade policies.</p>
<p>A failure to align approaches risks further stoking trade tensions and would likely have international repercussions. Without multinational coalitions, dirtier, lower-cost competition will undercut emerging low-carbon technologies. </p>
<p>A strong transatlantic partnership is a prerequisite to greening the global economy. Without creative compromises and skillful diplomacy, the EU may find that its tariffs lead to reprisals rather than reciprocal action, and the U.S. quest to create climate clubs will not get off the ground.</p>
<h2>EU’s textbook approach to tariffs</h2>
<p>The carbon border adjustment mechanism, or CBAM, is tied to the EU’s flagship climate policy, <a href="https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/development-eu-ets-2005-2020_en">its emission trading system</a>. The system requires large European factories and other greenhouse gas emitters to purchase allowances for each ton of carbon dioxide they release. It’s a form of a carbon price.</p>
<p>However, if only European industries have to pay this carbon price, the EU risks domestic production’s losing out to imports from countries with weaker regulations on emissions. This phenomenon, referred to as “carbon leakage,” can result in even dirtier industrial production.</p>
<p>To date, the EU has avoided carbon leakage by compensating domestic producers of certain industrial products with free emissions allowances. But that approach is becoming increasingly expensive as the <a href="https://www.catf.us/2022/08/why-are-carbon-contracts-difference-gaining-popularity-europe/">carbon price rises</a>, with a recent trading range of 70 to 100 euros per metric ton. <a href="https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_3661">The CBAM</a> makes it possible to phase out these free allowances by phasing in tariffs on imports from countries without comparable carbon pricing policies. Once finalized, the tariffs could be applied starting in 2026.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/e-gc682xVcg?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">How the EU’s carbon border adjustment would work.</span></figcaption>
</figure>
<p>The CBAM has been met with some international outrage, with the “<a href="https://www.cnbc.com/video/2022/09/12/brics-how-a-goldman-sachs-acronym-became-a-strategic-economic-bloc.html">BRICS” countries</a> – Brazil, Russia, India, China and South Africa – calling it “<a href="https://timesofindia.indiatimes.com/india/brics-nations-join-india-in-opposing-eu-carbon-tax/articleshow/85704371.cms">discriminatory</a>” and a U.S. senator accusing the EU of going “<a href="https://www.wsj.com/articles/the-eu-goes-rogue-on-climate-policy-clean-energy-greenhouse-gas-carbon-tax-policy-emissions-environmental-standards-11671054303">rogue</a>.”</p>
<p>In reality, the CBAM treats domestic products and imports equally by applying the same carbon price, just as any economics textbook recommends. It also aims to further global climate action by giving other countries the incentive to implement their own carbon pricing policies.</p>
<h2>Biden’s climate club approach</h2>
<p>Unlike the EU, the U.S. has failed to adopt a national carbon price despite <a href="https://epic.uchicago.edu/news/lessons-learned-from-the-last-major-u-s-climate-bill-lobbying-takes-its-toll/">several attempts</a>. The Inflation Reduction Act instead fills the federal climate policy void largely by offering subsidies for producing clean energy.</p>
<p>However, subsidies to American producers won’t reduce emissions from other countries’ production of internationally traded products.</p>
<p>For example, steel <a href="https://www.globalefficiencyintel.com/steel-climate-impact-international-benchmarking-energy-co2-intensities">accounts for 11% of global</a> carbon dioxide emissions, with the vast majority from East Asia, including 53% of global production from China. Transforming Chinese production is therefore critical to lowering emissions.</p>
<p>Encouraging a global shift to cleaner production methods will require international cooperation, including trade measures that enable expensive low-carbon investments and penalize high-emissions steel production.</p>
<p>President Joe Biden needed an approach to climate tariffs that would benefit U.S. producers without requiring a politically untenable carbon price. His <a href="https://www.nytimes.com/2022/12/07/business/economy/steel-tariffs-climate-change.html">proposed</a> green steel club is an agreement among countries that would commit their steel and aluminum industries to meeting certain emissions standards. Tariffs would be imposed on imports that exceed the standard or come from countries that are not signatories to the agreement.</p>
<p>Most U.S. manufacturers would benefit. U.S. steel typically produces fewer emissions than its competitors. The desire to exploit this “<a href="https://clcouncil.org/report/americas-carbon-advantage/">carbon advantage</a>” has taken hold with politicians on <a href="https://www.eenews.net/articles/republicans-propose-border-carbon-tax/">both</a> <a href="https://www.coons.senate.gov/news/press-releases/sen-coons-rep-peters-introduce-legislation-to-support-us-workers-and-international-climate-cooperation">sides</a> of the aisle.</p>
<p>Biden’s plan could be the first “climate club” of nations, consistent with the recommendations of an increasing <a href="https://rooseveltinstitute.org/publications/a-green-steel-deal-towards-pro-jobs-pro-climate-trans-atlantic-cooperation-on-carbon-border-measure/">number</a> of <a href="https://www.nature.com/articles/s41558-022-01383-9">policy experts</a>. In <a href="https://press.princeton.edu/books/hardcover/9780691224558/fixing-the-climate">a recent book</a>, Charles Sabel and David Victor suggest building on the international success in phasing out ozone-depleting chemicals: <a href="https://www.unep.org/ozonaction/who-we-are/about-montreal-protocol">The Montreal Protocol</a> used a combination of cooperative learning, penalties and pools of resources for countries in need of technical and financial support.</p>
<h2>Creative ways to cooperate</h2>
<p>The two visions for climate policy tariffs involve different paths toward somewhat different goals, so they cannot easily be reconciled. The premise of the EU strategy is that tariffs are necessary to ensure that climate policies impose the same costs on domestic and foreign emitters. In contrast, the U.S. is proposing tariffs that penalize producers with high emissions.</p>
<p>The U.S. cannot pursue the EU approach without some form of a national carbon price. At the same time, the EU is unlikely to abandon its long-planned and laboriously negotiated CBAM, particularly to partner with a White House that may have a different occupant in two years.</p>
<p>There are, however, pathways forward that blend elements of both visions.</p>
<figure class="align-center ">
<img alt="Two men in business suits, one with dark hair and one with white hair, gesture as they talk to each other and walk along a formal colonnade." src="https://images.theconversation.com/files/505456/original/file-20230119-13-enre46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505456/original/file-20230119-13-enre46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505456/original/file-20230119-13-enre46.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505456/original/file-20230119-13-enre46.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505456/original/file-20230119-13-enre46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505456/original/file-20230119-13-enre46.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505456/original/file-20230119-13-enre46.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Biden and French President Emmanuel Macron have clashed over subsidy rules in the Inflation Reduction Act.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-joe-biden-and-french-president-emmanuel-macron-news-photo/1245271895">Jim Watson-Pool/Getty Images</a></span>
</figcaption>
</figure>
<p>For example, parts of the CBAM, including the linkage to the EU carbon price, could be included as elements of climate clubs, including Biden’s green steel club. That may enable the EU to retain hard-fought progress on its emissions trading system.</p>
<p>Alternatively, some U.S. senators <a href="https://www.whitehouse.senate.gov/news/release/whitehouse-and-colleagues-introduce-clean-competition-act-to-boost-domestic-manufacturers-and-tackle-climate-change">are pushing legislation</a> to create a U.S. carbon border adjustment, including a domestic carbon price and a tariff on imports of some energy-intensive products like steel and aluminum. Bipartisan support for such legislation would create a basis for a durable compromise with the EU. However, even a narrow carbon price on industrial products may not be politically viable in the Republican-controlled House of Representatives.</p>
<h2>Looking ahead</h2>
<p>Any unilateral use of tariffs will strain sensitive geopolitical relationships.</p>
<p>By pursuing compromise rather than conflict, the U.S. and EU can leverage their joint economic strength to create a powerful coalition that encourages low-carbon industrial production around the globe, including in China and India, without ceding domestic advantages.</p>
<p>In our view, both sides have ample reasons to find common ground.</p><img src="https://counter.theconversation.com/content/198072/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Noah Kaufman is a research scholar at Columbia University's SIPA Center on Global Energy Policy. He was previously a senior economist at the Council of Economic Advisers. </span></em></p><p class="fine-print"><em><span>Chris Bataille is an Adjunct Research Fellow with the Center for Global Energy Policy (CGEP) of Columbia University’s School of International and Public Affairs (SIPA).</span></em></p><p class="fine-print"><em><span>Gautam Jain is a Senior Research Scholar at the Center on Global Energy Policy (CGEP) of Columbia University’s School of International and Public Affairs (SIPA)</span></em></p><p class="fine-print"><em><span>Sagatom Saha is an adjunct research scholar at Columbia University's SIPA Center on Global Energy Policy. He previously served in the International Trade Administration at the U.S. Commerce Department and the Office of the Special Presidential Envoy for Climate.</span></em></p>Both sides have reason to find common ground, says a group of energy and climate policy analysts.Noah Kaufman, Research Scholar in Climate Economics, Columbia UniversityChris Bataille, Research Fellow in Energy and Climate Policy, Columbia UniversityGautam Jain, Senior Research Scholar in Financial Markets, Columbia UniversitySagatom Saha, Research Scholar in Energy Policy, Columbia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1883872022-08-24T13:50:14Z2022-08-24T13:50:14ZSouth African citrus: new EU rules are unjust and punitive<figure><img src="https://images.theconversation.com/files/478553/original/file-20220810-4746-e6ok2b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Photo by Phill Magakoe / AFP) (Photo by Phill Magakoe/AFP via Getty Images</span></span></figcaption></figure><p>In mid-July 2022 the European Union <a href="https://www.freshplaza.com/article/9443691/new-eu-regulations-could-see-r654-million-of-sa-citrus-destroyed/">imposed new restrictions on South African citrus imports</a>. The new phytosanitary requirements were meant to address False Codling Moth, a citrus pest that is native to South Africa and for which there is zero tolerance in the <a href="https://www.moneyweb.co.za/news/industry/new-eu-law-could-see-r600m-of-sa-citrus-en-route-to-europe-being-destroyed/">EU</a>. </p>
<p>The new regulations are a major blow to South Africa’s citrus industry as they will severely disrupt exports. The country is the world’s <a href="https://www.trademap.org/">second largest exporter of citrus after Spain</a>. The EU accounted for 41% of Southern African citrus exports by value in 2021. Locally, in 2021 citrus accounted for 25% of South Africa’s total agriculture exports up from 19% in 2011.</p>
<p>In our view, which is based on decades of engaging with EU regulations, and food exports more generally, the regulations are unfair and punitive.</p>
<p>Firstly, the EU gave South Africa less than a month to adapt to the new regulations. The EU measures <a href="https://www.tralac.org/publications/article/15720-the-new-eu-rules-for-citrus-imports-from-south-africa-background-applicable-legal-texts-and-processes-and-the-dispute-declared-by-south-africa-under-the-rules-of-the-wto.html">were published</a> on 21 June 2022, entered into force on 24 June 2022, and required that consignments arriving in Europe from 14 July 2022 onwards had to comply with the new requirements. </p>
<p>The South African government <a href="https://www.tralac.org/publications/article/15720-the-new-eu-rules-for-citrus-imports-from-south-africa-background-applicable-legal-texts-and-processes-and-the-dispute-declared-by-south-africa-under-the-rules-of-the-wto">managed to negotiate</a> a settlement with the EU to clear floating containers of citrus blocked at EU Ports on 11 August 2022 (3 weeks later). Nevertheless the whole process <a href="https://www.businesslive.co.za/bd/opinion/columnists/2022-08-16-wandile-sihlobo-agricultural-exports-to-slow-amid-barriers-to-wool-beef-and-citrus/">imposed additional costs</a> on growers. At a minimum, transition measures are required. This is done to give countries time to adapt. </p>
<p>Secondly, since the EU first declared the False Codling Moth a quarantine pest in 2018, South Africa put in place <a href="https://www.europarl.europa.eu/doceo/document/E-9-2019-002282-ASW_EN.pdf">extensive measures</a> in line to meet the phytosanitary regulations. Its integrated pest management (systems approach) has meant significant investments in research and “learning by doing” to get the system right. There is evidence of success.</p>
<p><em>In our view, the new rules are de facto <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/twec.12447">non-tariff barriers to trade</a>. Non-tariff measures are imposed _de jure</em> to protect consumers from unhealthy or low-quality products, but <em>de facto</em> they represent an increase in trade costs. _</p>
<p>We also believe that additional requirements will only mean diverting scarce resources and imposing new costs on growers, threatening the long-term sustainability of the industry.</p>
<h2>Standards in global trade</h2>
<p>Product and process standards are the main factors shaping the international trade regime. The ability to meet these standards is both a threat for producers (excluding them from profitable markets) and an <a href="https://openknowledge.worldbank.org/bitstream/handle/10986/3880/WPS5396.pdf">opportunity</a> (providing the potential to enter high-margin markets).</p>
<p>Phytosanitary standards are particularly important. The challenge is that they are determined solely by the buying party or country, with the producer having little capacity to challenge decisions on conformance. An added problem is that strong lobbies can push for standards to be protectionist barriers. This harms both consumers who pay higher prices as well as producers who are forced to apply new ways of processing.</p>
<p>The ever changing landscape in phytosanitary standards is characteristic of global trade in fresh fruit. Responding to it requires constant investments in research and technology development to keep up and to comply. However, the political nature of these issues, which require government-to-government negotiations, makes it difficult to prove compliance and the basis for such standards. </p>
<p>As of 12 August, the current hurdle has cost local citrus growers over R200 million in losses. In addition, growers are more than likely to receive half their expected returns on any fruit that is released, due to the fact that most containers have been standing for a few weeks, and have therefore <a href="http://c1e39d912d21c91dce811d6da9929ae8.cdn.ilink247.com/ClientFiles/cga/CitrusGowersAssociation/Company/Documents/From%20the%20Desk%20of%20the%20CEO%2032_22%20-%2012%20August%202022.pdf">missed their programmes due to late arrival</a>.</p>
<p>Applicable from the 1 January 2018, the EU Directive listed False Codling Moth (FCM) as an EU quarantine pest and prescribed specific import requirements. This meant that South African citrus exporters who shipped to the EU market would be subject to new requirements. Non-EU countries could use cold treatment or another effective treatment to ensure the products are free from the pest.</p>
<p>From the 1 September 2019, exporting countries were required prior to export, to provide documentary evidence of the effectiveness of the treatment used for trade to continue.</p>
<p>In response to the EU’s 2018 False Codling Moth phytosanitary regulations, South Africa’s citrus industry developed the FCM Management System as an alternative to post-harvest disinfestation (cold treatment). </p>
<p>South Africa is currently <a href="https://www.europarl.europa.eu/doceo/document/E-9-2019-002282-ASW_EN.pdf;%20https://riverbioscience.co.za/about-us/">using integrated pest management</a> (systems approach) - the sterile insect technique and mating disruption - in conjunction with complementary controls to ensure citrus fruits are free of the moth – from the field to the packing house and shipment to the EU. A systems approach is a <a href="https://efsa.onlinelibrary.wiley.com/doi/epdf/10.2903/j.efsa.2021.6799">pest risk management option</a> that integrates different measures, at least two of which act independently, with cumulative effect.</p>
<p>The False Codling Moth Management System was implemented for the first time in 2018 for citrus exports to the EU with <a href="https://c1e39d912d21c91dce811d6da9929ae8.cdn.ilink247.com/ClientFiles/cga/CitrusGowersAssociation/Company/Documents/CGA%20Annual%20Report%202019%20v6%20FINAL.pdf">continuos improvements over the years</a> (p.32). Interceptions of FCM have been consistently low over the past three years. </p>
<p>The new regulations require orange imports to undergo further mandatory cold treatment processes and pre-cooling steps for specific periods. These have to be done at loading before shipping and subsequent <a href="https://www.moneyweb.co.za/news/industry/new-eu-law-could-see-r600m-of-sa-citrus-en-route-to-europe-being-destroyed/">importation</a>. </p>
<p>Some cold stores have modern technology to cool down the fruit to stipulated temperatures. But a number of cold stores still have outdated technologies that can’t.</p>
<h2>Next steps</h2>
<p>South Africa’s citrus industry recognises that standards are clearly essential. It has invested in research and technology to keep abreast of changes in phytosanitary standards, and to support shared capabilities necessary to supply high-quality, pest-and disease-free <a href="https://oxford.universitypressscholarship.com/view/10.1093/oso/9780192894311.001.0001/oso-9780192894311-chapter-6">fruit</a>. </p>
<p>But the setting of standards can be misused. This means they need to be transparently applied and designed.</p><img src="https://counter.theconversation.com/content/188387/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Roberts received funding from the Innovation and Inclusive Industrialisation in Agro-Processing project (IIAP), funded by the Global Challenges Research Fund (ES/S0001352/1) of the UK's ESRC.</span></em></p><p class="fine-print"><em><span>Shingie Chisoro received funding from the Innovation and Inclusive Industrialisation in Agro-Processing project (IIAP), funded by the Global Challenges Research Fund (ES/S0001352/1) of the UK's ESRC.
</span></em></p><p class="fine-print"><em><span>Antonio Andreoni does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The new rules are de facto non-tariff barriers to trade. They increase trade costs for South Africa’s citrus industry.Simon Roberts, Professor of Economics and Lead Researcher, Centre for Competition, Regulation and Economic Development, UJ, University of JohannesburgAntonio Andreoni, Professor of Development Economics, Department of Economics, SOAS University of London and Visiting Associate Professor, SARChI Industrial Development, University of JohannesburgShingie Chisoro, Senior Researcher, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1861482022-07-27T14:45:39Z2022-07-27T14:45:39ZHow costly political realities undercut Ghana’s electricity reforms<figure><img src="https://images.theconversation.com/files/473013/original/file-20220707-18-pzzw81.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ghana has struggled to find balance with its power generation.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/jbdodane/10021680456">Flickr</a></span></figcaption></figure><p>Ghana reformed its electricity sector by the book but has lurched from blackouts between 2012 and 2015 to a glut of energy which costs government about 5% of GDP. Fitch <a href="https://www.fitchratings.com/research/sovereigns/energy-sector-debt-risk-to-ghana-post-pandemic-debt-trajectory-03-03-2021">ranks</a> the energy sector as the biggest driver of national debt. How did this happen? It’s a classic case of implementing the “standard reform model” – a one-size-fits-all approach – that ignores a country’s political realities.</p>
<p>Ghana is not alone in reforming its electricity sector as it was a key requirement of the “<a href="https://www.worldbank.org/en/topic/governance/overview">good governance agenda</a>” of the 1990s, nor is it the only country where reforms have caused crises. Rwanda and Mozambique are other <a href="https://www.sciencedirect.com/science/article/abs/pii/S2214629619301860">examples</a>. </p>
<p>The governance agenda pushed by multilateral development institutions such as the <a href="https://www.worldbank.org/en/topic/governance/overview">World Bank</a> had a number of pillars on which the reform of the electricity sector rested.</p>
<p>They included:</p>
<ul>
<li><p>independent regulation </p></li>
<li><p>transparent tariff setting </p></li>
<li><p>independent power producers </p></li>
<li><p>splitting a utility into independent generation, transmission and distribution entities.</p></li>
</ul>
<p>The case for these reforms was that competition and the “right” institutions would create efficiency and allocate capital effectively. Ultimately it would bring down power production costs while meeting the needs of consumers.</p>
<p>Ghana introduced <a href="https://documents1.worldbank.org/curated/en/953141527091798128/pdf/Project-Information-Document-Integrated-Safeguards-Data-Sheet-Ghana-Energy-Sector-Transformation-Initiative-Project-P163984.pdf">independent power producers in 1998</a>, adding to its state-owned utilities. It also created two regulatory bodies. They are the <a href="https://www.energycom.gov.gh/">Energy Commission</a>, which licenses independent power producers and advises government, and the <a href="https://www.purc.com.gh/">Public Utilities Regulatory Commission</a>, which approves power purchase agreements and sets tariffs.</p>
<p>But these mainstream “solutions” didn’t work. My recent <a href="https://www.tandfonline.com/doi/full/10.1080/13563467.2022.2084517">paper</a> looks into the reasons. I argue that the common political drivers behind the crises of under-supply and over-supply are under-appreciated, and that mainstream approaches to improving electricity policy made these crises worse. As the case of Ghana shows, the standard reform model can increase opportunities for distorting the electricity system.</p>
<h2>Ghana’s power crises</h2>
<p>Ghana’s move from blackouts to a financial crisis caused by too much power can be traced back to 27 August 2012, when a small group of pirates triggered the first of <a href="https://theconversation.com/power-demand-in-ghana-has-dipped-after-every-crisis-the-drivers-and-consequences-182464">two major power crises</a> in the country. </p>
<p>Attempting to escape from the Togolese navy on a captured oil tanker, the pirates left the ship’s anchor trailing. It snagged on the West African Gas Pipeline, which transports Nigerian gas to Togo, Benin and Ghana. This sparked a major fuel shortage, which combined with drought to plunge the country into four years of electricity shortage and frequent grid shutdowns.</p>
<p>This crisis of shortage was quickly replaced with one of overabundance. Ghana went into a power plant construction overdrive, resulting in generation capacity equalling twice the country’s <a href="https://theconversation.com/lessons-to-be-learnt-from-ghanas-excess-electricity-shambles-121257">demand</a> by 2018. The installed capacity, according to the Energy Commission of Ghana, is 5,083MW, almost double the peak demand of 2,700MW.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/power-demand-in-ghana-has-dipped-after-every-crisis-the-drivers-and-consequences-182464">Power demand in Ghana has dipped after every crisis: the drivers and consequences</a>
</strong>
</em>
</p>
<hr>
<p>This increase in generation capacity came from take-or-pay contracts. The government’s distribution utility must pay private electricity companies typically for 90% of the power they make available, regardless of whether it is used. Ghana’s large imbalances in supply and demand leave the utility with a hefty bill, reaching an annual deficit of <a href="https://www.imf.org/-/media/Files/Publications/CR/2021/English/1GHAEA2021001.ashx">US$1 billion</a>. Ghana’s has renegotiated power purchase agreements with six of the independent power producers, a deal that the Minister of Finance Ken Ofori-Atta says will <a href="https://mofep.gov.gh/sites/default/files/budget-statements/2022-Mid-Year-Budget-Speech.pdf#page=15">save government US$13.2 billion</a> over the duration of the agreements. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/476271/original/file-20220727-27-rh9aec.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/476271/original/file-20220727-27-rh9aec.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=281&fit=crop&dpr=1 600w, https://images.theconversation.com/files/476271/original/file-20220727-27-rh9aec.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=281&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/476271/original/file-20220727-27-rh9aec.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=281&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/476271/original/file-20220727-27-rh9aec.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=353&fit=crop&dpr=1 754w, https://images.theconversation.com/files/476271/original/file-20220727-27-rh9aec.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=353&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/476271/original/file-20220727-27-rh9aec.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=353&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<h2>Political competition</h2>
<p>The break in the gas pipeline was an immediate trigger. But it was fixed by 2014.</p>
<p>The length and depth of Ghana’s shortage crisis can only be explained by “following the money” and the political drivers behind Ghana’s fiscal issues. </p>
<p>Ghana has two dominant political traditions that have contested power since independence. They are now aligned under the New Patriotic Party and National Democratic Congress. Competition between the two is fierce in Ghana’s swing regions. There’s also competition within each party, resulting in regular reshuffling of senior figures.</p>
<p>These political struggles are expensive, requiring the distribution of benefits to supporters and the employment of numerous party foot-soldiers. Back in 2016, researchers found that MPs on average <a href="https://www.wfd.org/sites/default/files/2022-01/Cost-of-Parliamentary-Politics-in-Ghana160920.pdf">needed GH₵389,803</a> (about US$85,000) to contest elections and these costs will have increased since then. Such costs encourage corrupt deal making and more legitimate rent seeking that benefits affiliated companies and donors. Equally, politicians <a href="https://theconversation.com/how-ghanaian-civil-servants-sought-to-resist-political-pressure-125029">feel</a> they must back popular policies, such as low electricity tariffs, and ensure government programmes like electrification are targeted at supporters. </p>
<p>Ghana’s power cuts came because the government and state utilities did not buy alternative imported light crude fuel and gas. That fuel could not be bought because of the national budget deficit in 2012 following that year’s election. Additionally, the governments of the National Democratic Congress and the New Patriotic Party have intervened to lower tariffs, or prevent their increase, despite the process being officially independent. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/ghanas-electricity-supply-mix-has-improved-but-reliability-and-cost-is-still-a-challenge-161762">Ghana’s electricity supply mix has improved, but reliability and cost is still a challenge</a>
</strong>
</em>
</p>
<hr>
<p>The intensity of party-political competition also partly explains the oversupply financial crisis. In the run up to the 2016 election, power shortages were continuing and the government seemingly panicked, signing <a href="https://www.energyforgrowth.org/wp-content/uploads/2021/03/A-Case-Study-of-Ghanas-Power-Purchase-Agreements.pdf">32 private-sector</a> power generation contracts. To do this, it overrode the role the experts, regulators and semi-independent utilities are supposed to play in planning electricity generation. </p>
<p>On top of this electoral pressure was the role of ideology. The increase in electricity was justified on the <a href="https://www.tandfonline.com/doi/full/10.1080/13563467.2022.2084517">assumption</a> that it would translate into industrialisation and growth. The business environment, structural barriers and international competition were <a href="https://imaniafrica.org/2016/06/23/imani-open-letter-government-7-steps-needed-significantly-reform-ghanas-ruing-business-environment-now/">disregarded</a>. </p>
<p>The result is that Ghana has to pay for power it can’t sell, plunging the energy utilities into debt.</p>
<h2>Misplaced mainstream solutions</h2>
<p>Mainstream prescriptions for solving such electricity crises do not appear to address these political drivers. If anything, they exacerbate them. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/lessons-to-be-learnt-from-ghanas-excess-electricity-shambles-121257">Lessons to be learnt from Ghana's excess electricity shambles</a>
</strong>
</em>
</p>
<hr>
<p>In Ghana, independent tariff setting and the procurement of power from private companies did not follow the official market logic or legal rules on the separation of political power. Political incentives, electoral pressures and ideological instincts overwhelmed such formal structures. </p>
<p>Market-based reforms made the crisis worse, enabling rapid procurement of private plants and the bypassing of expert planning. The oversupply crisis would almost certainly have been impossible without private-sector procurement. </p>
<p>It’s therefore necessary to abandon the assumption that market logic, privatisation and formal regulation provide the best answers to electricity sector crises.</p><img src="https://counter.theconversation.com/content/186148/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Barnaby Joseph Dye received funding from the UK government research councils (Economic and Social Science Research Council, UK Research and Innovation) for this research. It was completed as part of the FutureDAMS research consortium. </span></em></p>Ghana’s power sector is mired in debt and excess production.Barnaby Joseph Dye, Research Associate, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1846322022-06-10T12:30:50Z2022-06-10T12:30:50ZBiden just declared heat pumps and solar panels essential to national defense – here’s why and the challenges ahead<figure><img src="https://images.theconversation.com/files/468106/original/file-20220609-19608-lxmyyh.jpg?ixlib=rb-1.1.0&rect=0%2C3%2C1022%2C731&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">President Joe Biden authorized use of the Defense Production Act to ramp up production of several climate-friendly technologies.</span> <span class="attribution"><a class="source" href="https://images.nrel.gov/MX/Profiles/en/default/#/main/single/841ccf9e-d112-4ece-b75d-0e0c03f0de5e">Werner Slocum/NREL</a></span></figcaption></figure><p>Solar panels, heat pumps and hydrogen are all building blocks of a clean energy economy. But are they truly “essential to the national defense”?</p>
<p>President Joe Biden proclaimed that they are in early June when he <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/06/fact-sheet-president-biden-takes-bold-executive-action-to-spur-domestic-clean-energy-manufacturing/">authorized using the Defense Production Act</a> to ramp up their production in the U.S., along with insulation and power grid components.</p>
<p>As an environmental engineering professor, I agree that these technologies are essential to mitigating our risks from climate change and overreliance on fossil fuels. However, efforts to expand production capabilities must be accompanied by policies to stimulate demand if Biden hopes to accelerate the transition from fossil fuels to clean energy. </p>
<h2>Energy and the Defense Production Act</h2>
<p>The United States enacted the <a href="https://uslaw.link/citation/us-law/public/81/774">Defense Production Act of 1950</a> at the start of the Korean War to secure materials deemed essential to national defense. Presidents soon recognized that essential materials extend far beyond weapons and ammunition. They have invoked the act to secure domestic supplies of everything from <a href="https://www.bloomberg.com/news/articles/2011-11-30/obama-invokes-cold-war-security-powers-to-unmask-chinese-telecom-spyware#xj4y7vzkg">communications equipment</a> to <a href="https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-preventing-hoarding-health-medical-resources-respond-spread-covid-19/">medical resources</a> and <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/22/president-biden-announces-first-two-infant-formula-defense-production-act-authorizations/">baby formula</a>.</p>
<p>For energy, past presidents used the act to expand fossil fuel supplies, not transition away from them. Lyndon Johnson used it to <a href="https://www.resources.org/resources-radio/the-history-of-the-defense-production-act-in-the-energy-sector-with-ty-priest/">refurbish oil tankers</a> during the 1967 Arab oil embargo, and Richard Nixon to secure materials for the Trans-Alaska oil pipeline in 1974. Even when Jimmy Carter used the act in 1980 to seek substitutes for oil, <a href="https://www.presidency.ucsb.edu/documents/executive-order-12242-synthetic-fuels">synthetic fuels made from coal and natural gas</a> were a leading focus.</p>
<p>Today, the focus is on transitioning away from all fossil fuels, a move considered essential for confronting two key threats – climate change and volatile energy markets.</p>
<figure class="align-center ">
<img alt="A field of solar panels in the desert with Las Vegas casinos and mountains in the background." src="https://images.theconversation.com/files/468113/original/file-20220609-22-lh5ute.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/468113/original/file-20220609-22-lh5ute.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=418&fit=crop&dpr=1 600w, https://images.theconversation.com/files/468113/original/file-20220609-22-lh5ute.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=418&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/468113/original/file-20220609-22-lh5ute.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=418&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/468113/original/file-20220609-22-lh5ute.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=525&fit=crop&dpr=1 754w, https://images.theconversation.com/files/468113/original/file-20220609-22-lh5ute.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=525&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/468113/original/file-20220609-22-lh5ute.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=525&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Utility-scale solar is now cheaper than fossil fuels. This installation is at Nellis Air Force Base in Nevada.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/the-las-vegas-strip-is-shown-behind-solar-panels-during-a-news-photo/510721582">Ethan Miller/Getty Images</a></span>
</figcaption>
</figure>
<p>The Department of Defense has identified numerous <a href="https://www.defense.gov/News/News-Stories/Article/Article/2818343/dod-analysis-highlights-geostrategic-risks-of-climate-change/">national security risks</a> arising from climate change. Those include threats to the water supply, food production and infrastructure, which may trigger migration and competition for scarce resources. Fossil fuels are the <a href="https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data">dominant source of greenhouse gas emissions</a> that are driving global warming.</p>
<p>Russia’s invasion of Ukraine highlights additional risks of relying on fossil fuels. Russia and other adversaries are among the leading producers of these fuels. Overreliance on fossil fuels leaves the United States and its allies <a href="http://washingtonpost.com/business/2022/04/30/europe-natural-gas-scramble/">vulnerable to threats</a> and to price shocks in volatile markets.</p>
<p>Even as the world’s <a href="https://www.eia.gov/todayinenergy/detail.php?id=48756">top producer</a> of oil and natural gas, the United States has been rocked by price spikes as our allies shun Russian fuels.</p>
<h2>Targeting 4 pillars of clean energy</h2>
<p>Transitioning from fossil fuels to cleaner energy can mitigate these risks.</p>
<p>As I explain in my book, “<a href="https://yalebooks.yale.edu/book/9780300251678/confronting-climate-gridlock/">Confronting Climate Gridlock</a>,” building a clean energy economy requires four mutually reinforcing pillars – efficiency, clean electricity, electrification and clean fuels. </p>
<p>Efficiency shrinks energy demand and costs along with the burdens on the other pillars. Clean electricity eliminates <a href="https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks">greenhouse gas emissions from power plants</a> and enables the electrification of vehicles, heating and industry. Meanwhile, <a href="https://www.science.org/doi/10.1126/science.aas9793">clean fuels will be needed</a> for airplanes, ships and industrial processes that can’t easily be electrified.</p>
<p>The technologies targeted by Biden’s actions are well aligned with these pillars. </p>
<p>Insulation is crucial to energy efficiency. Solar panels provide one of the <a href="https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/">cheapest</a> and <a href="https://www.nrel.gov/analysis/life-cycle-assessment.html">cleanest</a> options for electricity. Power grid components are needed to integrate more wind and solar into the energy mix. </p>
<p><a href="https://www.energy.gov/energysaver/heat-pump-systems">Heat pumps</a>, which can both heat and cool a home, are far more efficient than traditional furnaces and replace natural gas or heating oil with electricity. <a href="https://www.nrel.gov/hydrogen/wind-to-hydrogen.html">Electrolyzers</a> produce hydrogen for use as a fuel or a feedstock for chemicals.</p>
<p><iframe id="76N59" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/76N59/12/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Generating demand is essential</h2>
<p>Production is only one step. For this effort to succeed, the U.S. must also ramp up demand. </p>
<p>Stimulating demand spurs learning by doing, which drives down costs, spurring greater demand. A virtuous cycle of rising adoption of technologies and falling costs can arise, as it has for <a href="https://doi.org/10.1016/j.isci.2022.104378">wind and solar power</a>, <a href="https://pubs.rsc.org/en/content/articlehtml/2021/ee/d1ee01530c">batteries</a> and <a href="https://doi.org/10.1016/j.enpol.2015.06.011">other technologies</a>.</p>
<p>The technologies targeted by Biden differ in their readiness for this virtuous cycle to work. </p>
<p>Insulation is already cheap and abundantly produced domestically. What’s needed in this case are policies like building codes and incentives that can stimulate demand by encouraging <a href="https://www.energy.gov/articles/president-biden-invokes-defense-production-act-accelerate-domestic-manufacturing-clean">more use of insulation</a> to help make homes and buildings more energy efficient, not more capacity for production.</p>
<p>Solar panels are currently cheap, but the <a href="https://www.statista.com/statistics/668749/regional-distribution-of-solar-pv-module-manufacturing/">vast majority are manufactured in Asia</a>. Even if Biden succeeds in <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/06/fact-sheet-president-biden-takes-bold-executive-action-to-spur-domestic-clean-energy-manufacturing/">tripling domestic manufacturing capacity</a>, U.S. production alone will remain insufficient to satisfy the growing <a href="https://emp.lbl.gov/generation-storage-and-hybrid-capacity">demand for new solar projects</a>. Biden also put a two-year <a href="https://theconversation.com/biden-throws-us-solar-industry-a-lifeline-with-tariff-relief-but-can-incentives-bring-manufacturing-back-184537">pause on the threat of new tariffs</a> for solar imports to keep supplies flowing while U.S. production tries to ramp up, and announced support for <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/06/fact-sheet-president-biden-takes-bold-executive-action-to-spur-domestic-clean-energy-manufacturing/">grid-strengthening projects</a> to boost growth of U.S. installations.</p>
<p>Electrolyzers face a tougher road. They’re expensive, and using them to make hydrogen from electricity and water for now <a href="https://www.energypolicy.columbia.edu/research/article/hydrogen-fact-sheet-production-low-carbon-hydrogen">costs far more than making hydrogen from natural gas</a> – a process that produces greenhouse gas emissions. The Department of Energy aims to <a href="https://www.energy.gov/eere/fuelcells/hydrogen-shot">slash electrolyzer costs by 80%</a> within a decade. Until it succeeds, there will be little demand for the electrolyzers that Biden hopes to see produced.</p>
<h2>Why heat pumps are most likely to benefit</h2>
<p>That leaves heat pumps as the technology most likely to benefit from Biden’s declaration. </p>
<p>Heat pumps can slash energy use, but they also cost more upfront and are unfamiliar to many contractors and consumers while technologies remain in flux. </p>
<p><a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/06/fact-sheet-president-biden-takes-bold-executive-action-to-spur-domestic-clean-energy-manufacturing/">Pairing use of the Defense Production Act</a> with customer incentives, increased government purchasing and funding for research and development can create a virtuous cycle of rising demand, improving technologies and falling costs.</p>
<figure class="align-center ">
<img alt="A worker in ballcap and short sleeves installs a large hat pump, hooking up hoses next to a house." src="https://images.theconversation.com/files/468093/original/file-20220609-15-8g6ytb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/468093/original/file-20220609-15-8g6ytb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=380&fit=crop&dpr=1 600w, https://images.theconversation.com/files/468093/original/file-20220609-15-8g6ytb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=380&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/468093/original/file-20220609-15-8g6ytb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=380&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/468093/original/file-20220609-15-8g6ytb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=477&fit=crop&dpr=1 754w, https://images.theconversation.com/files/468093/original/file-20220609-15-8g6ytb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=477&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/468093/original/file-20220609-15-8g6ytb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=477&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Heat pumps, which can both heat and cool and home, are four times more efficient than traditional furnaces and air conditioning.</span>
<span class="attribution"><a class="source" href="https://phyxter.ai/">Phyxter.ai</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Clean energy is indeed essential to mitigating the risks posed by climate change and volatile markets. Invoking the Defense Production Act can bolster supply, but the government will also have to stimulate demand and fund targeted research to spur the virtuous cycles needed to accelerate the energy transition.</p><img src="https://counter.theconversation.com/content/184632/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daniel Cohan serves on the Board of Scientific Counselors for the U.S. Environmental Protection Agency. He has received research funding from the Energy Foundation, the Carbon Hub, and various federal agencies.</span></em></p>Other presidents used the Defense Production Act to boost fossil fuel supplies. Biden is now using it to boost clean energy. But just ramping up production isn’t enough to succeed.Daniel Cohan, Associate Professor of Civil and Environmental Engineering, Rice UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1845372022-06-07T12:33:17Z2022-06-07T12:33:17ZBiden throws US solar installers a lifeline with tariff relief, but can incentives bring manufacturing back?<figure><img src="https://images.theconversation.com/files/467360/original/file-20220607-12-mf3uyt.jpg?ixlib=rb-1.1.0&rect=0%2C4%2C3000%2C1940&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. solar installations had been rising quickly until the threat of new tariffs darkened the 2022 outlook.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/roger-garbey-and-andres-hernandez-from-the-goldin-solar-news-photo/909389746">Joe Raedle/Getty Images</a></span></figcaption></figure><p><em>The Biden administration announced it was putting a two-year freeze on the threat of new solar tariffs, <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/06/fact-sheet-president-biden-takes-bold-executive-action-to-spur-domestic-clean-energy-manufacturing/">throwing a lifeline to U.S. solar installers</a> – and boosting the country’s ability to meet its climate goals.</em></p>
<p><em>The tariff threat involved imported solar panels and components from four Asian countries <a href="https://www.mcguirewoods.com/client-resources/Alerts/2022/4/us-department-commerce-investigation-solar-panel-imports-puts-solar-projects-risk">that supply about 80%</a> of photovoltaic cells and modules used in the U.S. The administration also announced new plans on June 6, 2022, to use the Defense Production Act to help industries ramp up production of solar panels in the U.S. and give U.S. solar manufacturers other incentives through federal purchasing.</em> </p>
<p><em>We asked energy researcher <a href="http://www.webberenergygroup.com/people/emily-beagle/">Emily Beagle</a> to explain the changes and the impact they could have.</em></p>
<h2>Part of President Joe Biden’s announcement is aimed at boosting US solar manufacturing. How large is that part of the industry today?</h2>
<p>In 2020, the entire U.S. solar industry employed over <a href="https://www.seia.org/sites/default/files/2021-05/National-Solar-Jobs-Census-2020-FINAL.pdf">231,000 people</a>. About 31,000 of those jobs – roughly 13% of all solar jobs – were in manufacturing. </p>
<p>Those jobs, including building solar panels and components, supported <a href="https://www.woodmac.com/news/editorial/whats-at-stake-for-clean-energy-in-the-us-election/">7.5 gigawatts</a> of manufacturing capacity in 2020. That’s a <a href="https://www.canarymedia.com/articles/solar/despite-a-solar-deployment-hot-streak-homegrown-manufacturing-in-america-is-stalled">tiny fraction</a> of global manufacturing capacity.</p>
<p>Most of the rest of the U.S. solar workforce, 67% of it, worked in installation and development. And most of the cheap solar cells in the panels they installed came from Asia – specifically, about <a href="https://subscriber.politicopro.com/article/eenews/2022/04/27/solar-industry-says-46-of-u-s-projects-at-risk-00028064">80% of solar panel imports</a> came from the four Asian countries addressed in Biden’s order.</p>
<h2>What effect did the threat of new tariffs have on solar installations and Biden’s climate goals more broadly?</h2>
<p>The first silicon solar cells were <a href="https://www.aps.org/publications/apsnews/200904/physicshistory.cfm">developed at Bell Labs in the U.S. in the 1940s and 1950s</a>, and the U.S. was an early manufacturing leader. But overseas competition and differing energy and research priorities and policies <a href="https://theconversation.com/to-understand-why-biden-extended-tariffs-on-solar-panels-take-a-closer-look-at-their-historical-impact-177528">drove much of the industry out</a>. China has <a href="https://www.nytimes.com/2022/04/29/climate/solar-industry-imports.html">dominated solar manufacturing</a> for the past decade.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two women in clean-suits, caps and gloves bend over a table with solar modules." src="https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/467361/original/file-20220607-26-56mjcv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Most solar cells and modules are currently manufactured overseas.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/employees-work-on-the-production-line-of-solar-panel-at-a-news-photo/1311503663">Si Wei/VCG via Getty Images</a></span>
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<p>In recent years, the federal government has put <a href="https://www.snl.com/articles/412799530.png">tariffs on solar imports</a> to try to boost growth of U.S. manufacturing. The tariffs raised some prices but didn’t stop the growth of solar installations. Then the U.S. Commerce Department announced in March 2022, that it had opened an <a href="https://www.govinfo.gov/content/pkg/FR-2022-04-01/pdf/2022-06827.pdf">investigation into solar imports</a> from Cambodia, Malaysia, Thailand and Vietnam. The issue was whether solar components from China – which faced tariffs – were being routed through those countries. If the investigation led to new tariffs, the Commerce Department could make them retroactive, significantly raising the cost for U.S. buyers.</p>
<p>That threat cut the U.S. solar installation forecasts for 2022 and 2023 by 46%, according to the <a href="https://www.seia.org/news/tariff-case-cuts-solar-deployment-forecasts-nearly-half-100000-jobs-risk">Solar Energy Industries Association</a>. </p>
<p>Over 300 projects have been delayed or canceled since the case was brought forward. These canceled or delayed projects account for 51 gigawatts of solar capacity and 6 gigawatt-hours of attached battery storage capacity. That would be more than double <a href="https://www.seia.org/us-solar-market-insight">all the solar capacity installed in the U.S. in 2021</a>, which was <a href="https://www.seia.org/us-solar-market-insight">23.6 gigawatts</a>.</p>
<p><iframe id="lgF5F" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/lgF5F/5/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Rapid installation of solar power to reduce emissions from the electricity sector is a key pillar of the Biden administration’s climate goals. To stay aligned with the administration’s climate target of <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/">reducing emissions 50%-52% by 2030</a>, the U.S. needs to install <a href="https://www.whitehouse.gov/wp-content/uploads/2021/10/US-Long-Term-Strategy.pdf">about 25 gigawatts</a> of new solar capacity each year for the next decade. Imposing tariffs could cause solar capacity to reach only 70%-80% of that goal.</p>
<h2>Can Biden’s order to use the Defense Production Act and provide other support give US manufacturing enough of a boost to succeed?</h2>
<p>Biden’s order does several important things to address the threat to the U.S. solar industry and expand other critical technologies to meet the administration’s climate goals. </p>
<p>In the short term, the order addresses the solar tariff threat by temporarily allowing solar imports from specific countries. Specifically, this 24-month “bridge” allows U.S. solar deployers to purchase solar parts from Cambodia, Malaysia, Thailand and Vietnam free of certain duties. </p>
<p>This is important for the Biden administration’s climate goals because it will help ensure that the U.S. has the solar components it needs in the immediate term to continue building out new solar capacity while domestic production ramps up. </p>
<p>The president is also authorizing use of the <a href="https://www.fema.gov/disaster/defense-production-act">Defense Production Act</a> not only to expand U.S. domestic manufacturing of solar panel components, but also to boost several other critical climate technologies, including building insulation, heat pumps, clean hydrogen and power grid infrastructure.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Workers prepare solar-paneled roofs on two new homes in a neighborhood with other homes with solar roofs in behind them." src="https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=349&fit=crop&dpr=1 600w, https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=349&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=349&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=439&fit=crop&dpr=1 754w, https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=439&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/467355/original/file-20220607-14-ib0q2c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=439&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">California now requires most new homes to be solar-ready, but the cost of the system and how soon it will pay off is an important concern.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/workers-install-solar-panels-on-the-roofs-of-homes-under-news-photo/957099636">Will Lester/Inland Valley Daily Bulletin via Getty Images</a></span>
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<p>Another important part of that order is the use of federal procurement provisions to give U.S. solar manufacturers a market.</p>
<p>Federal procurement provisions, such as <a href="https://www.tradecommissioner.gc.ca/sell2usgov-vendreaugouvusa/procurement-marches/buyamerica.aspx">Buy American</a>, use the vast purchasing power of the federal government to create demand for U.S. manufactured goods. The procurement provisions in Biden’s order, including master supply agreements and “super preferences,” will provide certainty and a guaranteed buyer – the federal government – for new solar products manufactured here in the U.S.</p>
<p>While a step in the right direction, whether the new efforts will be able to build up the U.S. solar manufacturing industry and make it competitive remains to be seen. The greatest potential impact to address not only challenges in the solar industry but U.S. climate goals more broadly lies with Congress, which could still pass historic climate legislation.</p><img src="https://counter.theconversation.com/content/184537/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Emily A. Beagle receives funding from DOE. </span></em></p>Only 13% of US solar industry jobs are currently in manufacturing. The Biden administration hopes the sector will grow fast, but that might not be so simple.Emily A. Beagle, Research Associate in Energy Systems, The University of Texas at AustinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1807832022-04-07T00:31:09Z2022-04-07T00:31:09ZBeyond tougher trade sanctions: 3 more ways NZ can add to global pressure on Russia<figure><img src="https://images.theconversation.com/files/456711/original/file-20220406-13565-n87xjv.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C7284%2C4859&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">GettyImages</span></span></figcaption></figure><p>Defence Minister Peeni Henare may <a href="https://www.nzherald.co.nz/nz/russia-ukraine-war-nz-defence-minister-asked-to-give-ukraine-lethal-aid-cabinet-said-no/FOL66ATLDASTPTA6ZTT763PKOY/">not have won Cabinet approval</a> to provide lethal weaponry to Ukraine, but the decision to apply <a href="https://www.beehive.govt.nz/release/new-zealand-apply-trade-sanctions-response-russian-atrocities">35% tariffs</a> to all Russian imports is a clear sign the government knew its response to Russia’s war of aggression had to accelerate.</p>
<p>Global stability and security are underpinned by the <a href="https://www.un.org/en/about-us/un-charter/chapter-1">United Nations Charter</a> and the rule of international law in the form of the <a href="https://www.icj-cij.org/public/files/case-related/182/182-20220316-ORD-01-00-EN.pdf">International Court of Justice</a>. Russia has put both in the bin.</p>
<p>By conducting a war in probable violation of the most basic rules of international humanitarian law – including deliberate use of <a href="https://news.sky.com/story/ukraine-war-russia-confirms-it-has-used-thermobaric-weapons-says-uks-ministry-of-defence-12561830">thermobaric bombs</a>, <a href="https://abcnews.go.com/US/wireStory/russia-urged-stop-land-mines-war-ukraine-83876941#:%7E:text=UNITED%20NATIONS%20%2D%2D%20A%20top,often%20kill%20and%20maim%20civilians.">landmines</a> and possibly <a href="https://www.cbsnews.com/news/what-is-white-phosphorus-russia-ukraine/">white phosphorus</a>, reckless attacks around the <a href="https://www.npr.org/2022/03/11/1085427380/ukraine-nuclear-power-plant-zaporizhzhia">Chernobyl nuclear plant</a>, targeting of <a href="https://www.bbc.com/news/health-60866669">hospitals</a> and <a href="https://www.bbc.com/news/world-europe-60772331">civilian shelters</a> – Russia’s actions appear neither isolated nor ad-hoc.</p>
<p>The latest evidence of apparent <a href="https://www.bbc.com/news/world-europe-60981228">execution</a>, <a href="https://www.theguardian.com/world/2022/apr/05/ukrainian-man-tells-of-days-of-torture-at-hands-of-occupying-troops">torture</a> and <a href="https://www.theguardian.com/world/2022/apr/03/all-wars-are-like-this-used-as-a-weapon-of-war-in-ukraine">rape</a> of non-combatants only confirms this. Given New Zealand’s reliance, like all small states, on a rule-based international order, the government must be prepared for further action in accordance with those principles.</p>
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<h2>Stepping up the response</h2>
<p>Beyond potentially further escalating the tariffs on Russian imports, there are three additional, tangible things that can be done immediately.</p>
<p>First, the government should expel a number of Russian diplomats and support staff from Wellington. The ambassador should remain for now, but their office should be reduced in size. </p>
<p>This will allow New Zealand to retain direct communication with Russia, and probably mean our ambassador in Moscow can stay to protect New Zealand citizens and interests. But Russia will feel the weight of this country’s displeasure, with the option of expelling the ambassador if necessary.</p>
<p>Second, as the defence minister clearly wishes, lethal military assistance should now be offered. Assuming the war continues within Ukraine’s territorial boundaries, moving from helping Ukrainians protect themselves to helping them actually fight is justified.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/ukraine-crisis-how-do-small-states-like-new-zealand-respond-in-an-increasingly-lawless-world-177919">Ukraine crisis: how do small states like New Zealand respond in an increasingly lawless world?</a>
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<hr>
<p>Third, New Zealand can actively promote the use of existing (or new) international legal mechanisms for holding to account those who have committed war crimes.</p>
<p>In fact, the country has a long track record in this field, including New Zealanders being appointed to the Tokyo War Crimes Tribunal after WWII, the Khmer Rouge Tribunal, the inquiry into the Gaza flotilla, and at the International Court of Justice.</p>
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<img alt="" src="https://images.theconversation.com/files/456713/original/file-20220406-5501-1p96vl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/456713/original/file-20220406-5501-1p96vl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=407&fit=crop&dpr=1 600w, https://images.theconversation.com/files/456713/original/file-20220406-5501-1p96vl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=407&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/456713/original/file-20220406-5501-1p96vl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=407&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/456713/original/file-20220406-5501-1p96vl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=511&fit=crop&dpr=1 754w, https://images.theconversation.com/files/456713/original/file-20220406-5501-1p96vl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=511&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/456713/original/file-20220406-5501-1p96vl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=511&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Ukrainian protesters outside the International Court of Justice in The Hague where Ukraine is petitioning to classify Russia’s invasion as a genocide.</span>
<span class="attribution"><span class="source">GettyImages</span></span>
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<h2>Independent investigation</h2>
<p>Although it’s unlikely Putin and his inner circle will ever be jailed for their crimes (assuming they never leave Russia again without diplomatic passports), and Russia won’t cooperate with any investigation, it’s important genuine justice be pursued.</p>
<p>For that to happen, the recording, analysis and judgement of alleged crimes must be done correctly – not only to add to the historical record underpinning the rules of war, but to ensure the atrocities are not forgotten. Future generations need to know what happened and how it stained Russia’s reputation.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/putin-is-staking-his-political-future-on-victory-in-ukraine-and-has-little-incentive-to-make-peace-179236">Putin is staking his political future on victory in Ukraine – and has little incentive to make peace</a>
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<p>It also needs to be clear that New Zealand’s commitment to justice (and that of other like-minded states) can’t be traded away in any future peace deal between Ukraine and Russia.</p>
<p>It won’t be easy, and it may well invite threats from Russia, which has been busy removing its signature from <a href="https://www.bbc.com/news/world-europe-38005282">the International Criminal Court</a> (ICC) and <a href="https://www.reuters.com/article/us-russia-warcrimes-convention-idUSKBN1WW2IN">revoking additional rules</a> to the Geneva Conventions aimed at enhancing the protection of victims of international armed conflicts. </p>
<p>Nonetheless, New Zealand must support calls for an <a href="https://www.nbcnews.com/video/u-n-chief-guterres-calls-for-investigation-into-possible-war-crimes-in-bucha-137054277959">independent investigation</a> into possible war crimes and crimes against humanity in Ukraine, and for the ICC to hear the case. At a practical level, the government can offer forensic, financial and legal aid for that investigation.</p>
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<h2>No repeat of Iraq</h2>
<p>Finally, and perhaps most importantly, New Zealand could also offer to help create a special <a href="https://www.theguardian.com/politics/2022/mar/19/gordon-brown-john-major-back-nuremberg-style-tribunal-vladimir-putin">international criminal tribunal</a> to supplement the work of the International Criminal Court. </p>
<p>Already called for by former UK prime ministers Gordon Brown and John Major, such a body would try Putin and his regime for the overarching crime of waging an illegal war. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/russias-denial-of-responsibility-for-atrocities-in-bucha-recalls-50-years-of-lies-over-the-katyn-massacre-180800">Russia's denial of responsibility for atrocities in Bucha recalls 50 years of lies over the Katyn massacre</a>
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<p>Focusing on the act of invasion itself, rather than practices on the ground, would be novel – effectively putting a superpower on trial for its decision to unjustifiably invade another country.</p>
<p>It was a mistake this did not happen when the US and Britain illegally invaded Iraq in 2003, and it should not be repeated now. Only by building a better world governed by more effective international law can any lasting global peace be assured.</p>
<p>Pressing for such a tribunal and prosecution may be just a first step, but New Zealand should take it. A future where no nation can wage aggressive war with impunity might seem far off, but there is a way to get there.</p><img src="https://counter.theconversation.com/content/180783/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alexander Gillespie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With evidence mounting of Russian war crimes in Ukraine, what options beyond trade sanctions should New Zealand now consider?Alexander Gillespie, Professor of Law, University of WaikatoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1775282022-04-06T12:23:25Z2022-04-06T12:23:25ZTo understand why Biden extended tariffs on solar panels, take a closer look at their historical impact<figure><img src="https://images.theconversation.com/files/456426/original/file-20220405-24-mj6ho3.jpg?ixlib=rb-1.1.0&rect=0%2C26%2C5991%2C3961&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">China's cheaper solar panels made it harder for U.S. companies to compete.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/an-employee-works-on-the-production-line-of-solar-panels-news-photo/1362904374">Ruan Xuefeng/VCG via Getty Images</a></span></figcaption></figure><p>President Joe Biden <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/02/04/a-proclamation-to-continue-facilitating-positive-adjustment-to-competition-from-imports-of-certain-crystalline-silicon-photovoltaic-cells-whether-or-not-partially-or-fully-assembled-into-other-produc/">extended tariffs on imported solar panels</a> in February 2022 in a bid to protect domestic manufacturing. These tariffs add a 14%-15% tax on cheaper imports, raising their cost in the U.S. At the same time, the Biden administration is urging an expansion of renewable energy and energy security, two priorities for many countries.</p>
<p>As an <a href="https://www.nrel.gov/research/staff/david-feldman.html">energy analyst</a> focused on renewable electricity generation, I follow the impact of solar policies. To understand why the tariffs were extended, it’s helpful to understand their historical impact.</p>
<h2>The U.S. was a solar leader once</h2>
<p>U.S. engineers <a href="https://www.aps.org/publications/apsnews/200904/physicshistory.cfm">invented the solar cell</a>, the part of the panel that generates electricity, in the 1950s at Bell Labs. The country was a world leader in manufacturing until about 20 years ago.</p>
<p>Several solar cells connected together make up a typical photovoltaic solar module. Producing the most common type of PV module, a <a href="https://www.energy.gov/eere/solar/crystalline-silicon-photovoltaics-research">crystalline silicon module</a>, is a multistep process. As global demand for solar-generated energy increased, many of these steps began occurring in China or involved Chinese companies in Southeast Asia.</p>
<p>Until 2011, the U.S. was a <a href="https://www.woodmac.com/industry/power-and-renewables/us-solar-market-insight/">net exporter</a> of PV modules. As PV module prices dropped precipitously in 2010, many U.S. and German companies could no longer compete and <a href="https://www.greentechmedia.com/articles/read/the-mercifully-short-list-of-fallen-solar-companies-2015-edition">closed operations</a>. U.S. companies asserted that China was providing unfair subsidies and its companies were <a href="https://www.nytimes.com/2012/05/18/business/energy-environment/us-slaps-tariffs-on-chinese-solar-panels.html">dumping solar cells</a> – selling them at less than the cost to manufacture them – to drive out competition.</p>
<figure class="align-center ">
<img alt="A small, square solar cell in plastic dish." src="https://images.theconversation.com/files/456431/original/file-20220405-2973-qkyz91.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/456431/original/file-20220405-2973-qkyz91.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=386&fit=crop&dpr=1 600w, https://images.theconversation.com/files/456431/original/file-20220405-2973-qkyz91.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=386&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/456431/original/file-20220405-2973-qkyz91.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=386&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/456431/original/file-20220405-2973-qkyz91.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=485&fit=crop&dpr=1 754w, https://images.theconversation.com/files/456431/original/file-20220405-2973-qkyz91.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=485&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/456431/original/file-20220405-2973-qkyz91.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=485&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Scientists at the National Renewable Energy Lab have been developing next-generation solar cells. A PV module, or solar panel, is made up of several cells.</span>
<span class="attribution"><a class="source" href="https://images.nrel.gov/soda/GetObject?ikey=21D9871C58C79072327F196813A49544EF7965C0B8AEA641E8C9018EFEE26EDF&user=publicguest&mode=inline&note=MX+drag+and+drop&target=61447.JPG">Dennis Schroeder / NREL</a></span>
</figcaption>
</figure>
<h2>How the solar tariffs work</h2>
<p>The U.S. placed its <a href="https://www.reuters.com/article/us-china-trade/u-s-sets-new-tariffs-on-chinese-solar-imports-idUSBRE84G19U20120517">first</a> and <a href="https://www.usitc.gov/press_room/news_release/2015/er0121ll329.htm">second</a> set of tariffs on Chinese cells and modules in 2012 and 2015, citing unfair trade practices.</p>
<p>However, low-cost modules and cells <a href="https://www.usitc.gov/press_room/us_safeguard.htm">still came into the United States</a> from outside China, particularly as Chinese companies added manufacturing in neighboring countries not subject to those duties. Most of the material to make cells and modules was still increasingly coming from China.</p>
<p>In 2018, the U.S. government put in place the Section 201 tariff, a four-year safeguard to give domestic PV manufacturers <a href="https://www.usitc.gov/press_room/us_safeguard.htm">temporary relief from the “serious” injury</a> imports were causing them.</p>
<p>The duties <a href="https://www.govinfo.gov/content/pkg/FR-2018-01-25/pdf/2018-01592.pdf">began at 30%</a> on most imported modules, decreasing 5% each year until 2022, when the rate dropped to 15%. PV cells were also subject to these duties, but the first 2.5 gigawatts of imported cells were exempt to allow companies that assemble modules some relief while encouraging PV cell manufacturing in the U.S.</p>
<p>Modules produced from cadmium telluride, rather than crystalline silicon, were also exempt, and in 2019 bifacial modules – which are designed with a clear backing so that energy is produced when light hits the front or the back of the panel – also <a href="https://www.photon.info/en/news/bifacial-pv-modules-can-be-imported-us-free-punitive-tariffs">became exempt</a>. Both are used primarily for large solar farms.</p>
<h2>U.S. module industry ramps up</h2>
<p>The tariffs are considered a <a href="https://www.nrel.gov/docs/fy21osti/74807.pdf">major factor</a> in the <a href="https://www.woodmac.com/industry/power-and-renewables/us-solar-market-insight/">more than tripling</a> of crystalline silicon module assembly capacity in the U.S. between 2018 and 2020, and also in the recent scale-up of cadmium telluride module manufacturing by First Solar. That U.S. company benefited from the increased market price of competing crystalline silicon PV modules.</p>
<p>In addition to the tariffs, many module assembly manufacturers cited supply contracts with utilities or roofing companies and the 2018 U.S. corporate tax reduction as critical <a href="https://www.nrel.gov/docs/fy21osti/74807.pdf">deciding factors for ramping up manufacturing</a>.</p>
<p>Companies assembling modules in the U.S. benefited from the ability to import virtually all of their cells without tariffs – <a href="https://www.nrel.gov/docs/fy21osti/74807.pdf">the 2.5-gigawatt quota was not hit</a> until a month before the initial four-year term ended – while competing against imported modules that were subject to the tariff.</p>
<figure class="align-center ">
<img alt="A worker in a hard hat and construction vest walks between rows of solar panels in a field." src="https://images.theconversation.com/files/456432/original/file-20220405-2973-r9mhfs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/456432/original/file-20220405-2973-r9mhfs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=379&fit=crop&dpr=1 600w, https://images.theconversation.com/files/456432/original/file-20220405-2973-r9mhfs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=379&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/456432/original/file-20220405-2973-r9mhfs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=379&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/456432/original/file-20220405-2973-r9mhfs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=477&fit=crop&dpr=1 754w, https://images.theconversation.com/files/456432/original/file-20220405-2973-r9mhfs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=477&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/456432/original/file-20220405-2973-r9mhfs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=477&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Utility-scale solar use has grown quickly in the U.S. in recent years.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/employees-from-a-radian-generations-operations-and-news-photo/893158122">Robert Nickelsberg/Getty Images</a></span>
</figcaption>
</figure>
<p>Still, even with the tariffs in place, around 80% of solar modules installed in the U.S. during the initial four-year term were imported. According to trade data, just over half of PV modules imported in 2020 were <a href="https://dataweb.usitc.gov/">not subject to the Section 201 tariffs</a>.</p>
<p>Additionally, modules produced in the U.S. still <a href="https://www.nrel.gov/docs/fy21osti/74807.pdf">rely heavily on China for parts</a>, such as the aluminum frame and glass. Soon after the Section 201 tariffs were put in place, the U.S. government placed <a href="https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/august/ustr-statement-section-301-tariff">Section 301 tariffs</a> on these Chinese products, increasing the cost of assembling PV modules in the U.S.</p>
<h2>How did tariffs affect the U.S. solar industry?</h2>
<p>The tariffs did not result in an increase in the domestic production of PV cells.</p>
<p>Because the Section 201 tariffs did not apply to the first 2.5 gigawatts of imported cells, a cap that was not reached in the <a href="https://www.usitc.gov/press_room/news_release/2021/er1124ll1852.htm">first three years of tariff implementation</a>, virtually all cells bought in the U.S. have been <a href="https://dataweb.usitc.gov/">free of Section 201 tariffs</a>. </p>
<p>Therefore, the tariff provided no competitive advantage for PV cells domestically produced. As of the end of 2021, there was <a href="https://www.woodmac.com/industry/power-and-renewables/us-solar-market-insight/">no PV cell production</a> in the United States.</p>
<p>The impact of the tariff on solar deployment in the U.S. is less clear.</p>
<p>The tariffs were put in place during a period when global PV module prices were falling. So, while there was a general runup in price when the tariffs were first proposed, U.S. panel prices have since trended downward and are lower than before the tariffs took effect, though they remain above global average prices. In fact, more <a href="https://www.eia.gov/electricity/monthly/">solar capacity was installed</a> in the U.S. during the Section 201 tariffs than at any other time in history, in large part because of the low cost.</p>
<figure class="align-center ">
<img alt="Two workers in wide-rimmed hats install solar panels on a roof" src="https://images.theconversation.com/files/456424/original/file-20220405-18-ayraf7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/456424/original/file-20220405-18-ayraf7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=390&fit=crop&dpr=1 600w, https://images.theconversation.com/files/456424/original/file-20220405-18-ayraf7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=390&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/456424/original/file-20220405-18-ayraf7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=390&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/456424/original/file-20220405-18-ayraf7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=490&fit=crop&dpr=1 754w, https://images.theconversation.com/files/456424/original/file-20220405-18-ayraf7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=490&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/456424/original/file-20220405-18-ayraf7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=490&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The tariffs on solar panel imports raised concerns about U.S. installation jobs, which were among the fastest-growing job sectors in the country.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/roger-garbey-and-andres-hernandez-from-the-goldin-solar-news-photo/909389746">Joe Raedle/Getty Images</a></span>
</figcaption>
</figure>
<p>Still, the U.S. solar trade group, the Solar Energy Industries Association, claims that the U.S. would have installed <a href="https://www.seia.org/research-resources/adverse-impact-section-201-tariffs">11% more solar</a>, employed 62,000 more people and had US$19 billion more in investment without the tariffs. Most U.S. solar jobs are associated with building projects, not manufacturing equipment, and <a href="https://www.greentechmedia.com/articles/read/cypress-creek-halts-1-5-gw-solar-development-tariffs-exemption">developers have said</a> the higher prices forced them to <a href="https://www.reuters.com/article/us-trump-effect-solar-insight/billions-in-u-s-solar-projects-shelved-after-trump-panel-tariff-idUSKCN1J30CT">delay or cancel</a> solar projects. At the end of 2020, of 231,000 U.S. solar jobs, only 31,000, 13%, were in manufacturing.</p>
<h2>How will the next four years affect solar expansion?</h2>
<p>The Biden administration set a U.S. goal in 2021 to reach <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/">zero carbon emissions</a> from the electricity sector by 2035 to stop its role in climate change. That will require <a href="https://www.energy.gov/sites/default/files/2021-09/Solar%20Futures%20Study.pdf">quadrupling 2020’s record level</a> of annual solar deployment by the end of the decade.</p>
<p>Tariffs have the potential to slow deployment by making PV systems more expensive. That could be offset, however, by mandates and significant public and private investment in the solar sector.</p>
<p>The U.S. goals are part of a larger global effort to both increase local energy security and reduce greenhouse gas emissions, which will likely require significant expansion of solar manufacturing. The U.S. has the potential to be part of this larger global supply chain, but it must scale up to compete.</p><img src="https://counter.theconversation.com/content/177528/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David J. Feldman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The tariffs targeting cheap Chinese imports mean prices in the US are higher than average, at the same time Biden is pushing for more renewable energy. But their effect might surprise you.David J. Feldman, Financial Analyst, National Renewable Energy LaboratoryLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1697082021-10-28T18:47:14Z2021-10-28T18:47:14ZImported deforestation: how Europe contributes to tree loss worldwide, and what we can do about it<figure><img src="https://images.theconversation.com/files/428320/original/file-20211025-25-1xjxkj4.jpg?ixlib=rb-1.1.0&rect=18%2C0%2C2048%2C1355&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/dfid/4115002439">DFID - UK Department for International Development</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>Forest area is <a href="https://www.weforum.org/agenda/2019/07/forest-europe-environment/">increasing in Europe</a>, mainly because farms are getting fewer and smaller. This should be good news, but it must be put into perspective alongside the loss of forest that the EU’s growing agricultural imports cause in third countries. We call this “imported deforestation”.</p>
<p>The European Union is the world’s main trader in agricultural products with <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Extra-EU_trade_in_agricultural_goods">imports totalling €142 billion in 2020</a>. These imports include commodities such as palm oil, beef, cocoa, coffee and soya which are responsible for deforestation in the countries that produce them.</p>
<p>The EU case is not unique. At the global level, tropical areas are losing forests at a rate of <a href="https://www.fao.org/3/ca9825en/ca9825en.pdf">10 million hectares per year</a> according to the FAO’s latest report on forest resources, and temperate areas, which are gaining forest area at a rate of 5 million hectares per year.</p>
<p>Of the 10 million hectares of forest lost each year, just under two-thirds can be unambiguously attributed to agricultural expansion, with the remaining third being a combination of forest fires, logging and other factors. About one-third of the forest area lost is linked to international trade. By fighting against imported deforestation, it is therefore possible to make a significant difference in total tree loss worldwide.</p>
<hr>
<p><strong><em>Lire cet article en français:</em></strong> <em><a href="https://theconversation.com/quelles-pistes-pour-freiner-la-deforestation-importee-163304">Quelles pistes pour freiner la déforestation importée</a>?</em></p>
<hr>
<p>Acknowledging its role in imported deforestation, the EU is currently stepping up to reduce the impacts of its imports. After the European Parliament <a href="https://www.europarl.europa.eu/RegData/etudes/STUD/2020/654174/EPRS_STU(2020)654174_EN.pdf">adopted a report</a> on the issue, the EU is heading toward a mix of mandatory and voluntary rules to tackle the problem. Meanwhile, some EU countries, like France, have already set up <a href="https://www.gouvernement.fr/en/ending-deforestation-caused-by-importing-unsustainable-products">national strategies</a> to combat imported deforestation.</p>
<h2>How to fight imported deforestation</h2>
<p>Preventing imported deforestation means knowing how to quantify the phenomenon and monitor it. For example, tropical wood from Africa can pass through China where it is processed before being imported into Europe. This means we need complex traceability chains to track the origin of imported wood with the support of customs services and private companies.</p>
<p>Then there is the question of timing. Should Ivory Coast cocoa from farms that replaced forests destroyed in the 2000s still be counted as a liability for imported deforestation? We need to set a cut-off date after which products imported from an area can be disconnected from deforestation.</p>
<p>It is also necessary to take forest degradation into account. This is the reduction of a forest’s capacity to provide goods and services, which is reflected in a reduction in tree density. Countries define forest degradation by setting their own tree cover thresholds, which results in several hundred definitions.</p>
<p>For imported deforestation, the choice of this threshold is critical. If it is low, heavy degradation can occur without this transformation being qualified as deforestation. If it is high, the conversion of vegetation that has all the ecological characteristics of forests into agricultural land might not technically be considered deforestation.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Illustration showing effects of threshold selection on perceptions of deforestation and degradation." src="https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=510&fit=crop&dpr=1 600w, https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=510&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=510&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=641&fit=crop&dpr=1 754w, https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=641&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/428754/original/file-20211027-21-a2jddm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=641&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Effects of threshold selection on perceptions of deforestation and degradation.</span>
<span class="attribution"><a class="source" href="https://highcarbonstock.org/">Adapted from High Carbon Stock</a>, <span class="license">Fourni par l'auteur</span></span>
</figcaption>
</figure>
<p>Many sustainable production activities, such as selective logging, lead to forest degradation. But with good forest management, this degradation is limited and reversible.</p>
<p>The same principle applies to certain forms of agroforestry (such as cultivating cocoa under forest shade) or the collection of firewood in dry forests. The challenge, then, is not to avoid all degradation, but to control the factors that cause it in order to keep it within sustainable limits.</p>
<p>These different issues, which at first glance seem technical, refer to political choices that are the responsibility of policy and the law.</p>
<h2>Zero deforestation certificates</h2>
<p>We believe it is necessary to distinguish between illegal and legal deforestation, building on the <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32010R0995">EU timber regulation</a> which bans the import of all illegally harvested timber.</p>
<p>Differentiating between legal and illegal is politically more feasible than boycotting agricultural production associated with deforestation that is legal in the producing country but deemed environmentally problematic by the EU.</p>
<p>If legal agricultural production is banned, the EU would risk exposing itself to trade retaliation, not to mention complaints to the World Trade Organisation about trade discrimination.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A farmer harvest cocoa" src="https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/428329/original/file-20211025-25-swzcde.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The EU is often importing deforestation when it imports cacao.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/ciat/32170883384">2017CIAT/NeilPalmer</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p>Ideally, producing and importing countries should agree on common definitions of forest and on cut-off dates. But this will be a long and difficult process.</p>
<p>It seems more realistic to ban the import of agricultural products from illegal deforestation and to modulate tariffs according to the information and guarantees that importers provide to ensure their production can be certified as “zero deforestation”. These certifications would be accredited by the public authorities and would be subject to a continuous evaluation process.</p>
<p>Switzerland has just paved the way via for this an <a href="https://www.seco.admin.ch/seco/fr/home/Aussenwirtschaftspolitik_Wirtschaftliche_Zusammenarbeit/Wirtschaftsbeziehungen/Freihandelsabkommen/partner_fha/partner_weltweit/indonesien.html">agreement with Indonesia</a> that lowers tariffs by 20% and then 40% for certified palm oil across three approved standards.</p>
<h2>A fair measure for small producers</h2>
<p>In all cases, it will be necessary for importers to comply with the legal requirement for due diligence to ensure that an imported product is not associated with illegal land conversion.</p>
<p>If there is insufficient information regarding the status of the product and the import goes ahead, the importer will not only have to fulfil its due diligence obligation, but will also have to demonstrate that its product is zero deforestation in order to benefit from a favourable customs tariff.</p>
<p>If the due diligence suggests a high risk of illegality, then the responsible importer will not market the shipment. If due diligence is successful and no risk of illegality is found, but the product is not certified as zero deforestation, a higher tariff is applied. If the due diligence is successful and the product is certified as zero deforestation, then it receives a favourable tariff.</p>
<p>Currently, many products such as <a href="https://www.fern.org/fileadmin/uploads/fern/Documents/Duty%20Free.pdf">soy</a> or <a href="https://fullfact.org/europe/cocoa-tariff/">cocoa</a> have tariffs of 0%. Differentiating between zero-deforestation products and others will require an increase in some of these tariffs.</p>
<p>The additional revenue from this could be used to fund programmes to help small-scale producers in exporting countries move toward sustainable practices and become certified. Such an allocation would refute accusations of protectionism and provide a good faith basis for defending this measure at the World Trade Organization.</p>
<p>As with all ecological taxation, the aim of a zero deforestation certification scheme would be for the yield of the import tax to decrease over time. Ideally, Europe would eventually only import certified zero deforestation products, redressing the global imbalance between the parts of the world that are gaining forests and those that are losing them.</p><img src="https://counter.theconversation.com/content/169708/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alain Karsenty is a member of the scientific committee of the Fondation Nicolas Hulot pour la Nature et l'Homme.</span></em></p><p class="fine-print"><em><span>Nicolas Picard ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>Europe’s forests are growing, but tropical areas are losing tree cover at a massive scale due to EU demand for imported products. Here’s how to redress the imbalance.Alain Karsenty, Économiste de l’environnement, directeur de recherches, enseignant à AgroParisTech et consultant international, CiradNicolas Picard, Directeur du GIP ECOFOR, chercheur en sciences forestières, InraeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1661772021-08-22T20:06:51Z2021-08-22T20:06:51ZLand of opportunity: more sustainable Australian farming would protect our lucrative exports (and the planet)<p>The European Union is <a href="https://www.abc.net.au/news/2021-08-17/australian-exporters-pay-the-price-with-european-carbon-tax/100379998">pressing ahead</a> with carbon border levies – charges on carbon-intensive goods from countries such as Australia that haven’t taken strong action to reduce emissions. The EU will impose such measures on a range of imported industrial materials including aluminium, steel and cement. </p>
<p>But what if these tariffs are one day applied to another key Australian export industry: agriculture? As National Farmers’ Federation chief executive Tony Mahar <a href="https://www.farmonline.com.au/story/7348275/eu-carbon-tariff-avoids-ag-for-now-but-sector-cant-be-naive/">said</a> last month:</p>
<blockquote>
<p>Business and governments across the world are embedding carbon abatement considerations into their trade negotiations and relationships. As an industry dependent on exporting, Australian agriculture must be ready to adjust to a more carbon-conscious trading future. </p>
</blockquote>
<p>In addition to a substantial greenhouse gas footprint from agriculture, Australia also has a truly terrible record on <a href="https://www.researchgate.net/publication/337080985_Spending_to_save_What_will_it_cost_to_halt_Australia%27s_extinction_crisis">biodiversity loss</a>. The argument for farmers to adopt more sustainable practices – and for governments to help the shift – is growing ever more compelling. Not only would it safeguard our exports, it would cut emissions and help protect nature.</p>
<figure class="align-center ">
<img alt="aerial view of cows and ute" src="https://images.theconversation.com/files/416912/original/file-20210819-19-ge4pia.jpg?ixlib=rb-1.1.0&rect=5%2C11%2C3758%2C2494&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/416912/original/file-20210819-19-ge4pia.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/416912/original/file-20210819-19-ge4pia.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/416912/original/file-20210819-19-ge4pia.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/416912/original/file-20210819-19-ge4pia.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/416912/original/file-20210819-19-ge4pia.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/416912/original/file-20210819-19-ge4pia.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australian farming must prepare for a more carbon-conscious future.</span>
<span class="attribution"><span class="source">Dean Lewins/AAP</span></span>
</figcaption>
</figure>
<h2>Looming carbon tariffs</h2>
<p>The EU policy, known formally as the <a href="https://ec.europa.eu/taxation_customs/green-taxation-0/carbon-border-adjustment-mechanism_en">Carbon Border Adjustment Measure</a>, aims to shield local industries operating under the EU’s emissions trading scheme and other similar policies. </p>
<p>From 2026, EU importers of some commodities must buy carbon certificates <a href="https://www.austrade.gov.au/news/insights/the-limited-impact-of-the-european-union-s-carbon-border-adjustment-mechanism-on-australian-agriculture">equivalent to</a> the cost that would have been incurred had the goods been produced under the EU’s emissions trading scheme. </p>
<p>The measure is meant to level the playing field – protecting EU companies from competition by producers in countries that don’t have carbon price regimes. The policy also pressures exporting countries to implement their own effective emissions policies.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/no-point-protesting-australia-faces-carbon-levies-unless-it-changes-course-155200">No point protesting, Australia faces carbon levies unless it changes course</a>
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<p>Australia does not export large volumes of industrial commodities to Europe, so the <a href="https://cdn.aigroup.com.au/Reports/2021/Carbon_Border_Adjustments_Policy_Paper.pdf?_cldee=dGVubmFudC5yZWVkQGFpZ3JvdXAuY29tLmF1&recipientid=contact-7ddca4953c244fa7b29d57951052d4d8-0e0c0eaf389c455685f07176f427283e&esid=26f33b4a-56fe-eb11-94ef-00224810dcd3">immediate effect</a> of the carbon tariff will be small. However, in 2026 the EU will <a href="https://www.austrade.gov.au/news/insights/the-limited-impact-of-the-european-union-s-carbon-border-adjustment-mechanism-on-australian-agriculture">consider</a> extending the measure’s scope to other products. </p>
<p>Carbon tariffs could also be imposed by other countries Australia exports to, as they increasingly demand cleaner production of goods, and as the principle of free trade seemingly <a href="https://theconversation.com/was-2016-the-year-the-world-turned-its-back-on-free-trade-67240">diminishes</a> in importance. These tariffs could also apply to goods subject to regulation, in addition to emissions trading schemes.</p>
<p>There is no immediate prospect of a carbon tariff on agriculture. But as many countries toughen their emissions targets to 2030 and adopt or strengthen net-zero targets, agriculture could become part of the mix. </p>
<figure class="align-center ">
<img alt="Eu flags with building in background" src="https://images.theconversation.com/files/416917/original/file-20210819-15-ke30na.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/416917/original/file-20210819-15-ke30na.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=407&fit=crop&dpr=1 600w, https://images.theconversation.com/files/416917/original/file-20210819-15-ke30na.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=407&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/416917/original/file-20210819-15-ke30na.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=407&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/416917/original/file-20210819-15-ke30na.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/416917/original/file-20210819-15-ke30na.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/416917/original/file-20210819-15-ke30na.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The EU carbon border tariff aims to protect European producers operating under a carbon price.</span>
<span class="attribution"><span class="source">OLIVIER HOSLET/EPA</span></span>
</figcaption>
</figure>
<h2>Carbon levies on agriculture?</h2>
<p>Agriculture accounts for about 13% of Australia’s <a href="https://www.industry.gov.au/sites/default/files/2020-12/australias-emissions-projections-2020.pdf">total greenhouse gas emissions</a>. The main source of emissions is methane from cattle and sheep. Others include rice fields, fertiliser use, agricultural waste and fuel use. </p>
<p>The industry is clearly sensitive to the problem. The National Farmers’ Federation has <a href="https://nff.org.au/wp-content/uploads/2020/08/2020.08.06_Policy_NRM_Climate_Change.pdf">endorsed</a> an economy-wide net-zero “aspiration”. It’s also calling for investments in carbon-neutral agricultural technologies to, among other goals, develop new export markets. Meat and Livestock Australia has set a 2030 <a href="https://www.mla.com.au/globalassets/mla-corporate/research-and-development/documents/cn30-information-sheet-final.pdf">carbon-neutral goal</a> for the red meat industry. </p>
<p>If Australia’s major trading partners apply carbon tariffs to agricultural products in future, Australian farmers will have a big incentive to make production less emissions-intensive. Potential ways to achieve this include:</p>
<ul>
<li>better soil and native vegetation cover management</li>
<li>less fertiliser use</li>
<li>switching to lower-emitting sheep and cattle breeds</li>
<li>feed additives which make livestock emit less methane</li>
<li>moving from ruminant livestock to other sources of meat, such as <a href="https://theconversation.com/a-us-ban-on-kangaroo-leather-would-be-an-animal-welfare-disaster-and-a-missed-farming-opportunity-155904">kangaroo</a>.</li>
</ul>
<p>Such measures can result in <a href="https://www.publish.csiro.au/an/AN16438">increased agricultural productivity</a>. </p>
<p>There are two ways Australia can avoid a carbon tariff on agriculture exports. First, agriculture can adopt cleaner production methods and have its goods certified as produced with low emissions. Second, the federal government can implement a comprehensive emissions-reduction policy, which in agriculture might mean minimum production standards to avoid high emissions practices or a <a href="https://theconversation.com/carbon-pricing-works-the-largest-ever-study-puts-it-beyond-doubt-142034">carbon price</a> where practicable. </p>
<p>The existing Emissions Reductions Fund would not help avoid carbon tariffs. This is because it applies only to businesses that opt in, and it subsidises emission-reduction projects rather that placing obligations on those who generate emissions. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/carbon-pricing-works-the-largest-ever-study-puts-it-beyond-doubt-142034">Carbon pricing works: the largest-ever study puts it beyond doubt</a>
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<figure class="align-center ">
<img alt="farmer feeds cattle" src="https://images.theconversation.com/files/416923/original/file-20210819-13-1mpll7m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/416923/original/file-20210819-13-1mpll7m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=412&fit=crop&dpr=1 600w, https://images.theconversation.com/files/416923/original/file-20210819-13-1mpll7m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=412&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/416923/original/file-20210819-13-1mpll7m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=412&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/416923/original/file-20210819-13-1mpll7m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=517&fit=crop&dpr=1 754w, https://images.theconversation.com/files/416923/original/file-20210819-13-1mpll7m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=517&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/416923/original/file-20210819-13-1mpll7m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=517&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Additives to stock feed can lead to fewer methane emissions.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<h2>Tariffs on biodiversity loss?</h2>
<p>In future, environmental border tariffs could well extend to a broader set of environmental harms, such as biodiversity loss.</p>
<p>Australia’s record on species loss is truly <a href="https://www.researchgate.net/publication/337080985_Spending_to_save_What_will_it_cost_to_halt_Australia%27s_extinction_crisis">appalling</a> – including in <a href="https://www.researchgate.net/publication/230817486_Impacts_of_red_meat_production_on_biodiversity_in_Australia_A_review_and_comparison_with_alternative_protein_production_industries">agricultural landscapes</a> which have been heavily modified.</p>
<p>Some countries are already using financial incentives to reduce damage to nature. For example, plans by the UK government would require farmers to demonstrate <a href="https://www.theguardian.com/environment/2020/nov/30/environment-to-benefit-from-biggest-farming-shake-up-in-50-years">environmental improvements</a> to receive farming subsidies.</p>
<p>A key challenge for the agriculture sector is to simultaneously reduce greenhouse gas emissions and improve biodiversity outcomes. There are proven, <a href="https://www.publish.csiro.au/book/7844/">science-based ways</a> to do this, such as:</p>
<ul>
<li>protecting patches of remnant native vegetation which provides habitat for animals and helps draw down and store carbon from the atmosphere </li>
<li>creating <a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0256089">healthy farm dams</a> which can provide higher-quality drinking water for livestock, improve farm productivity and create wildlife habitat</li>
<li>planting “<a href="https://onlinelibrary.wiley.com/doi/full/10.1111/emr.12303">shelterbelts</a>” – strips of woody vegetation that shelter livestock from wind and sun, provide wildlife habitat (when well designed and managed), and prevent moisture loss from soil. </li>
</ul>
<p>This integrated approach to agricultural production, climate change mitigation and biodiversity conservation is being researched and championed by the Australian National University’s <a href="https://www.sustainablefarms.org.au/">Sustainable Farms</a> project.</p>
<figure class="align-center ">
<img alt="girl runs past dam" src="https://images.theconversation.com/files/416921/original/file-20210819-26417-qy0w6a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/416921/original/file-20210819-26417-qy0w6a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=445&fit=crop&dpr=1 600w, https://images.theconversation.com/files/416921/original/file-20210819-26417-qy0w6a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=445&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/416921/original/file-20210819-26417-qy0w6a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=445&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/416921/original/file-20210819-26417-qy0w6a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=560&fit=crop&dpr=1 754w, https://images.theconversation.com/files/416921/original/file-20210819-26417-qy0w6a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=560&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/416921/original/file-20210819-26417-qy0w6a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=560&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Changes the management of dams of farms can improve biodiversity and farm production.</span>
<span class="attribution"><span class="source">Peter Lorimer/AAP</span></span>
</figcaption>
</figure>
<h2>Future-proofing Australian farming</h2>
<p>The Australian government has recognised the need for farming solutions to both climate change and biodiversity loss. For example, it’s currently developing a <a href="https://www.agriculture.gov.au/ag-farm-food/natural-resources/landcare/sustaining-future-australian-farming/carbon-biodiversity-pilot">stewardship program</a> to encourage farmers to improve environmental conditions on their land. </p>
<p>A crucial part of this and similar schemes will be establishing reliable systems for estimating and certifying farm emissions and biodiversity outcomes. Indeed, robust long-term monitoring is vital for such schemes to be seen as credible, nationally and internationally.</p>
<p>The opportunities are ripe for Australian farmers to adopt far more environmentally sustainable land management practices, and in the process, safeguard or even expand Australian agricultural exports.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australias-farmers-want-more-climate-action-and-theyre-starting-in-their-own-huge-backyards-144792">Australia's farmers want more climate action – and they’re starting in their own (huge) backyards</a>
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<img src="https://counter.theconversation.com/content/166177/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frank Jotzo leads and has led research projects funded by a variety of funders. He is the economics director at the Sustainable Farms project at The Australian National University.</span></em></p><p class="fine-print"><em><span>David Lindenmayer receives funding from the Australian Government, the Ian Potter Foundation, the William Buckland Foundation, the Australian Research Council, the Riverina Local land Services and Murray Local Land Services.
David Lindenmayer is a Research Director in the Sustainable Farms project at The Australian National University. </span></em></p>Adopting more environmentally conscious farm models would safeguard our agricultural exports, cut emissions and help protect nature.Frank Jotzo, Professor, Crawford School of Public Policy and Head of Energy, Institute for Climate Energy and Disaster Solutions, Australian National UniversityDavid Lindenmayer, Professor, The Fenner School of Environment and Society, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1639882021-07-11T20:14:24Z2021-07-11T20:14:24ZAre the Nationals now the party for mining, not farming? If so, Barnaby Joyce must tread carefully<figure><img src="https://images.theconversation.com/files/410528/original/file-20210709-13-44i0wo.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5505%2C3637&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Perry Duffin/AAP</span></span></figcaption></figure><p>The return of Barnaby Joyce to the federal National Party’s top job has highlighted tensions within, and dilemmas for, the broader party – particularly on climate change policy and coal.</p>
<p>Joyce and some of his Queensland colleagues unashamedly <a href="https://www.theguardian.com/australia-news/2021/jun/29/barnaby-joyce-says-australia-needs-low-emission-coal-stations-and-backs-nuclear-power">support the coal industry</a>, and the federal party appears <a href="https://theconversation.com/net-zero-by-2050-even-if-scott-morrison-gets-the-nationals-on-board-hold-the-applause-163074">broadly opposed</a> to Australia adopting a target of net-zero emissions by 2050.</p>
<p>These are positions at odds with progressive quarters of the party, particularly in Victoria. The divisions came to a head earlier this month when, in response to Joyce’s ascension, Victorian Nationals leader Peter Walsh and deputy Steph Ryan <a href="https://www.theaustralian.com.au/nation/politics/victorian-nationals-sought-disaffiliation-from-federal-party-over-barnaby-joyce/news-story/cf2e614aa1f979907a1b6ae28f4e75e8">sought to split</a> the state party from its federal counterpart.</p>
<p>The move was unsuccessful. But Walsh later called for the party to have “a constructive discussion about the transition of our energy supplies and how we reduce our impact on the Earth we live on”. </p>
<p>So are the federal Nationals the latter-day party for mining, not farming? If so, what does this mean for the party’s political positioning and prospects? To address this question, we must examine the Nationals’ evolution over the past century.</p>
<figure class="align-center ">
<img alt="surprised man seated, other man standing holding piece of coal" src="https://images.theconversation.com/files/410523/original/file-20210709-13-1m57y32.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/410523/original/file-20210709-13-1m57y32.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=386&fit=crop&dpr=1 600w, https://images.theconversation.com/files/410523/original/file-20210709-13-1m57y32.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=386&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/410523/original/file-20210709-13-1m57y32.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=386&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/410523/original/file-20210709-13-1m57y32.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=485&fit=crop&dpr=1 754w, https://images.theconversation.com/files/410523/original/file-20210709-13-1m57y32.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=485&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/410523/original/file-20210709-13-1m57y32.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=485&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Barnaby Joyce’s support for coal has troubled the Victorian Nationals.</span>
<span class="attribution"><span class="source">Mick Tsikas/AAP</span></span>
</figcaption>
</figure>
<h2>Coal as nation-builder</h2>
<p>The National Party began federally in 1920 as the Australian Country Party, and traditionally represented farmers and rural communities. But over time, the party evolved to represent and advocate for the broader interests of regional Australia. </p>
<p>Economic nationalism has underpinned the party, especially since the 1950s. Under this ethos, farming, mining and basic manufacturing were considered key foundations for nation-building – a view which persists today. As the Nationals’ Senator Matt Canavan wrote in an <a href="https://www.theaustralian.com.au/commentary/barnaby-will-help-restore-law-of-made-in-australia/news-story/8dd04fb3d1937eb11eb72df2506df472">opinion piece</a> last month:</p>
<blockquote>
<p>The restoration of Barnaby Joyce as deputy prime minister restores a strong advocate for the economically nationalist, Australia-first approach that has always served us well. </p>
</blockquote>
<p>Most Nationals candidates come from rural small businesses, finance organisations and social and community services – though many have farming roots or some involvement in farming activities. </p>
<p>Rural communities are under pressure from dwindling populations and limited employment opportunities. In that sense, the mining industry is an important source of jobs and economic activity in Australia’s regions.</p>
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<strong>
Read more:
<a href="https://theconversation.com/net-zero-by-2050-even-if-scott-morrison-gets-the-nationals-on-board-hold-the-applause-163074">Net zero by 2050? Even if Scott Morrison gets the Nationals on board, hold the applause</a>
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</em>
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<figure class="align-center ">
<img alt="coal pile at mine" src="https://images.theconversation.com/files/410533/original/file-20210709-13-j1ginm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/410533/original/file-20210709-13-j1ginm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/410533/original/file-20210709-13-j1ginm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/410533/original/file-20210709-13-j1ginm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/410533/original/file-20210709-13-j1ginm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/410533/original/file-20210709-13-j1ginm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/410533/original/file-20210709-13-j1ginm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Mining is an important source of jobs in regional Australia.</span>
<span class="attribution"><span class="source">Dean Lewins/AAP</span></span>
</figcaption>
</figure>
<p>The federal party’s vociferous support for mining and opposition to emissions reduction is, in part, values signalling. For many in the Nationals, coal helped build the nation, while climate change action and renewable energy represent a moral and material threat.</p>
<p>Regional differences also exist. Nationals’ support for mining is particularly strong in Queensland – traditionally a mining-dependent state where resource investment has long been considered a means of rural development. At both the Queensland and federal levels, strong political connections exist between mining companies and the Liberal-National Party. </p>
<p>In another sign of the federal party’s contemporary priorities, Joyce’s close party ally Matt Canavan recently <a href="https://www.theguardian.com/australia-news/audio/2021/jul/03/matt-canavan-on-leadership-and-why-he-doesnt-want-a-net-zero-policy-australian-politics-podcast">told the Guardian</a>:</p>
<blockquote>
<p>About 5% of our voters are farmers. It’s about 2% of the overall population. So 95% of our voters don’t farm, aren’t farmers or don’t own farmland.</p>
</blockquote>
<p>The Nationals’ apparent support for mining above farming exists partly because because they can get away with it. In many regions, farming and mining co-exist in reasonable harmony, both sectors enjoying the benefits of strong regional centres. </p>
<p>In some cases conflict does arise, <a href="https://www.afr.com/companies/agriculture/farmer-turns-against-santos-coal-seam-gas-project-20140523-iupn0">such as</a> with gas exploration in cropping country. But in those regions, disenfranchised Nationals voters typically direct their votes to micro-parties rather than Labor or the Greens. These votes often flow back to the Nationals via <a href="https://theconversation.com/minor-parties-perform-well-in-federal-election-and-reconfirm-the-power-of-preference-deals-117192">preferences</a>.</p>
<figure class="align-center ">
<img alt="Man in hard hat" src="https://images.theconversation.com/files/410529/original/file-20210709-15-rw9ncl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/410529/original/file-20210709-15-rw9ncl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/410529/original/file-20210709-15-rw9ncl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/410529/original/file-20210709-15-rw9ncl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/410529/original/file-20210709-15-rw9ncl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/410529/original/file-20210709-15-rw9ncl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/410529/original/file-20210709-15-rw9ncl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Pro-coal Nationals senator Matt Canavan has downplayed the importance of farmers to the party’s constituency.</span>
<span class="attribution"><span class="source">Lukas Coch/AAP</span></span>
</figcaption>
</figure>
<h2>A questionable strategy</h2>
<p>The federal Nationals’ pro-mining, anti-renewables stance may not, however, benefit the party over the long term.</p>
<p>First, mining is at best a very patchy contributor to rural development. Overall, net employment in agriculture is still higher <a href="https://www.abs.gov.au/statistics/industry/industry-overview/australian-industry/latest-release">than for mining</a> and is more evenly distributed across the regions. Mining investment can ebb and flow quickly with commodity prices and the stage of project development, <a href="https://www.tandfonline.com/doi/abs/10.1080/10371656.2018.1443725?journalCode=rrso20">leaving communities</a> with falling real estate values and an <a href="https://www.tandfonline.com/doi/abs/10.1080/10371656.2018.1443725?journalCode=rrso20">altered</a> social fabric. </p>
<p>The anti-emissions control stance could also trigger conflict with major farm organisations. Many, <a href="https://www.afr.com/policy/energy-and-climate/run-down-by-the-green-tariff-train-20210214-p572f6">such as</a> the National Farmers Federation and Meat and Livestock Association, <a href="https://www.afr.com/companies/agriculture/the-net-zero-dilemma-for-australian-farmers-20210212-p571ul">want to see</a> a strong national emissions reduction plan, under which landowners can benefit financially by participating in land carbon schemes. </p>
<p>Many farmers are also interested in renewable energy as both a source of income and cheaper power. Renewables projects are proliferating in regional areas and even Joyce has been known to <a href="https://reneweconomy.com.au/barnaby-gets-a-spade-and-starts-digging-for-white-rock-solar-farm-67949">turn up in a hard hat</a> to get behind them. So we can look forward to some interesting management of that cognitive dissonance.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/renewables-need-land-and-lots-of-it-that-poses-tricky-questions-for-regional-australia-156031">Renewables need land – and lots of it. That poses tricky questions for regional Australia</a>
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<figure class="align-center ">
<img alt="cows and wind turbines in field" src="https://images.theconversation.com/files/410531/original/file-20210709-25-18j0jsf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/410531/original/file-20210709-25-18j0jsf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/410531/original/file-20210709-25-18j0jsf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/410531/original/file-20210709-25-18j0jsf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/410531/original/file-20210709-25-18j0jsf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/410531/original/file-20210709-25-18j0jsf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/410531/original/file-20210709-25-18j0jsf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Many farmers are interested in hosting renewables projects.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Trouble ahead</h2>
<p>Following Joyce’s return to the federal party leadership, Victorian Nationals leader Peter Walsh said he’s had “a very frank discussion with him about the policy differences on climate change”.</p>
<p>But discontent on climate policy is not confined to Victoria. Across the party, Young Nationals organisations are generally <a href="https://www.smh.com.au/politics/federal/young-nationals-reject-federal-party-policy-to-back-emissions-trading-20170410-gvi0n1.html">far more open</a> to climate action than their older party colleagues. </p>
<p>And the hardline mining stance will not help the Nationals regain or even retain seats in areas such as <a href="https://www.smh.com.au/national/nsw/nsw-state-election-2015-greens-take-ballina-after-27year-nationals-reign-20150329-1ma6kh.html">Ballina</a> in NSW, where demographic changes have eroded the party’s support.</p>
<p>But the biggest test of the Nationals’ farming-vs-mining rift is perhaps yet to come. The European Union and other jurisdictions are <a href="https://theconversation.com/no-point-complaining-about-it-australia-will-face-carbon-levies-unless-it-changes-course-155200">considering imposing</a> tariffs on goods – including agricultural products – from nations such as Australia which lack strong emissions reduction policies.</p>
<p>While helping drive global climate action, such moves would partly be motivated by economic nationalism - boosting the international competitiveness of industries in the country/s applying the tariff. The sight of the Nationals impotently arguing for free trade in this instance will be fascinating political theatre.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/no-point-protesting-australia-faces-carbon-levies-unless-it-changes-course-155200">No point protesting, Australia faces carbon levies unless it changes course</a>
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<img src="https://counter.theconversation.com/content/163988/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoff Cockfield does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Barnaby Joyce’s pro-mining stance is at odds with the more progressive quarters of the party, and puts the Nationals in a difficult position on global carbon tariffs.Geoff Cockfield, Professor of Government and Economics, and Deputy Dean, University of Southern QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1634232021-07-07T02:06:05Z2021-07-07T02:06:05ZWhat New Zealand should win from its trade agreement with post-Brexit Britain<figure><img src="https://images.theconversation.com/files/410028/original/file-20210706-15-1p79udn.jpg?ixlib=rb-1.1.0&rect=5%2C0%2C3531%2C2354&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">GettyImages</span></span></figcaption></figure><p>Bruised by its divorce from the European Union, Britain is busy getting out more, making new friends and renewing old acquaintances. </p>
<p>Serenaded with promises of <a href="https://www.smh.com.au/national/scotch-whisky-salmon-and-sunburnt-backpackers-what-an-australia-uk-free-trade-deal-will-bring-20200620-p554j7.html">cheaper cars, whiskey and marmite</a>, Australia was first to sign a free trade agreement (FTA) with the UK — but New Zealand is not far behind.</p>
<p>The National Party opposition was <a href="https://www.scoop.co.nz/stories/PA2106/S00116/wheres-new-zealands-fta-with-the-uk.html">quick to criticise</a> the Labour government for being too slow with a UK deal, but Prime Minister Jacinda Ardern responded pointedly by saying New Zealand wanted “<a href="https://www.tvnz.co.nz/one-news/new-zealand/ardern-says-nz-wants-quality-over-speed-in-uk-free-trade-deal-after-australia-signs-its-own-agreement">quality over speed</a>”.</p>
<p>The significance of the Australian deal has also been downplayed, with the credit rating agency Moody’s <a href="https://www.crikey.com.au/2021/06/25/free-trade-deal-with-uk-small-potatoes/">saying</a>, “the economic impact of the trade deal is negligible”. Others have argued the deal is more about demonstrating post-Brexit sovereignty than economic gain.</p>
<p>Yet there’s no denying Britain needs to diversify its markets to offset the <a href="https://www.bbc.com/news/topics/cv0kerlpjwvt/economic-effects-of-brexit">negative economic impacts</a> of Brexit. New Zealand, too, is keen to grow trade after <a href="https://statisticsnz.shinyapps.io/trade_dashboard/">the pandemic disruptions</a> and <a href="https://www.tvnz.co.nz/one-news/new-zealand/nanaia-mahuta-looking-diversify-nzs-trade-away-reliance-china">diversify its trade markets</a> beyond China.</p>
<p>With a <a href="https://www.stuff.co.nz/national/politics/125496575/new-zealand-and-united-kingdom-to-reach-free-trade-agreement-in-august">deal expected</a> this August, the big questions are: what’s really in it for New Zealand, and what considerations will have guided negotiations? </p>
<p>Much has changed since Britain joined the old European Common Market and cut the colonial apron strings. New Zealand is a different country now, and can cut a deal on its own terms.</p>
<h2>Priority 1: product</h2>
<p>Where once Britain was New Zealand’s most important trading partner in the 19th century, today it ranks sixth. Well behind China, Australia and (ironically) the European Union, trade with the UK was nonetheless worth nearly NZ$6 billion by 2019. But it’s not exactly a two-way street.</p>
<p>While New Zealand embraced free trade and did away with many import tariffs, Britain still imposes tariffs on imports. So, while British motor vehicles attract very little in the way of tariffs (other than GST) in New Zealand, there remain <a href="https://www.mfat.govt.nz/br/trade/free-trade-agreements/free-trade-agreements-under-negotiation/new-zealand-united-kingdom-free-trade-agreement/key-facts-on-new-zealand-united-kingdom-trade/">prohibitively high tariffs</a> and quota restrictions on New Zealand’s key exports to the UK.</p>
<p>For example, beyond limited quota volumes, British tariffs on New Zealand butter and cheese are equivalent to <a href="https://www.scoop.co.nz/stories/BU2106/S00358/australia-deal-sets-the-benchmark-for-a-credible-nz-uk-fta.htm">45% of the product value</a>, 16% on honey and up to 20% on seafood products. The tariff on New Zealand wine ranges between £10 and £26 ($18–$48) per litre.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-uk-australia-trade-deal-is-not-really-about-economic-gain-its-about-demonstrating-post-brexit-sovereignty-162953">The UK–Australia trade deal is not really about economic gain – it's about demonstrating post-Brexit sovereignty</a>
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<hr>
<p>So, New Zealand should expect nothing less for it exports than the gains Australia has just made. While there is a lot of detail yet to come about the Australia-UK FTA, it appears British quotas will rise and tariffs drop quickly over the next decade. According to some analysis, this is <a href="https://www.lowyinstitute.org/the-interpreter/australia-sweeps-table-uk-trade-deal">effectively an elimination</a> of the old trade barriers.</p>
<p>The same must be a bottom line for New Zealand’s primary products, too. There may be resistance from the British agricultural sector, which has been sounding the alarm that free trade could “<a href="https://www.dailymail.co.uk/debate/article-9583115/NFU-president-MINETTE-BATTERS-level-throwing-family-farms-bus.html">could spell the end</a>” for farmers. It won’t, but the Australian FTA reportedly caused a “<a href="https://www.independent.co.uk/news/uk/politics/australia-deal-liz-truss-brexit-b1849297.html">ferocious row</a>” within Prime Minister Boris Johnson’s cabinet.</p>
<p>Regardless, settling for anything less than Canberra achieved would be a national disgrace for New Zealand.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1404893968681160704"}"></div></p>
<h2>Priority 2: principle</h2>
<p>The FTA’s scope needs to be wider than just product exchange. For example, New Zealand is part of an international initiative pushing for an <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/trade-and-climate/agreement-on-climate-change-trade-and-sustainability-accts-negotiations/">agreement on climate change, trade and sustainability</a>.</p>
<p>Including the guiding principles of that agreement – removing tariffs on environmental goods, eliminating harmful fossil fuel subsidies, and the development of eco-labelling programmes – should be a priority.</p>
<p>As New Zealand continues to improve its agricultural response to <a href="https://climateactiontracker.org/countries/">climate change</a> and <a href="https://api.worldanimalprotection.org/">humane farming standards</a>, this will help deflect any blowback against its exports. It also represents a competitive advantage, with New Zealand being seen to be using international trade to drive sustainability standards.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/theres-a-lot-we-dont-know-about-the-uk-trade-agreement-we-are-about-to-sign-162841">There's a lot we don't know about the UK trade agreement we are about to sign</a>
</strong>
</em>
</p>
<hr>
<p>Māori interests must be the other main priority in this area. After all, Māori have a unique relationship with the British Crown, given it was the emissaries of Queen Victoria with whom the <a href="https://nzhistory.govt.nz/politics/treaty/read-the-treaty/english-text">Treaty of Waitangi</a> was signed.</p>
<p>As the emissaries of Elizabeth II (the great-great-granddaughter of Victoria) negotiate this latest milestone in the relationship, they must be made fully aware of the importance and relevance of the Treaty to any new agreement, especially with Māori-led trade initiatives.</p>
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<h2>Priority 3: people</h2>
<p>Finally, the agreement must also be about people. Britain will be seeking to mitigate the <a href="https://academic.oup.com/oxrep/article-abstract/33/suppl_1/S31/3066076?redirectedFrom=fulltext">reduced migration flows</a> caused by Brexit, and New Zealanders will be prime targets. Aside from the tourist potential, Britain will want Kiwi students, workers and entrepreneurs.</p>
<p>Retaining and expanding British access for New Zealanders, however, must be reciprocal. If not, New Zealand risks losing one of the few positive outcomes of COVID-19, namely the “<a href="https://www.bbc.com/worklife/article/20200827-new-zealands-brain-gain-boost">brain gain</a>” of returning expats.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australia-uk-trade-deal-can-help-spur-post-pandemic-recovery-161219">Australia–UK trade deal can help spur post-pandemic recovery</a>
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<p>The government’s so-called “<a href="https://www.rnz.co.nz/news/political/442754/government-announces-reset-of-immigration-system">once-in-a-generation reset</a>” of the immigration system is central to this, moving New Zealand away from relying on low-skilled workers to attracting those with higher skills. Making New Zealand an attractive and viable option for Britain’s best and brightest should be a byproduct of the FTA.</p>
<p>With formal <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-under-negotiation/new-zealand-united-kingdom-free-trade-agreement/timeline-for-negotiations/">negotiations concluded</a>, the “quality” of the eventual deal remains to be seen. But New Zealanders should expect an agreement that appropriately acknowledges the special relationship between the two countries. </p>
<p>More than that, New Zealand is no longer the junior partner. The reality is, for post-Brexit Britain, a good deal for New Zealand is still a good deal.</p><img src="https://counter.theconversation.com/content/163423/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alexander Gillespie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With Britain keen to make post-Brexit deals, New Zealand can expect favourable terms from a trade agreement – anything less will be a failure.Alexander Gillespie, Professor of Law, University of WaikatoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1521232020-12-17T16:52:47Z2020-12-17T16:52:47ZWhat are Australian-style and Canadian-style Brexit trade deals?<p>Negotiations for a <a href="https://theconversation.com/what-the-british-public-thinks-about-post-brexit-trade-deals-128484">post-Brexit trade deal</a> between the European Union and the UK have been ongoing since March. Both have until the end of the <a href="https://theconversation.com/extending-the-brexit-transition-period-what-does-it-mean-for-a-deal-105271">Brexit transition period</a> – December 31 – to strike a <a href="https://theconversation.com/should-the-uk-remain-in-the-eu-customs-union-after-brexit-63179">free trade deal</a>. If no agreement is reached, the UK-EU trading partnership will be governed by <a href="https://theconversation.com/why-uk-could-be-doomed-to-years-without-proper-access-to-world-trade-61782">World Trade Organization</a> (WTO) rules. </p>
<p>The WTO is the only global organisation that deals with trade rules between nations, covering things like tariffs and product safety testing and <a href="https://theconversation.com/the-uks-plan-for-post-brexit-customs-is-more-hopeful-than-realistic-82345">certification procedures</a>. </p>
<p>The terms “Australian-style” or “Canadian-style” Brexit are meant to convey to the British public the kind of trade relationship they can expect with the EU if no preferential free trade agreement (FTA) is concluded between the UK and the EU at the end of the transition period. </p>
<p>They are a short-hand way of telling the public that it is perfectly normal not to be a member of the EU or Single Market, because both Australia and Canada manage this and remain functional and amicable trading partners with the EU. </p>
<h2>What is an Australian-style Brexit?</h2>
<p>An Australian-style Brexit means there will be <a href="https://theconversation.com/trade-deals-are-difficult-to-negotiate-and-britain-lacks-the-skills-for-the-job-71580">no trade deal</a> with the EU. Although the EU has some smaller agreements with Australia recognising each other’s product safety certification procedures for certain kinds of goods.</p>
<p>This means goods and services imported into the UK will be taxed and vice versa and there could be delays at the border for inspections on some goods. At the moment, there are no tariffs on moving goods between the UK and EU and very few such inspections.</p>
<p>Under WTO Most Favoured Nation (MFN) rules (treating everyone the same), the EU’s average tariffs on manufactured goods are fairly low (around 4%) although they are somewhat higher on agricultural products and on some composite goods, such as <a href="https://theconversation.com/how-brexit-will-hit-different-uk-regions-and-industries-91287">automobiles</a>.</p>
<figure class="align-center ">
<img alt="Crowd waving Australia flag" src="https://images.theconversation.com/files/375435/original/file-20201216-17-kps3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/375435/original/file-20201216-17-kps3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=385&fit=crop&dpr=1 600w, https://images.theconversation.com/files/375435/original/file-20201216-17-kps3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=385&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/375435/original/file-20201216-17-kps3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=385&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/375435/original/file-20201216-17-kps3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=484&fit=crop&dpr=1 754w, https://images.theconversation.com/files/375435/original/file-20201216-17-kps3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=484&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/375435/original/file-20201216-17-kps3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=484&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">An Australian-style Brexit means there will be no trade deal with the EU.</span>
<span class="attribution"><span class="source">Shuttershock</span></span>
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<p>Even without an FTA, WTO law prohibits unreasonable restrictions on trade in the form of excessive product safety certification procedures as well as subsidies that distort trade by granting financial support to struggling companies so that they can export at cheaper prices. </p>
<p>To be sure, trading with the EU without a preferential FTA would not be ideal for the UK, but it would be far from the disaster that many have fumed about for the past few years. </p>
<p>It is important to remember that the EU’s portion of UK’s total trade (currently high at around 40%) declines every year and only a fraction of British businesses export there. UK tariffs on EU goods (applied on a global WTO-MFN basis) are also fairly low across most products, although Britain can expect increases in the price of many <a href="https://theconversation.com/brexit-and-food-standards-could-get-even-worse-94866">foods</a>, whereas products from outside the EU should become cheaper.</p>
<h2>What is a Canadian-style Brexit?</h2>
<p>Canada has an FTA which it concluded with the EU in 2016, its called the <a href="https://theconversation.com/ceta-was-brexit-rather-than-the-walloons-behind-trade-deal-stutter-67800">Comprehensive Economic and Trade Agreement (Ceta)</a>. </p>
<p>This agreement removed tariffs entirely on 98% of goods – a substantial improvement from the global WTO regime. </p>
<p>Ceta also streamlined product testing processes through enlarged mutual recognition, reducing the cost of trade in animal and plant products. On services, Ceta provides a framework for the mutual recognition of professional qualifications and removes some unfair nationality requirements. Much of Ceta is about cooperating on services rules going forward rather than genuinely expanding market access to sectors that were previously closed.</p>
<figure class="align-center ">
<img alt="Woman waving Canadian flag" src="https://images.theconversation.com/files/375488/original/file-20201216-15-hyqbip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/375488/original/file-20201216-15-hyqbip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/375488/original/file-20201216-15-hyqbip.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/375488/original/file-20201216-15-hyqbip.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/375488/original/file-20201216-15-hyqbip.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/375488/original/file-20201216-15-hyqbip.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/375488/original/file-20201216-15-hyqbip.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Canada has an FTA which it concluded with the EU in 2016, its called the Comprehensive Economic and Trade Agreement (Ceta).</span>
<span class="attribution"><span class="source">shutterstock</span></span>
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<p>It is not clear what a Canada-style FTA between the UK and the EU would do with the <a href="https://theconversation.com/uk/topics/withdrawal-agreement-63389">Withdrawal Agreement (WA)</a> and <a href="https://theconversation.com/backstop-option-for-irish-border-after-brexit-the-difference-between-eu-and-uk-proposals-explained-97963">Northern Irish Protocol (NIP)</a> which come into effect automatically at the end of the transition period. </p>
<h2>Canada-style, the special option?</h2>
<p>The WA/NIP are legally binding international treaties which have direct effect and supremacy in UK courts over UK laws. </p>
<p>Under the terms of the NIP, Northern Ireland must apply all EU laws on goods as they now stand and as they are changed by the EU in the future. All of these laws are under the direct jurisdiction of the <a href="https://theconversation.com/uk/topics/eu-commission-10119">EU Commission</a> and the <a href="https://theconversation.com/the-uk-plans-to-leave-the-european-court-of-justice-heres-what-it-means-for-you-71524">European Court of Justice (ECJ)</a>. </p>
<p>The UK must also observe EU regulatory controls on goods imported into Northern Ireland from Great Britain to ensure conformity with EU rules, even where the goods are not at risk of moving on into EU. </p>
<p>While <a href="https://theconversation.com/where-the-uks-brexit-plan-and-customs-bill-leave-northern-ireland-100098">Northern Ireland remains in the UK Customs Territory</a>, it will be subject to EU tariffs on goods from Great Britain if the goods are at risk of going on into the EU. Northern Ireland will also be subject to EU tariffs on goods from Great Britain if they are partly made within Northern Ireland. Furthermore, Northern Ireland will be subject to the EU’s subsidy controls. These rules could end up applying to the granting of subsidies throughout the whole of the UK if any UK government support might theoretically affect trade between Northern Ireland and the EU, as determined by the ECJ.</p>
<p>Canada made no such commitments to the EU under Ceta. It would have been unthinkable and illegal under the Canadian Constitution to carve off one of their provinces with respect to international or internal trade and to subject trade rules to a wholly foreign court. </p>
<p>This is why, to exit the EU on genuine Australian, no-deal or WTO terms, the UK government would need to reject the WA/NIP. This now appears unlikely.</p><img src="https://counter.theconversation.com/content/152123/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Collins does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For the UK to exit the EU on genuine Australian, no-deal or WTO terms, the British government would need to reject the WA/NIP. This now appears unlikely.David Collins, Professor of International Economic Law, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1499662020-12-15T02:37:59Z2020-12-15T02:37:59ZAs China’s trade war with Australia shows, New Zealand must be careful to balance its own economic priorities<figure><img src="https://images.theconversation.com/files/374956/original/file-20201214-17-1oqmig7.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5194%2C2928&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>New Zealand and China are being <a href="https://unctad.org/system/files/official-document/diaeiainf2020d5_en_0.pdf">pushed toward</a> further regional economic integration as part of the Regional Comprehensive Economic Partnership (<a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/regional-comprehensive-economic-partnership-rcep/rcep-overview">RCEP</a>) signed last month.</p>
<p>On the face of it, the RCEP is a positive step for cross-border investments. It further integrates trade between the two nations, along with Japan, South Korea, Australia and the ten countries in the Association of Southeast Asian Nations (ASEAN).</p>
<p>But perhaps we should stop to ask whether the haste with which this is happening will generate equitable and sustainable benefits.</p>
<p>One of the main criticisms of globalisation is that, in an aggressive and politically driven push for economic integration, the institutional (legal, political) differences between trading and investment partner countries have been overlooked.</p>
<p>The US-China trade war in the past three years, and now COVID-19, have <a href="https://www.scmp.com/comment/opinion/article/3107066/what-lessons-does-chinas-fast-economic-recovery-covid-19-hold-us">highlighted the differences</a> in responses to trade, investment and the pandemic by countries with very different political and economic ideologies. </p>
<p>In particular, China is using its global power to expand its influence and <a href="https://www.nytimes.com/2020/11/23/world/asia/china-xi-jinping-globalization.html">reset the rules</a> of trade relationships. New Zealand must be cautious about its exposure to Chinese influence at this level.</p>
<h2>Rebalancing the books</h2>
<p>Our analysis of foreign direct investment (FDI) application data from the New Zealand Overseas Investment Office from the beginning of 2017 to the end of 2019 shows two conflicting trends.</p>
<p>In financial and insurance services, and the information, communications and technology sectors, application approvals favoured the US and Australia. But in manufacturing, even after the US–China trade war broke out, approvals favoured China.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/an-all-out-trade-war-with-china-would-cost-australia-6-of-gdp-151070">An all-out trade war with China would cost Australia 6% of GDP</a>
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<p>This greater receptiveness to Chinese investments in manufacturing might reflect the push for more economic integration with China in recent years.</p>
<p>But this approach needs to be scrutinised in light of the current stand-off between China and Australia.</p>
<h2>The downside of economic integration</h2>
<p>The recent <a href="https://www.scmp.com/news/asia/australasia/article/3081020/australia-wants-international-probe-coronavirus-origins">call by Australia</a> (supported by New Zealand, the EU and Canada) for an independent investigation into the origin of COVID-19 shows how much deeper institutional differences matter.</p>
<p>China <a href="https://www.smh.com.au/world/asia/if-you-make-china-the-enemy-china-will-be-the-enemy-beijing-s-fresh-threat-to-australia-20201118-p56fqs.html">imposed tariffs and other trade restrictions</a> on Australian beef, barley, minerals, wine and most recently <a href="https://www.theguardian.com/australia-news/2020/dec/14/china-formalises-cut-to-australias-coal-imports-state-media-reports">coal</a> in response to that call and to Australian government criticism of Beijing’s suppression of political dissent in Hong Kong.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/nz-remains-unscathed-by-us-china-trade-war-but-thats-no-reason-for-complacency-125710">NZ remains unscathed by US-China trade war, but that's no reason for complacency</a>
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<p>In an ideal world, the free trade agreement between Australia and China and the much-hyped regional economic integration represented by the RCEP might have salvaged the relationship and allowed the parties to talk more openly about their disputes.</p>
<p>But the opposite has happened. The stronger economic relationship and mutual economic dependency have actually made <a href="https://www.bloomberg.com/news/articles/2020-11-03/china-to-halt-key-australian-commodity-imports-as-tensions-mount">China’s retaliation</a> even more painful for Australia. The less powerful party is always hurt more when a relationship goes wrong.</p>
<h2>The lessons for New Zealand</h2>
<p>New Zealand and Australia are not alone in being at something of a crossroads with China. Many countries are confronting the difficulty (impossibility, even) of balancing the pressure to be part of China’s economic orbit and their fundamental institutional differences.</p>
<p>In essence, it is the tension between greater political and economic freedoms, and state intervention and control. The implications for resolving trade disputes and other economic disagreements are profound.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/beyond-travel-a-trans-tasman-bubble-is-an-opportunity-for-australia-and-nz-to-reduce-dependence-on-china-137062">Beyond travel, a trans-Tasman bubble is an opportunity for Australia and NZ to reduce dependence on China</a>
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<p>For that reason, New Zealand’s FDI policies and application approvals should reflect a preference for countries with similar institutional conventions. While balancing its trade interests is critical for New Zealand, it should not be driven purely by immediate economic benefits.</p>
<p>New Zealand’s FDI policies should reflect its own best long-term interests: continued regional economic integration with Australia, enhanced <a href="https://www.rnz.co.nz/news/political/419218/nz-begins-free-trade-talks-for-comprehensive-deal-with-uk">post-Brexit leverage</a> of the political, historical and cultural links with the UK, and closer economic ties with developing economies (especially Commonwealth countries such as India and Malaysia).</p>
<p>In doing so, New Zealand will reduce the political and economic risks of over-integration with China and avoid the kind of conflicts based on deep institutional differences we are now witnessing.</p><img src="https://counter.theconversation.com/content/149966/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Monica Ren is affiliated with King's College London.</span></em></p><p class="fine-print"><em><span>Hongzhi Gao and Ivy Guo do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The recently signed RCEP trade agreement encourages even closer ties with China, but this puts New Zealand’s long-term interests at risk.Hongzhi Gao, Associate professor, Te Herenga Waka — Victoria University of WellingtonIvy Guo, Research Assistant, Te Herenga Waka — Victoria University of WellingtonMonica Ren, Lecturer/ Assistant Professor, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1493402020-12-04T13:30:10Z2020-12-04T13:30:10ZWhy Biden will find it hard to undo Trump’s costly ‘America first’ trade policy<figure><img src="https://images.theconversation.com/files/372857/original/file-20201203-21-7nl64t.jpg?ixlib=rb-1.1.0&rect=182%2C239%2C6208%2C4167&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Biden says his Cabinet picks will help him restore American leadership in the world.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-elect-joe-biden-speaks-during-a-cabinet-news-photo/1229768384">Chandan Khanna/AFP via Getty Images</a></span></figcaption></figure><p>Since becoming president-elect, Joe Biden has signaled that <a href="https://joebiden.com/americanleadership/">restoring America’s leadership</a> on the world stage is among his highest priorities – an intention <a href="https://apnews.com/article/joe-biden-donald-trump-politics-susan-rice-national-security-06a33397de673043360ba6b5fd78af8a">aptly demonstrated</a> by his Cabinet picks.</p>
<p>Biden’s nominees are “ready to lead the world, not retreat from it,” <a href="https://www.nytimes.com/live/2020/11/24/us/joe-biden-trump">he said on Nov. 24</a>. “America is back.”</p>
<p>Perhaps nowhere is this return more urgent than in trade policy, a topic I follow closely as a <a href="https://cas.gsu.edu/profile/charles-hankla/">scholar of international political economy</a>. Over the past four years, President Donald Trump has <a href="https://theconversation.com/what-is-the-tpp-and-can-the-us-get-back-in-95028">ripped up trade deals</a>, launched <a href="https://www.channelnewsasia.com/news/commentary/us-china-trade-war-implications-effects-impact-trump-us-election-13382878">damaging trade wars</a> and <a href="https://theconversation.com/trumps-go-it-alone-approach-to-china-trade-ignores-wtos-better-way-to-win-93918">gunked up</a> the workings of international trade organizations. </p>
<p>All of this <a href="https://www.nytimes.com/2020/11/15/business/china-trade-rcep.html">has ceded global economic leadership</a> to China, as we can see from the trade negotiations Beijing recently oversaw with 14 other Asian nations. In November, the countries met in China’s capital and formally signed what is now the world’s largest regional free trade pact, covering nearly a third of humanity.</p>
<p>Biden <a href="https://www.foreignaffairs.com/articles/united-states/2020-01-23/why-america-must-lead-again">no doubt longs to return</a> to some semblance of the “golden era” of U.S. leadership, the half-century following World War II when <a href="https://www.rand.org/content/dam/rand/pubs/research_reports/RR2200/RR2226/RAND_RR2226.pdf">America helped create</a> and sustain the rules and institutions that fueled globalization. </p>
<p>But after four years of <a href="https://www.cnn.com/2020/11/01/world/trump-us-global-leadership-election-analysis-intl/index.html">Trump’s “retreat,”</a> it may be harder to return to leading than Biden thinks – thanks to the growing number of Americans on both the right and the left who are skeptical of free trade. </p>
<h2>The costs of ‘America first’</h2>
<p>While Trump advocated a trade policy he labeled “<a href="https://theconversation.com/what-does-america-first-mean-for-american-economic-interests-71931">America first</a>,” it’s probably not the best description. </p>
<p>The policy has involved applying <a href="https://www.americanactionforum.org/research/the-total-cost-of-trumps-new-tariffs/">punitive tariffs</a> on specific products such as steel and aluminum and on whole countries – most notably China – at a scale not seen in decades. But the price to the U.S. has been high.</p>
<p>Trump’s tariffs have <a href="https://www.reuters.com/article/us-usa-trade-economy/trumps-tariffs-cost-u-s-companies-46-billion-to-date-data-shows-idUSKBN1Z8222">cost American businesses</a> and <a href="https://www.forbes.com/sites/stuartanderson/2019/09/09/trump-tariffs-will-soon-cost-us-families-thousands-of-dollars-a-year/?sh=3cb94cca5b4b">consumers</a> tens of billions of dollars. And they have seriously hurt <a href="https://www.nytimes.com/2020/06/19/business/economy/trump-china-trade-war-farmers.html">U.S. farmers</a> and <a href="https://www.reuters.com/article/us-health-coronavirus-tariffs/trumps-tariffs-add-to-pandemic-induced-turmoil-of-u-s-manufacturers-idUSKBN22C1MY">manufacturers</a> by closing off export markets for American products in China and elsewhere. Moreover, the administration <a href="https://theconversation.com/most-us-farmers-remain-loyal-to-trump-despite-pain-from-trade-wars-and-covid-19-146535">has spent tens of billions more</a> trying to aid farmers harmed by the tariffs. </p>
<p>Putting Americans first was also the <a href="https://www.whitehouse.gov/presidential-actions/presidential-memorandum-regarding-withdrawal-united-states-trans-pacific-partnership-negotiations-agreement/">stated reason</a> behind the president’s decision to withdraw from trade deals like the <a href="https://theconversation.com/what-is-the-tpp-and-can-the-us-get-back-in-95028">Trans-Pacific Partnership</a> and focus on bilateral rather than multilateral agreements. Aside from denying American companies the benefits free trade pacts provide, this also has meant the U.S. <a href="https://www.reuters.com/article/us-usa-trump-business/trump-pulls-u-s-out-of-pacific-trade-deal-loosening-asia-ties-idUSKBN1571FD">increasingly sits on the sidelines</a> when global trade rules are being written.</p>
<p>That’s bad news for America because even when rules apply only to the trade agreement in question, they generally serve as a <a href="https://academic.oup.com/jiel/article-abstract/20/2/365/3865559">foundation for future deals</a> – including negotiations exclusively with the U.S. So if the U.S. government isn’t at the table, it could have long-term ramifications. </p>
<p>In America’s stead, other powerhouses will seek to dictate the terms of trade with U.S. allies, as Beijing did with the trade accord it signed in November. And Chinese interests – on the environment, labor standards and especially intellectual property protection – are not the same as those of the U.S. </p>
<h2>Biden and the populist right</h2>
<p>So there are very strong reasons to reengage with the world. Global trade may even be key to <a href="https://www.csis.org/analysis/trade-policy-can-lead-covid-19-economic-recovery">helping the U.S. recover</a> from the coronavirus pandemic. But to do so, Biden will have to navigate two groups that could be a thorn in his side. </p>
<p>The first is the <a href="https://items.ssrc.org/democracy-papers/return-with-a-vengeance-working-class-anger-and-the-rise-of-populism/">populist right</a> – conservative, mostly working-class voters who warmed to Trump’s anti-trade platform in 2016. </p>
<p>Like Trump, they tend to see trade through a nationalist lens in which the “winner takes all.” That is, they understand trade <a href="https://www.marketwatch.com/story/why-trump-hates-imports-and-why-thats-bananas-2019-09-06">not as beneficial</a> for all parties but rather as a competition that can be won or lost based on who’s <a href="https://foreignpolicy.com/2020/02/24/trump-trade-war-china-europe-deficit/">running a trade surplus</a> or who’s gaining or losing market share. </p>
<p>Furthermore, as the <a href="https://www.theatlantic.com/education/archive/2018/11/education-gap-explains-american-politics/575113/">base of the Republican Party</a> increasingly <a href="https://www.pewresearch.org/politics/2020/06/02/in-changing-u-s-electorate-race-and-education-remain-stark-dividing-lines/">shifts to encompass</a> less educated white voters, this has critical implications for the GOP. <a href="https://rodrik.typepad.com/dani_rodriks_weblog/2008/06/stolper-samuelson-for-the-real-world.html">Basic trade theory</a> suggests that, in a rich country such as the United States, lower-skilled workers are hurt by free trade, while skilled workers and capitalists get most of the benefits. This is because lower-income countries will have a comparative advantage in lower-skilled labor.</p>
<p>Many <a href="https://www.prri.org/spotlight/tpp-free-trade-agreements/">working-class voters</a> are understandably feeling left behind by this new economy and ignored by the government. Free trade has become a target of their ire, helping drive the Republican Party’s shift toward nationalism – and protectionism – and shoving aside the traditional pro-business conservatives. </p>
<p>If <a href="https://www.politico.com/news/georgia-senate-runoff-2021-latest-race-updates-and-polls">Republicans manage to hold onto</a> the Senate in January, it’s very likely that the growing power of the populist right will continue to influence trade skepticism in the party. This would tie Biden’s hands when it comes to negotiating new trade deals or taking other steps that will require Senate approval. </p>
<p>But even if Democrats manage to take the Senate, Biden will likely still need to court these working-class, mostly white voters when he seeks to maintain his congressional majorities in the midterms. Either way, they will remain a potent force well after Trump is gone. </p>
<h2>The protectionist left</h2>
<p>But the populist right is not the only important part of the U.S. political spectrum that is skeptical of trade. </p>
<p>The populist left – <a href="https://berniesanders.com/issues/fair-trade/">led especially by Sen. Bernie Sanders</a> – <a href="https://doi.org/10.1177/0032321717723505">has long favored</a> limiting foreign trade. Its motivations are somewhat different, focused more on a skepticism of corporate power and trade’s impact on labor rights and the environment. But they are also similar when it comes to the <a href="https://www.nytimes.com/2020/03/09/us/politics/bernie-sanders-voters.html">many working-class Americans</a> and <a href="https://poll.qu.edu/national/release-detail?ReleaseID=3655">young people</a> who form the left wing of the Democratic Party. </p>
<p>In the primaries, Biden beat Sanders and others who offered a more skeptical view of trade. But still, he will have to <a href="https://www.nytimes.com/2020/10/28/business/economy/democrats-biden-trade.html">accommodate the new energy</a> coursing through the left in America, including when it comes to <a href="https://www.cnbc.com/2020/03/09/biden-vs-sanders-trade-fight-is-war-for-future-of-democratic-party.html">its views on trade</a>. And the populist left will have a lot more power than the right in Biden’s Washington, from members of Congress to key Democratic interest groups like <a href="https://foreignpolicy.com/2020/11/05/protectionism-trump-biden-buy-american-tariffs">labor unions</a>. </p>
<h2>Potent populists</h2>
<p>A pro-trade optimist might point out that polls, like <a href="https://news.gallup.com/poll/286730/americans-vanishing-fear-foreign-trade.aspx">this one conducted in late 2019</a>, suggest overwhelming support for free trade among voters in both parties. Polls, however, don’t always measure how strongly and consistently these views are held. </p>
<p>What’s more, because the <a href="https://econpapers.repec.org/bookchap/cupcbooks/9780521362474.htm">harms of free trade are more concentrated</a> than its benefits, the minority of voters who push for protectionist policies are often more powerful than their numbers might suggest. Ultimately, although populists on the right and the left represent a minority position on trade, they will remain potent political forces for the foreseeable future.</p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>For these reasons, I believe it is unlikely that Biden will be able to return to business as usual on trade. While Trump’s aggressive protectionism will likely go away, Biden will probably keep up the pressure on China and <a href="https://www.nytimes.com/2020/12/02/opinion/biden-interview-mcconnell-china-iran.html">has already adopted</a> some of his predecessor’s “America first” rhetoric to appeal to the working class. And for his more progressive supporters, you’ll likely see him push for stronger labor and environmental protections in future trade agreements. </p>
<p>Biden might not be able to throw the door to global trade wide open, but he should be able to keep it from shutting any further.</p><img src="https://counter.theconversation.com/content/149340/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Hankla has donated to and volunteered with the Democratic Party of Georgia.</span></em></p>President-elect Biden hopes to restore America’s global leadership on issues like trade, but populists in both parties may make his job a lot harder.Charles Hankla, Associate Professor of Political Science, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1497082020-11-16T13:23:26Z2020-11-16T13:23:26ZTrump 2024? Presidential comebacks have mixed success<figure><img src="https://images.theconversation.com/files/369340/original/file-20201113-13-rswdz2.jpg?ixlib=rb-1.1.0&rect=120%2C551%2C4345%2C3276&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There are already reports that Trump is mulling a run in 2024.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/supporters-of-president-donald-trump-cheer-and-hold-a-shirt-news-photo/1201954048?adppopup=true">Caitlin O'Hara/Getty Images</a></span></figcaption></figure><p>American author F. Scott Fitzgerald <a href="https://www.theguardian.com/books/2012/feb/05/scott-fitzgerald-gatsby-mccrum">once wrote</a> that “there are no second acts in American lives.”</p>
<p>Yet it’s already assumed Donald Trump will go on to a next act in one form or another. </p>
<p>Will he start <a href="https://www.businessinsider.com/trump-planning-media-channel-rival-fox-news-axios-2020-11">his own media company</a>? Serve as <a href="https://nypost.com/2020/11/10/trump-planning-to-form-pac-remain-in-politics-as-gop-kingmaker/">a GOP kingmaker</a>? </p>
<p><a href="https://www.nytimes.com/2020/11/12/us/politics/trump-future.html?smid=nytcore-ios-share">There are even rumblings</a> that he will decide <a href="https://www.newsweek.com/donald-trump-ronna-mcdaniel-rnc-2024-run-1546815">to run again for president in 2024</a>. Having served only one term, he is constitutionally eligible to try for another. </p>
<p>If he does decide to run again – and if he wins – he’ll be in rare company.</p>
<p>Only one American president has lost reelection and then won back his office: Grover Cleveland. In the American elections course that I teach, students learn details about the long-term political impacts of these comeback efforts, most of which are exercises in futility.</p>
<h2>‘Gone to the White House, ha ha ha’</h2>
<p>The late 19th-century political environment resembled today’s in many ways: tight polarized elections, strong regional patterns in national voting, relatively high voter turnout and negative campaigning.</p>
<p>Cleveland, a Democrat, had been governor of New York for less than two years when his party nominated him for president in 1884. As governor, he had gained a reputation for fighting <a href="https://millercenter.org/president/cleveland">Tammany Hall corruption</a> in New York City.</p>
<p>During the 1884 campaign, in which Cleveland ran against Republican James Blaine, a scandal erupted when a New York woman named Maria Halpin <a href="https://www.smithsonianmag.com/history/president-clevelands-problem-child-100800/">accused Cleveland</a> of raping and impregnating her. She was eventually institutionalized and forced to give up her child for adoption. Cleveland disputed some of the details of the story, and his supporters <a href="https://www.smithsonianmag.com/history/president-clevelands-problem-child-100800/">countered jeers</a> of “Ma, ma, where’s my pa?” with chants of “Gone to the White House, ha ha ha.”</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A baby cries 'I want my pa!' in a political cartoon mocking Grover Cleveland." src="https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=831&fit=crop&dpr=1 600w, https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=831&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=831&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1045&fit=crop&dpr=1 754w, https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1045&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/369342/original/file-20201113-19-9gi9ic.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1045&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Grover Cleveland weathered attacks that he had fathered a child out of wedlock.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/another-voice-for-cleveland-political-cartoon-featuring-u-s-news-photo/1177464462?adppopup=true">Universal Images Group via Getty Images</a></span>
</figcaption>
</figure>
<p>Cleveland ended up winning the national popular vote <a href="https://www.270towin.com/1884_Election/">by a slim margin</a> – 48.85% to 48.28% – and won 219 electoral votes to Blaine’s 182. Cleveland’s base of support was in the South and in his home state of New York, while Blaine did well in the rest of the North. Voter turnout was high, <a href="https://www.presidency.ucsb.edu/statistics/data/voter-turnout-in-presidential-elections">estimated</a> at 77.5% of the voting-age population.</p>
<p>During Cleveland’s term, <a href="http://www.taxhistory.org/www/website.nsf/Web/THM1866?OpenDocument">tariffs became a divisive partisan issue</a> in American politics. Republicans favored higher tariffs to protect Northern manufacturing interests, while Democrats like Cleveland generally wanted lower tariffs to help the South’s agricultural export-oriented interests and to lower prices for consumers.</p>
<h2>Cleveland’s comeback</h2>
<p>When Cleveland ran for reelection in 1888, he faced off against Republican Benjamin Harrison. Cleveland again won the national popular vote by a tight margin, but lost two states – Indiana and New York – that he had won in 1884. It was enough to flip the <a href="https://www.270towin.com/1888_Election/">Electoral College</a> and allow Harrison to be elected president.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A campaign poster highlights the platform of Cleveland's reelection campaign." src="https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=805&fit=crop&dpr=1 600w, https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=805&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=805&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1012&fit=crop&dpr=1 754w, https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1012&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/369346/original/file-20201113-19-1cqzhfk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1012&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Grover Cleveland ran on tariff reform in 1888 – and lost.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/an-1888-campaign-poster-for-incumbent-president-grover-news-photo/640476369?adppopup=true">Library of Congress/Corbis/VCG via Getty Images</a></span>
</figcaption>
</figure>
<p>After losing the election, Cleveland returned to work as an attorney in New York. Under President Harrison, Congress approved the <a href="http://www.taxhistory.org/www/website.nsf/Web/THM1866?OpenDocument">McKinley Tariff and the Sherman Silver Purchase Act</a>, each of which were strongly opposed by Cleveland. </p>
<p>In 1891, after two years of avoiding the public spotlight, Cleveland again became <a href="https://elections.harpweek.com/1892/Overview-1892-2.htm">politically active</a> and started to vocally oppose the economic policies of Harrison. Cleveland attracted some national attention that year with a <a href="https://www.google.com/books/edition/Letters_and_Addresses_of_Grover_Clevelan/010NAQAAIAAJ?hl=en&gbpv=1&dq=%22grover+cleveland%22+silver+letter&pg=PA204&printsec=frontcover">public letter</a> indicating his continuing support for <a href="http://projects.vassar.edu/1896/currency.html">the gold standard</a>.</p>
<p>As Cleveland <a href="https://elections.harpweek.com/1892/Overview-1892-2.htm">met with party leaders</a> and made some public speeches in 1892, <a href="https://www.loc.gov/resource/sn83030313/1891-02-13/ed-1/?q=Herald&sp=4&st=text">national Democratic support</a> for his presidential nomination began to grow. By the time the Democratic National Convention met in June that year, support for Cleveland had become <a href="https://elections.harpweek.com/1892/Overview-1892-2.htm">overwhelming</a>, and he secured the nomination.</p>
<p>With Populist Party candidate James B. Weaver on the ballot pulling votes from both major party presidential candidates, Cleveland won the national popular vote for the third straight election, <a href="https://www.270towin.com/1892_Election/">this time besting Harrison by a 46% to 43% margin</a> and winning the Electoral College.</p>
<h2>Try, try again</h2>
<p>While Cleveland has, thus far, been the only U.S. president to lose reelection and then come back and win, other presidents have tried and failed. </p>
<p>In 1840, Democratic President Martin Van Buren lost reelection. He <a href="https://millercenter.org/president/vanburen/life-after-the-presidency">attempted</a> to be renominated by his party in 1844, but Democrats instead chose James Polk. By 1848, Van Buren joined with a group of disaffected Democrats and anti-slavery activists to become the nominee of the Free Soil Party, which opposed the extension of legal slavery to U.S. territories. While Van Buren <a href="https://www.presidency.ucsb.edu/statistics/elections/1848">won 10%</a> of the national popular vote and finished second in New York, Massachusetts and Vermont, he won no Electoral College votes.</p>
<p>Van Buren is the only president other than Cleveland to be renominated by his party, lose reelection and then appear again on ballots as a presidential candidate. </p>
<p>Three other presidents also made attempted comebacks to regain the presidency after leaving office.</p>
<p>In 1852, President Millard Fillmore, who had ascended to the presidency after the death of Zachary Taylor, made a <a href="https://millercenter.org/president/fillmore/campaigns-and-elections">halfhearted attempt</a> to win the Whig Party nomination for a full term. When he failed, he came back four years later as the presidential candidate of the American Party, better known as the “<a href="https://www.smithsonianmag.com/history/immigrants-conspiracies-and-secret-society-launched-american-nativism-180961915/">Know Nothings</a>,” a political movement to restrict Catholic immigration to the United States. Fillmore won over 21% of the national popular vote, the second-best performance by a third-party presidential candidate in American history and <a href="https://www.presidency.ucsb.edu/statistics/elections/1856">won Maryland’s electoral votes</a>.</p>
<p>The best performance by a third-party presidential candidate in American history was also by a former president, Theodore Roosevelt. In 1912, he ran for the Republican presidential nomination against his more conservative protege, President William Howard Taft. When Roosevelt <a href="https://www.smithsonianmag.com/history/1912-republican-convention-855607/">failed to get his party’s nomination</a> that year, he ran as the Progressive Party candidate.</p>
<p>After being <a href="https://www.history.com/news/shot-in-the-chest-100-years-ago-teddy-roosevelt-kept-on-talking">shot at a campaign rally</a> during the month before the election and surviving, <a href="https://www.presidency.ucsb.edu/statistics/elections/1912">Roosevelt got</a> 27% of the national popular vote and 88 electoral votes, finishing far ahead of Taft in both vote tallies – but well behind the winner, Woodrow Wilson.</p>
<p>The last American president to lose reelection and attempt to run for president again was Herbert Hoover, who was <a href="https://www.newyorker.com/magazine/2017/10/23/hating-on-herbert-hoover">unsuccessful</a> in both 1936 and 1940 at persuading other Republicans to let him lead the party again after he lost in a landslide in 1932.</p>
<p>Richard Nixon made a different kind of political comeback. </p>
<p>He lost the presidential election of 1960 while serving as Dwight D. Eisenhower’s vice president and then <a href="https://www.latimes.com/archives/la-xpm-1992-03-22-me-7477-story.html">went on to lose the 1962 California gubernatorial election</a>. After the two losses, Nixon famously told the press, “<a href="https://www.cnn.com/videos/tv/2019/03/20/tricky-dick-nixon-series-episode-2-clip-2.cnn">You won’t have Nixon to kick around anymore</a>.” But the press did get another whack at Nixon when he ran for president a second time – and won – <a href="https://www.270towin.com/1968_Election/">in 1968</a>.</p>
<figure class="align-center ">
<img alt="Nixon addresses the press after his 1962 loss." src="https://images.theconversation.com/files/369347/original/file-20201113-19-tl13fy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/369347/original/file-20201113-19-tl13fy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=388&fit=crop&dpr=1 600w, https://images.theconversation.com/files/369347/original/file-20201113-19-tl13fy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=388&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/369347/original/file-20201113-19-tl13fy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=388&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/369347/original/file-20201113-19-tl13fy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=487&fit=crop&dpr=1 754w, https://images.theconversation.com/files/369347/original/file-20201113-19-tl13fy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=487&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/369347/original/file-20201113-19-tl13fy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=487&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">After losing the 1962 California gubernatorial race, Nixon complained of his treatment by the press and hinted that he would retreat from public life.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/defeated-gubernatorial-candidate-richard-nixon-speaks-at-a-news-photo/514683092?adppopup=true">Bettmann via Getty Images</a></span>
</figcaption>
</figure>
<p>The last attempt at a political comeback by a defeated president was a very brief effort by Gerald Ford, who had lost reelection in 1976, to <a href="https://www.nytimes.com/2000/07/30/magazine/george-herbert-walker-bush-the-accidental-vice-president.html">negotiate</a> the possibility of being Ronald Reagan’s running mate during the 1980 Republican National Convention. The plan fell through, and Ford returned to private life.</p>
<p>Once out of office, most ex-presidents stay out of the spotlight and avoid criticizing their successor. Whether or not President Trump attempts a political comeback in 2024, it’s likely that he won’t stay mum over the next four years.</p>
<p>[<em>Get our most insightful politics and election stories.</em> <a href="https://theconversation.com/us/newsletters/politics-weekly-74/?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=politics-most">Sign up for The Conversation’s Politics Weekly</a>.]</p><img src="https://counter.theconversation.com/content/149708/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Speel does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Only one American president – Grover Cleveland – has lost reelection and then won back his office.Robert Speel, Associate Professor of Political Science, Erie campus, Penn StateLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1467802020-09-30T10:47:08Z2020-09-30T10:47:08ZPopulism in Brazil: how liberalisation and austerity led to the rise of Lula and Bolsonaro<p>While the rise of populist politicians in the Europe and the US gets a <a href="https://voxeu.org/article/moderator-s-introduction-vox-debate-populism">lot of attention</a> from the media and researchers alike, the drivers of the populism taking hold in emerging and developing economies still receives relatively little scrutiny. </p>
<p>In a <a href="https://www.wider.unu.edu/publication/roots-dissent">new working paper</a> we provide new evidence tracing the rise of populism in Brazil – through both the victory of presidents Luiz Inácio Lula da Silva in 2002 and Jair Bolsonaro in 2018 – to regional economic shocks caused by a process of trade liberalisation that began in the early 1990s. </p>
<p>Both Lula and Bolsonaro were able to mobilise voters by amplifying divisions caused by trade shocks and subsequent periods of austerity. But the two leaders were elected on very different platforms and narratives.</p>
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<strong>
Read more:
<a href="https://theconversation.com/what-is-populism-and-why-is-it-so-hard-to-define-107457">What is populism – and why is it so hard to define?</a>
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<h2>Economic shocks</h2>
<p>In 1990, the government of Fernando Collor de Mello started to implement a large programme of trade liberalisation in an attempt to modernise the economy. Between 1990 and 1995, import tariffs were reduced from an average of 30.5% to 12.8%. This reduction was uneven across regions and sectors. For instance, while the level of <a href="https://www.aeaweb.org/articles?id=10.1257/aer.20161214">tariff changes</a> in the agriculture and mining sectors were relatively small, in sectors such as clothing and rubber, import tariffs reduced by more than 30%. This meant that local industries faced larger increases in competition from cheaper imports with adverse consequences for some local economies. </p>
<p>The impact of these new tariffs varied across Brazil’s microregions – groups of economically integrated municipalities – depending on the concentration of different sectors in each area. Microregions that experienced the largest tariff cuts became more vulnerable to international competition, affecting the labour market and the structure of Brazil’s economy. This shock led to long-lasting declines in formal employment and in wages relative to other regions. The map below shows, for example that some of Brazil’s largest cities, including Belo Horizonte, São Paulo and Rio de Janeiro were highly affected by the tariff changes. </p>
<p><strong>Tariff reductions by microregion</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Map showing areas of Brazil most affected by tariff reductions." src="https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=533&fit=crop&dpr=1 754w, https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=533&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/360745/original/file-20200930-20-124ua5r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=533&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Regions with darker units faced the largest reductions in the level of tariffs.</span>
<span class="attribution"><span class="source">Authors’ illustration based on Kovak (2013) and Dix-Carneiro and Kovak (2017).</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>As our analysis shows, these effects persisted for decades and affected the political preferences of Brazilians. We found those microregions across Brazil that experienced the largest tariff cuts in the early 1990s were more likely to vote both for Lula in 2002 and for Bolsonaro in 2018. These microregions also recorded significant numbers of swing voters from Lula to Bolsonaro. </p>
<p><strong>Presidential votes by microregion</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two maps of Brazil showing which regions supported Lula and Bolsonaro." src="https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=533&fit=crop&dpr=1 754w, https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=533&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/360317/original/file-20200928-18-1775e9l.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=533&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Regions with darker colours show the largest shares of votes for Lula (2002) and for Bolsonaro (2018).</span>
<span class="attribution"><span class="source">Authors’ calculations based on data from the Tribunal Superior Eleitoral</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The effects of the trade reforms were further amplified by periods of austerity that hit Brazil just before the two elections. Both Lula and Bolsonaro exploited the effects of austerity and previous effects of the trade shocks by building political agendas that appealed to those voters who had lost out either economically or socially from the interaction between these economic shocks. </p>
<h2>From leftwing to rightwing populism</h2>
<p>But while these economic factors are directly linked to the rise of populism, they don’t explain its different varieties. Lula’s leftwing platform was very different from Bolsonaro’s far-right agenda. This dramatic shift in Brazilians’ preference for leftwing populism in 2002 and for rightwing populism in 2018 is explained by the different political strategies Lula and Bolsonaro used to capture large enough constituencies. </p>
<p>On the left, Lula took advantage of the austerity policies of his predecessors in the early 2000s, which lead to dramatic rises in inequality, to amplify economic cleavages in society. Lula’s variety of populism resulted in one of the <a href="https://www.jstor.org/stable/4491737">largest social protection programmes in the world</a> and large <a href="https://openknowledge.worldbank.org/handle/10986/12808">reductions in poverty and inequality</a>. But these achievements were marred by <a href="https://www.nytimes.com/2019/02/06/world/americas/brazil-lula-convict-corruption.html">accusations of corruption and economic mismanagement</a>, for which Lula was convicted and imprisoned between 2018 and 2019. </p>
<p><strong>Populists follow austerity</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Graph showing GDP growth rate and social spending in Brazil between 1995 and 2018" src="https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=330&fit=crop&dpr=1 600w, https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=330&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=330&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=414&fit=crop&dpr=1 754w, https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=414&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/360320/original/file-20200928-20-rkdotk.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=414&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">GDP growth rate (left axis) and social spending (right axis) between 1995 and 2018.</span>
<span class="attribution"><span class="source">Authors’ calculations based on data on GDP growth rate from the World Bank Group and social spending data from the Brazilian Institute for Applied Economic Research (IPEA)</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>On the right, Bolsonaro took advantage of the austerity policies implemented between 2015 and 2018 by the government of Dilma Rousseff, Lula’s successor. Bolsonaro also played on voters’ feelings of insecurity by promoting a strongman image, strengthening social and cultural divisions and anti-migration sentiment. His variety of populism has resulted in the <a href="https://www.cambridge.org/core/journals/environmental-conservation/article/brazils-new-president-and-ruralists-threaten-amazonias-environment-traditional-peoples-and-the-global-climate/F5C1E42BF9F6E6BDDB957B87601FC4F7">reversal of decades of economic development and climate adaptation</a> and one of the world’s largest death rates <a href="https://www.thelancet.com/journals/langlo/article/PIIS2214-109X(20)30285-0/fulltext">related to COVID-19</a>.</p>
<p>Across the world, the shortcomings of populist agendas in Mexico, the US, UK and India, among others, have been laid bare by <a href="https://www.ijhpm.com/article_3856.html">failures to contain the spread of</a> infections and death rates from the virus. Yet, the success of populist politicians lies on appealing to existing economic and social divisions. Given Brazil’s experience, there are now fears that the entrenchment of populism could reverse decades of development and threaten democracy itself across many other parts of the world.</p><img src="https://counter.theconversation.com/content/146780/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Patricia Justino receives funding from the UK Economic and Social Research Council. </span></em></p><p class="fine-print"><em><span>Bruno Martorano does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A new study shows how economic shocks caused by cuts to import tariff cuts in the 1990s is linked to the rise of populism in Brazil.Patricia Justino, Professor and Senior Research Fellow, World Institute for Development Economics Research (UNU-WIDER), United Nations UniversityBruno Martorano, Assistant Professor, Maastricht University and Maastricht Economic and Social Research Institute on Innovation and Technology (UNU-MERIT), United Nations UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1361612020-05-07T14:04:26Z2020-05-07T14:04:26ZCanada needs to see the U.S. and its trade motives clearly<figure><img src="https://images.theconversation.com/files/331964/original/file-20200501-42942-1aperbf.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4974%2C3179&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. President Donald Trump speaks during a meeting with Prime Minister Justin Trudeau in London in December 2019.</span> <span class="attribution"><span class="source">(AP Photo/ Evan Vucci)</span></span></figcaption></figure><p>Existential crises that threaten one’s entire society have a way of forcing us to see the world as it truly is. The coronavirus pandemic is no exception. Canada, once mocked by <em>South Park</em> as “<a href="https://youtu.be/bOR38552MJA">not even a real country anyway</a>,” has come together in remarkable fashion. Canadians and their leaders, from every region and across the political spectrum, are all pushing in the same direction.</p>
<p>But while the pandemic has showcased the country’s inspiring cohesiveness, it has also revealed the tragic costs, measured in lives lost and economic opportunity squandered, of Canada’s continued adherence to a one-dimensional ideology that long ago passed its best-before date.</p>
<p>Since the 1990s, Canadian economic development policy has been anchored in two words: free trade. The previously widely accepted notion that countries should have an industrial policy — a strategy for encouraging strong and desirable economic growth — was cast aside in the single-minded pursuit of comprehensive trade agreements. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/331960/original/file-20200501-42942-1ytj0g5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/331960/original/file-20200501-42942-1ytj0g5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=472&fit=crop&dpr=1 600w, https://images.theconversation.com/files/331960/original/file-20200501-42942-1ytj0g5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=472&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/331960/original/file-20200501-42942-1ytj0g5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=472&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/331960/original/file-20200501-42942-1ytj0g5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=593&fit=crop&dpr=1 754w, https://images.theconversation.com/files/331960/original/file-20200501-42942-1ytj0g5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=593&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/331960/original/file-20200501-42942-1ytj0g5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=593&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Standing from left, Mexico’s Carlos Salinas de Gortari, George H. W. Bush of the United States and Canada’s Brian Mulroney are all smiles standing behind their trade representatives as they sign the North American Free Trade Agreement in San Antonio in 1992.</span>
<span class="attribution"><span class="source">(AP PHOTO/Pat Sullivan)</span></span>
</figcaption>
</figure>
<p>Economic security and prosperity, so the conventional wisdom held, was best ensured by lowering trade barriers and encouraging specialization. Production would be global, which wouldn’t pose any problems in a free-trade world.</p>
<h2>Two flaws</h2>
<p>There have long been two flaws in this policy. First, while Canada may be “<a href="https://www.ubcpress.ca/a-trading-nation">a trading nation</a>,” trade is merely a means to an end: securing markets for Canadian producers and ensuring Canadians’ access to foreign goods and services. At the end of the day, it’s production, not trade, that matters most for a country’s economic security and power.</p>
<p>Second, policy-makers failed to appreciate the extent to which the entire free-trade world was dependent on the actions and support of the United States given its global superpower status. After the Second World War, the U.S. decided to underwrite a liberal multilateral order that encouraged free trade, which it was able to reinforce in the 1990s after the end of the Cold War. </p>
<p>For a long while in the 1990s, Canada was able to get away with neglecting industrial policy and to imagine that free trade would be our economic salvation. This was because the world of open borders, ostensibly supported by U.S. power, hid the long-term costs of de-industrialization since we still had easy access to cheap production in other countries.</p>
<p>Unfortunately for Canada, that world hasn’t existed for almost 20 years. The multilateral free-trade world was only ever as resilient as the American commitment to it. </p>
<p>The unilateral U.S. choice of security over prosperity following the 9/11 terrorist attacks was the beginning of the end of this multilateral economic order. The unsanctioned <a href="https://www.britannica.com/event/Iraq-War">American invasion of Iraq</a> hastened the system’s decline, as did its <a href="https://www.cnn.com/2013/10/30/world/meast/iraq-prison-abuse-scandal-fast-facts/index.html">open embrace of torture</a> in contravention of international conventions and basic human decency.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/331961/original/file-20200501-42903-1xjmre7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/331961/original/file-20200501-42903-1xjmre7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=296&fit=crop&dpr=1 600w, https://images.theconversation.com/files/331961/original/file-20200501-42903-1xjmre7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=296&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/331961/original/file-20200501-42903-1xjmre7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=296&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/331961/original/file-20200501-42903-1xjmre7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=372&fit=crop&dpr=1 754w, https://images.theconversation.com/files/331961/original/file-20200501-42903-1xjmre7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=372&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/331961/original/file-20200501-42903-1xjmre7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=372&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A U.S. Customs canine enforcement officer and his dog examine a line of cars entering the United States from Canada at the inspection station near Blaine, Wash., in August 2003, part of increased border security measures following 9/11.</span>
<span class="attribution"><span class="source">(AP Photo/Ted S. Warren)</span></span>
</figcaption>
</figure>
<p>Less dramatically, U.S. economic policy, under Democrats and Republicans alike, turned trade agreements from potentially win-win tariff-lowering treaties into agreements designed to <a href="https://www.theglobeandmail.com/report-on-business/tpp-is-about-many-things-but-free-trade-not-so-much/article27169740/">lock in the American advantage</a> on issues of the future: intellectual property, <a href="https://www.cigionline.org/articles/data-not-treaty-ready-and-cusma-not-data-ready">data governance</a> and internet governance. Free trade agreements are no longer about free trade.</p>
<h2>COVID-19 exposes the cracks</h2>
<p>All this happened before the pandemic exposed the physical vulnerability of countries lacking guaranteed access to producers of medical equipment. The current international scramble for medical equipment is not causing the world order to collapse: it’s a symptom of an order that has been falling apart in slow motion for a long while.</p>
<p>Countries have been tentatively, almost unconsciously, adjusting to this reality. These include forms of what I call digital economic nationalism, in which countries, <a href="https://www.ic.gc.ca/eic/site/093.nsf/eng/00008.html">including Canada</a>, are pursuing national industrial policies in high-tech areas <a href="https://ec.europa.eu/knowledge4policy/ai-watch/germany-ai-strategy-report_en">like artificial intelligence</a> and are seriously considering <a href="https://www.bbc.com/news/technology-47135058">the regulation</a> of global, mostly American, online platforms.</p>
<p>Still, <em>tentatively</em> is the operative word. Policy continues to be marked by a failure to think through the consequences of these long-term trends, and by the hope that U.S. President Donald Trump’s eventual departure from the Oval Office will restore the multilateral order. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/331973/original/file-20200501-42962-9zn1mz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/331973/original/file-20200501-42962-9zn1mz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=414&fit=crop&dpr=1 600w, https://images.theconversation.com/files/331973/original/file-20200501-42962-9zn1mz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=414&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/331973/original/file-20200501-42962-9zn1mz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=414&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/331973/original/file-20200501-42962-9zn1mz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=520&fit=crop&dpr=1 754w, https://images.theconversation.com/files/331973/original/file-20200501-42962-9zn1mz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=520&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/331973/original/file-20200501-42962-9zn1mz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=520&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Trump is seen in the Oval Office in January 2018. His eventual departure isn’t likely to result in changed American attitudes about bilateral trade.</span>
<span class="attribution"><span class="source">(AP Photo/Carolyn Kaster)</span></span>
</figcaption>
</figure>
<p>It won’t, for the simple reason that there is no longer a political bipartisan consensus on Capitol Hill that this order is worth saving. The liberal, multilateral world order that has been underwritten by the United States since the end of the Second World War cannot survive this degree of instability for very long.</p>
<p>Canada’s free-trade obsession has put us in a bind, making us overly reliant on global supply chains. That’s a huge unforced error given that 19 years ago, 9/11 showed us just how quickly border policy can change.</p>
<p>The recently concluded NAFTA 2.0, officially known as the U.S.-Mexico-Canada trade agreement (USMCA), has <a href="https://theconversation.com/nafta-has-been-replaced-but-at-what-cost-to-canada-104174">myriad</a> <a href="https://www.cbc.ca/news/politics/nafta-economic-impact-analysis-1.5477542">loopholes</a> that leave Canada open to future harassment and <a href="http://www.michaelgeist.ca/2020/02/we-dont-have-any-specific-analysis-cusma-negotiators-surprising-admission-on-key-privacy-issues/">concessions on data localization made without any analysis on their impact</a>. It also illustrates Canada hasn’t fully comprehended how the world has transformed since 1994. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/nafta-has-been-replaced-but-at-what-cost-to-canada-104174">NAFTA has been replaced, but at what cost to Canada?</a>
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</em>
</p>
<hr>
<p>Policy-makers could well find that the USMCA, purpose-built for a world that no longer exists, severely restricts their ability to set a production-focused policy appropriate for 2020 and beyond.</p>
<p>Still, acknowledging reality is the first step in dealing with a crisis. The post-Second World War order is gone. Trade policy must be put in its proper place, a component — but not the entire game — of a comprehensive, government-led domestic industrial policy that involves actual, production-focused planning for a world in which the conventional wisdom of the past 70 years no longer holds. </p>
<p>Just signing trade agreements is no longer enough to ensure Canadian prosperity. We have to deal with the world as it is, not as we wish it would be.</p><img src="https://counter.theconversation.com/content/136161/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Blayne Haggart receives funding from the Social Sciences and Humanities Research Council of Canada.</span></em></p>Canada’s free-trade obsession has made us overly reliant on global supply chains. That’s a huge unforced error given that 19 years ago, 9/11 showed us just how quickly border policy can change.Blayne Haggart, Associate Professor of Political Science, Brock UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1294782020-01-14T15:02:56Z2020-01-14T15:02:56ZHow we consume electricity has changed dramatically in the past 20 years – and the market has failed to keep up<figure><img src="https://images.theconversation.com/files/309942/original/file-20200114-151880-1gegeky.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C7951%2C5304&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> </figcaption></figure><p>It’s been more than two decades since Britain’s retail electricity market was opened to full competition in 1999. Before that, retail supply was provided by state-owned entities with regional monopolies. Today, all consumers, including households and businesses, are able to “shop around” for their electricity, switching to a different supplier or tariff to take advantage of better prices and services. </p>
<p>In principle, that is exactly what liberalised retail markets are supposed to provide: greater consumer choice and protections. But that’s only the case if it’s easy for consumers to switch suppliers and for new suppliers to enter the market. That’s how markets are supposed to stay competitive to deliver low prices and a high quality of service. That was the great hope of electricity policy in 1999, but after two decades, there’s little to celebrate.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/fact-check-are-fewer-people-switching-gas-or-electricity-company-76716">Fact Check: are fewer people switching gas or electricity company?</a>
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<hr>
<p>To enhance competition, smaller suppliers have been exempt from contributing towards the cost of decarbonisation policies. Known as “the threshold obligation”, this encouraged the entry of smaller companies into Britain’s retail electricity market, but the increase from six suppliers in 1999 to more than 70 in 2019 came at a cost. Many new suppliers have gone bankrupt due to unsustainable business models, resulting in consumers footing unpaid industry bills.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/309946/original/file-20200114-151825-j30b25.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/309946/original/file-20200114-151825-j30b25.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/309946/original/file-20200114-151825-j30b25.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/309946/original/file-20200114-151825-j30b25.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/309946/original/file-20200114-151825-j30b25.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/309946/original/file-20200114-151825-j30b25.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/309946/original/file-20200114-151825-j30b25.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Consumers have bore the brunt of costly failures in the electricity retail market.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/attractive-young-housewife-wears-shirt-home-1022105656">EverGrump/Shutterstock</a></span>
</figcaption>
</figure>
<p>The retail market is designed for a tech-savvy, informed consumer, who actively switches suppliers to benefit from a cheaper tariff. But over 50% of British consumers are on the default “<a href="https://www.ofgem.gov.uk/key-term-explained/standard-variable-tariff-0">standard variable tariff</a>”, which is the most expensive. This implies that most people are passive consumers, and don’t shop around at all. While suppliers that are exempt from the threshold obligation can offer lower tariffs, these only tend to benefit active consumers who seek out and switch to them. These consumers tend to be better off anyway, with better access to information and the time to compare choices.</p>
<p>The costs of decarbonisation and social policies are eventually recovered through electricity bills, so passive consumers end up bearing a disproportionate proportion of these costs. This has sparked debate about how to protect passive consumers from retailers who charge them more than others for the same service.</p>
<p>In January 2019, the energy market regulator, Ofgem, put a cap on the price of default tariffs to <a href="https://www.ofgem.gov.uk/system/files/docs/2019/02/information_for_elected_representatives_and_stakeholders.pdf">prevent disengaged consumers being exploited</a>. But this won’t work if the barriers to switching remain in place.</p>
<p>At the moment, consumers can’t easily access information about different electricity suppliers, and <a href="https://www.ofgem.gov.uk/ofgem-publications/39711/behaviouraleconomicsgbenergy.pdf">the market is so complex</a> that they don’t feel confident to switch even if they wanted to.</p>
<h2>Power to the people</h2>
<p>Not only has the retail market failed to achieve its original objectives for consumers, it also hasn’t kept pace with technological change and the need to transition away from fossil fuels. Since 1999, the electricity sector has undergone a transformation. Consumers can now generate their own electricity through solar panels and <a href="https://theconversation.com/the-electricity-network-is-changing-fast-heres-where-were-heading-51652">sell it back to the grid</a>. </p>
<p>There are companies that aggregate smaller consumers into groups and buy and sell electricity on their behalf. <a href="https://www.gov.uk/guidance/community-energy">Community energy services</a> allow local communities to collectively own a renewable energy project such as a wind farm and generate, store, consume and sell their own energy.</p>
<p>There are multi-service providers that don’t just sell electricity, but internet and telephone access too. These business models are possible today but were unthinkable in 1999. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/despite-good-progress-100-low-carbon-energy-is-still-a-long-way-off-for-the-uk-114949">Despite good progress, 100% low-carbon energy is still a long way off for the UK</a>
</strong>
</em>
</p>
<hr>
<p>Existing market regulations prevent these new services from being brought into the market by new players, because their business models aren’t aligned with traditional electricity suppliers and the existing system. If one of these new providers wanted to offer consumers free electricity with the purchase of an electric vehicle, this might require a consumer to have more than one supplier for the same premises – one which supplies electricity to the vehicle and another that satisfies the rest of the consumer’s demand. But at the moment, you’re <a href="https://www.elexon.co.uk/wp-content/uploads/2018/04/ELEXON-White-Paper-Enabling-customers-to-buy-power-from-multiple-providers.pdf">only allowed one supplier</a> as your single point of access to the retail market.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/309950/original/file-20200114-151829-zevbsk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/309950/original/file-20200114-151829-zevbsk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/309950/original/file-20200114-151829-zevbsk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/309950/original/file-20200114-151829-zevbsk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/309950/original/file-20200114-151829-zevbsk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/309950/original/file-20200114-151829-zevbsk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/309950/original/file-20200114-151829-zevbsk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Prosumers have become a major part of electricity supply in the UK since 1999.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/leicester-uk-january-26-2019-solar-1370757959">Nrqemi/Shutterstock</a></span>
</figcaption>
</figure>
<p>Regulations need to keep pace with this transformation. With the growth of “<a href="https://theconversation.com/beyond-bitcoin-how-blockchains-can-empower-communities-to-control-their-own-energy-supply-99411">prosumers</a>” – people who generate their energy as well as buying some – the electricity market is changing. Top-down structures in which traditional suppliers act as the primary liaison may no longer be the dominant model in the future.</p>
<p>As the cost of solar panels and battery storage falls, more people will take to generating their own energy, and the electricity system will become more decentralised. That means more power and control for consumers over their own energy use and bills. </p>
<p>But in order for everyone to benefit, the government should reconsider its current policy of funding renewable energy projects through an extra fee on electricity tariffs. Tariffs are charged <a href="https://www.ofgem.gov.uk/data-portal/breakdown-electricity-bill">based on how much electricity someone buys</a> from the grid. A prosumer, with rooftop solar panels that generate their own electricity, needs to buy less energy from the grid, resulting in higher prices for remaining consumers. </p>
<p>Britain’s retail electricity market has changed beyond recognition in the last 20 years. Energy policy has to catch up, and fast, to meet the urgent challenges of decarbonisation and fuel poverty.</p><img src="https://counter.theconversation.com/content/129478/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rahmat Poudineh does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The next 20 years of Britain’s electricity policy must look very different from the previous 20.Rahmat Poudineh, Senior Research Fellow and Director of Research, Oxford Institute for Energy Studies, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1282802020-01-13T13:54:10Z2020-01-13T13:54:10ZBrexit could spell the end of globalization, and the global prosperity that came with it<figure><img src="https://images.theconversation.com/files/309564/original/file-20200112-103974-16fx5oj.jpg?ixlib=rb-1.1.0&rect=131%2C237%2C5332%2C3333&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Many fear the U.K. will be worse off economically outside the EU.</span> <span class="attribution"><span class="source">AP Photo/Matt Dunham</span></span></figcaption></figure><p>The U.K. House of Commons <a href="https://www.nytimes.com/2020/01/09/world/europe/brexit-boris-johnson-parliament-vote.html">has finally voted for Brexit</a>. If the plan passes the House of Lords without much delay, the U.K. will leave the European Union several years after a 2016 referendum set it down this path. </p>
<p>More than merely tossing aside the EU, this vote represents a rejection of globalization and the implicit trade-off of some democratic control over economic policy for prosperity. It’s an exchange that more citizens across the world, including the United States, are unwilling to make – <a href="https://www.pewresearch.org/global/2018/09/26/americans-like-many-in-other-advanced-economies-not-convinced-of-trades-benefits/">often believing they can earn the same gains without a loss of economic control</a>. </p>
<p>As an <a href="https://scholar.google.com/citations?user=B744wv0AAAAJ&hl=en&oi=ao">economist</a>, I believe this trend of turning away from the institutions that facilitated economic globalization is troubling and may lead to the unraveling of more than a half century of growing global integration – <a href="https://fred.stlouisfed.org/series/NYGDPPCAPKDWLD">and the economic growth that came with it</a>.</p>
<p>To avert that outcome, we need to answer the seemingly simple question: How can societies reap the economic benefits of globalization while maintaining democratic participation within it?</p>
<h2>Traditional trade barriers</h2>
<p>Some of my research has focused on the ways in which <a href="https://www.sciencedirect.com/science/article/pii/S0147596714000286">democratic societies</a> <a href="https://www.doi.org/10.1111/j.1468-0343.2011.00387.x">set their own trade policies</a> – that is, tariffs, quotas and other types of barriers to foreign goods and services entering their markets. </p>
<p>But since the creation of the <a href="https://www.wto.org/english/tratop_e/gatt_e/gatt_e.htm">General Agreement on Tariffs and Trade</a> after World War II, countries’ ability to do this has been increasingly constrained by international accords. </p>
<p>At first, this primarily involved trade barriers like tariffs – U.S. President Donald Trump’s <a href="https://www.latimes.com/business/story/2019-11-05/china-insists-trump-give-up-tariffs-his-favorite-weapon-to-get-a-trade-deal">favorite weapon in his trade wars</a>. While <a href="https://www.britannica.com/event/Seattle-WTO-protests-of-1999">protests against the negative consequences of globalization</a> are hardly new, the loss of economic control over tariffs rarely led to a country’s outright rejection of <a href="https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot">this system</a>, primarily because the economic gains were so significant. </p>
<p>For example, one estimate of the effect of the EU’s single market, which eliminated virtually all trade barriers within the union, is that it <a href="https://ec.europa.eu/info/sites/info/files/economy-finance/dp094_en.pdf">has raised members’ GDP</a> by 8% to 9% – which translates to an average of about US$3,000 for every man, woman and child.</p>
<p>Beyond Europe, globalization has brought significant gains to billions of people, including by helping cut the number of people living in extreme poverty from 1.9 billion in 1990 to around 730 million in 2015. That’s a drop from 36% of the world’s population to less than 10%. </p>
<h2>‘Deep integration’</h2>
<p>But tariffs and quotas aren’t the only barriers to trade. </p>
<p>Countries across the world all have their own regulatory standards, quality certifications and other rules they require companies to follow. Known as <a href="https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/pages/technical-barriers-to-trade.aspx">technical barriers to trade</a>, they can be <a href="https://voxeu.org/article/zero-tariffs-and-high-trade-costs-eu-technical-barriers-trade">just as bad for trade</a> as traditional tariffs. And for global businesses, adhering to all these different rules can be costly.</p>
<p>So economists and trade negotiators began pushing countries to harmonize regulations governing issues like the environment, labor and intellectual property. This so-called deep integration is where international trade agreements moved into more controversial territory. </p>
<p>The EU, for example, has created a <a href="https://ec.europa.eu/growth/single-market/european-standards/harmonised-standards_en">large set of harmonized standards and regulations that countries must follow</a> in order to participate in the single market, one of the issues motivating U.K. voters who chose to leave. A famous case in which the <a href="https://www.telegraph.co.uk/news/worldnews/europe/3794278/Pint-of-beer-and-the-metric-mile-safe-after-Europe-backs-down.html">EU eventually backed down after a U.K. backlash</a> involved Brussels trying to enforce metric measurements, which would have endangered Britons’ beloved pints and miles. </p>
<p>In the U.S., the <a href="https://www.vox.com/policy-and-politics/2016/7/25/18076450/trans-pacific-partnership">Trans-Pacific Partnership</a>, negotiated by the Obama administration but shelved by Trump in 2017, delved deeply into these issues. <a href="https://www.aft.org/resolution/oppose-trans-pacific-partnership">A big part of the opposition to the agreement</a> arose from the delegation of these sensitive issues to often secretive international negotiations.</p>
<h2>Globalization’s paradox</h2>
<p>This trade-off – between the economic gains of global trade and the desire for local control over a country’s economy and markets – is what Harvard economist Dani Rodrik called <a href="https://drodrik.scholar.harvard.edu/publications/globalization-paradox-democracy-and-future-world-economy">“The Globalization Paradox.”</a> </p>
<p>It leaves countries with essentially three choices: </p>
<ol>
<li><p>They can reject globalization’s deeper integration and risk losing out on economic prosperity</p></li>
<li><p>They can simply cede control of large parts of their economic policy to prevailing international standards, risking the ire of their citizens</p></li>
<li><p>They can help shape globalization by joining and helping create the international organizations and agreements that set trade standards, giving up some control but having a seat at the table. </p></li>
</ol>
<p>I would argue that the third option offers the best answer to the question, “How can we keep globalization’s gains without ceding all control?”</p>
<p>The EU is one of the most ambitious attempts to follow the third path – and gave countries big and small equal say in much of its implementation. Its governing bodies consist of directly elected members and representatives of the member states’ democratically elected governments. </p>
<p>However, even this shared authority can cause problems, as evidenced by Brexit. Even if the EU is organized democratically, it does not necessarily follow that the citizens of the member states will feel much attachment to its decisions. This sentiment is doubly true in a country like the U.K., which has traditionally regarded itself as separate from continental Europe. </p>
<p>But policymakers and trade negotiators would be wise to take account of voters’ concerns about a loss of control and be cautious about moving beyond preventing traditional trade barriers like tariffs and quotas from being erected. </p>
<p>The biggest risk we all face today is that Trump’s trade wars, Brexit and other newly erected trade barriers become permanent and undo many of the gains the world has made since World War II. We’ll all be the poorer for it. </p>
<p>[ <em><a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=expertise">Expertise in your inbox. Sign up for The Conversation’s newsletter and get a digest of academic takes on today’s news, every day.</a></em> ]</p><img src="https://counter.theconversation.com/content/128280/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>William Hauk has previously received funding from the Center for International Business Education and Research, which receives funding from the U.S. Department of Education.</span></em></p>Brexit represented British voters’ desire to reclaim more control over their economic future, but some worry the cost will be some of the prosperity gained from globalization.William Hauk, Associate Professor of Economics, University of South CarolinaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1275222019-12-24T21:49:50Z2019-12-24T21:49:50ZProtecting Australian women from American jazz: the hidden aim of the 1927 tariff inquiry<figure><img src="https://images.theconversation.com/files/304525/original/file-20191130-156099-x0zwvb.jpg?ixlib=rb-1.1.0&rect=4845%2C1066%2C9618%2C5233&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">'For the sake of the husbands, wouldn't it be better if these records were kept out of Australia?' </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The 1927 Tariff Board inquiry into the import duty on gramophone records coming into Australia was about more than industry protection. </p>
<p>In fact the piano roll industry, which might be expected to be the one most concerned about the impact of imported records, wasn’t particularly worried. </p>
<p>But others were. </p>
<p>In the 1927 Tariff Board inquiry, a small group of wealthy white men laid bare their prejudices regarding the gender, class and aesthetic tastes of the Australian public. </p>
<p>The bottom line: the Australian consumer, typically regarded as female, could not be trusted with mass culture. </p>
<p>American jazz music was an agent of cultural and musical decline. It certainly didn’t live up to the standards of the musical establishment. It belonged to the modern department store, that emerging site of consumerism and commercialisation.</p>
<h2>Australia was awash with recorded music</h2>
<p>By 1925, mechanically-reproduced music was ubiquitous. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1124&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1124&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1124&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1412&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1412&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304526/original/file-20191130-156077-1c3ebw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1412&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>The local trade estimated that more than one million gramophones had been sold in Australia. That’s roughly one for every three households. </p>
<p>To walk down the street was to navigate a diverse and complex soundscape, completely different to a generation earlier. </p>
<p>Soldier-settlers doing it tough on the land, glitzy bohemians in city dancehalls, working families flocking to the expanding suburbs, Aboriginal people resisting colonialism on missions and reserves — the gramophone was ubiquitous. </p>
<p>A common sight on the streets of Melbourne was Amy Williams, a widowed mother who busked with her gramophone on the steps of St. Paul’s Cathedral. </p>
<p>She became a cause celebre in 1927. I told her story in a <a href="http://mymarvellousmelbourne.net.au/?p=275">recent podcast</a>.</p>
<p>Australia was host to a bustling and nationally-integrated recording trade.</p>
<p>By 1927, the country boasted four state-of-the-art record factories. They were owned by the biggest players in the global industry: the multinationals HMV, Columbia, Brunswick and Vocalion. </p>
<p>Their products were sold by a nationwide network of record dealers. Some 70% of the records sold in Australia were manufactured in Australia. </p>
<h2>‘Men, money and markets’</h2>
<p>Politically, those years were defined by conservative government and a focus on national reinvigoration after the horrors of war. The catchcry was “men, money and markets”.</p>
<p>“Men” referred to the need for increased migration to provide workers, “money” to the funds that would be needed to finance development, and “markets” to the countries that would have to be persuaded to buy Australia’s exports, especially minerals, wool and wheat.</p>
<p>It was an environment in which business elites took on the role of tastemakers. </p>
<p>Australia’s 1920s were anything but cocktails and the Charleston — our jazz age was muted. The depression lay around the corner. It was an anxious and uncertain time, and society was deeply riven along lines of gender, race and class. </p>
<p>And developments overseas were worrying Australian gramophone executives.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1197&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1197&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1197&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304534/original/file-20191130-156116-1sattxv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Melbourne Argus, December 19, 1927.</span>
<span class="attribution"><a class="source" href="https://trove.nla.gov.au/newspaper/article/3896978">Trove</a></span>
</figcaption>
</figure>
<p>The new process of <a href="https://en.wikipedia.org/wiki/History_of_sound_recording#The_Electrical_Era_(1925_to_1945)_(including_sound_on_film)">electrical recording</a> had led to an explosion in variety. </p>
<p>A cacophony of new voices entered the global recording trade, selling modern music for seriously cheap prices. </p>
<p>In response, the major manufacturers successfully petitioned the Tariff Board for an increase in the import tariff on gramophone records. The entire gramophone fraternity gathered to stress its national importance. </p>
<p>The transcripts of the Tariff Board inquiry read like a courtroom drama.</p>
<p>The Board was made up of prominent businessmen tasked with advising on industry protection. </p>
<p>In reading the transcripts I discovered they had strong aesthetic opinions too.</p>
<h2>Protecting morals through music</h2>
<p>Board member <a href="http://adb.anu.edu.au/biography/brookes-herbert-robinson-5372">Herbert Brookes</a> asked the manufacturers:</p>
<blockquote>
<p>Are you afraid that to allow these cheap records in is going to deprave the musical taste of the people?</p>
</blockquote>
<p>Brookes wanted records to be expensive enough not to lower musical taste, but not so expensive that they might “put up the price of classical music, such as Beethoven symphonies”.</p>
<p>A record retailer presented him with this deeply sexist scenario: </p>
<blockquote>
<p>A woman goes into a shop to buy dish clothes or towels, and she sees these records, and sees that they are cheap, and wastes her husband’s money by buying them although she really does not want them. That is how half of these cheap American records are sold.</p>
</blockquote>
<p>Brookes interjected:</p>
<blockquote>
<p>For the sake of the husbands, wouldn’t it be better if these records were kept out’ of Australia? </p>
</blockquote>
<p>The implication was that the typical (female) consumer had only a shallow and passive relationship to music. She needed guidance from elites. </p>
<p>A music seller at the flashy Myer Emporium on Melbourne’s Bourke Street claimed there were “two distinct classes of people buying records” at his store:</p>
<blockquote>
<p>One is the regular record buyer at four shillings and better prices … the better class of music, and the other class is the one who wants and will buy only a cheap record.</p>
</blockquote>
<p>In case the distinctions weren’t clear enough, he said the two “classes” of records at Myer were physically segregated by a glass partition, so that genteel shoppers wouldn’t be corrupted by rambunctious jazz lovers.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/explainer-the-history-of-jazz-51729">Explainer: the history of jazz</a>
</strong>
</em>
</p>
<hr>
<p>Ultimately, the Tariff Board inquiry was a foregone conclusion. The tariff increase was carried into law in early 1928, and imports of records plummeted. The big four manufacturers further entrenched their hold on the Australian market. </p>
<p>But people still listened to jazz in their thousands. </p>
<p>The Tariff Board became the Industries Assistance Commission, which became the Industry Commission, which became the Productivity Commission. Its inquiries and the work of other official agencies might also reflect cultural assumptions. They’re easier to see from a distance.</p><img src="https://counter.theconversation.com/content/127522/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Henry Reese does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Tariff Board was told that if women could buy music that was cheap they would buy music that was dirty.Henry Reese, Research Assistant, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1287352019-12-11T17:31:51Z2019-12-11T17:31:51ZUSMCA: The 3 most important changes in the new NAFTA and why they matter<figure><img src="https://images.theconversation.com/files/306386/original/file-20191211-95115-1lurugo.jpg?ixlib=rb-1.1.0&rect=10%2C10%2C2331%2C1408&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Leaders of the three countries signed the USMCA in November 2018.</span> <span class="attribution"><span class="source">AP Photo/Pablo Martinez Monsivais</span></span></figcaption></figure><p>President Donald Trump and Democratic leaders <a href="https://www.washingtonpost.com/business/2019/12/10/usmca-is-finally-done-deal-after-democrats-sign-off-heres-what-is-it/">agreed on a deal</a> to pass a new trade agreement between the U.S., Mexico and Canada that will update NAFTA. </p>
<p>Passing the new trade accord, known as the U.S.-Mexico-Canada Agreement, would be a substantial win for both Trump – given it’s one of <a href="https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-keeping-promise-renegotiate-nafta/">his campaign promises</a> – and Democrats, who <a href="https://www.bloomberg.com/news/articles/2019-12-11/pelosi-balances-impeachment-and-usmca-with-eye-on-2020-elections">want to show they’re legislating</a> even as they prepare to impeach the president. </p>
<p>So how is the USMCA different from the North American Free Trade Agreement, and why should you care? </p>
<p>Although the final revised text of the USMCA has not yet been released, the deal as <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between">detailed in May</a> contains numerous tweaks from its predecessor, both big and small. As an agriculture economist who studies trade, <a href="https://scholar.google.com/citations?user=rToS2UYAAAAJ&hl=en&oi=ao">I believe</a> three changes are especially noteworthy. </p>
<h2>Please pass the butter</h2>
<p>Since 1994, the U.S. and Canada <a href="https://ageconsearch.umn.edu/bitstream/16835/1/ag01fr01.pdf">have dropped tariffs</a> and other trade restrictions on most agricultural products. But there were a few exceptions, most notably dairy. </p>
<p>Dairy was a particularly problematic sticking point in year-long negotiations between the three countries. The <a href="https://accounts.wsj.com/auth/sso/login?code=Zt6os4RvG0AtL2ui&state=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fwhy-milk-matters-in-u-s-canada-trade-feud-1535803200&savelogin=on">U.S.</a> and <a href="https://slate.com/business/2018/06/trumps-beef-with-canadas-dairy-industry-explained.html">Canada</a> both have long histories of protectionist policies, such as subsidizing dairy farmers and setting import quotas on milk. Canadian tariffs on some products can be as high as 300%. </p>
<p>The new USMCA <a href="https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/october/united-states%E2%80%93mexico%E2%80%93canada-trade-fa-2">begins to change that</a>, representing a small but important win for both countries, especially the U.S. </p>
<p>Under the new accord, Canada <a href="https://www.cnn.com/2018/10/02/politics/usmca-canada-dairy/index.html">will curb some of the ways</a> it protects its dairy industry, such as allowing <a href="https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/october/united-states%E2%80%93mexico%E2%80%93canada-trade-fact">more American milk, butter, cheese and other dairy products</a> to enter Canada duty-free, with reciprocal treatment for Canadian dairy exports to the U.S.</p>
<h2>Made in North America</h2>
<p>The new agreement also made big changes for auto manufacturers in hopes of ensuring more vehicles and parts are made in North America. </p>
<p>Starting as early as 2020, to qualify for zero tariffs when crossing borders, a car or truck must have <a href="https://www.washingtonpost.com/business/economy/us-and-canada-closing-in-on-a-new-nafta-deal-as-deadline-looms/2018/09/30/2ef72018-c50b-11e8-b1ed-1d2d65b86d0c_story.html">75%</a> of its components manufactured in Canada, the U.S. or Mexico, up from 62.5% currently.</p>
<p>Even more noteworthy, negotiators agreed to a new requirement that 40% to 45% of a vehicle’s components must be made by workers earning at least US$16 per hour, which is about <a href="https://www.washingtonpost.com/business/2018/10/01/us-canada-mexico-just-reached-sweeping-new-nafta-deal-heres-whats-it/">three times more</a> than the average wage currently earned by Mexican auto workers. </p>
<p>This change is huge, particularly for low-paid workers in Mexico. But it may lead to challenges over the enforcement of labor laws and increase the cost of cars made in all three countries. </p>
<h2>Keeping up with the times</h2>
<p>Society has experienced significant technological changes since NAFTA was implemented in 1994. Back then, the internet was still in its infancy, while smartphones and self-driving cars were barely imaginable.</p>
<p>That’s why <a href="https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/october/united-states%E2%80%93mexico%E2%80%93canada-trade-fa-1">modernization</a> – updating rules and standards to keep up with the times – is a critical and positive update to the trade deal tying the North American continent together. </p>
<p>While NAFTA was the <a href="http://www.buildingipvalue.com/05_XB/052_055.htm">first trade treaty</a> to include intellectual property protections, the high pace of innovation has made modernization of its provisions imperative.</p>
<p>The new agreement <a href="https://www.washingtonpost.com/business/2018/10/01/us-canada-mexico-just-reached-sweeping-new-nafta-deal-heres-whats-it/?utm_term=.7be0c4624366">includes</a> stronger protections for patents and trademarks in areas such as biotech, financial services and domain names – all of which have advanced considerably over the past quarter-century. It also contains new provisions governing the expansion of digital trade and investment in innovative products and services. </p>
<p>Separately, negotiators agreed to update labor and environmental standards, which were not central to the 1994 accord and are now typical in modern trade agreements. Examples include enforcing a minimum wage for autoworkers, stricter environmental standards for Mexican trucks and new rules on fishing to protect marine life. </p>
<p>Apart from the changes, there is one important thing about the original NAFTA that will stay, thanks to the <a href="https://www.washingtonpost.com/business/2018/10/01/us-canada-mexico-just-reached-sweeping-new-nafta-deal-heres-whats-it/?utm_term=.15f9401acfa4">insistence</a> of Canada. Chapter 19 is the dispute settlement mechanism that allows countries to seek remedies for breaking the rules. It’s like “trade court” and makes it much easier to challenge another country’s policies.</p>
<p>Although Mexico’s Senate ratified the USMCA earlier this year, the deal still needed approval from Canada and the U.S. Congress. Democrats and <a href="https://www.politico.com/newsletters/morning-trade/2019/11/18/usmca-comes-down-to-labor-support-782542">labor unions insisted</a> on revisions to the text to address enforcement of labor and environmental provisions and intellectual property protection. The newly revised text agreed to by Trump and the Democrats addresses these issues and is now ready for approval by all three countries.</p>
<p>All in all, I believe the new NAFTA is definitely a modern and updated version of its important predecessor, which the U.S. Department of Agriculture <a href="https://www.fas.usda.gov/sites/development/files/nafta1.14.2008_0.pdf">characterized</a> as one of the most successful trade agreements in history. </p>
<p><em>This is an updated version of an <a href="https://theconversation.com/how-is-new-nafta-different-a-trade-expert-explains-104212">article originally published</a> on Oct. 2, 2018.</em></p>
<p>[ <em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/128735/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amanda M. Countryman receives funding from the National Science Foundation and the U.S. Department of Agriculture. </span></em></p>President Trump and Democrats recently agreed on a deal to pass the U.S.-Mexico-Canada Agreement. A trade scholar explains what’s new.Amanda M. Countryman, Associate Professor of Agricultural Economics, Colorado State UniversityLicensed as Creative Commons – attribution, no derivatives.