US ECONOMICS

CORONAVIRUS

U.S. Department of State. 02/07/2020. The United States Announces Assistance to Combat the Novel Coronavirus. Michael R. Pompeo, Secretary of State

This week the State Department has facilitated the transportation of nearly 17.8 tons of donated medical supplies to the Chinese people, including masks, gowns, gauze, respirators, and other vital materials.  These donations are a testament to the generosity of the American people.

Today, the United States government is announcing it is prepared to spend up to $100 million in existing funds to assist China and other impacted countries, both directly and through multilateral organizations, to contain and combat the novel coronavirus.  This commitment – along with the hundreds of millions generously donated by the American private sector – demonstrates strong U.S. leadership in response to the outbreak.

This assistance only adds to what the United States has done to strengthen health security programs around the world.  For the last twenty years, the United States through USAID has invested over one billion dollars to strengthen the capacity of more than 25 countries to prevent, detect, and respond to existing and emerging infectious disease threats.  Since 2015, under our commitment to the Global Health Security Agenda (GHSA), this support has helped improve surveillance and laboratory systems, risk communication, outbreak response, and address the rising threat of anti-microbial resistance.

The United States is and will remain the world’s most generous donor. We encourage the rest of the world to match our commitment.  Working together, we can have a profound impact to contain this growing threat.

U.S. Department of State. 02/08/2020. Evacuation of Americans from Wuhan, China. Morgan Ortagus, Department Spokesperson

Yesterday, two flights from Wuhan carrying U.S. citizens, their immediate family members, and U.S. Lawful Permanent Residents safely landed in the United States. As with the other recent evacuation flights, all passengers will be carefully screened and monitored by the U.S. Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS).

These flights represent a joint effort by the Department of State, the CDC, HHS, the Department of Defense, and state and local authorities to bring home Americans in need. In total, we evacuated over 800 passengers from Wuhan.

We remain committed to our vital mission of ensuring the welfare of U.S. citizens overseas and providing important information to help them stay safe. Our team here in Washington and at our Embassy and consulates in China are working closely with PRC authorities to offer all possible support to U.S. citizens throughout China.

MSaúde. 09/02/2020. INFORMAÇÕES SOBRE CORONAVÍRUS NO BRASIL

DOCUMENTO: https://saude.gov.br/

ECONOMY

DoC. February 6, 2020. It is my honor to discuss the Trump economic policy as it relates to the global economy. Remarks by Secretary of Commerce Wilbur Ross, at Oxford Union in Oxford, England. Wilbur Ross, Secretary of Commerce. Oxford, England. Introduced by Oxford Union President Sara Dube

Secretary Ross: It is my honor to discuss the Trump economic policy as it relates to the global economy.

We are incorrectly blamed for global economic problems.

From the late 1980s through the early 2000s, global merchandise export growth was usually double that of world GDP growth. But during four of the past five years, goods trade growth lagged global GDP growth.

Globalization had gotten out of control.

It takes 200 suppliers in 43 countries on six continents to make an iPhone.

Global trade growth likely turned negative in 2019 while GDP increased by nearly 3 percent, their first move in opposite directions. A contraction of auto exports accounted for 30 percent of the world trade slowdown.

Another reason is that intermediate product exports have declined from 54 percent of the total in 2008 to 52 percent now.

Developing countries had increased their share of value-added international trade from 31 percent in 2005 to 39 percent in 2015. But their share of global trade will likely decrease in coming years — due in part to higher wages and shipping rates, and partly due to the Fourth Industrial Revolution, or 4IR.

4IR is the expanded analytical capability generated by the 5G and the Internet of Things, and it is ushering in a new age of productivity, efficiency, customization, and sustainability.  As a result, exports peaked as a percentage of GDP at 26 percent in 2008.

These shifts may not adversely affect global GDP, but they could redistribute it to more developed countries. For example, the textile and apparel industry employs about 125 million people globally, mostly in less developed countries, and a total that is more than the combined totals of the automobile and electronics industries. But that industry and others are susceptible to the rapid adoption of 4IR digital technologies.

The EU — the world’s largest goods exporter — made about 34 percent of global goods exports in 2018. By comparison, the United States was just 8.8 percent.  But the United States was the world’s biggest importer, at $2.5 trillion worth of goods in 2018 — 50 percent more than its exports, and 15 percent of world imports.

In 2018, the U.S. goods trade deficit reached an unsustainable $887 billion. The United States runs deficits with 97 trading partners, of which China, followed by the EU, Mexico, Japan, and Vietnam are the largest.  These five account for 92 percent of the U.S. trade deficit.

Free-trade folklore says countries export what they do best; import what they do worst; and internally produce and consume the rest.  But that is not how trade really works.

The five markets I mentioned, and others, have tariff and non-tariff import barriers, and they subsidize exports. The U.S. is the least protectionist major country. Therefore, our trade policy issues are: How much of the $887 billion goods deficit is artificial, and how do we reduce these artificial deficits?  To answer these questions, we must study history.

Right after World War II, the United States had recurring trade surpluses. The U.S. economy was so strong that its leaders decided to help Europe and Asia’s fragile economies recover with direct aid like the Marshall Plan and with trade concessions to help them export to our market. These concessions were made permanent via GATT and the WTO.  They remain in effect today, even for export powerhouses like China, Germany, and Japan.

It took 25 years for these policies to shift the United States from trade surpluses to deficits. Now, many countries, including China, have a positive balance of trade solely because their surpluses with United States exceed their deficits with the rest of the world. Without their U.S. surpluses, they could not buy as much as they do from everyone else.

Almost half the U.S. merchandise trade deficit is with China, partly because wages are lower there, and partly because we let them into the WTO on the theory that they would obey global trade rules. Unfortunately, China disobeyed the rules; and the WTO has no real enforcement mechanisms. Therefore, the United States had to defend itself. We have 450 WTO-compliant trade actions in force against foreign exporters.  Almost half of them involve China.

And just this week, the U.S. government subjected currency undervaluation to countervailable duties. Artificial devaluation subsidizes exports but will now be less useful to countries using it to provide their exporters with a price advantage.

But piecemeal trade enforcement using anti-dumping and countervailing duty laws is expensive and slow because it requires extensive and detailed analysis of long-term market and pricing data. Once a case is eventually decided, exporters get around enforcement by using slight product modifications or illegal transshipments through ports in other countries.

If you doubt the impact of China’s WTO entry, then consider that before China’s admission into the WTO, its GDP grew slowly. But think about what happened after 2001!  Its GDP soared, increasing from $1.3 trillion to $14.3 trillion. The only change since 2001 was its membership in the WTO, not its inherent competitive advantage.

Another U.S. mistake was the North America Free Trade Agreement. Before NAFTA in 1993, the U.S. had a trade surplus with Mexico of $5 billion in 1992. But after NAFTA’s first year, that trade surplus had become a $16 billion trade deficit in goods. It is now over $100 billion annually.

The cumulative U.S. trade deficit with Mexico post NAFTA exceeds $1.2 trillion. One trillion, two-hundred billion is a huge number!

President Trump campaigned against such artificial trade deficits. No country can afford permanent, huge trade deficits — no more than a family can afford increasing credit-card debt year after year because of excess spending.

The U.S. cumulative 10-year trade deficit in goods is $7.7 trillion, and cost millions of good jobs.

Now, some economists claim our deficit comes from a savings rate lower than other countries. But that doesn’t explain the impacts of NAFTA, China’s WTO accession, other countries’ protectionist practices, or the preferential trade treatment accorded 90 percent of WTO members. It doesn’t explain the fact that China can airmail a package to a customer in the United States for far less than it costs for a shorter distance within the U.S. It doesn’t explain the impact of subsidized export financing by countries.

In short, the low U.S. savings theory — at best — only partially explains the U.S. trade deficit.

President Trump’s stated objective is to eliminate foreign export subsidies and all tariff and non-tariff trade barriers.  Why then is he imposing some tariffs and threatening others?

Tariffs are his only tool to offset the historic unilateral concessions I described, and to motivate trading partners to negotiate away some of their artificial advantages.  Without tariffs, and the threat of additional tariffs, countries would remain with trade barriers lopsided in their favor.  For example, the U.S. tariff on imported autos is 2.5 percent, but Europe’s tariff on U.S.-made autos is 10 percent. China’s is much higher.

Similar ratios are true for other industries. They would give up that differential only if the cost of not doing so would be even worse, namely, higher — or additional — U.S. tariffs.

The fact is that Trump’s tariff-tactics work, as his Phase One trade deal with China proves.

China has committed to buy $200 billion more goods from U.S. producers over the next two years. This would reduce the U.S. deficit by an average of $100 billion per year and add one-half percentage point to U.S. GDP.  More importantly, China agreed to end forced technology transfers, and show more respect for intellectual property rights. In return, the U.S. agreed not to impose tariffs scheduled for December 15, 2019, and to reduce the October tariffs.  The United States retained $72.5 billion of tariffs on some $370 billion of Chinese goods, pending further negotiations.

Tariff threats also facilitated the USMCA; the renegotiation of the pact with Korea; and two new agreements with Japan.

Further shifts in global supply chains are occurring due to new U.S. policies regarding regulations and taxes. Deregulation of shale gas and oil has moved the United States from being a substantial net importer to a net exporter of fuels. It also has created a much larger export business for petrochemicals.

In total, the U.S. government has cut eight regulations for every new one imposed. This makes it easier and cheaper to do business in the U.S. The U.S. also went from being one of the highest business tax countries to one of the lowest.

The most important U.S. tax reform was allowing an immediate 100 percent write-off of capital expenditures, cutting the effective cost of investment by 21 percent.  Nothing improves rate of return better than lower initial investment. The new U.S. corporate tax code is so effective that one foreign minister considered filing a WTO complaint over the tax plan being an unfair trade practice.

Beyond these policy changes, the shift in global supply chains will be further impacted by the digital technologies of the Fourth Industrial Revolution.

Historically, production location decisions sought large pools of low-cost unskilled and low-skilled workers. Now, almost every day, another breakthrough in robotics is announced. Some machines even can fold garments and insert them into packages. Others can pick up dissimilar components and place them in precise locations error free over and over.

The substitution of capital equipment and software for labor will intensify. But the radical transformation of the global production system is just beginning.

Korea is a leader in automation technologies, but still only has 710 robots per 10,000 workers. In the U.S., there are only 200 robots per 10,000 workers and our wages are higher than Korea’s.  We and China both also need robots to offset bad demographic trends.

Manufacturing is 68 percent of U.S. goods exports, and McKinsey & Co. believes 4IR will increase U.S. manufacturing exports by 14-20 percent by 2025. McKinsey also projects that 42 percent of ALL occupations are at least 50 percent automatable. And it is not just robots.

4IR, the Internet of Things, and capturing and analyzing vast amounts of real-time data will greatly improve efficiency.  Examples abound.  3D printing uses less material, less energy, and less labor. AI-empowered production reduces the time between product design and full production. AI also reduces the need for inventory, labor, and its related costs.

Meanwhile, the just-in-time economic model of ordering, production, and delivery prioritizes close geographic proximity of factories to their customers, and to each other.

Finally, the speed of stocking and replenishing products is an increasingly important competitive factor for changing fashions and seasonal styles.  Today, retailers must guess well ahead of time the demand for products. Ordering errors cause shortages of hot items and excess inventory of others that will be marked down. Quicker turnaround times will reduce both problems.

Meanwhile, other factors are changing global supply-chain dynamics. Growing cost pressures on low-wage, highly polluted countries hurt their competitive advantage.  Sustainability is increasingly important to both consumers and global executives, and environmental concerns are influencing supply-chain decisions. Manufacturing consumes 54 percent of world energy, and emits 20 percent of the CO2. Low LDC environmental spending is a competitive advantage but is degrading the global environment.

I doubt that the developed world will continue paying twice for improving the environment: first through higher domestic costs; and, second, through job displacement by countries with lower environmental standards. One sign of this change is the new maritime industry fuel rules effective this year. Ocean-going vessels must either use more expensive, lower sulfur fuels, or invest capital to reduce pollution from existing bunker fuels. Some countries are considering a carbon tax on imports to offset the disparity in environmental laws and enforcement.

Already, there are signs that proximity to customers and highly skilled workers is shrinking global supply chains. For example, the state of Iowa is almost in the exact center of the United States, not close to either coast. Yet, 30 percent of all greenfield capital expenditures over the last decade came from Germany and Japan, although international trade accounts for only 11.5 percent of Iowa’s GDP.

As one can clearly see, Fourth Industrial Revolution technologies and sustainability will do more to transform the 20 trillion dollars in global trade than U.S. tariffs on a few hundred billion dollars of goods ever could. It will disrupt those economies that lack highly trained workers.

CONSUMER CREDIT

FED. February 7, 2020. Consumer Credit December 2019

In 2019, consumer credit increased 4-3/4 percent, with revolving and nonrevolving credit increasing 4-1/4 percent and 4-3/4 percent, respectively. Consumer credit increased at a seasonally adjusted annual rate of 5 percent in the fourth quarter and at a rate of 6-1/4 percent in December.

FULL DOCUMENT: https://www.federalreserve.gov/releases/g19/current/g19.pdf

VENEZUELA

U.S. Department of State. 02/07/2020. The United States Takes Action Against Maduro’s Improper Use of the Venezuelan People’s Air Carrier. Michael R. Pompeo, Secretary of State

On February 7, the United States identified the Venezuelan state-owned airline Consorcio Venezolano de Industrias Aeronauticas y Servicios Aereos, S.A. (CONVIASA) as blocked property of the Government of Venezuela pursuant to Executive Order (E.O.) 13884.  Instead of acting as a bridge between peoples, this airline is being used to ferry Maduro and his inner circle to confer with dictators, authoritarian regimes, and other criminals around the world.  As a result of this action, U.S. persons are on notice that they may not transact with this airline or these aircraft – to include chartering, contracting, refueling, or purchasing them – except as otherwise authorized. This action increases pressure on Maduro to negotiate seriously and open a path out of the crisis through a transitional government that will lead to free and fair presidential elections.

We call on the international community to step up pressure on Maduro and further isolate him and his corrupt associates and other malign entities.  The United States is committed to supporting the Venezuelan people, interim President Juan Guaido, and the democratically elected National Assembly in their courageous struggle for Venezuela’s democratic restoration.

CHINA

U.S. Department of State. 02/08/2020. Secretary Michael R. Pompeo National Governors Association Winter Meeting “U.S. States and the China Competition”. Michael R. Pompeo, Secretary of State. Walter E. Washington Convention Center. Washington, D.C.

SECRETARY POMPEO: Thank you, Governor Hogan, Governor Cuomo. Nice to see you.

It’s great to be here with you all. I was watching basketball on my phone on the way in – Auburn 91, LSU 90 – and I – it’s a final in overtime. Yes, exactly. I was reminded – you said I’m the 70th Secretary of State. It always reminds me President Trump is the 45th President of the United States, so there is a lot more turnover in my gig than there is in his. (Laughter.) So it’s good to be with you today.

I do want to thank Governor Hogan and the vice chair, Governor Cuomo, and everyone else here at NGA for hosting me here today.

It’s a hard act to follow, following the President’s State of the Union address the other night. I have no medals of freedom to distribute here today.

Nor am I passing out copies, so you can’t tear them up when I’m done. (Laughter.)

I’ve gotten to know some of you as I’ve traveled throughout the states. I’ve probably traveled inside the country more than many secretaries of state. It’s something they usually don’t do as much. I think it’s important that the American people understand what our diplomats are doing around the world and why we’re doing it.

So I just wanted to mention that if you see me in your state, I’m not lost. Your state has not seceded from the union. I know where I am.

Although I know there are some folks in California who are clamoring for “Calexit,” so President Newsom, I look forward to working with Secretary of State Feinstein when that comes to be. (Laughter.)

I can get away with California jokes. I grew up in southern California. My dad still lives in the same house I grew up in in Orange County. It’s a wonderful place.

Last year, I received an invitation to an event that promised to be, quote, “an occasion for exclusive deal-making.” It said, quote, “the opportunities for mutually beneficial economic development between China and our individual states tremendous,” end of quote.

Deal-making sounds like it might have come from President Trump, but the invitation was actually from a former governor.

I was being invited to the U.S.-China Governors’ Collaboration Summit.

It was an event co-hosted by the National Governors Association and something called the Chinese People’s Association For Friendship and Foreign Countries. Sounds pretty harmless.

What the invitation did not say is that the group – the group I just mentioned – is the public face of the Chinese Communist Party’s official foreign influence agency, the United Front Work Department.

Now, I was lucky. I was familiar with that organization from my time as the director of the Central Intelligence Agency.

But it got me thinking.

How many of you made the link between that group and Chinese Communist Party officials?

What if you made a new friend while you were at that event?

What if your new friend asked you for introductions to other politically connected and powerful people?

What if your new friend offered to invest big money in your state, perhaps in your pension, in industries sensitive to our national security?

These aren’t hypotheticals. These scenarios are all too true, and they impact American foreign policy significantly.

Indeed, last year, a Chinese Government-backed think tank in Beijing produced a report that assessed all 50 of America’s governors on their attitudes towards China. They labeled each of you “friendly,” “hardline,” or “ambiguous.”

I’ll let you decide where you think you belong. Someone in China already has. Many of you, indeed, in that report are referenced by name.

So here’s the lesson: The lesson is that competition with China is not just a federal issue. It’s why I wanted to be here today, Governor Hogan. It’s happening in your states with consequences for our foreign policy, for the citizens that reside in your states, and indeed, for each of you.

And, in fact, whether you are viewed by the CCP as friendly or hardline, know that it’s working you, know that it’s working the team around you.

Competition with China is happening inside of your state, and it affects our capacity to perform America’s vital national security functions.

I want to set the context today for this topic.

At the end of the Cold War, America started to engage with China heavily. It made good sense. We thought that the more we interacted, the more it would become like a liberal democracy, like us here in the United States.

It didn’t happen, and you all know this.

Indeed, under Xi Jinping, the country is moving exactly in the opposite direction – more repression, more unfair competition, more predatory economic practices; indeed, a more aggressive military posture as well.

You should know this doesn’t mean we can’t do business with China. I had an operation when I ran Century International. We had a small office in Shanghai. We can find places to cooperate when our interests converge.

You can see that in the first part of the trade deal that President Trump got done, signed last month.

We’re happy about that. It was the right thing to do. That was indeed a deal that was good for both the United States and China. And these economic ties are powerful. They’re important and good. They’re good for your state; they’re good for America.

Look at the nearly 18 tons of medical supplies the United States just flew to China this past week to help fight the coronavirus. Yesterday we announced more than $100 million in assistance to China and the countries that are affected by that virus.

And on that note, too, I want to take just a moment to note I want to send my condolences to the loved ones of the United States citizen who fell victim to the coronavirus in Wuhan over the last days.

But while there are places we can cooperate, we can’t ignore China’s actions and strategic intentions. If we do, we risk the important components of our relationship that benefit both countries.

The Chinese Government has been methodical in the way it’s analyzed our system, our very open system, one that we’re deeply proud of. It’s assessed our vulnerabilities, and it’s decided to exploit our freedoms to gain advantage over us at the federal level, the state level, and the local level.

Last year, I announced that I would give a series of speeches on China, and this is part of that. It’s the context in which state and local government officials ought to think about the way they lead with respect to our relationship. It’s important. China matters.

It’s been part of my mission at the State Department to mobilize all parts of the United States Government. I was out in Silicon Valley a couple weeks ago to talk to America’s leading tech companies about this very set of issues.

And I need your help, too.

What China does in Topeka and Sacramento reverberates in Washington, in Beijing, and far beyond. Competition with China is happening. It’s happening in your state.

In fact, I would be surprised if most of you in the audience have not been lobbied by the Chinese Communist Party directly.

Chinese Communist Party friendship organizations like the one that I referenced earlier are in Richmond; Minneapolis; Portland; Jupiter, Florida; and many other cities around the country.

But sometimes China’s activities aren’t quite that public, and I want to talk about some of that today. Let me read you an excerpt of a letter from a Chinese diplomat. It was China’s Consul General in New York sent a letter last month to the speaker of one of your state legislatures.

Here’s what the letter said in part. It said, quote, “As we all know, Taiwan is part of China… avoid engaging in any official contact with Taiwan, including sending congratulatory messages to the electeds, introducing bills and proclamations for the election, sending officials and representatives to attend the inauguration ceremony, and inviting officials in Taiwan to visit the United States.” End of quote from the letter.

Think about that. You had a diplomat from China assigned here to the United States, a representative of the Chinese Communist Party in New York City, sending an official letter urging that an American elected official shouldn’t exercise his right to freedom of speech.

Let that sink in for just a minute.

And this isn’t a one-off event. It’s happening all across the country.

Chinese consulates in New York, in Illinois, in Texas, and two in California, bound by the diplomatic responsibilities and rights of the Vienna Convention, are very politically active at the state level, as is the embassy right here in Washington, D.C.

Maybe some of you have heard about the time when the Chinese consulate paid the UC-San Diego students to protest the Dalai Lama.

Or last August, when former governor Phil Bryant of Mississippi received a letter from a diplomat in the consul’s office in Houston, threatening to cancel a Chinese investment if the governor chose to travel to Taiwan. Phil went anyway.

Last year, a high school – a high school, a high school in Chicago – disinvited a Taiwanese representative to serve on a climate panel after Chinese pressure.

It’s one thing to pressure the Secretary of State of the United States of America. It seems quite something else to go after a high school principal. It shows depth. It shows systemization. It shows intent.

Chinese Communist Party officials, too, are cultivating relationships with county school board members and local politicians – often through what are known as sister cities programs.

Look, this Chinese competition is something you all know. It sits in the back of your mind. But you have many duties and you are busy people. But this competition is well underway. And while these might seem like local matters to some, the cumulative effect is of enormous national importance and international significance.

Of course, too, our public educational institutions are another arena of competition with China.

I know, governors, you don’t run these institutions on a day-to-day basis, but you often have impact on the people that do. The FBI director and I think the Attorney General, too, talked yesterday about something called the “Thousand Talents Plan.” It’s a plan to recruit scientists and professors to transfer the know-how we have here to China in exchange for enormous paydays.

The program has probably targeted campuses in your state. Indeed, the Department of Justice has indicted professors in my home state at the University of Kansas and at Virginia Tech and at Harvard.

A Texas A&M investigation reportedly discovered more than 100 academics participating in Chinese talent recruitment plans. Only five of them had declared that they were participating in this program.

And goodness knows what else we have not discovered.

There are indeed very credible reports of Chinese Government officials pressuring Chinese students – students studying right here in the United States of America – to monitor fellow Chinese students and to report back to Beijing.

One very prominent pro-democracy Chinese student on a college campus in the Northeast last year received death threats – death threats for exercising his right to free speech. The FBI became involved.

Make no mistake about it: We want talented, young Chinese students to come study in the United States of America. I see it at Wichita State University. These are wonderful young people. We ought to encourage them to be here. But they shouldn’t have to fear the long arm of Beijing, which often reaches out via groups like the Chinese Students and Scholars Association.

Look, that’s just one of many campus groups directly influenced by the Chinese Communist Party and its representatives right here in the United States.

Many of you are familiar with Confucius Institutes. Confucius Institutes purport to have the sole purpose of teaching Mandarin language skills and Chinese culture. A bipartisan Senate committee found last year in 2019 that the Chinese Communist Party controls nearly every aspect of the Confucius Institutes’ activities here in the United States.

Over the past few months, the University of Missouri, the University of Kansas, the University of Maryland have independently decided to close down their Confucius Institutes after conducting their own reviews, and schools in 22 other states are doing or have already done the same.

Sadly, China’s propaganda campaign starts even earlier than college. China has targeted K through 12 schools through its “Confucius Classrooms,” the CCP’s program to influence kids at elementary, middle, and high schools around the world.

Do you know that we have no ability to establish similar programs in China? I’m sure that doesn’t surprise you. President Trump has talked about reciprocity in trade. We should have reciprocity in all things. Today they have free rein in our system, and we’re completely shut out from theirs.

As of 2017, there were 519 of these classrooms in the United States. Beijing knows that today’s kids are tomorrow’s leaders.

The China competition is happening. It’s happening in your states, and it’s a competition that goes to the very basic freedoms that every one of us values.

And when it comes to doing business, I’m asking you to adopt a cautious mindset. In the words of President Reagan, when you’re approached for an introduction or a connection to a deal, trust but verify.

I know you all have power over pension funds or the people that run them. As of its latest public filing, the Florida Retirement System is invested in a company that in turn is invested in surveillance gear that the Chinese Communist Party uses to track more than 1 million Muslim minorities. California’s pension fund, the largest public pension fund in the country, is invested in companies that supply the People’s Liberation Army that puts our soldiers, sailors, airmen, and Marines at risk.

And it is the case for many Chinese companies, too – no Sarbanes-Oxley. Their books are not wide open, so it’s difficult to know if the transaction that’s being engaged in is transparent and fair and follows the rule of law.

Now, all of these things may well be legal. But the question is: Do they demonstrate good judgment and preserve America’s national security?

I want to urge vigilance on the local level, too. In the District of Columbia, there have been concerns raised that the new Metro cards manufactured by China could be vulnerable to cyber threats.

So again, it’s worth trusting but verifying. There are federal officials prepared to help you work your way through these challenges when they arise. Don’t make separate individual deals and agreements with China that undermine our national policy. I know none of you would do so intentionally. Let us help you make sure we’re getting it right.

We’re here to help. The Trump administration wants to help. There are so many things we have already done.

Last year, we issued a letter to state governments. It reaffirmed that Taiwan remains a key business partner and a friend in every other way.

We have strengthened the review process for Chinese companies that are investing in your states.

We have revoked visas for so-called “research scholars” who abused their privileges by teaching in Confucius Classrooms, and made sure that they departed the United States.

We’ve banned scientists from the Department of Energy, which overseas America’s 17 largest national – excuse me, nuke labs, including our nuclear research facility in New Mexico. We did so because they were participating in Chinese talent recruitment programs.

We have directed two Chinese propaganda outlets, the Chinese Global Television Network and Xinhua News Agency, to register as foreign agents.

And we at the State Department have started to require Chinese diplomats to apply – comply with the same rules we comply with when we’re in China. Chinese diplomats now must notify the State Department in advance of official meetings with state and local officials.

They must declare their official visits to U.S. educational and research institutions as well.

This is just fairness, reciprocity, basic common sense. This is not an onerous restriction to put on China.

Look, I know it’s 2:30 on a Saturday afternoon. There are lots of good things we could do. I hope you will all take on board what I’ve said today.

You all have important missions leading your states. These are complex, difficult jobs. You have the task to create jobs and opportunity in your state for your people, attract human capital, investment that undergirds our prosperity.

It’s a tough job, and you get curveballs every day from all across the place.

But don’t lose sight of the competition from China that’s already present in your state. Let’s all rise to the occasion and protect our security, our economy; indeed, all that we hold dear, all of those freedoms.

It’s what leaders must do.

It’s what we do as Americans.

I hope God will bless each and every one of you, each of your states, and the United States of America.

Thank you for letting me be with you here this afternoon. (Applause.)

________________

ORGANISMS

FOOD SECURITY

UNCTAD. 22 January 2020. Trade wars are huge threats to food security
By Dr. Mukhisa Kituyi, Secretary-General of UNCTAD

International trade has proven to be a critical mechanism for growth and development. It helps build stronger value chains, mitigate conflict and provides access to higher quality and quantities of goods and services.

It has also provided consumers with access to a more diversified and nutritious food basket. However, for trade to improve food security to the greatest number of people across the globe, greater international cooperation is necessary.

More than 820 million people - equivalent to more than 10% of the world’s population - were hungry and about 2 billion people experienced food insecurity in 2018.

This challenge exists in the context of a global population that is projected to grow from the current 7.7 billion to 8.5 billion in 2030 and rise to 9.7 billion in 2050.

Developing countries most affected

The majority of those facing hunger and food insecurity live in developing countries. These countries, including many least developed countries (LDCs), depend critically on the agricultural sector for employment, production and exports.

For instance, 57% of the labour force in LDCs was employed in agriculture in 2019, compared with only 3% in high-income countries. Within developing countries, poverty is higher in rural areas and the rural poor depend on agriculture.

Smallholders in developing countries face challenges that preclude them from benefitting fairly from global value chains.

Enhanced international and national measures on transparency and regulation are needed to ensure incomes arising from agriculture value chains are fairly shared by all actors.

We also need improved market access and risk management tools for smallholder farmers, including for female farmers, to expand opportunities and reduce income volatility.

Less distortion, more inclusion needed

The international agricultural trading system needs to become less distorted, more inclusive and sustainable, as well as take the specific needs of developing countries into account.

The high volume of agricultural subsidies given to producers in developed countries must be reduced. For instance, OECD countries provided US$315 billion worth of support and protection for their agricultural producers in 2017.

Instead of improving fair and transparent market access, growing anti-globalization sentiments and moves towards protectionism threaten to undermine the substantial benefits of global trade, particularly for food systems and nutrition.

At the same time, anti-globalization and protectionist approaches do nothing to address the problems they claim to respond to.

For example, what began as heated rhetoric over trade between the United States and China has evolved into a potential trade war, with negotiations foundering and both countries proposing trade barriers.

This environment is likely to make it more difficult to overcome barriers to the improvement of global trade.

Multilateral action critical

The collapse of agriculture negotiations has tremendously limited the scope for the use of trade for development and developing countries’ optimism about the potential of agricultural trade as a vehicle out of poverty is eroding.

Adequate multilateral trade negotiations would have led to substantial gains for both developing and developed countries, including increased global production of food and industrial goods, better trade infrastructure, more efficient customs procedures, lower tariff protection, and reduced production- and trade-distorting domestic support policies.

Trade agreements on agriculture also go far beyond food security – the special and differential treatment called for by developing countries on agriculture are a key requirement for them to continue to want to support the global trading regime in all sectors.

We also need stronger market information and reduced trade costs associated with non-tariff barriers to agricultural trade, including those measures that are more important today in light of the sustainability imperative.

The proliferation of non-tariff measures needs to be addressed and the costs of compliance with them brought down to ensure poorer countries benefit from market access for their agricultural products.

A proliferation of these measures is conceivable as countries develop and in the context of the implementation of 2030 Agenda.

To avoid potential adverse and unintended effects of this trend, policy coherence and convergence are essential. Traceability compliance must be sensible and support development.

These instruments, and the multilateral approach as a whole, provide important advantages for trade liberalization and should continue to be supported.

The role of trade in reducing hunger and ensuring food security must be prioritized. To do so, we must enhance international cooperation on a multilateral scale.

ILLICIT TRADE

UNCTAD. 28 January 2020. Global actors gather to forge a common front against illicit trade
Global goals. Illicit trade threatens achievement of the UN Sustainable Development Goals and better, more synchronized efforts are needed to combat it.

The global economy loses more than US$2 trillion annually due to smuggling, counterfeiting, trafficking of humans and wildlife and other forms of illicit trade that hold back progress on the global development agenda.

To address this alarming problem, UNCTAD and the Transnational Alliance to Combat Illicit Trade (TRACIT) are convening the first-ever Illicit Trade Forum on 3 and 4 February at the Palais des Nations in Geneva.

The forum is designed to encourage an open dialogue among representatives from member states, experts and non-governmental observers, with the aim to share expertise, promote international enforcement cooperation, coordinate resources and ensure countries are adequately equipped to mitigate illicit trade.

“Illicit trade endangers all aspects of development and all 17 of the UN Sustainable Development Goals (SDGs). It creates a triple threat to the financing of development: crowding out legitimate economic activity, depriving governments of revenues for investment in vital public services and increasing the costs of achieving the SDGs by eroding the progress already made,” UNCTAD Secretary-General Mukhisa Kituyi said.

TRACIT Director-General, Jeffrey Hardy, added: “Given the scale and damaging effects of illicit trade, a coordinated and sustained global response by governments and companies is urgently needed.”

The international response to illicit trade is largely fragmented among many sectors vulnerable to illicit trade, which necessitates a joint approach that considers the interconnected nature of the problem, commonalities and points of convergence among its various manifestations.

“Every country is feeling the malignant effects of illicit trade, underscoring the need for expanded partnerships and cooperation among governments to push back against this deterrent to global sustainable development,” said Pamela Coke-Hamilton, UNCTAD’s Director of International Trade.

Magnitude of illicit trade

Illicit trade drains nearly 3% of the world’s economy. If it were a country, its dark economy would be larger than Brazil, Italy and Canada – and as large as Mexico and Indonesia combined.

It endangers public health, as sub-standard and fake antimalarial medicines alone cause more than 100,000 deaths per year in Sub-Saharan Africa.

Illicit trade also pushes endangered species to the brink of extinction and causes irreversible damage to ecosystems. For instance, illegal logging, with an estimated annual value of up to $157 billion, is the world’s most profitable crime involving natural resources.

Further, it threatens the rule of law, owing to its links with organized crime – from human trafficking networks and tobacco smuggling to the involvement of organized criminal groups in fuel theft and the trade of counterfeit goods. Even more frightening are the links to terrorist financing that heighten threats to national and global security.

Defending the SDGs together

Experts at the forum will deliberate how to act together to defend the SDGs against the onslaught of illicit trade.

They will explore the different methods used to measure illicit trade and identify common approaches by governments and industry actors to counter this problem and deter associated illegal activities, like money laundering.

Participants will examine the role of the private sector in ensuring that illicit trade does not compromise the integrity of legitimate markets or jeopardize the well-being of consumers.

The forum will discuss how stakeholders can better deter illegal trade across sectors, address vulnerabilities in supply chain systems, report criminal activity, promote sustainable resource management and protect against forced labour and other human rights abuses.

It is expected to generate a roadmap for collective action by government, business and other stakeholders, including a call for shared policy guidelines and a process to ensure Member States benefit from intergovernmental experiences and expertise.

Facts and (estimated) figures on illicit trade

(Source: Mapping the Impact of Illicit Trade on the SDGs report by TRACIT)

Counterfeit goods

• Up to 5% of goods imported to the European Union are fake. Imports of counterfeit and pirated goods are worth nearly $500 billion a year.

Food and fish

• Fake, substandard, smuggled and illegal agri-foods cost the global food industry an estimated $30 billion to $40 billion each year.
• Côte d'Ivoire lost about 125,000 tons of cocoa to smuggling in the 2017- 2018 season, equivalent to 9% of the harvest – a significant loss in a country where cocoa accounts for 20% of exports.
• One in four alcohol bottles worldwide are illicit, representing 25.8% of all global consumption.
• Global losses to illegal, unreported and unregulated fishing are estimated at between $15 billion and $36 billion, representing 14 to 33% of global marine capture value.

Health

• Between 72,000 and 169,000 children may be dying from pneumonia every year after receiving ineffective illicit medicines.

Mining

• South Africa’s illegal trade in precious metals is estimated at $1.3 billion a year, a significant drain on the country’s GDP, export and trade balances. Illegally extracted gold and platinum alone cost the legal industry 5% to 10% of its annual production, according to South Africa’s Chamber of Mines.
• Illegal gold mining in Ghana degrades forests, pollutes around 75% of the waterways and erodes biodiversity. The water contaminated with heavy metals has resulted in cases of poisoning.

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LGCJ.: