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Globalization and Trade

Honduras

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Jamaica

Latin America and the Caribbean

World

A CEPR Primer on Obama’s Trip to Jamaica and Panama

From April 8-11, President Obama will make his first trip south of the U.S. border since February of 2014.  On April 9, he will be in Kingston, Jamaica for meetings with Prime Minister Portia Simpson-Miller and the leaders of the Caribbean Community (CARICOM), an organization made up of 15 Caribbean governments.  Then on April 10 and 11, he will be in Panama City where he’ll participate in the seventh Summit of the Americas alongside the leaders of every independent government in the hemisphere including – for the first time – the Republic of Cuba.   

As we had predicted, the last Summit of the Americas that took place in Cartagena, Colombia in April of 2012 was a stormy affair for Obama, with many Latin American leaders objecting to the U.S.’ refusal to allow Cuba’s participation in the summit and criticizing the U.S. “War on Drugs” (not to mention that little scandal involving Secret Service agents and local prostitutes).  Following Obama’s efforts to begin the normalization of relations with Cuba and the lifting of his veto on Raul Castro’s participation in the Panama summit, many expect the U.S. president to receive a warmer welcome this time around.  But dark clouds have gathered again following the White House’s executive order declaring Venezuela an “extraordinary national security threat” and slapping senior Venezuelan officials with sanctions. 

On April 7, two senior White House officials, Ricardo Zúñiga – National Security Council Senior Director for Western Hemisphere Affairs – and Ben Rhodes – Deputy National Security Advisor for Strategic Communications – provided the press with a briefing on Obama’s trip to Kingston and Panama City.  As a service to our readers, CEPR has the pleasure of offering its own background briefing on some of the key issues that are sure to come up during Obama’s trip, with a few choice contributions from the aforementioned White House briefing.

Let’s start with Jamaica.  On April 9, President Obama will, in the words of Zúñiga, “have an opportunity to speak to Prime Minister Miller about (…) our strong support for Jamaica's work to deal with a debt crisis, with a fiscal crisis, and its strong performance in the last two years in working with the IMF and World Bank and others to address that, in support of the prosperity and security of her citizens.”

CEPR / April 08, 2015

Article Artículo

Latin America and the Caribbean

Mexico

World

“U.S. Ties with Mexico’s Military Have Never Been Closer”: An Interview with Jesse Franzblau

The kidnapping and disappearance of 43 students from a teacher-training college in Ayotzinapa, Guerrero has sparked renewed attention to the devastating effects of the U.S.-backed drug war in Mexico. More than six months have passed since the students’ disappearance, and while dozens of police officials and local drug gang members have been arrested, the investigations are marred with allegations of coerced confessions, and investigators are accused of covering up the truth by suppressing information.

Currently, a “caravan” of family members of the victims is traveling around the U.S. to bring attention to the terrible consequences of the war against drugs in Mexico. Felipe de la Cruz Sandoval, spokesperson for the group of parents and a member of the Rural Teachers College of Ayotzinapa Guerrero, said the caravan aims “to shed light on the foreign policy of the United States, specifically the Mérida Initiative and its connection with the socioeconomic conditions and violence in Mexico.”

The Mérida Initiative was negotiated behind closed doors between former presidents George W. Bush of the U.S. and Felipe Calderón of Mexico in March 2007, and was inaugurated in December 2008. The former U.S. ambassador to Mexico, Antonio O. Garza, said months before it was approved that it was “the most aggressive undertaking ever to combat Mexican drug cartels.” U.S. funding for judicial processes, forensic services, investigative capacity, and Mexico’s judicial reforms doesn’t seem to have had much impact so far: impunity remains rampant in Mexico, with 98.3 percent of crimes going unpunished. According to a recent U.N. report, Mexican security agents regularly engage in torture. The U.N. Committee on Enforced Disappearances has also found that the problem of disappearances of civilians at the hands of the police and military is worsened by the government inaction.

I recently discussed these issues, by email, with Jesse Franzblau – a policy analyst who has been researching U.S. foreign policy and human rights in Mexico and Latin America since 2006. Franzblau has carried out research and written articles for the National Security Archive, The Nation, Al Jazeera, NACLA, Columbia Human Rights Law Review, the Universidad Nacional Autónoma de México’s Law Review and other outlets. Last year he was nominated, along with Mike Evans of the National Security Archive, and three Mexican journalists Carmen Aristegui, Daniel Lizárraga and Irvin Huerta (all formerly of Mexican news network MVS Noticias), for the 2014 Gabriel García Márquez Award for investigative journalism for their coverage of secret U.S. surveillance programs in Mexico.

CEPR and Mateo Crossa / April 07, 2015

Article Artículo

Too Many Pinocchios? The Washington Post Fact Checker, Public Citizen, and the Korea Free Trade Agreement

Glenn Kessler has a difficult job. He is asked to assess claims that often arise in the middle of heated political debates. Inevitably his judgements will leave some unhappy. I sometimes fall into the unhappy camp, as is the case today with his assessment of Public Citizen's claims on the job impact of the Korea-U.S. Free Trade Agreement. He gave Public Citizen a whopping four pinocchios in saying that the deal led to the loss of 85,000 jobs.

Before getting to the substance, let me say that I have known Kessler for years, and I'm sure he reached this assessment in good faith. I have discussed many issues with him over the years (including a related trade issue) and I have always felt that he was trying to determine the facts of the situation. In this case, I just think he got it wrong.

He raises several objections to Public Citizen's number. Just briefly listing them, he is concerned about:

1) the relationship between the estimates of jobs per dollar of exports and jobs per dollar of imports;

2) the years chosen as endpoints for the Public Citizen analysis;

3) the nature of the counterfactual (i.e. what would have happened in the absence of the trade deal); and

4) Public Citizen's exclusion of re-exports from the calculation.

There is some validity to all of these concerns, but none of these issues individually or collectively undermine the basic story in the Public Citizen report.

Starting with the estimates of jobs per dollar, these are always very crude. Public Citizen took their estimate of jobs per dollar from a report from International Trade Commission which calculated how many jobs would be generated by a projected increase in exports associated with the U.S.-Korea Free Trade Agreement. Kessler points out that this estimate is from 2007 so it would be out of date by 2012, when the deal first took effect. Furthermore, it was an estimate of jobs per dollar of exports, not imports.

Both of these points are true, but not likely of much consequence. The original estimate of jobs per dollar of exports is at best a crude approximation rather than a carefully constructed number. Certainly no one could rule out that the true number in 2007 may have been 10 percent higher or 10 percent lower. Ideally we would have separate estimate for the jobs lost in the industries competing with imports, but it is unlikely to be hugely different. (Most exports and imports are manufactured goods.) Furthermore, U.S. imports tend to be somewhat less capital intensive than U.S. exports, which means that there are likely to be more jobs lost per million dollars of imports than are gained per million dollars of exports.

On the second point, Kessler takes issue with where Public Citizen decided the trade agreement's impact would first be felt. There will always be some ambiguity on this sort of question because businesses will start responding once they are sure the deal will go into effect, even before it actually is in place. Whatever date one picks, it is pretty hard not to see a clear pattern of rising deficits around the time of the deal. Here's the data from the Commerce Department going back to 2007.

 

Korea trade deficit 32525 image001

                Source: U.S. Department of Commerce.

The deal was ratified in late 2011 and went into effect in March of 2012. Whatever date we want to pick as the point at which the deal first started having an effect on trade, there seems no way of escaping the fact that there was a large increase in the deficit after that point.

Dean Baker / April 07, 2015