A new protectionist device is being planned in the United States that could devastate the exports of developing countries and cause American and other foreign companies to relocate. The complexities and implications of the proposed border adjustment tax are explained in this article. A version of this article was published by IPS. A second article on this issue will be published soon.
A new and deadly form of protectionism is being considered by Congress leaders and the President of the United States that could have devastating effect on the exports and investments of American trading partners, especially the developing countries.
The plan, known as a border adjustment tax, would have the effect of taxing imports of goods and services that enter the United States, while also providing a subsidy for US exports which would be exempted from the tax.
The aim is to improve the competitiveness of US products, drastically reduce the country’s imports while promoting its exports, and thus narrow the huge US trade deficit.
IFC investments in FIs supported at least 41 coal power plants since 2013
Investments contravene 2013 Bank policy on coal, contribute to climate change and deforestation
Lack of disclosure on FI sub-projects continues to deprive communities access to grievance mechanism
The negative development impact of the International Finance Corporation’s (IFC, the World Bank’s private sector arm) investments in financial intermediaries (FIs) has once again been brought to light (see Observer Spring 2014). An October 2016 report, Disaster for us and the planet, by US-based NGO Inclusive Development International (IDI) and partners, provided evidence that “IFC-supported financial institutions have funded at least 41 new coal projects … since the World Bank announced its coal ban in 2013”. While the IFC has claimed that the concerns of civil society organisations have largely been addressed through its response to previously highlighted harmful projects that it funds, the report demonstrates that the IFC remains exposed to highly damaging projects.
Mainstream economic thinking often tries to explain the trend of high and rising inequalities by referring to the forces of technology. Technological progress, so the argument goes, works to destroy middle pay routine jobs while at the same time creating many high skilled jobs. There is, however, increasing recognition that this ‘technology’ factor is but part of the story and there are other important forces at work. (see for example here).
The failure of this classical skills-related argument in explaining all of the wage inequality trends has not gone unnoticed by the OECD either. In a recently published working paper from their Economics department, the authors conclude that cross-country diverging experience “suggests that longer-term trends such as technological change and globalisation cannot fully account for decoupling of wages and productivity”. Country-specific public policies are also important as these shape the effects of global trends on inequalities.
In 2013 Mozambican government officials formed three private companies and took out illegal secret loans totaling $2 billion. Donors suspended credit to Mozambique because of the loans as the national currency fell by 70% in 2016. Restructuring the illegal loans means imposed austerity on a population already living in extreme austerity and eventually repaying the creditors from revenues derived from Mozambique’s natural gas deposits that on the market in 2023.
The open-ended working group (OEIGW) on transnational corporations (TNCs) and other business enterprises with respect to human rights successfully held its second meeting in October 2016, in Geneva. The OEIGW was established by a Human Rights Council resolution adopted in July 2014. According to this resolution, the next meeting of the OEIGW, expected in October 2017, will see the Chairperson rapporteur “prepare elements for the draft legally binding instrument [on TNCs and other business enterprises with respect to human rights] for substantive negotiations” (hereinafter referred to as “the Instrument” or “binding Instrument”).