Sunday, 10 June 2018

G6+1+Russia


The meeting of the world’s economic engine, commonly known as the G7, took place in Canada on June 09, 2018. Justin Trudeau the Canadian PM wanted this meeting to be a crowning of his career, but as it turned out it may have been a colossal disaster.

Trudeau a vacuous political neophyte never understood that the world changed with Trump’s election as President of the United States. A rise in populism is causing a serious rift in political circles and it seems that globalism is gladly seeing its twilight. In view of serious trade issues including NAFTA and Trump’s view that trade with the rest of the world is not fair; Trudeau inserted social issues on his agenda. Noble as it may be, gender and apple-pie social issues could not take precedent over lingering economic and security issues.

The G7 meetings of the past, never really produced much, but instead proclaimed to resolve issues but ultimately were just another waste of taxpayers’ money to get leaders of the world together for a photo-op. The problem this time was that Trump having withdrawn from international agreements like TTP and the Paris Climate Agreement had already sent a message that he wanted to renegotiate many issues that he believes affect his country’s economy and sovereignty. With a forthcoming summit with the leader of the rogue nation of North Korea, Trump did not put much effort into the Quebec meeting. So Trudeau and Macron decided that the meeting would be to pressure Trump on tariffs and social issues. The result was a resounding failure because Trump treated the meeting with contempt and not only was late at meetings but also left early. So the media labelled the meeting as G6+1.

The G6 made up of France, Canada, the U.K, Japan, Germany and Italy, have sometime been acting and behaving as offended U.S allies The mistake is that they believed that they could bully the leader of the most powerful country in the world. While in the past these meetings were about closed door discussions and agreements, which incidentally, did not come to any good results, this time Trump put all his cards on the table in public.

Trump has been very clear about trade and international multilateral agreements. He does not like them. In many ways his views on trade are very true. The U.S the largest economy in the world does have trade deficits with most other industrialized countries, and he wants to change that trend. The only way for him to get attention from the other G6 members was to impose tariffs on steel and aluminium. He used ‘security’ as the excuse to impose these tariffs because it was the only legal way for him to do it and by-pass Congress on trade issues. It is hypocritical  for any member of the G6 to complain about tariffs , when every single one of them have huge tariffs on imports in one way or another, Todays’ real free trade problems come from the fact that many countries protect some of their industries jealously by means of tariffs, and government subsidies.

As for NAFTA, there is no doubt that Canada, Mexico and the U.S have all benefitted from the original agreement. However as time went by, it seems that it may be time to renegotiate some of the original portions of the agreement. For Canada who accuses Trump of punishing his ally, Trudeau very conveniently ignores the fact that Canada imposes tariffs equivalent to over 200% on dairy and poultry products from the U.S thus hurting Canadian consumers. By the same token we must also acknowledge that the lumber issue has been adjudicated in favor of Canada several times, despite the fact that the Canadian government subsidises the industry. The Auto Pact has benefited Canada, and uses cheap steel and aluminum bought from China. Cheap labor in Mexico has also affected the U.S auto industry. In light of these facts it is clear that Trump wants to reverse some, if not all, the trade imbalance that exists between the U.S and the rest of the world.

The media is very quick to accuse Trump of playing the ‘Imperial’ card to negotiate, but ignore that the progressive ideas of the past decade are becoming tiresome and endangering the world economy. Under Obama the G7 was a lovefest of progressivism, which as we saw did nothing for world trade, the economy or world security. The Iran deal was put together by some G7 members, China and Russia. The result was to allow Iran to restart its nuclear program in 15 years and also get access to $T delivered in cash by cargo planes; the same money being used today to destabilize the Middle East. When Trump called for the abolition of the Iran agreement all the European allies disagreed, not for security reasons but in truth for economic reasons. The claim to be ‘Allies’ when it comes to trade tariffs is a bit disingenuous when they do not support him on serious security issues.

The Europeans do not like the fact that Trump calls for better contributions to NATO or cites them for their approach in the fight against terrorism. European and Canadian immigration policies have created havoc in their respective countries and yet they accuse Trump of being racist for promoting legal immigration. No wonder that Trump, rightly or wrongly, promotes to bring back Russia to the table for future G7 + Russia meetings. In fact I would go so far as adding China and calling it the G9. The real powers today are the U.S, Russia and China.  Russia was rightly excluded because of the Crimea and East Ukraine invasion. But it is time for the world to recognize that either these meetings are totally useless and mere photo-ops, or they must decide that to achieve serious and meaningful results the real powerful countries should be at the table. I believe that Trump understands this theory.

The Quebec G7 meeting was a fiasco; let us not sugar coat it. Trudeau and his progressive friends bungled it. They thought that ganging up on Trump would be advantageous, but they forgot that Trump is not the usual U.S President. He is after all a business man who has honed his negotiating skills through actual deal making not political pandering. He also knows that under his leadership the U.S economy is booming with a GDP of $20.4T compared to a $19.2T for the other six members combined. By Trump refusing to sign the final meeting’s communique further proves that the Canadian PM misjudged his place in world politics. He is a light weight with vacuous, globalist progressive ideas that do not serve Canada well on the international scene, except at the feckless United Nations. One does not have to give one’s shirt to achieve successful negotiations. The other members of the G6 better start understanding that Trump is a different President who is prepared to go it alone when necessary. Unfortunately this does not bode well when the U.S is still the policeman of the world and the engine of the world’s economy. Cooperation with your true ally is better that poking him in the eye.

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