Globalism and Trade Barriers.




Ministro das Relações Exteriores Discurso do Ministro José Serra por ocasião da cerimônia de transmissão do cargo de ministro de estado das Relações Exteriores – Brasília, 18 de maio de 2016

Nine simple, self-evident, mercantilist rules for assuring a sane, self-sufficient and full-employment economy, with a treasure overflowing with gold.
“To take care of our own is the number one American obligation. The destiny of America, certainly is not either to reform or to police the world.” Senator Gerald Nye of North Dakota."The United States is better situated from a military standpoint than any other nation in the world. Even in our present condition of unpreparedness no foreign power is in a position to invade us today. If we concentrate on our own defenses and build the strength that this nation should maintain, no foreign army will ever attempt to land on American shores." Charles Lindbergh.

In his speech before The National Interest Magazine and its parent institution, The Center for the National Interest, and invited guests, the presumptive GOP nominee for President of the United States articulated five important criticisms of American foreign policy: the nation’s resources are overextended; many of our allies aren’t paying their fair share; our friends fear they can’t depend on us; our rivals no longer respect us – and the country doesn’t have clear foreign policy goals. 


The decison taken by the Brittons to leave the European Union, after more then forty years of full finantial, economic and military participation, must be reckonned as one of the most important political facts in the history of the Western Hemisphere. If the separation takes place in the following two years of sour negotiations, it will be an event similar in consequences to that of the sudden fall of the Soviet Union. These two events can be taken as milestones in the Western History and as the definitive burial of the socialist utopias kindled during and after the ninteenth century. Since 2012, the House of Commons Foreign Affairs Commitee produced important documents about the costs and benefits of the European Union for the UK. We reproduce below the RESEARCH PAPER 13/42 (1 July 2013) a hundred pages analysis on the consequences of a British withdrawal. A saida do Reino Unido da União Europeia representa um rude golpe à utópica concepção de um estado europeu supranacional, em que as nações participantes renunciam a uma parcela considerável de sua soberania nacional em troca de uma esperada maior segurança econômica. A queda da União Soviética e o esfacelamento da União Europeia são dois fatos relacionados que marcam um ponto decisivo na história do Ocidente.



The Treaty on European Union provides for a Member State to leave the EU, either on the basis of a negotiated withdrawal agreement or without one. If the UK were to leave the EU following a referendum, it is likely that the Government would negotiate an agreement with the EU, which would probably contain transitional arrangements as well as provide for the UK’s long-term future relations with the EU. There is no precedent for such an agreement, but it would in all likelihood come at the end of complex and lengthy negotiations.

The Treaty on European Union provides for a Member State to leave the EU, either on the basis of a negotiated withdrawal agreement or without one. If the UK were to leave the EU following a referendum, it is likely that the Government would negotiate an agreement with the EU, which would probably contain transitional arrangements as well as provide for the UK’s long-term future relations with the EU. There is no precedent for such an agreement, but it would in all likelihood come at the end of complex and lengthy negotiations.

The full impact of a UK withdrawal is impossible to predict, but from an assessment of the current EU role in a range of policy areas, it is possible to identify issues and estimate some of the impacts of removing the EU role in these areas. The implications would be greater in areas such as agriculture, trade and employment than they would in, say, education or culture.

As to whether UK citizens would benefit from leaving the EU, this would depend on how the UK Government of the day filled the policy gaps left by withdrawal from the EU. In some areas, the environment, for example, where the UK is bound by other international agreements, much of the content of EU law would probably remain. In others, it might be expedient for the UK to retain the substance of EU law, or for the Government to remove EU obligations from UK statutes.

Much would depend on whether the UK sought to remain in the European Economic Area (EEA) and therefore continue to have access to the single market, or preferred to go it alone and negotiate bilateral agreements with the EU.

Commons Briefing papers RP13-42. Author: Vaughne Miller

Topics: Economic policy, EU budget, EU defence policy, EU external relations, EU institutions, EU law and treaties, EU political integration, International law, International politics and government, International trade


The people of the United Kingdom have voted to leave the European Union.

Inevitably, there will be a period of uncertainty and adjustment following this result.

There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold.

And it will take some time for the United Kingdom to establish new relationships with Europe and the rest of the world.

Some market and economic volatility can be expected as this process unfolds.

But we are well prepared for this.  The Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have been in close contact, including through the night and this morning.

The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.

These adjustments will be supported by a resilient UK financial system – one that the Bank of England has consistently strengthened over the last seven years.

 The capital requirements of our largest banks are now ten times higher than before the crisis.

 The Bank of England has stress tested them against scenarios more severe than the country currently faces.

 As a result of these actions, UK banks have raised over £130bn of capital, and now have more than £600bn of high quality liquid assets.

 Why does this matter?

 This substantial capital and huge liquidity gives banks the flexibility they need to continue to lend to UK businesses and households, even during challenging times.

 Moreover, as a backstop, and to support the functioning of markets, the Bank of England stands ready to provide more than £250bn of additional funds through its normal facilities.

 The Bank of England is also able to provide substantial liquidity in foreign currency, if required.

 We expect institutions to draw on this funding if and when appropriate, just as we expect them to draw on their own resources as needed in order to provide credit, to support markets and to supply other financial services to the real economy.

 In the coming weeks, the Bank will assess economic conditions and will consider any additional policy responses.


 A few months ago, the Bank judged that the risks around the referendum were the most significant, near-term domestic risks to financial stability.

 To mitigate them, the Bank of England has put in place extensive contingency plans.

 These begin with ensuring that the core of our financial system is well-capitalised, liquid and strong.

 This resilience is backed up by the Bank of England's liquidity facilities in sterling and foreign currencies.

 All these resources will support orderly market functioning in the face of any short-term volatility.

 The Bank will continue to consult and cooperate with all relevant domestic and international authorities to ensure that the UK financial system can absorb any stresses and can concentrate on serving the real economy.

 That economy will adjust to new trading relationships that will be put in place over time.

 It is these public and private decisions that will determine the UK's long-term economic prospects.

 The best contribution of the Bank of England to this process is to continue to pursue relentlessly our responsibilities for monetary and financial stability.

 These are unchanged.

 We have taken all the necessary steps to prepare for today's events.

 In the future we will not hesitate to take any additional measures required to meet our responsibilities as the United Kingdom moves forward.

( End of Quote)


Donald J, Trump, newly elected President of the United States, proposes to rebuilt America's economic strength by import substitution, and Keynesian policies. The proposed Americas infrastructure First Plan, clearly stated in this policy document, is worth of attention by the huge questions it focus on and by its immediate effect on employment and national production.


International trade is necessary but its effects, the good and the bad ones, are differently felt by the world trading countries. Since the US abandoned her isolationist policies, in the beginning of the XX century, and became, by well-known historical accidents, the chief economy of the world, the American people has payed with money and blood the construction of the so called Free World. After the Second Worl War, the United States sponsored the reconstruction of Europe and Japan, and spent boundless resources for spreading economic development in all parts of the world, through international institutions ad hoc created.  The so called world security still rests on the shoulders of the American tax payers. The irrational geopolitical and economic state of affairs, created in function of the existence of the Soviet Union, now long extinct, is having an artificial prolonged life, to support the mantainance of absolete international institutions and the continuance and preservation of no longer necessary American commitments abroad. Through her liberal ideology, vigorous during the Soviet era, the US has created economic competitors in Europe, Asia and in the Americas . Instead of sponsoring Russia immediate entrance into a new Western alliance, the US following the irrationality of fratricidal Europe, hesitate to embrace this Western country, favouring in this way the accelleration of the Asian inevitable economic hegemony. With this in mind the rationale of President Trump's Administration become clear and defensible, its aim is just to stop the deindustrialization of America, and insure full employement for Americans. The Economic tool box provides several instruments for attaining these basic aims. One of them is the tariff on imported goods. What is a tariff? An American  economist, Arthur J. Gosnell Professor of Economics, Rochester Institute of Technology will explain.


O comércio internacional é necessário, mas seus efeitos, os bons e os maus, são sentidos diferentemente pelos países comerciais do mundo. Desde que os EUA abandonaram suas políticas de isolamento, no início do século XX, e se tornaram, por conhecidos acidentes históricos, a principal economia do mundo, o povo americano pagou com dinheiro e sangue a construção do chamado Mundo Livre. . Após a Segunda Guerra Mundial, os Estados Unidos patrocinaram a reconstrução da Europa e do Japão e gastaram recursos ilimitados para disseminar o desenvolvimento econômico em todas as partes do mundo, por meio de instituições internacionais criadas ad hoc. A chamada segurança mundial ainda depende dos ombros dos contribuintes americanos. O estado de coisas geopolítico e econômico irracional, criado em função da existência da União Soviética, há muito extinta, está tendo uma vida artificial prolongada, para sustentar a manutenção de instituições internacionais obsoletas, a manutenção e a preservação de compromissos americanos desnecessários no exterior. Através de sua ideologia liberal, vigorosa durante a Era Soviética, os EUA criaram competidores econômicos na Europa, Ásia e nas Américas. Em vez de patrocinar a entrada imediata da Rússia numa nova aliança ocidental, os Estados Unidos, seguindo a irracionalidade da Europa fratricida, hesitam em abraçar esse país ocidental, favorecendo assim a aceleração da inevitável hegemonia econômica asiática. Com isso em mente, a justificativa da administração do Presidente Trump se torna clara e defensável, seu objetivo é apenas o de impedir a desindustrialização da América e assegurar o pleno emprego dos americanos. A caixa de ferramentas econômicas fornece vários instrumentos para atingir esses objetivos básicos. Uma delas é a tarifa sobre produtos importados. O que é uma tarifa? Um economista americano, Arthur J. Gosnell Professor de Economia, Rochester Institute of Technology explicará.

What is a tariff? An American  economist explains. March 15, 2018 6.42am EDT

The world is lurching ever closer to a full-blown trade war as the U.S., Europe, Canada, China and Mexico talk tariffs and retaliation. President Donald Trump made the initial salvo back in March, when he placed duties on steel and aluminum. These actions have prompted significant concern and discussion about the wisdom of this action. As an economist who shares some of those concerns, I believe it’s important to first understand what a tariff actually is and does before we can determine whether Trump’s new trade barriers are good or bad.

Two kinds of tariffs

A tariff, simply put, is a tax levied on an imported good. There are two types. A “unit” or specific tariff is a tax levied as a fixed charge for each unit of a good that is imported – for instance $300 per ton of imported steel. An “ad valorem” tariff is levied as a proportion of the value of imported goods. An example is a 20 percent tariff on imported automobiles. Both tariffs act in similar ways.

Tariffs are one of the oldest trade policy instruments, with their use dating back to at least the 18th century. Historically, the main objective of a tariff was to raise revenue. In fact, before ratifying the 16th Amendment in 1913 and formally creating the income tax, the U.S. government raised most of its revenue from tariffs. Even so, the main purpose of a tariff these days tends to be about protecting particular domestic industries from foreign competition, alongside raising revenue. Men work with cocoa beans in Enchi, Ghana, the world’s top exporter of the commodity. Reuters/Thierry Gouegnon

Examining a tariff’s impact

The impact of a tariff depends on whether the levying country is large or small – not in terms of size but the potency of its trade and ability to influence world prices. Ghana, for example, roughly the size of Minnesota with a population similar to Texas, is the world’s top exporter of cocoa. The Netherlands, meanwhile, slightly smaller than New Jersey, is the commodity’s biggest importer. As such, both countries’ trade policies can have a significant impact on the price of cocoa on global markets. So if the Netherlands were to levy a tariff on imports of Ghanaian cocoa to protect a nascent – and currently imaginary – industry of small Dutch cocoa bean growers, there would generally be three effects.

First, the price of the import good, cocoa, would rise, making it more costly for domestic consumers of the product. This would be bad news for Dutch chocolatiers – the Netherlands is the world’s biggest exporter of cocoa butter – and citizens – who eat a lot of chocolate. But it’d be good news for companies in the domestic import-competing industry – the experimental Dutch farmers growing cocoa plants in a greenhouse – because the good they produce is now cheaper than the import, and so the cocoa butter makers would buy more of the local variety.

Second, because the tariff-levying country is large, it drives down the export price of the good in question. So the pre-tariff price at which Ghana can export cocoa to the Netherlands declines, Ghanaian growers and producers make less money, and the country’s economy is hurt. Economists call this a “terms of trade gain” for the country imposing the tariff. Such a tariff ensures that the price of cocoa in the Netherlands does not rise by the entire amount of the tariff. Finally, the overall volume of trade in the product between the countries involved decreases because the demand for and supply of the good falls. If the tariff-levying country is small, however, there are only two effects: The good’s price will go up – domestic consumers will pay more, while producers will sell more – and the country’s trade of the product will decline. The action will have no impact on global prices.

Benefits and costs

For a “large” country, the benefits of a tariff are mixed. Consumers, whether businesses like Dutch cocoa butter makers or individuals who enjoy a tasty bar of dark chocolate, face higher prices and hence are the losers. The industry being protected, however, benefits by becoming more competitive and selling more of its wares. In addition, the government will gain a new source of revenue. The net effect boils down to whether any gains in the terms of trade are greater than the resulting “efficiency loss” – that is, how much the tariff artificially distorts consumption and production decisions in negative ways. If the magnitude of the terms of trade gain is larger than that of the efficiency loss, then the country benefits from the tariff. If not, then it loses. For a small country with no market impact, the terms of trade gain is zero, hence a tariff unambiguously makes it worse off.

Political economy of tariffs

The fact that a large country can, in some cases, be better off with a tariff has led some to suggest that such nations ought to, when necessary, levy “optimal tariffs” against their trade partners. An optimal tariff maximizes the difference between the terms of trade gain and the efficiency loss and hence is essentially a “beggar-thy-neighbor” trade policy. In other words, the problem with such strategic tariffs is that in addition to frequently being illegal, they are not implemented in a vacuum. Aggrieved trade partners are likely to respond with appropriate tariffs or other trade policy instruments of their own. These kind of sequential “tit-for-tat” actions can easily degenerate into a trade war. This is in part why trade economists are typically against restricted trade and for free trade.


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