G7 Hypocrisy

Diplomacy has become the art of talking as though something is agreed and will happen, when in fact nothing has changed and nothing different will ensue. Trump did indeed blow up the G7 meeting because he insists on facing the facts of trade imbalances and the emptiness of virtue signaling. By not making the gesture of signing some insipid joint communique, he exposed the whole charade.

Liz Peek at the Hill explains in article Hypocritical France and Germany scold Trump; how dare they  Excerpts below in italics with my bolds

Emmanuel Macron is having a “crise de colere;” that’s French for hissy fit.

In the run-up to the Group of Seven (G-7) meeting, the French president joined with Germany’s Angela Merkel in warning that he would refuse to sign a joint statement from the G-7 unless the U.S. demonstrates a willingness to shift its position on the Iran nuclear agreement, the Paris Agreement and on tariffs. The nerve!

Let’s start with tariffs. As Commerce Secretary Wilbur Ross has written, the EU is quick to criticize the United States for not pursuing free trade, but at the same time, they charge higher tariffs than the U.S. in 17 of 22 major consumer goods categories.

On dairy products, fruits and vegetables, cereals, sugar, fish, chemicals, electrical machinery and many other goods, the EU charges import fees far above those levied by the U.S. What is the rationale for that imbalance? There is none. Europe is simply protecting its interests.

On autos, the EU imposes a 10-percent fee on imports from the U.S. while we reciprocate with a 2.5-percent charge. Again, why the difference? Why shouldn’t we help out our car manufacturers and workers just as the French and Germans help theirs?

It isn’t as though the U.S. has a built-in advantage. As Ross wrote, “Today Europe exports 1.14 million automobiles to the U.S., nearly four times as many as the U.S. exports to Europe.”

And, of course, the EU doesn’t rely on tariffs alone to jack up their trade surplus with the U.S. They also give their exporters enormous help with financing and impose other kinds of barriers to American goods, like obscure health standards and regulations.

In short, over the years they have tilted the playing field in their favor, and we have let them get away with it. Today, their protectionist measures help earn them a roughly $150 billion annual trade surplus; there is no plausible excuse for that.

As for the Iran deal, France and Germany are incensed that a seriously flawed agreement will be abandoned. They do not care, apparently, that Tehran’s mullahs have not lived up to the spirit of the deal, instead spending the billions received as part of the pact to foment unrest across the region.

Their pique is not because they believe that in return for being freed from sanctions, Tehran was about to emerge as a reliable actor for peace in the Middle East. No, they are miffed that their scramble to do business with Iran will have to wait.

Given the EU’s sluggish growth track, brought on in large part by dysfunctional work rules and regulations of the sort that President Trump has worked to eliminate in the U.S., they are desperate for access to new markets.

Even as President Trump ditched the Iran deal and threatened to re-impose sanctions, EU officials encouraged companies to power forward with commercial ties, so greedy are they for growth.

Already, however, many firms have decided the risk of running afoul of U.S. prohibitions is simply too great and have started to leave the country.

French company Total, the only major oil firm to re-engage in Iran, signed a $5 billion, 20-year agreement last year to develop a large natural gas field. It has announced it is withdrawing from the deal.

The Danish shipping company Moller-Maersk announced it would cease shipping Iranian oil; the company’s CEO said in a statement that its business with the U.S. was more important than operating in Iran. Peugeot and Siemens, similarly, have announced they would withdraw from Iran.

Germany and France are unhappy, too, about President Trump’s withdrawal from the Paris treaty. But their outrage is undeserved. In 2017, the U.S. reported the largest year-to-year drop in carbon emissions of any advanced economy, according to a report from the International Energy Agency.

In the same year, the EU saw emissions rise 1.5 percent. Greenhouse gases also rose in Asia. In fact, the only country making progress toward emissions reductions at this time is the U.S. So, bemoaning the decision by President Trump to withdraw from the cherished Paris Agreement would appear to be little more than diplomatic theater.

While berating the U.S., the French allowed their own carbon dioxide emissions to rise 3.6 percent over their targeted level last year. France has decided to mothball its clean nuclear power industry, which of course makes any progress on emissions reductions all but impossible.

Meanwhile, last fall, French officials pledged to phase out all oil and gas production by 2040; they notably did not promise to stop importing and refining fossil fuels from other countries. It is consumption of course that is key to global carbon output, not where the production takes place.

Meanwhile, the Germans have set lofty targets for using renewables to generate electricity, only to find that the wind doesn’t always blow and the sun doesn’t always shine. Consequently, they have had to burn lignite, one of the dirtiest fuels on the planet, to satisfy their demand for power. Needless to say, like the French, the Germans have missed their emission goals.

It is tiresome to be lectured by the EU, a region that is facing serious, ongoing tensions. The Brussels wizards who readily criticize U.S. policies have not faced up to the block’s structural problems revealed during the financial crisis.

Just last week, anti-EU election results in Italy caused market turbulence; voter impatience with Europe’s bureaucrats is unlikely to disappear.

President Trump has upset conventions in some areas that should have been challenged decades ago. That is uncomfortable for those reliant on U.S. largesse, but should be cheered by Americans.

Summary

It is really remarkable to see a non-politician businessman operate with instincts for finding leverage and using it to strike new arrangements.  And Trump also shows how peer pressure and disapproval, so effective in cowing those who care, rolls off his back like nothing.  They truly don’t know what game he is playing because he is not wired like them, and they have seriously underestimated his capacities and determination.  Those who accuse him of polarizing the situation are mistaken; he is revealing the conflicts of interest that have been papered over and never challenged by previous Presidents.  As they say, “You can’t change until you first acknowledge the problem.”

 

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5 comments

  1. Hifast · June 11

    Reblogged this on HiFast News Feed.

    Like

  2. Bob Greene · June 11

    Maybe it’s about USA dollars coming into these great ideas.

    Like

  3. Ron Clutz · June 11

    Bob, this may be the first president in a long time whose instinct is not to leave money on the table. And he seems also to know that a good deal has to benefit both sides. The one with the leverage (in many instances that will be the US) should exploit that advantage, but not to the point of making the deal unpalatable. The EU used to complain that the US was acting like the world’s policeman without that authority. Well, those days are over; Trump wants to do business everywhere, so like it or lump it.

    Like

  4. Jack Broughton · June 11

    Great article, as usual. Only point of disagreement is Iran. I think Iran should be brought back into the world and that the sanctions are not helpful.

    Like

    • Ron Clutz · June 11

      Jack, I agree that Iran is a murky situation. Let’s hope for a breakthrough with N. Korea, which could encourage Iranians to give up their nuclear program. It is a shame that Iranian society, once progressive and accomplished in tech terms is outside the fence.

      Like

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