The ESADEgeo Daily Digest, 20/07/2017

South China Morning Post—Z. Lu / US and China talks in Washington end in deadlock as threat of trade war rises

  • China and the US failed to reach an agreement on trade at the first Comprehensive Economic Dialogue in Washington on Wednesday, co-chaired by US Treasury Secretary Steven Mnuchin, US Commerce Secretary Wilbur Ross and Chinese Vice-Premier Wang Yang.
  • US delegation statement: “China acknowledged our shared objective to reduce the trade deficit which both sides will work cooperatively to achieve.”
  • The statement issued by the Chinese delegation said both sides would promote cooperation in the manufacturing sector, improve communication about macroeconomic policies, as well as cooperation in the financial sector and its supervision.
  • The threat of trade war still looms. On Wednesday, when asked by a reporter if he would impose tariffs on steel imports, President Donald Trump said it “could happen”.

The Guardian—P. Beaumont / Netanyahu attack on EU policy towards Israel caught on microphone

  • At a meeting with the leaders of Hungary, Slovakia, Czech Republic and Poland, Israeli PM Benjamin Netanyahu urged these countries to close their doors to refugees from Africa and the Middle East.
  • “I think Europe has to decide if it wants to live and thrive or if it wants to shrivel and disappear,” Netanyahu said, being caught on an open microphone. “I am not very politically correct. I know that’s a shock to some of you. It’s a joke. But the truth is the truth – both about Europe’s security and Europe’s economic future. Both of these concerns mandate a different policy toward Israel.”
  • “The European Union is the only association of countries in the world that conditions the relations with Israel, which produces technology in every area, on political conditions. The only ones! Nobody does it [...] It’s crazy. It’s actually crazy,” added Netanyahu, referring to the EU association agreement with Israel that has been held up because of current Israeli policies.
  • “The EU is undermining its security by undermining Israel,” said Netanyahu. “Europe ends in Israel. East of Israel, there is no more Europe.”
  • Netanyahu also made a rare public admission that Israel has struck Iranian arms convoys in Syria bound for Hezbollah “dozens and dozens of times”.

Foreign Affairs—S. J. Karam / Capitalism did not win the Cold War

  • If capitalism won in 1991, its victory was short-lived. In the years that have followed, it is cronyism that has captured an increasing share of economic activity.
  • “Cronyism occurs when government officials and business elites collude to benefit themselves in ways that would be impossible if they were limited to arms-length transactions.”
  • The phenomenon of cronyism does not affect only countries like Venezuela, or the BRICs. Cronyism and inequality have grown hand in hand in the United States since the mid-1990s.
  • Technology and the ability to leverage strong brands into new foreign markets have also played a role in increasing inequality. But there is no question that people who have been well positioned in extractive sectors have benefited disproportionately.

Financial Times—G. Meyer / Coal has no future, says US railroad boss

  • CSX, a US freight railroad company and one of the largest carriers of US coal, will not buy a single new locomotive to pull coal trains.
  • “Fossil fuels are dead,” CSX CEO Hunter Harrison said. “That’s a long-term view. It’s not going to happen overnight. It’s not going to be in two or three years. But it’s going away, in my view.”
  • North American railroads have reshaped their asset holdings, acknowledging that coal’s apex has passed.

 The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. 

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