ESADEgeo Daily Digest, 22/10/2018

File:President Reagan and Soviet General Secretary Gorbachev signing the INF treaty.jpg

Brookings – Steven Pifer / The Trump administration is preparing a major mistake on the INF Treaty

  • Washington certainly has grounds for withdrawing from the Intermediate-range Nuclear Forces (INF) Treaty: Russia is violating the agreement. But doing so now would be a mistake.
  • The US will get the blame for killing the treaty. Moscow has vigorously denied the US charge and claims the US is in fact the one in violation. Moreover, once the US withdraws from the treaty, there is no reason for Russia to even pretend it is observing the limits.
  • Even if the Pentagon were to build a missile that it could deploy the match the Russians, a big question remains: Where could the US put it?
  • Instead of withdrawing from the treaty, Washington should declassify some information regarding the Russian violation and press European and Asian allies to raise the issue with President Putin. In addition, the US military should take treaty-compliant steps now to offset the Russian violation.
  • The New York Times – Andrew E. Kramer / Gorbachev calls Trump’s treaty withdrawal ‘not the work of a great mind’
  • Politico – Jakob Hanke / Russia slams US withdrawal from arms treaty as ‘blackmail’

Euractiv / Poland’s ruling PiS on top in regional polls, but losing urban vote

  • Poland’s ruling Law and Justice party  (PiS) came out on top in local elections Sunday, but were losing to opposition centrists in mayoral races in large cities including the capital Warsaw, exit polls showed.
  • IPSOS pollsters showed the PiS winning 32.3% of the vote across Poland, beating a centrist-liberal coalition headed by the opposition Civic Platform (PO) with 24.7%. In third place came the Polish Peasants’ Party (PSL), traditionally strong in rural areas, winning 16.6% of the vote.
  • Poland’s elections commission pegged turnout on Sunday at over 50%, dubbing it the “highest-ever” for local elections. Full official election results will be made public on Tuesday evening at the earliest.

Foreign Policy – Arvind Panagariya / The trade war has claimed its first victim

  • The World Trade Organization (WTO) might be the first victim of the trade war between China, the US, and the EU. Today, each is in flagrant violation of its rules.
  • As legal cover for its decision to impose tariffs on steel and aluminum, the US invoked a rarely used WTO clause that allows members to suspend some trade concessions on national security grounds. Trump’s tariffs undoubtedly violated the spirit of the clause, although perhaps not the letter of it.
  • WTO rules require that whenever one member country believes that another has violated its trading rights, it must bring the matter to the WTO Dispute Settlement Body. Since China and the EU, for instance, acted wholly unilaterally in retaliating to Trump’s gambit, there is no question that they broke the rules.
  • Following the steel and aluminum tariffs, the US imposed tariffs on imports from China worth $250 billion. This time, the president used US law—Section 301 of Trade Act of 1974—to justify the decision. But the WTO had already deemed trade restrictions imposed under this law invalid.
  • Whoever is in the White House come 2021 is likely to believe that the WTO fails to adequately protect US interests, that the US is more open to trade than its trading partners, and that China unfairly exploits the rules of the game. In other words, the next occupant probably isn’t going to be a leading champion of the WTO.

The Economist / Temporary economic downturns have long-lasting consequences

  • Studies show that students who graduate from university during a recession start out earning significantly less on average than those who complete their studies during better times. These lower earnings persist for many years.
  • Economists from Northwestern University and the University of California, Los Angeles estimate that workers who enter the labor market during a recession earn about 11% less on average at the start of their careers.
  • This drop in earnings lasts for 10 years and generates cumulative losses worth about 60% of one year’s salary.
  • Such effects are particularly large for high school dropouts and non-white workers. College graduates fare much better, experiencing losses that are only about half as large as the typical worker.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces.

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