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from The Great Debate:

Obama: Building trade to build growth

The Obama administration has quietly embraced the most ambitious agenda on trade and investment liberalization in the past two decades.

The United States is currently juggling no fewer than five high-level trade negotiations: free trade talks with the European Union; the Trans-Pacific Partnership (TPP) talks with a dozen Asia-Pacific countries; a new Information Technology Agreement covering trade in high-tech goods; negotiations on liberalizing services trade though the World Trade Organization, and a last-ditch effort this week to agree on new trade facilitation measures at the WTO ministerial meeting in Bali.

This about-face on trade from President Barack Obama’s first term is remarkable.

In 2008, candidate Obama promised to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico to add tougher provisions for protecting worker rights and the environment. Once in the Oval Office, he stalled for several years before even sending to Congress three free trade agreements -- with South Korea, Panama and Colombia -- that had been completed by the Bush administration. Today, however, the administration’s trade agenda is the most far-reaching since the late 1980s and early 1990s, when the United States was negotiating NAFTA and the Uruguay Round of world trade talks.

from MacroScope:

Mixed evidence from Germany

German trade data, already out, showed both exports and imports rose more than expected in April – up a sharp 2.3 and 1.9 percent respectively. That suggests that its fabled industrial base is in reasonable shape but also that domestic demand is holding up, possibly helped by some above-inflation pay deals. The figures represent a significant bounce from the first quarter when Europe’s largest economy just managed to eke out some growth.

Let’s not get carried away, though. Germany’s PMI survey earlier this week showed a slight decline in export orders in May and the Bundesbank has just released its latest set of economic forecasts, cutting its 2013 growth forecast to 0.3 percent, adding that risks are largely skewed to the downside. It expects a healthy bounce in growth in the second quarter then a marked throttling back.

from MacroScope:

Not again, please! Brazil and India more vulnerable now to another crisis

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After bad economic news from Germany, China and the United States over the past few weeks, here are two more. Brazil and India, two of the world's largest emerging economies, are increasingly vulnerable to another crisis or to the eventual end of the ultra-loose monetary policies in developed economies after five years of a severe global slowdown.

Weak demand for Brazil's exports and the voracious appetite of local consumers for imported goods widened the country's current account deficit to 2.93 percent of GDP in the 12 months through March, the widest gap in nearly eleven years. In dollar terms, that amounts to $67 billion.

from Deepti Govind:

Not again, please! Brazil and India more vulnerable now to another crisis

After bad economic news from Germany, China and the United States over the past few weeks, here are two more. Brazil and India, two of the world's largest emerging economies, are increasingly vulnerable to another crisis or to the eventual end of the ultra-loose monetary policies in developed economies after five years of a severe global slowdown.

Weak demand for Brazil's exports and the voracious appetite of local consumers for imported goods widened the country's current account deficit to 2.93 percent of GDP in the 12 months through March, the widest gap in nearly eleven years. In dollar terms, that amounts to $67 billion.

from Global Investing:

India’s deficit — not just about oil and gold

India's finance minister P Chidambaram can be forgiven for feeling cheerful. After all, prices for oil and gold, the two biggest constituents of his country's import bill, have tumbled sharply this week. If sustained, these developments might significantly ease India's current account deficit headache -- possibly to the tune of $20 billion a year.

Chidambaram said yesterday he expects the deficit to halve in a year or two from last year's 5 percent level. Markets are celebrating too -- the Indian rupee, stocks and bonds have all rallied this week.

from Global Investing:

Emerging markets’ export problem

Taiwan's forecast-beating export data today came as a pleasant surprise amid the general emerging markets economic gloom.  In a raft of developing countries, from South Korea to Brazil, from Malaysia to the Czech Republic, export data has disappointed. HSBC's monthly PMI index showed this month that recovery remains subdued.

With Europe still in the doldrums, this is not totally unsurprising. But economists are growing increasingly concerned because the lack of export growth coindides with a nascent U.S. recovery. Clearly EM is failing to ride the US coattails.

from MacroScope:

The fading strength of U.S. exports

U.S. exports posted their biggest drop in nearly four years in October, pushing the U.S. trade deficit higher despite a decline in imports to their lowest level in 1-1/2 years.

The data reveal that U.S. exports of goods and services have now decelerated to a year-on-year growth rate of just 1 percent compared with 2.8 percent in the third quarter of 2012 and 11.5 percent last year at this time, writes Deutsche Bank Securities chief U.S. economist Joseph LaVorgna in a research note.

from Expert Zone:

Trade freedom: how imports support U.S. jobs

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(The views expressed in this column are the author's own and do not represent those of Reuters)

Conventional wisdom says that exports are beneficial and imports are harmful. Conventional wisdom is wrong. A key element of this misperception is the mistaken idea that imports into a country cost jobs there. In fact, imports contribute to job creation.

from MacroScope:

Revving down

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It used to be the low-end stuff like shoes, clothes and furniture that displaced American manufacturing, then cars and consumer electronics.  A new report by Alan Tonelson, a researcher at the U.S. Business and Industry Council which represents 1,500 American companies, now shows that high-end U.S. industry is facing ever tougher foreign competition in its own backyard.

Tonelson has crunched the numbers since 1997 on high-value, advanced manufacturing – the crown jewel of American industry that is capital intensive and depends on technological superiority such as turbines, pharmaceuticals and electrical engineering. He finds that imported products had captured 38 percent of the $1.63 trillion U.S. market for advanced manufactured products by 2010, up from 24.5 percent when the government started collected the data in 1997.  Only six U.S.-based advanced manufacturers have gained market share in the United States in the 13-year period.  Sectors that are more than 50 percent dominated by foreign producers have risen from eight in 1997 to 32 by 2010, he said.

from Tales from the Trail:

Washington Extra — Beck, Bernanke and baseball

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An “American miracle” or an “exercise in self-aggrandizement on a Napoleonic scale”?

Reuters/Chris Keane (Beck at an NRA meeting in Charlotte May 15)

 No, I am not talking about Reuters Washington Extra, but Glenn Beck’s Restoring Honor rally which is due to take place on the steps of the Lincoln Memorial on Saturday. Beck, never one to hide his light under a bushel, has described tomorrow’s event as “a defibrillator to the heart of America”, “the Woodstock of the next generation”, and “the turning point” in American history. Eugene Robinson in today’s Washington Post was less optimistic about the rally and its “egomaniacal” host, who will be speaking a few steps down from where Martin Luther King gave his “I Have a Dream” speech on the same day in 1963. Washington Extra is not taking sides.

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