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from MacroScope:

Q3 rebound but at cost of price cutting?

A woman walks past a shop in Madrid

Manufacturing PMI surveys across the euro zone and for Britain are due. The emerging pattern is of an improving third quarter after a generally poor second three months of the year.

The UK economy continues to romp ahead – growing by 0.8 percent in the second quarter – but on the continent there are signs of a new slowdown. The Bundesbank now forecasts no Q2 growth at all in Germany and though the euro zone flash PMI, released a week ago, showed the currency area rebounding in July, that largely came at the cost of companies cutting prices further, thereby pushing inflation lower still.

France continues to languish but Spain is one brightening spot, posting 0.6 percent quarterly growth in Q2, not stellar but healthy and adding to 0.4 percent growth in Q1.

Geece is also showing glimmers of life, albeit from a very low base. The country's leading economic think tank predicts the economy should grow 0.7 percent this year, pulling clear of a six-year recession, but its soaring unemployment rate is likely to drop less than hoped. Moody's may upgrade Greece's sovereign rating which currently stands at Caa3, or at least raise the outlook, when it delivers a rating review later.

from Breakingviews:

New-age trade clubs: A guide for the perplexed

By Andy Mukherjee

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Global trade is going private. After a frustrating 12-year-long wait for the World Trade Organization to hammer out an accord acceptable to its 159 members, businesses and governments are now hedging their bets. Enter the Trans-Pacific Partnership, or TPP, which received a boost this week with Japan joining the negotiations.

from The Great Debate:

Re-thinking U.S.-China relations

The United States and China have been searching for a new way to frame their relationship.  President Barack Obama’s trip this week to Southeast Asia, the focus of much U.S-Chinese tension, reminds us that with new leadership now set in both countries, it is time for them to carry on with that important task.

The new head of China’s Communist Party Xi Jinping called for a “new type of great power relationship” when he visited Washington last spring. Secretary of State Hillary Clinton has said that Washington and Beijing “are trying to do something that is historically unprecedented, to write a new answer to the age-old question of what happens when an established power and a rising power meet.”

from The Great Debate:

China bashing: A U.S. political tradition

In every U.S. presidential election, the major party candidates vie to see who can appear tougher on China. Once the election is over, however, the substance of U.S. policy toward China usually changes little and is far more pragmatic than the campaign rhetoric. There are ominous signs, though, that things could be different this time.

The accusations have been among the most caustic ever. Republican presidential nominee Mitt Romney has denounced the Obama administration for being “a near-supplicant to Beijing” on trade matters, human rights and security issues. An Obama ad accuses Romney of shipping U.S. jobs to China through his activities at the Bain Capital financier group, and Democrats charge that Romney as president would not protect U.S. firms from China's depredations.

from Breakingviews:

Vietnam is a bad example to newly emerging markets

By Rob Cox

This column appears in the Oct. 1 edition of Newsweek magazine. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Almost exactly two years ago this week, Christine Gregoire, the governor of the U.S. state of Washington, was in Vietnam handing out French fries made from potatoes grown in her state at a Kentucky Fried Chicken outlet in Ho Chi Minh City. Gregoire, accompanied by representatives of more than 50 companies from home, was in Vietnam trying to drum up business with America’s former military adversary. But the most important stop on Gregoire’s itinerary may have been a ribbon-cutting ceremony for a new deepwater shipping terminal at Cai Mep.

from Expert Zone:

The rare earths distraction

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

The U.S., EU and Japan are suing China in the World Trade Organisation (WTO), calling Chinese export quotas on rare earth elements an illegal trade practice.

from Breakingviews:

China has much to gain from rare earths fight

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A challenge before the World Trade Organization may put China on the defensive over rare earth minerals, used to make essential components in everything from iPads to military gyroscopes. But the case could drag on for years, and Beijing’s policy should play well at home in the meantime.

from The Great Debate:

Moving Doha forward: The U.S. view

By Ron Kirk, U.S. Trade Representative Ron Kirk. The opinions expressed are his own.

Ron KirkRight now in Geneva, Switzerland, a test is underway.  It is a test of the willingness of World Trade Organization (WTO) members to move the decade-long Doha Development Round negotiations into the “end game” – as President Obama and other G20 Leaders have directed negotiators to do this year.  The window of opportunity for the talks to avoid decline into futility is a narrow one.  The United States will leave no stone unturned in its quest for an ambitious and balanced outcome.  But key negotiating partners must share this motivation.

from Davos Notebook:

A golden opportunity for a new trading system

INDONESIA-JAPAN/ PACT

By Mari Pangestu, who is the Trade Minister of Indonesia. The opinions expressed are her own.

The world continues to face great uncertainties. Global recovery has been uneven, unemployment high and current account imbalances have led to continued tension including the use of currencies and other mercantilist policies for protectionist purposes. And we have yet to conclude the Doha Round of World Trade Organization Negotiations. So what do trade policymakers have to do to face this situation and ensure trade continues to contribute to growth and development?

from Breakingviews:

China may stub its toe on rare earths quotas

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

HONG KONG -- China may stub its toe on its rare earths quotas. By restricting exports of the metallic elements, it is hoping to give domestic industries a boost. But Chinese companies will lose if the move leads to trade restrictions or boycotts of overseas acquisitions. If Beijing is serious about addressing environmental concerns, it should cut rare earths production, not exports.

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