Monthly Archives: March 2018

Are We on the Brink of a Trade War?

Since David Ricardo and other economists outlined the advantages of free trade about 200 years ago, it seems like recently, many of his lessons remain unlearned. In a time period where we see the advancement of populist movements on several fronts, “unfair trade” has become an easy scapegoat for right-wing grievances.

The suggested recipe – most recently proposed by the current U.S. President – is introducing higher import tariffs, which are protectionist tools against free competition. The effects of these measures are debated among economists, but the majority is skeptical that the potentially ensuing trade wars can lead to anything positive. On the contrary, sometimes they have led to real wars.

So now, at the threshold of a possible new trade war, what is the outlook? Will and should China and the EU react in kind to the introduction of new customs fees for steel and aluminium? Is it plausible that trade deficits are an issue of “national security”, as the U.S. president claims? Should concerned countries accept trade imbalances and customs fees, or should they risk further escalation by implementing further tariffs in response?

– Klaus Segbers

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What is the Effect of Mega Events on International Relations?

The Olympic Games in South Korea are just behind us, and the Paralympics will begin soon. Later this year, the World Soccer Championship will take place in the Russian Federation. In April, the annual Formula One car racing circus is going to be launched in Bahrain.

There is an ongoing debate on the pros and cons of mega-events like these: are the assumed advantages for the hosting countries (global attention, tourism, media as amplifiers, potential reconciliation between conflict partners) predominant, or is it the possible negative consequences (after-event empty sports venues, no lasting gains in employment, huge costs, sometimes corruption and negative environmental impact)?

In a couple of instances, prospective hosts have put the issue on a referendum, only to learn that a majority of the regional population concerned was voting an application down, or at least threatening to do so (Budapest 2017; Referendums have sunk five Olympic bids over the last two Olympic bidding cycles, and potential Olympic referendums ended the Boston bid and now many end the Budapest one. Some referendums curtailed a potential bid before it was submitted to the IOC, while others came at different stages during the candidature process.

In Germany, both Garmisch-Partenkirchen and Hamburg authorities experienced defeat by their respective populations. The IOC is experiencing problems finding suitable host states or regions, and was happy to find at least one bidder for 2022 and 2026, respectively.

So, are huge sports events like these not popular anymore? Or is it rather about a ‘Not in my backyard’ mood – people like to watch events on TV, but do not want them in their neighborhood?

The second aspect is about the original idea that during Olympic Games conflicts between states had to be put to rest, or at least for the duration of the games themselves. The apparent thaw between South and North Korea during the games in Pyeonchang seems to confirm that. The fact that Olympics were often boycotted seems to show the opposite (Berlin 1936, two boycotting countries;  Australia 1956 – eight countries; Japan 1964 – three countries; Canada 1976 – 34 countries; Soviet Union 1980 – 66 countries; USA 1984 – 18 countries; South Korea 1988 – 7 countries).

So this week’s question is: How do you assess the effect of big sports events on international politics?

– Klaus Segbers

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