Case
Mexican Manufacturing Advantage
1nc – Mexican Manufacturing
Turn – TTIP strengthens Mexico regardless of their inclusion in negotiations –
external compromises
Felbermayr et. al. 13 – (“Transatlantic Trade and Investment Partnership (TTIP) Who benefits from a
free trade deal?”, GED, http://www.ged-shorts.org/wp-content/uploads/2013/06/StudyTTIP_final_ENG.pdf)//javi
It is even more obvious than in the tariff scenario that the traditional trading partners of Europe and the
USA are hurt by the agreement. The losses that would be experienced by Canada, Mexico,
Japan, Australia, Chile or Norway are substantial in this scenario. These countries are highly motivated
to imitate the elimination of non-tariff barriers between the EU and USA or improve their partially
existing bilateral agreements with the USA and EU, or to enter into such agreements. There are many
signs that exactly such efforts are now underway. For the world in general, deep liberalization
between the EU and USA means a rise in average real income of 3.27%. That puts
enough money on the table to compensate the losers. It can be hoped that the
agreement increases the willingness of developing and emerging
countries to enter into compromises in the Doha Development Agenda. At the same
time, the industrial countries should also be ready to make compromises, because a
substantial intensification of the economic relationships between the USA and EU would
make the necessary resources available.
Alt cause – security issues
O’Neill 3/18/13 – (Shannon, “Mexico and the United States are linked closer than ever through
trade”, Voxxi, http://www.voxxi.com/mexico-united-states-linked-trade/)//javi
Mexico’s security problem is affecting their economy What could hurt Mexico, though, is
something coming from inside, as the security problem is one of the gravest threats to the
country overall; it affects its politics but it also affects its economics. If Mexico did not
have these serious, grave security threats, its growth would be much faster; the security
issue is a huge hit on the economy as it influences things like long-term foreign direct
investment. When investors think about setting up new factories or new operations,
security weighs in on their decision-making process. Part of the security challenge is
Mexico’s struggle to strengthen and professionalize its police forces and its court system.
Having fair and autonomous courts matters in terms of reducing impunity and therefore
violence, but it also matters in terms of economics. It matters when people think about
contracts and title disputes. Violence and the security issue harm the economy, but some
of the structural frameworks do so too. Mexico is quite a concentrated economy in many
sectors, with a lot of monopolies and oligopolies, so allowing many of these sectors to
become more competitive, allowing entrepreneurs to flourish and making it more possible for
Mexico to benefit from their ideas, opening up sectors to new ideas, to smaller companies, would be
very beneficial for the country.
Turn – WTO:
A. TTIP will reduce its effectiveness.
Atlantic-Community 7/26/13 – (“TTIP: Not Like Any Other Regional Free Trade Agreement”,
Atlantic-Community, http://www.atlantic-community.org/-/ttip-not-like-any-other-regional-free-tradeagreement?redirect=http%3A%2F%2Fwww.atlantic-community.org%2Fyouropinion%3Fp_p_id%3D101_INSTANCE_GES8xNFE98EL%26p_p_lifecycle%3D0%26p_p_state%3Dnormal
%26p_p_mode%3Dview%26p_p_col_id%3Daf-column-13%26p_p_col_pos%3D3%26p_p_col_count%3D8)//javi
The Transatlantic Trade and Investment Partnership (TTIP) is the latest attempt at a
comprehensive trade agreement between the two economic powerhouses of the EU and the
US. As more details emerge, it is becoming ever clearer that these negotiations will have far
more reaching implications than the two regions involved. To what extent will the
partnership affect multilateral relations, from which the EU has benefited so much, and how is it
being received across the world? The first round of talks, from July 8 to July 11, was held in Washington.
The scale of the agreement, should it be finalised, has sparked debate as to the benefits and
risks of the partnership to both European and global trade. The implementation of TTIP
will bring major economical benefit to both the EU and US economies, while also
contributing to the wider global economy, but some are wary of the geoeconomic
implications of the EU-US agreement. The press commentary this week looks at how
TTIP is viewed worldwide. Commentators are looking further down the line at a
harmonization between TTIP and other free trade agreements such as North American Free
Trade Agreement (NAFTA), while TTIP could be used as an influential stick to force China to
adopt western standards. While these may be positive feats, others are worried
about the damage that TTIP will cause to multilateralism and the World Trade
Organization (WTO).
B. That turns the case.
Panitchpakdi 4 (Supachai Panitchpakdi, secretary-general of the UN Conference on Trade and
Development, 2/26/2004, American Leadership and the World Trade Organization, p.
http://www.wto.org/english/news_e/spsp_e/spsp22_e.htm
The second point is that strengthening the world trading system is essential to America's
wider global objectives. Fighting terrorism, reducing poverty, improving health,
integrating China and other countries in the global economy — all of these issues are
linked, in one way or another, to world trade. This is not to say that trade is the answer to all
America's economic concerns; only that meaningful solutions are inconceivable without
it. The world trading system is the linchpin of today's global order — underpinning its
security as well as its prosperity. A successful WTO is an example of how multilateralism can work.
Conversely, if it weakens or fails, much else could fail with it. This is something which the US — at the epicentre of a more
interdependent world — cannot afford to ignore. These priorities must continue to guide US policy — as they have done since the Second World War. America has been the main driving force
behind eight rounds of multilateral trade negotiations, including the successful conclusion of the Uruguay Round and the creation of the WTO. The US — together with the EU — was
instrumental in launching the latest Doha Round two years ago. Likewise, the recent initiative, spearheaded by Ambassador Zoellick, to re-energize the negotiations and move them towards a
successful conclusion is yet another example of how essential the US is to the multilateral process — signalling that the US remains committed to further liberalization, that the Round is
moving, and that other countries have a tangible reason to get on board. The reality is this
: when the US leads the system can move
forward; when it withdraws, the system drifts. The fact that US leadership is essential, does not mean it is easy. As WTO rules have
expanded, so too has as the complexity of the issues the WTO deals with — everything from agriculture and accounting, to tariffs and telecommunication. The WTO is also exerting huge
gravitational pull on countries to join — and participate actively — in the system. The WTO now has 146 Members — up from just 23 in 1947 — and this could easily rise to 170 or more within
a decade. Emerging powers like China, Brazil, and India rightly demand a greater say in an institution in which they have a growing stake. So too do a rising number of voices outside the system
as well. More and more people recognize that the WTO matters. More non-state actors — businesses, unions, environmentalists, development NGOs — want the multilateral system to reflect
their causes and concerns. A decade ago, few people had even heard of the GATT. Today the WTO is front page news. A more visible WTO has inevitably become a more politicized WTO. The
sound and fury surrounding the WTO's recent Ministerial Meeting in Cancun — let alone Seattle — underline how challenging managing the WTO can be. But these challenges can be
exaggerated. They exist precisely because so many countries have embraced a common vision
. Countries the world over have turned to
open trade — and a rules-based system — as the key to their growth and development. They
agreed to the Doha Round because they believed their interests lay in freer trade, stronger rules, a more
effective WTO. Even in Cancun the great debate was whether the multilateral trading
system was moving fast and far enough — not whether it should be rolled back. Indeed, it is
critically important that we draw the right conclusions from Cancun — which are only now becoming clearer. The disappointment was that ministers were unable to reach agreement. The
achievement was that they exposed the risks of failure, highlighted the need for North-South collaboration, and — after a period of introspection — acknowledged the inescapable logic of
negotiation. Cancun showed that, if the challenges have increased, it is because the stakes are higher. The bigger challenge to American leadership comes from inside — not outside — the
United States. In America's current debate about trade, jobs and globalization we have heard a lot about the costs of liberalization. We need to hear more about the opportunities. We need to
be reminded of the advantages of America's openness and its trade with the world — about the economic growth tied to exports; the inflation-fighting role of imports, the innovative stimulus
of global competition. We need to explain that freer trade works precisely because it involves positive change — better products, better job opportunities, better ways of doing things, better
standards of living. While it is true that change can be threatening for people and societies, it is equally true that the vulnerable are not helped by resisting change — by putting up barriers and
shutting out competition. They are helped by training, education, new and better opportunities that — with the right support policies — can flow from a globalized economy. The fact is that
for every job in the US threatened by imports there is a growing number of high-paid, high skill jobs created by exports. Exports supported 7 million workers a decade ago; that number is
approaching around 12 million today. And these new jobs — in aerospace, finance, information technology — pay 10 per cent more than the average American wage. We especially need to
inject some clarity — and facts — into the current debate over the outsourcing of services jobs. Over the next decade, the US is projected to create an average of more than 2 million new
services jobs a year — compared to roughly 200,000 services jobs that will be outsourced. I am well aware that this issue is the source of much anxiety in America today. Many Americans
worry about the potential job losses that might arise from foreign competition in services sectors. But it’s worth remembering that concerns about the impact of foreign competition are not
new. Many of the reservations people are expressing today are echoes of what we heard in the 1970s and 1980s. But people at that time didn’t fully appreciate the power of American
ingenuity. Remarkable advances in technology and productivity laid the foundation for unprecedented job creation in the 1990s and there is no reason to doubt that this country, which has
shown time and again such remarkable potential for competing in the global economy, will not soon embark again on such a burst of job-creation. America's openness to service-sector trade
— combined with the high skills of its workforce — will lead to more growth, stronger industries, and a shift towards higher value-added, higher-paying employment. Conversely,
closing the door to service trade is a strategy for killing jobs, not saving them. Americans have
never run from a challenge and have never been defeatist in the face of strong competition. Part of this
challenge is to create the conditions for global growth and job creation here and around the world. I
believe Americans realize what is at stake. The process of opening to global trade can be
disruptive, but they recognize that the US economy cannot grow and prosper any other
way. They recognize the importance of finding global solutions to shared global problems. Besides,
what is the alternative to the WTO? Some argue that the world's only superpower need
not be tied down by the constraints of the multilateral system. They claim that US
sovereignty is compromised by international rules, and that multilateral institutions
limit rather than expand US influence. Americans should be deeply sceptical about these claims.
Almost none of the trade issues facing the US today are any easier to solve unilaterally,
bilaterally or regionally. The reality is probably just the opposite. What sense does it make —
for example — to negotiate e-commerce rules bilaterally? Who would be interested in
disciplining agricultural subsidies in a regional agreement but not globally? How can bilateral deals
— even dozens of them — come close to matching the economic impact of agreeing to
global free trade among 146 countries? Bilateral and regional deals can sometimes be a
complement to the multilateral system, but they can never be a substitute. There is a
bigger danger. By treating some countries preferentially, bilateral and regional deals
exclude others — fragmenting global trade and distorting the world economy. Instead of
liberalizing trade — and widening growth — they carve it up. Worse, they have a domino
effect: bilateral deals inevitably beget more bilateral deals, as countries left outside are
forced to seek their own preferential arrangements, or risk further marginalization. This is
precisely what we see happening today. There are already over two hundred bilateral and regional
agreements in existence, and each month we hear of a new or expanded deal. There is a basic
contradiction in the assumption that bilateral approaches serve to strengthen the multilateral, rulesbased system. Even when intended to spur free trade, they can ultimately risk
undermining it. This is in no one's interest, least of all the United States. America led in the
creation of the multilateral system after 1945 precisely to avoid a return to hostile blocs —
blocs that had done so much to fuel interwar instability and conflict. America's vision, in the
words of Cordell Hull, was that “enduring peace and the welfare of nations was indissolubly connected
with the friendliness, fairness and freedom of world trade”. Trade would bind nations together,
making another war unthinkable. Non-discriminatory rules would prevent a return to preferential
deals and closed alliances. A network of multilateral initiatives and organizations — the Marshal
Plan, the IMF, the World Bank, and the GATT, now the WTO — would provide the institutional
bedrock for the international rule of law, not power. Underpinning all this was the idea that
freedom — free trade, free democracies, the free exchange of ideas — was essential to peace and
prosperity, a more just world. It is a vision that has emerged pre-eminent a half century later. Trade has
expanded twenty-fold since 1950. Millions in Asia, Latin America, and Africa are being lifted out of
poverty, and millions more have new hope for the future. All the great powers — the US, Europe,
Japan, India, China and soon Russia — are part of a rules-based multilateral trading
system, greatly increasing the chances for world prosperity and peace. There is a growing
realization that — in our interdependent world — sovereignty is constrained, not by multilateral rules,
but by the absence of rules.
Mexican drug violence prevents economic integration
Kurtzman 9 – senior fellow at the Milken Institute, is co-author of "Global Edge: Using the Opacity
Index to Manage the Risk of Cross-Border Business" (Joel, “Mexico's Instability Is a Real Problem”, WSJ,
http://online.wsj.com/article/SB123206674721488169.html#printMode)//javi
Mexico is now in the midst of a vicious drug war. Police officers are being bribed and, especially
near the United States border, gunned down. Kidnappings and extortion are common place. And,
most alarming of all, a new Pentagon study concludes that Mexico is at risk of becoming a failed
state. Defense planners liken the situation to that of Pakistan, where wholesale collapse of civil
government is possible. One center of the violence is Tijuana, where last year more than
600 people were killed in drug violence. Many were shot with assault rifles in the streets
and left there to die. Some were killed in dance clubs in front of witnesses too scared to talk. It may
only be a matter of time before the drug war spills across the border and into the U.S. To meet that
threat, Michael Chertoff, the outgoing secretary for Homeland Security, recently announced that the
U.S. has a plan to "surge" civilian and possibly military law-enforcement personnel to the border should
that be necessary. The problem is that in Mexico's latest eruption of violence, it's difficult to
tell the good guys from the bad. Mexico's antidrug czar, Noe Ramirez Mandujano was recently
charged with accepting $450,000 from drug lords he was supposed to be hunting down. This was the
second time in recent years that one of Mexico's antidrug chiefs was arrested for taking possible payoffs
from drug kingpins. Suspicions that police chiefs, mayors and members of the military are
also on the take are rampant. In the past, the way Mexico dealt with corruption was with
eyes wide shut. Everyone knew a large number of government officials were taking
bribes, but no one did anything about it. Transparency commissioners were set up, but
given no teeth. And Mexico's drug traffickers used the lax law enforcement their bribes bought them
to grow into highly organized gangs. Once organized, they have been able to fill a vacuum in underworld
power created by Colombian President Álvaro Uribe's successful crackdown on his country's drug
cartels. The result is that drug traffickers are getting rich, while Mexico pays a heavy price in lost human
lives and in economic activity that might otherwise bring a modicum of prosperity to the country. In
2008, Mexico ranked 31st out of 60 countries studied in the Milken Institute/Kurtzman Group Opacity
Index. The cost to ordinary Mexicans from poorly functioning institutions has been huge. My colleague,
Glenn Yago, and I calculate that if Mexico were to reduce corruption and bring its legal, economic,
accounting and regulatory standards up to U.S. levels (the U.S. ranks 13th and Finland ranks first),
Mexico's nominal per capital GDP would increase by about $18,000 to roughly $28,000 a year. And it
would also receive a lot more direct foreign investment that would create jobs. And this impacts the
U.S. Thanks to Mexico's retarded economic growth, millions of Mexicans have illegally moved to the
U.S. to find work. Unless the violence can be reversed, the U.S. can anticipate that the flow
across the border will continue. To his credit, Mexico's President Felipe Calderón has deployed
45,000 members of his military and 5,000 federal police to fight drug traffickers. This suggests that he is
taking the violence and the threat to civil government seriously. But the path forward will be a difficult
one. Not only must Mexico fight its drug lords, it must do so while putting its institutional
house in order. That means firing government employees who are either corrupt or not willing to do
the job required to root out corruption. It will also likely require putting hundreds, or even thousands, of
police officers in jail. For more than a century, Mexico and the U.S. have enjoyed friendly
relations and some degree of economic integration. But if Mexico's epidemic of violence
continues, that relationship could end if the U.S. is forced to surge personnel to the
border.
TTIP will fail – increases trade deficit and rapid unemployment
Moody 8/1/13 – (Glyn, “Trade Agreements With Mexico And South Korea Turned Out To Be Disasters
For US: So Why Pursue TPP And TAFTA/TTIP?”, Tech Dirt,
http://www.techdirt.com/articles/20130731/08404024018/trade-agreements-with-mexico-southkorea-turned-out-to-be-disasters-us-so-why-pursue-tpp-taftattip.shtml)//javi
Two massive trade agreements currently being negotiated -- TPP and TAFTA/TTIP -- could
potentially affect most people on this planet, either directly or indirectly through the knock-on
effects. Like all such agreements, they have been justified on the grounds that everyone wins:
trade is boosted, prices drop, profits rise and jobs are created. That's why it's been hard to argue against
TPP or TAFTA -- after all, who doesn't want all those things? But given their huge impact, and the
fact that trade agreements are also used to impose a range of policies on countries that
are certainly not in the public interest there -- for example making it harder for generic drug
manufacturers to offer low-cost medicines -- it seems reasonable to ask what the evidence is
that entering into these agreements really does deliver all or even some of those
promised benefits. An article in US News provides statistics that show that two major trade
agreements -- the North American Free Trade Agreement (NAFTA) and the South Korea-US Free Trade
Agreement (KORUS) -- have not only failed to deliver, but have been disastrous for the US .
As regards NAFTA, for example, here are figures from a Reuters column it cites: The United States
ran a $1.6 billion trade surplus ($2.6 billion in today's dollars) with Mexico in 1993, the year
before NAFTA. Last year [2011], the United States ran a $64.5 billion deficit. That might
have been a one-off, were it not for the following facts about KORUS, reported here by the
Economic Policy Insitute (EPI) In the year after the agreement took effect (April 2012 to March
2013), U.S. domestic exports to South Korea (of goods made in the United States) fell $3.5
billion, compared with the same period in the previous year, a decline of 8.3 percent. In the same 12month period, imports from South Korea (which the administration consistently declines to discuss)
increased $2.3 billion, an increase of 4.0 percent, and the bilateral U.S. trade deficit with South Korea
increased $5.8 billion, a whopping 39.8 percent. But maybe the trade agreements are
generating jobs at least. Nope. Here's what happened with NAFTA: Bill Clinton (1993) and his
supporters claimed in the early 1990s that the North American Free Trade Agreement would create
200,000 new jobs through increased exports to Mexico. In fact, by 2010, growing trade
deficits with Mexico had eliminated 682,900 U.S. jobs Well, what about KORUS? When the
U.S.-Korea Free Trade Agreement (SKFTA) was completed in 2010, President Obama said that it
would increase U.S. goods exports by "$10 billion to $11 billion," supporting "70,000 American
jobs from increased goods exports alone" Here's what actually happened: Using the president's own
formula relating changes in trade to jobs, the growth in the trade deficit with South Korea in the first
year since KORUS took effect likely cost more than 40,000 U.S. jobs So where does this leave
TAFTA/TTIP? Well, the European Commission's FAQ on the subject refers to some research it
commissioned: One of the studies on which the Commission's impact assessment was based was an
independent report commissioned by the EU from the London-based Centre for Economic Policy
Research. The study, entitled 'Reducing barriers to Transatlantic Trade', outlines the economic effects of
a for both the EU and the US. It suggests the EU's economy could benefit by €119 billion a year -equivalent to an extra €545 for a family of four in the EU. According to the study, the US economy could
gain an extra €95 billion a year or €655 per American family. But the EPI is doubtful: A much more likely
outcome, based on North American experience under NAFTA, is that production workers
in all the member countries will suffer falling wages and job losses
(Scott et al. 2006), while U.S. and EU investors will profit handsomely, reinforcing the rapidly
rising share of profits in corporate and national income that has taken place over the last
decade in the United States (Mishel 2013).
Alt cause to Mexican economy – border infrastructure
Negroponte 5/2/13 – (Diana Villiers, “Obama’s Mexico Trip: Putting Trade and Investment at the Top
of the Agenda”, Brookings, http://www.brookings.edu/blogs/up-front/posts/2013/05/02-obamamexico-trip-trade-investment-negroponte)//javi
Related to the growth in two-way trade is the need to facilitate movement of
trucks across the U.S.-Mexico border. Despite an increased use of pre-clearance
procedures, Mexican trucks must line up several kilometers from the border while they
wait their turn to reach the fast lane that leads up to and through the U.S. border. Publicprivate partnerships are needed to construct the access roads some 10 kilometers from the
border so that pre-cleared vehicles can move rapidly through the border zone. Currently,
GPS vehicle trackers are used to link the sending and receiving manufacturers with U.S. Customs and
Border Patrol (CBP). Before the truck even reaches the border post, CBP will know the
content and value of the merchandise, as well as specifications on the cab and its driver.
Only if tampering is detected will CBP stop the truck for secondary inspection, otherwise
the truck sails through the border and onto its final destination. The Mexican private sector has
demonstrated interest in constructing those access roads, but it needs presidential mandates
from both governments to support the projects, as well as Mexican government purchase of necessary
land. Increasingly, the economies of both the U.S. and Mexico depend upon each other.
There is much for the presidents to discuss and many challenges lie ahead , including
productivity and education in both our countries. As President Obama begins his second term, it
is constructive for him to put energy and political will into deepening that economic
relationship.
Zero chance of hegemonic collapse — the US is too far ahead economically and
militarily.
Kagan 12 – senior fellow in foreign policy at the Brookings Institution (Robert, “Not Fade Away”, The New Republic,
p. International Relations Theory and the Consequences of Unipolarity, 1/11/12,
http://www.tnr.com/article/politics/magazine/99521/america-world-powerdeclinism?passthru=ZDkyNzQzZTk3YWY3YzE0OWM5MGRiZmIwNGQwNDBiZmI)
Less than a decade ago, most observers spoke not of America’s decline but of its enduring primacy. In 2002, the
historian Paul Kennedy, who in the late 1980s had written a much-discussed book on “the rise and fall of the great
powers,” America included, declared that never in history had there been such a great “disparity of power” as
between the United States and the rest of the world. Ikenberry agreed that “no other great power” had held “such
formidable advantages in military, economic, technological, cultural, or political capabilities.... The preeminence of
American power” was “unprecedented.” In 2004, the pundit Fareed Zakaria described the United States as
enjoying a “comprehensive uni-polarity” unlike anything seen since Rome. But a mere four years later Zakaria was
writing about the “post-American world” and “the rise of the rest,” and Kennedy was discoursing again upon the
inevitability of American decline. Did the
fundamentals of America’s relative power shift so
dramatically in just a few short years? The answer is no. Let’s start with the basic
indicators. In economic terms, and even despite the current years of recession and slow
growth, America’s position in the world has not changed. Its share of the world’s GDP
has held remarkably steady, not only over the past decade but over the past four
decades. In 1969, the United States produced roughly a quarter of the world’s economic output. Today it still
produces roughly a quarter, and it remains not only the largest but also the richest economy in
the world. People are rightly mesmerized by the rise of China, India, and other Asian
nations whose share of the global economy has been climbing steadily, but this has so
far come almost entirely at the expense of Europe and Japan, which have had a
declining share of the global economy. Optimists about China’s development predict
that it will overtake the United States as the largest economy in the world sometime in
the next two decades. This could mean that the United States will face an increasing
challenge to its economic position in the future. But the sheer size of an economy is not
by itself a good measure of overall power within the international system. If it were, then
early nineteenth-century China, with what was then the world’s largest economy, would have been the
predominant power instead of the prostrate victim of smaller European nations. Even if China does reach
this pinnacle again—and Chinese leaders face significant obstacles to sustaining the country’s growth
indefinitely—it will still remain far behind both the United States and Europe in terms of per capita
GDP. Military capacity matters, too, as early nineteenth-century China learned and Chinese leaders know today. As
Yan Xuetong recently noted, “military strength underpins hegemony.” Here the
United States remains
unmatched. It is far and away the most powerful nation the world has ever known, and
there has been no decline in America’s relative military capacity—at least not yet. Americans
currently spend less than $600 billion a year on defense, more than the rest of the other great powers
combined. (This figure does not include the deployment in Iraq, which is ending, or the combat forces in
Afghanistan, which are likely to diminish steadily over the next couple of years.) They do so, moreover, while
consuming a little less than 4 percent of GDP annually—a higher percentage than the other great powers, but in
historical terms lower than the 10 percent of GDP that the United States spent on defense in the mid-1950s and
the 7 percent it spent in the late 1980s. The superior expenditures underestimate America’s actual superiority in
military capability. American land and air forces are equipped with the
most advanced
weaponry, and are the most experienced in actual combat. They would defeat any
competitor in a head-to-head battle. American naval power remains predominant in
every region of the world. By these military and economic measures, at least, the United States today is
not remotely like Britain circa 1900, when that empire’s relative decline began to become apparent. It is more like
Britain circa 1870, when the empire was at the height of its power. It is possible to imagine a time when this might
no longer be the case, but that moment has not yet arrived.
2nc – Mexico econ defense
Mexican economy is expanding due to trade with Brazil & South Africa.
Wells & Natarajan 4/11 – Georgia & Prabha staff writers at the Wall Street Journal. “Mexico is
Picking up the Peso” 4/11/13.
http://online.wsj.com/article/SB10001424127887324010704578416870746707576.html
Mexico's economy has expanded at an annual pace of 3.9%, even as other large
emerging markets, including Brazil and South Africa, have seen growth slow. But the
pace of the currency's rally quickened in March after Mexico approved reforms to break
up the firms dominating its telecommunications sector. Analysts say these reforms, and
others in the works, should pave the way for faster growth. That in turn would attract more
foreign investment and strengthen state finances, prospects that have boosted the appeal of the peso,
investors say. Standard & Poor's Ratings Services said in March it is considering an upgrade of Mexico's
credit rating from triple-B in the next 18 months if Mexico continues with reforms. An upgrade would
make peso-denominated bonds more attractive.
Mexico’s economy is increasing now.
Tim Padgett of World Time, 3/8/13 Padgett is a well-known Time contributor and a Miami-based journalist
http://world.time.com/2013/03/08/mexicos-new-boom-why-the-world-should-tone-down-the-hype/
I couldn’t be happier that Mexico’s economy is rebounding. After barely 2% average annual growth
between 2000 and 2010, the country’s GDP expanded almost 4% in 2011 and 2012. Investment is
booming and the middle class is enlarging. Mexico’s manufacturing exports lead Latin
America, and its trade as a share of GDP tops China’s. Its No. 53 spot on the World Bank’s
ease-of-doing-business rankings far outshines the No. 126 grade of its main regional rival, Brazil;
it has signed more free trade agreements (44) than any other country, and it’s enrolling more
engineering students than any south of the Rio Grande. As I noted a year ago, it’s a trend well worth
applauding.
2nc – Mexico trade low
US-Mexico trade failing
Fletcher 5/28/13 – (Sam, “US, Mexico energy trade in flux”, Oil and Gas Journal,
http://www.ogj.com/articles/2013/05/us--mexico-energy-trade-in-flux.html)//javi
Energy trade between the US and Mexico is in flux with rising crude production in the US,
falling production in Mexico, and rising Mexican demand for gasoline, diesel, and other
petroleum products. Mexico is the third-largest supplier of crude to the US, but last year shipments of
Mexican crude to the US dropped to 972,000 b/d—the first time below 1 million b/d since 1994, the US
Energy Information Administration reported. Mexico’s share of total US crude imports fell to 11%
last year from 16% in 2003. Mexico’s production reportedly peaked in 2004 at 3.83 million b/d. While
the US consumes Mexican crude, it exports petroleum products to Mexico, some 600,000
b/d in 2012. Mexican demand for products has jumped 20% in the last decade while production capacity
remained essentially flat, so Mexico increasingly looks to the US for supply. Since 2004, US
exports of products to Mexico have nearly tripled, EIA said. Mexico exports its heavier crude and keeps
its lighter crude, mostly from southern regions, for its own refineries. More than 90% of Mexico's heavy
crude production is in its northeastern offshore region, which also accounts for 75% of Mexico’s
production decline. Production trends in Mexico vary by grade and location. Its heavy crude production
fell 46%, or 1.1 million b/d in 2004-12, officials said. However, production of light and extra light crude
oil rose 200,000 b/d in that same period. In recent years, US refineries have invested billions to upgrade
facilities to process heavy, sour crude. To recoup that investment, refiners likely will continue
importing heavy oil from Mexico and Venezuela, although the export of heavy crude from
Canadian tar sands is rapidly rising. Mexico’s economy is export oriented with total value of its
exports climbing to $32.9 billion in April from $31.9 billion in March. The US is its biggest market,
receiving 78% of its exports. Canada is its next biggest export market at 3%. Oil accounts for 14% of
Mexico’s exports, behind automobiles and related products at 24% of its total shipments. In the last 23
years, Mexico’s exports have averaged $10.8 billion/month from a record low of $1.2 billion in February
1980, when the global oil boom began to bust and crude prices fell, to a record high of $33.9 billion last
October. Natural gas trade Mexico is a growing market for US natural gas,
importing a record 2.1 bcfd last year, up 21% from 2011. Across-the-border flows from US
pipelines accounted for 80% of Mexico's total gas imports in 2012.
2nc – alt cause – drug war
Alt cause – war on drugs
The Global and Mail 12 [“The drug war spreads instability,” The Globe and Mail, September 6, 2012,
http://www.theglobeandmail.com/commentary/the-drug-war-spreads-instability/article4104311/]
The war on drugs doesn’t just cause human misery. It contributes to the political instability of
many parts of the world, including Mexico, Central America and now West Africa. The
transnational criminal groups in control of the drug trade have successfully destabilized
transit countries that stand between production and the market in Europe and North
America. This underscores the unintended consequences of prohibition: the growth of a huge
criminal black market financed by the profits of supplying demand for illegal drugs, and
the “balloon” effect, whereby drug production and transit corridors shift location to
avoid law enforcement. The war on drugs is inherently unwinnable, as the recent report
from the Global Commission on Drug Policy concludes.
2nc – alt cause – border
Mexico border is key to US-Mexican cooperation
ASCOA 8/1/13 – Americas Society (AS) is the premier forum dedicated to education, debate, and
dialogue in the Americas. Council of the Americas (COA) is the premier international business
organization whose members share a common commitment to economic and social development, open
markets, the rule of law, and democracy throughout the Western Hemisphere (“Reasons why the USMexico border Is critical to the economy”, voxxi, http://www.voxxi.com/us-mexico-border-critical-toeconomy/)//javi
The US.-Mexico border offers unparalleled economic opportunities for Americans who
live near the border as well as for workers and their employers throughout the United States. With the
House of Representatives looking at various approaches to immigration reform—in which increased
border security is a top priority—it is also critical to look at how the border improves
competitiveness and brings direct and indirect prosperity to communities across the
country. This fact sheet—the fifth in our series on immigrants and the economy—details five reasons
why US-Mexico border is critical for the US economy. A secure border is vital, but so is a
border that provides security in a way that does not result in the unintended
consequence of unnecessarily stifling commerce. Five reasons why the US-Mexico border is
critical for the U.S. economy
2nc – status quo is sufficient
Mexico has FTAs
Meacham 7/25, Carl Meacham, 7/25/13, “The Trans-Atlantic Trade and Investment Partnership:
Mexico Wants In—Why Not?” Carl Meacham is the director of the Americas Program at the Center for
Strategic and International Studies (CSIS) in Washington, D.C. Tania Miranda, intern scholar with the CSIS
Americas Program, provided research assistance. http://csis.org/publication/trans-atlantic-trade-andinvestment-partnership-mexico-wants-why-not Mollie
Mexico, Latin America's second largest economy, is currently a member of 12 different FTAs
involving 44 other nations, making it among the most open of the world's leading
economies. In 2011, a full third of Mexico's gross domestic product (GDP) was comprised of
exports and imports. In contrast, just 15 percent of U.S. GDP was derived from the same. Mexico's
extensive network of FTAs includes most of the Western Hemisphere, Israel, and Japan.
It also belongs to an economic partnership with the European Union (enacted in 2000) and to
NAFTA—the world's largest FTA to date, with a combined GDP of $17 trillion linking 450 million
people. Last year, Mexico joined the Trans-Pacific Partnership (TPP) negotiations, a highstandard FTA among a number of Pacific Rim countries that remains in the works. It is also a member of
the World Trade Organization (WTO), the Asia Pacific Economic Cooperation (APEC), the
Organization for Economic Cooperation and Development (OECD), the Latin American
Integration Association (ALADI), and the emerging Pacific Alliance, a free trade and integration
effort that hopes to become the commercial bridge between the Americas and the Asia Pacific region.
Mexico alone is a bigger market for the United States than all the BRIC economies
combined, and growing opportunities for trade and investment in the economy solidify this status
moving forward.
2nc – Aerospace
Aerospace Industry growing – most qualified indicators prove – despite
Government spending
AMD 11 Aerospace Manufacturing & Design Magazine
[Positive predictions for 2011, FEBRUARY 2011, http://www.onlineamd.com/amd-0211-positivepredictions-2011.aspx]
The AERO Indicator Say it all in one number. Are we safe and on course? The AERO Indicator
mathematically combines all the above economic data and more into one forecasting
number. The AERO Indicator is a weighted average from a group of regression analyses of moving
averages of very current aerospace commercial and defense related data, a survey measure of industrial
opinions, and a daily index of stock market prices of a select number of small, medium, and large
aerospace companies whose business is dominated by aerospace products, parts, and services. The
weighting of AERO indicator averages, indexes, surveys, and the time frame used in forecasting, is
proprietary to Barr Group Aerospace. How to Read the Indicator The reading of 101.38 for November
2010 means that, during the next six months, the U.S. Aerospace and Defense Manufacturing Sector will
grow at a 1.38% annual rate. Skies are Clear at 30,000 feet The aerospace manufacturing sector
has recovered slower than the overall economy, but is poised to lead the growth of the
economy in 2011. All indicators point to slow growth during the next six months. Then
we predict the rate of growth to increase, despite cuts in DoD spending. While DoD spending is
projected to fall during the next few years, direct and indirect spending on aircraft and missiles is
projected to only fall from $100.4 billion in 2010 to $97.8 billion in 2011, or 2.6%. The Aero Indicator
predicts a slow start in 2011 but fueled by idle capacity, wider sources of capital
funding, higher sustainable profits in both the commercial and defense manufacturing
sectors, growth of cargo and passenger traffic, more planes on order, and higher
demand for MRO – all with local and state political support – should result in a very
good year for aerospace manufacturers. While larger firms have already recovered, smaller firms
will soon follow. Contributors to the forecast Dr. Saul “Sonny” Barr is the senior economist
at Barr Group Aerospace and professor emeritus of economics and finance at the
University of Tennessee. His company has provided economic development, consulting, and training
services to the Pentagon, Goodyear, Raytheon, Honeywell, Alcoa, Embry-Riddle Aeronautical University,
local airports, and government, as well as many others. Statistics, including news and commentary, is
updated minute-by-minute on the AeroWeb. For detailed information about the AeroWeb, go to
barrgroupaerospace.com.
Aerospace industry strong now
AIA research center, ‘9 [cites 2009. http://www.gcxmag.com/gcx/article.asp?magarticle_id=743]
The aerospace industry is still smarting from 2008, a year when the world's financial
markets nearly collapsed, sending many industries — including several segments of the aerospace
industry — into a tailspin. Yet, aerospace entered this difficult period strong and resilient,
and the momentum generated by a remarkable period of growth carried the industry
through the last year, and will push aerospace sales to another record year in 2009 . AIA
estimates that aerospace sales will reach $214.1 billion in 2009, up more than 4 percent from
2008. Moving forward, the aerospace industry is likely to endure further turbulence
before breaking through to clearer skies. At times, rudder control may seem sluggish, as the
market conditions that spur aircraft sales are largely exogenous to the aerospace industry, in that they
are tied to a rebound of the overall economy. Already though, a few bright spots are appearing,
such as indications of stabilization of some aerospace metrics. Just recently, The Boeing Co.
reported that fewer customers were deferring jet orders, while International Air Transport Association
reported that international scheduled traffic results show moderately improving conditions.
China will inevitably overtake the US – labor costs, tech leapfrogging and
government spending
MacPherson ’09 – American patent attorney, Juris Doctor degree from Harvard Law School [Alan,
“The emergence of a new competitor in the commercial aircraft sector: the China syndrome,”
www.elsevier.com/locate/futures]
Even with infant-industry status, there is good reason to suspect that China’s
commercial aerospace sector will become internationally competitive in a relatively
short space of time (e.g. 10 years or less). There are several reasons for this. First, China’s labor
costs are at least 4 times lower than those that prevail in Europe and North America [14].
This is especially important in light of the labor-intensive nature of certain aspects of the airframe
production process. Second, China will be starting its production effort with state-of-the-art
machine tools and fixtures, new materials handling processes, Western design software,
and advanced engineering procedures. In effect, the first fully operational set of Chinese
production facilities will technologically leapfrog comparable facilities in the West.
Third, the Chinese government has the investment capital and political determination
required for massive and sustained industry support. Fourth, Western components are
readily available to install on Chinese airframes—engines, avionics, hydraulics, fly-by-wire
systems. The net result will be Chinese aircraft that are endowed with proven Western
and/or Russian systems, cheap Chinese airframes, and performance characteristics that
match US Federal Aviation Authority (FAA) and EU Joint Aviation Authority (JAA) technical and safety
standards. Finally, China will be able to pump-prime its domestic aerospace industry by
mandating the purchasing behavior of Chinese airlines. This would represent a non-tariff
trade barrier of immense significance at the global level. Pulling these five strands together, it
would appear that China will soon be in a position to serve both domestic and international markets.
Eventually, for example, Western airlines will find it hard to ignore Chinese aircraft that are fully
FAA/JAA compliant— especially if they sell at a fraction of the cost of Western alternatives.
Multiple factors make Chinese aerospace industry rise inevitable
Cliff, Ohlandt, and Yang, 11 (Roger, Chad J. R, and David, “Ready for Takeoff: China’s Advancing
Aerospace Industry,” 2011, Cliff was the Assistant for Strategy Development, Office of the Secretary of
Defense, Ohlandt is an aerospace engineer at RAND specializing in Chinese space policy, and Yang is and
assistant political scientist at the RAND institute specializing in Chinese security studies)
However, it is difficult to quantify the extent to which improvements in China’s civilian
aerospace capabilities in general, and international cooperation in the civilian aerospace sector in
particular, are driving improvements in China’s military aerospace capabilities. China’s
defense spending has quintupled in real terms since 1995, a greater than 12 percent annual
growth rate. This means that vastly more resources are now available for the development of aerospace
and other defense capabilities than were available just 15 years ago. Moreover, China’s military
aerospace industry has benefited from direct technical assistance from Russian, Israeli,
and other foreign firms and technical experts. With China being one of the world’s
largest trading nations, China’s military aerospace industry can purchase state-of-the-art
parts and technologies from throughout the world. The industry also has the ability to
tap into expertise in firms outside of the aerospace sector and in Chinese universities,
which themselves are increasingly integrated into the world scientific and engineering community.
Finally, China is engaged in large-scale espionage efforts to acquire key aerospace and
other military technologies. The technologies being transferred to Chinese firms are in most
instances not cutting-edge. Leading aerospace firms are generally reluctant to share their best
technologies, because those technologies are the source of their competitive advantage. As an example,
RollsRoyce is unwilling to share its technology for forging unitary turbine rings (known as bladed-rings,
or “blings”) with its own wholly owned subsidiary in Indianapolis, preferring instead to keep this
“crownjewel” technology at its facility in the United Kingdom. 2 Out-of-date Western technologies,
however, can still be new technologies to China, which, for example, has yet to master the technology
for turbo- fan engines, which first entered production 50 years ago in the West (Younossi et al., 2002,
pp. 9–24). But the nature of the aerospace technologies being transferred to China and
the range of alternative technology sources available make the U.S. security policy
implications opaque. Since it is difficult to quantify the degree to which international cooperation in
civil aerospace is assisting the development of military aerospace capabilities in China, whether even a
complete cutoff of such cooperation would substantially slow that development is equally unclear. A
complete cutoff, moreover, would be impractical. Russia in particular is unlikely to go along with a U.S.organized ban on cooperation in civil aerospace with China, and whether European and other Asian
countries would do so is also questionable. A U.S.-only ban would likely slow the development of China’s
military aerospace capability by only a small amount while handing business opportunities to European
and Asian companies and aggravating relations with Beijing. At a minimum, a smart U.S. policy would
limit restrictions to cooperation in technology areas that are not available from other countries or in
which other countries that also possess those technologies are willing to coordinate with the United
States in imposing restrictions.
US-EU Relations Advantage
1nc – US-EU Relations Advantage
Multiple issues overcome passage - prefer experts
Erlanger 6/12, Steven Erlanger, New York Times, very dedicated reporter with background at a variety
of large scale newspapers, graduated from Harvard, this article cites said Douglas J. Elliott, a senior
fellow in economics at the Brookings Institution., "Conflicting Goals Complicate an Effort to Forge a
Trans-Atlantic Trade Deal". www.nytimes.com/2013/06/13/business/global/to-create-jobs-europepushes-for-trade-deal-with-us.html?pagewanted=all&_r=0 Mollie
PARIS — The leaders of the European Union, mired in recession and battered by
increasing opposition from voters, are desperate for political success to promote
economic growth. They are pushing for a rapid negotiation of a trade agreement with the
United States aimed at expanding commerce and creating jobs. But many experts say any such
deal faces long odds. France has already raised objections about its “cultural exception,”
which is aimed at protecting subsidized, domestic movies and television programs, and continued to
press the issue ahead of a meeting on Friday of the European Union’s trade ministers. At the same time,
there is a range of other, probably more serious problems, including agricultural disputes
over things like genetically modified food and chlorinated chicken and regulatory questions
about car safety, pharmaceuticals and financial derivatives. New concerns about
widespread American spying on Internet and telephone traffic will make existing
disagreements about data privacy, an important issue in Europe, even more fractious.
Alt cause – bugging incident
Pop 1/7/13 – (Valentina, “EU-US relations at risk after new bugging scandal”, EU Observer,
http://euobserver.com/foreign/120689)//javi
EU politicians have questioned the future of trade talks and demanded explanations
from Washington after Der Spiegel revelations that EU offices in Brussels, New York and
Washington are bugged by American intelligence. The telephone lines and computer
networks of EU offices in Brussels were tapped by the American National Security Agency
(NSA) under its so-called Prism surveillance programme, German daily Der Spiegel reports,
based on new documents leaked by fugitive whistleblower Edward Snowden. An NSA
document from September 2010 describes Europeans as specific targets, the German magazine
says. In addition, a series of bogus phone calls to the Justus Lipsius building, which hosts
the EU Council, were traced back to Nato headquarters in Brussels where NSA agents
are based, indicating an attack on the EU communications security, Spiegel writes. The
German leak is the latest in a series of disclosures about Prism published over the last few weeks in
British daily The Guardian and in the US paper, the Washington Post. They show that the US
government searches through the telephone calls, emails, instant messages and
Facebook data of people in or outside the US by infiltrating the servers of Internet giants like Apple or
Microsoft. The British intelligence service, GCHQ, is allegedly running an even bigger surveillance
programme named Tempora, which taps into transatlantic fibre-optic cables used for telephone and
Internet services. "As soon as we saw these reports, the European External Action Service made
contact with the US authorities in both Washington DC and Brussels to seek urgent clarification of
the veracity of, and facts surrounding, these allegations," foreign policy chief Catherine Ashton
said in a statement. Her New York and Washington delegations send diplomatic cables classified up to
the level of "Secret." The designation covers texts which could "seriously harm" EU
interests, "raise international tensions" or "threaten life" and "public order" if they get
out. For his part, European Parliament chief Martin Schulz said EU-US relations risk
serious harm. "I am deeply worried and shocked about the allegations of US
authorities spying on EU offices. If the allegations prove to be true, it would be an extremely
serious matter which will have a severe impact on EU-US relations," he said in an emailed statement.
EU justice commissioner Viviane Reding on Sunday told an audience in Luxemburg that "partners do not
spy on each other." She also questioned the future of the recently-launched EU-US free
trade talks.
Protectionism is on the rise now – WTO forecasts
Miles 4/10/13, Tom Miles, Reuters, "WTO cuts 2013 trade forecast, sees protectionist threat",
www.reuters.com/article/2013/04/10/us-trade-wto-idUSBRE9390AO20130410 Mollie
Reuters) - The World Trade Organization slashed its forecast for trade growth in 2013 on
Wednesday, saying it feared protectionism was on the increase. It cut its forecast for global
trade growth in 2013 to 3.3 percent from 4.5 percent and said trade grew only 2.0 percent in 2012. That
was the smallest annual rise since records began in 1981 and the second weakest figure on record after
2009, when trade shrank. Trade in commercial services also grew by only 2 percent in 2012, to $4.3
trillion. WTO Director General Pascal Lamy warned that 2013 could turn out even weaker than
expected, especially because of risks from the euro crisis, and countries might try to
restrict trade further in a desperate attempt to shore up domestic growth. "The threat
of protectionism may be greater now than at any time since the start of the crisis, since
other policies to restore growth have been tried and found wanting," he said.
Plan leads to protectionism
MarketWatch 12, 9/12/12, This article is citing WTO Director General Pascal Lamy, "WTO official
warns of rising protectionism",www.marketwatch.com/story/wto-official-warns-of-rising-protectionism2012-09-21 Mollie
Mr. Lamy said an increase in WTO formal disputes is a natural consequence of the rise in
trade restrictions globally, including antidumping and counter-subsidy tariffs. He warned
that a proliferation of regional and bilateral trade pacts has made reaching a global deal
to liberalize trade more difficult. Such deals may lower tariffs among the parties involved,
but they can lower the incentive for parties to come to the table to tackle more difficult
non-tariff issues, he said. "The risk of fragmentation becomes more acute in today's
world where tariffs are increasingly an instrument of the past," Mr. Lamy said.
Mexican involvement kills the negotiations
Meacham 7/25, Carl Meacham, 7/25/13, “The Trans-Atlantic Trade and Investment Partnership:
Mexico Wants In—Why Not?” Carl Meacham is the director of the Americas Program at the Center for
Strategic and International Studies (CSIS) in Washington, D.C. Tania Miranda, intern scholar with the CSIS
Americas Program, provided research assistance. http://csis.org/publication/trans-atlantic-trade-andinvestment-partnership-mexico-wants-why-not Mollie
First, given the years of encouragement that preceded the formal start of EU-U.S.
negotiations, neither party wishes to jeopardize what could be the biggest FTA in history
by bringing more participants on board--regardless of the value their inclusion adds. Leaders
from both the United States and the EU think this would bring a long and burdensome
political process that could prove detrimental for the negotiations. And though both have
shied away from anything that might complicate the process of reaching an initial agreement, neither
has rejected the idea of accepting more members down the road, once the agreement is consolidated.
The second argument is more of a corollary to the first. At his talk with the Americas Program last week,
Christian Leffler, the EU’s managing director for the Americas, explained that because
Mexico already shares FTAs with the United States and the EU, including Mexico in the
TTIP can be seen as superfluous—at least for now. Particularly given the drag additional
parties could put on negotiations, the benefits of including Mexico, so the argument
goes, fail to outweigh the potential costs.
Iran proliferation wouldn’t cause extinction – stability and deterrence theory
Cayias 3/25/13 – first-year graduate student at the American Military University, earning a Master’s of
Arts in Intelligence Studies. She received my bachelor’s degrees at the University of Utah in Political
Science and International Studies, and minored in Russian (Jennifer, “The Threat of Nuclear
Proliferation: A response to “Thou Shalt Not Fear a Nuclear Iran””, International Affairs Review,
http://www.iar-gwu.org/node/477)//javi
Deterrence theory asserts that the mere possession of a nuclear arsenal protects a state
by deterring would-be aggressors. One has only to look at the recent history of Russia,
India, Pakistan, and Israel to see that this is not quite accurate. What nuclear arsenals do
successfully deter is nuclear attack in general, and the potential of global nuclear war.
Nuclear weapons did not deter Chechnya from waging a guerrilla war against the Russian Federation, or
Tibet from defying China. They have not deterred conventional attacks on Israel by Hamas, Egypt, or
Syria – despite Israel’s conventional attack on Syria’s nuclear facilities. Nor have they deterred attacks
on Indian, Pakistani, or U.S. forces (or allies) in proxy wars in Afghanistan or Kashmir. A nuclear
arsenal grants a state a stronger image of sovereignty in the eyes of the international
community, not due to a new capacity to defend itself, but to the security threat any new nuclear
power poses as a potential proliferator. Ironically, what is most threatening about a nuclear Iran
is not the military threat it would pose to its neighbors, nor a domino effect it might
have on other Middle Eastern states’ nuclear efforts. A nuclear Iran presents expanded
potential for proliferation – overt, covert, and unintentional. First, while latent and “second-tier”
nuclear proliferation is already a problem without Iran’s contribution, its participation in the nuclear
black market thus far indicates it would most likely follow Pakistan’s example, should it become a
primary source. Second, a proliferation threat posed by the emergence of any new nuclear power is the
possibility that such a state could follow a path similar to that of the Soviet Union – that being the fall of
the regime and the destabilization of its internal security and infrastructure. After the fall of the Soviet
Union, its former territory became a haven for black market activity, including the illicit sale and
trafficking of nuclear materials, to unknown and unaccountable recipients. The economic and political
chaos of the 1990s particularly impacted Russia’s “nuclear cities,” which thrived on the nuclear facilities
around which they were built. In other words, the potential threat posed by a new nuclear power is not
so much the mere possession of its arsenal, but the stability (or lack thereof) of its regime and security
infrastructure, and to what extent it can remain accountable for its nuclear technology. Having a
nuclear arsenal makes the stability and integrity of a state more important to the
international community, precisely because of the potential threat its disintegration
would pose. Since 1991, the United States and the International Atomic Energy Association (along
with several non-governmental organizations) have worked to establish greater control and oversight of
Russia’s nuclear arsenal and facilities, with incomplete and inconsistent success. In part this is due to the
limitations posed by sovereignty – Russia is deeply suspicious of foreign intervention within its territory
and unlikely to voluntarily halt a defense program it sees as invaluable to its national security. Likewise,
Pakistan refused to take direct action against A.Q. Khan, when his network was exposed in 2004, for the
same reasons. The threat posed by each of these states is not that they might use their arsenals, but
that they do not have complete control over them.
1nc – terror turn
Turn – U.S.-EU cooperation causes terrorist attacks on US soil
COG 3/3/08 – (Bob Thiel, “A Combined EU & North American Trade Block Coming?”, Church of God
News, http://www.cogwriter.com/news/prophecy/a-combined-eu-north-american-trade-blockcoming/)//javi
it will become increasingly clear that the British will be in more agreement
with the Canadians and Americans and that the European Union in more agreement
with the Mexicans than the EU will have with the English-speaking nations. Trade wars
and/or serious trade disputes will most likely arise. The Brits will ultimately decide that they are more supportive of the
However, over time,
Americans and Canadians. They will be so much more supportive that they will end up in a trading agreement with them (with the Australians and New Zealanders
The EU will decide that Mexico and the rest of Latin America
are in more agreement with it and thus make some type of serious trading agreement
with most (or all) of Latin America. The Vatican will also have influence here as Latin America is highly Roman Catholic. The Europeans and
Americans, however, will continue to have military agreements, though many will be tense about them. Eventually, the Europeans (possibly under
the cover of pretending that they are involved in a “NATO-like” exercise in North America) will eventually launch a surprise attack
against the United States in fulfillment of both biblical and Catholic prophecies. The Mexicans will most likely
be allied with the Europeans for this to happen.
probably also becoming part of that agreement).
That causes the U.S. lash out, precipitating global war
*terrorist attacks will increase nationalism and cause US lashout
Schwartz-Morgan ‘1 Nicole, Assistant Professor of Politics and Economics at Royal Military College of
Canada, 10/10/2001, “Wild Globalization and Terrorism,” http://www.wfs.org/mmmorgan.htm
The terrorist act can reactivate atavistic defense mechanisms which drive us to gather
around clan chieftans. Nationalistic sentiment re-awakens, setting up an implacable frontier
which divides "us" from "them," each group solidifying its cohesion in a rising hate/fear of the
other group. (Remember Yugoslavia?) To be sure, the allies are trying for the moment to avoid
the language of polarization, insisting that "this is not a war," that it is "not against
Islam," "civilians will not be targeted." But the word "war" was pronounced, a word heavy with
significance which forces the issue of partisanship. And it must be understood that the sentiment of
partisanship, of belonging to the group, is one of the strongest of human emotions. Because the
enemy has been named in the media (Islam), the situation has become emotionally
volatile. Another spectacular attack, coming on top of an economic recession could
easily radicalize the latent attitudes of the United States, and also of Europe, where racial
prejudices are especially close to the surface and ask no more than a pretext to burst out. This is the
Sarajevo syndrome: an isolated act of madness becomes the pretext for a war that is
just as mad, made of ancestral rancor, measureless ambitions, and armies in search of a
war. We should not be fooled by our expressions of good will and charity toward the
innocent victims of this or other distant wars. It is our own comfortable circumstances which
permit us these benevolent sentiments. If conditions change so that poverty and famine put the
fear of starvation in our guts, the human beast will reappear. And if epidemic becomes a clear and
present danger, fear will unleash hatred in the land of the free, flinging missiles
indiscriminately toward any supposed havens of the unseen enemy. And on the other
side, no matter how profoundly complex and differentiated Islamic nations and tribes
may be, they will be forced to behave as one clan by those who see advantage in
radicalizing the conflict, whether they be themselves merchants or terrorists.
2nc – alt cause – NSA
NSA leak hurts the agreement and relationship – confidence and trust
Llana 7/1/13 – the Monitor's Europe Bureau Chief. Previously she was the paper's Latin America
Bureau Chief (Sara Miller, “Has NSA spying put US-EU trade deal on the rocks?”, CS Monitor,
http://www.csmonitor.com/World/terrorism-security/2013/0701/Has-NSA-spying-put-US-EU-tradedeal-on-the-rocks)//javi
Revelations that the United States has systematically spied on Europe are threatening what
is being billed as a pivotal moment for the transatlantic relationship: the start of
negotiations next week for a major trade deal. The latest disclosures from Edward
Snowden, the former National Security Agency (NSA) contractor, came in a report over the
weekend in the German daily Der Spiegel, alleging that the NSA bugged European Union
offices and that half a billion phone calls, e-mails, and text messages from Germany
alone are tapped by the US in an average month – far surpassing the average attention
given to other European allies. In fact, Germany is spied on just as often as China or Iraq,
the paper claims. If the extent of US surveillance in the world is not surprising to some, it’s
still controversial in Europe, especially in countries like Germany that place a high priority
on data privacy. But the timing of the revelations, as negotiations for the Transatlantic Trade
and Investment Partnership (TTIP) are set to begin July 8, has created a firestorm, says Johannes
Thimm, an expert on US foreign policy at the German Institute for International and Security Affairs in
Berlin. “There are economic interests involved on both sides, and while the [TTIP] is generally in the
spirit of cooperation, there are some trade-offs and really hard negotiations ahead,” Dr. Thimm
says. American ability to access that communication as it is playing out, he says, gives the US “a huge
strategic advantage." The Spanish daily El Pais quoted a slew of EU officials voicing their outrage. The
European commissioner for justice and fundamental rights, Viviane Reding, said plainly: "Partners
do not spy on each other," she said. "We cannot negotiate over a big transatlantic market if
there is the slightest doubt that our partners are carrying out spying activities on the
offices of our negotiators.” The European Parliament's foreign affairs committee head, Elmar Brok,
reiterated that view. "The spying has taken on dimensions that I would never have thought possible
from a democratic state," he told Der Spiegel. "How should we still negotiate if we must fear that our
negotiating position is being listened to beforehand?" The anger has generated not only
threats that the TTIP is at risk, but that a cloud looms over the entire
transatlantic relationship. Germany Justice Minister Sabine Leutheusser-Schnarrenberger
said the fact that “our friends in the US see Europeans as enemies exceeds the imaginable.” The
president of the European Parliament, Martin Schulz, said that “if this is true, it’s an immense
scandal that could have a severe impact on relations between the EU and the US.”
2nc – protectionism now
Protectionism is on the rise globally
MarketWatch 12, 9/12/12, This article is citing WTO Director General Pascal Lamy, "WTO official
warns of rising protectionism",www.marketwatch.com/story/wto-official-warns-of-rising-protectionism2012-09-21 Mollie
SINGAPORE--The head of the World Trade Organization warned Friday that protectionist
measures are on the rise around the world, after the Geneva-based group said world trade will
grow more slowly in 2012 than predicted earlier this year. "I remain convinced that this recovery will
be slow," WTO Director-General Pascal Lamy told a business group. He said the pressure to throw
up trade barriers is greater today than it was even in 2008-2009, in the immediate
aftermath of the financial crisis. The WTO earlier Friday slashed its forecast for growth in
global trade in 2012 to 2.5% from 3.7%, citing global headwinds including anemic U.S.
growth and China's slowdown. "The last thing we need is for this disappointing, slow
growth to be impacted by more protectionism," Mr. Lamy said. The global body has been
stymied under Mr. Lamy's tenure by a failure to advance global trade talks known as the Doha round. In
recent weeks, the U.S. and China have filed high-profile cases against each other with
WTO tribunals.
2nc – won’t pass
US focused on TPP, not TTIP
Erlanger 6/12, Steven Erlanger, New York Times, very dedicated reporter with background at a variety
of large scale newspapers, graduated from Harvard, this article cites said Douglas J. Elliott, a senior
fellow in economics at the Brookings Institution., "Conflicting Goals Complicate an Effort to Forge a
Trans-Atlantic Trade Deal". www.nytimes.com/2013/06/13/business/global/to-create-jobs-europepushes-for-trade-deal-with-us.html?pagewanted=all&_r=0 Mollie
He noted that the United States was trying to negotiate a similar deal, known as the Trans-
Pacific Partnership, with Asian countries and especially with Japan. China is not included in those
negotiations, which the Obama administration considers a higher, more immediate
priority than the European talks.
At best, 1 in 3 chance – this evidence assumes their warrants
Erlanger 6/12, Steven Erlanger, New York Times, very dedicated reporter with background at a variety
of large scale newspapers, graduated from Harvard, this article cites said Douglas J. Elliott, a senior
fellow in economics at the Brookings Institution., "Conflicting Goals Complicate an Effort to Forge a
Trans-Atlantic Trade Deal". www.nytimes.com/2013/06/13/business/global/to-create-jobs-europepushes-for-trade-deal-with-us.html?pagewanted=all&_r=0 Mollie
“Done properly, TTIP is a good thing, but there are deeply entrenched interests on both
sides of the Atlantic, and they will always fight harder to keep what they have rather
than get something new,” said Douglas J. Elliott, a senior fellow in economics at the Brookings
Institution. “There will be small benefits for a lot of people but big losses in certain sectors, and they’ll
fight.” There is “maybe a 1-in-3 chance TTIP will happen,” Mr. Elliott said. “And 1-in-3 is
optimistic, but the desire to get some economic growth may overcome some serious
political problems.”
It won’t pass –
1) Food safety standards are ideological – negotiations can’t overcome
Erlanger 6/12, Steven Erlanger, New York Times, very dedicated reporter with background at a variety
of large scale newspapers, graduated from Harvard, this article cites said Douglas J. Elliott, a senior
fellow in economics at the Brookings Institution., "Conflicting Goals Complicate an Effort to Forge a
Trans-Atlantic Trade Deal". www.nytimes.com/2013/06/13/business/global/to-create-jobs-europepushes-for-trade-deal-with-us.html?pagewanted=all&_r=0 Mollie
Given already low average tariffs (under 3 percent), the main problems are nontariff barriers,
things like differing customs and regulatory requirements. The United States and Europe have
different auto-safety requirements, for example, and not all American states have the same ones.
They differ on how to ensure the safety of chicken — the Europeans do not allow the import of
American chicken that has been chlorinated to kill bacteria. They differ on the safety of
genetically modified grains and foods. In general, said Mr. Elliott of Brookings, European
regulators “have a more cautionary approach than Americans, and they have to prove
safety rather than disprove arguments about why something is unsafe.” American
regulators generally require scientific evidence that something is unsafe; the Europeans
are more precautionary. Tariffs and agricultural subsidies are monetary figures that can
be negotiated. “But safety is qualitative and cultural,” he said. “On both sides we
have strong views about how to do things, and we can get very entrenched.”
2) Financial, aerospace, and ag interests
Erlanger 6/12, Steven Erlanger, New York Times, very dedicated reporter with background at a variety
of large scale newspapers, graduated from Harvard, this article cites said Douglas J. Elliott, a senior
fellow in economics at the Brookings Institution., "Conflicting Goals Complicate an Effort to Forge a
Trans-Atlantic Trade Deal". www.nytimes.com/2013/06/13/business/global/to-create-jobs-europepushes-for-trade-deal-with-us.html?pagewanted=all&_r=0 Mollie
Other major issues will include the regulation of derivatives and some other financial
products, and whether foreign and multinational banks must operate in America as if they are United
States banks. The fight over subsidies to Airbus and Boeing will no doubt come up, and
there are questions about whether the Senate will agree to a separate vote on
agriculture, as the United States farm lobby wants.
3) The cultural exception
Erlanger 6/12, Steven Erlanger, New York Times, very dedicated reporter with background at a variety
of large scale newspapers, graduated from Harvard, this article cites said Douglas J. Elliott, a senior
fellow in economics at the Brookings Institution., "Conflicting Goals Complicate an Effort to Forge a
Trans-Atlantic Trade Deal". www.nytimes.com/2013/06/13/business/global/to-create-jobs-europepushes-for-trade-deal-with-us.html?pagewanted=all&_r=0 Mollie
Within Europe, divisions remain over what to put on the table. Belgium appears to be
lining up with France in favoring support for homegrown movies and television
production in the name of cultural diversity. Hungary and Greece could back Paris as
well. A core issue for France and its allies is “control of the digital space and the implications of the
evolution of the digital economy for culture,” said a senior European Union diplomat, who spoke on
condition of anonymity to avoid disrupting the internal negotiations. “The reality is that the global
market is currently dominated by U.S. operators,” citing companies like Google, Apple
and Netflix, “and that is why it is such a sensitive issue.”
2nc – U.S.-EU relations defense
Alt causes to relations collapse- Asia
Apps 12- staff writer at Reuters, (Peter, “Analysis: EU faces defense challenge as U.S. looks to Asia”,
Jan. 10th, 2012, Reuters, http://www.reuters.com/article/2012/01/10/us-europe-defenceidUSTRE8091MH20120110, //CJD)
But as Washington pulls troops back from the continent, two decades after the Cold War
ended, and refocuses on Asia, the cash-strapped nations of Europe face uncomfortable
truths over just how paltry their real military capabilities have become. NATO's war in
Libya last year was trumpeted as Europe starting to take responsibility for its own
backyard, with Britain and France calling the shots while Washington "led from behind."
In reality, the campaign was heavily dependent on U.S. military, technical, intelligence
and logistical support - the Europeans could not even supply enough of their own
munitions. According to one security source, of more than 100 cruise missiles fired during the
opening days of the campaign, only two were European, and even those were built in
the United States -Tomahawks, fired from a British nuclear submarine. For strategists in
Washington focused on the need to cut some half a trillion dollars from their defense
budget, Europe offers few threats and even fewer opportunities. This much has become
clear in last week's announced U.S. strategy shift. "SWITZERLAND WRIT LARGE" While several
European states provided at least a token military presence in support of the U.S. war in
Afghanistan, they would be able to offer much less in the way of useful capabilities in
any stand-off with China, Iran or North Korea. In what some are calling the "Asian
century," even the "special relationship" between the United States and its 20th-century
Atlantic ally Britain looks much less relevant. "The new U.S. strategy underlines the
growing divergence between European and American strategic interests," said Nick Witney,
a former head of the European Defense Agency and now a senior fellow at the European Council on
Foreign Relations. "Europe is going to have to grow up and learn to take responsibility for
its own security, without Uncle Sam to prod and cajole - or, more likely, decline into a
strategic backwater... Switzerland writ large" The U.S. pullback from Europe, of course, is
not new. During the Cold War, Washington kept some 400,000 troops in Europe, facing off
against the Soviet Union. Only some 80,000 remain and some analysts see that being
halved again in the coming years. Those U.S. bases likely to remain open in Europe - such
as the giant air force facility at Ramstein in southwestern Germany or the major signals
listening post at Menwith Hill in northern England - will be those most useful to
Washington for global operations further afield, particularly in the Middle East. "It's not
as if the lights are going to go out completely on the U.S. presence in Europe ," said Charles
Kupchan, director for European affairs at Bill Clinton's National Security Council and now a senior fellow
at the Council on Foreign Relations. But, he added: "The overall message is that Europe is going
to need to start taking more care of its own defense, that they won't be able to call on
the U.S. in the same way as the past." The prospect of Europe making up the gap,
however, seems remote to many. MONEY NOT PROBLEM According to data from the Stockholm
International Peace Research Institute, total defense spending across Europe fell by 2.8
percent in 2010 as the financial crisis began to bite. A similar fall is expected to be
recorded for 2011. But Europe's defense weakness is clearly not just a matter of money
or even personnel. France, Britain, Germany and Italy remain in the top 10 global defense spenders.
Total estimates of European Union defense and security spending vary between $200
and 300 billion, depending on what is included. That might be well under half that of the
United States, but by some assessments it still outstrips both Russia and China
combined. China's official 2011 military budget was some $91 billion, although many
analysts suspect the real figure could be much higher. Russia's 2011 defense budget was
$53 billion. According to the European Defense Agency and the International Institute for Strategic
Studies, in 2010 Europe had some 1.6 million full-time military personnel and as many as 5
million including reserve and paramilitary personnel -- more than the United States, the
global military superpower. The problem, critics say, is that Europe spends that cash and
uses those personnel in an almost uniquely inefficient way. "It's always been obvious
what needs to be done - taking a more collective approach to Europe's security," said
Kupchan. "But if anything, European countries have gone with the opposite approach."
Many of Europe's individual states, defense experts say, continue to use the sector as a
way of bolstering national industry and employment rather than building true military
capability that would be of use internationally. Attempts at cooperation among European
governments frequently flounder, with critics blaming mismanagement and political
interference. Projects such as the British-German-Italian-Spanish Eurofighter or the
A400M military transport aircraft ran billions over budget and suffered years of delays.
There have been attempts to solve the problem. In 2004, the European Union set up the
European Defense Agency largely to provide coordination and avoid such issues. Critics
say it has known mixed success at best, although supporters hope the U.S. drawdown
could provide just the impetus it needs to thrive. "What we are being told to do now is that we
have to do our job," EDA chief executive Claude-France Arnould told Reuters. "We should go full
speed ahead with pooling and sharing." But solving those technical issues of policy
coordination would only be a beginning. Most of the continent's military personnel,
many analysts say, are effectively undeployable. On paper, even after abolishing national
service, Germany retains some 250,000 service personnel, and almost twice that many
when reserves are included. Yet Berlin has struggled to provide a few thousand to
support NATO in Afghanistan. There is also the question of whether European voters are
willing to back governments in international ventures. "Contributing troops to these
conflicts has been very financially and politically expensive for European countries," says
Tomas Valasek, director of foreign policy and defense at the Center for European
Reform. "There will be some who will rejoice that the U.S. has in effect said that it plans
to do fewer 'nationbuilding' wars." Those who want to see a more activist European
military approach must put their faith in the growing but still rocky alliance between
Britain and France, showcased in Libya. But insiders say that tandem between the
traditional west European military powers is already showing many of the same
problems of other European attempts at defense cooperation. "There is" much talk about
"smart defense, burden sharing and so forth but not much more," one senior British
officer said on condition of anonymity. "But then, it is early days." Some analysts believe
the fledgling Franco-British alliance is already faltering amid obvious growing divisions
between the two on other issues within the European Union, for example over financial
regulation and the euro. Britain is facing particular challenges of its own. Having spent
the last decade focusing on supporting Washington in just the kind of wars the United
States now wants to avoid, it is seen once again struggling to find a new geopolitical
role. "The UK in particular finds itself in an awkward and uncomfortable position," said Kupchan. "If
the U.S. is going to reorientate itself toward Asia, then the special relationship with the
UK loses much of its salience." The former U.S. official said that this might be grounds for the
British government under Prime Minister David Cameron to seek a closer relationship with European
allies: "But Cameron's government seems to be taking the opposite approach," Kupchan
said. "There is a risk that Britain may simply end up isolated." WHAT THREAT? Behind both
the U.S. drawdown and Europe's questioning of its military future lies a simple truth Europe faces fewer security threats than at any point in its history. Eastern European
states might be nervous over the U.S. withdrawal and still fear former overlord Moscow.
But few serious strategists believe Russia represents any serious danger beyond
perennial threats to cut off winter oil and gas supplies. Some in Washington and
elsewhere would like to see the Europeans taking a much more activist role in nearby
parts of the Middle East. But after the mixed success of the Iraqi and Afghan
interventions, many others are unconvinced that such actions would make the world a
safer place. Though it might still seem a distant prospect, some believe Europe's greatest
threat may still come from within - the risk that financial crisis and economic hardship
could fuel violent ambitions at home, as it did in the 1930s. "If the economic crisis
continues to deepen, you cannot exclude the possibility of autocratic, xenophobic or
extremist regimes potentially coming to power in parts of Europe," said Valasek at the
Center for European Reform in London. "In that case, I think the U.S. would find itself getting involved in
Europe once again." If the coming decade is to be characterized by growing military build-up and
confrontation in Asia, however, it is hard to see Europe taking a significant role. In theory, British,
French and other long-range European warships could deploy alongside their U.S.
counterparts in any face-off with Beijing - but only in very small numbers that are
unlikely to make any substantial strategic difference. Yet that, some Europeans suggest, might
not be an entirely bad thing for a continent that twice in the last century dragged the wider world into
devastating global conflicts. "If there were to be a serious military confrontation between
the U.S. and China in the years to come, God forbid, the sidelines might be the most sensible
place to be," says Sam Perlo-Freeman, head of the military expenditure project at the
Stockholm International Peace Research Institute. "The new focus on Asia might pose
challenges the Europe. "But it also offers an opportunity for us to decide what we really want."
EU and US fail at cooperating- energy, Human rights and Climate change prove
Hamilton and Burwell 09- *Senior Analyst in Wikistrat’s Analytic Community Dr. Daniel Hamilton is the Austrian Marshall Plan Foundation Professor and
Director of the Center for Transatlantic Relations, named in annual surveys conducted by the University of Pennsylvania as the 6th leading “Global Go To University Think Tank” in 2011. He has
held a variety of senior positions in the U.S. Department of State, including Deputy Assistant Secretary for European Affairs, responsible for NATO, OSCE and transatlantic security issues,
**tlantic Council vice president, and director of the Program on Transatlantic Relations at the Atlantic Council. Her areas of expertise include US-EU relations and the development of the
European Union's foreign and defense policies, and a range of transatlantic economic and political issues. She is the principal author or rapporteur of several Atlantic Council publications
including Transatlantic Leadership for a New Global Economy; Transatlantic Transformation: Building a New NATO-EU Security Architecture; Law and the Lone Superpower: Rebuilding a
Transatlantic Consensus on International Law; and The Post-9/11 Partnership: Transatlantic Cooperation against Terrorism, (Daniel S. and Frances G., “Shoulder to Shoulder: Forging a Strategic
U.S.-EU Partnership”, December 2009, Atlantic Council of the United States Center for European Policy Studies Center for Strategic and International Studies Center for Transatlantic Relations,
Johns Hopkins University SAIS Fundacion Alternativas Prague Security Studies Institute Real Instituto Elcano Swedish Institute of International Affairs,
http://www.acus.org/files/publication_pdfs/65/US-EUPartnership.pdf, //CJD)
Sixth, we must renew our efforts to preserve a habitable planet, including improving the
human condition of those most impoverished and distressed. For decades we applied our
best strategic thinking to issues of deterrence and containment. Today, we must apply
that sort of strategic thinking to the challenges posed by humankind’s impact on our
earth. How we tackle the related issues of climate change, energy efficiency, resource
scarcity and human development will determine whether we will live securely in the
world of tomorrow. The U.S. and Europe have generally failed to approach the issues of
energy sustainability and climate change with anything like the foresight required.
Energy sustainability has largely been a matter of securing ever increasing quantities of
fuel. Only recently has the focus shifted to diversity of supply and alternatives to traditional
sources. In Europe, many governments continue to defend national energy companies,
despite the challenge they present to the integration of European energy markets.
Europe is ahead of the United States in terms of reducing carbon emissions (including
through energy efficiency), but to be truly effective, the efforts of the two major industrial
regions of the world should be coordinated. That is far from the case now. Moreover,
the U.S. and Europe cannot afford to be concerned only with their own energy needs
and environmental impact. Around the world, shortages of energy supplies and other
resources are a primary cause of tension and even conflict. The Nigerian delta offers a
vivid illustration of the violence and poverty that can accompany resource exploitation
and environmental degradation. The transatlantic partners will not be immune should
that region fall into chaos, as a growing percentage of their natural gas supplies comes
from this region. If predictions about the impact of climate change are at all accurate, the U.S. and
Europe will face even more challenges, not only as their own societies struggle to adapt,
but as others are overwhelmed by the pressures these trends have unleashed. Recent
decades have brought unparalleled progress for many parts of the world. But billions of
people have been left behind. Helping them break the cycle of poverty and despair is
not only the right thing to do; it is clearly in our self-interest. Impoverished regions can
represent great threats to America, Europe, and the world. We must work with the
people of these regions to promote sustainable economic growth, better health, good
governance and greater human security. Large-scale human disasters burden much of
today’s world. Humanitarian crises are immediate; too often they are manmade. We
must not only to react to them but also work to prevent them. Doing so will save lives
and money. If we can improve the collective machinery to carry out humanitarian
actions, we may be able to avoid having to choose between intervening militarily and
turning away in the face of massive human tragedy.
US-EU relations fail at operation- Arab Springs prove
Korteweg 13- senior research fellow, Centre for European Reform, (Rem, “The EU and transatlantic Relations”, March
2013, Centre for European reform,
http://www.cer.org.uk/sites/default/files/publications/attachments/pdf/2013/bal_comp_rk_eu_trans_15march13-7087.pdf,
//CJD)
At the political level, the annual EU-US summit is important on paper, yet disappoints in
reality. The EU-US relationship suffered a blow when President Obama cancelled the
summit in 2010. The relationship does not achieve its full potential because the United
States sees the EU mainly as a trade bloc, not as a credible political actor. But both sides
are to blame. The summit also fails to deliver due to a steadfast desire from EU countries
to maintain exclusive bilateral relations with Washington, instead of working through
Brussels. It also results from an unclear division of labour between the European Council
and the Commission on transatlantic affairs. At the most senior level the EU sends three
people to the summit – President Van rompuy, President Barroso and Highrepresentative Ashton – while the US sends one, the President. In order to avoid
Kissinger’s famous dilemma of ‘not knowing who to call in Europe’, the United States
supports greater European integration. The dilemma however, has still not been
satisfactorily resolved. In spite of positive developments, neither the EEAS nor its chief,
Lady Ashton, have enough clout to cajole the EU member-states to exclusively defer to
her and the bureaucracy she runs. The EU-US summits have generally focused on trade
and economic policy. While foreign policy issues are discussed – such as the Middle East
Peace Process and the ‘Arab Spring’ – they receive less attention. There are no on-going
strategic EU-US dialogues that deal with these issues. Nevertheless, the EU and
Washington do co-operate on global issues, formulating common approaches on
transnational issues such as human rights, internet freedom, non-proliferation and
strengthening of international regimes. Their common weight is often instrumental in
placing issues high on the international agenda. Common diplomatic positions yield the
promise of greater achievement and forewarn a strengthened role of the EU on the
international stage. For instance, the recent joint statement by then-Secretary Clinton and
Lady Ashton on Asia-Pacific security at the Asia regional Forum enjoyed strong UK
support. London realises that its foreign policy interests are at times best served
through the EU. After such promising statements however, the EU often fails to follow-up with
concerted action. EU-US relations would benefit from greater co-ordination among
different EU member states on strategic foreign policy issues. This particularly requires
greater co-ordination between Germany, France and the UK.2 European discord over
how to deal with Asia for instance, is impacting the ability of the EU to co-operate
closely with the US on the rise of China; an issue the UK feels strongly about.3 regarding
security issues, bilateral relations usually take precedence over EU-US co-operation.
Specific national security interests are not deferred to the European level. However, the
EU has achieved some success in the foreign policy domain alongside the US. For
instance, the EU and Washington worked together on Burma and the Iran sanctions
regime. In an increasingly complex and multipolar world, co-operation among a united
Europe and the United States has a better chance of defending British interests. Dissent
between the EU and its member states and the US is usually a recipe for diplomatic
failure, while common positions improve the prospects for success. The UK however, is
sometimes concerned that stronger EU-US co-operation will come at the expense of its
bilateral dealings with Washington. For instance, plans for a permanent EU seat in the UN
Security Council– which has some support in Washington - is met with resistance in
London as it would probably replace the UK’s seat. Generally however, such zero-sum thinking
is exaggerated. On his first trip overseas, Secretary John Kerry visited the UK, Germany, France
and Italy, side-stepping Brussels. It signals that the United States continues to see
bilateral relationships as the foundation for the transatlantic partnership. But the US
does have outspoken views about UK membership of the EU. President Obama has
made it clear he prefers that the UK play a strong role inside the European Union.
Washington considers the UK a key ally capable of contributing to EU reform aimed at
changing the organisation into a strong and capable partner of the US.
Add-Ons
AT: Deterrence Add-On
Manufacturing Strong Now
Manufacturing is growing at its fastest pace in years
Puzzanghera, 8/1 Jim, reporter for LA Times, 2013, http://www.latimes.com/business/money/la-fimo-ism-manufacturing-economy-20130801,0,7724106.story, “Manufacturing sector expanded in July at
fastest pace in two years,” ADM
WASHINGTON -- Factories heated up last month as the manufacturing sector expanded
at its fastest pace in two years, the Institute for Supply Management said Thursday. The
group's purchasing managers index jumped to 55.4 in July from 50.9 the previous month. It was the
second-straight month of improvement after the index fell to to 49.9 in May, a four-year low that
indicated the crucial economic sector had contracted. A reading above 50 indicates that
manufacturing businesses are expanding. The July figure exceeded analyst
expectations for a more modest rise and was the highest since June 2011. The index gained in
all its major categories last month. The employment figure, a gauge of industry hiring, rebounded
into expansion territory at 54.4 after dropping to 48.7 in June. July's reading was the strongest since
June 2012. The production index soared to 65, its highest level since 2004. The new
orders index, a read on future activity, also jumped significantly to 58.3, a more than two-year high. Of
the 18 industries the index tracks, 13 reported growth in July, including transportation equipment and
computers and electronics. Four reported contracting in July, including the apparel industry. The strong
ISM report comes after other positive economic data in recent days, particularly the goverment's report
that the economy expanded at a 1.7% annualized rate in the second quarter. Though still weak, the
growth rate was better than anticipated in the face of this year's tax increases and federal
spending cuts.
AT: Deterrence
Manufacturing is inevitable, even if it’s not located in America – domestic
manufacturing is not key to deterrence
Reich, 09 Robert, former U.S. Secretary of Labor, is professor of public policy at the University of
California at Berkeley. His latest book is Supercapitalism, 5/28,
http://www.forbes.com/2009/05/28/robert-reich-manufacturing-business-economy.html,
“Manufacturing Jobs Are Never Coming Back” | ADM
It doesn’t make sense for America to try to enlarge manufacturing as a portion of the
economy. Even if the U.S. were to seal its borders and bar any manufactured goods from coming
in from abroad–something I don’t recommend–we’d still be losing manufacturing
jobs. That’s mainly because of technology. When we think of manufacturing jobs, we tend to imagine
old-time assembly lines populated by millions of blue-collar workers who had well-paying jobs with good
benefits. But that picture no longer describes most manufacturing. I recently toured a U.S. factory
containing two employees and 400 computerized robots. The two live people sat in front of computer
screens and instructed the robots. In a few years this factory won’t have a single employee on site,
except for an occasional visiting technician who repairs and upgrades the robots. Factory jobs are
vanishing all over the world. Even China is losing them. The Chinese are doing more manufacturing
than ever, but they’re also becoming far more efficient at it. They’ve shuttered most of the old state-run
factories. Their new factories are chock full of automated and computerized machines . As a
result, they don’t need as many manufacturing workers as before. Economists at Alliance
Capital Management took a look at employment trends in twenty large economies and found that
between 1995 and 2002–before the asset bubble and subsequent bust–twenty-two million
manufacturing jobs disappeared. The United States wasn’t even the biggest loser. We lost about 11% of
our manufacturing jobs in that period, but the Japanese lost 16% of theirs. Even developing nations lost
factory jobs: Brazil suffered a 20% decline, and China had a 15% drop. What happened to
manufacturing? In two words, higher productivity. As productivity rises, employment
falls because fewer people are needed. In this, manufacturing is following the same trend as
agriculture. A century ago, almost 30% of adult Americans worked on a farm. Nowadays, fewer than
5% do. That doesn’t mean the U.S. failed at agriculture. Quite the opposite. American agriculture is a
huge success story. America can generate far larger crops than a century ago with far fewer people. New
technologies, more efficient machines, new methods of fertilizing, better systems of crop rotation, and
efficiencies of large scale have all made farming much more productive. Manufacturing is analogous. In
America and elsewhere around the world, it’s a success. Since 1995, even as manufacturing employment
has dropped around the world, global industrial output has risen more than 30%. We should stop
pining after the days when millions of Americans stood along assembly lines and
continuously bolted, fit, soldered or clamped what went by. Those days are over. And stop
blaming poor nations whose workers get very low wages. Of course their wages are low; these nations
are poor. They can become more prosperous only by exporting to rich nations. When America blocks
their exports by erecting tariffs and subsidizing our domestic industries, we prevent them from doing
better. Helping poorer nations become more prosperous is not only in the interest of humanity but also
wise because it lessens global instability. Want to blame something? Blame new knowledge. Knowledge
created the electronic gadgets and software that can now do almost any routine task. This goes well
beyond the factory floor. America also used to have lots of elevator operators, telephone operators,
bank tellers and service-station attendants. Remember? Most have been replaced by technology.
Supermarket check-out clerks are being replaced by automatic scanners. The Internet has taken over the
routine tasks of travel agents, real estate brokers, stock brokers and even accountants. With digitization
and high-speed data networks a lot of back office work can now be done more cheaply abroad. Any job
that’s even slightly routine is disappearing from the U.S. But this doesn’t mean we are left
with fewer jobs. It means only that we have fewer routine jobs, including traditional manufacturing.
When the U.S. economy gets back on track, many routine jobs won’t be returning–but new jobs will take
their place. A quarter of all Americans now work in jobs that weren’t listed in the Census Bureau’s
occupation codes in 1967. Technophobes, neo-Luddites and anti-globalists be warned: You’re on the
wrong side of history. You see only the loss of old jobs. You’re overlooking all the new ones. The reason
they’re so easy to overlook is that so much of the new value added is invisible. A growing percent of
every consumer dollar goes to people who analyze, manipulate, innovate and create. These people are
responsible for research and development, design and engineering. Or for high-level sales, marketing
and advertising. They’re composers, writers and producers. They’re lawyers, journalists, doctors and
management consultants. I call this “symbolic analytic” work because most of it has to do with
analyzing, manipulating and communicating through numbers, shapes, words, ideas. Symbolic-analytic
work can’t be directly touched or held in your hands, as goods that come out of factories can be. In fact,
many of these tasks are officially classified as services rather than manufacturing. Yet almost whatever
consumers buy these days, they’re paying more for these sorts of tasks than for the physical material or
its assemblage. On the back of every one of Apple’s iPods is the notice “Designed by Apple in California,
Assembled in China.” You can bet iPod’s design garners a bigger share of the iPod’s purchase price than
its assembly. Symbolic analysts have been hit by the current downturn, just as everyone else has. But
over the long term, symbolic analysts will do just fine–as long as they stay away from job functions that
are becoming routinized. They will continue to benefit from economic change. Computer technology
gives them more tools for thinking, creating and communicating. The global market gives them more
potential customers for their insights. To be sure, symbolic analysts are popping up all over the world.
More than half of all Fortune 500 companies say they’re outsourcing some software development or
expanding their own development centers outside the U.S. But apart from recessions, demand for
symbolic analysts in the U.S. will continue to grow faster than the supply. The nations with the highest
percentages of their working populations doing symbolic-analytic tasks will have the highest standard of
living and be the most competitive internationally. America’s biggest challenge is to educate more of our
people sufficiently to excel at them. We do remarkably well with the children from relatively affluent
families. Our universities are the envy of the world. Entire regions specialize in one or another kind of
symbolic analytic work–Los Angeles for music and film, Silicon Valley for software and the Internet,
greater Boston for bio-medical engineering, and New York, until recently, for finance. But we’re in
danger of losing ground because too many of our kids, especially those from lower-middle class and
poor families, can’t get the education they need. They’re getting low-paid jobs in the local service
economy–in retail stores, restaurant outlets, hotels and hospitals. Some argue that even if I’m correct
about all this, the erosion of traditional manufacturing impedes the capacity of Americans
to learn these symbolic-analytic tasks, because such learning depends on an intimate
understanding of the assembly process. This may be true for a few of these tasks: Manufacturing
engineers surely need to know manufacturing inside out, and some design engineers need
that knowledge as well. But most symbolic analysts do not. Whatever they need to learn about
manufacturing assembly can usually be discovered on line. Others argue we need more
manufacturing assembly operations in the U.S. because our national security depends
on it. That seems doubtful. U.S. military contractors subcontract all over the world.
As long as they diversify their sources so as not to be dependent on one location or country, we’re safe.
In the unlikely event that much of the rest of the world where manufacturing is now
done suddenly turns on us, we can create the factories and equipment we need . We’ve
mobilized for war before, quite successfully.
Deterrence Fails
Political factors and perception of weakness undermines conventional
deterrence
Gerson, 09 Michael S., research analyst at the Center for Naval Analyses, a federally funded research
center in Alexandria, Va., where his research focuses on deterrence, nuclear strategy,
counterproliferation, missile defense, and arms control. He is a graduate of the University of Texas and
the University of Chicago, Autumn, Parameters,
http://strategicstudiesinstitute.army.mil/pubs/parameters/Articles/09autumn/gerson.pdf,
“Conventional Deterrence in the Second Nuclear Age” | ADM
Credibility, according to Sir Lawrence Freedman, is the “magic ingredient” of
deterrence.44 Deterrence credibility is a function of an adversary’s assessment of a
nation’s military capability and political resolve. For deterrence to be credible, an adversary has
to believe that the United States has both the military capability and the political willpower to carry out
its announced objectives.45 Of all the concepts and theories associated with deterrence, the issue of
how to demonstrate or signal credibility has been the dominant theme in academic and
policy literature. Whereas in the nuclear context discussions about deterrence credibility have centered
on political willpower and resolve, in conventional deterrence the issue of credibility has focused on the
military capabilities component of the credibility equation. The almost exclusive emphasis on resolve for
credible nuclear deterrence and on capabilities for credible conventional deterrence is the result of the
inherent differences between nuclear and conventional weapons. There is little doubt that nuclear
weapons are extremely destructive. The pertinent question for credible nuclear deterrence is
not whether one can inflict significant costs for unwanted actions (assuming, of course, that
the nuclear forces are survivable and there are appropriate command, control, and communications),
but rather whether one will use nuclear weapons, since the execution of the threat might risk
retaliation in kind. As Herman Kahn argued, in the nuclear are-na “credibility depends on being willing to
accept the other side’s retaliatory blow. It depends on the harm he can do, not the harm we can do.”46
In the conventional setting, it has been advocated that the situation is essentially reversed. Given the
comparatively limited power of conventional weapons, an adversary may doubt whether conventional
forces are capable of denying a rapid victory or inflicting the associated costs that outweigh the benefits
of aggression. As Richard Harknett explains: The nature of conventional forces invites
skepticism at a level that few deterrence theorists have emphasized—that of
capability. Due to the contestable nature of conventional forces, it is a state’s capability to inflict
costs that is most likely to be questioned by a challenger. In a conventional environment, the issue of
credibility is dominated by suspicions about the capability to inflict costs rather than on the decision to
inflict costs . . . . In the end, a state evaluating a conventional deterrent can assume that the deterrer
will retaliate. The pertinent question is how costly that response will be.47The importance of the
credibility of US conventional capabilities remains relevant. Future adversaries may
discount conventional threats in the mistaken belief that they could circumvent US forces
via a fait accompli strategy or otherwise withstand, overcome, or outmaneuver the United States on the
conventional battlefield. But a singular focus on the capabilities part of the credibility equation misses
the critical importance of an adversary’s judgment of US political resolve. In future conventional
deterrence challenges, perceptions of US political willpower are likely to be as important for deterrence
credibility as military capabilities. One of the key challenges facing the United States in future
conventional deterrence contingencies is the perception that American public
and political leaders are highly sensitive to US combat casualties and civilian
collateral damage.48 Regardless of the actual validity of this belief—and there is some evidence
suggesting that the US public is willing to tolerate casualties if the conflict is viewed as legitimate or the
public believes the United States has a reasonable chance of prevailing49—this view appears to be
relatively widespread.50 If conventional deterrence is largely based on the threat to rapidly
engage the opponent’s forces in combat, then the credibility of this threat depends on
an opponent’s belief that the United States is willing to accept the human and fiscal
costs of conventional conflict. Consequently, perceptions of casualty sensitivity can undermine the
credibility and potential success of conventional deterrence. A nation might be more inclined to
attempt regional aggression if it believes that a sufficient US military response would be
hindered or prevented by the political pressures associated with America’s alleged aversion to
casualties.
AT: Drug Cartels Add-On
Reforms Solve
Nieto’s reforms ensure economic and political stability in mexico
Casey, 13 Nicholas, Reporter, The Wall Street Journal, 3/12,
http://online.wsj.com/article/SB10001424127887323826704578356641370976554.html, “Mexico
Leader's Next Push Is to Tackle Energy” | ADM
Now the president is setting his sights on another major goal: An overhaul of the
energy sector and state-run Petróleos Mexicanos, one of the world's biggest oil firms, whose
output is slipping. He proposes to change the law to attract foreign investors—an about-face for a
country that once nationalized its oil and barred foreign participation by constitutional amendment.
"Mexico was long viewed as a stable country but one that was marred by lots of security
concerns," said Gray Newman, Morgan Stanley's MS -0.25% chief Latin America economist. "But now
it's seen as a leader among emerging markets on the reform front." To be sure,
Mr. Peña Nieto's reforms depend on the continued support of Mexico's three political parties,
which are often fractious. When Mexico transitioned out of one-party rule in 2000, the country's
political establishment disintegrated. State governors refused to cooperate with presidents for the first
time; Mr. Peña Nieto's Institutional Revolutionary Party, the PRI, then in the opposition, even blocked
many measures it now supports. There is also the issue of enforcement. Mexico has a long history of
laws on the books that authorities fail to implement and powerful interests manage to circumvent. But
there are signs that Mr. Peña Nieto has found a workable solution with Mexico's lawmakers,
Mexican politicians say. Shortly after taking office, he signed the so-called Pact for Mexico, an
accord with Mexico's three main political parties, which includes wide-ranging reform
goals to be achieved during his term in office. Members of Mr. Peña Nieto's opposition say they
are inclined to cooperate. Alejandra Barrales, a senator from the leftist Party of the Democratic
Revolution, who helped negotiate the pact for her party, said she felt "the PRI is open to
negotiation.…They want to get the reforms." On Tuesday, ratings agency Standard & Poor's moved
Mexico's debt ratings outlook to "positive" from "stable," saying energy reform was
now looking likely. Mr. Peña Nieto, the agency said, was pushing through overhauls that
escaped his predecessors "due in part to the president's stronger political power." In trying to overhaul
the telecom sector, education, labor and energy, Mr. Peña Nieto is taking on many of Mexico's sacred
cows. In trying to do so, he has the professed support of large majorities in Congress.
AT: Drug Cartels
Anti-cartel efforts fail – empirics prove
Couto, 13 Andrew, Senior Thesis submitted in partial fulfillment of the requirements for graduation in
the Honors Program Liberty University, Spring,
http://digitalcommons.liberty.edu/cgi/viewcontent.cgi?article=1373&context=honors, “Mexican Drug
Cartels - Significance and Potential Impact on the United States” | ADM
the United States and Mexican governments need to develop solutions to the drug
problem in Mexico (not to mention the U.S. drug problem). This, however, is easier said than done. After 30
years of struggling against drug organizations’ activities, the U.S. and Mexico often have very little to show
for their respective “wars.” The struggle against drugs is an interminable struggle. A sense of impossibility can become
pervasive. Beith writes on this: “Most Mexican officials concede that it will be impossible to eradicate the
drug problem entirely. Their best hope is to make Mexico so difficult for drug traffickers to navigate that they are forced to go
Both
elsewhere” (2012, p. 31). While implementing solutions, it is important that neither nation’s government allow impositions on the personal rights of its citizens in
The militaristic approach that Cave, Zabludovsky, and Archibold (2012) predict Peña Nieto will
continue to implement against drug cartels is not effective and must be abandoned
the name of the common good.
for other possible solutions. The rest of this section will discuss various proposed measures to fight the rug problem, analyzing benefits and disadvantages. At the
One of the best proposed solutions to both the drug problem of Mexico and the United States is
demand reduction. This is also the hardest to implement. United States demand drives drug
end, a blended approach will be suggested.
traffickers in the U.S. and in Mexico. Without that demand, drug traffickers would seek other more lucrative businesses and drug-related violence would diminish.
the majority of drugs that traffickers pass through Mexico are not intended for
Mexican clientele, but U.S. citizens who will pay more (2002). This reduction has to occur in the heaviest users of
Recio argues that
drugs. Kleiman argues that 80 percent of drugs are consumed by the minority of heaviest users and thus believes that “reducing the demand for cannabis or the
Affecting demand reduction
in this U.S. clientele would cause the drug trade to diminish. However, government can only judge its citizens’
demand for cocaine among casual cocaine users cannot reduce the northbound flow of drugs” (2011, p. 92 ).
actions, not their thoughts. Hypothetically, a government could make the punishment harsher and harsher for drug-related activity, and if the internal demand of
the individual remains, that person will still engage in drug-related activity. Thus,
pure demand reduction is an internal, moral
initiative, not a government one. The solution touching upon demand reduction which the government can impact is viewing drug use as
a public health issue.
Empirically denied — drug trafficking organizations have operated in Mexico
for more than a century – don’t cause instability.
Beittel, 13 June S., Analyst in Latin American Affairs, Congressional Research Service, 4/15,
http://www.fas.org/sgp/crs/row/R41576.pdf, “Mexico’s Drug Trafficking Organizations: Source and
Scope of the Violence” | ADM
Drug trafficking organizations have operated in Mexico for more than a century.
The DTOs can be described as global businesses with forward and backward linkages for
managing supply and distribution in many countries. As businesses, they are concerned with
bringing their product to market in the most efficient way in order to maximize their profits.
The Mexican DTOs are the major wholesalers of illegal drugs in the United States and are
increasingly gaining control of U.S. retail level distribution through alliances with U.S. gangs. Their
operations, however, are markedly less violent in the United States than in Mexico
despite their reported presence in more than 1,000 U.S. cities.26 The DTOs use the tools of bribery and
violence, which are complementary. Violence is used to discipline employees, enforce transactions, limit
the entry of competitors, and coerce. Bribery and corruption help neutralize government action against
the DTOs, ensure impunity, and facilitate smooth operations.
AT: Resource Wars Add-On
Trade Doesn’t Solve
Regional trade has competing peace creation and peace diversion effects –
doesn’t prevent conflict overall
Hadjiyiannis et al, 12 Costas, Department of Economics, University of Cyprus, and Maria S.
Heracleous, University of Cyprus, and Chrysostomos Tabakis, NOVA School of Business and Economics,
Universidade Nova de Lisboa, April, http://businessschool.exeter.ac.uk/media/universityofexeter/businessschool/documents/events/Hadjiyiannis.pdf,
“Regionalism and Conáict: Peace Creation and Peace Diversion” | ADM
We find that PTAs lead to a peace creation and a peace diversion effect. Peace creation is
the reduction in the probability of conflict between members of a FTA or a CU. Regionalism
increases peacetime welfare due to free trade between members and the improved terms of trade
between members and non-members. This increases the opportunity cost of conflict and
therefore reduces the possibility of war. This seems to be what the founders of the EU envisioned and
what the EU itself still presents as the key reason for its creation. However, just as in the case of trade
creation and trade diversion, peace creation is accompanied by peace diversion.
In other words, regionalism increases the possibility of a non-member country starting a
war because regionalism reduces the gains from trade due to the worsened terms of
trade with member countries. The paper contributes to the literature in two ways. First it is the
first paper to explicitly model and identify the peace diversion effect and second it is the
first paper to endogeneize the gains from trade including trade policy by considering large
countries.
No Resource Wars
No resource wars – countries are too dependent on each other to attack for
resources
Barnett, 12 Thomas P. M., worked in US national security circles since the end of the Cold War,
starting first with the Department of Navy's premier think tank, the Center for Naval Analyses. From
there he moved to serve as a senior researcher and professor at the Naval War College in Newport RI,
where he became a top assistant to Vice Admiral Arthur Cebrowksi - the father of "network-centric
warfare." After 9/11, Barnett served in Cebrowski's Office of Force Transformation in the Office of the
Secretary of Defense as the Assistant for Strategic Futures. He developed a famous PowerPoint brief on
the subject of globalization and international security, which later morphed into a New York Timesbestseling book, "The Pentagon's New Map: War and Peace in the Twenty-First Century" (2004). Since
leaving government service in 2005, Dr. Barnett has amassed a number of duties in the private sector:
running his own consultancy, Barnett Consulting LLP; 5/29, http://nation.time.com/2012/05/29/deathto-resource-wars/, “Death to “Resource Wars”!” | ADM
Nice Washington Post piece on Saturday about how the “center of gravity” in global oil exploration and
production is shifting to the Western hemisphere. No, the bulk of global conventional oil reserves still
sits in the Persian Gulf, but the larger point is worth exploring: we no longer project global futures
where East and West logically fight over Middle East energy reserves. Those expected
long-term dynamics are collapsing right now before our eyes. It’s not just the
new conventional oil finds in the Americas, but the lifting of unconventional reserves (so-called
tight oil). Then there’s the “fracking revolution” in natural gas that favors the Western Hemisphere in a
big, big way, because four of the top seven reserves in the world (U.S., Argentina, Mexico, Canada) are
found here. The fracking revolution kicks off two additional mini-revolutions in energy: the accelerated
shift to natural gas-powered vehicles, reducing the oil demand even further, and the displacement of
coal in electricity generation frees up the cleanest and most high-quality coal in the world for export to
Asia, where electricity demand is skyrocketing. So here’s the geo-strategic reality shaping up: the
Western Hemisphere doesn’t need the Persian Gulf, which is source #5 to the U.S. market,
after the U.S. itself, North America, South America and Africa. But not only is the U.S. increasingly
less worried about the Persian Gulf and more willing — logically — to let that become
Asia’s problem to manage (it’s their oil after all, as more than half of it heads their way now, and
that percentage will only grow), it also becomes a trusted and important energy supplier to
Asia (liquid natural gas and coal over time). Toss in China’s growing food reliance on the
Western Hemisphere, which only grows with that nation’s middle class, and the climate
change that makes it harder to grow food over there, and we’re looking at a global
future in which China and the U.S. are intertwined in basic resource dependencies: they need our
food and energy, and we need their savings. Those realities are already firmly in place: the
Western hemisphere largely feeds the Eastern one in terms of major grain flows (reflecting underlying
water-resource realities), and Asia has been the primary saver in the global financial system for several
decades now. So no, there is no civilizational fight over the Middle East. All that
imagined nonsense falls by the wayside. Likewise, the “strategic pivot” pursued by the U.S.
today is a complete whiff in strategic terms. Globalization has already “conquered”
East Asia, creating the vast and inescapable interdependencies described here. That “battle,”
however you want to describe it, is already over.
AT: U.S. Economy Add-On
U.S.-Mexico Trade Not Key
(additional materials in other Mexico negative files—this is copied from the
Border Infrastructure Negative)
Trade with Mexico isn’t key to the economy — it’s a small percentage of the
GDP and their authors conflate correlation with causation
Villarreal 12 — M. Angeles Villarreal, Specialist in International Trade and Finance (M. Angeles
Villarreal, Congressional Research Service, 08-09-2012, “U.S.-Mexico Economic Relations: Trends, Issues,
and Implications”, http://www.fas.org/sgp/crs/row/RL32934.pdf, Accessed 08-02-2013 | AK)
Effects on the U.S. Economy
The overall effect of NAFTA on the U.S. economy has been relatively small, primarily
because two-way trade with Mexico amounts to less than 3% of U.S. GDP. Thus,
any changes in trade patterns with Mexico would not be expected to be
significant in relation to the overall U.S. economy. In some sectors, however, trade-related
effects could be more significant, especially in those industries that were more exposed to the removal
of tariff and non-tariff trade barriers, such as the textile and apparel, and automotive industries. Since
NAFTA, the automotive, textile, and apparel industries have experienced some of the more noteworthy
changes in trading patterns, which may also have affected U.S. employment in these industries. U.S.
trade with Mexico has increased considerably more than U.S. trade with other countries, and Mexico
has become a more significant trading partner with the United States since NAFTA implementation. In
the automotive industry, the industry comprising the most U.S. trade with Mexico, NAFTA provisions
consisted of a phased elimination of tariffs, the gradual removal of many non-tariff
barriers to trade including rules of origin provisions, enhanced protection of intellectual property
rights, less restrictive government procurement practices, and the elimination of performance
requirements on investors from other NAFTA countries. These provisions may have
accelerated the ongoing trade patterns between the United States and Mexico. Because the
United States and Canada were already highly integrated, most of the trade impacts on
the U.S. automotive industry relate to trade liberalization with Mexico. Prior to NAFTA
Mexico had a series of government decrees protecting the domestic auto sector by reserving the
domestic automobile market for domestically produced parts and vehicles. NAFTA established the
removal of Mexico’s restrictive trade and investment policies and the elimination of U.S. tariffs on autos
and auto parts. By 2006, the automotive industry has had the highest dollar increase ($41 billion) in total
U.S. trade with Mexico since NAFTA passage. The main NAFTA provisions related to textiles and apparel
consisted of eliminating tariffs and quotas for goods coming from Mexico and eliminating Mexican
tariffs on U.S. textile and apparel products. To benefit from the free trade provision, goods were
required to meet the rules of origin provision, which assured that apparel products that were traded
among the three NAFTA partners were made of yarn and fabric made within the free trade area. The
strict rules of origin provisions were meant to ensure that U.S. textiles producers would continue to
supply U.S. apparel companies that moved to Mexico. Without a rules of origin provision, apparel
companies would have been able to import low-cost fabrics from countries such as China and export the
final product to the United States under the free trade provision.51 While some U.S. industries
may have benefitted from increased demand for U.S. products in Mexico, creating new
jobs, other industries have experienced job losses. Data on the effects of trade
liberalization with Mexico are limited and the effect on specific sectors of the U.S.
economy is difficult to quantify. Trade-related job gains and losses since NAFTA may
have accelerated trends that were ongoing prior to NAFTA and may not be totally
attributable to the trade agreement.52 Quantifying these effects is
challenging because of the other economic factors that influence trade and
employment levels. The devaluation of the Mexican peso in 1995 resulted in lower Mexican wages,
which likely provided an incentive for U.S. companies to move to lower their production costs. Traderelated employment effects following NAFTA could have also resulted from the lowering of
trade barriers, and from the economic conditions in Mexico and the United States influencing
investment decisions and the demand for goods.
Offcase
U.S.-Mexico Trade Bad DA
This is probably better read on the case as a turn to the Mexico Manufacturing advantage.
1nc – U.S.-Mexico Trade Bad DA
Trade between the U.S. and Mexico crushes American jobs.
Duckworth 12, Catie Duckworth, Research Associate at the Council on Hemispheric Affairs , 6/18/12,
"The Failures of NAFTA", www.coha.org/the-failures-of-nafta/ Mollie
Failures for the United States In 1992, Gary Hufbauer, a NAFTA enthusiast from the Institute of
International Economics, predicted that “NAFTA will generate a $7 to $9 billion [USD] surplus that would
ensure the net creation of 170,000 jobs in the U.S. economy the first year.”(5) However, quite the
opposite occurred; the U.S. trade deficit with both Mexico and Canada increased, costing
the United States an estimated 150,000 jobs in 1994 alone.(6) According to the United States
Census Bureau, while the United States actually had a trade surplus with Mexico of
approximately $1 billion USD in both 1993 and 1994, by 2007 the growing trade deficit
with Mexico had reached an all-time high, at $74 billion USD.(7) Although U.S. exports to
Mexico did increase slightly under NAFTA, the U.S. encountered the new problem of “revolving door
exports.” Most U.S. exports to Mexico have consisted of mechanical parts, which are used
to assemble goods in Mexican factories that are then imported back into the United
States for cheap, a process known as the maquiladora system. Such exports have doubled since the
implementation of NAFTA, leading only to more imports from Mexico and a deepening trade deficit.(8)
The combination of increased imports from Mexico and a growing trade deficit have led
to job losses, mostly in high-wage, non-college-educated manufacturing positions, in all 50 U.S.
states and the District of Colombia.(9) When these displaced American workers later re-enter
the job market, they find difficulty securing new jobs and often have to settle for
markedly lower wages. As of March 2011, the United States has lost approximately 700,000
jobs due to disruptions in supply chains brought about by NAFTA.(10)
It also crushes Mexican jobs — increasing poverty and turning their economy
impact.
Duckworth 12, Catie Duckworth, Research Associate at the Council on Hemispheric Affairs , 6/18/12,
"The Failures of NAFTA", www.coha.org/the-failures-of-nafta/ Mollie
Failures for Mexico Although NAFTA has been detrimental for the United States, the free trade
agreement has been far worse for Mexico. While proponents touted NAFTA as ostensibly a
beneficial social policy, the income gap in Mexico has in fact widened since NAFTA’s
implementation, with this development creating even more poverty in a country already
afflicted with the concentration of wealth in too few hands. The poverty rate in Mexico rose from
45.6 percent in 1994 to 50.3 percent in 2000, and the number continues to climb.(11) In
2010, the World Bank reported the most recent poverty rate in Mexico at 51.3
percent.(12) Perhaps the most devastating blow dealt by NAFTA to the Mexican economy
was the near destruction of Mexico’s agricultural sector, in which 2 million farm workers
lost their jobs and 8 million small-scale farmers were forced to sell their land at
disastrously low prices, or desert it, due to sharply declining food prices.(13) Importantly,
the U.S. government subsidizes many domestically produced agricultural products,
allowing the products to be sold to Mexico at prices 30 percent below the cost of production.(14) Thus,
after NAFTA’s inauguration, U.S. agricultural exports crowded out Mexican agriculture produce, and the
United States became the main food supplier of Mexico. In one case, U.S. corn exports, by maintaining
subsidized prices, have all but rendered Mexican corn cultivation obsolete and non-competitive. Corn,
or maize, had been one of the main crops and an integral part of the identity of the Mexican people
since pre-Columbian days, but due to subsidized U.S. agricultural products, this tradition has all but
come to an end. Thus, NAFTA has not only negatively impacted Mexico’s economy, but also altered its
national identity by infringing on ancestral traditions.
2nc – impact – culture
Destroys Mexican culture – agriculture industry and ancestral ties
Duckworth 12, Catie Duckworth, Research Associate at the Council on Hemispheric Affairs , 6/18/12,
"The Failures of NAFTA", www.coha.org/the-failures-of-nafta/ Mollie
Failures for Mexico Although NAFTA has been detrimental for the United States, the free trade
agreement has been far worse for Mexico. While proponents touted NAFTA as ostensibly a beneficial
social policy, the income gap in Mexico has in fact widened since NAFTA’s implementation, with this
development creating even more poverty in a country already afflicted with the concentration of wealth
in too few hands. The poverty rate in Mexico rose from 45.6 percent in 1994 to 50.3 percent in 2000,
and the number continues to climb.(11) In 2010, the World Bank reported the most recent poverty rate
in Mexico at 51.3 percent.(12) Perhaps the most devastating blow dealt by NAFTA to the Mexican
economy was the near destruction of Mexico’s agricultural sector, in which 2 million farm workers lost
their jobs and 8 million small-scale farmers were forced to sell their land at disastrously low prices, or
desert it, due to sharply declining food prices.(13) Importantly, the U.S. government subsidizes many
domestically produced agricultural products, allowing the products to be sold to Mexico at prices 30
percent below the cost of production.(14) Thus, after NAFTA’s inauguration, U.S. agricultural exports
crowded out Mexican agriculture produce, and the United States became the main food supplier of
Mexico. In one case, U.S. corn exports, by maintaining subsidized prices, have all but
rendered Mexican corn cultivation obsolete and non-competitive. Corn, or maize, had
been one of the main crops and an integral part of the identity of the Mexican people
since pre-Columbian days, but due to subsidized U.S. agricultural products, this tradition
has all but come to an end. Thus, NAFTA has not only negatively impacted Mexico’s
economy, but also altered its national identity by infringing on ancestral traditions.
Cultural diversity prevents extinction.
Lam 2000 [Maivan Clech, Associate Professor at American University Washington College of Law, At
The Edge of the State: Indigenous Peoples and Self-Determination, p. 205-206]
Nevertheless, as anthropologists know, ethnicity is both an enabling and an inescapable
condition of human existence. It is a collective system of meaning that generates social energy
which can be put to constructive and destructive uses equally. Stavenhagen writes: Cultures are
complex patterns of social relationships, material objects, and spiritual values that give
meaning and identity to community life and are a resource for solving the problems of
everyday life. That some very ugly campaigns in modern history, usually unleashed by the destructive
economic and military policies of the world’s powerful states, have tapped, frighteningly successfully,
into ethnic energy is undeniable. But it is just as undeniable that knowledge—of the universe,
of a specific part of it, of workable social relationships, of human nature—that is crucial
to the project of human survival remains separately encoded in the distinctive cultures of ethnic
groups. No human community or ethnic group can construct an informed and meaningful future if it is
cut off from its cultural past. And alienation from meaning, as much as exploited meaning,
can lead to violence.
2nc – no offense
No offense – offshoring and comparative loss outweighs
Duckworth 12, Catie Duckworth, Research Associate at the Council on Hemispheric Affairs , 6/18/12,
"The Failures of NAFTA", www.coha.org/the-failures-of-nafta/ Mollie
Due to the decline in the competitiveness of Mexican agricultural products, the rural population has
been pushed from the countryside into the cities to seek employment in the booming
manufacturing sector, one of the many paradoxical consequences of NAFTA. Many American
corporations took advantage of this plethora of cheap labor and constructed factories
along the U.S.-Mexico border, creating the maquiladora system. While these factories, or
maquilas, created 1.3 million jobs in the export-manufacturing sector, they still were not able to
counterbalance jobs lost in the agricultural sector, and it was not long before foreign competition
threatened these newly created jobs.(15) Since 2001, one third of all NAFTA-created
manufacturing jobs in Mexico have disappeared as North American corporations
continue to offshore operations to China, where manufacturing wages are about an eighth of
those in Mexico.(16) Although NAFTA is not the only cause of the economic distress Mexico has faced in
the past decade, the economic pact failed to generate a Mexican economy capable of
competing in a global market, thus negating what little economic benefit it brought
Mexico.
2nc – laundry list
Causes mass starvation, drug violence and decreased human rights conditions
Duckworth 12, Catie Duckworth, Research Associate at the Council on Hemispheric Affairs , 6/18/12,
"The Failures of NAFTA", www.coha.org/the-failures-of-nafta/ Mollie
Moreover, even with the creation of new manufacturing jobs, Mexican living conditions have
consistently declined since NAFTA’s advent. In the pact’s first five years, real wages in
Mexico fell by 20 percent, and workers in the manufacturing sector now earn about a fourth of
their pre-NAFTA wages.(17) Additionally, the prices of most goods in Mexico have significantly
increased. The cost of tortillas, which represent 75 percent of the daily caloric intake for
Mexico’s poor, increased by 571 percent in the first six years of NAFTA, rendering meager
wages even more insufficient than before NAFTA’s implementation(18) and making it increasingly
difficult for families to meet basic needs. Wage disparities between Americans and Mexicans
have also widened. In 1994, Mexicans earned 23 percent of what Americans earned overall; by 2006,
the differential had dropped to 12 percent.(19) With this wage reduction, the lower class in
Mexico has expanded, pushing more poverty-stricken individuals into areas that were
already troubled by inadequate housing, healthcare, and public safety,(20) and generating
further problems for the Mexican state, such as drug violence and urban sprawl.
Human rights solve extinction.
Rhonda Copelan, Professor of Law – NYU, New York City Law Review, 1999, p. 71-2
The indivisible human rights framework survived the Cold War despite U.S. machinations to
truncate it in the international arena. The framework is there to shatter the myth of the superiority.
Indeed, in the face of systemic inequality and crushing poverty, violence by official and private
actors, globalization of the market economy, and military and environmental depredation, the
human rights framework is gaining new force and new dimensions. It is being broadened
today by the movements of people in different parts of the world, particularly in the Southern
Hemisphere and significantly of women, who understand the protection of human rights as a matter
of individual and collective human survival and betterment. Also emerging is a notion of thirdgeneration rights, encompassing collective rights that cannot be solved on a state-by-state basis and
that call for new mechanisms of accountability, particularly affecting Northern countries. The emerging
rights include human-centered sustainable development, environmental protection, peace, and security.
Given the poverty and inequality in the United States as well as our role in the world, it is
imperative that we bring the human rights framework to bear on both domestic and
foreign policy.
Canada CP
The United States federal government and the government of Canada should
include Mexico in a joint trade agreement with the European Union
This solves
Marowits 6/12 (Ross, The Canadian Press Reporter, Edmonton Journal, June 12, 2013, “North American free trade agreement with
Europe needed, says ex-Mexican diplomat,”
http://www.edmontonjournal.com/business/North+American+free+trade+agreement+with+Europe+ne
eded+says/8514844/story.html, alp)
efforts to strike free trade deals with Europe must eventually be
harmonized into a North American agreement involving Mexico, a former Mexican diplomat said
Wednesday. "I know this creates a lot of heartburn in...Washington, but eventually that has to be the step forward," Arturo Sarukhan
told an economic conference in Montreal. The former ambassador to the United States
said that a continental trade deal is needed to synchronize rules between the E uropean
Union and the NAFTA countries — Canada, United States and Mexico. Failing to bind together three
parallel trade processes will cause disruptions to North American supply chains and
trade with Europe, he said. That could hurt the automotive and aerospace industries, for
example, because European and North American companies operate on both continents. "Just imagine
what will happen about access to market, exports, rules of origin if you've got three
separate parallel treaties (with Europe) instead of one that encompasses the three partners," Sarukhan said in an interview. "It
MONTREAL - Canadian and U.S.
doesn't make sense." Sarukhan acknowledged that moving to this next step won't happen quickly because of U.S. concerns that it would slow
he sees no philosophical opposition from Canada or the United
States. "I think it's more an issue of process and timing than substance," he added. Mexico has already
concluded a free trade agreement with Europe. Canada has been negotiating an agreement
with the European Union for several years while the United States is set to launch its effort this
summer, putting pressure on the Canadian government to get a deal with the EU done soon. A U.S. deal with Europe
could have implications for global trade since together they account for nearly half the
world economy and 30 per cent of global trade. Canadian and U.S. officials said those deals remain the top priority. "I think it's a little
bit putting the cart before the horse," said David Cary Jacobson, the U.S. ambassador to Canada. "Canada is in the
down its own impending negotiations. But
final stages of negotiating its agreement, we haven't even begun to negotiate ours and I think we're just going to have to wait to see how this
acknowledged, however, that overlapping supply chains does
present issues that will eventually have to be resolved. Maxime Bernier, Canada's minister for small business, said
extending a European trade agreement to include Mexico would follow the history of
how NAFTA flowed from a deal between Canada and the United States. He said it's always advantageous
thing plays out," Jacobson said. Jacobson
for a country to foster freedom of trade to build prosperity and jobs. "So let's do the first step and try to have this (EU) agreement settled as
soon as possible and after that we'll see," he said after speaking to the Conference of Montreal. Bernier said he's optimistic that Canada will
soon conclude a trade deal with the EU but wouldn't speculate when that will be achieved. Canadian and EU officials say a free trade
agreement will completely eliminate all industrial tariffs within seven years, a measure that will save Canadian exporters $213 million annually
_ and European exporters $635 million _ at current exchange rates. The two sides have closed the gap on several key issues but remain apart
on a few others. A major sticking point is Europe's unwillingness to open up its market to beef imports, particularly problematic because
Canadians would need a big enough entry — believed to be 40,000 tonnes annually at a minimum — to justify converting production to
hormone and antibiotic free beef as required by EU restrictions. Meanwhile, France and Ireland are resisting any significant quota assuming
that whatever Canada gets, the U.S. is likely to demand an equal or greater amount. France also said it won't back any deal with the U.S. that
threatens the country's prestigious film, radio or TV industries.
Mexico says no to the US offer – wants independence – Canadian offer solves
Clark 6/18 (Campbell, The Globe and Mail, June 18, 2013, “Mexico pushes for direct ties with Canada, apart from U.S. influence,”
http://www.theglobeandmail.com/news/politics/mexico-pushes-for-closer-direct-ties-with-canadaapart-from-us-influence/article12594783/?cmpid=rss1, alp)
Nieto wants ties with Canada to be a priority in the country’s
foreign policy, rather than the on-again, off-again interest of two countries distracted by
relations with the United States, Mexico’s ambassador says. Ambassador Francisco Suarez Davila arrived in
Ottawa a week ago with a mandate to pursue a new deepening of relations between the two
countries – not just for dealing with the U.S., but also as direct trading partners, and potential diplomatic
allies on the world stage. “I think I have arrived at a very opportune time. The political stars are aligned,” Mr. Suarez said
New Mexican President Enrique Pena
in an interview with The Globe and Mail. “That’s the indication I have received from President Pena, to go beyond the rhetoric to really
establish that Canada is a priority for Mexico’s foreign policy. It’s a real priority: Canada, itself, apart from the North American [regional
It is a simple but important signal in Canada-Mexico relations: that the two
countries should see each other as important for more than just what that means in
dealing with the United States. They have been trade partners in the North American Free Trade
Agreement since 1993, and from time to time expressed a desire for stronger ties. But the interest has
blown hot and cold. Both countries’ perspectives on North America are, of course,
dominated by relations with the U.S. “It’s a fact of life that we have this big elephant in between.
It’s there. But we don’t at all like the idea of an off and on approach,” Mr. Suarez said. “Sort of, you
know, oh now Mexico is important, but until that time, no, it’s more important for us just to have a relationship with the United States.” The
“political stars” that Mr. Suarez refers to is that changes in both capitals are coming at the
same time as Ottawa tries to re-focus Canadian foreign policy around major emerging
markets, and Mr. Pena is signalling new interest in Canada. Mr. Suarez, an economist who has served as
Mexico’s envoy to the International Monetary Fund and to the Organization for Economic Co-operation and Development, noted the two
countries are already important to each other in economic terms, as each other’s thirdlargest trading partners. He noted that Mexico and Canada joined together to fight protectionist U.S. meat-labelling rules,
known by the acronym COOL, by challenging them at the World Trade Organization, winning a decision from a trade tribunal. “We acted
together with the WTO. We’ve got the decision. And we’re ready to act, taking possible reprisals if they don’t fulfill the WTO.
Common vision and common action,” Mr. Suarez said. He said that Mexico and Canada can strike a similar alliance
in 12-nation talks for the Trans-Pacific Partnership, to ensure that the talks stay focused
on economics and trade, and that it is not used by the U.S. to jockey with China for
political influence. Within North America, Canada and Mexico have common interests in
integrating the continent’s three economies, by pushing for better-aligned
dynamic].”
infrastructure – notably railways and oil-and-gas pipelines – across the continent. That, and cheap energy –
from the U.S. shale-gas revolution, and extensive oil and gas in both Canada and Mexico, can lead
to a revival of North American manufacturing if it’s combined with integrated
infrastructure and better transportation costs, he argues, leading to “the re-industrialization of these countries.”
For many in the United States and Canada, however, the question is whether it is Mexico, with lower labour costs, that will benefit primarily
American auto manufacturers and Canadian companies like
Bombardier have built plants in Mexico to take advantage of lower wages. But Mr. Suarez argues that’s a
from a revival of North American manufacturing.
short-sighted argument. Mexico, with a young population, can offer a labour force to the U.S. and Canada, but also a market with a middle class
of 50 million people. And Canadians can benefit when their companies manufacture in Mexico, he argues. “You developed Bombardier as a
very successful enterprise in Canada,” he said. “They are building airplane parts [in Mexico]. Those airplane parts are sent to Canada, and they
integrate the Bombardier full units here. But at a cost where they can where the Bombardier planes can compete better with the Brazilian
planes, or whatever.” Editor's note: A earlier version of this story incorrectly stated the number of countries involved in the Trans-Pacific
Partnership. This version is now correct.
BRIC DA
1nc – BRIC DA
BRIC economies are strong now — rise of the new decade proves
Singh and Dube 11- *CUTS Centre for International Trade, Economics and Environment, **South
African Institute of International Affairs, (Suresh P. and Memory, “BRICS and the world Order: A
beginner’s Guide”, saiia, 02/22/11, http://cuts-international.org/BRICSTERN/pdf/BRICS_and_the_World_Order-A_Beginners_Guide.pdf, //CJD)
The BRICS forum has evolved and expanded after formalisation of the group . In addition to
the four founder countries, it now includes South Africa, as discussed. During 2001–10,
the BRIC countries achieved significant gains in both an economic and a political sense.
As far as demographic and economic progress of the group is concerned, in 2010 BRICS
countries collectively accounted for more than 40% of the global population and nearly
30% of the land mass. The group constituted a share of about 25% of the world GDP in
PPP terms compared with 16% in 2000. This is expected to rise significantly in the near
future.5 Along with improvements in economic indicators, the group has also realised
improvement in social indicators, such as increased literacy levels. Significant positive
changes have taken place in all the BRICS countries over the last two decades (1990–
2010). The economic size in nominal terms (US dollars) has increased manifold – with
Brazil by over four times, India nearly five times, China over fourteen times, and South
Africa by over three times. The situation further improves if comparison is made based
on PPP. China has emerged as the second-largest economy, followed by India in fourth
position, Russia in sixth and Brazil in eighth. The increasing trend in GDP is reflected
further by a significant increase in per capita income over the last two decades. These
have brought in perceptive changes about the potential and importance of BRICS in
reshaping the global economic order. The BRICS, now increasingly recognised as some of
the fastest-growing countries and the engines of the global recovery process, plays a
formidable role in shaping macroeconomic policy, as was observed after the financial
crisis (2008–10).
The plan crowds out BRIC countries
Moody 3/13/13 – (Glyn, “Mexico Will Ask To Join US-EU Transatlantic Trade Agreement”, Tech Dirt,
http://www.techdirt.com/articles/20130313/10181122311/mexico-will-ask-to-join-us-eu-transatlantictrade-agreement.shtml)//javi
Whether or not Mexico and Canada become part of TAFTA, and under what terms, it's pretty clear what the
US strategy here is. Just today we learned that South Korea is likely to join Japan in asking to sign up to the TPP
talks. That would make TPP the defining international agreement for the entire Pacific region.
TAFTA obviously aims to do the same for the Atlantic. As well as establishing the US as the
key link between the giant TPP and TAFTA blocs, this double-headed approach would also isolate the main
emerging economies -- Brazil, Russia, India and above all China -- if they refuse to join as presumably junior partners. That globe-spanning pair of trade pacts, it
would seem, are what Obama hopes to be remembered for when he leaves office: his legacy to America -- and to history.
EU FDI is key to BRICs’ economic growth
Hunya and Stöllinger 09-research economists at the Vienna Institute for International Economic
Studies, (Gábor and Roman, “Foreign Direct Investment Flows between the EU and the BRICs”,
December 2009,Vienna Institute for International Economic Studies,
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&ved=0CEIQFjAC&url=
http%3A%2F%2Fwiiw.ac.at%2Fforeign-direct-investment-flows-between-the-eu-and-the-brics-dlp1960.pdf&ei=NP_7Uc_3F8uMyAHikIE4&usg=AFQjCNFDBedZbC0n5I9Bh-twO3SEzSaOA&sig2=BtydrdERRAZyreNoGXkyfw, //CJD)
Bilateral investment flows document the coincidence of two ways of competitiveness: it
requires corporate competitiveness, i.e. high relative productivity of firms on the side of
the source country and locational competitiveness, i.e. the relative attractiveness of an
economy for investors, on the side of the host country. In the case of the BRICs, large
domestic markets coupled with very high growth rates over the last years and efforts –
albeit in varying degrees – to improve the investment climate in their economies
advanced them to the top five of the most attractive locations for FDI in recent UNCTAD
surveys5. The EU, on the other hand, is the world’s most important provider of FDI and has
55 of the 100 largest non-financial MNCs domiciled in its territory (UNCTAD, 2008b)6, far
more than any other economy. Consequently, EU FDI flows to the BRICs have increased
steadily over the period 2001-2007, especially to Russia and Brazil, where flows reached
EUR 16.7 billion and EUR 15.3 billion in 2007 respectively. The growth path of flows to
India and China is flatter and flows remained at a low level in 2007 (Figure 2, left). The
share of the BRICs in extra-EU FDI stocks has not increased strongly in recent years, with
the notable exception to Russia. Over five years, the combined share of the BRICs plus
Hong Kong in extra-EU outward FDI stocks increased only by 2.5 percentage points to
10% in 2007 (Figure 2, right). Hong Kong’s share in extra-EU FDI decreased between 2002
and 2007 which can be explained by the increased attractiveness of China as a
destination for FDI so that the detour via Hong Kong is not necessary anymore. China’s
share in extra-EU stocks increased only marginally, to 1.23% in 2007, the combined share of
China and Hong Kong actually declined slightly to 4% in 20077. Thus one can consider this country
with rapidly increasing inward investment a place where EU companies were relatively
reluctant in their FDI activities. The slow pick-up of the BRIC’s share in EU outward FDI
stocks is indeed surprising and it can only partially be explained by attractive investment
opportunities elsewhere, such as in the close-by new EU member states. The
overwhelming majority of FDI stocks continues to be in the advanced countries with
high asset prices and a long history of FDI. This can change only very gradually by flows
shifting to emerging economies. Other explanations for relatively low EU FDI in the
BRICs can be associated with the risks and obstacles related to FDI in the individual BRIC
countries. FDI is driven to some extent by returns on investments and the BRICs are very
attractive in this respect (Figure 3). Taking the ratio of income earned on EU FDI abroad in
2007 to accumulated stocks until end of 2006 as a crude measure for the returns on FDI,
FDI in the BRICs appear to be more profitable than FDI in the new EU member states. In
2007 EU firms earned returns on their FDI engagements above 13% in China and Hong
Kong, well above the average of EU-extra FDI but also above the returns achieved in the most
profitable new member states, Bulgaria and Slovakia. Profitability of EU FDI in Russia and Brazil
is somewhat lower, 11.3% and 11.8% respectively, which is similar to the returns on FDI
in the most profitable new member states but well above their average8. With returns
on FDI exceeding 18%, India emerges as the by far most profitable location among the
BRICs for EU firms. Locational factors such as the perception of country risk9, which was
found to be a decisive factor for FDI in emerging markets (Frenkel, Funke and Stadtmann,
2004), may explain the modest increase of EU FDI especially in the Asian BRICs. This would
suggest that in several cases EU firms consider risk adjusted returns on FDI to be higher
in the new EU member states (which also provide good investment opportunities because of
privatization programmes) than in the BRICs. Other locational factors are specific to individual
BRICs. For example, inefficient bureaucracy and a poorly developed infrastructure figure
among the most important barriers for FDI in India (Bartlett, 2008). In China, investors’
concerns about property rights and remaining restrictions and caps to foreign ownership
in the service sectors restrict EU investments in banking and telecommunications.
Another factor favouring FDI in the new EU member states vs. the BRICs is geographic
proximity in combination with industry structure. Especially small and medium sized
enterprises tend to limit their FDI engagement in geographically close countries (Hunya,
2008). While the share of EU FDI going to the BRICs remains small, the EU is an important source
of FDI for all BRICs. This constellation mirrors trade, as the EU is a more important
trading partner for the BRICs than vice versa. In terms of FDI flows, the EU is by far the
most important investor in Russia and Brazil accounting on average for 57% and 53% of
the total FDI going to these countries in the period 2004-2007 (Figure 4, left). In the
Asian BRIC economies the share of the EU in inward FDI is much lower, ranging from
31% in India to only 10% in China. This is explained by the large intra-regional FDI flows
in South and South-East Asia. In the case of China, Hong Kong stands out as the largest
investor accounting for 37% of total inflows in the period 2004-2007. FDI flows
originating from Singapore, Taiwan and South Korea make up another 13%10. The high
share of intra-regional FDI in Asian countries is linked to the high degree of vertical trade
integration. In the case of Hong Kong, however, a part of the FDI flows to China
constitutes ‘round-tripping capital’, i.e. Chinese investments taking a detour via Hong Kong
for tax or other reasons (Poncet, 2008). This phenomenon is also found in India and Russia.
Since round-tripping inflates a country’s aggregate FDI, the role of the EU as a provider
of FDI to India and China might be higher than suggested by the statistics; in the case of
Russia the situation is different because much of Russian round-tripping capital enters
via Cyprus which is an EU member state (see Box 2). Regardless of the precise share of EU
member states in Russia’s inward FDI, EU firms show a very high presence in Russia. A
major reason for this is Russia’s proximity which is one of the major determinants of the
intensity of bilateral FDI flows to emerging markets (Frenkel, Funke and Stadtmann, 2004). The
EU emerges as the largest provider of FDI among the Triad countries in each of the BRICs
(Figure 4, right). In Russia and Brazil, the amount invested by EU firms equalled seven to eight
times the amount of FDI undertaken by US firms in these countries (average 2005-2007).
The average annual FDI flow from the EU to China in 2005-2007 amounted to EUR 6.6 billion,
more than twice the amount pouring in from the United States. Japan, which has a strong
Asian focus in its outward FDI, recorded on average EUR 4.9 billion to China during the same
period. In Hong Kong, the magnitude of FDI flows from the EU and the United States are
on a more similar level amounting to EUR 4.9 billion and EUR 3.7 billion respectively. EU
flows to India were the lowest among the BRIC countries amounting to EUR 3.9 billion
on average for the period 2005-2007, albeit the EU is the number one investor in India if
Mauritius is neglected (see Box 2). Whereas the strong FDI links between the EU and
Russia could be expected due to the proximity of the two markets and was also found in
the trade in goods and services, the favourable position of EU firms in Brazil compared
to US firms is more surprising and in contrast with the result found in services trade. The
strong position of EU firms in the BRICs is mainly the result of FDI from Spain which has
close historical links with South America11 and Germany which is a major and
geographically well diversified provider of FDI.
This is key to the global economy — turns the case
Moghadam 11- director of the European Department at the International Monetary Fund (IMF) since
November 2011. Prior to taking up his current position, he was Director of the Fund’s Strategy, Policy,
and Review Department for three years, and Head of the Managing Director’s office also for three years,
serving both Rodrigo de Rato and Dominique Strauss-Kahn. He previously worked in both the European
and the Asia-Pacific Departments of the Fund. Mr. Moghadam earned a bachelor's degree in
mathematics at Oxford University, a master’s degree in economics at the London School of Economics,
and a PhD in economics at the University of Warwick, (Reza, “New Growth Drivers for Low-Income
Countries: The Role of BRICs Prepared by the Strategy, Policy, and Review Department”, January 12,
2011, International Monetary Fund, https://www.imf.org/external/np/pp/eng/2011/011211.pdf, //CJD)
26. While they are difficult to quantify, the effects of BRIC FDI on local economies have been
tangible: BRIC FDI has helped tap natural resources in many LICs. This is most evident in
the rapid growth of oil and mining industries in Africa, partly made possible by BRIC
investment, leading to sharp increases in production, exports, and processing capacity .
In some cases, BRICs’ investment may also have strengthened the bargaining power of
LICs, helping them to negotiate more favorable contracts with foreign firms. BRIC
financing has helped increase manufacturing capacity in some LICs. This is clearly the
case in countries such as Ghana where most Chinese FDI is involved in agroprocessing
and garment manufacturing. Even in resource-rich countries, there is now a greater
emphasis on increasing value added in both upstream and downstream industries (e.g.,
building refining capacity in Nigeria, and processing copper into electric wires in
Zambia). 27. The key challenge for LICs is to amplify these positive effects of BRIC FDI by
continuing to attract more inflows, ensuring that natural resource extraction
contributes to strengthening domestic revenue mobilization, and fostering greater
linkages with local economies. As is the case for trade flows, this challenge is not specific
to BRIC FDI but is heightened by the prospect of attracting more FDI than in the past
from a broader array of countries. Recipient countries can foster FDI by improving
their business environment. The focus should be on improvements in areas that are critical
for attracting FDI such as the availability of adequate and reliable infrastructure, rule of
law, and reduction of red tape and corruption (Dabla-Norris et al., 2010). At the same
time, reducing high trade barriers is important, especially for FDI in search of
intermediate inputs and regional exports. Recipient countries should ensure that
greater FDI, particularly in natural resources, translates into higher fiscal revenue,
which can then be spent in priority areas. In the face of strong competition for FDI
among recipient countries, LIC policymakers should carefully evaluate the benefits of
policy incentives against the cost and the fiscal implications of such incentives to ensure
that public resources are used for the highest priorities. Regional policy coordination
could help countries limit incentive competition. Deeper regional integration could also
make small LIC economies more attractive to FDI, notably by having regional projects
especially in the power and transport sectors.20 Moreover, policies aimed at attracting
FDI should avoid discriminating against domestic firms. BRICs and LICs can cooperate
more closely in promoting local employment and industrial linkages. While an important
goal of attracting FDI is to increase local employment and strengthen local productive
capacity, excessive local employment and input requirements could deter FDI inflows
and undermine the efficiency of foreigninvested firms. To avoid such an outcome,
investors could be encouraged to hire and train more local workers while, at the same
time, recipient countries could aim to facilitate firms’ access to necessary skills,
including by upgrading education programs and rationalizing labor market regulations.
Similarly, linkages to local firms could be facilitated by encouraging joint ventures,
improving internal transport systems, and ensuring equal access to industrial clustering
by local firms (Broadman, 2006).
2nc – uniqueness – BRIC
Even if decline in BRICS is happening now rebound is inevitable
McMillan et al 13- focuses her practice on financial and commercial transactions primarily in the
energy industry. She represents lenders and borrowers in a variety of domestic and cross-border
financing transactions, including syndicated and single-bank financings, secured and unsecured
transactions, first lien/second lien finance, and loan and credit restructurings, (Christine, “The FDI
Report 2013:
Global greenfield investment trends”, 2013, FDI intelligence,
http://ftbsitessvr01.ft.com/forms/fDi/report2013/files/The_fDi_Report_2013.pdf, //CJD)
FDI into BRIC countries Brazil, Russia, India and China have all become major players in global
FDI. From 2003 to 2012, the BRIC countries attracted 22.29% of global FDI projects. China
alone attracted more than one-tenth of global FDI projects and has topped the regional
rankings every year since 2003. BRIC countries have attracted 26,027 projects since
2003, with estimated capital investment of $2230bn, creating approximately 8 million
jobs directly. The highest volume of FDI into the BRIC countries was in 2008, with a
total of 3205 projects recorded. In 2012, three of the BRIC countries – China, India and Brazil –
finished in the top five destination countries for FDI globally. Collectively, they attracted
17.64% of global FDI projects. Brazil saw the largest increase in market share of the
BRIC countries in 2012, attracting 18.42% of FDI projects into the BRICs. Russia attracted
11.3% of FDI projects into the BRICs in 2012 and ranked second in capital investment in
Europe in 2012. India attracted 30.02% of FDI projects into the BRICs in 2012. The
country also performed well from a regional and global perspective in 2012, ranking
second in Asia-Pacific and fourth globally by project numbers. China accounted for
40.26% of FDI projects into the BRICs in 2012 and captured 8.01% of global FDI projects.
Within Asia-Pacific, China was the top country for FDI by project numbers, with a
regional market share of 25.24% of projects. The economic slowdown in BRIC economies
and worldwide is likely to lead to a continued decline in FDI to the BRIC countries in
2013. However, from 2014 onwards we expect FDI into the BRICs to rebound due to
stronger economic growth and local factors. The 2014 FIFA World Cup and 2016
Olympics in Brazil and the 2018 FIFA World Cup in Russia should stimulate FDI. Major
FDI reforms in India, including passing a new land acquisition law and permitting more
FDI in retailing, airlines and broadcasting is likely to increase FDI into India in the
medium to longer term and once the path of Chinese GDP growth becomes clearer
investors are likely to expand FDI again into China.
BRIC is on the brink of decline- steady flow of euros is key to resolve their
problem
Escobar 13- author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble
Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is
Obama does Globalistan, (Pepe, “Has BRICS failed?”, March 28, 2013, Tacstrat,
http://tacstrat.com/content/index.php/2013/03/28/has-brics-failed/, //CJD)
Reports on the premature death of the BRICS (Brazil, Russia, India, China and South Africa)
have been greatly exaggerated. Western corporate media is flooded with such
nonsense, perpetrated in this particular case by the head of Morgan Stanley Investment
Management. Reality spells otherwise. The BRICS meet in Durban, South Africa, this Tuesday
to, among other steps, create their own credit rating agency, sidelining the dictatorship
– or at least “biased agendas”, in New Delhi’s diplomatic take – of the
Moody’s/Standard & Poor’s variety. They will also further advance the idea of the BRICS
Development Bank, with a seed capital of US$50 billion (only structural details need to be
finalized), helping infrastructure and sustainable development projects. Crucially, the US
and the European Union won’t have stakes in this Bank of the South – a concrete
alternative, pushed especially by India and Brazil, to the Western-dominated World
Bank and the Bretton Woods system. As former Indian finance minister Jaswant Singh has
observed, such a development bank could, for instance, channel Beijing’s know-how to
help finance India’s massive infrastructure needs. The huge political and economic
differences among BRICS members are self-evident. But as they evolve as a group, the
point is not whether they should be protecting the global economy from the now nonstop crisis of advanced casino capitalism. The point is that, beyond measures to facilitate
mutual trade, their actions are indeed becoming increasingly political – as the BRICS not
only deploy their economic clout but also take concrete steps leading towards a
multipolar world. Brazil is particularly active in this regard. Inevitably, the usual Atlanticist,
Washington consensus fanatics – myopically – can see nothing else besides the BRICS
“demanding more recognition from Western powers”. Of course there are problems. Brazil,
China and India’s growth slowed down. As China, for instance, became Brazil’s top trading partner –
ahead of the US – whole sectors of Brazilian industry have suffered from the competition of cheap
Chinese manufacturing. But some long-term prospects are inevitable. BRICS will eventually
become more forceful at the International Monetary Fund. Crucially, BRICS will be
trading in their own currencies, including a globally convertible yuan, further away from
the US dollar and the petrodollar. That Chinese slowdown It was Goldman Sachs’ Jim O’Neill
who coined the term BRIC (no South Africa then) in 2001. It’s enlightening to check what
hethinks about it now. O’Neill points out that China, even growing by a “mere” 7.7% in 2012,
“created the equivalent of another Greek economy every 11-and-a-half weeks”. China’s
slowdown was “structural and cyclical” – a “planned downturn” to control overheating
and inflation. The BRICS push is part of an irresistible global trend. Most of it is decoded
here, in a new United Nations Development Programme report. The bottom line; the
North is being overtaken in the economic race by the global South at a dizzying speed.
According to the report, “for the first time in 150 years, the combined output of the
developing world’s three leading economies – Brazil, China and India – is about equal to
the combined GDP of the long-standing industrial powers of the North”. The obvious
conclusion is that, “the rise of the South is radically reshaping the world of the 21st
century, with developing nations driving economic growth, lifting hundreds of millions
of people from poverty, and propelling billions more into a new global middle class.”
And bang in the middle of this process, we find an Eurasian epic; the development of the
Russia-China strategic relationship. It’s always about Pipelineistan Russian President Vladimir
Putin is taking no prisoners; he wants to steer the BRICS towards “a full-scale strategic
cooperation mechanism that will allow us to look for solutions to key issues of global
politics together”. This will imply a common BRICS foreign policy – and not only selective
coordination on some themes. It will take time. It will be hard. Putin is very much aware
of it. What makes it even more fascinating is that Putin advanced his ideas during last
week’s three-day visit to Moscow by new Chinese President Xi Jinping. He went out of his
way to stress Russian-Chinese relations now are “the best in their centuries-long
history”. That’s not exactly what hegemonic Atlanticists want to hear – still eager to
frame the relationship in Cold War terms. Xi retributed in style; “We did not come to see
you for nothing” – as is partially detailed here. And wait till China’s creative drive starts
yielding dividends. Inevitably, Pipelineistan is at the heart of the ultimate BRICS
complementary relationship. China’s need of Russia’s oil and gas is a matter of national
security. Russia wants to sell more and more of it, diversifying away from the West;
moreover, Russia would more than welcome Chinese investment in its Far East – the
immense Trans-Baikal region. And by the way, the “yellow peril” is not taking over Siberia – as the
West would have it. There are only 300,000 Chinese living in Russia. A direct consequence of the
Putin-Xi summit is that from now on Beijing will pay in advance for Russian oil – in
exchange for a share in a number of projects, for instance as in CNPC and Rosneft jointly
exploring offshore blocks in the Barents Sea and other blocks onshore Russia. Gazprom,
for its part, clinched a long awaited gas deal with CNPC; 38 billion cubic meters a year
delivered by the ESPO pipeline from Siberia starting in 2018. And by the end of 2013, a
new Chinese contract with Gazprom will be finalized, involving gas supply for the next
30 years. The geopolitical ramifications are immense; importing more gas from Russia
helps Beijing to gradually escape its Malacca and Hormuz dilemma - not to mention
industrialize the immense, highly populated and heavily dependent on agriculture
interior provinces left behind in the economic boom. That’s how Russian gas fits into the
Chinese Communist Party’s master plan; configuring the internal provinces as a supply
base for the increasingly wealthy, urban, based in the east coast, 400 million-strong
Chinese middle class. When Putin stressed that he does not see the BRICS as a
“geopolitical competitor” to the West, it was the clincher; the official denial that
confirms it’s true. Durban may be solidifying just the beginning of such a competition. It
goes without saying that Western elites – even mired in stagnation and bankruptcy –
won’t let any of their privileges go without a fierce fight.
BRICS is recovering now- Asian prosperity rises it’s GDP
Zongyi 7/7- staff writer at Global Times, (Liu, “BRICS have proved economic world order”, 7/7/13, Global Times,
http://www.globaltimes.cn/content/794384.shtml#.Ufv52pK1Fsk, //CJD)
Since the BRIC grouping's first formal summit was held in Yekaterinburg, Russia, in 2009,
the group, now named BRICS after the inclusion of South Africa, has made a series of
achievements through cooperation in the fields of economy, finance, politics and
security. But there are still some Western scholars, particularly from the US, who argue
that BRICS is merely a created concept with bleak prospects due to various internal
conflicts. What makes them believe so? In my opinion, these Western scholars have either
failed to realize or are not willing to admit that the formation of BRICS is in essence a
natural outcome of changes in the world economic pattern. At the end of the 20th century,
Japanese scholar Kenichi Ohmae put forward the idea that the world consisted of three
economic plates, one centering around the US which included Canada and Central and
South America, one taking the EU as its core which includes EU members, the
Commonwealth of Independent States and Africa, and one that included China, South
Korea, Southeast Asia, West Asia, Australia and New Zealand with Japan as the core.
After entering the 21st century, especially the 2008 financial crisis, big changes have taken
place in the global economic pattern, leading to three new economic plates: the US and
European countries, Pan-Asian countries, and energy states. The most prominent
change is the emergence of the Pan-Asian plate. The development of China and India has
totally changed Japan's central role in the Asian economy. The Pan-Asian plate includes not
only those higher up the value chain like Japan and South Korea, but also Southeast
Asian and South Asian countries. China and India are positioned in the middle, and
China has become the center of Asian trade. A vertical supply chain has been formed in
the Pan-Asian plate, breaking the traditional pattern determined by geographical
position. Besides Asian countries, Latin American countries like Brazil and Chile and African
countries like Tanzania and Gabon are also contained in the Asian economic and
financial circle. This supply chain of the Pan-Asian plate continues to expand, and the
GDP of developing countries has risen to take 50 percent of the world's GDP. This will
further change the structure of demand worldwide. The appearance of the BRICS group
is the best reflection of these major changes in the world economic pattern. When Jim
O'Neill came up with the BRIC concept in 2001, he saw four promising markets for
investment. However, he only foresaw an economic trend but did not realize it would be
also a political one. O'Neill later raised the concepts of Next 11 and VISTA. Countries
included in these concepts are mostly a part of the Pan-Asian industrial chain. Or we can
say that as long as a country is included in the Pan-Asian economic chain, its prospects
will be promising. But O'Neill opposed the inclusion of South Africa into BRIC due to its
relatively small economic scale. In fact, South Africa, Africa's biggest economy, reflects
the increasing trend of Africa merging into the Pan-Asian economic plate. With the
economic development of emerging countries such as China and India, the economic
chain of the Pan-Asian plate will continue to expand, and the BRICS group will have
more members in the future. The growth of the Pan-Asian plate and the formation of
BRICS countries are the results of globalization, pushed by market forces. They are not
exclusive to the US or European countries, since transnational groups from the US and
Europe served as catalysts in the process. Globalization is a historical trend which
cannot be stopped. Attempts to economically isolate countries like China and India
through establishing exclusive economic zones or through trans-regional trade
arrangements are impractical. Countries should understand this trend and actively
participate in the economic chain of the Pan-Asian plate for its own good. Japan joined
negotiations for the TPP, which came more out of political consideration. At the same
time, it also engages in negotiations for the China-Japan-South Korean Free Trade
Agreement and Regional Comprehensive Economic Partnership, which vividly illustrates
this irresistible trend.
2nc – uniqueness – EU
EU is increasing its investment in BRICS now
Hunya and Stöllinger 09-research economists at the Vienna Institute for International Economic
Studies, (Gábor and Roman, “Foreign Direct Investment Flows between the EU and the BRICs”,
December 2009,Vienna Institute for International Economic Studies,
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&ved=0CEIQFjAC&url=
http%3A%2F%2Fwiiw.ac.at%2Fforeign-direct-investment-flows-between-the-eu-and-the-brics-dlp1960.pdf&ei=NP_7Uc_3F8uMyAHikIE4&usg=AFQjCNFDBedZbC0n5I9Bh-twO3SEzSaOA&sig2=BtydrdERRAZyreNoGXkyfw, //CJD)
The major source of FDI in the BRICs is by a large distance the US with more than 5
thousand investment projects, 29% of the total (Table 5). The highest number of
investments occurred in 2006 followed by 2008. Last year the share of US projects was
lower than before while that of Japan, second in the overall ranking, increased . The main
EU investors, Germany, the UK, France and Italy occupy the ranks 3 to 6, with Germany coming close to
Japan. The joint share of the four largest EU economies amounts to 24% for the whole
observed period and 26% in 2008 which is a slight increase in concentration. The share of
the EU15 increased from 32% in 2003 to 38% in 2008 which points to a growing
importance of the EU among the investors in the BRICs. In terms of reported investment
capital the lead of the USA is much smaller than for the number of projects, with 15%
for the whole observed period and only slightly higher in 2008. Germany comes second
while Japan is further down the list. Investing countries with relatively high amounts of
investments relative to the number of projects include Korea and Hong Kong. Those with
relatively small sums per project are France and Italy. Still, the share of the four leading
EU investors is 22%, higher than that of the USA for the whole observed period,
reaching as much as 27% in the year 2008. As to the EU15, their share in the invested
sum increased from 33% in 2003 to 40% in 2008. This is another strong argument
supporting the increasing role of the EU investors in the BRICs.
2nc – link – US
Independently, expansion of US economic engagement crowds out Latin
American BRICS FDI
Brand et. Al. 12- Lecturer and Post-Doc Researcher at the Department of Political Science at the University of Mainz, (Alexander, “BRICs and U.S.
Hegemony: Theoretical Reflections on Shifting Power Patterns and Empirical Evidence from Latin America”, 2012, MAINZ PAPERS ON INTERNATIONAL AND
EUROPEAN POLITICS, http://international.politics.uni-mainz.de/files/2012/10/mpiep04.pdf, //CJD)
In the military realm, there is no other regional hegemonic contender to the U.S. in sight.
U.S. military capabilities are overwhelming, while Chinese activism towards Latin America
has so far been relatively restricted in the military realm (exchange of personnel, arms trade).
In that sense, it rather serves as a corollary to increased economic interests in the region.
In comparison, Brazilian military ambitions and policies tend to be more in line with
establishing itself as a regional power also in military terms. However, huge gaps remain
concerning capabilities, thus Brazil is hardly in the position to effectively balance the
U.S. militarily. In the economic dimension, the U.S. still is very important for Latin
America. What is more, despite the activities of BRIC states throughout the region, the
traditional asymmetrically patterned relationship still continues to exist: While Latin
America on the whole is not the U.S.’s most important trading partner, Latin American
states are still by and large dependent on their exports to the U.S. market – either
heavily (Mexico) or to still impressive degrees. The same is true for the U.S. as the main
source of FDI flows to Latin America; although Brazilian and Chinese activism is surging,
it is still at a comparatively low level. Thus, the very phenomena that have captured the
attention of analysts recently – Chinese FDI targeted to resource and infrastructure
projects, intensified economic exchange between e.g. Brazil and China themselves, the
growth of trade volumes between China and LA as well as Brazil and its regional
neighbors still do not, in essence and so far, signal a fundamental break with the
established patterns of asymmetrical economic relations between the U.S. and Latin
America and hence, the strong U.S. influence in the region. In terms of monetary and
currency policy, the U.S. position in terms of a dominance of the dollar throughout Latin
America remains intact so far as well. This means that fiscal and monetary policies on
behalf of the United States still exert considerable influence within the region, be they
intentionally targeted at achieving certain outcomes or not. China’s relationship (as an
external actor) with Latin America is illuminating in this regard, however. It uses Latin
America’s natural resources to sustain China’s economic growth while establishing
alliances to support itself diplomatically. It has expanded its leverage in Latin America as
it becomes an essential market for some of the major states of the region. China has
relied primarily upon economic strategies to create a closer relationship with Latin
America through increased trade and investment. Monetary aspects of economic policies
surface from time to time, but not least given the fact that China (especially its large
dollar-denominated foreign holdings) also depends largely on some measure of dollar
stability, no pattern of outright challenge to U.S. monetary hegemony has emerged so
far. Hence, despite its expanded activities in the region, Latin America does not
constitute a primary interest for China in terms of either economic activity (Watson 2011:
66) or, more general, hegemonic ambitions in the Latin American region to date.
Concerning institutional innovation and the use of alliances a/o multilateral
coordination as a means to strengthen one’s influence, things look remarkably different.
Here we can detect a mixture of institutional failure (OAS, FTAA), the fostering of bi- and
multilateral trade institutions as well as non-activism on behalf of the U.S. In contrast,
even the Chinese have – as actors traditionally and geographically external to the region
– significantly expanded their institutional ties to LA lately. State visits, applications for
observer status, summits and common institutional frameworks constitute a relatively
significant level of activism. Brazil, on the other hand, has for years sought to use the
institutional level to strengthen its status as regional power (and potential contender to
U.S. regional hegemony). Here, the idea of an intended counterbalancing of U.S.
hegemony is particularly clear. Interestingly, however, this does not seem to translate into
soft power success evenly so far. Although the U.S. – its foreign and regional policies in
particular – still continues to be the target for a lot of criticism in Latin America, it
nevertheless remains attractive in terms of being a key destination for migration, not
least in the university sector with the latter having an arguably formative impact on the
attitudes of educated elites. Despite the fact that LA is hardly a region overwhelmed by
U.S. public diplomacy initiatives – the need to restore “leadership in the hemisphere”
(White House 2012) might be occasionally reaffirmed – the U.S. remains a(n indirect)
leader in terms of lifestyle at least. In comparison, Chinese activism and investment in
“soft power”-related issues has not led to a wholehearted embrace of China. It might be
that China uses the soft power tools at its disposal mainly to pave the way for its
economic interests, but in any case, this has not (yet at least) produced a significant reorientation of LA towards Chinese values, language, lifestyle etc. Brazil’s efforts to brand
itself as a regional alternative to the U.S. – at least in South America – have been more
successful. With this, however, goes the ambivalent message of presenting itself precisely
not as a hegemon in the traditional sense; what is more, more often than not, Brazilian
has to navigate between playing the “alternative card” and being in line with key U.S.
policy preferences. In terms of hegemony as described at the outset, this means that the
U.S. is still in a formidable position at least regarding its resource base for regional
hegemony. More questionable given its lack of attention to institutional matters and the
intentional forging of soft power dynamics is the will component, even more the
strategic competence if one is to assume that the U.S. is interested in maintaining its
regional hegemony. Concerning the tacit acceptance necessary to uphold a hegemonic
relationship, we find a mixed picture of criticism towards the U.S. (which sometimes
translates into electoral victory in case the anti-U.S. card is being played) and still high
levels of attractiveness ascribed towards the U.S. China has expanded its regional resource
base in economic terms and it has used institutional as well as soft power instruments
to smooth its way towards enhanced economic exchange. In terms of hegemony,
however, it seems to lack most of the ingredients to act as a regional hegemon,
especially since most activities are both modest in size and strictly tied to either narrow
economic or narrow diplomatic goals17; Chinese hegemonic aspirations can hardly be
detected in the Latin American region. Brazil has especially fostered institutional cooperation and
presented itself as an alternative to the U.S.; it thus has signaled at least rhetorically a will to
balance U.S. hegemony. However, it lacks the material power base and quite often –
given a lot of similar policy objectives – a de facto will to challenge the U.S. in Latin
America as a whole. Additionally, we have to take into account that Latin America is
heterogeneous. At least three subregional groupings can be identified. The first group
comprises Mexico, Central America and the Caribbean. These Latin American countries
are characterized by a high economic dependency on the U.S., strong military presence,
a strong soft power-influence of the U.S. and institutional inclusion via free trade
agreements and security cooperation schemes. Additionally, there is a political will to
follow the U.S. as a close ally and economic partner. In this region, U.S. hegemony is
unchallenged. The second group is comprised by the Andean countries. These countries are
economically highly dependent of the U.S. and of strategic importance in the War on
Drugs. But this group is split because of political reasons. The left wing governments in
Venezuela, Ecuador and Bolivia try to escape U.S. hegemony, at least on the rhetorical
level. There is even a certain degree of rapprochement towards the extra-hemispheric
countries China, Russia and Iran, rivals or even enemies of the U.S. Additionally,
especially Venezuela initiated regional alternatives like ALBA, trying to challenge U.S.
hegemony by building counter-balancing alliances, so far, without proven success. The
right wing government in Colombia follows the U.S. almost unconditionally and is
economically and militarily integrated into U.S. hegemony. This strategy was also
pursued by the conservative government of Alan García in Peru until 2011. The third
group is comprised of the more southern countries in the Southern Cone and Brazil.
These countries are economically less dependent on the U.S. and politically more
independent. U.S. influence is more limited in all dimensions here which renders the
notion of U.S. hegemony here highly questionable. To sum up, U.S. hegemony today is
not what it used to be some decades ago. Clearly, we cannot speak any more of one
single dominant power in the Latin American region or traditional patterns of hegemony
without inserting some qualifications. But at least in the northern parts of Latin America,
U.S. hegemony is still a matter of fact. Chinese and Brazilian activism in Latin America
might have contributed to a certain weakening of U.S. influence, especially in South
America, but both countries are not (yet?) in any meaningful ways acting as (or on the
power base of being) hegemonic contenders in the region. In terms of the at times
suggested coming of “No One’s World” (Kupchan 2012) – a multipolar international
system without any global hegemon – the implications are less obvious. One conclusion
could be that the U.S. is still in a strong position throughout the Americas, while U.S.
hegemony is more openly challenged in other parts of the world, for instance Southeast
Asia. However, we would also stress that a more nuanced analysis of the very political
implications and concomitant dynamics of the shifts usually debated with regard to any
assessment of a decline of U.S. hegemony or the ascendency of potential rival states is
necessary. Impressive GDP growth rates (especially if projected three decades into the
future), shifting shares of world trade, relative growth in military expenditures and the
size of foreign reserves/debt may not in themselves speak meaningfully to these
questions; most arguments nevertheless are based on such imprecise or empty
indicators (e.g. ibid.: 74-85; Layne 2012). It is in this regard that a more comprehensive
assessment of any form of hegemony (in its crucial aspects of resources, will,
competence and legitimacy) which are in turn based on power potentials in at least four
dimensions (military, economic, institutional and soft power) could lead to a reappraisal of U.S. hegemony under an analytical lens.
Expanding US- EU economic engagement tanks BRICS competitivenessrevenue crowd out
Oppenheimer 12- Professor of Geosciences and International Affairs in the Woodrow Wilson School
and the Department of Geosciences at Princeton University. He is the Director of the Program in
Science,Technology and Environmental Policy (STEP) at the Woodrow Wilson School and Faculty
Associate of the Atmospheric and Ocean Sciences Program, Princeton Environmental Institute, and The
Princeton Institute for International and Regional Studies, (Michael F., “The U.S. and Europe Face the
BRICs: What Kind of Order?”, April 27th, 2012, Sais institute, http://transatlantic.saisjhu.edu/publications/books/Transatlantic_2020/ch02.pdf, //CJD)
Over the medium-to long-term, and even under favorable growth assumptions, the challenge posed
by the BRICs (and other rising states) to an efficiently functioning, liberal global system will
be severe, and the barriers to a common U.S.-European response will be high. This is the
case even as the BRICS themselves face growing impediments to growth. Extrapolating
recent hyper-economic performance based on continued success of investment/export
led growth models can make the BRIC challenge seem more formidable than it is, and
can cause us to overlook areas of potential collective action among developed countries
and rising states as the problems they encounter begin to converge. At the Center for Global
Affairs at NYU, we’ve been working under a Carnegie Corporation grant to develop
alternate future scenarios for pivotal states, and have become convinced of the
contingent nature of recent BRIC successes, particularly for China, Russia and Turkey.
Growth rates for this set of countries will continue to exceed those for advanced
developed countries given their continued, though diminishing, cost advantages, but
will not be sustained at recent historic rates, and weak internal institutions, income
inequalities, inadequate infrastructure, ageing populations, environmental stresses
could cause dramatic declines in economic performance and government legitimacy. As
BRIC governments face these inhibitions, some political space could be created for more
market-driven development strategies, and a narrowing of differences about how to
maintain/extend a liberal global system. The growing disquiet among Western investors
concerning their treatment in China, for example, could reinforce outside leverage for
liberal reforms. However, even in a less robust future, the BRICs will continue to challenge the
liberal system. Not present at the creation, with often illiberal economic and political
institutions, growing power and an uncertain and divided West, we can expect strong
assertions of views in conflict with our own, and growing friction between the BRICs and
established powers. Global negotiations—on almost anything—will face diminishing
returns; regional and bilateral arrangements will proliferate; home-grown systems of
economic management and global trade/financial engagement will widen differences
and clog negotiating arenas. For at least the medium term future, reform of global
institutions to reflect shifts in relative economic power may succeed, but will complicate
decision-making without necessarily enhancing legitimacy. The extent and effects of
revisionist challenges to the liberal order will also depend on internal reform and
transatlantic collaboration among advanced countries. It is hard to imagine the latter
without the former. Without fiscal solvency, economic growth and job creation in the
U.S., sustained transatlantic leadership is implausible. Without improved EU institutions
and structural reform at national levels, a positive European response to U.S. initiatives
is equally implausible. With diffuse leadership and internal preoccupations, disparate and
conflicting responses to BRIC challenges (and opportunities) are more likely than not. There is a
strong possibility that the West will not meet these tests, that the result could be an
illiberal, multipolar and conflict-prone world, delivering far less than optimum growth
and with fewer opportunities for the BRICs of the future. A common U.S.- European
agenda that works within this system of diminished relative power and consensus would
begin with a rebuilding of economic competitiveness and institutions of common action.
For the short term, U.S. fiscal pressures, stubborn unemployment and partisan divides limit
bold leadership on behalf of new ideas. Europe’s institutional deficit and deepening
divisions between north and south limit both its ability to propose new ideas and its
capacity to respond to ideas from outside. Yet we should be able to find sufficient
political capital to continue present efforts to reform global institutions, improve crossborder financial regulation, bring collective pressure on China for more market-based
currency pricing, improve IMF surveillance and seek commitments from major players to
limit global trade and financial imbalances. While a restarted Doha is too far a reach,
prevention of further protectionist backsliding should be possible. Many of these efforts
will not succeed over the short term, but could lay the ground for effective followthrough when internal conditions become more favorable.
2nc – internal link – EU key
EU is key to BRICS funding- 80% of revenue
Grant et. Al. 13- diplomat for New Zealand for over 10 years and was posted in New York, Geneva and Pretoria, where she held the position of
Deputy High Commissioner. She has participated in United Nations and World Trade Organization negotiations. Ms. Grant also worked as a consultant on trade and
development matters before joining Business Unity South Africa in April 2007 as Executive Director: Trade Policy. Her portfolio at BUSA included trade negotiations,
trade and investment promotion activities, international relations and trade policy matters. She represented BUSA at NEDLAC on trade and other related issues. Ms.
Grant was the Secretary of the SADC Employers Group and SADC Business Forum from 2007 to 2010 and continues to support efforts towards strengthening private
sector participation in regional and trade policy debates, (Catherine, “BRICS FDI: A Preliminary View”, March 2013, SAIIA,
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=17&ved=0CLgBEBYwEA&url=http%3A%2F%2Fwww.saiia.org.za%2Fdoc_download%2F173brics-fdi-a-preliminary-view&ei=NP_7Uc_3F8uMyAHikIE4&usg=AFQjCNE51g_GvhzeSY_EdtN_P0q37ErqkA&sig2=hpcdmNQucZOEDXxTW5S0Jw, //CJD)
Generally, the evidence suggests that intra-BRICS countries’ investment is not substantial.
Traditional economies play a pivotal role in investment in the BRICS countries, with the
EU-27, the US and Japan having been critical in this regard.13 The EU-27 in particular has
been the largest source of FDI to the BRICS. The UK has been the biggest investor in
Russia and China, Spain the biggest investor in Brazil, and Germany the biggest investor
in India.14 South Africa has benefited from nearly 80% of FDI inflows coming from the
EU. With the cancellation of the BITs, existing investments are protected for an
additional 10 years, but new investments are not. US FDI has been directed mainly
towards China, reaching its peak in 2008 prior to the global economic crisis, and falling
to its lowest levels in the middle of the crisis in 2009. Japanese FDI has been relatively
diverse, destined for Brazil and increasingly for India; but mainly dominated by China
since 2003. Brazil and India competed effectively for Japanese FDI, whereas Russia and
South Africa received relatively less of the incoming FDI from Japan.
EU and BRICS FDI is directly interlinked
Havlik et al 09- Wiener Institut für Internationale Wirtschaftsvergleich (wiiw), the Vienna Institute for
International Economic Studies, Rahlgasse, (Peter, “EU and BRICs: Challenges and opportunities for
European competitiveness and cooperation”, 10 July 2009, Enterprise and Industry Directorate-General
European Commission, 10 July 2009,
http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=5586, //CJD)
While the share of EU FDI going to the BRICs remains small. the EU is an important source
of FDI for all BRICs. This constellation mirrors trade, as the EU is a more important trading
partner for the BRICs than vice versa. In terms of FDI flows: the EU is by far the most
important investor in Russia and Brazil accounting on average for 57% and 53% of the
total FDI going to these countries in the period 2004-2007 (Figure 1.3.4, left). In the Asian
BRIC economies the share of the i inward FDI is much lower, ranging from 31% in India
to only 10% in China. This is explained by the large intra-regional FDI flows in South and
South-East Asia. In the case of Hong Kong stands out as the largest investor accounting
for 37% of total inflows in the period 2004-2007. FDI flows originating from Singapore,
Taiwan and South Korea make up another 13%" The high share of intra-regional FDI in
Asian countries is linked to the high degree of vertical trade integration. In the case of
Hong Kong, however, a part of the FDI flows to China constitutes round-tripping capital
ie Chinese investment taking a detour via Hong Kong for tax or other reasons (Poncet
2008). This phenomenon is also found in India and Russia since round-tripping inflates a
country's aggregate EDIL the role of the EU as a provider of FDI to India and China might
be higher than suggested by the statistics in the case of Russia the situation is different
because much of Russian round-tripping capital enters was Cyprus gardes of the precise
share of EU which is an EU member state (see Box 13.2). Reg member states in Russia's
inward FDI EU firms show a very high presence in Russia. A major reason for it is Russia’s
proximity which is one of the major determinant intensity of bilateral FDI flows to
emerging markets (Frenkel. Funke and Stadma, 2004). The EU emerges as the largest provider
of FDI among the Triad countries in each of the BRICs (Figure 13.4 right Russia and Brazil, the
amount invested by EU firms equaled seven to eight times the amount of FDI us firms in
these countries (average by 2000 The average annual FDI flow from the EU to China in
2005-2007 amounted to EUR 6.6 billion, more than twice the amount pouring in from
the United States. Japan. which has a strong Asian focus in its outward FDI, recorded on
average EUR 4.9 billion to China during the same period. In Hong Kong-the magnitude of
FDI flows from the EU and t EUR4.9 billion EUR 3.7 the United States are on a more s level
amounting billion respectively. EU flows to India were the lowest among the BRIC
counties amounting to EUR 3.9 billion on average for the period 2005-2007, albeit the
EU is the number one investor in India if Mauritius is neglected (see Box 1.3.2). Whereas the
strong Ho links between the EU and Russia could be expected due to the proximity of
the two markets and was also found in the trade in goods and services, the favorable
position of EU firms in Brazil compared to US firms is more surprising and in contrast
with the result found in services trade. The strong position of EU firms in the BRICs is
mainly the result of from Spain which has close historical links with South America" and
Germany which is a major and geographically well diversified provider of FDI.
2nc – internal link – FDI
FDI is key to BRICS economy
Rao et. Al. 10- Department of Banking Technology, School of Management, Pondicherry University,
(Kode Chandra Sekhara, “Determinants of FDI in BRICS Countries: A panel analysis”, Int. Journal of
Business Science and Applied Management, Volume 5, Issue 3, 2010, http://www.business-andmanagement.org/download.php?file=2010/5_3--1--13-Vijayakumar,Sridharan,Rao.pdf, //CJD)
In recent days, BRICS- the fast developing economies of the world having larger market
potentials are expected to attract larger inflow of FDI. However, the factors attracting the
FDI inflows towards these countries are relatively less researched. This study made an
attempt to identify the factors determining the FDI inflows of BRICS countries from the
period 1975 to 2007. The determinant factors include: Market size, Economic Stability and
Growth Prospects, Cost of Labour, Infrastructure Facilities, Trade Openness, Currency
value and Gross capital formation. The study finds that other than Economic Stability
and Growth prospects (measured by inflation rate and Industrial production respectively), Trade
openness (measured by the ratio of total trade to GDP) all other factors seem to be the
potential determinants of FDI inflows in BRICS countries. The empirical results are
robust in general for alternative variables determining FDI flows. The empirical analysis
has some policy implications towards the improvement of investment climate to attract
higher FDI inflows into BRICS countries that are expected to facilitate their economy in
enhancement of Market potential, Infrastructural development and Capital Formation.
Inflation (the Economic stability variable) and the Industrial production (the Growth Perspective
variable) are critical factors in attracting FDI, which helps to make appropriate policies for
improving the performance of domestic economy. Therefore, it is an important object to
maintain the stability of the currency of the host country to attract increased FDI. The
benefit of trade openness in terms of their impact on FDI is not validated in this study.
Thus, BRICS countries as developing nations have to involve themselves in the path of
economic reform and liberalisation activities. As expected, the negatively significance of
wage rate seems to validate the study as the determinant of FDI. The tag of fast-paced
economic growth notwithstanding, Brazil, Russia, India, China and South Africa (BRICS),
will have to tackle the challenge of ensuring and achieving growth without sacrificing
equity, and by utilizing the benefits of innovation to address the issues of inequality of
economies. The challenge is to have an innovation policy that will ensure growth
accompanied by equity, for which they must have necessary institutional mechanisms
in place. Thus, BRICS nations should face the challenges, ranging from gradual
deterioration of demographies and questions about environmental sustainability to
potential international trade frictions. The economic growth should be maintained at
least at current levels instead of slow down. The BRICS countries’ short and mediumterm outlook remains favourable in relation to the advanced economies. Investment
ratios in Brazil remain very low. Russia is highly dependent on hydrocarbons and
therefore it faces very adverse demographic developments. India will have to overcome
domestic opposition to growth-enhancing and growthsustaining economic reforms.
South Africa has to make initiation in promoting investment flows. Overall, the
emergence of the BRICS nations have to be seen in the context of the innovation system
that could evolve a proper understanding of the dynamics of innovation in these
countries under globalization which would be of immense policy relevance not only for
each of these countries but also for the BRICS as a group and other less developed
countries that are aspiring to catch up. Thus, the BRICS nations have to figure out that the
engine of growth and development including for heavily indebted countries lies in the
execution of major infrastructure projects, investment, and technological innovations
carried out in an environmentally conscious fashion. The future studies can focus on the
variables relating to the regional competency of the nations as well as equivalent to
home countries of the foreign investors. Such variables should include: Relative Market
Share and Relative Growth of the economy, Relative Corporate Rate, Risk Factors and
Corporate Governance. Sectoral analysis also expected to enhance the understanding of
industry specific FDI flows and its associated determinants. Thus, the overall
significance of the model specified in this study would contribute to a greater
understanding of the FDI determinants in the emerging markets, as well as, the findings
of this study would also lay emphasis on the importance of liberalisation and economic
policy reforms.
2nc – impact – econ
BRICS key to the global economy- supports developing countries
Morazán 12- in Germany for more than 30 years. After earning his doctorate in economics, Morazán began working as a research associate at The
SÜDWIND Institute for Economics and Ecumenism in Siegburg, Germany, in 1992. He currently focuses mainly on poverty reduction, external debt, the effectiveness
of development cooperation through the Millennium Development Goals and the BRICS countries, as well as methods of evaluating development cooperation
projects, (Pedro, “The Role of BRICS in the developing world”, April 2012, European Parliament,
http://www.ab.gov.tr/files/ardb/evt/1_avrupa_birligi/1_9_politikalar/1_9_8_dis_politika/The_role_of_BRICS_in_the_developing_world.pdf, //CJD)
The implications of increased relations are differing among the heterogeneous group of
developing countries. Largely, BRICS have contributed to economic growth and
sustainable development as recent studies show (IMF 2011e; Lin 2012). The biggest effect
can be identified in trade relations. 60 % of BRIC total impact on LICs is attributed to
trade. Due to strong trade ties of BRIC to Middle East, North Africa and Central Asia,
respective impacts are pronounced in these regions. Oil exporting countries are more
influenced by trade shocks than others (IMF 2011e: 18). Indirect spillovers to LICs include
commodity prices, global interest rates and demand. The influence of BRIC on these
variables should not be underestimated. In terms of demand and productivity, a 1 % increase
in BRIC is followed by a 0.7 % increase in LICs output over 3 years (Lin 2012). Moreover,
due to higher wages and mechanisation, China and other MICs are moving from lowskilled, labour-intense production to higher value added goods, thereby leaving spaces
and opportunities for LIC-economies to create jobs in these sectors (Lin 2012). Impacts of
FDI from BRIC to LICs can be very strong in countries with high inflows in percentage of
GDP (e.g. Sudan, Zambia). In general, these flows are seen as a minor contributor to LIC
growth only. After all, the volume is somewhat undersized in comparison to western
countries and so far “empirical evidence (...) is inconclusive” (IMF 2011e: 19). Taking into
account the overlapping structure of trade, FDI, grants and development financing the
positive impact of BRIC becomes more obvious. Especially African countries show
substantial improvement in electricity supply, railway and road infrastructure as well as
communication structures. Service security and lower transport and communication
expenditures are enabling further economic development. Positive spillovers include
higher productivity, higher exportrates, diversification of industries, and intensifying of
regional trade linkages. The IMF is also acknowledging BRIC assistance being
complementary to traditional development aid (IMF 2011a: 27). The BRIC impact on LICs
growth has significantly increased during the financial crisis.BRIC were affected less
than western countries, which has also led to an increased share in total LICs export.
BRIC economies are not fully intertwined with western structures, thereby providing
certain autonomy and reducing growth volatility in LICs (Lin 2012). Counterfactual analysis
show, that if BRIC growth would have declined at the same extent as industrialized
countries during the crisis, LICs’ growth would have been 0.3 – 1.1 % lower (IMF 2011e:
27). By and large, there are remarkable spillovers and positive impacts through BRICS’
engagement, especially regarding trade. Trade, FDI and development financing have
not only contributed to LICs’ economic development but also lessened the effects of
the recent financial crisis on LICs. However, many LICs still rely too much on exports of
primary commodities and are in need of diversification and improved technologies for
their industries. The World Bank’s Global Development Finance lists the BRICS in its
statistical databank as developing debtor countries and – except for South Africa – they
can all be found in the TOP 5 borrowers11. With an external total debt stock of USD
1,615.7 billion in 2010, the BRICS together “accounted for almost 40 % of the end 2010
external debt stock owed by all developing countries” (GDF 2012: 2). However, especially
China, but also other BRICS have incurred enormous amounts of international reserves
over recent years. Except for Brazil (83.2 % of external debt stock) and South Africa (97.0 %) this
amount surpasses the external debt stock, and in the case of China even more than five
times (531.2 %). Also related to GNI, none of the BRICS is severely indebted with the
indicators ranging from 9.3 % (China) to 26.9 % (Russian Federation). Although BRICS
play an increasingly important role as providers of development finance, financial flows
are generally (still) much smaller than OECD countries’ financing, however, it tends to be
less concessional. Debt creating flows from BRICS to SSA, for instance, have risen
dramatically: Total loan disbursements from BRICS to SSA grew by an average of 60 %
annually over the period 2000-10, reaching over USD 6 billion in 2010 (cf. Figure 5).
Figure 5 also shows that again China plays the predominant role in this overall trend
(World Bank 2011: 22). This has raised concerns that BRICS financing could affect debt
sustainability negatively, especially in countries which have received debt relief recently
and countries with weak institutions. Indeed, though generally benefits are identifiable
through increased BRICS development financing, some risks remain especially
connected with the following findings: BRIC seem to “provide more financing to LICs
with weaker institutions and governance.” (IMF 2011d: 18).
indicators seem to
point to the fact that BRIC financing is based at least partly on commercial risk
calculations: if the risk is perceived higher, the concessionality of the loan decreases.
For example, countries with higher BRIC loan commitments (=higher exposure),
countries without IMF-supported programmes and countries with weaker institutions
(which all could reflect a higher risk of debt distress) tend to receive loans on less
concessional terms (IMF 2011d: 12f). Both factors are inconsistent with the logic of the
IMF debt sustainability framework for LICs, which was designed to help maintain long
term debt sustainability providing guidelines for debtor and creditor countries on
borrowing limits and grant-allocation decisions according to a country’s prospective
repayment ability. Within this framework, countries with strong institutions and good
governance indicators are perceived as having higher repayment ability; they can
therefore manage higher debt indicators and incur more loans with low concessionality.
Thus, especially countries with weak institutions are at higher risk to run into debt
distress if much and less conditional financing is provided. However, so far there are
very few examples of BRICS financing creating debt sustainability problems. In the case
of Bhutan, for instance, partly loan financed investment in hydropower projects (by
India) is seen as unproblematic as the prospective rate of return is seen as increasing
repayment capacities (IMF 2009). In Mozambique, where two non-concessional loans where signed
with China and Brazil for infrastructure projects, amounts are fairly small but still raise
some concerns that this form of financing needs to be used more productively than in
the past (IMF 2011f). A case in point is certainly Zimbabwe, currently classified as being
in debt distress, where the government agreed upon non-concessional loans with China
amounting to USD 566 million (IMF 2011g). However, Zimbabwe has not yet received debt
relief under the respective frameworks (the Heavily Indebted Poor Countries Initiative and
Multilateral Debt Relief Initiative), and it is likely that China will take its share if conditions are
met for debt relief in the future. Although not yet problematic, it is certainly important
to observe BRICS’ financing, its social and economic returns and possible debt
sustainability issues in LICs in the future. However, it can also be seen, that the debt
sustainability framework could turn out to be a toothless tiger if it is not used as a
guidance by all development partners on both sides. This implies that the EU should not
only engage in capacity strengthening of debt and project management as well as
governance issues in LICs but also engage in a political dialogue with BRICS (and other
non-OECD development partners) to come to common terms of needs-based
development financing within a commonly designed debt sustainability framework.
BRICS economy is key to the global economy- GDP and FDI
Jaeger 09- Director at Deutsche Bank Research in New York, USA. He is responsible for
economic, financial, and political risk research, with a special focus on the larger emerging
markets. His current research interests include the global economic, political, and financial implications of the rise of the ‘BRIC’ countries, he oversaw Deutsche Bank’s EEMEA (Eastern
Europe, Middle East, and Africa) and Latin American sovereign and country risk research in London and New York. He holds a Ph.D. from the London School of Economics, (Markus, “BRIC
Outward FDI - the Dragon Will Outpace the Jaguar, the Tiger and the Bear”, 06/08/2009, Consensus Economics,
http://www.consensuseconomics.com/News_and_Articles/BRIC_Outward_FDI402.htm, //CJD)
Economic and financial commentary often focuses on BRIC (Brazil, Russia, India and China) FX
reserve accumulation. BRIC outward foreign direct investment typically attracts less
attention. While BRIC FDI (foreign direct investment) remains relatively small, their FDI
potential is substantial. On account of its economic size, rapid economic growth, large
external surpluses and the nature of political-strategic incentives, China has by far the
largest outward FDI potential. It will be interesting to observe whether the current crisis
will lead China to move closer to realizing its considerable potential. The BRICs are
becoming increasingly important economic players. In 2007 the BRIC countries' share of
global GDP amounted to almost 13% (measured at market exchange rates) or to 20% (in
purchasing power parity terms). The BRICs are also becoming increasingly important financial
players. BRIC external assets amounted to more than USD 4.1tn in 2007, a 45% increase
from the previous year! Although combined BRIC external assets remain much smaller
than the United States' estimated USD 17tn, the medium-term outlook for external
growth remains favourable, current volatility in global financial flows notwithstanding.
BRIC FX reserve accumulation generally receives more commentary than BRIC outward
FDI, politically sensitive investment projects excepted. This is not surprising. In spite of
considerable external asset growth, BRIC outward FDI flows and stocks remain relatively
small. In 2007, the BRIC share of the global FDI stock was a mere 3.3% (USD 510bn),
while flows amounted to a somewhat higher 4.5% (USD 90bn), much smaller than the
BRIC countries' economic weight. To put these numbers into perspective, combined
BRIC outward FDI flows were smaller than Italy's. The BRIC share in global flows has,
however, increased substantially from 1% in the 1990s to 4% during 2003-07. Although
China's outward FDI remains smaller than Russia's, there are good reasons to believe
that it will increase more quickly and substantially in the coming years. First and most
trivially, China's greater economic size, its faster economic growth rate and, especially, its
larger external surpluses are likely to support significant external asset accumulation. On
the current account side, China will run much, much larger surpluses than the other BRICs
(which won't run any surpluses at all over the next few years). On the capital account side, China will
receive larger equity inflows (incl. FDI) and benefit from sizeable debt inflows, generating
persistent capital account surpluses over the medium term (partly thanks to tighter
restrictions on capital outflows). A share of this surplus will be recycled in the form of FDI.
Second, China's "catch up" potential is significant. Its outward FDI stock and flows are low
as a share of GDP and as a share of total external assets. The FDI stock amounts to a
mere 3% of GDP, compared to Brazil's 10% and Russia's 20%. External asset holdings are
also heavily skewed towards reserve assets and in dollar terms Chinese FDI is smaller
than Brazilian and Russian FDI! The lower level of FDI is in part due to the rapid increase
in the size of the denominator (GDP measured in USD, external assets) and in part due
to (historically) significant restrictions on outward FDI. Rapidly rising per capita income
over the coming years should therefore support rising Chinese outward FDI. Admittedly,
all these metrics are very rough but they do give an indication of China's catch-up
potential. Third, the government has liberalized regulations governing outward FDI flows
in recent years and has streamlined bureaucratic procedures. The government offers
various kinds of support for Chinese companies seeking to invest overseas as part and
parcel of its "going abroad" and "national champion" policy. Today the FDI regime is
much more supportive of (or at least far less restrictive towards) outward FDI than in
the 1990s and this should help lead to increased outward FDI flows.
Politics
Politics Links
Plan is politically unpopular- GOP and public backlash prove
PC 11- Public Citizen institution, (“Unfair Trade Deals Becoming Even More Unpopular, U.S. Polling
Shows”, July 2011, Public Citizen, http://www.citizen.org/documents/polling-memo-july-2011.pdf,
//CJD)
Republicans want fair trade, just like Democrats Republicans at all educational levels are
highly skeptical of status quo trade policy. In a poll released by National Journal in May
2011, nearly 60 percent of Republicans at lower educational levels agreed with the
statement that “international trade has been bad for the U.S. economy because imports
have reduced demand for American-made goods, cost jobs here at home, and produced
potentially unsafe products.” Only 36 percent agreed with the alternative statement that
“international trade has been good for the U.S. economy because demand for U.S.
products abroad has resulted in economic growth and jobs for Americans and provided
more choices for consumers.” This skepticism is even creeping up the educational scale,
with nearly half of college-educated Republicans preferring the former statement as
well. Most Republicans in both educational groups believed that “decisions by American
companies to relocate jobs to other countries” has played “a major role” in “the high
unemployment of the past few years;” and that competition from “lower-paid workers”
abroad would inevitably lead to slower growth in Americans’ income in the future.7
Post-Election Polling Shows Continued Public Demands for Fair Trade Just after the November 2010
election, Greenberg Quinlan Rosner released the results of a poll8 they took for Democracy
Corps and Campaign for America’s Future. There are several interesting finds: • While
many pundits have suggested that Americans are primarily upset at the Democratic
Party or President Obama, Americans feel even less “warm” about corporations. Among
voters, only 29 percent fell warm towards corporations, while the comparable number is
only 13 percent among non-voters. The numbers for big banks specifically were even
worse in some regards: 12 percent among voters, and 16 percent among non-voters.
These are lower warm ratings that have Obama, the Democrats, the GOP, Sarah Palin,
Newt Gingrich, the NRA, labor unions, and more. (Only “the state of the economy”
garnered lower warm ratings, while "The Tea Party" fared poorly among non-voters.) •
Voters that voted for Democrats cited job offshoring as the most important issue facing
the country, and said that the GOP candidate’s support for job offshoring was the most
important reason to not vote Republican.
Plan costs PC- coalition forming for TAA proves
Sracic 13- staff writer at the Atlantic, (Paul, “The Odd Bipartisan Coalition That Could Sink Obama's
Free-Trade Legacy”, JUN 18 2013, The Atlantic,
http://www.theatlantic.com/politics/archive/2013/06/the-odd-bipartisan-coalition-that-could-sinkobamas-free-trade-legacy/276938/, //CJD)
Back when he was first seeking the Democratic Party's nomination for president, Barack Obama often
questioned free-trade agreements like NAFTA. By the end of his first year in office, however,
President Obama had already notified Congress that the U.S. would join Trans-Pacific
Partnership (TPP) free-trade negotiations. In October 2011 -- albeit with considerable
prodding from Republicans -- he submitted free-trade agreements negotiated by the
Bush Administration with Colombia, Panama, and South Korea to Congress. During this
year's State of the Union address, Obama reaffirmed his commitment to the TPP, and
announced that the U.S. would also pursue a Transatlantic Trade and Investment
Partnership (TTIP) free-trade agreement with EU countries. The sheer scope of these
deals is staggering. The TPP negotiations now include Brunei, Chile, Singapore, New
Zealand, Canada, Australia, Vietnam, Peru, Malaysia, Mexico, and very soon, Japan.
These nations have a collective GDP of about $11 trillion. For some perspective, U.S. annual
GDP is $15 trillion; China's is $7.3 trillion. U.S. joining the TPP is like entering into a deal
with a country that has the world's second-largest economy. It could add an estimated
$76 billion per year to the U.S. economy. To put this in context, that's equal to about 90
percent of the money saved by this year's sequester. The TPP is also crucial to the
administration's "Asia pivot." China is pursuing free-trade agreements in Asia, and the
TPP is an effort to balance out Chinese potential dominance in the region. And the TTIP is
even bigger. It would create the largest free-trade zone in the world and produce a $1
trillion annual increase in GDP for the economies on both sides of the Atlantic, according
to a European Commission study. If Obama could negotiate and implement just these
two agreements, he would almost without question be the most successful trade president in U.S.
history. But the Constitution charges Congress, not the president, with regulating
commerce, which means Congress has to pass legislation implementing any agreements
the president negotiates. And this is where the administration may have a huge problem
on its hands. In his book American Trade Politics, Professor I. M. Destler describes what he calls the
"imbalance" that always afflicts debates over trade policy: Producers and workers threated by
imports tend to be concentrated, organized, and ready and able to press their interests
in the political arena. Those who benefit from trade are generally diffuse, and their stake
in any particular trade matter is usually small. In any political battle over trade, this gives
the upper hand to anti-trade voices. This is important to keep in mind now, because the
success or failure of the TPP and the TTIP -- and the potential trillions in added wealth
for the nation's coffers -- will likely be determined by vote in Congress that may take
place as early as July. Candidate Obama attacked free-trade agreements in 2008 because
he knew that they were unpopular with important Democratic constituencies, especially
organized labor. Although Obama won't face voters again, members of Congress don't
have that luxury. It is generally agreed that the Obama will not be able to conclude the
TPP and TTIP negotiations unless Congress grants him Trade Promotion Authority (TPA) -commonly known as "fast-track" -- which guarantees that Congress will hold a straight
up or down vote on any trade agreement the president negotiates. Trade agreements
must be voted out of committee, and members can't offer amendments. The U.S. joining
the TPP is like entering into a deal with a country that has the world's second-largest
economy. It could add an estimated $76 billion per year to the U.S. economy -- about 90
percent of the money saved by this year's sequester. The logic behind fast-track is
obvious: Since Congress has the final say on U.S. laws governing commerce, the
president speaks not for himself but for the 535 members of Congress during trade
negotiations, since trade partners can't be expected to negotiate with 535 legislators.
Congress still has to ratify anything the president agrees to, but as a single package. That
gives trade partners the assurance that what's hammered out at the negotiating table
will remain in place. When Congress grants TPA to a president, the authorizing legislation
always includes negotiating objectives. This is a reminder to the president that he is acting
as a delegate from Congress. The negotiating objectives themselves, however, often
become the major point of contention. It was a battle over labor and environmental
standards, for example, that prevented the House from granting President Clinton fasttrack authority in 1998. This time, the list of concerns might well grow to include
broader definitions of things like state-owned industries and currency manipulation.
Another issue that's likely be attached to any discussion of TPA will be something called Trade
Adjustment Assistance (TAA), a program to help retrain workers whose jobs are lost as a
result of free-trade deals. TAA was renewed in October of 2011 and linked to approval
of the three agreements approved by the Congress at that time. Since TAA is due to
expire at the end of this year, it is bound to part of any legislation authorizing fast-track.
In the Senate, Democrat Max Baucus is already leading the charge for the renewal of TPA. He
can expect significant Republican support, but may have some trouble corralling
members of his own party. Democrat Sherrod Brown, whose power base in Northeast
Ohio's Rust Belt remains upset about the 1994 NAFTA, has already expressed
reservations. And since fast-track authorization is subject to filibuster, Obama may need
all the votes he can get. The battle in the House might be even more interesting.
Consider a recent piece by Renee Parsons, a former environmental lobbyist, in the
Huffington Post: As proposed, the TPA would eliminate Congress' Constitutional
responsibility as defined in Article I, Section 8 .... There is nothing ambiguous about Constitutional
intent in 1789 -- having just concluded a revolutionary war against an imperial autocrat ...
separation of powers and "checks and balances" were a clear decision by the country's
founders to prevent a strong executive from usurping power from the legislative branch
-- and that included foreign trade. You're about as likely to find Parsons, who blogs for the site
True Blue Progressive, at a Tea Party rally as you are to find Sarah Palin at a PETA convention. Still,
Parson's argument would get heads nodding at a Tea Party gathering. One can easily see
an odd alliance in the House between progressive Democrats, who reflect the concerns
of organized labor, and Tea Party Republicans, who don't want to give power away to
the president. Even Rep. Darrell Issa, usually a free-trade advocate, might oppose it
because of suspicions about the secretive nature of the TPP negotiations. In order to follow
through on his trade agenda, Obama is going to have to figure out a way to craft a coalition
of Democrats and Republicans. Unfortunately for him, he hasn't shown himself to be
very adept at this sort of bridge building. So far, in fact, Obama has avoided getting
involved at all, and hasn't even formally asked Congress to grant him fast-track. What
the president needs to understand if, as it appears, he wants to establish a free-trade
legacy, is that the toughest trade negotiators he will face are not in Tokyo or Brussels
but on Capitol Hill.
Republicans hate FTA policies- causes job outsourcing
Paul 07- Executive Director, Alliance for American Manufacturing, (Scott, “Stop the Presses:
Republicans Despise Free Trade... Do Their Candidates?”, October, 8th, 2007, Huffington Post,
http://www.huffingtonpost.com/scott-paul/stop-the-presses-republic_b_67613.html, //CJD)
This is the moment I've been waiting for. Year after year, the Wall Street Journal pumps up the
virtues of "free trade" through its own editorials, submissions on the op-ed page from
various luminaries, rants against anyone who dares to challenge the orthodoxy and
slanted news coverage of trade-related matters. Now, despite all their efforts, the Journal
reported last week that the vast majority of Republicans completely disagree with them.
I'm tempted to do a victory dance, but I'd rather see the Republican presidential candidates
respond. They have a chance at Tuesday's debate in Dearborn, Michigan, a state
devastated by the job losses that result from failed U.S. trade policy. And they have a
chance to listen to the concerns of voters in Iowa at our "Keep It Made in America"
Town Hall meeting on October 17 that will showcase the growing bipartisan chorus for
more accountability in our trade policy: challenging the currency and subsidy cheating
employed by countries like China, making sure our imports are safe, and negotiating
deals that actually improve our balance of trade, rather than worsening it. Now I'm waiting
for the next wave of stories, the ones that ask how Republicans could arrive at this position.
Have they failed to read basic economic texts? Have they succumbed to the jingoism of
Ross Perot and Pat Buchanan? Do they get upset when the Ivy League professors tell
them that all Americans need is more education in order to have job security? Or do
they merely think Tom Friedman is annoying and want to oppose anything he says? I
have a different explanation, one that is more plausible. We have an enormous overall trade
deficit and a record trade deficit with China. Even a declining dollar and the Chinese
product recall wave won't put much of a dent in it. This deficit -- and the massive dollar
reserves China has built up -- impacts all sorts of things in the U.S.: jobs, interest rates,
the safety of our food and consumer products, our national security, and the flexibility
we have in diplomacy. Republican voters, like most Americans, want our government to be
accountable, to provide security, and to encourage responsibility. With our current
trade policy, they strike out on all three counts. Unsafe imports arrive on our tables and
in our toy boxes because U.S. trade policy and regulators favors cheap and fast imports
over safe ones. Many manufacturers and farmers face overseas competition that is
subsidized -- unfairly -- while the Administration often turns a blind eye, costing us
profits, jobs and income, and ripping at the social fabric of the heartland. Despite lots of
evidence that existing trade deals don't work particularly well, the Congress is asked to
approve even more of them without a serious reassessment of the model. The offshoring
of manufacturing has reduced America's ability to supply our military and to ensure the
smooth operation of our economy. Has anyone bothered to think how a Chinese
blockade of Taiwan would impact our commerce, given our dependence on Asian-made
computer and electronic goods? It could be a crushing blow. Adam Smith and David
Ricardo -- two of the Journal's favorites -- never really contemplated a world of globalized,
stateless corporations that could shift production around at will. But that's the world we
now live in. That's why it is time for the Republicans running for President to decide
whether they want to embrace 19th century theory or prepare for 21st century reality.
We know where the voters are -- in the here and now.
Mexican trade policies are unpopular with the GOP- labor lobbies prove
Rosenbaum 01- staff writer at the New York times, (David E., “House Votes to Restrict Mexican Trucking”, June 27, 2001,
The New York Times, http://www.nytimes.com/2001/06/27/us/house-votes-to-restrict-mexican-trucking.html, //CJD)
The House of Representatives voted tonight to prohibit Mexican trucks from using
highways in the United States beyond 20 miles of the border. Even the sponsors of the
measure said they did not expect it to become law, but its passage underscored how
politically unpopular the North American Free Trade Agreement is. Under the pact,
Mexican trucks are supposed to gain full access to American roads next Jan. 1. The
restriction, approved by 285 to 143, was part of a bill that would permit the government
to spend almost $60 billion in the next fiscal year on highways, mass transit, aviation
and other transportation programs. The overall bill was approved, 426 to 1, opposed
only by Representative Ron Paul, Republican of Texas, who calls himself a libertarian
and opposes many government spending measures. The bill now goes to the Senate.
Transportation appropriation bills normally do not generate as much controversy as
most other spending measures. That is largely because more than three-quarters of the
money involved in the transportation bill -- raised through taxes on gasoline, airline
tickets and jet fuel -- is not allocated at the discretion of Congress but is instead spent
automatically through the highway trust fund and the airport and airways trust fund.
Another bill determines which specific projects get the money. Representative Martin Olav
Sabo, Democrat of Minnesota, offered the measure barring Mexican trucks after the
majority Republicans denied him a vote on a more moderate approach that would have
required safety inspections of Mexican trucks before they could operate in this country.
Mr. Sabo said he expected his amendment to be significantly modified in conference.
Labor unions complain that Mexican trucks are unsafe and would create hazards on
American roads. Whether that is true or not, the idea of restricting Mexican trucks is
grounded in general opposition to free trade with Mexico.
Lobbies ensure controversy
Moody 8/1/13 – (Glyn, “Trade Agreements With Mexico And South Korea Turned Out To Be Disasters
For US: So Why Pursue TPP And TAFTA/TTIP?”, Tech Dirt,
http://www.techdirt.com/articles/20130731/08404024018/trade-agreements-with-mexico-southkorea-turned-out-to-be-disasters-us-so-why-pursue-tpp-taftattip.shtml)//javi
That also provides an explanation as to why the US government is so keen to push ahead with
TPP and TAFTA/TTIP when all the available evidence suggests that both are likely to be harmful
for the US economy overall. Despite that fact, certain influential groups still stand to profit
"handsomely", and therefore have lobbied the politicians hard to engage in such
talks anyway. Unfortunately, much of those profits will be paid for by losses incurred by
ordinary members of the public through lower wages and unemployment caused by a
new "race to the bottom" and increased outsourcing. These are precisely the people who,
by an interesting coincidence, are never allowed to comment on or even see what is being
negotiated when these agreements are being drawn up in their name. Strange that.