Daily Management Review

There Might Not Be Much Bite For Emerging Markets By Trump’s Protectionist Bark


05/30/2017




There Might Not Be Much Bite For Emerging Markets By Trump’s Protectionist Bark
Even if talk becomes action, analysts say that much of a hit from the Trump administration's protectionist rhetoric might not have much of an impact on trade-dependent emerging markets.
 
In a final communique due to be released later on Saturday at the end of a summit of Group of Seven leaders, President Donald Trump has agreed to include a pledge to fight trade protectionism at the G-7 meeting on Saturday. the group's commitment to eliminating trade-distorting practices and the summit’s outcome was lauded by Trump in a post on Twitter.
 
Yet emerging markets were no longer as dependent on the West for trade, noted Chetan Sehgal, director of global emerging markets at Templeton Emerging Markets.
 
"Now intra-emerging markets are more important than just the U.S.," Sehgal said. "The trade within emerging markets has picked up much more than the trade with the U.S."
 
He pointed to data that indicates that while the portion going to developed markets has fallen to around 40 percent, nearly 60 percent of emerging markets' exports head to other emerging markets.
 
Many emerging market companies were no longer just assemblers of Western goods and had moved up the value chain, Sehgal also noted.
 
"Like 15 years back, the emerging markets used to have 15-20 percent of the world's patent applications but now it's nearly 45 percent," he said. "The next leg of growth is going to be fought based on intellectual capacity on patents and how you move up the technology curve. And I think emerging market companies are able to do that and therefore protectionism, which was important for trade earlier, is now no longer so much of a factor. "
 
The U.S. may not be setting the global trade agenda have been signaled by other indicators.
 
Agreement to assess options to proceed "expeditiously" without the U.S. was reached upon by 11 of the nations which signed on to the Trans-Pacific Partnership trade deal.
 
After U.S. President Donald Trump pulled the U.S. out of the pact, a broad 12-nation trade deal, which he claimed was a "disaster" that would hurt U.S. manufacturing, the TPP had been considered all but dead.
 
Trump has since reneged on some of his protectionist campaign rhetoric, such as a vow to label China a currency manipulator on "day one", although he ran on an anti-globalization agenda, since the election.
 
But by instituting plans to renegotiate the North American Free Trade Agreement, or NAFTA, after first threatening to terminate it entirely, and complaining about the U.S.'s free-trade agreement with South Korea, he has continued to target other U.S. trade partner.
 
Similar divergence in the economic fortunes of the U.S. and emerging Asia is noted by others.
 
China's One-Belt-One-Road (OBOR) initiative to build networks of trade and infrastructure across Asia, Africa, the Middle East and Europe was pointed out by Singapore bank DBS in a note last week.
 
Trump's oft-repeated and controversial plan to build a "big, beautiful wall" to block out its Southern neighbour Mexico was used as a contrast of that by the bank.
 
The OBOR project is "the antithesis of Trump's wall with Mexico – and it's not just a metaphor, both the Wall and the OBOR are plans for action – a contrast so sharp and so binary it's impossible for anyone to sit on the fence," DBS said.
 
Asia puts the surplus of exports in investments such as U.S. Treasurys as its exports more than it imports, it noted.
 
(Source:www.cnbc.com) 






Science & Technology

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

Over 270,000 Account Globally Banned From Twitter For Promotion Of Terrorism

Device Capable Of Hearing The Inner Voice Developed By Researchers

New mobile technologies will warn about natural disasters

The brewing industry welcomes blockchain

Asset-Sharing App Of Ryder Is Meant For Commercial Vehicles

Credit Suisse: China will become the leader in AI sphere

Five new technologies that will change the world

World Politics

World & Politics

Debates over Google are heating as a new EU directive is about to be introduced

Will Merkel accept Macron's plans for Europe?

USA and China are pushing North Korea to denuclearization

Germany's dilemma: Will the atomic energy win?

A Forceful Response To Syria Attack Will Be Given By U.S.: Trump

Is Trump’s Maximum Pressure Tactic On North Korea Succeeding Because Of China?

Why are Turkey-EU relations moving back?

Record-Breaking $39 Million raised for Rare Cancer Research in 2018 by Cycle for Survival