Tariff on Tires to Cost Consumers

In the September 14, 2009 Wall Street Journal article "Tariff on Tires to Cost Consumers," Timothy Aeppel reports on a trade war between the U.S. and China in the market for tires:

Consumers who buy low-price Chinese tires — the bulk of the tires China exports to the U.S. — will be hit hardest by the new tariff, as shortages in this market segment cause retailers to scramble to find alternative sources in other countries.

The tariffs, which apply to all Chinese tires, will cut off much of the flow of the more than 46 million Chinese tires that came to the U.S. last year, nearly 17% of all tires sold in the country.

The low end of the market will feel the impact of the tariff most, as U.S. manufacturers, who joined the Chinese in opposing the tariffs, have said it isn't profitable to produce inexpensive tires in domestic plants.

"I think within the next 60 days you'll see some pretty significant price increases," said Jim Mayfield, president of Del-Nat Tire Corp. of Memphis, Tenn., a large importer and distributor of Chinese tires. He estimates prices for "entry-level" tires could increase 20% to 30%.

Low-end tires cost roughly $50 to $60 apiece, while premium tires can sell for $200 to $250.

It will take many months for producers in places like Indonesia and Brazil to pick up the slack. And any tire manufacturer that wants to get involved in the low-end business would have to revamp factory lines to produce the sizes and types of tires favored by U.S. consumers, a costly and complicated process.

There could also be shortages, Mr. Mayfield said, as existing supplies run low and importers have trouble finding alternative sources. Many importers stopped placing orders for Chinese tires several weeks ago, fearing they might end up ordering tires that would carry a hefty tariff by the time they arrived in U.S. ports.

The tariffs won't just hit Chinese producers. Both of the U.S.'s remaining domestic manufacturers — Goodyear Tire & Rubber Co. and Cooper Tire & Rubber Co. — make tires in China that they sell in the U.S. Cooper this year is on track to import 2.5 million tires that it made in China. It was planning to boost that to four million next year.

Most of the tires coming from China are sold under private-label names and little-known discount brands. Many of these tires are sold through large retailers and national auto chains.

While China mainly exports tires at the low end of the market, it does export tires at all price points, said Robert Purcell, chief executive officer of Purcell Tire & Rubber Co. in Potosi, Mo., which has 70 outlets selling retail and commercial tires. He said Chinese producers appear to be steadily moving toward selling higher-price tires as they and foreign companies invest in new technology in China.

Rod Lache, an industry analyst at Deutsche Bank Securities, said the tariff is hitting at a difficult moment, which could compound turbulence in the marketplace. Inventories are low, he said, as companies have reduced stocks in the face of the recession.

Meanwhile, a massive reduction in capacity is taking place. In 2005, North America had the capacity to produce 370 million tires. Today, that number has been cut by more than 40 million — and a further 35 million are in the process of being eliminated.

"And now demand is starting to creep back up," Mr. Lache said.

Write to Timothy Aeppel at timothy.aeppel@wsj.com

Mercantilism

The main goal of mercantilism was to increase the money in a country’s treasury by creating a favorable balance of trade. A country had a favorable balance of trade if it had more exports than imports. Colonies helped a country have the goods to maintain a favorable balance of trade. For example, say Spain sold $500 in sugar to France, and France sold $300 in cloth to Spain. France would also have to pay Spain $200 worth of precious metals to pay for all the sugar. Spain would then have a favorable balance of trade because the value of its exports (sugar) was greater than the value of its imports (cloth). Spain would become richer because of the precious metals it received from France.


Colonies helped nations grow rich in several ways. Colonies provided various raw materials as well as mines that produced gold and silver. In addition, colonies served as markets for goods made in the home country.

Source: http://mrthompson.org/text/2-1%20Spain%20Claims%20an%20Empire.htm

Global Arcade

Global Arcade is the family fun center where you can play arcade games and learn about globalization and what is happening to people around the world.

Inside, you'll find Shockwave games and quizzes, message areas to talk about global issues, stories and interviews on globalization, and links to many more organizations and resources for information and action.

A New Path for Japan

A New Path for Japan

August 27, 2009
OP-ED CONTRIBUTOR
A New Path for Japan

By YUKIO HATOYAMA

TOKYO — In the post-Cold War period, Japan has been continually buffeted by the winds of market fundamentalism in a U.S.-led movement that is more usually called globalization. In the fundamentalist pursuit of capitalism people are treated not as an end but as a means. Consequently, human dignity is lost.

How can we put an end to unrestrained market fundamentalism and financial capitalism, that are void of morals or moderation, in order to protect the finances and livelihoods of our citizens? That is the issue we are now facing.

In these times, we must return to the idea of fraternity — as in the French slogan “liberté, égalité, fraternité” — as a force for moderating the danger inherent within freedom.

Fraternity as I mean it can be described as a principle that aims to adjust to the excesses of the current globalized brand of capitalism and accommodate the local economic practices that have been fostered through our traditions.

The recent economic crisis resulted from a way of thinking based on the idea that American-style free-market economics represents a universal and ideal economic order, and that all countries should modify the traditions and regulations governing their economies in line with global (or rather American) standards.

In Japan, opinion was divided on how far the trend toward globalization should go. Some advocated the active embrace of globalism and leaving everything up to the dictates of the market. Others favored a more reticent approach, believing that efforts should be made to expand the social safety net and protect our traditional economic activities. Since the administration of Prime Minister Junichiro Koizumi (2001-2006), the Liberal Democratic Party has stressed the former, while we in the Democratic Party of Japan have tended toward the latter position.

The economic order in any country is built up over long years and reflects the influence of traditions, habits and national lifestyles. But globalism has progressed without any regard for non-economic values, or for environmental issues or problems of resource restriction.

If we look back on the changes in Japanese society since the end of the Cold War, I believe it is no exaggeration to say that the global economy has damaged traditional economic activities and destroyed local communities.

In terms of market theory, people are simply personnel expenses. But in the real world people support the fabric of the local community and are the physical embodiment of its lifestyle, traditions and culture. An individual gains respect as a person by acquiring a job and a role within the local community and being able to maintain his family’s livelihood.

Under the principle of fraternity, we would not implement policies that leave areas relating to human lives and safety — such as agriculture, the environment and medicine — to the mercy of globalism.

Our responsibility as politicians is to refocus our attention on those non-economic values that have been thrown aside by the march of globalism. We must work on policies that regenerate the ties that bring people together, that take greater account of nature and the environment, that rebuild welfare and medical systems, that provide better education and child-rearing support, and that address wealth disparities.

Another national goal that emerges from the concept of fraternity is the creation of an East Asian community. Of course, the Japan-U.S. security pact will continue to be the cornerstone of Japanese diplomatic policy.

But at the same time, we must not forget our identity as a nation located in Asia. I believe that the East Asian region, which is showing increasing vitality, must be recognized as Japan’s basic sphere of being. So we must continue to build frameworks for stable economic cooperation and security across the region.

The financial crisis has suggested to many that the era of U.S. unilateralism may come to an end. It has also raised doubts about the permanence of the dollar as the key global currency.

I also feel that as a result of the failure of the Iraq war and the financial crisis, the era of U.S.-led globalism is coming to an end and that we are moving toward an era of multipolarity. But at present no one country is ready to replace the United States as the dominant country. Nor is there a currency ready to replace the dollar as the world’s key currency. Although the influence of the U.S. is declining, it will remain the world’s leading military and economic power for the next two to three decades.

Current developments show clearly that China will become one of the world’s leading economic nations while also continuing to expand its military power. The size of China’s economy will surpass that of Japan in the not-too-distant future.

How should Japan maintain its political and economic independence and protect its national interest when caught between the United States, which is fighting to retain its position as the world’s dominant power, and China, which is seeking ways to become dominant?

This is a question of concern not only to Japan but also to the small and medium-sized nations in Asia. They want the military power of the U.S. to function effectively for the stability of the region but want to restrain U.S. political and economic excesses. They also want to reduce the military threat posed by our neighbor China while ensuring that China’s expanding economy develops in an orderly fashion. These are major factors accelerating regional integration.

Today, as the supranational political and economic philosophies of Marxism and globalism have, for better or for worse, stagnated, nationalism is once again starting to have a major influence in various countries.

As we seek to build new structures for international cooperation, we must overcome excessive nationalism and go down a path toward rule-based economic cooperation and security.

Unlike Europe, the countries of this region differ in size, development stage and political system, so economic integration cannot be achieved over the short term. However, we should nonetheless aspire to move toward regional currency integration as a natural extension of the rapid economic growth begun by Japan, followed by South Korea, Taiwan and Hong Kong, and then achieved by the Association of Southeast Asian Nations (ASEAN) and China. We must spare no effort to build the permanent security frameworks essential to underpinning currency integration.

Establishing a common Asian currency will likely take more than 10 years. For such a single currency to bring about political integration will surely take longer still.

ASEAN, Japan, China (including Hong Kong), South Korea and Taiwan now account for one quarter of the world’s gross domestic product. The economic power of the East Asian region and the interdependent relationships within the region have grown wider and deeper. So the structures required for the formation of a regional economic bloc are already in place.

On the other hand, due to historical and cultural conflicts as well as conflicting national security interests, we must recognize that there are numerous difficult political issues. The problems of increased militarization and territorial disputes cannot be resolved by bilateral negotiations between, for example, Japan and South Korea, or Japan and China. The more these problems are discussed bilaterally, the greater the risk that emotions become inflamed and nationalism intensified.

Therefore, I would suggest, somewhat paradoxically, that the issues that stand in the way of regional integration can only be truly resolved by moving toward greater integration. The experience of the E.U. shows us how regional integration can defuse territorial disputes.

I believe that regional integration and collective security is the path we should follow toward realizing the principles of pacifism and multilateral cooperation advocated by the Japanese Constitution. It is also the appropriate path for protecting Japan’s political and economic independence and pursuing our interests in our position between the United States and China.

Let me conclude by quoting the words of Count Coudenhove-Kalergi, founder of the first popular movement for a united Europe, written 85 years ago in “Pan-Europa” (my grandfather, Ichiro Hatoyama, translated his book, “The Totalitarian State Against Man,” into Japanese): “All great historical ideas started as a utopian dream and ended with reality. Whether a particular idea remains as a utopian dream or becomes a reality depends on the number of people who believe in the ideal and their ability to act upon it.”

Yukio Hatoyama heads the Democratic Party of Japan, and would become prime minister should the party win in Sunday’s elections. A longer version of this article appears in the September issue of the monthly Japanese journal Voice.

Japan must shake off US-style globalization

"Japan must shake off US-style globalization" is an excerpt from an article by Yukio Hatoyama, the leader of the Democratic Party of Japan.

Tokyo – In the post-cold war period, Japan has been continually buffeted by the winds of market fundamentalism in a US-led movement that is more usually called globalization. Freedom is supposed to be the highest of all values, but in the fundamentalist pursuit of capitalism people are treated not as an end but as a means. Consequently, human dignity has been lost.

The recent financial crisis and its aftermath have once again forced us to take note of this reality. How can we put an end to unrestrained market fundamentalism and financial capitalism that are void of morals or moderation in order to protect the finances and livelihoods of our citizens? That is the issue we are now facing.

In these times, we must return to the idea of fraternity – as in the French slogan "liberté, égalité, fraternité" – as a force for moderating the danger inherent within freedom. It must be the compass that determines our political direction, a yardstick for deciding our policies. The idea of fraternity is also the spirit behind our idea of achieving "an era of independence and coexistence" in today's world.

Fraternity as I mean it can be described as a principle that aims to adjust to the excesses of the current globalized brand of capitalism and accommodate the local economic practices that have been fostered through our traditions.

The recent worldwide economic crisis resulted from a way of thinking based on the principle that American-style free-market economics represents a universal and ideal economic order – and that all countries should modify the traditions and regulations governing their own economy in order to reform the structure of their economic society in line with global standards (or rather American standards).

In Japan, opinion was divided on how far the trend toward globalization should go. Some people advocated the active embrace of globalism and supported leaving everything up to the dictates of the market. Others favored a more reticent approach, believing that effort should be made instead to expand the social safety net and protect our traditional economic activities. Since the administration of Prime Minister Junichiro Koizumi (2001-2006), the Liberal Democratic Party has stressed the former while we in the Democratic Party of Japan have tended toward the latter position.

(For context on Japan's election August 30, read: Briefing: Why power may shift in Japan)

The economic order or local economic activities in any country are built up over long years and reflect the influence of each country's traditions, habits, and national lifestyles. However, globalism progressed without any regard for various non-economic values, nor for environmental issues or problems of resource restriction. If we look back on the changes in Japanese society that have occurred since the end of the cold war, I believe it is no exaggeration to say that the global economy has damaged traditional economic activities and destroyed local communities.

Capital and means of production can now be transferred easily across international borders. However, people cannot move so easily. In terms of market theory, people are simply personnel expenses, but in the real world people support the fabric of the local community and are the physical embodiment of its lifestyle, traditions, and culture. An individual gains respect as a person by acquiring a job and a role within the local community and being able to maintain his family's livelihood.

Under the principle of fraternity, we would not implement policies that leave economic activities in areas relating to human lives and safety, such as agriculture, the environment and medicine, to the mercy of the tides of globalism.

Our responsibility as politicians is to refocus our attention on those non-economic values that have been thrown aside by the march of globalism. We must work on policies that regenerate the ties that bring people together, that take greater account of nature and the environment, that rebuild welfare and medical systems, that provide better education and child rearing support, and that address wealth disparities. This is required in order to create an environment in which each individual citizen is able to pursue happiness.

Overcoming nationalism through an East Asian community

Another national goal that emerges from the concept of fraternity is the creation of an East Asian community. Off course, the Japan-US security pact will continue to be the cornerstone of Japanese diplomatic policy. Unquestionably, the Japan-US relationship is an important pillar of our diplomacy. However, at the same time, we must not forget our identity as a nation located in Asia. I believe that the East Asian region, which is showing increasing vitality in its economic growth and even closer mutual ties, must be recognized as Japan's basic sphere of being. Therefore, we must continue to make efforts to build frameworks for stable economic cooperation and national security across the region.

The recent financial crisis has suggested to many people that the era of American unilateralism may come to an end. It has also made people harbor doubts about the permanence of the dollar as the key global currency. I also feel that as a result of the failure of the Iraq war and the financial crisis, the era of US-led globalism is coming to an end and that we are moving away from a unipolar world toward an era of multipolarity.

However, at present, there is no one country ready to replace the United States as the world's most dominant country. Neither is there a currency ready to replace the dollar as the world's key currency.

Although the influence of the US is declining, it will remain the world's leading military and economic power for the next two to three decades. Current developments show clearly that China, which has by far the world's largest population, will become one of the world's leading economic nations, while also continuing to expand its military power.

The size of China's economy will surpass that of Japan in the not-too-distant future. How should Japan maintain its political and economic independence and protect its national interest when caught between the United States, which is fighting to retain its position as the world's dominant power, and China, which is seeking ways to become dominant?

This is a question of concern not only to Japan but also to the small and medium-sized nations in Asia. They want the military power of the US to function effectively for the stability of the region but want to restrain US political and economic excesses. They also want to reduce the military threat posed by our neighbor China while ensuring that China's expanding economy develops in an orderly fashion. These are major factors accelerating regional integration.

Today, as the supranational political and economic philosophies of Marxism and globalism have, for better or for worse, stagnated, nationalism is once again starting to have a major influence on policymaking decisions in various countries. As symbolized by the anti-Japanese riots that occurred in China a few years ago, the spread of the Internet has accelerated the integration of nationalism and populism, and the emergence of uncontrollable political turbulence is a very real risk.

As we maintain an awareness of this environment and seek to build new structures for international cooperation, we must overcome excessive nationalism and go down a path toward rule-based economic cooperation and security.

Unlike Europe, the countries of this region differ in their population sizes, development stages and political systems, and therefore economic integration cannot be achieved over the short term.

However, we should nonetheless aspire to move toward regional currency integration as a natural extension of the rapid economic growth begun by Japan, followed by South Korea, Taiwan, and Hong Kong, and then achieved by the ASEAN nations and China. We must therefore spare no effort to build the permanent security frameworks essential to underpinning currency integration.

Establishing a common Asian currency will likely take more than 10 years. For such a single currency to bring about political integration will surely take longer still.

ASEAN (Association of Southeast Asian Nations), Japan, China (including Hong Kong), South Korea, and Taiwan now account for one quarter of the world's gross domestic product. The economic power of the East Asian region and the interdependent relationships within the region have grown wider and deeper, which is unprecedented. As such, the underlying structures required for the formation of a regional economic bloc are already in place.

On the other hand, due to the historical and cultural conflicts existing between the countries of this region, in addition to their conflicting national security interests, we must recognize that there are numerous difficult political issues. The problems of increased militarization and territorial disputes cannot be resolved by bilateral negotiations between, for example, Japan and South Korea, or Japan and China. The more these problems are discussed bilaterally, the greater the risk that citizens' emotions in each country will become inflamed and nationalism will be intensified.

Therefore, somewhat paradoxically, I would suggest that the issues that stand in the way of regional integration can only really be resolved through the process of moving toward greater regional integration. The experience of the European Union shows us how regional integration can defuse territorial disputes.

I believe that integration and collective security in the Asia-Pacific region is the path we should follow toward realizing the principles of pacifism and multilateral cooperation advocated by the Japanese constitution. It is also the appropriate path for protecting Japan's political and economic independence and pursuing our national interest from our position between two of the world's great powers, the United States and China.

We are currently standing at a turning point in global history, and therefore our resolve and vision are being tested.

Let me conclude by quoting the words of Count Coudenhove-Kalergi, the father of the European Union, written 85 years ago, when he published "Pan-Europa." (My grandfather, Ichiro Hatoyama, translated his book "The Totalitarian State Against Man" into Japanese.)

"All great historical ideas started as a utopian dream and ended with reality."

"Whether a particular idea remains as a utopian dream or becomes a reality depends on the number of people who believe in the ideal and their ability to act upon it."

Yukio Hatoyama heads the Democratic Party of Japan. This is an abridged version of an article entitled "My Political Philosophy" in the September issue of the monthly Japanese journal "Voice." © Voice/Global Viewpoint Network. Distributed by Tribune Media Services.

Hot, Flat, and Crowded

Hot, Flat, and Crowded by Thomas L. Friedman.

Boycott Flor de Caña in support to sugar workers

Boycott Flor de Caña in support to sugar workers
by Flor de Caña boycott group | 06.07.2009
Join to "Flor de Caña Boycott Group" - Send your letter to the importers and distributors in USA

http://www.facebook.com/group.php?gid=76399022845

"In Nicaragua, a holding by the name Pellas Group has a sugar cane plantation called Ingenio San Antonio. This plantation produces the raw material for making Flor de Caña rum. The labor conditions and the use of pesticides in the plantation have sentenced to death more than 3,000 former workers, besides contaminating the water, lands and the air of the western part of the country.”

“This holding is Nicaragua´s most powerful, and it is very difficult to get them to change their corporate practices, above all because it fashions itself a responsible and pro-environment business, buying public opinion through corporate social responsibility programs. For this reason, we request people´s solidarity through denunciation and dissemination of the message”

For this reason we have prepared letters translated into different languages, so that each person that wants to show his/her indignation to what is happening and let his/her protest be known, can send them to Compañía Licorera de Nicaragua SA, and to the importers and distributors of Flor de Caña rum in their respective countries.

LETTER:

Letter to Compañía Licorera de Nicaragua SA (CLNSA)
Send to: info@flordecana.com
CC: marrowsmith@deussenglobal.com y boicotpellas@gmail.com

Directors of Compañía Licorera de Nicaragua SA

The purpose of this letter is to inform you of my decision to refrain from buying or consuming Flor de Caña Rum. This decision is based on the current situation of your company, regarding its involvement in a series of claims having to do with labor, human rights, and environmental issues. Among these:

1) Contamination of land and water of the western part of Nicaragua (Chichigalpa), where Ingenio San Antonio is located. This is due to the excessive use of toxic agricultural products in the region.
2) Air contamination, due to the irresponsible burning of the sugar cane fields as a common practice of planting and harvesting in the western part of Nicaragua (Chichigalpa), where Ingenio San Antonio is located.
3) Contamination of workers at Ingenio San Antonio through fumigation of toxic agricultural products. This, along with other questionable labor practices (i.e. such as an excessive number of hours working under the sun) has contributed to have them develop Chronic Renal Insufficiency (IRC), a disease which has already killed more than 3,000 people in that zone of Nicaragua.
4) The proscription of independent labor unions, allowing only those that are “company unions” sponsored by the businesses of the Pellas Group (Compañía Licorera de Nicaragua and Nicaragua Sugar Estates Ltd, propietor of Ingenio San Antonio).

I urge you to revise and change your environmentally hazardous practices regarding the use of chemicals and the burning of sugar cane fields (among others). I also urge you to welcome independent studies of water, land and air quality at Ingenio San Antonio and its vicinity. Lastly, I urge you to listen and answer the claims of the former workers organized through ANAIRC.

While these minimal conditions are not met, and clear evidence attesting to the opposite is not produced, I will continue to denounce, both nationally and internationally, the suspicions regarding your corporate practices.

Sincerely,

Name
Country

Letter to importers and distributors

Distribution/importation in the United State
Skyy Spirit LLC: skyyreception@skyy.com (Property of Gruppo Campari Company)

Directors of Skyy Spirit LLC,

The purpose of this letter is to inform you of my total disagreement with your company´s importation and distribution of Nicaraguan rum Flor de Caña in [your country]. My position is based on the fact that the brand´s holding company -the Pellas Group –is involved in a series of claims having to do with labor, human rights, and environmental issues. Among these:

1) Contamination of land and water of the western part of Nicaragua (Chichigalpa), where Ingenio San Antonio is located. This is where the sugar cane with which the rum is produced, is grown and processed. The contamination is due to the excessive use of toxic agricultural products in the region.
2) Air contamination, due to the irresponsible burning of the sugar cane fields as a common practice of planting and harvesting in the western part of Nicaragua (Chichigalpa), where Ingenio San Antonio is located.
3) Contamination of workers at Ingenio San Antonio through fumigation of toxic agricultural products. This, along with other questionable labor practices (i.e. such as an excessive number of hours working under the sun) has contributed to have them develop Chronic Renal Insufficiency (IRC), a disease which has already killed more than 3,000 people in that zone of Nicaragua.
4) Violation of labor rights, through the formation of “company unions” paid by the Pellas Group (Compañía Licorera de Nicaragua and Nicaragua Sugar Estates Ltd, proprietor of Ingenio San Antonio).

For these reasons, I have decided not to consume this product until the Pellas Group is completely free of suspicion and has demonstrated a change in its corporate practices associated with the environment, as well as the life, human rights and labor rights of its workers, former workers, and the Nicaraguan people in general.

I hereby let my protest be known against the importation and distribution Flor de caña rum, in solidarity with the people of Nicaragua. I appeal to your sense of corporate responsibility to become informed about this product which is currently being boycotted in Nicaragua for these reasons, and which is being questioned by a group of former workers from Ingenio San Antonio who are patients of IRC,organized under ANAIRC. They are demanding a reparations package from the Pellas Group, and to this day have not yet received an answer.

If your company does not reconsider the importation and distribution of Flor de Caña rum, it will become an accomplice to the corporation that produces it.

Sincerely,

Name