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Trade as a tool of geopolitics

According to the Minutes of the U.S. Trade Policy Review meeting released recently by the World Trade Organisation, major trade partners have expressed concern over the impact of the security measures instituted by the United States on the flow and cost of international trade from what is perhaps the most open economy. These concerns relate to a series of regulations introduced over the past few years in the name of combating terrorism; they include the Bioterrorism Act, which warrants the registration of all food suppliers (and even cultivators of crops) and the obligation to feed information to the U.S. authorities on the movement of food consignments, and the Container Security Initiative warranting precautions in the transportation of containers. Not only the chairperson of the TPR meeting (held in March), Claudia Uribe of Colombia, but also representatives of the European Union and countries such as South Korea and Japan called for balancing security concerns with the needs of legitimate trade. Switzerland was "somewhat concerned" that lack of definition of "national security" by the U.S. and wide discretion in the interpretation of this concept could undermine an otherwise sound and liberal American policy on foreign direct investment (under the Exon-Florio Amendment, which can be used to thwart ownership or control of U.S. businesses by foreigners). China was "highly concerned" that the U.S. interpretation and application of WTO national security clauses had seriously eroded the credibility of the multilateral trade regime.

It is China's observation that comes nearest to the truth. Although China apparently made no specific reference to this issue at the TPR meeting, the U.S. has, for more than four decades, imposed an economic boycott on its small neighbour, Cuba. Cuba itself recounted at the meeting the plethora of prohibitions on travel, trade (import-export), and technology transfer that Washington has imposed on it, in gross violation of its rights under both GATT and the WTO. What is more, the U.S. has imposed sanctions on foreign entities, including banks and companies, for violating its sanctions against Cuba. All this is not surprising, considering that Washington has defied more than a dozen resolutions adopted by the United Nations General Assembly, through overwhelming majorities, appealing to it to lift its Cuba sanctions. According to the U.S. Department of the Treasury, which administers these sanctions, they are intended to "isolate the Cuban government economically and deprive it of U.S. dollars". It is clear that the U.S., which does business with regimes of all hues and has entered into preferential trading arrangements with assorted countries, shows scant regard for trade between nations as a legitimate part of the international order and treats trade more as a tool of its geopolitics. This does not bode well either for free and fair trade or for international security.

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