G8 A time for a new agenda?

 

Sometimes international meetings turn out to be timely. There is some global crisis which needs attention. Whatever the agenda of the summit may say, however well crafted it may be, events take it over. Sometimes there is mercifully no such crisis, so the Summiteers have to concentrate on the pre arranged agenda and feel under some compulsion to come up with an answer or an agreed policy.

The latest G8 has partly been overtaken by the changing stance of the USA on Syria and the Russian response to it. There are limits, however, to what the Summit can do, given the sharp differences of view that we know about between Russia and the USA over this issue. The West will be aware that the UN is not about to give cover for any military intervention by the west. They should also know that escalation in these circumstances can be a dangerous game. It is good that Mr Hague has recognised that neither the UN nor the UK Parliament wish  the Uk government to become involved militarily. He has reaffirmed that no decision has been taken to arm the rebels, and would be well advised to understand just how much opposition there is to this course of action.

The G8 should move on to the issues of jobs, trade and economic growth. I do not think there is much by way of a showy communique they can produce. Best of all would be some movement in favour of more free trade around the world, taking down obstacles to economic progress. Sometimes the best outcome is that there is no real outcome.

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15 Comments

  1. lifelogic
    Posted June 18, 2013 at 5:32 am | Permalink

    Indeed free trade and removing the many (usually government) obstacles to it.

    Talking of which, the government needs urgently to get rid of (or at least revisit) the idiotic tenancy deposit protection scheme. This now seems to have been thrown into further absurdity by the court of appeal decision Superstike vs Rodrigues. If you can take a deposit when you rent a car why on earth can you not do it for a flat and without all the pointless expense, hassle and inconvenience this idiotic law. A law which even extends it to very large landlord fines and also restricts repossession proceedings.

    Do they want properties available to rent or not? It is rather like renting a car and then not having to give it back due to a technicality on the deposit paper work.

    Lots more profitable work for, largely parasitic, lawyers – no doubt many on legal aid, more costs for landlords and more expensive rents and fewer properties available to rent.

  2. Robert K
    Posted June 18, 2013 at 5:56 am | Permalink

    Is it just me, or is the US unable to look at a war without wanting to get involved? It must be one of the most pugilistic nations in history.

  3. colliemum
    Posted June 18, 2013 at 5:57 am | Permalink

    It is well beyond time that you, the MPs, hammer home to Cameron and Hague that there is absolutely no reason for the UK to ‘support’ either side in Syria – not with arms, money, and especially not with our squaddies.
    it is inconceivable that neither Hague nor Cameron have understood by now that the so-called ‘rebels’ are jihadis, and that toppling Assad by now means that yet another islamic dictatorship will be established in that region.
    Have they learned nothing from what happened and is happening in Egypt, Tunisia, Libya?
    How stupid are they, how stupid are their advisers?

    Reply Many of us are doing so.

  4. Andyvan
    Posted June 18, 2013 at 7:12 am | Permalink

    The G8 has never made any contribution to jobs, trade, economic growth or peace. The best any government can do for any of those objectives is to get out of the way so that the private sector can get on with the work. Politicians and bureaucrats can only interfere and cause trouble in whatever they do and the G8 simply do it more. In fact the best thing for those alleged leaders is to have a nice little chat amongst themselves and leave the real world alone.

    • waramess
      Posted June 18, 2013 at 2:52 pm | Permalink

      I agree and since they have not understood how to achieve this in their own countries I fail to see how a collective effort would be any more effective.

  5. Jerry
    Posted June 18, 2013 at 7:18 am | Permalink

    The G8 should concentrate on economic crisis, that is it’s prime reason for being and that is actually more important to the world. Let the UN deal with the on-coming diplomatic crisis being caused by civil war in Syria because only at the UN can all sides have representation and thus be heard.

  6. Denis Cooper
    Posted June 18, 2013 at 8:13 am | Permalink

    I’m struck by the economic insignificance of the planned EU-US trade deal.

    Big numbers are bandied about in an effort to extol its benefits, but put into context the numbers are not so impressive.

    For example:

    http://www.telegraph.co.uk/finance/economics/10124883/G8-three-Ts-trade-tax-and-transparency.html

    “Such a deal could add over £100bn to Europe’s GDP, with Mr Cameron claiming it could “turbo-charge the transatlantic economy”.”

    but even if that one-off increase in GDP did eventually materialise it would only be about €120 billion on the collective EU GDP of about €13000 billion, or less than 1%.

    Similarly:

    http://www.telegraph.co.uk/news/worldnews/g8/10126201/Quitting-EU-would-damage-Britain.html

    “The Prime Minister said it would be worth £11 billion to Britain, the equivalent of £384 for every household, bringing two million new jobs and “lower prices in the shops”. ”

    As UK GDP is about 15% of the collective EU GDP, £11 billion would be less than the pro rata share of £15 billion out of £100 billion; but leaving that aside and taking the £11 billion figure, UK GDP is about £1500 billion and so that would be a one-off increase of about 0.7%.

    Now of course a 0.7% increase in GDP is not to be dismissed out of hand, and we would be very pleased if the ONS announced that UK GDP had increased by 0.7% in the past quarter, but that is the point: with the natural growth rate of the UK economy averaging out somewhere near 2.5% a year over the long term, the projected economic benefit of the EU-US trade deal would be a one-off increase equivalent to no more than a few months of trend growth.

    And it has to be recognised that it would be a one-off: while we might have increases in GDP averaging out close to 0.7% for quarter after quarter after quarter for decades to come, the 0.7% increase from the EU-US trade deal would occur only once, and probably spread out over so many years that its effects were barely discernible.

    Also, taking that £11 billion as being about 0.7% of UK GDP, it’s not easy to see how that could possibly translate to the claimed “equivalent of £384 for every household”, if that it to be taken as meaning an increase of £384 a year in the income of an average household.

    That would mean that the average household presently had an annual income of around £52000, far higher than the real figure of around £25800:

    http://www.newstatesman.com/economics/economics/2012/05/uk-monthly-household-income-rises-4-cent-%C2%A32150

    “… the average monthly household income in the UK reached £2,150 in May 2012 …”.

    In a simple pro rata basis, a 0.7% increase in GDP would translate to an increase of £181 in the annual income of the average household; or putting it in an even less exciting light, if the projected benefits of the EU-US trade deal were realised then it would be worth an extra £3.47 a week for the average UK household.

    Likewise, Cameron’s picture of the deal “bringing two million new jobs” doesn’t stand up to examination if that it to be understood as meaning two million new jobs in the UK; with a workforce of just under 30 million, on a simple pro rata basis a 0.7% increase in GDP would translate to 210,000 new jobs, not 2 million.

    So it can only be assumed that the “two million new jobs” to which Cameron refers in fact means two million new jobs across the whole of the EU and maybe also in the US, not two million new jobs in this country dramatically slashing our unemployment rate.

    Bearing in mind the original projection that the EU Single Market could increase the collective GDP of the EU member states by 5%, which probably has not in fact been realised and has come at increased costs largely cancelling the benefits of the freer trade, but which in any case would have been equivalent to just a couple of years of natural growth and the trend rate, and that this trade deal between the world’s two largest trade blocs is projected to increase GDP by only 1% or less, which would be equivalent to just some months of natural growth, doesn’t it appear that the law of diminishing returns is now operating strongly on the benefits of free trade?

  7. Mike Stallard
    Posted June 18, 2013 at 8:16 am | Permalink

    Free Trade!
    Well, how do we work that in with the Single Market then?
    How do we work out our own Trade Agreements outside the EU?
    The number of States who are allowed to trade with the EU is tiny. I do not think that it is likely to increase although there are some talks, I understand, between the EU and USA about to start next month.
    The number of trade agreements at the moment is woeful actually.
    http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149622.jpg
    (Sorry about the link)

  8. margaret brandreth-j
    Posted June 18, 2013 at 8:38 am | Permalink

    Mr Obama did say he would supply arms with international backing , that being the imperative and it was a good move in consideration of Putin’s opposition . The diplomacy which was showy was demonstrably appropriate at this time . Enniskillen provided the setting for a good boast of peace witnessed by Putin .

    Osbourne last night talked about the agreement waiting to happen ,which the public don’t really know about and would provide many jobs. I would like to understand a great more about this deal.

  9. Richard1
    Posted June 18, 2013 at 9:56 am | Permalink

    Given the overwhelming evidence that lower tax rates generate higher growth, perhaps the G8, along with its campaign against tax avoidance, should also promote an objective for governments around the world to hold total tax/GDP below 30%. It could also affirm the principle, since governments don’t have their own money – only what they take from their citizens, that governments will borrow only in exceptional circumstances (such as wars) and will otherwise seek to run balanced budgets.

  10. Atlas
    Posted June 18, 2013 at 1:14 pm | Permalink

    Cameron is getting quite excited about this USA – EU deal. Since the Devil is in the detail, exactly how much could tariffs be reduced by? I guess it is 3.5 % of the present prices – it’s hardly going to drop the prices of things in the shops to an extent that would make everybody feel a lot better.

  11. Mark B
    Posted June 18, 2013 at 3:23 pm | Permalink

    John Redwood MP said, “It is good that Mr Hague has recognised that neither the UN nor the UK Parliament wish the Uk government to become involved militarily.”

    And the people, whose blood and treasure would have to be spent in order for us to undertake this foreign policy and, subsequent military disaster.

    Syria is a Russian ‘client state’ and a very important military ally. They have a Naval Base in the region, and would feel very threatened should their be a regime change. Plus, if Assad was to fall, then Putin would lose face both domestically and abroad. He has always modeled himself as a strong man and a defender of Russia and her people. Those little shows of force are not just for fun – he is serious !

  12. Gary
    Posted June 18, 2013 at 3:24 pm | Permalink

    Hear, hear.

    I don’t usually agree much with Ken Livingstone, but he did say that for all the money that we have spent on war trying to procure resources, or access routes to resources, it would have been cheaper to just pay the going market rate for those resources. So then, who is really benefiting from all these wars ?

  13. Lindsay McDougall
    Posted June 18, 2013 at 6:08 pm | Permalink

    If the G8 countries were to be in favour of complete free trade worldwide, that would be good. Unfortunately, the EU does not have a reputation for external free trade, and the Americans protect cotton and other industries. If the G8 were to be solidly for free trade, we would find out what are the objections of BRICS and emerging nations were.

  14. Pleb
    Posted June 19, 2013 at 5:47 pm | Permalink

    John, I seem to have lost access to your blog?

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