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Whose responsibility is it? # 19


As this is my first article for 2017 I wish everyone a Happy New Year filled with good sense and positive actions, and no procrastination.

I extend condolences to the family and friends of the great Peter Abrahams and treasure his memory as the voice of analysis and reasoning that I grew up with at 6pm on the radio. His was a humble but transforming influence on all who were fortunate to hear him and his views on world events were more instructive than most modern-day communication inventions.

Well the “Trumpet” has sounded and Donald Trump has been invested as President of the United States, and the simple usually celebratory event has been characterized by strong differences. He has the lowest approval record of any new President at about 12%, and there were mass protests mainly by women’s groups and individuals in many cities in the USA and outside of the country.

His Press Secretary’s first conference was directed at rebuking the media for underplaying the “vast numbers of persons” who turned out to watch the Inauguration ceremony. This was not a good start, and sets up a speculation of a Presidency without press coverage, or worse still, “Government by Twitter”.

The new President has some obvious traits that should have been identified by appropriately qualified American psychiatrists over the course of the campaign (as they have done frequently with other world leaders). In my amateur view, the least of his problems seems to be A.D.D. (Attention Deficit Disorder) as he seems to forget the direction of his script and tends to easily develop his own rant and at times contradicts his own previous pronouncements. This and other possible problems are dangerous traits for a very powerful man, and holds significant challenges for those persons and countries in weak positions (like Jamaica).

There were of course similar potentially dangerous leaders in the 20th  century that we may have forgotten and these include Hitler, Stalin, Mussolini, and others not observed at the global scale but dangerous in their own countries or regions. The vulnerable must consider options for self-preservation and pay particular attention to the first scheduled visitors from Britain, Taiwan, and Israel, and the possible impacts on trade and peace.

The trade agenda must be of concern to Jamaica. The review of the NAFTA challenges Mexico and Canada (one of our major trading partners), and depending on the outcome could impact trade tariffs and labour stability. It is a time for reflection as had negotiations developed differently, 34 countries in the hemisphere would have been a part of the USA led F.T.A.A. (Free Trade Area of the Americas), and would now be in a precarious and unstable agreement subject to the idiosyncrasies of President Trump.

But the real question on trade must be whether the President’s direction will affect world trade (as differentiated from world production), as there have been measurable precedents albeit usually during times of war. A USA reversal from the largest international consumer nation to one that is internally focused must be a clear danger.

This is probably a good thing for Americans if they had a large unemployed population, but they do not. However it provides an opportunity for importing specific skills without opening up their floodgates of general immigration. If you are a skilled programmer or a specialist nurse, as well as other selected professions then you could be lucky. This is probably great news for India, the Philippines, and a few other countries, but not for the poorer nations with unskilled labour.

Certainly Britain must be concerned with a double whammy of BREXIT and an uncertain trade ally in the USA. Also, China is faced with choices, namely; continuing to pretend to be a powerful but benign giant; or the Giant Panda that suddenly exposes its sharp claws. Russia and China wish to upset the hegemony of the US dollar as the “Petrodollar” bringing uncertainty to the valuation of world currencies.

Therefore traditional trading arrangements that are subject to the influence of the USA must be seen as possible uncertainties regardless of their time in operation. It may be fair to anticipate that where the W.T.O. rules do not meet the needs of President Trump, then he will unilaterally abandon these.

Non-tariff barriers have always been used by the USA whenever it suited their interests, and I can see a greater use of these in the immediate future. Trade into the USA will be interrupted (hopefully temporarily) by trade measures, and China’s access via third country manufacturing will have to be re-evaluated, and this will have investment implications for places like Jamaica.

The TPP (Trans Pacific Partnership) which was a much vaunted initiative of the Obama administration is being abandoned leaving the Pacific Rim: (Far East, Western countries of South America, Australia, New Zealand, and East Africa), very disappointed. They will all have to recalibrate their future strategies.

In addition, any change in global trade patterns has the potential to require change in global shipping and airlifts. The directions and volumes will dictate the viability of logistics hubs and the requirements for newer and larger vessels. This impacts Singapore, Holland, Panama, Jamaica, and the Bahamas, as well as the USA cross-continental cargo rail networks.

We should be concerned as I believe me that we are in a poker game where the new POTUS can make any card a wild card; and do so retroactively. We need to have a strategy for holding four aces plus the unknown wild card. This is a challenge but it is one that we must be up to.

This is our collective responsibility.


 

Executive Insights
From the Desk of James Moss- Solomon
Executive in Residence, MSBM
November 26, 2016

 

 

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