Trade

In the Financial Times on Wednesday, Chris Cook argues that British immigration laws are giving an unfair edge to soccer clubs with more money.

Clubs with deep pockets hire the small number of local and foreign gifted players available, while poorer clubs must make do with the remaining, potentially much weaker, local journeymen.

Not only that, he says, but the protectionist measures of allowing non-European workers only if the fit certain high-skill benchmarks also inflate wages for less-skilled Europeans, raising ticket prices.

Cook contends tougher competition would boost the English national team:

The impact of more foreign players on the elite band of players who might conceivably play for the national team is that they need to play better to keep their places in their club teams. So, they improve. The English team has markedly improved since foreign footballers started pouring into the country’s top league.

Would some British and European soccer players be pushed out of work if rules were liberalized? Probably, but a more competitive league would be worth it Cook says.

Consumers of an increasing range of products will soon feel the pain in their wallets already endured by so many fans on a Saturday afternoon, who routinely complain that they pay ever-greater sums to watch a football league dominated by just four clubs. What English football needs is fewer English footballers. 

Not knowing that much about the economics of the Premiere Leage, here's a question: If teams in the lower half of the standings became much more competitive, would it increase their revenues? Higher ticket sales? More advertising?  

Laurence Griffiths/Getty Images 

A disturbing report from The Telegraph suggests that China may soon cut off the world's supply of the metals needed for many modern electronics:

A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.

China mines over 95pc of the world’s rare earth minerals, mostly in Inner Mongolia. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price.[...]

New technologies have since increased the value and strategic importance of these metals, but it will take years for fresh supply to come on stream from deposits in Australia, North America, and South Africa. The rare earth family are hard to find, and harder to extract.

 Danger Room's Nathan Hodge comments:

[I]t’s a reminder of the role that strategic resources play, especially for the high-tech military of the United States. [...]

Of course, China is not the only country that’s figuring out how to play the mineral wealth hand in geopolitics. For several years now, Russia has used natural gas supply as a way to exert less-than-subtle pressure on its neighbors. Energy, the Kremlin found, is a more effective instrument than an aging nuclear weapons stockpile: You can actually turn the gas taps off when you feel like punishing someone.

As an old piece of wisdom from Strategic Air Command put it: “When you have them by the balls, their hearts and minds will follow.”

During the ongoing political crisis in Iran, another less noticed "revolution" has been going on in Peru with relatively little international attention, but potentially with lasting consequences for both the country and its role in the global economy.

Over the past two weeks, indigenous protesters have successfully forced the Peruvian protesters have successfully forced the government to reverse planned land reforms that would have opened their traditional land to investment and exploration by international energy companies. 

The demonstrations against the reform turned violent earlier this month in a confrontation that left 50 dead, including 23 police officers. Peru's prime minister offered to resign over the controversy after the government caved to the Indians demands. The leader of the protest movement has fled into exile in Nicaragua after being charged with inciting the violence. 

President Alan Garcia has come under fire for his insensitivity to the violence and for comparing the protesters to "garden watchdogs" protecting their food. Garcia had framed the new development as both an economic opportunity for the region, a way of clamping down on illegal logging, and a way to combat drug trafficking by increasing government presence. 

Granted, the news has been dominated by Iran this month for good reason, but protests leading to the killing of 23 police officers, the reversal of a major government decisions affecting multinational corporations, and the resignation of a head of government, seems like a pretty big deal. I think it's safe to say that if this had happened in Asia or the Middle East it would have been front page news in the United States.

Consider how intertwined it is with U.S. foreign policy, it's always surprising how little discussion Latin American affairs (unless Hugo or Fidel are talking) merits in the United States. Peru's largely ignored situation is a perect example. Since when are race, money, violence, and drugs not interesting topics? 

AFP/Getty Images 

Move over Roquefort. The newest niche transatlantic trade dispute involves Canadian seal products, which the EU has banned because of Canada's commercial hunting practices. Inuit hunters are exempt from the ban, but fear that it will inevitably affect their livelihoods.

While touring Inuit Communities in Northern Canda, Governor General Michaelle Jean -- Queen Elizabeth's representative in the Canadian government -- butchered and ate raw seal heart in solidarity with the hunters:

Ms Jean used a traditional Inuit knife to help gut the animal then ate a slice of raw heart.

It came weeks after the EU voted to ban Canadian seal products, but Ms Jean did not say if her actions were in response to the EU proposals....

Asked later if her actions were a message to the EU, she said: "Take from it what you will." 

An EU spokesperson called Jean's actions "too bizarre to acknowledge," which the Inuit, who I presume have been eating seal heats for quite some time, would probably take umbrage at. And this from the continent where its a major media scandal when companies paint fake black hooves on ham legs.

Update: Video from the CBC if you really want it:

ATTILA KISBENEDEK/AFP/Getty Images

Want to get a sense of just how bad things are? Take a spin on Google Earth.

The latest issue of International Economy, edited by FP contributor David Smick, has a clever graphic showing the depth of the economic crisis, so I thought I'd share.

The above image, pulled today from Vesseltracker.com's Google Earth file, shows container ships languishing off the Singapore coast. Welcome to the  largest parking lot on Earth. International Economy explains:

The world's busiest port for container traffic, Singapore saw its year-over-year volume drop by 19.6 percent in January 2009, followed by a 19.8 percent drop in February. As of mid-March 2009, 11.3 percent of the world's shipping capacity, sat idle, a record.

It's a rough time to be an Asian tiger, or to be in the shipping business. The IMF projects that Singapore's economy will shrink significantly in 2009. Globally, bulk shipping rates have dropped more than 80 percent in the past year on weak demand, and orders for new shipping vessels are cratering. In Busan, South Korea, the fifth-largest port in the world, empty shipping containers are piling up faster than officials can manage.

"Things have really started to get bad -- laborers spend their entire day waiting for a call from the docks that they have a job," Kim Sang Cheul, a dockworker at Busan, told Bloomberg. "People spend all day staring at their phone as if staring at it can make it ring. You’re lucky if you get a call."

Green shoots? Not so much.

(For another view of Singapore's port, you can check out Vesseltracker's Microsoft Virtual Earth mashup map.)

Our long international nightmare is over. The U.S. and EU have reached an agreement to end the world's most entertaining trade dispute, which began with George W. Bush's lame-duck decision to raise import duties on Roquefort cheese:

The new US administration has now agreed to drop the import duty threat, due to come into force this week, and which would have affected to a lesser degree a range of EU products, from truffles and mineral water to chewing gum.

Under the provisional deal, the EU will keep the hormone-treated beef ban, which it claims poses a health threat, but will quadruple imports of non-hormone treated American beef in four years.

Cheese farmer and lefty icon Jose Bove (above) described the deal as evidence that the U.S. has "accepted that health is more important than trade," even though this is actually an expansion of trade and between all this beef and cheese, I'm not sure who's getting healthy. 

But in any event, kudos to negotiators for ensuring that neither American populism nor European ludditism will bring down the transatlantic alliance. Time for a celebratory cheeseburger.

JACQUES DEMARTHON/AFP/Getty Images

 I'll start with the bad news for anyone with a pet guinea pig: this blog post is not about pets. It's about food staples -- the guinea pig being a major one for Peru, with 65 million of the critters eaten each year.  In addition to genetically engineering the perfect pig, Peru celebrates its culinary tradition in splendid a guinea pig festival.

Alas, despite a bull market at home, exporting the creature has proven difficult in a world where guinea-pigs are at times more associated with cages and hampster wheels than with fine cutlery. But now from the blogosphere a rather brilliant suggestion: export to China.  No qualms about pet vs. platter there. And guinea pigs are remarkably economical -- at just $3.20 to feed half a dozen people. Sounds like guinea pigs are a recession proof (even countercyclical) market. I'm investing now.

Hat tip: Double Handshake. 

STAN HONDA/AFP/Getty Images

This promotional video that Israeli defense contractor Rafael made for a recent Indian aerospace trade fair is just weird beyond belief: 

(Hat tip: Marginal Revolution)