Author Archives: Tarson Núñez

About Tarson Núñez

Pesquisador em Ciência Política da FEE. Political Science Researcher at the FEE.

Trump’s withdrawal from the Paris Agreement: political impact in the US

On June 1, 2017, President Donald Trump officially announced the decision of the United States to unilaterally withdraw from the Paris Agreement. This withdrawal represented the materialization of one of his campaign promises and was based on the negative assessment of the impact of the agreement on the country’s economy. According to Trump, the Paris Agreement would weaken their economy, weaken their sovereignty, impose unacceptable legal risks and put the US at a permanent disadvantage compared to other countries in the world. According to him, the costs imposed by the agreement are very high, for “billions of dollars that should be invested here in America will be sent to the same countries that have taken away our factories and our jobs.”

Trump’s stance on this issue is also related to a very particular view of international agreements operated on a global scale. To him, the logic of countries competing against each other is the one that should guide the United States’ international policy, not the concurrence around common goals. Therefore, Trump considers it unacceptable that “[…] under the agreement, China will be able to increase its emissions for another 13 years, while we will not. India makes its participation dependent on receiving billions of dollars in aid from developed countries […] The Paris Agreement is very unfair to the US”.

The President’s decision, however, is far from consensual in the country. Actually, the withdrawal of the United States from the climate agreement widened the public controversy around the Government and produced a series of reactions from the most diverse sectors of the American society. Environmental groups, scientists, social movement activists and even some business sectors have promoted intense political mobilizations against Trump and in defense of the compliance with the agreement. The public controversy is another element that affects the popularity of the Government, which, in July 2017, had the approval of only 36% of voters.

Alongside Trump is the powerful lobby of the fossil fuel industry, led by major oil and mining companies, such as ExxonMobil, British Petroleum (BP), Shell, Chevron and Koch Industries. Within Congress alone, this lobby has been investing, on average, more than US$130 million per year. This sector is the main support base for Trump when it comes to environmental issues, and the scope of its intervention goes beyond this legal lobbying activity within the institutional framework of Congress. The Koch brothers, owners of Koch Industries (one of the largest private groups in the country), also have a strong political intervention in the Republican Party. The intervention through the support and funding of candidates aligned with the ultraconservative agenda of the brothers has been altering the correlation of internal forces in the party and had a decisive impact in last year’s elections. According to the New York Times, the Koch brothers’ budget for the election was on the order of US$899 million.

On the other hand, Trump’s negationist positions on the climate issue are fought against by a broad coalition of social and environmental movements. These movements were already very active even before the presidential election. In 2016, the US government suspended the construction of a pipeline on indigenous land, the Dakota Access Pipeline. This decision was a concrete demonstration of the pressure of the movements on Obama Administration regarding environmental issues. Besides that, in the democratic government, confronting the climate issue was also part of a strategy of development and economic recovery that was based on a transition of the energy matrix and industrial structure dependent on renewable energies and technological innovation aimed at sustainability.

The strength of environmental social movements has been proved in major mobilizations. On April 19, the People’s Climate Movement held the Peoples Climate March, which brought together more than 200,000 people in Washington DC and was accompanied, on the same day, by demonstrations in 370 other cities in the country. The Peoples Climate Movement is organized by a coalition of 50 entities and movements, which includes environmentalists, labor unions, pacifists and some cultural, racial, religious and political movements. The organizing committee is articulated with a network of over 500 local and national organizations throughout the United States. This march was not the first one, but it is one more step in a movement that has a long history in the United States. In September 2014, during the United Nations Climate Summit in New York, the coalition mobilized 400,000 people in a march in the city.

The political forces behind the mobilizations are originated in the anti-globalization movements, which have found a space of convergence between the environmental movements and the movements which struggle for social justice in the matter of climate change. These movements, whose fights date back to the anti-globalization demonstrations in Seattle at the turn of the century, have been building a joint agenda. One of the milestones in this process of convergence was the United States Social Forum in 2010, and the first most massive expression of this period was the Occupy Wall Street movement, which convulsed the country in 2011. From this process, large coalitions of entities fighting against climate change emerged in a spectrum ranging from the specific fight against global warming, such as 350.org, to a broader scope, such as the Climate Justice Alliance, which links the environmental cause with the struggle for broader social change.

In addition to the resistance related to environmental social movements, Trump’s decision was able to trigger a mobilization of other relevant social and political sectors. The scientific community, the opposition of the Democratic Party and even some relevant business sectors are aligned with the fight against the change of the United States’ stance regarding climate change. These new actors are currently articulated around the We Are Still In movement, launched on the same day that Trump formalized the withdrawal of the United States from the Paris Agreement. This movement, whose launching manifesto bears 2,200 signatures of scientists, politicians, artists and entrepreneurs who claim to represent “more than 127 million Americans and US$6.2 trillion in the American economy” postulates that “in the absence of a leadership from Washington, the states, cities, universities, businesses and investors representing a sizable percentage of the US economy will seek to achieve ambitious climate goals, working together to take effective action and ensure that the United States remains a global leader in reducing emissions”.

The numbers are impressive. There are 228 mayors, including those from cities such as New York, Chicago, Atlanta, Boston, Houston, San Francisco and Washington, and nine governors of the states of California, Hawaii, Connecticut, New York, Rhode Island, Oregon, Virginia and Washington. Signing the manifesto there are also 318 deans and directors of higher education institutions, including the prestigious University of California, New York State University and Columbia University, more than 1,600 companies from all sectors, such as Google, IBM, Adidas, Lego, Lyft, Amazon, Microsoft, Erickson, BASF, Tesla, Nike and a large number of small and medium-sized companies committed to the sustainability agenda.

Another important initiative in this field is the so-called America’s Pledge, a movement launched by California Governor Jerry Brown along with billionaire Michael Bloomberg. Brown, a left-wing Democrat, has pioneered a lot of environmental policies. Since the beginning of the 1970s, during his first administration, he implemented a development policy that sought to achieve economic growth while having environmental sustainability as a policy guideline. His articulation with Bloomberg, who, besides being a media entrepreneur, is also an exponent of the Republican Party (he was mayor of New York City), demonstrates that the appeal of sustainability crosses the political spectrum.

America’s Pledge also aims to establish a commitment from state and local governments and also businesses to meet the goals of the Paris Agreement, regardless of the Federal Government’s withdrawal. This is possible given the federative nature of the American political system, in which states and local governments have a strong influence on the decision and implementation of public policies. The alignment of governments and companies, in tune with the demands of social movements, helps to reduce the impact of Trump’s decision to withdraw from the agreement.

The conflict over the Paris Agreement is also the expression of a split in the US business sectors. On the one hand are the traditional and conservative forces of the oil and coal industry and on the other hand is a group of economic sectors with a high participation of companies of greater technological intensity, accompanied by a large contingent of small and medium-sized business sectors. The auto industry apparently seeks to maintain a certain distance from both movements, not openly aligning itself with the fossil fuel lobby, but also avoiding engaging in the movement in defense of the agreement.

More than just an intersectoral dispute between distinct economic branches, this polarization around the theme of climate change is the expression of a broader and more global process. The intense technological changes experienced by contemporary capitalism open the way for a structural conflict between the industrial sectors remaining from the second industrial revolution, whose economic importance is declining, and the new dynamic sectors, whose interests and needs are not convergent with those of the traditional ones.

The outcomes of the dispute over the Paris Agreement are still largely unpredictable. The United States’ withdrawal has not shaken the international consensus built so far and apparently will not change the overall situation. Although Trump administration does have the prerogative to eliminate the advances of the industrial and energy policies built during Obama administration, it will surely face significant political and institutional resistance. However, regardless of which of these two paths will prevail, at least one result can already be seen in a very concrete way: the huge problems that the Trump administration is facing to implement its agenda. The conflict surrounding the Paris Agreement has created a common ground for social and environmental movements, progressive political forces and business sectors which is bound to have a significant impact on the US political landscape.

The political changes in contemporary China and their global impacts

In an international scenario marked by increasing instability, a moment in which the process of economic globalization reveals the intensity of its contradictions, China still maintains a path of relative stability. According to World Bank data, since the 2008 crisis China has been growing at an average of 8.3% per year, while the world economy has grown by an average of 2.2%. Although China’s Gross Domestic Product (GDP) growth rate has fallen from roughly 10% in the years immediately after 2008 to around 7%, its growth is still almost three times higher than the global one (6.9% vs. 2.4% in 2015). While in the West some analysts have coined the term “the new normal” to describe mediocre growth patterns which are unable to ensure social cohesion even in central countries, China, even at a slower pace, keeps being able to guarantee greater economic, social and political stability.

The resilience of the Chinese economy in a global context of difficulties is not adequately explained by macroeconomic variables only. Especially in the case of China, the political dimension is decisive. In this sense, understanding the dynamics of the Chinese economy depends on understanding the specific characteristics of the Chinese model, especially the relation between politics and economics, since much of this capacity for adaptation and growth is related to a political model of management of the economy. It is a model that, while granting a large space for the private initiative, favors competition among companies, is receptive to foreign investment and combines these characteristics with strong state intervention and long-term strategic planning. In this sense, the country’s economic management is directly oriented by the political priorities established by the State.

What is happening now is a deliberate movement to adapt the Chinese economy to a new international scenario, through actions to reorient the Chinese development model. This process began in the 2011-15 Five-Year Plan, which has already reflected a repositioning of the country in a world in crisis and which is consolidated in the resolutions of the Third Plenary Session of the XVIII Central Committee of the Communist Party of China. In this document, the Chinese leaders evaluate the results of this period and design a strategy for the coming years. Taking into account the peculiarities of the Chinese model, the reflections made there and the orientations elaborated in this process provide the basic guidelines for understanding China’s evolution in the next period.

To understand nowadays People’s Republic of China, one needs to take, as a starting point, the major transformations that were triggered by the reforms initiated by Deng Hsiao Ping in the late 1970s. At that moment, Chinese leaders broke with the policy of isolation and began a process of economic opening. The privatization of state companies and the controlled opening to international capital generated a dynamic business sector. The abundance of cheap labor ensured the international competitiveness of the Chinese products, and the focus on manufacturing production for the world market rapidly made China a global player, now the world’s second largest economy.

From the internal point of view, these policies have had deep impacts. Overcoming the limits of the previous model has created a rapid growth momentum that has transformed Chinese society very quickly and intensely. The influx of foreign capital and the new operating rules of local companies have promoted a process of continuous economic growth which has been observed for more than thirty years. This growth has generated, on the one hand, a thriving business sector that has played a leading role in transforming China into an economic power. On the other hand, growth has also created jobs that have enabled millions of farm workers to migrate to the cities in search of opportunities. In this process, a mechanism that has allowed China to take 600 million people out of poverty and misery was created. In addition, this process has also spawned a new middle class of professionals who now constitute a vibrant internal market.1 Thus, China is advancing in this turbulent economic international scenario by combining caution, flexibility and creativity in the management of its economy with firmness when planning a national development strategy.

Every innovation in terms of development policy is first implemented in a locality or region, as a test, and then, if approved, it is adopted in the whole country. In addition, all these measures are formulated in the light of a strictly planned long-term strategy. With thorough attention to the analysis of the scenarios that are open and taking into consideration changing trends in political, economic, local, regional and global terms, Chinese leaders have demonstrated a unique ability to cope with the turbulence of the conjuncture. This attitude has guided the recent changes that China has been making to face the international situation resulting from the financial crisis of 2008.

The core of this strategy is a transition from an export-led growth model to one based on the Chinese domestic market. The millions of citizens who have left poverty and the huge new middle class have become the basis for the sustainability of growth. This redirection of the economy is combined with a movement of internationalization of Chinese companies and a geopolitical expansion. Today, in addition to exporting goods, China exports capital — on the one hand, through the purchase of assets in central countries, mostly in Europe, and, on the other hand, through a growing presence of Chinese companies operating in the Asian, African and Latin American markets.

China’s repositioning movement operates in an articulated way internationally and domestically. At the international level, a set of economic and geopolitical initiatives operate to strengthen China’s position. Measures to reinforce the convertibility of the Chinese currency, the formation of the BRICS Development Bank, the strategic initiatives of the new “Silk Road” and a series of actions aimed at deepening the articulation of the Chinese economy in Central Asia, in partnership with Russia, India, Pakistan and other smaller countries, give sustainability to the country’s international projection.2

On the other hand, at the internal political level, the new orientation focuses on social cohesion. Three elements are viewed as central to this strategy: (a) consideration of the internal market as a vector for development; (B) support for innovation and technological development; and (c) confrontation of the internal contradictions that interfere with the country’s development. In all three cases, the management of economic processes is closely linked to the political dimensions that constitute the background of the Chinese development project.

In the case of the domestic market, Chinese leaders are fully aware that improving the social and economic conditions of the population tends to be the mainstay of the growth of Chinese economy. However, the governmental emphasis is not limited to the economic aspect of raising real wages as a tool to stimulate consumption. Chinese leaders are seeking a global improvement, which also implies strengthening social rights, with the expansion of social security mechanisms, labor rights and institutional arrangements for consumer protection. It aims “to pay more attention to the work, employment and income of the inhabitants, to social security and to the health of the people” (CENTRAL COMMITTEE OF THE COMMUNIST PARTY OF CHINA, p. 34). Thus, understanding that better income distribution and improvements in the quality of life is important for the sustainability of economic growth is central to the new model. In this sense, China is running counter to the global trend which is acting towards labor flexibility and/or cuts in social rights. On the contrary, the Chinese leaders are working precisely towards the institutional formalization of rights as an instrument to promote social inclusion and invigorate the economy.

In the technological field, China has gone from a period when its manufacturing products were basically copies of foreign merchandise to a moment in which the Chinese companies started to compete in markets based on technological development. The Chinese state invests heavily in research, in the expansion of higher education, in the training of skilled labor, and in the technical staff of world-class scientists and researchers. Thus, today Chinese companies are competing on an equal footing with high-tech companies worldwide. This process has resulted from large public investments of the Chinese state in science and technology, aimed at the qualification of the productive processes.

Finally, the third element of this Chinese repositioning demonstrates a great deal of self- awareness and critical thinking of the country’s leaders. The perception that the process experienced by the country since the reforms has brought — in addition to economic growth — problems that need to be addressed lies in the effort of strengthening social cohesion and ensuring political stability. Addressing the social inequalities created in the development process, combating the corruption and the environmental degradation brought about by accelerated growth are today’s political priorities.

In this respect, there lies the most important paradigm shift operated by Chinese leaders: the transition from a model that sought growth at any cost to a model focused on environmental sustainability. China is now among the countries which invest the most in environmental policies, explicitly including in its political guidelines the goal of building a “socialist ecological civilization” (CENTRAL COMMITTEE OF THE COMMUNIST PARTY OF CHINA, p. 4). All these movements have both a political and an economic dimension. China seeks to ensure that the development of its economy is an instrument for building a more harmonious society. In this model, growth is an instrument for social development and not an end in itself. With this, China sets the frameworks for stability and sustainable growth.

It is evident that this model is not exempt from contradictions. The increase of labor disputes in China reflects the concern of industrial workers over their wages and working conditions. Andreas Bieler and Chun-yi Lee, of the University of Norfolk, have recently analyzed the forms of resistance and organization of factory workers in China, showing the growth of workers’ mobilizations in the country. Similarly, Ruckus and Bartholl (2014) extensively assess the increase of labor disputes in China. Both studies show that labor relations and social inequalities may constitute a component of potential instability in the political situation of the country, and it is precisely the goal of neutralizing these conflicts that constitutes the efforts of Chinese leaders to reorient the country’s economic model. Building a strategy to combine economic growth with political stability and competitiveness in the world market is the central objective of the Chinese government in this new global context.

1POMAR, W. China: desfazendo mitos. São Paulo: Publisher Brasil, 2009.

2 CINTRA, M. A. A.; SILVA FILHO, E. B., COSTA PINTO, E. (Org.). China em transformação: dimensões econômicas e sociopolíticas. Rio de Janeiro: IPEA, 2015.

The Argentinian elections and their meaning to Mercosur

The dynamics of the integration process depends, by definition, on the agreement of the hegemonic political forces in each country regarding its national objectives. In the case of Mercosur, the election that took place on the 25th of October in Argentina has a meaningful weight on the perspectives on regional integration. When this article is published, the results of the election will have already been defined. It is, therefore, less the case of evaluating the electoral process, but of analyzing its impact on the future of Mercosur. It is evident that the Argentinian election is only one among many other factors that affect the bloc’s evolution. Both the domestic political processes in the other countries and the international dynamics itself are decisive factors. However, the results in Argentina, the second most important country in the bloc, will surely have a meaningful weight.

Two main projects ran for this election: the continuity of Kirchner’s peronism, represented by the candidacy of the Governor of the province of Buenos Aires, Daniel Scioli, of the Front for Victory (FPV), and the opposition, of liberal hue, represented by Mauricio Macri, mayor of Buenos Aires, of the Republican Proposal (PRO). Scioli ran with a nationalist, center-left platform for the continuity of the current Government’s project, characterized by many analysts as populist. Macri, on the other hand, already agglutinated a set of political forces of liberal, center-right, pro-market hue. The opposition candidate represented a bet on a radical change in Argentinian politics, focused on the search for a restoration of the country’s relations with foreign investors and the review of the developmentalist strategy implemented in recent years.

Scioli, by contrast, was clearly the continuity candidate, although his relationship with officialism has always been somewhat conflicting. The Governor of the province of Buenos Aires was vice president in the first term of Néstor Kirchner’s administration (2003-06) and had aspirations regarding the presidency. He lost ground to Cristina and has since adopted a position of relative detachment to the extent that he even established a cordial relationship with the president’s archenemies, such as the media group Clarin. Although he has remained in the FPV, he sought to make clear his views differed from Cristina’s. However, the convergence between the recovery of the Government’s popularity and the fact that Scioli was the most electorally viable candidate made the two extremes of this complex relationship approach once again, a move that was consolidated by the nomination of kircherist Carlos Zanini for Scioli’s vice president.

As regards integration, the views of the two major candidates showed a clear distinction. The candidate of the ruling party incorporated explicitly an integrationist approach into his speech, focusing on Latin America and the South-South relations. In this context, Brazil is a strategic ally, and Argentina’s priority should be to “[…] strengthen and expand Mercosur, consolidate Unasur and give greater dynamism to Celac”.[1] Macri, on his turn, argued that Argentina needed to “reinsert itself in the world” and leave the “Bolivarian axis”.[2] To Rogelio Frigerio, one of his main contributors, “[…] it is necessary to review Mercosur and begin to look more to the Pacific”.[3] The candidate explicitly expressed his skepticism about the bloc, stating that it is now “[…] almost fiction, full of deadlocks, victim of a setback compared with what had been achieved in the past decade”.[4] A superficial reading of the candidates’ positioning, therefore, points to a simplistic view: if Macri wins, the country will break up with Mercosur; if Scioli wins, there will be a greater integration.

However, the reality is often more complex, especially with respect to the relationship between Argentina and its neighbors. On the one hand, it is inevitable to see that Cristina Kirchner’s integrationist speech in her two terms in office has not always been followed by concrete actions. On the contrary, the frequent imposition of barriers in relation to Brazilian exports and the Argentinian objections that have blocked the Mercosur-European Union agreement show that, in real life, such attitudes on the part of Argentina have hindered more than aided the integration furthering. The internal contradictions of the Argentinian politics and economy have imposed a dynamics in which the national interests tend to pose obstacles to the deepening of the integration.

Argentina has been through two big waves of deindustrialization: the first one, during the military dictatorship years (1976-85), and the second one, in the 1990s, in Carlos Menem’s terms in office. Until 1976, manufacturing accounted for more than two-thirds of the total Argentinian exports. The share of manufacturing in the Gross Domestic Product (GDP) of the country fell from 30.9% in 1989 to 17.1% in 1998. Therefore, the protection of the national industry tends to be a priority of the government, which implies the adoption of protectionist measures. In addition, the country has been experiencing serious currency exchange problems since the default of the early 2000s and the subsequent conflicts with creditors, which also imposes structural limits to its trade balance. These two factors mean that the government tends to adopt measures that are contradictory to its prointegration speech.

On the other hand, Macri`s proposal to break with a project focused on the region and on the search for a greater openness towards the rest of the world does not imply renouncing integration. To Argentina, Mercosur keeps being essential. The bloc has generated a trade growth 12 times higher among its members since its formation. In 2013, Argentina destined 28% of its exports to its regional partners and received 28% of its imports from them. This trade registered a high coefficient of intra-industry trade: over 50% of the total exports of manufactured goods from Argentina were allocated to the bloc.

Moreover, the high degree of institutionalization in the process implies a cost for its rupture. The leader of the Unión Cívica Radical (UCR), party that supports Macri, has said that “[…] it is very difficult for any government to revert the integration processes”, “[…] the correlation of parliamentary forces will not change much and many decisions depend on this state of affairs”.[5] This hinders radical changes under the agreement terms. Moreover, the institutional structure of Mercosur, gestated in the 1990s, is not incompatible with Macri’s liberal agenda.

Therefore, for the liberals, despite the pursuit of greater openness to the rest of the world, Mercosur, in its current design (as a free trade agreement, which is highly advantageous for the Argentinian economy), is also functional. The cost of a rupture would not justify the necessary political effort. Still, the trend, in case PRO wins, is for the country to progressively detach from the bloc’s agenda, with few real efforts to promote the advancement of integration. In this sense, in the long term, Macri’s victory could indeed lead to some kind of weakening of Mercosur’s dynamics. The attempt to leave the “Bolivarian axis” and to extend its relations with other blocs and countries was an important part of the opposition speech.

On the other hand, in case Scioli wins, the starting point tends to be the same: the bloc will continue as it is today — at a slow pace amid deadlocks often caused by Argentina itself. This can result in the continuation of the current dynamics. However, if the starting point is the same, this outcome can also make room for new developments. If the candidate of the ruling party wins, it is possible that the integrationist vocation statements of peronism, far more rhetorical than real, can go beyond the speech. The ideas of productive complementation, value chain articulation on a regional scale and the integration initiatives in the area of infrastructure represent a potentially innovative approach.

The continuity of a FPV government may then make room for a new dynamics, a strategy for deepening Mercosur. In his platform, Scioli champions the resolution of intra-bloc trade disputes, a greater political boost of the productive integration, the repositioning of the strategy of international insertion of the bloc, the addition of value and technological content to strategic sectors and investments in infrastructure and energy integration projects.[6] In this case, the election results can lead to important advances in the region’s integration process.

 

 

[1]  The Union of South American Nations (Unasur) and the Community of Latin American and Caribbean States (CELAC) are two integrationist projects that emerged from an articulation of the countries which aspired to have a protagonist role in the hemisphere, out of the United States’ orbit. Translation mine.

GENTILI, P. Scioli y Macri ante el Mercosur. Página 12, Buenos Aires, 14 jul. 2015. Retrieved from . Translation mine.

[2]  GENTILI, P. Scioli y Macri ante el Mercosur. Página 12, Buenos Aires, 14 jul. 2015. Retrieved from . Translation mine.

[3]  PARTIDO de Macri apuesta a revisar el Mercosur. Montevideo Portal, Montevideo, 10 nov. 2014. Retrieved from . Translation mine.

[4]  MACRI: “Hay que recuperar el Mercosur”. Buenos Aires Ciudad, Buenos Aires, 27 mayo 2013. Retrieved from . Translation mine.

[5]  MOREAU: Macri no fortalecería la relación com el Mercosur. BAE Negocios, Buenos Aires, 18 dez. 2014. Retrieved from < http://www.diariobae.com/notas/48421-moreau-macri-fortaleceria-la-relacion-con-el-mercosur.html>.

[6]  DESARROLLO ARGENTINO (DAR). El-Mercosur y los desafios de la regionalización. 2015. Retrieved from .