The Organisation of Petroleum Exporting Countries (OPEC) met on Wednesday, September 26, in Vienna. The uncertainties associated with the international oil market have been greatly compounded by the September 11 terrorist attacks on the United States.
The president this week signed into law a 40 billion dollar emergency appropriations package in response to the September 11 terrorist attacks. The package forms part of considerable planned spending increases, which in combination with expected tax cuts, will result in the country's fiscal position deteriorating significantly. This will have important implications for Federal Reserve policy, the bond market, and long-term global interest rates.
The World Trade Center's twin towers in New York City and the Pentagon in Washington were on Tuesday subjected to devastating terrorist attacks. The atrocities will prompt a wide-ranging review of US security and intelligence systems which, on Tuesday's evidence, failed spectacularly.
This piece focuses on the performance of and prospects for Trade Adjustment Assistance (TAA) programmes. The number of employees and employers who have benefited from programmes designed to counter the effects of certain trade agreements has expanded dramatically during the past few years. Such trade adjustment assistance is likely to be included in future legislation implementing new WTO and other trade agreements, largely to garner support for further trade liberalisation.
Despite the continuing fragility of the economy, prompt policy action and the resilience of the US consumer are likely to prevent a full-blown recession, thereby shaping the probable path of the US economic downturn. Therefore, the risk of negative balance sheets and potential inflationary problems could arise from too rapid a recovery.
China said yesterday it would release the crew of the US EP-3 surveillance aircraft that was forced to land in Hainan Island on April 8, following a mid-air collision with a Chinese fighter. The Bush administration will welcome resolution of the dispute, especially as opinion polls released yesterday showed that a majority of US citizens regarded the crew as 'hostages'. Had the 24 crew members not been released before the Easter holiday, the crisis would have become far more significant for the White House, and inflamed anti-China sentiment in Congress. In the short term, resolution of the crisis will result in a scaling down of the criticism of some conservatives that the White House has been unduly accommodating towards China. However, in the longer-term, the episode will strengthen the conservative 'anti-China' lobby in Washington, which could hamper Bush's future attempts to improve relations with Beijing.
The US Supreme Court heard oral argument last month on whether 'medical necessity' should override the federal government's blanket prohibition on the use of marijuana. If the Court were to accept this argument, it would provide a powerful boost to the medical marijuana movement and hamper the federal government's ability to pursue its current drugs policy. A ruling in favour of the federal government, however, would constrain the ability of states to formulate independent drug policies. The Supreme Court is likely to sidestep the substantive issue of whether 'medical necessity' allows the distribution of marijuana to seriously ill patients. Its inclination will be to decide the case on a narrow procedural ground which would leave the federal government to decide if it wishes to pursue criminal prosecutions.
A combination of good fortune and some skilful planning have allowed the Bush administration to make a successful start in office. These factors will probably allow the president to pursue much of his agenda effectively this year. However, difficulties will be encountered once Washington politics becomes preoccupied by the 2002 congressional elections.
Senior Palestinian officials this week rejected US President Bill Clinton's peace proposals. All the Palestinian factions have now rejected the proposals designed to end the conflict with Israel. This is a sign of the overwhelming domestic pressure Palestinian leader Yasser Arafat is under. However, his position remains one of conditional acceptance as he awaits further US interpretations and clarifications. Arafat's conditional acceptance of the US proposals is an attempt to improve his diplomatic position. He hopes to make use of the enhanced Arab engagement in the Palestinian-Israeli peace process to improve on the terms of a future peace agreement. This will be essential if he is to win domestic approval of any deal.
Topic:
Conflict Resolution, Diplomacy, Ethnic Conflict, and Politics
Congressional criticism of 'Plan Colombia's' military component, and the advent of a new administration in Washington, are likely to lead to a strategic review of US policy. The outcome may be a policy that is less military focused, more regionally oriented, and based on closer cooperation with other aid donors. It has become increasingly clear that Plan Colombia can only be implemented if the EU and its member states are prepared to increase their financial contribution. This will give the Europeans considerable leverage, and they are likely to use it to insist on a less militarised approach. However, even with a change in policy emphasis, the prospects of success will remain poor.
Topic:
Security, Foreign Policy, and International Cooperation
Political Geography:
United States, Europe, Colombia, and South America