The severe disagreements between Germany and the US have to be seen against this backdrop and have been a subject for long, however, Mr Obama might have addressed this topic in a more conciliatory way than Mr Trump’s current harsh way. After all, the trade balance surplus continuously accumulated by Germany
(__nearly 9 per cent in 2016__)
is inacceptable and constitutes a severe threat to the so-called free trade and is just an expression of the malfunctioning of the European Monetary Union:
On the one hand there is a deficit limit of 3 per cent in this union but on the other hand a surplus limit of 6 per cent, that, taken by itself, is a no-go because deficits and surpluses are directly linked.
So, whatever you think about Mr Trump, in this case his reproach is entirely correct and expressing it in such a harsh manner shows that more and more countries are jolly well fed of this German irreconcilability, e.g. regarding the so-called free trade.
the German constant trade balance surplus of about the last ten years results from the major design flaw of the European Monetary Union:
The exchange rate mechanism was repealed with the introduction of the so-called common European currency
(__but that is definitely a foreign currency for each member state of this monetary union now as it is not possible to adjust the monetary policy to each country-specific demands__)
, and it was repealed without replacing it by an adequate compensatory mechanism. This adequate compensatory mechanism is the Golden Rule of Wages.
* * *
The definition of the Golden Rule of Wages in a nutshell:
Development of the nominal wages = target rate of inflation (__of the European Central Bank__) at about 2% + (__country-specific__) development of productivity (__as an average value over a longer period of time__).
This way the balance of general development of productivity and general purchasing power is secured thus the economic development is sustainably secured
this way a sustainable process of producing will be possible because only a good general purchasing power enables the mass of people to buy goods sustainably produced.
(__It is self-speaking that a sustainable process of producing is more expensive and results in prices increasing a little bit.__)
* * *
In the light of the aforementioned context, you might say it is not the USA are on the prisoner’s box provided the arguments will be discussed at WTO level. You can read the contextual, relevant points in the agreement under international law called GATT (__1947; 1994__) still unaltered valid and incorporated in the WTO and signed by Germany in 1951:
[…] Article XII: Restrictions to Safeguard the Balance of Payments
- […] any contracting party, in order to safeguard its external financial position and its balance of payments, may restrict the quantity or value of merchandise permitted to be imported […]
- (a) Contracting parties undertake, in carrying out their domestic policies, to pay due regard to the need for maintaining or restoring equilibrium in their balance of payments on a sound and lasting basis and to the desirability of avoiding an uneconomic employment of productive resources. They recognize that, in order to achieve these ends, it is desirable so far as possible to adopt measures which expand rather than contract international trade. […]
Article XVIII: Governmental Assistance to Economic Development
- The contracting parties recognize further that it may be necessary for those contracting parties, in order to implement programmes and policies of economic development designed to raise the general standard of living of their people, to take protective or other measures affecting imports, and that such measures are justified in so far as they facilitate the attainment of the objectives of this Agreement. They agree, therefore, that those contracting parties should enjoy additional facilities to enable them (a) to maintain sufficient flexibility in their tariff structure to be able to grant the tariff protection required for the establishment of a particular industry and (b) to apply quantitative restrictions for balance of payments purposes in a manner which takes full account of the continued high level of demand for imports likely to be generated by their programmes of economic development.
Article XIX: Emergency Action on Imports of Particular Products
1.(a) If, as a result of unforeseen developments and of the effect of the obligations incurred by a contracting party under this Agreement, including tariff concessions, any product is being imported into the territory of that contracting party in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the contracting party shall be free, in respect of such product, and to the extent and for such time as may be necessary to prevent or remedy such injury, to suspend the obligation in whole or in part or to withdraw or modify the concession.
(__Source: Text of The General Agreement on Tariffs and Trade.__)
* * *
So, the Europeans should no longer allow for the German wannabe-hegemon to block their own future.
(__Mind you Germany is in that position only due to the malfunctioning European Monetary Union. So, there were good reasons for the Brexit, thus these reasons are completely independent from a Mr Nigel Farage’s. In the following you can look at Lord Lawson’s reasons, the reasons of the “Lexit”, and Lord Owen’s.__)
Thus, this speech by Mrs Merkel which is just another example of her not accepting any kind of democratic processes
(__such as referenda__)
that are not to her liking, as well as it shows her incapacity of adapting to changed situations in a constructive way justifies the following:
EU-contracts that are obviously solely to the unilateral advantage of this wannabe-hegemon, i.e. damage the economies of most EU-member states, are to be dissolved with immediate effect and are substituted by “general special agreements”. If there is no tendency to do so, Germany should go its own
special way alone!
© Joachim Endemann (__EndemannVerlag; translated by Kirsten Grunau__)