World losing confidence in Obama

Most of the world breathed easier when Barack Obama was re-elected, but it would seem more a sigh of relief than enthusiasm for the man everyone fell in love with four years ago. Confidence in the president on a variety of issues has declined precipitously since 2009.

For example, according to a recent Pew Research Center survey of 20 countries from across the world, "in 2009, large majorities in France, Germany, Britain and Spain believed Obama would take significant measures to control climate change," however by 2012, "fewer than three-in-ten in these countries said Obama had, in fact, done this."

Western Europeans also feel he has "failed to meet expectations on his handling of the Israeli-Palestinian conflict." The decline in confidence was not quite as sharp as with climate change, however the U.S. "no" vote in the UN on Palestinian statehood will almost certainly add to the disillusionment. In Muslim countries only a minority expected fairness to begin with and that expectation has now dropped to new lows.

Yet another issue of concern is Obama's use of drone attacks. The most supportive nation is Great Britain where 44 per cent support the strikes but even there 47 per cent disapprove. After Britain disapproval increases from 59 per cent in Germany to 89 per cent in Egypt.

What all this means is hard to say. It may be just another sign of declining American influence in the world. It seems that on keys issues, the world is now going to have to lead the former leader.

Starbucks sticks it to the Brits

I always look forward to reading yet another story about how multinational corporations slither out of their tax responsibilities and was, therefore, duly amused by a piece I encountered in Al Jazeera about the world's favourite coffee shop. It appears Starbucks, while selling £643-million worth of goods in the U.K. last year, paid not a cent in corporate taxes.

This was nothing new for the coffee giant. Despite handling a third of Britain's coffee shop trade, and boasting to investors the U.K. was among the best performing of its overseas markets, Starbucks has reported 13 years of losses to the taxman. Apparently it pulls this off by such sleight of hand as transferring funds to a sister company in the Netherlands as royalty payments and paying high interest rates on money borrowed from other parts of the corporation.

Her Majesty's tax collectors are not amused. The U.K. finance ministry announced it will provide £76-million of new money to track down wealthy individuals and companies who try to avoid paying tax. (Starbucks is by no means alone.) How much good this will do is moot. According to U.S. attorney David Spencer, consultant to Tax Justice Network, "There is more and more evidence of the fact that multinationals are shifting substantial income from high tax to low tax jurisdictions. This is because the OECD's [rules] are very complex and very difficult to enforce."

Public reaction may be more effective. Outraged Brits are calling for a boycott of Starbucks and protests at its shops. A spokesperson for the company stated, "We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more." Indeed—many millions of pounds more.

The free trade bust

Judging by the editorial hype in the corporate press and among Conservative politicians, the Canada-U.S. Free Trade Agreement was the greatest boon to this country since the fur trade. When the agreement celebrated its 25th anniversary in October, International Trade Minister Ed Fast claimed opponents of such agreements are "denying Canadians an opportunity to benefit from economic growth and long-term prosperity.”

A recent article in the CCPA Monitor by economist Jim Stanford begs to disagree. Accusing the boosters of being long on self-congratulation and short on facts, Stanford took a different approach and adduced a few pertinent facts re before and after:

• Our exports to the U.S. today account for the same share of our GDP (19 per cent) as before the agreement was signed.
• Our exports to the U.S. are now mostly unprocessed or minimally processed natural resources whereas in the mid-1980s they were mostly relatively sophisticated manufactured goods.
• Our share of U.S. imports has declined from 19 per cent to 14 per cent.
• Our productivity has declined as a per cent of U.S. rates.
• Our inflation-adjusted family income levels are the same as in 1980.

In summary, the agreement did not boost our GDP, did not increase our share of U.S. imports or the quality of goods exported, did not improve our competitiveness, and did not increase our incomes. By Stanford's reckoning, the agreement was more bust than boon. Something to keep in mind as our government rushes madly about the globe eager to sign a free trade agreement with anyone who has a pen.