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Does the com­pany owned by the world’s wealth­i­est man re­ally de­serve nearly $7 bil­lion of tax­pay­ers’ money?

New Zealand Listener - - CONTENTS - JOANNE BLACK

Joanne Black

Last week­end, a friend and I vis­ited Culpeper, a small town in the state of Vir­ginia, south­west of the cap­i­tal. The orig­i­nal town cen­tre has nice cafes and in­de­pen­dent shops, many sell­ing hand­made, sec­ond-hand or re­pur­posed items.

The shops pro­vided a wel­come refuge from the swirling snow out­side and from the strip malls along the high­way nearby and the chain stores near where I live.

In­creas­ingly, the only dif­fer­ence between malls in var­i­ous US cities is the num­ber of stores that are per­ma­nently closed. But on­line re­tail­ing is not solely to blame; if, as the say­ing goes, the cus­tomer is al­ways right, then the cus­tomer is re­spon­si­ble for the white-bread re­tail diet.

Al­most all re­tail­ers are strug­gling, which is why re­cent moves by the state gov­ern­ment here are such an af­front. Mary­land politi­cians have just taken another step to­wards of­fer­ing Ama­zon an as­ton­ish­ing US$5 bil­lion ($6.9 bil­lion) in in­cen­tives if the com­pany builds its pro­posed “HQ2” here in Mont­gomery County, where

I live, a few kilo­me­tres from the bor­der with Wash­ing­ton

DC. Ama­zon has a short­list of 20 lo­ca­tions for its mas­sive com­plex, in­clud­ing two other sites nearby, one in DC and one in Vir­ginia. As a Mary­land tax­payer, I op­pose this huge pack­age of sub­si­dies. If the state has bil­lions to give away, we are be­ing over­taxed.

I also op­pose it be­cause re­cently I walked a few blocks through cen­tral Bal­ti­more, which is also in Mary­land, and saw, sleep­ing in door­ways, nu­mer­ous ex­am­ples of need far greater than Ama­zon’s.

I con­sider it a mat­ter of prin­ci­ple that pub­lic money should not be used to sub­sidise any pri­vate com­pany. But for funds to be ear­marked for Ama­zon – the world’s big­gest on­line re­tailer, owned by the world’s wealth­i­est per­son, Jeff Be­zos – is sim­ply of­fen­sive. Ev­ery state com­pet­ing in Ama­zon’s beauty con­test is of­fer­ing in­cen­tives, but no pro­posal is a as gen­er­ous as Mary­land’s. The world over, noth­ing comes as eas­ily to politi­cians as spend­ing tax­pay­ers’ money.

It is not yet clear how Pres­i­dent Don­ald Trump’s con­fi­dent dec­la­ra­tion on Twit­ter last month that “trade wars are easy to win” is pan­ning out. The bal­loon went up when he sud­denly im­posed im­port tar­iffs on wash­ing ma­chines, so­lar pan­els and, later, steel and alu­minium, es­pe­cially from China.

Trump then upped the ante, threat­en­ing tar­iffs on US$50 ­bil­lion worth of im­ports from China, rang­ing from mo­tor­cy­cles and snow ploughs to ma­te­rial used in den­tal fill­ings. China re­tal­i­ated with threats of tar­iffs on pork, nuts, fruit and sparkling wine, and later, af­ter more provo­ca­tion, pro­posed tar­iffs on Amer­i­can cars, chem­i­cals and soy­beans. This tit for tat is rem­i­nis­cent of two kids goad­ing each other in the back seat on a long car trip.

The opaque na­ture of Chi­nese com­merce means its com­pa­nies are of­ten sub­sidised, so Trump is cor­rect to say that there is not a level play­ing field in in­ter­na­tional trade. Ev­ery coun­try that trades with China knows this and re­sents it. Tack­ling it is a good idea. But Trump’s wil­ful in­sis­tence that com­plex­ity is re­duc­ible to a tweet is un­help­ful.

Trad­ing pacts such as the Trans-Pa­cific Part­ner­ship and its “com­pre­hen­sive and pro­gres­sive” suc­ces­sor, the CPTPP, are a bet­ter re­sponse, be­cause trans­parency, rules and dis­pute pro­ce­dures are agreed.

But why ne­go­ti­ate com­plex deals when you can tweet from bed in­stead? Per­haps, rather than say that trade wars are easy to win, Trump meant to tweet that trade wars are easy to start. If so, he has proved his point.

The tit for tat is rem­i­nis­cent of two kids goad­ing each other in the back seat on a long car trip.

“It seems we’ve been ac­cused of hack­ing.”

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