A Chinese Foreign Ministry spokeswoman has declared that a recent shipment of arms from China to Zimbabwe is completely unrelated to the current post-election tension in the country and is part of “perfectly normal trade in military goods between China and Zimbabwe.” But this hasn’t stopped the 300,000 member South African Transport and Allied Workers Union from refusing to unload the shipment.

The South African workers refusal to accept the arms shipment has been publically echoed by the governments of Angola, Mozambique, Namibia and Tanzania with their refusal to accept the arms and ship them overland to Zimbabwe. The U.S. has voiced its support of these countries on the matter and urged the Chinese government to recall the shipment. Although the South African government itself has not endorsed the refusal of the weapons, South African citizen action coupled with the support of neighboring countries has essentially created an informal embargo of the Chinese weapons. These actions contrast sharply with President Thabo Mbeki’s policy of quiet diplomacy, and refusal to deem Zimbabwe's current political and economic woes a "crisis."

I think this story is an incredibly powerful demonstration of the power individuals and governments have when they work together to take a stand on an issue.

Muslims in Malaysia and elsewhere are boycotting Dutch imports in the wake of an incendiary Internet-posted movie by Dutch legislator Geert Wilders. The right-wing politician means to provoke with his 15-minute anti-Islamization movie, Fitna, which many say equates Islam with terrorism.

In Malaysia, where more than six of every 10 inhabitants are Muslim, the Foreign Ministry has strongly condemned the film. The Religious Council has also urged the boycott of Dutch products, saying it created unnecessary tensions.

One of Malaysia’s leading supermarket chains initiated a "soft boycott" in 40 stores by marking the products with red labels. The chain buys $18.8 million worth of Dutch goods a year, ranging from dairy products and cosmetics to electronics.

Malaysia's former prime minister Mahathir Mohamad said that a boycott would make the Netherlands "close shop" since the world's 1.3 billion Muslims make up the wealthiest population and are also the biggest importers. “We must not be afraid of losing trade with them. If we do, then we won't be thinking as Muslims, but more for our own self interests," he said.

The Dutch are fearful that the boycotts will affect their businesses. Malaysian dairy giant Dutch Lady Milk Industries took out full-page newspaper advertisements to denounce the film. Dutch businesses are even threatening to take legal action against Wilders if their businesses were affected by his film.

Oman, Jordan, Singapore, Pakistan and the United Nations Secretary General Ban Ki-moon are among others who have condemned the film.

Higher food prices aren’t all bad, according to the Council on Foreign Relations. Rather, continued increases in the price of foods, especially basic staples like corn and wheat, could provide the pressure needed to break the international deadlock on agricultural policy. In an effort to prevent food shortages, many countries have already begun to reduce agricultural import tariffs as a means of increasing production.

Countries scrambling to fill grocery shelves may be willing to bend where they haven’t previously. If major exporters start exporting less, this in turn could make farm industries in developed countries like the United States feel less threatened by imports… Peter Mandelson, the EU trade minister, notes a shift already afoot: “There’s much less of a need for protectionism than when we started [the Doha Round of global trade talks] in 2001.”

Today's Business Week reports that a disagreement between the EU and South Africa is threatening the unity of the Southern African Customs Union, the world's oldest customs union. Last year several countries broke rank with South Africa, signing a trade agreement with the EU. It is feared that South Africa may use this as a reason to disband the union entirely.

If South Africa does break ranks with other participating countries including Botswana, Namibia, Swaziland and Lesotho, tariffs protecting Namibian beer makers from European beer would not apply to countries like South Africa. The result would be the inability of Southern African countries to effectively protect certain industries (and in this case a significant loss to the global beer supply as well as domestic economies).

A young coal worker in Shanxi, China. Photo: andi808 (flickr)

Check this out: China has the worst coal mine safety record in the world. Only two months ago, 105 men were killed in one mine. Last year, approximately 3,800 miners were killed in accidents.

Listen as Ted Koppel explores the safety problems surrounding China's coal industry.

China will soon transition from being a net exporter of coal to importing approximately 15 million tons more than it produces. Why? A booming economy, growing at 10 percent a year with every intention of maintaining its rapid speed, and an unusually harsh winter.

The government seems to be feeling pressure both to improve safety records, but also to keep the much demanded coal coming. In the end it seems that the economic concerns trump all.

The New York Times reports that despite concern over Nafta among Mexican farmers and U.S. big sugar companies, in time Nafta should make the U.S. consumer and the Mexican farmer better off.

Today, Business Week takes a look at how Mexico is benefiting under Nafta -- but why the free trade agreement hasn't solved all of Mexico's economic woes.

There's no question that the country has benefited greatly from Nafta: Mexico has become the world's 15th-largest exporter, sending abroad $272 billion of merchandise in 2007 ($43 billion of which was oil). It transformed a $3 billion trade deficit with the U.S. in 1993 into a $75 billion surplus in 2007. Mexico went on to sign free-trade agreements with 41 other countries, attracting some $223 billion of foreign investment in 15 years.

So, why did tens of thousands of angry Mexican farmers take to the streets in late January, demanding that Nafta be renegotiated? Because after a decade and a half of free trade, Mexico's economic transformation is incomplete, and many Mexicans are blaming Nafta for a plethora of problems that have more to do with bad government policies than with free trade.

Most assume that China will experience a significant downturn in growth as a result of the recent scare in the US economy. But on January 3rd The Economist published an article suggesting that growth of GDP in China is less dependent on the export of cheap goods to Western consumer markets.

The headline ratio of exports to GDP is very misleading. It compares apples and oranges: exports are measured as gross revenue while GDP is measured in value-added terms…
Once these adjustments are made, Mr Anderson reckons that the "true" export share is just under 10% of GDP. That makes China slightly more exposed to exports than Japan, but nowhere near as export-led as Taiwan or Singapore.

Today an International Herald Tribune article asks, "is economic history about to change course?" As power transfers from the west to the east, many economists are worried about a protectionist backlash by governments in attempt to regain control.

"Economic theory tells us that globalization is a win-win, but it isn't, at least not in the West," Roach said. "The theory was written for another era. We have to ask some hard questions about unfettered capitalism. We need a new script."

The risk is that Western governments, mindful of the growing backlash among voters, will be tempted to rewrite the script by engaging in old and new forms of protectionism.

Many are predicting 2008 to be a year for the economic history books.

The Council on Foreign Relations takes a look at the possibility of a global recession.

As many indices mark the worst stock market losses since 9/11, India suspends trading and Japan marks the worst two-day losses in 17 years, analysts are talking global recession (and its implications for the US).

The Council on Foreign Relations' Lee Hudson Teslik says that this recession (or mild economic turn down) could have implications for a number of US policies, ranging from immigration to possibly increasingly protectionist economic policies as US job losses cause citizens to feel the squeeze-- and subsequently pressure politicians.

However, can emerging markets counterbalance the fear and uncertainty present in the US and across Asia?

Globally, economists see a silver lining in the developing world. Emerging markets in East Asia, the Middle East, Latin America, Eastern Europe, and even Africa have seen rapid recent growth (Economist),
and analysts hope growing consumption in these regions might offset declines in the United States. Either way, analyst Zakaria and others argue, a downturn need not bring a permanent loss of power for Washington, if policymakers reclaim the “open and expansive” attitude with which they once embraced the world.

The BBC reports that the Chinese toy scare of 2007 has led to an export boom for India's traditional wooden toy makers.

Steven E. Landsburg outlines a few simple ways to wrap your mind around the concept of free trade and outsourcing in the New York Times op-ed, What to Expect When You're Free Trading.

Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?

Internally torn about free trade vs. protectionism? Well worth the read.