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THE INDEX — September 14, 2009

Days after President Obama introduced new tariffs on Chinese tires, China's commerce ministry took steps towards imposing tariffs on U.S. automotive and poultry exports. China launched anti-dumping and anti-subsidy investigations into the two industries, citing complaints from Chinese manufacturers that the U.S.-made products entered China's markets with "unfair competition." Officials say the probe is not intended as retaliation for the new U.S. policy, which was widely condemned in China as a "grave act of trade protectionism," said Chen Deming, China's minister of commerce. (The U.S. tariff will tack an additional 35 percent surcharge on Chinese-made tires, starting September 26.) Beijing has requested World Trade Organization (WTO)-sanctioned consultations over the U.S. tariffs, noting that they are in contravention of both WTO rules and commitments made at the April G-20 summit. In the United States, some analysts have called the tariffs an overtly political effort to appease union workers and secure their support for domestic policies, especially health care. Both China and the United States, however, stand to lose if a trade row escalates—the Chinese economy relies heavily on exports to the United States, while Beijing holds trillions in Treasury bonds and dollar-denominated assets. Amidst widespread warnings that protectionist sanctions could hinder a rebound from the economic crisis, fears of a full-blown trade war pushed markets lower around the world on Monday. The United Nations’ highest court will hear final arguments from Argentina over claims that a Uruguayan paper mill is polluting a shared river. The mill, which sits on the Uruguay River, is causing “irreversible” environmental damage and discharging pollutants into the water and the air, according to Argentinean lawyers arguing before the International Court of Justice (ICJ). Argentinean lawyers contend the mill releases harmful effluents into densely populated area whose inhabitants use the river for fishing, leisure, and tourism, while Uruguayan officials claim the mill is a model of eco-responsibility. Argentina filed an application with the ICJ in May 2006, accusing Uruguay of unilaterally authorizing construction of two mills on the river and breaching a 1975 bilateral treaty, which said all decisions regarding the river must be made through consultations and agreement between both countries. The ICJ dismissed a bid by Argentina in July 2006 to halt construction of both mills, but plans for the second mill have now been abandoned. At least 14 women and children were killed and dozens more were injured in southern Pakistan as a charity food giveaway became a stampede. According to officials, hundreds of women had assembled in the southern port city of Karachi to collect free flour and rice from a local businessman observing the Muslim holy month of Ramadan. However, the distribution quickly devolved into chaos, with most of the deaths caused by suffocation. Crowding and congestion made it impossible for rescue workers to adequately respond. President Asif Ali Zardari expressed "shock and grief" over the deaths and ordered an immediate judicial probe to determine responsibility. Prices for staple goods have risen sharply in the region and the government has not been able to provide relief to the growing numbers of people stricken with poverty. During Ramadan, Islam's most sacred month, many wealthy business leaders in the community give alms, distributing free foodstuffs or cooked foods to the poor. Venezuelan President Hugo Chavez said that his country has received $2.2 billion in credit from Russia to purchase nearly 100 tanks and a series of anti-aircraft rocket systems. The weapons include 92 Soviet-era T-72 main battle tanks and 300-millimeter Smerch multiple-launch rocket systems. After meeting with Russian President Dmitry Medvedev and Prime Minister Vladimir Putin, Chavez noted that the weapons were needed “to modernize our fleet of armored vehicles,” but also said the purchases were not directed at any particular country. Tensions between Venezuela and its neighbor, Colombia, have been heightened of late, due to Colombia's agreement with U.S. forces to allow access to several of domestic bases. “With these rockets it is going to be very difficult for [the United States] to come and bomb us,” Chavez said. Venezuela also finalized a deal with a group of Russian companies to invest $20 billion to develop the Junin 6 block of crude reserves in the Orinoco Belt, estimated as one of the largest sand oil deposits in the world.

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