The once-thriving practice of outsourcing manufacturing may be thwarted by rising energy costs.

According to the Wall Street Journal, many U.S. manufacturers have halted plans to build factories overseas because the costs to transport goods back home have risen. Some, such as the heater manufacturer DESA LLC, are even considering moving production back to the U.S. "My cost of getting a shipping container here from China just keeps going up — and I don't see any end in sight," said DESA retail heating division president Claude Hayes. The company now considers itself lucky to have kept its old U.S. factories.

The return of DESA's heaters to the U.S. coincides with a new report by CIBC World Markets called "Will Soaring Transport Costs Reverse Globalization?" The report argues that high energy costs could potentially reverse the outsourcing that has occurred in some areas of manufacturing. Foreign trade cannot expect the same opportunities to develop markets in India as there were 30 years ago because of today's high energy costs. This situation could give countries closer to the U.S. like Mexico a little more appeal in the future than current economic giants such as China.

But do not expect outsourcing — the major transformer of world economies in the last 30 years — to go silently into the night. As Andrew Leonard points out in his article "Who Needs Tariffs When You Have Expensive Oil?" high energy prices do not affect all aspects of global trade, including the areas of telecommunications and computers. For example, the software industry in India will continue to thrive because it thrives on cheap Internet and not natural resources. So while some manufacturing may feel the pressure of high oil prices, American companies will continue to outsource in other ways.

Energy costs won't likely come down anytime soon. Could American manufacturing make a comeback?

Photo: Mark oh! (flickr)

Photo: Michael Foley Photography (flickr)

Move over Italy. Developing countries are the up-and-coming leaders of the leather market, boasting cheaper production costs and fewer environmental regulations.

There is a good chance that your soccer ball, leather belt or aviator jacket was tanned in one of Pakistan’s 2,500 leather factories in the industrial centers of Karachi, Kasur, and Sialkot. The factories mostly employ poor people from neighboring areas, especially young children who will work for cheap wages. In one town alone, Kasur, more than 700 children worked in leather-tanning factories, according to the International Labor Organization.

NPR's Marketplace recently profiled a 17-year-old Pakistani boy, Mohmen, who's worked in the tanning industry since he was 13.

Like so many of Pakistan’s child workers, Mohmen has sacrificed his childhood to support his family. He has toiled in a hazardous leather tanning factory for four years. Six days a week Mohmen moves animal skins from a cart to a conveyor belt.

His heavy workload is not the only thing in the factory that will begin to take a toll on Mohmen. A 1996 Swedish study found that leather tannery workers experience an increased risk of cancer due to their exposure to toxic chemicals.

Mohmen would like to leave and go home to his family but he knows that he cannot. “How can I go home if I have to keep paying somebody? I keep paying what my family owes.” He is just a kid, but he is in an adult world where there is no rest from poverty's harsh realities.

We buy cheap bootleg DVDs and fake Coach purses from random street vendors with little hesitation. But what about buying your daily medication from them, too?

This is a common practice in the developing world. In Zimbabwe, for example, street vendors offer the poverty-stricken populace medicine for a price five to eight times less than a legitimate pharmacy.

The trouble with these cheap meds is that they're often not the real thing. One study cited by the World Health Organization says the counterfeit medication industry could reach $75 billion by 2010. Although the industry's reach is worldwide, it's more prevalent in developing countries. The WHO says "many countries in Africa and parts of Asia and Latin America have areas where more that 30% of the medicines on sale can be counterfeit."

Though buying counterfeit medications can save a lot of money, it is also very risky. In 1995, 89 Haitian children died from taking counterfeit cough syrup that contained the active ingredient in antifreeze instead of the real medication. Governments in the developing world often lack the resources to track and prosecute these illegal manufacturers and sellers. The Internet is only making the fight harder.

Major pharmaceutical companies are protecting their products from counterfeiters using different methods. Today, companies like GlaxoSmithKline use holographic labels or stickers to make their product more distinguishable from fakes. Recently, counterfeit drugmakers have, however, been able to convincingly duplicate many of these stickers and packaging. For example, one study revealed that about half of Southeast Asia's supply of the anti-malarial drug Artesunate was counterfeit despite holographic packaging.

The easiest and fastest way to decrease the market for these fake drugs is for consumers to increase their own awareness. Many news organizations have begun to help. In this video, Al-Jazeera reports on counterfeit drugs in Mauritania.

Throughout the past 40 days, South Koreans have vehemently opposed a government proposal to lift a five-year suspension on the import of U.S. beef. Fear of meat tainted with mad cow disease prompted 100,000 Koreans took to the streets of Seoul. Korea suspended the imports in 2003 when the first case of mad cow was discovered in American beef.

The public outcry over the proposal to lift the ban is President Lee Myung Bak's first big challenge as he tries to improve relations between the U.S. and South Korea. Though the president and his administration took office in February, already the uproar has prompted the president’s entire cabinet to offer their resignations. The divisive trade deal and a trucker’s strike over the surging price of fuel could further slow the South Korean economy.

This Al Jazeera video shows some of the more striking images from the demonstrations and gives an overview of the political climate that has led to the near- daily protests.

Controversial U.S. Farm Bill was just passed into law. Photo: Johnny Alive (flickr)

Critics of the newly passed U.S. Farm Bill say the measure will hurt poor farmers in the rest of the world.

The $100-billion Farm Bill, which passed into law in May, increases crop subsidies, boosts conservation spending and expands the food stamp program. It also guarantees annual payments to farmers and pays farmers for any crops they sell for less than the federally regulated minimum price.

President Bush claims that the bill "provides a safety net for [U.S.] farmers … without encouraging overproduction and depressing prices.” But international agencies – and even members of the president’s own administration – railed against the measure.

Deputy U.S. Agriculture Secretary Chuck Conner said the measure “heads in the wrong direction in terms of our international obligations,” and expects trade partners “to protest in every way they can." Australia is already making plans to challenge the Bill through the World Trade Organization.

Oxfam America says that by encouraging large companies to overproduce, U.S. government subsidies lead to dumping – selling surplus goods in international markets at prices under the cost of production. The humanitarian agency says this undermines local production, threatens millions of farmers worldwide and clearly violates WTO rules.

Even before this Farm Bill, U.S. farm programs were criticized internationally for their trade-distorting subsidies. This bill further undermines our moral authority. Horst Koehler, an official with the International Monetary Fund, criticized the U.S. for its "double standards" about open markets.

Our hypocrisy not only damages our reputation, but makes the EU and other large exporters less likely to adopt the kind of policies that will help the world’s farmers.

"If you've ever smoked a major-brand cigarette, the chances are you've smoked Malawian tobacco," says the BBC. "Virtually every western cigarette uses a bit of the produce from this small southern African nation in its blend."

The battle between cigarette companies and anti-tobacco campaigns poses a challenge for Malawi, one of the poorest nations in the world. In Malawi, tobacco production contributes to 10 percent of GDP and is the second-largest employer in the country.

Proponents of tobacco production argue that tobacco is a crop of choice for farmers because it is easy to grow on marginal soils that yield little else, and earns about seven times more than maize and 22 times more than cotton. In Malawi, revenues from tobacco production are generated from a mere 2 percent of the country’s arable land.

Critics of tobacco production argue that the wealth generated by this resource is not spread evenly across the country. With the price of tobacco constantly fluctuating, those hardest hit are small farmers who are often forced to sell their produce at a loss when tobacco prices fall below market value. According to The Malawi Tobacco Control Commission (TCC), a local government watchdog, it takes US$1 for farm workers to produce a kilogram of tobacco, but that kilo is sold for only US$0.70. As a result, farmers on the big tobacco estates become bonded laborers, forcing whole families to work and repay the landlord. One study found Malawi's tobacco industry employs 78,000 children.

What's not in dispute is that Malawi's tobacco industry is struggling. The government is starting to push alternatives. One is farming mushrooms, where there is already a"brisk local market" — and a potential to meet unmet global demand.

On the tobacco auction floor. Photo: joellaflickr (flickr)

Is the Silk Road making a comeback?

Newsweek says the historic trade route between Asia and the Middle East is reopening as trade grows between China and oil-rich Gulf countries. The chance to renew the old economic relationship between Asia and the Gulf coincides with a U.S. economy on the rocks and much of the world heading towards recession.

The joining of wealth seems perfect, with the Middle East is rich in oil and China looking for overseas investment.

What could reviving the old Silk Road mean for the U.S.? Newsweek quotes David Rubenstein, co-founder of the equity powerhouse Carlyle, as saying: “The economic center of the world is beginning to shift from the U.S. and Europe to the Middle East and Asia."

The original silk road. Photo: sanjoyg (flickr)

Social entrepreneur Steven Redgrave gained renown by winning gold medals in rowing in five consecutive Olympics from 1984 to 2000. After retiring from competition, Redgrave was knighted in 2001, launched a line of men’s leisurewear and started a charitable trust focusing on educational and social needs in the UK.

In 2005 he visited Africa, and was moved to action by the poverty he observed. With the help of a major British retailer, Redgrave relaunched his clothing line, FiveG (short for "Five Gold"), as a 100-percent fair-trade enterprise.

In this video diary, produced by Fairtrade Foundation, we follow Redgrave as he visits a rural farming community in Mali that produces cotton for his products.

Thanks to fair trade, not only do these rural farmers receive a higher wage, but their community as a whole benefits as well. The video explains how the community receives what is called a "social premium" that is used for community development projects, including a new health center and a primary school.

For an in-depth look at fair-trade cotton, check out this analysis from the Center for Strategic and International Studies in our archives.

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.

A scramble for Africa’s resources and major manufacturing outlets has begun. India and China are emerging as competitors as each country looks to make its mark on the continent. India attempted to entice African leaders last week at an India-Africa Summit. The aim was to persuade them to welcome Indian investment. They are pushing to keep up with China’s plans to meet with African leaders at an even bigger summit they plan to host in May.

What could make India the one to successfully invest in Africa? For one, India has a history of close relations in Africa dating back to colonial times. Recently, India has also been a major aid donor to Africa along with sending about 9,000 UN Peacekeepers to the continent. However, India has tried to separate its recent efforts from China’s presence in Africa by insisting its interests are mostly focused on development.

Could India find a place as a new economic powerhouse in Africa?

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.