he developing member status is an area identified for WTO reform by the US, the EU and the Trilateral Trade Ministerial Cooperation. The grievance is that some of the world’s top trading nations that declared themselves as developing members are taking advantage of the 155 special and deferential treatment provisions embedded to date across the range of WTO agreements, resorting to weaker commitments, undermining the functioning of the multilateral trading system and impeding the negotiation of future agreements...
I was recently in Anantarivo, Madagascar for the 11th Private Sector Forum organised by the African Union Commission and its partners, in which one of the central themes was the African Continental Free Trade Agreement (AfCFTA). The AfCFTA, a landmark milestone on its own terms, was entered into agreement on 21 March 2018 by African leaders and ratified by 28 African countries.
La politique commerciale des Etats-Unis est en train de déstabiliser profondément le système commercial international. L'Union européenne se bat pour le maintien de la stabilité du système, fortement menacée. Ce texte est repris d'un article pour la Fondation Schuman.
What have been the economic costs of the trade conflict between America and China? Who has borne these costs? How will the struggle end? Scott Lincicome joins to explore these questions. Scott Lincicome is an international trade attorney with experience in trade litigation before the Department of Commerce, the US International Trade Commission, the US Court of International Trade, the European Commission and the World Trade Organization’s Dispute Settlement Body...
This two-part series aims at deciphering the irreconcilable Chinese and North Korean economic integration strategies, using the Dandong-Sinuiju area as an analog for the larger bilateral economic relationship.(...)this part examines how China tried, unsuccessfully, to impose its own views on economic integration without Pyongyang’s support, dooming the prospects for joint economic cooperation.
This two-part series aims at explaining the irreconcilable Chinese and North Korean strategies for economic integration, using the Dandong-Sinuiju area to illustrate some of the larger problems in their bilateral economic relationship. This part focuses on the North Korean-led economic integration projects in Sinuiju. It concludes that, while coordination with the Chinese side has proven difficult, it has not prevented Pyongyang from awkwardly trying to implement one-sided economic integration strategies...
The OECD is leading an international effort to rewrite the global tax rules with the goal of addressing how to levy taxes in the digital economy. The current proposal includes a new method of allocating a portion of consumer-facing corporations’ profits based largely on sales, rather than business location. Abandoning the corporate tax’s connection to physical location will immediately increase taxes on many of the largest businesses and could in the medium term lead to higher taxes for all businesses, hurting workers and consumers. Counter to the OECD’s goals, the proposal will also further destabilize the rules governing international corporate taxes. The Treasury Department and Congress should not approve any plan that overturns the physical-presence requirement for business taxation.
New America’s Natural Security Index compares the natural security of China and the United States and identifies their top resource allies and trade partners. By comparing the countries’ resources, production, imports, and exports, the index finds that the United States has a comparative natural security advantage over China, though China has a more diversified resource trade and investment portfolio, according to our analysis. Altogether, this project suggests that natural resources will help shape the competition between the United States and China for geopolitical influence and investments—and that competition will, in turn, shape global natural security.
This paper provides an overview of historical antecedents for India’s reengagement with the region, outlines the driving factors for India’s Act East Policy, describes the conceptual evolutions of Act East and the Indo-Pacific, details the four elements of India’s Act East Policy to date, and, in conclusion, identifies priority areas for future Indian policy.
igeria’s recent announcement confirming that it is closing its borders to prevent movement of all goods has been met with harsh criticism from neighbors and regional integration advocates. The Buhari administration has justified the decision as a tactic to curb smuggling of goods of which the country wants to internally increase production, such as rice...
Recently, the World Trade Organization (WTO) granted the United States the right to impose tariffs on nearly $7.5 billion of European imports. These tariffs are the latest of many new trade barriers that the Trump Administration has imposed, but they are markedly different than the president’s unilateral tariffs on China and others. Specifically, they follow 15 years of due process at the WTO during a fight between United States and the European Union (EU) over illegal government subsidies for commercial jetliners...
For years, the fear of China using its financial clout to obtain highly sensitive or national security-related US technology and data has preoccupied presidents and lawmakers. In 2018, President Donald Trump signed into law the Foreign Investment Risk Review Modernization Act (FIRRMA), a bipartisan measure that expanded the powers of the Committee on Foreign Investments in the United States (CFIUS), an interagency group in the executive branch, to scrutinize foreign investments for national security risks. The new law also authorized the Commerce Department to step up controls on technology exports. Then this month, the US Treasury proposed detailed regulations to implement part of CFIUS's new powers, aimed at safeguarding investments without stifling legitimate and beneficial transactions—and without overwhelming a strapped bureaucracy with a mountain of countless minor investigations...
Record Number of Americans Say International Trade Is Good for the US EconomyOctober 9, 2019By: Brendan Helm, Research Assistant; Dina Smeltz, Senior Fellow, Public Opinion and Foreign Policy; Alexander Hitch, Research AssociatePresident Donald Trump has embarked on an ambitious and disruptive trade agenda, driven by his belief that the United States has lost “many billions of dollars” to trading partners and that “trade wars are good, and easy to win.” During his term, the president has escalated trade tensions with China; has renegotiated trade agreements with countries such as Mexico, Canada, and South Korea; and has withdrawn involvement in trade deals such as the Trans-Pacific Partnership. By contrast, the 2019 Chicago Council Survey finds that the American public is more likely than ever to say that international trade benefits the United States, but Republicans and Democrats differ on whether President Trump’s strategy is an effective approach to trade policy.
On October 9, the Bureau of Industry and Security (BIS) of the Department of Commerce announced it had added to its entity list 28 Chinese government and commercial organizations that had been implicated in human rights violations against Uighur Muslims in the Xinjiang region of China. Included on the list are eight leading Chinese technology companies, including artificial intelligence (AI) champions Hikvision, iFLYTEK, SenseTime, and Megvii. The Chinese government condemned BIS’s announcement and accused the United States of interfering in China’s internal affairs and supporting terrorist forces.
Ces vingt dernières années, le nombre de règlements de différends entre investisseurs et États a explosé dans le monde : de 6 affaires connues en 1995, l’on est passé à 942 aujourd’hui. Pas moins de 106 demandes d’arbitrage afférentes à des traités d’investissement concernaient des États d’Afrique. Cela représente11 % de tous les différends connus entre investisseurs et États dans le monde...
Artificial Intelligence (AI) is poised to transform the global economy, and Canada’s leadership in this technology presents a unique set of opportunities in the Asia Pacific.The policy brief Towards Canada’s Asia Strategy on AI outlines and argues for a comprehensive and long-term strategy that addresses Canada’s challenges and opportunities in its commercial, people-to-people, and geopolitical engagements in Asia as they relate to AI.The brief by APF Canada researcher Dongwoo Kim also provides four policy recommendations for the Government of Canada for the development of a comprehensive and dynamic Asia Strategy on AI for enhanced engagement with the growing economies of the Asia Pacific.
Since the 2016 Presidential election, international trade policy has been daily fodder for front-page news coverage and has contributed to heightened volatility in finan-cial markets. Though both major candidates in that election promised some revision of trade policy, the winner took the more extreme position, actually promising a trade war. Since the election, he has clearly shown that he considers there to be continuing political and/or economic benefits from prosecuting that war.
La FNH et l’Institut Veblen formulent une série de propositions qui vont de mesures unilatérales à des changements à adopter dans la conduite des négociations commerciales : de la manière dont sont négociés les accords, jusqu’à leur finalité, en passant par le choix des partenaires et les outils à mettre en place. L’objectif est de les mettre au débat dans le contexte de la mise en place de la nouvelle Commission européenne, tant au niveau national qu’européen.
The objectives of this chapter are two-fold. Firstly, it examines how Korea took advantage of globalization in the past to sustain its growth dynamics. Secondly, it assesses the change in the way the country participates in, and responds to, globalization in the wake of the crisis. To that purpose, the main emphasis is placed on the role of both inward and outward foreign direct investment (FDI). In other words, the chapter aims to explore how FDI has influenced the restructuring of the Korean economy in the past and how it can be expected to continue to do so in the future.
L’arrivée au pouvoir de Donald Trump sur la base d’un programme souverainiste, les annonces de hausse des droits de douane sur de nombreux produits ou encore la dénonciation des pratiques commerciales chinoises ont remis sur le devant de la scène la question du protectionnisme et de ses conséquences sur le commerce international.Dans ce contexte, notre Note se propose d’analyser comment la France est exposée au risque protectionniste en examinant l’insertion de nos entreprises industrielles dans les chaînes de valeur mondiales.
In 2010, China had used its dominance over rare earth elements (REEs) to effectively implement its ban on exports to Japan, ostensibly following the collision of a Chinese fishing vessel with Japanese coast guard vessels. Almost a decade later, as China threatens to ban exports to the United States (US), a replay of the same could be in the offing...
Recognising that there is a general economic imperative to engage in low-carbon indus-trial transformation, not least to position Europe’s industry competitively for the future, how can the EU build upon its leadership role and continue to offer solutions for reduc-tions and underpin growth in future industries? Leadership on climate change policies has enhanced the global role of the EU. Can it also do so at a time ofmultilateralismin crisis?
At the presentation of her team for the next European Commission, President-elect Ursula von der Leyen declared that hers will be a ‘geopolitical Commission’. It is no surprise, therefore, that her mission letter to Mr Hogan, the incoming Commissioner-designate for Trade, assigns two roles to European Union trade policy.
One of President Trump’s most prominent policy actions since taking office has been to raise tariffs, which significantly harm the U.S. economy. Trade barriers such as tariffs increase the cost of both consumer and producer goods and depress the economic benefits of competition, inhibiting economic growth. Research suggests that tariffs are directly responsible for inflation, depressed aggregate demand, less capital expenditures, and lower productivity levels.The president’s tariffs, when combined with corresponding retaliation, threaten nearly $630 billion of traded goods annually. The following analysis calculates the overall impact these tariffs could have on the prices of goods in the United States.
Though historically China has been a sanctions recipient, with only a few isolated incidents of using sanctions in return, this situation is likely going to change in the years to come. China’s global economic position — as well as its ambitions to serve as not only a global power, but also potentially the leading international power — will push it to consider means of exerting international leverage. The United States has shown vividly in the last 30 years that sanctions are one means to this end, and Chinese scholars are demonstrating increasing facility with sanctions doctrine. China’s increasing assertiveness in economic sanctions will allow it to not only hit back directly against the United States with retaliatory measures, but also to develop independent rationales to apply sanctions in pursuit of Chinese policy objectives...
On Tuesday, September 17, the Center for East Asia Policy Studies at Brookings, theU.S.-Japan Research Institute, and theGlobal Taiwan Institute co-hosted a panel of experts to discuss these issues. Panelists also examined how Japan and Taiwan have weathered the tariff trade war and how they can prepare themselves for a protracted U.S.-China economic conflict.Following the discussion, panelists answered questions from the audience.
Earlier this year, the 15 heads of states and governments of the Economic Community of West African States (ECOWAS) agreed to launch a new currency, the “Eco,” in January 2020. In doing so, ostensibly, the leaders believe that business people and travelers will be freed from the hassles of exchanging currencies, intra-area trade will boom, and an integrated and prosperous region will flourish...
When Chinese President Xi Jinping toured a rare-earth processor a week after the Trump administration blacklisted Huawei in May, he highlighted the importance of rare earths in global supply chains - a statement widely interpreted as a threat to restrict Chinese exports to the United States. With the trade war having moved beyond tariffs and into issues such as currency, rare earths could be the next salvo in the conflict.
On 3 September 2019, China crossed a major threshold in the implementation of its ascent to become Hegemon comes 2049. Xi Jinping delivered an extremely important speech in which he asserted in stronger terms than usual the commitment to the ascent of China and ensuing struggles with the US...
No relationship will be as significant in the years ahead as the one between the U.S. and China. Forty years ago, Washington and Beijing established diplomatic relations, setting the stage for the defining bilateral relationship of the 21st century. Today, the trajectory of the U.S-China relationship has ripple effects throughout the global economy and plays a critical role in a host of security, trade, political, technological and environmental issues, among others. Amid rising tensions over tariffs and more, discussion about U.S. policy toward China is needed now more than ever. To explore some of the key issues facing the U.S.-China relationship today, USIP will host a conversation with Rep. Darin LaHood (R-IL) and Rep. Rick Larsen (D-WA), co-chairs of the House U.S.-China Working Group.
Longstanding trade relations between Iran and China have deepened since the U.S. imposed punitive economic sanctions on the Islamic Republic in November 2018. Chinese State Councilor Wang Yi called the two countries “comprehensive strategic partners” during a visit by Iranian Foreign Minister Mohammad Javad Zarif in August 2019.Trade between the two countries dates back to at least 200 B.C. Their cultural and economic ties were cultivated along Asia’s ancient Silk Road. In the 13th century, they were both briefly consumed by the Mongol Empire. Both countries, ruled by successive dynasties for more than two millennia, witnessed revolutions in the 20th century—China in 1949, Iran in 1979—that transformed Asia and challenged the international order dominated by the West.
In “Toward Sustainable, Equitable Trade Policy—Not False Solutions,” Roosevelt Vice President of Policy and Strategy Nell Abernathy and Roosevelt Fellow Todd N. Tucker explore a progressive one-two punch for trade that can restructure international and domestic policy to 1) curb the extractive power of corporations and increase the power of workers and consumers, 2) as well as reclaim the public power of government to serve the public good. Just as trade deals now encompass more than trade alone, a new global governance agenda must take a comprehensive approach toward meeting the needs of working people.
President Donald Trump, in defending his trade war with China, has yet again let his Twitter fingers get ahead of reality. He tweeted in late August that “China wants to make a deal so badly. Thousands of companies are leaving because of the Tariffs. They must stem the flow.” This supposed exodus of foreign firms is another element informing his view that China is under increasing economic pressure and thus anxious to accept US terms for a trade agreement. As is the case with Trump’s claim that the US tariffs are slowing China’s economy and increasing its unemployment, the facts fail to support his view.
The U.S. Trade and Development Agency (TDA)is an independent U.S. government export promotion and foreign assistance agency. TDA aims to support U.S. jobs by linking U.S. firms to export opportunities for development projects in developing and middle-income countries through funding “pre-export” assistance...
Several analyses have examined energy and geopolitics in a low-carbon future and one of the major scenarios is of more geopolitical turbulence. None of these analyses, however, explores how a more mercantilist global energy arrangement would affect specific fuels or how we think about global energy security as a common good today. The predominant approach is bifurcated, with multilateral institutions seeking to incorporate major new energy producers and consumers into the dialogue about shared approaches to energy security while countries compete more aggressively in regional and sectorial domains. Much of the old understanding of energy security emanated from the development of a global oil market whereas the future of energy security may depend much more on the security and reliability of the electric power system and the security of information systems...
The World Trade Organization (WTO) is in need of reform, including new rules. While there is not yet a comprehensive reform agenda for the WTO, developing e-commerce rules should be seen as part of WTO reform in two respects. First, the development of such rules will allow the WTO to demonstrate a capacity to remain relevant to the challenges and opportunities governing international trade today. Second, many of the issues that need to be addressed in a comprehensive outcome on e-commerce would contribute to broader WTO reform. This paper proposes, among other things, that the WTO become a platform that can enable increased regulatory cooperation and encourage good regulatory practice. Such a result is needed to overcome many of the current barriers to e-commerce. Success in the e-commerce context would also position the WTO to better address regulatory barriers to trade more broadly.
Since the inauguration of Donald Trump as the president of the US, the world has observed an unprecedented rise in border tariffs. This column shows that trade protection had in fact started much earlier, in the form of non-tariff barriers. An empirical analysis reveals that the average trade dampening effect of such barriers is comparable to that of trade defence instruments such as anti-dumping duties. However, this negative effect can be mitigated by free trade agreements.
There is no possibility for a firm to manage the security issue at its level. Security is a systemic property, it is an environment feature. As illustrated by the Edward Snowden case on how American companies were “forced” to cooperate with US intelligence agencies. Trust must be established at the political level from the education system, to the socialization institution and the legal framework of the society. As H. Kissinger noted : “the dilemma of such technologies is that it is impossible to establish rules of conduct unless a common understanding of at least some of the key capabilities exists. But these are precisely the capabilities the major actors will be reluctant to disclose. The US has appealed to China for restraint in purloining trade secrets via cyber intrusions, arguing that the scale of activity is unprecedented. Yet to what extent is the US prepared to disclose its own cyber intelligence efforts ?42” As a consequence, a company’s management and employees loyalty toward one state becomes the critical political variable of the emerging digital society. It is a structural digital security dilemma...
This paper aims to accomplish three things: take lessons from the recent history of China’s use of economic coercion against other jurisdictions, estimate the ultimate financial cost of China’s economic coercion against Canada, and examine the options Canada has at its disposal, taking into consideration our convictions and willingness to take action. We must better understand the risks of pursuing further trade ties with China, stop fearing further Chinese retaliation (which is beyond our control anyway), and recognize that the fungibility in our agriproduct exports gives us significant leeway in finding other markets around the globe. Indeed, Canada should be taking every measure available to diversify our trade beyond China. Taiwan has been vigilantly doing so for years, and Canadians should take note of its ef-forts to achieve greater resilience against China’s economic coercion (Fontaine 2017). Such trade diversification should be part of Canada’s long-term strategy in the Indo-Pacific region...
The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property. Forty-two data points are used to construct a summary index and to measure the degree of economic freedom in five broad areas...
The Centre for International Governance Innovation conducted consultations in the spring of 2019 with trade experts and stakeholders about options for modernizing the trade rules and strengthening the World Trade Organization (WTO). The consultations focused on the three themes of improving the WTO through monitoring of existing rules, strengthening and safeguarding the dispute settlement function, and modernizing the trade rules for the twenty-first century. This report synthesizes the results of the consultations.
Merchants investing most of their time studying how to do business on the leading electronic commerce platforms in Asia may soon find themselves falling behind the latest advancements in the online retail space. The recent buzz around “social commerce,” a concept that emerged from the intersection of social media and e-commerce, is already changing the way people shop...
As the Group of Seven (G7) leaders conclude talks in Biarritz, storm clouds over international commercial relations are darkening. While the G7 is best placed to address specific frictions between the European Union and the United States — specifically the US threat to impose tariffs on auto imports from the EU and plans by several EU member states (including G7 host, France) to impose a tax on digital services companies that are largely based in that the United States — the larger issue is the deteriorating trade relationship between the United States and China. At the moment, the prospects for a negotiated settlement to an escalating bilateral trade war appear to be dim, while the risk to the global economy is growing. With markets unsettled by the latest rounds of escalation, and showing increasing scepticism with every renewal of trade talks, how should Canadian economic and trade policy respond?
President Donald Trump’s trade war with the world involves multiple battles with US allies and others alike. Each battle uses a particular US legal rationale, such as calling foreign imports a “national security threat,” followed by Trump imposing tariffs and/or quotas on imports. Subsequent retaliation by trading partners and the prospect of further escalation risk significantly hampering trade and investment, and possibly the global economy.The timelines below track the development of the most pressing trade conflicts with links to the latest available data and PIIE analysis.
This paper was prepared at the request of the Greens/EFA Group in the European Parliament to inform the response of the European Union (EU) to the growing trade confrontation between the United States (US) and China. The request included the following questions:1.What risks face the EU with regard to China’s strategic aims in trade policy and how can the EU respond?2.The US effort to isolate China poses particular risks for Europe. How can the EU counter such effortswith the aim of forging its own distinct trade policy?3.How should the EU move forward with reform of the World Trade Organization (WTO) in light of differing demands and aims of trading blocs like China and the US?
Recent work on China’s accession to the World Trade Organizations pays little attention to the wave of reforms in China in the 1980s and 1990s. These reforms created the preconditions for accession and strongly influenced its outcomes. The preeminence of processing trade at the time of accession sharply reduced the impact of accession-related tariff reductions on exports and set the stage for China’s increases in domestic value added and reduction in China’s involvement in global production sharing since that time. The assessment in this paper, based on export data and simulation results on the ex ante accession-related effects on export volumes in the literature, finds that the accession must have increased China’s real export growth by at most is substantial, but not as large as suggested by the difference between the pre- and post-accession export growth rates in the four years before and after accession. This is because the influence of cyclical fluctuations related to the Asian financial crisis and the U.S. dot-com crash dampened export growth in the period before accession in 2001 and accelerated it afterward
In April and May 2019, over 600 million Indian citizens cast their ballots in the largest democratic exercise in human history. India’s national elections brought a landslide victory for the ruling Bharatiya Janata Party (BJP) and incumbent Prime Minister Narendra Modi, while dealing another embarrassing blow to the once-dominant Congress Party. During Prime Minister Modi’s first term in office, defense and strategic ties with the U.S. reached new heights and crossed several key milestones. However, new challenges threaten to stall momentum in the relationship, including the Trump Administration’s decision to impose tariffs on Indian exports and revoke tariff-free access to certain Indian goods; new U.S. sanctions targeting Russian defense exports and Iranian oil exports; differences over new Indian policies governing e-commerce and data localization; and the specter of an expansive U.S. Section 301 investigation that could exacerbate existing trade tensions and threaten progress on strategic convergence. Prime Minister Modi’s return to office should herald a bright future for Indo–U.S. relations—if the two sides can manage the trade and sanctions disputes facing them.
You're listening to The Trade Guys, a podcast produced by CSIS where we talk about trade in terms that everyone can understand. I'm H. Andrew Schwartz and I'm here with Scott Miller and Bill Reinsch, the CSIS Trade Guys. In this episode, President Trump picks up his Twitter megaphone to call out China as U.S.-China trade negotiations are set to resume in Shanghai this week.
In this episode of Dollar & Sense, David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at Brookings, joins David Dollar as they offer their reactions to this week’s primary debates and unpack the trade policies of the Democratic candidates running for president. Wessel and Dollar describe how Democrats’ positions compare to President Trump’s trade policies, with a focus on Senators Warren and Sanders...
A hallmark of the Trump administration is its disdain for the views of experts.Judging by the President’s seemingly relentless march to a full-blown trade war with China, this disdain for expert advice is likely to cost both the U.S. and the global economies dearly. It is also likely to deprive Trump of a strong U.S. economy and a buoyant stock market on which to run his 2020 reelection bid. As if to underline the risks involved, U.S. and global stock markets have lost around 5% in value over the past few days on fears of an escalating trade war.
The 2008 crisis has revealed how banking and liquidity problems can have far-reaching consequences on global trade. This column reconstructs the evolution of global trade finance from the Middle Ages until today. Just like in medieval times, today’s global trade is predominantly financed through banks so that banking problems automatically transmit to international trade. In contrast, from the 16th to the 20th century, trade finance was mostly market-based. The decline of market-based trade finance was triggered by major geopolitical shocks.
Artificial intelligence has made spectacular progress in recent years. One particular source of high expectations is automatic translation and whether it will finally bring about the long-predicted death of distance in trade. This column examines the impact of a common language on bilateral trade and finds that the net result of reducing linguistic frictions with a set of trading partners is not apparent.The potential impact of machine translation on foreign trade remains up in the air.
The decision by the Trump administration to withdraw from the Iran deal and to amplify its sanctions regime against Iran has demonstrated how a relatively unused and untested tool available uniquely to the US: the dollar as a currency, together with the infrastructure of the global payments system, is being weaponised
La nouvelle présidente de la Commission européenne, Ursula von der Leyen, a présenté un programme climat particulièrement ambitieux. Au cours des cent premiers jours de son mandat, elle proposera un Green Deal européen et une législation imposant la neutralité totale en carbone en 2050. Sa priorité immédiate sera de redoubler d'efforts pour réduire les émissions de gaz à effet de serre de l'UE, avec pour objectif d'émettre en 2030 moitié moins qu’en 1990. L'analyse de l'économiste Jean Pisani-Ferry pour Terra Nova, qui analyse chaque mois les grands enjeux de l'actualité européenne et internationale.
This paper discusses the nexus between the Donald Trump administration’s trade policy and International Monetary Fund (IMF) exchange rate surveillance. It reviews the evolution of IMF surveillance and the possible implications of incorporating currency manipulation clauses into bilateral trade agreements. Such clauses constitute a key US trade negotiation objective. While they may reflect genuine concern over practices to thwart international adjustment, they could erode the effectiveness of the IMF at a time of transition and resulting tension in the global economy...
Japan and South Korea are showing no signs of backing down from a trade dispute that could disrupt global production of smartphones, computers, and other electronics. The recent flare-up, rooted in historical disagreements, marks a deterioration in the relationship between two important U.S. allies. The global tech industry and U.S. interests in Asia could suffer if the dispute isn’t resolved soon.
The European Union (EU) is positioning itself as a champion of the multilateral trading system, yet the single European currency has resulted in notably lopsided trade and economic growth.As a result, the very “Euro project” that was designed to facilitate trade and reduce frictions between countries is now posing a major threat to the sustainability of the multilateral system. This is increasing the likelihood of a wholesale rejection of market orientated economic policies.Germany and the Netherlands have been running perennial current account surpluses of a size that would embarrass even the most mercantilist of Asian countries. At the same time, the currency union’s sub-optimal nature has been a major contributor to income stagnation, high unemployment and deflationary pressures in southern Europe. These have promoted political populism and disillusionment with the market economy and free trade.
Against the backdrop of new tariffs imposed by the Trump administration and retaliation from targeted countries, notably China, the trade wars of the 1930s have received renewed attention. This column argues that they mainly served to intensify a pre-existing trend towards the formation of trade blocs. The trade wars of the present day may therefore serve a similar purpose as those in the 1930s, that is, the intensification of China- and US-centric trade blocs.
Les préoccupations sur les conséquences potentielles de l’accord commercial récemment conclu entre l’UE et le Mercosur sont légitimes, mais elles ne doivent pas empêcher un débat argumenté sur les avantages et inconvénients d’un tel accord.
The Indian Ocean has seen a steady increase in the size and number of Ultra Large Container Vessels (ULCVs) or mega-ships equal to or in excess of 18,000 twenty-foot equivalent units (TEU) from 2014 onwards. This has created economic and infrastructural pressures on Indian Ocean littorals. With mega-ships growing on the Asia-Europe route, the Indian Ocean Region (IOR) will need to create flexibility in landside maritime infrastructure and hinterland transport systems to be able to respond adequately to a range of externalities. This paper analyses the challenges that are emerging due to the increased size of ships in the IOR. In the absence of any global regulation on the size of container vessels, the paper recommends that India take a lead in bringing together the IOR littorals to determine the point at which the economies of scale associated with mega-ships might decline.
The rules-based framework, as instantiated in rules established under the World Trade Organization (WTO), is not equipped to address the issues that are emerging under the technological conditions generated by the digital transformation. The emerging knowledge-based and data-driven economy features incentives for strategic trade and investment policy and a confluence of factors contributing to market failure at a global scale; digital social media and platform business models have raised concerns with calls for regulation affecting cross-border data flows; and newfound security issues raised by the vulnerabilities in the infrastructure of the digitized economy have precipitated a potential decoupling of global production networks along geopolitical fault lines.To date, the response has been fragmented, incomplete and, in large part, conducted outside the WTO. A new WTO digital round is required to create a multilateral framework that is fit for purpose for the digital age.
Like other countries participating in the multilateral trading system, China agreed to limit the use of import tariffs when it joined the WTO. As this column shows, however, it continued to employ other instruments of trade policy, including a new set of restrictions on exports which partly restored the asymmetric treatment of Chinese industries embodied in its pre-WTO import tariffs. Today's tariff wars appear to be just the latest example of an ongoing battle whose skirmishes have taken many forms.
As digital technology creates new and different ways to transact we have witnessed the emergence of new forms of currency and transaction platforms to support different methods and types of value exchange. New methods of transaction could have wider economic and social implications with regard to the extent of government control over the economy; the structure of traditional models of tax, social security and pensions; and the role of individuals and communities in the wider financial system. Because the landscape of innovations in this sphere is broad and fast moving, thought should be given to the potential impact of these changes on wider society, and how they could be harnessed by government, communities and individuals for societal good. This perspective explores how digital platforms are changing the ways we transact and exchange value and the associated societal impact.
After 20 years of on-and-off again talks, the Mercosur trade bloc, consisting of Brazil, Argentina, Uruguay and Paraguay, and the European Union have reached an agreement to strengthen commercial ties. The deal would form one of the world’s largest free trade areas and includes the elimination of nearly 90 percent of tariffs on both sides. How significant is the Mercosur-E.U. trade deal, and what are its most important provisions? Which sectors in the South American countries stand to gain or lose the most from the agreement? What challenges will the deal face before its final approval, and to what extent could presidential results in Argentina and Uruguay in October affect its implementation?
The US-China trade war will leave both countries worse off in coming years, according to an analysis of current and threatened trade scenarios that is based on a global simulation model of the world economy. The model employed here assumes that US tariffs will raise prices for American consumers and for producers who import intermediate inputs from China, and that Chinese tariffs will disrupt the supply chains of US exporters and producers. Several studies and news reports indicate that these effects are already happening for American consumers and businesses.
On July 10, 2019, the Information Technology and Innovation Foundation hosted a panel discussion and spirited debate about the fraught economic and political realities of the U.S.-China trading relationship and the best-available options for policymakers. LA Times Economics Reporter Don Lee moderated the conversation.
Successive Administrations have used sanctions extensively to try to change Iran’s behavior. Sanctions have had a substantial effect on Iran’s economy but little, if any, observable effect on Iran’s conventional defense programs or regional malign activities. During 2012-2015, when the global community was relatively united in pressuring Iran, Iran’s economy shrank as its crude oil exports fell by more than 50%, and Iran had limited ability to utilize its $120 billion in assets held abroad...
The liberal international order set up under U.S. leadership at the end of World War II has produced enormous economic benefits for both the United States and the rest of the world. But recently, the order has been under severe strain, the result of shifting economic forces at home and challenges from new powers abroad. U.S. leadership remains critical to an international order that delivers broad-based prosperity for Americans and stability abroad. In a new essay collection, CSIS experts on economics, trade, energy, technology, and development share their thoughts on how the United States can reaffirm its leadership through smart policies both at home and abroad.
The rapid rise of China to the status of economic powerhouse has roiled marketplaces all over the world and caused serious disruptions in the global trading system. Part of this was inevitable—in economics, as in many things, size matters, and China is the proverbial 800-pound gorilla. Once it emerged from its largely self-imposed economic cocoon, it was bound to leave a very large footprint.But that footprint has proved heavier than expected, in large part because of the policies China has chosen to pursue. Having watched the rapid development of Japan, the original “capitalist developmental state” (a term coined by Chalmers Johnson), and then the Asian Tigers—South Korea, Hong Kong, Singapore, and Taiwan—China has developed its own blend of state control and market policies, with the emphasis on the former...
The Trump administration's Prosper Africa program, announced in June, aims to double two-way trade and investment between US and African companies. While many development experts welcome the US's commitment to more actively engage with African companies and leaders, questions remain about the program's impact. Will it attract American businesses? Can it compare to China's influence on the continent? Are there enough resources available to support the program? In this episode of the CGD podcast, I host a conversation between four experts on African policy about what needs to happen to make Prosper Africa successful: Landry Signé from Brookings' Global Economy and Development Program, Aubrey Hruby from the Atlantic Council's Africa Center, Judd Devermont from the Center for Strategic and International Studies' Africa Program, and our own Gyude Moore, a visiting fellow here at CGD. On the podcast, they share their expectations for Prosper Africa and discuss the roles that infrastructure, communication, and the new US Development Finance Corporation might play in its impact.
This Global Governance Working Paper is a feature of the Council of Councils (CoC), an initiative of the Council on Foreign Relations. Targeting critical global problems where new, creative thinking is needed, the working papers identify new principles, rules, or institutional arrangements that can improve international cooperation by addressing long-standing or emerging global problems. The views and recommendations are the opinion of the author only. They do not necessarily represent a consensus of the CoC members, and they are not the positions of the supporting institutions. The Council on Foreign Relations takes no institutional positions on policy issues and has no affiliation with the U.S. government.
Trade policy has played and will continue to play a prominent role in forming or curtailing economic opportunity for America’s diverse working class. Unfortunately, President Donald Trump’s renegotiated North American Free Trade Agreement (NAFTA)—the United States-Mexico-Canada Agreement (USMCA)—does not do enough to consider the needs of working Americans. Among other oversights, Trump’s trade deal lacks certain and swift labor enforcement provisions, fails to mention climate change, and locks in high drug prices for pharmaceutical companies. The proposed trade agreement serves as yet another example of corporate handouts to the very people squeezing the working class and securing greater profits and power for the wealthiest few. Moreover, President Trump’s deal fails to consider the unique needs and concerns of workers of color, continuing a long trend in the trade policy sphere. While race is rarely the focal point of policy debates regarding globalization and trade in the United States, people of color—particularly Black people—are far more prevalent than commonly appreciated in the sectors that are hurt most by trade. Additionally, systemic economic and social inequities along racial lines can intensify the effects of trade dislocations, increasing the need for racially conscious trade policies...
The world’s largest trade area since the advent of the World Trade Organization is rising to the fore in Africa. Yet with so much discussions in the West around disputes with China, it is easy to have missed this monumental geo-economic development...
The Trump administration has raised the alarm about China’s domination of large infrastructure projects in Africa, diagnosing the growing indebtedness of African nations to China as a threat to US national security, as well as the sovereignty of the countries affected. They also correctly bemoan the unfair advantages conferred on Chinese firms by Beijing’s multi-billion dollar financial commitments. China’s commercial interests in Africa have evolved from infrastructure-centric, government-to-government (G2G) financing to challenge areas of traditional US investment strengths, such as foreign direct investment, private equity, and venture capital. As a result, the administration needs to account for the true nature of the economic challenge to US interests that China’s changing engagement with Africa poses.
rade at a Crossroads: A Vision for the US-India Trade Relationship, a joint report with the Atlantic Council's South Asia Center and the U.S. India Strategic Partnership Forum, provides an expert analysis of the current state of the relationship, including recent negotiations, and recommendations for the path forward in the short-, medium-, and long-term. This report urges both countries to prioritize efforts to manage current tensions, reach an early agreement and build on successes to initiate a series of cooperative projects in areas such as intellectual property rights, digital trade and regulatory coherence, mirroring previous successes on the WTO Trade Facilitation Agreement. Finally, the report provides a sober assessment of future prospects for a bilateral Free Trade Agreement (FTA). While highlighting many compelling reasons to avoid rushing into exploration of an FTA in the near future, it concludes with a vision of this ultimate form of economic integration through trade negotiations.
The introduction of a revenue-based tax on digital giants by the French government has sparked condemnation on the part of the U.S. administration, and threats of trade retaliation, starting with an official investigation. European divisions had already led to the abandonment of an EU-wide digital tax. While EU-US tensions had so far centred on German exports, how will this new episode affect the political dynamic in Europe on trade issues? An interview with Rémi Bourgeot, economist and associate fellow at IRIS.
Ce premier rapport du Conseil national de productivité (CNP) se veut un tour d’horizon, pour la France, des enjeux et des questions concernant la productivité et la compétitivité. C’est un exercice original qui est amené à évoluer en fonction des discussions avec les partenaires sociaux et les autres parties prenantes, ainsi qu’avec les autres conseils nationaux de productivité organisés en réseau européen. Avec cette version préliminaire du rapport s’ouvre une phase de consultation d’un mois durant laquelle les partenaires sociaux, au premier chef, mais aussi l’ensemble des parties prenantes sont invités à transmettre au Conseil leurs réactions. C’est à l’issue de ces échanges que la version définitive du texte sera publiée.
L'entrée en vigueur de la zone de libre-échange continentale africaine (ZLEC) a été approuvée par tous les pays d’Afrique le 7 juillet 2019. Si les modalités de mise en œuvre de l’accord restent à négocier, l’acte de naissance politique de la ZLEC est de première importance pour l’avenir des relations entre pays du continent, et entre le continent et les autres. Que dit l’accord de libre-échange sur la place que s’assignent les pays du continent dans les relations internationales, et quelles conclusions l’Union européenne peut-elle en tirer ? La lecture politique et stratégique des relations entre ces deux grandes régions constitue un préalable indispensable tant pour les négociations commerciales que pour la coopération en matière de développement durable.
By encouraging clean technology deployment and imposing new costs on commonly traded commodities, climate policy would have significant impacts on international trade flows. This document answers basic questions about climate policy and its implications for the international trade of goods.
If, as some argue, conflict between the Islamic world and the West is on the horizon, then the frontline of such disputes is in the Mediterranean area, where North Africa and southern Europe meet. The fear of increased migration from North Africa into southern Europe co-exists with an inevitable growth in anti-Arab feeling by some Europeans whose own economies are less than robust. As France, Spain, and Italy assume the presidency of the European Union over the next two years, a valuable opportunity to initiate a dialogue on how best to promote the economic and political stability of Algeria, Tunisia, and Morocco should also emerge. This paper analyzes the degree to which the North American Free Trade Agreement (NAFTA) among the United States, Canada, and Mexico may offer insights and possible solutions to help promote stronger trade among the states of the Mediterranean while at the same time establishing stabilizing economic links among them.
In 1944, an international conference was convened in Bretton Woods, New Hampshire, to lay out a framework for international economic relations in the postwar world. The institutions that grew out of that conference --the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade (GATT)--have generally served us well. But today's international economic environment is much different than could have been foreseen in 1944, and the time may be ripe for a broad rethinking of international economic institutions and arrangements. Four fundamental policy questions underlie debates about the future nature and purposes of international economic institutions. First, should concerted efforts be made to stabilize exchange rates among major currencies? Second, has the expansion of private credit and capital markets eliminated the need for official sources of international credit? Third, do the GATT principles of nondiscrimination and multilateralism still provide the best basis for expanding world trade? Fourth, what aspects of economic regulation require international cooperation?
This study analyzes Chinese commercial negotiating practices for two reasons. The first is to minimize future misunderstandings in such activities, and the second is to provide guidance for government-to-government negotiations. The research procedure used involved interviews with American businessmen and bankers with extensive experience in the China trade, and — in order to control for American cultural factors — interviews with comparable Japanese bankers and businessmen. What was learned from the experiences of businessmen is of value in government-to-government negotiations, even though there are substantial differences between commercial and diplomatic relationships. At present, both Beijing and Washington seek a more cooperative and complementary relationship. By better understanding the Chinese style of negotiating in the commercial realm, we should be able to avoid misunderstandings and achieve desired goals in the political realm.
India has long been a challenging trading partner for the United States. And in the World Trade Organization (WTO), it has wavered between a begrudging participant and a full-scale obstructionist. Successive US administrations have tried to pry open its markets by offering trade concessions to get it to play by the multilateral rules, with limited success.President Donald Trump is now reversing course, as he has on most trade issues, seeking instead to punish India with tariffs. Since the beginning of 2018, his administration has increased duties on 14 percent of India’s exports to the United States. India has recently retaliated by slapping new tariffs on about 6 percent of US exports to India, including $600 million of almonds from California...
With ratification of NAFTA 2.0 still up in the air in the U.S. and Canada, a new international report looks beyond that deeply flawed agreement to imagine a more progressive and truly fair trade regime. The report, which includes contributions by trade experts and activists from all three North American countries, critically analyzes the USMCA (known as CUSMA in Canada and T-MEC in Mexico) and sets out alternatives that would give priority to human rights and the rights of nature over corporate rights.The report challenges both the Trump administration’s trade wars and the broken, neoliberal status quo. It recommends many practical changes to current trade rules, including safeguarding climate-protecting initiatives from trade challenge; fully eliminating investor-state dispute settlement; enshrining labour, indigenous and gender rights; and exempting public services from trade treaty interference. It also looks at ways to replace excessive intellectual property protections with measures that would encourage innovation while supporting user rights, data privacy and access to affordable medicines.
By agreeing to restart stalled trade talks at their meeting in Osaka last week, President Trump and his Chinese counterpart Xi Jinping averted a new round of punitive measures in a trade conflict that’s moving into its second year.But the respite is likely to be short-lived. The history of international conflicts over trade and economic matters suggests the outcome of the current trade tensions could be just the earliest stage in China’s campaign to replace the current rules-based trade order with a system aligned with Chinese mercantilist policies an practices...
nnovations in technologyhave the potential to enable anddisruptinternational commerce(e.g., online shoppinganddrone delivery services).Along with emerging technologies such as artificial intelligence and the Internet of Things,blockchainmay change the conduct of internationaltrade, includinghow it is financed, how companies manage supply chains, andhow border officials vet imports.Congress may face questions about the potential benefits and risks of this new technology andwhether, orhow,blockchainshould be regulated.
In this episode, the Trade Guys and Jack Caporal (filling in for Andrew Schwartz) talk with Scott Paul, president of the Alliance for American Manufacturing (AAM). They discuss what the U.S. should be doing domestically while engaged in a trade war with China.
After nearly 20 years of negotiations, the EU and the four founding members of the customs union Mercosur (Argentina, Brazil, Paraguay, and Uruguay)1 have reached an agreement to lower trade barriers, sending a signal to the world’s protectionists that increased economic cooperation and integration can benefit all sides. The accord underscores the EU’s willingness to make trade concessions at a time when the US is threatening to get into a trade war. The four Mercosur countries are betting that they too can benefit from increased trade cooperation. The accord is thus an important accomplishment for both parties...
Like other countries participating in the multilateral trading system, China agreed to limit the use of import tariffs when it joined the WTO. As this column shows, however, it continued to employ other instruments of trade policy, including a new set of restrictions on exports which partly restored the asymmetric treatment of Chinese industries embodied in its pre-WTO import tariffs. Today's tariff wars appear to be just the latest example of an ongoing battle whose skirmishes have taken many forms.
Échec provisoire ou définitif, l’affaire Renault-FCA pose des problèmes de stratégie et de valorisation, de gouvernance et de gestion, d’actionnariat et de diplomatie qu’il faut distinguer si on ne veut pas sombrer dans la confusion. Le débat public sur l’opportunité de cette fusion a oscillé entre considérations patriotiques, défense de l’emploi, appréciations du rôle de l’État, sans que n’apparaissent réellement les enjeux...
Dépourvue de ressources naturelles, la Turquie est très dépendante des importations énergétiques en provenance de la Russie et de l’Iran. Ouvertement opposée aux sanctions contre l’Iran qui entravent son économie, elle a recouru à l’or «non monétaire» (transactions hors pièces d’or et lingots) pour contourner l’extraterritorialité du dollar et fait face aux menaces de sanctions américaines. La géopolitique et l’économie étant devenues indissociables, l’évaluation économique de l’impact des sanctions contre l’Iran sur la Turquie relève d’un exercice très inhabituel, à mi-chemin entre l’analyse économique et le documentaire d’espionnage.
The World Trade Organization’s (WTO) Aid for Trade initiative is designed to connect developing countries to the global trade system in a sustainable manner. For the world’s poorest countries – where trade plays an essential role in their economic development – it can be a powerful tool to help achieve the UN’s Sustainable Development Goals (SDGs)...
Trade has become a taboo topic in climate negotiations on the implementation of the Paris climate agreement. This must change. The nexus between trade and climate change must be addressed in the climate regime. In particular, a definition is needed that will clarify the meaning of a climate “response measure.” Without a definition provided by climate negotiators, the task of defining which national climate measures are permissible and which are not when they restrict trade while pursuing climate mitigation and adaptation will be left to the judges of the World Trade Organization. To avoid a collision between the climate and trade regimes that will potentially be harmful to both, the ongoing deliberation on response measures in the climate regime must be reframed by ending the climate taboo on trade.