Trade
Biden on trade: same policy, different tone?
Author: Bryan Mercurio, CUHK
US President Donald Trump has changed the direction of trade discussions in the United States and the impact of his term in office will continue to influence policy throughout President-elect Joe Biden’s term. Biden’s policies naturally align with those of Trump’s and to some degree will simply pick up from where Trump finishes.
Domestic issues, such as middle-class incomes, jobs and manufacturing will remain at the centre of trade policymaking. Biden is an economic nationalist, emphasising the need for enhanced ‘Buy American’ policies, domestic manufacturing and preparedness for future health pandemics. But Biden will seek to re-engage the international community and reclaim the United States’ position at the top. Biden is a multilateralist and as a senator demonstrated deep interest in global relations. Biden is likely to view trade through the prism of foreign policy and will review Trump’s trade measures to uncover their effectiveness — including tariffs, export controls, sanctions, national security exceptions, trade remedy investigations and antagonism towards the World Trade Organization (WTO).
Trade is a historically combative issue in US politics, and Biden will proceed with caution and would be wise to approach the issue holistically. He can start with domestic policies including innovation and tax, and then link trade to broader economic and geopolitical objectives. Trade measures alone simply cannot reshape the domestic economy or deliver for many middle-class voters. By viewing trade as part of a broader policy, Biden could gain the space needed to formulate a modern and progressive trade policy.
Biden’s trade policy may take time to emerge as his nominee for US Trade Representative Katherine Tai could take months to be confirmed and Trade Promotion Authority (TPA) expires in July 2021. The administration must also obtain congressional support for its trade policy. Biden will have to reach a balance between trade liberalisation with domestic priorities and contemporary trade-related issues which interest members of Congress, including opposition to investor-state dispute settlement, digital trade, currency manipulation, climate change, labour and gender. Biden will also have to decide whether to continue using unilateral national security measures under Section 232 of the Trade Expansion Act , particularly against allies and partners.
Re-joining the Trans-Pacific Partnership (TPP) would signal that the United States is ready to regain its leadership role and respond to the recently signed Regional Comprehensive Economic Partnership (RCEP) between ASEAN and five partner countries, including China. But Biden has not made re-joining the agreement a priority given the difficulties he will face garnering support for the move.
Biden could seek to create an enhanced and renamed agreement, allowing him to enter the TPP through a backdoor. He could emulate President Trump who harshly criticised the North Atlantic Free Trade Agreement but essentially rebranded it the United States–Mexico–Canada Agreement. But the strong and growing support for protectionism among Democrats and aversion to free trade policies among Republicans may make the negotiation of a mega-regional trade agreement difficult if not impossible.
It is expected that the Biden administration will be constructive and re-engage with the multilateral trading system through the WTO. Biden could seek to regain US leadership status with simple moves — starting with allowing the appointment of Ngozi Okonjo-Iweala as Director-General. Biden should also allow for appointments on the Appellate Body, effectively incapacitated since the United States began blocking all new appointments. Discussions could focus on completing niche but difficult agreements, such as on fisheries subsidies, e-commerce and environmental goods.
China will continue to feature prominently in US trade policy, with the incoming administration sharing Trump’s concerns over China’s use of subsidies, industrial overcapacity, state-owned enterprises and national security. President Trump’s trade war with China included unilateral tariffs, bans and eventually a so-called ‘phase one’ trade deal which includes purchase commitments and other areas of managed trade.
Biden will continue this tough stance but take a more multilateral approach in engaging with China. Biden will seek to develop a cooperative approach with allies. He will seek to reform the rules on subsidies and other issues at the WTO to create what it…
Trade
Self-Reliance and Openness: Core Principles of China’s Third Plenary Session
The Third Plenum communique from the CCP indicates a prioritization of stability and compromise in response to China’s economic challenges. It highlights the concept of Chinese-style modernization and establishes political guidelines for balancing regulation and market forces.
The CCP’s Third Plenum communique signals a focus on stability and compromise in the face of China’s economic challenges. It emphasises Chinese-style modernisation and sets political directions for balancing regulation and market forces. While not as groundbreaking as previous plenums, it acknowledges the importance of market mechanisms and technological self-reliance, aiming to address issues like high youth unemployment and private sector uncertainty. The communique seeks to navigate the complexities of global competition and domestic innovation, potentially reshaping global supply chains and trade dynamics. Overall, it presents a pragmatic blueprint for China’s economic future.
Source : Self-reliance and openness central pillars of China’s Third Plenum | East Asia Forum
Trade
Trade Prevails Over Political Persuasions in China-Germany Relations
China and Germany maintain a strong bilateral relationship, rooted in economic cooperation despite ideological differences. Recent visits and agreements focus on expanding trade and addressing mutual concerns, navigating challenges while nurturing ties.
Evolving Bilateral Ties
China and Germany share a strong bilateral relationship, rooted in history since 1972. This connection has seen moments of cooperation intertwined with periods of tension. German Chancellor Olaf Scholz’s April 2024 visit underscores Germany’s commitment to fostering this partnership, reflecting a mutual interest in maintaining economic ties despite ideological differences.
Economic Pragmatism
As the second and third largest global economies, China and Germany’s economic interdependence is crucial. Germany emerged as China’s primary trading partner in 2023, with trade values reaching €254.4 billion (US$280 billion). In response to global scrutiny, Germany has taken a balanced approach, emphasizing economic stability over political discord. This was evident during Scholz’s prior visit in November 2022, where his diplomatic tone contrasted with broader EU sentiments.
Facing Challenges Together
Despite increasing public skepticism in Germany regarding China’s global influence and human rights issues, both nations continue to seek common ground. Their October 2023 Joint Statement highlights intentions to pursue cooperation in areas like carbon neutrality and open markets. To navigate these complex terrains, Germany can utilize its institutional frameworks to enhance dialogue, while also considering supply chain diversification to reduce dependency on China. The intertwining nature of their economies suggests that, despite challenges, both countries will continue to prioritize their substantial trade relations.
Source : Trade trumps political persuasions in China–Germany relations
Trade
Fixing fragmentation in the settlement of international trade disputes
Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.
Fragmentation in Global Trade
Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.
Challenges with WTO Dispute Settlement
The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.
The Path Forward for Global Trade
Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.
Source : Fixing fragmentation in the settlement of international trade disputes
- China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
- Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
- Australia Can Enhance China’s Credibility in the CPTPP
- Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
- China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
- China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
