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Begin New Search Topic Free Trade Political Geography North America

11. East Asia decouples from the United States: Trade war, COVID-19, and East Asia's new trade blocs

Author:
Peter A. Petri and Michael G. Plummer
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
he deepening US-China trade war and nationalist reactions to the COVID-19 pandemic are reshaping global economic relationships. Alongside these developments, two new megaregional trade agreements, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), will refocus East Asia’s economic ties in the region itself. The new accords are moving forward without the United States and India, once seen as critical partners in the CPTPP and RCEP, respectively. Using a computable general equilibrium model, we show that the agreements will raise global national incomes in 2030 by an annual $147 billion and $186 billion, respectively. They will yield especially large benefits for China, Japan, and South Korea and losses for the United States and India. These effects are simulated both in a business-as-before-Trump environment and in the context of a sustained US-China trade war. The effects were simulated before the COVID-19 shock but seem increasingly likely in the wake of the pandemic. Compared with business as before, the trade war generates large global losses rising to $301 billion annually by 2030. The new agreements offset the effects of the trade war globally, but not for the United States and China. The trade war makes RCEP especially valuable because it strengthens East Asian interdependence, raising trade among members by $428 billion and reducing trade among nonmembers by $48 billion. These shifts bring regional ties closer to institutional arrangements proposed in the 1990s and incentivize greater cooperation among China, Japan, and South Korea.
Topic:
Treaties and Agreements, Trade Wars, Trans-Pacific Partnership, Free Trade, COVID-19, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

12. The Impact of Rules of Origin on Supply Chains: USMCA’s Auto Rules as a Case Study

Author:
William Alan Reinsch, Jack Capotal, Madeleine Waddoups, and Nadir Takarli
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
In recent decades, supply chains have become more global while bilateral and regional free trade agreements (FTA) have continued to grow in popularity. For free trade agreements to operate as intended— that is, to provide benefits to the member countries—it must be possible for goods to be identified as products of an FTA member and therefore be eligible for preferential treatment. Free trade agreements also are expected to encourage manufacturers outside the agreement’s boundaries to locate production facilities within the countries party to the agreement to take advantage of the preferential treatment for goods produced there. Rules of origin codified in trade agreements play a crucial role in shaping global supply chains by setting out rules to ascertain the origin of a good. The newly negotiated U.S.-Mexico-Canada Agreement (USMCA) demonstrates the power of rules of origin to force the many businesses that depend on the current trade agreement to alter their supply chains and business models. Analyzing the new rules, the Scholl Chair in International Business finds that the USMCA will bring new costs to both parts and auto manufacturers and consumers and may provide a boon to North American steel and aluminum manufacturers.
Topic:
International Cooperation, International Trade and Finance, NAFTA, Free Trade, USMCA, and Supply Chains
Political Geography:
Canada, North America, Mexico, and United States of America

13. A golden opportunity for a US-Taiwan free trade agreement

Author:
Dan Blumenthal and Michael Mazza
Publication Date:
02-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The United States and Taiwan can create a free trade agreement (FTA) that serves the interests of both sides. Taiwan should seek to set the gold standard in economic openness, as well as in the legal, regulatory, and standards frameworks that will govern emerging technologies and industries such as 5G, the internet of things (IOT), artificial intelligence (AI), and the future industries to be built upon them. In pursuit of the United States’ vision for a “free and open” Indo-Pacific, it would be wise for the US to enlist in its effort countries that are, themselves, already free and open. Taiwan should be considered a crucial partner in the Trump administration’s strategy. This monograph serves to provide a framework for a US-Taiwan free trade agreement (FTA), outlining areas of concern for the United States, in addition to areas that provide opportunities for closer bilateral cooperation. Importantly, such cooperation could give greater impetus for free trade negotiations, advance the Trump administration’s Indo-Pacific strategy, and bolster the United States’ National Security Strategy. In order to deepen economic ties and to, at the same time, advance the Indo-Pacific strategy, the United States should prioritize a free trade agreement (FTA) with Taiwan. The US has not completed or ratified a free trade agreement since the U.S.-Korea deal. It is now negotiating with Japan and the Philippines. But, as this paper will show, an FTA with Taiwan would have substantial strategic benefits and would, moreover, be far easier to conclude than other agreements under discussion.
Topic:
Foreign Policy, Bilateral Relations, Free Trade, and Trade
Political Geography:
Taiwan, Asia, North America, and United States of America

14. Canada’s Progressive Trade Agenda and a Free Trade Agreement with China: Are They Incompatible?

Author:
Hugh Stephens
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
The “non-market” clause in the just-concluded update of NAFTA, now known as the U.S.-Mexico-Canada Agreement (USMCA) would appear to limit Canada’s options in terms of negotiating a free trade agreement with China at the present time (given the de facto U.S. veto over a Canada-China agreement that it provides), yet Prime Minister Trudeau has already reaffirmed Canada’s intention to pursue closer economic ties with China despite this apparent limitation. If negotiations proceed, negotiating a free trade agreement (FTA) with China will be very different from negotiating one with a country that shares Canada’s Western values. However, a trade agreement with China makes good economic sense, and while there are some unique obstacles to reaching such an agreement owing to differing views of progressive trade, these are not insurmountable. In fact, Canada can use the same models in negotiating with China that it has used with Western countries. Such an approach combines trade goals with respecting Chinese cultural and political differences, particularly those that fall into the category of progressivism. This category includes labour rights, Indigenous and gender issues, and governance. Prime Minister Justin Trudeau’s government has been focused on progressive elements in trade deals, while China has made it clear it is not interested in including them in any such pact. Concluding an agreement would mean that China and Canada must both recognize the political requirements and dynamics on the opposite side of the negotiating table, while seeking common ground diplomatically. Side agreements such as those that exist in the original NAFTA and in the Comprehensive Economic and Trade Agreement (CETA) are one way to work with the two countries’ differences. Many of the provisions in a side agreement are not binding and thus not subject to the agreement’s dispute settlement mechanism or trade sanctions. Instead, they are more aspirational and sometimes lay out a process for civil society groups to raise issues and help the thinking on those issues evolve, rather than simply holding the parties accountable for breaches. Canada is rightly concerned about Chinese stances on human rights, labour, environmental and gender issues. However, instead of including these issues in the main document on trade, they can be dealt with as shared interests between the two countries. Establishing separate but parallel mechanisms to deal with these issues would be a practical way to make progress. Focusing on micro, small and medium-sized businesses as one Chapter of the Trans-Pacific Partnership (TPP) did, could be another successful approach. Women own many of these businesses in developing countries, so such a focus would make a substantial contribution to their welfare. None of this means Canada should kowtow to China or look the other way on important values and issues. Side agreements and special focuses have formed parts of agreements with other countries that already share Canada’s Western values. This type of give-and-take is present even when Canada negotiates with countries that are not polar opposites. No country’s interests are exactly the same as those of any other and it’s unrealistic to expect unanimity on every issue. Language and firm commitments on progressive issues are still evolving in many of Canada’s free trade agreements, including the USMCA. It would be unreasonable to hope that everything can be achieved in an agreement with China on the first go-around. Rather, viewing a trade agreement with China as a work-in-progress means controversial elements can be brought into the negotiations and language used that reflects the understanding that these issues are evolving. It will require creative thinking, flexibility and joint commitment to find a solution, but—assuming that the USMCA does not rule out Canada-China negotiations toward a trade agreement— it should be possible to find sufficient common ground without having to resort to obfuscation and “creative ambiguity”.
Topic:
Treaties and Agreements, Bilateral Relations, Sanctions, NAFTA, Free Trade, and Trade
Political Geography:
China, Canada, Asia, and North America

15. Made in China 2025 as a Challenge in Global Trade Governance: Analysis and Recommendations

Author:
Anton Malkin
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
This paper provides a reassessment of Made in China 2025 (MIC 2025) — China’s industrial policy framework aimed at helping the country overcome the much-maligned middle-income trap — in the context of global trade governance. It suggests that China’s industrial policies have been viewed too narrowly — without sufficient attention to longer-term global governance issues — by a large segment of the global business and policy-making community. The paper argues that the general aims of MIC 2025 and the policies that underpin them are not unreasonable, given the increasingly prevalent dilemmas in global trade that China’s leaders are grappling with. These include problems of international development arising from growing global industrial concentration — driven by the growth of the intangible economy — and China’s shrinking access to importing and developing technological components (such as semiconductor chips) that are increasingly characterized as “dual-use” by China’s trading partners. This suggests that resolving the concerns of China’s trading partners regarding China’s industrial policies requires global trade governance reform to ensure an equitable, rules-based global trading order that addresses the legitimate needs of developing and middle-income economies in acquiring foreign-owned technological components and know-how, for the purposes of economic development. The paper concludes by outlining specific recommendations for Canada’s policy makers in improving their economic relationship with China in the context of MIC 2025.
Topic:
Development, Industrial Policy, Science and Technology, Governance, and Free Trade
Political Geography:
China, Canada, Asia, and North America

16. The Stupendous US Record Gets Suppressed

Author:
Amity Shlaes
Publication Date:
03-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In recent years, the consensus regarding the American past has slipped leftward, and then leftward again. No longer is American history a story of opportunity, or of military or domestic triumph. America’s has become, rather, a story of wrongs, racial and social. Today, any historical figure who failed at any time to support abolition, or, worse, took the Confederate side in the Civil War, must be expunged from history. Wrongs must be righted, and equality of result enforced. The equality campaign spills over into a less obvious field, one that might otherwise provide a useful check upon the non-empirical claims of the humanities: economics. In a discipline that once showcased the power of markets, an axiom is taking hold: equal incomes lead to general prosperity, and point toward utopia. Teachers, book club presidents, and especially professors withhold any evidence to the contrary. Universities lead the shift, and the population follows. Today, millennials, those born between 1982 and 2000, outnumber baby boomers by the millions, and polls suggest that they support redistribution specifically, and government action generally, more than their predecessors. A 2014 Reason/Rupe poll found 48 percent of millennials agreeing that government should “do more” to solve problems, whereas 37 percent said that government was doing “too many things.” A full 58 percent of the youngest of millennials, those 18-24 when surveyed, held a “positive” view of socialism, in dramatic contrast with their parents: only 23 percent of those aged 55 to 64 viewed socialism positively.
Topic:
Government, Markets, History, Economy, Economic Growth, Tax Systems, Free Trade, and Welfare
Political Geography:
North America and United States of America

17. The Strategic Case for South Korea to Join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Author:
Kyle Ferrier
Publication Date:
04-2018
Content Type:
Journal Article
Journal:
International Journal of Korean Studies
Institution:
International Council on Korean Studies
Abstract:
South Korea is at a critical crossroads. The future of the liberal international order, a major source of strength for Seoul, is unclear. President Donald Trump has repudiated the longstanding American role of upholding the liberal order. While Beijing has been quick to capitalize on this policy shift, the norms China seeks to promote either fall short of or run counter to the advancement of an open and rules-based international system. Although South Korea may be caught between these two great powers, it is by no means powerless to influence how international economic norms are advanced. To best meet its economic and even strategic interests, the Moon administration should begin negotiations to have South Korea join the remaining countries in the Trans-Pacific Partnership, known as the CPTPP.
Topic:
International Relations, Belt and Road Initiative (BRI), Trans-Pacific Partnership, Free Trade, Regionalism, and Donald Trump
Political Geography:
China, Asia, South Korea, North America, and United States of America

18. Tensions in U.S.-Korea Economic Relations

Author:
Troy Stangarone
Publication Date:
04-2018
Content Type:
Journal Article
Journal:
International Journal of Korean Studies
Institution:
International Council on Korean Studies
Abstract:
Following a relatively successful period for U.S.-South Korea economic relations under the Bush and Obama administrations, Washington and Seoul have entered a new period of economic tension in the Trump administration. Unlike prior U.S. presidents, who placed a priority on negotiating fair rules in the United States’ economic relationships, President Trump has prioritized outcomes. As a result, one of his administration’s earliest moves was to renegotiate the KORUS Free Trade Agreement. While the results of the renegotiation were modest, they may help to expand the sale of American automobiles in the Republic of Korea in the long-run. The largest outcome of the negotiations may be to protect the Ford Motor Company from South Korean competition in the U.S. market as the company transitions to sales focused on light trucks. While the renegotiation has eased tensions for the moment, the prospect of economic engagement with North Korea, the Trump administration’s continued use of national security to erect trade barriers, and the emergence of new technologies such as artificial intelligence and autonomous vehicles could result in growing tensions in the relationship.
Topic:
Economics, Treaties and Agreements, Bilateral Relations, Negotiation, Free Trade, and Donald Trump
Political Geography:
Asia, South Korea, North Korea, North America, and United States of America

19. The Economic and Social Roots of Populist Rebellion: Support for Donald Trump in 2016

Author:
Thomas Ferguson, Benjamin I. Page, Jacob Rothschild, Arturo Chang, and Jie Chen
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper critically analyzes voting patterns in the 2016 U.S. presidential election. Using survey data from the American National Election Survey and aggregate data on Congressional districts, it assesses the roles that economic and social factors played in Donald J. Trump’s “Populist” candidacy. It shows the hollowness of claims that economic issues played little or no role in the campaign and that social factors such as race or gender suffice to explain the outcome. While agreeing that racial resentment and sexism were important influences, the paper shows how various economic considerations helped Trump win the Republican primary and then led significant blocs of voters to shift from supporting Democrats or abstaining in 2012 to vote for him. It also presents striking evidence of the importance of political money and Senators’ “reverse coattails” in the dramatic final result.
Topic:
Political Economy, Populism, Economic Policy, Free Trade, Money, Voting, Donald Trump, Political Parties, and Presidential Elections
Political Geography:
North America and United States of America

20. The Framework for a U.S.-Japan Free Trade Agreement

Author:
Derek M. Scissors and Dan Blumenthal
Publication Date:
09-2017
Content Type:
Working Paper
Institution:
Project 2049 Institute
Abstract:
The United States and Japan can create a bilateral free trade and investment agreement that both sides will sign and ratify. While the Trans-Pacific Partnership (TPP) initially appeared to qualify as the new approach the U.S., Japan, and East Asia needed. It failed to sufficiently promote free markets and address concerns to generate enough support from traditional protectionist opponents in the United States. Nonetheless, the TPP did clarify the value of a directly relatied initiative: a U.S.-Japan bilateral agreement. This monograph serves to provide a framework for a U.S.-Japan Free Trade Agreement (FTA) and offers an outline for what such an agreement should look like in order to work both economically and in terms of domestic politics.
Topic:
Economics, Treaties and Agreements, Domestic Politics, Investment, and Free Trade
Political Geography:
Japan, Asia, North America, and United States of America