Search

Begin New Search Topic Trade Political Geography United States of America

11. Curbing State-Driven Trade Policies: How to Craft New & Effective Approaches to Counter Distortive Practices

Author:
Wendy Cutler
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
Asia Society Policy Institute
Abstract:
Much attention has been focused on China’s unfair intellectual property practices and the imbalance in the U.S.-China trade relationship, but equally troubling are large-scale Chinese industrial subsidies, the behavior of state-owned enterprises (SOEs), and in general, the oversized and opaque role of the Chinese state in the economy. While the U.S-China phase one trade deal tackled some important sources of bilateral tension and aimed to boost Chinese purchases of U.S. goods and services, it was silent on industrial subsidies and related matters, leaving them for the next phase of negotiations, the fate of which is now in question. U.S. concerns on these matters are shared by other trading partners including the European Union (EU) and Japan. Yet despite widespread disapproval of such practices, building new global rules to combat subsidies has proven challenging. This is due to several factors, ranging from gridlock at the WTO, differences of views among like-minded countries on the required level of ambition, and uncertainty as to how best to approach the enormous complexities in China’s subsidies and related policies. The Organization for Economic Cooperation and Development (OECD) has sought to unpack this complexity, conducting recent studies of Chinese subsidies in two key sectors: aluminum and semiconductors. Both studies illustrate how Chinese subsidies are not simple cash handouts from the state to protected firms so that they can sell at favorable and distorting prices. The OECD finds subsidies can take various forms, including downstream or upstream help that trickles up or down to the firm that’s intended to benefit. They can take the form of favorable equity or debt purchases or bonds provided at below-market rates. And with interconnected global value chains, subsidies can effectively be granted covertly, intended to benefit one firm that might be several links away along the chain. In China, the problem is compounded by an opaque “party-state” structure that obscures not only the recipients of subsidies, but also the source. According to Mark Wu, a Harvard Law School professor who previously served as the Director for Intellectual Property in the Office of the U.S. Trade Representative, subsidies not only flow directly from government bodies in Beijing, but also indirectly through informal responses to directives — sometimes even left unsaid, but understood — from the Chinese Communist Party. Against this backdrop, the Asia Society Policy Institute (ASPI) convened two roundtables in the fall of 2019 and the spring of 2020 to discuss how best to build a new rules-based infrastructure that might combat such subsidies and prevent trade-distorting results such as unfair competition, market access barriers, and, above all, overcapacity in global markets. Experts from the private sector, think tanks, governments, and academia weighed in with possible solutions, which included: Negotiating new rules in the WTO; Using the WTO dispute settlement system, despite its often-discussed flaws; Forming ad hoc rules-based approaches, where possible, like the U.S-EU-Japan trilateral initiative; Plurilateral negotiations conducted on a sector-by-sector basis; Forming coalitions of like-minded trading partners to establish an alternative model, much in the way that the Trans-Pacific Partnership (TPP) was framed. During the roundtables, most experts agreed that there is no silver bullet that solves the subsidy and related issues on its own. And most agree that, left unaddressed, the problem is likely to deepen. The COVID-19 pandemic might even exacerbate it by leading to more state involvement in economies around the world and making it hard to discipline Beijing’s practices. Recognizing all of these real challenges that the international trade community faces, the roundtables reached the following key conclusions: Transparency on the scope, level, and nature of industrial subsidies is vital; Efforts to publicize the ongoing work in these areas, particularly that being done by the OECD, should accelerate; Turning research into tangible new policies is a key step; and Persuading China to agree to updated rules will be necessary, given that China is a singular contributor to overcapacity.
Topic:
International Trade and Finance, Treaties and Agreements, Trade, Industry, and WTO
Political Geography:
China, Asia, North America, and United States of America

12. The Avoidable War: The Case for Managed Strategic Competition

Author:
Kevin Rudd
Publication Date:
01-2020
Content Type:
Special Report
Institution:
Asia Society Policy Institute
Abstract:
Throughout the recent 18 months of the U.S.-China trade war, which has landed in a “phase one” deal, and awaits the tackling of more difficult economic elements in phase two negotiations, there has been a slow and steady structural shift in the U.S.-China relationship as it continues to head in a more adversarial direction. Against the backdrop of this drift toward confrontation occurring in the absence of any common strategic understanding or high-level diplomatic mechanism to manage the mounting economic, security, and technological tensions into the future, Asia Society Policy Institute President the Hon. Kevin Rudd brings together a series of speeches delivered during 2019 in the collection, The Avoidable War: The Case for Managed Strategic Competition. This volume works to help make sense of where the U.S.-China relationship is heading in the current period of strategic competition, and follows on from Rudd’s 2018 collection, The Avoidable War: Reflections on U.S.-China Relations and the End of Strategic Engagement. In this new volume, Rudd focuses not only on the bilateral relationship, but also on China's domestic politics, economics, and its strategic vision. But on the bilateral relationship, Rudd writes that while there may be a truce of sorts on the trade front during 2020, that will not be the case across the rest of the economic, political, and security relationship. Challenges will continue in areas such as the future of 5G mobile telecommunications infrastructure, the Belt and Road Initiative, Xinjiang, Hong Kong, allegations of Chinese political influence and interference in foreign countries’ internal democratic processes, and China’s increasingly close strategic collaboration with Russia. Militarily, tensions will continue in the East China Sea, the South China Sea, and the wider Indo-Pacific, together with confrontations less visible to the public eye in espionage, cyber, and space. Against this backdrop, and the steady erosion of diplomatic and political capital in the overall relationship, Rudd asserts that the “2020s loom as a decade of living dangerously in the U.S.-China relationship.” The Avoidable War: The Case for Managed Strategic Competition includes six speeches from 2019 covering a range of critical challenges in the U.S.-China relationship, as well as a December 2019 conversation at the Harvard Kennedy School which begins to outline an approach to managing the growing tinderbox of tensions across the spectrum of the bilateral relationship.
Topic:
Diplomacy, Bilateral Relations, Trade, and Strategic Competition
Political Geography:
China, Asia, North America, and United States of America

13. United G20 must pave the way for robust post-COVID-19 recovery

Author:
Phil Thornton
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The world is facing unprecedented health and economic crises that require a global solution. Governments have locked down their economies to contain the mounting death toll from the COVID-19 pandemic. With this response well underway, now is the time to move into a recovery effort. This will require a coordinated response to the health emergency and a global growth plan that is based on synchronized monetary, fiscal, and debt relief policies. Failure to act will risk a substantial shock to the postwar order established by the United States and its allies more than seventy years ago. The most effective global forum for coordinating this recovery effort is the Group of 20 (G20), which led the way out of the global financial crisis (GFC) in 2009, the closest parallel we have to the current catastrophe. Eleven years ago, world leaders used the G20 meeting in London as the forum to deliver a unified response and a massive fiscal stimulus that helped stem economic free fall and prevented the recession from becoming a second Great Depression. A decade on, it is clear that the G20 is the only body with the clout to save the global economy. This does not mean that the G20 should be the only forum for actions for its member states. The United States, for example, should also work closely with like-minded states that support a rules-based world order, and there are many other fora where it can and must be active with partners and allies. But no others share the G20’s depth and breadth in the key focus areas for recovery. The other multilateral organizations that could take up the challenge lack either the substance or membership. The United Nations may count all countries as members but is too unwieldly to coordinate a response. The International Monetary Fund (IMF) has the resources but requires direction from its 189 members. The Group of Seven (G7), which once oversaw financial and economic management, does not include the fast-growing emerging economies. The G20 represents both the world’s richest and fastest-growing countries, making it the forum for international collaboration. It combines that representation with agility.
Topic:
Security, Energy Policy, G20, Global Markets, Geopolitics, Economy, Business, Trade, Coronavirus, and COVID-19
Political Geography:
China, Middle East, Canada, Asia, Saudi Arabia, North America, and United States of America

14. Assessing Indian digital trade policies: Will they support a $5 trillion economy?

Author:
Mark Linscott
Publication Date:
06-2020
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
The ongoing COVID-19 pandemic has forced nearly all public policy questions to be seen through the lens of how to detect and respond to the disease as it spreads rapidly across the globe. These include obvious questions of national health care policy and whether there is a place for international efforts to coordinate their national responses. Trade policy has come to the fore as a growing number of countries restrict exports of critical medical supplies to ensure sufficient availability for patients in-country. In this crisis, international collaboration to keep trade flowing has been limited and has not prevented many countries from imposing new trade restrictions. The importance of digital policies has grown as countries seek to harness the tools of big data, artificial intelligence (AI), and vital infrastructure to trace outbreaks of the virus and assist efforts to find cures and vaccines. While digital tools are proving vital in efforts to track outbreaks and trace contacts, legitimate concerns are growing about potentially invasive government surveillance even after the virus retreats. These policy areas—health, trade, and digital—overlap in the international, national, and local efforts to reduce the duration of the pandemic and mitigate its effects with respect to human lives and economic well-being. The analysis in this paper, while initially conducted before anyone had ever heard of COVID-19, has been impacted by its sudden emergence and will likely require updating to assess the experiences of this ongoing crisis. The paper, which focuses on the U.S.-India bilateral relationship, concludes with a series of questions, as opposed to policy recommendations. This is due partly to the very complexity that all governments confront in mapping out digital policies given the ubiquitous role digital networks and devices play in our daily lives. But these questions may have even more tangible relevance now that COVID-19 is forcing a reckoning with a severe interruption in global economic growth, which could be on the scale of the Great Depression in the 1930s. Ultimately, the governments of India, the United States, and other nations will determine for themselves what answers are relevant to their individual circumstances.
Topic:
Economy, Business, Trade, and Digital Policy
Political Geography:
South Asia, Canada, India, North America, and United States of America

15. Making the most of Prosper Africa: Leveraging US competitiveness in African markets

Author:
Audrey Hruby
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Global powers are jockeying for access to opportunities in African markets. In recent years, through the Forum on China-Africa Cooperation, the Tokyo International Conference of African Development, the Russia-Africa Summit, and many others, the world’s largest economies have sought to make headway in what are seen as fast-growing and lucrative new markets. In this environment, effective United States (US)-Africa policy requires greater focus on areas of American competitiveness and concerted efforts to educate, mobilize, and support US commercial success in African markets. In this update of her 2017 issue brief “Escaping China’s shadow: Finding America’s competitive edge in Africa,” Senior Fellow Aubrey Hruby outlines recommendations for how to best utilize Prosper Africa and leverage American private sector competitiveness by focusing efforts on sectors in which the United States already leads.
Topic:
Global Markets, Economy, Trade, and Strategic Competition
Political Geography:
Africa, China, and United States of America

16. The China Trade Challenge: Phase II

Author:
The Conference Board
Publication Date:
03-2020
Content Type:
Special Report
Institution:
The Conference Board
Abstract:
China’s fast-paced economic rise and defiance of globally accepted market rules—along with the growing and yet unknown economic impact of the coronavirus (COVID-19)—are driving the next phase of US-China trade negations to the top of the nation’s post-election agenda. While the Phase I US-China trade deal has eased tension, it also set the stage for discussions on other important economic disputes, including forced technology transfer, cyber theft of intellectual property (IP), industrial policies, state subsidies, and new technology, according to a new Solutions Brief, The China Trade Challenge: Phase II, by the Committee for Economic Development of The Conference Board (CED).
Topic:
Bilateral Relations, Global Markets, Economy, Global Political Economy, and Trade
Political Geography:
China, Asia, North America, and United States of America

17. Americans Positive on South Korea Despite Trump’s Views on Alliance

Author:
Karl Friedhoff
Publication Date:
10-2020
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
The Trump presidency has strained relations with several Asian allies, including South Korea. But the 2020 Chicago Council Survey results show that President Donald Trump’s repeated threats and bullying tactics on defense and trade issues with Seoul have done little to soften support among the American public for the alliance with South Korea. In fact, favorable views of South Korea are now at an all-time high.
Topic:
International Relations, Defense Policy, and Trade
Political Geography:
South Korea, North America, Korea, and United States of America

18. Challenges in the Transatlantic Partnership: Are We Drifting Apart?

Author:
Martin Michelot
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Europeum Institute for European Policy
Abstract:
During November 2019, EUROPEUM co-organized the second Transatlantic Policy Forum along with CEPA, a leading US think-tank. The private roundtable provided a unique opportunity for candid and open discussion about the issues that are at the heart of transatlantic cooperation. Our research fellow Martin Michelot concluded a debrief and analysis of these debates. 2019 will certainly go down as a year when the political unity of the Alliance was tested - and when NATO held together strong. The year ended with a NATO Leaders Summit that centered around the comments made by French President Emmanuel Macron a month prior, where he declared NATO to be in a state of “brain death” and cast a shadow on whether the collective security guarantee would still hold strong in the near future. That was not the only moment of transatlantic tension: tensions flared over European 5G markets, which may be built by Chinese companies, and trade has become an inflamed issue between Europe, the U.S. and China. The debrief includes analysis of NATO, U.S.-EU Trading Relations and a to-do list for transatlantic cooperation.
Topic:
International Relations, NATO, Trade, and Transatlantic Relations
Political Geography:
China, Asia, United States of America, and North America

19. Next Steps for US Trade, Manufacturing, and Supply Chains After COVID-19

Author:
Thomas J. Duesterberg
Publication Date:
07-2020
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The imperative to return supply chains to the United States for products important to national defense, medical security, and competitiveness in key industrial and technology sectors is not new. The explosive growth of the Chinese manufacturing sector, its mercantilist challenge to the world trading system, and its impact on jobs and industrial leadership in the United States is well known and well documented. This challenge has prompted new research and policies to help reverse the erosion of US supply chains. US technology leadership has been undermined by China’s forced technology transfer, theft of intellectual property, and subsidization of traditional and new higher technology sectors. In turn, the loss of global markets and US manufacturing jobs have resulted in social problems of increasing devastation to communities in industrial areas. China’s economic growth depends, in a historically unprecedented way, on its export model and the suppression of domestic consumption. This results in a cycle of overproduction, expansion of external spheres of economic influence, and dumping of products abroad. In recent years, the United States has begun to challenge the Chinese model. However, much work remains to be done to accomplish the goal of ending mercantilist practices, establishing a level playing field for US producers, and reinvigorating domestic production. Critical supply chains for US national defense and high technology leadership have become overly dependent on China and other foreign sources. The vulnerability of supply chains has been demonstrated by interruptions in supply of key materials by both natural disasters and political decisions such as Beijing’s cutoff of rare earth metals a decade ago. More recently, in July 2020, the production of critical personal protective equipment was interrupted by massive flooding in the interior of China. Beyond Beijing’s unfair practices, China is a continental economy with the ambition to displace the United States as the leader in the global economy of the 21st century and has the economies of scale to represent a serious, long term threat to US leadership and markets. The COVID-19 pandemic has accelerated these preexisting trends and underscores the importance of bringing industrial supply chains, including medical products, back to the United States. First, the cut-off of medical supplies, not just from China but from Europe and other allies, brought the vulnerabilities of relying on outside sourcing into clearer and more immediate focus. Ninety countries blocked the exports of medical products during the early months of the pandemic. Second, border closures around the world, even within the European Union (EU), added to the worries about supply chain interruptions, including for workers and logistics. Seventy percent of the world’s points of entry restricted foreign travelers at some point as the pandemic grew. Third, border closures and supply chain interruptions increased tensions between nations, especially between the United States and China, which was criticized for its suppression of information at the start of the pandemic. Beijing’s brazen imposition of a new security law in Hong Kong while the world was preoccupied by the pandemic further eroded its global standing, especially in Europe. Fourth, the economic collapse due to the pandemic response again focused attention on the need to create more domestic jobs, including those in the hard-hit industrial sector. Finally, all these developments led allies such as the United Kingdom, Japan, and the EU to advance new policies meant to bring production back to home territories. These trends support initiatives to increase the resiliency of domestic production, even beyond the parameters of defense and medical security.
Topic:
Economics, Science and Technology, Manufacturing, Trade, COVID-19, and Supply Chains
Political Geography:
China, Asia, North America, and United States of America

20. Greek-American relations: what next?

Author:
George Tzogopoulos
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
With President Donald Trump and Prime Minister Kyriakos Mitsotakis scheduled to meet early this January, Dr. George Tzogopoulos, Research Fellow at ELIAMEP, outlines the course of Greek-American relations from 2015 onwards. Dr. Tzogopoulos argues that Athens and Washington DC have entered a period of strong cooperation that can be further consolidated in 2020. Defense, energy and trade are the main focal points. The agenda includes the need to create a new security environment in the Mediterranean – with Greece playing a key role. The excellent status of Greek-American relations creates new opportunities for closer bilateral cooperation on defense, energy and trade. The region of Northern Greece becomes of gradually higher significance for the US. US foreign policy towards Greece reflects its interest in restraining Russian influence. While anti-Americanism in Greece is declining, there is widespread concern in the domestic public sphere on whether the US will support Greece in the case of a crisis with Turkey in the Eastern Mediterranean. US support to the trilateral cooperation of Greece-Israel-Cyprus will be reinforced through the Eastern Mediterranean Security and Energy Partnership Act. The US-Greece Strategic Dialogue and NATO Mediterranean Dialogue are useful instruments for strengthening Greece’s role in the South, contributing towards a new security landscape.
Topic:
Security, Energy Policy, Bilateral Relations, and Trade
Political Geography:
Europe, Greece, North America, and United States of America