Search

Begin New Search Topic Trade Political Geography United States of America

31. WTO'ing a Resolution to the China Subsidy Problem

Author:
Chad P. Bown and Jennifer A. Hillman
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The United States, the European Union, and Japan have begun a trilateral process to confront the Chinese economic model, including its use of industrial subsidies and deployment of state-owned enterprises. This paper seeks to identify the main areas of tension and to assess the legal-economic challenges to constructing new rules to address the underlying conflict. It first provides a brief history of subsidy disciplines in the General Agreement on Tariffs and Trade and the World Trade Organization (WTO) predating any concerns introduced by China. It then describes contemporary economic problems with China’s approach to subsidies, their impact, and the apparent ineffectiveness of the WTO’s Agreement on Subsidies and Countervailing Measures to address them. Finally, it calls for increased efforts to measure and pinpoint the source of the problems—in a manner analogous to how the Organization for Economic Cooperation and Development took on agricultural subsidies in the 1980s—before providing a legal-economic assessment of proposals for reforms to notifications, evidence, remedies, enforcement, and the definition of a subsidy.
Topic:
Economics, World Trade Organization, Tariffs, and Trade
Political Geography:
Japan, Europe, Asia, North America, United States of America, and European Union

32. US-China Trade War: Both Countries Lose, World Markets Adjust, Others Gain

Author:
Sherman Robinson and Karen Thierfelder
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The terms of the US-China trade war change often, but the tariff escalations have inflicted documented economic damage on both countries. Expanding the conflict will only increase the damage and reverberate across the world economy. This Policy Brief uses a computable general equilibrium model of the global economy to analyze three scenarios that could unfold in coming months. The first scenario is the current situation (as of June 2019). Two additional scenarios assume implementation of proposed US tariffs and Chinese responses. The models project the situation after the two countries and the rest of the world adjust across a time horizon of three to five years. For the United States, higher tariffs raise prices and reduce demand for consumers and producers. For China, the tariffs raise the prices of consumer goods but have less direct impact on producers, because the Chinese have exempted some intermediate inputs. US exports and imports decline under all three scenarios. But China can successfully divert its exports away from the United States and escape maximum economic damage.
Topic:
Economics, Global Markets, Finance, Trade Wars, and Trade
Political Geography:
China, Asia, North America, and United States of America

33. Protectionism under Trump: The China Shock, Intolerance, and the "First White President"

Author:
Marcus Noland
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In 2016, the United States elected an avowedly protectionist president. This paper uses US county-level electoral data to examine this outcome. The hypothesis that support for protectionism was purely a response to globalization is rejected. Exposure to trade competition encouraged a shift to the Republican candidate, but this effect is mediated by race, diversity, education, and age. If the turn toward protectionism is due to economic dislocation, then public policy interventions could mitigate the impact and support the reestablishment of a political consensus for open trade. If, however, the drivers are identity or cultural values, then the scope for constructive policy intervention is unclear.
Topic:
Economy, Trade, Donald Trump, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

34. China, Like the US, Faces Challenges in Achieving Inclusive Growth Through Manufacturing

Author:
Robert Z. Lawrence
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
For more than three decades the goal of becoming “the factory of the world” has been at the core of China’s development strategy. This strategy, in combination with high rates of domestic investment and low rates of consumption, made Chinese production the most manufacturing intensive in the world. But as its wages have risen, China’s competitiveness in the most labor-intensive manufacturing industries has eroded. Its ability to assemble products remains a major source of its exports, but it has also tried to shift toward more sophisticated value-added production domestically. Chinese domestic spending has shifted away from investment toward more consumption as citizens’ incomes have grown. Like Americans, Chinese people are also spending more on services than on manufactured goods. All these changes are fundamentally altering the structure of China’s production, reducing the role of manufacturing, and increasing the skill levels of workers in manufacturing. This Policy Brief reviews the challenges posed by these developments for China’s long-term goal of achieving more inclusive growth. It presents evidence that commonly held perceptions that Chinese manufacturing employment growth is robust are wrong. In fact, such growth has peaked and China is now following the pattern of structural change that is typical of a more mature emerging economy, in which the share of employment in manufacturing declines as workers are increasingly employed in services.
Topic:
Economic growth, Manufacturing, and Trade
Political Geography:
China, Asia, North America, and United States of America

35. A Golden Opportunity for a U.S.-Taiwan Free Trade Agreement

Author:
Dan Blumenthal and Michael Mazza
Publication Date:
02-2019
Content Type:
Special Report
Institution:
Project 2049 Institute
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 U.S. 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 U.S.-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.
Topic:
Treaties and Agreements, Bilateral Relations, Free Trade, and Trade
Political Geography:
China, Taiwan, Asia, United States of America, and Indo-Pacific

36. Assessing President Trump’s Trade Priorities

Author:
Daniel Griswold
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
President Trump has delivered on his promise to shake up Washington, arguably nowhere more so than in the policy space of international trade. President Trump’s trade agenda has challenged more than seven decades of bipartisan policy commitment to seeking lower trade barriers at home and abroad through negotiated agreements. While President Trump pays lip service to pursuing free trade and eliminating tariffs, his trade policies so far have been marked by higher U.S. duties on a range of products, from washing machines to steel. Under Section 301 of the Trade Act of 1974, the administration has imposed duties on $250 billion of imports from China, with those duties set to escalate in 2019 absent an agreement with China. And under Section 232 of the Trade Expansion Act of 1962, the president is threatening to impose a 25 percent duty on imported automobiles in the name of national security. The Trump administration has renegotiated existing trade agreements with Canada, Mexico, and South Korea, but its modifications are as likely to restrict trade as expand it. One of the president’s first actions after assuming office was to withdraw the United States from the pending Trans-Pacific Partnership, which would have eliminated almost all duties with 11 trading partners around the Pacific Rim, including Japan.
Topic:
Economy, Tariffs, Trade, and Donald Trump
Political Geography:
North America and United States of America

37. U.S.-China Relations: The Way Forward

Author:
P. H. Yu
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
As confrontation looms over Washington and Beijing, it is critical to identify the true nature of this challenge from an international relations perspective before any attempt to devise a counter measure. Wrong presumptions or prejudicial interpretations may lead to dire consequences of unforeseeable magnitude. One past example would be the U.S. government’s belief that Iraq was developing weapons of mass destruction (WMDs) before the American invasion in 2003. A more current example would be the American nuclear anxiety on North Korea and how President Trump bypassed conventional American strategic thinking and circumvented hawkish threats of preemptive nuclear annihilation to resolve a “draconian crisis” via “smart diplomacy.” These examples may shed light on a pathway to resolution for the current U.S.-China trade conflict. The United States and China have ample experience of weathering a crisis on the brink of war, whether it was on the Korean Peninsula or in Indochina. China today remains on the U.S. sanctions list for certain high-tech products and military equipment. Both the Trump administration and Congress continue to criticize China regularly, ranging from human rights to religious rights, from the rule of law to the autocratic political system, from the state-owned banks to restrictive market access to foreign corporations, and from currency manipulation to unfair trade practices.
Topic:
International Relations, Bilateral Relations, Trade Wars, and Trade
Political Geography:
China, Asia, North America, and United States of America

38. Trade in Trouble: How the Asia Pacific Can Step Up and Lead Reforms

Author:
Wendy Cutler, Peter Grey, Kim Jong-Hoon, Mari Pangestu, Yoichi Sozuki, and Tu Xinquan
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Asia Society Policy Institute
Abstract:
The U.S.-China trade dispute has dominated headlines over the past year, disrupting trade and investment flows and increasing uncertainty at a time when the global economy is already facing headwinds. The conflict has left many countries in the Asia Pacific feeling caught in the crossfire seeking to navigate the tensions without alienating either country. While the World Trade Organization (WTO) would ideally help reduce the frictions, it has not been up to the task. The paralysis at the WTO points to a deeper problem: it’s inability to keep up with the pace of change or address the challenges of new developments in advanced technologies and the digital economy. Simply put, the trade regime is in trouble and in need of reform. At this dynamic and uncertain time in trade, the Asia Society Policy Institute (ASPI) convened a group of leading trade experts and former trade officials from across the Asia Pacific, led by ASPI Vice President Wendy Cutler. In this issue paper, the authors examine the major developments in the international trading system, including the U.S.-China trade dispute, FTA activity in the Asia Pacific, and efforts to reform the WTO. In this challenging environment, the authors find that the Asia Pacific is uniquely well-positioned to lead reforms to get the system back on track. This paper is the latest product of the ASPI initiative, “Building a High Standard and Inclusive Asia-Pacific Trade Architecture.” It builds on the work of two previous reports published in March 2017 and January 2018.
Topic:
Economy, Trade Wars, Trade, and WTO
Political Geography:
China, Asia, North America, and United States of America

39. Advancing the U.S.-Korea Economic Agenda

Author:
Wendy Cutler and Hyemin Lee
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Asia Society Policy Institute
Abstract:
For nearly 70 years, the United States-Republic of Korea alliance has remained strong, built mainly on shared strategic and national security interests. While the North Korean nuclear threat has long dominated political discussions and media headlines, the economic pillar of the relationship is no less important. With amendments to the U.S.-Korea Free Trade Agreement (KORUS) now in place, it is an opportune time for both countries to look beyond KORUS and expand their bilateral economic engagement to new and evolving areas. This closer cooperation can serve as an engine for growth in a slowing Korean economy, as an opportunity for job creation in the United States, and as a vehicle for jointly writing the rules for the technologies of the Fourth Industrial Revolution. As policymakers in Washington and Seoul look to the future, the Asia Society Policy Institute (ASPI) charts a possible path forward in its newest issue paper, Advancing the U.S.-Korea Economic Agenda. This paper presents a range of concrete actions that the United States and South Korea can take to advance and strengthen their bilateral economic relationship in the areas of trade and investment, energy, digital economy and advanced technologies, infrastructure, and women’s economic empowerment. The recommendations included in this paper are based partly on two roundtables ASPI organized with South Korean and American experts in Seoul in June 2018, with support from the Korea Institute for International Economic Policy, and in Washington, D.C., in October 2018. The ideas are also based on discussions with government officials, business leaders, and think tank experts.
Topic:
National Security, Treaties and Agreements, Bilateral Relations, Alliance, and Trade
Political Geography:
Asia, South Korea, North America, and United States of America

40. Agricultural trade aid: Implications and consequences for US global trade relationships in the context of the World Trade Organization

Author:
Joseph W. Glauber
Publication Date:
11-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
In retaliation for adverse trade actions from the Trump administration against foreign imports, many countries have imposed tariffs on US agricultural exports. To shore up political support from an important constituency, the Trump administration has authorized an estimated total of $28 billion in 2018 and 2019 to farmers and ranchers in compensation packages for their losses in those years. This report uses estimates of the distribution and size of the 2018 and 2019 trade aid packages to evaluate how these programs will affect World Trade Organization domestic support limits and their potential consequences for US trade relations.
Topic:
Agriculture, Humanitarian Aid, World Trade Organization, Tariffs, and Trade
Political Geography:
Global Focus and United States of America