William Krist's Blog, page 21

Globalization, Not Globalism: Free Trade Versus Destructive Statist Ideology

After the 2008 financial crisis, calls rang out across establishment publications and the executive offices of Wall Street that we were witnessing the death of globalization. The calls grew louder and more numerous after Brexit, the election of Donald Trump, the pandemic, and Russia’s invasion of Ukraine. Yet the data appears to dispute this narrative. Global trade hit a record $28.5 trillion last year with projections to grow in 2023. The pace, however, is expected to slow. The reason for this is less a problem with globalization itself and more the historic setbacks that globalism has faced. 

Before continuing, it is important to define some terms. Globalization occurs when societies around the world begin to interact and integrate economically and politically. The intercontinental trade experienced during the Age of Sail and via the Silk Road are early examples of globalization. Globalization really took off after World War II and received a recent boost with the widespread adoption of the internet. Importantly, globalization in common discourse includes both the voluntary economic activities between peoples of different nations and the involuntary geopolitical activities of governments.

In contrast, Ian Bremmer defines globalism as an ideology that calls for top-down trade liberalization and global integration backed by a unipolar power. Statists believe that market exchange between people is literally impossible without government; only when a group claims a legal monopoly on violence and then builds infrastructure, provides security, documents property titles, and serves as the final arbiter of disputes can a market come into existence. Globalism is the application of this perspective to international trade. Globalists believe that top-down global governance enforced and secured by a unipolar superpower enables globalization.

But, like statists on a more local scale, the globalist view is logically and historically flawed. Global trade was well underway before the first major attempt at global governance, the League of Nations, in 1919. The league’s stated aim was to ensure peace and justice for all nations of the world through collective security. Falling apart at the outset of World War II, it failed miserably. But globalism as an ideology found its footing after the war. Europe was devastated. This left the US and the USSR as the only two countries with the ability to exert power globally.

So began the fastest era of globalization in history. Trade exploded as people moved on from the war. The globalist project also got off the ground with the founding of the United Nations and the World Bank. Globalism was limited only by the ideological differences between the two superpowers. The USSR wanted to support revolutions while the US aimed for top-down trade liberalization—which drove the recent allies apart and plunged the world into the Cold War.

In the United States, the neoliberals and neoconservatives dominated the political mainstream through their shared mission to bring markets and democracy to the world at gunpoint and financed by US taxpayers. Fortunately for them, the rate at which their interventions at home and abroad were wrecking US society was slower than that of the Soviets. The abolition of prices and private property eventually led to the collapse of the USSR in the early 1990s. With its main adversary defeated, the United States had achieved one of the central tenets of globalism, unipolarity.

From the outset, the US establishment gorged itself on its new globe-spanning influence. Through new international organizations like the World Trade Organization, “free trade” agreements were introduced. Some ran for hundreds of pages, yet all free trade really requires is an absence of policy. The United States sailed its navy around the world’s oceans promising to secure shipping lanes like a global highway patrolman. Through the promise of US military security and the bankrolling of international governance organizations, US taxpayers were forced to subsidize global trade.

As Murray Rothbard highlights in Man, Economy, and State with Power and Market, there is no such thing as international trade in a truly free market. Nations would still exist, but they would be pockets of culture instead of economic units. Any state restrictions on trade between people based on location are a violation of their liberty and a cost to society. Most free-market economists understand this and advocate against state restrictions accordingly. But subsidies to international trade are also antithetical to the free market. The proper free-market position is the complete absence of policy on both sides. No restrictions and no subsidies. Let people freely choose who they do business with. There should be no hand on either end of the scale.

Economic integration was far from the only focus of the US regime during its unipolar moment. Too many people had gained wealth, power, and status during the Cold War as part of the US war-making class. Despite the USSR’s total collapse, the last thing the United States wanted to do was declare victory and give up its privileged position. Instead, the United States scrambled to find a new enemy to justify the continuation of those privileges. Their eyes settled on the Middle East where they would, in time, launch eight unessential wars that killed any notion of a “rules-based international order.” US unipolarity proved Albert Jay Nock correct; governments are only as peaceful as they are weak.

This institutional desire for war would sow the seeds of destruction for the United States’ unipolar moment. As the United States eviscerated any notion that it stood for a rules-based order through its adventurism in the Middle East, tension was brewing in Eastern Europe and East Asia. To the doubtless joy of weapons companies and foreign policy elites, the Russian and Chinese governments were transformed back into the United States’ enemies.

The Russian invasion of Ukraine in February was a huge win for the US war machine, but it also represented an enormous step backward for globalism. The Russians seceded from the global order the United States had led for three decades. The West’s reaction, grounded in strict sanctions and forced economic divestment, deepened the rift in the global system.

What the future holds is anyone’s guess, but the globalist dream of a singular system of global governance is surely wrecked for the near future as the Russo-Chinese bloc breaks away. There will be pain because so many connections between nations are controlled by governments; however, a significant degree of globalization is still valued by the world’s consumers. The data contradicts any idea that globalization is reversing. It is only slowing as governments attempt to drag consumers along on their quest to divest from the other side.

Despite the claims that globalization is dead, international trade is alive and well. But the drive toward an interconnected world is slowing down as the ideology of globalism experiences its biggest setback in decades. The statist conflation of unipolar global governance and international trade explains where these claims are coming from and why they are flawed.

Connor O’Keeffe is a writer and video producer at the Mises Institute. He has a masters in economics and a bachelors in geology.

To read the full article, click here. 

 

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How Important are Mutual Recognition Agreements for Trade Facilitation?

Trade in the 21st century may face lower tariffs, but regulations that affect international trade in goods and services have proliferated. While regulations are important for many public policy objectives, different and complex non-tariff measures can become unnecessarily costly trade barriers for the millions of companies engaged in international trade. Trade policy can play a crucial role in reducing these unnecessary costs, without impairing the ability of regulatory authorities to carry out their public policy responsibilities. Mutual recognition agreements (MRAs) are a concrete trade policy instrument, specifically designed to achieve this dual objective. This paper revisits the arguments in favour of upgrading the existing EU MRAs to cover 21st century regulatory aspects impacting trade flows, offering empirical evidence on the positive difference MRAs have both on the value of exports and on increasing the number of exporting firms and their product portfolio towards new export destinations. The paper also summarises the results of a recent EU firm-level survey on the importance of MRAs for export performance. The results of the EU business surveys confirm the need for a renewed attention to MRAs, in particular with regard to emerging regulatory issues.

1. THE IMPORTANCE OF REGULATORY COOPERATION FOR TRADE FACILITATION

International trade is present in everyone’s life. Our daily routine depends on complex trade flows and production processes scattered across multiple countries, even if this hardly gets noticed by the final consumers. Trade flows have evolved over time and are becoming increasingly intricate, with countless parts and components crossing multiple borders at different stages of production along global supply chains before reaching the final consumer. While trade flows today may face lower tariffs, non-tariff rules and regulations that affect international trade in goods and services have proliferated. These non-tariff measures (NTMs) can play an important role in addressing public policy objectives, such as consumer safety or environmental protection. Companies and products engaged in complex global supply chains need to comply with a whole range of administrative and technical requirements, including testing and certification obligations that may differ from one country to another. At times, such different and complex non-tariff measures can become unnecessarily costly trade barriers for the millions of companies engaged in international trade.

These unnecessary regulatory costs matter both for exporters and end consumers. EU exporters offered clear examples of such barriers, as part of a pan-European business survey (European Commission and UNITC, 2016). For instance, an Italian company exporting lamps and lighting indicated that they need a certificate of conformity for their products that can only be issued from a third country, leading to additional shipping and testing costs, plus delays of several weeks before being able to export their products. A Greek exporter of frozen yoghourt indicated that, for certain destinations, their products must obtain a halal certificate. Due to the lack of an accredited certifying authority in Greece, the producer has to use the services of an accredited body abroad, leading to additional costs of €60,000 per year. Quite often, producers are required to obtain certification by a specific accredited entity in the importing country. To complete the certification, producers and exporters are required to ship samples of their products for inspection and hire local intermediaries to facilitate the certification process. A Lithuanian exporter of metallic products estimated that the costs associated with such procedures can be up to 33% of the value of the exported product.

The difficulties faced by EU exporters abroad are related to the different conformity assessment procedures applicable to products, across different jurisdictions. According to the International Standards Organisation (ISO), conformity assessment is described as 3 ecipe policy brief — 10/2022 “different techniques that ensure a product, process, service, management system, person or organisation fulfils specified requirements”.

ECI_22_PolicyBrief_RegCo_10_2022_LY04

Lucian Cernat is the Head of Global Regulatory Cooperation and International Procurement Negotiation at the European Commission.

To read the full policy brief, please click here.

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The World Bank, the IMF, and the GATT/WTO: Which Institution Most Supported Trade Reform in Developing Economies?

The 1980s and 1990s saw a policy revolution in developing countries in which many highly protected (if not closed) economies were opened to world trade. These reforms were largely undertaken unilaterally, but international economic institutions such as the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade/World Trade Organization supported these efforts. This paper examines the ways in which these institutions promoted, or failed to promote, trade policy reform during this pivotal period.

1. INTRODUCTION

The decade from 1985 to 1995 was a period of dramatic trade policy reform, particularly by developing countries. Many of them shed import substitution policies that had been in place since the 1950s and embraced exchange rate and trade reforms that opened their economies to the world (Dean, Desai, and Reidel 1994; Irwin 2022). In doing so, previously closed economies such as China and India became open to world trade and investment, and other emerging markets in Latin America, Asia, and Africa reduced their trade barriers and increased their participation in global trade. These policy changes reshaped the world economy, enabled the emergence of global supply chains, and produced the high level of interdependence that we see today.

Most countries opened their economies by performing the trade policy threestep: (1) devaluing their currencies and establishing competitive exchange rates, (2) abolishing foreign exchange controls and converting quantitative import restrictions into tariffs, and (3) gradually reducing the dispersion and level of those tariffs. In most cases, these reforms were undertaken unilaterally, often in the midst of an economic crisis. The lessons of experience, such as the success that Taiwan and Korea enjoyed after opening their economies in the 1960s, along with changing ideas about economic policy, contributed to the decision to reform their trade policies (Krueger 1997).

The World Bank, the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT)—then the World Trade Organization (WTO) after 1995—supported and encouraged the reform efforts. These institutions play an influential role in shaping international economic policy and their charters gave them a common purpose in promoting world trade.1 Although these organizations may not have been the driving force behind the reform efforts, what impact did they have in promoting the trade reforms of the 1980s and 1990s?2

Evaluating the contribution of these institutions to trade reform in developing countries is challenging because they approached the goal of expanding trade in very different ways. The GATT established trade rules and facilitated multilateral negotiations to reduce tariff and nontariff barriers to trade. The World Bank made loans to countries conditional on their making changes to their trade policies. The IMF sought “exchange rate stability” to help “in the elimination of foreign exchange restrictions which hamper the growth of world trade.” The institutions also differed in their ability to influence a country’s policies. The GATT/WTO was the weakest of the three in having virtually no leverage over sovereign governments. The World Bank and IMF had financial resources that they could use to win compliance with the policies that they deemed desirable.

Empirical assessments of the impact of these multilateral institutions on government policies and economic outcomes are plagued with difficulties. Studies based on observational data suffer from sample selection problems: the countries that choose to join the GATT/WTO, accept a World Bank loan, or enter into an IMF program are not randomly selected. These institutions dealt with different countries at different times and in different ways. The degree of compliance with loan conditionality is hard to observe. And it is not possible to know the counterfactual of whether a country’s policies would have changed even in the absence of those actions.

That said, it is possible to reach some tentative if impressionistic judgments, perhaps even surprising ones, about the contribution of these institutions to the trade reform process. One might suspect that the GATT/WTO, which of the three institutions focuses most directly on trade, had the biggest impact on developing-country policies, but on closer examination its impact was limited. The World Bank provided billions of dollars in trade policy loans, but this may not have had a decisive influence on a country’s decision to undertake trade reforms. Of the three, the IMF’s role in promoting trade reform may be the most underrated. The IMF focused more on stabilization and macroeconomic stability and yet it provided critical ingredients to trade reforms by encouraging countries to devalue overvalued currencies and start the process of eliminating exchange rate controls and import restrictions.

Working Paper- PIIE

Douglas A. Irwin is a nonresident senior fellow at the Peterson Institute for International Economics since February 2018, is the John French Professor of Economics at Dartmouth College.

To read the full working paper, please click here. 

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The Impact of the Ukraine Crisis on International Trade

On 24 February 2022, Russia invaded Ukraine, triggering international condemnation. The 2 March 2022 United Nations resolution demanding that Russia immediately end its military operations in Ukraine was adopted by 141 countries, with 37 abstentions and 5 against, while the 12 October 2022 UN resolution demanding the reversal of Russia’s attempted illegal annexation of Ukrainian territories was adopted by 143 countries, with 35 abstentions and 5 against1.

The international condemnation was followed quickly by the imposition of wide-ranging economic sanctions on Russia, and the provision of military support to Ukraine, by most OECD and European Union countries. Trade-related sanctions have included prohibitions of exports to Russia of strategic goods, including high-tech goods and components for use in electronics, telecommunications, aerospace and oil refining, among other sectors. Sanctions imposed by the United States apply not only to goods exported by US companies, but also to goods produced elsewhere using US technologies. The extraterritorial nature of US sanctions has likely impacted exports to Russia even from countries that have not applied sanctions.The EU, United Kingdom and US have also announced plans to phase out imports of Russian energy.

The war hit the global economy by creating new geopolitical and economic uncertainties, soaring energy prices, and disruptions to global value chains in which Russian and Ukrainian companies were involved. Economic sanctions exerted adverse effects not only on Russia, but also on countries that imposed them and, more generally, on other economies because of higher energy and commodity prices.

Isolating the impact on the global economy and trade of Russia’s war is difficult because global inflation pressures were building up already before the war, along with the recovery from the COVID-19 pandemic. The pandemic resulted in shortages of various materials and machinery, and in increased transportation costs and times. The fiscal stimulus implemented by most countries around the world in 2020-2021 supported household incomes, but the uncertainty and lockdown restrictions boosted household savings in several countries, creating pent-up demand. Sandbu (2022) argued that one of the reasons for the global surge in inflation, which came earlier than the energy price shock, was the strong rebound in US consumer goods demand, leading to a global scarcity of goods, with spill-over effects on the rest of the world. As pandemic-related restrictions were eased and largely eliminated from 2021 or early 2022, demand for contact-intensive services has also resumed 2. These developments would have exerted upward pressure on various prices even without the war.

WP 20

Zsolt Darvas (zsolt.darvas@bruegel.org) is a Senior Fellow at Bruegel and Senior Research Fellow at Corvinus University of Budapest. Catarina Martins (catarina.martins@bruegel.org) is a Research Analyst at Bruegel.

To read the full working paper, please click here.

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Reimagining The TPP: Revisions That Could Facilitate U.S. Reentry

The Trans-Pacific Partnership (TPP) offered the United States an opportunity to expand market access for U.S. workers, businesses, and farmers; create a level playing field on labor and environmental issues; and promote U.S. standards in the Asia-Pacific. Since the United States withdrew from the TPP in 2017, our regional partners have concluded trade deals without us, and China has forcefully asserted its economic and national security interests. This has increased the urgency for the United States to step up its economic engagement in the world’s fastest-growing region.

A return to the TPP, now known as the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP), would provide an immediate boost to U.S. economic competitiveness and geopolitical influence. It would also help ensure that the United States features prominently in regional supply chain decisions. However, many concerns about the original TPP are legitimate and U.S. trade policy views have shifted since the agreement was concluded. This calls into question whether the United States could ever muster the political support necessary to join the current agreement.

In light of this dynamic, this paper attempts to shift the conversation away from a binary choice between rejoining the agreement as it exists or staying away. Rather, we focus on whether it is possible to modify the CPTPP to meet our economic interests and facilitate potential U.S. reentry. To develop our recommendations, we engaged in extensive consultations over the past year with a broad range of trade experts, domestic stakeholders, and CPTPP members. We were also inspired by the bipartisan support for the United States–Mexico–Canada Agreement (USMCA), which was itself a renegotiation of a previously unpopular agreement, as well as the important work underway on the U.S.-led IndoPacific Economic Framework (IPEF).

To help start a meaningful conversation about potential CPTPP reentry, we suggest 12 areas for potential updates or improvements:

Improve CPTPP rules of origin, especially on autos and trucks.
Strengthen labor provisions to ensure a level playing field.
Bolster provisions to better protect the environment.
Modernize rules to address anticompetitive behavior from non market economies.
Strengthen provisions to combat currency manipulation.
Adopt a targeted approach to investor-state dispute settlement obligations..
Apply a flexible approach to government procurement rules.
Modernize rules to reflect advancements in digital trade and promote digital inclusiveness.
Enhance fairness in intellectual property rights protection and enforcement.
Embed supply chain security and resilience into the agreement as a new chapter.
Adopt collective approaches to address economic coercion.
Incentivize members to review and improve the agreement over time.

We believe that a revised CPTPP that includes these changes is worth considering as a means to bolster our international competitiveness, protect our economic and national security interests, promote our values and norms, and shape the rules that will govern trade and investment for years to come.

 

ASPI_CPTPP3_rev

To read the full report, please click here.

To watch the discussion, please click here.

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Deglobalisation and Protectionism

Trade in goods has slowed markedly since the global financial crisis (GFC), but there is no deglobalisation: most countries have seen increased international integration across nearly all goods, services and factor markets. China has become more self-reliant and is a notable exception in goods trade. Despite some dramatic instances, protectionism has largely been kept at bay and trade in goods remains quite free, perhaps freer than it was before the GFC. The proliferation and deepening of free trade agreements have contributed to this outcome. There has been deglobalisation of capital markets, but not because of protectionism. Despite efforts to erect barriers in some sensitive sectors, technology flows quite freely across borders because of the internet. However, trade policy uncertainty increased after the election of President Trump, a trend that persists under President Biden, and the biggest challenge is to avoid backsliding. There are many missed opportunities in the globalisation of services and of capital flows – especially those to developing countries. Increased migration remains potentially the largest source of gain from globalisation, but it is also the most fraught politically.

The idea that deglobalisation is underway has become commonplace (Irwin, 2020). Deglobalisation means that most countries become progressively less connected through all or most channels: trade in goods, trade in services, capital flows, movement of people and the transfer of technology. Such a process would thus mark a reversal of economic trends that have prevailed over at least the last 150 years, interrupted only by world wars and economic depression.

DeglobandProtPDFBruegel

Uri Dadush (uri.dadush@bruegel.org) is a Non-Resident Fellow at Bruegel and Research Professor at the University of Maryland.

To view the full report, please click here.

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International Cooperation in the Semiconductor Sector During a Period of Intensified Official Support

Some Relevant History – seeking mutual understanding and cooperation and the absence of friction

Semiconductors, since they became commercialized in the 1970s, have had a special place in the global economy. Semiconductors made possible the dawning and growth of the information age. The two leading producers in that timeframe were Japan and the United States. They fueled Japan’s pre-eminence in consumer electronics. They were the foundation of Silicon Valley. Chips are high-value, low-weight, and bulk products that can travel physically across borders with ease. Trade in semiconductors was an imperative for both countries. While that period was an era characterized by trade friction between the United States and Japan, and semiconductor trade was no exception, nevertheless, the first joint public policy initiative by the governments of Japan and the United States at the request of their respective industries, was to remove all tariffs on semiconductors through a trilateral agreement.1 It was applied on an MFN basis.

The most important part of this story, however, as carried forward into the present, is the fact that the U.S. and Japan found common ground in an arrangement for semiconductors reached in Vancouver, Canada, in August 1996. The agreement was unprecedented in format. It envisaged the creation of two parallel venues, intergovernmental meetings (GAMS) and an industry council (ultimately, the WSC). Representatives of the European Commission,2 suspicious of what the US and Japan might agree to, were nearby in another hotel. To allay their concerns, I kept them currently informed.

I and my counterpart, the counsel for the Japanese industry, jointly drafted a charter for the industry council. I proposed a series of purposes, which were debated by the two associations and adopted. It was contemplated from the outset that other regions would join. This was not an arrangement for special status for either Japanese or American producers. It was to be inclusive and nondiscriminatory. The price for entry into membership was according duty-free trade to semiconductors. Market forces and fair trade were to determine competitive outcomes. The foundational principle was that “The competitiveness of companies and their products, not the intervention of governments and authorities, should be the principal determinant of industrial success and international trade.”

The European Electronic Component Manufacturers Association (EECA) and the Korea Semiconductor Industry Association (KSIA) became formal participants at a meeting in Hawaii in April 1997. The venue was then named the World Semiconductor Council, consisting of CEOs of semiconductor companies in the four regions, and staffed by a group of mid-level company executives, meeting three times a year in a configuration known as the Joint Steering Committee (JSTC).

Meetings of the WSC followed annually, with hosting shared on a rotating basis. The next meeting was in Carlsbad, California. At the Fiugi (Italy) meeting in 1999, the Charter was updated and Chinese Taipei became a member. The officials representing the five parties, the three governments (U.S, Japan, Korea) and two authorities (EU Commission and Chinese Taipei), present at a subsequent 1999 meeting in Brussels issued a new Joint Statement as their operational intergovernmental agreement.

A major objective of the WSC was to bring China into the Council, as it was a major market for chips and aspired to become a major producer as well. China joined the WSC in 2006 in San Francisco, and the same year joined the GAMS.3 The way had been smoothed five years earlier by China acceding to the WTO and the ITA at the same time. The industry also succeeded in 2006 in obtaining an agreement of the six GAMS members to eliminate the tariffs on multi-chip packages (MCPs) on an MFN basis.4

The WSC, with the support of the GAMS, worked for the expansion of duty-free treatment of later generations of chips in the Information Technology Agreement (ITA 2). The Council also addressed common issues to improve the environmental impact of semiconductor production, fought counterfeiting, supported customs facilitation efforts, and worked for the removal of other barriers, including when they took the form of regulations applicable to encryption. Antitrust rules were strictly adhered to, starting with the earliest meeting of the Japanese and American industry CEOs, when Bob Galvin, CEO of Motorola, had the former dean of the University of Chicago School of Law sit in on the meetings. 

The GAMS/WSC/JSTC structure has been maintained by generations of officials and industry executives. It is a one-of-a-kind structure, never replicated for other industries, designed to foster international cooperation in support of an industry critical to all six regions and globally.

During the last decade, JSTC and WSC’s attention turned as well to subsidies, known in group discussions as “regional support”. Government support in terms of financial outlays was not a major part of the competitive picture during when the GAMS and WSC were formed. There was no mention made of the subject in the WSC Charter. Subsidies for industries engaged in the use of emerging technologies were not unknown or by any means confined to this sector. As an example, a report on Conflict and Cooperation in National Competition for High-Technology Industry was issued the same year at the Vancouver meeting jointly by the U.S. National Academies, the Hamburg Institute for Economic Research and the Kiel Institute for World Economics recommended that it was inadvisable to have all R&D subsidies free from disciplines, without regard to whether the support was for basic or applied research.5 I chaired the U.S. delegation that prepared the report.

Subsidies are a particularly difficult issue to address in trade policy, as they are generally considered a matter of domestic policy, within the sovereignty of trading countries. There are also serious definitional as well as measurement problems. The JSTC was attempting, for their industrial sector, to begin fill a hole in the disciplines of the international trading system through which subsidies poured in copious quantities.

International Cooperation in the Semiconductor Sector

To read the full paper, please click here. 

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Is Trade Sexist? How “Pink” Tariff Policies’ Harmful Effects Can Be Curtailed Through Litigation and Legislation

Women in the United States face unconscious and conscious sexism in many aspects of their lives. United States trade policy exacerbates this issue by imposing gender-based tariff rates that cause women to pay more for their apparel and footwear. This is due to the United States placing different tariffs on different products based on whether the product is meant for use by “females” or “males.” While some tariffs favor men and some favor women, the overall tariff burden still rests on women. The goal of this Note is to discuss the likelihood of solving this problem through litigation or legislation. This Note will first analyze and review the two cases regarding this issue that have been heard at the United States Court of Appeals for the Federal Circuit level. It will discuss why the tariffs are facially discriminatory, and why they deserve to be treated with the intermediate scrutiny standard. This Note will also show that with a changing culture and court composition, courts may rule differently on this issue moving forward. It will conclude by analyzing the possibility of these gendered tariffs being abolished through legislation.

Is Trade Sexist_ How _Pink_ Tariff Policies_ Harmful Effects Can

To read the original report by the BYU Law Review, please click here.

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U.S. Strategy Toward Sub-Saharan Africa

Sub-Saharan Africa is critical to advancing our global priorities. It has one of the world’s fastest growing populations, largest free trade areas, most diverse ecosystems, and one of the largest regional voting groups in the United Nations (UN). It is impossible to meet this era’s defining challenges without African contributions and leadership. The region will factor prominently in efforts to: end the COVID-19 pandemic; tackle the climate crisis; reverse the global tide of democratic backsliding; address global food insecurity; strengthen an open and stable international system; shape the rules of the world on vital issues like trade, cyber, and emerging technologies; and confront the threat of terrorism, conflict, and transnational crime.

This strategy reframes the region’s importance to U.S. national security interests. In November 2021, Secretary of State Antony Blinken affirmed that “Africa will shape the future— and not just the future of the African people but of the world.” Accordingly, this strategy articulates a new vision for how and with whom we engage, while identifying additional areas of focus. It welcomes and affirms African agency, and seeks to include and elevate African voices in the most consequential global conversations. It calls for developing a deeper bench of partners and more flexible regional architecture to respond to urgent challenges and catalyze economic growth and opportunities. It recognizes the region’s youth as an engine of entrepreneurship and innovation, and it emphasizes the enduring and historical ties between the American and African peoples. And it recasts traditional U.S. policy priorities—democracy and governance, peace and security, trade and investment, and development—as pathways to bolster the region’s ability to solve global problems alongside the United States. This strategy outlines four objectives to advance U.S. priorities in concert with regional partners in sub-Saharan Africa during the next five years. The United States will leverage all of our diplomatic, development, and defense capabilities, as well as strengthen our trade and commercial ties, focus on digital ecosystems, and rebalance toward urban hubs, to support these objectives:

1. Foster Openness and Open Societies

2. Deliver Democratic and Security Dividends

3. Advance Pandemic Recovery and Economic Opportunity

4. Support Conservation, Climate Adaptation, and a Just Energy

Transition

This strategy represents a new approach, emphasizing and elevating the issues that will further embed Africa’s position in shaping our shared future. It resolves to press for the necessary resources and prize innovation in our efforts to strengthen vital partnerships. The United States will both address immediate crises and threats, and seek to connect short-term efforts with the longer-term imperative of bolstering Africa’s capabilities to solve global problems. The strategy’s strength lies in its determination to graduate from policies that inadvertently treat subSaharan Africa as a world apart and have struggled to keep pace with the profound transformations across the continent and the world. This strategy calls for change because continuity is insufficient to meet the task ahead.

U.S.-Strategy-Toward-Sub-Saharan-Africa-FINAL

To read the original report by the White House, please click here.

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The Role of International Trade in Realizing an Inclusive Circular Economy

The transition to a circular economy is essential to address the triple threat of pollution, climate change and biodiversity loss. International trade will play a key role in delivering this transition, as no single country can achieve a circular economy alone. Currently, the distribution of value from circular trade is highly uneven, with the Global North accruing most of the economic gains while the Global South bears most of the environmental and human costs. Greater collaboration at the global level is therefore necessary to prevent the development of a circular trade divide.

Despite the importance of the circular economy in achieving global environmental and human development goals, there remains limited awareness or understanding among trade actors. To address this knowledge gap, this research paper presents a working definition of circular trade and outlines the main types of circular trade flow in goods, services, materials and intellectual property. The paper then explores the main benefits and challenges of each flow, before proposing a pathway to collective action to ensure that global trade enables fair, inclusive and circular societies.

2022-10-04-role-international-trade-inclusive-circular-economy-barrie-et-al

By Dr. Jack Barrie, Research Fellow, Environment and Society Programme. Dr Patrick Schröder, Senior Research Fellow, Environment and Society Programme. Marianne Schneider-Petsinger, Senior Research Fellow, Global Economy and Finance Programme; Project Director, Global Trade Policy Forum. Richard King, Senior Research Fellow, Environment and Society Programme. Professor Tim Benton, Research Director, Emerging Risks; Director, Environment and Society Programme.

To read the full report from Chatham House, click here.

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