William Krist's Blog, page 31

Trade and US agriculture: What to Expect From the Biden Administration

Key Points

Following four years of contentious trade wars and unilateral trade actions against key US partners under the previous administration, the Joe Biden administration must decide whether to continue those policies or change course to work multilaterally to achieve its goals. Thus far, trade policy under the new administration looks a lot like it did with the previous one. 
US farmers and ranchers have genuinely benefited from the multilateral trading system, but, as the past four years have shown, they are also vulnerable when the system is not working as intended.
The next four years will present an opportunity for the United States to again lead in global trade policy. The recent agreement to remove tariffs on EU steel and aluminum exports is a good start.

Trade-and-US-Agriculture

To read the full report from the American Enterprise Institute, please click here.

Winning the Tech Talent Competition

Talent is critical to innovation, and America’s deep pool of skilled scientists and engineers is a key component of its technological primacy. But today, for the first time in decades, U.S. leadership is under serious threat. Reaping the fruits of significant long-term investments, China’s supply of science, technology, engineering, and mathematics (STEM) talent now rivals that of the United States, both in terms of quantity and quality. Given current trends, it is inevitable that China will overtake the United States in purely domestic terms—if it has not done so already. The most powerful—and perhaps only—lasting and asymmetric American advantage is its ability to attract and retain international talent, a feat China has not been able to replicate despite extensive efforts. But the U.S. government risks squandering that advantage through poor immigration policy. Without significant reforms to STEM immigration, the United States will struggle to maintain long-term competitiveness and achieve near-term technology priorities such as semiconductor supply chain security, leadership in artificial intelligence (AI), and clean energy innovation.

211028_Zwetsloot_Talent_Competition

To read the full report from the Center for Strategic & International Studies, please click here.

New WTO Report on G20 Shows Restraint in New Pandemic-Related Trade Restrictions

G20 economies have continued to roll back COVID-19-related trade-restrictive measures and demonstrated restraint in the imposition of new ones, but the value of trade covered by pandemic-related restrictions still in place now exceeds that of trade-facilitating measures, according to the latest WTO Trade Monitoring Report on G20 trade measures released today (28 October). Ahead of a G20 leaders’ summit in Rome this weekend, Director-General Ngozi Okonjo-Iweala called on G20 economies to continue to unwind pandemic-related trade restrictions and to push for a strong WTO response to the pandemic at the 12th Ministerial Conference.

report_trdev_nov21_e

To read the full report from the World Trade Organization, please click here.

How E-labels Can Support Trade and Innovation in ICT, Medical, and Other Products

Displaying regulatory and other product information electronically is more practical than using small, confusing physical labels. But countries need to align their approaches to “e-labels” in order to maximize their benefits and avoid creating a new barrier to trade and innovation.

 
2021-e-labels

 








To read the full report from the Information Technology & Innovation Foundation, please click here.

Making the Most of the 2021 WTO Ministerial: What the United States Should Do

The 12th Ministerial Conference (MC12) of the World Trade Organization (WTO), from November 30 to December 3, 2021, in Geneva, provides a major opportunity to articulate a US vision for the multilateral trading system, setting priorities for updating the WTO rulebook and refocusing the WTO dispute settlement on judging compliance with existing WTO obligations. This collection of essays by leading PIIE scholars offers recommendations on how the United States can help advance world trade reforms at MC12. To restore credibility to the rules-based trading system, the WTO needs to come up with firm plans to address the shared challenges its members face: (1) ensuring that the trading system speeds the production and flow of essential goods to fight the pandemic, including vaccines across borders; (2) addressing how trade measures can support carbon abatement commitments through new provisions covering green subsidies, energy regulations, and carbon taxes and border measures; and (3) advancing a plan to fix the dispute settlement process so that it can be used effectively to counter foreign subsidies and other discriminatory practices that harm workers, farmers, and companies doing business abroad or competing against unfair imports at home. To be credible, the global trading rules must be enforceable.

piieb21-3

To read the full report from the Peterson Institute for International Economics, please click here.

Subsidies and Market Access: Towards an Inventory of Corporate Subsidies by China, the EU and the US

The number of subsidy-related trade disputes has increased sharply since 2010, as have investigations launched into subsidised imports. Yet, at present there is no work programme at the WTO on the trade-related aspects of subsidies in general; no serious attempts to find common ground.

Worse, governments face a conundrum. They are mindful that foreign subsidies can erode the market access won in previously negotiated multilateral and regional trade agreements. Yet, evidently, governments want to retain subsidies to tackle pressing national and global concerns, such as the COVID-19 pandemic response, decarbonisation, and the clean energy transition. What one government regards as a good subsidy and a legitimate exercise of national sovereignty can be viewed more negatively by trading partners.

Recriminations have been exacerbated by a lack of comparable and reliable information on subsidy schemes and awards. In this Hinrich Foundation sponsored report, authors Simon J. Evenett and Johannes Fritz of the University of St. Gallen assembled an inventory of 18,137 corporate subsidies awarded by China, the EU, and the US since November 2008 to assess the scale of national and cross-border commerce affected by these trading powers’ subventions.

Given that trillions of US dollars of trade are involved, and the growing discord between governments over subsidy matters, the time is ripe for deliberation about the nexus between subsidies, market access, and the potential for enhanced international cooperation. The paper concludes by describing six specific goals of this needed policy dialogue on the trade-related aspects of corporate subsidies.

GTA28 Report Subsidies and market access Towards an inventory of corporate subsidies by China, the EU and the US

To read the full report from the Hinrich Foundation, please click here.

The Evolution of Taiwan’s Trade Linkages With the U.S. and Global Economies

Economic, trade, innovation, and supply chain linkages between the United States and Taiwan are vitally important to the health of both nations’ advanced technology industries, enterprises, and broader economies. Taiwanese companies represent key suppliers to many “Tier 1” U.S. original equipment manufacturing (OEM) firms, meaning that the success of those U.S. OEMs, particularly in the information and communications technology (ICT) industry, depends on the vibrancy and innovation capacity of key Taiwanese suppliers. Especially in the semiconductor, related ICT, and electric vehicle (EV) industries, Taiwanese enterprises have become vital players in global supply chains for the manufacture of sophisticated advanced-technology products. Building off the Information Technology and Innovation Foundation’s (ITIF) prior report “Global Trade Interdependence: U.S. Trade Linkages With Korea, Mexico, and Taiwan,” this report examines the continually evolving Taiwanese trade, economic, innovation, and supply chain linkages with the United States and other global economies. The report further examines how countries are implementing strategies to promote reshoring and supply chain resiliency, and provides policy recommendations on a variety of issues such as how to advance supply chain resiliency, foster greater levels of technology and innovation collaboration and cooperation, and more broadly deepen trade and economic linkages between both Taiwan and the United States and Taiwan and the broader global innovation economy.

2021-taiwan-trade

To read the full report from the Information Technology & Innovation Foundation, please click here.

Illuminating the Effects of the US-China Tariff War on China’s Economy

How much has the US-China tariff war impacted economic outcomes in China? We address this question using high-frequency night lights data, together with measures of the trade exposure of fine grid locations constructed from Chinese firms’ geo-coordinates. Exploiting within-grid variation over time and controlling extensively for grid-specific contemporaneous trends, we find that each 1 percentage point increase in exposure to the US tariffs was associated with a 0.59% reduction in night-time luminosity. We combine these with structural elasticities that relate night lights to economic outcomes, motivated by the statistical framework of Henderson et al. (2012). The negative impact of the tariff war was highly skewed across locations: While grids with negligible direct exposure to the US tariffs accounted for up to 70% of China’s population, we infer that the 2.5% of the population in grids with the largest US tariff shocks saw a 2.52% (1.62%) decrease in income per capita (manufacturing employment) relative to unaffected grids. By contrast, we do not find significant effects from China’s retaliatory tariffs.

w29349

To read the full report from the National Bureau of Economic Research, please click here.

Degrees of Separation: A Targeted Approach to U.S.-China Decoupling – Final Report

The CSIS Economics Program launched Degrees of Separation to establish clearer objectives for U.S. engagement with China and to assess whether disengagement from specific economic activities can help in meeting such objectives.

The interim report reviewed the evolution of the U.S.-China relationship and identified six distinct areas that motivated U.S.-China engagement from 1972 through the end of the Trump administration: (1) geostrategy; (2) economics; (3) human rights and civil society; (4) global rules and norms; (5) global public goods; and (6) technology and innovation. This final report presents a framework for assessing specific economic activities as candidates for targeted decoupling, along with findings from three illustrative case studies designed to test it: artificial intelligence, biotechnology, and financial flows. The hope is that such a framework, which forces the identification of risks as well as U.S. objectives, can boost transparency and predictability, lessen regulatory uncertainty, and support engagement between the United States and China in areas that do not unacceptably compromise U.S. national security.

211021_Segal_DegreesSeparation_Final

To read the full report from the Center for Strategic & International Studies, please click here.

Mercantilist Reciprocity or Free trade: Globalization at a Crossroads

The case for free trade has always been a tough sell. Trade is an economic endeavor, but trade policy is the product of politics, where perceptions often matter more than facts. Study after study has shown that countries that are more open to trade grow faster than those that are relatively closed. The benefits of trade come from imports, which deliver more competition, greater variety, lower prices, better quality, and innovation. But when it comes to trading across borders or when our individual transactions are aggregated at the national level, we seem to forget these basic principles. We assume that the goal of exchange is to achieve a trade surplus. This view reflects a fundamental misunderstanding of international economics and the purpose of trade.

Domestic politics, national security concerns, and geopolitics conspire against the economics and the prospects for resuscitating multilateralism. Our collective challenge is to remind ourselves – indeed, to internalize – that trade barriers are not assets to deploy at the negotiating table, but impediments to domestic businesses, workers, and consumers.

Mercantilist reciprocity or free trade - Hinrich Foundation - Dan Ikenson - October 2021

To read the full report from the Hinrich Foundation, please click here.