A range of newer issues have appeared recently in global trade discussions concerning innovation. 21st century rules, the U.S. government shutdown, the use of trade deals as leverage for domestic reform, and corporate cross-border mergers (“corporate inversions”). The following is a bit more information on each topic. This just further illustrates to me the very broad scope global trade now encompasses and global public policy challenges they present.
The Uruguay Round was concluded, in 1995, prior to the commercial use of the Internet. Many of the WTO disciplines concerning the multilateral system need to be updated. The WTO is adding to the general discussion of global trade the newer dimension of how domestic innovation can help developing countries promote greater global trade and their own economic development. This is really important and a very interesting newer topic in global trade relations. “Azevedo Opens Public Forum.” WTO News (Oct. 1, 2013).
Good editorial from the Financial Times discussing the TPP and the multilateral system (WTO). Discusses the TPP as setting a “gold” standard for newer trade issues in the 21st Century (compared to the WTO that predates the Internet age and that has been hampered by outdated rules and processes). “Trading Principles.” Financial Times (Oct. 4, 2013).
The impact of the U.S. government shutdown on both the TPP and TTIP is raising significant questions especially as to the renewal of “fast track authority.” “U.S. Tries to Reassure Asia Allies.” Financial Times (Oct. 7, 2013).
Trade deals are often seen as leverage for domestic reforms. That is the thinking concerning Japan’s role in the TPP and “Abenomics.” The TPP is perhaps the most important part for domestic reform — the removal of Japanese trade restrictions and protectionism. “TPP Negotiations and Japan.” Financial Times (Oct. 8, 2013).
“Corporate inversions” are long-standing means of avoiding U.S. taxation on multinational profits. These cross-border mergers have been one step ahead of each new round of tax law changes. Newest rules require that 25% of assets and income need to be in foreign domicile. The Obama administration and the Congress want to review international corporate taxation as part of their review of corporate taxation generally. “New Corporate Tax Shelter: A Merger Abroad.” New York Times (Oct. 9, 2013).