The first two weeks of January 2014 have seen very interesting developments in global trade relations — the filing of new WTO litigation by Russia, successfully concluding the Bali negotiations, restricting U.S. litigation against multinationals, sparring in Congress over President Obama’s trade policies, trade and income inequality, and renewed foreign investment into the corporate and real estate sectors in the U.S.
The latter is particularly interesting in terms of promoting economic development and jobs in the U.S. However, this development also raises broader issues concerning foreign investment into the U.S. and the selling of U.S. assets to foreign corporations and foreign sovereign wealth funds — especially from the public’s standpoint. Public policy and public reactions are still unfolding. I suspect better public diplomacy would be beneficial.
The Director General of the WTO Azevedo discusses the success of the Bali Ministerial, its three pillars (agriculture, trade facilitation, development), and the importance of the multilateral system. “Bali is Just the Start.” WTO News (January 6, 2014).
The Supreme Court ruled again to restrict actions against multinationals for human rights violations abroad. (Daimler Case). “Justices Raise Bar for Suing Foreign Companies.” New York Times (Jan. 15, 2014). It is also argued that expanding global trade (concluding the TPP and TTIP) would assist in reducing income inequality in the U.S. “The Free-Trade Lift.” Washington Post (Editorial 1.17.14).
A leading Republican Robert Zoellick has supported granting of Fast Track to President Obama despite concerns of extending labor and environmental protections in a treaty that he could not otherwise do by congressional legislation. “Leading From the Front on Free Trade.” Wall Street Journal (January 15, 2014).
Foreign investment into the U.S. is increasing from Asia. Foreign Direct Investment (FDI) is a primary means of increasing jobs and economic development here in the U.S. It helps to increase U.S. export opportunities to new markets. (This also allows the foreign firms to increase global activity in light of their own shrinking domestic markets.) “Suntory Enters World Stage (Purchase of Jimmy Beam).” Wall Street Journal (January 15, 2014).
Foreign investment into U.S. commercial real estate often frees up U.S. domestic capital for increased domestic operations. It allows U.S. firms to us the proceeds from appreciated real estate and put it into corporate expansion. “Time Warner Nears a Deal for its Manhattan Building.” Wall Street Journal (January 15, 2014).