A great number of recent events have occurred this last month impacting global trade and finance. They include among others: continued aggressive actions of U.S. regulatory agencies concerning foreign banks and auditors, Argentina taking its international bond default case to the U.S. Supreme Court, U.S. investigation of Credit Suisse for promoting tax evasion by U.S. nationals, and continued congressional opposition to granting President Obama ‘Fast Track’ authority in trade negotiations. Yes, trade and international transactions are highly politicized, domestically and internationally. Here are a few of the highlight. 

• “[A]   revival of the U.S. economy should not be confused with a resurgence   of America’s role … [T]he most important emerging theme in world   politics is America’s slow retreat ….” “Indispensable Americans are Pulling Back.”  Financial Times (Jan. 21, 2014).  This “slow retreat” is certainly evidenced by the      inaction of the Congress to extend “fast-track” authority to  President Obama to the detriment of the U.S. in global trade negotiations.     

•  The  U.S. regulatory agencies are continuing with aggressive extraterritorial   application of U.S. economic legislation to foreign banks and foreign auditors under the Dodd-Frank legislation. Most recently the Federal  Reserve is about to require foreign banks to increase their capital  requirements and the SEC is about to suspend Chinese auditing affiliates of   U.S. firms for failure to turn over work documents as part of a SEC’s      investigation of Chinese firms. “Exporting U.S. Rules for Banks.”  New York Times (January 23, 2014) and “Judge Suspends Chinese Units  of Auditors.” Wall Street Journal (January 23, 2014).      Chinese listed firms  in the U.S. must comply with U.S. audit rules  of the SEC.  China has criticized this ruling and has raised issues    concerning regulation of U.S. multinationals in China. “China Criticizes Auditors   Ruling.” Wall Street Journal (Jan. 27, 2104).      

• The   U.S. Treasury Dept. has released the latest annual report concerning foreign  mergers and national security. CFIUS Annual Report for 2012  December 2013). It shows (p.17) that China is the second-place home   country of an acquiring corporation behind the U.K.  The China-U.S. Trade Law Blog  (Jan. 28, 2014) analyzes the data presented. 

• The  United States another case  against India in the WTO concerning its      restrictions on the sale of  solar cells and modules to India. “U.S. Files Dispute Against   India (Solar Cells and Solar Modules).” WTO News      (Feb. 11, 2014). “U.S. Files Complaint on India  Solar Plans.” Wall Street Journal (Feb. 11, 2014).   This case involves U.S. objections to India’s domestic-content      requirements. “New Trade Enforcement Action  Combats Barrier to U.S. Clean Energy Products.” USTR  News (Feb. 19, 2014).

• A  new book by the WTO “Connecting to Global Markets” (2014)  makes the case that international economic law and international trade rules, especially as they relate to foreign direct investment and   intellectual property rights, impact the ability of developing countries   to engage successfully in the global trading system. “Connecting to Global     Markets” (eds. M. Jansen, M. Sadnia and M. Smeets).” WTO  News (Feb. 11, 2014). (PDF of book.)      

• Argentina   has taken its bond default case under the Foreign Sovereign Immunities  Act to the U.S. Supreme Court. This is a major case concerning   sovereign debt default and debt restructuring in international finance and  global relations. “Argentine Takes Case to U.S.  Supreme Court.” New York Times (2.26.14).

• U.S.   investigations by the U.S. Dept. of Justice and the Congress continue   against Credit Suisse for helping U.S. taxpayers avoid millions of dollars    of taxes by setting up secret bank accounts offshore. (This is a follow up  to earlier issues concerning UBS.) The amendment to the U.S. – Swiss tax  treaty remains unratified. If ratified this would expedite request for  U.S. names for tax evasion (in addition to tax fraud requests) “Credit Suisse and Congress.” Financial   Times (2.26.14); “Credit Suisse Hearing Attacks  Swiss Secrecy.” Financial Times (2.27.14).

•  Some  economists argue that the TPP and TTIP are no big deal. Krugman, “No Big Deal.”  New York Times (Feb. 28, 2014).  This often overlooks some   good economic arguments  to the contrary (job creation and economic  development within states) and certainly overlooks non-economic aspects of   trade and international economic policy. For example, they fail to   acknowledge the importance that multilateral trade negotiations play in  overall U.S. diplomatic and national security policies — they help  maintain the role of the U.S. on the global stage. Often opposition to these agreements are focused on narrow political interest groups within the U.S. and a failure to appreciate the ever-globalization of trade and  public policies. The federal government has an obligation to encourage   greater trade and not withdraw into parochial domestic politics. Malawer,  “Trade: The President and Fast  Track.” Richmond Times-Dispatch (Feb. 16,  2014).