The issues of maritime shipping (containerization), export subsidies, currency valuations, global taxation, Investor-State clauses in investment treaties, and WTO litigation continue to be big issues in global trade relations. They issues go to the core of global trade today. Unfortunately, many of these issues are still very contentious. It’s good that the global trading system is moving toward greater judicial determination in the WTO and bilateral investment relations. Here are some specifics:
“Colossus Cargo Ships.” New York Times (Oct. 4, 2014).
…. The author contends that an export-driven economy relying upon export subsidies is a sustainable trade strategy. This is a misplaced idea. Even China today is moving away from that dated notion. Protectionism cannot replace free trade as the best means of achieving economic development and job creation. “Faith in Free Trade.” New York Times (Oct. 4, 2014).
…. Keeping currency values low is now a key export & economic development strategy not just for China but for the EU & Japan. “Overseas Stimulus.” New York Times (Oct. 3, 2014).
…. This argument that Investor-State clauses (ISDS clauses) are invalid because they work against the host-state and the environment is simply incorrect. They support firms and freer trade and investment. This has been a staple of U.S. trade and investment policy for decades. They have been included in our bilateral investment treaties (BIT) and have proven to be forward-looking in moving away from nationalistic and restrictive practices. “Trade Clauses and Governments.” Washington Post (October 2, 2014).
…. Global tax strategies by technology firms have managed to create a global backlash by governments. This has actually been beneficial to the chances of revamping the existing system. “Technology Tax Defense.” Financial Times (Oct. 2, 2014).
…. The WTO Director-General recently discussed the Dispute Resolution system. He noted 4 broad conclusions: (i) Disputes over 16 years have involved over $1 trillion of trade flows; (ii) Dispute mechanisms in Regional Trade Agreements have not been used even though they could have been; (iii)There has been a surge in use of the DSU, with the highest number in 2014, a doubling since 2012, and a high rate of appeal; (iv) More than 2/3 of the members have utilized the system. This is impressive in contrast to the poor history of the WTO to negotiate new rules. “WTO Disputes and Challenges.” WTO News (Sept. 27, 2014).
…. U.S. multinationals are already world-class experts in tax avoidance. This has already created the ‘territorial’ tax system that they want. This needs to be aggressively remedied. The new Treasury rules should only be the beginning. “Banked Overseas.” New York Times (Sept. 26, 2014).