Good two articles appearing the same day in two of the world’s leading financial newspapers. They discuss China and Russia as posing fundamentally new challenges to the existing international political system.
The implicit question raised by these two articles is what is the impact of this new geopolitics on global trade relations?
Geopolitics and global trade cannot be viewed as discrete topics but as intricately intertwined. This impact is now clearly playing out and is obvious to many but not to all.
To me one of the most important questions is now how do these two nations challenge the existing rules, foster development of newer ones, and implement decisions of international dispute resolution bodies.
So far they have joined the global trading system and seem to be utilizing the WTO’s dispute resolution system. In fact, both have so far proven to be very active. China since it accession in 2001 and Russia since its accession in 2012. China has implemented most of the recommended changes and Russia is in midst of its first cases.
Hopefully, this reliance on an international judicial and arbitration mechanism will carryover to nontrade areas such as territorial and investment disputes. We’ll see.