There have been several interesting developments in global trade the last few weeks reflecting the greater role it has to play in the global system and the broad factors influencing trade policy. They include the emergence of the Chinese initiative concerning the Asian Infrastructure Investment Bank (and the role of China in this new economic era), the dispute over arbitration provisions in trade agreements (as to the issue of sovereignty), and the general relationship of geopolitics and geoeconomics (as to influences on trade policy generally).
- New WTO dispute filed against US in WTO by Indonesia over antidumping duties. Just the usual. “Indonesia and the U.S.” WTO News (March 13, 2015).
- The Asian Infrastructure Investment Bank (AIIB), the new China initiative challenging the U.S. dominated World Bank It is gaining more European members after the U.K. In many ways if the U.S. would join it could mean more investment opportunities for the U.S. and would indicate a less confrontational approach to global trade. But geopolitical issues (non-trade and non-financial issues) seem to predominate in the current U.S. opposition to the new bank. This is part of China’s efforts to mold newer international institutions and global trade rules. “China’s New Bank (AIIB).” Financial Times (March 16, 2015).
- U.S. ports are struggling to handle larger container ships. Infrastructure around them, rail links and roads need upgrading. Importers and exporters are facing higher costs. Shipping is a critical aspect of global trade, needless to say, but U.S. trade officials often seen to ignore this. The real impetus in improving this situation seems to be left to the states and cities where these facilities are located. Really need much more aggressive federal leadership. “U.S. Ports and Gridlock.” Financial Times (March 18, 2015).
- Speech by Azevedo on current WTO challenges and concerns over bilateral and regional agreements. “Speech by Director General.” WTO News (3.24.15).
- Investor-State Dispute Settlement provisions (ISDS) and the TPP. Opposition continues to grow to these provisions. Some view these provisions as a door for multinationals to file suit against regulations. Some sense these violate sovereignty and should not be included when dealing with developed countries. (They do make sense when dealing with developing countries without well-defined judicial systems and the rule of law.) Opposition to these provisions are within foreign countries as well as within the U.S. “TPP — Back Door for Foreign Suits.” Wall Street Journal (March 26, 2015).
Newer dimensions of the post-Cold War era are now becoming more clearly apparent. How will the globally interconnected economic and financial systems of the last 25 years be changed by the rising geopolitics and geoeconomic of this decade? The rise of China and the Mideast religious chaos, among others, are the most obvious challenges to what we once considered a workable and sustainable global system of governance. One led by the U.S. and various multilateral institutions. One suggestion, and only one in formulating a remedy, is that the US and its allies need to offer China and others greater influence in the structures of such governance. I would also add making it clear that international cooperation is a precondition of developing strong innovative economies. The continued development of a rules-based international order is critical. Continued chaos is not. “China’s Rise Confounds a Splintered West.” Financial Times (March 27, 2015).