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Begin New Search Topic International Trade and Finance Content Type Policy Brief Publication Year within 10 Years Publication Year within 3 Years

1. Can the World Trade Organization be saved? Should it?

Author:
Alan Wm. Wolff
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Heads of state, trade ministers, and academics have repeatedly called for reforming the World Trade Organization (WTO), the institution charged with the stewardship of the global trading system. The durability and worth of the WTO are being increasingly questioned despite the fact that by almost all objective measures, it has been a great success, with world trade growing much faster than global GDP over the last 75 years. However, past success does not guarantee future performance. This Policy Brief examines the institution’s most serious defects and the multitude of challenges it faces. It suggests the institution needs to evolve to reach broad-based international trade agreements, adding much needed new rules to the world trade rulebook and developing effective means to settle disputes that would render the rules of the system enforceable once again.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and World Trade Organization
Political Geography:
Global Focus

2. Harnessing allied space capabilities

Author:
Robert Murray, Tiffany Vora, and Nicholas Eftimiades
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The United States’ vast network of alliances and partnerships offers a competitive advantage—this is especially evident in outer space. Often characterized as a global commons, space holds value for all humankind across commercial, exploration, and security vectors. As technological advancements trigger a proliferation in spacefaring nations, the United States and its allies and partners are confronted with new challenges to and opportunities for collective action. This series examines how US space strategy can recognize the comparative advantages of allies and partners in space and best harness allied capabilities.
Topic:
Security, Defense Policy, International Trade and Finance, National Security, Science and Technology, Space, Institutions, and Defense Industry
Political Geography:
Europe, Eurasia, Canada, United States of America, and Indo-Pacific

3. Current Capabilities and Future Potential of African Textile and Apparel Industries

Author:
Lindsay Whitfield and Chema Triki
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:
The textile and apparel industry is a globalised industry characterised by a high degree of dependency and fragmentation in global supply chains. From the mid-20th century, cotton textile and apparel manufacturing production relocated from industrialised to developing countries, particularly in Asia, and was quickly followed by the emergence of the petrochemical industry and synthetic fibre production in East Asian countries, while South Asia continued to focus on cotton and natural fibres. China, Bangladesh, and Vietnam are currently the central players in global apparel supply chains, with China and increasingly Vietnam having vertically integrated industries with access to a diverse range of fabrics and thus a large product portfolio. The largest apparel consumer markets are concentrated in Europe, North America, and other wealthy countries such as Japan, as they have higher purchasing power and economically larger markets. Large emerging economies such as China and India largely supply their domestic markets but have not yet become major destination consumption markets for other developing economies. Changes in international trade over the past 30 years fostered the textile and apparel global value chain dynamic. These changes were marked by opening trade borders, lowering tariffs, tax breaks or subsidies offered by various governments, and free trade agreements. Low labour costs and lower production costs have shaped the decisions of global actors to relocate their operations from one country to another. Current global trends are set to transform the global value chains of textiles and apparel again. These trends include increasing production costs in China, the drive to shorten supply chains post-Covid pandemic through nearshoring and seeking countries with yarn-to-garment (or vertical) production capabilities, and a sustainability shift. These trends are leading global apparel buyers to diversify their sourcing away from China and Asia more generally and to consider new supply bases. These structural trends in the industry, together with the AfCFTA, represent a window of opportunity for African countries. African industry actors and their governments should build new textile and apparel industries that seek to participate in global and regional markets and engage with global technologies and international partnerships. Attracting foreign firms with the necessary technical, organisational, and managerial capabilities is essential. The AfCFTA represents a powerful tool to respond to the verticality need of the industry, considering the current production levels of raw materials, but also an opportunity to increase the number of African countries with industrial capabilities in textile and apparel. The ongoing negotiations on rules of origin will significantly impact the continent's potential to create synergetic regional value chains.
Topic:
Development, Industrial Policy, International Trade and Finance, Business, Supply Chains, and Textile Industry
Political Geography:
Africa

4. Formula for a Crisis: Protectionism and Supply Chain Resiliency—the Infant Formula Case Study

Author:
Scott Lincicome, Gabriella Beaumont-Smith, and Alfredo Carrillo Obregon
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
It has become accepted wisdom in Washington that the COVID-19 pandemic revealed how openness to international trade and investment increases U.S. vulnerability to economic shocks and contributes to widespread shortages of food, medicine, and other essential goods. This official narrative, however, ignores ample economic research showing that, while disruptions are inevitable in a modern economy, the alternative to free trade—a protectionism‐​driven onshoring of global supply chains—carries its own risks and can even heighten vulnerability by inhibiting natural market adjustments to economic shocks. The infant formula crisis, which lasted for most of 2022 and was unique to the United States, provided an unfortunate real‐​world lesson in this regard.
Topic:
International Trade and Finance, Free Trade, Resilience, COVID-19, and Supply Chains
Political Geography:
North America and United States of America

5. The power of control: How the EU can shape the new era of strategic export restrictions

Author:
Tobias Gehrke and Julian Ringhof
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
Technology is increasingly a battleground in the strategic competition between the US and China. Western technology contributes to China’s military modernisation as well as the development of Russian weapon systems. The US is restricting trade in key technologies with China and pushing EU member states to follow its lead. To better defend its interests, the EU needs to develop clearer policies on China and security, including pursuing the ‘de-risking’ of its relations with Beijing. The EU must develop a new strategic technology doctrine and upgrade its export control policy. This more coherent stance will enable the EU both to act where necessary but also to defend itself and its member states from future pressure from China – and the US.
Topic:
Security, International Trade and Finance, European Union, and Exports
Political Geography:
China, Europe, and United States of America

6. Refining the EU’s Geoeconomic Approach to Trade Policy

Author:
Sjorre Couvreur
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
The great powers are adapting their policies to a new geoeconomic context. When looking at the EU’s strongest external policy tool, trade policy, one could ask if the EU is doing enough? This policy brief makes recommendations on how to improve the buy-in of Member States for trade-security initiatives, advance cooperation between DG Trade and the EEAS, and avoid escalation in an age of geoeconomics.
Topic:
International Trade and Finance, Regional Cooperation, Hegemony, and European Union
Political Geography:
Europe

7. China’s Belt and Road Initiative: Successful economic strategy or failed soft-power tool?

Author:
Jyrki Kallio
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The Belt and Road Initiative (BRI) is part of China’s efforts to integrate its neighbouring countries into its economic sphere, thus increasing China’s security in its immediate neighbourhood while facing an increasingly hostile international environment due to its rivalry with the US. In reality, the BRI has evolved into an umbrella term for various infrastructure and development projects with no unified object or strategy. The projects should, in principle, increase goodwill towards China, and correspondingly boost its influence, but in practice they are mainly aimed at economic benefit. The results of the BRI, especially as a soft-power tool, are ambiguous. Its ideational basis is thin, consisting mainly of China’s critique towards the “hegemony of the West”. This reduces the BRI to a hollow slogan with little appeal apart from the pragmatic gains. However, the BRI is here to stay for the duration of Xi Jinping’s rule because China’s foreign policy is often driven by prestige. The BRI is enshrined in the Communist Party’s Constitution in order to both add weight to the initiative and to increase the Party’s prestige with its success, modest as it may be.
Topic:
Economics, International Trade and Finance, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:
China and Asia

8. New Dynamism in ASEAN and East Asia: The Role of the RCEP as a ‘Living’ Agreement

Author:
Shandre Mugan Thangavelu, Fukunari Kimura, and Dionisius Narjoko
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This policy brief highlights the importance of maintaining open regionalism and economic and regional integration for sustainable and inclusive regional and global growth in the Association of Southeast Asian Nations (ASEAN) and East Asia. With rising global uncertainties and global value chain (GVC) disruptions, the region requires a new economic and social agenda beyond trading arrangements, and the alignment of global, regional, and domestic policies and structural issues. The Regional Comprehensive Economic Partnership (RCEP) is expected to provide a new institutional framework under the built-in institutional feature (Chapter 18) of the agreement.
Topic:
International Trade and Finance, Regional Cooperation, Regionalism, and Global Value Chains
Political Geography:
Asia and ASEAN

9. Regional Perspectives on the Indo-Pacific Economic Framework

Author:
Matthew Goodman and Aidan Arasasingham
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
The proposed Indo-Pacific Economic Framework (IPEF) is the Biden administration’s answer to questions about the United States’ economic commitment to the vital Indo-Pacific region. For this initiative to succeed, it must address concerns among regional partners about the framework’s form, function, benefits, inclusivity, and durability. Based on conversations with representatives from over a dozen regional governments, this brief summarizes Indo-Pacific perspectives on the IPEF.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Regionalism
Political Geography:
North America, United States of America, and Indo-Pacific

10. Securing Asia’s Subsea Network U.S. Interests and Strategic Options

Author:
Matthew Goodman and Matthew Wayland
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
More than 1 million kilometers of submarine cables traversing the ocean floor, each about as wide as a garden hose, transmit up to 99 percent of international data, underpinning global trade and communication. This vital digital infrastructure faces myriad threats, from earthquakes and typhoons to fishing nets and saboteurs. The United States derives significant advantages from its centrality in Asia’s subsea cables, which contribute up to $169 billion to the U.S. economy annually and could benefit more U.S. workers and businesses as demand for digital products and services grows globally. But realizing those benefits will require the United States to step up its policy engagement on Asia’s cable networks, which are changing with China’s rise, the emergence of new regional hubs, and new transpacific routes designed to reduce risks and increase network resiliency.
Topic:
Security, International Trade and Finance, Communications, Maritime, and Commerce
Political Geography:
China and Asia

11. Beyond 2025: The Future of the African Growth and Opportunity Act

Author:
Daniel F. Runde and Sundar R. Ramanujam
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Over the past two decades, the United States has provided assistance and support for sub-Saharan Africa’s efforts to transform its economic and trade relationships, centered around the African Growth and Opportunity Act (AGOA). First enacted into law on May 18, 2000, AGOA was designed to significantly enhance designated sub-Saharan African countries’ market access to the United States by providing duty-free treatment for specific import categories. The legislation’s primary goal was to promote economic growth through good governance and free markets. To qualify and remain eligible for AGOA, countries were expected to demonstrate progress toward market liberalization and to improve the rule of law, human rights protections, and core labor standards. More than 20 years later, AGOA continues to provide preferential treatment to 44 countries in the region, spanning over 6,500 tariff lines. Since May 2000, AGOA has been amended four times, mostly to clarify preferential treatment terms, technical standards, and sunset deadlines. The act was initially designed to be valid for eight years, expiring at the end of September 2007. In July 2004, however, President George W. Bush signed the AGOA Acceleration Act, extending it to 2015. Toward the end of his second term, in June 2015 President Barack Obama extended its validity by signing the Trade Preferences Extension Act, under which AGOA is set to expire in 2025. The global political and economic landscape has changed profoundly since AGOA was enacted in 2000, even before the Covid-19 pandemic created new disruptions and accelerated several ongoing changes. The mobile telephony revolution has created new opportunities for millions to participate in the digital sphere, use mobile banking and payments systems, and receive commercial, educational, and medical services via the internet. Even as the sub-Saharan African region’s middle class continues to grow, it is also set to experience a youth population boom in the next three decades—which, under the right conditions, could pay a demographic dividend and avert a social crisis. Meanwhile, the United States has also entered an era of great-power competition with China. With China’s influence in sub-Saharan Africa rising significantly, this competition is also playing out through the region’s political and economic institutions. Considering these opportunities and challenges, leaders in Washington (and their constituents across the United States) ought to look at Africa as a prospect for deepening commercial partnerships, not as a continent that needs to be “saved” through foreign assistance. Accordingly, the United States can consider one of the three following scenarios in response to AGOA’s current expiration timeline
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
Africa

12. The EU’s Carbon Border Adjustment Mechanism: A Piece in the Industry Decarbonization Puzzle

Author:
Carole Mathieu
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Institut français des relations internationales (IFRI)
Abstract:
The Carbon Border Adjustment Mechanism (CBAM) is a first step toward reconciling the European Union (EU)’s climate and trade interests. However, a complementary set of domestic and external policies will be needed to drive the decarbonization of European and global energy-intensive industries. • By 2035, the EU must have fully replaced its unsustainable free allocation regime by an effective CBAM. Yet, rushing implementation may bring little climate benefit and additional strains on industrial competitiveness, in a context of soaring energy prices. • Even with the CBAM as a complement, the EU Emission Trading Scheme (ETS) is no silver bullet. Triggering large-scale investment in deep-decarbonization projects across the EU requires a package of well-coordinated policies, including those enabling crucial access to affordable low-carbon electricity. • Climate clubs are not a credible alternative to the EU’s CBAM, nor desirable amid the geopolitical crisis. Instead, the EU should convince all large industrial countries that the race for clean manufacturing requires guiding principles, to avoid undue distortion of trade and ensure a fair industrial transition globally. • Setting expectations about CBAM at the right level – both internally and externally – is the best way to support the EU’s green industrial policy while containing diplomatic tensions.
Topic:
International Trade and Finance, European Union, Industry, Carbon Tax, and Carbon Emissions
Political Geography:
Europe

13. Mirror, Mirror on the Wall, Who Has the Fairest Clauses of Us All? Stress-testing the Application of Mirror Clauses to Pesticides

Author:
Emily Rees
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
In less than six months, ‘mirror clauses’ have taken EU trade policy by storm. To inject ‘reciprocity’ in trading terms, the French Presidency of the Council is proposing that imported food and feed be produced under the exact same sanitary, phytosanitary, welfare and environmental standards as those imposed on domestic products within the European Union. The international trade rulebook is both complex and yet relatively straightforward in ensuring that process and production methods applied to imports respond to legitimate justifications and do not result in a disguised barrier to trade. The European Union may learn from the United States’ playbook to ensure that mirror clauses are negotiated with trading partners bilaterally, rather than imposed on them unilaterally. As part of its Farm to Fork strategy, the European Commission has announced two pesticides reduction targets to be attained by 2030, and it is in this framework that questions relating to plant health and international trade have been gaining traction. With pesticides targets set to raise costs for European farmers and productivity levels likely compromised, there are genuine concerns that domestic products will be competitively undercut by imports produced ‘less sustainably’. To grasp the complexity of mirror clauses applied to the phytosanitary sphere, understanding how the European Food Safety Agency authorises and bans active molecules and bio solutions is vital. Appreciating the daily efforts of national customs agents in checking imports for pesticides residues, and coordinating efforts of Member States on rejected food and feed imports that do not meet EU requirements, is also paramount. There are warranted societal justifications to impose measures to protect humans, animals, plants and ecosystems. To remain legitimate under international law however, mirror clauses should be ‘stress-tested’ to avoid being applied as a means to gain competitiveness. Countries are unequal when it comes to the risk of pests and climate change is already intensifying their distribution with potentially dramatic impact for global food security. When it comes to protecting plant health, regional conditions must be considered to not only avoid inconsistency with WTO rules but also to ensure that mirror clauses do not result in a practical ban on imports from developing countries impacting livelihoods worldwide.
Topic:
Agriculture, International Trade and Finance, Treaties and Agreements, European Union, Mercosur, and Pesticides
Political Geography:
Europe

14. Should the EU Pursue a Strategic Ginseng Policy? Trade Dependency in the Brave New World of Geopolitics

Author:
Oscar Guinea and Vanika Sharma
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Political leaders all over the world are calling for strategic autonomy. The removal of critical trade dependencies has become a guiding principle in most policy proposals, including the EU’s new industrial strategy. In making these decisions, it is important for policymakers to understand the reasons behind why shortages of critical goods and technologies have emerged in the first place. The instruments that new policies cerate should respond to real problems, not invented ones. For instance, if shortages are due to temporary mismatches of supply and demand, most of them will be fixed without the need of any policy intervention. On the other hand, shortages can also be engineered by countries using their dominance in the production of certain goods to coerce other countries. As the EU experienced first-hand after the Russian war on Ukraine in 2022, the concentration of market power in the production of any product carries geopolitical risks. For that purpose, it is crucial to understand the nature of trade dependencies. This policy brief presents indicators and a conceptual framework to measure trade dependency. The framework consists of two indicators: the first measures the share of EU imports from outside the EU over EU production proxied as the sum of imports and exports, while the second indicator considers the market concentration using the Herfindahl-Hirschman index (HHI). It then applies this framework to EU trade with the rest of the world in 2020 and elaborates on the product categories and partner countries behind these dependencies. From a total of more than 9,000 product categories, there were only 233 products that could be classified as dependent within our framework. In terms of values, they represented 1.5% of EU total imports or €50 billion. The major suppliers of these products to the EU were China, United States, Russia, and the United Kingdom. Imports of hydrocarbons from Russia are part of this list of trade dependencies, but so are many other goods which are not of strategic importance. A policy intervention should be tailored to the specific product and the specific export country. Given the small size of the EU imports in which the EU can be considered dependent, it is not advisable to base Europe’s new industrial policy on a general fear of dependency and apply new policies in many sectors. Many of these products are easy to substitute and the economy can function without them. For the select few products where dependency is an economic concern, our paper explores different measures that the EU can put in place to lower trade dependency and how this dependency can be reduced through international trade.
Topic:
International Trade and Finance, Treaties and Agreements, European Union, Geopolitics, and Imports
Political Geography:
Europe

15. Economic Equidistance is Not an Option: Germany and the US-Chinese Geo-Economic Conflict

Author:
Markus Jaeger
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Intensifying US-Chinese rivalry will increase pressure on Germany to support a more hawkish US geo-economic policy. The new ­German government should give Washington support in as far as US policies seek to create an economic level playing field vis-à-vis China. Given its dependence on international trade and investment, Germany should seek to resist a broader politicization of inter­national economic relations.
Topic:
Economics, International Trade and Finance, Geopolitics, and Rivalry
Political Geography:
China, Germany, and United States of America

16. European unilateralism as a tool for regulating international trade: a necessary evil in a collapsing multilateral system

Author:
Alan Hervé
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The carbon border adjustment mechanism (CBAM), the fight to prevent illegal foreign subsidies, the ban on trade in deforestation products, the due diligence obligation imposed on European companies, the anti-coercion regulation, the reciprocity instrument in public procurement, the foreign investment screening regulation, not to mention the set of exceptional trade measures implemented in the context of the Covid-19 pandemic and the invasion of Ukraine; there is a long list of decisions adopted and under discussion that mark the European Union's determination to decide alone on the regulation of trade between itself and the rest of the world. This European "neo-unilateralism" is certainly based on a logic that is not entirely new - the defence of the Union's interests through trade policy or trade regulation instruments - but it also presents singular features and reflects political choices that prevail, more than in the past, over strict mercantile considerations. It is a vehicle for promoting the European Union's strategic autonomy in a multilateral system that is in the process of collapsing and an international order that has been hit by crises.
Topic:
International Trade and Finance, European Union, Multilateralism, International System, and Unilateralism
Political Geography:
Europe

17. The Digital Economy Partnership Agreement: Should Canada Join?

Author:
Dan Ciuriak and Robert Fay
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
The Digital Economy Partnership Agreement (DEPA) provides the most comprehensive template yet for a regional trade agreement tailored for the digitally transformed economy. The DEPA lays groundwork for discussions on critical areas that go beyond the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This policy brief makes the case that joining the DEPA early would allow Canada to develop it so that it meets small, open economies’ needs and so that new provisions meet the values that Canada holds, and recommends areas for attention and collaboration with like-minded countries.
Topic:
International Cooperation, International Trade and Finance, Intellectual Property/Copyright, and Digital Economy
Political Geography:
Canada and North America

18. Economic Security in Emerging Markets: A Look at India, Vietnam, and Indonesia

Author:
Matthew Goodman, Matthew Reynolds, and Julianne Fittipaldi
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
With the outbreak of the Covid-19 pandemic, supply chain resilience has emerged as a policy priority of the United States and its allies. The issue of supply chains has also raised the profile of emerging economies that offer possible alternatives to China as production platforms for multinational firms. This report surveys economic security policy developments in three major emerging economies: India, Vietnam, and Indonesia. It finds that all are attempting to take advantage of this new focus on supply chain resilience, while (to varying degrees) balancing the economic security risks posed by China’s rise. The United States and its allies have an opportunity to work with these emerging economies to shape their decisions about trade, investment, and technology policies in ways that promote mutual economic security and enhance international economic rules and norms.
Topic:
Security, Economics, Emerging Markets, International Trade and Finance, and Markets
Political Geography:
Indonesia, India, Asia, Vietnam, and Asia-Pacific

19. Green New Deal for Carbon-neutrality and Open Trade Policy in Korea

Author:
Jukwan Lee, Jongduk Kim, Jinyoung Moon, Jyun-Hyun Eom, Ji Hyeon Kim, and Jungmin Suh
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study focuses on Korea’s Green New Deal policy and global response measures to climate change that affect international trade. A trade policy perspective and approach have been applied while reviewing the carbon-neutral policy pursued by the Green New Deal. We attempted through an empirical analysis to determine whether the expansion of openness helps reduce carbon emissions and simulate the impact of a carbon-neutral policy, such as the EU's carbon border adjustment, on the global economy under global production networks. In addition, the amount of financial support from Korea's Green New Deal needed to offset the negative economic effects of other countries’ independent carbon-neutral policies was derived. This study finally suggests that the effect of the Green New Deal can be expanded through the restoration of openness and global cooperation.
Topic:
Climate Change, International Trade and Finance, Economy, Trade, Carbon Emissions, and Green New Deal
Political Geography:
Asia and South Korea

20. Have trade agreements been bad for America?

Author:
Alan Wm. Wolff, Robert Z. Lawrence, and Gary Clyde Hufbauer
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Many Americans are persuaded that trade agreements of the last 40 years have been a costly mistake. To be sure, open markets leave some people behind, and promises to help those hurt were broken. But on balance, expanding trade has greatly benefited the US economy, and policy approaches taken need to be built on rather than abandoned. Alan Wm. Wolff, Gary Clyde Hufbauer, and Robert Z. Lawrence say more must be done to help those harmed, but protectionism is not the solution. The international trading system needs more outspoken US support and leadership if it is to be maintained and improved.
Topic:
International Trade and Finance, Treaties and Agreements, Economy, and Trade
Political Geography:
Global Focus and United States of America

21. How to save the WTO with more flexible trading rules

Author:
Robert Z. Lawrence
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The clash between the Western and Chinese economic systems is threatening the world trading system, with countries increasingly using trade as a tool to coerce other countries. It is imperative to return to an inclusive, rules-based international trading order before the problems in trade spill over into the other geopolitical frictions that plague the world. This Policy Brief argues for a system that steers between two extremes that have emerged: “deep integration,” a single undertaking in which all members of the World Trade Organization (WTO) are expected to adhere to all rules regardless of their preferences and circumstances, and “decoupling,” in which groups of countries centered on the United States or China limit trade with each other. Instead, Lawrence says, the world trading system should have a “variable geometry” that allows open plurilateral agreements among self-selected members that desire deeper integration on particular issues while allowing members that prefer to implement distinctive domestic policies to remain outside some of these agreements and follow a set of more limited rules. The universal rules would permit diversity but still promote trade between all countries through measures such as safeguards that would deal mainly with the most harmful systemic frictions. If the multilateral system is not up to the task of creating such an approach, it is likely to lose its relevance as differentiated regional or topic groupings become increasingly dominant.
Topic:
Economics, International Trade and Finance, World Trade Organization, Reform, and Trade
Political Geography:
Global Focus

22. EU carbon border adjustment mechanism faces many challenges

Author:
Gary Clyde Hufbauer, Jeffrey J. Schott, Megan Hogan, and Jisun Kim
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
This Policy Brief assesses the evolving EU Emissions Trading System and EU carbon border adjustment mechanism (CBAM) and explains objections within Europe and from major trading countries likely to be affected by the proposed CBAM import levies. While EU officials have sought to ensure that the CBAM is consistent with obligations under the World Trade Organization (WTO), key aspects of the CBAM could violate WTO rules and are likely to be contested, taking years to play out. Meanwhile, several other countries will adopt new carbon-inspired border restrictions, adding to global trade frictions. Major carbon-emitting countries, therefore, need to act cooperatively instead of unilaterally to both advance the fight against climate change and update the rules-based global trading system. Two-thirds of greenhouse gas emissions result from nontraded activities, such as road transport, electricity generation, and home and office heating. Countries can curb emissions in these activities, while developing guidelines for carbon abatement in traded sectors.
Topic:
Climate Change, Economics, International Trade and Finance, World Trade Organization, European Union, and Carbon Emissions
Political Geography:
Europe

23. Is South Korea vulnerable to EU and US carbon border restrictions?

Author:
Jeffrey J. Schott and Megan Hogan
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
South Korean exports, especially carbon-intensive products like steel, are increasingly vulnerable to both the European Union’s proposed carbon border adjustment mechanism (CBAM)—set to begin on January 1, 2023—and the proposed Clean Competition Act (CCA) before the US Congress. Schott and Hogan caution that Korean exporters should not count on Korea’s decade-old EU and US free trade agreements (FTAs), nor on the multilateral trading rules of the World Trade Organization (WTO), to protect them from new carbon-based import barriers in key foreign markets. The WTO and the FTAs have broad and loosely defined exemptions for environmental protection. Nor is Korea likely to be shielded by its own cap-and-trade emissions trading system (the K-ETS), because of extensive use of free allowances and large differences between EU and Korean carbon prices. While the threat the EU CBAM poses to Korean exports is imminent, passage of the CCA faces major legislative obstacles. But US imports of Korean steel and other carbon-intensive goods are still subject to climate-related duties at the US border under US unfair trade statutes. The US Department of Commerce has ruled that free allowances issued under the K-ETS (and EU ETS) are implicit subsidies that can be offset by countervailing duties. These charges are in addition to the harsh tariff-rate quotas on imported Korean steel applied under the “national security” authority of Section 232 of US trade law, which are more restrictive than measures imposed against European and other steel exporters. The authors suggest relaxing these US barriers, as they have been for shipments from Europe, in return for Korean participation in the nascent US-EU talks to establish a “Global Arrangement on Sustainable Steel and Aluminum.”
Topic:
Economics, International Trade and Finance, European Union, Exports, and Carbon Emissions
Political Geography:
Europe, Asia, South Korea, and United States of America

24. China's CPTPP bid spurs South Korea to act on Asia-Pacific trade pacts

Author:
Jeffrey J. Schott
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
China’s sudden application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 has broad implications for South Korea’s economic relations with China, Japan, and the United States. In the past, Korea frequently debated but invariably postponed deciding whether to participate in negotiations on the CPTPP, despite the substantial benefits to be gained from doing so. However, China’s application has prompted Korean officials to get off the fence and apply as well. As China moves to deepen its ties to regional partners, Korea needs to follow suit, complementing the ongoing implementation of the Regional Comprehensive Economic Partnership (RCEP) with expedited negotiations to join the CPTPP and participation in the US-led Indo-Pacific Economic Framework for Prosperity (IPEF). Korean participation in the RCEP, CPTPP, and IPEF is desirable and mutually reinforcing and should allow Korea to sustain its strong commercial interests in both the US and Chinese markets.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Trade
Political Geography:
China, South Korea, and Asia-Pacific

25. Has Globalisation Really Peaked for Europe?

Author:
Lucian Cernat
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This paper builds on the recent arguments put forward by Richard Baldwin and others debunking the myth that we enter a period of de-globalisation. The paper argues that globalisation is a complex phenomenon that requires detailed, firm-level indicators going beyond simple aggregate metrics. When using such indicators, the picture is much more nuanced and, in the case of Europe, the role of global trade is as important as ever for hundreds of thousands of companies and millions of jobs supported by global trade flows. A strong participation in the “new globalisation” is also key for the future EU competitiveness in technology-driven sectors.
Topic:
Globalization, International Trade and Finance, Science and Technology, European Union, and Trade
Political Geography:
Europe

26. The Black Hole of National Security: Striking the Right Balance for the National Security Exception in International Trade

Author:
James Bacchus
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Article XXI of the General Agreement on Tariffs and Trade (GATT) reserves for members of the World Trade Organization (WTO) the legal authority to restrict trade in goods to protect members’ “essential” security interests. Similar exceptions to WTO trade obligations exist in other WTO agreements. For more than seven decades, WTO members exercised self‐​restraint in invoking these exceptions, doing so only for narrow purposes and in truly exceptional circumstances to avoid pushing the boundaries of the law too far and thereby upending the delicate balance between members’ legitimate pursuit of their security interests and their obligations to reduce barriers to trade. Yet, trade restrictions justified on national security grounds have proliferated in recent years and are increasingly subject to litigation in WTO dispute settlement. As a result, the national security provisions contained within the WTO agreements, as well as fundamental questions about the nexus between trade and national security, are set to be tested and clarified by WTO jurists—a less than ideal outcome that could lead to the further undermining of WTO dispute settlement and the rules‐​based international trading system more broadly. This paper explains the origins of the national security exceptions in the GATT and the WTO agreements and the history of their invocation, summarizes recent litigation that has clarified these exceptions, discusses current developments and upcoming litigation that could prove pivotal to our understanding of the trade‐​security nexus and the future of the world trading system, and offers some concluding thoughts on the options available to WTO members for striking a balance between trade liberalization and the defense of national security.
Topic:
International Trade and Finance, National Security, World Trade Organization, and Tariffs
Political Geography:
Global Focus

27. Do Evolving Digital Trade Rules Create an Uneven Playing Field? Understanding Global Perspectives

Author:
Michael Pisa and Ugonma Nwankwo
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
This brief is based on a roundtable hosted by CGD as part of the Governing Data for Development project, which explores how governments can use data to support innovation, development, and inclusive growth while protecting citizens and communities against harm.
Topic:
Development, Economics, International Trade and Finance, and Digital Economy
Political Geography:
Global Focus

28. China's Ties with Southeast Asia : From Green Shoots to Sustained Recovery

Author:
Kensuke Tanaka
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
China's rebound happened relatively quickly owing to a large extent to timely macroeconomic policy responses to the crisis. Lagging somewhat behind China, most Southeast Asian countries have now entered the transition from recession to recovery. Some export-dependent Southeast Asian countries shifted their export destination to China to benefit from its early recovery. This switch of export destination to China illustrates China's important role in leading the recovery of the region. Enhancing regional macroeconomic co-operation would help reduce vulnerability of the region and ensure a sustained recovery. Regional macroeconomic co-operation remains at an early stage in Southeast Asia, but possibilities for further co-operation should be explored.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, and Economic Recovery
Political Geography:
China, Asia, and Southeast Asia

29. A CO2-Border Adjustment Mechanism as a Building Block of a Climate Club

Author:
Felix Bierbrauer, Gabriel Felbermayr, Axel Ockenfels, Klaus M. Schmidt, and Jens Sudekum
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
The EU steps up its efforts to curb its territorial CO2-emissions. It is planning to introduce a carbon border adjustment mechanism (CBAM) to level the playing field and to raise own resources. The authors point out that unilateral European climate policy action, whether shored up with a CBAM or not, can only play a limited role in reducing global CO2-emissions. A EU-CBAM cannot stop indirect leakage, it has ambiguous effects on other countries’ mitigation efforts, and it poses the risk of conflicts with trade partners. They propose that the EU, together with the US and other like-minded countries, should push hard to establish a climate club with a common minimum price of CO2 and a common CBAM applied to third countries. Such a framework would incentivize other countries to join while limiting leakage and reducing the risk of trade policy disputes.
Topic:
Climate Change, Environment, International Trade and Finance, Regional Cooperation, European Union, and Carbon Emissions
Political Geography:
Europe

30. Beyond trade war in Washington: The United States and our less global future

Author:
Lauri Tahtinen
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
“What worries me most, however, is the fact that the rules-based international order is being challenged. Quite surprisingly, not by the usual suspects, but by its main architect and guarantor: the US.” Tus spoke Donald Tusk, the President of the European Council in advance of the G7 Summit of 2018.1 In doing so, he was echoing the sentiments of many others. Sabre-rattling at friends and foes alike defned the Trump administration’s approach to trade policy, not unlike in many other policy felds. It also demonstrated Donald Trump’s preference for bilateral agreements, the most prominent of which was the so-called Phase One deal with China. Trade policy was a defnite pri- ority for the Trump administration, but it took some self-contradictory forms. Often Trump wanted to wreak havoc for its own sake, which both held back part of his “negative agenda”, such as confronting Chi- na, and the “positive” one of bilateral mini deals, as in the late 2020 trade-smoothing with Brazil. By contrast, trade has not been a priority for either the Biden administration or the 117th Congress thus far.2 Tere is little sign that President Biden would ei- ther immediately roll back Trump-era tarifs and re- classifcations – much less sanctions – or initiate his own positive trade agenda. Tis lack of initiative stands in contrast to rapid executive action on climate, Cov- id-19, US manufacturing and other policy priorities. Congress, too, has been conspicuously silent on trade. With organized labour a resurgent force within Dem- ocratic Party politics, any talk of new trade deals over assistance for the deindustrialized homeland will face some headwind. Te silence around trade suggests that while Biden will attempt to smooth over the worst rows over com- merce, the easiest course for his administration is, by and large, to underwrite a policy shift on trade. Te rest of the world must come to terms with this change, but also formulate cogent responses to it. Te stakes are high because a functioning and fex- ible trading system is essential for tackling the great- est challenges of our time, including the fght against climate change and the production of vaccines against COVID-19. Instead of turning against internation- al cooperation, these and many other priorities need to be integrated into the global trading system. First and foremost, the world needs a proudly pragmatic approach, in place of a “summit for democracy” or any such high-minded initiative which runs the risk of preventing partnerships and ringing hollow. An al- liance of democracies may be the outcome of cooper- ation but should not be positioned as its prerequisite. At the end of World War I, the United States fa- thered the Covenant of the League of Nations but rejected it at birth; Washington withheld its rec- ognition of the child, never joining the League. The United States received a second chance at the end of the World War, founding the United Nations and the Bretton Woods institutions, and a third one at the end of the Cold War when the World Trade Organization came to supersede the General Agreement on Tarifs and Trade (GATT). Now, America is edging closer to rejection, again. Te main argument of this Briefng Paper is that not only has US governmental policy on trade shifted, but also that the environment in which it is developed has altered radically – not least due to US policy itself. Tis means that, one, rules-based trading will need new champions and, two, others must coax the United States to come along when they can fnd shared rea- sons for doing so. The paper looks at both the worlds that the US chose to mould and the ones that it rejected: the US- MCA and the TPP. It also asks how Europeans might orient themselves in the direction of the United States, examines what trade without deals may mean and, f- nally, situates current policy in the longer trajectory of the US role on trade.
Topic:
International Trade and Finance, Trade Wars, Trans-Pacific Partnership, and USMCA
Political Geography:
North America and United States of America

31. Africa Megatrends: Looking over the Horizon into the Future

Author:
Olli Ruohomäki
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Africa is an enormous continent composed of several regions and 54 states, populated with more than 1.3 bil- lion people. Tere are more than 1,500 languages and diverse cultures. Both low-income and high-income countries and disparate levels of development are found on the continent. There is both concern and hope in the air regard- ing the trajectory that Africa’s development will take. Dwelling solely on negative news about confict, polit- ical turmoil, hunger and refugees is not constructive. Neither is seeing Africa through ‘rose-tinted glasses’ as a continent full of promise for trade and investment prospects. Rather, a balanced and realistic vision that looks over the horizon into the future is required. Talking about the diverse and vast continent as a whole is fraught with potential accusations of sweeping generalizations and even arrogance. Nonetheless, this is exactly what the business of forecasting is all about. To put it another way, predicting the future is essentially about painting the canvas with broad strokes and seeing the big picture. It is then up to area studies, sociology, anthropology, political science and similar disciplines to dwell on the more nuanced and detailed case studies. Hence, despite the complexity that forecasting the future of Africa entails, it is possible to outline the main contours of the trajectory of change that in- forms the course of developments on the continent.1 It is with this in mind that this Briefng Paper exam- ines seven megatrends that are shaping the future of Africa
Topic:
Climate Change, Democratization, Environment, International Trade and Finance, Regional Cooperation, Urbanization, Conflict, Regionalism, and Population Growth
Political Geography:
Africa

32. Illicit Cigarette Consumption in Mexico

Author:
Oxford Economics
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Oxford Economics
Abstract:
This research seeks to quantify the size and scale of the illicit consumption of cigarettes in Mexico, as well as the impact on government revenues, and how this has changed in recent years. This study shows that: In the first half of 2021, an estimated 18.8% of all cigarettes consumed in Mexico were of illicit origin. In volume terms, this was more than 38% higher than the same period in 2019 (pre-Covid level). The rise in Illicit Consumption has been driven by an increased presence of cigarettes without the SAT’s security code – particularly the brands ‘Economicos’ and ‘Link’ – with Domestic Illicit now accounting for around two thirds of total Illicit Consumption in Mexico (up from 50% in 2019). Non Domestic Illicit consumption – primarily consisting of cigarettes originating from China – has been relatively stable over the last few years. Foregone Excise Tax receipts amounted to an estimated 19.4% of total potential Excise Tax revenues in 2021 H1.
Topic:
International Trade and Finance, Tax Systems, Illegal Trade, and Consumption
Political Geography:
North America and Mexico

33. China and the Persian Gulf in the Aftermath of a U.S. Withdrawal

Author:
Steven Simon
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Quincy Institute for Responsible Statecraft
Abstract:
• Given longstanding U.S. economic ties to the Arab Gulf states, the withdrawal of the U.S. military would not mean the United States is departing from the region. Even if it did signify that, however, China would be unlikely to fill the vacuum. A U.S. decision to maintain a military presence in the region should therefore not be based on fear of a strategic vacuum that China will fill to America’s disadvantage. • The United States should leverage China’s interest in stable cross–Gulf relations by working in tandem with Beijing to encourage dialogue and confidence-building measures. • The United States should monitor Chinese military deployments to the Indian Ocean and work with Gulf partners to set limits on China’s military use of air and naval bases. This would serve as a confidence-building measure and ensure that the Gulf does not become an arena for competition amid heightened Sino–American tensions.
Topic:
Foreign Policy, International Trade and Finance, Military Affairs, and Strategic Engagement
Political Geography:
China, Middle East, Persian Gulf, and United States of America

34. The Good, the Bad and the Ugly: Taking Stock of Europe’s New Trade Policy Strategy

Author:
Fredrik Erixon
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief takes stock of the EU Trade Policy Review – the Commission’s proposed strategy for trade. Despite appearances, the Review doesn’t come close to its billing as a strategy for the new geopolitics of trade. In fact, the Review is weak on key geopolitical developments and rather gives the impression that the EU doesn’t have an ambition to shape outcomes. Obviously, the Review is anchored in Europe’s general economic climate: defensiveness on globalization, competition and digitalization. It follows that Europe is getting increasingly detached from world developments. There are several good parts in the Review. The Commission wants to revive and reform the World Trade Organisation, and it’s clear about what factors that have made the Geneva-based trade body dysfunctional. The Review also acknowledges that the EU will seek a closer alliance with the United States and use that for constructive purposes. Finally, it is welcome that the Commission proposes some new instruments for dealing with market distortions caused by foreign subsidies and protectionism in government procurement. All these initiatives can achieve good outcomes. However, they all require that Europe makes changes in its own policies and positions. The bad parts in the Review are Europe’s weak agenda for getting better market access in the growth regions in the world and its continued passivity on matters related to China. Europe’s main trade-policy challenge in the next decade is to ensure that businesses and consumers in Europe get better integrated with a world-market dynamism that predominantly will come from the Asian region. Absent a realistic and medium-term strategy for dealing with challenges connected to the rise of China, Europe will have difficulties getting the EU-China Comprehensive Agreement on Investment approved. Europe needs an actionable agenda for addressing bilateral frictions with China and problems that occur outside bilateral trade. Finally, the ugly part of the trade strategy are all the commercial policies in the EU – with strong effects on trade – that aren’t recognized or only casually mentioned in the Review. The latter category includes the ambition to introduce an autonomous carbon border tax on imports. Such a policy comes at a high political and economic cost, and the measure’s effect on reducing global carbon emissions is at best very negligible.
Topic:
Globalization, International Political Economy, International Trade and Finance, Treaties and Agreements, European Union, Geopolitics, Digital Economy, and Trade
Political Geography:
Europe

35. Global Trade Today is Global Value Chains

Author:
David Henig
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
In the last 25 years global value chains have come to dominate global trade in a way surprisingly little discussed or understood. To meet the policy challenges of today and the future we need to understand the key characteristics of this new global trade and how they came about. The OECD estimate around 70% of total trade takes place in global value chains. Using their definition as where “the different stages of the production process are located across different countries”, and considering both goods and services inputs, this may be an understatement. The example most commonly used is the automotive sector, with 30,000 parts and associated services like satellite navigation going into one car. However there are many others. Modern primary commodity production is optimised by technology developed in other countries, diverse services and goods are frequently combined to create new product offerings, and most international business to consumer transactions are facilitated by leading global platforms. Positively this new globalization has provided consumers with an unprecedented choice of products at affordable prices. More challengingly it has seen governments struggle with the question of how they can best influence modern trade, amid signs of a backlash and simple demands for ‘more domestic manufacturing’. The popular global narrative that feeds such demands is one that has a traditional view of trade as a set of simple primary or manufactured goods transactions. Policymakers must move on from this narrative, making their choices, and explaining them clearly, on the basis of global value chains.
Topic:
International Political Economy, International Trade and Finance, Trade, and Global Value Chains
Political Geography:
Global Focus

36. Economic crisis in the Middle East and North Africa

Author:
Marek Dabrowski and Marta Dominguez-Jimenez
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
In the 2010s, the economic situation in the Middle East and North Africa (MENA) deteriorated as a result of lower oil and other commodity prices, a new round of domestic political instability, continuous intra-regional conflicts, stalled economic and governance reforms and, finally, the COVID-19 pandemic. The growth of real GDP, which slowed after the global financial crisis of 2008-2009, further decelerated in the second half of the 2010s and became negative in 2020 as result of the COVID-19 shock. Fiscal balances have deteriorated, even in the oil-exporting countries, and public debt has grown rapidly. MENA countries continue to face numerous long-term socio-economic and institutional challenges including high unemployment (especially youth unemployment), low female labour-market participation rates, the poor quality of education, costly and ineffective public sectors, high military and security spending, high energy subsidies and trade protectionism. Only comprehensive long-term reform programmes can address these challenges. The European Union is MENA’s second largest trading partner after the region itself, and is one of two main sources of foreign direct investment and a major aid donor. However, given the critical importance of the MENA region to its own security and stability, the EU’s engagement in conflict resolution and in supporting economic and political transformation of the region is insufficient and should be intensified. The EU should also update and upgrade its existing association agreements with the countries of the Southern and Eastern Mediterranean, including their free trade provisions.
Topic:
International Trade and Finance, Governance, European Union, Trade, COVID-19, and Economic Crisis
Political Geography:
Europe, Middle East, and North Africa

37. New York City: Rebuilding a Future-Focused Economy

Author:
Committee for Economic Development of the Conference Board
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
Major shifts are expected in how New Yorkers work in the postpandemic economy—remotely or in the office. But the COVID-19 pandemic has also dramatically accelerated a shift in the sectoral landscape of New York City and the industries in which New Yorkers will work. Restoring the city’s economic dynamism and creating a postpandemic, locally prosperous, and globally competitive economy will hinge on leveraging the city’s growth sectors and ensuring that New Yorkers have the skills they need to rebuild a thriving, future-focused NYC economy. The city lost almost 900,000 jobs during the initial months of the pandemic and had recovered just over half of those jobs by June 2021. Many of these job losses are in sectors that had seen relative weakness prior to the pandemic, including the city’s historically important finance & insurance and real estate sectors. The recovery in NYC has so far been an unbalanced one, lagging behind other major US city centers. Much of NYC’s ongoing economic recovery has been concentrated in health care, life sciences, and the growing tech industry, sectors that were strengthening prior to the pandemic. Indeed, tech jobs were already driving much of the employment growth in NYC before the pandemic. And while office and residential buildings emptied out during the crisis, Big Tech companies—including Amazon, Apple, Facebook, and Google—have increasingly moved in, expanding their office and warehouse spaces and accelerating hiring.
Topic:
International Trade and Finance, Finance, Economy, and COVID-19
Political Geography:
New York, North America, and United States of America

38. The Impact of Unilateral Trade Policy on International Trade Structure

Author:
Moonhee Cho
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Uncertainty grows with the diffusion of unilateral trade policies. In particular, the average value of the World Uncertainty Index increased by four to fivefold compared to 1990. Recently, unilateral trade policies are spreading internationally. Non-tariff measures including anti-dumping, countervailing measures, SPS and TBT are increasing. Moreover, both developing and developed countries are adopting trade-disruptive measures and these are rapidly increasing. This report analyzes the widespread diffusion of unilateral trade policies and changes in trade structures.
Topic:
International Trade and Finance, Trade Policy, and Unilateralism
Political Geography:
Global Focus

39. The Impact of Intellectual Property Protection through FTA on International Trade

Author:
Hyunsoo Kim, Sangjun Yea, Hyeyoon Keum, and Min Ji Kang
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The importance of intellectual property rights (IPRs) for innovation has grown and the protection of intellectual property in international trade has also been strengthened. AI-related patent applications have been increasing rapidly and many AI patents are being filed in various industries. Intellectual property also represents one of the main controversies of U.S.-China trade relations in the past three decades and remains one of the core issues behind the two countries’ recent trade conflicts. As a result, global protection for IPRs has been expanded in recent decades. This article investigates changes in the trend regarding the IP protection level in FTA and how the IP protection through FTAs has affected the composition of aggregate trade flows of member countries in order to provide basic findings necessary to formulate the FTA policies regarding the protection of IPRs in Korea.
Topic:
International Trade and Finance, Intellectual Property/Copyright, Economy, and Artificial Intelligence
Political Geography:
China, South Korea, and United States of America

40. The Crisis of the WTO and New Direction for Negotiation Strategies of Korea

Author:
Jin Kyo Suh, Cheon-Kee Lee, Jukwan Lee, Ji Hyeon Kim, and Myeonghwa Jung
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The WTO is facing a historical crisis. Its main functions ‒ namely, providing a negotiating forum, administrating WTO trade agreements and monitoring national trade policies, and resolving trade disputes ‒ have been significantly paralyzed. Although the cause of the crisis is partly institutional, higher uncertainty is also a considerable problem aggravating the fate of the multilateral trading system. Such uncertainty comes from two factors: rising protectionism, and trade frictions between developed and developing countries including those between the United States and China. Meanwhile, the WTO also needs to respond to rapid structural changes in global trade. The center of the world’s trade is shifting towards trade in services. The development and spread of information and communication technology (ICT) are making it easier to supply services across borders. The regionalization or localization of global value chains (GVCs) continues and GVCs are shifting towards knowledge-based goods. Therefore, the WTO faces a historical challenge it is highly unlikely to survive without proper reflection on the new trends of global trade. With Korea no longer claiming for preferential treatments as a developing country, it could take relatively firm negotiating positions at the WTO concerning market expansion and improved access towards foreign markets. Moreover, Korea could contribute as a mediator to speak for balancing the interests of both developed and developing countries on conflicting issues, such as the developing country status. Korea also needs to establish a more precise give-and-take negotiation strategy in future WTO negotiations on agriculture, non-agriculture, and service sectors to maximize its national interests. In particular, Korea should put stress on services and TRIPs negotiations to ensure its international competitiveness on those sectors. Trade in services and IP will dominate trade in goods. Korea also should focus on how to raise the efficiency and stability of the East-Asian regional value chains by strengthening its co-operation with China, Japan, and Southeast Asia. At the same time, Korea needs to consider ways to become the bridgehead connecting East Asia’s value chains to either North America’s value chains or the EU’s value chains utilizing given FTAs with those economies. Finally, Korea should prepare for the emergence of various forms of plurilateral negotiations and where appropriate, take lead and reflect its national interests on the final outcome.
Topic:
Development, International Trade and Finance, Negotiation, Trade Policy, and WTO
Political Geography:
South Korea