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Begin New Search Topic International Trade and Finance Content Type Special Report Publication Year within 10 Years

1. China/United States: Europe off Balance

Author:
Thomas Gomart and Marc Hecker
Publication Date:
04-2023
Content Type:
Special Report
Institution:
Institut français des relations internationales (IFRI)
Abstract:
As French President Emmanuel Macron (accompanied by Ursula von der Leyen) is on a state visit to China, some twenty Ifri researchers decipher the stakes of the U.S./China/Europe strategic triangle. This 16-text study follows Olaf Scholz’s visit to Beijing (November 2022) and precedes that of Emmanuel Macron (April 2023). It comes especially one year after the beginning of a geopolitical and geoeconomic shock of a rare magnitude: the invasion of Ukraine by Russia. The War in Ukraine or the Return of Bloc Geopolitics? The war in Ukraine has broken ties between the European Union (EU) and Russia for the foreseeable future, particularly in the field of energy, though not without consequences in the Middle East, Africa, and the Indo-Pacific. Furthermore, this war has become the main show of active indirect confrontation between the United States—which has provided military support to Ukrainians, with help from its European allies—and China, which has supported Russia politically and economically. In February 2022, Moscow and Beijing declared their “no limits friendship”; in March 2023, Xi Jinping offered his personal support to Vladimir Putin after the International Criminal Court issued a warrant for his arrest. In its position on the political settlement of the Ukraine crisis, presented in February 2023, China stated: “All parties should oppose the pursuit of one’s own security at the cost of others’ security, prevent bloc confrontation, and work together for peace and stability on the Eurasian Continent”. China is no more of a mediator than the United States: it would be unrealistic to believe so. We appear to be witnessing a return of bloc geopolitics, albeit in a starkly different context than that of the Cold War (1947-1991). Globalization has produced strong economic and technological interdependencies that make any prospect of decoupling very costly, if not impossible. Economic partners are no longer necessarily military allies, and vice versa. In other words, a gap is opening up between geopolitical perceptions and geoeconomic realities. The term “decoupling” is popular in the United States, though much less so elsewhere. The rejection of bloc geopolitics is particularly acute outside of the West, where a “pragmatic” approach to foreign policy is often promoted. The Saudi foreign minister summed this up during the World Policy Conference in December 2022: “Polarization is the last thing we need right now. […] We need to build bridges, strengthen connections, and find areas of cooperation”. A few months later, China pulled off an extraordinary diplomatic coup by brokering a deal to restore relations between Riyadh and Tehran. For the EU, the situation is particularly delicate: Europe is in the Western camp, but a severing of ties with Beijing would cause a crushing economic blow. In 2022, China accounted for more than 20% of the EU’s imports, while the United States accounted for around 12%. By 2030, the EU’s GDP is expected to rise to $20.5 trillion, compared to $30.5 trillion for the United States and $33.7 trillion for China. In January 2023, the President of the European Commission declared at Davos: “We still need to work and trade with China, especially when it comes to this transition. So, we need to refocus our approach on de-risking, rather than decoupling”. For its part, Beijing has encouraged European aspirations of “strategic autonomy”, understood in China as a form of detachment from the United States. At the same time, the EU is constantly strengthening its military, technological, financial and energy ties with the U.S. This collective study notes a hypothetical search for balance on the part of the Europeans, faced with a war on their territory (the Western peninsula of the heartland), who cannot escape Sino-American mechanisms, and who do not form a monolithic whole. It also analyzes the strategy of several important actors outside our continent, and shows that, from Ukraine to Taiwan, via Africa and the Middle East, Europeans have little room for maneuver. This is why the study proposes recommendations to try, at a crucial moment, to reinforce their positioning.
Topic:
Foreign Policy, Climate Change, International Trade and Finance, Science and Technology, European Union, and Industry
Political Geography:
China, Europe, and United States of America

2. Trade Balances and International Competitiveness in Cyber-physical, Digital Task-intensive, ICT Capital-intensive and Traditional Industries

Author:
Alexandra Bykova and Roman Stöllinger
Publication Date:
05-2023
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
In this report, we analyse the international competitiveness of the EU in four industry groups over the period 1995-2018. The groups are delineated by specific factor intensities, where these intensities are assessed from digital tasks performed by labour services and ICT capital stocks. The EU’s positions relating to trade balances, revealed comparative advantages and unit value ratios are assessed relative to its main competitors, such as the US, China, Japan and South Korea. The trade specialisation patterns confirm EU advantages in traditional industries, which still represent the largest part of global trade, and in the group of digital task-intensive industries. In the cyber-physical group of industries, which are characterised by both high digital task and ICT capital intensities, the EU records a trade deficit, although this has been receding in recent years. Competitiveness indicators depict heterogeneity among EU countries. The loss of international competitiveness for some technology front-runners is a worrying sign. On the positive side, however, a reduction in trade deficits or an improvement in product quality and market shares is evident for certain EU countries, especially in the Central European region.
Topic:
International Trade and Finance, European Union, Trade, Digitalization, and International Competition
Political Geography:
Japan, China, Europe, Asia, South Korea, and United States of America

3. Rewriting the Future of America’s Maritime Industry to Compete with China

Author:
Michael Roberts
Publication Date:
10-2023
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
For decades, companies outside the United States have dominated the international commercial shipping and shipbuilding industries. At various times since World War II, Japan, Korea, and certain European countries have been able to leverage their export-driven manufacturing economies and government support to become world leaders in commercial shipbuilding and major players in international shipping. The People’s Republic of China (PRC) has taken that strategy to a new level and now produces more than half the large commercial ships delivered annually, controls scores of seaports in dozens of foreign countries, and owns almost one-fifth of the global commercial fleet. American commercial shipbuilders and US flag shipping companies have long faced fierce headwinds in international markets and have seen support from the US government dwindle. The US reset its maritime policies in the 1990s when America was the sole superpower and the security benefits of a robust commercial maritime industry were in doubt. By the end of 2022, Americans owned only 3 percent of the 55,000 ships in the global commercial fleet, including just 178 large US flag cargo ships, 85 of which are committed to international trade (see tables 1 and 2 below for a breakdown of US and global commercial fleets). The emergence of the PRC as a challenger to America’s global leadership has forced sweeping changes in US policy and spending priorities to boost America’s economic and military security. This report recommends that the US reform its policies governing America’s commercial maritime industries because shipping and shipbuilding are core components of national power. These industries remain especially crucial in the twenty-first century, as international trade is more important to a healthy American economy today than ever before. Yet Americans have almost no control over the maritime logistics systems that feed the US economy. The pandemic-induced supply chain crisis showed how much damage can be done when those systems break down.
Topic:
International Trade and Finance, National Security, Maritime, Industry, Domestic Policy, and Supply Chains
Political Geography:
China, Asia, North America, and United States of America

4. EU-Pacific Talks: Trade relations with the Indo-Pacific

Author:
Eliška Prostřední
Publication Date:
04-2023
Content Type:
Special Report
Institution:
Europeum Institute for European Policy
Abstract:
Overall, the debate focused on the diversification of global trading partners and how to achieve it. Speakers also discussed the threats associated with dependence on only a few strong countries, which can then take the position of rule makers. The whole debate was linked to the possibilities of global trade with countries that are part of the Indo-Pacific region. Writes Eliska Prostřední in her report on the debate "EU-Pacific Talks: Trade relations with the Indo-Pacific".
Topic:
International Trade and Finance, Partnerships, Diversification, Trade, Debates, and Economic Dependence
Political Geography:
Europe and Indo-Pacific

5. International Practice of Sanction Evasion and Circumvention Possibilities for Russia

Author:
Davit Shatakishvili
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Georgian Foundation for Strategic International Studies -GFSIS
Abstract:
Sanctions play a special role in the economic and political life of the world. Historically, despite their various forms of use, sanctions have acquired an essentially functional substance in the 20th century. The goal of the sanctions is primarily to ensure global peace. In case of violation of market principles, military aggression, or disregard for the rules established between nations, the violator is sanctioned by specific countries and/or groups of states, who, in doing so, aim to bring it back to the norms of international law. Sanctions increase political and economic pressure on the target country, which are reflected in various dimensions and quantitative figures. Consequently, the country loses some of its political leverage and experiences tangible economic regress. For the sake of universal peace and global security, the policy of sanctions has not lost its relevance in the 21st century. As a result of Russia’s aggressive military intervention in Ukraine, the world community has applied an unprecedented package of sanctions against the aggressor, which has spread to almost every industry of the country and is still being added to. In this regard, Russia broke the anti-record and surpassed countries such as North Korea, Iran, Syria, and Venezuela. Over the decades, sanctioned countries have accumulated extensive experience on how to circumvent the imposed sanctions, so as to at least partially help the country overcome the economic difficulties. It is interesting which ways and schemes such countries use to circumvent the restrictions, and based on that experience, what opportunities there are for the Russian Federation to do the same and evade the sanctions imposed on it, a move which will not only limit but also further pave the way for its aggressive foreign policy and threaten world peace.
Topic:
Security, Foreign Policy, International Trade and Finance, Oil, Sanctions, Global Markets, Cryptocurrencies, and Russia-Ukraine War
Political Geography:
Russia and Eurasia

6. Functional Specialisation in EU Value Chains: Methods for Identifying EU Countries’ Roles in International Production Networks

Author:
Aleksandra Kordalska, Magdalena Olczyk, Roman Stöllinger, and Zuzana Zavarská
Publication Date:
08-2022
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Geographically dispersed production networks have allowed countries to specialise in different functions of the value chain. By making use of two methodologies for quantifying the magnitude of functional specialisation – one based on trade flows and one based on FDI flows – detailed profiles of the functional specialisations of EU member states are identified. The analyses are conducted at the country, industry and regional level. In line with the existing literature, they reveal that EU-CEE countries are predominantly specialised in the fabrication stage, that is, they serve as ‘factory economies’, while the Western EU countries are mainly performing knowledge-intensive pre-fabrication activities – a characteristic of ‘headquarter economies’. This dualism within the EU is confirmed by a cluster analysis. While functional specialisation patterns tend to be persistent, especially in the fabrication stage, there are also some signs of functional diversification in EU-CEE countries in more recent years. Still, these functional changes remain limited to a few industries. The dichotomy of factory and headquarter economies is also clearly discernible at the regional level. However, the fact that in most EU countries – mainly in the capital regions – there are some headquarter-type regions implies that a complete functional ‘lock-in’ in fabrication is less likely than suggested by the country-level patterns. Hence, while the results point towards major difficulties of functional diversification beyond the fabrication stage in the EU-CEE countries and regions, there are also several promising elements and trends discernible, in particular at the industry and the regional level.
Topic:
International Trade and Finance, European Union, Economy, Value Chains, Specialization, and Competition
Political Geography:
Europe

7. U.S. Strategy: Rebalancing Global Energy between Europe, Russia, and Asia and U.S. Security Policy in the Middle East and the Gulf

Author:
Anthony H. Cordesman
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
The war in Ukraine has already shown how dangerous it is for the U.S. to assume that it can rebalance its forces to one region and count on a lasting peace or detente in others. It now is all too clear that U.S. strategy must continue to focus on Europe as well as China. What is less clear is the extent to which the Ukraine War is an equal warning that the U.S. must have a truly global strategy – and one that continues to focus on other critical regions like the Middle East. The sudden escalation of the Ukraine crisis into a major regional conflict and the need for political and diplomatic support in the UN as well as for sanctions are warnings that much of the U.S. success in deterrence and defense lies in creating long-term global diplomatic and political support as well as true and lasting strategic partnerships.
Topic:
Security, Energy Policy, International Trade and Finance, Hegemony, and Strategic Interests
Political Geography:
Russia, Europe, Middle East, Asia, North America, and United States of America

8. The Indo-Pacific Economic Framework and Digital Trade in Southeast Asia

Author:
Andreyka Natalegawa and Gregory B. Poling
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
In October 2021, the Biden administration announced the development of an Indo-Pacific Economic Framework (IPEF) with partner nations to “define our shared objectives around trade facilitation, standards for the digital economy and technology, supply chain resiliency, decarbonization and clean energy, infrastructure, worker standards, and other areas of shared interest.” Details on the framework are still being worked out, but it now seems that those six areas of focus have been distilled into four negotiating “pillars.” Deputy U.S. Trade Representative Sarah Bianchi said in early February that these would include “fair and resilient trade, supply chain resilience, infrastructure and decarbonization, and tax and anticorruption.” The Office of the U.S. Trade Representative (USTR) will likely lead negotiations on the first, while it appears that the Commerce Department will take the lead on the other three. The details of each pillar will be worked out in the months ahead, but the Biden administration is certain to face challenges and trade-offs across each, given the diversity of economies and political constraints across the region. USTR has said the trade pillar will be “high-ambition” and include binding commitments. But this will be complicated by the fact that the administration plans to roll out the IPEF through executive action rather than as a traditional trade deal requiring congressional approval. This pathway will help the framework sidestep political obstacles that agreements like the Trans-Pacific Partnership faced before Congress, but it also means that the administration cannot offer increased market access or any other concessions that would require changes to U.S. law. Moreover, moving forward with the IPEF through executive action has led to concerns among partners that the framework could be vulnerable to U.S. domestic politics or that a future administration may well roll back or abandon the framework. Given these self-imposed constraints, the administration will face headwinds trying to convince countries to sign on to high-standard provisions on digital trade, labor, and environmental standards that might run counter to their perceived short-term political or economic interests. One possible solution would have been to make the involvement in the other three pillars, where there are likely to be more tangible benefits for other countries, contingent on an agreement in the trade pillar. But that would run counter to the desire to get as many countries on board as possible. So, the administration has instead indicated that countries will be invited to engage in each pillar a la carte. And while like-mindedness in and of itself does not immediately guarantee their support for the IPEF, the likely result is that only Japan, Australia, New Zealand, Singapore, and perhaps South Korea—the most developed economies which already share U.S. standards on digital trade, environment, and labor—will engage with USTR on the trade pillar. But a wider array of economies will likely join the talks with the Commerce Department on the other three.
Topic:
Economics, International Trade and Finance, Digital Economy, and Economic Cooperation
Political Geography:
Asia, Southeast Asia, and Indo-Pacific

9. Securing Medical Supply Chains with Trusted Trade Partners

Author:
Meredith Broadbent
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
There is bipartisan consensus on Capitol Hill and in the Biden administration regarding excessive dependence on Chinese manufacturing and production. An extension of this is that diversification of supply chains for certain medical products will make U.S. citizens more secure in fighting future infectious diseases. The highly disrupted international economic environment, reeling from supply and demand dislocations unleashed by the pandemic, U.S.-China trade conflicts, and war in Eastern Europe, is prompting certain countries in the Western Hemisphere to seize the occasion to aggressively market themselves as attractive hosts for foreign direct investment looking to move closer to the U.S. market. It is an opportune time for the United States to shape some of the larger forces of global economic disruption, including the movement of investment and production capital. It is time to forge enhanced trade links and diversified supply chains with friends and allies to promote health security, stronger economic and diplomatic engagement, commitments to exchange of data on production, and best practices in fighting disease. This paper breaks down CSIS’s analyses on the capacity for nearshoring in Canada, Brazil, Colombia, and Mexico.
Topic:
International Trade and Finance, Manufacturing, Medicine, and Supply Chains
Political Geography:
North America and United States of America

10. Multilateral Trade Arrangements and Climate Provisions

Author:
Emily Benson, Sparsha Janardhan, and William Alan Reinsch
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
This new paper from the CSIS Scholl Chair in International Business assesses sectoral standards bodies, evaluates environmental provisions in trade agreements, and explores opportunities for addressing climate concerns in newer trade arrangements, such as the recent announcement to negotiate a deal on green steel and aluminum between the European Union and the United States. As this paper seeks to demonstrate, binding agreements with clear enforcement mechanisms are best suited for ensuring that parties meet their climate change obligations as outlined in various bilateral or multilateral agreements. Since concluding agreements that are both binding and have clear enforcement capabilities are not always possible or politically desirable, pursuing a mixed approach—one based on best practices from a diverse set of trade architectures—may be the most viable approach that produces the most tangible outcomes. This paper evaluates climate provisions in trade architectures and makes recommendations for including climate provisions, including sectoral standards, in trade arrangements in a way that encourages increased multilateral collaboration in a WTO-compliant manner.
Topic:
Climate Change, International Cooperation, International Trade and Finance, and Multilateralism
Political Geography:
Global Focus