Trade Around the World

By: Madelyn Cunningham

The concluding panel of the 2020 Washington International Trade Conference was “Trade Around the World,” a discussion featuring ambassadors H.E. Fitsum Arega, Ambassador of Ethiopia, H.E. Rosemary Banks, Ambassador of New Zealand, H.E. Stavros Lambrinidis, Ambassador of the European Union, and H.E. Ashok Kumar Mirpuri, Ambassador of Singapore. Laura Lane, President of Global Affairs for UPS, moderated the discussion through trade relations and FDI between their countries and the United States and the dissolution of the Appellate Body in the WTO.

Laura Lane opened the panel by discussing the relationship between Singapore and the United States, asking Ambassador Mirpuri to talk about this partnership and possible trade interests of Singapore in the future. Ambassador Mirpuri starts by stating the growing importance of trade in the political sphere, acknowledging that while the audience may have some familiarity with Singapore whether that be through business or the trade relationship with the United States, Singapore is a hyper-globalized country driven by trade.

Trade drives the Singaporean economy, but H.E. Mirpuri brought up the new challenges regarding issues of trade and expressed the need to identify where global trade will be going because of geopolitical conflict, recent anti-globalization and protectionist efforts, and the fourth wave of industrialization. To address these issues and changes, Mirpuri expressed that through the U.S. – Singapore trade relationship, Singapore has shifted its mindset towards future problems and adjusting in this age of digitization and global changes.

Ambassador Mirpuri stressed the need for a rules-based system in the WTO, explaining that for small countries especially, there must be an established system of rules and operations in order for the world dispute settlement process to be fully functioning. To account for the current instability in the WTO and the changing trade atmosphere with digitization, Ambassador Mirpuri identified how Singapore has been adapting.

Mirpuri stated that last month, partnered with New Zealand and Chile, Singapore concluded the Digital Economic Partnership Agreement (DEPA), and hopes agreement will act as a “pathfinder” for e-commerce. Another significant change was the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is currently going through the ratification process.

Moderator Lane then shifted the conversation to bring in New Zealand Ambassador, H.E. Rosemary Banks, asking where she saw the U.S. – New Zealand relationship currently, and the issues on New Zealand’s trade agenda. Ambassador Banks brought up research recently done on the relationship between New Zealand and the United States, which concluded that the first time the country asked for a reciprocal trade agreement with the U.S. was in 1939. She stated that while trade relationships can take a long time, 80 years is a little excessive.

Ambassador Banks then brought up the direction of New Zealand trade policy, she stated that over the last 25 years, there has been significant emphasis on negotiating comprehensive bilateral agreements, establishing relationships with Asian Pacific countries, and maintaining global influence through existing trade agreements. While this has worked in favor of New Zealand, there is worry over taking assumptions of the three-pronged system for granted and the response to encourage the “open-pluralism approach”. Banks called back to Zoellick’s point in his remarks regarding the gap in systems for the process of creating new laws and rules.

Ambassador Banks expressed New Zealand’s excitement to head as the APEC Chair of 2021 in the form of a work program to be established this year, stating that there is a great need for multilateral trade relationships and a functioning and comprehensive dispute settlement system for trade issues. Banks concluded by answering a question asked in Ambassador Zoellick’s session regarding the importance of international trade.

To this, she brought up the “Trade for All Initiative”, a country-wide exercise that involved a consultation to listen to the entire population about their vision for trade policy. Through this consultation, it was found that there is a great divide as to thoughts on current New Zealand trade policy and whether or not it should be shifted in regard to the values of sustainability and equal economic empowerment.

Lane then brought Ambassador of Ethiopia, H.E. Fitsum Arega, into the conversation. With the recent push towards a multilateral trading system and the African Continental Free Trade Agreement (ACFTA), Lane asked how this would tie into a future trade relationship between the United States and Ethiopia.

Ambassador Arega responded with increasing public investment of the Ethiopian government, both social and economic, strengthening the education sector and industrial infrastructure of the country. There is a growing preparation for global trade agreements and relationships in Ethiopia, and Arega identified Africa as the next frontier for business investment and trade because of these changes both domestically and continentally.

In addition to domestic reform, Ambassador Arega stated that the newly elected prime minister, Abiy Ahmed, has made Ethiopian involvement in the World Trade Organization and global trade has a priority in recent years. Arega also identified the vast potential for a United States trade partnership with Ethiopia, as it builds its infrastructure, it has also been building an environmentally sustainable textile market. The African Continental Free Trade Agreement is also a turning point for the continent, Arega explained, allowing for greater opportunities for processing and attractive investment.

Lane turned to H.E. Stavros Lambrinidis, Ambassador of the European Union, she asked whether or not the optimism for a US-EU trade agreement and future policies is warranted. Ambassador Lambrinidis responded that there is good reason to believe in the negotiations of future policy. He stated that when talking about the relationship between the United States and European Union, the benefits of this relationship could demonstrate that free trade can work in a globalized system and not in a way that would isolate certain countries.

Ambassador Lambrinidis identified the single European market as the biggest deregulation experiment in the world, allowing for an open market without borders of the most profitable businesses globally. The key focus of negotiations of a free market should be on the future, and special attention should be placed on the functions of said market from the grassroots of the economy to measure its effectiveness.

Lambrinidis also stated that the success of the single market is also reliant on the European progressive, values-based system; as trade is not only about making money, but about assigning values. GSP+ agreements establish that in order to negotiate and maintain a relationship, countries must also ensure human rights and sustainability practices.

Ambassador Lambrinidis then brought up the need for an established, rules-based system in the WTO and broader world order, as it is not only important to small countries, but also to large markets. Lambrinidis expressed great disdain for unilateral efforts to “destroy” the WTO, and while it is not easy to reverse protectionist and mercantilist policies and economies, he argued that the WTO must become stronger in the face of these issues and enforcing these changes.

With the changing world order comes new standards according to Lambrinidis, and no matter where countries are in their development, he believed there should be no exceptions to the implementation of these standards.

To further this point, Lane asked the panel to expand on their thoughts on the need to strengthen international systems and reforming the dispute settlement system of the WTO into this decade. Ambassador Rosemary Banks started the discussion, she stated that the first challenge of reforming multilateral organizations is having absolute commitment from major players of said organization.

Lane then moved on to special treatment for developing nations, especially as China, while a trade “powerhouse”, still receives exceptions from the WTO due to its first introduction as a developing country. Ambassador Lambrinidis identified this fact as a significant area of the WTO in need of reform as well as transparency and the Appellate Body.

He then stated that the WTO will always be in danger of collapsing as long as countries believe they are powerful enough to perform unilaterally and outside of its systems. He argued that without a neutral referee or party prosiding, dispute settlement will never work multilaterally, no matter how developed a rules-based system may be. China must play a bigger role in demanding rights but also in accepting obligations, and must be on board with future reforms.

Featuring:

H.E. Fitsum Arega, Ambassador of Ethiopia to the United States 

H.E. Rosemary Banks, Ambassador of New Zealand to the United States

H.E. Stavros Lambrinidis, Ambassador of the European Union to the United States

H.E. Ashok Kumar Mirpuri, Ambassador of Singapore to the United States

Laura Lane, moderator, President, Global Public Affairs, UPS

To view more details about the event, visit the event page here.

The post WITC 2020: Trade Around the World – Ambassadors’ Roundtable appeared first on WITA.

Meet the [Trade] Press, Reporters Roundtable

By: Madelyn Cunningham

On February 4th, 2020, WITA hosted a panel discussion of trade reporters entitled, “Meet the [Trade] Press.” Similar to the press roundtable of the inaugural WITC last year, this panel allowed insight into the opinions of various reporters, from junior correspondents to senior editors. With trade on the forefront of global news, hearing from those who break the latest stories gave the audience a look into trade’s growing importance in the media. 

The reporters featured in the panel were Jenny Leonard, a trade reporter at Bloomberg News, David Lynch, a global economics correspondent at the Washington Post, James Politi, the World Trade Editor of the Financial Times, and Ana Swanson, a trade and economics correspondent at the New York Times. Moderating the discussion was Ambassador Susan Schwab, a strategic advisor at Mayer Brown LLP.

To begin the panel, Ambassador Schwab gave the roundtable context on the recent crisis of dispute settlement within the WTO, specifically on the provision Uruguay Round Agreement Act, that states that every five years, the United States Congress can vote by joint resolution to move the United States out of the WTO. While this matter has not been voted on since 2005, it still holds valuable insight into the political side of trade agreements. Schwab then goes on to ask the panel what they hear about the WTO on the Hill, and whether or not they think a joint resolution to vote will arise in Congress.

Ana Swanson responded by discussing the relevance of the WTO, as not only is there a general argument against its relevance in global politics, but it is more so being used as a political counter against the Trump administration over the need to fix its dispute settlement process. She stated that while there is a growing questioning of the WTO’s relevance, Director-General Roberto Azevêdo seems to be taking these criticisms seriously, and that the recent crises may be worked on in the future at the institutional level.

Moving on to whether or not Congress will take a vote, Swanson concluded that given the high margin of disapproval for the vote in 2005, and the continued non-voting trend throughout the rest of the decade, it would be difficult to pass in Congress.

Ambassador Susan Schwab went on to ask, in relation to the coronavirus and U.S.-China relations as a whole, what the timing prospects were for a Phase Two Deal and so on. David Lynch spoke on the Phase One Deal to introduce his response, as its implementation will most likely delay any further deals to follow it, as the Chinese government would rather first implement Phase One before any additional deals are mediated. Lynch predicted that the Phase Two deal will be something that develops next year, after the 2020 Presidential Election.

Jenny Leonard of Bloomberg News follows up on this point with her opinion as to the contents and timing of the Phase Two Deal, stating that even Phase One would be a win for the Trump administration. Thus, the Phase Two Deal may not necessarily be on the forefront of his trade agenda. 

James Politi argued that even with the trade deals with China, the tariffs will stay, as with the recent unfolding of the coronavirus and its effect on the Chinese economy, the need to implement Phase One has been lifted. Over the long-term however, if these purchases have not been followed through, the administration and the USTR will be put under a lot of pressure in the enforcement of the first deal, setting back Phase Two even further. To conclude, Politi emphasizes that the outcome of the implementation of Phase One and creation of future trade deals with China is still unclear, as is the perception of whether or not these deals were a win for the Trump administration.

The panel was skeptical of the implementation of Phase One before the presidential election later this year, as Trump’s trade promises have been kept and used on his campaign trail. Jenny Leonard followed with the skepticism that while the drafting of Phase Two is still in the air, so is the implementation of Phase One. 

In regard to working with our allies, Schwab asked James Politi about the prospects of the U.S. and the E.U. working together in the future. Politi responded that the trust between the U.S. and the E.U. has been broken down, so having one front against Chinese trade is very unlikely as the E.U. has felt fairly targeted in recent trade policy and tariff implementation. Politi argues that the E.U. would thus take a more “pragmatic” approach, instead of only aligning with the United States in trade policy, they would rather build a trade relationship with China.

David Lynch made the interesting point that the United States no longer shares the same values as the European Union, a statement contrary to popular and academic belief throughout history. He goes on to state that Trump has further diverged from the European Union going as far as to say that the institution is worse than China. 

James Politi follows up on the shift of the European Union, as the trilateral discussions were stalled due to misgivings and an overall lack of trust. He goes on to discuss the greater pressure on member states to enact deals with Trump with its growing isolation from world powers.

Ana Swanson states that while the U.S., Europe, and Japan may have a common interest in addressing unfair economic competition from China, there is also competition among those countries for the China market. Whether through multilateral export control or investment into Chinese services like Huawei, there is a lot of contradiction between this so called “common interest” and the actual actions of those countries.

Ambassador Susan Schwab summarizes the panelists’ prediction for future trade deals with China as a mini-deal being more likely than an actual Phase Two Deal, and even further more so than no deal at all, at least before the election. Schwab claimed that the general deadline for any other deal would be until July 1st, 2021, whether that be a follow up to Phase One, or a mini-deal with tariff proclamation authority.

Moving forward, Ambassador Schwab brings up the UK as a general talking point. James Politi discussed the implications of Brexit, as negotiations were supposed to be underway for a trade deal with the U.S., similar tensions between the U.S. and the E.U. have come up. As negotiations have not been started and there is no set launch date, so similarly to the pane’s prediction for further U.S. China deals, a mini-deal is more likely than one that is more comprehensive. Overall, U.K. trade deals will be “slow-rolling” post-Brexit.

In regard to trade deals from other countries, while the possibility of a trade deal with Japan and Vietnam received no comment, Ana Swanson touched on how a deal with India would most likely be a mini-deal, this deal still being one of the largest deals between the U.S. and India. She goes on to speak more broadly on mini-deals, there is no set motivation for the administration to return to more comprehensive trade deals, as not only is it a more streamlined process in avoiding a Congressional vote, but it makes no difference to the American public.

To get at trade policy and politics, Ambassador Schwab asked the panel to elaborate on trends of U.S. trade politics and the legacy of the Trump administration’s trade policy as it stands today. Jenny Leonard begins by claiming that “bashing” China works in favor of the administration and will be present in all administrations to come, no matter the party. 

David Lynch follows up on this by claiming the president “blew up” conversations that were previously sterile, this has resulted in a shake up of the current system. He claimed that these deals were made for President Trump to use in his campaign, but there will be various costs to this approach, such as irritating allies, economic inefficiency due to company cost, but they will eventually even out.

Ana Swanson then discusses the difference of the trade agenda a couple months ago versus today, with the December tariffs on China about to come into effect, an unclear timeline of trade deals like the USMCA and Phase One, however these issues were resolved within the past months. This difference in the trade climate has been translated into political victories, possibly even having long-lasting positive political implications. Swanson also brought up the point that the USMCA was a bipartisan effort, as the trade agreement brought in elements of the democratic and labor union platform.

Swanson questioned whether or not a Democratic president would be able to reach the populist Republicans to form a trade coalition in the future, but overall trade policy is shifting into a different, more bipartisan direction.

To conclude the discussion, Ambassador Schwab asked the panel where they individually got their news, especially in their interactions with various political institutions. While panelists said the various news sources represented in the room, interestingly enough twitter has also become a big outlet for news in recent years.

Featuring:

Jenny Leonard, Trade Reporter, Bloomberg News

David Lynch, Global Economics Correspondent, Washington Post

James Politi, World Trade Editor, Financial Times

Ana Swanson, Trade and Economics Correspondent, New York Times

Ambassador Susan Schwab, moderator, Strategic Advisor, Mayer Brown LLP

To view more details about the event, visit the event page here.

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