tag:theconversation.com,2011:/nz/topics/trade-deals-34326/articlesTrade deals – The Conversation2023-06-06T14:29:01Ztag:theconversation.com,2011:article/2069692023-06-06T14:29:01Z2023-06-06T14:29:01ZUK PM Sunak visits Washington to strengthen ties, watch baseball – having already struck out on trade deal<figure><img src="https://images.theconversation.com/files/530357/original/file-20230606-21-psgkb.jpg?ixlib=rb-1.1.0&rect=5%2C0%2C3820%2C1784&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">'I don't drink coffee, I take tea' -- the quintessential Englishman in, well, D.C.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-joe-biden-meets-with-britains-prime-minister-news-photo/1251744533?adppopup=true">Paul Faith/WPA Pool/Getty Images</a></span></figcaption></figure><p>Alongside <a href="https://www.reuters.com/world/uk/uks-sunak-says-he-wants-build-biden-ties-washington-trip-2023-06-03/">meetings with President Joe Biden</a>, U.S. business leaders and members of Congress, U.K. Prime Minister Rishi Sunak will <a href="https://www.ft.com/content/bac3258e-6051-4658-bdc4-8acfc9410242">take in a baseball game</a> during a Washington trip that starts June 7, 2023. He may be given the honor of <a href="https://www.thetimes.co.uk/article/rishi-sunaks-us-visit-baseball-biden-and-billions-in-investment-lcl8lcjzm">throwing out the first pitch</a>; many at home will be hoping he doesn’t drop the ball.</p>
<p>It is a high-stakes visit for Sunak, his first to Washington since becoming prime minister in October 2022. The British leader will be keen to <a href="https://finance.yahoo.com/news/biden-business-baseball-uk-pms-213136143.html">showcase his close relationship with Biden</a>. And he will want to underscore <a href="https://ecfr.eu/article/sanity-returns-to-british-foreign-policy/">his more stable and pragmatic foreign policy</a>, in contrast to his predecessors, <a href="https://theconversation.com/boris-johnsons-messy-political-legacy-of-lies-scandals-and-delivering-brexit-to-his-base-186601">Boris Johnson</a> and <a href="https://theconversation.com/uk-prime-minister-forced-from-office-amid-economic-turmoil-chaos-in-parliament-and-a-party-in-disarray-192795">Liz Truss</a>.</p>
<p>Yet Sunak, despite being prime minister for less than a year, is under great pressure. His party remains far <a href="https://www.ipsos.com/en-uk/uk-opinion-polls">behind in the polls</a>, less than 18 months before the next general election is held in the U.K. </p>
<p>He has little time to burnish his credentials as a leader, and Washington may not be the most fertile ground to do so. Bilateral relations between London and Washington have been <a href="https://www.ft.com/content/bac3258e-6051-4658-bdc4-8acfc9410242">thorny in recent years</a>, and three topics illustrate the challenges – and possible opportunities – ahead for Sunak: trade, Northern Ireland and security.</p>
<h2>The forgotten trade deal</h2>
<p>Sunak and Biden will have a busy agenda during talks due to take place in the Oval Office on June 8, but one topic will be conspicuously absent. As a <a href="https://www.bloomberg.com/news/articles/2023-05-30/uk-s-sunak-won-t-push-biden-for-trade-deal-on-us-visit-next-week#xj4y7vzkg">Downing Street spokesperson confirmed</a> prior to the trip: “We are not seeking to push a free trade agreement with the U.S. currently.” </p>
<p>This is in stark contrast to what Sunak’s Conservative Party manifesto had touted in the 2019 general election – the second to take place since a 2016 referendum upset the U.K.’s trading setup by triggering the country’s exit from the European Union.</p>
<p>The document promised that in a post-Brexit U.K., 80% of trade would be covered by <a href="https://www.politico.eu/article/uk-conservative-manifesto-explained/">free trade agreements within three years</a>.</p>
<p>Negotiations for a trade deal with the U.S. began in 2020 under the Trump administration, but made limited progress. The pandemic, and the question of access of U.S. agricultural goods to the U.K. market, <a href="https://www.ft.com/content/1fd173a6-8718-4798-b692-685801ec1604">further disrupted talks</a>. In particular, U.K. concerns about <a href="https://www.mercatus.org/research/policy-briefs/removing-barriers-us-uk-agricultural-trade">differing food standard practices in the U.S.</a>, such as chlorine-washed chicken or hormone-treated beef, complicated discussions.</p>
<p>Yet the broad <a href="https://www.americanprogress.org/article/a-new-horizon-in-u-s-trade-policy/">ideological shift in American attitudes toward trade</a> proved the main obstacle. Since taking office, the Biden administration has consistently expressed its skepticism of emulating past free-trade agreements. According to the administration, these deals have too often ended up <a href="https://www.nytimes.com/2023/04/03/us/politics/biden-free-trade.html">impoverishing American workers</a>, while enriching multinational firms. </p>
<p>That shift on trade policy is not limited to members of the administration. Both Democrats and Republicans, even if for different reasons, have become <a href="https://www.politico.com/news/2023/05/25/joe-bidens-economy-trade-china-00096781">more critical of unfettered globalization</a>.</p>
<figure class="align-center ">
<img alt="A man in a lifejacket stands on a boat in front of white cliffs" src="https://images.theconversation.com/files/530355/original/file-20230606-23-psgkb.jpg?ixlib=rb-1.1.0&rect=17%2C147%2C3912%2C2468&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/530355/original/file-20230606-23-psgkb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/530355/original/file-20230606-23-psgkb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/530355/original/file-20230606-23-psgkb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/530355/original/file-20230606-23-psgkb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/530355/original/file-20230606-23-psgkb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/530355/original/file-20230606-23-psgkb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Don’t expect the U.S. to throw a lifeline on trade any time soon.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BritainPolitics/52fef49e7bc546f4bcc3cbcd3a645ae6/photo?Query=Rishi%20sunak&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=3488&currentItemNo=6">Yui Mok/Pool Photo via AP</a></span>
</figcaption>
</figure>
<p>In lieu of any breakthrough on a trade deal between the two countries, the U.K. has been focusing efforts on <a href="https://www.gov.uk/government/news/trade-minister-in-us-to-sign-fourth-trade-pact-with-a-us-state">striking deals with individual U.S. states</a>. In particular, the U.K. government hopes Rishi’s visit can pave the way for closer partnerships with California and Texas.</p>
<p>But these will have only a modest impact at best, when the U.K. economy is forecast to <a href="https://www.politico.eu/article/uk-recession-economy-inflation-international-monetary-fund-growth-forecast/">grow by only 0.4% in 2023</a>.</p>
<h2>The shadow of Northern Ireland</h2>
<p>With trade unlikely to further cement U.S.-U.K. ties, Sunak will also have to navigate the divisive question of Northern Ireland. There is <a href="https://www.theguardian.com/us-news/2021/jun/10/why-joe-biden-is-so-invested-in-defending-good-friday-agreement">still strong bipartisan support in the U.S. for the 1998 Good Friday Agreement</a>, which ended 30 years of conflict in Northern Ireland. This reflects the historic role played by Democratic and Republican administrations <a href="https://theconversation.com/good-friday-agreement-how-the-us-came-to-be-a-key-broker-in-northern-irelands-peace-deal-202584">in helping to mediate and implement the accord</a>.</p>
<p>In that context, the U.K.’s exit from the EU served only to fuel tension between London and Washington. Brexit negotiations lingered for many years because of the sheer difficulty of reconciling conflicting pressures over the status of Northern Ireland, which is part of the U.K. but borders the Republic of Ireland, which remains an EU member state. </p>
<p>Throughout the prolonged Brexit process, American politicians across the aisle repeatedly expressed <a href="https://www.theguardian.com/us-news/2022/may/20/pelosi-warns-changes-to-northern-ireland-protocol-could-affect-us-trade-deal-with-britain">their concerns to the U.K. government</a>. They emphasized the need to avoid measures that could restore a hard border on the island of Ireland. Among those airing such views was Joe Biden, who <a href="https://twitter.com/JoeBiden/status/1306334039557586944?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1306334039557586944%7Ctwgr%5E707718523194ac7991194adfce8016bce541f538%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Ftheconversation.com%2Fgood-friday-agreement-how-the-us-came-to-be-a-key-broker-in-northern-irelands-peace-deal-202584">warned in 2020,</a> “We can’t allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit.”</p>
<p>Biden’s deeply rooted <a href="https://www.theguardian.com/us-news/2021/jun/10/why-joe-biden-is-so-invested-in-defending-good-friday-agreement">emotional attachment to Ireland</a> has hardly abated since he has been in office. His recent visit in April, for the 25th anniversary of the Good Friday Agreement, was <a href="https://theconversation.com/good-friday-agreement-joe-bidens-historic-visit-to-ireland-comes-during-turbulent-times-203258">rich in personal significance and symbolism</a>. </p>
<p>Most of the trip was viewed as a homecoming, with Biden visiting his ancestral roots in Ireland. His time in Northern Ireland was brief in comparison, with only a <a href="https://www.dailymail.co.uk/news/article-11964121/Joe-Biden-meet-Rishi-Sunak-visit-Belfast-today-no-trade-talks.html">terse meeting with Sunak</a>. And if the message was not sufficiently clear, later remarks by Biden at a fundraiser <a href="https://www.politico.eu/article/joe-biden-northern-ireland-brits-screw-around/">left little doubt</a> as to the president’s feelings. He went to the island of Ireland “to make sure the Brits didn’t screw around” with the region’s peace process, he said.</p>
<p>Sunak did <a href="https://www.ft.com/content/bac3258e-6051-4658-bdc4-8acfc9410242">win some praise for the recent Windsor Framework</a>, which addressed some of the tension over Northern Ireland. But he has yet to solve the prolonged <a href="https://www.ft.com/content/1488bce3-7da9-4d16-b3f1-d4c465e218a5">boycott of power-sharing institutions</a> by the pro-U.K. Democratic Unionist Party.</p>
<p>Nonetheless, Sunak will have his work cut out for him to convince Biden that the U.K. can play a constructive role in further stabilizing Northern Ireland. </p>
<h2>Better off sticking to security and China</h2>
<p>Trade and Northern Ireland will likely bring little joy for Sunak. He will, however, be on far more fertile ground when the discussion shifts to the realm of security.</p>
<p>The prime minister has signaled on many occasions his <a href="https://www.bloomberg.com/news/articles/2023-05-17/sunak-says-uk-aligned-with-us-on-china-mulls-investment-curbs#xj4y7vzkg">very close alignment with the U.S.</a> insofar as tackling China. At the recent G7 summit in Japan, Sunak <a href="https://www.politico.eu/article/britain-prime-minister-rishi-sunak-ranks-china-top-threat-global-security-g7-summit/">defined Beijing</a> as “the biggest challenge of our age to global security and prosperity.” And the March 2023 <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/13/fact-sheet-trilateral-australia-uk-us-partnership-on-nuclear-powered-submarines/">signing of the AUKUS nuclear submarine deal</a> in San Diego further confirmed the U.K.’s tilt to the Indo-Pacific.</p>
<p>Regarding Ukraine, the U.K. has frequently been at the vanguard of providing support and new weapons to Kyiv. In May 2023, Sunak announced a plan, with Dutch Prime Minister Mark Rutte, to <a href="https://www.theguardian.com/world/2023/may/16/uk-and-netherlands-agree-international-coalition-to-help-ukraine-with-f-16-jets">build an “international coalition</a>” to help Ukraine acquire F-16 fighter jets. </p>
<p>Britain also led the way in being the first Western country <a href="https://www.defensenews.com/global/europe/2023/05/15/britain-to-train-ukrainian-pilots-supply-more-missiles-and-drones/">to supply long-range cruise missiles to Ukraine</a>. This was after being the first country to agree to deliver battle tanks to support the Ukrainian army. And that bullishness <a href="https://news.yahoo.com/how-the-uk-helped-convince-the-us-and-its-allies-to-spend-big-to-help-ukraine-in-its-war-with-russia-193918302.html">reportedly played a key part</a> in convincing Washington to lift its objection to sending F-16s to Ukraine.</p>
<p>The alignment in the field of global security will undoubtedly help Sunak’s attempt to ingratiate himself with Biden. But the harder test will be whether this convergence between Washington and London can extend to NATO. </p>
<p>The alliance will hold a crucial summit in Lithuania in July, where it will discuss longer-term plans to support Ukraine. That will include the thorny question of offering NATO membership to Kiev, which does not yet <a href="https://www.washingtonpost.com/national-security/2023/05/14/ukraine-nato-membership-vilnius-summit/">have unanimous support among members</a>.</p>
<p>Even without talk of a trade deal, in terms of agenda items on Sunak’s visit, the bases are loaded. It is questionable whether he can hit a home run though.</p><img src="https://counter.theconversation.com/content/206969/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Garret Martin receives funding from the European Union for the research center he co-directs at American University, the Transatlantic Policy Center.</span></em></p>The UK leader’s visit to the US comes amid trouble at home, with low ratings for his Conservative Party. But don’t expect much joy for Sunak on trade or Northern Ireland.Garret Martin, Senior Professorial Lecturer, Co-Director Transatlantic Policy Center, American University School of International ServiceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2015952023-03-17T13:15:38Z2023-03-17T13:15:38ZAn international battle over cheese has left European producers feeling bitter<figure><img src="https://images.theconversation.com/files/516024/original/file-20230317-2279-s4e9bx.jpg?ixlib=rb-1.1.0&rect=126%2C99%2C5912%2C3911&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/july-11-2022-lyon-france-switzerland-2225136575">ventdusud/Shutterstock</a></span></figcaption></figure><p>For most cheese lovers, taste is the thing. Whether it’s a tangy blue stilton or a creamy oozing camembert, the most important element is the eating. </p>
<p>But cheese has profound political and economic properties too, with implications for international trade deals and commerce.</p>
<p>The taste of gruyere, for example, can depend on where you eat it. In Europe, it has a particular taste that comes from being a Swiss cheese (a French version is also available) made by heating Swiss cow’s milk in a copper vat and then ripening the cheese in Swiss cellars with the humidity of a natural cave. </p>
<p>In the US though, gruyere means any nutty, pale yellow cheese made from cow’s milk, and it can be produced anywhere in the world. That definition was recently <a href="https://fingfx.thomsonreuters.com/gfx/legaldocs/jnpwyakwnpw/GRUYERE%20TRADEMARKS%20opinion.pdf">given legal weight</a> by the US court system after representatives of Swiss and French manufacturers tried to win <a href="https://www.uspto.gov/trademarks/apply/certification-mark-applications">protected status</a> for the word “gruyere”. This would have restricted the use of the term in the US for cheeses produced in particular parts of Switzerland and France.</p>
<p>The European consortiums’ aim was to extend the kind of prize status grueyere enjoys <a href="https://europa.eu/youreurope/business/running-business/intellectual-property/geographical-indications/index_en.htm">closer to home</a>. For in Switzerland and the EU, gruyere is protected by a <a href="https://www.ige.ch/en/protecting-your-ip/indications-of-source/protecting-geographical-indications">geographical label</a> which certifies that production, including the sourcing of the raw materials, takes place in a specific geographical area. It is a means of <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4272893">preserving</a> cultural heritage and expertise, which in the case of gruyere, is said to go back to <a href="https://www.gruyere.com/en/le-gruyere-aop/the-history">the 12th century</a>.</p>
<p>In the US however, the <a href="https://www.usdec.org/">Dairy Export Council</a> argued that vast quantities of cheese made in all kinds of places have been labelled and sold as gruyere for decades. They argued that the name “gruyere” is generic and cannot be owned by anyone. The US court sided with them.</p>
<p>The case highlights the clear difference between the ways Europeans and Americans regulate geographical names of traditional foods. The contrasting views had already been a <a href="https://www.cato.org/cato-online-forum/geographical-indications-ttip-impossible-task">tricky element</a> in recent negotiations for a proposed trade deal between the US and the EU. </p>
<p>For in Europe, many products – including hams, cheese and wines – receive strong levels of legal protection to preserve the reputations and traditions that have sometimes been built over centuries. They are considered “<a href="https://theconversation.com/why-europe-and-the-us-are-locked-in-a-food-fight-over-ttip-45279">products with a story</a>” and the names of the geographical locations where they are produced are given intellectual property rights.</p>
<p>The US follows a very different set of rules. There, firms use European geographical names (not only gruyere, but also parmesan, asiago, feta and <a href="https://h2o.law.harvard.edu/cases/4997/export">fontina</a>, among others) to label cheeses that have been produced far from their original homes. The reason is that most US consumers view these names as generic – to them they just describe the features of the product, like whether it melts well, or has a salty taste. </p>
<p>The economic stakes are high on both sides of the Atlantic. To Europeans, the absence of legal protection in the US leads to unacceptable exploitation of Europe’s cultural legacy and costs manufacturers of cheese a lot of money, as they can’t rely on exclusive rights over names which attract customers.</p>
<p>On the other hand, American cheese producers are concerned that caving into Europeans’ demands to monopolise such names would be unfair as they wouldn’t be able to continue using terms that they perceive as generic. Introducing legal protection would offer European cheese producers an unfair competitive edge.</p>
<p>It would, in American eyes, essentially be a trade barrier that would drive up customer prices by forcing many US producers to undergo an expensive rebranding process. According to one <a href="https://eu.wisfarmer.com/story/news/2019/03/06/tremendous-losses-face-u-s-dairy-over-eu-cheese-names/3071424002/">study</a>, the American dairy industry could lose as much as US$20 billion (£16 billion) if the Europeans were successful in restricting the use of common cheese names.</p>
<h2>Hard cheese</h2>
<p>A US <a href="http://www.commonfoodnames.com/">Consortium for Common Food Names</a> has even been set up specifically to represent the interests of American producers and farmers to lobby US lawmakers into denying legal protection for numerous European geographical terms, not only for cheeses. It obviously <a href="http://www.commonfoodnames.com/court-of-appeals-extends-huge-victory-for-worldwideproducers-of-gruyere/">welcomed</a> the gruyere decision enthusiastically.</p>
<figure class="align-center ">
<img alt="Swiss mountain landscape." src="https://images.theconversation.com/files/516025/original/file-20230317-14-3xknih.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/516025/original/file-20230317-14-3xknih.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/516025/original/file-20230317-14-3xknih.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/516025/original/file-20230317-14-3xknih.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/516025/original/file-20230317-14-3xknih.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/516025/original/file-20230317-14-3xknih.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/516025/original/file-20230317-14-3xknih.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Swiss cheese, (almost) as old as the hills.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/landscape-regional-park-paysdenhaut-switzerland-1810833901">Pawel Piotr/Shutterstock</a></span>
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</figure>
<p>The group backs up its <a href="https://www.foodingredientsfirst.com/news/us-dairy-sector-celebrates-ruling-on-gruyere-as-generic-cheese-term.html">stance</a> by arguing that the US was founded on the work of immigrants who brought authentic and artisan traditions from around the world, including many of the processes protected in Europe. </p>
<p>And it is no doubt true that when Europeans emigrated to the US in the 19th and 20th centuries, many continued to produce the delicacies they had made back home. They brought with them traditional manufacturing techniques and the names they were used to. </p>
<p>But surely this argument cannot be stretched to the point of denying Europeans all rights over geographical terms which still have a reputation further afield. Not all of the US businesses which use famous European geographical names were founded by European migrants.</p>
<p>One possible compromise might be to attempt to reach bilateral agreements allowing only those US producers created by European migrants to use the labels in question. </p>
<p>But for the time being, the impasse continues. European producers will strive to get the protection in the US that they think their delicacies deserve – and their American counterparts will fiercely reject any move to restrict their freedom to use the labels they wish to use. There is still a hearty appetite for this trans-Atlantic food fight.</p><img src="https://counter.theconversation.com/content/201595/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For some producers, the American approach to EU delicacies really grates.Enrico Bonadio, Reader in Intellectual Property Law, City, University of LondonAndrea Zappalaglio, Lecturer in Intellectual Property Law, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1722742021-11-29T18:19:04Z2021-11-29T18:19:04ZCanada should look inward to address American protectionism<figure><img src="https://images.theconversation.com/files/433575/original/file-20211123-14-ljjmb.jpg?ixlib=rb-1.1.0&rect=0%2C22%2C4984%2C3267&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. President Joe Biden shakes hands with Prime Minister Justin Trudeau as they meet in the Oval Office of the White House on Nov. 18, 2021, in Washington. </span> <span class="attribution"><span class="source"> (AP Photo/Evan Vucci) </span></span></figcaption></figure><iframe style="width: 100%; height: 175px; border: none; position: relative; z-index: 1;" allowtransparency="" src="https://narrations.ad-auris.com/widget/the-conversation-canada/canada-should-look-inward-to-address-american-protectionism" width="100%" height="400"></iframe>
<p><a href="https://www.cnbc.com/2021/11/19/house-passes-build-back-better-act-what-happens-next-in-the-senate.html">U.S. President Joe Biden’s Build Back Better Act</a> shows that American protectionism existed before and continues past the Donald Trump administration. Canada must finally learn from this hallmark of American politics and calibrate its trade policy to have a stronger industrial focus.</p>
<p>Under the proposed bill, <a href="https://www.cbc.ca/news/world/trudeau-biden-warning-washington-1.6252455">consumers of electric vehicles can receive</a> US$12,500 in tax credits. But to receive the full rebate, the vehicle must be produced by American manufacturers.</p>
<p>The act, not yet approved by the Senate, serves as a response to both economic and environmental crises. It aims to restore the American auto industry while addressing climate change.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A woman with long dark hair wears a red mask as she walks outdoors." src="https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/433576/original/file-20211123-24-vrw61u.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">International Trade Minister Mary Ng is seen in October 2021 in Ottawa.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span>
</figcaption>
</figure>
<p>Canada’s international trade minister, Mary Ng, says in a letter to congressional leaders <a href="https://cdn.motor1.com/pdf-files/letter-from-canadian-trade-minister-on-ev-tax-credits.pdf">that the bill is discriminatory and will cause “irreparable harm”</a> to both Canadian and American auto sectors. Prime Minister Justin Trudeau said he <a href="https://globalnews.ca/news/8385844/justin-trudeau-joe-biden-summit/">also expressed concern</a> about the rebates and their impact on continental trade in his recent Oval Office meeting with Biden. </p>
<h2>U.S. protectionism is nothing new</h2>
<p>Despite their frustration, Canadian policy-makers shouldn’t be surprised. The proposed legislation is among a string of protectionist measures pushed by several administrations. </p>
<p>The Barack Obama administration <a href="https://www.cbc.ca/news/canada/buy-american-provision-returns-in-obama-s-jobs-act-1.1061213">supported Buy American</a> provisions in the wake of the 2008 economic recession. Canadian policy-makers complained at the time that the provisions were discriminatory, <a href="https://www.ctvnews.ca/obama-dilutes-buy-american-rules-for-canada-1.480762">and they were ultimately watered down.</a></p>
<figure class="align-center ">
<img alt="A man stands at a podium with an American flag behind him talking to factory workers." src="https://images.theconversation.com/files/433963/original/file-20211125-23-108biq8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/433963/original/file-20211125-23-108biq8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=299&fit=crop&dpr=1 600w, https://images.theconversation.com/files/433963/original/file-20211125-23-108biq8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=299&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/433963/original/file-20211125-23-108biq8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=299&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/433963/original/file-20211125-23-108biq8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=376&fit=crop&dpr=1 754w, https://images.theconversation.com/files/433963/original/file-20211125-23-108biq8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=376&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/433963/original/file-20211125-23-108biq8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=376&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">President Barack Obama speaks following a tour of a factory in Jacksonville, Fla., that opened in 2011 with help from a federal economic stimulus package Obama pushed through Congress in 2009 that had a heavy ‘Buy American’ focus.</span>
<span class="attribution"><span class="source">(AP Photo/Gary McCullough)</span></span>
</figcaption>
</figure>
<p>The Trump administration was especially protectionist. It applied tariffs broadly, including on <a href="https://globalnews.ca/news/7258571/trump-tariffs-timeline-since-2017/">Canadian steel and aluminium twice</a>. By 2019, the United States was leading the world with <a href="http://www.pages.drexel.edu/%7Ecas86/KFSYY-GSDB-Update.pdf">more sanctions</a> than at any other period in its history. </p>
<p>Biden signalled his support for America-first provisions during his presidential campaign. The <a href="https://democrats.org/where-we-stand/party-platform/">Democratic platform</a> included references to restoring auto sector jobs and increasing electric vehicle sales. </p>
<p>In April 2021, the Biden administration <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/28/fact-sheet-biden-harris-administration-issues-proposed-buy-american-rule-advancing-the-presidents-commitment-to-ensuring-the-future-of-america-is-made-in-america-by-all-of-americas/">opened a Made in America Office</a> and directed agencies to increase the amount of American content in their purchases.</p>
<p>More broadly, Americans <a href="https://doi.org/10.4324/9780429268168-15">have long offered</a> significant subsidies to its agricultural sector. </p>
<p>The trend line in American trade policy is clear. Protectionism is back on table in significant ways.</p>
<p><a href="https://www.tandfonline.com/doi/abs/10.1080/19187033.2012.11675001">Scholars have argued</a> that crises demand exceptional state intervention to ensure a return to stability. The Biden administration must lead on the environment, the economy, health and social justice while staying politically viable. These pressures leave Biden with little choice.</p>
<h2>Canadian responses through industrial policy</h2>
<p>Ng has already signalled Canada’s intention to fight the American EV rebates. Beyond the Canadian delegation’s recent lobbying visit to Washington, D.C., Ng <a href="https://cdn.motor1.com/pdf-files/letter-from-canadian-trade-minister-on-ev-tax-credits.pdf">has argued</a> that the rebates are “inconsistent” with agreements like the Canada-United States-Mexico Agreement, known as CUSMA. </p>
<p>Setting aside the potential success of a challenge, Canada has other and better options.</p>
<p>The Canadian government <a href="https://doi.org/10.4324/9781315098029-8">has often been a driver of industry</a>. Especially before the 1980s, Ottawa used federal subsidies, Crown corporations and strategic infrastructure developments to support industry. </p>
<p><a href="https://pm.gc.ca/en/news/news-releases/2021/07/15/governments-quebec-and-canada-driving-recovery-quebecs-aerospace">Though these tools continue</a>, new economic thinking has tended to push policy-makers away from their use. Instead, the preference has been to let the markets do the work. </p>
<p>But federal supports continue as a form of regional development. <a href="https://www.ic.gc.ca/eic/site/ad-ad.nsf/eng/ad03909.html">Aerospace</a>, <a href="https://agriculture.canada.ca/en/canadas-agriculture-sectors/animal-industry/canadian-dairy-information-centre/canadas-dairy-industry-glance">dairy</a>, <a href="https://thenarwhal.ca/atlantic-cod-dfo-canada-plan/">cod fishing</a>, <a href="https://www.nrcan.gc.ca/our-natural-resources/forests-forestry/forest-industry-trade/overview-canadas-forest-industry/13311">forestry</a> and <a href="https://www150.statcan.gc.ca/n1/pub/36-28-0001/2021007/article/00003-eng.htm">petroleum industries</a> each have regional dynamics that help motivate government support.</p>
<p>While not all state inventions are the same as the consumer EV rebates in Biden’s Build Back Better legislation, their purposes are similar. Pro-industry policies help fuel economic growth and social cohesion and can assist governments in achieving other political goals, like net-zero emissions.</p>
<p>Canadian governments have the tools on hand to insulate domestic industries from significant market changes. </p>
<p>These tools are actively used in some areas. The government <a href="https://ipolitics.ca/2018/08/31/we-will-not-get-rid-of-supply-management-trudeau-says-as-nafta-talks-falter/">continues to defend</a> dairy supply management, for example, as critical to our prosperity. </p>
<figure class="align-center ">
<img alt="A black-and-white dairy cow pokes her nose towards the camera in a barn as another cow stands behind her." src="https://images.theconversation.com/files/433969/original/file-20211125-27-l3w3ds.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/433969/original/file-20211125-27-l3w3ds.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/433969/original/file-20211125-27-l3w3ds.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/433969/original/file-20211125-27-l3w3ds.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/433969/original/file-20211125-27-l3w3ds.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/433969/original/file-20211125-27-l3w3ds.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/433969/original/file-20211125-27-l3w3ds.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Dairy cows are shown in a barn on a farm in eastern Ontario in 2017. Former U.S. president Donald Trump was sharply critical of Canada’s supply-managed dairy sector.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
</figcaption>
</figure>
<h2>Taxation tools</h2>
<p>Canadian governments also use tax credits to promote consumption. Without limiting them to vehicles built in Canada, <a href="https://chargehub.com/en/electric-car-incentives-in-canada.html">both federal and provincial governments</a> offer electric vehicle subsidies. These subsidies have a similar dollar value to the current American proposal. </p>
<p>There may be reason to believe this is not a sustainable practice. But Canada has few other options.</p>
<p>It appears Canadian lawmakers are still hoping the Americans will exempt Canada from Build Back Better. Ontario’s Conservative government under Doug Ford <a href="https://www.cbc.ca/news/canada/toronto/doug-ford-electric-vehicle-rebate-ev-sales-ontario-1.6244947">is resisting</a> electric vehicle rebates, while <a href="https://www.thestar.com/news/world/2021/11/18/justin-trudeau-has-an-auto-agenda-but-joe-biden-is-in-the-drivers-seat.html">the Trudeau government continues to appeal</a> to Washington to exclude Canada from the measures.</p>
<figure class="align-center ">
<img alt="A woman digs through her purse while standing behind her red electric vehicle at a charging station." src="https://images.theconversation.com/files/433970/original/file-20211125-17-qkgkkp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/433970/original/file-20211125-17-qkgkkp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=382&fit=crop&dpr=1 600w, https://images.theconversation.com/files/433970/original/file-20211125-17-qkgkkp.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=382&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/433970/original/file-20211125-17-qkgkkp.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=382&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/433970/original/file-20211125-17-qkgkkp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=480&fit=crop&dpr=1 754w, https://images.theconversation.com/files/433970/original/file-20211125-17-qkgkkp.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=480&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/433970/original/file-20211125-17-qkgkkp.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=480&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A woman prepares to plug in her electric vehicle in Markham, Ont., in April 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Frank Gunn</span></span>
</figcaption>
</figure>
<p>But even if Canada is successful in stopping the proposed EV rebates, American protectionism is here to stay. </p>
<p>While embracing protectionism is not to Canada’s advantage, holding out for exemptions isn’t good policy. Instead, Canada needs to accept the reality of global trading conditions.</p>
<p>Certainly, there are international responses for Canada. Canada should reflect on its <a href="https://www.international.gc.ca/gac-amc/campaign-campagne/inclusive_trade/index.aspx?lang=eng">Inclusive Trade Agenda</a> more. This review should include a reconsideration of the value of global trade deals over bilateral agreements. </p>
<p>But Canada should also look inward. Targeted supports to Canadian industries will be needed to weather this protectionist storm.</p><img src="https://counter.theconversation.com/content/172274/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Noah Fry does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Amid another flurry of U.S. protectionist measures, Canada should reconsider the value of global trade deals over bilateral agreements. But it should also support its own industries.Noah Fry, PhD Student, Political Science, McMaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1723572021-11-29T10:14:50Z2021-11-29T10:14:50ZUS and Africa: mending fences and building bridges in the face of growing China presence<figure><img src="https://images.theconversation.com/files/433756/original/file-20211124-23-1vpmn04.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Senegalese foreign minister Aissata Tall Sall and US secretary of state Antony Blinken at a news conference.</span> <span class="attribution"><span class="source">Photo by Andrew Harnik/Pool/AFP via Getty Images</span></span></figcaption></figure><p>In the last 20 years or so Africa has been an intermittent strategic interest for the US. Successive US presidents have attached contrasting levels of importance to the continent. This has been clear from their policies and strategic engagement. </p>
<p>But with the rise of China as a <a href="https://www.cnbc.com/2019/10/09/the-us-china-trade-rivalry-is-underway-in-africa.html">strategic competitor</a> in Africa the focus on US-Africa relations has become more closely scrutinised. More attention is being given to the messaging about the importance of Africa in this geostrategic craftsmanship.</p>
<p>This has come to the fore in the wake of the <a href="https://abcnews.go.com/Politics/secretary-state-antony-blinken-making-1st-trip-africa/story?id=81207112">recent visit</a> by secretary of state Antony Blinken to the continent through Kenya, Nigeria and Senegal. The question is: what does the visit signal about the US’ evolving interest in Africa and specifically its <a href="https://www.state.gov/the-united-states-and-africa-building-a-21st-century-partnership/">African policy</a>?</p>
<p>The visit to Africa is a reset and repositioning attempt by the new administration, first to mend diplomatic fences. The <a href="https://energycapitalpower.com/trumps-foreign-policy-ignores-africa/">Donald Trump presidency</a> was largely indifferent to the continent. He left Africa representative positions in his government <a href="https://www.bbc.co.uk/news/world-africa-49096505">unfilled for long stretches</a>. And he labelled the continent with a <a href="https://www.bbc.com/news/world-us-canada-42670715">vile epithet</a> that was indicative of this indifference. </p>
<p>But Blinken’s visit has a second objective: to set a new tone and underscore the Biden administration’s belief that Africa matters to the US as a strategic partner. </p>
<p>The three countries visited all signalled strategic interest in different areas. </p>
<p>Kenya <a href="https://www.kenyanews.go.ke/kenya-us-strengthens-security-ties/">highlighted</a> security, COVID-19 vaccine cooperation and perhaps a diplomatic gesture given that President Uhuru Kenyatta was the first African president to visit President Joe Biden’s White House. </p>
<p>Nigeria, as the <a href="https://www.state.gov/u-s-relations-with-nigeria/">biggest economy</a> in Africa, was mostly for trade and investment reasons. For its part, Senegal got the nod for being a <a href="https://www.straitstimes.com/world/blinken-showcases-benefits-of-democracy-on-senegal-visit">democracy success</a> story. </p>
<h2>Policy reset?</h2>
<p>Biden carries <a href="https://qz.com/africa/1929614/how-a-joe-biden-will-change-donald-trumps-us-africa-relations/">much promise</a> for the continent after Trump’s era of indifference. This was shown symbolically by the decision to give his <a href="https://www.youtube.com/watch?app=desktop&v=CE3X77YBSN8">first speech</a> of America’s global re-engagement to the African Union. </p>
<p>But his administration has had to confront the reality that China has made <a href="http://www.bsi-economics.org/219-chinese-investment-in-africa-part-1">irreversible</a> inroads into Africa that could not be shooed away. </p>
<p>The administration has had to hatch a two pronged strategy. In the first it has sought to recommit to a strategic partnership with Africa to achieve a number of goals: </p>
<ul>
<li><p>trade and investment </p></li>
<li><p>infrastructure through the global Build Back Better World Initiative </p></li>
<li><p>the COVID-19 health crisis </p></li>
<li><p>democratic governance </p></li>
<li><p>climate change and peace</p></li>
<li><p>security as a bulwark against extremism and terrorism. </p></li>
</ul>
<p>Second, it has had to position itself as a benevolent <a href="https://www.bloomberg.com/news/articles/2021-11-19/u-s-intent-on-forging-closer-ties-with-africa-blinken-says">alternative</a> to Beijing, promising a respectful, open, non-predatory and trustworthy relationship that will deliver mutual benefits.</p>
<h2>Opportunities</h2>
<p>The <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Africa-EU_-_international_trade_in_goods_statistics#Africa.E2.80.99s_main_trade_in_goods_partner_is_the_EU">US trade with Africa</a> is a dismal 5%. China posts 8% while the EU’s is 28%. The <a href="https://agoa.info/about-agoa.html">African Growth and Opportunity</a> initiatives and the recent <a href="https://iclg.com/alb/17243-africa-us-announces-renewed-prosper-africa-trade-initiative">Prosper Africa initiatives</a> have failed to realise substantive dividends. </p>
<p>The US strategic rapprochement with Africa has to ensure a sustained and substantial increase in two way trade flows if it is to be seen as serious. Stronger support of the new <a href="https://www.worldbank.org/en/topic/trade/publication/the-african-continental-free-trade-area">African Continental Free Trade Area</a> would be a good start.</p>
<p><a href="https://iclg.com/alb/16281-shifting-patterns-of-funding-in-africa-will-help-to-address-continent-wide-infrastructure-gap">Infrastructural support</a> is another area of potential strategic cooperation. </p>
<p>Biden’s <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-better-world-b3w-partnership/">Build Back Better World</a> and the 2018 Better Utilisation of Investments Leading to Development Act are both infrastructural initiatives that can help deliver cooperation in critical infrastructural development. </p>
<p>Elsewhere, this is seen as a <a href="https://www.voanews.com/a/build-back-better-world-biden-s-counter-to-china-s-belt-and-road/6299568.html">policy response</a> to the <a href="https://www.cgdev.org/publication/examining-debt-implications-belt-and-road-initiative-a-policy-perspective?gclid=CjwKCAiAnO2MBhApEiwA8q0HYXAaVu1AHFSWw2P29EDOgH9LNUlxsjv_UUO1iml4bMWypvFWnTNfkRoCczwQAvD_BwE">China Belt and Road Initiative</a>.</p>
<p>The COVID-19 health crisis has brought home the gulf in vaccine access between Africa and countries like the US. The US can boast of a vaccination rate of over <a href="https://edition.cnn.com/2021/06/12/health/us-coronavirus-saturday/index.html">64%</a> while sub-Saharan Africa has managed less than <a href="https://qz.com/africa/2078868/sub-saharan-africa-expected-to-recover-slowest-from-pandemic/">6%</a> of its population. </p>
<p>This is a momentous opportunity for US-Africa cooperation. The <a href="https://www.state.gov/innovative-next-steps-in-the-global-covid-19-response/">US Global Covid Corps</a> seeks to make US logistical capacity available to support countries with “turning vaccine doses into actual shots in arms”. It could also be a transformative initiative in continental public health infrastructure. </p>
<p>There are also opportunities for co-operation when it comes to building democracy. </p>
<p>Across the continent there has been a <a href="https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI%282021%29690647">recession</a> of democracy in the last few years. The US itself struggles with its own domestic democracy challenges and has become more reticent in its democracy crusade. </p>
<p>But in Africa, the US is best positioned to use its global standing to champion the primacy of democratic governance. </p>
<p>Finally, the growing menace of Islamic State and attendant terrorism threats on the continent has made this an urgent priority. </p>
<p>The US is alive to the fact that the risk of having terrorism havens emerge in fragile and weak states is a real threat to its strategic interests. Support of Africa’s peace and security architecture will continue to be a plank in US policy priorities.</p>
<h2>More of the same</h2>
<p>President Bill Clinton’s potentially transformative <a href="https://ustr.gov/issue-areas/trade-development/preference-programs/african-growth-and-opportunity-act-agoa">African Growth and Opportunity Act</a> initiative was intended to help Africa close its US trade deficit through trade and development via tariff free market access. </p>
<p>President George Bush’s own <a href="https://www.state.gov/pepfar/">health policy</a>, while relatively sector specific, was a notable success. President Barack Obama’s two signature programmes – <a href="https://www.usaid.gov/powerafrica">Power Africa</a>, which successfully promoted electrification, and <a href="https://www.feedthefuture.gov/">Feed the Future</a> – focused on modernising agriculture in a way that furthered the Africa Growth and Opportunity Act objectives. </p>
<p>The aim of Trump’s 2018 <a href="https://www.prosperafrica.gov/">Prosper Africa initiative</a> was to double trade and investment in Africa. It was well intentioned. But it was less of an independent policy framework and more a strategic intervention to challenge China in Africa. </p>
<p>On the whole, there is a broad consensus that while successive US governments’ rhetoric is often aspirational, Africa is still <a href="https://www.theguardian.com/global-development/2020/nov/30/obama-didnt-deliver-for-africa-can-biden-show-black-lives-matter-everywhere">marginal</a> to US interests. Not many drastic changes are expected during the Biden presidency.</p>
<p>The US-Africa relations will continue in flux over the foreseeable future, though with China’s growing influence on the continent the US can ill afford windows of benign neglect. </p>
<p>In fact, as Blinken <a href="https://www.independent.co.uk/news/world/americas/antony-blinken-senegal-nigeria-dakar-joe-biden-b1961918.html">soberly noted</a>, perhaps Africa now has choices rather than a choice. China’s presence on the continent might be the only reason that the US begins to take Africa more seriously and consistently as a strategic interest rather than simply a moral afterthought.</p><img src="https://counter.theconversation.com/content/172357/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David E Kiwuwa does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The recent visit of the US secretary of state to Nigeria, Kenya and Senegal appears driven by the fear of China’s inroads in Africa as well as the need to mend diplomatic fences.David E Kiwuwa, Associate Professor of International Studies, University of NottinghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1686852021-09-24T16:02:42Z2021-09-24T16:02:42ZWhy the UK’s ambitious plans for a trade deal with the US have been shelved<p>A trade deal between the UK and the US was once counted as a great <a href="https://www.theguardian.com/politics/2021/sep/21/britains-hopes-of-early-post-brexit-trade-deal-with-us-appear-dashed">potential prize of Brexit</a>. But now those plans have been delayed, with no clear timetable in sight.</p>
<p>Downplaying expectations of an agreement between the two countries before he met with the US president on September 21, British prime minister Boris Johnson said that Joe Biden had a “<a href="https://news.sky.com/story/boris-johnon-refuses-to-commit-to-us-uk-trade-deal-being-done-by-2024-as-he-says-joe-biden-has-a-lot-of-fish-to-fry-12413356">lot of fish to fry</a>”. </p>
<p>The apparent frostiness of the Biden administration swiftly led to <a href="https://inews.co.uk/news/politics/uk-seek-join-us-mexico-canada-trade-pact-boris-johnson-gives-up-deal-joe-biden-1211275?ito=twitter_share_article-top">suggestions</a> from unnamed British government sources that the UK might instead apply to join the US-Mexico-Canada (<a href="https://www.trade.gov/usmca">USMCA</a>) agreement as an alternative.</p>
<p>The difficulty, of course, is that nobody knew how seriously to take this. There was back tracking soon after, with a <a href="https://www.independent.co.uk/news/uk/politics/usmca-trade-deal-boris-johnson-b1924874.html">Downing Street spokesperson</a> insisting the focus was still a direct deal with the US.</p>
<p>After all, there are towering obstacles to the UK joining the USMCA in practice. For a start, doing so would require the agreement of all three existing members. The fact that they do not appear to have even been consulted about the possibility is something of a diplomatic <em>faux pas</em> and makes the entire situation even stranger. </p>
<p>If the current US administration is unwilling to negotiate a bilateral free trade agreement with the UK, why should it be more predisposed to negotiate a quadrilateral one? </p>
<p>From Joe Biden’s perspective, the political risks are considerable. Given the present scepticism towards trade agreements <a href="https://news.gallup.com/poll/342419/sharply-fewer-view-foreign-trade-opportunity.aspx">among a significant minority</a> of the US public, securing a new one would by no means be universally popular. And at a time when the <a href="https://www.washingtonpost.com/politics/2021/04/07/heres-how-narrow-democratic-house-majority-is/">Democrat majority is wafer-thin</a> and the world is still reeling from the pandemic, it’s a big ask to expect him to focus on including the UK within the USMCA.</p>
<p>As for Canada, it already has a <a href="https://www.gov.uk/guidance/summary-of-the-uk-canada-trade-continuity-agreement">trade agreement with the UK</a> (rolled over from the agreement struck between Canada and the EU) and the two are currently in negotiations to deepen and extend this. </p>
<p>That the Canadians might be nonplussed by the idea of the UK joining the USMCA without any warning seems understandable. It is also, like Mexico, a member of the <a href="https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/index.aspx?lang=eng">Comprehensive and Progressive Trans-Pacific Partnership</a> – another group the UK has <a href="https://www.gov.uk/government/news/uk-applies-to-join-huge-pacific-free-trade-area-cptpp">applied to join</a>. It is difficult to see either of these two countries seeing any benefit from expanding the USMCA to include the UK. What’s in it for them? </p>
<h2>Winners and losers</h2>
<p>Similar questions might be asked of the UK’s motivations. Our own research related to Canada, for example, <a href="https://www.tandfonline.com/doi/10.1080/21582041.2018.1558277">suggests</a> that the impact on trade and GDP of any further deepening of ties beyond bilateral agreements (both those already in place and any yet to be completed) would be small at best. </p>
<p>Given the challenges of distance and geography, as well as the relatively <a href="https://www.rug.nl/ggdc/productivity/pwt/?lang=en">modest size</a> of the Mexican and Canadian markets relative to the US, EU and China, any benefits would be minor. </p>
<p>And even an exclusive agreement with the US would have only a tiny impact on UK GDP and living standards. The Department for International Trade <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/869592/UK_US_FTA_negotiations.pdf">estimates</a> between 0.05% and 0.36% of extra GDP from an ambitious deal, and somewhere from 0.02% to 0.15% based on a – perhaps more realistic – limited free trade agreement. </p>
<figure class="align-center ">
<img alt="US and UK flags on a desk next to paper and pens." src="https://images.theconversation.com/files/423152/original/file-20210924-23-j1uakw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/423152/original/file-20210924-23-j1uakw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=350&fit=crop&dpr=1 600w, https://images.theconversation.com/files/423152/original/file-20210924-23-j1uakw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=350&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/423152/original/file-20210924-23-j1uakw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=350&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/423152/original/file-20210924-23-j1uakw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=440&fit=crop&dpr=1 754w, https://images.theconversation.com/files/423152/original/file-20210924-23-j1uakw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=440&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/423152/original/file-20210924-23-j1uakw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=440&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Nothing signed yet…</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/usa-british-flags-on-table-negotiation-1560827963">Shutterstock/vchal</a></span>
</figcaption>
</figure>
<p>To make those rather abstract figures feel real, that would equate to a pay rise of anywhere between roughly 50 pence and £9 per month for the average British worker. </p>
<p>Nor would an eventual deal with the US benefit every sector of the British economy. Agriculture and food processing could be particularly at risk, depending on the specifics of any agreement. There are also broader questions of what the UK would be willing to sacrifice. For example, would British consumers be prepared to import and buy food from animals treated with hormones? </p>
<p>For the time being then, it seems that the UK faces an uphill battle to secure meaningful further access to the markets of the American continent. There appears to be little appetite from across the Atlantic to reach for much beyond the status quo. </p>
<p>For the UK, a more realistic approach might be to work to gradually secure a reduction in various non-tariff barriers over time. Anything more than that seems, right now, like something of an unattainable prize.</p><img src="https://counter.theconversation.com/content/168685/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Joe Biden seems to have little appetite for closer economic ties.Alex de Ruyter, Professor of Economics and Director of the Centre for Brexit Studies, Birmingham City UniversityDavid Hearne, Researcher at the Centre for Brexit Studies, Birmingham City UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1537622021-01-31T14:00:28Z2021-01-31T14:00:28ZWhat Biden’s presidency means for Canada-U.S. agri-food trade<figure><img src="https://images.theconversation.com/files/380338/original/file-20210124-19-14iw1hi.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4000%2C2886&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Prime Minister Justin Trudeau and Joe Biden, U.S. vice president at the time, walk down the Hall of Honour on Parliament Hill in Ottawa in December 2016. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Patrick Doyle</span></span></figcaption></figure><p>Although international trade has long been affected by domestic politics, former U.S. president Donald Trump dramatically increased trade irritants between the United States and Canada. This was especially challenging in the agricultural sector where political interference in international trade is more prevalent than in the non-agricultural sector. </p>
<p>In our recent article in the <a href="https://doi.org/10.1111/cjag.12267"><em>Canadian Journal of Agricultural Economics</em></a>, we analyzed how Trump’s presidency affected agri-food trade between the two countries and how the situation might change under President Joe Biden. </p>
<p>We argue that Trump’s negative rhetoric and actions heightened trade uncertainty and undermined global trading rules, which tends to disrupt international trade. This was a major challenge for a small open economy like Canada that depends largely on the American market. In particular, the politically sensitive nature of the agri-food sector makes agricultural trade highly dependent on diplomatic ties between countries.</p>
<h2>Canada more reliant on the U.S.</h2>
<p>Canada’s relationship with the U.S. is important for the agri-food sector in both countries, but it’s somewhat one-sided in terms of Canadian reliance on the American market. </p>
<p>Canada is the top destination for American agricultural exports, accounting for 15 per cent of the country’s total agricultural <a href="https://www.fas.usda.gov/regions/canada">exports in 2019</a>. Conversely, the U.S. is the foremost buyer of Canadian agri-food products, accounting for <a href="https://www.fas.usda.gov/regions/canada">58 per cent of total Canadian agri-food exports</a>. This isn’t surprising due to the countries’ close proximity and similar consumer tastes and values.</p>
<p><a href="https://doi.org/10.1080/02722011.2020.1748925">But the Canada-U.S. political relationship became hostile</a> during the Trump presidency due to the former president’s erratic foreign policy decisions, tariff wars and his <a href="https://www.washingtonpost.com/politics/trump-attacks-canada-to-show-north-korea-hes-strong-aide-says/2018/06/10/afc16c0c-6cba-11e8-bd50-b80389a4e569_story.html">verbal attacks on Prime Minister Justin Trudeau</a>. The tense political relationship created an environment of uncertainty, adversely affecting the bilateral trading relationship. </p>
<figure class="align-center ">
<img alt="A cyclist rides between two bright-yellow canola fields." src="https://images.theconversation.com/files/381122/original/file-20210128-17-1hr0fyr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381122/original/file-20210128-17-1hr0fyr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=354&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381122/original/file-20210128-17-1hr0fyr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=354&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381122/original/file-20210128-17-1hr0fyr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=354&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381122/original/file-20210128-17-1hr0fyr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=445&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381122/original/file-20210128-17-1hr0fyr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=445&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381122/original/file-20210128-17-1hr0fyr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=445&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A cyclist passes between two canola fields near Cremona, Alta., in a July 2016. The U.S. was the top market for Canadian canola in 2019.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Jeff McIntosh</span></span>
</figcaption>
</figure>
<p>Major trade disputes between the two countries at both the World Trade Organization (WTO) and within the former North American Free Trade Agreement (NAFTA) <a href="https://www.jstor.org/stable/4128725?seq=1#metadata_info_tab_contents">have largely involved the agricultural sector</a>. WTO trade disputes over softwood lumber, hard wheat and durum and the compulsory country-of-origin labelling requirements, for example, were all within the agricultural sector. </p>
<p>The long-standing softwood lumber dispute predates Trump, but was <a href="https://www.nytimes.com/2017/04/24/us/politics/lumber-tariff-canada-trump.html">escalated during his presidency</a> and could not be sorted out under NAFTA and WTO dispute settlement mechanisms. It was resolved only through political negotiations when both parties signed a <a href="https://www.international.gc.ca/controls-controles/softwood-bois_oeuvre/recent.aspx?lang=eng">memorandum of understanding</a>.</p>
<h2>Canada diversifying?</h2>
<p>The graph below shows that although bilateral agri-food exports from Canada to the U.S. increased marginally from 2015 and 2019, Canadian agri-food imports from the U.S. remained flat. </p>
<figure class="align-center ">
<img alt="A graph shows agri-food imports and export numbers between Canada, the U.S. and the rest of the world." src="https://images.theconversation.com/files/380078/original/file-20210121-15-i9kkvo.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/380078/original/file-20210121-15-i9kkvo.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=372&fit=crop&dpr=1 600w, https://images.theconversation.com/files/380078/original/file-20210121-15-i9kkvo.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=372&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/380078/original/file-20210121-15-i9kkvo.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=372&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/380078/original/file-20210121-15-i9kkvo.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=468&fit=crop&dpr=1 754w, https://images.theconversation.com/files/380078/original/file-20210121-15-i9kkvo.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=468&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/380078/original/file-20210121-15-i9kkvo.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=468&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Agri-food imports and exports.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The increasing number of agri-food imports to Canada from nations other than the U.S., and the flat-lining of imports from south of the border, shows the Canadian economy may be diversifying away from the U.S. and not relying solely on Americans to be the main suppliers of its food basket. </p>
<p>Continuing trade uncertainty with the U.S. could push Canada to pursue its market diversification agenda more aggressively. Canada has shown serious signs of market diversification through its membership in two major free-trade agreements — the Comprehensive Economic and Trade Agreement (CETA) with the European Union and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) with Pacific Rim countries.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/canada-u-k-free-trade-a-post-brexit-opportunity-130970">Canada-U.K. free trade: A post-Brexit opportunity</a>
</strong>
</em>
</p>
<hr>
<h2>Biden’s presidency</h2>
<p>In his inaugural speech, <a href="https://www.nytimes.com/2021/01/20/us/politics/biden-inauguration-speech-transcript.html">Biden promised to immediately work to repair and renew relationships</a> with U.S. allies and return America to a leadership role in the world. <a href="https://www.thestar.com/politics/federal/2021/01/22/joe-biden-tells-justin-trudeau-in-their-first-phone-call-that-buy-american-plan-wont-target-canada.html">His first call to a foreign leader was made to Trudeau</a>, and he assured the prime minister that “Buy American” policies weren’t aimed at Canada.</p>
<p>Biden is facing significant domestic political challenges, and it’s too soon to know how he’ll deal with trade irritants and address the harm done by the Trump administration. But it’s clear he’s intent on returning to multilateralism. </p>
<p>The American dissatisfaction with the World Trade Organization (WTO) predates Trump and runs deep in the U.S. Barack Obama’s administration <a href="https://www.piie.com/blogs/realtime-economic-issues-watch/wto-judicial-appointments-bad-omen-trading-system">also blocked appointments to the appellate body based</a> on this dissatisfaction. However, <a href="https://www.washingtonpost.com/politics/2021/01/14/biden-trade-katherine-tai-tariff/">Biden has been clear about supporting a strong multilateral trading system</a> and isn’t expected to be obstructionist like the Trump administration, but instead will likely work with allies to address concerns with the WTO.</p>
<p>When it comes to trade deals, Biden has acknowledged the importance of deals like <a href="https://www.politico.com/newsletters/morning-trade/2019/08/01/biden-says-he-would-renegotiate-tpp-464000">the CPTPP</a> that Trump pulled out of on his third day in office. But he’s also promised to protect American workers.</p>
<h2>Protectionist forces</h2>
<p>Protectionist forces will continue to disrupt trade between the two countries, but we can expect a closer and more constructive relationship under Biden. Trade disputes won’t disappear, but the approach to them will change, and improved U.S.-Canada diplomatic relations will have a positive impact on Canada’s agri-food sector.</p>
<p><a href="https://www.ctvnews.ca/world/america-votes/president-biden-s-first-foreign-leader-call-will-be-to-pm-trudeau-1.5275207">Canada’s prime minister and Biden</a> are much closer in terms of ideology, policy objectives and leadership style than Trump and Trudeau were, and <a href="https://www.wsj.com/articles/biden-is-expected-to-review-trumps-trade-tariffs-11604917803">they share views on eliminating trade barriers</a> instead of imposing them. </p>
<figure class="align-center ">
<img alt="Joe and Jill Biden wave as they exit a plane." src="https://images.theconversation.com/files/380340/original/file-20210124-23-1bzwecn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/380340/original/file-20210124-23-1bzwecn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/380340/original/file-20210124-23-1bzwecn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/380340/original/file-20210124-23-1bzwecn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/380340/original/file-20210124-23-1bzwecn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=508&fit=crop&dpr=1 754w, https://images.theconversation.com/files/380340/original/file-20210124-23-1bzwecn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=508&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/380340/original/file-20210124-23-1bzwecn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=508&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Biden and his wife, Jill Biden, arrive at the airport in Richmond, B.C. in 2015 when he was serving as U.S. vice-president. THE CANADIAN PRESS/Jonathan Hayward.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Jonathan Hayward</span></span>
</figcaption>
</figure>
<p>The past four years of trade tensions between the U.S. and Canada were largely politically motivated, especially Trump’s imposition of steel and aluminium tariffs in the name of national security, which Canada responded to <a href="https://www.canadiangrocer.com/blog/trumps-trade-war-with-canada-and-the-impact-on-grocery-81308">by imposing retaliatory tariffs on a number of agri-food products from the United States</a>. </p>
<p>Such unilateral decisions will probably be minimal under Biden. Bilateral trade flows between both countries are unlikely to be affected by the types of erratic trade actions favoured by Trump.</p>
<p>Closer political ties between the Biden administration and the Canadian prime minister means a more constructive and co-operative approach to solving challenges between the two countries in the agri-food sector. Trade disputes will undoubtedly continue, but diplomatic efforts will work to resolve these disputes. This is a positive development for the Canadian agri-food industry.</p><img src="https://counter.theconversation.com/content/153762/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sylvanus Kwaku Afesorgbor receives funding from Ontario Ministry of Agriculture and Rural Affairs. </span></em></p><p class="fine-print"><em><span>Eugene Beaulieu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Closer political ties between Joe Biden and Justin Trudeau likely means a more constructive and co-operative approach to solving challenges between the two countries in the agri-food sector.Sylvanus Kwaku Afesorgbor, Assistant Professor, Agri-Food Trade and Policy, University of GuelphEugene Beaulieu, Professor, Economics, University of CalgaryLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1464142020-09-18T14:35:20Z2020-09-18T14:35:20ZHere’s why South Africa and its neighbours are anxious about EU and UK post-Brexit trade talks<figure><img src="https://images.theconversation.com/files/358824/original/file-20200918-20-rva8zg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">EU and UK are major markets for South African exports, including vehicles</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>As the deadline for the <a href="https://www.theguardian.com/politics/2020/jul/23/considerable-gaps-remain-brexit-talks-says-uk-negotiator-david-frost">post-Brexit trade talks</a> between the European Union (EU) and the United Kingdom (UK) looms, concerns have arisen as to whether the two parties will be able to conclude a deal. In terms of the Brexit divorce agreement, the UK is expected to leave the EU single market and customs union on 1 January 2021. A trade deal will govern future trade relations between the EU and the UK. The prospect of striking such a deal, however, has been <a href="https://www.bbc.com/news/world-europe-54099257">thrown into doubt</a> by the publication recently of a new controversial bill by the British government that seeks to overrule parts of the Brexit withdrawal pact.</p>
<p>The outcome of these talks will have implications for the South African economy, specifically trade. The EU as a regional bloc is South Africa’s largest trade partner in the world, and South Africa is the <a href="https://ec.europa.eu/trade/policy/countries-and-regions/countries/south-africa/">EU’s biggest trade partner</a> in Africa. South Africa has longstanding and extensive trade relations with the UK. Prior to exiting the EU, the UK was South Africa’s second largest trade partner, after Germany, in the EU regional community. The country is also <a href="https://www.ancparliament.org.za/content/statement-minister-trade-and-industry-conclusion-agreement-uk-addressing-trading">South Africa’s fourth biggest market</a> for exports, behind only China, Germany and the United States.</p>
<p>Until the UK decided to leave the EU, it traded with South Africa under an <a href="https://www.tralac.org/documents/resources/faqs/2049-sadc-eu-epa-faqs-july-2018/file.html">economic partnership agreement </a>(EPA) between the EU and some member states of the Southern African Development Community (SADC). The EU-SADC EPA entered into force on 10 October 2016. Under this agreement, the EU has fully or partially eliminated custom duties for South African exports, except for aluminium and various agricultural products.</p>
<p>The EU-SADC EPA specifies <a href="https://www.wto.org/english/tratop_e/roi_e/roi_info_e.htm">rules of origin</a> to fulfil in order for products to obtain preferential market access. Rules of origin refer to the criteria used to determine the national source of a product. The agreement provides for trade remedies to tackle unfair trade practices. It also contains <a href="https://www.wto.org/english/tratop_e/safeg_e/safeg_info_e.htm">safeguard measures</a> to increase import duties in cases where a surge in imports unduly threatens to cause serious injury to the domestic market.</p>
<p>With the UK deciding to quit the EU it meant that it would no longer be a part of the EU-SADC EPA. This implied, in turn, that trade between the SADC countries and the UK would no longer enjoy the preferential terms that existed under the EU-SADC EPA framework. </p>
<h2>The new deal</h2>
<p>To prevent disruption to trade, the Southern African Customs Union nations struck a deal with the UK in 2017. The custom union countries are South Africa, Botswana, Lesotho, Namibia, and Eswatini – plus Mozambique (SACUM). The agreement in principle is that SACUM and UK will carry over the terms of the provisions of the EU-SADC EPA into a new bilateral trade agreement. The roll-over was intended to ensure continuity in trade ties after the UK had left the EU.</p>
<p>Following two years of negotiations, <a href="https://www.ancparliament.org.za/content/statement-minister-trade-and-industry-conclusion-agreement-uk-addressing-trading">a new agreement</a>, the SACUM-UK EPA, was concluded in September 2019. In essence, this entailed a transfer of the terms of the SADC-EU EPA into the new SACUM-UK EPA. These terms cover rules for:</p>
<ul>
<li>trade in goods,</li>
<li>preferential tariff rates on all sides, </li>
<li>trade remedies, </li>
<li>technical standards for health and safety for agricultural and industrial products,</li>
<li>protection of South African and UK’s <a href="https://www.wipo.int/geo_indications/en/">geographical indications</a>, and </li>
<li>dispute settlement. </li>
</ul>
<p>But, there were some issues that needed further discussion and resolution. These are <a href="https://www.wto.org/english/tratop_e/agric_e/negs_bkgrnd10_access_e.htm">tariff-rate quotas</a>, and the sourcing of inputs from across the EU region into production for export. There’s also the treatment of bilateral safeguard measures, other transitional arrangements, geographical indications, and <a href="https://www.ancparliament.org.za/content/statement-minister-trade-and-industry-conclusion-agreement-uk-addressing-trading">the built-in agenda</a>.</p>
<p>SACUM countries are entitled to duty and quota-free access for their exports under the EU-SADC EPA. Given the developed nature of its economy, South Africa enjoys less favourable treatment for some of its agricultural, fish and aluminium exports. A new trade provision was agreed that allowed SACUM nations and the UK to source and use EU inputs for production to export to each other’s markets. This ensured the continuity of integrated value chains across South Africa, the EU and the UK, particularly in the automobile industry.</p>
<p>The SACUM-UK agreement provides for transitional arrangements. These enable the transfer to it of certain provisions from the EU-SADC EPA. These include, among others, customs matters concerning the protection of geographical indications. On the other hand, the UK is required to provide sufficient time for exporters from SACUM countries to adjust to new technical rules for manufactured goods in cases where those deviate from EU regulations. </p>
<p>An agreement was also reached on a built-in agenda to address areas of interest in future that could not be resolved during the negotiations. These include market access issues, <a href="https://findrulesoforigin.org/en/glossary?uid=accum&returnto=gloscen">regional cumulation</a>, export taxes, technical barriers to trade, geographical indications, and electronic certification.</p>
<h2>Need for certainty</h2>
<p>There has been a great deal of anxiety on the part of SACUM countries about the final outcome of the EU-UK trade talks, and the impact this will have on the trade relationship between SACUM nations and the UK. A deal between the EU and the UK will help reinforce the certainty and continuity that the SACUM-UK agreement seeks to achieve when the UK exits the EU customs area. If the EU and the UK are unable to agree on any deal, their trade relationship will be regulated by the rules of the World Trade Organisation. This means the UK will be treated as any trading nation that does not enjoy <a href="https://www.tandfonline.com/doi/abs/10.1080/10220461.2020.1779801">preferential trade with the EU</a>. </p>
<p>In this scenario, the SACUM-UK arrangement will be preserved, but it will also introduce new complications in trade and uncertainty concerning how certain issues, such as the level and quantity of local inputs in the production of motor cars in South Africa for export to the EU and UK markets, will be addressed. A deal between the EU and the UK, therefore, will be the most preferable outcome for SACUM countries.</p><img src="https://counter.theconversation.com/content/146414/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mills Soko does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An EU-UK trade deal will reinforce the certainty and continuity that South Africa, Botswana, Lesotho, Namibia, and Eswatini – plus Mozambique are seeking in their relationship with the UK.Mills Soko, Professor: International Business & Strategy, Wits Business School, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1459802020-09-11T14:50:02Z2020-09-11T14:50:02ZBrexit: why US politicians are opposed to Boris Johnson’s latest move<p>Nancy Pelosi, the speaker of the US House of Representatives, has led a volley of warnings by senior American politicians that the UK government should not undo the Brexit withdrawal agreement it has signed with the European Union. </p>
<p>Pelosi <a href="https://twitter.com/SpeakerPelosi/status/1303815868011380744">stated</a>:</p>
<blockquote>
<p>If the UK violates its international agreements and Brexit undermines the Good Friday accord, there will be absolutely no chance of a US-UK trade agreement passing the Congress.</p>
</blockquote>
<p>Pelosi’s blunt statement has put extra pressure on UK prime minister Boris Johnson as he moves to introduce a new <a href="https://www.instituteforgovernment.org.uk/explainers/internal-market-bill">internal market bill</a> that would override <a href="https://www.instituteforgovernment.org.uk/explainers/brexit-deal-northern-ireland-protocol">arrangements agreed</a> on how the border between Ireland and Northern Ireland will operate after Brexit. Those elements are designed to ensure an open border between the two sides. </p>
<p>Why is the American opposition significant? The British government has made much of its post-Brexit aim to strike a trade deal with the US, but any such deal must be ratified by Congress, which is currently in Democrat hands and likely to remain so. While the president of the US can negotiate trade deals, they must be signed off by Congress. </p>
<p>Why have Pelosi and several other senior American politicians been so outspoken on this? The manifest answer is to protect the Good Friday Agreement. However, there are other motivations underlying this opposition.</p>
<h2>US support for the Good Friday Agreement</h2>
<p>Pelosi <a href="https://www.irishtimes.com/news/politics/pelosi-warns-no-chance-of-us-uk-trade-deal-passing-congress-if-brexit-law-breached-1.4350920">says</a> “The Good Friday Agreement is treasured by the American people and will be proudly defended in the United States Congress.” </p>
<p>While we should not overestimate the American people’s understanding of international affairs, there is some truth in this statement. In the US, the making of peace in Ireland is broadly perceived as a historic international settlement in which America played a significant role. </p>
<p>In Washington, there has long been a bipartisan consensus about supporting the peace process in Northern Ireland. Successive administrations have lent diplomatic and economic support, beginning with President Jimmy Carter in the mid-1970s. While there has been more notable involvement by Democrat-led administrations, Republicans have also invested.</p>
<p>The diplomatic high point of that involvement was the role played by President Bill Clinton and his administration in brokering the Good Friday Agreement in 1998. This ended almost 30 years of violent conflict and established a devolved government in which unionists and nationalists share power.</p>
<p>Less remarked upon is the support of the “peace dividend” by president George W Bush’s administration in the crucial years following the agreement. Richard Haas, appointed envoy by Bush, was active in advancing the decommissioning of arms in this period and would later return to Northern Ireland to chair inter-party talks on unresolved issues from the peace process.</p>
<p>US interest and investment in Northern Ireland has waned somewhat in recent years and the Trump administration has shown little interest. So, there was surprise when, in March 2020, Donald Trump’s former chief of staff, Mick Mulvaney, was <a href="https://www.irishtimes.com/news/ireland/irish-news/appointment-of-mick-mulvaney-as-us-special-envoy-to-ni-welcomed-1.4196505">appointed US special envoy</a> to Northern Ireland. Mulvaney has stated his commitment to “getting economic opportunities” in the province.</p>
<p>While Trump’s support for a hard Brexit and his general disdain for liberal internationalism signals little concern for the peace process, this is not the majority view in Washington. In October 2019, <a href="https://www.bbc.co.uk/news/uk-northern-ireland-50658187">a resolution</a> was introduced in the US House of Representatives reaffirming support for the Good Friday Agreement. It was co-sponsored by Democratic congressman Thomas Suozzi and Republican congressman Peter King. In November 2019, the House voted in favour of the resolution, passing it by a unanimous voice vote.</p>
<p>Such bipartisan and fulsome American support for the Good Friday Agreement provides significant political capital for those now opposing the UK’s new bill.</p>
<h2>Politicking</h2>
<p>While American support for the Good Friday Agreement is broadly bipartisan, there is also much politicking underlying Pelosi’s remarks. They reflect not only a commitment to protecting the agreement but also the complex interactions of political and diplomatic actors activated by Brexit on both sides of the Atlantic.</p>
<p>In this activation, Ireland’s influence in Washington has been significant, though often missed by British observers. Ireland’s soft power in the US draws on the appeal of an ethnic identity that almost 35 million Americans <a href="https://www.irishcentral.com/news/census-shows-almost-seven-times-more-irish-americans-than-population-of-ireland-218344001-237779801">claimed in the last national census</a>. It has close ties to the Irish American leadership at the heart of American politics and to the Irish American lobby in Washington. </p>
<p>That Irish American leadership includes Congressman Richard Neal, a long time spokesman for Irish interests. He chairs the influential <a href="https://waysandmeans.house.gov">Ways and Means Committee</a> in Congress, which will oversee any post-Brexit trade deal between the US and the UK. He, too, has recently restated his view that “any US-UK trade agreement must preserve the Good Friday Agreement”.</p>
<p>As leading Democrats heading towards an election, there can be little doubt that Pelosi and Neal’s robust opposition to the UK’s new bill goes beyond a sincere and principled defence of the Good Friday Agreement to oppose Trump’s support of Brexit and underline Democrat control of the House. </p>
<h2>Push back</h2>
<p>And so the British politicians and diplomats trying to negotiate a new trade deal with the Trump administration have been increasingly frustrated by the powerful and consistent push back from the Democratic leadership in Washington.</p>
<p>If Joe Biden wins the presidency, that push back may get even stronger. His foreign policy adviser <a href="https://twitter.com/ABlinken/status/1303463396227063808">tweeted</a> this week: “Joe Biden is committed to preserving the hard-earned peace & stability in Northern Ireland. As the UK and EU work out their relationship, any arrangements must protect the Good Friday Agreement and prevent the return of a hard border.”</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1303463396227063808"}"></div></p>
<p>Biden would come to power as an avowed internationalist and supporter of the EU. He would also be the 23rd US president of Irish heritage.</p><img src="https://counter.theconversation.com/content/145980/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Liam Kennedy does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The US is a key player in the Good Friday Agreement – but there’s an election to think about too.Liam Kennedy, Professor of American Studies, University College DublinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1309702020-02-05T22:09:37Z2020-02-05T22:09:37ZCanada-U.K. free trade: A post-Brexit opportunity<figure><img src="https://images.theconversation.com/files/313740/original/file-20200205-149752-11ee8av.jpg?ixlib=rb-1.1.0&rect=0%2C184%2C4075%2C2504&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Prime Minister Justin Trudeau meets with U.K. Prime Minister Boris Johnson during the G7 Summit in Biarritz, France, in August 2019. Can the U.K. and Canada forge a post-Brexit trade deal?</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span></figcaption></figure><p>The hard work now begins for the United Kingdom to shape an independent trade policy outside of the European Union. Brexit has finally happened after more than three years of negotiations, posturing, parliamentary shenanigans, two elections and considerable policy uncertainty.</p>
<p>As the <a href="https://www.nytimes.com/2020/02/03/world/europe/after-brexit.html"><em>New York Times</em></a> reports, the U.K. faces complex and arduous negotiations trying to maintain its privileged access to 450 million European consumers with zero tariffs or other trade restrictions. </p>
<p>It’s crucial for the U.K. to negotiate and sign some sort of trade agreement with the EU as soon as possible because the transitional period ends on Dec. 31, 2020. After that date if there are no deals, the British will lose their preferential access to that important market. This will significantly disrupt trade flows and supply chains that are vital to the U.K. economy.</p>
<p>Unfortunately, that’s a very short time to negotiate a deal. Trade deals typically <a href="https://voxeu.org/article/why-do-trade-negotiations-take-so-long">take more than two years to hammer out</a>.</p>
<h2>Deal with U.S.?</h2>
<p>The EU is critical but the U.K. is also looking to sign trade deals with other countries — perhaps none more important for the British economy than one with the United States. </p>
<p>But a deal with the Americans is at best a few years away and will not come easy, even though the U.S. is an important partner for the U.K. and there has been a lot of <a href="https://www.independent.co.uk/topic/uk-us-trade-deal">discussion about such a deal</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-quick-british-american-trade-deal-nafta-suggests-not-a-chance-87708">A 'quick' British-American trade deal? NAFTA suggests not a chance</a>
</strong>
</em>
</p>
<hr>
<p>There are many significant road blocks to such a deal — Donald Trump’s administration <a href="https://www.piie.com/blogs/trade-investment-policy-watch/protectionism-under-trump-policy-identity-and-anxiety">is more about protectionism</a> than it is about trade agreements, and it will be extremely difficult to negotiate as the president focuses on re-election. Witness the tumultuous and prolonged negotiations over <a href="https://www.macleans.ca/news/canada/nafta-lives-canada-and-the-u-s-reach-an-11th-hour-a-deal/">minor improvements to the NAFTA agreement</a>.</p>
<p>Even if Trump is defeated in November, the Americans have not been able to negotiate a deal with the EU. Talks started in 2013 and <a href="https://www.npr.org/sections/thetwo-way/2016/08/28/491721332/german-official-says-u-s-europe-trade-talks-have-collapsed-blames-washington">were suspended in 2016</a>. The lack of results stemmed from challenges on both sides but does not bode well for a desperate and less economically powerful U.K. to be able to make headway with the U.S.</p>
<h2>Losing preferential access</h2>
<p>Meanwhile, the U.K. has other important trade policy challenges to resolve. Not only do the British lose privileged access to the EU on Dec. 31, but they also lose preferential access to all the countries and trading blocks with which the EU currently has agreements. </p>
<p>The EU has trade deals fully implemented, or partially in place, with <a href="https://ec.europa.eu/trade/policy/countries-and-regions/negotiations-and-agreements/#_being-negotiated">88 countries</a>, including Canada. Many of these agreements are with small economies, but the point is that due to Brexit, the U.K. will lose all the preferential access it’s enjoyed as a member of the EU. </p>
<p>The U.K. must negotiate agreements with these 88 countries simply to maintain its current trade relationship.</p>
<p>But British officials don’t have experience or capacity to effectively negotiate multiple new trade agreements and will already have their hands full negotiating with the EU. This is where Canada comes in. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/313753/original/file-20200205-149772-12vtbit.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/313753/original/file-20200205-149772-12vtbit.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/313753/original/file-20200205-149772-12vtbit.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/313753/original/file-20200205-149772-12vtbit.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/313753/original/file-20200205-149772-12vtbit.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/313753/original/file-20200205-149772-12vtbit.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/313753/original/file-20200205-149772-12vtbit.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">British Prime Minister Boris Johnson, Canada’s Justin Trudeau and Germany’s Angela Merkel are seen at the G7 summit in France in August 2019.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
</figcaption>
</figure>
<p>Canada has an important and comprehensive agreement with the EU <a href="https://www.policyschool.ca/wp-content/uploads/2019/11/TradePolicyTrends.Beaulieudylanklemen-final.pdf">called CETA</a>, short for the Canada-European Union Comprehensive Economic and Trade Agreement. CETA is a cutting-edge and modern trade agreement that is comprehensive in its coverage. It also contains progressive commitments to promote labour rights, environmental protection and sustainable development. </p>
<h2>A perfect template</h2>
<p>CETA provides the perfect template for the U.K. to adopt and use as a model for future bilateral agreements after finalizing a free-trade agreement with Canada.</p>
<p>Obviously, the U.K. urgently needs to complete a deal with the EU first and foremost. But a deal with Canada should be its second priority. Not only can CETA provide a model for a <a href="https://www.theglobeandmail.com/business/article-ceta-can-serve-as-template-for-post-brexit-canada-uk-trade-deal/">U.K.-EU deal</a>, it can also be the template for the Canada-U.K. deal.</p>
<p>The U.K. can get an early and relatively easy win by completing a new trade agreement with Canada. The two countries, in fact, have already agreed informally to move forward on a Canada-U.K. agreement built on CETA.</p>
<p>Along with Dylan Klemen of the University of Calgary’s School of Public Policy, I have argued that <a href="https://www.policyschool.ca/wp-content/uploads/2019/07/Trade-Policy-Trends-Brexit-final.pdf">this would be an important win for Canadian trade policy as well</a>. The U.K. is Canada’s fifth largest trading partner, and was its largest trading partner when it remained in the EU. The U.K. is Canada’s second largest source of foreign direct investment, and the second largest foreign destination for Canadian investors.</p>
<p>The <a href="https://www.policyschool.ca/wp-content/uploads/2019/07/Trade-Policy-Trends-Brexit-final.pdf">following graphic</a> shows Canada’s 10 most valuable exports (in terms of product groups) to the U.K. over the last five years. Exports of gold are sizably larger than Canada’s other top exports to the country. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/313826/original/file-20200205-149796-1mlv182.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/313826/original/file-20200205-149796-1mlv182.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=472&fit=crop&dpr=1 600w, https://images.theconversation.com/files/313826/original/file-20200205-149796-1mlv182.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=472&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/313826/original/file-20200205-149796-1mlv182.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=472&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/313826/original/file-20200205-149796-1mlv182.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=593&fit=crop&dpr=1 754w, https://images.theconversation.com/files/313826/original/file-20200205-149796-1mlv182.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=593&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/313826/original/file-20200205-149796-1mlv182.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=593&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Canada-U.K. trade statistics.</span>
<span class="attribution"><span class="source">(Eugene Beaulieu)</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>With Brexit, Canada lost one of its key objectives in signing CETA in the first place — free trade with the U.K. </p>
<p>Prime Minister Justin Trudeau began informal discussions on free trade with <a href="https://www.cbc.ca/news/politics/canada-uk-trade-talks-brexit-vote-1.4973281">former British prime minister Teresa May</a>, and <a href="https://www.thestar.com/news/canada/2020/01/31/justin-trudeau-predicts-orderly-brexit-minimal-trade-and-investment-disruption.html">recently confirmed his commitment</a> to a trade agreement between the two countries under Boris Johnson. </p>
<h2>Easy to complete?</h2>
<p>For Canadian trade policy, there is another reason to move quickly with a CETA-based agreement with the U.K. — and another reason to believe the agreement will be easy to complete. And that’s the opportunity <a href="https://www.policyschool.ca/wp-content/uploads/2019/12/final_Canada-UK-Trade-Beaulieu-Dawar-GarnerKnapp.pdf">for Canada to move forward with its diversification strategy and achieve its progressive trade objectives</a>. </p>
<p>The U.K. and Canada should quickly negotiate a free-trade deal with strong environmental and labour provisions modelled closely after CETA.</p>
<p>Free trade with Canada provides an early and relatively straightforward win for the U.K. as well as a win for Canada’s trade diversification strategy and progressive trade agenda. It’s also important that both countries complete a deal to avoid disruptions to the flows of trade and commerce between the two countries. </p>
<p>Meanwhile, the U.K. can use CETA as a template for its own negotiations with the EU. Such a template could be a model for future negotiations with the long list of countries with whom it will be trying to ensure continued market access.</p><img src="https://counter.theconversation.com/content/130970/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eugene Beaulieu receives funding from SSHRC and ESRC.</span></em></p>The U.K. is now in the unenviable position of having to negotiate multiple trade deals following Brexit. Here’s why it should start with Canada.Eugene Beaulieu, Professor, Economics, University of CalgaryLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1306632020-01-30T17:12:06Z2020-01-30T17:12:06ZBritain’s Brexit divorce is here – but the bickering over alimony payments and who gets the house is only beginning<figure><img src="https://images.theconversation.com/files/312601/original/file-20200129-92949-9qu8gf.jpg?ixlib=rb-1.1.0&rect=47%2C127%2C4446%2C2863&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The main immediate impact of Brexit is that UK lawmakers will have to vacate the EU Parliament.
</span> <span class="attribution"><span class="source">AP Photo/Francisco Seco</span></span></figcaption></figure><p>On Jan. 31, 2020, the United Kingdom formally ceases to be a member of the European Union, 1,317 days after citizens of the U.K. narrowly voted to do so in their <a href="https://theconversation.com/what-explains-britains-brexit-shocker-61620">Brexit referendum</a>. </p>
<p>So <a href="https://theconversation.com/britain-is-about-to-leave-the-eu-whats-next-130023">what happens</a> now? Does it mean the U.K. and EU are officially divorced?</p>
<p>As with many relationships, it’s complicated. </p>
<p>Prime Minister Boris Johnson and other “leave” proponents will be keen to celebrate <a href="https://www.theguardian.com/politics/2020/jan/28/got-brexit-done-tory-party-sells-12-tea-towel-in-celebration">finally getting “Brexit done”</a> after years of frustrating negotiations. But as <a href="https://www.american.edu/sis/faculty/garretm.cfm">an expert</a> in the <a href="https://theconversation.com/how-does-the-unidentified-political-object-that-is-the-european-union-really-work-123425">EU</a> and <a href="https://theconversation.com/3-days-3-key-votes-and-no-end-in-sight-for-brexit-113515">Brexit</a>, I believe that “it is only half-time,” as <a href="https://uk.finance.yahoo.com/video/leo-varadkar-only-half-time-230708450.html">Irish Prime Minister Leo Varadkar put it</a>. The thorny negotiations are about to start.</p>
<p><iframe id="wIAp9" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/wIAp9/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>On Feb. 1, Brexit’s impact on the United Kingdom <a href="https://www.bbc.com/news/uk-politics-50838994">will be limited</a>. Yes, the country will no longer be part of the European Union and its members of the European Parliament will officially step down. </p>
<p>But, until Dec. 31, the U.K. will remain in the union’s single market and customs union. It will continue to contribute to the EU budget. And it will still have to follow the EU’s rules and regulations. This is all part of the so-called transition period – which could last as long as three years.</p>
<p>By <a href="https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_104">joint agreement</a>, the EU and the U.K. can extend this transition period once for either 12 or 24 months. The United Kingdom, however, <a href="https://www.bbc.com/news/election-2019-50818134">ruled out this option</a> in December. So, absent a change on this front, the two parties will have fewer than 11 months to negotiate the future terms of their relationship.</p>
<p>This is an extremely tall order for such a short period of time. London and Brussels need to reach an agreement on their terms of trade, <a href="https://www.bbc.com/news/uk-politics-50838994">as well as a host of other sensitive issues</a>. These include law enforcement and security, data sharing, access to fishing waters, aviation standards and safety. </p>
<p>Comprehensive trade agreements are notoriously difficult to negotiate. For reference, the recent EU-Canada accord <a href="https://www.brookings.edu/blog/order-from-chaos/2020/01/13/brexit-endgame-brexit-nears-northern-ireland-assembly-reconvenes-and-megxit-distracts/">took seven years</a>. As long as the end of 2020 remains the deadline, London and Brussels could only realistically strive for a minimal deal before the U.K. is on its own, leaving many issues to be resolved for later years.</p>
<p>Furthermore, the EU is a formidable negotiator. European Commission President Ursula von der Leyen made it clear <a href="https://www.economist.com/britain/2020/01/11/britain-is-almost-out-of-the-eu-but-what-next">that the United Kingdom faces clear choices</a>. The more London diverges from EU rules and regulations, <a href="https://thehill.com/opinion/international/474398-more-than-brexit-high-stakes-for-the-united-kingdoms-foreign-policy">the more restricted its access to the EU’s single market</a>. This matters a lot as the EU <a href="https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7851">currently accounts for 45% of all U.K. exports and 53% of all its imports</a>.</p>
<p>Moreover, the trade talks will have far-reaching ramifications. Once out of the EU, the U.K. will have to negotiate trade agreements with other countries, especially the United States – which is, after all, the <a href="https://www.bbc.com/news/business-44802666">United Kingdom’s second-largest trading partner after the EU</a>. And the very different approaches to food regulations in the EU and the U.S. could hinder Britain’s ability to reach an agreement with both key partners.</p>
<p>Additionally, any other third country will first want <a href="https://www.economist.com/britain/2020/01/11/britain-is-almost-out-of-the-eu-but-what-next">clarity on the future terms of the EU-U.K. trade relationship</a> before embarking on serious negotiations with Britain. </p>
<p>Finally, in a broader sense, leaving the European Union will present a stark challenge for the <a href="https://thehill.com/opinion/international/474398-more-than-brexit-high-stakes-for-the-united-kingdoms-foreign-policy">future of the United Kingdom’s foreign policy</a>. London will reclaim some independence of action, but it could struggle to <a href="https://www.ft.com/content/fbcd92a4-40fa-11ea-a047-eae9bd51ceba">exercise influence in a new era of Great Power rivalry</a> involving China, the EU and the U.S.</p>
<p>Thus, far from having completed Brexit, the United Kingdom will still face major decisions and challenges in the coming year.</p>
<p>[ <em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/130663/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Garret Martin receives funding from the European Union for the Transatlantic Policy Center, a Jean Monnet Center of Excellence based at American University.</span></em></p>Even though the UK is officially out of the EU on Jan. 31, it’ll take at least another 11 months of negotiations before its departure is complete.Garret Martin, Professorial Lecturer, American University School of International ServiceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1308952020-01-30T14:22:03Z2020-01-30T14:22:03ZPost-Brexit trade: public prioritises deal with EU and is most concerned about food<figure><img src="https://images.theconversation.com/files/312828/original/file-20200130-41516-1q5hwwf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Remain voters overwhelmingly prioritise a deal with the EU.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-uk-july-2-2019-banner-1440742535">Amani A / Shutterstock.com</a></span></figcaption></figure><p>From February 1 Britain will start trade talks in earnest. Some <a href="https://www.telegraph.co.uk/news/2020/01/13/britain-should-prioritise-american-trade-talks-eu/">claim</a> that a deal with the US should be prioritised over a deal with the EU. <a href="https://www.telegraph.co.uk/politics/2020/01/17/boris-johnson-expected-open-trade-talks-us-negotiating-eu/">Reports</a> also suggest the UK government is considering opening trade talks with the US first or that running trade negotiations with both the EU and the US concurrently <a href="https://www.thetimes.co.uk/article/brexit-trade-talks-why-negotiate-with-brussels-and-washington-at-once-v36wj7vns">might</a> help the government to play one side off against the other.</p>
<p>The government faces important choices as it sets priorities for trade negotiations. Not least because it also plans to negotiate trade deals with other countries including Australia and New Zealand and to improve trade ties with emerging economies, including India, as part of its strategy of promoting a <a href="https://theconversation.com/brexits-global-britain-uk-needs-a-clear-economic-strategy-for-its-trading-future-not-a-dead-colonial-fantasy-116707">“Global Britain”</a>.</p>
<p>We <a href="https://demos.co.uk/wp-content/uploads/2019/10/Emerging-divisions-on-trade.pdf">surveyed more than 2,000 people</a> to find out who the public’s preferred trade partners are and which sections of the economy they care most about when it comes to trade deals. We find significant divisions between Leave and Remain voters over their preferred trading partners and in terms of who they think has the upper hand in negotiations. </p>
<p>While Remain voters overwhelmingly prioritise a deal with the EU, Leave voters are much more interested in a US trade deal. Perhaps unsurprisingly, Remain voters are generally more pessimistic than Leave voters about the UK’s prospects for securing advantageous trade deals.</p>
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Read more:
<a href="https://theconversation.com/five-options-for-brexit-trade-explained-114932">Five options for Brexit trade explained</a>
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<h2>Which deal is most important?</h2>
<p>We asked respondents to score different trading partners from 1 to 11, where 1 means it should not be a priority and 11 means it should be a top priority. Everyone scored each of the potential trading partners that we suggested quite highly. At the same time, they clearly saw some as more important than others. </p>
<p>Despite <a href="https://www.telegraph.co.uk/finance/economics/11700443/The-EUs-dwindling-importance-to-UK-trade-in-three-charts.html">arguments</a> that the EU represents a declining proportion of the UK’s trade, our findings suggest that, overall, the public still see the EU as the priority partner in future trade deals (with an average score of 9 out of 11). This is followed by Canada (average score of 8.5) and then the US (average score of 8.2). This could put significant pressure on the government if negotiations with the EU falter.</p>
<p>Divisions over Brexit appear to play a significant role in shaping voters’ priorities on trade. Those that voted Remain prioritise a deal with the EU, whereas Leavers prioritise a deal with the US followed by Australia (8.9). Leavers scored a trade deal with the EU as their lowest priority (7.9) and behind a deal with Canada, Japan, China or India.</p>
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<p><strong>With which of the following should the UK Government prioritise post-Brexit trade deals with?</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=430&fit=crop&dpr=1 600w, https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=430&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=430&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=540&fit=crop&dpr=1 754w, https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=540&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/312810/original/file-20200130-41476-1lwl5xg.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=540&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://demos.co.uk/wp-content/uploads/2019/10/Emerging-divisions-on-trade.pdf">Source: Vasilopoulou, Keith, Talving</a></span>
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<p>Given the public support for a trade deal with other countries, including Canada, the government may also find pressure to engage in further simultaneous trade negotiations. Doing this might prove to be problematic when questions have also been <a href="https://www.ft.com/content/220ff806-3c5c-11ea-a01a-bae547046735">raised</a> about the government’s capacity or readiness to conduct a series of simultaneous negotiations given their complexity and demands on the civil service.</p>
<p>These findings also raise significant questions about what shapes the public’s trade priorities and the role of cultural, historic ties and language. The lower score for India suggests the public may still need convincing about a key aspect of the Global Britain strategy, which is developing trade relations with emerging trade powers.</p>
<h2>What should trade deals cover?</h2>
<p>To gain insights into the economic sectors that the public sees as the priority for trade deals after Brexit, respondents scored five different sectors between 1 and 11, with 1 indicating that the sector was not a priority and 11 indicating it to be a top priority. Here food scored highest (with an average score of 9.5). </p>
<p>This might reflect concern following reports of potential food shortages or <a href="https://theconversation.com/brexit-and-food-there-is-no-plan-so-what-is-the-uk-going-to-put-on-the-table-81210">empty shelves</a> in the event of a no-deal Brexit. It could also reflect concerns around <a href="https://theconversation.com/brexit-and-food-standards-could-get-even-worse-94866">food safety</a> in the event of a trade deal with the US, with <a href="https://theconversation.com/chlorine-washed-chicken-qanda-food-safety-expert-explains-why-us-poultry-is-banned-in-the-eu-81921">chlorinated chicken</a> and <a href="https://www.independent.co.uk/news/business/news/uk-us-trade-deal-food-standards-chlorinated-chicken-gm-brexit-a9060876.html">GM crops</a> getting a lot of news coverage.</p>
<p>Alongside food, people also prioritise high tech services (mean score of 7.9) for trade deals. This is an area that will be particularly difficult to forge free trade deals with key partners such as the US. Meanwhile, the public do not see cars or motorbikes as a priority area for trade deals, but this is an area that the US has identified as one of its <a href="https://www.huffingtonpost.co.uk/entry/john-bolton-uk-us-trade-deal_uk_5d52918ae4b05fa9df047068">priority areas</a> for an agreement. Significantly, we find limited differences between Remain and Leave voters.</p>
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<p><strong>Which sectors should the UK Government prioritise in its trade deals after Brexit?</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=357&fit=crop&dpr=1 600w, https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=357&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=357&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=448&fit=crop&dpr=1 754w, https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=448&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/312812/original/file-20200130-41554-xkndsh.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=448&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://demos.co.uk/wp-content/uploads/2019/10/Emerging-divisions-on-trade.pdf">Source: Vasilopoulou, Keith, Talving</a></span>
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<h2>Who will have the upper hand?</h2>
<p>Overall, our respondents thought that each of the suggested trading partners would have the upper hand over the UK in trade negotiations (on a scale of 1 to 11 where 1 represents the UK and 11 represents the trade partner having the upper hand). Here the US was viewed as the most powerful trading partner (averaging a score of 7.3) followed by the EU (averaging a score of 6.9). It’s plausible that the public may conflate the geopolitical power of the US with its economic size and understate the size of the EU and Chinese economies.</p>
<p>Again, we find that divisions over Brexit structure attitudes towards new trade negotiations. For example, Remain voters tend to view other countries as having a much stronger hand in future trade negotiations. In comparison Leave voters appear to be more optimistic about the UK’s power in negotiations.</p>
<hr>
<p><strong>Who do you think would have the upper hand in trade negotiations between the following?</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=361&fit=crop&dpr=1 600w, https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=361&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=361&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=453&fit=crop&dpr=1 754w, https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=453&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/312814/original/file-20200130-41541-j79e5e.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=453&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://demos.co.uk/wp-content/uploads/2019/10/Emerging-divisions-on-trade.pdf">Source: Vasilopoulou, Keith, Talving</a></span>
</figcaption>
</figure>
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<p>Our survey also suggests that the UK public might understate the economic power of some potential partners in trade negotiations. India was seen as having a weaker hand in negotiations than both Canada and Australia, despite having a larger economy than both, as ranked by the <a href="https://databank.worldbank.org/data/download/GDP.pdf">World Bank</a>. This raises the prospect that citizens might feel too many concessions are being made to countries that are seen to be in a weaker position than economic realities suggest.</p>
<p>How the UK government will navigate public sentiment is another matter. Boris Johnson has <a href="https://www.gov.uk/government/speeches/pm-statement-in-downing-street-13-december-2019">spoken of healing</a> the divisions surrounding Brexit. </p>
<p>A strategy of negotiating simultaneous deals with the EU and the US might appear to be a way to bridge differences between those who voted Leave and Remain. It may be a way of meeting the Remain preference for a trade deal with the EU and the Leave preference for a deal with the US. But our research suggests that the government may still face significant challenges in winning public support for the final terms of these deals.</p>
<p>Overall people thought that both the EU and US held the upper hand in negotiations. This raises questions as to whether the public may have become reconciled to an unfavourable deal. If they have not, then Remain voters in particular may be particularly aggrieved by the results of a UK-US trade deal given that their preference for deals are with other trade partners. Similarly, Leave voters might become particularly dissatisfied with the results of a trade deal with the EU given their lower preference for this and their relatively optimistic appraisal of the UK’s strength in negotiations.</p>
<p>As a result, free trade agreements are likely to become the next big battleground of political and economic grievances. Not least because our research suggests there may be considerable areas where the public misunderstand trade-related issues or have priorities that could prove problematic or out of line with economic realities.</p><img src="https://counter.theconversation.com/content/130895/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daniel Keith has received funding from the ESRC.</span></em></p><p class="fine-print"><em><span>Sofia Vasilopoulou has received funding from the ESRC in the past.</span></em></p><p class="fine-print"><em><span>Liisa Talving does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How the public ranks different post-Brexit trade partners and which sections of the economy they prioritise.Daniel Keith, Lecturer in Politics, University of YorkLiisa Talving, Research Fellow in Comparative Politics, University of TartuSofia Vasilopoulou, Senior Lecturer, Department of Politics, University of YorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1253992019-10-18T11:25:06Z2019-10-18T11:25:06ZTrump is flouting global trade rules with China yet embracing them with the EU – here’s why it matters<p>Just as America’s trade war with China may be winding down, its troubles with Europe seem to be growing. </p>
<p>On Oct. 11, President Donald Trump <a href="https://www.bloomberg.com/news/articles/2019-10-11/u-s-china-said-to-reach-partial-deal-could-set-up-trade-truce-k1melw60">said that the United States and China had agreed</a>, in principle, to “phase one” of a trade deal. Although the details are murky, the deal appears to suggest small wins for both sides and a cessation – for now – in tariff escalation. </p>
<p>Three days later, the <a href="https://fortune.com/2019/10/14/us-eu-trade-war-airbus-vs-boeing-wto-gives-okay-us-7-5-billion-eu-import-tariffs/">U.S. imposed US$7.5 billion of sanctions</a> on European Union products – such as Scotch whiskey and French cheese – to protest the EU’s subsidies of aviation giant Airbus. </p>
<p>But there is one notable difference between these two conflicts. </p>
<p>Trump has been managing the dispute with China largely outside the international legal framework regulating trade. Though he has employed various justifications for his actions, <a href="https://www.cnbc.com/video/2019/05/15/american-tariffs-on-chinese-goods-are-illegal-former-wto-official.html">many experts agree</a> that they violate international law. By contrast, Trump’s European tariffs were sanctioned by the World Trade Organization. They are thus indisputably legal.</p>
<p>As a <a href="https://scholar.google.com/citations?user=Y58-EhUAAAAJ&hl=en&oi=ao">scholar of trade policy</a>, these two simultaneous moves – one outside international law and the other inside it – fascinate me. They show that Trump’s approach to trade is not so much anti-establishment as it is opportunistic. </p>
<h2>A tale of two trade talks</h2>
<p>The deal with China, which that country hasn’t yet formally endorsed, <a href="https://www.nytimes.com/2019/10/15/business/economy/china-trade-deal.html">appears to include</a> a promise by Beijing to purchase up to $50 billion of additional U.S. agricultural products and to revisit its foreign investment and intellectual property laws. </p>
<p>In return, the White House has suspended the imposition of its threatened tariff hikes, which had been due to take place on Oct. 15. </p>
<p>Trump claims to have achieved more success with his aggressive stance during the 18-month trade war than prior presidents could boast when playing by the rules. It is ironic, then, that his trade sanctions against Europe resulted from <a href="https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/october/us-wins-75-billion-award-airbus">over a decade of work</a> by previous administrations and stuck to the book.</p>
<p>The United States has long maintained that European countries subsidize Airbus, while the European Union has claimed that Washington uses defense spending to do the same for Boeing. The EU may soon get permission from the WTO to impose its own trade sanctions on U.S. products if that case goes the way <a href="https://theweek.com/articles/870915/trumps-trade-war-takes-eu">it is expected to</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/297587/original/file-20191017-156314-1899fzj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/297587/original/file-20191017-156314-1899fzj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/297587/original/file-20191017-156314-1899fzj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/297587/original/file-20191017-156314-1899fzj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/297587/original/file-20191017-156314-1899fzj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/297587/original/file-20191017-156314-1899fzj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/297587/original/file-20191017-156314-1899fzj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">U.S. President Donald Trump shakes hands with Chinese Vice Premier Liu He.</span>
<span class="attribution"><span class="source">AP Photo/Andrew Harnik</span></span>
</figcaption>
</figure>
<h2>‘Forum shopping’</h2>
<p>So why is the U.S. following the rules in one case but flouting them in another? Put simply, I believe Trump is “forum shopping.” </p>
<p>Forum shopping is a term coined by <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1758-5899.2012.00195.x">international relations theorists</a> to explain why countries use varying international organizations, or none at all, to conclude similar deals. In all sorts of policy areas, <a href="https://georgetown.app.box.com/s/m4xk4tjq0plr63kn2ntukx491xuyks87">these theorists argue</a>, states will choose to negotiate in forums that they believe will stack the odds in their favor. </p>
<p>That’s why the U.S. chose to work within the rules on Europe – it knew they were on its side – but beyond them in dealing with China.</p>
<p>In the Europe dispute, the issue is quite definable: The EU’s Airbus subsidies <a href="https://www.nytimes.com/2019/10/02/us/politics/airbus-tariffs-wto.html">are a likely violation</a> of global trade rules. </p>
<p>For this reason, the administration has evidently concluded that the smart approach is to follow through with the legal process. </p>
<p>The China dispute is different. It encompasses a wide range of issues – from intellectual property theft to currency manipulation – that would be difficult to adjudicate comprehensively. More to the point, the key Trump complaint – the <a href="https://www.brookings.edu/wp-content/uploads/2019/02/us_china_economic_relationship.pdf">trade imbalance</a> – is not in itself even a violation of international trade law. </p>
<p>The legal route would have taken a long time and may well have gone nowhere. Given Trump’s political need to confront China, such an approach was too risky to consider.</p>
<h2>Long-term consequences</h2>
<p>But forum shopping has costs. </p>
<p>When even the principal architect of the international trading rules – the United States – only appeals to those rules in search of its own interests, <a href="https://www.theglobeandmail.com/opinion/whither-the-rule-of-law/article33953502/">the system’s legitimacy</a> is eroded. </p>
<p>Why should Americans care?</p>
<p>There is a reason that the development of an international trading system has been backed by Washington for seven decades – it is extremely useful. </p>
<p>Having a level playing field in trade, based on clear rules, open information and non-discrimination <a href="https://www.thebalance.com/globalization-and-its-impact-on-economic-growth-1978843">has played a key role</a> in American, and global, economic growth. It has also encouraged interdependence and <a href="https://theconversation.com/trumps-one-on-one-approach-to-china-has-dangerous-implications-for-global-trade-and-world-peace-116505">reduced conflict</a>. Chucking that system for a quick result as Trump has done in the case of China is a mistake.</p>
<p>Ultimately, for legal norms to function, I believe leading players like the U.S., China and the EU must all adopt a more enlightened, long-term view of their interests. They must be willing to recognize the authority of international rules even if they are tempted to ignore them in individual cases.</p>
<p>Let’s hope that future presidents will take a broader view and recognize America’s interests in a rule-based, cooperative international system, both in the trade arena and beyond.</p>
<p>[ <em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/125399/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Hankla does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Trump administration’s tendency to follow rules only if they’re in its interest could end up hurting the US in the long run.Charles Hankla, Associate Professor of Political Science, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1214052019-08-05T12:57:51Z2019-08-05T12:57:51ZWill Trump’s trade war with China ever end?<p>President Donald Trump recently escalated his trade war with China, threatening to impose a 10% tariff on the <a href="https://www.bbc.com/news/business-49199559">remaining US$300 billion</a> of untaxed Chinese imports.</p>
<p>If the new tariff goes into effect in September as promised, <a href="https://www.bloomberg.com/news/articles/2019-08-01/trump-ratchets-up-trade-war-with-new-tariffs-on-chinese-imports?srnd=premium">virtually all Chinese exports</a> to the U.S. would be subject to levies ranging from 10% to 25%. <a href="https://www.bloomberg.com/news/articles/2019-08-05/china-hits-back-at-trump-with-weaker-yuan-halt-on-crop-imports">China retaliated</a> by letting the value of its currency fall to the lowest level in more than a decade and halting all crop imports. </p>
<p>Many Americans like me are now wondering: Is there any end in sight?</p>
<h2>How to win an economic war</h2>
<p>As a <a href="https://shared.cas.gsu.edu/profile/charles-hankla-2-2/">scholar of trade policy</a>, I’ve repeatedly <a href="https://theconversation.com/economic-history-shows-why-trumps-america-first-tariff-policy-is-so-dangerous-92715">made the point</a> that free exchange is a <a href="https://www.thenewbarcelonapost.com/en/200-years-david-ricardo-principles-trade-and-distribution/">positive sum game</a> – meaning every participating country can benefit – rather than zero sum — as <a href="https://www.cnbc.com/video/2018/03/12/trump-thinks-trade-is-a-zero-sum-game-says-expert.html">Trump seems to believe</a>. This is why commercial disputes are certain to harm all participants. </p>
<p><a href="https://theconversation.com/trumps-go-it-alone-approach-to-china-trade-ignores-wtos-better-way-to-win-93918">I believe</a> that the United States could have avoided its current predicament by using the World Trade Organization’s existing <a href="https://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm">dispute resolution process</a> to address its justifiable concerns with Chinese behavior.</p>
<p>Still, from the perspective of a single country, starting a trade war could potentially be justified if the end result ultimately shifts the terms of trade in its favor. </p>
<p>Such a victory can only be achieved when the country has more <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674840317&content=reviews">bargaining leverage</a> than its opponent – in other words, when it can impose more pain on its adversary than it experiences itself. </p>
<p>And the longer the trade war continues, the more concessions that country will have to win in order to compensate for the damage caused.</p>
<p>So, after nearly 18 months of escalating disputes between the U.S. and China, where are we? Is either side winning, and can any concessions justify the <a href="https://thehill.com/opinion/finance/443255-us-china-trade-war-major-pain-little-gain">economic harm</a> that both sides have already experienced?</p>
<h2>China’s pain</h2>
<p>First and foremost, it has become increasingly clear that the trade war is hurting the economies <a href="https://www.bloomberg.com/opinion/articles/2019-08-01/trump-s-trade-war-has-hurt-both-the-u-s-and-china">of both countries</a>. Neither will emerge from this conflict unscathed. </p>
<p>Unfortunately, however, the last 18 months have done little to clarify who is winning – that is, who is hurting less and can credibly hold out for longer.</p>
<p>Take China. Before the trade war, it was already facing a number of significant challenges, first among them how to effect a transition from its current reliance on cheap manufacturing <a href="https://www.washingtonpost.com/news/monkey-cage/wp/2018/05/03/what-is-made-in-china-2025-and-why-is-it-a-threat-to-trumps-trade-goals/?noredirect=on&utm_term=.ee3e3095db09">to the production of higher value-added goods</a>. China’s political stability is also somewhat precarious, as evidenced by recent events in <a href="https://www.cnn.com/asia/live-news/hong-kong-protest-mong-kok-intl-hnk/index.html">Hong Kong</a> and <a href="https://www.nytimes.com/2019/07/10/world/asia/china-xinjiang-rights.html">Xianjing</a>, as well as Chinese leader Xi Jinping’s <a href="https://www.nytimes.com/2018/03/07/world/asia/china-xi-jinping-party-term-limit.html">authoritarian crackdown</a>.</p>
<p>Moreover, China’s economic growth has slowed to a <a href="https://www.cnn.com/2019/07/15/economy/china-gdp-growth/index.html">27-year</a> low of 6.2%. And perhaps more ominously for the country, there are growing signs that foreign companies from America and elsewhere are <a href="https://www.forbes.com/sites/kenrapoza/2019/07/16/europe-joins-us-companies-moving-out-of-china/#24b2deb615bf">looking outside China</a> as they expand their sourcing, production and distribution activities.</p>
<p>Of course, China’s growth rate still makes it among the fastest-expanding economies in the world, so the recent slowdown can hardly be termed a crisis. And the shift away from China, limited as it is, began before the trade war, spurred on by <a href="https://www.economist.com/business/2011/06/09/the-end-of-cheap-goods">rising prices</a>, <a href="https://www.marketwatch.com/story/why-is-the-us-accusing-china-of-stealing-intellectual-property-2018-04-05">intellectual property theft</a> and other issues.</p>
<h2>Not necessarily America’s gain</h2>
<p>The problem for the U.S. is that Americans are also increasingly feeling the pinch.<br>
Perhaps most notably, farmers – many of whom continue to <a href="https://www.cnbc.com/2019/05/19/farmers-are-hurting-but-they-still-support-trump-and-his-trade-war-for-now.html">support Trump</a> – are <a href="https://www.msn.com/en-us/money/markets/farmers-are-losing-patience-with-trumps-trade-war/ar-AABv8iG">beginning to tire</a> of the sacrifices they are making for his uncompromising positions. With the Chinese government <a href="https://www.bloomberg.com/news/articles/2019-08-02/china-s-trump-retaliation-options-range-from-soybeans-to-boeing">threatening to retaliate</a> if Trump follows through on the new tariffs, their willingness to go along may be even more sorely tested.</p>
<p>To keep agriculture on its side, the Trump administration has channeled <a href="https://www.washingtonpost.com/politics/2019/08/01/nine-in-counties-that-voted-trump-have-received-subsidies-fight-trade-war/?utm_term=.f8e22f004d13">billions of dollars in subsidies</a> to those hurt by his trade policies. But this approach also has its political costs, with more fiscally conservative backers of the president <a href="https://time.com/5347827/republicans-fume-at-president-trumps-12-billion-plan-to-aid-farmers/">balking at the price tag</a>.</p>
<p>From a broader perspective, recent studies have undercut <a href="https://www.whitehouse.gov/briefings-statements/remarks-president-trump-marine-one-departure-56/">Trump’s claim</a> that Chinese companies are bearing the brunt of the tariff payments, showing that the <a href="https://www.nber.org/papers/w25672.pdf">bulk of costs</a> are passed to U.S. companies and consumers. And the stock market is <a href="https://www.nytimes.com/2019/08/02/business/economy/china-us-trade-threats.html">reacting negatively</a> to the latest Trump threats.</p>
<p>It is true that the overall American economy remains strong, with <a href="https://www.wsj.com/articles/u-s-july-nonfarm-payrolls-grew-by-164-000-11564749103">expanding employment</a> and a fast, though slowing, <a href="https://www.npr.org/2019/07/26/745547982/the-u-s-economy-is-slowing-as-trade-war-takes-a-toll">growth rate</a> of 2.1% in the most recent period. But China has one more strategic advantage that could make a substantial difference: It can wait out Trump’s presidency. </p>
<p>If the Trump administration’s approach to trade represented a <a href="https://www.politico.com/magazine/story/2017/01/yes-a-bipartisan-foreign-policy-is-possibleeven-now-214617">bipartisan consensus</a>, the U.S. could keep up the pressure over the long term. Containment policy during the Cold War, in which the United States committed itself to curbing Soviet influence, represents the <a href="https://www.hoover.org/research/orienting-principle-foreign-policy">classic example of a consensus</a> that was credibly maintained, in one form or another, across several administrations.</p>
<p>But because the tariffs are so associated with Trump’s personality, the Chinese government can <a href="https://www.cnbc.com/2019/08/02/china-has-can-hold-out-longer-than-the-us-in-the-trade-war-expert.html">afford to wait</a> for a new president. If a Democrat wins in 2020, he or she will <a href="https://www.vox.com/policy-and-politics/2019/2/18/18215442/2020-democratic-presidential-candidates-policies-trade">likely maintain</a> a harder line on China than we saw before Trump, but will <a href="https://www.bloomberg.com/news/articles/2019-07-31/democratic-candidates-target-bungled-trump-trade-war-in-debate">probably repudiate</a> the current president’s penchant for punitive and precipitous tariffs. </p>
<p>In a sense, America’s negotiating credibility has become yet another casualty of its polarized politics. </p>
<h2>In other words: No end in sight</h2>
<p>In the final analysis, China may have the most to lose from the ongoing dispute. But the U.S. bargaining position is more politically vulnerable. </p>
<p>And the Chinese can credibly claim that buckling under American pressure would be <a href="https://www.nytimes.com/2019/05/14/world/asia/china-propaganda-trade.html">unacceptable to their domestic audience</a>. </p>
<p><a href="https://www.jstor.org/stable/3687811?seq=1#page_scan_tab_contents">Studies of shooting wars</a> indicate that they tend to continue until events on the ground reveal which side is likely to win. The same is surely true for trade wars. </p>
<p>Since neither side is clearly winning or losing, we have probably not seen the end of this conflict.</p>
<p>[ <em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/121405/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Hankla does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Trump’s endgame for the US-China trade war still seems elusive as the conflict continues to escalate.Charles Hankla, Associate Professor of Political Science, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1202582019-07-12T20:39:26Z2019-07-12T20:39:26ZThe ‘giant sucking sound’ of NAFTA: Ross Perot was ridiculed as alarmist in 1992 but his warning turned out to be prescient<figure><img src="https://images.theconversation.com/files/283762/original/file-20190711-173366-achyt5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Perot become a household name after making an independent run for president in 1992.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Associated-Press-Domestic-News-Virginia-United-/f8f37976e5e6da11af9f0014c2589dfb/51/0">AP Photo/Doug Mills</a></span></figcaption></figure><p>H. Ross Perot famously <a href="https://www.youtube.com/watch?v=Osc9AI8aCt4&feature=youtu.be">had a way with words</a> that galvanized ordinary Americans and helped him become the most successful third-party candidate since 1912. </p>
<p>He hurled <a href="https://www.marketwatch.com/story/slow-dancing-snakes-and-giant-sucking-sounds-memorable-quotes-from-ross-perot-2019-07-09">one of his most well-known lines</a> during a 1992 debate with Bill Clinton and George H.W. Bush when he assailed the North American Free Trade Agreement, which had just been tentatively agreed to by Canada, the U.S. and Mexico. </p>
<p>He predicted Americans would soon hear a “<a href="https://www.youtube.com/watch?v=W3LvZAZ-HV4">giant sucking sound</a>” as production operations and factories packed up in the United States and moved to Mexico. Perot said something similar a year later in a <a href="https://www.youtube.com/watch?v=0fi8OOAKuGQ">debate with Vice President Al Gore</a>, the most high profile in a series of debates on the trade pact, a few of which <a href="https://clas.berkeley.edu/harley-shaiken-0">I participated in</a> as an adviser to key Democratic leaders in Congress who opposed it. </p>
<p>Economists, business leaders, Clinton and most Republicans dismissed Perot’s worries as overblown. Despite the fact that <a href="https://www.nytimes.com/1993/11/17/opinion/in-america-pretty-words-on-nafta.html">most had never read</a> the agreement, they argued free trade would create jobs, period. Over the objections of Perot, <a href="https://www.govtrack.us/congress/votes/103-1993/h575">most Democrats in the House</a> and other critics like me – NAFTA was ratified and went into effect on Jan. 1, 1994. </p>
<p>A quarter century later, another populist billionaire <a href="https://www.nytimes.com/2019/07/09/business/economy/ross-perot-nafta-trade.html">is promoting</a> an updated, expanded and renamed NAFTA, which he <a href="https://theconversation.com/us/topics/usmca-60377">rebranded as the United States Mexico Canada Agreement</a> in an effort to avoid any association with the “giant sucking sounds” many Americans experienced from “free trade.”</p>
<p>As it turns out, Perot, <a href="https://www.nytimes.com/2019/07/09/us/politics/ross-perot-death.html">who died</a> on July 9, had a point. <a href="https://www.washingtonpost.com/outlook/2019/07/11/ross-perot-brought-us-tea-party-president-trump/?utm_term=.a511e05bc767">His projections</a> were often fanciful, but his warning turned out to be prescient. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/W3LvZAZ-HV4?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Perot talks about NAFTA’s ‘giant sucking sound.’</span></figcaption>
</figure>
<h2>Perot’s warning</h2>
<p>“You implement that NAFTA, the Mexican trade agreement, where they pay people a dollar an hour, have no health care, no retirement, no pollution controls,” Perot said during the second presidential debate in October 1992, “and you’re going to hear a giant sucking sound of jobs being pulled out of this country.” </p>
<p>The response to that remark was fierce and immediate. Economists <a href="https://www.nytimes.com/1993/09/17/us/a-primer-why-economists-favor-free-trade-agreement.html">argued</a> he was dead wrong as they sang the praises of free trade. Perot’s warning, however, resonated with workers, unions, environmentalists and people in manufacturing towns across the country, helping him earn <a href="https://www.nytimes.com/2019/07/09/us/politics/ross-perot-death.html?searchResultPosition=1">20 million votes or about 19% of the total</a>.</p>
<p>After Clinton became president, he took over the ratification of NAFTA and managed to add a side agreement with language for labor rights and the environment to bolster support from some Democrats in Congress.</p>
<p>When he finally signed it into law in December 1993, <a href="https://knowledge.wharton.upenn.edu/article/naftas-impact-u-s-economy-facts/">he declared</a>, “NAFTA will tear down trade barriers between our three nations … and create 200,000 jobs in the U.S. by 1995 alone.” </p>
<p>He was emphatic that the agreement would become “a force for social progress as well as economic growth.”</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/283764/original/file-20190711-173325-1psnmz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/283764/original/file-20190711-173325-1psnmz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/283764/original/file-20190711-173325-1psnmz6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/283764/original/file-20190711-173325-1psnmz6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/283764/original/file-20190711-173325-1psnmz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=509&fit=crop&dpr=1 754w, https://images.theconversation.com/files/283764/original/file-20190711-173325-1psnmz6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=509&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/283764/original/file-20190711-173325-1psnmz6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=509&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Al Gore and Ross Perot debated NAFTA with Larry King.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Watchf-Associated-Press-Domestic-News-Dist-of-/6caab51062df4ded8078bb89b4186082/4/0">AP Photo/George Bennet</a></span>
</figcaption>
</figure>
<h2>Perot’s vindication</h2>
<p>It didn’t quite turn out that way. </p>
<p>Scholars and policymakers <a href="https://www.cfr.org/backgrounder/naftas-economic-impact">often disagree</a> about the impact that NAFTA has had on economic growth and job generation in the U.S. That impact, they say, is not always easy to disentangle from other economic, social and political factors that have influenced U.S. growth. </p>
<p>It is true that leaders of all three countries did tear down trade barriers and insert effective protections for corporations and investment. But critics like Perot were right – and Clinton was wrong – about the warning on jobs. </p>
<p><a href="http://www.epi.org/blog/fast-track-to-lost-jobs-and-lower-wages/">The Economic Policy Institute</a>, a left-leaning think tank, concluded that the U.S. lost about 850,000 jobs from 1993 to 2013 as a result of NAFTA and that number has undoubtedly risen. And the “social progress as well as economic growth” in relation to the agreement never seemed to appear. Despite strong productivity growth in U.S. and Mexican manufacturing, real wages sank by <a href="https://clas.berkeley.edu/research/trade-nafta-paradox">17%</a> in Mexico from 1994 to 2011 and slid in the U.S. as well.</p>
<p>In key manufacturing industries, such as the auto industry, NAFTA has had a <a href="https://clas.berkeley.edu/research/trade-nafta-paradox">clear impact</a>. Global auto producers built 11 new assembly plants in North America from 2009 to 2017. All but three were sited in Mexico – even though they all primarily made vehicles for the U.S. market.</p>
<p>As a result, Mexican employment in the <a href="http://www.inegi.org.mx/sistemas/bie">sector has soared</a>, while American auto jobs <a href="https://data.bls.gov/cgi-bin/srgate">have declined</a>. Last year, Mexico had almost the same number of people working in its motor vehicle industry as the U.S. did, with about <a href="https://data.bls.gov/cgi-bin/srgate">800,000</a> in <a href="http://www.inegi.org.mx/sistemas/bie/">each</a> country. Mexican employment in this sector has almost doubled since 2007 while U.S. employment has slightly slipped. </p>
<p>An even more significant impact has been pushing down on U.S. manufacturing wages as a result of suppressed wages in Mexico due largely to a lack of independent unions in the export sector. With the threat of shifting production to Mexico a factor, real autoworker wages in the U.S. plummeted <a href="https://www.nytimes.com/2019/07/10/opinion/trump-economy.html?em_pos=small&ref=headline&nl_art=9&te=1&nl=opinion-today&emc=edit_ty_20190711?campaign_id=39&instance_id=10831&segment_id=15113&user_id=7ef266ef86ea556ee2bcb48d00ec020d&regi_id=11501198emc=edit_ty_20190711">26%</a> from 2002 to 2013 and have stagnated since. </p>
<p>Ultimately, it’s not just manufacturing workers who are affected by the “sucking sound.” <a href="https://www.nytimes.com/interactive/2019/05/01/magazine/lordstown-general-motors-plant.html">Families and entire communities</a> can be devastated when a worker loses a job as a result.</p>
<h2>The USMCA and Perot’s legacy</h2>
<p>So will the new NAFTA – the United States Mexico Canada Agreement – end the sucking of jobs south? </p>
<p>Not likely. Mexico <a href="https://www.apnews.com/f076c902045f4cea9236d7093cd00036">has a new reform-minded president</a>, but the obstacles are daunting. They include <a href="https://newrepublic.com/article/153467/mexico-brink-labor-revolution">powerful and often corrupt company unions</a> in Mexico who profit off the status quo and employers who have become accustomed to rock-bottom wages.</p>
<p>What Americans need is trade between the U.S. and Mexico that benefits people in both countries. To do that, labor rights need to be harmonized to the best standards in North America, not slide to the lowest. Workers and communities throughout North America should be the beneficiaries of expanded trade, not its victims. </p>
<p>While Mexico has pledged and passed positive labor reforms, it <a href="http://library.fes.de/pdf-files/bueros/mexiko/15508.pdf">doesn’t have the capacity</a> to implement them. An important <a href="https://clas.berkeley.edu/research/trade-nafta-paradox">lesson from NAFTA</a> is promises often evaporate once a deal goes into effect. The original NAFTA included similar promises but failed to deliver.</p>
<p>Americans have heard enough of Perot’s “giant sucking sound” over the last 25 years. What they need now is broadly shared prosperity. I’m sure that will sound a lot better to the ear.</p><img src="https://counter.theconversation.com/content/120258/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Harley Shaiken is affiliated with Advisory Board Member of the Center for American Progress</span></em></p>As the US prepares to replace NAFTA, a labor scholar who was critical of Perot but shared concerns about the deal revisits the claim that helped him become the most successful third-party candidate since Teddy Roosevelt.Harley Shaiken, Director of the Center for Latin American Studies and Professor of Letters and Science, University of California, BerkeleyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1191202019-06-21T12:12:53Z2019-06-21T12:12:53ZIndustrial policy is back on the agenda – and it’s never been needed more than it is now<figure><img src="https://images.theconversation.com/files/280597/original/file-20190620-149814-1850ps7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/redcar-beach-sunset-north-east-coast-1113631013?src=axuYVReQ-tQ-KSXojSQrRQ-1-5&studio=1">Shutterstock/pauljrobinson</a></span></figcaption></figure><p>Trade tensions – and possible deals – are high on the political agenda in <a href="https://theconversation.com/brexit-what-has-to-happen-in-uk-and-eu-parliaments-to-ratify-withdrawal-and-future-trade-agreements-107127">Europe</a>, the <a href="https://theconversation.com/is-trumps-trade-war-saving-american-jobs-or-killing-them-117159">United States</a> and <a href="https://theconversation.com/us-china-trade-china-is-building-bridges-with-the-world-while-the-us-puts-up-walls-99038">China</a>. Perhaps that’s one reason why governments seem keen to get more involved in guiding their economies by targeting particular technologies and industries – using what’s known as “<a href="https://academic.oup.com/cjres/advance-article-abstract/doi/10.1093/cjres/rsz006/5490915?redirectedFrom=fulltext">industrial policy</a>”. </p>
<p>China has launched its <a href="http://www.chinadaily.com.cn/business/2017-10/12/content_33163772.htm">2025 programme</a> to gear up its industrial base for the next decade. Both the UK and the <a href="https://ec.europa.eu/commission/news/new-industrial-policy-strategy-2017-sep-18_en">EU</a> have recently unveiled industrial strategies designed to promote innovation and growth. This can involve government working collaboratively with business to discover knowledge and identify opportunities and challenges. </p>
<p>The UK government has always intervened to some extent in industry – famously “<a href="https://www.parliament.uk/business/committees/committees-a-z/commons-select/business-energy-industrial-strategy/news-parliament-2015/industrial-strategy-evidence1-16-17/">before breakfast, lunch, tea and dinner</a>” in the words of former UK trade and industry secretary Michael Heseltine. </p>
<p>But the <a href="https://www.gov.uk/government/topical-events/the-uks-industrial-strategy">current approach</a> in Britain still appears to suggest something of a shift in thinking. The question is whether we’ll see an improvement in policy design and implementation. On that, there are hopes that things may be different this time round. </p>
<p>We should recall that industrial policy in the UK fell out of favour back in the 1970s, when the <a href="https://politicalquarterly.blog/2018/10/24/dont-be-fooled-uk-industrial-strategy-has-a-long-history-of-picking-winners/">government was accused</a> of “picking winners” and supporting so-called “lame-duck” corporations. (Although some of those ducks included British Aerospace and Rolls Royce – now both highly successful companies.)</p>
<p>But after years of de-industrialisation – and a decade on from the <a href="https://theconversation.com/six-charts-that-show-how-much-the-world-has-changed-since-the-2007-08-financial-crisis-83477">global financial crisis</a> – questions still arise as to whether the UK needs rebalancing. And, if so, how? This is what brings industrial policy back on the agenda. </p>
<p>For example, the UK has the <a href="https://bit.ly/2WAtV3U">widest regional income and productivity disparities</a> in northern Europe. Some might say that growing regional disparity is a root cause of <a href="https://www.centreforcities.org/podcast/city-talks-revenge-places-dont-matter/">increasing populist politics</a>, which is especially prevalent in declining regions. </p>
<p>These spatial imbalances and the neglect of manufacturing (which is a big driver of productivity growth) have also slowed the UK’s national economic performance. British productivity falls well below that of other leading European nations such as <a href="https://www.theguardian.com/business/2016/nov/24/why-is-uks-productivity-still-behind-that-of-other-major-economies">Germany and France</a>. </p>
<p>Neglect aside, manufacturing is vitally important to a nation’s economic strength. In the UK, <a href="https://excellentnewspaper.com/uk-manufacturing-sector-far-larger-than-politicians-realise-the-guardian/">advanced manufacturing</a> capital-intensive industries such as aerospace, chemicals and energy generation provide highly skilled jobs and support supplier industries. Also, manufacturing sectors are especially important to the country’s regional hinterland, where they are key sources of innovation and growth. </p>
<p>So how can industrial policy revitalise manufacturing and promote inclusive and more balanced growth today? This question is especially topical given the scale of ongoing technological change. </p>
<p>New technologies such as artificial intelligence, machine learning, and automation – coming together in what is termed “<a href="https://www.birmingham.ac.uk/research/perspective/industry-4-and-what-to-expect-for-industry-policy.aspx">Industry 4.0</a>” – present big challenges and opportunities for industry. There are calls for a <a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=2ahUKEwjEvaDprPjiAhUhmVwKHcazAMsQFjAAegQIABAC&url=http%3A%2F%2Fwww.makers-rise.org%2Fwp-content%2Fuploads%2F2019%2F05%2FPolicy-Report-May-2019.pdf&usg=AOvVaw0tvmvDOgTrtxEVBpspNPMu">transformative industrial policy</a>
tackling issues such as skills, infrastructure, business access to new technologies, rebuilding of localised supply chains and much more. </p>
<p>So in contrast with the past, today’s industrial policy can play a key role in shaping the process of industrial transformation. Instead of picking winners, today’s industrial policy can focus upon building a stable of potentially successful innovative organisations.</p>
<h2>Innovation at the heart of industry</h2>
<p>A regional approach is essential to do this, however. It is often at a regional level that existing specialisms and capabilities are more apparent and have a better chance of connecting with emergent technologies in new ways. In that regard, industrial policy needs to bring together sectors, technologies and place in a genuinely “place-based” approach.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-make-a-place-based-industrial-strategy-work-98716">How to make a 'place-based' industrial strategy work</a>
</strong>
</em>
</p>
<hr>
<p>The Italian region of Emilia Romagna has long used this tactic to develop new specialisms, opening up markets in sectors including tiles, clothing, shoes, culinary machinery and its celebrated <a href="http://thepackagingvalley.com/web/">machine packaging industry</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/280598/original/file-20190620-149810-9bkbij.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/280598/original/file-20190620-149810-9bkbij.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/280598/original/file-20190620-149810-9bkbij.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/280598/original/file-20190620-149810-9bkbij.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/280598/original/file-20190620-149810-9bkbij.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=425&fit=crop&dpr=1 754w, https://images.theconversation.com/files/280598/original/file-20190620-149810-9bkbij.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=425&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/280598/original/file-20190620-149810-9bkbij.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=425&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Emilia Romagna at work.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/industrial-plants-dusk-ferrara-emilia-romagna-1199658523?src=0s-D24jq8xwnAoh_Z-lXig-1-8&studio=1">Shutterstock/Giorgio Morara</a></span>
</figcaption>
</figure>
<p>In the US, a federal initiative which invests in new technology, the <a href="https://www.energy.gov/eere/amo/national-network-manufacturing-innovation">National Network of Manufacturing Institutes (NNMI)</a>, is trying to link technological development and industrial capacity with the aim of creating new jobs and innovations. </p>
<p>Likewise, well designed public-private collaborations can identify and support skills packages which can be tailored to circumstances in response to industry needs. Denmark’s <a href="https://denmark.dk/society-and-business/the-danish-labour-market">flexicurity model</a> protects workers from job losses during periods of technological change by using unemployment insurance-linked funds to sustain continuous learning. In so doing, it helps to avoid job loss and boosts worker retraining. </p>
<p>In the UK, a new “<a href="https://www.madesmarter.uk/">Made Smarter</a>” programme is currently being piloted in the North West. Its purpose is to test the most effective ways to engage with manufacturers to encourage them to adopt new technologies.</p>
<p>Although the Made Smarter programme is a promising initiative, there is a concern with the UK government’s commitment and the lack of scale. Beyond the pilot, there is only £121m for the UK as a whole for business to adopt new digital technologies. This isn’t going to go very far – and doesn’t compensate for the government’s <a href="https://www.business-live.co.uk/business/manufacturing/government-needs-rethink-decision-scrap-10784047">scrapping of the Manufacturing Advisory Service</a> a few years ago, which was a major policy blunder.</p>
<p>Critically, industrial policy can and should deal with the challenge of climate change. It can promote the development of <a href="https://drodrik.scholar.harvard.edu/files/dani-rodrik/files/green_industrial_policy.pdf">renewable energy technologies</a>, through appropriate research and development grants and loans. </p>
<p>In short, industrial policy is back on the agenda – where it belongs. This time round, it should aim to build on existing expertise and capabilities and link them with radical new technologies. In doing so, it can help people, businesses, and places achieve their full potential.</p><img src="https://counter.theconversation.com/content/119120/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Phil Tomlinson receives funding from the European Regional Development Fund to establish two business acceleration hubs in the South West of England. </span></em></p><p class="fine-print"><em><span>David Bailey receives funding from the Economic and Social Research Council's UK in a Changing Europe Initiative (grant reference: ES/T000848/1).</span></em></p><p class="fine-print"><em><span>Peter Tyler receives funding from The Engineering and Physical Sciences Research Council (EPSRC)
on a project entitled 'The Long term dynamics of interdependent infrastructure systems’.</span></em></p><p class="fine-print"><em><span>Amy Glasmeier does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Properly executed, government intervention can provide a real economic boost.Phil Tomlinson, Associate Professor in Business Economics, Deputy Director Centre for Governance, Regulation and Industrial Strategy (CGR&IS), University of BathAmy Glasmeier, Professor of Economic Geography and Regional Planning, Massachusetts Institute of Technology (MIT)David Bailey, Professor of Business Economics, University of BirminghamPeter Tyler, Professor in Urban and Regional Economics, University of CambridgeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1169182019-05-21T22:57:45Z2019-05-21T22:57:45ZThe new NAFTA’s assault on public health<figure><img src="https://images.theconversation.com/files/275157/original/file-20190517-69174-1yeydve.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C2396%2C1422&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. President Donald Trump, Prime Minister Justin Trudeau and Mexico's President Enrique Pena Nieto hold a news conference before signing the USMCA. The deal, if passed into law, poses dangers to public health.</span> <span class="attribution"><span class="source">(AP Photo/Pablo Martinez Monsivais)</span></span></figcaption></figure><p><a href="https://www.ctvnews.ca/politics/canada-agrees-to-new-trilateral-trade-deal-with-u-s-and-mexico-1.4115731">The negotiations were strained</a> and at times it looked like it would be stillborn, but the USMCA (the new North American Free Trade Agreement linking the economies of the United States, Mexico and Canada) was signed in November 2018 and awaits ratification.</p>
<p><a href="https://www.washingtonpost.com/business/economy/north-american-trade-deal-faces-early-headwinds-on-capitol-hill/2019/03/29/ef5b0d0c-5178-11e9-88a1-ed346f0ec94f_story.html?utm_term=.f984de2e42de">Its future is still uncertain.</a> Although U.S. President Donald Trump finally <a href="https://globalnews.ca/news/5291819/freeland-tariffs-the-west-block/">removed tariffs on steel and aluminium imports from Canada and Mexico</a>, something both countries and even some congressional Republicans were demanding for the deal to be ratified, <a href="https://www.ctvnews.ca/politics/new-nafta-deal-at-risk-as-u-s-democrats-want-negotiations-reopened-1.4363491">Democrats in the U.S.</a> are unhappy with its costly monopoly protection for new pharmaceuticals and weak enforcement measures for labour and environmental protection. </p>
<p>But beneath the political jockeying is a sleeper issue concerning public health that signals a bad agreement.</p>
<h2>Health impact assessment</h2>
<p>We undertook <a href="https://globalizationandhealth.biomedcentral.com/articles/10.1186/s12992-019-0476-8">a recently released health impact assessment of the USMCA</a>, focusing on three specific aspects of the agreement with direct or indirect health effects —pharmaceuticals, health and environmental regulations and labour and environmental protection. </p>
<p>For prescription drugs, <a href="https://www.healthsystemtracker.org/chart-collection/recent-forecasted-trends-prescription-drug-spending/#item-growth-in-price-and-utilization-of-pharmaceuticals-has-varied-over-time_2019">the costs of which have risen dramatically since the era of patent protection</a> in trade agreements, the USMCA contains provisions the Americans wanted in the <a href="http://www.ijhpm.com/article_3186.html">Trans-Pacific Partnership agreement</a>. </p>
<p>These provisions were suspended by the remaining countries when Trump pulled the U.S. out of that agreement. Now they’re back in, but with an even longer 10-year guaranteed monopoly for biologics, a new category of costly drugs used to treat cancers and autoimmune disorders. Generic equivalents known as “biosimilars” can <a href="http://www.pmprb-cepmb.gc.ca/view.asp?ccid=1304">cut the price by almost half</a>. </p>
<p>Canada currently offers eight years of market protection for biologics; the additional two years <a href="https://www.pbo-dpb.gc.ca/en/blog/news/CUSMA_prescription_drugs">could eventually add almost $170 million to each year’s drug costs</a>. Hardest hit would be Mexico, which presently offers no such monopoly rights for biologics. </p>
<p>The USMCA also locks in rules that make it easier for drug companies to “evergreen” their products through minor changes in their components or in how they’re administered, extending the years of patent protection and prevent regulators from using, for several years, the patent drug company’s test data when approving generic versions.</p>
<h2>Impact on health regulations</h2>
<p>A more subtle but critical set of changes in the USMCA imposes new constraints on the three countries’ abilities to enact health, safety and environmental policies or regulations. </p>
<p>It is these so-called <a href="https://journals.sagepub.com/doi/abs/10.1177/1468018117731415?journalCode=gspa">behind-the-border rules in trade and investment agreements</a> that have garnered the greatest public health concerns. The USMCA tries to assuage these concerns by affirming countries’ “inherent right to regulate” including “to protect public health, safety, the environment (and) natural resources.” </p>
<p>But it immediately undercuts this right by specifying that it must be exercised “in a manner consistent with this agreement.” That “consistent manner” includes provisions that could make it harder for Mexico to use existing safeguards under World Trade Organization rules to ensure domestic food security or <a href="https://www.iatp.org/blog/201902/fair-prices-and-bold-new-deal-mexico">to guarantee minimum food prices to reduce rural poverty and support small-scale Mexican farmers</a>. </p>
<p>It requires the three governments to ensure that any new international standards upon which new regulations might be based “do not create unnecessary obstacles to international trade,” suggesting trade issues will trump new health regulations. This became an issue even during negotiations, when <a href="https://theconversation.com/how-nafta-will-make-us-fat-if-the-u-s-has-its-way-94198">the U.S. wanted the agreement to ban any front-of-package nutrition labelling</a> that would warn consumers of unhealthy levels of fat, salt or sugar.</p>
<p>Canada and Mexico rejected this, but the USMCA contains several provisions on labelling that could lead to trade disputes should the two other countries choose to adopt new nutrition labels, <a href="https://www.canada.ca/en/health-canada/programs/consultation-front-of-package-nutrition-labelling-cgi/summary-of-proposed-amendments.html">as Canada is proposing to do</a>. </p>
<p>American and Canadian trade associations representing meat processors have already argued that <a href="https://www.regulations.gov/document?D=OMB-2018-0006-0007">Canada’s proposal violates the USMCA</a>, portending a possible trade challenge if the USMCA becomes law. </p>
<h2>Foxes guarding the hen house</h2>
<p>Other rules open the doors for “persons of another party” — in other words, primarily U.S.-based corporations — to have a seat at the table when Canada or Mexico decide to consult on new regulations. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/275748/original/file-20190521-23814-1p6twfg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Inviting corporations to help determine new regulations is a bit like asking the fox to guard the hen house.</span>
<span class="attribution"><span class="source">Scott Walsh/Unsplash</span></span>
</figcaption>
</figure>
<p>This runs the risk of <a href="https://www.investopedia.com/terms/r/regulatory-capture.asp">regulatory capture</a> by private vested interests, akin to inviting the foxes to guard the hen house. Unaware that your <a href="http://time.com/4832688/makeup-shampoo-toxic/">cosmetics are not always healthy or safe</a>? The USMCA would like to keep it that way, requiring governments to wait until a problem shows up and fix it later.</p>
<p>In a similar way, USMCA provisions require governments to submit detailed scientific evidence and explanation for any new government regulation, which is likely to lead to <a href="https://www.iatp.org/sites/default/files/2018-11/NewNAFTA_Stuart%20Trew.pdf">“regulatory chill,”</a> slowing down or preventing the introduction of novel health protection measures. This risk is compounded by an entire and enforceable chapter that aims to have the three governments harmonize their regulations to enable freer movement of goods across borders. </p>
<p>The economic elephant in the USMCA is, of course, the U.S., whose regulatory rules will likely set the tone for Canada and Mexico, and the Trump administration <a href="https://www.brookings.edu/interactives/tracking-deregulation-in-the-trump-era/">is keen to undo as many health and environmental regulations as possible</a>. </p>
<p>There are some less troubling glimmers in the new agreement. Controversial rules allowing foreign investors to sue governments over regulations that may undermine the value of their investment have been eliminated between the U.S. and Canada, apart from a three-year window for “legacy claims” to be made. </p>
<p><a href="https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2018/01/NAFTA%20Dispute%20Table%20Report%202018.pdf">Canada fared particularly badly under the old NAFTA</a> while the U.S. never lost a case, yet it was the United States that scrapped the rules while Canada wanted to keep them. So go figure. The Americans hedged their bets, however, by retaining the rules to protect U.S. investors in Mexico. </p>
<h2>Mandatory Mexican minimum wage</h2>
<p>The USMCA also contains provisions that claim to protect labour rights and the environment, often used by governments to sell trade deals to skeptical citizens. </p>
<p>A key labour provision, however, requires Mexico to amend its laws to allow workers to more effectively collectively bargain. The country <a href="https://www.washingtonexaminer.com/policy/economy/mexico-adopts-labor-reforms-advancing-trump-usmca-trade-deal">recently passed</a> legislation to satisfy this provision but questions remain over implementation and enforcement strategies. </p>
<p>A second provision mandates a substantially increased minimum hourly wage in Mexico’s auto-manufacturing sector, which could help relieve poverty for Mexicans, although Mexican exporters might opt instead to pay the low tariff the U.S. would levy if they fail to raise wages. </p>
<p>And while there’s lots of references to labour rights and multilateral environmental agreements in the USMCA, it’s unsurprisingly silent on climate change and the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris climate accord.</a> And there are escape clauses — provisions only become enforceable if a country lowers its existing level of protection to gain a trade or investment advantage. This might prevent a race to the regulatory bottom, but it’s hardly a reassuring reach for the top. </p>
<p>In the end we have an agreement that binds governments’ future regulatory options in return for scant evidence of improved labour or environmental protection, or even economic gain. The IMF, for example, estimates <a href="https://www.imf.org/en/Publications/WP/Issues/2019/03/26/NAFTA-to-USMCA-What-is-Gained-46680">a net economic boost across the three countries of US$550 million a year</a>, chump change at best. </p>
<p>The U.S. International Trade Office (ITO), with some fanfare, begged to differ, announcing American gains of <a href="https://www.usitc.gov/publications/332/pub4889.pdf">US$62 billion and 176,000 new jobs</a>. The rub here is that these numbers rest on a unique modelling assumption, “reduced policy uncertainty,” that raised the eyebrows of most conventional trade economists. Remove this novel assumption and the American study actually shows a net loss in both income and jobs. Make America Great Again? Perhaps not so much. </p>
<p>As with any trade agreement, some economic sectors will be winners and others losers. But as far as protecting public health is concerned, the USMCA is a big step backwards.</p><img src="https://counter.theconversation.com/content/116918/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ronald Labonte receives funding from the Canadian Institutes of Health Research. </span></em></p><p class="fine-print"><em><span>Courtney McNamara receives funding from the Norwegian Research Council for her project ‘Trade, Labor Markets, and Health.’ </span></em></p><p class="fine-print"><em><span>Deborah Gleeson has received funding in the past from the Australian Research Council. She has received funding from various national and international non-government organisations to attend speaking engagements related to trade agreements and health. She has represented the Public Health Association of Australia on matters related to trade agreements and public health.</span></em></p><p class="fine-print"><em><span>Eric Crosbie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The collective public health of Canada, the United States and Mexico will take a hit if the new NAFTA becomes law.Ronald Labonte, Professor and Canada Research Chair, L’Université d’Ottawa/University of OttawaCourtney McNamara, Senior Researcher, Department of Sociology and Political Science, Norwegian University of Science and TechnologyDeborah Gleeson, Senior Lecturer in Public Health, La Trobe UniversityEric Crosbie, Assistant Professor, University of Nevada, RenoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1142732019-05-09T22:48:33Z2019-05-09T22:48:33ZHow global cities are changing international trade<figure><img src="https://images.theconversation.com/files/272889/original/file-20190506-103045-kagzoz.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4500%2C2997&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fireworks explode over the Toronto skyline, during the opening ceremonies for the Pan Am Games in July 2015. Toronto is among several global cities that are driving trade in services among countries.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/AP-Rebecca Blackwell</span></span></figcaption></figure><p>The geographic diversification of international trade and investment has become a public policy goal of many countries, <a href="https://international.gc.ca/gac-amc/campaign-campagne/trade-diversification-commerce/index.aspx?lang=eng">including Canada</a>. </p>
<p>Increasingly, policy-makers are raising concerns regarding the risks, largely political, that arise when there’s too much concentration of trade and investment on a small number of trading partners. </p>
<p>Trade in services, however, may offer better opportunities for trade diversification. But facilitating trade in services requires supportive regulation and strong global cities like Toronto and London to serve as hubs.</p>
<p>In recent years Canada <a href="https://www.cbc.ca/news/politics/fall-economic-statement-trade-mcgregor-wednesday-1.4914420">has expressed interest in reducing its dependence on</a> the United States, particularly after last year’s difficult NAFTA renegotiations. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=431&fit=crop&dpr=1 600w, https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=431&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=431&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=542&fit=crop&dpr=1 754w, https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=542&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/272881/original/file-20190506-103057-zlxscu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=542&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Jim Carr takes part in a Canada 2020 panel discussion in Ottawa in December 2018.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
</figcaption>
</figure>
<p>Reflecting that priority, Canada now has a <a href="https://pm.gc.ca/eng/minister-international-trade-diversification-mandate-letter-august-28-2018">minister of international trade diversification</a>, Jim Carr. Canada has also pursued trade agreements with more distant partners via <a href="https://www.cbc.ca/news/politics/eu-court-canada-ceta-1.5116305">the Comprehensive Economic and Trade Agreement (CETA)</a> between Canada and the European Union (EU) and the <a href="https://www.cbc.ca/news/politics/cptpp-in-effect-sunday-1.4955582">Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)</a> with 10 other countries in the Asia-Pacific region. </p>
<p>In fact, the various countries that have ratified the CPTPP have stated as one objective the ambition to <a href="https://voxeu.org/content/american-non-trumpian-perspective-asian-integration">develop diverse and more distant trade and investment partners</a> in the face of the rise of China due to the possibility of becoming overly dependent on the Chinese market.</p>
<p>The implicit assumption is that distance is less important to trade now because technology has lowered transportation and communications costs, and trade deals can overcome the remaining costs of distance.</p>
<h2>Proximity versus distance</h2>
<p>But is this entirely true? Can nations move away from their traditional trading partnerships — typically based on geographic proximity — in favour of new nations located further afield? <a href="http://eprints.lse.ac.uk/91922/1/Estrin_Long-read-can-the-UK-capitalise_Author.pdf">Our research</a> grappled with these considerations of proximity and distance in matters of trade, particularly as they pertain to Canada and the United Kingdom.</p>
<p>Our Canada-U.K. collaboration — comprising researchers from the London School of Economics, Western University’s Ivey Business School and Simon Fraser University’s Beedie School of Business — surveyed recent academic and practitioner data and publications on trade and what are known as foreign direct investment (FDI) flows in order to assess the role of distance.</p>
<p>We conclude that if you are trading in goods, physical distance still matters. The evidence also suggests that trade agreements between distant countries may not be able to overcome the costs of distance.</p>
<p>But that’s not true for all forms of distant trade. Our research findings show a very different result for trade in services. <a href="https://www.wto.org/english/tratop_e/serv_e/cbt_course_e/c1s3p1_e.htm">Services trade include</a> direct activities like professional business services, education and tourism, but also includes indirect services such as research and design that are embedded in final products or are traded within companies.</p>
<p>Indirect trade in services has increased over time, as <a href="https://www.oecd.org/sti/ind/global-value-chains.htm">global value chains have become more geographically dispersed</a>. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/272885/original/file-20190506-103085-1cz89cu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Hal Varian, Google’s chief economist, in Google Canada’s office in Toronto in September 2018.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Cole Burston</span></span>
</figcaption>
</figure>
<p>Global value chains allow the stages of production to be distributed around the world. One example is the global dispersion of research activities by multinational firms. A case in point: When Google creates a tech hub in Toronto, it effectively exports that knowledge to other Google subsidiaries around the world. </p>
<p>Distance matters less for the global movement of these services, particularly when they are knowledge-intensive and digital. It’s therefore not surprising that evidence suggests <a href="https://www2.deloitte.com/insights/us/en/economy/issues-by-the-numbers/trade-in-services-economy-growth.html">trade in services, direct and indirect, is growing faster than trade in goods</a>.</p>
<p>But even though trade in services is seems less affected by geographic distance, there’s evidence that other measures of distance have an impact.</p>
<h2>Cultural differences are a type of distance</h2>
<p>International business scholars have identified a series of more general distance measures, including cultural and regulatory distance, between countries. These are sometimes referred to as <a href="https://ghemawat.com/cage">CAGE distance</a>, meaning cultural, administrative and economic differences between trading nations in addition to geographic distance. </p>
<p>Commonalities in several of these areas have facilitated trade and investment flows of various types among Commonwealth countries, despite the vast geographic distances that separate them.</p>
<p>However, in general, because trade in services involves the movement of people along with knowledge and capital, these social, political and economic dimensions take on a heightened role and can inhibit trade in services. </p>
<p>Trade agreements now seek to minimize these costs by including specific clauses with respect to trade in services. For example, the <a href="https://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/overview-apercu.aspx?lang=eng">CPTPP includes clauses regarding financial services and investment protection</a>. Yet more comprehensive service sector liberalization, such as public sector procurement or recognition of certifications, are difficult to negotiate because they require a higher degree of regulatory alignment, which can be politically controversial.</p>
<p>And so the evidence suggests that the impact of distance on trade depends on the nature of what is being traded (goods or services), and how one measures distance. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/272888/original/file-20190506-103078-1jm8js7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/272888/original/file-20190506-103078-1jm8js7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=442&fit=crop&dpr=1 600w, https://images.theconversation.com/files/272888/original/file-20190506-103078-1jm8js7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=442&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/272888/original/file-20190506-103078-1jm8js7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=442&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/272888/original/file-20190506-103078-1jm8js7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=556&fit=crop&dpr=1 754w, https://images.theconversation.com/files/272888/original/file-20190506-103078-1jm8js7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=556&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/272888/original/file-20190506-103078-1jm8js7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=556&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Shipping containers are seen at the Fairview Cove Container Terminal in in Halifax.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Andrew Vaughan</span></span>
</figcaption>
</figure>
<p>We then asked whether it matters where distance is measured from. This seems an obvious question, since when we talk about trade, we mostly think of countries. However, we found that the majority of trade in services, particularly knowledge-intensive services, in fact originates in, and is traded with, a relatively small number of international metropolitan regions, sometimes referred to as global cities. </p>
<p>Most trade in services, it turns out, happens <a href="https://blogs.lse.ac.uk/management/2018/11/23/global-cities-multinationals-and-trade-in-the-age-of-brexit/">between cities rather than between countries</a>.</p>
<p>While there is no one particular definition of a <a href="https://www.lboro.ac.uk/gawc/">global city</a>, it’s clear that in order to understand the nature of trade in services and the policies that might encourage them, one must understand what global cities do and how they do it. </p>
<h2>Cultural differences & global cities</h2>
<p>It turns out that global cities essentially limit the impact of the aforementioned CAGE distance. Cities provide sophisticated communication, education and transportation infrastructures, and the cosmopolitan values that attract and retain talent. </p>
<p>That’s why it’s generally easier to move people and services between global hubs like London, Toronto, New York and Hong Kong. However, the decentralized nature of global value chains means that it’s not only the world’s largest cities that are global. Smaller cities can establish specific niches as global centres for research and design, <a href="https://www.managementtoday.co.uk/cambridge-become-worlds-leading-biotech-cluster/long-reads/article/1520800">such as Cambridge in the U.K. for biotechnology</a>.</p>
<p>Global cities not only attract knowledge-intensive service firms, they have the capacity to spawn the kinds of companies that will become global exporters of services. </p>
<p>The important lesson to be drawn from cities is that they illustrate the links between innovative activity and international integration while at the same time blurring the distinctions between innovation and trade policy. Policies that promote innovation, in other words, are not entirely separate from those that promote diversified trade. <a href="https://blogs.lse.ac.uk/management/2018/11/23/global-cities-multinationals-and-trade-in-the-age-of-brexit/">When countries help their global cities to foster knowledge-based activities, they will also also promote diversified trade in services</a>.</p>
<p>At the same time, cities themselves undertake trade and promotion activities that, in principle, complement those of the national government. In talking to city-based investment and trade promotion agencies, we learned that cities have developed sophisticated strategies to identify and promote trade and investment opportunities, typically with other cities around the globe. </p>
<p>However, these activities are not always co-ordinated with national diversification strategies. Canada has created <a href="https://www.investcanada.ca/">Invest in Canada</a>, in part to fill this role, but its mandate is focused primarily on investment attraction.</p>
<p>Cities have not been central to public policy discussions on trade growth and diversification, which have centred in large measure on trade agreements between countries. We suggest that while trade agreements between countries are important, the role of cities in driving trade in services should be fully explored.</p><img src="https://counter.theconversation.com/content/114273/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Klaus Meyer receives funding fromSSHRC/ESRC.</span></em></p><p class="fine-print"><em><span>Daniel Shapiro receives funding from SSHRC. </span></em></p>Cities have not been central to public policy discussions on trade growth and diversification that are typically centred on trade pacts between countries. But cities are now driving a lot of trade.Klaus Meyer, Professor of International Business, Western UniversityDaniel Shapiro, Professor of Global Business Strategy, Simon Fraser UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1149322019-04-10T10:05:40Z2019-04-10T10:05:40ZFive options for Brexit trade explained<figure><img src="https://images.theconversation.com/files/268550/original/file-20190410-2912-ja387r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The British prime minister’s request for another Brexit delay results from the intensity of diverging positions in the British parliament over Brexit. After a series of <a href="https://theconversation.com/brexit-q-a-what-are-indicative-votes-and-how-do-they-work-114229">indicative votes</a>, where no Brexit plan received majority support, we can sum up the five options as: Theresa May’s withdrawal agreement, a no-deal Brexit, staying in the customs union, staying in the single market, and the so-called Common Market 2.0 idea. </p>
<p>Here’s a break down of what those options mean.</p>
<h2>1. Theresa May’s withdrawal agreement</h2>
<p><strong>Strike your own trade deals? Yes.</strong></p>
<p><strong>Freedom of movement? No.</strong></p>
<p><strong>EU budget contributions? Yes.</strong></p>
<p><strong>Does it solve the Irish border issue? Yes.</strong></p>
<p>May’s withdrawal agreement is unpopular in the UK but has been approved by the EU. As it stands, things would remain the same for the time being, until a trade deal is organised. It avoids the need for an Irish border until then, as the UK and EU would form a customs union. In the meantime, the UK and EU would negotiate their future relationship. The broad shape of this is set out in a non-binding <a href="https://theconversation.com/brexit-political-declaration-what-it-means-for-the-future-uk-eu-relationship-107256">political declaration</a>, which suggests the future relationship will be a comprehensive trade agreement. </p>
<p>In this scenario, the UK would not be bound by EU freedom of movement requirements – a <a href="https://www.ft.com/content/49dc02dc-c637-11e7-a1d2-6786f39ef675">fundamental principle of the EU single market</a> that allows goods, money, services and people to move freely within the bloc. The UK would also be able to sign free trade agreements with others, as Brexiteer MPs demand. The UK would make contributions to the EU budget to participate in selected programmes of interest. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/268552/original/file-20190410-2909-46kdoq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/268552/original/file-20190410-2909-46kdoq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/268552/original/file-20190410-2909-46kdoq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/268552/original/file-20190410-2909-46kdoq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/268552/original/file-20190410-2909-46kdoq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/268552/original/file-20190410-2909-46kdoq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/268552/original/file-20190410-2909-46kdoq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">May’s withdrawal agreement has been rejected three times by parliament.</span>
<span class="attribution"><span class="source">Alexandros Michailidis / Shutterstock.com</span></span>
</figcaption>
</figure>
<p>However, the withdrawal agreement specifies that if no satisfactory technological and regulatory solution is agreed for the Irish border to avoid a return of a hard border in Northern Ireland and respect the Good Friday Agreement, the UK would retain regulatory alignment with the EU. The <a href="https://theconversation.com/brexit-why-is-the-irish-border-backstop-so-crucial-to-securing-a-brexit-deal-113398">infamous Irish backstop</a> is an insurance mechanism and would cease to exist as soon as adequate alternative mechanisms are viable to operate customs checks without a physical border. </p>
<p>The prime minister’s deal places the UK on a path to a future trade agreement with the EU, the extent of which is, at present, uncertain. But whatever form it takes it will represent less access to the EU’s single market, especially for services, than at present, and some form of increased transaction costs for businesses. Remaining in a customs union or in the single market would avoid some of these, while allowing the UK to exit the formal political institutions of the EU. Yet, both options have pitfalls. </p>
<h2>2. Customs union</h2>
<p><strong>Strike your own trade deals? No.</strong></p>
<p><strong>Freedom of movement? No.</strong></p>
<p><strong>EU budget contributions? Yes, but limited.</strong></p>
<p><strong>Does it solve the Irish border issue? Yes.</strong></p>
<p>Remaining in a customs union would resolve the Irish border matter, and would meet May’s red line regarding ending the free movement of people. But it would commit the UK to applying the same external tariffs and restrictions on goods as the EU, and to adopt the same <a href="https://www.wto.org/english/tratop_e/roi_e/roi_info_e.htm">rules of origin</a> for goods, as well as regulations in areas related to the customs union. </p>
<p>This would curtail the UK’s ability to negotiate independent, preferential trade agreements as it would have no leeway to alter EU tariffs. The flip side is that the UK would have preferential access to any country that has negotiated a trade agreement with the EU. Crucially, this would apply to goods, but not, in the absence of an agreement on services, secure access to the EU market for UK services sectors. Contributions to the EU budget would be limited to participation in specific programmes the UK may be interested in.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/268551/original/file-20190410-2909-mvsd9s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/268551/original/file-20190410-2909-mvsd9s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/268551/original/file-20190410-2909-mvsd9s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/268551/original/file-20190410-2909-mvsd9s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/268551/original/file-20190410-2909-mvsd9s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/268551/original/file-20190410-2909-mvsd9s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/268551/original/file-20190410-2909-mvsd9s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Irish border is a sticking point in Brexit negotiations.</span>
<span class="attribution"><span class="source">Kevin J. Frost / Shutterstock.com</span></span>
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<h2>3. Single market</h2>
<p><strong>Strike your own trade deals? Yes (although there would be some constraints on their content).</strong></p>
<p><strong>Freedom of movement? Yes.</strong></p>
<p><strong>EU budget contributions? Yes.</strong></p>
<p><strong>Does it solve the Irish border issue? No. Some checks may be necessary.</strong></p>
<p>Membership of the single market would improve the prospects for the UK’s services sector. But it implies accepting the four freedoms of movement that form its basis – including movement of people. It will also entail budgetary payments to support participation in the single market’s programmes. European Free Trade Association (EFTA) states are members of the single market through the European Economic Area (EEA) with the EU, but can strike their own preferential trade agreements, so the UK would too. </p>
<p>Single market membership reduces the need for certain checks at the Irish border, but if there are different tariffs in place on each side of the border, some form of checks could be required. It could be that some technological customs is viable that eliminates the need for checks at the border and minimises business disruption, however, there will be more transactional costs than at present.</p>
<h2>4. Common Market 2.0</h2>
<p><strong>Strike your own trade deals? No.</strong></p>
<p><strong>Freedom of movement? Yes.</strong></p>
<p><strong>EU budget contributions? Yes.</strong></p>
<p><strong>Does it solve the Irish border issue? Yes.</strong></p>
<p>A cross-party panel of MPs presented a compromise solution, dubbed <a href="https://theconversation.com/brexit-with-brie-common-market-2-0-proposal-explained-through-the-import-and-export-of-cheese-114330">“Common Market 2.0” proposal</a>, aimed at combining some of the benefits of the customs union and single market options. Common Market 2.0 involves accepting the current withdrawal agreement but renegotiating the political declaration, committing the UK to join the European Free Trade Association (EFTA). </p>
<p>EFTA states, as part of the EEA, respect the four freedoms of movement of the internal market, including people. They also make contributions to the EU budget to the programmes and agencies they participate in, and towards reducing economic inequality amongst EEA states through EEA grants. This is the relationship Norway has with the EU.</p>
<p>Where the Common Market 2.0 proposal differs from Norway’s relationship (which is why it’s also called the Norway+ model) is that it commits the UK to entering a special customs arrangement with the EU. It is unclear if this would be a customs union, which would curtail the UK’s ability to negotiate preferential trade deals, or something else. This presently does not exist between EFTA and the EU, has not been agreed by Europe yet and is not guaranteed to happen.</p>
<h2>5. No-deal Brexit</h2>
<p><strong>Strike your own trade deals? Yes.</strong></p>
<p><strong>Freedom of movement? No.</strong></p>
<p><strong>EU budget contributions? No.</strong></p>
<p><strong>Does it solve the Irish border issue? No.</strong></p>
<p>If no agreement is reached, the default position is a no-deal Brexit. Outside the EU, the UK would no longer need to abide by EU freedom of movement requirements, nor would it have to contribute to the EU’s budget. The UK would be able to negotiate preferential trade agreements, no longer bound by EU tariffs and rules.</p>
<p>Negotiating trade agreements is a lengthy process and the UK will find it hard to negotiate better deals than the EU gets. Plus, the EU is the UK’s biggest trade partner and it would immediately face a number of trade barriers if it defaults to WTO rules.</p>
<p>This would be <a href="https://theconversation.com/no-deal-seven-reasons-why-a-wto-only-brexit-would-be-bad-for-britain-102009">highly disruptive to businesses</a> in the UK and EU, and entail serious economic consequences for both sides. And, in order to ensure that the appropriate tariffs are applied at the borders in a relationship governed by WTO terms some form of border control would be required between Northern Ireland and the Republic of Ireland. This would be necessary to guarantee the integrity of the single market and avoid Ireland becoming a back door for third party goods.</p><img src="https://counter.theconversation.com/content/114932/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Maria Garcia has received funding from the ESRC and EU in the past. She is affiliated with UACES (the academic association for contemporary European studies).</span></em></p>These are the five options for Brexit: Theresa May’s withdrawal agreement, staying in the customs union, staying in the single market, the so-called Common Market 2.0 idea or a no-deal Brexit.Maria Garcia, Senior Lecturer in International Relations, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1137802019-03-26T16:57:21Z2019-03-26T16:57:21ZIs Brexit an opportunity to revive the EU-India trade deal?<p>The European Union and India have been negotiating a free trade agreement (FTA) since 2007. Despite growing trade between the EU and India, talks stalled in 2013 after 16 rounds, only resuming in 2018. There has been <a href="https://www.politico.eu/article/brexit-eu-hopes-for-india-trade-deal-talks/">talk in Brussels</a> that Brexit might help remove some of the hurdles to an agreement. But this is unlikely to be the case. </p>
<p>If anything, the UK is better positioned to secure a trade deal with India than the EU, although this will not be straightforward. The UK’s desire to curb immigration is likely to lead to tough negotiations. But future UK-India FTA talks may well be an opportunity to negotiate a manageable set of strategic priorities.</p>
<p>The EU is India’s largest trading partner, accounting for around 13% of India’s <a href="http://ec.europa.eu/trade/policy/countries-and-regions/countries/india/index_en.htm">total trade in goods in 2017</a>. India contributes around 2.3% of total EU trade and is the EU’s ninth biggest trade partner. Trade in goods between the EU and India grew by three times over 2002-18, <a href="http://ec.europa.eu/trade/policy/countries-and-regions/countries/india/index_en.htm">from €28 billion to €91 billion</a>. </p>
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<p>Services are also an important component of EU-India trade. Eurostat data <a href="https://ec.europa.eu/eurostat/en/web/products-eurostat-news/-/DDN-20180712-3">shows</a> that Indian services exports to the EU were €16.6 billion in 2018, while imports were €17.1 billion. The sector has also attracted foreign direct investment from the EU, including Germany, the Netherlands, France, Italy and Belgium, as well as the UK.</p>
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<h2>Sticking points</h2>
<p>Talks between the EU and India broke down in 2013, after it became clear that reaching an agreement on the demands for tariff reductions and market access, as well as the inclusion of social, environmental and human rights clauses would be impossible. Discussions resumed in 2018, which led to the declaration of an EU-India strategic partnership. While this agreement helped to resume the talks, it mainly reaffirmed current ties rather than tackling any of the issues that caused the trade agreement discussions to stall initially. </p>
<p>From the EU’s perspective, the main sticking points were drug patents, tariffs for second-hand cars, agriculture, services, rules of origin and an unacceptable list of sensitive items. The EU is adamant about negotiating a stronger intellectual property regime and a sustainable development chapter with social and environmental clauses, which India is unwilling to include in the trade agreement. </p>
<p>Plus, the EU wants detailed provisions for investor-state dispute settlement (ISDS) after India cancelled 20 bilateral investment protection treaties <a href="https://hsfnotes.com/arbitration/2017/03/16/mixed-messages-to-investors-as-india-quietly-terminates-bilateral-investment-treaties-with-58-countries/">with individual EU countries in 2016</a>. The ISDS demand is not acceptable to India and current regulations require foreign investors to resolve their problems in Indian courts for a period of five years before pursuing a claim under international law. </p>
<p>India views the proposed trade deal as an opportunity to address issues it has with the way the two sides trade in services. In particular, India wants more visas to be granted to its skilled workers in the services industry. This has been a longstanding demand. </p>
<p>After Brexit, this demand is unlikely to fade. But, at a time when all EU member states are grappling with a “migration crisis” any loosening of visa rules is highly unlikely. India has also been demanding status as a “data-secure nation”, which will reduce compliance costs for Indian software providers. But, given EU concerns over regulatory norms and data-privacy standards it is unlikely that the EU will agree to this demand.</p>
<h2>Opportunity for a UK trade deal?</h2>
<p>The UK is among India’s main trading partners from the EU bloc. Trade totalled €13.6 billion in 2018, accounting for 17% of India’s overall trade with the EU. Moreover, trade between India and the UK increased at an average rate of 8.8% a year between 2002 and 2018. </p>
<p>Machinery and transport equipment constitute 40% of India’s exports, and accounts for nearly 20% of total UK’s trade with India. The UK’s exports of alcoholic beverages also registered a significant increase, from €14m to €162m from 2002-18. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=330&fit=crop&dpr=1 600w, https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=330&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=330&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=415&fit=crop&dpr=1 754w, https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=415&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/264374/original/file-20190318-28499-kyd29m.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=415&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Eurostat</span></span>
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<p>The lack of progress in EU-India trade talks might just be an opportunity for the UK to launch its own negotiations for a trade deal with India. From an economic perspective, India is an attractive trade partner. It is projected to be the world’s fastest growing economy, with an annual GDP growth rate of around 6.5%. In the UK, GDP is predicted to grow by a mere 1.5% in 2019. India is also home to almost one-fifth of the world’s population. It could be a strategic partner for the UK in Asia, presenting an opportunity to increase Britain’s soft power in the region. </p>
<p>From India’s perspective, a trade deal with the UK could be an opportunity to increase pressure on other Asian countries, especially China, to liberalise their trade. This will also help India’s geopolitical considerations in the region given the history of tense diplomatic relations with Pakistan. And it could help strengthen India’s Commonwealth ties. </p>
<p>But other issues remain. The UK and India would still have to agree on reducing tariffs on their respective imports. Visa numbers and intellectual property would also be issues for the UK, as they were with the EU, and could yet prove contentious. So free trade talks between the UK and India could still be long and drawn out.</p>
<p>Recent political developments, however – including Brexit, eurozone uncertainty, sluggish global growth rates and trade tensions from the Trump administration’s pursuit of a protectionist agenda – all have serious implications for future trade talks. These could well nudge the partners to review their red lines and return to the negotiating table.</p><img src="https://counter.theconversation.com/content/113780/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sangeeta Khorana received funding from UK-ESRC, FCO. </span></em></p>Despite growing trade between the EU and India, talks stalled in 2013 after 16 rounds, only resuming in 2018. Some in Brussels blame Britain.Sangeeta Khorana, Professor of Economics, Bournemouth UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1130002019-03-15T12:32:47Z2019-03-15T12:32:47ZTrade wars are growing over the digital economy – and developing countries are shaping the agenda<figure><img src="https://images.theconversation.com/files/263954/original/file-20190314-28468-14jz4oo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/aerial-view-kwai-tsing-container-terminals-1061199119">Shutterstock</a></span></figcaption></figure><p>At the heart of the <a href="https://theconversation.com/trade-war-is-in-neither-the-us-nor-chinas-interests-94942">current US trade war with China</a> is tariffs on imports like steel, sorghum and silicon chips. But, with the growing role of data and digital technology in the world economy, a new arena of digital trade conflict is on the cards.</p>
<p>Rapid growth in e-commerce, cloud computing, and other parts of the digital economy are driving important shifts in the global economy. Digital firms are today among the leading global companies. Meanwhile, firms in all sectors are incorporating digital tools into their business models. </p>
<p>But the growth and globalisation of the digital economy is still not underpinned by clear global regulatory frameworks. While there are clear rules governing trade in goods such as books and DVDs, it is still not clear what happens when these goods become digital and are transmitted across borders through platforms such as Netflix. Similarly, while we have clear rules on goods like cars, TVs and industrial machinery, we lack clear regulations on the data that these goods increasingly collect and transmit.</p>
<p>The desire to put rules in place on digital trade is gaining momentum. This has grown as a number of countries, such as <a href="https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/march/2018-fact-sheet-key-barriers-digital">China, Indonesia and Nigeria</a>, which have introduced policies that legislate against foreign data flows and e-commerce, affecting the business models of leading global digital corporations. A new push came during the World Economic Forum in Davos earlier this year when 76 countries <a href="https://www.weforum.org/agenda/2019/01/davos-participants-call-for-digital-trade-deal/">announced plans</a> to begin negotiations on digital trade. </p>
<h2>Digital divide</h2>
<p>Behind the agenda to introduce global rules on digital trade, there are significant tensions that could spill over into conflict. On one side is the US and a number of leading digital nations, backed by the vast lobbying power of Silicon Valley and big business. On the other side, a number of emerging and developing countries are looking to resist new rules that they see as adding extra burden on them, with vague benefits.</p>
<p>Leading digital firms, and other big companies using digital tools, <a href="http://www.lse.ac.uk/internationalDevelopment/pdf/WP/WP175.pdf">have mobilised</a>. They are pushing for international rules on issues such as data flows, custom duties on e-commerce and requirements that foreign firms reveal their computer (source) code. </p>
<p>This campaign is most visible in the US where digital firms like Google, Facebook, and Amazon have grown in political power. They have pushed for trade rules that enable them to expand globally without facing complex rules in different countries, which limit their ability to operate from a distance. This is the <a href="https://publicpolicy.googleblog.com/2010/11/promoting-free-trade-for-internet.html">core of their business models</a>.</p>
<p>During the Obama administration in the US these activities contributed to the emergence of the <a href="https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2016/digital-2-dozen">“digital trade agenda”</a>. Digital trade rules were seen as crucial for giving rapidly growing US firms a predictable global landscape, as they expanded. This agenda was pursued through a number of channels, notably the Trans-Pacific Partnership (TPP), which was <a href="https://ustr.gov/sites/default/files/TPP-Ensuring-a-Free-and-Open-Internet-Fact-Sheet.pdf">described by the US trade representative at the time as</a> the “most ambitious and visionary internet trade agreement ever attempted”. </p>
<p>The Trump administration, with a focus on supporting traditional industries, has shown less interest in digital trade. This has led to a stronger roles for other leading digital economies such as Australia, Japan, and some European countries, <a href="https://www.politico.eu/article/silicon-valley-tech-lobbyists-swarm-brussels/">with support from global digital firms</a>.</p>
<p>But there has been strong opposition from a number of less developed countries. Many of them believe these rules will widen the digital divide that already exists between the developed and the developing world, by exposing local digital firms to fierce competition. As the history of trade rules <a href="https://www.theguardian.com/politics/2003/may/19/globalisation.politics">has shown</a>, rapidly opening developing economies up to foreign competition can potentially hollow them out. Plus, some countries argue that they might need to adopt more active policy to develop their own digital economies, which they fear global rules could limit. </p>
<p>Their resistance came to the fore during discussions on new digital trade rules <a href="https://www.ictsd.org/bridges-news/bridges-africa/news/the-digital-trade-agenda-and-africa">in the World Trade Organisation (WTO) in 2017</a>. The fight was led by India and the WTO’s Africa Group, which highlighted the risks of imposing WTO rules on future economic development. Through coalition building, they were able to resist the push for new rules leading to an impasse in the WTO.</p>
<h2>A global realignment?</h2>
<p>The success of developing and emerging countries in resisting the push for digital trade rules at the WTO was also down to the lack of strong consensus in leading economies. The EU, in particular, was hesitant. Key voices expressed concerns about the impact of new rules on the European digital economy, limiting the ability to establish strong online data protections in the continent. </p>
<p>Recent indications, however, highlight growing alignment between these leading economies. A <a href="http://trade.ec.europa.eu/doclib/press/index.cfm?id=1490&serie=1106&langId=en">recent draft</a> of the digital trade chapter in the “deep and comprehensive trade agreement” between the EU and Tunisia shows a European shift towards a stronger position on digital trade.</p>
<p>Nonetheless, emboldened by their previous successes, some developing country alliances are now looking to roll back other digital trade commitments in the WTO which they see as damaging. Notably, the “moratorium on e-commerce” – <a href="https://www.wto.org/english/thewto_e/minist_e/mc11_e/briefing_notes_e/bfecom_e.htm">adopted in 1998 at the WTO</a> in which countries agreed to (temporarily) refrain from imposing custom duties on electronic transmissions – is being challenged by India and South Africa. They see these rules as problematic, limiting their ability to collect tariffs as more goods are sold digitally.</p>
<p>These diverging positions are likely to increasingly cause conflict in the coming years. The stakes are high and outcomes are likely to shape the direction of the global economy in the future.</p><img src="https://counter.theconversation.com/content/113000/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Despite the growing role of data and technology in the world economy, there are very few rules to govern digital trade.Christopher Foster, Presidential Fellow at the Global Development Institute, University of ManchesterShamel Azmeh, Lecturer in International Development, Global Development Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1130772019-03-12T12:07:25Z2019-03-12T12:07:25ZBrexit Britain’s weakness exposed in US trade deal documents<p>The US has <a href="https://ustr.gov/sites/default/files/Summary_of_U.S.-UK_Negotiating_Objectives.pdf">published</a> its objectives for a proposed trade agreement with the UK – and its thinking highlights just how weak Britain’s bargaining position will be in the post-Brexit global economy.</p>
<p>The US trade representative outlines many of the usual ways to increase trade between the two countries – namely, reducing tariffs and ensuring both sides share the same standards and regulations. But the emphasis is very much on the UK aligning itself with US standards. This will have major implications. It will move the UK away from the EU standards it currently has, which will harm trade with its most important trading partner and generate potential hurdles in a future trade deal with the EU.</p>
<p>The US is taking a tough line from the outset on a number of issues. With a population of 66m and GDP of roughly US$3 trillion, the UK is dwarfed by the bloc it is leaving – the EU’s population is 500m and has a combined GDP of US$20 trillion. Plus, the UK has a transparent need to both replace existing EU trade agreements and create new ones.</p>
<p>In Britain, concerns over food safety have been at the heart of debate over a potential US-UK trade agreement. The <a href="https://www.theguardian.com/environment/2017/jan/29/britain-us-trade-deal-gm-food-eu-rules">expectation</a> of American chlorine-washed chicken entering British markets as part of a deal quickly became <a href="https://www.telegraph.co.uk/news/2017/07/29/hormonal-beef-chlorine-chicken-could-coming-uk-trade-deal-us/">politically</a> contentious, <a href="https://www.telegraph.co.uk/news/2017/07/26/cabinet-split-michael-gove-says-britain-will-not-accept-us-chlorinated/">splitting</a> Theresa May’s cabinet <a href="https://www.telegraph.co.uk/news/2017/11/01/liam-fox-reopens-cabinet-rift-michael-gove-chlorinated-chicken/">twice</a> in 2017. </p>
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Read more:
<a href="https://theconversation.com/chlorine-washed-chicken-qanda-food-safety-expert-explains-why-us-poultry-is-banned-in-the-eu-81921">Chlorine-washed chicken Q&A: food safety expert explains why US poultry is banned in the EU</a>
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<p>But the quandary facing the British government extends well beyond concerns over the consumer safety implications of US mass production methods. With US agricultural imports would also come US agricultural and sanitary and phytosanitary standards, which are in place to protect against diseases. This will create hurdles for British agricultural exports heading to the EU, as it will no longer meet EU standards.</p>
<p>For British farmers, the wholesale removal of trade barriers with the US may also come at a time when the industry is particularly vulnerable. Following Brexit, British agriculture will lose access to the EU subsidies it receives through the <a href="https://theconversation.com/explainer-what-is-the-eu-common-agricultural-policy-56329">Common Agricultural Policy</a>. While the UK government has promised to replace these, questions about its ability to fund its many post-Brexit promises remain.</p>
<h2>Beyond agriculture</h2>
<p>British manufacturers face the same demands to harmonise their regulations from the US trade representative, creating similar difficulties for exporters targeting the EU. Then, when it comes to services, US demands are much more dramatic. </p>
<p>Britain’s service sector brings in a substantial trade surplus – something the US will be loath to add to its growing trade deficit. Central to US plans will be to privatise and deregulate British services, such as healthcare provision or utilities and infrastructure, to enable easy market access for internationally-engaged American enterprises. These same corporations are <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2105262">actively</a> <a href="https://doi.org/10.1017/S002081831800005X">engaged</a> in the trade agreement process on the US side.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/263358/original/file-20190312-86690-f3rll4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/263358/original/file-20190312-86690-f3rll4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=388&fit=crop&dpr=1 600w, https://images.theconversation.com/files/263358/original/file-20190312-86690-f3rll4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=388&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/263358/original/file-20190312-86690-f3rll4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=388&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/263358/original/file-20190312-86690-f3rll4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=487&fit=crop&dpr=1 754w, https://images.theconversation.com/files/263358/original/file-20190312-86690-f3rll4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=487&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/263358/original/file-20190312-86690-f3rll4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=487&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">There’s a lot more than just chickens at stake in a US-UK trade deal.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/processing-factory-chicken-728819017">Shutterstock</a></span>
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<p>American ambitions for bringing UK regulations in line with its own also extends to trade of digital goods and services, potentially causing a tremendous shift away from EU regulations, which concern everything from intellectual property rights to data protection and digital privacy.</p>
<h2>Beyond trade</h2>
<p>As part of the deep integration objectives, the US-UK trade agreement will cover additional non-trade issues. These include labour standards, environmental protection and anti-corruption measures – all areas where the UK arguably is currently tougher than the US. </p>
<p>It is telling that the wording of the <a href="https://ustr.gov/sites/default/files/Summary_of_U.S.-UK_Negotiating_Objectives.pdf">US objectives</a> focuses explicitly on the UK obligations in upholding these kinds of standards. In contrast, <a href="https://ustr.gov/sites/default/files/2018.12.21_Summary_of_U.S.-Japan_Negotiating_Objectives.pdf">US objectives for negotiations with Japan</a> refer to both “parties”, rather than specifically Japanese obligations.</p>
<p>Perhaps the differences in wording is a result of different teams writing the documents. But it could also reveal the extent to which the UK is viewed by the US team as the weaker party to their deal, which will likely have extensive effects on the concessions the UK negotiating team can manage to extract from the US opening position.</p>
<h2>Relinquishing control, not taking it back</h2>
<p>Rather than taking back control, the starting point for US-UK trade negotiations is one where the British government cedes sovereignty over a wide range of issues. Britain’s size and detachment from the EU single market limits its bargaining power with large trade partners, whose governments will have no concern for the effects on the British public.</p>
<p>While harmonising standards with the US will pose a barrier to future trade with the EU, the deal could also increase limitations on British foreign policy more broadly. The US is also pursuing a clause that allows it to withdraw from a US-UK agreement if the UK agrees to an agreement with certain countries such as China. Similar terms are included in the <a href="https://ustr.gov/sites/default/files/2018.12.21_Summary_of_U.S.-Japan_Negotiating_Objectives.pdf">US-Japan trade agreement objectives</a>, as the Trump administration tries to limit China’s economic influence across the globe. There is also a section in the US objectives that is designed to limit Britain’s independence over its Middle East foreign policy.</p>
<p>The hard line taken by the US, along with the wide range of concessions demanded of the UK clearly point to the UK’s weakened bargaining position outside the EU. And the US is not the only trading partner seeking significant concessions in exchange for a deal. India, Japan, and South Korea have all signalled similar expectations in preparations for their own deals. All of this sits in stark contrast to the Brexit campaign’s promise to “take back control”.</p><img src="https://counter.theconversation.com/content/113077/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Plouffe does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>America’s objectives for a trade agreement with Britain spell out a stark Brexit future.Michael Plouffe, Lecturer in International Political Economy, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1119712019-03-03T15:11:06Z2019-03-03T15:11:06ZA U.S.-China trade deal does not slow China’s rise<figure><img src="https://images.theconversation.com/files/261752/original/file-20190302-110123-8wo9rf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. President Donald Trump with China's President Xi Jinping during a bilateral meeting in December 2018 in Buenos Aires, Argentina.</span> <span class="attribution"><span class="source">(AP Photo/Pablo Martinez Monsivais)</span></span></figcaption></figure><p>The original <a href="https://www.cnbc.com/2019/03/01/trump-says-hes-asked-china-to-remove-tariffs-on-agricultural-products.html">March 1 deadline</a> has passed as the United States and China hash out a trade deal amid <a href="https://www.cnbc.com/2019/02/14/us-and-china-trade-talks-deadlocked-on-technology-transfers-reports.html">deadlocked negotiations</a>.</p>
<p>Any U.S.-China trade deal likely falls short compared to what the <a href="https://www.cfr.org/backgrounder/what-trans-pacific-partnership-tpp">Trans-Pacific Partnership</a> (TPP) could have been. </p>
<p>Within current talks, Donald Trump’s administration is focused on greater access to subsidized Chinese industries and addressing intellectual property theft linked to alleged forced technology transfers to China. All of this has an impact on America’s economic competitiveness <a href="https://www.bbc.com/news/business-47392570">in the short term</a>. </p>
<p>But is the U.S. adequately managing <a href="https://www.brookings.edu/blog/order-from-chaos/2019/01/15/assessing-u-s-china-relations-2-years-into-the-trump-presidency/">long-term Chinese efforts</a> to don the mantle of global leader?</p>
<p>On the <a href="https://www.washingtonpost.com/news/worldviews/wp/2018/04/13/a-timeline-of-trumps-complicated-relationship-with-the-tpp/?utm_term=.0f28a1e83e38">third day of his administration in 2017</a>, Trump honoured a campaign promise by withdrawing from the contentious TPP. The historic 12-nation agreement was on track to cover roughly 40 per cent of the global economy.</p>
<p><a href="https://www.nytimes.com/2016/09/02/business/international/pacific-trade-pact-faces-rough-road-in-congress.html">Democrats and some Republicans</a> in Congress, advocacy groups and some members of the American public flatly opposed the agreement. Concerns about the oversized influence of multinational corporations and the controversial investor-state dispute process <a href="https://slate.com/news-and-politics/2017/01/why-the-trans-pacific-partnership-failed.html">was a feature of the public discourse</a>.</p>
<h2>Lost opportunity to rein in China?</h2>
<p>But America may have missed a window of opportunity to curb China’s rise when it pulled out of the TPP.</p>
<p>Scholars <a href="https://www.belfercenter.org/publication/destined-war-can-america-and-china-escape-thucydidess-trap">Graham Allison</a> and <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674975071">Kori Schake</a> have grappled over if and how China can replace America as the world’s ranking power. Allison’s recent work, <a href="https://www.belfercenter.org/publication/destined-war-can-america-and-china-escape-thucydidess-trap"><em>Destined for War</em></a>, discusses the “windows of opportunity” the U.S. can exploit to slow the pace of the rising power. </p>
<p>If history is any credible guide, the transition from <a href="https://warontherocks.com/2017/12/a-tale-of-two-hegemons-the-anglo-american-roots-of-the-postwar-international-system/"><em>Pax Britannica</em> to <em>Pax Americana</em> </a> may help U.S. policy-makers and the public alike to understand the imperatives that surround China’s rise.</p>
<p>At the turn of the 20th century, America had unprecedented growth, thanks to Alfred Thayer Mahan’s <a href="https://www.theatlantic.com/magazine/archive/1890/12/the-united-states-looking-outward/306348/">vision of American sea power</a>. And in the early years between the two World Wars, the United States, Great Britain and Japan headlined a global naval arms race.</p>
<p>In 1921, President Warren Harding held the <a href="https://history.state.gov/milestones/1921-1936/naval-conference">Washington Naval Conference </a> to disarm tensions among the competing navies in the Pacific. The naval powers agreed to discontinue their shipbuilding programs and capped their naval fleets in the region. America also protected holdings in East Asia from the threat of a rising Japan. </p>
<p><a href="https://warontherocks.com/2017/12/a-tale-of-two-hegemons-the-anglo-american-roots-of-the-postwar-international-system/">The agreement was a triumph for America</a>. But for Britain, their naval power was now at “eye level” with the United States.</p>
<h2>The U.K. could not challenge the U.S.</h2>
<p><a href="https://www.economist.com/special-report/2002/06/27/imperial-overstretch">An overstretched</a> Britain had neither the political will nor the financial ability to oppose America’s demands, aware that an arms race with the U.S. would likely bankrupt the British economy. </p>
<p><a href="https://www.jstor.org/stable/j.ctt1df4g5b"><em>Pax Britannica</em></a>, a symbol of Britain’s naval dominance, was forced to <a href="https://www.theatlantic.com/international/archive/2016/05/china-india-rising-powers/484106/">deliberately accommodate</a> America’s rise. Britain’s reduced Pacific fleet and degraded Anglo-Japanese relations marked a turning point in America’s ascendancy.</p>
<p>It was not the first time Britain missed an opportunity to slow America’s rise. The American Civil War offered the chance, but Britain decided against joining on behalf of the Confederacy due to the <a href="https://newrepublic.com/article/94957/amanda-foreman-britain-america-civil-war-neutrality">issue of slavery</a>. Schake also notes the <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674975071">Venezuela crisis of 1895</a> marked an early turning point in the leadership transition. This could have also been a window of opportunity. </p>
<p>How does this apply to current U.S.-China relations? The “battleground” remains the same as in 1921; instead, <a href="https://www.hurstpublishers.com/book/belt-and-road/">China plans to supplant America</a> to become the global leader. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=381&fit=crop&dpr=1 600w, https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=381&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=381&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=479&fit=crop&dpr=1 754w, https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=479&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/261754/original/file-20190302-110143-vh1amb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=479&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">U.S. President Barack Obama, right, talks with Australia’s Prime Minister Malcolm Turnbull, left, before the start of a meeting with other leaders of the Trans-Pacific Partnership countries in the Philippines in November 2015. (AP Photo/Susan Walsh)</span>
<span class="attribution"><span class="source">(AP Photo/Susan Walsh)</span></span>
</figcaption>
</figure>
<p>Barack Obama’s administration <a href="https://www.cfr.org/backgrounder/what-trans-pacific-partnership-tpp">crafted the TPP</a> as a geopolitical instrument to halt China’s plans. It presented east and southeast Asian nations with an alternative to China’s coercive diplomacy in the region, such as in the case of <a href="https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html">Sri Lanka</a>. </p>
<p>Reducing trade barriers had the potential to provide America with greater investment opportunities in the Asia-Pacific region. It could have weakened China’s diplomatic clout while also creating economic incentives for American investment in the area. It exploited a window of opportunity that targeted the source of China’s rise — its economy. </p>
<p>Pulling out of the TPP was not solely a product of the current administration —a Hillary Clinton administration <a href="https://www.bloomberg.com/news/videos/2016-08-11/clinton-i-oppose-tpp-now-and-i-ll-oppose-it-as-president">may have withdrawn</a> too. America’s anti-free trade mood reflects the priority of the public and lawmakers, which is to preserve U.S. jobs and sovereignty. </p>
<h2>Shifts in global power are afoot</h2>
<p>But shifts in global power may be under way with implications beyond what happens on the home front. A <a href="https://foreignpolicy.com/2019/01/07/a-new-cold-war-has-begun/">tech Cold War</a> is brewing, China’s plans for expansion under the <a href="https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative">Belt and Road initiative</a> continue and South China Sea claims are an extension of China’s sovereignty. </p>
<p>The rebooted TPP, the 11-nation <a href="https://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/index.aspx?lang=eng">Comprehensive and Progressive Agreement for Trans-Pacific Partnership</a>, is likely to reduce barriers to trade and increase investment opportunities across Asia and Latin America for its member countries, including Canada.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/261753/original/file-20190302-110119-1u8rarn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Canada’s minister of international trade, Francois-Philippe Champagne, talks to the media about the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in January 2018.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Christopher Katsarov</span></span>
</figcaption>
</figure>
<p>But the agreement, without U.S. representation, hardly lives up to America’s once-desired aim to create a trade zone in a large swath of East Asia that would isolate China while addressing the global power shifts under way. A renegotiated CPTPP, with American backing, may have even strengthened the Trump administration’s position in its current trade negotiations with the Chinese.</p>
<p>The U.K. was unable to prevent the last global leadership transition due to missed windows of opportunity and deliberate accommodation. An America that views China’s rise through a short-term bilateral lens runs the risk of accidentally accommodating Chinese efforts to replace America. </p>
<p>Taking advantage of a window of opportunity may be key to curbing the next global leadership transition —and the CPTPP may be the window that America needs before we are forced to accommodate to China’s interests. The U.S. should reconsider joining the pact if it wants any shot at slowing China’s rise.</p><img src="https://counter.theconversation.com/content/111971/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The author is affiliated with the United States Air Force. This article was prepared by James L. Anderson in his personal capacity. The opinions expressed in this article are the author's own and do not reflect the view of the United States Air Force, Department of Defense, or United States Government. </span></em></p>America may have missed a window of opportunity to curb China’s rise when it pulled out of the Trans-Pacific Partnership.James L. Anderson, Visiting Fulbright Fellow at Centre for International and Defence Policy, Queen's University, OntarioLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1124882019-02-26T11:41:00Z2019-02-26T11:41:00ZWTO offers Trump a solution to enforcing a trade deal with a China that breaks promises<p><a href="https://www.bloomberg.com/news/articles/2019-02-24/trump-extends-china-tariff-truce-after-substantial-progress?srnd=premium">Optimism is growing</a> that China and the U.S. will be able reach a deal to end the year-old trade war, with President Donald Trump extending his March 2 deadline. </p>
<p>One of the <a href="https://www.nytimes.com/2019/02/12/business/us-china-trade-talks.html">biggest stumbling blocks</a> between the two countries has been a lack of trust, a key to <a href="https://www.pon.harvard.edu/daily/dealmaking-aily/dealmaking-negotiations-how-to-build-trust-at-the-bargaining-table/">any successful negotiation</a>. The Trump administration <a href="https://www.bloomberg.com/news/articles/2019-02-24/trump-extends-china-tariff-truce-after-substantial-progress?srnd=premium">has insisted</a> it will make a strong enforcement mechanism part of any deal. But what might that look like? </p>
<p>As a trade economist, I believe the answer to the trust conundrum lies in learning from an international body the <a href="https://www.bbc.com/news/world-us-canada-45364150">president disdains</a>: the World Trade Organization. </p>
<h2>Empty words?</h2>
<p>From the American perspective, a key issue is that in the past the Chinese have <a href="https://itif.org/publications/2015/09/17/false-promises-yawning-gap-between-china%E2%80%99s-wto-commitments-and-practices">made all sorts of promises</a> to address U.S. concerns that they later reneged on. Or, China has taken so long to act that when it finally did it made little difference. </p>
<p>Several examples of Chinese promises going unkept readily come to mind. </p>
<p>When China joined the World Trade Organization in 2001, <a href="http://news.bbc.co.uk/2/hi/business/1702241.stm">it was given “developing country” status</a>. This <a href="http://www.eastasiaforum.org/2019/01/21/chinas-developing-country-status-in-the-wto-time-for-an-upgrade/">allowed China to levy high tariffs</a> on imports from the U.S. and Europe even as it benefited from low duties on its exports. </p>
<p>The <a href="https://itif.org/publications/2015/09/17/false-promises-yawning-gap-between-china%E2%80%99s-wto-commitments-and-practices">understanding at that time</a> was that as its economy grew, China would gradually adopt market-based economic principles and commit itself to the basic tenets of liberalized trade and globalization. But this has not happened. </p>
<p>Sometime after China joined the WTO, the <a href="https://qz.com/938648/if-us-trade-with-china-is-so-unfair-why-is-gm-the-best-selling-car-there/">country imposed a 21 percent to 30 percent tariff</a> on cars. It was only this past December, and under pressure because of the current trade talks, that the Chinese finally <a href="https://www.cnn.com/2018/12/14/business/china-us-auto-tariffs/index.html">agreed to temporarily reduce</a> the tariff to 15 percent. In contrast, the corresponding U.S. tariff on Chinese auto imports has long been 2.5 percent. </p>
<p>More generally, also after becoming a WTO member, China <a href="https://www.innovationfiles.org/top-9-false-promises-that-china-made-in-joining-the-world-trade-organization">promised to open up</a> its banking, telecommunications and electronic payment processing sectors. But action in these areas has either <a href="https://www.nytimes.com/2019/02/12/business/us-china-trade-talks.html?emc=edit_th_190213&nl=todaysheadlines&nlid=253946410213">been non-existent or half-hearted</a>. </p>
<p>Even now, the Chinese telecommunications industry <a href="https://www.nytimes.com/2019/02/12/business/us-china-trade-talks.html">remains very much under government control</a>, and the government <a href="https://www.nytimes.com/2018/08/06/technology/china-generation-blocked-internet.html">has effectively precluded</a> Facebook and Google from offering their services in China. </p>
<p>Concerns about the reliability of the Chinese are not limited to economic and technological matters. To see this, note that on a state visit to the U.S. in 2015, President Xi Jinping <a href="https://www.reuters.com/article/us-usa-china-pacific/xi-denies-china-turning-artificial-islands-into-military-bases-idUSKCN0RP1ZH20150925">promised not to militarize</a> the artificial islands on disputed reefs that the Chinese were building in the South China Sea. </p>
<p>However, we <a href="https://www.economist.com/asia/2018/06/21/china-has-militarised-the-south-china-sea-and-got-away-with-it">now have clear evidence</a> that he has done exactly what he promised he would not do. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/259169/original/file-20190214-1748-r7zwhb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259169/original/file-20190214-1748-r7zwhb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259169/original/file-20190214-1748-r7zwhb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259169/original/file-20190214-1748-r7zwhb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259169/original/file-20190214-1748-r7zwhb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259169/original/file-20190214-1748-r7zwhb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259169/original/file-20190214-1748-r7zwhb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Chinese and U.S. negotiators chat before sitting down for formal talks.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/China-US-Trade-Talks/601606d295b3441d87ddad9fb3ba0419/4/0">AP Photo/Mark Schiefelbein</a></span>
</figcaption>
</figure>
<h2>Holding China’s feet to the fire</h2>
<p>Given all this, I believe it would be rather naïve on the part of the U.S. to agree to any Chinese promises in the current trade talks without also building a robust enforcement mechanism into any deal. </p>
<p>Indeed, the negotiators themselves seem to understand this, but difficulty finding a way to enforce any agreements – both past and present – <a href="https://www.nytimes.com/2019/02/12/business/us-china-trade-talks.html">is making it harder</a> to come to a deal. And that’s where the WTO and its enforcement mechanisms come in. </p>
<p>For example, China agreed to <a href="https://www.wto.org/english/news_e/pres01_e/pr243_e.htm">just such a mechanism</a> with its WTO ascension. This enforcement rule permitted a nation to automatically levy tariffs on certain Chinese goods and services if that country’s domestic market was hurt by those same exports. Unfortunately, like most WTO rules, this rule had a finite life and was allowed to lapse at the end in 2013. Even though this mechanism has been infrequently used, President Barack Obama <a href="https://ustr.gov/about-us/policy-offices/press-office/press-releases/2010/december/united-states-prevails-wto-section-421-safeguard">took advantage of it with some success</a> in 2009 to impose tariffs on Chinese-made tires that were harming U.S. manufacturers.</p>
<p>If such an enforcement mechanism can be built into a trade deal, then the U.S. would not have to plead its case before some international body before it retaliated against the Chinese. Instead, when confronted with one or more broken promises, it would have the legal right to act unilaterally to hold China accountable. </p>
<p>That said, since the current negotiations are between two sovereign nations, the key is to devise an enforcement mechanism that is agreeable to both the U.S. and China. Only then will a resulting trade deal be self-enforcing.</p>
<p>Since the U.S. and China are both members of the WTO, another but less potent enforcement mechanism would lie in utilizing its <a href="https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm">dispute settlement mechanism</a> to address any disagreements that may arise after a deal is reached. The U.S. has <a href="https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm">had success in the past</a> in using this WTO mechanism as well to <a href="https://www.npr.org/2013/08/05/209097983/wto-sides-with-u-s-in-poultry-dispute-with-china">hold China accountable</a>. </p>
<h2>A deal worth the paper it’s printed on</h2>
<p>The venerable Chinese sage Sun Tzu <a href="https://www.goodreads.com/quotes/659546-in-the-midst-of-chaos-there-is-also-opportunity">once said</a> that “in the midst of chaos, there is also opportunity.” </p>
<p>The U.S. now has an opportunity to conclude a meaningful trade deal with China that also has enforcement built into it. Therefore, the American negotiators ought to seize this opportunity and ensure a deal isn’t backed primarily by Chinese promises. </p>
<p>Otherwise, it won’t be the last time a U.S. president fumes about unfair Chinese trading practices. </p>
<p><em>This is an updated version of an <a href="https://theconversation.com/us-china-trade-talks-will-the-chinese-keep-promises-to-stop-bad-behavior-111900">article originally published</a> on Feb. 19, 2019.</em></p><img src="https://counter.theconversation.com/content/112488/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amitrajeet A. Batabyal does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>American and Chinese trade negotiators are pushing hard to get a deal, but a major sticking point remains: ensuring China honors any promises it makes.Amitrajeet A. Batabyal, Arthur J. Gosnell Professor of Economics, Rochester Institute of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1112012019-02-06T15:07:36Z2019-02-06T15:07:36ZUK’s post-Brexit trade with Japan in jeopardy while uncertainty persists<p>Nissan <a href="https://www.bbc.co.uk/news/business-47107561">has said</a> it will no longer be producing its new X Trail car at its Sunderland plant in north-east England. They will instead be produced in Japan. Although no current jobs are scheduled to be lost, the region was looking forward to benefiting from an extra 740 jobs that the new car would create. </p>
<p>Nissan explained that Brexit was only one factor among several, accounting for the decision. A shrinking car market in Europe and China, as well as new regulations on diesel, have hit the sector hard. Plus, Japan has just signed a <a href="https://theconversation.com/eu-japan-trade-deal-comes-into-force-to-create-worlds-biggest-trade-zone-110729">trade deal with the EU</a> which will see tariffs on its car exports reduced to zero over the next seven years.</p>
<p>Nonetheless, it’s hard not to see this as a product of Brexit uncertainty and could well be the start of others leaving British shores. It reflects concerns among many international businesses in the UK about the prospect of a no-deal Brexit.</p>
<p>Nissan’s presence in the UK is driven by its bottom line. It set up its Sunderland plant following tax breaks and other financial incentives offered to Japanese companies <a href="http://www.thejournal.co.uk/news/revealed-how-margaret-thatcher-saved-6464068">by Prime Minister Margaret Thatcher in 1984</a>. A big part of the appeal was the fact that the UK offered a “gateway” to the rest of Europe, with access to the EU single market and a readily available pool of labour. </p>
<p>Today, more than 1,000 Japanese firms jointly employ around 160,000 people in the UK, in sectors including financial services, <a href="https://www.independent.co.uk/news/uk/politics/brexit-japan-shinichi-iida-trade-eu-theresa-may-a8280021.html">manufacturing and pharmaceuticals</a>. And the three Japanese car giants – Honda, Nissan and Toyota – comprise almost half of UK car production. </p>
<p>Japanese investment in the UK, <a href="https://www.gov.uk/government/speeches/japan-and-the-uk-an-enduring-trade-partnership">amounting to £46 billion to date</a>, is part of a valuable trading partnership. UK exports to Japan in 2016 <a href="https://www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/whodoestheuktradewith/2017-02-21">amounted to £12.5 billion</a>, split evenly between goods and services, and comprising sectors like vehicles, power generating equipment, financial services, food and drink, and pharmaceuticals. In the same year, the UK’s imports of Japanese goods and services reached £11.5 billion, notably in automobiles, automobile parts and power engines. Today, more than <a href="https://www.gov.uk/government/publications/exporting-to-japan/exporting-to-japan">450 UK firms operate in Japan</a> and they sit at the forefront of innovation in sectors like life sciences and energy, exploiting the opportunities presented by Japan’s acute ageing population and its dearth of resources.</p>
<h2>Deal or no deal</h2>
<p>A managed departure based on Theresa May’s withdrawal agreement would provide Japanese and UK firms with a transition period of 21 months, during which negotiations for a longer-term agreement could be set in train. In contrast, a no-deal Brexit, requiring the UK immediately to trade according to World Trade Organisation rules, would mean that British products have only weeks to enjoy their tariff-free entry into the Japanese market.</p>
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Read more:
<a href="https://theconversation.com/no-deal-seven-reasons-why-a-wto-only-brexit-would-be-bad-for-britain-102009">No deal? Seven reasons why a WTO-only Brexit would be bad for Britain</a>
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<p>Meanwhile, high-profile Japanese firms have repeatedly warned that a no-deal Brexit could lead to them halting production in the UK and diverting investments elsewhere. Johan van Zyl, head of Toyota Motor Europe, said that tariff-free sales to Europe <a href="https://www.bbc.co.uk/news/business-45715029">are crucial for the future of its plant</a>, which employs 2,500 people in Derbyshire and from which 90% of the 150,000 cars produced each year are exported to the rest of the continent. Nissan’s chief made similar warnings in 2016. More surprisingly, the Japanese prime minister, Shinzo Abe, along with leaders from Japan’s business lobby, Keidanren, <a href="https://www.theguardian.com/world/2016/jun/15/brexit-is-a-huge-negative-for-japanese-companies-in-the-uk">also voiced fears</a> that a hard Brexit could be a “huge negative” for Japanese companies in the UK and re-emphasised the UK’s principal value as a gateway to Europe. </p>
<p>Concerns around a no-deal Brexit centre on the impact of reintroducing border controls, and the re-imposition of those recently removed tariff and non-tariff barriers, as well as a loss of access to valuable European labour. Large Japanese banks have <a href="https://www.theguardian.com/politics/2016/dec/15/philip-hammond-japanese-banks-concerned-brexit">also expressed concerns</a> about the possible loss of the “EU passport”, which enables banks based in London to operate freely across the continent’s financial markets. </p>
<p>Not every sector would lose out and more positive noises come from industries where the UK would remain competitive, particularly where it has notable R&D expertise and skills. Japan’s SoftBank <a href="https://www.ft.com/content/235b1af4-4c7f-11e6-8172-e39ecd3b86fc">purchase</a> of software design firm Arm Holdings after the referendum in 2016 is a case in point. Abe has also spoken of Japan negotiating a new trade deal with the UK and he invited the UK <a href="https://www.bbc.co.uk/news/uk-politics-45780889">to join the Trans-Pacific Partnership trade bloc</a>.</p>
<p>The sticking point for all of these agreements is that to date the British government has been unable to present a clear picture of what the immediate future will look like. In 1984, Thatcher stood firmly against her chancellor, who was keen to make changes to corporation tax that would damage Nissan’s interests. She recognised that damaging relations with this major employer could jeopardise future inward investment. The same could well be true today.</p><img src="https://counter.theconversation.com/content/111201/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Julie Gilson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What Brexit means for future UK-Japan business.Julie Gilson, Reader in Asian Studies, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1107292019-01-30T14:39:03Z2019-01-30T14:39:03ZEU-Japan trade deal comes into force to create world’s biggest trade zone<figure><img src="https://images.theconversation.com/files/256153/original/file-20190129-108342-ssdal3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Two new landmark agreements between the EU and Japan come into effect <a href="http://trade.ec.europa.eu/doclib/press/index.cfm?id=1954">on February 1, 2019</a>: the Economic Partnership Agreement and the Strategic Partnership Agreement. The economic agreement is the largest bilateral trade deal ever made by the EU in terms of market size and will be the largest zone of free trade created in history. </p>
<p>It drastically reduces tariffs between the EU and Japan, paving the way for simpler and faster trade between the two, and therefore an increase in volume. The strategic partnership commits to security cooperation on issues like nuclear proliferation, regional security, international terrorism and organised crime, cyber-security, and energy and climate security.</p>
<p>As Han Dorussen and I explain in our new book <a href="https://www.routledge.com/EU-Japan-Security-Cooperation-Trends-and-Prospects/Kirchner-Dorussen/p/book/9781138315808">EU-Japan Security Cooperation: Trends and Prospects</a>, these agreements come at a crucial time in the development of international trade and global governance. Brexit has the UK trying to redefine its relationship with the EU and potentially forge its own trade policies with the rest of the world.</p>
<p>Perhaps more importantly, the new EU-Japan agreements stand in direct contrast to Donald Trump’s decision to introduce an “America First” trade policy. Since being elected president in 2016, Trump has emphasised bilateral deals, erected trade barriers and undermined international institutions like the World Trade Organisation. Indeed, it was the anticipation of Trump’s nationalist policies, and especially his <a href="https://theconversation.com/what-trump-means-for-us-trade-and-globalisation-68692">withdrawal from the Trans-Pacific Partnership (TPP) trade agreement</a>, that gave renewed impetus to the EU and Japan’s lingering negotiations of the two agreements. Large trade agreements take a notoriously long time to negotiate and talks between the EU and Japan first began in 2013. </p>
<p>Japan and the EU – and Germany in particular – are export-driven economies and advocates of open trade. The protectionist stance of President Trump left them feeling vulnerable. So the new economic agreement is seen as strongly reaffirming the rules-based international trading system. </p>
<p>The concessions Japan offered to the EU on agricultural products are a blow to US farmers, who for a long time had been hoping to pry open this sealed market. The EU-Japan deal will emphasise Japan’s commitment to free trade and give a further thrust to the newly-formed multilateral trade agreement known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which rose from the ashes of the TPP after the US withdrawal.</p>
<h2>Opening up trade</h2>
<p>The EU-Japan economic agreement will ultimately remove 97% of the tariffs that Japan applies to European goods and 99% of those applied by the EU. It is estimated that EU companies will save €1 billion a year in duties which they currently pay when exporting to Japan. A number of longstanding regulatory barriers, for example on car exports, will also be removed. </p>
<p>The agreement will open up the Japanese market of 127m consumers to key EU agricultural products and increase EU export opportunities in many other sectors such as financial services. As Japan will scrap duties on agricultural products, the Europeans stand to gain most from exports of consumer products, such as cheese, pork, and wines. </p>
<p>Japan’s main interest in a trade deal with Europe was to increase its auto industry exports. The EU currently imposes a 10% tariff on Japanese cars. Under the agreement, it will lower this to zero over eight years. Although cars and auto components account for about a fifth of Japan’s exports to Europe, Japanese car makers’ share of the European market is only about 10% – much lower than in the US or Asia.</p>
<p>Besides these improvements, the economic agreement will strengthen cooperation between Europe and Japan in a range of areas. It will reaffirm their shared commitment to sustainable development, and include for the first time a specific commitment to the Paris climate agreement. </p>
<p>EU firms already export more than €58 billion in goods and €28 billion in services to Japan every year. This will grow, and the strategic partnership will lead to further deepening of EU-Japan relations and engagement across a wide range of global, regional and bilateral thematic issues. It reaffirms the shared values and common principles that form the basis of EU-Japan relations, including human rights, democracy and the rule of law. </p>
<p>Together, the EU and Japan’s economies account for about a third of global GDP. The new trade agreement should therefore serve to bolster the global economy, as well as marking a strong commitment to multilateralism by two of the world’s biggest economies.</p><img src="https://counter.theconversation.com/content/110729/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Emil Kirchner does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The EU and Japan’s economies together account for about a third of global GDP.Emil Kirchner, Emeritus Professor, Department of Government, University of EssexLicensed as Creative Commons – attribution, no derivatives.