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Policing rules, competition, lockdowns, and new ‘frameworks’
Published 01 June 2022
Can the US-led Indo-Pacific Economic Framework succeed if market access is off the table? Will weather, war, and poor government responses worsen food insecurity? Does the United States’ new China policy allow any space for negotiations or engagement? Check out our new reading list to catch up with the latest articles and reports on global trade.
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“Economic frameworks” are not free trade agreements | Promoting a rules-based order | Food insecurity and supply chain woes | Digital trade and minerals trade | More related research from Hinrich Foundation
“Economic frameworks” are not free trade agreements
US engagement with Asia on trade and economic issues have stepped up in recent weeks. Can the United States successfully reengage with key trade partners in Asia if market access is off the table? In mid-May, a rescheduled summit with ASEAN nations in Washington DC led to mixed outcomes, Politico reports, although it did lead to the launch of the Indo-Pacific Economic Framework (IPEF) agreement, a new effort to engage in the absence of renewed trade negotiations. To win broader support, the Biden Administration had to water down its initial statement, explains the Financial Times. The announcement of the agreement and its dynamics are covered by Politico while the Center for Strategic and International Studies unpacks the launch.
The region’s reaction is mixed too. Malaysia welcomes the plan as a good beginning, per Reuters, but it’s a tough sell overall in Asia, says Al Jazeera. In an interview with Nikkei Asia, Singapore’s Prime Minister Lee Hsien Loong urges for a balance between the US and China. Fiji becomes the first Pacific Island nation to join the IPEF.
Mentioned Publications
- U.S., EU hold off hitting China’s industrial policies, ASEAN summit emits mixed signals on trade – Gavin Bade, Politico Weekly Trade, 16 May 2022
A rescheduled US-ASEAN summit leads to questions about US commitment to the region and its openness to engaging in trade. - Fact Sheet: U.S.-ASEAN Special Summit in Washington, DC – The White House, 12 May 2022
- Joe Biden waters down Indo-Pacific Economic Framework to win more support – Demetri Sevastopulo and Kana Inagaki, Financial Times, 20 May 2022
What kind of agreements can we expect the US-led IPEF to produce? - 12 Asian nations join negotiations on Biden's signature economic initiative for the region – Stephen Overly, Politico, 23 May 2022
US President Biden launches the Indo-Pacific Economic Framework. - Statement on Indo-Pacific Economic Framework for Prosperity – The White House, 23 May 2022
- Unpacking the Indo-Pacific Economic Framework Launch - Aidan Arasasingham, Emily Benson, Matthew P. Goodman, and William Alan Reinsch, Center for Strategic and International Studies, 23 May 2022
CSIS provides a useful summary of the IPEF proposal and the current state of play. - Malaysia says US Indo-Pacific economic plan only a 'good beginning' – Reuters, 15 May 2022
Malaysia welcomes the IPEF proposal but sees more immediate economic opportunity in RCEP. - ‘Difficult to believe’: Biden’s economy plan a tough sell in Asia – Andrew Haffner, Al Jazeera, 20 May 2022
The Biden Administration faces a tough sell in convincing Asian trading partners to commit to the IPEF. - Singapore to join Biden Indo-Pacific pact, back China's CPTPP entry: Lee – Dylan Loh, Nikkei Asia, 23 May 2022
Singapore seeks a balance between the US and China in its trade relations. - Fiji joins US-led Indo-Pacific economic initiative on eve of Chinese visit – Demetri Sevastopulo, Kathrin Hille, and Nic Fildes, Financial Times, 27 May 2022
Fiji will become the 14th country to sign onto the IPEF and the first Pacific Island nation.
Promoting a rules-based order
In a May 26 speech, US Secretary of State Blinken attempted to clarify the US policy toward China, calling for domestic investment and closer alignment with allies to better compete with China. What does this posture mean for US-China trade relations, and is there space for any negotiations or engagement? In an interview with the Wire China, former USTR Ambassador Charlene Barshefsky is optimistic, claiming engagement with China is more important than ever. Elsewhere, the Wall Street Journal concludes that Vietnam won the US-China trade war.
How does the WTO help to make trade policies and regulations transparent, and what can it do to improve? Recommendations for the WTO to enhance global trade intelligence are outlined by Alan Wolff for the Peterson Institute for International Economics. The WTO’s new data portal enables users to find information more easily.
Mentioned Publications
- The Administration’s Approach to the People’s Republic of China – Anthony J. Blinken, US Secretary of State, 26 May 2022
The US will invest in its capabilities, align with its allies, and compete with China to maintain the rules-based international order. - Charlene Barshefsky on Why Engagement with China is More Important Than Ever – Bob Davis, The Wire China, 8 May 2022
USTR Charlene Barshefsky oversaw the negotiation of China’s WTO accession. She weighs in on her legacy and the importance of ongoing engagement. - Who Won the U.S.-China Trade War? – Bob Davis and Lingling Wei, The Wall Street Journal, 20 May 2022
The US and China each won some and lost some, but only third-party countries like Vietnam have reaped the spoils of the trade war. - Enhancing Global Trade Intelligence – Alan Wm. Wolff, Peterson Institute for International Economics, April 2022
What role can the WTO play in enhancing transparency for governments and companies engaged in trade? - WTO Data Portal – World Trade Organization, 17 May 2022
The WTO has created a new portal to make it easier to find key trade-related policies and data.
Food insecurity and supply chain woes
Weather and war have lead to serious shortages of grain, but poor government responses could lead to a calamity. The risks are spelled out by The Economist in their May 21 briefing. India’s export ban on wheat is analyzed by the Peterson Institute for International Economics.
At the beginning of 2022, analysts flagged China’s zero-Covid policy as a key risk for the global economy. Their projections proved prophetic, as the Financial Times vividly illustrates the situation in China.
Mentioned Publications
- A world grain shortage puts tens of millions at risk – The Economist, 21 May 2022
War, adverse weather, and export controls are causing shortages of grain and agricultural inputs. Is massive food insecurity ahead? - India’s wheat export ban: Bad economics, good politics, modest impact – Cullen S. Hendrix, Peterson Institute for International Economics, 23 May 2022
As the world teeters on the brink of food insecurity, what will be the impact of India’s export ban on wheat? - Shanghai lockdown exposes global supply chain strains – Peggy Hollinger, Andrew Edgecliffe-Johnson, and Primrose Riordan and Gloria Li, Financial Times, 15 May 2022
Supply chain blockages in China have moved inland as Covid-19 restrictions hamper movement.
Digital trade and minerals trade
As Canada seeks to join the Digital Economy Partnership Agreement, what role will it play in laying out global rules for digital trade?
What are the critical materials and minerals needed for high-tech manufacturing? The Wire China provides key information and context on critical minerals.
Mentioned Publications
- Minister Ng announces Canada’s request to join the Digital Economy Partnership Agreement – Global Affairs Canada, 22 May 2022
How will Canada’s addition to the agreement help advance digital trade rules, and what does this portend for the deal’s further expansion? - Critical Minerals, in Context – Eliot Chen, The Wire China, 15 May 2022
As technologies advance and competition heats, some minerals become more important in manufacturing and spur a race for supplies.
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