Hello from Washington, many American cabinets are absent because they accompany President Joe Biden to Europe. Meanwhile, U.S. Trade Representative Katherine Tai is in London today, and she hopes to replicate the success of the Airbus-Boeing deal with Brussels by reaching a similar bilateral agreement with the United Kingdom. We will pay close attention to things.

Our main part focuses on how the transaction is passed. The short answer to this is to omit a lot of details about how the truce will work.

Concession waters Figure the decline of globalization.

Unusual strategy for resolving 17-year disputes

For nearly two decades, Washington and Brussels have been arguing about Airbus and Boeing, but they have just reached a detente, which includes five years of high tariffs on transatlantic trade worth $11.5 billion.

How did they do it? The diplomat told us that the Biden administration changed its tone. We think there is another important factor. The two sides came up with a way to gracefully avoid the quarrel over the legal terms of any agreement in the past few years: Don’t really write anything down.

This Two pages of text The agreement, or “understanding of the cooperation framework”, is very high-level and vague. Points 1 and 2 on the first page set up a working group that will “seek to overcome differences” (maybe such differences already exist?). Points 3 and 4 are the core of the current controversy-the United States accuses Europe of lowering market interest rates and terms when providing aircraft development loans to Airbus, and Europe accuses the United States of opaque research and development funding and contracts by the Pentagon and NASA And other federal agencies awarded the Boeing Company. Therefore, both parties agreed to uphold market interest rates and maintain transparency. Point 5 is the key point-both parties agree to figure out the meaning of points 3 and 4 in practice and how to implement them. This is the whole point of the controversy, and this document does not solve this problem. Point 6 promises that both parties will do something in China (I will return to this topic). Point 7 is the other most important point-they will suspend tariffs for five years, and point 8 is that they will continue to talk about existing subsidies.

When it comes to the page of “non-market economies” again, the situation is very vague, but cooperation on the China issue is one of the conditions for the shelving of tariffs. Regarding the review of investment in aircraft manufacturers and the coordination and review of aircraft manufacturers’ investments in joint ventures and factories located in the aforementioned “non-market economies”, there are some loose words. In addition, there is a commitment to information sharing. This is all in its early stages, but as you might expect, Americans seem to be very serious about it.

So, um, what should I do now? Well, there are still many missing, and it seems that there is still a lot to do. This is by no means the end. One of the important themes of Tuesday’s conference call and press conference was the idea of ??ending the endless litigation. sounds great. But if the two sides continue to diverge on the issue of allowing subsidies, what will happen? For example, if it is not the market but the government that issues loans, who decides what constitutes a market interest rate? A US trade official said that the answer is a “common understanding” with Europe, that is, “private lender”. .. Specific items will be provided”. Does this need to be tested in some way? Should European governments seek quotations? The common understanding is not codified anywhere. The official added: “One of the values ??of an agreement like this is , We don’t have to try to attribute the uncertainty to these details that are currently unknown. “

It’s worth noting that there is no real outline of the dispute resolution mechanism or process for escalating complaints. We think there will be many of them because they have been fighting for it. [checks notes] Nearly twenty yearsThe officials again stated that this is because they are going beyond the lawsuit. I like this lofty new theme. It forms an interesting contrast with the USMCA trade agreement, in which US officials are using various legal tools embedded in their trade agreements to escalate disputes and formally record dissatisfaction. However, with the use of Airbus/Boeing in Europe, they think it is better for everyone to move on without these things. A U.S. official summed up this point best, saying: “We don’t want this to become a new form of litigation. We want to change this form. We consciously choose not to join all procedures or mechanisms to resolve our disputes. Basically, “We will continue to litigate.””

This is probably a genius. It’s almost an admission that trade lawyers have become too legalized for their own benefit, and in fact everyone will get rid of it, drink beer to solve this problem, or pick up the phone and yell at each other a bit-I mean, really , Who knows?This is especially interesting when you remember that it was the United States that first filed a complaint with the World Trade Organization to file a lawsuit on this dispute, because they believed they would win a huge ruling in their favor (this They kind of, for equality).

So, once we solve some problems, will we reach a more detailed agreement within five years? Officials said, not necessarily. This is not a goal. Who needs trade agreements, details, and laws? Not these guys. What if things don’t work and the “expectations” are not met? Well, the tariffs are about to start again.

Maybe this can work. We are still a bit cynical, but now this is a welcome truce, that’s for sure.

Concession waters

We think this chart is self-explanatory and we will not waste too much on it.However, we believe that readers will have their own views on the drivers of global decline, and welcome your ideas in the comments section below, or through email. Claire Jones

Trade ties

After more reports Airbus-Boeing dispute?We would recommend This, From Peggy Hollinger, as to why, truce or no truce, there is still some way to go before the quarrel finally subsides. It shows that relaxing in the details means that the root cause of the dispute has not yet been resolved.

The United States made a shocking appointment last night, Naming Lina Khan The head of the Federal Trade Commission, the country’s competition authority. Those who have read her papers, Amazon’s antitrust paradox, Will realize that this may have a huge impact on police policing Big technology, Is actually a broader competition policy.For those who haven’t, it’s well worth reading and can be found Here. We will also recommend her Lunch with the Financial TimesAt the same time, the Nikkei ($) reported that Amazon is challenging Alibaba In own backyard, By stepping up to recruit sellers in Vietnam.

More from the Nikkei. Japan’s Concentration of technology required for stacking chip layers painting The world’s largest contract chip manufacturer, TSMC, To become a new domestic R&D center.review Japan Dominate the chip industry In the past few decades.

British manufacturer Yes — Surprisingly — there may be less Prevent cheap imports from the U.S. Post-Brexit Trade Regulatory Agency More than they have under the EU system.

North Korea, The border has been strictly closed during the pandemic, Yes Facing more food shortages. Claire Jones