Business, not bureaucracy, is the focus of trade


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When we return after the seasonal holidays, important trade secrets from Brussels Hello. The “rental” work here is steadily going on after the general holidays, although the gods of the weather abnormally bring summer sunshine to Brussels, they did not manage to produce too much sunshine in the actual summer. It’s also an important Labor Day. Say hello to our American readers and enjoy their less frequent rest days.

The main focus of the talks in the town was the upcoming German election on September 26, when Angela Merkel finally left the Chancellery. Later this week, we will study the potential impact of changes in the ruling party (or the change of prime minister of the same party) on EU trade and foreign policy. Today’s main article looks more broadly at global trade issues and what to watch out for by the end of the year.

We hope to hear from you.Send any ideas to [email protected] Or email me [email protected]

What we will focus on for the rest of 2021

With the resignation of Donald Trump, we look forward to getting some respite from the drama, but the first half of 2021 is much more lively than we expected.The EU-China deal suddenly appeared to the unsuspecting public, and it was eye-catching Hit a brick wall, A trade war broke out vaccine And transferred to the vaccine Patent exemption, There is a Transatlantic Armistice Agreement Boeing-Airbus and the World Trade Organization finally got New boss.

So what will happen in the rest of the year? We hesitate to be quiet again, because it looks like a seductive fate, but in our opinion, some of the debates have indeed eliminated a lot of heat. last week The European Commission resolved the vaccine delivery case against AstraZeneca (which may be politically unwise). The main problem in rich countries now is to get people who have not been vaccinated, not to increase domestic supply and fight export restrictions.

The WTO’s vaccine patent problem has nowhere to go: it is stuck in a deadlock between the original supporters of intellectual property exemptions, India and South Africa, and most of the wealthy countries, which are still far apart in the breadth of the intellectual property suspension. What will it do? benefit. Just like the EU-AstraZeneca litigation, we expect that as more capacity (obviously not enough, but more) is put into use around the world, the exemption as a problem will decrease.

At the same time, the China-EU agreement is in a state of indefinite stagnation. Brussels and Washington may make some perfunctions, which will solve the steel and aluminum tariffs as they did with Boeing-Airbus, but this is not the content of global governance.

In other places, a lot of bureaucratic procedures are running, but few people will produce amazing results before Christmas. The EU and the United States will meet at their new bilateral trade and technical committees, but it is difficult to see where they will make rapid progress. The WTO’s biennial ministerial meeting was held in late November and early December. However, there are still many questions about how many delegates will be allowed to attend the meeting in person, and of course there will not be the usual overnight negotiation meetings. If anything is to be decided, to a large extent it must be negotiated in advance. As we wrote In June, little progress was made in the negotiation of fisheries subsidies that may be delivered by the Ministerial Conference.

Ngozi Okonjo-Ivera, who took over as WTO Director-General in March this year, is known for her wide connections and energetic contacts, but her diplomatic efforts have yet to achieve any major breakthroughs. The European Union will advance its plan for carbon border measures, but the Climate Change Conference (COP) in Glasgow in November is unlikely to be a moment of success or failure for the initiative.

So what will trade secrets focus on? Well, the real world and the policy world, first of all.More interruptions supply chain Better than we expected, it will be a good test of whether and how the resilience of enterprises and trading systems can be repaired. In the short to medium term, the relationship between the health of trade and globalization and pure economic growth is far greater than tariffs and regulatory policies, so we will pay close attention to the macroeconomic situation-including the intersection with trade policy, such as the huge US fiscal package. In combination with the purchase terms of the United States.

If large formal transactions (EU-China or US accession to the Trans-Pacific Partnership (CPTPP)) will not come, how will Europe and the US engage with Asia, especially China? Everyone said (correctly) that what matters most today is the intersection of trade and national security. But, apart from more disagreements on technology regulation, how exactly will this happen? Data and numbers are huge global governance issues, but there is no clear way to deal with them. No matter how many results the COP produces, the interaction of climate and trade will be a big deal for individuals, companies, and investors, no matter what the government does.

In other words, we hope that there will be some time and space for us to look away from the daily policy process, and to observe more extensively what is actually happening in the world trading system and globalization. It should be very interesting. fasten your seatbelt. And, as always, let us know what you think.

Concession waters

So far, one of the trends this year has been soaring transportation costs. As Christmas approaches, we think this situation may continue into the last period of 2021. Although the surge has been widely covered, what has attracted less attention is the huge gap between the fees paid by customers favored by the shipping industry and those on hold. Don’t pay much attention to it.

We introduced the diversion of the route from the Far East to the West Coast of the United States FT AlphavilleWe have seen the same trend on the Far East to Nordic route, where smaller companies-usually higher fees than larger competitors-are affected.

As shown in the figure above, the price difference has increased from around USD 4,000 per container at the beginning of the year to around USD 7,000. In our view, this is similar to what we saw during the Great Financial Crisis, when the gap between the financing costs of larger banks and the financing costs of their smaller competitors widened. Claire Jones

Trade ties

One of the top Covid vaccine distributors in the world, Chad Bowen Peterson Institute, explain how Repurpose the supply chain for the jab of failing clinical trials.

The Financial Times today’s roundup.Well-known EU legal experts have support The British government asks to rewrite the controversial part Brexit Aid Agreement. David RubinHead of Emerging Markets Economics, Citi debate The benefits of a surge in government investment in the United States and Europe will be diminished if it aims to Alternative trade rather than supplementary trade.

Nikkei report ($, subscription required) TSMC will increase price Next year’s semiconductor, Driven by higher input and logistics costs, as well as the demand for chips from electronics and automobile manufacturers. It’s not just Britain that is facing a labor shortage.Lack of workers in farms and food distributors in Southeast Asia Be felt (Nikkei, $) Coming all the way to Japanese supermarkets, palm oil prices have risen by 32% this year.

Convene all data geeks. Manifest is a supply chain platform with Drawn Some supply chain This is great for products and companies from the 1920s to the present. Alan Beatty, Francesca Regalado and Claire Jones.

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