Europe armed itself to fight global trade bullying
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Hello from Brussels, welcome Christmas in the shadow of the Omicron variant. Last week, the government announced the latest restrictions. Restaurants and bars are not restricted by time (after all, this is Brussels’ cafe culture), and schools remain open for the time being, but there are ambitious instructions that all children 6 years of age or older must wear masks.
As for the impact of Omicron on the world economy and trade, we are somewhat optimistic that the blow will be Smaller Compared with previous variants, they themselves are not fatal to globalization.Today’s main content is about the EU’s preparations to deal with trade bullies, and Concession waters It’s about shipping delays.
One of all, i am all
We have been doing for a while Regarding how the EU uses a series of unilateral (sorry, we have been doing this, “autonomous”) trade tools to arm itself. Purpose: To combat companies that are unfairly subsidized by the state for exporting cheap goods, bidding on procurement contracts, or operating in the EU single market, or trading partners who use forced labor or damage the environment in their trade with Europe.
A prototype of one of the weapons will be launched from the European Commission’s seminar this week for review by the European Parliament and the Council of Member States. this”Anti-coercion instrument“(ACI) aims to prevent-and when necessary counter-attack through tools such as trade restrictions, divestments and blocking government procurement-foreign governments use unfair means to try to force policy changes. The European Council on Foreign Relations has an article on this topic. Excellent paper here.
There are several interesting things.First, it relies on a creative interpretation General principles According to public international law, (roughly speaking) governments are not bound by treaties with foreign governments that impose undue coercion (including economic and financial pressure). During the 1973 Arab oil embargo, people discussed a lot, trying to get oil importing countries to withdraw their support for Israel.
If the target country subsequently challenges the use of ACI in the World Trade Organization, the EU will have to use various provisions in WTO rules to defend it. This strategy is a bit of “different opinions”-impose trade restrictions on a vicious foreign government and see if you can convince the WTO Dispute Settlement Group that this is reasonable. In short, entrepreneurial legal innovation has a perfect score.
The second interesting aspect is that the possible targets have changed and the possible range of the instrument has also changed. The original motive was to fight back against the United States under the leadership of Donald Trump. The Trump administration threatened to impose tariffs on imported European handbags and other consumer goods in an attempt to force EU countries to abandon their tariffs. Digital Service Tax.
The provisional agreement on digital service tax means that the basic principles have disappeared, and now the more likely target is China-let’s face it, it has created a richer and dirtier set of mandatory technologies instead of France Cruel treatment by handbag manufacturers.Just ask Australian.
The current debate is how to formulate deployment rules: who decides to use weapons (if the committee decides on its own, it’s a lot of Power) and under what circumstances. Fans of this idea say that it should be flexible and fast, with limited discretion. Bernd Langer, Chairman of the International Trade Committee of the European Parliament, said: “We should make a whole set of measures possible so that our measures cannot be calculated from the beginning.” The country is easy to be divided”.
Skeptics (including Estonia, Sweden and Japan) Worried that it will not actually get into trouble under the restrictions of WTO rules, and will eventually be subject to political management of trade. Of course, the EU itself has a serious risk of becoming a bully.
As it happens, we now have a mandatory test case. Lithuania (population 2.8 million, GDP 63 billion US dollars) has surpassed China (population 1.4 billion, GDP 15 trillion US dollars), especially through the establishment of strong relations with Taiwan. It is indeed strategic autonomy. So far, China has imposed little punishment on Lithuania, but Vilnius complained on Friday that Chinese customs had blocked all its exports. It is not clear (until recently) whether the restrained response was due to Beijing’s belief that Lithuania was too small and insignificant, or whether it was worried about a wider impact across Europe.
If the latter, will formal anti-coercion tools help formalize this threat as the Three Musketeers? D’Artagnan principle All member states are one for all?Interestingly, a report The Swedish National Center for China follows the case of Lithuania, a government-sponsored think tank-Sweden is the other major EU country bullied by China this year-hinting that it might not.
First, it believes that China’s aggressive diplomacy is unlikely to be intimidated by the threat of punishment, and therefore a cycle of revenge will begin. ACI is not a precision instrument that operates under strictly defined standards. It is a blunt instrument that, if used awkwardly, may cause serious injury to the user. Members of the European Union’s business lobby are often caught in the crossfire of trade wars, such as the Beverage Association Spirit Europe (the strange capital is theirs), Has urged The committee conducts transparent consultations on each use of the tool to assess the full economic impact. Second, ACI cannot be used for undisclosed mandatory actions by the attacker or target, because many people may not disclose it.
The China Center’s report stated that it is better to “absorb” than retaliation, and help member countries that find trade with China blocked to develop other supply chains or give them financial compensation through solidarity funds.
To some extent, the principles in these two cases are the same, which is equivalent to NATO Article 5 on collective defense: an attack on a member state forces a collective response. This is exactly what the EU was born for. However, the problem is not only the method, but also the political will. Although general dissatisfaction with China has been growing, there are still big differences in the attitudes of member states in dealing with Beijing. What is important is not only the design of legal tools: it is also the readiness to use them.
Now, transporting goods through the world’s major trade arteries is not only very expensive, but also very slow. We heard a lot of anecdotes about this, most of which focused on delays in ports such as Los Angeles and Long Beach. But what has been lacking is a data set that can describe how bad things were during the pandemic.
Moving forward, Flexport proposes a marine aging indicator to track the journey time from the Far East to the west coast of the United States and back. Very severe, we believe you will agree. Claire Jones
economist Darong Asimoglu Say this Supply chain crisis It is an opportunity for a broader dialogue on the economy and its uses.
FT reporter Want to know Is it recent inflation Data will lead to U.S. Federal Reserve Withdraw stimulus measures faster.
Only a quarter of small British businesses Ready for New border control A trade agency stated that imports from the EU will be levied after four weeks.
Between the summit Narendra Modi with Vladimir Putin Nowadays May be finalized (Nikkei, $) The long-awaited $681 million production transaction Russian assault rifle in India.
Japanese brewer To do Yes Seek arbitration (Nikkei, $) Dissolved the partnership with a military subsidiary in Myanmar after Norway and other multinational companies Norwegian Telecom And Korean steel manufacturers Pohang Steelers Those who have trouble with the military government. Alan Beatty and Francesca Regalado