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Hello from Washington, it’s expiring at the end of this week for the Thanksgiving holiday. My attention was drawn to the fact that Americans like to eat marshmallows on sweet potatoes for this vacation, which sounds a bit much.
In other news, today’s note looks a bit ahead of the World Trade Organization ministerial conference next week, wondering if the US really cares about what happens in Geneva.
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Tai remains silent on all WTO matters
Bob Lighthizer, head of trade for former President Donald Trump, often referred to the WTO as a “failed organization”. Speaking to the Financial Times in January this year, he suggested that the panel was full of “professional bureaucrats” focusing on the “bureaucratic things they do”. Also, he said, the WTO just had so many members and they all blocked and got blocked.
Fast forward to November. Lighthizer has been replaced by Katherine Tai, and we are now approaching the 2021 WTO Ministerial Conference. The question is, does Tai think differently?
Sure, she has a different way of speaking. In a round table with reporters a few weeks ago, it seemed to shine and express genuine enthusiasm for reforming the battered and much-scolded multilateral body. Her “vision,” she said, is that “WTO members come to Geneva or wherever to gather and share their honest selves.” Members should “be prepared to fight for the WTO vision that you want”.
“Just bringing the WTO back to where it was four or five years ago,” she added, “isn’t really going to bring back the energy we need for a world economy that is changing very quickly and is moving ever further away from that Point and the reality where the WTO began. “
But has the US actually proposed something practical itself that could drive such change? The answer seems to be no.
One of the major problems in the WTO’s relationship with the US pre-Biden had to do with the Appellate Body, which is supposed to settle disputes between members. The US effectively crippled it by blocking new appointments because it didn’t like what it viewed as a judicial submission. A week before the critical ministerial conference, we still have no idea how Tai thinks a reformed appellate body is possible.
Here is the thing. Here in Washington, the WTO doesn’t seem like a big item on the agenda. As it continues its decades-long argument over fisheries subsidies, Washington is deadlocked by the idea that China is subsidizing its steel and sinking it in Europe and the US, winning the race to make the world’s most advanced chips, and it is by now Far ahead of securing the minerals and rare earths required for the energy transition. Now as economic policymakers try to recover from the pandemic by injecting huge amounts of money into the domestic economy, they are also trying to figure out how to catch up with China and make sure the US always has access to medicines, chips and minerals, to make them batteries and so on.
It also does things like pissing off allies (namely Mexico and Canada) by threatening to undermine the terms of recently signed agreements by offering people tax credits on electric vehicles.
Geneva’s antiquated consensus-based negotiation processes seem worlds apart from current US concerns.
The pandemic taught us, if we didn’t already know, that everything can change in the blink of an eye. Adam Tooze argued in a New York Times article adapted from his latest book: Switch offthat the world’s decision makers have demonstrated to us their inability to rule the deeply globalized world that they created. Part of that problem, he argues, is that global institutions have proven to be toothless, even in a situation where geopolitical tensions could have been put aside in the face of a common enemy.
So what are we hoping for? Well, hopefully a fisheries subsidy agreement. If WTO members cannot, says Jake Colvin, president of the National Foreign Trade Council, a business lobby group, it is possible that “everyone will go elsewhere to deal with important trade issues.” There are a lot of people out there who say similar things. It feels like crunch time.
Apart from that, Alan Wolff, former deputy director general of the WTO, said in a speech that the members of the panel should agree on two more “essential” points and draw up a statement on how countries are dealing with the pandemic, as well as an adequate overview of the pandemic dealing with climate change in the retail sector. The US and China joined talks on environmental trade, including fossil fuel subsidies, earlier this month.
There is a good sign and that is Tai’s visit to India. India is part of what the Brussels element of trade secrets like to call “the awkward bunch”. That is, they block most things. Inu Manak of the Cato Institute, a think tank, said Tai’s visit was important as many delegates expressed “frustration” with India and called for more US leadership and diplomacy.
Ultimately, however, we wonder if Biden’s trade policy is about figuring out how to do it appear To like multilateralism while politely bypassing existing trade rules to make domestic investments like electric vehicles and semiconductors. The course of the WTO meeting could give us further clues.
The New York Times has an interesting article ($) on how wealthy nations are battling one another to attract immigrants to address labor shortages. The diagram explains why this is so.
Since the outbreak of the pandemic, the U.S. has seen what is known as The Great Resignation, which saw millions of workers withdraw from the job market.
While this trend was far more pronounced in the US than anywhere else, it has also affected parts of Europe and Asia. Claire Jones
A fun story about that Chips crisis. An increase in counterfeit Semiconductors entering the Japanese market have spawned a home industry of chip detectives (Nikkei, $).
Ed White and Sara Germano did an excellent piece on what the tennis star’s case is like Peng Shuai leads to a rethinking of companies like those in China.
China will have “no exceptions, no outsourcing, no transitions, no special treatment” which will apply to accession CPTPPa senior Mexican trade official told Nikkei ($).
It seems that the residence fees have the desired effect Get companies to sell their cargoes from theUS West Coast shipyards. Aime Williams and Francesca Regalado
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