Author: Satoshi Inomata, IDE-JETRO
According to traditional trade theory, the direction and magnitude of product flows are principally determined by the comparative advantages of trading countries. These comparative advantages depend on endowments of production factors: labour, capital (including human capital) and land (or natural resources). Forces integrating the different factor endowments of various countries — especially capital and technologies from advanced economies and cheap labour from developing countries — drive the development of global value chains (GVCs). Read more…
Author: Editorial Board, ANU
The lockdowns that started in China’s Hubei province on 23 January were a major disruption to the international supply of manufactured goods. Its capital Wuhan, the epicentre of the COVID-19 pandemic, is an industrial powerhouse that produces nearly 10 per cent of all motor vehicles made in China and, for example, is home to more than 100 parts suppliers for Honda alone.
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Author: Shiro Armstrong, ANU
The health and economic crises from the coronavirus are unlike anything the world has experienced since the Great Depression and Second World War. The global community is at risk of repeating the mistakes of the 1930s and undoing the foundations of lasting peace and prosperity that were forged in the ashes of that war. Read more…
Author: Ken Heydon, LSE
Well before the COVID-19 pandemic, global value chains (GVCs) were losing their impetus as drivers of world growth. Between 2012 and 2015, GVCs were already playing a lesser role in stimulating trade than they had in earlier cycles. Concerns about the environmental footprint of globally-fragmented production were one thing. But rising protectionism was the principal reason. Read more…
Authors: Peter Gourevitch, UC San Diego and Deborah Seligsohn, Villanova University
The international trading system was under attack even before the COVID-19 crisis. The pandemic has intensified the combat by challenging confidence in the global system. It has made the world acutely aware of the inequality and inefficiency that exists not just in economics, but also in disease management and treatment.
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Author: Edwin M Truman, Peterson Institution for International Economics
The COVID-19 pandemic combines three shocks: medical, economic and financial. Policymakers around the world must respond to these shocks not only to limit the extent of the immediate economic, health and social damage but also to demonstrate support for the institutions of international economic and financial cooperation in the future. Read more…
Author: C H Kwan, Nomura Institute of Capital Markets Research
Phase one of the US–China Economic and Trade Agreement was signed on 15 January 2020 in an step to end the trade war that began in March 2018. China promised to greatly increase its imports from the United States in exchange for no further hikes in US additional tariffs on imports from China. A ceasefire is now in place, but many challenges remain. Read more…
Authors: Heather Smith, Canberra and Allan Gyngell, ANU
In 1941, even before the Japanese attack on Pearl Harbour, Paul Hasluck, then a public servant and later an Australian Liberal Party foreign minister, recommended the establishment in the Australian Department of External Affairs of a Post-Hostilities Section. Read more…
Author: Jane Kelsey, University of Auckland
Negotiations on the Digital Economy Partnership Agreement (DEPA) between Chile, New Zealand and Singapore were concluded on 21 January 2020. The Joint Ministerial Statement issued in May 2019 promised a ‘first-of-its-kind’ and ‘forward-looking’ agreement that would be a pathfinder for the WTO and APEC — offering new approaches to digital trade issues and exploring new frontiers in the digital economy. But significant new rules and obligations were never likely.
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Author: Helena Varkkey, University of Malaya
Malaysia and the European Union share a long history and strong trade ties. The European Union is Malaysia’s third-largest trading partner and is its largest source of foreign direct investment, and Malaysia is a major exporter of raw materials to the European Union. But politics over palm oil threaten their relationship.
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Author: Gary Clyde Hufbauer and Euijin Jung, PIIE
Globalisation was under threat even before the pandemic. US President Donald Trump set the tone by declaring himself ‘tariff man’, imposing bogus ‘national security’ tariffs on steel and aluminium imports from allies while launching a trade war with China and eviscerating the WTO Appellate Body. But Trump was not alone in attacking the global trading system.
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Author: Editorial Board, ANU
The new year and new decade are off to a bad start. The spread of the novel coronavirus out of Wuhan and the bushfires in Australia are global events that remind us how interconnected the world now is.
More than ever we face challenges on a global scale that require global action. But the world is moving in the opposite direction away from collective action.
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Author: Edward Alden, CFR
Since the phase one trade deal between China and the United States was inked on 15 January, much of the commentary has focussed on the overly ambitious targets for Chinese purchases of US goods. Critics charge that the deal amounts to ‘managed trade’ or ‘central planning’ that substitutes government diktats for market forces.
The real danger of the new agreement, however, is that it replaces a trading system based largely on agreed rules with one based purely on negotiating muscle. Read more…
Author: Suman Bery, Wilson Center
With Indian economic growth slowing, commentary is focused on Finance Minister Nirmala Sitharaman’s 2020–21 Union Budget.
Less public attention is being paid to India’s external challenges. The world economy matters to India today and India has itself become a global player. The rules-based multilateral economic order which supported global integration for a generation is under widespread challenge. Read more…
Author: Stephen Roach, Yale University
From tariffs and the blacklisting of Huawei to democracy and human rights concerns over Hong Kong and Xinjiang Province, the United States raised the heat on China to a boil. A so-called Phase I trade deal lowers the immediate threat of tariffs but doesn’t end a deep-rooted structural conflict. Washington is caught in the grips of a ‘China deceit’ narrative, convinced that China has broken a solemn pledge made at the time of its WTO accession in late 2001 to mould itself in the image of the West.
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