Publication in Economics, Politics and Public Policy in East Asia and the Pacific

Deconstructing US–China decoupling

A Chinese worker checks photovoltaic cells for solar panels to be exported to the United States at a plant in Ganyu county, Lianyungang city, east China's Jiangsu province, 9 October 2014 (Photo: Reuters).

Author: Sourabh Gupta, ICAS

There is too much fraternising with the ‘enemy’ for US–China economic ties and global technology ecosystems to be disentangled into neat geopolitical coalitions. Nevertheless, in the short course of 18 months, US President Donald Trump’s administration has provided ample signals of how selective decoupling of US–China ties could transpire if regularised as policy.

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Trump has abandoned dispute settlement

World Trade Organization (WTO) Director-General Roberto Azevedo arrives for a news conference after a two-day General Council meeting at the WTO headquarters in Geneva, Switzerland, 10 December, 2019 (Photo: Reuters/Balibouse).

Author: Sourabh Gupta, ICAS

On 10 December 2019, the two-man demolition crew of President Donald Trump and United States Trade Representative (USTR) Robert Lighthizer took their wrecking ball to the World Trade Organization’s (WTO) Appellate Body in Geneva. Two of the three remaining dispute settlement judges concluded their terms on this day — with a minimum of three judges needed to hear cases. The US blocking of the appointment of judges to the dwindling Appellate Body has effectively placed the dispute settlement mechanism at the centre of the multilateral rules-based trading system on life support.

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ASEAN anchor to Asian trade policy strategy

ASEAN Chair and Thai Prime Minister Prayuth Chan-ocho looks ahead as Japan's Prime Minsiter Shinzo Abe, South Korea's President Moon Jae-in and others attend a photo session in Bangkok, Thailand, 3 November 2019 (Photo: Reuters/The Yomiuri Shimbun).

Author: Editorial Board, ANU

As the global trade regime threatens to unravel under the Trump administration’s assault on the WTO dispute settlement disciplines and its tearing up the rules in its trade war with China, ASEAN — the motley Southeast Asian grouping that includes Indonesia, Singapore, Malaysia, Thailand, Myanmar, Vietnam, Cambodia, Laos, Brunei and the Philippines — would seem the most unlikely bloc to spring effectively to its defence.

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US–Japan trade and Trump’s political trophy

US President Donald Trump reaches out to shake hands with Japan's Prime Minister Shinzo Abe during a bilateral meeting on the sidelines of the 74th session of the United Nations General Assembly (UNGA) in New York City, New York, US, 25 September 2019 (Photo: Reuters/Jonathan Ernst).

Author: Editorial Board, ANU

US President Donald Trump and Japanese Prime Minister Shinzo Abe inked the US–Japan Trade Agreement to much fanfare on 25 September 2019. Abe declared the deal a ‘win-win’ for both sides while Trump has emphasised that it ‘a huge victory for America’s farmers, ranchers and growers’. Yet the deal is positioned as an initial agreement in the midst of ongoing negotiations. With an estimated liberalisation rate of 60–70 per cent on a trade value basis, it falls far short of the comprehensive standards expected of bilateral accords under World Trade Organization rules. So why the rush to get a limited deal?

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The ‘Trump Factor’ in the US–Japan trade deal

US President Donald Trump shakes hands with Japan's Ambassador to the United States Shinsuke Sugiyama in front of US Trade Representative Robert Lighthizer during a formal signing ceremony for the US-Japan Trade Agreement at the White House in Washington, 7 October 2019 (Photo: Reuters/Kevin Lamarque).

Author: Aurelia George Mulgan, UNSW Canberra

‘Win–win’ is the phrase du jour for both Prime Minister Abe and chief trade negotiator Toshimitsu Motegi when describing the recent US–Japan trade agreement. Both have emphasised how the deal has delivered positive outcomes for Japan as well as for the United States. But the result on the most critical issue for Japan — US tariffs on Japanese cars and car parts — was a negative.

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Surprising momentum but meagre outcomes from the G7

French President Emmanuel Macron shakes hands with US President Donald Trump during a joint press conference at the end of the G7 summit in Biarritz, France, 26 August 2019 (Photo: Reuters/Philippe Wojazer).

Author: Yves Tiberghien, UBC

Following last year’s acrimony at the G7 in Canada and great US–China drama last Friday, the worst was expected in Biarritz, France. Surprisingly, this long G7 summit — a full three days — ended well. The tweets from US President Donald Trump following the summit have all been positive, including personal praise for each G7 leader and a pinned tweet thanking France.

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Expanding ASEAN’s Indo-Pacific role

ASEAN leaders shake hands on stage during the opening ceremony of the 34th ASEAN Summit at the Athenee Hotel in Bangkok, Thailand, 23 June 2019.(Photo: Reuters/Athit Perawongmetha)

Author: Prapat Thepchatree, Thammasat University

The 34th ASEAN summit in Bangkok last June took place in a global economic environment that is in a state of uncertainty. While the summit identified some key issues of reform and made progress on its Indo-Pacific policy, ASEAN needs to take bolder action to promote regional cooperation and integration.   Read more…

Getting Asia’s act together on trade

A worker cycles past containers outside a logistics center near Tianjin Port, China, 16 May 2019 (Photo: Reuters/Jason Lee).

Author: Editorial Board, ANU

Populism and anti-globalisation is gripping much of the West. The United States and the United Kingdom, for example, are conflicted in different ways over trade and globalisation.

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RCEP is now vital in defending the global trading order

US President Donald Trump boards Air Force One at Joint Base Andrews in Maryland, US, 2 August 2019 (Photo: Reuters/Yuri Gripas).

Authors: Peter Drysdale, ANU, and Mari Pangestu, University of Indonesia

The principal founder of the WTO-based global trading order, the United States, appears hell bent on tearing it down by flouting its rules and undermining its core institution — the appellate board at the heart of its dispute settlement process. What can the rest of the world do to defend its stake in the prosperity and political security that the multilateral trading order delivers?

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The end of the WTO and the last case?

Roberto Azevedo, Director-General of the World Trade Organization (WTO) arrives for the General Council meeting at the WTO in Geneva, Switzerland, 26 July, 2018. REUTERS/Denis Balibouse

Authors: Henry Gao, SMU, and Weihuan Zhou, UNSW

On 14 June 2019 the WTO issued a communication announcing that the panel proceedings in case DS516 (European Union Measures Related to Price Comparison Methodologies) initiated by China against the European Union had been suspended at the request of China. Called by US Trade Representative Robert Lighthizer as the ‘most serious litigation matter that we have at the WTO right now’, the case could affect billions of dollars of Chinese products. But its significance rises beyond commercial interests. Read more…

The rules based economic disorder after Osaka G20

US President Donald Trump and Japanese Prime Minister Shinzo Abe shake hands at the start the G20 Summit in Osaka 28 June 2019 (Photo: Kimimasa Mayama/Reuters).

Author: Shiro Armstrong, ANU

The Osaka G20 summit may yet be remembered in history as the moment the global rules based order was lost. There was no mention of the rules-based order in the communique, signaling an edge towards rule by might rather than rules among the major powers. The uncertainty that has clouded the global economy over the past few years is child’s play compared with what could come now without a major effort by middle powers to avert catastrophe.

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The world has a simple request for Japan: don’t drop the ball at the Osaka G20 summit

Headquarters of the World Trade Organization (WTO), Geneva, Switzerland (Photo: Reuters/Denis Balibouse).

Author: Editorial Board, ANU

Japan will host the G20 summit over 28–29 June at the most challenging time in the G20’s history. This may seem like a bold statement. After all, the G20 faced the prospect of another great depression back in 2008 and we are certainly not in the middle of a great recession today. Although today’s economic risks and challenges are substantial — a trading system in crisis, slowing global growth, rising financial risks, growing geopolitical tensions, the probability of a US recession, to name a few — they are not at 2008 levels. At least not yet.

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Japan’s strategic choice at the Osaka G20

Angel Gurria (L), Secretary-General of the OECD shows reports about the G20 to Japanese Prime Minister Shinzo Abe (R) in Tokyo, Japan, 15 April 2019 (Photo: Kimimasa Mayama/Pool via REUTERS).

Author: Shiro Armstrong, ANU

The world will be watching Osaka next week for what is shaping up to be the most important G20 summit since the leaders convened to coordinate a response to the global financial crisis. The G20 has been less effective during ‘peace’ times but make no mistake, the global trading system is now in crisis.

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Can the Osaka G20 summit resuscitate the rules-based trading system?

Banners announcing the G20 summit seen in Osaka, Japan, 5 June 2019 (Photo: Naoki Morita/AFLO/Reuters).

Author: Fukunari Kimura, ERIA and Keio University

Economists are fretting over the trade turmoil that currently roils the world economy. Worst case scenarios are now front and centre, including the prospect of a WTO minus one (the United States or China), or perhaps even the world minus the WTO. The US–China trade war has significantly degraded the rules-based trading regime. The upcoming Osaka G20 summit over 28–29 June could send the global trade system either into intensive care or to the coroner.

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Triage care for the WTO 

A logo is pictured outside the World Trade Organization (WTO) headquarters next to a red traffic light in Geneva, Switzerland, 2 October 2018 (Photo: Reuters/Denis Balibouse).

Authors: Weihuan Zhou, UNSW Sydney and Colin B Picker, University of Wollongong

The ongoing crisis in the dispute settlement mechanism (DSM) of the World Trade Organization (WTO) is approaching a critical point. This is a result of the US blockage of the appointment of members to the WTO’s highest court, the Appellate Body (AB). Read more…