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What Does 2021 Hold for Global Trade?

How will the expected economic recovery impact trade? Will the Biden administration maintain current President Donald Trump’s tariffs on China? Has globalization been fundamentally altered by the pandemic? BRINK invited Nicolas Lamp, a global trade expert based at the Faculty of Law of Queen’s University Canada, to share his thoughts on what trends to expect in 2021.

LAMP:在大流行中出现前列的概念是恢复力的思想。最初,各国采取了敦促生产的敦促的形式,以便在许多人在大流行开始时再也不会在大流行开始时,当他们不得不依赖某些关键材料的外国供应商。

But resilience doesn’t necessarily mean that you repatriate; it could also mean that you try to diversify your suppliers, or that you engage in stockholding. If there is a movement toward greater reshoring or nearshoring of production, that would definitely have an impact on trade.

There are many who are skeptical that the supply chains can really be brought back on a significant scale. We should also keep in mind the longer-running trends already in place toward less trade, in particular with China becoming less focused on trade and more focused on domestic consumption, as well as the larger estrangement between China and the West.

The Impact of Regional Trade Deals

BRINK:Do you think we’re going to see more regionalization, with a higher proportion of trade occurring within regions rather than between them?

LAMP:我认为我们已经有了这个;我们有工厂欧洲,北美和工厂亚洲。但有些政策正在加强区域化趋势,例如北美的USMCA。

There was quite a bit of skepticism about whether the USMCA would really have an impact on supply chains, but it turns out that, as far as we can see, particularly here in Canada, the higher regionalvalue content requirementsfor autos in the USMCA seem to be having an impact, as car manufacturers have announced major new investments in Ontario, and GM is even reopening an old plant.

Under NAFTA, 62.5% of a car had to be produced within the NAFTA countries in order for it to count as originating within NAFTA. The USMCA brought that up to 75%, so if you source major components of a car from China or anywhere else outside of the USMCA, you will not meet that regional value content requirement.

BRINK:What about the Regional Comprehensive Economic Partnership (RCEP) — are we going to see a similar pattern of regionalization in Asia?

LAMP:While theeconomic impact鉴于各方中的预先存在的自由诉讼,鉴于当前的自由诉讼,通过common rules of originand the provisions on regional cumulation are clearly a step toward greater integration in Asia, though it would be a bigger one if India were part of the agreement.

与USMCA的关键差异是,USMCA本质上是一种试图将吊桥带到外界,至少在Autos和Auto和Auto Parts的贸易方面。在RCEP中,您没有相当于它。

BRINK:What about the Trans Pacific Partnership (TPP)?

LAMP:我们在美国可能会尝试重新加入TPP的有趣情况,同时,中国对愿意加入TPP的噪音。

一个人可能会质疑中国是否认真对待这一问题,因为TPP中的一些规定,特别是在国有企业方面,可能很难吞咽。然而,真正的潜在问题是中国和美国之间是否有某种宏观议价,任何新的协议都需要适应这两个大国。

这样的讨价还价可以采取他们两者的形式加入TPP。它可以以双边的“第二阶段”协议的形式进行。或者可以反映在WTO中的再次参与。

The Trump administration hiking tariffs gave the U.S. leverage. The tariffs are illegal under WTO law, so the leverage can’t be used in a WTO negotiation, but it could potentially be used to get a new grand bargain with China.

转向零排放和全球贸易

BRINK:有很多谈论峰值油的可能性并朝向零排放。您是否看到对价值链和全球贸易产生重大影响?

LAMP:That’s definitely possible. We’ve talked about border tax adjustments for a long time, but it’s not really been implemented on any scale by any major trading country. However, the European Union seems to be finally getting serious about theircarbon border tax adjustment。And Canada just announced that it wants to hike the carbon tax to $170 per ton by 2030, so the issue is bound to become more politically important for Canada as well.

The concern for any country that implements an economically significant price on carbon is carbon leakage: the possibility that companies will move their production to other countries where they face a lower cost for the carbon.

To stem carbon leakage, countries can levy the equivalent of the carbon tax on imports at the border. While this can be done legally, it could still spark considerable trade friction, if only because it raises questions about the equivalency of what the different countries are doing on climate change.

From a climate perspective, it will be good to have these conversations about different systems and whether they impose an equivalent cost on carbon. If large markets move ahead with a carbon price, and then impose it on imports as well, that could have a spillover effect on other countries, which would be very positive from a climate perspective.

How Will President-Elect Biden Treat President Trump’s Trade Legacy?

BRINK:If you were to predict a surprise in the global trading system in 2021 that people are not thinking enough about, what would you have in mind?

LAMP:What’s really going to be interesting to see is the reassessment of President Trump’s trade legacy that’s going to happen.

At the moment, President Trump is still seen mostly as a wrecking-ball, but over time, I think we will realize that the effect of some of what he did was more like a catalyst, where he released longstanding pressures that have now broken into the open and that can’t be put back in the box. That is particularly the case for the relationship with China.

与中国的关系至少有三个重要方面,我们需要区分:第一个是国家安全维度,在其中在美国有广泛的两党协议。对于特朗普政府而言,这些安全问题将是相同的。因此,我认为我们将看到一些有限的去耦,继续在美国和中国之间的关系。

第二个维度是经济和技术竞争的。这种维度在许多方面难以解开安全维度,但特朗普政府的一些行动似乎旨在使中国的经济增长和技术进步,即使是不受安全视角不受严格必要的。

There are some signs that the Biden administration will take a less aggressive path and put more emphasis on strengthening the United States’ own capacity than on holding China down.

Where Is the US/China Relationship Heading?

The third dimension, which hasn’t gotten quite as much attention, is the legal relationship between the U.S. and China as it is embodied in the WTO. The problem is that China still has much higher bound tariffs in the WTO than the U.S. The average bound tariff for China是10%, for the U.S.,it’s 3.4%。There’s really no way for the U.S. to bring China tariffs down to its level in a regular WTO negotiation, because it simply does not have enough bargaining ammunition.

What the Trump administration did by hiking all these tariffs regardless of WTO rules was to give that U.S. leverage. The tariffs areillegal under WTO law,所以杠杆不能用于常规WTO negotiation, but it could potentially be used somehow to get a new grand bargain with China, perhaps following the climate model, where former President Obama and President Xi Jinping双边地协议about how they would go forward, which then allowed the Paris Agreement to come together. Something similar is needed in the trade sphere.

For me personally, that is the biggest open question: Will the Biden administration be able to use all the ammunition that the Trump administration has given it, including the tariffs that are still in place, to achieve some sort of new grand bargain with China?

Nicolas Lamp

Assistant Professor of Law at Queen’s University @nicolas_lamp.

尼古拉斯灯加入了皇后大学的法律学院,是2014年助理教授。2020年,他被交叉指定了女王的政策研究学院。他还担任国际法课程的学术主任,这是一个八周的夏季课程,夏季期间在英格兰·赫斯曼克郡城堡的獾国际学习中心提供。自2019年以来,他也是一年一度的女王贸易政策研究所,这是由女王的政策研究学院主办的加拿大贸易官员的专业培训课程。

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