Last week President Donald Trump seemed to be on the cusp of a trade deal with China. A couple of threatening tweets later, the odds of ending the 16-month-old U.S.-China trade war have dropped dramatically.
Whether or not American and Chinese trade negotiators ultimately salvage a deal – the U.S. says China backpedaled on a commitment and intends to raise tariffs within days – the episode highlights drawbacks in Trump’s trade strategy, which tends to be protectionist, confrontational and negotiated one on one.
Unfortunately, Trump’s policies are only an acceleration of a trend in international trade that’s been going on for several decades. It’s a move away from multilateralism – in which many countries agree on certain trading principles – and toward bilateralism – which pits nation against nation, raising the stakes.
I am a specialist in the politics of trade. My observations lead me to believe that the increasing abandonment of multilateralism will have pernicious long-term consequences. Not only will trade become more costly for businesses and consumers, it may even make the planet a more dangerous place.
Source: Trump’s one-on-one approach to China has dangerous implications for global trade and world peace : The Conversation
The former Chancellor said the Chequers Brexit plan had been “conspicuously unsuccessful” in uniting the Conservative Party.
Speaking on TalkRadio, the Tory peer said: “What it effectively does is make the United Kingdom not a member of the European Union but a colony of the European Union. Governed outside it but governed by the European Union.
“Of course, the whole purpose of Brexit was to recover our independence and become, once again, a self-governing democracy.
‘So it is, if you say, like a compromise. It’s the worst of all worlds.”
Source: Brexit news: Lord Lawson says Chequers would make UK a COLONY of EU | UK | News | Express.co.uk
Joachim Lang, director-general of Germany’s BDI industry federation, warned that the UK and EU do not have much time left to strike a deal.
Speaking to the Financial Times, Mr Lang said: “We have reached a critical phase. The time that remains is incredibly short.”
Mr Lang said the two sides are not prepared for the outcome if there is no deal.
He said: “In a no-deal scenario, and without a transition phase, we would end up with a border and customs regime that no one is prepared for.”
Source: Brexit news: German businesses urge UK to soften negotiation stance | UK | News | Express.co.uk
The Trump administration has drafted legislation that would allow the U.S. to ditch World Trade Organization rules and give President Donald Trump tighter control over U.S. trade policy, according to Axios, which published the leaked draft.
The proposed “United States Fair and Reciprocal Trade Act” would give the president unilateral power to renegotiate with individual countries or apply tariffs, bypassing international WTO rules for collective negotiation.
The leaked draft emerged a few days after Axios reported that Trump has repeatedly told White House officials that he wants to withdraw the U.S. from the WTO. “The WTO is designed by the rest of the world to screw the United States,” Axios’s source quoted Trump as saying.
The proposed legislation is far from a done deal, according to other media reports and the White House itself. A CNN source said the draft is just the “beginning of a conversation” on trade. Axios reported that “most officials involved in the bill’s drafting … think the bill is unrealistic or unworkable.”
White House spokeswoman Lindsay Walters told Axios that Trump has asked for ideas on how to address “the unfair imbalance of tariffs that put the U.S. at a disadvantage.” She said the main people involved haven’t yet met to review the draft legislation.
Source: Leaked Trump Draft Bill Would Ditch WTO Trade Rules
Staying in the WTO is potentially important so that British companies can still bid for government work in the United States, European Union and Japan. Britain is a member of the agreement now only by virtue of its EU membership.
In letters published by the WTO on Tuesday, the EU and British ambassadors said Britain would make an offer on the degree to which it was willing to open its own procurement markets in return for continued membership.
The 46 countries in the agreement have liberalised access to each other’s markets, with an estimated $1.7 trillion annual spend. China is hoping to join, which could add a further incentive for membership.
British officials have previously said that rolling over membership of the agreement should be relatively easy, since there was an incentive for other members to retain their access to Britain’s procurement market, too. But any negotiation in the WTO can be an opportunity to make new demands.
A British trade official told Reuters in March that a draft offer had already been circulated, part of a strategy of trying to minimise the disruption of Brexit at the WTO.
The Geneva-based WTO is already in crisis because of a potential global trade war and a U.S. block on new judicial appointments.
WTO Director-General Roberto Azevedo said last year that Brexit was going to be “a bumpy road”, but just how bumpy would depend on many things, including negotiations with the EU.
British hopes for a smooth transition at the WTO have already been dashed by disagreement in agriculture, where major suppliers are unhappy with losing the flexibility they have enjoyed with the EU as one market of 28 countries.
Source: Britain asks to join WTO procurement deal in latest Brexit step | Reuters
The debate around the UK’s level of involvement in the EU single market after Brexit may lead to a significant u-turn in government policy. Having initially said it would not seek a customs union with the EU after Brexit (after leaving the full, existing customs union), it looks as though the UK government’s position is softening. Given the alternatives to the single market that are available to the UK, a potential u-turn is welcome.
Leaving the single market but agreeing to a customs union doesn’t rule out the UK making its own trade deals. However, it should be careful what it wishes for. Freedom comes at a price. A customs union only covers trade in goods, so the UK would need an umbrella agreement to cover its other arrangements with the EU.
The World Trade Organisation (WTO) sets out the basics in Article XXIV of the General Agreement of Tariffs and Trade (GATT). In essence, a customs union is where tariffs are removed between members of the union, and the tariffs charged on imports coming from outside the union are harmonised across members of the union. This definition seems straightforward but when you dig deeper into Article XXIV, you find that while these rules apply to trade in goods, they say nothing about services – which are of course very important for the UK.
Source: A customs union would free the UK to strike trade deals – but it doesn’t solve every Brexit problem : The Conversation
JOHN MILLS, a Labour-supporting Brexiteer, has insisted the UK must stand strong and be prepared to walk away from the table in European Union negotiations.
Source: Brexit news: UK must be prepared to walk from EU says John Mills | UK | News | Express.co.uk
FOR the past few months many have doubted the words which stood out from Theresa May’s Chatham House speech back in January: “No deal is better than a bad deal.”
Source: No deal really is better than a bad deal with Brussels says ROSS CLARK | Express Comment | Comment | Express.co.uk
It would be wrong to hope that either domestic or international checks and balances will constrain Trump abroad. Geopolitically, the result would be unpredictable – at best.
Source: What would a Trump presidency mean for the rest of the world?
Conservative MP David Davies has been telling anti-TTIP activists that a leave vote is how they can torpedo the deal.
Source: Fact Check: is Brexit the way to escape TTIP?