GLOBAL TRADE RELATIONS

   

             NEWS UPDATES

  • TO 20 years today. Great success in dispute settlement. Less so in writing new trade rules. Need to do better. "WTO Celebrates 20 Years." WTO News (January 1, 2015). 
  • Further multilateral cooperation in a variety of fields such as trade, climate and arms control should be built upon the trade and rule of law systems already existing. This forthcoming year seems ripe for such a new diplomatic push, so says the Financial Times in its editorial today. "Push for Multilateral Cooperation" Financial Times (Jan. 2, 2015).
  • China drops rare earth quotas. Previously lost a WTO case to the U.S. "China Axes Rare Earth Quotas." Financial Times (January 6, 2015).
  • Obama needs to create a coalition of Republicans and some Democrats in order to pass 'fast track.' "Editorial -- Obama and Trade." Financial Times (January 10, 2015).
  • China is issuing new tech rules (cybersecurity) to protect its computer systems. U.S. firms view these as protectionist. This is in response to U.S. tech spying on Chinese firms. "China's Self-Destructive Tech Crackdown." New York Times (Editorial 1.31.15); "New Chinese Tech Rules." New York Times (Feb. 6, 2015).
  • Obama is proposing a one-time tax of 14% on offshore monies held by U.S. multinationals. (raising about $238 billion). "Obama Plans to Tax Overseas Cash." Financial Times (Feb. 2, 2015).
  • The 'Investor State Dispute Settlement' clause  (ISDS) is causing major havoc in the TTIP negotiations between the U.S. and EU. There is significant European opposition to it. "ISDS Clause and TTIP." Euract.com (Jan. 14, 2015).
  • Interesting short video by Robert Reich. Video --- "TPP = NAFTA of Steroids." (Robert Reich) (2015).
  • Interview with USTR Froman discussing TPP, globalization, income equality, trader agreements and fast track. "Politics of Trade." New York Times (Feb.7, 2015).
  • New national security strategy report by the Obama administration includes further promoting 'rules of the road,' strengthening global institutions, and further supporting trade agenda (TPP, TTIP). "Fact Sheet -- The 2015 National Security Strategy." (White House 2015).
  • LLCs & offshore shell companies allow billions of questionable dollars (often criminal and result of international tax evasion) to be invested in to the U.S. (for example into elite New York City real estate condos). This evidences the often unmanageable cross-border flow of funds and violation of money laundering laws. This also reflects globalization of the financial markets, insufficient state corporate laws, local real estate recording lows, and adverse impact on local  markets.  "Foreign Investment in U.S. (NYC) Real Estate." New York Times (Feb. 8th, 2015). 
  • China hits Qualcomm for an almost $1bn fine for violating its antitrust rules concerning licensing and cross-licensing of intellectual property rights (patents). This escalates trade friction with the U.S. and multinationals to a higher level. "China and Qualcomm." New York Times (Feb. 10, 2015). 
  • The U.S. filed a new case against China over "Demonstration Bases - Common Service Platforms." These are geographical clusters of 150 similar firms of an industry or sub-sectors which receive lower-priced discounted services. The U.S. argues these discounts amount to an export subsidy. "U.S. Launches Challenge to Extensive Chinese Export Subsidy Program." USTR News (Feb. 11, 2015). "White House Files New China Trade Case in WTO." New York Times (Feb. 11, 2015). "U.S. -China Dispute over Export-Contingent Subsidies." WTO News (Feb. 11, 2015) (relating to textiles, agriculture, medical products, light industry, chemical engineering, new materials and building materials). 
  • Editorial by the Financial Times against including  currency manipulation provisions in 'Fast Track'. They are not workable. "US Congress Threatens Trade Deal with Currency Debate." Financial Times (Feb. 12, 2015).
  • Chinese antidumping duty on steel from EU and Japanese firms found to be improper. "EU / Japan win in WTO Panel Against China." Japan Times (February 13, 2015).
  • New Congressional proposal to extend the reach of U.S. law (Foreign Sovereign Immunities Act) to foreign states (terrorism financing)." JASTA and FSIA." The American Lawyer (2.17.15).
  • A panel has been established by the WTO pursuant to a request by the EU concerning Boeing as to  extension of  U.S. tax measures (Washington state measures favoring domestic over imported goods). The EU alleges these are prohibited subsidies." Panel Established on EU Complaint against U.S. Over Large Commercial Aircraft," WTO News (Feb. 23, 2015)
  • Warren attacks arbitration provisions (Investor-State Dispute Settlement -- ISDS provisions) in TPP. Warren and TPP." Washington Post (2.25.15)
  • New proposed Internet regulations in China and recent Chinese antitrust decisions have the potential of significantly reducing the business opportunities of U.S. Internet, telecom, and social media firms in China. Part of broader trade relations between China and the U.S. raising issues of cybersecurity and national security. China has some valid reason to be concerned as well as the U.S. "China, Technology and Suspicion." New York Times (Feb. 28, 2015).
  •  The New York Times argues that currency manipulation should be included in the TransPacific Partnership negotiations. "Role of Congress in Trade (Fast Track / TPP)." New York Times (March 2, 2015).
  • Investor-State Dispute Settlement provisions (ISDS) and the TPP. These provisions are important when investing in countries with weaker legal systems. It's a mechanism of international adjudication that allows mitigating risks of foreign investments. "TPP and ISDS." Wall Street Journal (3.3.15).
  • The use of restrictions on international finance as trade sanctions is viewed as "weaponization of finance." Imposes pain but changes behavior little. Perhaps even encourage counter-measures such as cyber attacks.  "Weaponized Finance." Financial Times (March 4, 2015).
  • Three Gulf airlines (Qatar, Emirates and Etihad) are under attack by U.S. carriers as state-owned enterprises that receive state subsidies. But these issue do not fall under the WTO rules. Have separate bilateral 'Open-Skies Treaties' that govern this sector. But watch out for U.S. renegotiation of these agreements and efforts to bring these under other global trade rules. "U.S. Airlines Attack Gulf Airlines for Subsidies." Wall Street Journal (3.7. 2015).
  • New page on WTO website on quantitative restrictions under GATT Articles XI and XII including export restrictions and MFN treatment. "Quantitative Restrictions." WTO Website.
  • Interesting piece on how China is responding to U.S. aggressive WTO litigation. China is now responding by new antitrust and Internet litigation and regulation aimed at U.S. firms. And so it goes. "U.S. Offensive in China Trade War." Asian Lawyer (March 12, 2015). (Blog: Malawer, 'U.S. Trade Offensive.' (March 14 2015). 
  • The Asian Infrastructure Investment Bank (AIIB), the new China initiative challenging the U.S. dominated World Bank It is gaining more European members after the U.K. In many ways if the U.S. would join it could mean more investment opportunities for the U.S. and would indicate a less confrontational approach to global trade. But geopolitical issues  (non-trade and non-financial issues) seem to predominate in the current U.S. opposition to the new bank. This is part of China's efforts to mold newer international institutions and global trade rules. "China's New Bank (AIIB)." Financial Times (March 16, 2015). 
  • Speech by Azevedo on current WTO challenges and concerns over bilateral and regional agreements. "Speech by Director General." WTO News (3.24.15). 
  • Investor-State Dispute Settlement provisions (ISDS) and the TPP. Opposition continues to grow to these provisions. Some view these provisions as a door for multinationals to file suit against regulations. Some sense these violate  sovereignty and should not be included when dealing with developed countries. (They do make sense when dealing with developing countries without well defined judicial systems and the rule of law.) Opposition to these provisions are within foreign countries as well as within the U.S. "TPP -- Back Door for Foreign Suits." Wall Street Journal (March 26, 2015). 
  • The President issued a new Executive Order authorizing freezing of property of foreign nationals in the U.S. if they are involved in cyber attacks on critical infrastructure, disruption of computer networks, or stealing trade secrets for commercial or competitive gain. This is the application of U.S. trade sanctions (under IEEPA) to foreign activity outside of the U.S. that has an effect within the U.S. Just the latest example. Executive Order -- "Blocking the Property of Certain Person Engaging in Significant Malicious Cyber-Enabled Activities." (April 1, 2015). 
  • The EU is now going after Google for antitrust violations for manipulating search results and Apple for manipulating tax transactions. U.S. technology multinationals are under heavy scrutiny by the EU. Aggressive compared to the U.S. and its general acquiescence. "EU Antitrust and Tax and Google and Apple." New York Times (April 3, 2015).
  • TPP & TPA need to be concluded by the President and Congress. They are in our national interest. "Why Asian Trade Deal Matters." New York Times ( 4.4.15). 
  • Friedman argues that the 'Obama Doctrine' in foreign affairs is 'engagement.' In the context of Myanmar, Cuba and Iran it is recognizing that trade sanctions should be lifted to establish diplomatic relations. In the case of Cuba they have failed and in case of Iran they have been somewhat success. (Need to keep in mind that many trade sanctions can only be lifted by the Congress.) "The Obama Doctrine and Iran." New York Times (April 6, 2015).
  •  The AB of the WTO denied claims of Vietnam concerning U.S. antidumping duties on shrimp. "U.S. - Vietnam Shrimp." WTO News (April 7, 2015). 
  • As geopolitical tensions grows so do cyber attacks. Firms may be attacked for reasons totally unrelated to their business or for particular economic / commercial advantage. This latter is more prevalent for China than Russia which is more interested in traditional espionage. Cyber is a new domain and there is always conflict over a new domain. "Global Tension Increase Cyber Threat. " Financial Times (April 10, 2015). 
  • Article 11 of the "Multilateral Agreement on the Liberalization of International Air Transport (Model Open- Skies Agreement) [MALIAT]" governs "Fair Competition." No specific language as to government subsidies. "Model Open Skies Agreement
  • In addition to the Google antitrust case brought by the EU Commission recently an action is now being filed against Gazprom. This seems to evidence that antitrust laws are not only used for business and trade reasons but to some extent geopolitical ones. Certainly such cases might very well have geopolitical consequences. "EU Poise to Unveil Antitrust Charges Against Russia's Gazprom." Financial Times (April 21, 2015). 
  • Obama is in a fight with the liberal wing of the Democratic Party over international trade, Fast Track (TPA) and the TPP. "Obama Escalates Feud Over Pacific Treaty." New York Times (April 25, 2015).
  • Economist in support of global trade and TPP. Discusses popular disbeliefs, bad policy and irrational  voters. "The Wisdom of Free Trade." New York Times (4.26.15).
  • The WTO just published one-page case summaries of all DSU cases for the last twenty years from 1995-2014. This is an invaluable research publication. "One-Page Summaries of WTO Cases, 1995 - 2014." (WTO, April 2015). 
  • Recent suggestion to create an appellate mechanism for international investment treaties based upon the WTO's experience. "Why We Need a Global Appellate Mechanism for International Investment Law." Columbia FDI Perspectives (April 27, 2015).
  • Jon Huntsman discusses the future of trade and concludes "Trade flows will reflect the realities of global power as well as demographics." (The dominant trade hub will move from the Pacific to the Indian Ocean.). He also concludes that the WTO may not have a monopoly in running the global trading system. "The Future of Global Trade: Jon Huntsman on the Radical Change Ahead -- Trade Will be More Important than Ever 30 Years from Now." Wall Street Journal (4.27.15).
  • Friedman argues that the adoption of TPP would serve national security. Specifically, it would write the rules for much of the trading system. In fact, he argues this is about whether we will have a rules-based global system at all. This is an important time for a coalition of free-market democracies that are at the core of world order to come together to write the rules of globalization for this century. China will have to adopt to this system of rules. The slide to global disorder can only be stopped by increasing the rules for order in global relations. "On Trade: Obama Right, Critics Wrong." New York Times (April 29, 2015).
  • More infrastructure investments (roads, terminals) needed for US ports to catch up with larger volume of bigger ships. Really critical for job creation, economic development, staying competitive, and competing in the global economy. "Bigger Ships and U.S. Port Infrastructure." Wall Street Journal (April 30, 2015).
  • Malawer, "Chinese Economic Cyber Espionage --U.S. Litigation in the WTO and Other Diplomatic Remedies."Georgetown Journal of International Affairs (Summer 2015). 
 
                                                                                  
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