International Trade

  • Could a recent Pakistan/India meeting result in bilateral dialogue resumption?

    The Hope for Trade between India and Pakistan Rests with its Leaders

    Indian Prime Minister Narendra Modi’s recent meeting with Pakistan’s Prime Minister Nawaz Sharif on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Russia, and his visit to Pakistan next year for the SAARC summit, has raised hopes about the possibility of resumption of the bilateral composite dialogue.

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  • Hopes are that competitive neutrality will prevent SOEs from dominating the TPP.

    Competitive Neutrality and the TPP

    As the Trans-Pacific Partnership (TPP) goes through another round, some details have started trickling out from the secretive negotiations. A concerning detail for Australia is the provision that applies penalties to foreign state-owned enterprises (SOEs) if they receive discounted loans when investing in TPP member economies.

    The idea of ‘competitive neutrality’ is the basis for these provisions. This clause aims to stop SOEs from receiving an advantage over their private competitors by virtue of their connection to their home state.

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  • Geographical origin has created a TTIP food fight.

    It Matters Where it's Made to Europe, but to the U.S., not so Much

    Black Forest ham, Asiago, Gorgonzola, Gouda, and many other European geographical indications for foodstuffs are at the centre of a TTIP food fight. They are all protected from imitation by other companies in many countries of the world. Not in the US though. And as the details of the Transatlantic Trade and Investment Partnership are negotiated, the EU wants to stop American manufacturers from being able to falsely label their products with their protected names.

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  • US China trade has been relatively flat for slightly more than one year.

    Uninspiring Trade between China and the U.S.

    US exports of goods and services to China have been practically flat since the first quarter of 2014, while Chinese exports to the United States have expanded only modestly. This is not an inspiring record. Meanwhile, two-way stocks of direct investment remain well below potential — about US$60 billion from the United States to China and around US$50 billion going the other direction. This stands in contrast with a potential of at least US$100 billion in each direction.

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  • The international trading system is at a crossroads.

    China's Approach to Negotiating Trade Agreements

    The international trading system is at a crossroads. While the Doha Round of WTO negotiations remains deadlocked, new trade rules are being called for to adjust for new realities, such as the expansion of global value chains (GVCs). This means for the first time since the establishment of the WTO in 1995, regionalism has prospered over multilateralism, with the parallel emergence of three mega-regional trade negotiation platforms. With this in mind, China must reconsider its approach to negotiating trade agreements.

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  • The clock is ticking on the TPP.

    Can the TPP be a One Size Fits All?

    The White House’s effort to hammer the Trans-Pacific Partnership (TPP) agreement in Maui failed. As time is running out for President Obama’s legacy achievement, both Washington and Beijing are reassessing their options.

    Last week, Pacific Rim officials met on the island of Maui, Hawaii, to conclude the Trans-Pacific Partnership (TPP) agreement. In addition to trade ministers from 12 countries, the meeting included 650 officials, lobby groups and other stakeholders.

    However, the talks failed.

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  • A majority of EMU trade has been with high-income countries.

    Extra-EMU Trade Surpasses 50% of Total Trade

    The ECB's Economic Bulletin neatly summarizes some interesting trends in Eurozone trade patterns.   There are four main points.

    First, through the early 2000s, most of the trade was between EMU countries.  Since then, however, trade outside of EMU has increased, and in Q1 of this year, extra-EMU trade accounted for more than 55%.

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  • The TPP could end up doing more harm than good in the Asian region.

    Wrapping up the TPP is not without Risks

    The largest hurdle for the 12-member Trans-Pacific Partnership (TPP) agreement — the US president’s ability to get Trade Promotion Authority, or fast track — is now clear. Many people think that the TPP can wrap up in a few months.

    There are still difficult issues to resolve, but they are trivial compared to the ability to get a straight up-or-down vote in the US Congress, without which the deal would be a non-starter. The remaining issues can easily be horse-traded at the political level and compromises can happen in order to complete the deal.

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  • Asian nations and asymmetric interdependence in dealings with China.

    Asian Countries Dependence on China for Trade has Pluses and Minuses

    Economic integration has steadily increased in East Asia. But the region still suffers from what South Korean President Park Geun-hye calls ‘Asia’s paradox’, the disconnect between economic interdependence and backward political and security cooperation. Any further economic integration will likely reflect political power shifts in the region.

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