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The United States is past engaging with China



Author: Kanishka Jayasuriya, Murdoch University

The executive order by US President Donald Trump blocking Chinese tech giant Huawei from the United States is an aggressive unilateral step under the guise of national security. It deals another blow to China as a potential strategic technology competitor to the United States and follows in the wake of the 25 per cent US tariff on a broad swathe of Chinese goods.

This is more than a resetting of the trade relationship between China and the United States. US policymakers have sought to engage and integrate China into the global economy via global trade rules and institutions since the 1980s.

Past US administrations based their China policies on the assumption that China’s economy will move to a more liberal market order via institutional adjustments imposed through global rules. These strategies led to a complex and intertwined relationship between the United States and China. The changes signalled by Trump’s executive order reflect a post-engagement policy supported by the US security community. A significant element of this post-engagement policy is the overt disregard for the WTO rules which have been a US political project since the Cold War.

A key element of this post-engagement policy is the the reconfiguration of security and economics within both trade and strategic policy. The integration of China into the economic order was originally premised on the primacy of a US-based security order in the Asia Pacific. This has been challenged on two fronts. One is the emergence of Chinese political and economic projects such as the Belt and Road Initiative, seen as a challenge to US dominance. The other is the strategic assertiveness of the Chinese military, particularly in the South China Sea.

These Chinese economic–political projects are rooted in distinctive patterns of Chinese capitalist transformation and internationalisation. The United States is now competing by implementing its own political projects on infrastructure, connectivity and trade, with US security agencies combining to promote those particular forms of economic integration that are directly linked to security interests.

The policies of the Trump administration are a response to the domestic political failures of using engagement strategies to manage the various ups and downs of the US–China relationship, such as the Trans-Pacific Partnership and its security counterpart, the ‘Pivot to Asia’. The policies overturn the instruments through which previous strategies of engagement were conceived and executed. The reconfiguration of the relationship between economics and security is at the core of this post-engagement management. This relationship has always been shaped by domestic US politics.

The recent executive order is emblematic of this post-engagement strategy, reshaping the US–China relationship by eschewing the use of international legal rules. The new strategy is in favour of the unilateral use of coercive domestic-based policy instruments such as sanctions, the use of the ‘national security’ doctrine and…

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Fixing fragmentation in the settlement of international trade disputes



Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.

Fragmentation in Global Trade

Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.

Challenges with WTO Dispute Settlement

The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.

The Path Forward for Global Trade

Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.

Source : Fixing fragmentation in the settlement of international trade disputes

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WTO ministerial trading in low expectations and high stakes



The WTO’s 13th Ministerial Conference is set to focus on e-commerce transparency, investment facilitation, and admitting new members. However, progress may be hindered by disputes, especially regarding fisheries subsidies.

The World Trade Organisation’s 13th Ministerial Conference

The World Trade Organisation’s (WTO) 13th Ministerial Conference is set to take place in Abu Dhabi on 26–29 February, with expectations of deals on electronic commerce transparency, investment facilitation for development, and the admission of Timor Leste and the Comoros as WTO members. Despite these positive developments, the expectations are relatively modest compared to promises made at the 12th Ministerial Conference, which included addressing fisheries subsidies and restoring a fully functioning dispute settlement mechanism by 2024.

Challenges in Dispute Settlement and Agricultural Trade Reform

However, challenges remain, especially in the deadlock of dispute settlement since December 2019 due to a US veto on the appointment of Appellate Body judges. Progress in restoring the dispute settlement mechanism has stalled, and discord continues regarding India’s grain stockholding policy as a potential illegal subsidy. Restoring a fully functioning dispute settlement mechanism hinges on addressing US concerns about perceived bias against trade remedies in relation to China’s state subsidies.

Geopolitical Tensions and the Future of Trade Relations

The likelihood of reaching agreements amid geopolitical tensions between Western democracies and China appears slim, with issues surrounding subsidies and global supply chains causing rifts in trade relations. As nations focus on self-reliance within the global value chain, opportunities for trading face obstacles. Advocacy for open markets and addressing protectionist sentiments remains crucial for fostering resilience to external shocks and promoting economic growth.

Source : WTO ministerial trading in low expectations and high stakes

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Getting Vietnam’s economic growth back on track



Vietnam’s economy grew 8% in 2022 but slowed in 2023 due to falling exports and delays in public investments. The economy’s future depends on structural reforms and reducing dependency on foreign investment.

Vietnam’s Economic Roller Coaster

After emerging from COVID-19 with an 8 per cent annual growth rate, Vietnam’s economy took a downturn in the first half of 2023. The drop was attributed to falling exports due to monetary tightening in developed countries and a slow post-pandemic recovery in China.

Trade Performance and Monetary Policy

Exports were down 12 per cent on-year, with the industrial production index showing negative growth early in 2023 but ended with an increase of approximately 1 per cent for the year. Monetary policy was loosened throughout the year, with bank credit growing by 13.5 per cent overall and 1.7 per cent in the last 20 days of 2023.

Challenges and Prospects

Vietnam’s economy suffered from delayed public investments, electricity shortages, and a declining domestic private sector in the last two years. Looking ahead to 2024, economic growth is expected to be in the range of 5.5–6 per cent, but the country faces uncertainties due to geopolitical tensions and global economic conditions.

Source : Getting Vietnam’s economic growth back on track

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