Is there a cycle to it?

For those following the trade war and its aftermaths at the WTO, Arvind Panagariya's piece on WTO being on the brink is a concise summation.

A Panglossian may still argue that the vast damage that a wider trade war would inflict would at last convince political leaderships that trade openness is not the enemy, protectionism is. If so, this would be a replay of history that saw the highly prosperous First Globalisation from 1870 to 1914 descend into escalating protection during inter-war years. Lessons learned from that phase of protectionism brought the global leadership together to build what came to be known as the GATT-WTO system.

Times are cyclical. So is trade and responses to the globalization debate, perhaps?

Asia and multilateral rules

More on the importance of a rules-based multilateral trading system and Asian economies vis a vis a growing emphasis on China setting the agenda is found in this piece in the East Asian Forum blog.

It summarises the situation thus:

Asia has more at stake in the global system than any other part of the world — its economies depend on the open rules-based system not only for their economic prosperity but also for their political security. The appeal to the rules-based system is a critically important dimension of protecting economic security and political security more broadly. Asian countries need to stand firm in the face of the threat to the global trade regime. The dynamic of Asian growth depends importantly upon remaining committed to the trade reform agenda and encouraging entrenchment and deepening — including by China, the Southeast Asian economies and India — of the open rules-based international trading system.

There is mention of investment facilitation and building a multilateral-based international digital economy regime in the above piece. The critical question is whether there is a common approach on these issues amongst Asian economies and how would multilateral and bilateral disciplines be framed in these arenas.With the challenges to the dispute settlement system at the WTO as well as the stagnation of the negotiation fora, it would need a renewed sense of purpose vis a vis national positions to revitalise the negotiation of multilateral rules.

China and world trade rules

A piece on China, globalization and trade rules in the Project Syndicate makes for an interesting read. In Globalization with Chinese characteristics, Barry Eichengreen argues that trade rules influenced by China will be very different from the current ones. 

In sum, while a China-led global economy will remain open to trade, it will be less respectful of US intellectual property, less receptive to US foreign investment, and less accommodating of US exporters and multinationals seeking a level playing field.

Will China really shape future multilateral trade and investment rules? Will it do so in the WTO, regionally or in numerous bilateral agreements? 

We have blogged about China and trade rules here and here.

ISDS and Carribean islands - a good result so far

For those who follow international investment disputes and love the Carribean, this blogpost in the Kluwer Arbitration Blog gives an account if ISDS disputes pertaining to the Carribean islands.

Interesting to note that out of the 17 disputes covering the Dominican Republic, Grenada and Jamaica, the 5 which were settled were in favour of the State. 

An alternative approach to viewing investor state relations - the Brazilian approach

My friend Felipe Hees piece on the Brazilian approach to the vexed question of investor state dispute settlement makes interesting reading. In this South Centre brief, he explains what prompted the approach and how different it is from the traditional model of Bilateral Investment Treaties - an approach that focuses on preventing disputes rather than offering a platform for private investors to sue governments.

I had written about this issue in this piece where the models of investment norm setting were seen through the prism of the tussle for policy space by governments.

India has its own model bilateral investment treaty.

Currency manipulation anyone?

For those interested and following issues of currency manipulation, possible international norms on currency undervaluation, this report by the US Treasury titled 'Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States' in April 2018 provides an insight into what is being looked at.

No currency manipulators were announced in this report though.

For a more detailed study on this issue, I had a done a piece ages ago titled 'To Manipulate or Not - Currency Misalignment, trade law and the search for solutions'.

Crisis in the crown jewel

The WTO's dispute settlement mechanism is often referred to as the jewel in the crown of the WTO.However, of late, it has faced some challenges.

For those following the developments at the dispute settlement mechanism at the WTO, two recent pieces may be of interest - 

First, this detailed analysis of what needs to be done to set the system right is available in a March 2018 Peterson Institute for International Economics Policy Brief which argues that the impasse is too serious to ignore.

Second, this piece by Terence P. Stewart, sets out the rationale for some of the 'concerns' on the functioning of the dispute settlement system.

There indeed is a thin line, at times, between interpretation of existing rights and obligations as against creating new rights and obligations. How this is perceived and tackled differs depending on one's views the role of the judicial authority to be. 

There are no easy answers to this crisis.