Retooling the Sustainability Standards in EU Free Trade Agreements

ABSTRACT The EU’s weak promotional policy towards sustainability in its free trade arguments is up for revision. Labour and environmental standards need to be tightened. They were given a boost on balance by a remarkable panel ruling of January 2021 in the long-standing EU–Korea labour dispute. Compliance ought to be subject to regular dispute settlement between governments. Sanctions must be added to the EU’s toolbox, going beyond trade retaliation. Private stakeholders should become more involved in monitoring and enforcement, both at the international and at the domestic level. All this will put an extra responsibility on the EU and its Member States to protect their labour force and the environment as well.

China’s Export Control Law enables trade retaliation

Significance It establishes a comprehensive framework for restricting export of military and dual-use products and technologies on national security grounds or for public policy reasons. It creates a legal basis for mandatory licensing or outright prohibition of the export of products, services or technologies based on their features, their end-users and end-uses, and geographical destinations. Impacts Export controls will help to maintain the international competitiveness of Chinese firms as their technological capabilities advance. Foreign companies may find themselves under investigation in China for acts they perform elsewhere. The law covers transportation, so shipping companies may need to reconsider their routing decisions.

The 2008 Financial Crisis and the Lack of Retaliatory Trade Intervention

The 2008 financial crisis did not precipitate global retaliatory trade intervention, in seeming contrast to the Great Depression in 1930s. This article discusses the influence of model structure in optimal tariff (OT) calculations in explaining this puzzle. We emphasize how earlier literature reports high OTs in numerical calculation (of a hundred percent) but only uses simple trade models. We use numerical general equilibrium (GE) calibration and simulation methodology to calculate OTs both with and without retaliation in a series of observationally equivalent models and explore the influence of model structures on OT levels. We gradually add more realistic features into the basic GE model, and show sharply declined OTs, which suggests that trade retaliation incentives effectively disappear with the deepening of globalization in 2008 compared to 1930. (JEL codes: F11, C63, F13).

Canada foreign policy will be on back burner in 2020

Significance Canada 's ties with China are strained and are one foreign policy challenge that the recently re-elected Trudeau government faces this year. However, his government is now a minority administration. Impacts Canada will pass the US-Mexico-Canada Agreement, but that could be slowed in the fractious parliament. Canada will push for a UN Security Council seat in June, but is unlikely to be elected. Canada will extradite Huawei’s Meng Wanzhou per US needs, likely meaning further Chinese diplomatic and trade retaliation. Ottawa will eventually decide not to allow Huawei to participate in Canada’s 5G network. A swift UK-Canada free trade deal is unlikely, as the UK must first settle its EU relationship.

At the Vanishing Point of Law: Rebalancing, Non-Violation Claims, and the Role of the Multilateral Trade Regime in the Trade Wars

ABSTRACT What role can the multilateral trade regime play in the trade wars triggered by the USA under the Trump administration? This article argues that the traditional goal of dispute settlement in the WTO—the positive resolution of disputes—has become largely unattainable in the circumstances of the trade wars, but that the regime can still play a valuable role by providing a framework for the rebalancing of obligations among the participants. Using the regime in this way would defuse tensions among the participants, would ensure that any new equilibrium that they achieve is integrated into the legal structure of the trade regime, and would provide the participants the opportunity to use the trade regime’s tools for solving disagreements at the margins, thereby lowering the risk that trade retaliation will spiral out of control. The article uses the example of non-violation claims in the context of national security measures to illustrate the potential for and benefits of re-integrating the trade wars into the multilateral trade regime. The article provides a detailed discussion of the legal justification for non-violation complaints in response to national security measures and argues that such claims provide an alternative course of action that is less confrontational than unilateral retaliation or violation claims, and faster to adjudicate than violation claims.