The WTO under threat

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What’s next for the WTO? | Unintended consequences of the US-China trade war | Free trade agreement updates | Terms of trade | More research from Hinrich Foundation

What’s next for the WTO?

Kristen Hopewell in Foreign Affairs describes how the world is abandoning the WTO. The WTO has begun the process of selecting its next Director General.  Alisa DiCaprio for Mercatus Center provides her vision for the WTO’s global digital trade rules.  Dani Rodrik in Project Syndicate argues for the adoption of a "beggar-thy-neighbor" test in enforcing trade rules. The WTO updates its global trade outlook and statistics.

Mentioned publications 

1. The World Is Abandoning the WTO – Kristen Hopewell, Foreign Affairs, October 7, 2024
   Hopewell catalogues how the world’s economies are undermining and diverging from WTO rules.
2. WTO initiates selection process for next Director-General – World Trade Organization, October 8, 2024
   The WTO begins the process of selecting its next Director-General, with DG Ngozi intending to seek reappointment.
3. A Vision for the WTO’s Global Digital Trade Rules – Alisa DiCaprio, Mercatus Center, October 9, 2024
   DiCaprio gives practical ideas for how the WTO should approach digital trade.
4. The Beggar-Thy-Neighbor Test – Dani Rodrik, Project Syndicate, October 10, 2024
   Rodrik makes the case for a different approach to international trade rules.
5. Global Trade Outlook and Statistics – World Trade Organization, October 10, 2024
   The WTO reports that global goods trade is slightly more than expected in 2024, while services trade growth is even more positive.

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Unintended consequences of the US-China trade war

Permanent normal trade relation (PNTR) was granted to China with the best of intensions; now US lawmakers are considering revoking it. Mark A. DiPlacido, Trevor Jones, and Chris Griswold in American Compass provide a guide to PNTR revocation. Bloomberg reports on what really happens when the US puts tariffs on China.  Megan Dubois in Foreign Policy finds that underwhelming high-profile foreign investments in Wisconsin weigh heavily on the mind of voters.

Mentioned publications 

1. Disfavored Nation: A Guide to Rescinding Permanent Normal Trade Relations with China – Mark A. DiPlacido, Trevor Jones, and Chris Griswold, American Compass, October 2024
   The authors present a practical alternative to PNTR revocation.
2. What Really Happens on the Ground When the US Slaps Tariffs on China – Shawn Donnan and Bill Allison, Bloomberg, October 8, 2024
   Bloomberg provides a real-world example illustrating complications that can arise from tariffs.
3. 'Made in America' Is on the Ballot in Wisconsin – Megan DuBois, Foreign Policy, October 10, 2024
   DuBois highlights how high-profile investments have become political footballs in a battleground state.

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Free trade agreement updates

The Asia Global Institute provides an update on the impact of the Regional Comprehensive Economic Partnership (RCEP). The Diplomat reports that Indonesia has applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Peterson Institute for International Economics keeps tabs on who’s in and who’s out of CPTPP and RCEP.

Mentioned publications 

1. AGI RCEP Trade Tracker Reveals Four Facts – Asia Global Institute, July 30, 2024
   AGI reports on the impact of RCEP to date.
2. Indonesia Officially Lodges Application to Join Trans-Pacific Trade Pact – Sebastian Strangio, The Diplomat, September 26, 2024
   The Diplomat reports that Indonesia has officially applied to join the CPTPP.
3. Which countries are in the CPTPP and RCEP trade agreements and which want in? – Jeffrey J. Schott, Peterson Institute for International Economics, September 2024
   The latest on accessions, applications, and interest expressed in CPTPP membership.

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Terms of trade

How farfetched is the idea of negotiating a US-China agreement to strengthen the renminbi (RMB) vis a vis the dollar? Yawen Chen argues that China’s current economic woes make the idea of a second Plaza Accord less outlandish. The Financial Times reports that Trump would not weaken the dollar, according to one of his top advisors. Two top Chinese economists explain why internationalization of the RMB is neither easy nor urgent. Russia is urging the BRICS to end dollar dominance, per Reuters. Anders Aslund in Project Syndicate writes that the Russian economy’s days are numbered.

Mentioned publications 

1. China’s woes make Plaza Accord 2.0 less outlandish – Yawen Chen, Reuters (Commentary), October 17, 2024
   Chen asks whether an agreement to strengthen the RMB could actually benefit China.
2. HF sponsored accessTrump would not weaken the dollar, says adviser Scott Bessent – Alex Rogers and James Politi, Financial Times, October 10, 2024
   The FT reports that a close adviser to Trump considers him a free trader at heart.
3. Why RMB internationalization is neither easy nor urgent – Translation of Southern Weekly interview with Yu Yongding and Pan Yingli, The East is Read, August 4, 2024
   Two well-respected economists examine the prospects for RMB internationalization.
4. At BRICS summit, Russia to push to end dollar dominance – Reuters, October 16, 2024
   Reuters reports on Russia’s efforts to build an alternative international payments system.
5. The Russian War Economy’s Days Are Numbered – Anders Aslund, Project Syndicate, October 1, 2024
   Aslund describes a stagnant Russian economy that may be hiding inflation.

More related analysis from HF:

• Getting to yes: What’s behind the e-commerce standoff at the WTO?
• Least Favored Nation: What it means if the US revokes PNTR with China
• The renminbi's long march

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