How 2020 has even more ways to cripple global trade
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Geneva — 2020 could end today and it would still rival the most challenging periods for the international trading system. But the next three-and-a-half months may bring even more potential disruptions that could secure 2020’s spot as the most turbulent in modern history.
Several key events will occur that have potential to turbocharge the global trade regime’s trajectory towards dysfunction and chaos. On the flip side, it’s possible the outcomes could help cushion the worst global recession since the financial crisis and set the world on a path to recovery.
“There’s no question that the next three months will be pivotal for the state of global trade,” said Edward Alden, a senior fellow at the Council on Foreign Relations. With protectionism on the rise in ways similar to the lead-up to the Great Depression, “the echoes of the 1930s are pretty clear,” he said.
Here are five key political and economic events affecting trade in the remainder of 2020:
WTO aircraft dispute
A panel of three World Trade Organisation (WTO) arbiters will soon determine whether and how much the EU can retaliate against the US for its illegal subsidies to Boeing.
While the EU has asked the WTO for authorisation to impose levies on $11.2bn of US products, those close to the case say the figure is likely to be lower — perhaps much lower than the WTO’s $7.5bn award to the US in its parallel dispute against EU subsidies to Airbus.
There are hopes the ruling, which could come in a matter of weeks, could spur the US to restart negotiations to settle the 15-year-old dispute. A settlement would be a huge relief to European exporters, who are currently facing stiff US retaliatory tariffs, and for US industries that could soon find themselves on the receiving end of WTO-authorised EU tariffs.
The US presidential election
Arguably the most important trade development this year is the possibility that Americans deliver President Donald Trump a second term.
If Trump is re-elected in November, it’s likely the US will increase tariffs on foreign trade partners as a means to reshore and diversify the US’s supply chains — particularly for medical goods.
As Trump highlighted at a media conference on Monday, a second term would almost certainly see an escalation in the US’s geopolitical fight with China, which Trump blames for spreading the Covid-19 pandemic and US economic misery.
“If Trump wins, expect ...
Several key events will occur that have potential to turbocharge the global trade regime’s trajectory towards dysfunction and chaos. On the flip side, it’s possible the outcomes could help cushion the worst global recession since the financial crisis and set the world on a path to recovery.
“There’s no question that the next three months will be pivotal for the state of global trade,” said Edward Alden, a senior fellow at the Council on Foreign Relations. With protectionism on the rise in ways similar to the lead-up to the Great Depression, “the echoes of the 1930s are pretty clear,” he said.
Here are five key political and economic events affecting trade in the remainder of 2020:
WTO aircraft dispute
A panel of three World Trade Organisation (WTO) arbiters will soon determine whether and how much the EU can retaliate against the US for its illegal subsidies to Boeing.
While the EU has asked the WTO for authorisation to impose levies on $11.2bn of US products, those close to the case say the figure is likely to be lower — perhaps much lower than the WTO’s $7.5bn award to the US in its parallel dispute against EU subsidies to Airbus.
There are hopes the ruling, which could come in a matter of weeks, could spur the US to restart negotiations to settle the 15-year-old dispute. A settlement would be a huge relief to European exporters, who are currently facing stiff US retaliatory tariffs, and for US industries that could soon find themselves on the receiving end of WTO-authorised EU tariffs.
The US presidential election
Arguably the most important trade development this year is the possibility that Americans deliver President Donald Trump a second term.
If Trump is re-elected in November, it’s likely the US will increase tariffs on foreign trade partners as a means to reshore and diversify the US’s supply chains — particularly for medical goods.
As Trump highlighted at a media conference on Monday, a second term would almost certainly see an escalation in the US’s geopolitical fight with China, which Trump blames for spreading the Covid-19 pandemic and US economic misery.
“If Trump wins, expect ...