- 2018-09-27
Who is the new hegemon of global trade?
Global human resources executives are bound to be disappointed: the position of the new hegemon of the global trading system will still be vacant for the foreseeable future. Donald Trump has transformed the United States from an "anchor" that stabilizes the global economy into a giant iron ball that destroys the global economy in a record short time. However, the only two possible candidates for the size of the economy to meet this vacancy requirement are China and the European Union (EU), and each of them has a requirement that cannot be met. No matter what speech Chinese President Xi Jinping delivers in Davos, China is determined to dominate a series of low-tech and high-tech fields through almost any necessary means, breaking the rules that China considers inconvenient, and, more importantly, preventing The emerging global regulations prevent China from doing so.
Then only the European Union is left. Its problem lies in the second requirement: voters in the region. As you can see now, the particularly brutal features of Trump’s policies have unexpectedly helped maintain internal unity among EU member states. Germany has been keen to offer various incentives to entice the United States, including a possible trade agreement that only covers industrial products to prevent in advance the steel and aluminum tariffs that the United States threatens to impose. This will make retaliation that the EU has threatened unnecessary and prevent the trade war from spreading to Germany's cherished auto industry.
This commodity-only agreement has never been feasible. Agriculture is an indispensable part of the aggressive export interests of the United States, and European public opinion will almost certainly dislike a deal with Trump, especially considering the EU’s commitment to make compliance with the Paris Climate Agreement an indispensable part of any new trade agreement. An indispensable part. The United States rejected the offer: the European Union was left behind by the offer.
In this case, Trump also threatened to impose taxes on steel and automobiles, so that the escalation of the situation and the consideration of transactions no longer exist.
On May 31, the U.S. government announced that it would impose tariffs of 25% and 10% on steel and aluminum products exported to the United States from the European Union, Canada, Mexico and other countries, respectively.
One stone stirs up a thousand waves, and countries obviously will not let it go:
Canadian Prime Minister Trudeau posted several messages on social networking sites: "The United States levies one dollar on Canada, and we will also impose one dollar on the United States." The Canadian government introduced a new policy on the same day: levying 16.6 billion Canadian dollars on American products Import tariffs are calculated in two levels: 25% and 10%.
Mexico is also unambiguous, you tax and I also tax: Mexico has announced that it will take reciprocal measures against all types of agricultural and industrial products in the United States, as well as steel and other products. The Mexican Ministry of Economy also attached a note: "These measures will remain in effect until the US government cancels the tariffs imposed on June 1."
The EU is already facing a lot of mess. The United States is adding fuel to the fire at this time. The EU will naturally fight back. According to news, the EU will impose import tariffs on 2.8 billion euros (3.3 billion U.S. dollars) of American goods. But the conversations within the EU in the past few weeks have not shown that a global leader is being born. Germany wants to settle things down instead of taking a stand on principle. What is particularly worrying is that many EU officials have expressed such a view: Compared with tariffs, the Korean model quota is a relatively better result-the agreement between the United States and South Korea forces the latter to limit its steel exports to 3 70% of the annual average. If the quota is high enough, perhaps reaching 100% of recent exports, the EU's retaliatory actions may be minimized, and the EU may pretend to file a lawsuit in the World Trade Organization (WTO), and the case will be in the severely blocked WTO dispute settlement system. Crawl slowly, and life will be roughly as before.
This idea is attractive, but dangerous. The whole idea of realizing trade normalization through purely quantitative measures such as quotas is a reverse operation. The WTO law implemented in 1994 clearly prohibits this practice. This is to a certain extent aimed at the controlled trade in the 1980s, such as the controlled trade between the United States and Japan in the automotive sector, and Japan accepted "voluntary export restrictions" at that time. The current quotas proposed by the United States are for imports, not exports, and are not so excessive. However, the EU will negotiate with the idea that quotas are a better result, which does not quite fit its status as the guardian of world trade laws. This will be the long-term weakening of the multilateral system in exchange for a comfortable life for a while. The European Union, which pursues this defeatism, cannot become the anchor of tomorrow's global economy.
Germany has always undermined EU unity for its unique export interests. For example, in 2013, German Chancellor Angela Merkel withdrew support for imposing anti-dumping tariffs on solar energy from China, one of today’s important trade disputes, fearing that China would retaliate against Germany, which sells goods and services to China. For enterprises, this move caused the European Commission (European Commission) to be in chaos.
By the way, the overly optimistic Brexit commentators who "want to sell us cars" are actually right: they say that the EU's interests are over-influenced by German automakers. They are just wrong on this point: they believe that tariffs on finished cars sold to the UK are more weighty than the broader threat to the EU single market. German manufacturers worry that giving the UK preferential treatment will encourage other member states to leave the European Union, which will undermine the supply chain they have worked so hard to build in Eastern Europe.
In summary, even before Trump came to power, the state of multilateral governance was already poor. Facts for decades have been proving that the United States is not a reliable hegemon. The EU is too often swayed by well-organized small-scale lobbying. In the 1990s, the EU used the WTO as a tool to promote restrictive intellectual property rights, which gave the WTO a notoriety. At the beginning of this century, the EU, which refused to fight against farmers who received huge subsidies in the region, was the entire multilateral trade agreement-the Doha Round. (Doha)-one of the reasons for miscarriage. Trump's criticism of the WTO dispute settlement mechanism is not groundless. The Barack Obama administration has also severely criticized the general unfairness of WTO rulings and refused to appoint WTO judges who hold positions that the US government does not like.
However, as the global trading system is discovering, something is better than nothing. There has not yet been any candidate worthy of hope for the position of good overlord. This position may remain vacant for a long time.