https://youtu.be/vcn5Lxshw20
US’s intention to destroy China will be a difficult process
https://youtu.be/_3tjcoudjbI
US multilateralism is coming back in many areas but in trade, many retrograde policies of the past are continuing.
AFTER the end of the Trump presidency in January, multilateralists around the world heaved a collective sigh of relief.
Gone would be the wrecking ball aimed at international institutions.
Gone would be the go-it-alone approach to dealing with global problems.
Gone would be policies towards the rest of the world premised on
“America First”.
Gone, hopefully, would be the capricious trade wars, some of them directed at American allies.
To a large extent, these high hopes have proved justified.
Within its first 40 days, the Biden administration has reversed many of
its predecessor’s disengagements from multilateral institutions and
processes.
It has rejoined the Paris Agreement on climate change, which the United States had abandoned in 2017.
It walked back to former president Donald Trump’s decision to withdraw
from the World Health Organisation (WHO), which was due to take effect
from July 6.
It has pledged US$4bil (RM16bil) for the WHO-sponsored Covax initiative
which aims to distribute Covid-19 vaccines to the developing world,
which the Trump administration refused to join.
It has agreed to endorse an allocation of special drawing rights – the
International Monetary Fund’s hard currency – which would provide
additional resources to poor countries without adding to their debt, and
which former Treasury secretary Steve Mnuchin had declined to support.
Given that the World Bank is the world’s biggest financier of climate
change-related investments, its president David Malpass reasonably
expects that the Biden administration, for which battling climate change
is a priority, will be supportive of its mission.
The administration has also vowed the US’ “unshakeable” commitment to
Nato, which Trump had derided as an outdated organisation that imposes
excessive burdens on the US.
But there is one critical area where the Biden administration is hesitant to support multilateralism, and that is trade.
Here, multilateralists can be grateful for some small mercies.
At least the administration has affirmed its commitment to the World
Trade Organisation (WTO) – the custodian and enforcer of world trade
rules – which the Trump administration all but ignored during the last
four years and even threatened to leave.
It has also broken the impasse over WTO’s leadership, by endorsing the
candidacy of Nigerian-American economist Ngozi Okonjo-Iweala for the
post of directorgeneral, which was supported by the majority of the
WTO’s 164 members, but which the Trump administration had blocked.
So, after being leaderless for almost six months, the WTO now at least has someone in charge.
Modest ambitions
But beyond that, and judging by actions rather than words, the
multilateralist ambitions of the Biden administration on trade appear
modest.
It has made clear that it will not pursue any trade agreements until it
restores America’s competitiveness by investing trillions of dollars in
areas such as energy, education and infrastructure.
It has endorsed “Buy American” policies, which would favour domestic producers and would be blatantly illegal under WTO rules.
Citing “systemic problems”, it has continued the Trump administration’s
policy of blocking appointments of new judges to the WTO’s appellate
body, which functions as a “supreme court” that adjudicates trade
disputes.
The body has been unable to issue any judgments since Dec 11, 2019,
because it did not have the minimum of three members required to issue a
ruling.
Currently, with all judges having completed their terms, there is not a
single judge on the body. This means that any appeal against a judgment
by a lower panel at the WTO disappears into legal limbo, and the
judgment is not binding.
In September last year, a lower panel ruled in favour of China, which
made the case that the 25% tariffs levied by the US in June and
September 2018 violated the WTO’s cardinal principle of
non-discrimination.
The US is appealing that judgment, but the appeal cannot be heard, as the US would know, so the tariffs will remain in place.
Indeed, the Biden administration appears in no hurry to lift the Trump
administration’s tariffs on China, all of which are likely to be
WTO-illegal, according to trade experts.
It wants to use these tariffs as leverage to secure concessions from
Beijing, including its compliance with the phase one trade deal
negotiated by the Trump administration under which China was supposed to
buy US$ 200 bil worth of US goods and services split over last year and
this year, but is falling short of the target.
It has also continued the Trump administration’s policy of designating
Hong Kong’s exports as “Made in China”, citing “national security”
concerns – which means that in the US view, that issue, too, cannot be
adjudicated by the WTO.
In short, a return to multilateralism on trade does not seem to be a priority for the Biden administration.
‘Elephant in the room’
The rise of China is one of the main sources of this reticence.
Like the Republicans, Democrats believe that the WTO is not fit for
purpose in dealing with all of China’s alleged trade malpractices.
The case for this is well articulated in a 2016 paper by Harvard Law
School Prof Mark Wu, now a senior adviser to the US Trade
Representative’s office.
He argues that the main problem is that WTO rules – which were crafted
before China joined the organisation – were not made with China’s
distinctive economic system in mind.
WTO rules can address only those among China’s trade malpractices which
are shared by other countries – such as requiring foreign investors to
partner with local firms and buy from local suppliers, or granting
exclusive rights to local firms to import or sell goods in the local
market – which are practices that are not unique to China, and for which
case law already exists.
But problems arise in cases where the boundaries between state and
private enterprises are blurred, as is often the case in China. It is
then not easy to judge whether a preferential transaction is of a
private commercial nature – which falls outside the WTO rules – or
amounts to a state subsidy.
At the heart of the problem is what constitutes a “public body”, which in China is not as clear as in other countries.
It is widely accepted, including by WTO itself, that WTO rules need to
be updated, not only relating to China but also to issues such as
digital trade, competition, services, labour and the environment.
But China, which is involved in the majority of trade disputes involving major economic powers, is the “elephant in the room”.
However, updating the rules should not mean sidelining the WTO in the meantime, which is what seems to be happening.
In a departure from the unilateral approach taken by the Trump
administration, the Biden administration says it plans to deal with
China’s trade practices in concert with other countries.
But there is no better way to do this than in a multilateral forum like
the WTO, which applies a core set of principles to trade disputes such
as non-discrimination, has mechanisms to monitor and enforce its rules
and which would accommodate the concerns of multiple countries, which is
how multilateralism should work.
Besides, China has a good record of complying with WTO rulings that go
against it, and not such a good record of caving in to bilateral
pressures.
Judicial paralysis
Shutting down the WTO’s judicial function by effectively neutralising its appellate body is especially ill advised.
Some concerns about the way the body functions and its alleged “judicial
overreach” may be legitimate, but even if so, this applies only to a
minority of cases that the body has adjudicated.
Disabling the WTO’s appellate body prevents the majority of cases, including those unrelated to China, from being resolved.
Besides, for all the criticisms levelled against it, the appellate body has a proud record.
In its 25 years of operation, it has resolved 195 disputes compared with
around 160 cases completed in 74 years by the International Court of
Justice, with 15 standing judges. Moreover, it has disposed of cases
within a few months on average, compared with a few years in the case of
other international adjudicating bodies.
Recounting these achievements in her farewell speech on Nov 30 last
year, the last appellate judge to finish her term, Dr Zhao Hong, pointed
out: “Though there was room to improve, the appellate body
distinguishes itself for its outstanding performance among all
international adjudicating bodies.”
By continuing to paralyse its functioning, the Biden administration
undermines multilateralism and perpetuates the law of the jungle on
trade issues, where might is right.
So while the administration has made a good start by re-embracing
multilateralism in many areas, its trade policies still leave much to be
desired.
-By VIKRAM KHANNA— The Straits Times/ANN
Diplomatic realpolitik
AS double-think runs wild in the White House, Crown Prince Mohammad bin
Salman (MBS) of Saudi Arabia must be enjoying a quiet chuckle.
Diplomatic realpolitik has been accorded precedence over the severe
action that was expected of President Joe Biden in the context of the US
intelligence report that the Crown Prince was complicit in the ghastly
killing of dissident journalist Jamal Khashoggi at the Saudi consulate
in Istanbul in October 2018.
The Washington Post columnist was allegedly drugged and his body dismembered. Every tenet of human rights was thus violated.
By advancing what they call a “free pass” to MBS, America’s President
has proffered a feeble excuse to justify his defence of the de facto
leader of the desert kingdom. Biden, who had referred to Saudi Arabia as
a “pariah kingdom with no redeeming social value” in course of his
election campaign, has now softened his stance to a dramatic degree.
It thus comes about that in the somewhat surprising reckoning of the US
President, the price of directly penalising Saudi Arabia’s crown prince
is “too high”.
He may be right when viewed through the prism of certitudes of foreign policy.
The US President was reportedly convinced by his newly formed national
security team that there was no way to formally bar the Saudi crown
prince from entering the United States or to take a call on the criminal
charges against him.
Altogether, it was feared by the current US administration that a
drastic reprisal would have breached the equation with one of America’s
key Arab allies, not to discount the flutter within the Arab region
generally.
There is said to have been a consensus in the White House that the price
of that breach was quite “simply too high” in terms of Saudi
cooperation in the fight against terrorism and in confronting Iran.
Biden had been urged by a section of the establishment to at least
impose the same travel restrictions against the Crown Prince as the
Trump administration had imposed on others involved in the plot.
The White House appears to have drawn a fine distinction between MBS and
the Saudi military. While the Crown Prince is unlikely to be invited to
the United States in the immediate perspective, the establishment has
denied that the Saudi ruler is being given a “pass”.
It is pretty obvious though, that the coveted International Visitor
Program (IVP) will not be denied to the Saudi Arabian Crown Prince.
Going by the terms of protocol, he may yet be treated as a state guest
in America.-Reuter
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