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What Biden should do in post-isolation trade

Former US President Donald Trump’s “America First” policy of isolation and protection traders has severely affected the United States and its global leadership role. Raising tariffs on imports from the United States, especially China, has only succeeded in encouraging other countries to impose reciprocal tariffs on US goods. Therefore, Trump’s trade policy has hurt most Americans, from farmers to middle-class consumers.
Under the Trump administration, the United States unilaterally abandoned its global role. This would have given the United States an advantage in creating international rules for trade and climate crisis management. The United States is disdainful of the World Trade Organization by withdrawing from the 2015 Paris Agreement, the World Health Organization, and the Trans-Pacific Partnership (TPP) Trade Agreement and refusing to agree to appoint the WTO to the Appellate Body. The attack has started.
Trump’s isolation was particularly painful for Europe and Japan’s major allies. It also threatened their values ​​when the United States abandoned the moral heights of free trade and rule-based multilateralism.
President Joe Biden’s administration has swiftly overturned many of Trump’s economic, environmental, and Covid-19 policies, including returning the United States to the Paris Agreement and revoking the United States’ withdrawal from the WHO. However, Biden took a very long time to roll back his predecessor’s protective tradeist measures. Almost a year after Biden’s term, some of Trump’s tariffs remain intact. There is no talk of the United States joining the Trans-Pacific Partnership (CPTPP), the successor to the TPP. The Biden administration is discussing the WTO’s resurgence, but has yet to put rhetoric into action.
Biden’s negligence is puzzling. He clarifies his policy goals for China, which he sees as America’s most serious competitor. In December, Biden invited more than 100 world leaders to the Summit for Democracy to discuss issues raised by authoritarian nations, primarily China and Russia. Given this, why is his administration not in a hurry to join the CPTPP?
The original TPP was signed in 2016 by 12 Pacific Rim countries, including the United States during President Barack Obama, excluding China in particular. It promotes comprehensive free trade and investment, protects intellectual property rights, regulates digital commerce, and prevents signatories from gaining an unfair competitive advantage through the actions of state-owned enterprises (SOEs). It was devised as a regional economic union for the purpose of. The agreement was a thinly disguised attempt to help major Pacific economies, with the exception of South Korea, compete more effectively with China. And the successor, the CPTPP, is becoming more and more influential in the Asia-Pacific region, even though the United States has so far refused to participate. It’s not difficult to understand why. Many countries that rely on the Chinese market have long had to swallow China’s trade and investment situation. For example, Chinese authorities often require foreign companies that invest directly in China to establish joint ventures with local partners rather than establishing wholly owned subsidiaries. In addition, state-owned banks funding state-owned enterprises allowed China’s rapid export growth, and other countries complained about excessive subsidies. The TPP was to not only expand free and fair trade between member states and rule-based investment, but also set engagement rules to prevent China from misusing its trading partners. ..
After Trump withdrew the United States from the TPP in January 2017, Japan’s then Prime Minister Shinzo Abe led the creation of the CPTPP (TPP11) among the remaining members of the agreement. Some of the provisions that the United States pushed during the initial TPP negotiations were shelved, but they could be reintroduced if the United States decides to join the treaty. TPP11 works well, but still misses the existence of America.
In addition, while the United States has been wasting the last five years away from the new Asia-Pacific trade and investment framework, there have been two other important developments. First, 10 member states of China, Japan, South Korea, Australia, New Zealand, and the Association of Southeast Asian Nations (Asean) have signed the Regional Comprehensive Economic Partnership (RCEP). (India dropped out of the agreement at the final stage of the negotiations.)
The RCEP, which came into force on January 1, trades $ 2.5 trillion between member countries, or about 13% of the world’s commodity trade, with 15 signatories accounting for 30% of the world’s GDP. This is the first free trade agreement between Japan and China, and it is expected that bilateral trade relations will deepen. However, to accommodate the emerging markets of the ASEAN economy, average rates under the RCEP will remain higher than the TPP11 agreement, narrowing the scope of investment.
The second development was that in September 2021, China and Taiwan applied for separate participation in TPP11, presenting a major challenge to the Government of Japan. For starters, can existing TPP11 member states negotiate with China to maintain the high entry standards of the agreement, or can they be split on how tough the route is? ??
In addition, while China opposes joining Taiwan’s agreement, TPP11 countries may feel that welcoming Taiwan, the world’s leading manufacturer of high-end semiconductors, will bring additional economic security benefits. Hmm. It may lead to a severe reaction from China.
Given the uncertainty about whether Japan is ready to play a tough political economy game with China and Taiwan over TPP11, we need stronger US leadership than ever before. The rapid accession of the United States to the agreement will strengthen US trade with important Asia-Pacific economies and strengthen their efforts to compete with China. Biden should make it an urgent priority. — Project Syndicate

• Former Deputy Minister of Finance Takatoshi Ito is a professor at the Faculty of International Public Relations, Columbia University and a senior professor at the National Graduate Institute for Policy Studies.



http://www.gulf-times.com/story/708030/What-Biden-should-do-on-trade-post-isolationism What Biden should do in post-isolation trade

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