Trade Talks Research Articles

Israeli-Egyptian Gas Cooperation: Significance of Political Domestic Factors

Israeli gas discoveries and the Egyptian energy crisis prompted gas trade talks between the two countries. A letter of intention signed in 2014 gave the impression that Israel would soon supply its neighbor with much-needed energy resources. This development seemed to be an obvious result of the economic and political needs of both states and the recent transformation of the regional international system. Surprisingly, the negotiations became prolonged and were marred by tensions and backtracking. The article aims to present the domestic factors in Egypt and Israel that shape the approach of these countries to mutual energy cooperation and to assess their current and future impact on the energy outlook of the Eastern Mediterranean.

Doing Business across the Iron Curtain: Trade and Financial Relations between the United Kingdom and Hungary, 1945–1956

Abstract This article explores economic relations between the United Kingdom and Hungary between 1944 and 1956. After the Second World War, the UK attempted to maintain some of its influence in Soviet-occupied Hungary by resuming trade relations with the country as early as 1946. Financial discussions around settling Hungary’s debts began a year later, but they ended abruptly in December 1949. British-Hungarian trade and financial talks resumed only in 1953, and a trade agreement was not signed until June 1956. In addition to providing an outline of British-Hungarian economic relations, this article also assesses the relationship between a relatively small country in the Soviet sphere of influence and the United Kingdom, as well as the role of economic diplomacy in East-West relations in the first decade of the Cold War.

The Impact of High-Tech Industries on China-US Business Negotiations - Taking the ChipIndustry as an Example

Since 2018, China and the US have held several rounds of high-level economic and trade consultations, which largely stopped in 2020. Subsequently, the US started a massive tax increase on China. However, faced with global inflation, the call was high to restart trade talks with China and eliminate tariffs on China. In June, US President Joe Biden said in a speech to the nation from Washington that the White House was reviewing the penalties imposed on China under former Donald Trump and could opt to remove them altogether. However, the US has issued a series of containment policies in the chip industry, which further casts a shadow over the resumption of bilateral talks. The high-tech industry, with chips as the representative, has been playing an essential role in the China-US business negotiations. Compared to previous studies with more focus on the one-way research about how China-US gaming influences high-tech industries, this article attempts to analyze it from a new perspective: the China-US gaming in the chip industry. Through observational studies, the article intends to make an in-depth analysis of the significant role high-tech industries have played in the China-US business negotiations and explore where the crux lies. Through a series of observational studies, this article argues that America will not loosen controls on Chinese high-tech industries, especially on the chip industry. For the US and China - the worlds first and second largest economies, the failure of business negotiations would mean no winners for either side.

Trade networks and firm value: Evidence from the U.S.-China trade war

We study the financial implications of the 2018–2019 U.S.-China trade war for global supply chains. Around the dates when higher tariffs are announced, U.S. firms that depend more on exports to and imports from China experience larger declines in market value, with the negative effect spilling over to the affected firms' suppliers and customers through production networks. The trade war effect is mainly concentrated among U.S. firms that sell to Chinese customers with low R&D intensity or outsource to Chinese differentiated input suppliers. We also exploit the within-firm variation in tariff exposure according to the detailed product lists and conduct a reverse experiment based on the 2019 trade talks. To explain the findings, we propose a theoretical model that highlights how complex trade structures shape shareholder wealth.

Trade Rules of State Enterprises: a Lawmaking Perspective

State Enterprises are important actors in global trade, yet their regulation is a highly contentious issue that presently troubles the WTO and U.S.-China trade talks. This article proposes a typological framework of the multinational, regional, and bilateral trade rules concerning state enterprises. It compares their similarities and divergences from a lawmaking perspective, analyzing how lawmakers mix and match legal elements of ownership, control, purpose, authorization, function, activity, and industry of state enterprises with diverse policy ends. It reveals that some elements regulate behaviors while others pay more regulatory attention to the firm’s identity. These action-oriented and actor-focused approaches provide different lawmaking options. This typological study summarizes the existing doctrinal analysis of a particular provision under the same framework. It also provides a list of available lawmaking elements for regulators to pin down their policy differences towards state enterprises in international trade, enabling future lawmaking amidst the current geopolitical struggles on these entities.

The Limits of Détente: The United States, the Soviet Union, and the Arab-Israeli Conflict, 1969–1973

The Limits of Détente: The United States, the Soviet Union, and the Arab-Israeli Conflict, 1969–1973

China–US economic and trade relations, trade news, and short‐term fluctuation of the RMB exchange rate

AbstractThe trade war between the US and China affects the fluctuation of RMB exchange rate. We collect news on China–US trade policies and talks from January 2017 to July 2020. Results show that China–US dialogue and tariff imposition have the greatest impact on the percentage of RMB appreciation and depreciation. Additionally, tariff relaxation and increasing enterprise restrictions can cause a sharp appreciation and depreciation. “Policies” events and trade news from the US influence RMB fluctuations the most significantly. Finally, positive events cannot significantly cause RMB appreciation, but negative events can significantly cause RMB devaluation.

The Roadmap to the ASEAN-EU FTA: Reimagining SPS Cooperation in the Regionto-Region Context

While the Association of Southeast Asian Nations (ASEAN) and the European Union (EU) relaunched negotiations on ASEAN-EU FTA in 2017, few signs have indicated significant progress in trade talks and EU has been prompted to pursue, in parallel, bilateral free trade agreements (FTAs) with individual ASEANMembers States as building blocks for the region-to-region megaproject. The underlying divergence in economic, political, historical, and social dimensions between ASEAN and EU has continued to condition bi-regional negotiations, and issues of sanitary and phytosanitary (SPS) are of particular importance given the large inter-regional agri-food trade and inherent tensions embedded in SPS measures that are adopted to strike a balance between trade liberalization and public health. Whether and how the two blocs can reconcile different interests and policy agendas in shaping SPS cooperation under the prospective FTA merits in-depth examination. This article analyses the trajectory and dynamics in ASEAN-EU SPS cooperation. It assesses the SPS Chapters of the EUSingapore and EU-Vietnam FTAs, drawing on their relevance to and implications for region-to-region development. Lastly, this article highlights various bottom-up SPS cooperation initiatives between the two—due to EU’s technical assistance, and more critically, ambition to export its normative paradigms globally—emphasizing their role as catalyst for deeper region-to-region SPS cooperation. ASEAN-EU FTA, EU-Singapore FTA, EU-Vietnam FTA, SPS Agreement, sanitary and phytosanitary measures, New Asian Regionalism

International trading system: Up the down staircase?

The future of the international trading system under modern challenges is uncertain. The surge of protectionism, the re-balancing of power between nations, and a recent pandemic along with expanding digitalization demonstrate the necessity of rethinking global trade governance. The paper aims to reveal the key challenges of modern international trading system and provide possible ways to address them. Participants in the debate indicated that protectionism inevitably remains in modern trade policy, although liberalization and multilateral trade talks could provide incentives for more fair trade. The global interconnectivity in the framework of global value chains requires a new trade agenda. It is clear that states, especially in modern circumstances, primarily defend their national interests. However, strategically all WTO members will benefit from the development of multilateral cooperation. The responsibility of national policy makers and companies, especially those most powerful, is to maintain sustainable economic development. COVID-19 made more evident the core problems of the development of the international trading system. It has also provoked “pandemic-specific” protectionism, which should be taken into account in future developments of global governance. Digital technologies will certainly re-shape the modern structure of international trade, regardless of whether it happens in a revolutionary or evolutionary manner. The globalization leads to the digital divide among nations and the necessity to adjust the national policies. The World Trade Organization is not obliged to cope with all these issues, but its members are.

Competitiveness of the EU Agri-Food Sector on the US Market: Worth Reviving Transatlantic Trade?

The systematically strengthening role of emerging economies has become a factor strongly determining the overall trade policy of the European Union (EU) and the United States of America (USA), as well as their bilateral relations. One of the initiatives aiming at the strengthening of economic ties within the transatlantic partnership, as a consequence promoting stabilization of the positions of the EU and the USA in the world economy, was related with negotiations concerning the Transatlantic Trade and Investment Partnership. The EU-USA trade talks were suspended at the end of 2016; however, the establishment of the EU-USA free trade area might be a breakthrough in the transatlantic relations, while the conclusion of this agreement would significantly determine the competitive position of the agri-food sector of these two economies, both in their bilateral relations and in world trade. In view of the above, the aim of this paper is to estimate the competitive position of the EU agri-food sector in transatlantic trade considering the conclusion of the agreement establishing the EU-USA free trade area. For this purpose, Widodo’s method of mapping products on the target market was applied. Results from the conducted analyses suggest that from 2010–2020 comparative advantages gained by the EU on the US market were sources of an advantageous export specialization. In view of the forecasted dynamic increase in agri-food export from the EU to the USA caused by possible liberalization of bilateral trade, the relatively strong competitive position of the EU on the American market might be maintained or even strengthened. However, such a situation would be determined by the regulatory cooperation progressing with the reduction of tariffs.

The Breadth–Depth Trade‐Off and Varieties of Preferential Trade Agreements

AbstractThe varieties of preferential trade agreements have increased in recent decades. Regional blocs concluding deals with third‐party actors have contributed immensely to these changes in trade agreements. These varieties have motivated our reexamination of the breadth–depth trade‐off in trade agreements. We argue that a breadth–depth trade‐off is present in initial plurilateral agreements. Large groups of states at this initial stage exhibit greater preference heterogeneity that discourages deeper cooperation. Conversely, we expect the breadth–depth trade‐off to be absent in follow‐up plurilateral agreements and region‐to‐third‐party agreements. For the former, the initial pacts serve a learning function that enables deeper cooperation. For the latter, institutional mechanisms lessen preference heterogeneity and transforms negotiations to approximate bilateral trade talks that alleviate the breadth–depth trade‐off. Our test on 234 trade agreements finds support for our argument. Our paper highlights the importance of distinguishing trade negotiation configurations to better understand how membership affects the depth of agreements.

Who Teams Up with the European Parliament? Examining Multilevel Party Cooperation in the European Union

AbstractAs in nearly all European Union (EU) policy areas, scholars have turned to analysing the role of national parliaments, in addition to that of the European Parliament (EP), in trade politics. Yet, there is limited understanding of how the parliamentarians at the two levels interact. This article fills the gap by conceptualizing these interactions as a continuum ranging between cooperation, coexistence and competition. We use this continuum to explore multilevel party interactions in EU trade talks and show how cooperation compels politicization – national parliamentarians mainly interact with their European colleagues in salient matters. However, we argue that the impact of politicization on multilevel relations between parliamentarians in the EP and national parliaments is conditioned by party-level factors. Hence, we account for how and why politicization triggers multilevel party cooperation across parliaments in the EU through ideological orientation, government position and policy preferences and show how this takes place in the case of trade.

Who Had Their Cake and Ate It? Lessons from the UK’s Withdrawal Process and its Impact on the Post-Brexit Trade Talks

AbstractThis Article highlights the legal and procedural restrictions a Member States faces during its withdrawal from the EU and subsequent talks on a future trade relationship by analyzing the unprecedented case of the UK. One such restriction consists of an obligation to negotiate withdrawal as a result of the principle of sincere cooperation. Other limits derive from the withdrawal process itself, designed as it was by the European institutions on the basis of a very scant Article 50 TEU. By then comparing the three substantive pillars of the EU-UK WA—citizens’ rights, the financial settlement, and the Irish border— with the UK’s initial negotiating red lines, I offer two conclusions: That the aforementioned constraints on the withdrawing state can significantly weaken the defense of its interests during its withdrawal process and that having to agree to important issues in a first and separate stage of “orderly withdrawal” talks also diminishes the state’s bargaining power with regards to the next stage of negotiating a future partnership with the EU.

Brazil\u2019s sugarcane embitters the EU-Mercosur trade talks

The Brazilian government’s decision to open the Amazon biome to sugarcane expansion reignited EU concerns regarding the sustainability of Brazil’s sugar sector, hindering the ratification of the EU-Mercosur trade agreement. Meanwhile, in the EU, certain conventional biofuels face stricter controls, whilst uncertainty surrounding the commercialisation of more sustainable advanced-biofuels renders bioethanol as a short- to medium-term fix. This paper examines Brazil’s land-use changes and associated greenhouse gas emissions arising from an EU driven ethanol import policy and projections for other 13 biocommodities. Results suggest that Brazil’s sugarcane could satisfy growing ethanol demand and comply with EU environmental criteria, since almost all sugarcane expansion is expected to occur on long-established pasturelands in the South and Midwest. However, expansion of sugarcane is also driven by competition for viable lands with other relevant commodities, mainly soy and beef. As a result, deforestation trends in the Amazon and Cerrado biomes linked to soy and beef production could jeopardize Brazil’s contribution to the Paris agreement with an additional 1 ± 0.3 billion CO2eq tonnes above its First NDC target by 2030. Trade talks with a narrow focus on a single commodity could thus risk unsustainable outcomes, calling for systemic sustainability benchmarks, should the deal be ratified.

Beyond Trade War: Reevaluating Intellectual Property Bilateralism in the US–China Context

ABSTRACT The Economic and Trade Agreement between the USA and the People’s Republic of China (hereinafter the ‘Phase One Agreement’) concluded in January 2020 leaves many important questions unanswered. This article goes beyond narrow textualist approaches and seeks to conceptualize the current trade tension by providing an alternative narrative with a focus on China’s post–Trade War commitments to higher intellectual property rights standards. In particular, it focuses on the bilateral interaction between the USA and China during and shortly after the Trade War and how the interaction impacts China’s legal changes from a transnational law perspective. It further argues that US-reinforced intellectual property rights rules have potentially paved the way for further US–China trade and investment talks. However, in order to better maintain a long-term balance between preservation of policymaking autonomy and regulation of protectionist measures, an approach better aligned with the World Trade Organization framework needs to be pursued.

Trade Paradiplomacy and the Politics of International Economic Law: The Inclusion of Quebec and the Exclusion of Wallonia in the CETA Negotiations

ABSTRACT International trade negotiations are no longer largely limited to federal government's constitutional jurisdictions. In this context, substate governments, like Quebec and Wallonia, are aware that their ability to formulate and implement policy, are subject to negotiations in trade talks. This article compares the role of Quebec and Wallonia in the CETA negotiations. While Wallonia was able to force the inclusion of an interpretative legal instrument to clarify certain parts of CETA, Quebec, like the other Canadian provinces, was able to influence the negotiation from within. Quebec's influence was felt on many issues such as regulatory cooperation, certification, labour mobility, cultural diversity, but also on issues that were ultimately left outside the agreement. The comparison provides important lessons: the inclusion in the negotiating process of substate governments, like Quebec, makes it easier for them to make important concessions during the negotiation but also to accept the outcome of the negotiation. Moreover, substate governments are important actors in legitimising these trade treaties. When they strongly oppose them, like Wallonia did, it has a deleterious effect on the legitimacy of the agreement.

POSITIONING MALAYSIA IN THE REALM OF GLOBAL UNCERTAINTY: ANALYSING ITS CONCERN AND STRUGGLES OF PAKATAN HARAPAN GOVERNMENT

The US-China trade war juggernaut has shackled the political, economic and social landscapes of nation states globally at varying degrees. While trade talks are still ongoing and President Trump has hinted at the possibility of an interim agreement, the prospects of both sides agreeing on a comprehensive US-China trade deal in the near-term remains cloudy. Several factors place Malaysia to be in interesting position. First, Malaysia has and is still a geopolitically important trading route. Being an integral component to the production house of the global supply chain of finished products, its economy depends highly on the movement of goods and global currency. Furthermore, Malaysia is dominantly attached to the Chinese economy. It implies the fact that trade protectionism in the U.S. has resulted into a slowdown of Chinese growth, which eventually will have a domino effect on the Malaysian economy. Worsening the situation, COVID-19 shuts down major operations in the world, disrupting global supply and chain. Countries react towards inward strategies, alleviating national security and domestic economies at the expense of globalization process. While we have passed the first wave and re-generating world economy, global economy trajectory is still deemed ambiguous. China, as major hub for manufacturing, supply and chain is affected and struggles to increase its GDP from 6.1% end of 2019. In surfacing this uncertainty, the seventh Prime Minister Dr. Mahathir Mohammed lays out three frameworks that guide the conduct of Malaysian foreign policy. First, Malaysia remains as an active discussant at all platforms which Kuala Lumpur is already a member. Second, it will communicate its influence towards any decision-making processes in platforms which Kuala Lumpur is not a member. Third, Kuala Lumpur will align with the increasing penetration of Industrial Revolution 4.0 and the blue economy. Should this be the way from 2020 onwards or new strategies ought to be crafted? What are the contemporary indicators Kuala Lumpur having to consider? Eventually, what could be the ultimate message Malaysia in positioning herself, which described her synergies and potential in near future? These questions will guide to examine the feasibility of Change in Continuity as a conduct of Malaysian foreign policy in near future.

The United States-China Trade War: Empirical Assessment

This paper aims to explore the US-China trade war by looking at various issues surrounding the US-China trade relation. The US-China trade war had been imminent since January 2018, meritoriously commenced on 6 July 2018, which is still ongoing. The US imposed sanctions on various Chinese goods, which was counter by the Chinese side also. Both side have felt the effect of the trade war though China felt the impact more than United States. Though, both nations have recently held positive trade talks which leads to the first phase of negotiation the trade war is still ongoing. If the partnership between the United states and China collapses, this will also end up harming the global economy severely since they are crucial cornerstones of the international economy.

The International Regulation of Competition Policy and Government Procurement: Exploring the Boundaries of the Trade Regime

ABSTRACT The proliferation of ‘behind-the-border’ issues has become a major challenge for the global trading system. Why are some trade-related issues integrated in the strongly judicialized WTO with its dispute settlement system, while others are governed in isolation from the trade regime? Contributing to the literature on WTO issue boundaries, the paper highlights the role of uncertainty and demand for transgovernmental regulatory cooperation as drivers of regime outcomes. I argue that high technical and political uncertainty delays GATT/WTO integration of trade-related issues in favour of a soft-law trade pathway. A further-reaching separation from the trade regime occurs when uncertainty remains high and national regulatory authorities exhibit a demand for trade-separate cooperation with foreign counterparts. Case studies on government procurement and competition policy substantiate the argument. Government procurement has been integrated into the GATT/WTO trade regime under a market access agenda pursued by EU and US trade actors, but only after uncertainty had been reduced in technical soft-law trade talks at the OECD. Conversely, in competition policy – despite repeated efforts at GATT/WTO integration – cooperation has thrived in less judicialized transgovernmental networks such as the International Competition Network, driven by competition agencies eager to solve regulatory cooperation problems independently from the trade regime.

The WIPO-WTO Relationship

Abstract The current, prevailing narrative on the WIPO-WTO relationship refers to “forum-shifting”. The idea is that developed countries moved from WIPO to WTO in order to obtain stronger IP protection at the international level by joining trade talks with IP negotiations. As a result, WTO would have become the main international forum for trade-related IP issues. This paper argues that the forum-shifting narrative, despite its merits, may fail to catch the complexity of WIPO-WTO relationship. Moreover, long-standing issues, as well as recent developments in trade and IP, demonstrate that the two Organizations have been characterized by continuity and constitute in reality interdependent, complementary fora. This is not to deny the differences existing between WIPO and WTO nor to discard the merits of the forum-shifting theory. Nonetheless, it is argued, it is time to move beyond it in order to grasp the implications of the WIPO-WTO relationship towards future international economic governance.