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The WTO struck several deals. Skepticism remains.

Published 28 June 2022

The World Trade Organization's Ministerial Conference - MC12 - issued a package of agreements but do they have a long-term significance for trade? Do the outcomes of MC12 impact US-China relations? In light of trade restrictive policies in the US and China, is decoupling inevitable? Check out our new reading list to catch up with the latest articles and reports on global trade.

Deal-making at the WTO has not convinced critics

The long awaited WTO Ministerial Conference, or MC12, issued a package of agreements, including on fisheries subsidies, food insecurity, an intellectual property right waiver for Covid vaccines, WTO reform, and an extension of the e-commerce customs moratorium. But do the agreements have long-term significance? The MC12 package was a face-saving exercise, argues Alan Beattie of the Financial Times. Coverage was extensive; the World Economic Forum noted the politics of the negotiations, Reuters reported on extension of the e-commerce moratorium, Inu Manak explains the fisheries subsidies deal to the China Trade Monitor, while Bryan Mercurio discusses the TRIPS waiver agreement in Think Global Health. The TRIPS waiver even offers a glimmer of hope for US-China trade relations, argues Wendy Cutler. Lastly, WTO Deputy Director General Anabel Gonzalez argues that there was more than meets the eye in the meetings’ outcomes. 

Mentioned publications

  1. WTO members secure unprecedented package of trade outcomes at MC12World Trade Organization, 23 June 2022
    WTO members come to agreements on fisheries subsidies, a patent waiver for Covid vaccines, food insecurity, and WTO reforms, among others.
  2. The WTO’s marathon exercise in staying alive – Op-ed: Alan Beattie, Financial Times, 17 June 2022
    MC12’s outcomes represent a symbolic victory for the WTO.
  3. Understanding the WTO Ministerial Meeting: What just happened and what’s next? – Sean Doherty and Aditi Sara Verghese, World Economic Forum, 20 June 2022
    The WEF provides a clear and concise summary of the ministerial meeting’s outcomes.
  4. WTO provisionally agrees to extend e-commerce tariff moratorium – sourcesReuters, 17 June 2022 
    WTO members agree to extend the moratorium on customs duties on e-commerce until at least the next ministerial meeting.
  5. Q & A with Inu Manak on WTO Fisheries Subsidies Deal – Simon Lester, China Trade Monitor, 21 June 2022
    An analysis and insights on what was accomplished in the fisheries subsidies agreement, and where it will go from here.
  6. Sharpening the Tools in the Pandemic-Ending Toolbox – Bryan Mercurio, Think Global Health, 23 June 2022 
    WTO members agree on an IP waiver for Covid vaccines. What does the agreement cover and how will it work? 
  7. A glimmer of hope for improved US-China trade relations –Wendy Cutler, The Hill, 22 June 2022
    A key compromise negotiated between the US and China enabled an agreement on the WTO TRIPS waiver. 
  8. MC12: more than meets the eye – DDG Anabel Gonzalez, World Trade Organization, 20 June 2022
    Although expectations were low for the outcomes of this ministerial meeting, the stakes could not be higher for the WTO and for the world.

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Decoupling is easier said than done

Policymakers in the US and China are passing laws to further restrict trade. But US industry is not leaving China just yet – due to complex supply chains and their own preference to stay in the China market. There is no divorce yet, argues Michael Hirsch In Foreign Policy. The Wall Street Journal reviews Chubb CEO Evan Greenberg’s calls for renewed dialogue with China. The United States' Uyghur Forced Labor Prevention Act came into effect last week. That poses complications for supply chains for electric vehicle batteries, reports the New York Times.  

In Russia, companies that want to leave are facing challenges in doing so. The Wall Street Journal details the struggles of cigarette manufacturer Philip Morris to dismantle operations to exit the market.  

The US economy is now seeing signs that supply chain challenges are shifting again. Per Craig Fuller for FreightWaves, purchasers are cancelling or delaying orders, resulting in less demand for containers and trucking – the collision of inflation and a supply chain “bullwhip effect”

Mentioned publications

  1. The U.S. and China Haven’t Divorced Just Yet – Michael Hirsh, Foreign Policy, 22 June 2022 
    Despite tariffs and other trade restrictions, decoupling isn’t happening, and is unlikely to happen in a significant way. 
  2. One American CEO Argues for Mending Fences With China – Lingling Wei and Charles Hutzler, The Wall Street Journal, 13 June 2022
    While geopolitical tensions weigh against speaking out in favor of US-China engagement, some CEOs continue to press for better relations.
  3. Red Flags for Forced Labor Found in China’s Car Battery Supply Chain – Ana Swanson and Chris Buckley, The New York Times, 20 June 2022
    As the US government begins to implement the Uyghur Forced Labor Prevention Act, how will US-China trade be affected?
  4. Companies Find Leaving Russia Difficult, Though Many Are Trying – Jennifer Maloney and Thomas Gryta, The Wall Street Journal, 21 June 2022
    Even when companies want to leave their investments in a country with a relatively small economic footprint, decoupling is hard to do.
  5. A potential economic recession and the supply chain bullwhip are colliding – Craig Fuller, FreightWaves, 21 June 2022
    Key indicators show that supply chains are experiencing the bullwhip effect.

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Sustainable trade?

The ongoing push to make greater use of biofuels may come into conflict with ensuring enough crops for global food security. The Financial Times describes the coming policy conflict

Mentioned publications

  1. Food vs fuel: Ukraine war sharpens debate on use of crops for energy – Emiko Terazono and Camilla Hodgson, Financial Times, 12 June 2022
    Will the continued use of crops for biofuel exacerbate food insecurity?

Visualizing trade

Lastly, the WTO provides us with a new tool for visualizing trade flows between economies, with its Trade Connectivity Heatmap

Mentioned publications

  1. Trade Connectivity HeatmapWorld Trade Organization, 23 June 2022
    A new WTO tool allows users to visualize trade relationships between countries in terms of intensity of goods traded. 

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