China is a market economy

Comments on Gary Clyde Hufbauer and Cathleen Cimino-Isaacs "Is China a market economy?" 29/07/2015

While it was understandable that at the time when China joint the WTO, it was not unreasonable to regard some parts of the Chinese economy were not market economy, it is no longer reasonable to use that as a trade barrier or as a tool for anti dumping purpose. Fifteen years have past since then and China has changed a lot. Yes, there are some sectors where there may be monopolies, duopolies or oligopolies still operate, but they are not too different from some western and industrialised countries. For example, some utility industries in Australia operate as monopolies or oligopolies.

The following paragraph from the author is telling that it is not a legal issue as opposed to a policy one. It is a form of imperialism in action:

"Whether the United States takes a hard-line mix-and-match approach, rather than grant China market economy status across the board, could well turn on policy considerations rather than legal parsing. Among these considerations will be the general atmosphere of commercial relations with China in 2015 and 2016, including the evolution of the renminbi exchange rate (devaluation would inspire a hard-line approach) and the outcome of the US–China Bilateral Investment Treaty negotiations (success would have the opposite effect)."

The authors' recommendations are not particularly unreasonable in that any firms whether they are state owned or not, should publish any information as an ordinary firm would. However, there is a danger that those recommendations could be abused and used for more than what are recommended for.

Further the accusations of China manipulates its currency does not have merits at all. One cannot use trade surplus or deficit with a country alone as a test of whether a currency is fair valued or not. China can have surplus with some countries and deficits with some other countries as well as about balanced trade with the rest. The US have run trade deficits with many countries for very long time and those countries include free exchange countries. If surplus or deficit is the sole measure, then why the free exchange rate countries have not had their currencies moved in the direction to balance their trade with the US?

PS: I have had a look at the Eastasiaforum website and could not find my comments there even by 9.23 am, 30 July 2015. Maybe the use of the phrase imperialism caused the editors some headaches. I only meant economic imperialism, in the sense similar to past imperialists which, when they were losing their former powers, tried to create difficulties for either new comers of new power or left some difficulties to their former colonies. In Chinese, the phrase "垂死挣扎“ adequately describes such behaviours.

Doha round difficulties and approaches to WTO negotiations

Comments on Ann Capling “The end of Doha as we have known it: what next for Australian trade policy?” 3/05/2011, http://www.eastasiaforum.org/2011/05/03/the-end-of-doha-as-we-have-known-it-what-next-for-australian-trade-policy/

I have to say that I am very unfamiliar to WTO Doha round negotiations, not to mention the causes of current difficulties.

I would like to ask a question however. Why could WTO adopt a rather different approach to member negotiations by having a forward opt in strategy?

Such a strategy would be to advance a version of forward and make it an agreement among them first if there are at least a set minimum number of countries or with a set minimum share of world trade agree to a clause, with it open for other members to opt in at a later stage. Once opting in, a country should only move forward.

This strategy would settle on agreements and leave disagreements aside.

With proper provisions or revision to existing rules, it could avoid the current cumbersome negotiations and make gradual and steady advancement and could potentially replace the needs for regional trade agreement for many countries.

In fact, such a strategy could be applied to some other international organisations, such as different UN bodies.

More specifically, UN climate change negotiations.

WTO and FTAs - both can be good

Comments on Barry Desker “Time for rethinking trade policy and refocusing on the WTO”, 16/12/2010, http://www.eastasiaforum.org/2010/12/16/time-for-rethinking-trade-policy-and-refocusing-on-the-wto/

While it may be a time to do some re-thinking, a pre-determined view or conclusion that the WTO approach is definitely preferable to FTAs may be premature.

The very basis of the theory that Professor Jagdish Bhagwati uses may have involved unrealistic assumptions. The WTO rules or a realistic negotiated WTO outcome are themselves second best because of the many exemptions and distortions embedded in those rules. So the argument that FTAs are second best and therefore is inferior to a WTO approach simply ignores the fact WTOs are also second best.

So it should be a case of comparing one second best with another second best. In that comparison, there is no necessity that WTOs are better.

Let's consider a simple point. Is there a way to improve the current WTO based trade outcome for the world as a whole, or at least for those involved in FTAs by designing and implementing some optimising FTAs?

Can anyone say for certain that such improvements do not exist at all? I doubt it.

My view is that it is highly likely that some FTAs can be negotiated to further improve the current WTO trade outcome, based on pure logic and simple reasoning. Of course, complex modelling could be conducted to show that, based on realistic examples and cases.

It is not good enough just to resort blindly to the views of some existing authorities in a field to make conclusions without carefully examining the assumptions involved or used by those authorities.

That is not a sound and scientific approach.

Does WTO have any tooth?

Comments on Alan Kohler “Obama's perilous protectionism”, 15/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/China-America-marraige-hits-the-rocks-pd20090915-VVSFV?OpenDocument&src=sph

It would be interesting to see what the WTO should say on the US new tariff on Chinese Tyers.

Does the WTO have any tooth to enforce its own rules, especially when it deals with world most powerful economies like the US?

WTO needs enforcement

Comments on Rajiv Kumar “India: Pumping new life into the Doha Round”, 8/09/2009, http://www.eastasiaforum.org/2009/09/08/india-pumping-new-life-into-the-doha-round/

If existing WTO rules cannot prevent governments from taking protectionist measures in trade, what is the use for the conclusion of another round of trade negotiations that is simply likely to be no secure in safeguard measures?

The fact is that the collapse in trade has been much serious than the decline in economic growth.

WTO needs to enforce existing rules as opposed to let them bended by some governments.

Does it have the courage to do it?