How Do You Solve a Problem Like Maria? US – Countervailing Measures (China) (21.5)

The rise of China as a genuine world power, economically and militarily, constitutes the gravest challenge faced by the liberal international order constructed in the aftermath of the Great Depression and the Second World War. A major source of strain in the trade relations between China and the other core members of the liberal world trading system is its extensive use of state-owned enterprises as an instrument of general (domestic) economic policy. This paper builds on Ruggie's theory of embedded liberalism and the theory of economic policy to characterize the political and economic difficulties and opportunities in moving toward a new regime for dealing with subsidies. The conclusion sketches some goals such a regime should seek to embody.

No More Strategical Neutrality on Technological Neutrality: Technological Neutrality as a Bridge Between the Analogue Trading Regime and Digital Trade

The World Trade Organization (WTO), a unique multilateral trading regime, has failed to establish its relevance to the digital nature of trade. This article revisits the ‘principle of technological neutrality’ to make the cross-border supply of services by electronic means subject to the current rules-based trading regime. I argue that the principle of technological neutrality could help resolve a number of thorny legal issues: confirming the applicability of the General Agreement on Trade in Services (GATS) rules to the delivery of services by electronic means; providing a guideline to determine the likeness of services in the era of digital trade; and backing up an evolutionary approach to interpreting the GATS schedules of commitments. However, the WTO adjudicatory bodies have been reluctant to rely on the principle of technological neutrality, which is referred to as strategic neutrality in this article. This article urges the WTO adjudicatory bodies to abandon their strategically neutral position on technological neutrality immediately. It also explores ways to incorporate the principle of technological neutrality into the world trading system at the bilateral, plurilateral, and multilateral levels.

Measuring China’s economic impact in the Caribbean

The remarkable surge in Chinese economic productivity, especially since the turn of the century, has been of material benefit to every economy in the world trading system, and the Caribbean has shared in those benefits. The most substantial benefit to the Caribbean from the relationship with China has been via the purchase of more affordable products made in China or made with Chinese inputs. The Caribbean has secured additional imports that may be of the order of 5–10 per cent, compared with what the same money would have bought from alternative sources. This benefit may not increase in the future, and may well decline, if the anti-globalisation sentiment now sweeping across many Western nations is not reversed in the near future and the region’s access to Chinese products is reduced. By comparison, the benefits from Chinese investment in the Caribbean, as well as from exports to China and Chinese tourism to the Caribbean, while not insignificant, are much less substantial. Caribbean strategies for transportation upgrades and investment, renewable energy adoption, the use of digital currencies, and the universal use of the US dollar offer the promise of reaping benefits for the Caribbean from the China connection in the medium to long term, even in the face of Western isolationism.

Geo-Politics of Most Favoured Nation (MFN) Status under the WTO and Future of Trade between India-Pakistan

This paper presents the impact of political decision on regional trade between India and Pakistan from the prospect of Pakistan Most Favoured Nation (MFN). The study is based on pre and post MFN status, which shows substantial evidence that Indian decision of declaring Pakistan as MFN in 1996 has shifted the dimension of trade in favour of India. The study is based on qualitative and descriptive analysis, which shows consumerism in Pakistan and its trend of Indian exports to Pakistan. The broad objective of study is aimed at analysing the possibility of trade between India and Pakistan under the world trading system. However, Pakistan exports to India are indifferent to Indian economic situation and Pakistan’s decision has insignificant impact on mutual trade. Thus, despite the volatile relationship, trade can play an important role for economic growth of Pakistan and the country can exploit the bigger market of India. Further, reduction in political tensions would eventually benefit both countries and means can generate larger benefits and trade facilitation measures. In this regard, trade routes should be opened, communications shall be restarted, and contracts should restore.

On the Structure of the World Economy: An Absorbing Markov Chain Approach

The expansion of global production networks has raised many important questions about the interdependence among countries and how future changes in the world economy are likely to affect the countries’ positioning in global value chains. We are approaching the structure and lengths of value chains from a completely different perspective than has been available so far. By assigning a random endogenous variable to a network linkage representing the number of intermediate sales/purchases before absorption (final use or value added), the discrete-time absorbing Markov chains proposed here shed new light on the world input/output networks. The variance of this variable can help assess the risk when shaping the chain length and optimize the level of production. Contrary to what might be expected simply on the basis of comparative advantage, the results reveal that both the input and output chains exhibit the same quasi-stationary product distribution. Put differently, the expected proportion of time spent in a state before absorption is invariant to changes of the network type. Finally, the several global metrics proposed here, including the probability distribution of global value added/final output, provide guidance for policy makers when estimating the resilience of world trading system and forecasting the macroeconomic developments.