Commentary from the Trade Wars

Posted by Stan on 12/19/07 • Categorized as International Trade

Exceptionally good post on Vox EU by Professor Simon Evenett on trade frictions between China and the US and EU. Here’s the teaser:

If the US and EU continue down the path of confronting China directly, they will face a choice between piecemeal trade actions that highlights the divergence between their words and deeds, or the imposition of a blatantly WTO-illegal restriction on Chinese exports that would ruin their reputations as good WTO members.

More interesting is Evenett’s conclusion that despite all the rhetoric, there may be little to worry about from the US and EU when it comes to either WTO dispute resolution or tariff legislation. However, anti-subsidy actions (e.g. the recent glossy paper case) may be a sign of things to come.

I agree, but there is also a price to pay on the diplomatic front from all the rhetoric. Evenett is, I think, an economist, so this was outside of the scope of his column. However, as the figurative fisticuffs fly (damn fine alliteration, that), relationships can be bruised. None of us who are involved with foreign trade and investment in China are too happy when that occurs.


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