Jiang, Qing- Yun Shanghai University of International Business and Economics

  • View
    51

  • Download
    0

Embed Size (px)

DESCRIPTION

Mega-Regional Trading Arrangements: TPP and TTIP - how China and other emerging economy react to the new rules governing the trade and investment?. Jiang, Qing- Yun Shanghai University of International Business and Economics & Co-Effort LLP, Shanghai. - PowerPoint PPT Presentation

Text of Jiang, Qing- Yun Shanghai University of International Business and Economics

Slide 1

Mega-Regional Trading Arrangements: TPP and TTIP- how China and other emerging economy react to the new rules governing the trade and investment?Jiang, Qing-YunShanghai University of International Business and Economics& Co-Effort LLP, Shanghai1Mega-Regional Trading Arrangements: TPP and TTIPHow should China React?2Problems with RegionalismTrade diversion tendency to favour over trade creation Discrimination (Cordell Hull)Inward focus Market development small and localCost to multilateral systemCompeting blocs less flexible than countriesApril 2014Center for International Economic and Trade Governance33Todays Mega-RegionalsRCEP 10 ASEAN members plus China, Japan, Korea, Australia, India and New Zealand (by 2016?)TPPAustralia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, Vietnam (P4 2005, TPP by 2015?)T-TIPUnited States and European Union (by 2015?)April 20144Center for International Economic and Trade GovernanceRegional Comprehensive Economic Partnership (RCEP): 16 members ; 15% of world trade; dynamic regionWTO-consistent, concensus recognises differences between members, allows flexibilityGains perhaps 0.6% global GDP; 81% of benefit accrues to CJK and India (because no agreements so far and size); ASEAN already has agreements (merely consolidates)

TPP from P4 USA initiated enlargement of discussionsWTO-plus and WTO-extra USAs objectivesGains approx 0.4% of global GDP

4TPP combines existing RTAsApril 2014Center for International Economic and Trade Governance5

Source: Fergusson et al (2013) Because much trade already covered by RTAs, difficult to generate great gains.USA has agreements with 6 of the 11 others: Australia, Canada, Chile, Mexico, Peru and Singapore 5Comprehensive High Quality RTA April 2014Center for International Economic and Trade Governance6

Source: Fergusson et al (2013) Extremely challenging for partners very different levels of income, size of economy

6Why TPP in 2008-2012?Doha failing, TPP signals pivot to AsiaTPP preferences may attract US businessCounter Chinas influence in WTO via East AsiansEurope failing to grow or influenceAsia is the dynamic bit of the world economyForce the Democrats to state their position on trade

Cement in the US templateApril 2014Center for International Economic and Trade Governance7Benefits of a Single AgreementMore trade and more advantage over excluded US model harder to change ex postEclipse models offered by ..China ..EU-Japan (Fergusson et al, 2013)April 2014Center for International Economic and Trade Governance8US vs. Asian TemplatesApril 2014Center for International Economic and Trade Governance9

Key implications of the US templateSmall partners small voices; little differentiation by income levelExcluded countries no voice;IP provisions extended even beyond US-KoreaDispute settlement more legalisticInvestor-State arbitrationSOEs

Secret negotiationsApril 2014Center for International Economic and Trade Governance10TTIP ambitious outcomes in Market access; Regulatory issues and non-tariff barriers; and Rules, principles, and new modes of cooperation to address shared global trade challenges and opportunities.April 2014Center for International Economic and Trade Governance11TTIP Main Areasmarket access for agricultural and industrial goods, small- and medium-sized enterprises,government procurement, sustainable developmentinvestment, services,intellectual property rights,dispute settlement, energy raw materials, competition, sanitary and phytosanitary measures,customs/trade facilitation,regulatory issues,state-owned enterprises. April 2014Center for International Economic and Trade Governance12Living agreement Why TTIP?EUStagnation parallel of Single MarketCounter the pivotFear of trade exclusion US Access to sensitive marketsExtend US template or at least prevent emergence of an alternativeEven if not, reinforce standards in WTS justified by interest in GVCsApril 2014Center for International Economic and Trade Governance13Counter the pivot but Mr Putin has made this moot

13What are these RTAs worth? TPPWithout Japan and Korea 0.4% of world trade USA 1.9%, Mexico 3.9%, Vietnam 19.8% of exportsWith Japan and Korea 1.6% of world trade USA 4.4%, Mexico 6.2%, Vietnam 37.3% - exportsJapan 14.0%, Korea 12.4% - exportsBig effects for big reformersNon-members lose somewhat

Source: Petri ,Plummer and Zhai (2012)

April 2014Center for International Economic and Trade Governance14All these estimates depend very heavily on assumptions about what is liberalised and how this affects trade; these are EXTEMELY approximate14What are these RTAs worth? TPPWithout Japan and Korea 0.1% of world GDP USA 0.1%, Mexico 0.7%, Vietnam 7.7%With Japan and Korea 0.3% of world GDP USA 0.4%, Mexico 1.0%, Vietnam 13.6%Japan 2.2%, Korea 2.2%

Source: Petri ,Plummer and Zhai (2012)

April 2014Center for International Economic and Trade Governance15All these estimates depend very heavily on assumptions about what is liberalised and how this affects trade; these are EXTEMELY approximate15What is TTIP worth (A) Trade?April 2014Center for International Economic and Trade Governance16

Source: Francois et al , (2013)

RoW converges onto US-EU standards, thus reducing trade costs everywhere; everyone gains something% change in exports by 2027, high spill-oversWhat is TTIP worth (A) - GDP?April 2014Center for International Economic and Trade Governance17Source: Francois et al , (2013)

RoW converges onto US-EU standards, thus reducing trade costs everywhere; everyone gains something

% change in GDP by 2027, high spill-oversEffects on China - % of GDPApril 2014Center for International Economic and Trade Governance18

How realistic are these plans?Less than 50:50 chance of TPP or TTIP occurring effectively Lack of US Trade Promotion AuthorityOpposition probably growing in USA and in partnersBut high commitment from some TPP governmentsEU/US political challenges massiveApril 2014Center for International Economic and Trade Governance19Anti-trade lobbies - e.g. labour in USAAgriculture Japan, EUEnvironmentalists espec in EU (standards eroded), but also USA loss of policy spaceSmaller country governments Investor-State DS

19How to react at a world level?Mega-RTAs are discriminatoryMultilateralism has served the world well especially the smaller powersMore voice and rightsStrength in numbersComplete Doha and start on WTO 2.0Keep agenda relatively simpleCreate genuine alliances among challenger powersTry to make more use of Article 24 reviewsApril 2014Center for International Economic and Trade Governance20ChinaApril 2014Center for International Economic and Trade Governance21China is excluded Enter TPP?

ChinaApril 2014Center for International Economic and Trade Governance22China is excluded Enter TPP?

Judgement depends on probabilitiesBut these may change with Chinas strategies: If China expresses a willingness to enter greater chance of creation maybe better outcome (? unlikely)If China stands aloof maybe less chance of creation but maybe not if exclusion is an objective22China: Macro responsesEmerging market group Large growing marketShallower integration; Less demanding standards based on Chinas EU-ChinaCounter-force ?Constrain Europe options under TTIPBut what do you have to offer?April 2014Center for International Economic and Trade Governance23Emerging market group unattractive globallyalmost certainly not attractive to China in the long run23China: Micro responsesPress to be included in TPP?Likely influence on outcome smallPress for information? Not successful so farTherefore - wait and seeTry to keep standards-deep processes flexibleContinue domestic reform process anywayPress for WTO engagementEstablish US branches to use US lawApril 2014Center for International Economic and Trade Governance24Thank youQuestions and Comments?

April 2014Center for International Economic and Trade Governance25