Today's col. This Macron-in-China thing. He has form, 2 years ago alienated half the EU pushing a dodgy investment deal with China. EU assertiveness isn't foiled by manipulation from DC or Beijing but by internal divisions his approach doesn't fix.🧵1/n

ft.com/content/b57c5a… This was the Comprehensive Agreement on Investment (CAI), driven through by Angela Merkel literally in the dying hours of Germany's presidency of the EU member states in December 2020 while the incoming Biden admin was still in transition. 2/n

ft.com/content/cfe4b5…

Today's Trade Secrets. The UK, that noted Asia-Pacific nation, is joining the Trans-Pacific Partnership. Entry talks have been a rough ride & it's conceded things (palm oil & beef imports) it might get flak for. Worth it in the end? I say no. A🧵: 1/n

ft.com/content/f3f6d0… The narrative is all "buccaneering free-market Global Britain making its mark in the fastest-growing region on earth", blah blah. Keeps the pound-shop David Ricardos in the right-wing British think-tanks happy. In reality the gains are utterly minimal (0.08% GDP). Why? 2/n

Today's Trade Secrets and a 🧵. Biden's new chip export controls are, unlike Trump crashing clumsily about, a v serious attempt to decouple US/China in tech and more. TBF they tried hard to get allies like EU on board but then went it alone. RISKY. 1/n

ft.com/content/a24a84… Not just obvious stuff (China retaliates on rare earths, ramps up manufacturing basic chips and floods world market to create dependence). Also combining it with Biden's onshoring industrial policy, Chips Act etc increases chance of ruptures in supply network. 2/n

Reupping Trade Secrets from this morning with a thread. A lot of complaints around the world about the strong dollar and high Fed rates. But US unlikely to be moved and go for a 1985 Plaza-style deliberate weakening for a while yet. 1/n

ft.com/content/e4ac19… Some countries seeing their currencies tank are obviously partly themselves to blame (Turkey seems to be setting monetary policy, and the UK fiscal policy, on a dare). Overall the rise of the dollar is entirely explicable but the magnitude looks excessive. 2/n

Your occasional reminder that Kwasi Kwarteng's PhD thesis was literally on the subject of the debasement of currency in England.

repository.cam.ac.uk/handle/1810/25… Basically UK fiscal policy at the moment is just a doctoral fieldwork assignment gone horribly wrong.

Seeing this graphic doing the rounds a lot WRT to the UK-Australia trade deal. It's really quite misleading. Here's why. AFAICT (happy to be corrected) most of these issues are either legally unchanged as a result of the deal or will make no difference anyway. Specifically: 1/n - Australia's really not going to be exporting any significant amount of chicken or pork to the UK - it's too far away and they're not a low-cost producer.
2/n

Thread to follow today's Trade Secrets re vaccine patent waivers. Lots of people (including me) have noted that negotiating a waiver to WTO rules will take months & IP isn't the main constraint on expanding vaccine production anyway. So who cares? (1/n)

ft.com/content/0930fe… Well, if I and others (eg the great @snlester) are right, this is mainly aimed at creating leverage over the big pharma companies to share technology and spread production faster. (Also a nifty bit of PR to shift the conversation off US export restrictions.) 2/n.

Massive stuff, though note it’s not supporting the very broad waiver covering all sorts of covid treatments proposed by India and South Africa, which is in any case being revised. But still, USTR crossing Big Pharma? Massive.

https://twitter.com/ambassadortai/status/1390021205974003720

This is my recent take on why a limited and partial waiver might be worth a go. (I am not claiming credit for the US’s change of position.) ft.com/content/b3c2ae…

V good points but overall I stick with the conclusion that this is a v risky deal.

1. It’s overstating it to say that COM now has final say over investment. FDI screening remains a MS competency. COM has had to take a v secondary supporting role over Huawei and 5G.

1/n

https://twitter.com/IanaDreyer/status/1346196787682566145

2. Subsidy control we’ll wait to see what happens. But more generally it’s going to be v hard to override a determined MS’s views on investment, especially given how politicised this whole thing has become.

2/n

The chart-topping band of @ChrisGiles_ @jimbrunsden (me on drums) have a piece up about the Brexit level playing field stand-off. But here's the thing: the opacity surrounding these (as so many) trade talks is making things much worse. Quick 🧵 (1/n)

ft.com/content/2d2369… One of the things that struck me talking to experts about this was a lot of hedging about "this is what I think the EU means" and "this is what the UK appears to believe". There's lots of jargon (non-regression, ratchet, equivalence etc) capable of multiple meanings. (2/n)

WTO director-generalship latest: looks like Nigeria have shaken things up by nominating Ngozi Okonjo-Iweala for the DG position. (Credit to
@Politico
who got their story out earlier this morning btw pro.politico.eu/news/nigeria-n…) 1/n Here's the nomination paper. NB involved de-nominating a Nigerian candidate with a lower profile & unlikely to succeed. 2/n

Further to Today's Trade Secrets (ft.com/content/07f928…)and offshoring - the WTO director-general issue we'll come back to in coming days - it's worth having a look at this triumphalist Robert Lighthizer op-ed on reshoring in the NYT this week: nytimes.com/2020/05/11/opi…

1/n Lighthizer cites a report by Kearney (mgt consultancy) showing 2019 was a bumper year for reshoring in America, imports from low-cost countries falling relative to US manufacturing output. *Relative to*. Remember that. *Relative*.

2/n

John Bolton's, erm, "ambitious" sectoral trade deal idea might escape the clutches of WTO law for a while but would run smack into the US Congress. In fact it's mainly a foreign policy signal(from US side) and to sway gullible MPs and voters (from UK). Me: ft.com/content/34c5bb… NB v quick thread on interesting wrinkle on attitudes to Ireland and UK in Washington. During the Troubles, State Dept and some foreign policy hawks were always more pro-UK for natsec reasons, as opposed to the largely Dem Irish-American caucus on the Hill. 1/n

There’s a reason the US hasn’t called China a currency manipulator since the 1990s. It carries almost no sanction and thus merely makes you look angry and weak. So naturally Donald Trump went there. Me: ft.com/content/40a877… Also a quick thread on trade and currencies. 1/n There are almost no binding rules to stop govts manipulating fx, despite vast effort by the Bush II and Obama admins to turn the IMF into a global currency sheriff and the G20 into its posse. (The US did have a reasonable case at the time, but failed to carry the day.) 2/n

OK I've done this on and off, now starting a regular series:

NO-ONE COULD HAVE PREDICTED THIS: unintended yet entirely foreseeable results of boneheaded trade policy.
No. 1 in a series NO-ONE COULD HAVE PREDICTED THIS: unintended yet entirely foreseeable results of boneheaded trade policy
No. 2 in a series

In wake of Trump in UK, my Free Trade newsletter today is on global regulation & the fanciful Brexiter notion that WTO rules mean Britain can trade seamlessly with the EU even if it leaves the Single Market. Thread (WARNING CONTAINS CHLORINE CHICKEN): 1/n ft.com/content/b40528… The argument is that product rules are increasingly set globally and that WTO law, specifically on technical barriers to trade (TBT) and sanitary/phytosanitary standards (SPS), constrains governments from setting eg food regs not based on scientific evidence. 2/n

Oh God, no. A return to large-scale agricultural dumping in the guise of food aid. A proven way of undercutting farmers and destroying local markets in developing countries. You would do less damage just chucking the stuff overboard in the middle of the Atlantic. Even the World Food Programme, whose MO for decades was basically shovelling American ag surpluses at developing countries (sometimes the right solution tbf, but heavily overused) has moved away from this. www1.wfp.org/food-assistance

Those US negotiating objectives for a UK trade deal. What do you reckon this bit is referring to? (Clue: Nye Bevan.) And BTW - "procedural fairness" can be a bit of a Trojan horse.
"Procedural Fairness for Pharmaceuticals and Medical Devices:
- Seek standards to ensure that /mf / government regulatory reimbursement regimes are transparent, provide procedural fairness, are nondiscriminatory, and provide full market access for U.S. products."
ustr.gov/sites/default/…

RARE GOOD NEWS ON UK TRADE POLICY KLAXON: UK gets permission to remain a member of WTO government procurement agreement, retains access to $1.7 trillion public tenders market. Story up on ft.com soon. Tweetstream on post-Brexit UK trade policy follows. 1/n Three announcements on UK post-Brexit trade this week. One provoked outrage; two didn’t. Relatively uncontroversial ones: 1. UK stays in WTO GPA, overcame objections from US, Moldova, others. 2/n

Roses are red,

Violets are blue.

Sugar is an interesting example of how what ought to be an efficient global commodity market has historically been distorted by trade policy interventions, often based on political economy reflecting path dependency, an obvious example... 1/n ...being the EU sugar regime which for a long time held up the European relative to the world price through a combination of tariffs and domestic production quotas in order to maintain a northern European sugar beet industry which was in itself a legacy of self-sufficiency... 2/n

A few morning-after thoughts on last night's EU-US trade announcement. First up: bold move from the Commission. A big surprise to many including members of Congress and EU member states (and, rather less importantly, me). 1/n ft.com/content/b97410… Some of the deal can easily be achieved as they are meaningless - the soybean and LNG parts, which the EU is already doing. If Trump continues to believe these are concessions he is v gullible indeed, and hats off to the Commission for fooling him. Let's no-one tell him, eh. 2/n