Metropolitan Digital

The Conversation

  • Written by Charles Hankla, Associate Professor of Political Science, Georgia State University

Just as America’s trade war with China may be winding down, its troubles with Europe seem to be growing.

On Oct. 11, President Donald Trump said that the United States and China had agreed[1], in principle, to “phase one” of a trade deal. Although the details are murky, the deal appears to suggest small wins for both sides and a cessation – for now – in tariff escalation.

Three days later, the U.S. imposed US$7.5 billion of sanctions[2] on European Union products – such as Scotch whiskey and French cheese – to protest the EU’s subsidies of aviation giant Airbus.

But there is one notable difference between these two conflicts.

Trump has been managing the dispute with China largely outside the international legal framework regulating trade. Though he has employed various justifications for his actions, many experts agree[3] that they violate international law. By contrast, Trump’s European tariffs were sanctioned by the World Trade Organization. They are thus indisputably legal.

As a scholar of trade policy[4], these two simultaneous moves – one outside international law and the other inside it – fascinate me. They show that Trump’s approach to trade is not so much anti-establishment as it is opportunistic.

A tale of two trade talks

The deal with China, which that country hasn’t yet formally endorsed, appears to include[5] a promise by Beijing to purchase up to $50 billion of additional U.S. agricultural products and to revisit its foreign investment and intellectual property laws.

In return, the White House has suspended the imposition of its threatened tariff hikes, which had been due to take place on Oct. 15.

Trump claims to have achieved more success with his aggressive stance during the 18-month trade war than prior presidents could boast when playing by the rules. It is ironic, then, that his trade sanctions against Europe resulted from over a decade of work[6] by previous administrations and stuck to the book.

The United States has long maintained that European countries subsidize Airbus, while the European Union has claimed that Washington uses defense spending to do the same for Boeing. The EU may soon get permission from the WTO to impose its own trade sanctions on U.S. products if that case goes the way it is expected to[7].

Trump is flouting global trade rules with China yet embracing them with the EU – here's why it matters U.S. President Donald Trump shakes hands with Chinese Vice Premier Liu He. AP Photo/Andrew Harnik

‘Forum shopping’

So why is the U.S. following the rules in one case but flouting them in another? Put simply, I believe Trump is “forum shopping.”

Forum shopping is a term coined by international relations theorists[8] to explain why countries use varying international organizations, or none at all, to conclude similar deals. In all sorts of policy areas, these theorists argue[9], states will choose to negotiate in forums that they believe will stack the odds in their favor.

That’s why the U.S. chose to work within the rules on Europe – it knew they were on its side – but beyond them in dealing with China.

In the Europe dispute, the issue is quite definable: The EU’s Airbus subsidies are a likely violation[10] of global trade rules.

For this reason, the administration has evidently concluded that the smart approach is to follow through with the legal process.

The China dispute is different. It encompasses a wide range of issues – from intellectual property theft to currency manipulation – that would be difficult to adjudicate comprehensively. More to the point, the key Trump complaint – the trade imbalance[11] – is not in itself even a violation of international trade law.

The legal route would have taken a long time and may well have gone nowhere. Given Trump’s political need to confront China, such an approach was too risky to consider.

Long-term consequences

But forum shopping has costs.

When even the principal architect of the international trading rules – the United States – only appeals to those rules in search of its own interests, the system’s legitimacy[12] is eroded.

Why should Americans care?

There is a reason that the development of an international trading system has been backed by Washington for seven decades – it is extremely useful.

Having a level playing field in trade, based on clear rules, open information and non-discrimination has played a key role[13] in American, and global, economic growth. It has also encouraged interdependence and reduced conflict[14]. Chucking that system for a quick result as Trump has done in the case of China is a mistake.

Ultimately, for legal norms to function, I believe leading players like the U.S., China and the EU must all adopt a more enlightened, long-term view of their interests. They must be willing to recognize the authority of international rules even if they are tempted to ignore them in individual cases.

Let’s hope that future presidents will take a broader view and recognize America’s interests in a rule-based, cooperative international system, both in the trade arena and beyond.

[ Deep knowledge, daily. Sign up for The Conversation’s newsletter[15]. ]

References

  1. ^ said that the United States and China had agreed (www.bloomberg.com)
  2. ^ U.S. imposed US$7.5 billion of sanctions (fortune.com)
  3. ^ many experts agree (www.cnbc.com)
  4. ^ scholar of trade policy (scholar.google.com)
  5. ^ appears to include (www.nytimes.com)
  6. ^ over a decade of work (ustr.gov)
  7. ^ it is expected to (theweek.com)
  8. ^ international relations theorists (onlinelibrary.wiley.com)
  9. ^ these theorists argue (georgetown.app.box.com)
  10. ^ are a likely violation (www.nytimes.com)
  11. ^ trade imbalance (www.brookings.edu)
  12. ^ the system’s legitimacy (www.theglobeandmail.com)
  13. ^ has played a key role (www.thebalance.com)
  14. ^ reduced conflict (theconversation.com)
  15. ^ Sign up for The Conversation’s newsletter (theconversation.com)

Authors: Charles Hankla, Associate Professor of Political Science, Georgia State University

Read more http://theconversation.com/trump-is-flouting-global-trade-rules-with-china-yet-embracing-them-with-the-eu-heres-why-it-matters-125399

Metropolitan republishes selected articles from The Conversation USA with permission

Visit The Conversation to see more

Entertainment News

Phish’s 2018 Fall Tour to Conclude with Four Performances at MGM Grand Garden Arena

LAS VEGAS (May 15, 2018) – Phish, the American rock band known worldwide for its dedicated fan base, recently announced a 14-date Fall tour which will conclude in Las Vegas with four performances at...

Blane Ferguson - avatar Blane Ferguson

Dave Damiani and The No Vacancy Orchestra are “Bending The Standard”

Tina Sinatra, Dave Damiani & Landau Murphy Jr. celebrate 100 years of Frank Sinatra in Los Angeles There have been stories about independent filmmakers, but how about the independent big band...

Tom Estey - avatar Tom Estey

Billboard Chart-Topping Saxophonist VANDELL ANDREW Returns With New Single

From the vantage point of 30, his age and the name of his infectious, sensually grooving new full length album, Vandell continues to be fueled by the impressive roar of accolades and achievements th...

Metropolitan Digital - avatar Metropolitan Digital

Metropolitan Business News

Office Cleaner Takes Ownership of the Neglected Dishwasher

In an office that a dishwasher is being used communally, it is pretty difficult to set rules on how a certain appliance needs to be taken cared of. A dishwasher is a responsibility of no one until you...

News Company - avatar News Company

Amazing tips to become a successful trader

Everyone is working very hard to secure their financial freedom. Most of the people find it hard to support their family even after having a 9-5 day job. For this very reason, people often look for ...

News Company - avatar News Company

Best Practice For Young Professionals Working Through HR Internships

The industry of human relations is vitally important to the health and prosperity of a business.   Whether they are operating in textile manufacturing, accounting, sports, IT development or hospit...

News Company - avatar News Company

4 Easy Steps To Gaining SEO Momentum For Your Business

SEO (search engine optimisation) does not have to be a tiresome and overbearing exercise that diverts attention away from the core functions of a business.   SEO Shark affirms this as a smart and ...

News Company - avatar News Company

How to Manage An SEO Project On Limited Funds

SEO operators don’t need thousands upon thousands of dollars to become successful.   What SEO practitioners needs more than ever is the skills and diligence to identify problems that are acting a...

News Company - avatar News Company

An Introduction To Coworking For Australian Business Owners

Advancing technology is bringing with it great advantages in communications and networking, and to survive in business you need to keep up. With the rate at which everything changes these days, that...

News Company - avatar News Company

Holidays

New Baggage Regulations to Help Aussie Parents Travel with Infants

Travelling around the globe has never been easy, especially when infants tag along for the trip. One of the main issues that parents often have to deal with is the need to bring extra item...

News Company - avatar News Company

Maya Beach Opens to Tourists

Despite recent reports that Southern Thailand's famous Maya Beach will close for three months this year, in fact no decision to this effect has been made by Thai authorities. Phi Phi Nati...

Maevadi Rosenfeldt - avatar Maevadi Rosenfeldt

SKYN LAUNCHES GUIDE TO THE BEST PLACES TO GET INTIMATE

SKYN®, Australia’s best-selling condom*, today launches its very first SKYN® Places of Intimacy Guide.   Curated in partnership with GQ Magazine and Conde Nast, the Guide features 30 lux...

SKYN - avatar SKYN