After the signing of the first-phase trade agreement between China and the United States, the focus of domestic political opinion in the United States has once again returned to the impeachment case. The 2020 election campaign is less than 10 months away. The outside world is concerned that Trump will take the opportunity to rush to harvest other trade “victory” and rush to polish his golden paint signboard of “America first, do what he says” before the election. Trump, who attended the World Economic Forum in Davos in Switzerland on Tuesday and Wednesday (January 21 and 22), showed his two harvest goals to all walks of life.
One day before his departure, Trump, who was retaliating against a 100% tariff on US $ 2.4 billion in French goods due to a French digital tax threat, suddenly spoke to French President Macron, who would not attend the forum, and decided to “truce” and agree to work in the economy. The Organization for Development and Cooperation (OECD) is still expected to recognize the global network service taxation consensus, with France deferring digital taxes until the end of the year in exchange for the United States to stop the threat of tariffs.
This has sent a big signal for the thawing of US-European trade relations, as the European Union has repeatedly stated that if the United States levies taxes on France.
Harvesting goal one: US-Europe trade agreement
Although French Treasury Bruno Le Maire and U.S. Treasury Secretary Steven Mnuchin, who are together in Davos, have not yet reached a concrete foundational consensus on global taxation, the latter is more openly planning to implement Digital taxes like Britain and Italy threaten to retaliate with tariffs, but now that the US and France are in a truce, I believe Mnuchin’s move is just verbal pressure.
Trump himself met with European Commission President Ursula von der Leyen on Tuesday. After the meeting, Trump was also soft-handed and hard-handed, while praising Von Delaneen as “very good”, but on the other hand threatened that if the United States and Europe do not reach an agreement in the short term, they will be punished again by the threat of auto tariffs. “We expect to have an agreement that can be signed within a few weeks,” Von Delaneen said.
It can be seen that Trump may repeat the trick of the first phase of the China-U.S. Agreement, signing an agreement that allows him to promote the US-friendly agreement as his trade “victory”, and take it easy after the end of the election.
According to the EU ’s guidelines for trade negotiations with the United States, the two parties will only talk about industrial products and the regulatory provisions of the two sides, and specifically state that they will not talk about agricultural trade. However, since the EU’s regulation of agricultural products is one of the most dissatisfied points of the United States with bilateral trade, the negotiations between the two sides have made little progress.
However, EU Trade Commissioner Phil Hogan, who visited Washington last week, said the EU was willing to consider some concessions in agriculture, such as quarantine standards, to break the deadlock. Therefore, it may not be possible for the US-Europe trade agreement to be reached in the form of a US-Japan agreement in the short term, and the EU will slightly open up the market for US agricultural products.
Harvesting target two: WTO reform
Trump also met with the Director-General of the World Trade Organization (WTO) Roberto Azevedo on Wednesday and said after the meeting: “We will do something that I think is very dramatic.” He also claimed that Azevedo will visit Washington next week or next week with senior officials of the World Trade Organization to “work on it.”
Azevedo also said: “If the WTO is to play its role in today’s global economy, it must be innovative.”
The events or innovations Trump and Azevedo spoke of may be related to the WTO reform statement issued by the United States, the European Union and Japan in Washington last Tuesday (January 14). This statement is only three pages long, but focuses on the issue of “state subsidies”. In addition to tightening restrictions on various subsidies, the definition of state subsidies has been expanded, so that state-owned banks’ financing operations may also be regarded as subsidies-this Obviously there are China that pays more attention to the central control of the economic structure.
With the United States refusing to appoint a judge, the WTO’s appeal body is no longer functioning. Azevedo, of course, hopes to get Trump to change his mind. From these statements of Trump, it can also be seen that he does not completely refuse to change his mind, but to see how much space the WTO can give him to change.
However, WTO decision-making adopts a consensus-based system, and as long as one member country opposes it, no plan can be achieved. Therefore, Trump’s WTO reform may actually be difficult to achieve.
This does not mean that Trump has no room for operation. The reforms in the United States, Europe, and Japan can actually be carried out in the form of “Plurilateralism”, which is implemented by some WTO members in advance, and some of them that benefit others are automatically opened to other WTO members that have not joined. And the goal is to be able to join in the end. If the reforms of the United States, Europe, and Japan can be approved by the WTO Director General, such reforms may be implemented in disguised form in other member states through the looser rules of the WTO arbitration mechanism.
If the situation develops this way, the United States, which has always spoken of the WTO, will also allow Trump to call himself “the first US president to promote WTO reform.”
Of course, goals may not be achieved. However, these two major harvesting projects have little actual content, are very symbolic, and can be reached in the short term. They are indeed suitable for Trump to use in the next few months to enrich his “trade performance chart.”