Article: US-China Trade War: A Way Out?
The on-going trade war between the US and China has posed challenges to the existing multilateral trading system and evoked discussions among academics and experts. The US-China Phase One trade deal signed on 15 January 2020 seems to be a good sign of mitigating the tensions, but it actually does not address the fundamental problems that triggered the trade war.
A thought-provoking Joint Statement entitled “US-China Trade Relations: A Way Forward” (the Statement) issued by a group of eminent Chinese/US economists and legal scholars in October 2019 has proposed a framework for the bilateral trade talks going forward. However, in the co-authored article entitled “US-China Trade War: A Way Out?”, Herbert Smith Freehills China International Business and Economic Law (CIBEL) Centre member Dr Weihuan Zhou and Associate Professor Henry Gao of Singapore Management University’s School of Law have argued that the Statement provided little substantive guidance for the parties to resolve the true problems and may further undermine the current rules-based multilateral trade system.
The authors have proposed an alternative framework which “seeks to strike a proper balance between the preservation of policy space and the regulation of protectionist measures, a balance that is better-aligned with the approach taken under the WTO.”
Different from the Statement, Dr Zhou and Associate Professor Gao’s approach avoids breaching the existing WTO rules and also encourages the parties ultimately re-invigorating the multilateral trade negotiations under the WTO through inclusive negotiations.
“The fact that both the bilateral and the multilateral negotiations now face new challenges does not mean that they are insurmountable.” Dr Zhou and Associate Professor Gao wrote in the article, “Our framework provides a starting point for the bilateral negotiation which should, in our view, contribute to and form an integral part of further negotiations on the multilateral basis.”
Last but not least, the team mentioned that the US-China trade war “also presents an excellent opportunity to reflect on the shortcomings of the current system and reform the rules of international trade,” –
“One should never let a good crisis go to waste.”
The article will be published in the October 2020 issue of the World Trade Review. Full text is available below.