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From “China Shock” to deglobalisation shock: China’s WTO accession and US economic engagement 20 years on

I have a new report out with USSC, From “China Shock” to deglobalisation shock: China’s WTO accession and US economic engagement 20 years on.

Main points are as follows:

• China’s accession to the World Trade Organization (WTO) in 2001 was an important element of its growing integration into the world economy, as well as its domestic economic reform program dating back to 1978.

• In terms of access to US markets, accession only served to make permanent access China enjoyed since the 1980s.

• “China shock” literature highlights the number of US manufacturing jobs lost to import competition from China in previous decades.

• However, a broader assessment of the economic impact of the “China shock” suggests it has been a net positive for the US economy.

• US policymakers are increasingly critical of the role of the World Trade Organization and its failure to discipline China’s trade and industrial policies, but Australian policymakers see G7-led WTO reform as a key element to push back against China’s coercive economic diplomacy.

• President Trump’s trade war and sanctions against China led Chinese elites to equally question the extent of economic interdependence with the United States. President Xi Jinping revived the Maoist concept of “self-reliance,” explicitly citing the rise of foreign unilateralism and trade protectionism as a motivation.

• Far from calling out and disciplining China’s behaviour, President Trump’s trade policies, maintained by the Biden administration, have encouraged China to double-down on its state-led development model and strategic industry and trade policy, while potential multilateral solutions and processes have been neglected and under-utilised.

• The growth in discriminatory trade measures among G20 economies since the global financial crisis in 2008 demonstrates that the problems in the multilateral trading system are not specific to China.

• A key to restoring domestic political support for US leadership of the multilateral trading system is to reframe that leadership in terms of strategic competition with China around the rules and norms of the global economy.

• Effective US leadership of the multilateral trading system would not only promote US foreign policy objectives such as prosecuting its strategic competition with China but would also discipline US domestic economic policy in ways that better serve its economic interests. It also provides a rules-based framework to manage trade frictions arising from climate mitigation under the Paris Agreement and growth in the digital economy.

posted on 24 January 2022 by skirchner in Economics, Free Trade & Protectionism

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Australia has become a net exporter of human and financial capital

I have an op-ed in the AFR noting that Australia has become a net exporter of human and financial capital. I argue that reversing these net outflows should be a priority for post-pandemic recovery. Full text below the fold. Note AFR is responsible for ‘savings’ instead of ‘saving’!

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posted on 22 December 2021 by skirchner in Financial Markets, Free Trade & Protectionism, Population & Migration

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China’s WTO Accession and US Economic Engagement 20 Years On

I have an article in Australian Outlook marking the 20th anniversary of China’s accession to the WTO and recent debates about US economic engagement with China.

posted on 09 December 2021 by skirchner in Free Trade & Protectionism

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Omicron is the least of the problems for global trade

I have an op-ed in the AFR noting that logistics are the least of the problems facing the WTO’s MC12 when the world’s two largest economies no longer seek greater integration.

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posted on 30 November 2021 by skirchner in Free Trade & Protectionism

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A Geoeconomic Alliance: The Potential and Limits of Economic Statecraft

I have a new report out with the United States Studies Centre, A Geoeconomic Alliance: The Potential and Limits of Economic Statecraft. The report examines the history and application of economic statecraft and its relevance to the Australia-US alliance and US-China strategic competition. An important theme that emerges from the report is the limits to economic statecraft in pursuing geopolitical objectives. In particular, China’s economic statecraft has prompted defensive reactions in target countries, including strengthening cooperation with the United States.

There is a short version in Australian Outlook.

posted on 30 September 2021 by skirchner in Economics, Foreign Affairs & Defence, Foreign Investment, Free Trade & Protectionism

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Countering China’s trade coercion should be alliance agenda

I have an op-ed in the AFR arguing that China’s economic statecraft, including its attempted coercion of Australia, has mostly been unsuccessful in promoting its geopolitical objectives and may prompt a collective allied response.

posted on 21 September 2021 by skirchner in Economics, Foreign Affairs & Defence, Free Trade & Protectionism

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The US is central to this China trade quarrel

I have an op-ed in The Canberra Times on why Australia-China trade tensions are as much about our trade and industry policy as they are about our foreign policy.

posted on 25 May 2020 by skirchner in Free Trade & Protectionism

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Birmingham on thin ice challenging China to take Australia to the WTO

I have an op-ed in the AFR arguing our barley producers are just as much casualties of Australian industry and trade policy as they are of Chinese foreign policy. As one trade lawyer put it to me, China will wait for Australia to launch a WTO case, then retaliate with WTO complaints against our duties on Chinese imports and negotiate the cases jointly at the WTO.

posted on 15 May 2020 by skirchner in Free Trade & Protectionism

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Failure to converge? The Australia-US productivity gap in long-run perspective

I have a new report out with the United States Studies Centre on the Australia-US productivity gap in long-run perspective.

The report discusses the relationship between US and Australian productivity and how the openness of the Australian economy has allowed us to import productivity trends from the global frontier represented by the United States.

A key implication is that the globalisation of the Australian economy is an important determinant of Australian productivity growth. The slower pace of globalisation since the mid-2000s explains the slowdown in productivity growth in ways that competing explanations do not.

The report concludes that re-establishing and improving Australia’s international connectedness must be a priority for Australian policymakers in the aftermath of the pandemic.

posted on 16 April 2020 by skirchner in Free Trade & Protectionism

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US-China trade deal is spin for Trump’s failed protectionism

I have an op-ed in the AFR on the US-China ‘phase one’ trade deal noting its lack of substance in law and economics. To the extent that third parties like Australia are adversely affected by trade diversion, they could mount a case against China at the WTO.

posted on 23 January 2020 by skirchner in Free Trade & Protectionism

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US protectionism a costly failure

I have an op-ed in the AFR explaining why the ‘phase one’ US-China trade deal exemplifies the costly failure of President Trump’s protectionist trade diplomacy.

posted on 17 December 2019 by skirchner in Free Trade & Protectionism

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Could the US-China trade deal save or sink Trump?

I talk to the United States Studies Center’s @2020VisionCast podcast about last week’s tentative trade deal between the US and China, US Commerce Secretary Wilbur Ross’s visit to Australia and other topics.

posted on 16 October 2019 by skirchner in Free Trade & Protectionism

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Trump’s fake trade deal comes at a high price for global economy

I have an op-ed in the AFR on the tentative trade deal the Trump Administration has negotiated with China. While partially forestalling further tariff increases, enormous economic damage has already been done and will get worse in 2020.

posted on 14 October 2019 by skirchner in Free Trade & Protectionism

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Why a US-China deal won’t end the trade war

With the US-China trade talks on the brink of collapse, I have an op-ed in the AFR on why a trade deal won’t resolve uncertainty over tariffs

posted on 09 May 2019 by skirchner in Free Trade & Protectionism

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Debate Papers: Will the global trading system survive President Trump’s tariffs

In the latest installment of the United States Studies Centre’s Debate Papers series, Alan Oxley takes the affirmative and I take the negative on whether the global trading system will survive President Trump’s tariffs.

posted on 04 September 2018 by skirchner in Free Trade & Protectionism

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