2012-03-07

Protectionism update

The U.S. and China are again in conflict over the latest U.S. actions.

US trade bill 'breaks W.T.O. rules'
Claiming that a US trade bill targeting Chinese exports violates World Trade Organisation rules, China's commerce minister said yesterday that his country was not obligated to follow the mandate.

US President Barack Obama is set to sign the bill into law to empower the US Department of Commerce to impose duties on subsidised goods from China and Vietnam, a move that the White House says will protect American jobs.

China is also studying the US-initiated free-trade agreement known as the Trans-Pacific Partnership, which according to some Chinese academics sets standards that Beijing would not accept and were aimed at isolating the world's second-largest economy and largest exporter.
Protectionism will be a slow burn of various maneuvers designed to buy time or pass WTO regulations, until social mood is negative enough that nations are willing to drop out of the WTO or blatantly ignore its rules. These changes have little effect today, but it's a slow, non-linear process of setting the stage for the final break. The more acrimonious the trade relationship when social mood falls sharply, the better the chances that a full blown trade war will erupt.

No comments:

Post a Comment