In an exclusive interview with the first finance and economics reporter, Tu Xinquan, President of Chinas WTO Research Institute of the University of foreign economic relations and trade, said that Bidens election is a good thing for both the appellate body and the candidates for the WTO director general: the appellate body will probably be restored, and Biden has no reason to oppose the new WTO Director-General candidate.
At the same time, Tu Xinquan believes that the Biden government can still do some work in terms of tariff policies before that. There is no need to change the policy, just change the implementation strength of the policy, and the implementation force is all discretionary, which is the case for all governments.
And these things dont have much political impact. Because these requests are (to be) put forward by American enterprises and American importers, and are made to protect the interests of American enterprises, he explained
First finance and Economics: after the results of the U.S. general election come out, do you think this change in the US political arena will promote the WTO to break the deadlock?
Tu Xinquan: I think the change in American politics is a very important factor. The dilemma that WTO is facing now, or the survival crisis, should be said to be caused by the United States or trump administration. Although before the trump administration came to power, the WTO was not perfect, there were also problems and difficulties, but at least no hostage doubted whether the WTO should exist, but the attitude of trump government was that WTO should not exist.
Therefore, many of the policies adopted by the trump administration are fatal to the WTO. Intuitively, one is the problem of the Appellate Body: the trump administration obstructs the appellate body from selecting new judges by using the so-called consensus principle.
In my opinion, there is still considerable personal color in this matter. Trump does not necessarily know much about (WTO), but he hates other peoples restrictions on him and the United States, so he hopes to abolish this independent international judicial system.
But for Biden, I dont think its a big problem. On the one hand, Biden recognized internationalism and multilateralism. On the other hand, objectively speaking, the appeal bodys restriction on the United States is not so great.
The reason lies in the fact that the binding force of WTO dispute settlement mechanism is still soft, not rigid in real sense. After the WTO ruling comes out, especially for countries like the United States, if they do not implement it, others may not have much choice, unless they apply for authorization (tariff) retaliation like the European Union, but most countries will not do so.
From the past experience, as of 2018, the WTO has about 21 applications for authorization of retaliation, 15 of which are against the United States, but the United States just does not implement it.
Of course, if the United States does not implement it, on the one hand, it may not be unwilling, but the executive branch wants to change it, but Congress will not pass it. In some other cases, it may not want to change it and feel that this policy still needs to be used. As far as the United States is concerned, there is no substantial harm other than losing face.
To sum up, from a rational point of view, the appellate body has no harm to the United States, only benefits. If Biden holds such a rational and multilateral attitude, it should restore the appellate body. I personally think it will be a high probability event.
Tu Xinquan: I share the view of an expert from the US side, that is, the trump governments opposition to the appointment of the director general is a consistent policy, that is, it has always been to suppress and undermine the WTO. Therefore, to deny the appointment of the director general is also to undermine the WTO. Therefore, my own understanding is that even if the candidate of South Korea is recommended in the end, he will object: it does not depend on who this person is.
And lethizer also believes that multinational companies are bad for the United States. In his several speeches, he pointed out that he believed that this is not the time for multinational companies to pursue efficiency, but to pursue security and domestic employment. In its view, WTO is an old-fashioned representative of globalization and needs to be suppressed.
Therefore, I think it is an excuse for the United States to support South Korea. As for Biden, although there are some differences in the Democratic Party on globalization, Biden supports globalization. At the same time, he also needs allies, including Europe, Africa and Japan, who support Africa. Why should he oppose it? At the same time, a Director-General will not have any influence on the United States. Everyone should be the same.
To sum up, as far as the Biden administration is concerned, I think that the United States can raise its hands to agree to the next WTO Council meeting. I think it is certainly beneficial for the WTO to be in power under the Biden administration.
First finance and Economics: after Biden came to power, what level can Bidens free trade policy go back to?
Tu Xinquan: my judgment is based on the current state of Biden team. Im afraid it is very difficult to make great achievements in trade policy. On the one hand, because of the polarization in the United States, there are differences between the Democratic Party and the Republican Party. On the other hand, there are also great differences within the Democratic Party itself. The relationship between the so-called progressives and the establishment faction is also very delicate. Therefore, it is really difficult to say that there is any big move in trade.
Specifically, it is impossible to reach the level of the Clinton administration. So can it reach the level of the Obama administration? It may also have to be analyzed in detail. For example, at present, various circles are discussing whether the United States will return to the comprehensive and progressive trans Pacific Partnership Agreement (cptpp). Personally, I think it is very difficult. Maybe Biden will put forward a similar policy direction (which will not be very soon), but it is also very difficult for them to complete it. So is the case with TTIP.
During her election campaign, Hillary Clinton once said that she would not accept the current version of the trans Pacific Partnership Agreement (TPP), but at that time, wasnt that version that Clinton talked about as secretary of state? Thats what Im saying. The left-wing populists in the Democratic Party are also against free trade, but the Democratic Party itself needs to win over this wave of power. Judging from the current trend, this wave of strength is stronger, so the greater resistance within the Democratic Party may be due to its own.
First finance and Economics: but can we cancel some previous policies? For example, to make adjustments on issues such as tariffs?
In addition, we can not go to trial one by one, but can be reviewed by one industry together. All these can be operated in administrative procedures, and do not need the approval of Congress. We just need to adjust the procedures of the US Department of Commerce. This is a discretionary field in itself, and these matters will not cause too much political impact. First finance and Economics: why? Tu Xinquan: because these requests are (will be) put forward by American enterprises and American importers, and they are made to safeguard the interests of American enterprises. For example, we can operate in this way on both investment and regulation issues: there is no need to change the policy, only to change the implementation of the policy, and the enforcement force is discretionary, which is the case for all governments. To sum up, if we really want to normalize the economy, there are many measures that can be taken, which are also within Bidens administrative power. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931
In addition, we can not go to trial one by one, but can be reviewed by one industry together. All these can be operated in administrative procedures, and do not need the approval of Congress. We just need to adjust the procedures of the US Department of Commerce. This is a discretionary field in itself, and these matters will not cause too much political impact.
To sum up, if we really want to normalize the economy, there are many measures that can be taken, which are also within Bidens administrative power.