trade disruption

Trade in Times of Crisis

Trade in Times of Crisis

In all, the pandemic has highlighted a range of challenges and gaps in our trade regime rules. It made clear that times of crisis are not the right times for trying to manage complex issues. Instead, it makes more sense to try to agree on likely steps that can be taken and on coordination mechanisms in advance of the next disaster. Fortunately, the UN’s Economic and Social Commission for Asia and the Pacific (UNESCAP) has already put together a great set of materials to help close the gaps. There is a handbook, online course materials, and a group of resource documents. But perhaps most important for trade officials, there is also a model chapter on trade in times of crisis that deserves to be widely inserted into ongoing regional trade agreements. This short chapter, about a dozen pages, would help during the next disruption by providing a consistent framework for working together with members. It does not address all avenues of trade disruption shown through the Covid-19 pandemic, including subsidies, but it does consider carefully key weaknesses of existing processes and attempt to provide greater clarity around allowable steps to resolve and manage crisis situations. It provides useful precision about what situations might trigger the use of the chapter provisions, helps define essential goods and services, addresses realistic challenges to trade facilitation, and provides the outline of an institutional structure to be utilized in times of crisis. Although the chapter, prepared by Runqiu Du and originally drafted by Tracey Epps, Danae Wheeler and Georgia Whelan, could be easily inserted into FTAs across the region without change, it might also be modified to better suit the specific needs and interests of members.

Setting Trade Policies in the Biden Administration

Setting Trade Policies in the Biden Administration

Of course, confirmation is only needed at the top. Restaffing the rest of the vacant posts, however, will also take some time. This includes restarting the pipeline for junior talent in various agencies. At the same time that staff are being rapidly hired or rehired, it will be important to figure out what these people are meant to be doing. Getting alignment on policy is always challenging. The Biden team inherits a disrupted trade and economic policy landscape as well. As Biden’s team members have been saying recently, it will take time to sort out policy priorities and determine next steps. This is particularly true for China policy, where some of the existing policies, like tariffs, are likely to remain in place while others might be adjusted, removed, or even toughened. Incoming staff members will need to spend time taking stock of what policies are in place, which have been partially implemented, which are clearly not working well, what impact any or all of these policies have had, and what opportunities and challenges remain. Biden has already called for a “worker centered” trade and economic policy objective. It remains unclear exactly how this outcome might be best met. Existing policies will need to be recalibrated to better fit revised goals.

How to Block Trade

How to Block Trade

As Covid plus a deteriorating global trade regime makes previously unthinkable actions possible, expect more actions to block trade. Some will try for creativity, but others will simply act and dare others to challenge their bad behavior. It is easier to take such actions, of course, at a time when the global trade dispute system is broken. Governments can continue to file claims against one another at the WTO. Absent a fully functioning system though, the “losing” party can simply sit on the verdict (“send it out into the void”) and make no change to any policy. Some bad behavior could, in theory, be constrained by a variety of regional or bilateral trade deals that often come with their own dispute settlement mechanisms. Most of these dispute systems have never been used, though, as governments have tended to trust the WTO system to resolve disputes whenever possible. It’s unclear how well these other mechanisms in the majority of trade agreements might fare in tackling tough disputes. A determined government is never likely to be constrained by the mere presence of a dispute settlement system. The system works only when members are willing to abide by the rules. The global trade problem is not just that the “court” system is not working, but that some of the members in the system don’t even seem interested in participating.

Pivoting the Business: Small Business Survival in Travel and Tourism

Pivoting the Business: Small Business Survival in Travel and Tourism

It might be assumed that MSMEs that deliver services to travelers will be unable to manage at all. As an example, if no one is coming to the visit the city, site or beach, what good are tour operators or local guides? However, smaller firms should not despair. For many companies, it is possible to pivot and offer travel and tourism services online. AirBnB, for instance, has been developing an innovative lineup of “experiences” from their local hosts that are in hot demand. Many of these offerings even come with substantial price tags for customers, allowing firms to generate revenue in a purely virtual world. It may even be the case that some firms offering extremely popular experiences make more money in the downturn than before, as a global audience can provide more customers than those requiring a physical presence. What do these travel experiences look like? Could be learning the secrets of Japanese whiskey, frying spring rolls with a street vendor in Bangkok, creating a storybook for the whole family with an author in Mexico, or taking a scuba “tour” with a local guide in the Maldives. Customers might sign up for virtual walking “tours” of far-flung locations like temples or forests in Bhutan or opt to make sangria with drag queens in Spain. Innovative offerings from creative MSMEs could dramatically expand the concept of travel, leaving customers even more eager to experience something similar in person once flights and travel resume. Destinations that weren’t anywhere on a personal “bucket list” could shoot up during a time of lockdown and travel disruptions.