US-China Decoupling: Implications for Asia

US-China Decoupling: Implications for Asia

While firms have shifted some production already out of China, it is economically risky for companies to completely ignore the unique advantages that China offers including its quality infrastructure and sizable domestic market, which serve as strong incentives for firms to stay put. Most companies that believe they may be exposed to an ongoing set of trade tensions between the US and China have engaged in internal reviews and scenario planning. COVID-19 has both put a hold on and, paradoxically, accelerated some of this thinking. While the pandemic has made it difficult for many companies to focus on strategy not directly related to immediate survival and management of a series of supply chain disruptions caused by market shutdowns, it has also amplified the risks of potential exposure to new challenges. Every company has begun talking about building more resilience into their systems. What, exactly, such resilience will mean is less clear. For some, it means holding more inventory. For others, it means identifying key chokepoints in the supply chain and looking for additional sources of supply to lower risks in these specific aspects of the chain. For others, it means shifting production closer to final markets to reduce disruptive effects caused by border closings and other specific obstacles. At this point, however, most firms have already instituted supply chain reshuffling between internal locations, if such options are available. For example, companies that have overlapping capabilities in multiple locations have ramped up production in some markets while lowering production elsewhere. Internal swings to mitigate risks have already been put in place wherever possible.

The Critical Role of Qualifications in Supporting Student and Worker Movements

The Critical Role of Qualifications in Supporting Student and Worker Movements

It is therefore necessary to have some common standards and qualifications in order for governments to adequately assess the opportunities and risks that can come with the movement of any specific individual. But this is easier said than done. In regions like ASEAN, governments have adopted different approaches to the management and recognition of qualifications and qualification bodies. Some ASEAN member states have established comprehensive National Qualifications Frameworks (NQF) the provide a comprehensive overview of the structures and activities that led to the award of qualifications and recognition of learning outcomes, while others have yet to develop national qualification system at all. This makes it challenging to understand, compare and evaluate qualifications between countries. An inability to reference, compare and recognize different qualification systems will become more complex in a post-COVID environment, with the proliferation of academic and professional online learning. While online education opens the door to thousands of professional and academic certifications across the world, it also complicates the process of certifying and recognising multiple qualifications.

An Obsession with Building Trade Platforms

An Obsession with Building Trade Platforms

My bleak assessment of the odds of government-led platforms does not mean, however, that governments have no role to play in encouraging the growth of digital trade in their domestic economies. Rather than invest money in building flawed platforms, governments need to focus with laser-like intensity on building the right domestic infrastructure and policy settings to support digital trade. For many governments, this starts with clear knowledge and understanding of what the digital economy looks like today and what sort of support will be needed for the future. Officials need to remember that firms deliver both goods and services online and build systems to support both types of companies. Another default decision made by many governments seems to be to insist that individuals be given coding skills. If companies are going to be competing online, it makes sense to officials that firms need the ability to craft webpages, apps, and other complicated pieces of programming. While this is not entirely wrong, for most smaller firms today, there are already ample free or low-cost solutions that solve most basic needs for companies moving online. Many firms no longer need a website at all, but can set up virtual storefronts on a range of platforms.

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.

The WTO Needs Reform, But There’s a Context

The WTO Needs Reform, But There’s a Context

Ultimately, there was really only one compelling idea: empower members and advocates from around the globe to interact within an informed context of trade and work with the institution as it actually existed. It was—and remains—a fundamental point. The WTO is currently winnowing down candidates to fill the vacant Director General post and considering a wide range of reform proposals and suggestions. The institution’s faltering legal system just ruled in a dispute between two of the largest members in the system, setting up another round of inquiries into the health and functioning of what has always been called the “crown jewel” of the organization. As WTO members grapple with the biggest sets of challenges faced over its 25-year history, maintaining a clear-eyed view of possibilities is important. The WTO may become anything the members want it to become, but for the moment, it does not operate with the same logic or functions like the UN, the IMF, the World Bank, the OECD, a national government, a corporation, or an NGO. Transposing the “wishful thinking” that WTO reform will take place based on experiences with these other institutions and organizational forms, no matter how good, will fail.