CUTS Washington Monthly Brief
#7, October 2018

From the Editor’s Desk 

The Evolving Dynamics of the WTO Reforms
In view of its antagonism to China as well as its dispute settlement record on lost cases, the Trump administration has little confidence in the World Trade Organisation. Regarding China, the U.S. may be right in saying that it has taken advantage of the WTO to boost its economy, which would have been done by any other smart country.

As a possible or perceived consequence, the U.S. has held up the appointment of judges in the WTO's dispute settlement body, which could lead to seizure of its dispute settlement system. After all, the dispute settlement system is what gives the WTO its reputation of being an effective multilateral body. Thus, there are calls for WTO reforms to look at the whole gamut of the WTO acquis.

This is because there is a broad consensus among many major members of the WTO that it is facing an institutional crisis and its ability to govern global trade is at stake. The need for urgent reforms is also recognised by the G20 countries, which unanimously agreed to discuss specific areas of reform at the WTO in its next meeting to be held at Buenos Aires in November 2018.
Furthermore, a group of trade ministers recently convened a meeting in Ottawa, Canada to discuss WTO reforms echoed similar sentiments by vouching  to protect and strengthen the dispute settlement system, improving the efficiency and effectiveness of the WTO monitoring function and modernising rules to address new trade issues of the 21st Century such as electronic commerce, investment facilitation.
However, it was surprising that neither the U.S. nor China or India were invited to this meeting. The European Union and Canada have tabled their blueprints on the modernisation of the WTO, which have been sharply criticised by the U.S. on their proposals on reforming the WTO’s dispute settlement mechanism and India on proposed changes in the application of special and differential treatment provisions of the WTO agreements.

In short, it is a fact that the WTO confronts multi-dimensional challenges and each of them needs to be addressed systematically to protect and advance the rules-based global trade governance. The initiatives for improvement and reforms of the WTO will succeed if and only if diverse interests of countries at different stages of development are considered. The future rules on global trade governance should, therefore, provide adequate flexibilities for legitimate interests of all countries.

                                                                                                                                     Pradeep S. Mehta
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This is the Seventh Edition of the Monthly Brief of CUTS Washington D.C. Center, which carries select published news or comments on a relevant issue. There are equally important issues which may have been missed out to keep this Monthly Brief short and swiftly readable. CUTS International is a not-for-profit, non-governmental think- and action-tank and the listing of paid news/articles is for informative and educative purposes only.

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China–Japan cooperation going global
Japanese Prime Minister Shinzo Abe has just concluded his landmark state visit to China, the first by a Japanese leader to China in seven years. Commemorating the 40th anniversary of the China–Japan Peace and Friendship Treaty, Abe and Chinese President Xi Jinping announced a raft of initiatives.
Modi, Abe back ‘free Indo-Pacific’
India and Japan outlined a vision for strengthened bilateral relations at the 13th annual summit in Tokyo on 29th October. Enhanced strategic and defence cooperation dominated the talks between Prime Minister Narendra Modi and his Japanese counterpart, Shinzo Abe.
America's closest Asian allies are all pushing for stronger ties with India
As Washington and Beijing fight out their trade war, Asia's most developed countries are trying to reduce their dependence on China and turn toward India. Japan, South Korea, Taiwan and Australia— all close allies of the United States — are among the countries attempting to diversify their economies away from dependence on China, whose export-oriented industries are likely to be hurt by the trade war.
Regional Trends in the Indo-Pacific: Towards Connectivity or Competition?
With China’s celebration of the fifth anniversary of its Belt and Road Initiative, the Regional Comprehensive Economic Partnership (RCEP) gaining speed, and India and Japan’s Asia-Africa Growth Corridor (AAGC) in development, it appears that the Indo-Pacific is moving toward connectivity. However, security considerations, trade tensions, and criticisms of each initiative persist.


Who will lead India’s transition in adopting electric vehicles?
In order to reduce rising oil imports and greenhouse gas emissions, the government of India is considering a 30 per cent penetration of electric vehicles (EVs) across two-wheelers and four-wheelers throughout the country by 2030. It has been providing substantial support in that endeavour.
Renewable Energy Share in India’s Power Generation Reaches All-Time High In August 2018
The share of energy generated from renewable energy sources in India has reached an all-time high, according to the latest data released by the government. Renewable energy technologies contributed a record 13.4% to the total energy generation in India in August 2018.
Another Victim of the Trade Spat: U.S. Oil to China
U.S. oil exports to China have slowed to a trickle amid the trade spat between Washington and Beijing, in an abrupt reversal (PayWall) that is upending global crude trade flows and forcing American producers to find new buyers. China was the biggest buyer of U.S. crude oil in the first half of this year.
The Permian Oil Boom Is Showing Signs of Overheating
The U.S. has become an energy superpower because of Permian. The region’s crude output has doubled in the last four years, and could rise another 50 percent by 2023, according to industry consultant IHS Markit. That could propel the U.S.  (PayWall) past Saudi Arabia and Russia, which in recent years have alternated in the role of world’s top oil producer.


What Does the New NAFTA Mean for Asia and Asian Firms?
After a year-long bullying negotiation, the US was able to get Mexico and Canada to sign onto a replacement of the North America Free Trade Agreement (NAFTA) with a new one called the United States-Mexico-Canada Agreement (USMCA) in order, in the words of President Donald Trump, to provide a level playing field to American enterprises and labour.

Trump threats, demands spark 'existential crisis' at WTO
The World Trade Organization is scrambling to develop a plan for the biggest reform in its 23-year history after U.S. President Donald Trump brought the world’s top trade court to the brink of collapse by blocking appointments of its judges and threatening to pull the United States out of the organization.
US to open trade talks with Japan, EU, UK
The Trump administration on Tuesday kicked off a fast-track process for three separate trade deals with Japan, the European Union and the United Kingdom. In three letters, United States Trade Representative Robert Lighthizer notified Congress of the intent to open the trade talks. Trade in goods and services with the three tops $1.5 trillion.
U.S. Plans More China Tariffs If Trump-Xi Meeting Fails, Sources Say
The U.S. is preparing to announce (PayWall) by early December tariffs on all remaining Chinese imports if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, three people familiar with the matter said.


U.S. going backwards with Trump’s policies: Economics Nobel winner William Nordhaus
U.S. economists William Nordhaus and Paul Romer on Monday shared the 2018 Nobel Economics Prize for constructing “green growth” models that show how innovation and climate policies can be integrated with economic growth. Working independently, they have addressed “some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable growth,” the Royal Swedish Academy of Sciences said in a statement. 
OPIC commits $125 mn for Indian firms with international growth ambitions
Aiming to expand access to capital for medium-sized companies in India, the US government's development finance institution Overseas Private Investment Corporation Tuesday signed a $125 million commitment with Greater Pacific Capital (GPC).
India, China join hands to train Afghan diplomats
India and China on Monday jointly launched a training programme for Afghan diplomats in New Delhi, a move that signalled India-China cooperation going regional and prompted China’s envoy to India Luo Zhaohui to suggest the neighbours extend cooperation to other countries such as Iran, Nepal and Myanmar.
IMF members pledge to avoid using currencies as trade weapon
The International Monetary Fund said on Saturday its members pledged to refrain from competitive currency devaluations and step up dialogue on trade, as escalating trade frictions and higher borrowing costs threatened to knock global growth.