Unit5TextITheComingTradeWars.docx

1、Unit5TextITheComingTradeWarsWarm-up The following news has made headlines in a number of major newspapers recently.13 March, 2012-The US, Japan and the European Union have filed a case against China at the World Trade Organization, challenging its restrictions on rare earth exports. US President Bar

2、ack Obama accused China of breaking agreed trade rules. They argue that by limiting exports, China, which produces more than 95% of the worlds rare earth metals, has pushed up prices. Beijing has set quotas for exports of rare earths, which are critical to the manufacture of high-tech products from

3、hybrid cars to flat-screen TVs.Beijing has denied the allegations in the WTO case, saying that it enforced the quotas to ensure there was no environmental damage caused due to excessive mining. Chinas Industry Minister, Miao Wei, told state media agency Xinhua that the country was actively preparing

4、 to defend ourselves against the WTO complaints and denied the quotas were trade protectionism. Chinese foreign ministry spokesman Liu Weimin said: We think the policy is in line with WTO rules. Exports have been stable. China will continue to export, and will manage rare earths based on WTO rules.

5、What kind of organization is WTO? What kind of role does it play in settling disputes in international trade?The World Trade Organization is an international organization designed to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marr

6、akech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1947.The WTOs procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Name the recent case

7、s of trade conflicts that you know, and find out the major complaints.In 2009, Washington expanded sanctions against European food products in retaliation for Europes boycott against hormone-treated American beef.After the 2008 financial crisis, U. S, government initiated a bailout plan of GM and Ch

8、rysler to the exclusion of foreign firms. As a response, E.U. accused U. S. of violating the so-called national treatment clauses in trade agreements, and put Washington on notice that it will pursue legal trade remedies if the final bailout package was discriminatory. In an article entitled “The Da

9、ngers of Turning Inward”, Jeffrey E. Garten, the author of “The Coming Trade Wars” (Text I), alarms us of the danger of economic protectionism, which is to be differentiated from “ordinary protectionism”?Ordinary protectionism such as tariffs and quotas would be one aspect of this problem, but it wo

10、nt be the worst of it because a web of treaties and the enforcement capabilities 执法能力of the WTO will constrain the most egregious过分的 behavior. Economic nationalism is more insidious 暗中为害的because it is broader, more subtle and subject to fewer legal constraints. It is a frame of mind that casts doubt

11、 on the very assumption that we live in a single international market, and that relatively open borders are a virtue. It is based on a calculation that despite all the talk about economic interdependence, nations can go it alone, and could be better off in doing so. True economic nationalists want a

12、bove all to protect capital and jobs in their own countries. They see global commerce not as a win-win proposition but as a contest in which there is a victor and a loser. They are thus not focused on international agreements to open the world economy; to the contrary, they are usually figuring out

13、how to avoid international commercial obligations. Despite the increasing pace of globalization, recent years witnessed a reverse trend of protectionism in international trade. For instance:In 2009, E.U. reintroduced export subsidies on butter and cheese and levied tariffs on American exports of bio

14、diesel fuel. India raised tariffs on steel products. Brazil and Argentina pressed for a higher external tariff on imports into Mercosur.In 2010, USA filed 2 cases in World Trade Organization against China over Electrical Steel and Credit Card payment providers. USA alleged that China had unfairly pu

15、t duties on US made Steel and was locking out Mastercard and Visa from the credit card processing market in China.The much-publicized Buy America provision of the U.S. stimulus package restricted purchases of construction-related goods to many U.S. manufacturers.On October 11th 2011, Americas Senate

16、 passed the Currency Exchange Rate Oversight Reform Act, which would allow any “fundamentally misaligned” currency to be labelled a subsidy subject to countervailing duties. In other words, steep tariffs would be imposed on imports from nations with undervalued currencies. It was a provision aimed s

17、quarely at Chinas yuan. What are the regular protectionist measures?Tariffs, import quotas, anti-dumping legislation, subsidy, currency manipulation, discriminatory government procurement歧视性政府采购, stimulus and bailout, administrative barriers行政壁垒 (restrictive import rules concerning such issues as fo

18、od safety and environmental standard), etc. How does protectionism justify itself? Protectionist policy justifies itself by claiming to protect national economy and domestic market, to retain jobs, to protect and support infant industries. Often, proponents of protectionism say that free trade is fi

19、ne in theory, but it does not apply in the real world. Modern trade theory assumes perfectly competitive markets whose characteristics do not reflect real-world market conditions. Moreover, even though protectionists may concede that economic losses occur with tariffs and other restrictions, they of

20、ten argue that noneconomic benefits such as national security more than offset the economic losses. What are the negative consequences of protectionism?Sabotage free trade, lose jobs in the long run despite short-term gain, or to quote Alan Greenspan, protectionism will only lead to “an atrophy of o

21、ur competitive ability. . If the protectionist route is followed, newer, more efficient industries will have less scope to expand, and overall output and economic welfare will suffer”.The Coming Trade WarsThe massive intrusion of government into national economics could spark disastrous protectionis

22、m.Jeffrey E. Garten【1】Its hard to find a top economic official, economist or global business leader who doesnt recognize todays heightened dangers of protectionism. But it is equally difficult to identify any high-powered efforts to actively ward off the prospect of higher tariffs, quotas or trade-b

23、locking regulations. It is as if talking about the threat is seen as enough to deter a gigantic rollback of global commerce. But rhetoric will not prevent a trade war, which is now, I believe, more likely than it has been at any time since the early 1970s, when currencies were no longer fixed to the

24、 value of gold and began to float against one another.【2】A half-century of steady trade liberalization was in jeopardy even before the current financial and economic meltdown. Prior to the implosion of Bear Stearns, the U.S. Congress had taken away almost all of President Bushs trade-negotiating aut

25、hority, feeling that the U.S. was no longer gaining enough from new trade agreements, while jobs were being lost and wages undercut. Well before “subprime” entered the popular lexicon, the Doha round of trade negotiations had collapsed, as rich and poor nations fought over contentious issues like ag

26、riculture. The rise of China and India has raised deep concerns over import penetration, not just in the U.S. and Europe but also in emerging markets like Mexico. For a few years now, prominent economists were raising warning flags that support for free trade was being eroded by the perception that

27、trade was contributing to ever-greater income inequalities.【3】Now, however, the collapse of the global banking system, a deepening global recession and the massive intrusion of governments into national economies a trend that cant help but politicize economic policy decisions have all added fuel to

28、the fire. Unemployment is growing, with more than 70,000 layoffs announced in the U.S. and Europe last Monday alone, and global trade volume is now decreasing by more than 2 percent, according to the World Bank for the first time in a quarter century. Container ships sit idle in ports demand is down

29、 50 percent year on year. Americas own exports declined 6 percent last year, Chinas 9 percent and Japans a shocking 35 percent. Trade financing, the essential lubricant of the entire commercial system, has dried up. Slow growth has meant massive industrial overcapacity in heavy industries such as st

30、eel, automobiles and electronics, and with global manufacturing dropping at an annual rate of 20 percent, the situation will get much worse. To be sure, we have yet to see a major outbreak of protectionism. Unlike crises in finance, trade problems are slow to emerge, but once the momentum begins, th

31、e trend takes years to reverse.【4】Meanwhile, there are straws in the wind. In the first half of 2008, antidumping investigations around the world were up at least 30 percent. In December, Washington expanded existing sanctions against selected EU food products in retaliation for Europes boycott of A

32、merican hormone-treated beef, an old dispute to be sure, but one that is being escalated. Brazil and Argentina are exerting pressure on members of Mercosur, the South American trade block, to raise the groups external tariff. And because the WTOs permissible limits on tariffs level are often much higher than the actual tariffs that countries have imposed in recent years, it is all too possible that governments will now raise tariffs and still be within their legal limits a blow to trade, whatever the law says. Just last December, after the G20 called on members to resist prot