Site Loader

Let us now take a closer look at the present scenario. In South East Asia we will be focusing on China, India, Singapore, Malaysia, Hong Kong and Philippines. We will be looking at the how the rise of protectionism in the US is affecting these countries. Apart from the effect of western protectionism we will take a brief look into the nature of the trade policies followed by these nations and that affects regional trade.Let us first consider the policy shifts and news pertaining to protectionist policies in the US since the onset of the new administration. US has been the bastion of modern protectionism as matter it never followed free trade until 1945 when the WWII wiped out most of its industrial competitors. President Trump’s stance can clearly be ascertained from his first address to the joint session of the US Congress “Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes. But when foreign companies ship their products into America, we charge them nothing, or almost nothing… I believe strongly in free trade but it also has to be fair trade”. Some of the key decisions that affect trade are as follows: • Withdrawal from Trans-Pacific Partnership: US withdrew from the TPP through executive mandate when Trump took power. Potential members had invested heavy political capital to bring about the deal. The withdrawal increased uncertainty among U.S. allies about the reliability of the U.S. on different geopolitical and economic issues/matters. It is the first time the U.S. has backed out from an agreement it championed to other countries.The previous administration had hoped to strengthen US interests in Asia and provide China strong inducements to integrate into and support a U.S. led order however the withdrawal in January 2017 marks a major blow to these ambitions.Countries in the region have responded to the withdrawal by seeking China’s favour in the region. The withdrawal has forced geopolitical lines to be redrawn in the region.  • Re-negotiation of NAFTA (North American Free Trade Agreement): US under Trumps directive has opened talks to re-negotiate NAFTA to try and reverse trade deficit. The US trade deficits with the NAFTA countries is just under 10% of its total trade deficit. President Trump is not a fan of the treaty and has made his displeasure known on many an occasion.  The focus of the renegotiation lies with regaining US manufacturing jobs and eliminating trade deficit with Mexico. A unilateral US exit from NAFTA before the mid-term elections in Nov 2018 is a real possibility, the move would reduce US GDP by half a percent but would heavily catastrophically damaging to Canadian and Mexican economies. • Renegotiation of US- South Korea Free Trade Agreement (KORUS): The current administration has faced stiff opposition to the proposal exit from KORUS. Instead they have begun the process to renegotiate the treaty to address the severe trade deficit. The discussion took place during Trump’s Asia visit in late 2017.• Increase in Tariffs: US has placed trade restrictions on more than 400 products from more than 40 countries. The administration’s rationale for pursuing this course of action is based on Department of Commerce’s report which has determined that certain imports are being sold in US at unfairly low prices due to favourable conditions like cheap labour, government subsidies, tax breaks back in home countries.  The laws give the government authority to impose duties to bring prices to fair levels.• Major Trade Cases in Progress / Pending with the Presidento Boeing – Bombardier: This is dispute brought forward by Boeing regarding unfair pricing by Bombardier in the US of its C series aircraft. The DOC imposed a hefty 300% duty on the crafts as response which has soured US-Canada Trade relations with each side threatening escalating response to an already contentious situation. The final decision is due in Feb, 2018.o Steel & Aluminium: This is regards to the proposed sweeping barriers against steel imports based on investigation opened on 19th April 2017. The investigation aims to find how steel the US needs to protect its national security. This is indirect to steel dumping by China across the globe. The investigation has gathered a great deal of domestic support from steelworkers that have lost jobs due to cheap foreign imports. Many US allies have expressed protests saying that the burden of tariffs will pass onto their companies. There is a similar case for Aluminium as well. In both cases the targeted countries can go after the US in the WTO if restrictions are placed.o Solar Power: The deadline for this decision is Jan 26, 2018 and it deals with two companies Suniva and Solar World. They have argued for restrictions against cheap Chinese products in this domain to ensure that the American solar industry is not gobbled up by the foreign competition. These companies have brought a “safeguard case”. Under this type of case the president has broad range of powers to help any ailing sector.o Washing Machines (Whirlpool): This is a safeguard case, very similar to the solar power one. Whirlpool has brought this case against its South Korean rival LG and Samsung. It hopes to get increased tariffs or limit the no of machines entering the US market. Its claims that LG and Samsung have moved production to different parts of the world to effectively dodge tariffs. Final decision is due by 2nd Feb, 2018.• Outlook on Chinese Imports and Investments: Trump has been very vocal about how china has been stealing US jobs and taking advantage in trade. In Aug, 2017 the current administration launched a special investigation into China’s intellectual rights policy. Currently China forces/coerces companies to share intellectual property as a precursor condition to doing business locally. The investigation looks in to transfer of technology that can potentially help Chinese producers to get an unfair advantage over their American counterparts. This is one of the most critical issues on which a retaliation on China’s end can trigger a trade war. • Visa Restrictions: US has recently imposed restrictions on H1B visas. The move restricts labour movement from countries like India and China. Major firms from these countries have been affected by the sweeping changed. The change has strained relationships and drawn sharp criticisms internationally.Other than shifts in US policy the BREXIT vote raised a cloud uncertainty for SEA region’s trade with EU and UK. UK’s exit from the EU is important from an international supply chain perspective for firms from the SEA region.There have been subtle shifts in trade policies in South East Asia. Let us take a country wise overview of their current and historic outlook towards free trade:• China: There have been recent reports that even though the government is endorsing • India:• Hong Kong:• Singapore:• Malaysia:• Philippines:

Post Author: admin

x

Hi!
I'm Erica!

Would you like to get a custom essay? How about receiving a customized one?

Check it out