THE INSTITUTE FOR INTERNATIONAL TRADE

A MESSAGE FROM THE DIRECTOR

COVID-19 continues, understandably, to preoccupy policy-makers. In this month’s edition we cover three regional initiatives, including a preview of the forthcoming ASEAN Heads of State Summit; our joint endorsement with partner GTPA of the recent APEC Leaders’ statement; and a forthcoming interactive policy-focussed webinar on the dynamics, restrictions, and policy implications resulting from servicification of global supply chains across ASEAN. We also provide you with an invitation to our forthcoming webinar on trade dynamics in the Indian Ocean Rim Association, and explore how recovery from COVID-19 could threaten the international trading system if not carefully handled. There is much to contemplate at all these levels.

Yet the need to continually revise the rules governing the trading system has not gone away. In relation to this we explore the ongoing need to manage digital technologies and services to adapt to the rapidly unfolding cluster of technologies constituting the ‘fourth industrial revolution’. 

Finally, after the crisis has passed there will be a pressing need to roll back some crisis interventions, notably trade distorting subsidies. In our first IIT Working Paper we explore the issues pertaining to reform of industrial subsidies through the WTO.

Professor Peter Draper 

COVID-19 has presented the world with both a major health and economic crisis. These crises have so far revealed a lack of leadership at the international level, thereby preventing a concerted response in the way that we have often seen in previous crises. In relation to the health crisis, the current response does not compare well to the responses led by the US to the 2014-15 Ebola crisis or the 2003 HIV-AIDS crisis in Africa. The economic crisis is still in an early phase, but there are no signs yet the G20 will play a similar role in responding to the extent it did in the 2008-09 Global Financial Crisis. Covid-19, and the responses to it, would also seem to have become a catalyst for escalating pre-existing tensions between the world’s two largest economies, the US and China. This is further complicating international cooperation. A key question is whether other actors might step into the vacuum to provide sorely missing leadership.

By Milton Churche and Michael Mugliston, Visiting Fellows, Institute for International Trade

POLICY AND ENGAGEMENT

Subsidisation by states of their domestic industries to gain competitive advantage abroad is a perennial topic in international trade discussions. As the world moves into a multipolar environment and China rises in economic prominence, the rules governing subsidies, particularly to the industrial sector, are in the spotlight. The politics of reform are fraught, for a range of reasons ranging from states’ geo-economic positioning, through paralysis in the World Trade Organization, to domestic social considerations. IIT's latest working paper reviews the key issues that need to be considered if serious efforts to reform multilateral industrial subsidies regimes are to be engaged.

By Ph.D Wenxiao Wang, Professor Peter Draper, Dr Dessie Ambaw, Professor Andreas Freytag, Dr Naoise McDonagh, and Mr Keith Wilson

EVENTS

With the multilateral trading system at an impasse most economies have turned to regional trade cooperation frameworks to boost trade and investment and foster economic growth. The vast region encompassing Indian Ocean Rim Association (IORA) member states links major sea-lanes and is home to key global and regional transportation hubs. Twenty two years after IORA’s formal establishment, its member states should consider deeper and more meaningful trade and investment cooperation initiatives.

Join us from 3.30pm to 5pm on Tuesday, 23 June 2020 (ACST) as we launch our latest report, Building Trade Integration Dynamics in the Indian Ocean Rim Association: A Technical Analysis and engage in an interactive discussion with the Department of Foreign Affairs and Trade (DFAT) and the Australian Chamber of Commerce and Industry (ACCI) on the evolution of trade, investment and regional integration amongst IORA member states since 1997, and the strategic opportunities to enhance trade across the region in a post-COVID-19 world.

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