INTERNATIONAL TRADE TENTIONS: A WORRY FOR ASIA
The uncertainty in the global trade environment does not bode well for Asian economies that are heavily dependent on international trade and investment as a means of sustained growth.
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Between 2002 and 2017, economic growth in Asia averaged about 6% annually, outpacing the global economy as a whole, which expanded about 4% on an average. Consequently, Asia’s share of global gross domestic product (GDP) rose from 25% in 2002 to about 35% in 2017. While China and India are important contributors to the region’s dynamism, Indonesia and the rest of South-East Asia have also grown rapidly during the 15-year period.
This has, in turn, been driven in no small part by the region having seized opportunities for global trade and investments. In fact, Asia’s share of global exports spiked from about 29% in 2002 to 38% in 2017, while its share of global imports increased from about 22% to 31% during the period.
It is notable that merchandise trade in Asia (in value terms) grew at an average of 17.5% between 2002 and 2008 before the global financial crisis struck. Since 2010, the annual growth in the value of merchandise trade plummeted significantly, with the sharpest contraction (-13%) observed in 2015. The most recent data from International Monetary Fund’s World Economic Outlook (April 2018) suggests that Asia’s merchandise trade continued to shrink in 2016, but somewhat rebounded in 2017, although the growth rate remains well below the pre-crisis average.
The tepid recovery notwithstanding, Asian economies should well be concerned about a gradual erosion of a rule-based multilateral trading system, particularly given the tit-for-tat tariff threats by the US and China.
The Donald Trump administration announced the imposition of tariffs on $60 billion worth of Chinese imports under Section 301 of the Trade Act of 1974, primarily on aeronautical, energy and technology-intensive areas. This was in addition to the more general tariffs imposed on washing machines, solar panels, steel and aluminium imports on China and its other trading partners. China, in turn, has threatened retaliatory tariffs worth $3 billion of goods from the US with 90% in food-related products and the rest in steel tubes and aluminium products.
Trade wars blame game
Both parties have a role to play in the US-China and overall global trade tensions. While China cannot be considered a currency manipulator (based on the US Treasury criteria or in terms of actual currency value), concerns abound about the continued interventionist industrial policies by the country to build national champions with government funding and its mercantilist strategy to secure core technologies and develop indigenous expertise in semiconductors and related areas. This is part of its “Made in China 2025” (inspired by Germany’s “Industry 4.0 plan”) which aims to develop world-class dominance in 10 domestic tech-manufacturing industries.
In so doing, critics have argued that China has failed at times to respect the World Trade Organization (WTO) agreements on Trade Related Aspects of Intellectual Property Rights (TRIPs) and Trade Related Aspects of Investment Measures (TRIMs). While it remains far from clear that China’s policies have actually violated the WTO code on TRIPs and TRIMs, political scientist Oh Seung-Youn has at various times referred to China’s use of “convenient compliance”. She has argued that although China removes such policies when challenged at the WTO, by that time it usually achieves whatever it wanted to from implementing those industrial policies. In other words, the country not only manages to achieve what it wants, but also creates the reputation of being a “responsible” WTO member.
Others have argued that the WTO itself is ill-equipped to deal with the unique challenges posed by a rising China with its unique economic structure. In fact, writing in 2012, the Indian government’s chief economic adviser Arvind Subramanian had noted that “...the previous bargain struck at the time of China’s WTO accession may no longer be an equilibrium... Hence, a new bargain may need to be struck, which would reflect China’s increased size”. Deputy US trade representative Dennis Shea, on his part, has chosen to blame the WTO’s appellate body for the “steadily worsening rupture of trust”.
On the other hand, the Trump a has undertaken aggressive unilateralism due to its “diminished giant syndrome” à la eminent trade scholar Jagdish Bhagwati of Columbia University. As he had once noted, the “protectionist retaliation” from other countries failing to comply with multilateral or bilateral obligations is not as serious an issue as Washington using its clout to arbitrarily and unilaterally declaring established trade practices as unacceptable. Such trade threats make it look as if “America believes in the law of the jungle rather than the rule of law”.
Implications for Asia
For now, the global trade environment will be much less buoyant and much more uncertain than it was in the past. This does not bode well for Asian economies, particularly those, which are heavily dependent on international trade and investment as a means of sustained growth. With Trump’s “America First” economic platform, the administration’s preference for bilateral agreements over multilateral ones as a means of promoting “fair trade”, as well as its willingness to use unilateral sanctions rather than work through the WTO to manage its trade concerns (“fair, reciprocal trade”), there is a clear vacuum in global trade leadership.
China could potentially take on that mantle, but to be viewed as being a credible champion of a rules-based international economic order, it must eschew some of its own mercantilist and predatory behaviour and begin to better respect intellectual property rights (IPRs). A Trans-Pacific trade war would not be to anyone’s benefit.
For the rest of Asia, it is critical that they reaffirm the importance of an open, transparent and rules-based multilateral trading system, while pushing forward with greater intra-regional trade initiatives that are of mutual benefit.
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PERDAGANGAN INTERNASIONAL: KEKHAWATIRAN UNTUK ASIA
Ketidakpastian dalam lingkungan perdagangan global bukan pertanda baik bagi ekonomi Asia yang sangat bergantung pada perdagangan dan investasi internasional sebagai sarana pertumbuhan berkelanjutan.
Antara 2002 dan 2017, pertumbuhan ekonomi di Asia rata-rata sekitar 6% per tahun, melampaui ekonomi global secara keseluruhan, yang meningkat sekitar 4% pada rata-rata. Akibatnya, pangsa Asia dari produk domestik bruto global (PDB) meningkat dari 25% pada tahun 2002 menjadi sekitar 35% pada tahun 2017. Sementara Cina dan India merupakan kontributor penting bagi dinamisme di kawasan ini, Indonesia dan negara-negara Asia Tenggara lainnya juga telah berkembang pesat selama periode 15 tahun.
Hal ini, pada gilirannya, didorong oleh sebagian kecil wilayah yang telah merebut peluang untuk perdagangan dan investasi global. Bahkan, pangsa ekspor global Asia melonjak dari sekitar 29% pada tahun 2002 menjadi 38% pada tahun 2017, sementara pangsa impor global meningkat dari sekitar 22% menjadi 31% selama periode tersebut.
Perlu dicatat bahwa perdagangan barang dagangan di Asia (dalam hal nilai) tumbuh rata-rata 17,5% antara tahun 2002 dan 2008 sebelum krisis keuangan global melanda. Sejak 2010, pertumbuhan tahunan dalam nilai perdagangan barang menurun drastis, dengan kontraksi paling tajam (-13%) teramati pada tahun 2015. Data terbaru dari Prospek ekonomi dunia dari Dana Moneter Internasional (April 2018) menunjukkan bahwa perdagangan barang Asia terus berlanjut. menyusut pada tahun 2016, tetapi melambung pada tahun 2017, meskipun tingkat pertumbuhan tetap jauh di bawah rata-rata sebelum krisis.
Namun pemulihan yang hangat, perekonomian Asia juga harus prihatin tentang erosi (penurunan) bertahap dari sistem perdagangan multilateral berbasis aturan, terutama mengingat ancaman tarif balas dendam oleh AS dan China.
Administrasi Donald Trump mengumumkan pengenaan tarif impor Cina senilai $ 60 miliar berdasarkan Pasal 301 Undang-Undang Perdagangan 1974, terutama di bidang aeronautika, energi dan teknologi intensif. Ini di samping tarif yang lebih umum dikenakan pada mesin cuci, panel surya, impor baja dan aluminium di China dan mitra dagang lainnya. China, pada gilirannya, telah mengancam tarif pembalasan senilai $ 3 miliar barang dari AS dengan 90% dalam produk-produk yang berhubungan dengan makanan dan sisanya dalam tabung baja dan produk aluminium.
MENYALAHKAN PERMAINAN PERANG DAGANG
Kedua belah pihak memiliki peran untuk bermain di AS-Cina dan ketegangan perdagangan global secara keseluruhan. Sementara Cina tidak dapat dianggap sebagai manipulator mata uang (berdasarkan kriteria Treasury AS atau dalam hal nilai mata uang yang sebenarnya), kekhawatiran berlimpah tentang kebijakan industri intervensionis lanjutan oleh negara untuk membangun kejuaraan nasional dengan pendanaan pemerintah dan strategi merkantilis untuk mengamankan teknologi inti dan mengembangkan keahlian pribumi di semikonduktor dan bidang terkait. Ini adalah bagian dari "Made in China 2025" (terinspirasi oleh "rencana Industri 4.0" Jerman) yang bertujuan untuk mengembangkan dominasi kelas dunia di 10 industri manufaktur teknologi domestik.
Dengan demikian, para kritikus telah berargumen bahwa China telah gagal untuk menghormati perjanjian Organisasi Perdagangan Dunia (WTO) tentang Aspek Perdagangan Terkait Hak Kekayaan Intelektual (TRIPs) dan Aspek Investasi Terkait Investasi (TRIMs). Meskipun masih belum bahwa kebijakan China telah benar-benar melanggar kode WTO pada TRIPs dan TRIMs, ilmuwan politik Oh Seung-Youn telah beberapa kali mengacu pada penggunaan "kepatuhan yang mudah" China. Dia berpendapat bahwa meskipun Cina menghapus kebijakan seperti itu ketika ditantang di WTO, pada saat itu biasanya mencapai apa pun yang diinginkannya dari menerapkan kebijakan industri tersebut. Dengan kata lain, negara tidak hanya berhasil mencapai apa yang diinginkannya, tetapi juga menciptakan reputasi sebagai anggota WTO yang "bertanggung jawab".
Yang lain berpendapat bahwa WTO itu sendiri tidak diperlengkapi untuk menghadapi tantangan unik atau baru yang ditimbulkan oleh kebangkitan Cina dengan struktur ekonominya yang unik. Bahkan, menulis pada tahun 2012, penasihat ekonomi utama pemerintah India Arvind Subramanian telah mencatat bahwa "... tawaran sebelumnya terjadi pada saat akses China WTO mungkin tidak lagi menjadi keseimbangan ... Oleh karena itu, tawar-menawar baru mungkin perlu dipukul, yang akan mencerminkan peningkatan ukuran China ”. Wakil perwakilan perdagangan AS Dennis Shea, pada bagiannya, telah memilih untuk menyalahkan badan banding WTO untuk "memburuknya kepercayaan yang terus memburuk".
Di sisi lain, administrasi Trump telah melakukan unilateralisme agresif karena "sindrom raksasa berkurang" - sarjana perdagangan terkemuka Jagdish Bhagwati dari Universitas Columbia. Seperti yang pernah dia catat, "pembalasan proteksionis" dari negara lain yang gagal memenuhi kewajiban multilateral atau bilateral tidak seserius masalah ketika Washington menggunakan kekuatannya untuk secara sewenang-wenang dan secara sepihak menyatakan praktik perdagangan yang ditetapkan tidak dapat diterima. Ancaman perdagangan seperti itu membuatnya tampak seolah-olah "Amerika percaya pada hukum rimba bukan aturan hukum".
Implikasinya untuk Asia
Untuk saat ini, lingkungan perdagangan global akan jauh lebih ringan dan tidak terduga daripada di masa lalu. Ini bukan pertanda baik bagi ekonomi Asia, terutama mereka, yang sangat bergantung pada perdagangan dan investasi internasional sebagai sarana pertumbuhan berkelanjutan. Dengan platform ekonomi "Amerika Pertama" Trump, preferensi pemerintah untuk perjanjian bilateral atas perjanjian multilateral sebagai sarana untuk mempromosikan "perdagangan yang adil", serta kesediaannya untuk menggunakan sanksi sepihak daripada bekerja melalui WTO untuk mengelola kekhawatiran perdagangannya (" adil, perdagangan timbal balik "), ada kekosongan yang jelas dalam kepemimpinan perdagangan global. China dapat berpotensi mengambil mantel itu, tetapi untuk dilihat sebagai seorang pemenang yang kredibel dari tatanan ekonomi internasional berbasis aturan, ia harus menjauhkan diri dari merkantilis dan perilaku predator dan mulai menghormati hak kekayaan intelektual (HAKI). Perang perdagangan Trans-Pasifik tidak akan menguntungkan siapa pun. Untuk kawasan Asia lainnya, sangat penting bahwa mereka menegaskan kembali pentingnya sistem perdagangan multilateral yang terbuka, transparan dan berbasis aturan, sambil mendorong maju dengan inisiatif perdagangan intra-regional yang lebih besar. yang saling menguntungkan.
QUESTIONS AND ANSWER BASED ON THE ABOVE ARTICLE
What is the economic growth in Asia in 2002 and 2007 and what caused the growth?
Answer:: Between 2002 and 2017, economic growth in Asia averaged about 6% per year, surpassing the global economy as a whole, which increased by about 4% on average. The Growth is due to the share of Asia's global exports jumping from about 29% in 2002 to 38% by 2017, while the share of global imports increased from about 22% to 31% during the period.
What causes global trade tensions?
Answer: What causes global trade tensions is the occurrence of trade wars in regulatory multilateral trading, especially given the threat of tariff rates by the US and China.
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What policies did America make to China causing global tension?
Answer: Administration Donald Trump announces the imposition of a $ 60 billion Chinese import tariff under Article 301 of the 1974 Trade Act, especially in the field of aeronautics, energy and intensive technology. This is in addition to the more common tariffs imposed on washing machines, solar panels, steel and aluminum imports in China and other trading partners.
What are the counter-policies China has made to the United States to cause global tension?
Answer: China threatens tariffs worth $ 3 billion in goods from the US with 90% in food-related products and the rest in steel tubes and aluminum products.
What kind of trade should be done so as not to cause global tension?
Answer: in order to avoid this, all countries must instill an open, transparent and rule-based trading system, and push forward with a larger, mutually beneficial intra-regional trade initiative.
(In paragraph eight sentence one) there is mentioned Intellectual Property Rights (TRIPs), what is intellectual property rights (TRIPs)?
Answer: rights arising as a result of the brain's thinking that produces a product or process useful to humans.
(In paragraph eight sentence one) there is mentioned investment aspect (TRIMs), what is the investation?
Answer: investing money or capital in a company or project for the purpose of making a profit.
What is meant by unilateralism (in paragraphs ten sentence one)?
Answer: unileteralism is the process of acting, reaching decisions, or supporting the principle unilaterally.
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