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    Trump’s ‘poison pill’ in China trade fight
    浏览量:292 | 回复:0 | 发布时间:2018-10-15 11:24:47

    Just a week ago one of the biggest flashpoints in global trade policy — the renegotiation of Nafta — was successfully resolved, as Donald Trump eked out a last-minute compromise with Canada and Mexico after months of tense negotiations.


    Everyone, especially the car workers in border towns like Windsor, Ontario, which I visited last month, was on eggshells waiting to see if a deal could finally be hatched.


    The United States-Mexico-Canada agreement was hailed by Mr Trump as a major victory. It cements two primary goals at this point in his presidency — to fulfil a key campaign pledge ahead of midterm elections, and to focus all of his trade wrath against China by reaching truces with America’s long-term allies.


    In fact, a number of provisions in the USMCA deal are squarely aimed at containing China, and making sure Canada and Mexico do the same. The most glaring example of this is article 32.10, which the FT wrote about on Sunday.


    It would require Canada or Mexico to notify the US if either intends to enter trade talks with a non-market economy, three months ahead of their start. During any negotiations with, say, Beijing, they would have to update US officials on the contents of the talks. Then, after any deal is reached, the US would be able to pull out of the USMCA — turning this into a de facto “poison pill” against any economic flirtation with Beijing.


    The measure attracted a lot of attention because it was a move by the US to rein in the independence of trade policy not just of Canada and Mexico but also possibly that of the EU, Japan and post-Brexit Britain some time in the future.


    “We have been very concerned about the efforts of China to essentially undermine the US position by entering into arrangements with others,” one senior White House official told the FT in Sunday’s story.


    The measure also calls on the three countries in the USMCA deal to abide by IMF standards against the manipulation of exchange rates; calls for a public disclosure of any data on market interventions; and establishes a panel to monitor implementation. The IMF could be called in as a referee in the event of a dispute.


    Finally, the USMCA includes sections that seek to make sure that state-owned enterprises are not benefiting from unfair subsidies — another provision which aims to counter Chinese investments.


    The package suggests that the US is getting serious about trying to create an anti-China sphere of influence in the global trading system. The Trump administration is trying to use this as leverage to put so much pressure on Beijing that it will return to the negotiating table at some point. One possible venue would be the G20 summit in Argentina in November, which Mr Trump and Xi Jinping, China’s president, are expected to attend.


    But most likely the extension of Mr Trump’s anti-China drive, from tariffs to trade deals with its allies, will mean more entrenched positions, and an escalating stand-off with Beijing.

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