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“Determined to slow China’s rise”

Ryan Hass from the Brookings Institution about the role of the US, China and the EU in the global trade system

Ryan L. Hass, David M. Rubenstein Fellow, Brookings Institution

Körber-Stiftung: Is the US still Germany’s most important partner for preserving a rules-based global order and free trade, or might China attempt to take this place?

Hass: Rhetorically, Beijing may seek to strike similar notes with Berlin. Words are important, but actions are more so. US-German relations will oscillate due to the leaders involved. When it comes to substance, they will remain aligned in wanting to lower barriers to trade, improve market access, protect intellectual property, and ensure a level playing field for economic competition.

Körber-Stiftung: What can the EU and the US do together to improve the global trade system?

Hass: First, they should revive the Trans-Atlantic Trade and Investment Partnership, alongside the Trans-Pacific Partnership. If the US and the EU could reach agreement on standards for trade and investment, pressure would mount on Beijing to lift its standards to remain competitive. Second, they should work together to update WTO rules. It may not be optimal to advance such efforts now given the current political environment, but the absence of immediate progress should not obscure planning for such steps.

Körber-Stiftung: Do you expect tensions between China and the US to escalate or de-escalate?

Hass: I expect US-China trade tensions to remain at an elevated level for at least the next year. President Trump’s trade representative believes China is hollowing out American competitiveness. Beijing increasingly believes Trump is determined to slow China’s rise. If China takes a case against the US to the WTO, and the WTO rules in favour of China, there is risk that the US would withdraw from the WTO. Key advisors in the Trump administration would welcome a justification for withdrawing from the WTO, so that the US could be less constrained in exercising its power unilaterally.

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