Hello, from Brussels. In today’s newsletter, we provide you with the latest developments in various running stories that share a common theme: multilateral policy making is a bit confusing, but trying to use bilateral or indeed unilateral—sorry, “autonomous “-Action to fill the vacuum is problematic. This is the kind of wailing and torn clothing (in a sharp, low-key way) on which we live. To balance it, next week we will demonstrate that the prospects for actual trade are actually quite good, even though the government occasionally tries to obstruct and mess things up.

Today, the editor has prepared three articles for the lucky ones, so today’s newsletter style is a bit different.

Concession waters In-depth study of inflation and supply chain.

The fragile U.S. framework will not worry China

First of all, we have more news about China’s fight to dominate the Asian trade structure, and whether the United States will take this seriously.On Tuesday, we noticed that the Biden administration had stated that it had no plans to join CPTPP (Integration and progress, etc., you know), but will launch some exciting Asian economic cooperation frameworks.U.S. Trade Representative Katherine Tai announced First Yesterday, with Japan, and in Interviewed by “Financial Times” Said that the United States needs to make “route revisions” in Asia. You judge for yourself, but to us, this US-Japan framework looks like a conversation shop of non-binding promises. Considering that the United States is basically absent from the large-scale debates of the World Trade Organization and has not joined the only agreement in the Asia-Pacific region, we particularly like the regions where the promise of “cooperation in regional and multilateral trade-related forums” is really important (the aforementioned CP stuff).

In related shocking news, the United States, Japan, and the European Union reunited the band in their form. Tripartite partnership To propose a new definition of government subsidies, China can immediately reject it when submitting it to the World Trade Organization for discussion.Forgive our negative emotions, but these three did their thing The first performance of 2017After a long delay of “creative differences”, they have not even released a demo version of their first album.

Coffee growers embracing trees in Brussels

Today’s second development comes from Brussels, where the European Commission was yesterday Announced the plan To green trade/impose neo-colonialism on exporters from developing countries (removed based on preference) and launch its plan Prevent deforestationIt will require companies that import or sell certain commodities (beef, soybeans, palm oil, coffee, cocoa and wood) to the EU market to certify their tree planting certificates.It has the usual characteristics of Brussels’ attempts to impose high standards through trade. Agricultural regulationsThis may be well-intentioned (although there is undoubtedly one or two protectionist sentiments), but the difficulty of supervision and implementation means that some imported products are likely to be rejected due to compliance costs, possibly from smaller imports Producers and poorer countries. For all the talks about international partnership and cooperation in Brussels, this is also shameless unilateralism and may not meet the requirements of the WTO.

You might argue that the world’s forests and climate cannot wait for a multilateral solution, or that this provides a model of a broader agreement that others can build, and you might be right.But the EU has Already here It actually prohibits imports Palm oil, And countries such as Malaysia and Indonesia do not regard Brussels as a pioneer in enlightened environmental policy formulation.

China and India embarrassed team on patrol

Finally, we turn our attention to the large-scale climate change conference of the parties (COP26) In Glasgow, the weekend finally ended after nearly two weeks. (Why such gatherings must be about twice as long as any other annual policy summit is completely beyond our imagination.) In the end, it did not evolve into a quarrel over climate and trade as some people feared. The EU obtains a carbon border adjustment mechanism (Building Material Manufacturers Association) The proposal was put forward in advance with limited product coverage and years of introduction. It has successfully turned the debate about carbon emission protectionism into a technical debate about system design and WTO compatibility, at least for now.

No, what we got from COP26 is China and India Last minute dilution The pledge to phase out coal shows that they are prepared to play an awkward role at international policy summits and describe it as supporting developing countries against the hypocrisy of the affluent world.This does not bode well for the large WTO Ministerial meeting, It’s less than two weeks now.Delhi is distressed by more or less everything on the agenda, and the Indian media has been report The Modi government is still dissatisfied with a major outcome of the meeting-the latest proposal of a fisheries subsidy agreement. More information about the WTO Ministerial Conference next week and next week.

We finally got it. Coordination policies in trade are in short supply, but trying to solve it through partial measures is not an obvious huge success. A pleasant idea.

Concession waters

The Bank for International Settlements published an interesting paper last week, arguing that most of the inflation we see now comes down to bottlenecks in the global supply chain. (Izabella Kaminska of FT Alphaville has already written here.)

The chart adds weight to this argument and shows that—as one might expect, if world trade does trigger inflation—most countries have witnessed a spike in inflation.

However, this also shows that the inflation we are seeing is not entirely due to obstacles in the supply chain. The inflation rate in the United States is about two percentage points higher than that on the Atlantic side. We think this has something to do with the duration of the US fiscal stimulus, which can boost consumer demand here more than anywhere else on the planet. Claire Jones

Trade ties

one China’s largest chip manufacturer already warn (Nikkei, $) Nikkei Asia has learned that it may have to cancel orders from foreign customers next year to prioritize domestic demand.

McKinsey think There is a lot of space for the world Trade Finance Industry Help more marginal companies access the global trading system more efficiently. (We will write an article on trade finance soon.)

British retailer Mark and Spencer Warned The EU’s efforts to resolve the post-Brexit Northern Ireland problem through a system of marking goods by destination may make the situation worse.

British “Financial Times” Editorial Board think That Joe Biden with Xi Jinping It should be said more.

Prime Minister of Singapore already supply (Nikkei Index, USD) US The Digital Economy Partnership Act signed with New Zealand and Chile serves as the starting point for regional digital trade agreements such as CPTPP. Alan Beatty and Francesca Regalado