Hello Brussels, and welcome to the last trade secrets of 2021.

Last weekend, we received some latest news about the UK Annual Brexit surrender Tradition that has continued Since 2018Lord David Frost, the Secretary of State for Brexit, accepted the final surrender and Resign. After the British surrender Friday Regarding the role of the European Court of Justice as the final arbitrator of the Northern Ireland Agreement, we are Thursday, And Downing Street strongly denies A week ago Will happen, even though British officials earlier Inform the U.S. media it will. This makes the 2021 surrender double bill, a 100% increase over previous years, and it is implemented in a comically incompetent manner. Good job, everyone.

Last night, it turns out that Frost will be replaced by Foreign Secretary Liz Tras, who is a free trade theorist and a former stayer in Europe. ladies and gentlemen, Place your bet! (We are accepting more surrenders.) “Trade Secrets” will return on January 10th, when it will provide a large number of new sharp views to share with you, and use a new form of sharing. Now, we will look back at that year.

Concession waters Focus on the impact of the deal maker’s perception of the supply chain on mergers and acquisitions in 2022.

Corporate rescues clumsy bureaucrats

On the surface, this year is not an outstanding year for world trade. China and the United States continue to collude with each other with high tariffs and strong rhetoric. The EU-China flagship agreement was unceremoniously pushed into a deep freeze. Supply chains around the world were disrupted by the roar of port after port, semiconductor inventories dried up, and Covid-19 Forcing the postponement of the Ministerial Conference of the World Trade Organization. Not exactly a retro turn around the sun.

However, looking back at the situation a year ago, frankly, the situation could be worse. The good news is not so much what policymakers have been doing, as it is the extraordinary flexibility of trade itself. (We may have discussed the relative contributions of business people and bureaucrats Once or twice This year already. )

At this time last year, the WTO Expected After a decline of 9.2% in 2020, this year’s merchandise trade will grow by 7.2%, which is now forecast Upgraded It will increase by 10.8% by 2021, and the decline last year was much smaller. Encouragingly, last year’s austerity seems to be mainly due to a sharp drop in demand, rather than a supply-side shock caused by Covid’s interruption of production and trade. In fact, the truly heroic trade policy makers are not actually the Minister of Trade, but the Ministry of Finance and the Central Bank, who promoted the introduction of stimulus measures. Although the Omicron variant is terribly contagious, compared with the fear of the previous wave of collapse, economists generally estimate that the blow to global growth and trade is fairly mild.

So, what about the aforementioned trade policy makers? As we all know, to what extent the administration of US President Joe Biden will break with the destructive modus operandi of Donald Trump-not only protectionism, but also protectionist aggression and repetition Impermanence and malice. Unfortunately, the answer is far from enough.

To be fair, unlike Trump, the Biden administration has not provoked everywhere. Where it can resolve disputes without compromising its core objectives, it has already done so, especially in disputes with the European Union. Airbus/Boeing lawsuits, digital service tax standoffs, steel and aluminum tariff disputes: all these transactions that were manipulated by the jury have settled down. These transactions are not beautiful, but work is now done.

But under the extremely misleading title of “worker-centered” trade policy, its core goal remains Exclude a lot And it embodies the wrong protectionist approach. In all respects, U.S. Trade Representative Katherine Tai (Katherine Tai) is more constructive than her predecessor, Robert Lighthizer. But the U.S. is still working hard to make work a “Stage 1“Trump signed the trade agreement with China. It still has not meaningfully participated in WTO reforms. It is exclude Joining the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP) has disappointed trade and foreign policy allies in the region, such as Japan and Australia.

This newsletter is not a series of forecasts for next year, but we very much doubt whether this will change a lot in 2022, especially since midterm elections will be held at the end of the year. Maybe we will make some progress in WTO reform. The United States at least admits that letting the dispute settlement mechanism wither and wither away is a bad thing in general, but they will focus on saying anything that can be cancelled and used in elections to their detriment. evidence of.

As far as the WTO itself is concerned, you have to regret the heroic efforts of its leadership and the chairman of the negotiating committee to achieve results at the ministerial meeting in December. To be honest, a big breakthrough seems unlikely, but in any case, if the meeting fails to reach an agreement, it may be a cathartic experience. In fact, the postponement due to Covid only pushes the problem to next year.

From the perspective of the European Union, apart from seeing that Chinese transactions that it judged wrongly should enter a low-temperature suspension, the European Commission’s main concern is Instrumentalization Use a series of legal weapons to implement its favored strategic autonomous policies. As for China itself, it continues its dual-cycle strategy, separating external and domestic key sectors.

But the thing is like this.Nevertheless, China continues to attract a large number of Foreign direct investment. As we said before, trade in goods (and services) has made a comeback. Of course, there are differences in the handling of personal data, but so far, there is not much evidence of global economic bifurcation or trifurcation. The reflux did not happen too much.Congestion in the supply chain is a serious problem, but currently we insist on our Default view They are mainly about sudden and unsustainable surges in demand. Globalization is not over, let alone going backwards. The performance of the world trading system may be much better than its policymakers deserve. We can at least be grateful for this in this holiday raging by the new crown virus.

Concession waters

To be fair, we are not surprised by the following poll from Datasite, an M&A data expert. The poll shows that supply chain barriers are one of the main reasons executives have listed possible errors in transactions in 2022.

Nonetheless, in some of the most affected industries—such as the automotive industry—the obstacles are so severe that more transactions are now underway.

“although [supply chain problems are] put pressure on [on the auto industry] In order to make some difficult choices, including how to cooperate with semiconductor suppliers in supply and research, this may also mean more investment in obtaining process and product technology to meet recent liquidity challenges,” said Datasite chief Revenue Officer Merlin Piscitelli Europe and Middle East said. “In fact, we saw some of these activities in real time on our platform, including new global industrial, transportation, and defense projects, which were transactions that were announced at the beginning rather than announced. , From January 1 to mid-December. ” Claire Jones

Trade ties

This Chad Bowen of the Peterson Institute exist False temptation of Managed trade.

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