Hello, from Brussels. In this cold year, we have been immersed in heat waves, mixed with monsoon rains.We are studying two issues today, both of which involve some transatlantic job competitions, especially considering the newsworthiness of Joe Biden trip to Europe This week and next week. In the extended introduction, we will discuss vaccine patent exemptions in the World Trade Organization, which will be discussed by the ambassadors this week. In a major part shorter than usual, we will study the EU’s carbon border adjustment mechanism, a draft of which was leaked on Friday. Concession waters Look at the extent to which the global tax agreement may increase the government’s treasury.

First, WTO exemptions.We realize Our determination Don’t write about Covid-19 vaccine patents before major events have lasted long.But some important things have happened, or more precisely, it is important that some things should happen but notA month ago, the United States received a lot of praise for supporting the patent exemption in the WTO’s Intellectual Property Agreement (Trips) in principle.ourselves hope After years of destructive obstruction under Donald Trump, Washington has returned to dominate the WTO debate and looks forward to detailed Trips negotiations on a feasible legal text.

On the contrary, we have a very unrealistic proposal From India and South Africa, they are almost as extensive as their initial exemption application in October last year. This will be the time for the United States to focus its debate by formulating its own negotiating text, especially when the WTO ambassador holds a comprehensive meeting on the subject this week. instead. . . there is nothing. No words, no plans, no comments. A Geneva trade official said that at an informal meeting last week, the United States issued a brief statement only to suggest that other countries submit texts for discussion.

The EU rightly continues to argue that patents are not the main factor in the supply of vaccines, and has now been angered by activists to the point that it has begun to make strange sharp comments. Last week, Trade Commissioner Valdis Dombrovskis Tell the Financial Times “There is no specific US proposal on the table, and we don’t have any information about its coming soon.”Brussels continues to promote its own plan Increase the flexibility of countries to use compulsory licenses instead of waiving: This may be a limited proposal, but on the bright side, it does have practical advantages.

We try not to be instinctively cynical: the United States’ declaration of its willingness to agree to the exemption is symbolic.But so far, the Biden administration’s actions are consistent with the public relations gimmicks, and then retreat to avoid being blamed for any subsequent disappointments, and hope that because it finally begins donate Its surplus vaccines abroad. If this situation continues, it will not be conducive to a rational debate on the issue, and activists may begin to doubt whether the United States is acting in good faith. This issue may cast a shadow over the biennial WTO Ministerial Conference to be held in Geneva at the end of the year.we have already Said before If you rely on pharmaceutical companies to do more in terms of transferring technology and production, then the limited exemption has some benefits, but if there is no progress in the plan, then this incentive will disappear. What we are talking about is just giving us a text.

EU seeks carbon copy of its emissions tax

When it comes to debate, you cannot blame the EU for its courage to lead carbon border measures aimed at balancing the price of domestic production and imports. Is it smart and brave? not sure.

The latest draft of the EU Carbon Border Adjustment Mechanism (CBAM) is Give way on Friday.It’s almost as expected, targeting some industry (Steel, aluminum, cement, fertilizer, power generation). To make it compatible with WTO laws, it is also linked to the EU’s own emissions trading scheme, and envisages a complex carbon content assessment system and an import licensing agency that can issue permits based on the emissions of countries and individual companies.

We will put aside the technical details (there is a very Detailed thread On the draft) until the final version comes out, and then look at the political economy of all this. There is no doubt that the EU is taking the risk of proposing this idea alone. The United States has repeatedly discussed whether carbon border measures are a good idea, and in any case (yet) does not have its own national carbon pricing plan. Countries such as China and India are flat. Pushing CBAM now may make the issues that dominate the entire climate change debate this year undermine other elements such as corporate governance and cannot guarantee progress.

The initial selection of CBAM products will not mainly affect geopolitical giants. The goods involved usually have a short supply chain, and this mechanism will mainly damage the EU’s immediate neighbors—— Russia, United Kingdom, Turkey -Brussels is more happy to annoy it than China or the United States. By the way, the situation in the UK is very interesting and highly symbolic of Britain’s post-Brexit status. If the UK joins the EU’s emissions trading scheme, it will automatically be exempted, as will members of the European Economic Area, including Switzerland. If not, even if it adopts its own similar plan, more bureaucratic troubles await in the form of evaluations and permits. Welcome, United Kingdom, Paperwork involving nominal sovereignty, part 237.

Although it tries to keep the United States on its side, it is very likely that the EU will eventually become diplomaticly isolated. The desired result is that other countries, perhaps a group of countries in the “carbon club” (although please refer to the link below for questions about these issues), under the threat of CBAM before actually seeing the tax on EU exports Adopt carbon pricing. Ideally, the EU would never have to extend it to the initial set of products or impose it on a limited number of countries. However, considering the complexity of the mechanism and the increased political costs of trade conflicts with China and other countries, it is not clear whether the threat to expand it completely is credible (you will occasionally hear some EU officials admit that in fact it is mainly for threats rather than inevitable The revocation of the promise, the acknowledgment shows that they did not play too much poker during their growth period).

It will be interesting to see how this develops. The EU wants to become a geostrategic participant: we are about to see how good its political judgment and diplomatic skills are.

Concession waters

There was a big news about taxation over the weekend because the finance ministers of the Group of Seven countries agreed to set the global minimum corporate tax rate at 15%. The lowest interest rate is the second of the two pillars currently being discussed by global officials.

The first is more important to European members, and the focus is on how to tax large technology companies under the global digital tax.Chris Giles and Delphin Strauss Say here, There is still a lot of controversy ahead, and negotiations are now entering the G20. But if the rules are passed in their current form, according to data from the Economic Cooperation Organization, the table below shows how much funding and development they will raise each year. Claire Jones

Trade ties

Bernice Lee and Richard Baron, writing for the World Economic Forum, debate Establish a limited “carbon club” of cooperating countries Carbon tariff Is a bad idea.

According to Jim Brunsden and Valentina Pop of European Express, the Financial Times I’m Waiting for action Regarding trade from the U.S. On a series of issues.

The problem of allowing developing countries to have leeway Reduce overfishing Occupy a leading position in the fisheries negotiations of the WTO, according to News service SeafoodSource.

David Frost, Secretary of State for Brexit, once again wrote an article in the Financial Times reveal He does not understand (or pretends not to understand) Northern Ireland Agreement signed by the United Kingdom In the withdrawal negotiations, and hope that the EU will solve the problem (our description of the situation, not his). Alan Beatty