Economic and trade frictions among the world’s major economies are on the rise

Since 2021, the world economy has struggled to recover in the face of COVID-19. Disruptions in global supply chains have become more prominent, trade frictions between major economies have intensified, and uncertainties in the operation of global economy and trade have increased.  The 2021 Global Economic and Trade Friction Index report (HEREINAFTER referred to as the Report) was officially released at the March regular press conference held by the China Council for the Promotion of International Trade (CCPIT).  Yu Yi, spokesman and general office director of the China Council for the Promotion of International Trade (CCPIT), said that in 2021, the global economic and trade friction index declined steadily year-on-year, but trade friction among major economies is still on the rise.
Yu yi said that in order to help Chinese enterprises effectively deal with economic and trade frictions and provide risk warning and decision-making support, CCPIT has systematically tracked the economic and trade measures of 20 countries (regions) and regularly issued the Global Economic and Trade Frictions Index.  Up to now, 20 monthly reports and 2 annual reports have been issued.
According to the report, the global trade friction index was at a high level for six months in 2021, down three months from the same period last year.  By country (region), the monthly average of global trade friction index for India, THE United States, Argentina, the European Union, Brazil and the United Kingdom is at a high level in 2021.
Experts say disputes over global economic and trade frictions have increased in diversity and complexity in the past two years.  This is because of various economic and trade imbalances brought about by globalization over the past decades, as well as the impact of information technology development, epidemic diseases and economic fluctuations, the global economic and trade situation is grim and trade frictions between major countries have intensified.
“The implementation of various measures varies greatly between developed and developing economies, and the intention of serving national manufacturing, national security and diplomatic interests is more obvious.”  Developed countries have adopted more industrial subsidies, investment restrictions and government procurement measures, Yu said.  The United States, the European Union, the United Kingdom, India, Brazil and Argentina have revised their domestic trade remedy laws and regulations, focusing on strengthening trade remedy enforcement.  Import and export restrictions have become the main tool for western countries to take measures against China.
Faced with such a situation, how should Chinese enterprises respond?  In specialist’s opinion, first of all, enterprises should vigorously enhance their original innovation ability, including original technological invention and technology-based integrated innovation, and seize the two high ends of the smile curve of the product value chain to improve their competitiveness and enhance their voice in international cooperation.  Second, we need to firmly uphold the multilateral trading system and properly handle international trade disputes in accordance with consultations and expert group procedures under the WTO dispute settlement mechanism. If the two sides sign bilateral or regional free trade agreements, disputes can be settled in accordance with the rules of the agreements.  Finally, the enterprise should actively respond to the lawsuit, give full play to the positive role of the China International Chamber of Commerce, the chamber of Commerce for import and export of various industries, industry associations, etc. Enterprises with much international business and high externality need to establish internal legal departments, or outsource foreign legal services to law firms.
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Post time: Apr-12-2022

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