Trade officials from the United States, Japan and the European Union announced they will be pushing for reforms to withstand China’s domestic subsidies and trade practices, yet experts say it is highly unlikely that the three blocs will forge a formal trade alliance.
Japanese economy minister Hiroshi Kajiyama, U.S. trade representative Robert Lighthizer and EU trade commissioner Phil Hogan said in a joint statement on Jan. 14 that the current World Trade Organization rules are not sufficient to “tackle market and trade distorting subsidization existing in certain jurisdictions.” This comes after many months of escalating trade tensions between the U.S. and China, with the two reaching a first agreement on Jan. 15.
Experts say an actual trade coalition between the U.S., Japan and the EU won’t happen anytime soon, particularly after President Donald Trump said earlier this week that he intends for the EU to be his next trade negotiation target.
Talks between the U.S., Japan and EU have been going on for years, with no particular results.
“It all started in the sidelines of the G-20 summit in Buenos Aires (in 2018),” says Bart Oosterveld, senior fellow in the Global Business and Economics Program at the Atlantic Council, a Washington-based think tank that focuses on international issues. “From the first statement, which was a few lines long, they talked about shared concerns that the U.S., the EU and Japan have of China’s trade practices, subsidies, dumping, over capacity, theft of intellectual property, forced technology transfer and the like.”
The conversation continued over several meetings, with the EU committing to improving existing multilateral trade practices at the G-20 summit in Japan last year, with a reformed World Trade Organization as the centerpiece.
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