From NAFTA to USMCA: Origin, Development, Debate and Alternative………………………………………………….Wang Xuedong

USMCA’s Goal, Principle and Governance Mechanism…………………..Ouyang Jun, Qiu Qiong

From NAFTA to USMCA: U.S. Unilateralism and Possible Responses of China…………………………………………………..Liao Fan

USMCA’s Restraint on Non-market Economies and Its Legality……………….Sun Nanxiang

Canada in USMCA: Perseverance and Compromise…………………………….Lyu Xiaoli

 Latin America-China Trade and Investment amid Global Tensions: A Need to Upgrade and Diversify………………………………………….Anabel González

Study on the Occupation and Industry of Overseas Chinese in Chile………………………Zhu Tao

 Competitive Authoritarianism in Latin America: Taking Peru as an Example…………………………………………………………Xu Yanran, Yuan Yuan

 Abstracts

 

From NAFTA to USMCA: Origin, Development, Debate and Alternative

Wang Xuedong

Abstract: NAFTA was the product of economic globalization and had great influence on the world economic model and institution arrangement. As a once successful example of regional integration and trade liberalization, NAFTA had remarkably accelerated economic cooperation and generated  obvious spillover effects in social and political field within more than 20 years since it came into being. However, NAFTA’s negative effects created by its externalities have become increasingly prominent and criticized. Since the outbreak of global financial crisis in 2008, US Administration has been seeking renegotiation of NAFTA, and President Trump has turned this attempt into reality in 2018. Though the three countries in North America have great differences in their own interests, their mutual dependence led the three parties to modify NAFTA on the basis of seeking common ground while reserving differences, and they finally reached a new agreement called United States-Mexico-Canada Agreement (USMCA). This paper illustrates the evolution from NAFTA to USMCA, analyzes the advantages and benefits of NAFTA, and points out relevant disputes which caused the necessity to renegotiate. Based on this analysis, this paper finally expounds the implication of the evolution from NAFTA to USMCA to the world. This evolution revealed that the conflicts of interests accumulated in the process of globalization will inevitably be released to some extent, it also proved the depth and resilience of interdependence between countries created by economic globalization.

Key words：NAFTA, renegotiation, USMCA, regional economic integration, interdependence

 

USMCA’s Goal, Principle and Governance Mechanism

Ouyang Jun, Qiu Qiong

Abstract: The United States-Mexico-Canada Agreement (USMCA) is widely concerned by the international community because it has in fact set a model for future trade negotiations and is likely to change global trade rules fundamentally. Based on illustration of agreement text and history event, the goals, this paper analyzes the goals, principles and governance mechanisms of international trade system that USMCA tries to construct. The USMCA is basically a liberal intergovernmentalism economic integration, which does not recognize the existence of collective interests beyond the interests of specific parties. The goals, principles and governance mechanisms advocated by USMCA can be traced back to the GATT tradition, which contradicted the functionalism integration rules advocated by the WTO. As for the goals, the USMCA treats the interests of all parties in a non-discriminatory manner, with special emphasis on protection of environment and labor, and emphasizes the integration based on market economic rules. While the WTO takes the interests of developing countries into consideration, which makes other objectives of WTO ignored in practice. As for the principles, under the USMCA framework, the principle of reciprocity has become the basic principle followed by negotiating parties; the cornerstone status of the Most-Favored-Nation (MFN) principle and the National Treatment (NT) principle has been further strengthened; and the principle of fair competition has received greater attention. By contrast, under the WTO framework, the principles of special and differential treatment are the ones effectively followed in practice while other principles like MFN and NT written in the legal texts are relatively marginalized. As for the governance mechanism, unlike the WTO, which involves transfer of sovereignty, USMCA does not seek to establish supranational institutions to exercise executive, legislative and judicial powers, rather, it leaves all powers to each party instead of third-party dispute resolution; it adheres to contract autonomy by which the parties commit their obligation voluntarily.

Key words: free intergovernmentalism, principle of reciprocity, environmental protection, labor protection, fair competition, contract autonomy

 

From NAFTA to USMCA: US Unilateralism and Possible Responses of China

Liao Fan

Abstract: Compared to its predecessor NAFTA, USMCA brought about changes mainly in the following areas: higher level automotive rules of origins, expanded dairy and agricultural market access, much more limited ISDS mechanism, and a newly inserted sunset clause. USMCA reflects to a great extent the “America First” stance and the unilateralism tendency of the Trump Administration. The relevant USMCA provisions reveal Trump’s attempts to revitalize America’s manufacture industry and strengthen its regulatory powers under the flag of “America First”; the negotiation and structuring of the agreement indicates the new tendency of the US to replace multilateral channels with bilateral channels, and replace MFN with reciprocity in making trade deals. The ultimate goal of the US unilateralism is not against globalization, but to reshape the global trade and economic rules so as to achieve a new generation of “globalization” consistent with US’ needs and interests. As response, China should, at the multilateral level, defend the multilateral system and push the WTO reform, while seeking to review and restrain those unreasonable provisions of the regional trade agreements under the WTO framework; at the regional level, accelerate the negotiation of the RCEP, and consider the possibility of joining CPTPP under proper conditions; at the domestic level, continue to deepen reform and opening-up and really let the market play the decisive role in resource allocation, so as to break America’s “confinement” with high-level trade and economic rules and quality business environment.

Key words: unilateralism, USMCA, NAFTA, ISDS, WTO, reciprocity, non-market economy

 

USMCA’s Restraint on Non-market Economies and Its Legality

Sun Nanxiang

Abstract: As the first trade agreement reached since President Trump took office in US, the USMCA is regarded as a model for 21st Century’s trade agreement. The USMCA continues the practices to treat nations differently, and begins to impose special restrictions on non-market economy, which undermine the non-discriminatory treatment doctrine in the multilateral trading system since World War II. In particular, the USMCA stipulates unfair treatments targeted on state-owned enterprises and investors from the so-called “non-market economy”, it also intends to hinder the FTAs negotiations between the contracting parties and the non-market economy. It should be noted that the multilateral trade rules recognize diversified domestic economic systems of all countries, and support the development right of state-owned enterprises. Theoretically, US unilateral measures violate the rules of international law, e.g., international treaty shall not impose obligations on third countries, regional trade agreements should be more liberalized, as well as good faith principle. In view of this, relevant international law should be used to address the improper constraints on non-market economy in USMCA. As a potential stakeholder, China should actively respond to the discourse of the so-called “non-market economy” by western nations, improve the conditions of fair competition in domestic market, develop trade relations with the Americas through the rule of law, and unswervingly maintain multilateral trading system in international society.

Key words: non-market economy, poison pill clause, state owned enterprise, rule of international law

 

Canada in USMCA: Perseverance and Compromise

Lyu Xiaoli

Abstract: This article tries to find out the implication and influence of USMCA on Canada. By analyzing the process of USMCA negotiations, the results, the reactions from all sides in Canada and the influences of related industries, the author finds the following main conclusions. First, the USMCA agreement is very important to Canada, which reduces the uncertainties faced by Canada’s economic development. Second, due to its economic and trade dependence on the United States, Canada did not occupy an advantaged position in the negotiation process. Part of Canada’s insistence and proposition has realized after a hard and seesaw game with the United States, but at the same time, it has also made many compromises. For Canada, the biggest achievement in the negotiation is to retain the dispute settlement mechanism of chapter 19 in NAFTA and extend the “sunset clause”. The tariff on cars is also basically exempted in the foreseeable future. However, Canada has had to open up its dairy market further, it also has to accept the most controversial “poison pill clause”. Third, under the new framework of USMCA, the stability of Canada’s economic development can be expected, meanwhile, its strategy of diversifying economic and trade relations will face more challenges.

Key words: USMCA, Canada, perseverance, compromise

 

Latin America-China Trade and Investment amid Global Tensions: A Need to Upgrade and Diversify

Anabel González

Abstract: Trade between Latin America and China has multiplied 18 times since 2000. Between 2005 and 2016, China invested close to $90 billion in the region. In the context of global trade confrontations, there is a strong motivation for Latin America and China to explore fresh options to upgrade, diversify and deepen their trade-and-investment relationship, not only to manage peril, but also to leverage new opportunities and strengthen economic cooperation. Given factor endowments on both sides of the relationship, current patterns are expected to continue anchoring Latin-Sino trade and investment in the future. Policy actions and investments, however, could spearhead other areas of economic activity that would open new prospects for Latin America to add value, diversify and modernize trade, foster inclusiveness, and spur productivity. Three areas of business opportunity stand out, all of which leverage demand dynamics and existing capabilities on either side of the Pacific: facilitating commerce in processed agricultural and food products; expanding trade in services, particularly tourism; and leveraging Chinese advanced technologies, digital platforms and capital to foster e-commerce. The benefits of a richer and more balanced relationship would accrue for China as well, with greater diversification of products, markets, and firms, new opportunities for services trade, and increased e-commerce integration.

Key words: trade conflict, investment, business opportunity, trade partnership, agricultural product, service trade, e-commerce

 

Study on the Occupation and Industry of Overseas Chinese in Chile

Zhu Tao

Abstract：Occupation and industry are the basis for overseas Chinese to adapt to the life abroad. Based on field survey data, this paper investigates the occupational and industry situation of overseas Chinese in Chile. It is found that Chilean overseas Chinese mainly engage in catering and trade, maintain a relatively stable occupational and industry structure, and thus have limited inter-generational occupational mobility. The above situation is a convenient and low-risk career choice for immigrants. It is not only a choice to adapt to the life abroad as soon as possible, but also reflects national characteristics and cultural traditions. Furthermore, the process and mechanism of Chilean overseas Chinese adapting to their living abroad are mainly embodied in the aspects of path dependence, exertion of their expertise, consideration of profits and risks, and mastery of consumer culture, so as to maintain their foothold in Chilean society. At the same time, the fact that Chilean overseas Chinese have a relatively single occupation and industry structure also affects their future development. Therefore, the overseas Chinese should not only adapt themselves to local business environment, strengthen self-discipline, establish the image of “law-abiding management” and “quality management”, but also pay more attention to the improvement of human capital and overall quality, and constantly integrate into the mainstream of local society, so as to safeguard their legitimate rights and interests, contribute to the prosperity and development of local society in a broader space.

Key words: Chile, overseas Chinese, occupation, industry, mechanism of adapting

 

Competitive Authoritarianism in Latin America: Taking Peru as an Example

Xu Yanran, Yuan Yuan

Abstract: Competitive authoritarianism is a relatively new concept in the study of world political history. For “competitive authoritarianism”, procedural legitimacy and excellent performance are the two key factors to maintain it. Taking Peruvian Fujimori government in the 1990s as the case, this paper discusses the social background and historical status of competitive authoritarianism in Peru. In the past decades, countries in Latin America which passed through the “democratic transition” process and functioned in accordance with the rules of “democracy” yet got stuck in national bankruptcy and social disintegration, saw the possibility of “self-redemption” as competitive authoritarianism emerged in the region. Meanwhile, competitive authoritarianism, which is balanced between democracy and authoritarianism, is endowed with unique resilience. In the 21st century, the trauma of neoliberalism has made competitive authoritarianism still livable in “pink tide” movement in Latin America. As a political act with great significance and far-reaching influence, the transition from authoritarianism to democracy should be a gradual process worthy of delicate resolution.

Key words: competitive authoritarianism, democracy, “Fujimori Phenomenon”, economic reform