2020 CONCORDIA ANNUAL SUMMIT

Global Repercussions in Trade & Manufacturing

Strategic Dialogue

• Aubrey Hruby opened the Strategic Dialogue by questioning what U.S.-China trade tensions and concessions have been like before and during the pandemic, and what the U.S.-China relation may be like after the pandemic subsides. Huiyao Wang observed the steady deterioration of U.S.-China diplomatic ties since China opened its economy in the 1980s, despite the increasing presence of U.S. businesses in China (70,000 to date). Wang suggested efforts to bridge lapses in communication as well as differences in the two countries’ culture and business strategies.
• Fred Hochberg provided the global context of the U.S.-China trade war. In the past two decades, 80% of worldwide economic growth has originated from American and Chinese economic activity. China’s tactical investment in, and increased export to, Sub-Saharan Africa and Southeast Asia exemplifies how the U.S.-China trade war impacts other regions of the world. Hochberg emphasized the critical role of the Export-Import Bank of the U.S. (EXIM) in enabling the exports of U.S. manufacturers to new markets, creating export-related jobs and helping small- and medium-sized manufacturers grow their businesses and hire new workers. Considering the possibilities of export-related employment, Hochberg believes that EXIM will be ever more critical in America’s post-pandemic economic recovery.
• Michelle Giuda delineated the communication and perception of geopolitical risks in U.S.-China relations. Giuda claimed that exaggerated risks not only sway the decision-making processes of multinational corporations (MNCs) as they navigate both American and Chinese markets, but have dire economic, political, and security implications for both governments. She also spoke of the difficulty facing MNCs in delivering environmental, social & governance initiatives across borders and cultures. MNCs must focus on employee unity and public diplomacy when values and interests of all international stakeholders do not align, and when company reputation must be preserved.

“Multinational companies navigating all of these forces in addition to COVID-19 makes it extremely risky when it comes to their reputation,” Michelle Giuda

• Nicholas Logothetis directed attention to the unexpected rise of container shipping over air freight shipping, with high delivery demand throughout the pandemic. Since Chinese shipyards are central to U.S. trade, this pandemic-driven rise of container shipping increases pressure on the U.S. to maintain amicable relations with China. Logothetis speculated that this especially-sensitive U.S.-China relationship may be one explanation for why the stock market has been in flux with U.S.-China news during the pandemic.
• Joakim Reiter contemplated European trade, security, and technology in tandem. He remembered that at one time, fellow European policymakers had erected “firewalls” between these three policy areas, when the three must be considered all at once for comprehensive, effective policymaking. He then moved on to Brexit, which he believes to be an example of a global trend toward national self-determination—nations unshackling themselves from international arrangements they had once made and from regulatory standards they had once committed themselves to. When these international arrangements are re-negotiated and regulations re-established, Reiter commented, the extent of data sharing between newly-outlined jurisdictions must be re-evaluated. He observed that the European Union has been restraining data flow to nations it considers “high-risk jurisdictions,” as it fears disruption of supply chains pertinent to European Union trade if the data is shared. 
• Antony Phillipson furthered discussion of Brexit’s impact on European trade and the movement of data across European businesses. He listed countries with which the UK has formed trade agreements since exiting the European Union in January this year: Japan, Australia, and New Zealand. Additionally, the UK has completed a fourth round of free trade negotiations with the U.S. concerning regulation of financial services, and has been exploring the possibility of joining the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP). He concurred with Reiter that the establishment of international standards and regulations for data trade and digital flows is essential for the security of future global trade.
• As an expert in African economic affairs, Hruby challenged the discrepancy between the bilateral nature of President Trump’s China policies and the plurilateral spillover effects of such policies.

“The U.S. is an old friend to China […] As China’s economic success has grown, the Chinese Communist Party has taken a pivot and is not interested in the family of nations by playing by the rules. This has frustrated policymakers in capitals around the world […] The trade challenges that we have are a derivative issue of the Chinese Communist Party’s change in its economic strategy, its diplomatic strategy, and its military strategy,” French Hill