Conventional wisdom says that foreign policy takes a backseat role in US elections. But last autumn’s Democratic primary debates suggest a potential shift is taking place in the conventional view. While healthcare dominated the discussion (Democrats attribute their 2018 midterm gains to the issue), through November foreign policy followed closely behind in second place in terms of minutes devoted to the discussion.

This trend is consistent with President Donald Trump’s America First approach to foreign policy, in which an eye is always kept on how decisions abroad play for the domestic audience. One former Trump administration official has called this dynamic the ‘recoupling’ of foreign policy with domestic policy.

The US–China trade conflict, which commanded headlines throughout 2019, is perhaps the best example of this recoupling, tying trade imbalances less with the geopolitical than with domestic impact on farmers. Immigration is another policy area in which Trump has linked domestic implications and indeed domestic opinion with foreign policy. It’s in the title: America First.

Now, for better or worse, the targeted killing of Qassem Soleimani, Iran’s response and the subsequent fallout may make US foreign policy towards Iran and the US role in the Middle East a central issue for the 2020 US elections. As it comes just ahead of the Democratic presidential primaries, voters will be looking to the candidates to differentiate their foreign policy experience and proposals for America’s Middle East policy.

To President Donald Trump, Soleimani’s assassination represents a campaign promise kept to confront Iran’s aggression.

The Trump administration initially justified the action by citing intelligence of an imminent threat to US personnel and targets, but after Defense Secretary Mark Esper called this into question, Trump tweeted that ‘it doesn’t really matter because of [Soleimani’s] horrible past’. Ultimately, Trump’s message, on the campaign trail and any general debate stage he agrees to be on, is that he has overseen a new national security strategy for Iran.

Soleimani’s removal from the Iranian calculus is just a part of this broader policy, which also includes neutralizing the Iranian government’s destabilizing influence in the Middle East, denying Iran and especially the Islamic Revolutionary Guard Corps’ access to funding for its malign activities, and rallying the international community against domestic human rights violations and unjust detentions.

To counter Trump, Democrats and democratic presidential candidates would be best-served by offering a simple argument that too links domestic interests and foreign policy: the killing of Soleimani and Trump’s national security strategy for Iran have not made the US or its interests safer.

Iran’s ballistic missile attack on US forces in Iraq, which Iran’s Supreme Leader Ayatollah Ali Khamenei called a ‘slap in the face’ for the US, makes the risks to US assets and personnel abundantly clear. Even if Iran reverts entirely to covert, proxy efforts to counter US interests, the current US–Iran tensions remain unresolved and will likely continue to persist through the 2020 elections in November.

As a matter of the first order, Soleimani was replaced by his deputy Brigadier General Esmail Ghaani within a day of the former’s death, with Khamenei saying that the Quds Force will be ‘unchanged’.

At the second order, Iraq’s parliament voted in favour of a nonbinding resolution to rescind the invitation to US forces, which led Trump to threaten sanctions and demands for reimbursement. Whether US troops will ultimately leave Iraq (following a ‘mistaken’ report that the US was preparing to depart) remains to be seen, but the destabilization of the US military presence in Iraq fulfils a key Iranian objective.

In the interim, the US-led coalition in Iraq and Syria fighting ISIS announced that it would at least temporarily cease its counterterrorism efforts to instead fortify its outposts and prepare for Iranian retaliation, opening a wider door for the resurgence of the terror group.

By arguing that the US, its troops and interest have not been made safer by Trump’s Middle East policy – from withdrawing from the Iran nuclear deal to the imposition of a ‘maximum pressure campaign’ to Soleimani’s killing – Democrats will be able to point to every post-Soleimani US injury, death, regional terrorism attack, asset compromise, cyberattack and shipping disruption as evidence.

Democratic presidential candidates also ought to be explicit about how they plan to manage tensions with Iran – strategic, diplomatic and military – particularly their position on the future of the nuclear deal.

Iran has made clear that the path to de-escalation is through sanctions relief. Asserting leverage need not always involve taking away all of your counterparty’s options (‘maximum pressure’). It also involves knowing what your adversary wants (sanctions relief) and showing a willingness to offer it (especially where it means less to you) in exchange for something of greater worth (avoiding war/a non-nuclear Iran).

Clarity around future policy of a potential Democratic president may bring de-escalation forward in a way that Trump’s statement of Iran standing down are unlikely to do.

In the face of multiple competing pressures, most especially intense pressure by the US president and Secretary of State Mike Pompeo, the UK government has carved out an independent choice on the role that Huawei will play in its 5G mobile networks. Announced just days before the UK exited the European Union, a move designed to allow the UK to reclaim its sovereignty, this was a model example of a sovereign decision, but one that carries risk and will create ongoing uncertainty.

The government’s assessment is that this will bolster Britain’s economic competitiveness through a rapid rollout of its 5G mobile network while staving off pressure from the United States and economic retaliation from China.

Britain’s decision treads a cautious line. The effort to balance the drive for competitiveness, the imperatives of national security and, especially, to appease while not appearing to appease America, has meant that the UK faces multiple pressures just as it seeks to forge an independent political future. So far, the UK government has handled these pressures artfully.

After months of intense scrutiny that at times looked like prevarication, and at other times looked a lot more contentious, the UK has decided to restrict Huawei’s access to a maximum of 35% of the market share of what it argues is the non-core part of its 5G mobile networks, and to enforce a total ban on Huawei’s access to the core.  

But no one should rest easy with the current choice. The UK has been divided internally on this decision, even among those on its National Security Council who have had privileged access to the intelligence offered by GCHQ. As the UK’s decision loomed, Tom Tugendhat, chair of the House of Commons Foreign Affairs Committee, cited Huawei’s connection to China’s intelligence services and its police state in Xinjiang and asked ‘is the risk worth it?’.

This division created latitude for the Johnson government to stake out its own position. But it also suggests that when it comes to national security, the case is not clear.  

The US response is more puzzling. Donald Trump and Pompeo have been coming down hard on the UK. But in the lead up to the UK’s decision, US Treasury Secretary Steven Mnuchin struck a much more nuanced tone, at least on the public record.

Despite weeks of pressure by Trump and Pompeo leading up to the announcement, the UK’s Huawei decision has so far failed to make headlines in the US, or garner much of an official response.

In an oped published in the Financial Times just days after the UK’s decision, acting US Assistant Secretary of Defense David Helvey took a strong line on China, calling for transatlantic unity and stressing the comprehensive nature of the competition that China presents. But he refrained from any specific mention of the UK’s announced decision. 

Given the previous US threat that allowing Huawei access would compromise future US–UK intelligence sharing and undermine the prospect for a free trade deal, this relatively muted response is surprising. Few among US national security experts have diverged from the view that Huawei presents a singular threat to national security.

This suggests one of two things: either that, even among those in the US who agree about the threat that Huawei presents for national security, opinion differs on how to deal with this threat; or, that America has conceded to the UK’s choice, even if it is a different position to its own.

What comes next is less certain. Now that Boris Johnson’s decision has been announced, the US has good reason to lay low. Restricting US–UK intelligence is a hollow threat: the US is a major beneficiary of this relationship and any attempt to unravel it would be costly for both parties.

The same is true of a future US–UK free trade deal, from which the US will most certainly reap substantial benefits, politically as well as economically.

The risk for the United States, of course, is that if it does not follow through, future threats to retaliate against the UK’s sovereign choices will become increasingly meaningless. And President Trump is not just any president. The current quiet could quickly be reversed if he sees a reason to make an example of the UK to signal to other countries currently debating their position on Huawei that proceeding will carry significant penalties.

The question remains whether in forging ahead, but with elements of caution, Britain has made the right decision. If the measure of success is political independence befitting the moment of Britain’s historic exit from the European Union, then the answer would appear to be yes. National security is an entirely different matter, and on this the debate is not over.

In the aftermath of World War II, the United States cemented its role as the leader of a new global order, characterized by the creation of international institutions and treaties like the United Nations and North Atlantic Treaty Organization. More recently, however, the United States has appeared to take an inward turn, a trend which has been mirrored across the globe and has led to the international order being challenged more now than ever before.

As the Trump administration and US members of Congress attempt to address multiple challenges from a rising China and a disruptive Russia to a nuclear North Korea and shifting Middle East, Senator Chris Coons will offer his vision for restoring American leadership on the world stage.What is the role of Congress in setting and shaping US foreign policy?  How will the outcome of the consequential 2020 elections shape the future of America’s global role? Would a change in administration necessarily increase prospects of American reengagement, and if so, across which international spheres?

There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

The end of 2018 was a monumental year for Latin America’s two biggest economies. In December 2018, Andrés Manuel López Obrador (AMLO) was inaugurated as Mexico’s 58th president. The following month saw another political shift further south, as Jair Bolsonaro became Brazil’s 38th president. While sitting on opposite ends of the political spectrum, both AMLO and Bolsonaro were considered to be political outsiders and have upended the status quo through their election to office. 

To what extent does the election of AMLO in Mexico and Bolsonaro in Brazil represent a shift in those countries’ definitions of national interest and foreign policy priorities? How will this affect these states’ policies regarding international commitments and cooperation on issues such as human rights, environment and climate change, migration, and trade? To what extent do possible shifts reflect changing domestic opinions?  Will any changes represent a long-term shift in state priorities and policies past these administrations?

The WTO Ministerial Conference in June 2020 presents a critical opportunity to move ahead on better alignment of trade and environmental sustainability objectives, policymaking and governance. In light of the challenges facing the WTO, meaningful efforts to address environmental sustainability would also help to reinvigorate the organization and strengthen its relevance. 

In this context, the meeting aims to advance discussion on two questions: How can the multilateral trade system better contribute to meeting the UN Sustainable Development Goals and the Paris climate goals? What priorities and tangible outcomes on trade and environmental sustainability should be advanced at the WTO Ministerial Conference in Nur Sultan in June and beyond?

The event will be hosted by the US and the Americas Programme and the Hoffmann Centre for Sustainable Resource Economy at Chatham House in partnership with both the Global Governance Centre and the Centre for Trade and Economic Integration at the Graduate Institute, Geneva.

We gratefully acknowledge the financial support for this event from the Chatham House Global Trade Policy Forum’s founding partner AIG and supporting partners Clifford Chance LLP, Diageo plc and EY, and on the Graduate Institute side, from the government of Switzerland.

As coronavirus spreads across the globe, states grapple to find the ideal strategy for coping with the global pandemic. And, in China, Singapore, South Korea, the US, the UK, and Europe, divergent policies are a product of state capacity and legal authority, but they also reveal competing views about the optimal role of centralized state authority, federalism, and the private sector.

Although it is too soon to know the longer-term effects, the apparent capacity of centralized state authority in China, South Korea and Singapore to respond effectively and rapidly is making headlines. In the United States, the opposite has been true. 

America’s response is being shaped by its federal structure, a dynamic private sector, and a culture of civic engagement. In the three weeks since the first US case of coronavirus was confirmed, state leaders, public health institutions, corporations, universities and churches have been at the vanguard of the nation’s effort to mitigate its spread.

Images of safety workers in hazmat suits disinfecting offices of multinational corporations and university campuses populate American Facebook pages. The contrast to the White House effort to manage the message, downplay, then rapidly escalate its estimation of the crisis is stark.

Bewildering response

For European onlookers, the absence of a clear and focused response from the White House is bewildering. By the time President Donald Trump declared a national emergency, several state emergencies had already been called, universities had shifted to online learning, and churches had begun to close.

By contrast, in Italy, France, Spain and Germany, the state has led national efforts to shutter borders and schools. In the UK, schools are largely remaining open as Prime Minister Boris Johnson has declared a strategy defined by herd immunity, which hinges on exposing resilient populations to the virus.

But America has never shared Europe’s conviction that the state must lead. The Center for Disease Control and Prevention, the leading national public health institute and a US federal agency, has attempted to set a benchmark for assessing the crisis and advising the nation. But in this instance, its response has been slowed due to faults in the initial tests it attempted to rollout. The Federal Reserve has moved early to cut interest rates and cut them again even further this week.

But states were the real first movers in America’s response and have been using their authority to declare a state of emergency independent of the declaration of a national emergency. This has allowed states to mobilize critical resources, and to pressure cities into action. After several days delay and intense public pressure, New York Governor Andrew Cuomo forced New York City Mayor Bill de Blasio to close the city’s schools.

Declarations of state emergencies by individual states have given corporations, universities and churches the freedom and legitimacy to move rapidly, and ahead of the federal government, to halt the spread in their communities.

Washington state was the first to declare a state of emergency. Amazon, one of the state’s leading employers, quickly announced a halt to all international travel and, alongside Microsoft, donated $1million to a rapid-response Seattle-based emergency funds. States have nudged their corporations to be first movers in the sector’s coronavirus response. But corporations have willingly taken up the challenge, often getting ahead of state as well as federal action.

Google moved rapidly to announce a move allowing employees to work from home after California declared a state of emergency. Facebook soon followed with an even more stringent policy, insisting employees work from home. Both companies have also met with World Health Organization (WHO) officials to talk about responses, and provided early funding for WHO’s Solidarity Response Fund set up in partnership with the UN Foundation and the Swiss Philanthropy Foundation.

America’s leading research universities, uniquely positioned with in-house public health and legal expertise, have also been driving preventive efforts. Just days after Washington declared a state of emergency, the University of Washington became the first to announce an end to classroom teaching and move courses online. A similar pattern followed at Stanford, Harvard, Princeton and Columbia - each also following the declaration of a state of emergency.

In addition, the decision by the Church of the Latter Day Saints to cancel its services worldwide followed Utah’s declaration of a state of emergency.

The gaping hole in the US response has been the national government. President Trump’s declaration of a national emergency came late, and his decision to ban travel from Europe but - at least initially - exclude the UK, created uncertainty and concern that the White House response is as much driven by politics as evidence.

This may soon change, as the House of Representatives has passed a COVID-19 response bill that the Senate will consider. These moves are vital to supporting state and private efforts to mobilize an effective response to a national and global crisis.

Need for public oversight

In the absence of greater coordination and leadership from the centre, the US response will pale in comparison to China’s dramatic moves to halt the spread. The chaos across America’s airports shows the need for public oversight. As New York State Governor Cuomo pleaded for federal government support to build new hospitals, he said: ‘I can’t do it. You can’t leave it to the states.'

When it comes to global pandemics, we may be discovering that authoritarian states can have a short-term advantage, but already Iran’s response demonstrates that this is not universally the case. Over time, the record across authoritarian states as they tackle the coronavirus will become more apparent, and it is likely to be mixed.

Open societies remain essential. Prevention requires innovation, creativity, open sharing of information, and the ability to inspire and mobilize international cooperation. The state is certainly necessary, but it is not sufficient alone.

This event is part of the Inaugural Virtual Roundtable Series on the US, Americas and the State of the World and will take place virtually only. Participants should not come to Chatham House for these events.

This event is part of the Inaugural Virtual Roundtable Series on the US, Americas and the State of the World and will take place virtually only.  Participants should not come to Chatham House for these events.

This event is part of the Inaugural Virtual Roundtable Series on the US, Americas and the State of the World and will take place virtually only.  Participants should not come to Chatham House for these events

This event is part of the Chatham House Global Trade Policy Forum. We would like to take this opportunity to to thank founding partner AIG and supporting partners Clifford Chance LLP, Diageo plc and EY for their generous support of the forum. 

This event is part of the Inaugural Virtual Roundtable Series on the US, Americas and the State of the World and will take place virtually only.  Participants should not come to Chatham House for these events.

This  event is  part of the US and Americas Programme Inaugural Virtual Roundtable Series on the US and the State of the World and will take place virtually only.

Please note this event is taking place between 2pm to 3pm BST. 

Global trade and the WTO – which has been at the heart of the rules-based international trade system since its creation in 1995 – faced a critical moment even before COVID-19. The Appellate Body’s demise in December 2019 led to a renewed focus on the future of the WTO. But the challenges facing the WTO run deeper than that – the organization has lost relevance as a negotiation forum, resulting in the global trade rules not having kept pace with changes in technology and the rise of China. While the WTO provides a forum for international cooperation to address the trade fallout from COVID-19, what implications will the pandemic have for the long-term reform of the global trade system?

Both the US and EU have proposed various WTO reform strategies and taken steps towards collaboration, but is a transatlantic partnership for WTO reform feasible? Do the US and EU believe that a rules-based international trade system is in their interest – especially in light of COVID-19? What are the biggest issues dividing the US and EU on reforming the WTO, and is there a common assessment of the key problems? What steps can the US and EU take to address the dispute settlement function of the WTO and to modernize the trade rules? Are there broader issues, such as environmental and social sustainability, that should be included in a transatlantic agenda for WTO reform?

This event is  part of the Chatham House Global Trade Policy Forum and will take place virtually only.

We would like to take this opportunity to thank founding partner AIG and supporting partners Clifford Chance LLP, Diageo plc, and EY for their generous support of the Chatham House Global Trade Policy Forum.

The pressure of the coronavirus pandemic is adding to a widely held misconception that trade in food products is bad for the environment due to the associated ‘food miles’ – the carbon footprint of agricultural products transported over long distances.

This concept, developed by large retailers a decade ago, is often invoked as a rationale for restricting trade and choosing locally-produced food over imports. Consuming local food may seem sensible at first glance as it reduces the carbon footprint of goods and generates local employment. 

However, this assumption ignores the emissions produced during the production, processing or storage stages which often dwarf transport emissions. Other avenues to address the climate change impact of trade are more promising.

Demystifying food emissions

In the US, for example, food items travel more than 8,000 km on average before reaching the consumer. Yet transport only accounts for 11 per cent of total emissions with 83 per cent – mostly nitrous oxide (N2O) and methane (CH4) emissions – occurring at the production stage.

US Department of Agriculture data on energy use in the American food system echoes this finding, showing that processing, packaging, and selling of food represent ten times the energy used to transport food.

In practice, it may be preferable from an environmental perspective to consume lamb, onion or dairy products transported by sea because the lower emissions generated at the production stage offset those resulting from transport. Similarly, growing tomatoes under heated greenhouses in Sweden is often more emissions-intensive than importing open-grown ones from Southern Europe.

Seasonality also matters. British apples placed in storage for ten months leads to twice the level of emissions as that of South American apples sea-freighted to the UK. And the type of transport is also important as, overall, maritime transport generates 25 to 250 times less emissions than trucks, and air freight generates on average five times more emissions than road transport.

Therefore, air-freighted Kenyan beans have a much larger carbon footprint than those produced in the UK, but crossing Europe by truck to import Italian wine might generate more emissions than transatlantic shipments.

Finally, one should take into account the last leg of transport. A consumer driving more than 10 km to purchase 1 kg of fresh produce will generate proportionately more greenhouse gas (GHG) emissions than air-freighting 1 kg of produce from Kenya.

Shifting consumption towards local foods may reduce GHG emissions in sectors with relatively low emissions intensities but, when non-carbon dioxide emissions are taken into account, this is more often the exception than the rule.

Under these circumstances, preventing trade is an inefficient and expensive way of reducing GHG emissions. Bureau et al. for example, calculate that a global tariff maintaining the volume of trade at current levels until 2030 may reduce global carbon dioxide emissions by 3.5 per cent. However, this would be roughly seven times less than the full implementation of the Paris Agreement and cost equivalent to the current GDP of Brazil or 1.8 per cent of world GDP.

By preventing an efficient use of resources, such restrictions would also undermine the role of trade in offsetting possible climate-induced production shortfalls in some parts of the world and allowing people to access food when they can’t produce it themselves.

Reducing the climate footprint of trade

This is not to say that nothing should be done to tackle transport emissions. The OECD estimates that international trade-related freight accounted for over 5 per cent of total global fuel emissions with shipping representing roughly half of it, trucks 40 per cent, air 6 per cent and rail 2 per cent. With the projected tripling of freight transport by 2050, emissions from shipping are expected to rise between 50 and 250 per cent.

Furthermore, because of their international nature, these emissions are not covered by the Paris Agreement. Instead the two UN agencies regulating these sectors – the International Civil Aviation Organization and the International Maritime Organization – are responsible for reducing these emissions and, so far, significant progress has proven elusive.

Regional or bilateral free trade agreements to further stimulate trade could address this problem by exploiting comparative advantages. Impact assessments of those agreements often point towards increases in GHG emissions due to a boost in trade flows. In the future, such agreements could incorporate – or develop in parallel – initiatives to ensure carbon neutrality by connecting carbon markets among contracting parties or by taxing international maritime and air transport emissions.

Such initiatives could be combined with providing additional preferences in the form of enhanced market access to low-carbon food and healthier food. The EU, as one of the chief proponents of bilateral and regional trade agreements and a leader in promoting a transition to a low-carbon economy could champion such an approach.

This article is part of a series from the Chatham House Global Trade Policy Forum, designed to promote research and policy recommendations on the future of global trade. It is adapted from the research paper, Delivering Sustainable Food and Land Use Systems: The Role of International Trade, authored by Christophe Bellmann, Bernice Lee and Jonathan Hepburn.

This event is part of the Chatham House Global Trade Policy Forum and will take place virtually only.

International trade has a crucial role to play in tackling climate change. The production and transport of goods is a major contributor to green-house gas emissions, as is the delivery of certain cross-border services. At the same time, it looks inevitable that the COVID-19 pandemic will lead to a radical re-think of global supply chains as companies and governments seek to build in greater resilience while at the same time preserving as far as possible the efficiency gains and lower costs that global supply chains generate when operating normally.

Future international trade rules will have a crucial role to play in addressing both challenges; they represent both an opportunity and a risk. If designed well, they could play a very important role in re-enforcing moves towards a more sustainable use of resources, greater overall alignment of economies with the Paris Agreement, and greater economic resilience. But they could also, if poorly designed and implemented, or overly influenced by strategic political considerations, have significant unintended and negative implications. These include: reduced economic efficiency, increased poverty, unnecessary economic decoupling and reduced consensus on the broader mitigation and adaptation measures required to meet the challenge of climate change.

Against this background, a number of key questions arise: In what areas, if any, do we need to modify or adapt key principles underlying the system of global trade rules in order to respond to the twin challenges of responding to climate change and building greater economic resilience?  Which are the most promising/practical areas on which trade policy experts should focus now to re-launch/re-energize discussions on WTO reform, including, for example, dispute settlement? What national economic policies will be needed to complement the development of new/reformed trade disciplines in these areas? How might future political changes, such as a change in the US administration, affect the prospects for and political momentum behind such deliberations? What in any eventuality is the best way to build the required political momentum?
 
This roundtable is convened by the Global Economy and Finance Programme and the US and the Americas Programme and it is part of the Chatham House Global Trade Policy Forum. The event will take place virtually only.

We would like to take this opportunity to thank founding partner AIG and supporting partners Clifford Chance LLP, Diageo plc, and EY for their generous support of the Chatham House Global Trade Policy Forum.

Please note this event is taking place between 2pm to 3pm BST.

Differing approaches across the hemisphere have had different impacts on presidential popularity and, at least in one case, on democratic institutions and human rights. Yet, even within that diversity, South America’s Southern Cone countries (Argentina, Chile, Paraguay and Uruguay) have shown a sign of solidarity: protecting and facilitating trade flows, sponsoring cross-border research and ensuring citizens’ return to their home countries.    

The response from populist leaders

On the extreme have been the responses of presidents of Brazil, Nicaragua and Mexico, all of whom have ignored the science of the virus and of experts and refused to implement isolation policies.  President Jair Bolsonaro of Brazil fired his health minister, Luis Henrique Mandetta on 16 April for contradicting him and earlier had claimed that the pandemic was a hoax or little more than a ‘measly cold.' 

Meanwhile, Nicaraguan president Daniel Ortega has resisted closing businesses and schools.  After a mysterious 34-day absence, Ortega appeared on television on 15 April reinforcing his refusal to close businesses saying that Nicaraguans must work or they will die and claiming that the virus was ‘imported.’ 

Mexico’s Andres Manuel Lopez Obrador (AMLO) has also resisted the call for strict stay-at-home policies, though with his Deputy Health Minister, Hugo López-Gatell, has closed schools – recently extending the closure to the 1st of June and urging non-essential businesses to close – but focusing primarily on social distancing. 

In contrast to his deputy health minister and Foreign Minister Marcelo Ebrard – who had declared the situation a health emergency on 30th March, later than many neighbouring countries – AMLO has largely attempted to avoid discussion of the pandemic, claiming that in his case he has lucky charms that prevent him from contracting the virus. 

And both Bolsonaro and AMLO have participated in large public rallies, doing all the things that politicians love, shaking hands and hugging babies, and in the case of the former even wiping his nose before embracing an elderly woman.

The Nicaraguan, Brazilian and Mexican presidents make an odd grouping since one (Bosonaro) is considered of the extreme populist right and the others (Ortega and AMLO) of the populist left. What unites them is good old-fashioned populism, a belief in a leader who represents the amorphous popular will and should be unfettered by checks and balances on his power, including something like… science.  

An eclectic group

At the other extreme have been the quick responses by governments in Peru, Argentina, Chile, El Salvador and Colombia which put quarantine measures in place in mid-March. In these cases, governments have even banned outdoor activities and in the case of Peru and Colombia (in the large cities) have imposed alternating days for when women and men can leave the house so as to better control outside movement.  

This too, though, is an eclectic group. It includes a Peronist president Alberto Fernández in Argentina, conservative presidents Sebastian Piñera in Chile and Ivan Duque in Colombia, interim president and relative political neophyte Martin Vizcarra in Peru and outsider president Nayib Bukele in El Salvador. 

El Salvador’s strict quarantine measures have led to rising concerns that Bukele is using the crisis to consolidate personal power, using the national police and the armed forces to enforce the quarantine and ignoring three rulings by the Supreme Court urging the president to end the abuses. In Argentina, Peronist Fernández has shown a surprising commitment to containment even as it hurts his party’s working-class base, not something typically expected of the populist Peronist Party.   

In all of these cases, the quick, strong responses by the presidents shored up their popularity. Peru’s Vizcarra saw his popularity shoot up 35 points in a week to 82 per cent according to surveys taken in March. In late March 2020, Fernández in Argentina saw his approval ratings swell to 79.2 per cent with 94.7 percent of citizens approving of the government’s strict shelter-at-home policies.   Even presidents Piñera and Duque who had struggled with low approval ratings throughout 2019 and saw those numbers sink even lower after the social protests that ended the year have seen their numbers rise.  

According to an 20th April poll, Piñera’s popular approval rating swelled from 13 percent in March 18th at the start of the crisis to 25 per cent by 20th April; while hardly a sweeping popular mandate, even that level was unthinkable only a few months ago when administration was battered by social protests. 

In Colombia, after a series of political missteps and the popular protests, Duque’s popular approval rating had slumped to 26 per cent; by April 2nd, 62 percent of Colombians supported the once-beleaguered president.   (No recent surveys were available for Bukele in El Salvador.)

In contrast, Bolsonaro’s in Brazil has only nudged up.  Before the crisis hit, the president’s popularity had been in steady decline from a high of 49 per cent in January 2019 to 30 per cent by early December 2019. But by the first week in April, in the midst of a crisis in which other presidents saw their approval ratings increase by double digits, after his public disagreements with the health minister, Bolsonaro’s had sunk to 33 per cent while the soon-to-be-fired Mandetta’s stood at 76 per cent.  

AMLO in Mexico has fared no better. The populist leftist scored a high 86 per cent approval rating in February 1, 2019. By March 28, 2020 with concerns over his weak and flippant COVID-19 response and a severe contraction in economic growth, AMLO’s approval rating had sunk 26 points to 60 per cent and his disapproval stood at 37 per cent.    

In the midst of disharmony, coordination

Despite these differences, many countries in the region have shown the solidarity they often speak of but rarely follow in policy or practice. Peru, Chile and other countries have collaborated in repatriating citizens back to their home countries in the midst of the crisis.  

Even the countries of the Southern Cone common market, MERCOSUR, have pulled together on a number of fronts.  The trade bloc had effectively been ruled a dead-man-walking after its failed efforts to integrate Venezuela into the bloc, lowering its standards to let in the petroleum dependent semi-authoritarian government of then President Hugo Chávez. 

Even on the basics of internal cooperation, the block was struggling, unable to coordinate monetary policies and non-tariff trade barriers between the original founding member states, Argentina, Brazil, Paraguay and Uruguay.

The 35-year-old customs union seemed to get a breath a new life with the announcement that it had concluded 20-year-long negotiations with the EU for a free trade deal. Ratification of that deal, however, ran aground on the political differences between the recently elected governments of Bolsonaro in Brazil and the Peronist Fernández in Argentina. 

Bolsonaro refused to attend the Fernández December 2019 inauguration, in protest of the newly elected president’s leftist leanings.  And this was well before their sharply divergent reactions to the COVID-19 virus. 

How surprising then that Mercosur has served as an effective coordination mechanism for these different and once opposed governments. The trade body is collaborating among member states to ensure the repatriation of citizens and has agreed to coordinate to ensure that trade flows, especially of medical supplies, are not interrupted by shutdown measures. 

Mercosur has even gone one step further than several other bodies have failed to take.  In early April the bloc’s governing body, based in Montevideo, Uruguay created a $16 million (12 million pound) fund to augment country research and assist in the purchase of supplies needed to combat the virus.  

Now if Brazil, Argentina and the others could only coordinate their domestic coronavirus responses and economic policy. In late March Fernández announced he was pulling Argentina out of a possible Mercosur-EU trade deal.

This event is part of the US and Americas Programme Inaugural Virtual Roundtable Series on the US and the State of the World and will take place virtually only.

This event will take place from 14:00 – 15:00 BST.