Finally, world found time to talk about trade. For last 6 months, it was all politics; domestic (Impeachment, Parliament suspension, Kashmir etc.) or International (Iran Oil, Afghanistan etc.) while world economic was bumping around. Last week (or more specifically weekend); 4 key events happened with likelihood of some tangible closures in coming months. The showstoppers were US – China Trade talks and EU-UK negotiating on Brexit but equally important were RCEP meeting in Thailand and PM Modi and President Xi meeting in India.
US and China after aggressive posture have agreed on truce with US agreeing to not impose higher tariffs on additional import from China and in return China agreed to buy more agriculture produce from US. Though this is no-where near expectation and all the issues still remain on table to be resolved, but after so much acrimony even this will be relieve to market and as both have agreed on next round of talks there is optimism around finding a long lasting solution.
Meanwhile UK and EU negotiators are working overtime in Brussels during last weekend to agree to a new deal. There seems to be slim chance of any agreement happening, but as in case of US China trade; at-least stalemate is broken. Both parties genuinely trying their best to find a deal as 31st Oct deadline approaches. With so low expectation on deal, any positive news will be lapped up by markets.
10 members of ASEAN and 6 FTA partners with combined GDP being approx. 40% of the world has their 2 day Intercessional Ministerial Meeting in Thailand to negotiate 16 countries mega trade deal, Regional Comprehensive Economic Partnership (RCEP) agreement. Again no deal agreed yet but Trade negotiating committee is meeting on 17th and 18th Oct with more substantial progress expected, probably finding agreeable draft by their leaders meeting on 4th November.
Not faraway from RCEP Meet, PM Modi and President Xi, leaders of 2 Asian superpower with combined PPP GDP of $37trillion had a informal meeting at seaside historic town of South India. This was second informal meeting but unlike Wuhan, which was more political to diffuse post Dokhlam crisis, issues of investment and trade were discussed. They have agreed to setup a special panel to address concerns mainly around huge trade deficit in favour of China (role reversal when compared with US).
These four events if concluded positively in next 3 months will determine if year 2020 will be happy one or not. WTO which helped in opening up international trade is one of the key reason for the progress made by emerging countries to speed up their growth. In last 5 years, there is consistent threat to this roadmap and therefore these talks are important for the world economy future.
Lets hope better sense prevailed, keeping economic out of politics, to whatever extent possible.