Global trade is undergoing fundamental change.
Brexit, tensions between the US and China, and Asia's determination to play a greater role in globalisation will have a dramatic impact on trade for years to come. Trade agreements are notoriously slow and complex for governments to negotiate, and during this period of uncertainty, our trade experts can help our clients to manage the impact on their businesses.
Driven by the energy transition, national security concerns, and commitments to support domestic production, countries are increasingly taking measures to develop green economies and energy systems at home. Read more about the green industrial policy revolution.
With increasing global demand for batteries to power the clean energy transition, the opportunities and risks are multiplying. New technology, new markets and new deals, including those associated with mineral extraction, human rights and the supply chain, regulatory changes and the race to find funding are giving rise to a number of issues for businesses to grapple with.
In this extract from a recent seminar, our international team considers the implications for the automotive sector, which is predicted to make up to 90% of future demand for batteries, as well as renewable energy generation, energy storage and beyond. Read more about Betting on Batteries.
On March 28, 2023, the United States and Japan reached an agreement on critical minerals for batteries, including those used to power electric vehicles signing the "Agreement Between the Government of the United States of America and the Government of Japan on Strengthening Critical Minerals Supply Chain" (the "Agreement"). Read more about the US And Japan Sign Agreement On Critical Minerals Supply Chain.
2023 is likely to be a crucial year in establishing the course of global trade policy for the coming decade, with radical changes to domestic rules on permitted state subsidies, supply chain regulations, cross-border data transfers, environmental-related tariffs and foreign investments possible in many jurisdictions. Questions also remain over the future of multilateral trade architecture, with proposals for ambitious trade agreements and WTO reform at critical junctures in the coming months. Explore our seven trends for businesses and governments to consider in 2023.
An isolated case or a precedent after all? – The WTO decision on the suspension of patent protection
In October 2020, India and South Africa submitted a widely noticed proposal to the WTO: Patent protection should be temporarily suspended for all technologies aiming at preventing, containing, and/or treating COVID-19, arguing that the patents would reduce the ability of countries to ensure the supply of vaccines as well as medical devices necessary to combat COVID-19. Read about the WTO decision on the suspension of patent protection.
Semiconductors are essential for many aspects of our lives – work, communication, energy production, healthcare and travel – as well as national security systems and military hardware. A global shortage of semiconductors and increasing protectionism means that the industry is of major strategic and geopolitical importance to governments. We take a look at increasing regulation, what it means for M&A and some of the challenges that lie ahead. Read more about semiconductors - increasing governmental and regulatory scrutiny.
After years of stalled negotiations, the World Trade Organization agreed a suite of deals at its bi-annual Ministerial Conference (MC12) held in Geneva in June. These include: an IP rights waiver concerning COVID-19 vaccines; an Agreement on Fisheries Subsidies – the first new WTO Agreement signed since 2013 (and also the first ever sustainability-focused WTO agreement); and an extension of a moratorium on applying customs duties to electronic transmissions. The package shows that WTO Members remain capable of agreeing new multilateral trade rules, even if the substance of such rules left some WTO Members disappointed. Here, our experts assess what came out of MC12. Read about the WTOs progress at this year's ministerial conference (MC12).
UK & EU
The EU has adopted a Regulation establishing a Carbon Border Adjustment Mechanism (CBAM) to deal with the long-standing problem of ‘carbon leakage’ that impedes the EU’s decarbonisation plans. It is part of the Commission’s ‘Fit for 55’ initiative published in July 2021 that will help towards achieving the EU’s target for a 55% reduction in greenhouse gas (GHG) emissions by 2030 (against 1990 levels). Here we answer 10 key questions about the new Regulation.
This briefing provides an overview of the High Court decision in R (on the application of British Sugar Plc) v Secretary of State for International Trade, which provides guidance on the scope, role and interpretation of EU and WTO jurisprudence under the UK's post-Brexit trade and subsidy regime. Read about the tariff sweetener not a subsidy: The first test of the UK's post-Brexit-subsidy control regime.
"Our mandate is clear: complacency is not an option." On June 15, U.S. Trade Representative Katherine Tai spoke at the National Press Club, in what was publicized as a "major speech," although sweeping in scope, the messages delivered were a continuation of the current Administration's trade policy. Throughout the remarks, Tai criticized "trade rules [designed] to liberalize as much as possible" and described "a global race to the bottom" where large corporations flock to countries with low wages and poor working conditions. To counter that model, Tai outlined a labor-focused vision for trade, leveraging U.S. competition and industrial policies to elevate workers at home and abroad. Read more about the Drumbeat on US Trade Policy Continues.
On March 30, 2023, the multilateral Export Controls and Human Rights Initiative announced the release of a Code of Conduct. The Initiative, launched in a December 2021 Joint Statement of the governments of Australia, Denmark, Norway, and the United States, highlights the importance of trade in advanced technologies while also acknowledging the danger that such technologies pose when used in ways that results in serious human rights abuses. In the 2021 Joint Statement, the signatory countries resolved to issue a code of conduct, with the goal that other states would join forces in using trade and export control measures to curb the use of advanced technology to inflict human rights abuses. Read more about the States Bring A Human Rights Focus To Dual Use Export Controls With A New Code Of Conduct.
Navigating foreign investment regimes can be critical to the success of a transaction. Foreign investment scrutiny is increasingly being applied to global M&A transactions. The global trend towards protectionism has led to more restrictive government measures. This requires a more strategic and co-ordinated approach towards foreign investment rules. Explore our guide on foreign investment and CFIUS processes.