Duke Professor Brought in as Expert in International Trade Disputes Involving China and Mexico
Tuesday, December 11, 2018
Dr. Gary Gereffi has a new book on Global Value Chains and Development: Redefining the Contours of 21st Century Capitalism, published by Cambridge University Press. It highlights the emergence of the global value chains (GVC) framework as a key paradigm for both researchers on globalization and international development organizations like the World Bank, the World Trade Organization (WTO), and the International Labor Organization.
During a recent research trip to China in October, Gereffi gave a keynote address based on his book to a WTO meeting in Shenzhen and several other lectures that focused on U.S.-China trade tensions and the broader topic of protectionism and global supply chains. He has also done several interviews on the subject. The latest two are both by Brink News: Interview #1 -- Protectionism, Interview #2 – New Technologies.
The business community is unsettled by the uncertainty surrounding the protectionist trade tensions between the United States and its leading trading partners, like Canada, Mexico and China. According to Gereffi’s interpretation, China is key to the global trading systems because it has been playing a double game: they have been accused of leading a "race to the bottom" in terms of export growth based on low wages, which is threatening the jobs of U.S. workers (this is a similar complaint raised against Mexico).
However, China is also involved in a "race to the top" based on competing with US companies for the key technologies of the future (such as artificial intelligence, automation, cloud computing, and advanced IT hardware and services). Furthermore, China is accused by some trade partners of "unfair competition" because Beijing is requiring US and other multinational firms transfer technology to the Chinese in order to get access to the domestic market.
Going forward, the U.S. will be under increasing pressure to resolve these trade controversies. North American neighbors Mexico and Canada use high percentages of U.S. content in their exports to the United States, so many American firms are dependent on these cross-border supply chains. With China, the U.S. is involved in a strategic competition over who will control the technologies of the future, including the dynamic digital economy and advanced manufacturing, which is far more important than current tariffs on traded goods between the two countries.