Shang-Jin Wei for PS Say More

The PS Say More Newsletter | [View this message in a web browser]( [PS Say More]( Welcome to Say More, a weekly newsletter offering readers exclusive insights into the ideas, interests, and personalities of some of the world’s leading thinkers. In each issue, a Project Syndicate contributor is invited to expand on topics covered in their commentaries, address new issues, and share recommendations about everything from books and recordings to hobbies and social media. This week, Project Syndicate catches up with [Shang-Jin Wei]( a former chief economist at the Asian Development Bank. Shang-Jin Wei Says More… Project Syndicate[Shang-Jin Wei]( Last August, you [wrote]( that “paradoxically, a downturn in America could help to improve bilateral economic relations with China” – a prediction that, you noted, was grounded in recent history. And yet, now that a downturn has arrived, US President Donald Trump has arguably become even more antagonistic toward China, calling the COVID-19 coronavirus a “Chinese virus” and accusing the World Health Organization of promoting “Chinese disinformation” about the virus. Why is this downturn – a global crisis – so far not spurring bilateral cooperation? Do you see hope for a reversal? Shang-Jin Wei: My statement last August is based on history: in the past, when the United States has faced economic or social difficulties – such as after the terrorist attacks of September, 11, 2001 and the 2008 global financial crisis – its appetite for international cooperation has tended to rise. Officials recognized that international coordination and cooperation can go a long way in supporting national recovery policies. That is why more than 90 US foreign-policy experts, including former high-ranking White House officials from Republican and Democratic administrations, recently issued a [joint statement]( urging Trump to work with China to address the COVID-19 pandemic. It is true, however, that since the 1990s, bilateral tensions have often risen in the run-up to US elections, with political candidates from both parties competing over who is tougher on China. In the current election season, Trump has a particularly strong incentive to ratchet up the bilateral competition, in order to shift voters’ attention away from his administration’s failures in handling the pandemic. So we can expect more antagonism in the months ahead. PS: You’ve [pointed out]( that “reducing tariffs and non-tariff trade barriers also can help to fight a pandemic-induced recession,” and yet “many countries maintain various trade barriers that both raise production costs and reduce domestic households’ real incomes.” What barriers should be eliminated most urgently, and by whom? Does the World Trade Organization have a role to play here, even with its dispute-settlement mechanism “[functionally dead]( SJW: The US has launched aggressive fiscal and monetary measures to address the economic fallout of the COVID-19 outbreak. These are necessary, but insufficient to cope with the pandemic-induced recession. The US would also benefit from rolling back the barriers it has imposed on imports from China and elsewhere. Until recently, the costs of Trump’s trade policies were partly offset by the sugar high produced by the 2017 tax cuts. But as the pandemic decimates economic output and causes unemployment to skyrocket, the US cannot afford trade policies that reduce households’ real purchasing power and raise production costs for firms. The same goes for other countries with high trade barriers, including China. Leaders must understand that reducing tariffs is not a favor to other countries; it is good for domestic households and firms. In terms of priority, removing tariffs and non-tariff barriers on personal protective equipment (PPE) and medical supplies should be at the top of the list. Academic research suggests that making this action permanent would maximize the boost to supply by eliminating uncertainty, which discourages investment. This does not rule out additional measures to increase resilience, including cultivating suppliers in other countries. International cooperation is also needed to address product quality issues. China is home to a very large number of medical-supply and PPE manufacturers, and the quality of their output varies widely. The Chinese government could publish a list of quality-certified manufacturers, from which foreign companies and governments could purchase reliably. Countries may also consider outsourcing procurement to foreign firms operating in China, which have the knowledge needed to find reliable local suppliers. As for the WTO, the lack of a functioning dispute-settlement mechanism severely limits its potential. But it remains the international organization best suited to urge countries to resist the protectionist impulse and negotiate reciprocal trade reforms. Still, there is no getting around the fact that US trade leadership is both uncertain and crucial to progress. To read the rest of our interview with Wei – in which he warns against judging China by rich-country standards, offers a baseline scenario for China’s economy in 2020, and highlights what Chinese and Americans are missing about each other – [click here](. If you are not yet a PS subscriber, [subscribe now](. PS Topic [The COVID-19 Crisis]( All the latest insights and analysis on the escalating – and evolving – pandemic from PS commentators. Previously in Say More [Anya Schiffrin]( – the director of the media and communications program at Columbia University’s School of International and Public Affairs – said what US President Donald Trump should learn from his Namibian counterpart, proposed supply-side solutions to misinformation, and discussed her family’s personal debt to “advocacy journalism.” [Read more](. [Jim O'Neill]( – Chair of Chatham House and a former chairman of Goldman Sachs Asset Management and UK Treasury Minister – urged leaders not to waste the COVID-19 crisis, expressed hope for the future of stakeholder capitalism, and recommended an uplifting read for these trying times. [Read more](. Project Syndicate publishes and provides, on a not-for-profit basis, original commentary by the world's leading thinkers to more than 500 media outlets in over 150 countries. This newsletter is a service of [Project Syndicate](. [Change your newsletter preferences](. Follow us on [Facebook]( [Twitter]( and [YouTube](. © Project Syndicate, all rights reserved. [Unsubscribe from all newsletters](.