National Post (National Edition)
MUTUALLY BENEFICIAL ENGAGEMENT HAS SURELY NEVER BEEN GREATER.
Chile, Malaysia, Mexico, New Zealand, Australia, Brunei, Singapore, Peru and Vietnam — to increase economic cooperation and growth, carried out mostly by private businesses.
It’s a wonderful world. While the headlines blasted President Donald Trump for launching a trade war on China and others over solar panels and washing machines, German Chancellor Angela Merkel and other Europeans in Davos sounded conciliatory, urging patience, and seemed full of optimism.
It would be unwise to pretend that world trade is a knowable and coherent system. The multiplying bilateral and multilateral agreements are mysterious wonders that attempt to increase the global movement of goods, services and investment. As a spectator sport, it is like watching a global football game with every team in the league together on the field, scoring US$2 billion in trade points every hour. It’s a wonderful sport that keeps getting better and better.
There a many who believe that these ongoing trade negotiations and alignments, bilaterally and multilaterally, are somehow equivalent to the international jockeying that in the past preceded armed conflict. A hot book in geo-political circles last year was Destined for War: Can America and China Escape Thucydides’s Trap. Harvard scholar Graham Allison claimed that such a trap is set when “a rising power rivals a ruling power — as Athens challenged Sparta in ancient Greece, or as Germany did Britain a century ago.”
Allison’s conclusion was that “based on the current trajectory, war between the United States and China in the decades ahead is not just possible, but much more likely than recognized at the moment. Indeed, judging by the historical record, war is more likely than not.”
But this is 2017, not 1914. The nature of these trade disputes and conflicts are not remotely military. The jockeying today is primarily over the ability to trade rather than a perverse desire for martial domination. It cannot be said often enough that economic trade is not a form of warfare in which there are winners and losers. Global trade always balances.
The reality of world economic development will eventually overcome the foolishness coming from Trump and his trade officials. Agreements that increase trade, however imperfect, are the driving force for more peaceful world cooperation. The TPP, on top of the Canada-Europe trade deal and scores of other trade pacts, are setting the direction. There is more to come.
The next big deal in the works is the Regional Comprehensive Economic Partnership (RCEP). Led by China, it would encompass the 10 members of the Association of Southeast Asian Nations along with India, Japan, South Korea, Australia and New Zealand. It overlaps heavily with TPP members, not just Japan, Australia and New Zealand, but Vietnam, Singapore and Malaysia.
The RCEP talks have been underway for years, but in the wake of the TPP deal, officials are talking of concluding the “mega-deal” (as they like to call it in Asia) later this year. India’s Commerce Secretary Suresh Prabhu said this week that “We would all aim to achieve an RCEP that results in the realization of the potential of the three pillars … goods, services and investments, in a manner that is balanced and collectively satisfying.”
This is not the language of war. It’s the language spoken in a wonderful, and mostly peaceful, trade-friendly world.