Politi­cians ‘ig­nor­ing trade war fall­out’

China Daily (Hong Kong) - - WORLD -

SAN FRAN­CISCO — The dam­ag­ing rip­ples of a trade war be­tween the United States and China could spill be­yond the econ­omy, but Wash­ing­ton politi­cians, who over­state trade prob­lems, tend to ig­nore that, a Cal­i­for­nia-based ex­pert said on Mon­day.

“Trade is im­por­tant for main­tain­ing peace be­tween coun­tries. When you have less trade, it raises the chances of con­flicts,” John Gra­ham, pro­fes­sor emer­i­tus of in­ter­na­tional busi­ness at the Univer­sity of Cal­i­for­nia, Irvine, said.

At the Boao Fo­rum for Asia con­fer­ence in China’s Hainan ear­lier this month, Chi­nese Pres­i­dent Xi Jin­ping said pros­per­ity and peace are re­lated.

“Trade brings pros­per­ity and peace. That’s a hugely im­por­tant con­cept. We know it’s true and ver­i­fied em­pir­i­cally,” Gra­ham said.

How­ever, the cur­rent lead­er­ship in Wash­ing­ton tends to ig­nore the re­la­tion­ship be­tween trade and peace. That’s a very big mis­take and dan­ger­ous to the world, he said.

In his key­note speech on April 10, Xi said China will launch a num­ber of land­mark mea­sures this year to sig­nif­i­cantly broaden its mar­ket ac­cess. It will also try to achieve faster progress in join­ing the World Trade Or­ga­ni­za­tion Agree­ment on Gov­ern­ment Pro­cure­ment.

“The key to hu­man progress since World War II has been open­ing up mar­kets all around the world. Pres­i­dent Xi talked about sup­port­ing the WTO and open­ing up mar­ket, which will be good to ev­ery­body on the planet,” Gra­ham said.

Though the open­ing-up may mean some US work­ers will lose jobs, Gra­ham said in­ter­na­tional trade ben­e­fits the av­er­age US cit­i­zens. The prob­lem most coun­tries have is the dis­par­ity be­tween high-in­come and low­in­come work­ers. Trade has noth­ing to do with it but do­mes­tic poli­cies do, he said.

“Do­mes­tic poli­cies make that hap­pen in all the coun­tries, par­tic­u­larly here. The tax pol­icy and anti-union pol­icy are help­ing ex­ac­er­bate the di­vide of in­comes across Amer­i­cans,” he said.

Gra­ham said politi­cians in Wash­ing­ton al­most al­ways over­state trade prob­lems when they fo­cus on mer­chan­dise trade deficit.

The US con­tin­ues to sell about $20 bil­lion more in ser­vices to Chi­nese cus­tomers than China does to the US, with tourism and ed­u­ca­tion be­ing promi­nent ex­am­ples, he said.

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