Af­ter UK Com­pro­mises on Brexit, What’s Next for the U.S.?

Both Bri­tain’s “soft Brexit” tac­tic and the United States’ es­ca­lat­ing dis­putes with its ma­jor global trad­ing part­ners are chang­ing glob­al­iza­tion trends. The Trump ad­min­is­tra­tion’s trade fights may, like Brexit, ul­ti­mately pro­duce re­sults that are op­po­site

China Pictorial (English) - - Contents - Text by Pang Zhongy­ing

Soon af­ter the Cold War ended, the World Trade Or­ga­ni­za­tion ( WTO) was founded in April 1994, and the United King­dom and the United States be­came lead­ers of glob­al­iza­tion. A mere 24 years later, the sit­u­a­tion has changed dra­mat­i­cally: Bri­tain and the United States have be­come lead­ers of de- glob­al­iza­tion. What ex­actly is de-glob­al­iza­tion? Bri­tain’s cur­rent pol­icy, pop­u­larly known as Brexit, is the process of leav­ing the Euro­pean Union (EU). The United States, on the other hand, is stir­ring up trade dis­putes with its largest trad­ing part­ners and even launch­ing a “trade war.”

De- glob­al­iza­tion does not re­fer to com­plete re­jec­tion of glob­al­iza­tion, but ad­vo­cacy for ad­just­ment of its re­la­tion­ship with the ex­ist­ing and pre­vi­ous glob­al­iza­tion trends. This ad­just­ment will un­doubt­edly af­fect do­mes­tic and in­ter­na­tional economies, lead­ing to “trade ( in­vest­ment) di­ver­sion” and “trade ( in­vest­ment) cre­ation.”

Two op­tions for de-glob­al­iza­tion have emerged so far: soft de-glob­al­iza­tion and hard de-glob­al­iza­tion.

For Bri­tain, the white pa­per pub­lished by the Bri­tish cab­i­net on July 12 shows that Bri­tain has made a great com­pro­mise in the process of Brexit, the main sym­bol of de-glob­al­iza­tion: it has cho­sen to adopt a “soft Brexit.” The white pa­per pro­posed to cre­ate a “free trade area for goods” with the EU, so that Bri­tain can con­tinue to align com­mod­ity rules and stan­dards and es­tab­lish close cus­toms ar­range­ments with the re­main­ing 27 EU mem­ber coun­tries. The Bri­tish gov­ern­ment hopes to par­tic­i­pate in EU in­sti­tu­tions in­clud­ing the Euro­pean Aviation Safety Agency and Euro­pean drug agen­cies and will ac­cept the rules and costs of these in­sti­tu­tions.

The hope is that as Bri­tain firmly leaves the EU, it will es­tab­lish a new part­ner­ship with the EU at the same time.

The white pa­per sets out a blueprint for the so- called “soft Brexit.” Bri­tain may for­mally leave the EU, but in essence will still main­tain most of the sub­stan­tive re­la­tions with the EU, es­pe­cially in trade and eco­nomic fields.

What en­light­en­ment does the Brexit white pa­per pro­vide for the un­der­stand­ing of the “trade war” launched by the Trump ad­min­is­tra­tion? First of all, “soft Brexit” is a big com­pro­mise on “de- glob­al­iza­tion,” which sug­gests that Bri­tish politi­cians are aware of the high cost of “eco­nomic na­tion­al­ism” and, to a cer­tain ex­tent, have given up the pol­icy of “throw­ing the baby out with the bath­wa­ter.”

Like Brexit, the United States’ trade war is ac­tu­ally just a break from the ex­ist­ing in­ter­na­tional gov­er­nance sys­tem and ar­range­ments. By con­trast, Bri­tain has al­ready com­pro­mised on the is­sue of Brexit. Will the United States fol­low with com­pro­mise in the trade war?

The an­swer de­pends on how many peo­ple in the United States sup­port the Trump ad­min­is­tra­tion’s “trade war” pro­posal. Amer­ica will hold its mid-term elec­tions in Novem­ber this year, which will test how much do­mes­tic sup­port there is for Trump’s “trade war.” Be­fore the elec­tions, un­for­tu­nately, the Trump ad­min­is­tra­tion is bet­ting with the liveli­hoods of peo­ple across the United States and around the world, hop­ing to win Amer­i­can vot­ers by at­tack­ing its trad­ing part­ners.

If most peo­ple in the United States end up sup­port­ing the “trade

war” of the Trump ad­min­is­tra­tion, the United States will likely refuse to com­pro­mise with China and the EU and con­tinue to wage the “trade war” un­til its trad­ing part­ners make con­ces­sions.

If Trump’s Repub­li­can Party makes no break­throughs or even fails in the mid-term elec­tions, al­though the Trump ad­min­is­tra­tion is dis­sat­is­fied with Bri­tain’s soft re­treat, its “trade war” strat­egy will grad­u­ally move to­wards com­pro­mise.

Presently, the Trump ad­min­is­tra­tion has failed to re­sume trade ne­go­ti­a­tions with other trad­ing part­ners such as China, but con­tin­ues to in­ten­sify the “trade war.” How­ever, be­cause Amer­i­can pro­duc­ers and con­sumers are al­ready feel­ing ad­verse ef­fects of the “trade war,” some mem­bers of the Trump ad­min­is­tra­tion have shown new signs of will­ing­ness to com­pro­mise. For ex­am­ple, at a hear­ing of the Fi­nan­cial Ser­vice Fo­rum on July 13, U. S. Trea­sury Sec­re­tary Steven Mnuchin stated that the ad­di­tional tar­iffs im­posed by the United States on Chi­nese goods was only a trade dis­pute, not a “trade war.” He pre­dicted China and the United States will re­sume trade ne­go­ti­a­tions, but only on the pre­req­ui­site that the Chi­nese gov­ern­ment is will­ing to make ma­jor ad­just­ments.

Of course, the sit­u­a­tion is not so sim­ple that Bri­tain’s “soft Brexit” could in­spire the end of the U.S. trade war. If trade dis­putes are not worth the gain or “eco­nomic pa­tri­o­tism” is not ap­plauded, the Trump ad­min­is­tra­tion will re­turn to the ne­go­ti­at­ing ta­ble. Be­fore that time, China needs to pre­pare for fu­ture ne­go­ti­a­tions with the Trump ad­min­is­tra­tion.

Chi­nese and U. S. teams, led by Chi­nese Vice Premier Liu He and U. S. Sec­re­tary of Com­merce Wil­bur Ross, held eco­nomic and trade con­sul­ta­tions in Bei­jing on June 3, 2018. by Ding Haitao/ Xin­hua

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