The tra­jec­tory of his­tory is chang­ing

Jamaica Gleaner - - BUSINESS - David Jes­sop David Jes­sop is a con­sul­tant to the Caribbean Coun­cil.david.jes­sop@caribbean-coun­cil.org

BE­ING ABLE to iden­tify the pol­icy changes that will trans­form the fu­ture is nor­mally far from easy.

Ar­guably, how­ever, in the week past, the re­marks of two world lead­ers make plain how the tra­jec­tory of global his­tory is about to change.

In a for­mal pol­icy pro­nounce­ment on Novem­ber 21, US pres­i­dent-elect Don­ald Trump con­firmed that on his first day in of­fice he would sign a note of in­tent to leave the Trans-Pa­cific Part­ner­ship, the Pa­cific Rim free trade agree­ment that does not in­volve China. In­stead, he said, his ad­min­is­tra­tion would ne­go­ti­ate “fair bi­lat­eral trade deals that bring jobs and in­dus­try back on to Amer­i­can shores”.

His pre-recorded video co­in­cided with a speech made one day ear­lier in Peru by China’s Pres­i­dent, Xi Jin­ping. There, China’s leader made clear that his coun­try in­tends step­ping into the trade pol­icy vac­uum the new US pol­icy will leave. He did so by of­fer­ing first the com­ple­tion of the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship which brings to­gether the na­tions of South East Asia and their main trad­ing part­ners such as Aus­tralia and Ja­pan, then join­ing this with sev­eral Latin Amer­i­can na­tions in a Free Trade Area of the Asia-Pa­cific (FTAAP). While this will be no easy task, both group­ings would then have China, the world’s sec­ond-largest econ­omy, at their core, ex­clude the US, and could ul­ti­mately ac­count for 57 per cent of global trade.

Mr Trump’s an­nounce­ment was aimed at demon­strat­ing to the US elec­torate that his pri­or­ity will be to de­liver his promised do­mes­tic agenda by pro­tect­ing and iso­lat­ing the US econ­omy, through ac­tions that he be­lieves will cre­ate em­ploy­ment and en­cour­age strong growth. It is an ap­proach that in­cludes a fo­cus on build­ing do­mes­tic in­fra­struc­ture, the ne­go­ti­a­tion of trade deals more favourable to the US, and much less cer­tainly on find­ing ways to cre­ate low US Pres­i­dent Barack Obama, right, and China’s Pres­i­dent Xi Jin­ping, left, at the open­ing ses­sion of the Asia-Pa­cific Eco­nomic Co­op­er­a­tion (APEC) in Lima, Peru, Sun­day, Novem­ber 20, 2016. Don­ald Trump takes over as US pres­i­dent next Jan­uary, a lead­er­ship tran­si­tion that is ex­pected to re­sult in dif­fer­ent re­la­tions with China. skilled jobs at a time when other to the US, but said in­stead that lead­er­ship and that global trade na­tions are turn­ing to au­to­ma­tion, the world “can­not stop tak­ing dy­nam­ics would change. ro­bot­ics, and an em­pha­sis steps just be­cause of tem­po­rary Latin Amer­i­can par­tic­i­pants on ed­u­ca­tion and hu­man dif­fi­cul­ties”. “His­tory”, he said, and me­dia com­men­ta­tors at the de­vel­op­ment. “has shown us that there is no event ob­served that there was a way out for pro­tec­tion­ism”. He real sense that global lead­er­ship also made clear China’s in­ter­est was pass­ing to China, in a in tak­ing for­ward eco­nomic glob­al­i­sa­tion, and in a re­flec­tion of re­cent G20 think­ing, called for closer in­ter­na­tional co­or­di­na­tion on de­vel­op­ment prac­tices, and the need to “pay at­ten­tion to re­solv­ing the is­sues of fair­ness and eq­uity.”

While there re­main reser­va­tions, most no­tably in Ja­pan, about what is be­ing pro­posed by China, at the APEC meet­ing, the Aus­tralian and New Zealand prime min­is­ters made clear to the me­dia their view that China would now fill the void of US

DOOR WILL NOT BE SHUT

In stark con­trast, speak­ing on Novem­ber 19 at the 24th Asi­aPa­cific Eco­nomic Co­op­er­a­tion fo­rum (APEC), Pres­i­dent Xi told busi­ness lead­ers from across the Asia-Pa­cific re­gion and the Amer­i­cas, “China will not shut the door to the out­side world, we will open it even wider”. He also made clear a day later to par­tic­i­pat­ing po­lit­i­cal lead­ers that China sees the Asia-Pa­cific re­gion as an engine to push for­ward the de­vel­op­ment of the world econ­omy.

He did not re­fer specif­i­cally fo­rum that had pre­vi­ously al­ways been dom­i­nated by an ex­hi­bi­tion of the US gov­ern­ment’s global will.

Ac­counts also sug­gest that Pres­i­dent Obama, who was present at the meet­ing, was left try­ing to re­as­sure al­lies that the US was not with­draw­ing from the Latin Amer­ica or the Pa­cific re­gion.

PO­LIT­I­CAL CHANGE

Strik­ingly, how­ever, at a col­lat­eral event, he told stu­dents and young lead­ers from Latin Amer­ica that Mr Trump would al­most cer­tainly re-ex­am­ine US trade deals in Latin Amer­ica and noted that ten­sions may arise around trade more than any­thing else. He did not, how­ever, ex­pect sig­nif­i­cant po­lit­i­cal change in hemi­spheric re­la­tions as US se­cu­rity de­pended on sta­bil­ity in Latin Amer­ica and the ab­sence of mass mi­gra­tion.

There are pow­er­ful and mul­ti­ple mes­sages in this for the Caribbean and Cen­tral Amer­ica.

The first is that if the US is to rene­go­ti­ate its key trade re­la­tion­ships on a bi­lat­eral ba­sis and, as is widely as­sumed, aban­dons the Transat­lantic Trade and In­vest­ment Part­ner­ship with Europe, China is set to be­come the new global cham­pion of freer trade. This will drag Europe, a de­tached UK, and even­tu­ally In­dia and Ja­pan, to say noth­ing of Canada or Mex­ico into new con­fig­u­ra­tions that re­spond to China’s ap­par­ent will­ing­ness to open its grow­ing mar­ket by grad­u­ally re­duc­ing its tar­iffs and re­stric­tions on goods and ser­vices.

The sec­ond is that if China is to de­liver greater eq­uity through eco­nomic glob­al­i­sa­tion, the Caribbean will need to de­velop a cal­i­brated di­a­logue with Beijing that goes far be­yond in­vest­ment and de­vel­op­ment fi­nanc­ing. It will need to find ways in which the re­gion might have im­proved mar­ket ac­cess and sup­port for its ex­ports of goods and ser­vices.

The third is to ac­cept that the world is be­ing re­shaped. De­spite the Caribbean’s geographic prox­im­ity to the US, its his­toric ties to Europe, and its shared val­ues and close eco­nomic and po­lit­i­cal re­la­tion­ship with both, there is a need to recog­nise that China’s rise is of pro­found sig­nif­i­cance, is more than just an eco­nomic phe­nom­e­non, and that the world’s cen­tres of grav­ity are re­lo­cat­ing.

And the fourth is the need to de­velop poli­cies that re­spond to the emer­gence of oth­ers vy­ing for global in­flu­ence in al­ter­na­tive ways. Al­ready, An­gela Merkel, Ger­many’s Chan­cel­lor, has made clear that she be­lieves that Europe is now the repos­i­tory of lib­eral so­cial val­ues and must do more to de­fend them glob­ally; there are early in­di­ca­tions that Canada may be mov­ing to in­crease its pro­file in Latin Amer­ica and the Caribbean; and per­haps more darkly, Rus­sia has be­gun to demon­strate its wish for mil­i­tary and geostrate­gic eq­uity with the US and wants to re­store the idea of spheres of in­flu­ence.

De­spite the small­ness of the re­gion, these tec­tonic shifts in in­ter­na­tional re­la­tions should oblige ev­ery Caribbean and Cen­tral Amer­i­can leader to ob­serve them closely and be­gin to for­mu­late new na­tional and re­gional per­spec­tives.

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AP PHOTO/PABLO MARTINEZ MON­SI­VAIS

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