ED­I­TO­RIAL A game that could be deadly

The Myanmar Times - Weekend - - News -

NOWA­DAYS, every­body who is some­body talks about tar­iffs. The word comes from some­body in the United States, some­body in China or some­body in Europe. The word sim­ply im­plies some sort of cus­toms duty im­posed on im­ports. How­ever, when politi­cians start us­ing it as an in­tim­i­dat­ing weapon or tool of vengeance, it gets com­pli­cated and, well, homely.

When one na­tion at­tempts to com­mence us­ing tar­iffs as a pro­tec­tion­ist tool against mounting im­ports, it should re­mem­ber that there is GATT and its off­spring, the WTO. The Gen­eral Agree­ment on Tar­iffs and Trade, or GATT, was the brain­child of the United Na­tions, and its no­ble in­ten­tion was to pro­mote in­ter­na­tional trade by tak­ing away or at least re­duc­ing trade bar­ri­ers. Af­ter a se­ries of agree­ments in the ma­jor cities around the world, GATT cre­ated the World Trade Or­ga­ni­za­tion (WTO) in 1995.

The av­er­age tar­iff lev­els for the ma­jor GATT par­tic­i­pants were about 22 per­cent in 1947, when the agree­ment was signed, but were 5pc af­ter the Uruguay Round in 1999. That is to say that GATT and its suc­ces­sor WTO have sig­nif­i­cantly re­duced tar­iffs.

That has led to a peace­ful and nor­mal way of trad­ing goods across the globe, un­til some “bril­liant” minds start think­ing of putting back bar­ri­ers to trade again.

Ex­am­ples of re­sort­ing to tar­iffs again are every­where. Threat­en­ing to put high tar­iffs on steel and alu­minium by one coun­try led an­other coun­try to re­tal­i­ate in a sim­i­lar or more dras­tic man­ner. Some in­ter­na­tional gu­rus in busi­ness said it may lead us to trade wars. A trade war be­tween the United States and China may have chaotic con­se­quences in faraway lands such as United King­dom and Ger­many.

Smaller coun­tries with much smaller GDPS might be shiv­er­ing, not just be­cause they are tiny com­pared to those giants, but be­cause tril­lions of dol­lars in their mar­kets may dis­ap­pear in a mat­ter of weeks. That may have a fa­tal im­pact on their economies.

No one with sane and nor­mally func­tion­ing minds would start this po­ten­tially dan­ger­ous and deadly game with ob­vi­ously neg­a­tive con­se­quences. Some say that world pol­i­tics is a cruel game be­ing played by in­sane in­di­vid­u­als. Well, it could very well be a game of thought­ful and fair com­pro­mises when stake­hold­ers are not act­ing in­sane.

The whole world is watch­ing what kind of de­ci­sions Don­ald Trump and Xi Jin­ping will be mak­ing in the com­ing days and hop­ing that their thoughts are fo­cussed less on greed and more on wis­dom.

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