China offers to lead international free trade

Upcoming conference in Shanghai sets out a new path, writes Lu Xu.

When NAFTA completes its metamorphosis into USMCA, relieving many Canadians since 73 per cent of Canadian trade is secured, it’s not the end of the rising headwinds against international trade — protectionism and unilateralism are still challenging the existing and synchronized global trade system, imposing uncertainties to the future of the world and regional economies and putting up multiple intangible hurdles for business insiders.

In today’s economic globalization, which is no longer daydreaming but reality, countries are highly integrated into the international division of labour and the industrial chain. Free trade, nevertheless, being winwin by nature, provides an opportunity for each country to take full advantage in a complementary way. It is too naive to think one gains at the expense of others. Provoking trade disputes harms both the interests of the parties concerned, as well as those involved in the global dimension.

While Canadians breathe a little easier, the Chinese are still busy fighting back over the trade bully but never being so clear-headed. The lesson we drew a long time ago is that giving up diversification of trade is taking the risk of having all eggs in just one basket. Over the past 40 years, China’s foreign trade has registered an average annual growth of 14.5 per cent with the contribution of diversified trade relations.

Next week, from Nov. 5 to 10, China will host the first International Import Expo (CIIE) in Shanghai, which is the first national-level exhibition with the theme of pure imports of commodities and services, a pioneering initiative in the history of international trade, and setting out to underpin global trade and economic growth. Over 2,800 businesses from 130 countries and regions have registered to participate. The second largest economic entity is opening its arms to welcome various partners across the world to jointly support economic globalization and trade liberalization, creating greater trade and investment opportunities for all.

CIIE is also aligned with the long-established Canadian development strategy for diversification. As one of the 12 guests of honour to CIIE, Canada incorporates China’s market into its big picture of a more resilient and diversified economy and trade. CIIE will certainly help Canadian beef and more to enter into thousands of Chinese families to satisfy their demand for a higher quality of life. In the next 15 years, China is expected to import a total of US$24 trillion goods and accommodate US$2 trillion of foreign direct investment. CIIE brings opportunities for countries to access the vast market — especially with its emerging middle-income class of 400 million people — in an easy and direct way, and to take advantage of China’s fast and vibrant development.

History tells us that openness brings progress and prosperity, and protectionists will finally get themselves into a position where there is no way out. A free-trade agreement among countries does help to accelerate successful business, but it never necessarily means negativity if there isn’t one. It is hard to imagine, in the 21 century, the flow of goods and services can be stopped by a piece of paper. The sooner the few short-sighted politicians can wake up, the better.