One hundred years ago this week, then-US president Woodrow Wilson began selling his “Fourteen Points” to a war-weary Europe and the Middle East. He started with an address to a joint session of the US Congress, proposing a new liberal international order to be installed at the end of World War I; one anchored, in part, around free trade.
To secure lasting peace in Europe and the world, point three called for “the removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance.”
Wilson believed that the so-called Great War resulted, in part, from the mercantilist empires that still controlled some of the European continent and their beggar-thy-neighbor policies that prevented free trade.
Last year, the new US administration took steps that began to undo much of Wilson’s vision. The day US President Donald Trump was inaugurated, his first act was to inform the members of the nascent Trans-Pacific Partnership (TPP) that the US would not be ratifying the regional trade pact.
With the demise of the Doha round of trade negotiations under the WTO, the TPP was positioned as a new era of trade — one that bound together 12 countries around the Pacific Rim. Former US president Barack Obama had staked his administration’s foreign policy on a “pivot to Asia” of which the TPP was a main pillar.
Also last year, after threatening to withdraw from the North American Free Trade Agreement (NAFTA), the regional trade pact that the US had entered into with Canada and Mexico in 1994, Trump demanded renegotiations — talks that have reportedly not gone well. Canada and Mexico are preparing for what is likely to come: a world without preferential free trade with the US.
The US trade representative, US congressional leaders and other economic nationalists stateside are targeting the WTO and its inability or unwillingness to hold the People’s Republic of China accountable for failing to follow international trade regime rules.
None of this should come as a surprise. Since June 2015, when Trump announced his candidacy for the Republican Party nomination to be US president, he railed against “horrible free-trade deals,” including the 24-year-old NAFTA and the TPP, the negotiations of which had just been concluded by Obama.
Trump’s “America first” speech at the APEC summit in November last year in Vietnam made clear that his administration will agree to trade agreements only when they benefit the US.
“We are not going to let the United States be taken advantage of anymore,” he said.
However, self-interested bargaining has always been the mainstay of international trade agreements. It is the basis upon which the entire global trading regime has been constructed.
In 1817, British political economist David Ricardo explained the theory of comparative advantage — all countries can benefit from trade, even though each might be at a different level of development and technological progress.
Trump recognized this in his APEC speech: “I am always going to put America first, the same way I expect all of you in this room to put your countries first.”
In the end, he is right: No country will enter into a trade agreement if it is to its detriment.
Yet, the Doha round of the WTO to create a new set of trade agreements is essentially stillborn, locked in failed negotiations over nationalistic agricultural policies of countries to appease farm lobbies, the harmonization of some service sectors and the problems associated with harmonizing rules among developed countries and less developed countries.
Divergent competition laws and the advent of digital technologies and cryptocurrencies are also challenges for the conclusion of a future global trade deal.
It is no shock that the world is facing rising isolationist policies as evidenced by Brexit and Trump’s threat to end NAFTA. There is little leadership coming from a scared and reticent West. The TPP might still happen without the US’ participation, but it will not be of global significance.
The only meaningful progress in promoting global trade is coming from Chinese President Xi Jinping (習近平) and his “One Belt, One Road” initiative.
The US is abdicating its role in the international community when it comes to fostering global economic growth through trade.
Such back and forth from the US is not new either. It is important to remember that, despite Wilson’s design for a new international legal and economic order, the US never joined the League of Nations, nor did it participate in much of the post-World War I geopolitical architecture.
Reacting to the Great Depression, the US chose at its own peril, and that of the rest of the world, a policy of isolationism.
We all know how that worked out. We should learn from the past 100 years and recommit to a rules-based international trade system.
James Cooper is a professor of law at California Western School of Law in San Diego. For two decades, he has consulted for the Bolivian, Chilean, German, Mexican, Paraguayan and US governments on rule of law and technology transfer issues.
With the fall of Kabul not yet six months past, Washington faces a fresh test of its ability to sustain Pax Americana, as more than 100,000 Russian troops, heavy artillery and tanks mass on Russia’s border with Ukraine. The mounting crisis looks set to become the greatest test of US President Joe Biden’s administration to date — the outcome of which could have far-reaching implications and send ripples through the Taiwan Strait. Moscow’s Ukraine gambit appears designed to probe the Biden administration — to ferret out its red lines and ascertain whether Washington is willing to commit troops to defend its
US-China relations are built on a series of fabrications about Taiwan. In fact, one of the major reasons the US-China relationship is so contentious right now is that Chinese belligerence is exposing these carefully constructed fictions to common sense. Readers know the story. In the 1970s and 1980s, American officials said what they needed to make common cause with Beijing vis-a-vis the Soviet Union. Diplomats couldn’t talk about Taiwan as a “country” — let alone an independent one — which it so clearly is. They enshrined in US policy that “all Chinese on either side of the Taiwan Strait maintain there
The start of any new year is always a good time for introspection, reflection and resolutions. This advice is appropriate for all. In Taiwan, it should clearly be heeded by the Chinese Nationalist Party (KMT), which continues to have its share of troubles. The KMT has had so many difficulties in the past decade that it almost seems to revel in them with the celebration of each new year. What then could be done? The KMT can begin by examining the present and slowly tracing backward to see how the dots are connected. Whether the party admits it or not, it
The Chinese Nationalist Party (KMT) is floundering. Over its past two years of politicking, it has racked up a staggering number of losses on votes that it initiated. Two of its four recall drives failed, and each of the two that succeeded only served to add another Democratic Progressive Party (DPP) seat to the legislature. This is not to mention the slap in the face that was last month’s referendum, with all four of its proposals soundly defeated, despite the money and effort that the party put into them. For all of its talk about upholding the duties of the opposition