ChineseandU.S.teams,ledbyChineseVicePremierLiuHeandU.S.SecretaryofCommerceWilburRoss,heldeconomicandtradeconsultationsinBeijingonJune3,2018.byDingHaitao/XinhuaSoonaftertheColdWarended,theWorldTradeOrganization(WTO)wasfoundedinApril1994,andtheUnitedKingdomandtheUnitedStatesbecameleadersofglobalization.Amere24yearslater,thesituationhaschangeddramatically:BritainandtheUnitedStateshavebecomeleadersofde-globalization.
Whatexactlyisde-globalization?Britain’scurrentpolicy,popularlyknownasBrexit,istheprocessofleavingtheEuropeanUnion(EU).TheUnitedStates,ontheotherhand,isstirringuptradedisputeswithitslargesttradingpartnersandevenlaunchinga“tradewar.”
De-globalizationdoesnotrefertocompleterejectionofglobalization,butadvocacyforadjustmentofitsrelationshipwiththeexistingandpreviousglobalizationtrends.Thisadjustmentwillundoubtedlyaffectdomesticandinternationaleconomies,leadingto“trade(investment)diversion”and“trade(investment)creation.”
Twooptionsforde-globalizationhaveemergedsofar:softde-globalizationandhardde-globalization.
ForBritain,thewhitepaperpublishedbytheBritishcabinetonJuly12showsthatBritainhasmadeagreatcompromiseintheprocessofBrexit,themainsymbolofde-globalization:ithaschosentoadopta“softBrexit.”Thewhitepaperproposedtocreatea“freetradeareaforgoods”withtheEU,sothatBritaincancontinuetoaligncommodityrulesandstandardsandestablishclosecustomsarrangementswiththeremaining27EUmembercountries.TheBritishgovernmenthopestoparticipateinEUinstitutionsincludingtheEuropeanAviationSafetyAgencyandEuropeandrugagenciesandwillaccepttherulesandcostsoftheseinstitutions.
ThehopeisthatasBritainfirmlyleavestheEU,itwillestablishanewpartnershipwiththeEUatthesametime.
Thewhitepapersetsoutablueprintfortheso-called“softBrexit.”BritainmayformallyleavetheEU,butinessencewillstillmaintainmostofthesubstantiverelationswiththeEU,especiallyintradeandeconomicfields.
WhatenlightenmentdoestheBrexitwhitepaperprovidefortheunderstandingofthe“tradewar”launchedbytheTrumpadministration?Firstofall,“softBrexit”isabigcompromiseon“de-globalization,”whichsuggeststhatBritishpoliticiansareawareofthehighcostof“economicnationalism”and,toacertainextent,havegivenupthepolicyof“throwingthebabyoutwiththebathwater.”
LikeBrexit,theUnitedStates’tradewarisactuallyjustabreakfromtheexistinginternationalgovernancesystemandarrangements.Bycontrast,BritainhasalreadycompromisedontheissueofBrexit.WilltheUnitedStatesfollowwithcompromiseinthetradewar?
TheanswerdependsonhowmanypeopleintheUnitedStatessupporttheTrumpadministration’s“tradewar”proposal.Americawillholditsmid-termelectionsinNovemberthisyear,whichwilltesthowmuchdomesticsupportthereisforTrump’s“tradewar.”Beforetheelections,unfortunately,theTrumpadministrationisbettingwiththelivelihoodsofpeopleacrosstheUnitedStatesandaroundtheworld,hopingtowinAmericanvotersbyattackingitstradingpartners.
IfmostpeopleintheUnitedStatesendupsupportingthe“tradewar”oftheTrumpadministration,theUnitedStateswilllikelyrefusetocompromisewithChinaandtheEUandcontinuetowagethe“tradewar”untilitstradingpartnersmakeconcessions.
IfTrump’sRepublicanPartymakesnobreakthroughsorevenfailsinthemid-termelections,althoughtheTrumpadministrationisdissatisfiedwithBritain’ssoftretreat,its“tradewar”strategywillgraduallymovetowardscompromise.
Presently,theTrumpadministrationhasfailedtoresumetradenegotiationswithothertradingpartnerssuchasChina,butcontinuestointensifythe“tradewar.”However,becauseAmericanproducersandconsumersarealreadyfeelingadverseeffectsofthe“tradewar,”somemembersoftheTrumpadministrationhaveshownnewsignsofwillingnesstocompromise.Forexample,atahearingoftheFinancialServiceForumonJuly13,U.S.TreasurySecretaryStevenMnuchinstatedthattheadditionaltariffsimposedbytheUnitedStatesonChinesegoodswasonlyatradedispute,nota“tradewar.”HepredictedChinaandtheUnitedStateswillresumetradenegotiations,butonlyontheprerequisitethattheChinesegovernmentiswillingtomakemajoradjustments.
Ofcourse,thesituationisnotsosimplethatBritain’s“softBrexit”couldinspiretheendoftheU.S.tradewar.Iftradedisputesarenotworththegainor“economicpatriotism”isnotapplauded,theTrumpadministrationwillreturntothenegotiatingtable.Beforethattime,ChinaneedstoprepareforfuturenegotiationswiththeTrumpadministration.
TheauthorisaprofessorofinternationalrelationsattheOceanUniversityofChina.