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Trade Wars And Looming Collapse Of Multilateralism
Focus on absolute gains in relation to interface with the other nation also paved way to make sense of global politics with international organisation like World Trade Organisation offering a platform to negotiate significant issues of trade, tarrifs, agreed rules etc
Photo Credit : Reuters
Anarchy has always been the defining yardstick of world order owing to lack of mechanisms of regulation. With states acting on basis of crude factor of securing national interest makes the picture look murky like a zero sum game. With the onset of globalisation, factors like trade, information technology, communication, rise of non traditional security dimensions led to many opportunities for cooperation. Focus on absolute gains in relation to interface with the other nation also paved way to make sense of global politics with international organisation like World Trade Organisation offering a platform to negotiate significant issues of trade, tarrifs, agreed rules etc.
As we move away from theoretical explanations, one finds that right from the onset of Trump era, the policy pronouncements of United States administration have been skeptical of idea of interconnected world. The plea to restore the glory of the nation are inherently protectionist & unwelcoming of the 'outside' as seen in case of Paris Climate Agreement too. President Trump announcing the tariffs of 25 per cent on steel imports and 10 per cent on imported aluminum are also in tune with that. There is a tremendous pressure that these institutions have come under.
No dobut this neo-liberal globalization was always contested. It is argued that this order was biased as it was certainly beneficial to US corporations. However this inequity cannot gloss over the fact that in this drill China, India and other developing countries too were beneficiaries. Openness in trade & investment did offer something to tackle poverty and unemployment.
With the same logic, WTO as an anchor of global economy, it was looked as 'Janus Faced'. If it at one side, it offered hope for world governance, then at other side there were remarks about its covert democratic deficit and legitimacy. China defied it openly with its state capitalism leading unfair advantages and that trade-round of talks were inconclusive owing to cumbersome nature of trade offs. With this Trump decision, it gives a cold shoulder to the need to streamline global order or if we were to put it common terms, it makes ailing person more vulnerable rather than offering any cure.
To favour America over the others was the focal point of his campaign for the presidency. Even in the past, US Presidents have resorted to tariffs and quotas as protection against dumping or subsidies. The current Republican orthodoxy for reasons of national security brings forward the debate for other countries to ponder whether future lies with free or protectionism. Agreed countries like U.S were also upset with dispute resolution mechanism of WTO but larger concern is that should economic nationalism lead to rampant dismantling.
Trump administration's remarks for national security argument in case of tariffs on steel and aluminum imports surely are not rational when juxtaposed with the fact that counter retaliation might cause more losses. This shall hurt the people who are already battling unemployment, rise of food prices and lead to a cascading effect on commodity exports at a disadvantage with steep tarrifs. Further such rash actions brings into focus how lack of wisdom in article which was meant to be used in case of war and scant regard for WTO rules, even after leading the trade talks since the dawn.
At the geopolitical level, if United States is withdrawing itself from leadership, China attempts to offer a narrative of reforming the chaos of foreign affairs. China’s new assertiveness is clearly depicted in One Belt, One Road, wherein the international paradigm is meticulously analzing that whether it will pave way for new W.T.O. However one cannot dismiss how the domestic intricacies of China are meshed up in manipulation. Further, both US and China are doing scarce little in giving up on their chauvinistic nationalism, which hampers world order as well. There is a crisis that looms over the alternative to the global architecture created in the aftermath of the Second World War.
War comes with cost and loss, trade wars are not any different here. Looking at way how the contours of Trump regime are shaping up where there is an attempt to damage that exists from past with no corrective action to be put in place, the real challenge is then of we are taking down the world order one by one, then will the challenges of stopping globalisation outweigh the threats. Germany has warned over the irrationality involved in such a gimmick and that diplomatic talks to be used to resolve the trade conflict.
Shared values have always existed in world forum. Stand-offs were followed by attempts for mutual agreements. If United States ventures into this monumental contest, it is trying to end an already disputed organisation. These moves have laid bare the need to deliberate whether aggression strike a right chord with opposition and bargaining. Or that one resorts to tackle their destiny on own with collapse of multilateralism, the hunt for the next hegemon, the world future seems to be pushed towards bleak multi-polar anarchy.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.