Only One Step Away From A Global Trade War
By Tyler Durden
Submitted by Valentin Katasonov via Strategic-Culture.org,
The financial crisis of 2007-2009 effectively terminated the process of globalization. In 2015 world trade suddenly dropped by more than 10% for the first time since 2009. Nothing like this has been seen since the Great Depression of the 1930s. But some politicians, public figures, scholars, and journalists continue to talk about globalization as an “objective? and “progressive? process, even though it has already ended.
The world has embarked on a new era. One important hallmark of this era is the strengthening of protectionism in international trade and investment, the splintering of the global market into trade and economic zones, and even the move to regulating trade on a bilateral basis. According to the WTO, just in the period between October 2015 and May 2016 the G20 countries adopted 145 laws aimed at strengthening trade barriers, and over 1,500 such laws have been adopted since 2008. In total, according to estimates by the renowned British economist Simon Evenett, there are close to 4,000 protectionist laws and regulations on the books around the world. And the countries of the G20 – where over 90% of global trade originates – are responsible for 80 % of those trade barriers.
Donald Trump jumped nimbly onto this bandwagon with campaign slogans promising to revitalize America’s weakened position in world trade – mostly by relying on protectionist measures:
First – he would halt the negotiations to draft the Transatlantic Partnership Agreement between the US and the EU and refuse to ratify the already-signed Trans-Pacific Partnership Agreement.
Second, he would either find a way out of NAFTA or would completely revise the terms of that treaty with the other parties (Canada and particularly Mexico).
Third, he would use bilateral agreements to frame American trade and economic relations with the rest of the world, while simultaneously moving away from a policy of multilateral or even global regulation of world trade (to the extent that the US is ready to refuse to take part in the work of the WTO).
Fourth, he would completely revise the terms of America’s trade and economic relations with China: increasing the typical level of import duties on Chinese goods to an average of 45% and adopting protectionist measures in connection with what is known as Beijing’s currency war (the artificially weak yuan compared to the US dollar).
Obviously the dogged and headlong pursuit of such a consistently protectionist program could not only strain relations with many of Washington’s trading partners, but could even trigger a trade war. In June the US president-elect thus described American-Chinese economic relations, “We already have a trade war and we’re losing badly?. By the spring of 2017 we are likely to hear of his first practical steps to restructure or “adjust? Washington’s international trade policy.
Trump’s protectionist mantras are already being echoed around the world. America’s trading partners are considering retaliatory measures. These are primarily the countries with which the US has the largest trade deficits. In 2015 America’s biggest trade imbalances were with the following …read more
Source: Only One Step Away From A Global Trade War
