Who could possibly be against trade? It is one of the great unifying and civilizing activities of human beings, it allows for cultural interaction that surely promotes world peace, and it contributes to the material well-being of humanity. It is a no-brainer.
A top level forum took place in Dubai on Sunday under the auspices of Asia House, a UK-based think tank, and the Dubai Multi Commodities Center, the UAE’s fastest growing free zone, which decided that actually, quite a few people in the early 21st century were turning increasingly against the very idea of global free trade.
President Trump, of course, with his America First dogma, was often mentioned as the main threat to the 200-year trend toward greater trade liberalization; those pesky British Brexiters were named and shamed; and China, which preaches its championship of global free trade but often behaves in contradictory manner, was also highlighted.
But there was a sense too that there was something wrong with the basic system that has governed world trade throughout the past two centuries, which reached its apogee in the globalization wave that began in the early 1990s and lasted right up until the global financial crisis of 2007-8.
The forum theme was “the new global trade order”, but all around it seemed there was evidence of growing disorder and disunity in global commercial relations. As Ahmed Bin Suleyem, the DMCC’s chairman, put it: “There is negativity everywhere about the global economy, a gloomy uncertainty wherever you look.”
Not that it was all down to the devious ways of politicians. Hamad Al-Buamim, president of the Dubai Chamber of Commerce and Industry, pointed to the problems of wealth inequality which globalization had caused; others highlighted the regular lapses into protectionism that has slowed the progress of world trade. These are structural hurdles in the world economic system.
But there was little doubt where most of the blame lay: in the “erratic and counterproductive” policies of the current US administration, in the words of former US ambassador to the European Union, Anthony Gardner, who thought such a mentality led to an “obsession with bilateralism” that was damaging global commerce.
You could see his point. The Trump administration has pulled out of the Trans Pacific Partnership, then signaled it might like to rejoin a reformed TPP, then pulled out again when it became obvious the existing members were not willing to accommodate such American caprice.
This was only one example of the apparent US hostility to global trade. Just as serious, and undoubtedly more damaging, is the Trump threat to leave the North American Free Trade Association, and the imminent possibility of a trade war with China.
Trade is one of the great unifying and civilizing activities of human beings, allowing for cultural interaction that surely promotes world peace, and the material well-being of humanity.
Frank Kane
Wolfgang Ischinger, chairman of the Munich Security Conference and former German ambassador to the UK and US, was also gloomy, and said that the Trump administration was the main reason behind the current malaise. But he allowed that the US president had yet to seriously follow through on threatened measures that would guarantee a global trade conflict with China. “It might all be tactical, bargaining, bullying,” he said.
Or, he added ominously, Trump might be trying to “blow up” the World Trade Organization, the body that tries to regulate global commerce.
In any case, he felt that to some degree, US complaints against China were justified so long as Beijing failed to eliminate practices that ignored intellectual property laws, allowed massive state subsidies of Chinese businesses, and imposed veiled tariffs against imports it did not like.
Ischinger said that China often saw foreign trade as an extension of foreign policy, citing the example of Daimler, the German car maker that had to make a grovelling apology to the Chinese authorities over an advertising campaign that mentioned the Dalai Lama, the Buddhist leader and Chinese hate-figure.
Doug Lippoldt, chief trade economist with HSBC (one of Asia House’s backers) and an avowed “trade optimist”, agreed China bore some of the blame for global trade’s current bad name, and threw in the charge of cybertheft too.
But it was not too late to have a “win win” in the US-China trade standoff, he believed, adding that the commitment to global trade inside Washington DC was “deep.” The President will not like that idea at all.
The position of the Middle East within this international free-for-all was explained by Lord Green, former chairman of HSBC and British trade minister, and current chairman of Asia House. He said that we were living in the era of the “rise of Asia”, and that economic gravity was puling the rest of the world, including the Middle East, further toward China. The Belt and Road policy of Beijing is certainly accelerating that process.
But, speaking on the sidelines, he also allowed that the Middle East should not give up on the west just yet, as continued strong links with Europe and North America made geo-political, strategic and financial sense. “It is not a binary proposition. The Middle East should not shed its westward links completely,” Green said.
- Frank Kane is an award-winning business journalist based in Dubai. Twitter: @frankkanedubai