The Global Open Trade Discussions in Redux
By: Amit Bhushan Date: 25th June 2018
With Global Open Trade feeling the heat, there of course seem a lot of cries on all sides for its redux. The political villains are being carved out and messiah nations are changing colours often blaming some real or perceived threats. While this is true for ‘nations’ with ‘activists or nationalist’ Netas, however the behavior of those with ‘pacifist’ Netas too, aren’t behaving any different or restrained. This is a far cry from past, when nations led by Netas who wanted Global Open Trade behaved differently and refrained from tit-for-tat actions. So, this round of Trade Fire seems more about maintain one set of preach and optics may be for political reasons while a different set ideals are followed in practice. Earlier, on account of ‘Hard Currency’ countries status, the nations could bring about an element of compromise formulas. This is apparently absent now with a single reigning ‘Hard Currency’ while challenger nations not ready to adhere to any of the yesteryears ‘large heartedness’ displayed by such Open Trade nations of the yesteryears. No wonder the Global Open Trade seems to fast becoming a causality with some of Netas in the Developed World gain notoriety for not adhering to the ‘Propounded Values’, the sham ‘Global Trade enthusiasts’ maintain a pacifists image but keep indulging in Tit-for-tat reactions, often without weighing overall impact of the actions which in any case have no reference model.
As far as ‘Game/author’ is concerned, I have long been a votary for the Macro-economic Reset, and the Global Trade War seems like another way to achieve this Reset. Of course, what is expected is that this Macro-economic reset brings in somewhat better accommodation for a larger mass of people, especially those in emerging markets to be able to participate in the market economy is a better way. It therefore behooves on the John Maynard Keynes of this era, to point to anomalies in the current trading system that is a cause for what quite a few economists have been calling ‘irrational economic behaviour’ of the Netas in both the developed and the emerging markets. This is while the Netas themselves might just be reacting to ‘public demands’ and therefore not keen to listen to the ‘Gyan’ from these economists even if they might be currently much greater in numbers vis-à-vis the ‘Game’ economists. To take an example regards such challenges, one can site the case of Natural fibers, textiles and Made-ups. This faces competition from Synthetic fibres, textiles and Made-ups which may have taken away the earlier shine of the Natural fibers sector and the nations who prided themselves on the same. Now, the synthetic fibers are competitive only because they originate from energy resources and since energy is a very basic need like food, so it has to be competitively priced. Now, one may argue that clothing also being a similar need, however to say that if synthetic fibres are sought to be phased out, then clothing would become unaffordable for masses is a far cry. This is especially true for the developed world and also the newly emerged economies including China. Also, the known energy resources are fast depleting, besides being a cause of pollution/environmental hazard. So, tax measures to tilt the balance towards more environment friendly natural fibers may help, even though this may be a cause for some temporary upset somewhere. The natural fibers also allow for a greater number of people especially in emerging markets to participate in the markets better. It therefore behooves on the Global Political Leadership that they weigh such options, rather than a haphazard Trade War kind of scenarios.
What the Trade War has shown is a lack of failure of political leaderships to show any direction to the global economy and a battle to guard the domestic turf. While a ‘Cry’ on steel glut does cause some action however on account of its rather little impact on the masses to participate better in the economy, the hue and cry on global trade continues. And the great economists of our era are busy finding political villains, rather than the root cause of the ‘economic behaviour’ of the people and therefore the Netas. The sudden rush of adrenaline to push for manufacturing in the developed world, which is a deviation from past when the Netas rather ignored the sector and prided on the dominance being achieved in services. There seems to be a sudden inactivity in emergence of new trading blocs in developed world, where such events were quite frequent and a make or break for the Netas. Now, the Netas in these developed countries may just be trying to rally some the emerging market Netas to evolve newer trade relations. While some of the newly emerged trading nations may be reflecting some dynamism, however the same may be on account of abilities to strike ‘Deals’ often on the back of heavy investments, rather than ability to show direction to grow trade globally. So there continue to be a vacuum and call for redux of the Global Open Trade Discussions. Let the ‘Game’ evolve…