Bargaining trumps bullets
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Bargaining trumps bullets

'When goods do not cross borders, soldiers will." It's a blunt quotation and one that certainly got my attention when Dr Supachai Panitchpakdi used it last week.

The former head of the World Trade Organization and the UN Conference on Trade and Development used the comment, attributed to the 19th century French economist Frédéric Bastiat, to make some sobering points about the state of our world today.

He began by taking issue with the terminology many people are using. What is going on between the United States and China cannot be called a "trade war", he said, because the issue is between two countries, not the entire world. That doesn't mean it isn't serious, of course.

"This is not a trade war," he said in a speech at the Bangkok Post International Forum. "A trade war is something that we saw in the Smoot-Hawley Tariff in 1930. That act came out against the rest of the world … so that the market in the US would be protected. But what happened was that the malaise that came up actually went on and on until the Great Depression."

The Great Depression and "global economic malaise" which started in the US and then went on to Europe helped fuel the rise of the Nazis in Germany, leading to World War II, he added.

In Dr Supachai's view, the US-China dispute is just the latest symptom of a condition that has been afflicting the world for nearly two decades.

"The rise of protectionism is a trend that has seen the decline in the rate of trade volume around the world and that is an alarming trend," he said. "It came up way before President Trump since the tariff on steel, the anti-dumping issue, came up during the time of President George W Bush."

This rise of protectionism and opposition to globalisation, he believes, is the real cause of the slowdown in global trade and at the root of the weakening state of the world economy right now, and I agree.

I also agree with him that when countries are not trading with each other, they will fight against each other. This is because the world population has been increasing dramatically.

It took from the dawn of human history until around 1800 for the world population to reach one billion, the second billion was achieved only 130 years later, the third billion in 30 years (1960), the fourth billion in 14 years (1974), and the fifth billion in only 13 years (1987). Now, we are at 7.7 billion and we are predicted to number 9.7 billion by 2050. Rising populations fuel a dramatic rise in demand for resources, and if we cannot get them from trade, human beings will fight for them.

The US has been accused of starting wars around the world for oil, while China has been accused of creating debt traps to gain access to resources and strategic locations in other countries. Then there is the absurd nine-dash line that Beijing uses to claim almost the entire South China Sea.

Of course, these are very sweeping and general accusations. Many people will demand more solid proof of malicious intent, and the two superpowers can always send out their smooth-talking diplomats to mount a defence. But, it is clear to some that these conflicts are being cooked up because they want more resources for their own people.

So why can't we just trade for it? Why resort to bullying and bullets to get what they want? Simple, it is cheaper and they have the power to do it. You don't want to buy our chemicals? Fine, we will take away your trade privileges instead.

You don't want our trains going through your country because you want us to give away our technology, or you don't want us to build our military bases in your country? Fine, we will give you loans that you cannot afford to pay and then build the railways and take your ports anyway.

I personally hope -- and I know that I am being naive here -- that the superpowers of the world can turn away from protectionism and the "me first" mentality and back toward multilateralism and "us together" mentality once again.

This is simply because I, and I am sure a lot of people out there, do not want the world to repeat the dark past of exchanging bullets instead of goods. Let us trade instead of fighting for what we need.

Erich Parpart

Senior Reporter - Asia Focus

Senior Reporter - Asia Focus

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