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Trump ‘looking for ways’ to reduce role of World Trade Organisation

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

The story of Donald Trump’s supposed connections to Russia has all the glamour of a spy movie, which is one reason why it makes world headlines.  With the publication of the Trump Dossier even the sex – an indispensable element of any good spy movie – is there.  The fact the story has so many of the elements of a good spy movie in itself however shows that it is fiction, and therefore fake.

By contrast the story of Donald Trump’s trade policies is real and it hugely matters but because international trade appears complicated the media barely touches the subject, though I suspect the media’s lack of interest in the subject is not shared by millions of people who voted for Trump for whom it is an issue of vital importance.

Donald Trump has put together a team of people to run his trade policy whose views differ markedly from those of the accepted globalist orthodoxies.  Wilbur Ross, his pick for Commerce Secretary, and Peter Navarro, his pick to lead the new National Trade Council in the White House, are known economic nationalists, as is Robert Lighthizer, his pick for US representative to the World Trade Organisation.

Ross is expected to be confirmed as Commerce Secretary shortly, whilst Navarro is an outspoken critic of the US’s trade relationship with China and Lighthizer is a longstanding advocate and defender of the interests of the US steel industry.

It has now been confirmed that the Trump administration has instructed Lighthizer to look for ways for the US to opt out of the trades dispute resolution procedure of the World Trade Organisation, the body that has been set up to regulate world trade.

This is a potentially highly important development.  The World Trade Organisation’s dispute resolution procedure lies at the heart of the existing globalist world trade system.  If the US – the keystone of the world economy and the country whose currency is used in the great bulk of international trade transactions – distances itself from it, then the whole globalist economic agenda will start to go into reverse.

In that case the period from Bill Clinton to Barack Obama will probably come to be seen as the heyday of globalisation, with the world retreating thereafter to a more controlled world trade system, which is actually far more historically typical of how world trade has normally operated.

The country that is widely seen as most threatened by the change of US trade policy is China.  In my opinion this is wrong.  With Chinese wages now higher than those in Mexico and Brazil China has for some time been reorienting its economy away from exporting towards internal consumption whilst forging bilateral economic links with its Eurasian partner Russia to secure its access to energy and raw materials.  The change in US trade policy will simply accelerate a shift in Chinese economic policy which has already been underway for some time.

The countries which in my opinion will be most affected by the threatened shift in US trade policy will be those such as Germany and Mexico which have staked their economic future to an excessive degree on exporting, specifically to the US.

The prospective change in US trade policy also represents a major geopolitical shift.  Before the 1940s US trade policy was traditionally protectionist, with US industry having been built up over the previous century behind a wall of protectionist barriers.

The US changed its trade policy in the 1940s and 1950s as a result of its Cold War duel with the USSR, with the US looking to win over countries by integrating their economies with its own by opening up its markets to their goods.   Along the way globalisation (as it came to be called) also obviously benefited US elites, making it easier for the US to import capital from abroad whilst enabling the US to penetrate foreign economies.

It seems that this process may now have run its course, so that a quarter century after the Cold War ended the US may finally be taking its first tentative steps back towards a trade and economic system which is more traditional to it.  In the sweep of US history that could well turn out to be the Trump administration’s main purpose, which would explain why it was elected.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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