Trade economist Dr Rebecca Harding reflects on the US Exim Bank’s annual spring conference compared with the ICC Banking Commission event in Beijing and notes how polarised attitudes to trade have become and that is businesses that trade and not governments
It is fair to say that world trade is facing a few challenges at the moment. The language between the United States and China has become ever-more belligerent in the last few weeks, with both sides taking an increasingly nationalistic approach to the discussions on the future world of trade. This perpetuates uncertainty and as a result dampens investment. It also dampens world trade: the CPB’s World Trade Index suggests that world trade volumes have dropped back by over 4% since October 2018 putting its gains during the previous twelve months into a sharp reverse.
The US, although stepping back from increasing tariffs on automotives recently, is still taking an adversarial approach towards its trade negotiations with China, Japan, Europe and the UK. Its position across all of these conversations is almost identical: to protect US agriculture and manufacturing (particularly aerospace and cars), to ensure its cyber security and intellectual property, to enable greater access for investors to overseas markets, and to protect American exporters from any unfair currency manipulation by its overseas trade partners.
These discussions are about so much more than trade. They are about the future of the world’s trade and, indeed, foreign policy systems in a world where the nature of trade relations and power are changing because of the growing importance of digital technologies, the rise of China and the role of the US in a multipolar world.