Who's In Charge? That it was left to the Chinese President, Xi Jinping, to lead the charge against the rise in protectionism across the globe struck NZ Herald business columnist, Fran O’Sullivan, as particularly galling. Since the 1980s, it has been the West that has set the pace on trade liberalisation – particularly the United States. That this no longer appears to be the case clearly left O’Sullivan unimpressed.
THE DEEP ANXIETY of the “Free Trade” lobby was on full display in this morning’s NZ Herald (7/9/16). Fran O’Sullivan, that most indefatigable of the Herald’s free trade advocates, was so moved by the uncertainty currently surrounding the ratification of the Trans-Pacific Partnership (TPP) that she devoted a good chunk of her business column to the global fight against protectionism.
That it was left to the Chinese President, Xi Jinping, to lead the charge against the rise in protectionism across the globe struck O’Sullivan as particularly galling. Since the 1980s, it has been the West that has set the pace on trade liberalisation – particularly the United States. That this no longer appears to be the case clearly leaves O’Sullivan unimpressed.
Of President Barack Obama’s reticence on the subject – on display at the just concluded G20 meeting in Hangzhou, China – O’Sullivan is scathing:
“US President Barack Obama could hardly lead the charge given the two candidates fighting for election to president don’t have the bottle to even support the Trans-Pacific Partnership (TPP). The US previously argued TPP would enhance US economic supremacy and ‘contain’ China's ambitions.”
Those scare-quotes around the word “contain” indicate just how sceptical O’Sullivan has become of the United States’ capacity to any longer dictate economic terms to the world’s major economic powers – especially China. Her dismay at this turn of events is clear:
“Now Xi is driving the call for a more open economy, yet another sign of how badly ‘the West’ has dropped the ball in the post-Global Financial Crisis era.”
But if the West has “dropped the ball” in relation to the GFC, and if its political leaders no longer “have the bottle” to support free trade agreements like the TPP, then it is surely incumbent upon O’Sullivan to tell her readers why. Sadly, no such explanation is forthcoming.
There is, of course, a very good reason for O’Sullivan’s silence on the cause of the West’s failure. Even in the business pages of the Herald, blaming the world’s economic problems on democracy is a reputationally risky gambit. And yet, no other explanation suffices. That the very same international trends: free trade, globalisation; whose declining influence O’Sullivan so volubly laments; are also the root causes of the massive upsurge of populism across the USA and the United Kingdom is simply undeniable.
It’s not that Donald Trump and Hilary Clinton lack “the bottle” to back the TPP, more a case of them recognising that to do so at this juncture in American history would cost them the election. What O’Sullivan refuses to recognise is that free trade and globalisation have, over the past 30 years, imposed a tremendous economic and social cost upon the populations of the West. That the effects of free trade and globalisation were bound, eventually, to trigger a day of democratic reckoning was something their proponents preferred not to think about.
O’Sullivan offers a fine example of this political denial by quoting the words of the Chinese billionaire, Jack Ma. The founder of Alibaba (China’s equivalent of TradeMe) told CNN that: “We should keep on going along the path of globalisation ... globalisation is good ... when trade stops, war comes.”
Wa went on to dismiss the strongly antagonistic tone adopted by Donald Trump towards America’s Chinese competitors: “Every time there’s an election, people start to criticise China. They criticise this, they criticise that ... [But] how can you stop global trade? How can you build a wall to stop the trade?”
The answer, of course, is by erecting the very same protectionist trade-barriers that Wa’s President, Xi Jinping, was warning the G20 against. As boss of the Chinese Communist Party, Xi clearly struggles to fathom the West’s sudden falling-out-of-love with what used to be called the “Washington Consensus”. Perhaps his political empathy would be enhanced if his party’s policies were subjected to the judgement of the Chinese people every four years – like those of his Western counterparts.
2016 may prove to be the year in which the electorates of the West finally demonstrate to their political elites the democratic folly of pursuing trade policies that are free – but not fair. If that is what they do, then, far from dropping the ball, the voters of the West will have saved the whole capitalist game.
This essay was originally posted on The Daily Blog of Wednesday, 7 September 2016.