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Building Up to a Breakdown

April 20, 2018
Can the world prosper under bilateral trade as well as it has done under multilateral terms? Yes, but with more uncertainty, more problems — and fewer options.

I’m no expert, but I suspect we are not building up to a “trade” war over steel and aluminum imports, and by extension over Chinese imports of U.S. automobiles, chemicals, fruit and vegetables, or whatever product or commodity comes to hand. I suspect this because such a “war” would not be advantageous to either of the putative participants, and because the very proposition of such a war belies the true intentions of the contenders: they are invoking the phraseology of combat in order to persuade the adversaries that they want some revision of the existing terms of their engagement.

Note, in this sense, the U.S. and Chinese officials pursuing this line of discussion indicate a true appreciation of the meaning of “war”, something that most analysis of the situation fails to reckon. A war is a real thing – a bloody, pitiless, regrettable thing, and no one who would enter into such an engagement can be assumed to have a clear understanding of the consequences. We see this proven in reverse in any of the open conflicts and in the numerous violent acts perpetrated so regularly. People undertake “war” when they have nothing to lose.

The U.S. and China have much to lose, and both sides recognize it. The reason there is so much at stake is because over 45 years a multilateral system of commerce and diplomacy has established a complex framework by which China has converted its resources and opportunities into global economic power. The resources may remain, but the opportunities are what is now at risk.

Multilateralism is a general term that allows individual parties (persons, companies, or nations) to agree to a broad series of principles and arrangements in order to achieve commercial and social progress in general – even if specific issues remain unaddressed or ignored. That created the opportunities for China to grow. 

Companies and nations have encouraged the economic liberalization and expansion of China, because that process brought more immediate financial advantages even if it left numerous other problems unaddressed and unresolved. And China has thrived without having to account for the various excesses or inadequacies of its system.

Multilateralism, I should note, is a more philosophic expression of “globalism,” the label given to the technological and commercial expansion beyond the geographical boundaries where laws and customs enforce fair trade. Although globalism has a bad reputation among many manufacturers, until lately there has been no serious challenge the underlying principles of multilateralism. Now, on this point, there should be some concern.

Again, I’m no expert, but what is prompting the current unease in global trade prospects is the apparent weakening of the multilateral framework that has propelled not only China in recent decades, but similarly the North American Free Trade Agreement and the European Union. Such arrangements are under steady criticism because many participants no longer realize or care that economic growth is meant to compensate for unaddressed and unresolved issues, like unemployment, income disparities, open-border migration, and the innumerable social and spiritual needs of people adrift in a world that operates on the simplistic calculus of profit or loss.

If multilateral approaches to global commerce fail, the result still will not be a trade war. It will be bilateral trade deals – the first evidence of which we see with the separate arrangements set up by the U.S. with Canada, the E.U., and other nations following the shocking threat of U.S. steel and aluminum tariffs.

Is it possible for the world to prosper under a new complex of bilateral agreements between nations? Of course, but it will be a world with an even greater sense of uncertainty as we tiptoe from day to day wondering what unknown problems or demands will be presented to us. And this will promote more reactionary choices, crowd-based decision-making to a scale beyond what we already know, as impulse overtakes reasoning and strategy. Perhaps we’re nearly there.

And what lies beyond that? Again, I’m no expert, but the devaluation of expertise is apparent now in the current trend away from reasoning. If patterns hold, then prudence, self-restraint, and self-reliance would become more necessary and more valuable. It cannot happen soon enough. 

About the Author

Robert Brooks | Content Director

Robert Brooks has been a business-to-business reporter, writer, editor, and columnist for more than 20 years, specializing in the primary metal and basic manufacturing industries. His work has covered a wide range of topics, including process technology, resource development, material selection, product design, workforce development, and industrial market strategies, among others. Currently, he specializes in subjects related to metal component and product design, development, and manufacturing — including castings, forgings, machined parts, and fabrications.

Brooks is a graduate of Kenyon College (B.A. English, Political Science) and Emory University (M.A. English.)