Trump and Trade

Trade is one of the main themes of US President Donald’s rump’s Asian tour as it will be for Prime Minister Justin Trudeau.

There is a very, very useful article in the Financial Times, headlined “Globalisation marches on without Trump,” which begins by saying that “When Donald Trump lays out his long-awaited vision for a new US strategy to engage with Asia later this week he will be doing so in a place replete with lessons about American misadventures … [because] …  Da Nang, host to this year’s Asia Pacific Economic Cooperation summit, today serves as a beach playground complete with the sort of $700 per night tropical resorts and lush palm-lined golf courses that Mr Trump might prize for his own property empire. But in March 1965 it was where 3,500 marines became the first regular US combat troops to land on Vietnamese soil, entering a conflict that a decade later would end with an ignominious retreat for a defeated and divided America.”

But, the FT continues, “Nowadays, the war in Asia that often consumes Mr Trump’s White House is an economic one. The strategy he will unveil in Da Nang on Friday hinges on developing stronger bilateral trade and investment ties with like-minded regional allies such as India and Japan. Behind it, much like his predecessor’s “pivot to Asia”, lies a desire to find a hard-nosed way to respond to a rising China. Many of Mr Trump’s top advisers view Beijing as a predatory economic rival that has, for too long, gamed an international system ill-equipped to cope with its brand of state-subsidised mercantilism.

The crux of the Financial Times’ take on Trump and Trade is that Asia is, already, writing America out of its plans for expanded free(er) trade. “From Asia to Europe and Latin America,” the article says, “other countries are striking trade deals and launching negotiations at an accelerating pace. Japan, Canada, Mexico and seven other countries that remained in the Trans-Pacific Partnership after Mr Trump pulled the US out of the trade pact are expected to announce at Apec that they will be moving ahead with the deal.”

President Trump proclaims himself a hard-nosed deal maker but the evidence suggests that (with six bankruptcies to his credit) he is anything but ~ his “deals” have a habit of going south and the only reasons he’s not in a debtors’ prison are:

  1. They closed all the debtors’ prisons in the mid 19th century; and
  2. The ease of US bankruptcy procedures.

The Asians and the Europeans and we Canadian know that President Trump is a blowhard and a bully but not really much of a negotiator ~ certainly not an honest one. To put it bluntly: ““It is not the right time to start new ambitious trade negotiations [with the US],” Lee Hsien Loong, prime minister of TPP member Singapore said during a recent visit to Washington. “I think [the Trump administration] believe that, bilaterally, you are bigger than any other partner that comes along and so you get a better deal. As a result of which I think not that many partners will be keen to deal with you bilaterally.”” That will be, I expect, the Asian consensus and, I think, the general opinion amongst most trading nations.

It needs to drive Canada’s trade policy, too.

America will turn itself around … the only question is: when? In 2020? Not until 2024? Or later still? Will it be sometime in the 2030s or beyond before the moderate middle regains control of the American political agenda and free traders are in control again?

Until that happens, however, Canada, like Asia and Europe, must look forward to increased globalization without American leadership or even participation.

 

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