The ominous drumbeats of a trade war underscore the critical juncture of US-China relations. It is a good example of, what business theorists call coopetition—the complex game of competing and cooperation at the same time. An illustrative example might be Samsung-Apple’s dog-eat-dog global competition in smartphones and patent litigation, while maintaining a supportive and lucrative supplier-customer relationship. It’s just business.
The US and China face the same complex partnership: increasingly tense competition that needs to be balanced by cooperation. China’ rise to Great Power status creates competition for geo-political influence, national security, territorial control, global prestige, and influence over the many mechanisms of the international order that has evolved– without China– since 1947. Not seeing eye-to-eye is not surprising for two nations with such different histories and cultures. The problem is that disagreement can turn into conflict. An intense trade war could stumble out of control. John Merscheimer, Dean of international relations realists, puts the historical probability of a significant military clash at only 70 percent.
Continue reading “U.S and China Relations: Time for Serious Food Diplomacy”
The world’s attention to the U.S. threat of a global trade war—which now seems underway with China’s announcement that it has raised tariffs on 128 U.S. exports—has been deflected to a true hot spot—the Korean Peninsula. President Trump has exercised his gift for stirring troubled pots by impulsively agreeing to meet with North Korean dictator Kim Jung On in May. These sorts of sensitive negotiations typically take a year or more of hard preparation by experienced technocrats on both sides negotiating scores of substantive issues and protocol measures necessary to lay the foundation for a fruitful meeting of heads of state. This foundational work typically leads to meetings of Deputies and then Ministers and Secretaries, all to create a final opportunity for Heads of State to meet and consummate a strategic and well-designed agreement.
President Trump’s model is different: A promise—or threat– to exercise the Art of the Deal with an erratic, nuclear-armed dictator based on virtually no foundation. A skeletal and disassembled staff of knowledgeable people on the U.S. side is scrambling Continue reading “Korea: Front and Center”
The current “trade war” that the U.S. appears to be launching is, fortunately, still at the level of frontier skirmishes. The theaters of war are being explored and the resolve of the enemy is being tested. With any luck, this will be mostly theater and little war. However, one cannot help but believe that a little bit of war could be a good thing, for a few very important reasons. It is these reasons that we shall explore over the next few weeks in this blog.
First, recognizing the wisdom in Colin Powell’s warning that no battle plan survives contact with the enemy, it is still wise to at least plan for battle. More specifically international trade is always a form of ongoing, simmering warfare. The economics of trade is an optimistic, entirely positive-sum story: cooperation, collaboration, expanding commerce, escalating opportunities, partnering for innovation, and creating mutual prospects for growth. The politics of trade, however, is always a form of warfare.
A bit of history will help set the stage. From the time of Marco Polo Continue reading “Reflections on a Trade War”
Elegy for the Trans-Pacific Partnership
Robert A. Rogowsky
Professor of Trade & Diplomacy
Middlebury Institute of International Studies in Monterey, CA
It has been more than a year since President Trump pulled the United States from the Trans-Pacific Partnership: the result of nearly a decade of negotiations with 11 other countries, including three of our largest trading partners, two South American trade partners and six more in Southeast Asia. The jilted trading partners have found their way back to a new TPP-11, which will undoubtedly open new opportunities for their industries and consumers, much at the expense of their U.S. counterparts.
The TPP was the new gold standard in trade agreements, to be surpassed in the future to be sure, but for now a major step forward in the hard task of negotiating rules for the rapidly evolving global marketplace, increasingly dominated by complex supply chains. It was the latest version of a long evolutionary process begun by Ronald Reagan when he proposed the expanded and visionary trade agenda to the GATT in 1982. Hard fought negotiations to open a new Round of negotiations in 1986 led to the Uruguay Round Agreement in 1994 creation of the WTO and expanded the trade agenda from manufacturing tariffs to begin to incorporate the global nature of business into rules defining a new level of governance for international commerce. Continue reading “Elegy for the Trans-Pacific Partnership”