Trading Places?

July 16, 2008 • Commentary
This article appeared in the South China Morning Post on July 16, 2008.

An inward‐​looking America could relinquish its economic leadership to 21st‐​century Asia

International trade has lifted millions of people in Asia out of poverty in recent decades and has done a great deal to bring China’s economy closer into line with the realities of 21st‐​century capitalism. Accordingly, it isn’t terribly surprising that, according to a sixcountry survey of soft power in Asia by the Chicago Council on Global Affairs, trade is wildly popular in China.

What is surprising, however, is how popular trade is throughout Asia. The survey covered Japan, South Korea, Vietnam, Indonesia and the United States, as well as China, and in all countries except the US, the figures on trade were striking.

The survey reports that in China, Japan and South Korea, for example, “no potential bilateral free‐​trade agreement … receives less than 53 per cent support”. Even more striking, between 70 per cent and 86 per cent of those surveyed in Japan, South Korea and China favour a Northeast Asian Free Trade Area including the three countries.

These findings reflect a wide recognition in Asia of the benefits of trade. The findings in the US, however, are much less encouraging: 54 per cent of Americans oppose a bilateral free‐​trade agreement with China, with only 41per cent in favour.

Not unrelated are Americans’ views of China as a strategic threat: 70 per cent say they are “very worried” or “somewhat worried” about China’s rise and its implications for American national security.

Even with unemployment having hovered between 4 per cent and 6 per cent for more than a decade, American politicians have cultivated a fear of China that has yielded military wariness and economic resentment.

The dissonant views in America and Asia could bear heavily on the nature of the world order in the coming decades. If the US decides to build a protectionist wall around itself and gird itself for war with potential adversaries — including China — the implications for global trade and China’s “peaceful rise” will be grave.

US neoconservatives like to pose the choice in America’s grand strategy as between one of globalisation and trade coupled with military expansionism, on the one hand, and military and economic isolationism accompanied by global upheaval on the other. This analysis misses the mark, and poses a false choice to Americans.

On the most pressing security challenges of the day — nuclear proliferation and salafist terrorism — there is little conflict between the world’s leading powers. But if Washington insists on attempting to dictate outcomes on the full range of international issues, it will be more difficult to obtain co‐​operation on the matters of central importance. The false choice of isolation or empire can be avoided if the US can prioritise its objectives and pursue as many as possible in co‐​operation with the world’s other leading powers.

If, by contrast, US leaders insist on attempting to determine outcomes in all arenas of global affairs by themselves, they should expect to encounter difficulties from the nations of Asia — and elsewhere.

The quest to integrate China as a “responsible stakeholder” in the world order will, after all, require China obtaining a stake. And enhancing the opportunities for positive‐​sum exchange — such as in trade — will help to lessen the tendency to greatpower competition that could otherwise emerge.

As the US continues to focus its energies disproportionately on the various political struggles in the Middle East, the economies and politics of East Asia are in flux. Even long‐​standing political rivals — China and Japan, Japan and South Korea — cannot deny the benefits from trade and peaceful economic interaction.

Trade is not a fail‐​safe bulwark against conflict, but interdependence can constrain the instincts for zero‐​sum interactions, as has been seen with the recent experience in cross‐​strait relations with Taiwan.

If America withdraws from this type of mutually beneficial economic interaction, all indications are that Asia will continue with an affirmative agenda of trade and economic growth — with America on the outside looking in.

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