Hmm… Macron: Trade wars quickly become war

,,Trade wars quickly become war,” full stop, French President Emmanuelle Macron said. How do you see such statement, as an exaggeration as it is hard to compare past with the situation now, or as an reminder that current tensions might lead to something bigger? Read few comments.

French President Emmanuel Macron. Credit,: http://www.elysee.fr

R. Daniel Kelemen, Professor of Political Science and Law, Jean Monnet Chair in European Union Politics, Department of Political Science, Rutgers University

I think Macron is clearly exaggerating with that statement. But, with the US on the verge of triggering a trade war with China and imposing steel and aluminum tariffs on EU countries, Macron is trying to underline the dangers of pursuing protectionism. He is right to warn of the dangers of Trump’s reckless policies, even if talk of the risk of war is exaggerated.

Alan Cafruny, Professor of International Affairs, Hamilton College

Although tariffs on the EU could trigger a much more general trade war between the USA and EU, it is also the case that both sides have a strong interest in compromise. In today’s world off global production chains a reprise of 1930s-style trade wars is highly unlikely. Since the election of Trump and his rhetoric of trade wars there has been a tendency to romanticize the post-World War II trading system, emphasizing its multilateral and liberal aspects. They certainly existed, but it is also the case that in the 1970s and 1980s especially the United States pursued unilateral, and highly coercive trade and monetary policies against both Europe and Japan.

Patrick Leblond, Assistant Professor, Graduate School of Public and International Affairs, University of Ottawa

I disagree with Macron’s statement. There is no evidence that nowadays that so-called “trade wars” rapidly devolve into actual wars. For example, Canada and the United States have had repeated acrimonious trade disputes on softwood lumber without any violence. With dispute settlement mechanisms at the WTO and within bilateral or regional trade agreements, there is a legal and administrative process to manage disputes that removes some (although not all) of the power plays between states. In the past, when trade disputes could not be settled through negotiation and diplomacy, force was often the only remaining solution. This is no longer the case.

Evan Jones, Honorary Associate, Department of Political Economy, University of Sydney

President Macron’s remark « Trade wars quickly become wars, full stop » is a flippant remark. It is historically inaccurate. It would be more accurate, as an aphorism, to claim that « Trade is war by other means » !

Reuters also notes of Macron: “Macron called on the world’s main economic powers to reform the WTO to save multilateralism and produce a blueprint by the end of the year.”

This is a very naive proposition, as the multilateral trade regulation system centred on the WTO is at an irreversible impasse, and for good reason

as many weaker countries saw that it was a vehicle for the most powerful countries to maintain their trading dominance. President Macron’s background does not inspire confidence that he has well educated himself on the nature of trade politics. It also appears that he is ill served by his advisers.

Regarding the US, it has always pursued aggressively its self-interest in trading relations and global trading rules. The current developments under Trump are thus not contrary to past practices, but merely variations on a constant strategy. The US has used multilateral vehicles (GATT, WTO) for its self-interest. With WTO at an impasse, it has increasingly turned to regional and bilateral ‘free’ trade agreements (mostly notably NAFTA). to favour US companies. The Trans Pacific Partnership FTA was a vehicle to undermine China’s growing economic power. The Transatlantic FTA was a vehicle to gain greater and asymmetric access to European markets. US directed sanctions against Russia are also a means of enhancing American economic leverage in Europe, so that the US wants to replace Russian gas imports into Europe with US gas exports (ludicrous in economic terms).

The European Union needs a more coherent and assertive pursuit of its own collective interests, not least maintaining environmental standards with the constant US attempts to weaken them. However, Brussels has been notoriously weak. It has rolled over regarding the early banning of Monsanto’s glyphosate. It has accommodated negotiations on the TAFTA, with little regard for the European populations’ interests. Ditto with the Canadian FTA (a trojan horse for US companies and interests). And it is currently accommodating negotiations with Mercosur and Mexico regarding FTAs.

The US conflict with Europe over trade and business is directly linked with Trump’s attempts to revive sanctions on Iran with the US threatening Europe that it has to comply. It is high time that the European Union saw its collective interests as residing other than in the Atlantic Alliance in which it does the bidding of the US.This also means countering the influential role that the US-dominated NATO exercises of European military and foreign policy.

Sara Meger, Lecturer in International Relations, School of Social and Political Sciences, University of Melbourne

While I don’t subscribe to the democratic or economic peace thesis which essentially posits that countries that economically integrate are less likely to go to war with each other, we do know that part of the long peace we’ve seen between great powers in the 20th century is due to the cooperative measures undertaken in global governance of both trade and politics. However, do I think that retaliatory raising of tariffs between the US and EU is going to lead to armed conflict? Not any time soon. What we are likely to see is the economic effects of increasing protectionism borne by your average person in Europe. The result of these maneovuers may be that purchasing power declines, or real wages decline, which may result in heightened forms of community and personal insecurities within European states. But I think it is a far logical stretch to assume that this trade dispute may eventuate in armed conflict between the US and powers of the EU. Given that the US still maintains a military predominance that exponentially exceeds its nearest peer competitors, and given the extent of military/security integration between the US and member states of the EU, as well as the EU itself, the likelihood that European states would actually pursue a policy of armed engagement over unfavourable trade arrangements with the US is very low.

Then again, all wars are trade wars. In the end, if Trump’s protectionism is the beginning of a longer term trend in foreign policy, we may see the disintegration of the liberal world order and a return to competition between these states sometime down the track.

Jonah Levy, Associate Professor, Vice-Chair of the Department of Political Science, University of California, Berkeley

With all due respect to President Macron, I do not think that the primary risk is that trade wars will turn into shooting wars. My concern is that trade wars will loosen the ties among longstanding allies. For whatever reasons, the recent tariffs on steel and aluminum seem to make no distinction between friend and foe or even between countries that are engaging in predatory practices and those that are playing by the rules. The economic effects of such behavior are bad, but the geopolitical effects are worse. President Trump is driving a wedge between the US and its closest allies; he is undermining multilateral institutions that help ensure order and the rule of law; and he is diminishing the credibility of the word of US leaders and their governments. These are the kinds of developments that can open the door to a shooting war. What is more, should the US need allies for wars — trade, shooting, or otherwise — we are much less likely to have them. It will be next to impossible to assemble multinational coalitions to counter aggressive behavior by the likes of Vladimir Putin of Kim Jong Un or even to secure the peace in the aftermath of an armed conflict. These problems, more than the price of steel or aluminum, are what keep me up at night.

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