FacebookTwitterRedditEmail

Will World Trade Collapse After America Withdraws From WTO? Don’t Bet on It!

With Trump slapping tariffs right, left and center on friends and foes alike, and threatening to withdraw America from WTO, concerns about declining global trade have heightened. Trading nations like China and Japan are wary and worried about the prospects for world trade, as are developing countries in Asia which have embarked on industrialisation and look to foreign markets for their manufactured goods in addition to their traditional agricultural produce.

The threat to growth in world trade didn’t begin with Trump’s “America First” policy. Way back in 2008 when the WTO Doha Round broke down on liberalization of agricultural trade, many already saw the writing on the wall. Countries in East Asia started to negotiate and enter into bilateral and regional FTAs.

The most significant FTA concluded in the new millennium in Asia was between the 10 member states of Association of Southeast Asian Nations (ASEAN) and China, dubbed ACFTA. China and ASEAN have a combined population of 1.9 billion and aggregate nominal GDP of almost $16 trillion in 2017 or 22% of global total. ACFTA is the largest trade grouping in terms of headcount, and the second largest measured by GDP, which ranks a close second to NAFTA’s 28%. After ACFTA came into effect in 2010, China’s  bilateral trade with ASEAN members soared from under $200 billion in 2009 to more than half a trillion dollars last year, a whisker shy of China-EU trade of $540 billion, and a fifth less than China-US trade. Close to 90% of products are transacted at ZERO tariffs under ACFTA.

Earlier this year, all the TPP signatories sans the US agreed on a slightly modified version of TPP called CPTPP with a combined GDP (excluding America’s) representing 13% of the global total. CPTPP got rid of a few predatory provisions insisted by Washington such as empowering large multinational corporates to sue member states for enacting legislation to protect public health that “harms” their business, “national treatment” for foreign oil and mineral companies, and extending the copyrights period to lifetime of creators plus 75 years (restored to 50 years) . No big loss to China which has bilateral or multilateral FTA with all the 11 CPTPP signatories, except Japan and Mexico. The object  of the original TPP to contain China is thus defanged.

A more ambitious and momentous regional FTA may be wrapped up by this year or next, after years of protracted and hard bargaining. The mother of all FTAs, the Regional Comprehensive  Economic Partnership or RCEP for short, is a multilateral FTA between the 10 ASEAN members and their 6 dialogue partners, namely, China, India, Japan, South Korea, Australia and New Zealand. The 16 countries together  have close to half of the world population, and boast an aggregate nominal GDP representing four-tenths of the global GDP, or one-third larger than that of NAFTA . With faster growth rates of RCEP than NAFTA, and if purchasing power parity GDP is used instead of nominal GDP,  NAFTA will be left behind in the dust in no time .

And we have yet to mention the Belt and Road Initiative, which facilitates and increases trade between more than 70 participating countries with two-thirds of world population and a combined nominal GDP accounting for 35% of world total, slightly smaller than RCEP’s as a result of Japan and India not coming on board yet. Though BRI isn’t a customs union, the first multilateral FTA, i.e. Eurasia Economic Union or EAEU spearheaded by Russia has hit the ground running with 5 members. EAEU will eventually be enlarged to encompass all former USSR states except those in the Baltics. The EAEU as it stands now is a market of 183 million consumers and nominal GDP in excess of $4 trillion, one third more than ASEAN’s $2.8 trillion. Turkey and Iran have expressed interest in joining EAEU. More importantly, there’s likelihood of ASEAN-China FTA linking up with EAEU. If that materializes, the enlarged ACFTA-EAEU will have total GDP in excess of $20 trillion or 27% of global GDP (nominal), snapping at NAFTA’s heels.

The world outside America have long prepared for Washington’s withdrawal from WTO. Most of the pieces to deal with global trade ex USA are in place. Instead of hurting other countries, Trump’s America First and America Only policies will hurt itself with trade protectionism, unilateralism and self-imposed isolation. The rest of the world can get by, and pretty well too, without USA.

More articles by:

bernie-the-sandernistas-cover-344x550

April 24, 2019
Susan Babbitt
Disdain and Dignity: An Old (Anti-Imperialist) Story
Adam Jonas Horowitz
Letter to the Emperor
Lawrence Davidson
A Decisive Struggle For Our Future
John Steppling
The Mandate for Israel: Keep the Arabs Down
Victor Grossman
Many Feet
Cira Pascual Marquina
The Commune is the Supreme Expression of Participatory Democracy: a Conversation with Anacaona Marin of El Panal Commune
Binoy Kampmark
Failed States and Militias: General Khalifa Haftar Moves on Tripoli
Dean Baker
Payments to Hospitals Aren’t Going to Hospital Buildings
Alvaro Huerta
Top Ten List in Defense of MEChA
Colin Todhunter
As the 2019 Indian General Election Takes Place, Are the Nation’s Farmers Being Dealt a Knock-Out Blow?
Charlie Gers
Trump’s Transgender Troops Ban is un-American and Inhumane
Barbara Nimri Aziz
Just Another Spring in Progress?
Thomas Knapp
On Obstruction, the Mueller Report is Clintonesque
Elliot Sperber
Every Truck’s a Garbage Truck
April 23, 2019
Peter Bolton
The Monroe Doctrine is Back, and as the Latest US Attack on Cuba Shows, Its Purpose is to Serve the Neoliberal Order
David Schultz
The Mueller Report: Trump Too Inept to Obstruct Justice
Geoff Beckman
Crazy Uncle Joe and the Can’t We All Just Get Along Democrats
Medea Benjamin
Activists Protect DC Venezuelan Embassy from US-supported Coup
Patrick Cockburn
What Revolutionaries in the Middle East Have Learned Since the Arab Spring
Jim Goodman
Don’t Fall for the Hype of Free Trade Agreements
Lance Olsen
Climate and Forests: Land Managers Must Adapt, and Conservationists, Too
William Minter
The Coming Ebola Epidemic
Tony McKenna
Stephen King’s IT: a 2019 Retrospective
David Swanson
Pentagon Claims 1,100 High Schools Bar Recruiters; Peace Activists Offer $1,000 Award If Any Such School Can Be Found
Gary Olson
A Few Comments on the recent PBS Series: Reconstruction: America After the Civil War
April 22, 2019
Melvin Goodman
The NYTs Tries to Rehabilitate Bloody Gina Haspel
Robert Fisk
After ISIS, a Divided Iraq, Wounded and Grief-Stricken
Binoy Kampmark
Julian Assange as Neuroses
John Laforge
Chernobyl’s Deadly Effects Estimates Vary
Kenneth Surin
Mueller Time? Not for Now
Cesar Chelala
Yemen: The Triumph of Barbarism
Kerron Ó Luain
What the “White Irish Slaves” Meme Tells Us About Identity Politics
Andy Piascik
Grocery Store Workers Take on Billion Dollar Multinational
Seiji Yamada – Gregory G. Maskarinec
Health as a Human Right: No Migrants Need Apply
Howard Lisnoff
Loose Bullets and Loose Cannons
Ricardo Alarcón de Quesada
Dreaming in Miami
Graham Peebles
Consuming Stuff: The Polluting World of Fashion
Robert Dodge
Earth Day: Our Planet in Peril
Weekend Edition
April 19, 2019
Friday - Sunday
Andrew Levine
What Will It Take For Trump to Get His Due?
Roy Eidelson
Is the American Psychological Association Addicted to Militarism and War?
Jeffrey St. Clair
Roaming Charges: Time is Blind, Man is Stupid
Joshua Frank
Top 20 Mueller Report “Findings”
Rob Urie
Why Russiagate Will Never Go Away
Paul Street
Stephen Moore Gets Something Right: It’s Capitalism vs. Democracy
Russell Mokhiber
Why Boeing and Its Executives Should be Prosecuted for Manslaughter
FacebookTwitterRedditEmail