Economic multilateralism: Trump's other victim




The US president's trade policy destabilized alliances with trading partners in the world's first economy.

Bogota, October 20, 2020 (Portfolio)– At the end of donald Trump's four-year presidency, America's trade deficit has not yet been covered, but the economic multilateralism that defended that country so much and for quite some time, according to experts.

"Donald Trump's trade policy brought few tangible advantages to the U.S. economy, while underscathing the multilateral trading system, destabilizing alliances with U.S. trading partners and creating a climate of unpublished uncertainty," explained Eswar Prasad, a professor at Cornell University.

America's chronic trade deficit, which Donald Trump had pledged to reduce, increased under his presidency because, although the one he has with China – his privileged target – declined, imports from Mexico or Canada soared. The increase in tariffs "protected American producers," according to Gianluca Orefice, a professor at Paris-Dauphine University.But they also "increased production costs" in the industry, making clear America's reliance on Chinese suppliers.

ROMPER UNBUILTAnd

although Donald Trump did not alter the structure of the U.S. economy, it did disrupt, and lastingly, international economic diplomacy."His policy was very damaging to Europe, to the World Trade Organization, which will be difficult to repair," said Edward Alden, an expert at the Council on Foreign Relations.

"Donald Trump showed that he was able to break up, but unable to build," confirmed Sébastien Jean, director of the Center for Prospective Studies and International Information (CEPII). "When you see what you've got from China, you feel like asking yourself, 'What about all this?'"

The truce agreed in January in the trade war between the two powers leaves unresolved the main points of discord, around intellectual property and forced technology transfers.Based on "erratic statements" and "unilateral decisions," the United States now seems like an "unrefidified trading partner," according to Eswar Prasad.

This led some countries to dodge Washington to close bilateral and regional trade agreements. For example, in the Asia-Pacific area, where China is trying to capture several countries around a comprehensive free trade agreement, after the United States withdrew in 2017 from a major trade pact in the region.

The truce agreed in January in the trade war between the two powers leaves unresolved the main points of discord, around intellectual property and forced technology transfers.Based on "erratic statements" and "unilateral decisions," the United States now seems like an "unrefidified trading partner," according to Eswar Prasad.

This led some countries to dodge Washington to close bilateral and regional trade agreements. For example, in the Asia-Pacific area, where China is trying to capture several countries around a comprehensive free trade agreement, after the United States withdrew in 2017 from a major trade pact in the region.

The American president, like the entrepreneur he is, seeks the "deal" or a relationship of forces between two or three parties, and is not very much in love with complicated multi-party negotiations.Thus, in his relations with Europeans, Donald Trump has often ignored the European Commission, which is responsible for trade, preferring to directly criticize German cars or France's rate against large technology groups.

FORCE RELATIONSH

IPThe result of four years of this policy is the "weakening of the multilateral trading sys[…]tem, embodied by the WTO, which the United States helped implement" with the idea of establishing universal rules of play for trade in goods and services, Eswar Prasad considered.However, in Trump's favor, Edward Alden recognizes the merit of NAFTA (North American Free Trade Agreement) "renegotiation" with Canada and Mexico, now called T-MEC.

Pascal Lamy, a former WTO director, highlighted Donald Trump's efforts to "popularize" the need to reform the institution and force China to accept "a tightening of the rules."

Sébastien Jean notes, for his part, that his violent attacks "changed the relationship of forces" with Beijing. Under his influence, "the European Union itself changed its approach," as evidenced by the example of telecom giant Huawei, veted by Washington and now also by several European countries.

For Europeans, a presidency of Joe Biden, Trump's Democratic rival, "would mean a return to the most courteous relations," according to the Bruegel European Reflection Institute. But "the differences between Trump and Biden over trade are less important than on many other issues," Edward Alden said.

Capital Economics researcher Vicky Redwood stressed that China's policy of economic containment, which began during Barack Obama's tenure, builds consensus between both Democrats and Republicans. According to her, with or without Trump, "trade war was inevitable."

Published in Portfolio, available here

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