Macroscope | Global trade has bigger problems than Donald Trump, and bilateral deals are not the solution

Can Japan and the European Union together save the world trade order from destruction at the hands of Donald Trump, who seems intent on wrecking it in pursuit of America's national interest? Their recent agreement to sign what would be the world's biggest trade deal to date might appear to suggest so.

But the truth is that attempts by Japan's Prime Minister Shinzo Abe, European Commission president Jean-Claude Juncker and European Council president Donald Tusk to present themselves as champions of multilateral trade are really little more than political posturing in the face of deeper challenges to the global economic order.

Their agreement to create a trade pact covering around one-third of global gross domestic product certainly sounds enlightened at a time when, by contrast, Trump has pulled the US out of the Trans-Pacific Partnership (TPP) and is threatening to walk away from the North American Free Trade Agreement (Nafta).

Abe, meanwhile has managed to keep a scaled-down version of the TPP on the road among 11 of the original dozen members. This plus the Japan-EU agreement makes the Japanese leader look good at a time when China's President Xi Jinping is also billing himself as a champion of free trade.