In 2018,
trade, more than any other policy area, was “disrupted”. What used to be an archaic, technical and – let’s face it – boring array of issues now dominates front-page headlines, magazine covers and even John Oliver’s comedic documentaries on HBO’s
Last Week Tonight. Constituencies that have traditionally opposed free-trade agreements (FTAs) are now extolling their virtues, and countries not known for their free-trade sensibilities – including
China,
Russia and
France – are nominating themselves as defenders of the global trade system.
Still, it is worth asking how much has actually been disrupted. President
Donald Trump did pull the
United States out of the 12-country
Trans-Pacific Partnership (TPP), but the remaining 11 signatories have implemented the bulk of the agreement on their own, while leaving the door open for the US to rejoin in the future. And more countries have shown an interest in joining, suggesting that the TPP could eventually extend well beyond what was originally envisioned. Moreover, the updated North American Free Trade Agreement (Nafta) – now to be called the United States-
Mexico-
Canada Agreement – is largely based on the TPP template, which already included Canada and Mexico, with some noteworthy additions.
Meanwhile, the
European Union is implementing FTAs with Canada,
Singapore,
Vietnam and
Japan, and pursuing deals with
Australia, Mexico,
New Zealand,
Asean, Mercosur (the Southern Common Market) and others. The Pacific Alliance continues to expand trade and other partnerships in Latin America. The Regional Comprehensive Economic Partnership is proceeding apace in the
Asia-Pacific region. And the
African Union has made more progress towards implementing the Continental Free Trade Agreement.
In short, the global trend towards deeper integration and higher standards in trade has continued. The Trump administration has certainly made a lot of noise by deploying trade remedies in unpredictable and unexpected ways, engaging in tit-for-tat tariffs, reintroducing import quotas and seriously constraining the World Trade Organisation’s dispute-settlement body. Yet, in the end, Trump’s revamping of Nafta might actually help to broaden support for trade in the US, given that many of his most loyal supporters have traditionally been suspicious of trade agreements.
That, at any rate, is the glass-half-full interpretation. The alternative is that there has, in fact, been a significant historical rupture. By surrendering its global leadership role, the US has lost the trust of its closest allies and partners, and handed a gift to its adversaries. In this scenario, the EU or China might supplant the US as the global rule-maker, or there will be no rule-maker, and the international order will be governed by drift. In the latter case, other countries might well imitate the US by pursuing unilateral action and upholding their international obligations only when it suits them.
