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Inside Out
US-China trade: protectionists should be careful what they wish for
- The rising global clamour for protectionist policies ignores free trade’s success in alleviating extreme poverty and preventing violent conflict
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David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades.
Sad to say, I believe we are watching the sun set on a four-decade era of steadily liberalised world trade and of unprecedented openness to multilateral cooperation. Amid rising international clamour for protection, my first thought is beware what you wish for.
It is surely a depressing paradox that the Covid-19 pandemic, which has illustrated the critical importance of intensive international cooperation, has provided what might prove to be a final nail in the coffin of self-interested multilateralism.
Instead of positively responding to the urgent imperative to work together to bring Covid-19 under control, we have seen disarray. Instead of cooperating to find an optimal response, governments have shut their borders, created a hodgepodge of different strategic responses and allowed millions to die unnecessarily.
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Leaders are still ignoring the merits of working together and are instead debating how to be more “resilient” in future. This means pressing for subsidies to forge intrinsically protectionist policies to ensure domestic self-reliance.
A quick browse of articles in the Post over the past weekend reveals the extent of this broad-based slippage towards protection. We see the Japanese government discussing subsidies of around US$3.4 billion to Taiwan’s TSMC and Sony for a new semiconductor production plant that will reduce its reliance on imported chips.
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