My Take | Nations in the Indo-Pacific want trade, not war
- The historical relationship between war and trade is not hopeful, but there may still be a chance that the alphabet soup of CPTPP, RCEP and IPEF will win out over the militarism of Aukus and Quad
When Britain declared war on Germany at the start of August 1914, they had the biggest trade relationship between any two European countries. Seven years before the Great War, Norman Angell published his famous book, The Great Illusion, which argued economic interdependence between the great industrialised powers would make war impractical.
The “great illusion” turned out to be about trade, not war. Still the idea that trade can stop war understandably has great appeal, even today. Shortly before the fall of the Berlin Wall, there was a book titled The Rise of the Trading States, which was influential for a time. It argued that nimble trading economies such as Hong Kong and Taiwan would be the future, rather than the political states of traditional powers. It was trade, the author argued, that would be the basis of wealth, rather than possession of land.
Today, after a century of total war, the Cold War and threat of Cold War 2.0, we are supposed to be much less naive about the peace-inducing effects of trade. And yet, I can’t help but hope that enhanced trade may still stop, or at least restrain, the increasingly dangerous rivalry between the great powers of today in the Indo-Pacific.
When people nowadays talk about war between China and the United States, war over Taiwan, war between China and Australia, and a third world war in the Asia-Pacific, frankly I am seriously scared. One hope I cling to for peace in the region is the alphabet soup of the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), RCEP (Regional Comprehensive Economic Partnership), perhaps even the IPEF (Indo-Pacific Economic Framework).
Like most people, I have trouble keeping tabs on what’s what, and who’s in and who’s out. Before looking up the details while writing this column, all I could say off the top of my head was that China is in the RCEP and wants to join the CPTPP, but it doesn’t want Taiwan to join. However, Australia and Japan don’t want China to join. The US left the TPP (the previous incarnation of CPTPP) under Donald Trump, then set up its own IPEF on its own initiative, which isn’t really a multilateral trade deal at all. Why? Because it can.
The latest news is that post-Brexit Britain is set to join the CPTPP. Pro-Brexiters are rejoicing, thinking it helps to justify leaving the European Union. Will the Asian market on the other side of the globe be more lucrative than the EU common market just across the British Channel? Who knows? I am not an economist, but it does seem an absurdly roundabout way to get from A to B, especially when considering the great damage that has been done to the British economy and society.