How A Global Trading System Dies

How A Global Trading System Dies

by

R. E. Prindle

 

My title is one of the two slogans on the cover of the September/October issue of the CFR’s Foreign Affairs magazine.  As it is the CFR that can only mean the Council is lamenting the termination of the Chinese uncontested domination of manufacturing and distribution in both Europe and North America.

Of course nothing is more natural or desirable than change.  During the Obama administration when the whole of American mores were forcefully being changed change was good.  Now that President Trump is reorganizing the CFR trading system out of favoring China change is lamentable.  The unfair Chinese system was thought perfect by the CFR.

Strangely, in reading the articles in Foreign Affairs there seems to be a cognitive disconnect about what happened.  The Chinese did not originate the Chinese Trading System to which the CFR alludes, the US did.  The Chinese didn’t have an inkling of an idea of establishing a global trading system.  The country was quite insular and seemingly content to stay that way.

Then in 1971 Nixon and Kissinger traveled to China, groveling before Mao in his nighties and changed the successful old system of Chinese containment releasing the genie from the bottle.

Then Americans, always ready to sell their birthright for a mess of pottage, saw that the Chinese would work hard for virtually nothing so they took their expertise and exported it to China free of any charges to show them how to make gidgets and gadgets for simple minded Americans and so to be able to eventually conquer the world without munitions or armies of any sort but by simply manufacturing gidgets and gadgets.

Not being complete idiots the Chinese studied American history during the nineteenth century and learn that by merely using intellectual properties without paying for them was a royal road to riches and by excluding competition from American goods and restricting outside investments to exclude the very corporation who were exploiting cheap Chinese labor, stealing trade and manufacturing secrets that all the apples on the tree would fall in China.

Speaking of apples, here is an example of the peculiar trading system the CFR so adores.  At one time Washington State was shipping whole crops of apples to China and prospering mightily.  The bureaucrats in DC, mostly CFR members considerately thought this matter over and, apparently thinking it unfair that American growers should be prospering they ordered the Washington State growers to go to China and teach them how to grow apples commercially themselves.  You see, the Chinese couldn’t figure that one out themselves.  Consequently Washington State growers lost that lucrative market.

And in that vein the CFR bureaucrats organized their amazing global trading system whose demise they now deplore.  The opinion of the apple growers hasn’t been solicited.

This incredibly unfair, even criminal, approach to global trade is now dying a natural death.  No, correct that, President Trump is blowing it apart.  As Chinese intransigence hardens into a total refusal to give up their advantages conferred on them by the CFR, President Trump, who’d rather win than lose, is hardening the US approach.  In the latest development he is apparently assuming an autocratic stance more consonant with global political trends and has or is about to order US corporations to abandon China and bring their manufacturing back to the US.

Such a ukase would be the worst thing that could happen to China that, after all, has built its prosperity by exploiting the people of the US and Europe.

Not only is a global trading system dying but the whole post-French Revolution democratic political system is dying.  Democracy is dead as autocracy rises from the ruins of the pre-Soviet Revolution Czarist autocratic system.  Today, change is now.  Rather than resist the current, let’s go with the flow.