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GLOBAL TRADE FACES A WORLD WITHOUT COMMON VALUES

Rich and poor nations, liberal democracies and state autocracies have different horses in this race, a theme that will be addressed at the FT Weekend Festival in Washington.

Trading is on my mind these days, in part because I'll be discussing the topic this coming Saturday, May 7, at the first-ever FT Weekend Festival in Washington DC. For those who still do not know, it will be an essential event. The Weekend Festival, which has been held in London for years, is a place where great thinkers are heard discussing the most important ideas of the moment in politics, economics, society and culture. These four aspects are equally important and interrelated with each other. 

This year, for the first time, we're bringing you to the Beltway (Interstate 495 that loops around Washington), with guests like Henry Kissinger, Tina Brown, Chimamanda Ngozi Adichie, Simon Schama, Elizabeth Strout and, of course, many of Financial Times. I'll be participating in a couple of sessions, including one called "The Great Decoupling," on the US-China relationship and deglobalization, with my colleague Martin Wolf and former US Trade Representative Robert Lighthizer, who rarely does this kind of thing. 

Lighthizer is, in my opinion, one of the only bright spots of Donald Trump's presidency. While I don't agree with everything (or many things) he did, I think his reset of US trade policy from willfully blind neoliberalism to a more realistic view of political economy, and in particular the "one world, two systems" conflict between liberal market economies and state-run systems like China, it was badly needed.

As we have already discussed here, the architects of neoliberalism believed that if capital markets and world trade were connected through a series of institutions that floated above the laws of any one nation-state, the world would be less likely to fall. in anarchy. For a long time, this idea worked, in part because the balance between national interests and the world economy did not shift too far. Even during the Reagan years, despite the anti-government rhetoric, there was a sense that world trade should serve the national interest and not just itself (or, more specifically, the interests of large multinational companies).

Consider how the United States fought back when Japan tried to take over the entire physical infrastructure of the computer. It was the Reagan administration's response—including imposing tariffs and quotas on Japanese exports and subsidizing the development of next-generation computer technology—that kept the US in the game. In addition, it shifted much of Japan's production to South Korea, Taiwan, Singapore, and Malaysia, which was ultimately positive, because it reduced the concentration of power and created both lower prices and greater resilience. That sounds much less like “government is the problem” and more like smart industrial policy.

"While the Reagan administration embraced free trade, it opposed mercantilism," says Clyde Prestowitz, a labor economist who worked at the Commerce Department during the Reagan years. The administration strove to maintain America's technological leadership by creating a partnership between industry and government around research and development. Notably, the deputy trade representative during Reagan's second term was none other than the architect of Trump's trade strategy with China: Robert Lighthizer.

The policies taken will affect the global industry at various levels. As is well known, industry and commerce are inseparable and thanks to the rapid penetration of Internet technology over the last 20 years, many industrial sectors have been digitized, for example the global casino industry with online gambling platforms such as agent no wager casino. In the end, our world seems to have completely changed.

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