The World Economic Forum, which is held in Davos, Switzerland, is important to the many Peoples of the world. From poor people to rich people, poor countries to rich countries, small businesses to transinternational corporations, gatherings like Davos matter, because they are where the global elite share their views on how the global economy should work. Davos is an event where the highly influential meet and decide how they are going to “shape global, regional, and industry agendas." Although the platform is far from apolitical, special interest free, and fully transparent, the effort to shape public perception on how the economy should work forces economic leaders to expose their thinking, which helps the Peoples of the world understand the agendas being implemented in their countries and communities.
Most of the Davos elite are obsessed with globalization and free trade. US President Donald Trump, therefore, stood in sharp contrast when he delivered his speech at the Davos World Economic Forum. His “American First” agenda is not, however, simply an outliner. The so-called Brexit serves as a clear example of a wealthy Western population pushing back against globalization and free trade. Although Trump rages against so-called “globalists,” undervalues US foreign policy, and sacrifices US foreign policy interests for his domestic political interests, he is not actually anti-globalization or anti-trade. His embrace of a territorial tax code testifies to this reality and his insistence that “First America” does not mean “American alone.” In truth, Trump’s alleged nationalist agenda may actually have a broader appeal and impact, if it could be probably framed.
Reflecting back on Davos 2017, Chinese President Xi Jinpin sought to frame China as the champion of globalization and the US under the leadership Donald Trump as the champion of protectionist isolationism. Clearly, Xi’s speech appealed to the elites at Davos, who happen to benefit the most from globalization and free trade. In reality, China is far more closed to the world than the US. Globalization simply affords China access to foreign economies and enables Beijing to extend its influence into foreign lands. Nonetheless, the Xi Jinpin narrative distorts the reality of what “America First,” or any other “nation first” agenda, can mean by polarizing the issue between globalization and nationalization. The alternative view is a recalibration of trade and foreign policy to prioritize the needs of a nation and People above global interests.
To the alarm of Davos elites, the Trump Administration rejected the Obama Administration-brokered TPP agreement and sought to renegotiate NAFTA. In contrast, the Regional Comprehensive Economic Partnership (RCEP), which is built on the trade agreements between members of the Association of Southeast Asian Nations (ASEAN), is helping to expand trade among partner nations. Where TPP offered the benefit of establishing equalizing standards in labor and trade practices across Asia, RCEP is seen as a means to replace the US with China as the dominant trade partner. The US appears to be forsaking opportunity while losing influence. Like NAFTA and CAFTA, the problem with TPP was the untargeted free trade component of the agreement.
Free trade deleverages domestic businesses, workers, and governments by forcing them to compete against foreign competitors with much lower financial needs. For smaller nations, this is not a problem, because their economies can meet the needs of their workers and consumers by specializing in the production of certain goods. In other words, there is more need for labor than there is need for jobs. As such, smaller nations tend to see accelerated globalization and free trade as beneficial. For larger nations, however, there is often more need for jobs than there is need for labor, thus outsourcing means people will not have jobs in countries like the US and China. This, in turn, means workers cannot demand higher wages as their financial burdens naturally rise with economic growth, inflation, advances in technology, and rising productivity.
By rejecting TPP, the Trump Administration has forsaken the trade benefits of the agreement, but it also avoided the costs associated with it. The economic interests of trade partners shift very rapidly with the changing nature of the economy, especially in an era defined by democratic uprisings and a pull back from rapid globalization to a more localized focus. Because a stable global economy depends on healthy national economies, national economies must be built on industries that serve the local needs of a people with locally plentiful resources that are as local as possible with excess production being used to participate in the global economy. As such, trade agreements must be recalibrated regularly to reflect shifting economic interests. In terms of economic policies, this means addressing the economic interests of a nation’s majority and building a diplomatic infrastructure to periodically address shifts in trade relations.
With that in mind, the Trump Administration has not condemned trade. In fact, Mr. Trump’s visit to China in late 2017 served as backdrop for several major deals between US companies and China. It would seem the President wants trade, but prefers bilateral trade negotiations over permanent multilateral trade pacts. Instead of worrying about the Trump Administration’s resistance to free trade, Trump’s attempt to shrink America’s diplomatic infrastructure, including the US State Department and contributions to the UN, should be the focus of efforts to shift the President’s priority. If trade advocates hope to see trade growth under the Trump Administration, it will require the President to expand America’s diplomatic and trade infrastructure to accommodate his preferred approach to trade.
It is, of course, important to remember that bilateral trade relations can also share the same shortcomings as multilateral trade pacts or introduce new ones. The success of this approach depends upon the preconceived notions of the representatives and whose interests they actually represent. If trade representatives simply seek bilateral free trade across all industries, there will be no benefit. If the US government taps business leaders whose preconceived notions and ulterior motives compel them to seek deals that favor the interests of their industries and businesses, the process will be detrimental to the US and the American People. If America’s trade representatives promote healthy trade policies, which focus on securing America’s manufacturing sector and trading America’s extracted goods, bilateral trade relations will be more beneficial. Above all, “America First” will mean a recommitment to trade and globalization as well as a recommitment to US domestic economic interests, which is something non-US citizens can embrace.
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