By Denis Bright
Welcome to one of the negotiating triumphs of the century. This Win-Win Outcome fulfils the highest expectations of most G20 countries including Australia’s representatives in Argentina who all played a behind the scenes role in influencing the positive outcomes.
The world’s two superpowers in the US and China have temporarily called a halt to trade war diplomacy:
US President Donald Trump and his Chinese counterpart Xi Jinping have agreed to halt new trade tariffs for 90 days to allow for talks, the US says. At a post-G20 summit meeting in Buenos Aires, Mr Trump agreed not to boost tariffs on $200bn (£157bn) of Chinese goods from 10% to 25% on 1 January.
China will buy a “very substantial” amount of agricultural, industrial and energy products, the US says. Meanwhile, Beijing says the two sides agreed to open up their markets.
It was the first face-to-face meeting between the two leaders since a trade war erupted earlier this year.
The dispute broke out after Mr Trump complained China was doing nothing to cut its large surplus in bilateral trade. At the summit in Argentina’s capital earlier on Saturday, the G20 leaders agreed a joint declaration that notes divisions over trade but does not criticise protectionism.
In the Associated Press picture (AP) President Trump’s maintains a statesmanlike poise. Perhaps posterity will fully appreciate the significance of the bilateral negotiations. Other luminaries are not included in this AP pictorial with its focus on President Xi Jinping and President Trump. The Xinhua picture attributed to Li Xueren is objectively a better record of events. However, the AP coverage is better infotainment of this incredible event.
In the AP record, US National Security Adviser, John Bolton, relaxes with some banter on the left side of President Trump. This is an amazing stance for the US War Hawk from Maryland with a long-standing commitment to regime change from Libya to Syria, Iran and North Korea.
Managing director of the IMF, Christine Lagarde, had of course been campaigning for this negotiated outcome for months and dared to take the podium at the St. Petersburg Economic Forum on 26 May 2018. This was attended by Japanese Prime Minister Shinzo Abe, French President Emmanuel Macron and China’s Vice President Wang Qishan (Bloomberg 26 May 2018).
More conventional leaders would not dare to challenge the direction of President Trump’s impulsive economic diplomacy.
Eyewitness news sources were too busy reporting the latest tensions between Russia and Ukraine to cover important forums like the St. Petersburg Economic Forum or the Far Eastern Forum in Vladivostok in September 2018. These events attracted international visitors like Prime Minister Shinzo Abe from the other side of a re-emerging global geopolitical divide. That such divides could be re-imposed in 2018 surely betrays the spirit of 1989 which was about consensus-building and greater freedom for all.
Speaking in St. Petersburg Christine Lagarde offered some prophetic assurances:
“The good news today is that the sun is shining on the global economy. We went through a decade of difficult time, and now, we have an economy that is doing well,” Lagarde said.
Lagarde said her list of worries also include high levels of sovereign and corporate debt and tighter financial conditions in emerging markets from monetary tightening, particularly in the U.S.
The IMF chief has repeatedly warned against the risks of a global trade war amid aggressive steps by President Donald Trump to crack down on what he sees as the unfair trading practices of U.S. competitors. The Trump administration on Wednesday launched a probe to determine if imported cars imperil national security, a move that could lead to higher tariffs, and next week Commerce Secretary Wilbur Ross will be in Beijing for the next round of trade negotiations to ease tensions between the world’s two largest economies.
“It would be a great mistake to resort to protectionism and unilateralism. This would be a self-inflicted wound,” Lagarde said. “Nobody wins a trade war.”
If the goodwill generated at the bilateral talks between China and the US continues, the dark shadows of protectionism can be halted so that global investment multipliers work their magic for humankind in developed and developing countries alike.
The global economic profile of the USA is not being enhanced by the style of financialisation being offered by the Casino Capitalism promoted by President Trump and his Republican predecessors.
Well before the G20 Summit in Buenos Aires, IMF staff had crunched the numbers to show that China and other Asian economies had carried the real burden of partial economic recovery from the Global Financial Crisis (GFC) a decade ago now:
US efforts to punish emergent countries for their success would offer terrible negative blow-back to countries like Australia as it waited for Casino Capitalism to deliver almost non-existent capital flows for investment in infrastructure and community development for both metropolitan and regional locations.
In the twenty-seven years since the fall of the Berlin Wall, capitalism must move in proactively social market directions away from the old assumptions of Thatcherism. Even Prime Minister Scott Morrison rooted for the changes in Buenos Aires behind the scenes.
Australian Prime Minister: I believe that both China and the United States are very keen to see a more open trading environment around the world, and more trade all across the world and particularly between their two nations. We all benefit from that. I think this will be a good opportunity over the course of the next two days to re-assert our commitment to these principles of trade and encourage all of the nations here to get on with that job. Because it’s what drags people out of poverty, it’s what gives people choice in life and that will be our focus, as it always is, at these important events.
This is one occasion when our leaders need bipartisan support without any qualifications. It was a real achievement to be tested in the forthcoming 90 days.
Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in advancing pragmatic policies compatible with contemporary globalisation.