[UNCTAD] Countries are shifting away from US and China

Written by RT

    The Delegates of Ukraine, New Zealand and many other nations have demonstrated their willingness to shift away from the United States of America and China as central economic powers, as a result of the volatile US-China Trade War.

    Although most delegates agree that good economic ties should be maintained with both the US and China, New Zealand has suggested that “stronger economic ties” should be fostered with developing countries and other economic powers, such as the Association of Southeast Asian Nations (ASEAN). The Delegate of Thailand also mentioned the dangers of heavy reliance on few countries with tense international relations, referring to the US and China. He suggested Thailand as a trade power where trade could be directed, instead of to China. However, there are large technological and manufacturing gaps between China and Thailand, thus it may seem far-fetched for Thailand to suggest herself as an economic power that can replace China, the second largest economy in the world.

    The Delegate of the United States claimed that the US is willing to foster “mutually beneficial” ties with “certain developed countries, such as Canada”. It remains unanswered as to why the US is only willing to build strong economic ties with “developed countries”. Will diversifying trade alleviate the fall-outs of the US-China Trade War? Diversifying trade and strengthening the global supply chain will improve economic stability for countries that are not caught in the crossfire of the Trade War. This instability is caused by tariffs imposed by the US and China on other countries in order to alleviate the losses incurred. However, only the US imposes tariffs on countries outside of China, such as Mexico and the European Union. China has focused on increasing tariffs on the US, rather than imposing tariffs on other economic partners. Thus, it can be seen that China is not the party who has caused great devastation to other economies.

    Diversifying sources of trade requires administrative work that is expensive and time-consuming, such as quality checking and cost-benefit analysis, that have to be borne by the countries. Most of the countries that are adversely affected by the US-China Trade War are developing countries which cannot afford to incur such losses. As the two greatest economic powers in the world, it is nearly impossible for countries to shift their trade away from the US and China without causing detrimental economic decline.

       However, to alleviate the impact of economic devastation due to the US-China Trade War in developing countries, the Delegate of South Africa recommended that the World Trade Organisation (WTO) can assist in the formation of economic unions and trade blocs. This allows smaller nations to reduce their reliance on the ever-volatile US and China, encouraging trade amongst themselves while also facilitating trade with other strong economic powers.

    Conclusively, it is economically unsustainable to alienate the strongest economies in the world, which will set the global economy more than a few steps back. It is imperative that delegates consider a greater range of impacts of the US-China Trade War, beyond the economic consequences. Delegates need to identify root causes of the fallouts and manage the fallout from the root of the problem, such as US tariffs imposed on countries outside of China.