[UNCTAD] The US-China Trade War: A War with No Victors
Written by Ars Technica
"Talk is cheap. Actions are what matter ... I hope that both sides come to the table and action follows words." - U.S. Representative Todd Rokita, on the US-China trade war
The US-China trade war is a lose-lose scenario: one that compromises the stability of the global economy as well as the state of international relations. [Image source: Olhar Digital]
In 2019, the United Nations Conference on Trade and Development (UNCTAD) conducted an in-depth study on the effects of the US-China trade war. The resultant paper, titled ‘Trade and Trade Diversion Effects of United States Tariffs on China’, concluded that while the US suffered the brunt of the cost from the US-China trade war, China experienced significant economic consequences as well. Despite the clear consequences, however, both the US and China have continued their conflict, bringing the UNCTAD to their present iteration.
"Talk is cheap. Actions are what matter ... I hope that both sides come to the table and action follows words." - U.S. Representative Todd Rokita, on the US-China trade war
The US-China trade war is a lose-lose scenario: one that compromises the stability of the global economy as well as the state of international relations. [Image source: Olhar Digital]
In 2019, the United Nations Conference on Trade and Development (UNCTAD) conducted an in-depth study on the effects of the US-China trade war. The resultant paper, titled ‘Trade and Trade Diversion Effects of United States Tariffs on China’, concluded that while the US suffered the brunt of the cost from the US-China trade war, China experienced significant economic consequences as well. Despite the clear consequences, however, both the US and China have continued their conflict, bringing the UNCTAD to their present iteration.
Quiet Times
Interestingly enough, both delegates of the United States and China were notably quiet during committee. From the start of debate all the way to the end of the first day of council, the delegates of the two global superpowers were conspicuously silent. Then again, it is worth noting that this surprisingly light-handed approach from the two contenders meant that other members of the UNCTAD were able to freely voice their concerns and ideas.
This is not to say that they were absent - the delegates of the US and China did speak prominently at certain times, such as the joint press conference conducted by the International Press Gallery. The delegate of the United States responded to difficult questions with poise, stating:
“Although trade diversion away from China has had a negative impact on many American companies, the US believes that if she is able to boost production in countries such as Thailand and Malaysia to be able to manufacture the goods that the US needs, the US will be able to mitigate the effects of reduced efficiency caused by diverting supply chains away from China.”
As for the delegate of China, their response to every question was simply a blunt “no comment”.
A Room Full of Lightbulbs
US and China aside, the other member states of the UNCTAD made admirable efforts to address the economic instability caused by the US-China trade war. Indeed, it was these delegates who pushed most of the council debate forward with bright ideas and passionate advocacy.
The first issue to be tackled was that of the disruption in the global supply chain. Immediately, the UNCTAD was aflush with ideas, with some delegates proclaiming that the way to go was regional clusters of production. These, the delegates proclaimed, would increase resilience to international trade disruptions. Other than the diversification of trade routes, delegates also encouraged the provision of aid to developing countries. The UNCTAD also agreed to focus on manfacturing in these less developed countries, which would kill two birds with one stone by giving these countries an avenue for economic prosperity, while also reducing international dependency on China as a source of manufactured goods.
Interestingly enough, both delegates of the United States and China were notably quiet during committee. From the start of debate all the way to the end of the first day of council, the delegates of the two global superpowers were conspicuously silent. Then again, it is worth noting that this surprisingly light-handed approach from the two contenders meant that other members of the UNCTAD were able to freely voice their concerns and ideas.
This is not to say that they were absent - the delegates of the US and China did speak prominently at certain times, such as the joint press conference conducted by the International Press Gallery. The delegate of the United States responded to difficult questions with poise, stating:
“Although trade diversion away from China has had a negative impact on many American companies, the US believes that if she is able to boost production in countries such as Thailand and Malaysia to be able to manufacture the goods that the US needs, the US will be able to mitigate the effects of reduced efficiency caused by diverting supply chains away from China.”
As for the delegate of China, their response to every question was simply a blunt “no comment”.
A Room Full of Lightbulbs
US and China aside, the other member states of the UNCTAD made admirable efforts to address the economic instability caused by the US-China trade war. Indeed, it was these delegates who pushed most of the council debate forward with bright ideas and passionate advocacy.
The first issue to be tackled was that of the disruption in the global supply chain. Immediately, the UNCTAD was aflush with ideas, with some delegates proclaiming that the way to go was regional clusters of production. These, the delegates proclaimed, would increase resilience to international trade disruptions. Other than the diversification of trade routes, delegates also encouraged the provision of aid to developing countries. The UNCTAD also agreed to focus on manfacturing in these less developed countries, which would kill two birds with one stone by giving these countries an avenue for economic prosperity, while also reducing international dependency on China as a source of manufactured goods.
Fair or Free?
“Free trade agreements” and “fair trade agreements” were two phrases commonly flung around in council debate - and the two terms caused a fair amount of confusement among the delegates of the UNCTAD. Due to their similar sounding terms yet diametrically opposed natures, it took quite a while for delegates to gain a clear grasp on the meaning of said terms.
Even after this was accomplished, there was still much difficulty in eatsblishing guidelines regarding free and fair trade - the fact that free trade focuses on a free market and profit while fair trade focuses on ethical business meant that the members of the UNCTAD were quite divided over the issue.
Some delegates, such as the delegate of the US, felt that a compromise would be best. This proposal of a free trade system with fair trade elements soon gained rapid support, but there were also concerns that it would not be feasible or sustainable.
All in all, it is clear that the UNCTAD will require a much firmer and more decisive stance regarding this aspect of international trade.
To Trade or Not To Trade
Considering the US-China trade war began with the infamous Trump’s egomaniac attempts to, as he often quoted, “Make America Great Again”, one does wonder why both sides have not sought to concretely deescalate the situation and resolve the conflict. As it is, it seems that the US-China trade war may continue to drag out for a while yet - but at least now, the international economy is better equipped to handle to the fallout, all thanks to the UNCTAD.
“Free trade agreements” and “fair trade agreements” were two phrases commonly flung around in council debate - and the two terms caused a fair amount of confusement among the delegates of the UNCTAD. Due to their similar sounding terms yet diametrically opposed natures, it took quite a while for delegates to gain a clear grasp on the meaning of said terms.
Even after this was accomplished, there was still much difficulty in eatsblishing guidelines regarding free and fair trade - the fact that free trade focuses on a free market and profit while fair trade focuses on ethical business meant that the members of the UNCTAD were quite divided over the issue.
Some delegates, such as the delegate of the US, felt that a compromise would be best. This proposal of a free trade system with fair trade elements soon gained rapid support, but there were also concerns that it would not be feasible or sustainable.
All in all, it is clear that the UNCTAD will require a much firmer and more decisive stance regarding this aspect of international trade.
To Trade or Not To Trade
Considering the US-China trade war began with the infamous Trump’s egomaniac attempts to, as he often quoted, “Make America Great Again”, one does wonder why both sides have not sought to concretely deescalate the situation and resolve the conflict. As it is, it seems that the US-China trade war may continue to drag out for a while yet - but at least now, the international economy is better equipped to handle to the fallout, all thanks to the UNCTAD.
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