WTO Reform: A New Round Of Trade Talks Are Necessary

Bilateral will do no good. This is like India and Pakistan going bilateral on Kashmir. No progress has been made in 70 years. If the US and China insist on resolving this on their own, there might be no progress.

This is not about saying the US is right about China, or China has a point. This is about the very mechanism of talks, the very framework. The issues come later.

China might not be a western-style democracy. But Germany is. France is. The UK is. Italy is. India is a democracy. You want all of them at the table.

Infographic: Here’s How the Global GDP Is Divvied Up

The US seems to be 25% of the global economy, but that is very far from 100% or even 51%. The European Union, Japan, India, and China are important players. By now the supply chains in the global economy are so complex, it makes little sense to not give the major trade powers seats at the table. China and the US can not do this alone.

There is economic theory around trade. Much of it supports trade. But then there is the politics of trade. And that can sometimes decouple from the economic theory. If your goal is to fill up the streets of Hong Kong with protesters, maybe the trade war is a good idea. But that does not seem to be the stated goal. The US trade deficit might be more to do with the US dollar's position in the global economy.

A prolonged trade war might cost Donald Trump the 2020 election. He might lose even without it. The polls show him at 42% and trailing Joe Biden in every battleground state. The dude might get impeached. Maybe there is no firewall for him in the US Senate. Maybe it will be Pence versus Harris in 2020. Who knows?

There is political peril for both sides. The Chinese army out in the streets of Hong Kong will seriously undermine the Chinese Communist Party. This is not 1989. You can not cover it up.

The biggest political peril is that the two powers drag the global economy into a major recession, and that gives rise to all sorts of fascists around the world.