A narrative about the US and global trade is being established by disgruntled voices among America’s allies in Europe and Japan, and amplified by adversaries like China. It goes like this: the US is an international scofflaw willing to subvert the world economy with distortive subsidies, degrade the World Trade Organization and use export controls to pursue aggressive foreign policies while benefiting its own companies.
These are legitimate, if overheated, critiques, but there remains a fundamental counterpoint. While governments’ ability to use trade as a strategic tool remains unproven, the need for raw military power on occasion to ensure the peace necessary for trade is not. In that aspect of globalisation the US remains the rock on which a striking amount of the superstructure of world trade stands.
The decade before Vladimir Putin’s invasion of Ukraine showed the need for hard power to establish the conditions for soft. Faced with an increasingly belligerent dictator in Moscow, the EU tried to pull Ukraine into its orbit in the only way it really knows, via economic integration — the “Deep and Comprehensive Free Trade Agreement” signed between Brussels and Kyiv in 2014. Even after Russia’s subsequent annexation of Crimea, the EU’s policy of “strategic autonomy”, launched in 2020, mainly rested on exerting influence through trade, regulation and values. Warnings from central and eastern European states about the continued threat from Russia were largely disregarded.
The US was not alone in arming and training the Ukrainian army after 2014, but it certainly played a leading role. Without that support, Kyiv would quite possibly now be Putingrad, the EU would be in crisis, with its pro-Russia and appeasement elements in the ascendant, and the expansion of its cherished single market would have been permanently blocked on its eastern border.
Moreover, an emboldened China would be more confident about annexing Taiwan, with all the catastrophic consequences for trade in the world’s fastest-growing region and the global market in semiconductors.
The EU has at least recognised the indispensability of America through this week’s EU-Nato statement, affirming the overwhelming importance of the transatlantic bond. Certainly, economic, political and cultural affiliation to (and cash from) the EU will be a vital part of pulling a liberated Ukraine out of Russia’s orbit. But the guarantee of a secure future will surely rely implicitly or explicitly on Nato and the US.
In the old saying about interventions followed by reconstructions — wars in the former Yugoslavia in the 1990s, or indeed the ill-fated invasion of Afghanistan in 2001 — the Americans cook the dinner and the Europeans help with the dishes. (Obviously there are cases like Iraq where the US smashes up the kitchen while some European countries urge it to stop.)
It’s slightly surreal for the EU’s vice-president for the European Green Deal, Frans Timmermans, to be tweeting about the imperative of green reconstruction in Ukraine after the war. Restricting yourself to doing the dishes is one thing; but obsessing about the eco-friendly nature of the washing-up liquid takes the elevation of values over security a little too far.
Even in calmer geopolitical times, the US’s military contribution to civilian trade is easy to overlook. The most obvious example is the American navy’s decades-old role patrolling sea lanes used by commercial shipping.
According to estimates from the Center for Global Development think-tank, the US is by far the biggest protector of sea lanes, spending nearly 0.2 per cent of gross national income against an average among the world’s 40 most powerful countries of 0.015 per cent, which helps put the US’s relatively miserly aid budget into a little more context.
Being slightly fanciful, it’s not the first time that a major military power has used force to enable trade in Europe. The Roman empire delivered enough peace (and roads) to expand trade across the continent; the Mongols secured the overland Silk Road, connecting medieval Europe to east Asia.
Europe, let alone the world, is not some chaotic free-for-all that requires a global hegemon to provide order. But in certain theatres of conflict and commerce, thanks to expansionist autocracies like Russia, there are more security threats to global trade since the end of the cold war.
The US’s attempts to weaponise trade are legitimate subjects for criticism. But its literal use of weapons to secure the conditions for commerce in Europe surely is not.
alan.beattie@ft.com
Source: Economy - ft.com
