Uncertainty over US trade leadership, global institutions, after Trump: Frank Lavin

ECONOMYNEXT – The world in entering an uncertain era where the of the United States, its trade leaderhisp and the relevance of key global institutions are being questioned after Donald Trump won Presidential polls, a long-time Republican operative has said.

Frank Lavin, was political director at the White House for Ronald Reagan, undersecretary for trade in the Commerce Department during George Bush administration and was ambassador to Singapore during the George H W Bush administration.

He says there is now uncertainty over the future of the North Atlantic Treaty Organisation, the Bretton Woods twins and the World Trade Organizations that has defined global relations from the cold war era.

Pulling out of the planned Transpacific Agreement (TPP) will also leave a vacuum for some party other than the US to shape the future trade relations of a large part of the globe, Lavin warns.

Post-Post Cold War Era

NATO, WTO and the Bretton Woods institutions were still relevant in the post-cold war era. But now the world was entering a post-post cold era.

"I’d say we are a new era for the world where the post-cold war era is fading," Lavin said, participating in a podcast with Advocata Insitute (www.advocata.org) a freemarket think tank based in Sri Lanka, where he serves on its advisory board.

 "The cold war era gave us structure and alliances and patterns of behaviour that had moments of high tensions but also had long periods of high stability."

In the post cold war era the institutional architecture that made up of the Bretton Woods institutions, the WTO (and its predecessor the General Agreement on Trade and Tariffs) were still relevant and promoted "international co-ordination allowing the leading countries to work together to shape a system that was stable."

"And we had a reasonably prosperous moment in the post-cold war era," Lavin notes.

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"Now we are in the post-post cold war era where the institutors themselves and the value of the institutions are being questioned.

"So we had President-elect Trump as candidate raise the questions on the value of NATO, or our alliance with Japan or the structure of our alliance with Korea.

"This would not have been possible in the cold war era or even the post-cold war era.

"So, one of the reasons for the uncertainty, I think, is in this new era that is still to be defined as to what is America’s role in the world, and what kind of architecture is going to govern that role."

Trade Leadership

With scrapping the proposed Trans Pacific Partnership (TPP) being part of the ‘core messaging’ of President-elect Trump, there is now little possibility of making it a reality.

The TPP would have woven together North and South America and fast growing countries in Asia which are in favour of free trade.

The TPP would have allowed the United States to set the architecture for the region and determine the future trade relationships, Lavin says.

"If the United States is not going to exercise leadership and not set that architecture then what we are doing is – indirectly at least – allowing other parties to do it," Lavin said.

"And some might do it with us in mind and others might do it do exclude us from that pattern. So I think the United State is worse off and the region is worse off without US trade leadership." (Colombo/Dec04/2016)

 

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