A US senator, Josh Hawley's recent remarks in The New York Times much highlights the economic views of the U.S. during this pandemic.
Among many, the call for abolishing the World Trade Organisation (WTO) needs attention.
What are the key observations?
The emergency triggered by the coronavirus pandemic is not a mere health crisis.
With millions of Americans unemployed, it is also an economic crisis.
The pandemic has exposed a hard truth about the modern global economy.
It weakens American workers and has empowered China’s rise.
Calling for a sweeping reform, Hawley wants the US to begin by abandoning the WTO.
Under the WTO, capital and goods moved across borders easier than before.
But the jobs also moved, and too many jobs left America’s borders for elsewhere.
As factories closed, workers suffered, from small towns to the urban core.
What are the other concerns highlighted?
Hawley’s attack was not just limited to the trading system.
He takes on the myths of the “liberal international order”.
He criticises America’s post-Cold War crusade.
It worked to overturn the system of sovereign states into one without borders and supra-national institutions in the name of lasting peace and prosperity.
But the liberal economic order is seen to have sent American production overseas, compromised American supply chains, and cost American jobs.
All this is said to have happened while enriching Communist China.
What are the changing trends in the U.S.?
Hawley has also moved a resolution in the US Senate asking Washington to walk out of WTO.
The last time the US congress discussed such a resolution was during 2005.
The House of Representatives had then rejected it with a massive margin of 338-86.
But trade politics in the US have evolved significantly in recent years.
Under Trump, the Republican Party has turned from the champion to a critic of free trade.
The Democratic Party, which embraced globalisation since the early 1990s, has seen the erosion of working class support.
Elections this year (2020) could reveal on the shifting alignments on trade and the anti-trade sentiment in America.
What are the future prospects?
In replacing the WTO, Hawley calls for the U.S. to seek new arrangements and new rules, in concert with other free nations.
The prime objective is to restore America’s economic sovereignty.
This in turn involves, “building a new network of trusted friends and partners to resist Chinese economic imperialism”.
Trump Administration is also reportedly working on an initiative to rearrange the global supply chains currently centred on China.
Significant political contestations within the US and between the US and China to reform, reorient or bypass the WTO system are expected.
All major economies will be drawn into this conflict.
New Delhi should pay close attention to Hawley’s theme on working with “trusted friends and partners” to restructure international trade.
As the world trade system arrives at a crucial moment, India should be prepared to take the right direction.
