As we plunge into an unnecessary and costly global trade war, it is awfully important to reassess why the road to a solution was less-travelled, indeed, why it will remain that way even as we brace for the forthcoming storms. US President Donald J. Trump did not fire the first shots in that war only out of a personal vendetta or a shallow understanding of global trade mechanisms, nor was his espousal of the cause dictated by merely vested interests. As poll after poll indicate, his undiminished public approval suggests a wide swath of voters agree with his stance. This is the bad news: although economic experts have a formula to exit this quagmire with the least damage inflicted, public support intervenes to even give it a chance.
In no other circle than the Council on Foreign Relations (CFR), which was founded by David Rockefeller and Walter Lipmann, among others, almost a century ago (1921) to shape broad US external relations, occasionally dotting the i's and crossing the t's of specific policy proposals, a credible blueprint seeks to modify this slide into blind-folded protectionism. Its April 2018 report (#76), The Work Ahead: Machines, Skills, and US Leadership in the Twenty-First Century (edited by Edward Allen and Laura Taylor-Kale), pinpoints the flaws and proposes commensurate policy-actions to resurrect the United States in a way that cannot but collide with Trumps trajectory.
Its seven observations reject the Trump trajectory, consisting of blaming (a) China for its continued US trade surpluses (valued at over US$ 350 billion in 2017), (b) Mexico, wherefrom illegal migrants supposedly come to take US jobs, thus exacerbating its own trade surpluses on the back of the North American Free Trade Agreement (NAFTA), beginning, interestingly, from Mexico's very first year of NAFTA membership in 1994; (c) Canada, for similar reasons; or (d) the European Union (EU). The thrust of that report was on what artificial intelligence (AI) has imposed upon the United States, that is, mostly of a domestic restructuration need.
The first observation (or 'finding') was how the higher AI skills needed was set to complicate social inequality: this was precisely the one group of unemployed educated citizens who defected from the Democratic Party to vote for Trump in the last election. Yet, to embrace those high AI skills, the second finding observed, required admitting immigrants and keeping trade relations open. The third took off from here by noting now only by the economy being consistently strong can wages be raised, and the fourth how emergent technologies just did not connect with mainstream society because the right type of education was not being imparted. Against that background of inadequate technology-related efforts were a string of worker-related gaps: the fifth pointing out the paucity of training for displaced workers, the sixth a similar paucity of workers for jobs owing to inadequate skills, migrants, and so forth, and the seventh the shortage of non-wage benefits for the emergent 'gig' and other part-time, contractual workers.
Through a concerted two-way discussion among a host of experts, the Report went on to add just as many 'recommendations': the need to make job-creation an explicit purpose, the imperative of the United States remaining the world's tech leader, why growth and labour demand must be kept strong, the growing urgency to enhance post-secondary education, reducing labour barriers and making employment benefits a greater priority, while finally establishing a national commission on research.
Education is rightfully center-stage in this formula. Yet, it carries the greatest disincentives, if anecdotal evidence is any indicator: not only is education becoming more expensive at a time when the purchasing power of citizens has been shrinking and government/public funding is evaporating, but it is also finding alternate interests eating away the typical student's time-slot, such as social media, and all the inducements therein.
It is not the only shortfall area: greater stress with tax payments (not only from citizens whose lost jobs mean they can only pay less, but also from the spiralling new needs for taxes, as for infrastructure-building); and simply, the neo-liberal framework under which hi-tech has developed, as if in a sine qua non mutual relationship, also being anathema to labour benefits, public sector growth, and a range of other worker benefits.
Trump has no sympathy for these arenas, even as his bash-China, punish-Mexico, and similar other policies, portray him as being the biggest supporter of the working class. Casting his 'America First' policy approach invites a patriotism that is at odds with many of the 'recommendations' it makes and the root-cause behind several of the 'findings' postulated. Think-tank brainstorming may become irreparably subjugated to polling-booth revenge in which populism plays an effective substitute to the very rational behaviour the United States has preached since at least the Washington Consensus proposal of 1989.
Even if technocratic solutions withstand political and public pressures, the tide is too huge for them to last too long or make any dent in this populist surge: trade wars will reinforce those walls, and the genie that came out of the US commercial bottle to throttle other countries, particularly US rivals, may provoke them to shift from one retaliatory measure to another to stop the process from reversing.
Lessons should be learned elsewhere. For Bangladesh they mean not just the opportunity window of exploiting China's tariffs on US cotton to profit from the lower market-price this entails, but also vulnerability windows. One pertains to education: we cannot suffocate education growth for our students in the way the US counterparts have been experiencing (spiralling costs, disappearing interest), since we are at a far lower intellectual threshold when that set of skills is most in demand; but to galvanise our own scientists and innovators, we need far more incentives than presently available before they migrate elsewhere. Simultaneously, we need to protect our own workers in a way that we have not, as the Rana Plaza tragedy or Tazreen factory-fire exposed so blatantly.
We have before us a laboratory of trials and errors, and also successors and failures, if we are keen to learn. If the US formula to return to the previous 'normal' does not find a follower, we have multiple lessons to learn waiting at our gates for free. One of them, the benefits of free-trade, currently awaits leadership, while another, post-secondary education, identifies our greatest gap. Jumping in is not an option for the faint-hearted; but the rewards could be the most enduring development since our independence.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.