Populist politicians are weaponizing trade to the determent of the global economy, a new book has claimed.
As politicians on both sides of the Atlantic raise the stakes, trade is increasingly becoming a tool of coercion to achieve strategic influence.
Although trade, wars and foreign policy have been interwoven throughout history, the belligerence of the language today means trade is becoming predominantly political and strategic, rather than economic.
Politicians have resorted to economic nationalism, using the rhetoric of conflict to recapture the lost territory of global leadership and to win the hearts and minds of their ‘populist’ electorates.
Dame DeAnne Julius, chair of University College London and former chair of the Royal Institute of International Affairs, said: “At a time when the Trans-Pacific Partnership and the North American Free Trade Agreement are being revisited and Brexit is being negotiated, this book shows how the economic benefits of trade are being tied to strategic foreign policy objectives, leading to win–lose bargaining and greater international tensions.
“It also examines trade in the arms and dual-use sectors, providing a glimpse into hidden Russian–Syrian and Chinese–North Korean flows. The Hardings’ book is an ominous and eye-opening preparation for the weaponization of trade to come.”
The book, by Rebecca Harding and Jack Harding, looks at the risks for us all as trade becomes an instrument of foreign policy, and shows how politicians could turn things around.
The authors explain why the weaponization of trade is so dangerous and also present new data on unseen trade in arms and dual-use goods.
These are used to fight proxy wars, wreaking havoc with beneficial trade and increasing migration, which in turn further fuels the fear and the febrile atmosphere at home. They present policy recommendations for reversing these trends: increasing trade finance, promoting the benefits of globalization and controlling the export of weapons.
Andrew Sentance, Senior Economic Adviser to PwC and former member of the Bank of England’s Monetary Policy Committee, says as the new world economic order – led by Brexit, Donald Trump and the rise of China – takes shape, this provides an invaluable guide.
“In this new world, trade can become a weapon for political aggression rather than a benign instrument for economic progress,” he says, making this a “must-read for everyone seeking to understand the emerging twenty-first-century economy.”
THE WEAPONIZATION OF TRADE: The Great Unbalancing of Politics and Economics, a new book from LPP in its ‘Perspectives’ series, will be published on October 25th