from Asia Unbound

As the G8 Meets, Free Trade is in Chaos

June 17, 2013

Britain's Prime Minister David Cameron welcomes U.S. President Barack Obama on his arrival to the Lough Erne golf resort where the G8 summit is taking place in Enniskillen, Northern Ireland on June 17, 2013. (Yves Herman/Courtesy Reuters)
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At the start of his second term in January, President Barack Obama announced a massive platform of new policy proposals. Since then, many of his ideas – on gun control, a solution to America’s debt crisis, and other issues – have been abandoned, leaving the president’s supporters on the left almost apoplectic. Yet even as he has backed off from fights on other issues, President Obama and his administration have continued to push for many new trade deals, such as the Trans-Pacific Partnership (TPP), that encompasses much of Asia, the fastest-growing region in the world. The White House also has proposed the Transatlantic Trade and Investment Partnership (TATIP), a free trade deal with Europe.

As President Obama and the other leaders of the G-8 nations prepare to convene in Northern Ireland, a closer look at the U.S.’s trade agenda reveals that the Obama administration’s rhetoric is more smoke and mirrors than serious policy. Even if the TPP or the Europe deal were viable initiatives, the White House knows that they will almost surely never pass Congress, which took five years to approve free trade deals with even minnows like Panama and Colombia. On a broader scale, global trade and economic integration are in crisis. Banks are retreating from international deals. The World Trade Organization’s Doha Round is dead. Leading nations like France, China, and Brazil are throwing up new types of protectionism, and a new era of deglobalization – the opposite of global economic integration –has arrived.

I analyze the factors behind this deglobalization, including the failures of Asia’s regional trade pacts and the rise of state capitalism, in a new piece for BloombergBusinessweek. Read it here.