By nature, I am very middle of the road when it comes to politics and religion. It is my policy to not discuss these topics in social media. Not because they are not interesting subjects, truly they both are, but because the discourse often leads nowhere and people’s points of views are so steadfastly fixated on minutiae and polarized to one extreme or the other. I find that no one is open to conflicting opinions or new ideas. Whereas, my personal comfort zone is found in the world of technology and business, which is ever-changing and requires mental agility to survive and thrive.
However, something profound is happening to make me change my mind this one time. Recently, it has crossed my mind that a new world order is evolving that is worthy of a broader discussion. Years ago, I read a fascinating story that made a claim that in the recorded history of mankind, there have been just eight years without a record of war. I cannot say if this claim has merit or not, but it seems to ring close to the truth.
Man has battled over many issues – politics, religion, land, rights, egos, savagery, and more. Often, the reasons to go to war are a mystery to those who actually fight the battles. But, war has been a consistent elements of man’s existence on earth.
During the past century, we have seen several significant global conflicts – WWI, WWII, Vietnam War, War in Afghanistan, Iraq War and Insurgency, and many more almost too numerous to list.
While fighting continues today around the world, a new form of war is taking centre stage – the Trade War. Are these global trade wars in reality the advent of World War III?
Are the global trade wars the newest form of political, religious, and ideological dominance? As they say, ‘Money is Power’.
The North American Free Trade Agreement, and its theoretical replacement, the USMCA or United States, Mexico, Canada Agreement, appears to be in jeopardy again due to the internal political polarization within the United States. The US is experiencing a next generation of civil war with the extremest alignment of its two core political parties. There is a serious gap in opinion between the left and the right. Oddly enough, both Canada and Mexico are secondary players to this dispute even though we are both named parties. This three-way business deal is truly just a one-sided, lopsided deal. But, Canada and Mexico do depend upon the USA for trade, so we soldier onward in polite support whilst the USA fights its own internal battles.
The China-US trade war is ratcheting upwards at an ever quickening pace. The European Union and the United Kingdom seem to racing towards Brexit chaos as well. More can be said about Russia, the Middle East, Asia, and most recently, South America, most notably with the election of the new President in Brazil is tethering on the edge of economic policy change.
In Brazil, the recent election of Jair Bolsonaro, a long-serving right wing legislator with authoritarian tendencies, will likely put an end to what remains of Brazil’s soft power abroad. Brazil has always tried to softly influence world affairs, but most expect a harder stance with the new President. A stance that is not welcomed nor likely to be effective.
The turmoil in Venezuela continues as the Southern Common Market, Mercosur, suspended Venezuela’s membership for violating democratic principles and failing to comply with trade obligations adopted since its incorporation into the bloc in 2012. Mercosur members stated that Venezuela will remain suspended until democratic order and stability is achieved in the country. Sadly, the country continues to be in crisis and on the verge of civil war.
The 2017 darling of Wall Street, Argentina, is now caught in a near economic collapse this year and is struggling for its very survival.
Trade has always been a source of trouble worldwide, but more recently, it seems to be displacing physical global war conflicts with global trade disputes. So, is trade the new battleground? Are economists replacing generals? Are economic sanctions the next generation of gun salvo attacks? Is dumping of product equal to carpet bombing from the air?
As a strategic maneuver, China has ceased 13 Canadians and held them as political pawns after Canada arrested Huawei CFO and Vice Chair, Meng Wanzhou, at the request of the United States. Canada was carefully following its own domestic laws and adhering to international laws when this action was taken. However, China has strategically retaliated with arrests of Canadians in China in an effort to pressure Canada to release Meng. Canada has resisted this pressure and is now snared between the USA and China in their trade dispute. Are we a pawn engulfed in a larger trade game that does not realistically include us? Two of the arrested Canadians are of high profile, ex-diplomat Michael Kovrig and entrepreneur Michael Spavor. Eight of the 13 have been quietly released, including the Alberta school teacher arrested for teaching illegally in China. The other political pawns are still largely unknown to the public.
Just yesterday, January 3, 2019, the U.S. State Department updated its warning to American citizens regarding travel to China. Its increased its travel warning about China, urging Americans to “exercise increased caution” in the country due to arbitrary enforcement of local laws as well as special restrictions on dual U.S.-Chinese nationals. The State Department warning noted that Chinese authorities have “exit bans” to prevent U.S. citizens from leaving China, sometimes “for years.” And the department said those bans are used “coercively” to compel Americans to participate in Chinese government investigations, “lure” people back to China from abroad, and to help Chinese authorities resolve civil disputes “in favour of Chinese parties.”
So, this international chess match of global trade wars is strategically escalating. The economic impacts are now being felt and whole country economies are being upset and sent spiraling out of control on a downward financial trajectory as the effects of these trade tactics hit home. Similar to physical wars, trade wars induce economic hardship, loss of jobs, disrupted supply chains, blur foreign affairs focus, create monetary recession, and produce general fiscal turmoil.
So, what is the answer? Where does the world go from here? Historically, the proverbial pendulum swings back the other way on a decade by decade basis. So, do we need to simply wait it all out? Or, is there something that can be done here to find a fix and return balance to world trade?
Canada is trying to energize new trading partners such as in it engagement in the Trans-Pacific Partnership and by working hard to develop new Free Trade Agreements with the European Union. Both of these economic efforts could dramatically reduce Canada’s unhealthy dependency on the USA for trade and help to stabilize our economy.
Often, the chief antagonists must be removed first. These are typically just one or two leaders with a small group of individual followers in positions of power. These power squads are found on both sides of a dispute that is tilting the global economy. Elections, revolt, upstarts rising to power, and time are the drivers of this sort of removal.
Next, there needs to be a political will to change. Once hardships trickle down to the average Joe, then a grassroots surge happens to slowly shift the political will towards a new direction. While it takes time, this seems to be how we got into this mess in the first place. So, time and hardship will influence political will.
Then, a sane voice of reason needs to step up and lead everyone away from the abyss and back toward the safety of the centre. Can Canada be that voice of reason? In the past, we have been a leader in intermediation of physical wars by facilitating peace talks. One of our Prime Ministers, in 1957, won the Nobel Peace Prize (Lester Pearson for the 1956 Suez crisis) for this kind of diplomacy. So, can we do the same for the economic trade wars?
Canada, it may be your time to shine again, but this time in solving the troubles of a new kind of war – The Trade Wars.
About the Author:
Michael Martin has more than 35 years of experience in systems design for broadband networks, optical fibre, wireless and digital communications technologies.
He is a Senior Executive with IBM Canada’s Office of the CTO, Global Services. Over the past 14 years with IBM, he has worked in the GBS Global Center of Competency for Energy and Utilities and the GTS Global Center of Excellence for Energy and Utilities. He was previously a founding partner and President of MICAN Communications and before that was President of Comlink Systems Limited and Ensat Broadcast Services, Inc., both divisions of Cygnal Technologies Corporation (CYN: TSX).
Martin currently serves on the Board of Directors for TeraGo Inc (TGO: TSX) and previously served on the Board of Directors for Avante Logixx Inc. (XX: TSX.V).
He serves as a Member, SCC ISO-IEC JTC 1/SC-41 – Internet of Things and related technologies, ISO – International Organization for Standardization, and as a member of the NIST SP 500-325 Fog Computing Conceptual Model, National Institute of Standards and Technology.
He served on the Board of Governors of the University of Ontario Institute of Technology (UOIT) and on the Board of Advisers of five different Colleges in Ontario. For 16 years he served on the Board of the Society of Motion Picture and Television Engineers (SMPTE), Toronto Section.
He holds three master’s degrees, in business (MBA), communication (MA), and education (MEd). As well, he has diplomas and certifications in business, computer programming, internetworking, project management, media, photography, and communication technology.