Trump’s “America First” is now “America Alone” and “America Isolated”
I’m expanding on points presented by Fareed Zachariah in this mornings broadcast on world trade and US research and development. Fareed interviewed author Parag Khanna, of “The Future is Asian”, who pointed to the World free trade associations being rapidly formed, from which the US is not included, partly because we pulled out of the Transpacific Partnership TPP. That has now been ratified as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with 11 countries representing 13.4% of global GDP and $13.6 trillion. It is estimated that the US suffers a loss of $2 trillion by not being in this agreement.
The Asians may ratify the RCEP, or Regional Comprehensive Economic Partnership of the 10 ASEAN SouthEast Asian countries, and the 6 FTA of China, Japan, South Korea, India, Australia, and New Zealand. This includes all 16 Asian Countries from China and India to Australia.
There is more trade between the EU and China, and Southeast Asia, than between the EU and the US. The combined GDP is $49.5 trillion, or 39% of the world’s GDP. The combined GDP is expected to grow to $250 trillion by 2050. This includes the market for the Airbus, Boeing’s rival. China is also making inroads into Africa and South Korea with its Belt and Road initiative. China has now fallen to our third trade partner, behind Canada and Mexico.
The North American Free Trade Agreement representing $24.8 trillion in GDP is still in force between the US, Canada, and Mexico. It will be replaced by the USMCA, the United States Mexico Canada Agreement. when it is ratified.
The European Common Market is between the EU’s 28 member states, with $20 trillion in GDP.
The UK has a GDP of $2.8 trillion or $3.0 trillion in PPP, and is soon to undergo Brexit.
The US GDP in 2018 was $20.5 trillion.
There was supposed to be a Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU, which would be the world’s largest, but negotiations were halted by Trump. There are negations reported on a similar agreement, but negotiations are classified. It is opposed by many groups as unions, environment and safety NGOs, and individual governments, as being a business dominated agreement. The US and EU represent 60% of Global GDP, 33% of world trade in goods, and 42% of world trade in services.
The UN signatories to the Iran nuclear non-proliferation treaty are trying to get around the US trade blockade around Iran. That consists of the five permanent Security Council members (the P5) of the US, the UK, Russia, France, and China, plus Germany. The US is not only itself sanctioning Iran but trying to enforce what is seems to be a total trade blockade around Iran.
The free trade agreements find the cheapest and most competitive ways to produce and ship products. Trump’s Tariff Wall around the US to bring all manufacturing home is going to boomerang into pricing us out of World Trade and Markets. Also remember, that interdependence in trade and products is cement against actual conflicts, or even trade conflicts.
Fareed also showed NSF data which showed China’s rapid rise in non-defense Research and Development to about the same level as US spending. The US spending has only risen 4% a year. This goes from about $280 billion (PPP) in the year 2000, to about $500 billion (PPP) in 2015. The US budget for non-defense R&D spending is only about 2% of GDP, and has remained so since 1982. It rose to 6% in 1965, during the Kennedy-Johnson years, and slowly fell back down to 1982.
Fareed also discussed the effects of immigration on US science. Of US Nobel Prize winners, 39% were foreign born. This week it was also recalled that of Jews applying during the Nazi era, only 200,000 were let in to the US, while 300,000 were rejected. These were rejected on the vague basis of a neediness test. The immigration policy was to take as few Jews and foreigners as possible. This neediness test is the same policy that Trump has just re-applied, as to whether there is any possibility that immigrants might need any public assistance. Scientists and Universities are increasingly worried that talented students and scientists will be discouraged from coming to the US, or staying here. The British science community is also worried about this with Brexit.
Fareed’s conclusion was for the US to increase R&D, and not purposely discriminate against foreigners. I would add a return to respect for Science in our government, as required by law. Trump and the Republican’s fight against climate change recognition is also pushing us out of markets of a world demanding clean energy production and efficient uses of it.
