Like many other ill-conceived election promises by Donald Trump, abandoning TPP (Trans Pacific Partnership) is surely one that both the US (United States) administration and more importantly the American people must now be regretting. Protectionism is quite simply the wrong option, which post-Brexit, the British have quickly come to realise – according to recent polls already in excess of 54% today will vote against Brexit. Anyway, in a clear bid to rebuke Trump’s hasty decision, ministers and high-level representatives from nations that have signed on to the TPP, recently met up in Vina del Marin, Chile, with possible new partners: China, Colombia and South Korea. A clear signal to the US being that multilateral trade and pacific integration are alive and kicking and the leadership mantle given up by the US is likely to be assumed by China. The meeting, hosted by Chile as president pro tempore of the Pacific Alliance trade bloc (Chile, Colombia, Mexico and Peru), was to put forward a symbol of stability in increasingly uncertain seas. Protectionism, nationalism and populism are sadly on the rise worldwide. Indeed, multilateralism and the very concept of economic collective security are being challenged. However, while the fears that drive retrenchment on trade must be reckoned with, one at the same time needs to be mindful of the fact that some of the social and economic inequities resulting from unbridled trade are real.

It is in this context that the Chinese trade juggernaut sometimes comes into the spotlight in a negative manner. However, this perception is fast changing. Despite global concerns on most countries running negative trade balances with China, over the first five months of 2017, their trade with China increased. China’s total trade volume of goods from January to May 2017, hit 10.76 trillion Yuan, up 19.8 percent from the same period in 2016. A number of analysts attribute this to China’s new role as a responsible world trade leader, which going forward envisions to take smaller economies along in a manner that accounts for a win-win for all stakeholders. Keeping in line with this Chinese concept of deliberating providing extra space to its smaller trading partners we saw that during the same period Chinese exports increased 14.8 percent from a year ago to 5.88 trillion Yuan, but in sharp contrast to yesteryears its imports jumped 26.5 percent to 4.88 trillion Yuan.

Thereby, narrowing its trade surplus in the same period to 993.97 billion Yuan. Ironically, Pakistan in this appears to be an exception, as in our case a reverse phenomenon is being witnessed – instead, our trade deficit with China has been growing. And it is here that this writer often advocates revisiting our trade agreement with China and to also monitor CPEC’s (China Pakistan Economic Corridor) terms and conditions in a way, which ensures that over the long-term, annual capital inflows (through exports and investment) always outpace annual capital outflows. Clearly the government is failing on this count. Even much before the kicking-in of any tangible CPEC effects, Pakistan’s manufacturing is fast losing its competitiveness and our exports are nose-diving. Month on month exports for the month of May 2017 over May 2016 fell by nearly 11% and in 11 months for the period July 2016-May 2017 over its previous year’s corresponding period they fell by nearly 3.5%. Alarmingly, imports on the other hand are increasing, which registered increases of 27.88% and 20.6% respectively. At this rate in the coming months, a default on our foreign exchange commitments and a run on the Pak rupee’s value is imminent!

Back to the moot in Chile, the 15 Pacific Rim nations in attending signalled a strong and stable consensus that if trade can be conducted in a responsible, fair and an open manner, free trade and regional or cross-regional integration is the way forward for achieving inclusive and progressive development; this of course coupled with the necessary social and environmental responsibilities. Chile, for instance, has used economic integration and well-crafted trade deals to drive growth, which in turn has allowed the country to adapt smart, socially responsible policies regarding infrastructure, education, health care and labour rights to ensure the benefits are seen by all Chileans, not just an elite. In Pakistan, this balance still eludes us. The Chilean economy has grown 5 percent on average over the past 10 years, largely on the back of growing trade, while the poverty rate has decreased steadily to 11.7 percent in 2015 from 39 percent in 1990, the year when Chile successfully negotiated its first international trade deal. Pakistan’s trade deals on the contrary tell a sad story of poor negotiations, especially the ones signed with China, Indonesia and Malaysia.

Though Chile is a good example of how trade makes developing nations prosper, the real irony in Vena del Mar points to the reality that the previous leader, US, that pulled out in fact even today enjoys a very healthy trade surplus (nearly $4 billion/annum) with Chile, a country which despite being on the losing side proudly carries the flag of free and fair trade. What Mr Trump needs to realise is that trade is not a zero-sum game? For too long, the countries driving economic globalisation have taken public support for free trade as a given. With rapidly changing economies, we must now acknowledge the real dangers of people being left behind in their upward mobility. At the same time, we must not pretend that closing borders and raising tariffs will reverse the continuing march of technology that has created an increasingly globalised and interconnected world. And it is in recognition to this modern day reality that one would have liked to see Mr Trump instead take up a leadership role to check ideologies of fear and build public support by working to harness trade and integration as an engine for inclusive growth and opportunity for billions. But then again, it is perhaps too much to expect from the man!

The writer is an entrepreneur and economic analyst.

kamal.monnoo@gmail.com