A panel of savvy trade and foreign policy experts boldly prophesied the future of economic developments around the world during a lead-off discussion at Atlanta’s celebration of World Trade Day on May 3 at the Renaissance Waverly Hotel and Convention Center.
While crystal ball gazing can be fraught with false predictions resulting in crushed reputations and ruined political careers, the panelists analyzing “Geopolitical Forces Impacting International Market Opportunities” showed no fear in addressing a packed chamber of attendees.
Among the predictions for future developments in 20-to-25 years were China’s dominance of the world trading order at the expense of the U.S., massive investment by Canadian, possibly Chinese, European and Mexican companies into the United States, continued setbacks in Europe due to Brexit and the Italian deficit crisis; continuing difficulties in Brazil and Venezuela, increased trade and investment between North and South Korea and the emergence of the African continent as a magnet for manufacturing operations.
The panelists were Dr. Alasdair Young, Sam Nunn School of International Affairs at the Georgia Institute of Technology; Ambassador Charles Shapiro, president of the World Affairs Council of Atlanta; Dr. Jagdesh Sheth, Charles Kellstadt chair in marketing, Goizueta Business School, Emory University; Amini Kajunju, executive director of the Atlanta-based International University of Grand-Bassam (IUGB) Foundation, which supports IUGB in the Cote d’Ivoire, and Young-jun Kim, South Korea’s consul general for the Southeast, based in Atlanta.
There was unanimous agreement that China would play an increasingly important role in the world’s trading system in the next quarter century.
Dr. Sheth went so far as to say that this development is generally “underestimated” and that Asia will evolve as the world’s largest trading bloc replacing that of the Americas and Europe.
He foresees China being transformed from an exporting to an outsourcing country with “Vietnam, Indonesia and even India” benefiting, eventually exporting goods back to China and elsewhere in the world.
Both Mr. Shapiro and Dr. Young saw China’s dominance at the expense of the world trading order that the U.S. put in place following World War II, which they said would be replaced to the West’s disadvantage.
“We established the rules to our advantage,” Mr. Shapiro said. “Abandoning that, who knows what what will follow. China will be constructing trade architecture, not to the benefit of the U.S.”
Meanwhile, according to Dr. Sheth, the U.S. in the next five to 10 years will benefit from massive investment from all corners of the world with European companies taking an important role in infrastructure development if they are allowed. He also cited massive increased investment by the Germans in the auto sector and the French in U.S. infrastructure with Chinese companies also increasing their investment as will Canadian and Mexican companies.
Consul General Kim also weighed in, saying that South Korea would continue to invest in the Southeast, adding to the $15 billion already invested in the region by 200 Korean companies.
While the growth of foreign investment sounds appealing, it won’t be enough to counterbalance China as the world’s dominant economy. Ms. Kajunju cited a recent report of the U.S. Government Accountability Office, which contrasts U.S. and Chinese objectives in sub-Saharan Africa.
While the U.S., according to the report, seeks to strengthen democratic institutions, support human rights, improve health and education and build global trade, Chinese objectives are to build closer ties including projects providing mutual benefit and a policy of noninterference in sub-Saharan countries’ domestic affairs.
She pointed to the bottom line whereby China’s total trade with sub-Saharan Africa surpassed that of the U.S. 10 years ago in 2009.
Although the U.S. has changed its foreign policies under the Trump administration, Mr. Shapiro pointed to an emerging irony due to the transformation of NAFTA. With the emergence of a revised agreement known as the United States-Mexico-Canada Agreement (USMCA), Mr. Trump has gone from decrying trade relations with Mexico and Canada to a fervent supporter of the new pact.
Dr. Young also pointed to an irony underlying the U.S. abandonment of the Trans-Pacific Partnership. This development works to Europe’s advantage, he said, which seeks to replace the active role the U.S. has played there in the past.
Both Mr. Shapiro and Dr. Sheth entertained the prospect that the U.S. dollar may be replaced in time by a new international currency, which would undermine the U.S.’s advantage in the current world order.
For the full World Trade Day program organized by Atlanta’s World Trade Center, click here.