From: lessgovt@gmail.com   
      
   What the West Loses by Trading With Dictatorships   
   By Mathias Döpfner, Sept. 14, 2023, WSJ   
   In 1989, the political scientist Francis Fukuyama declared the end of history:   
   “What we may be witnessing is not just the end of the Cold War, or the   
   passing of a particular period of postwar history, but the end of history as   
   such: that is, the end    
   point of mankind’s ideological evolution and the universalization of Western   
   liberal democracy as the final form of human government.” Today we have to   
   acknowledge: Fukuyama was wrong.   
      
   After decades of increasing globalization, democracy and freedom have not   
   prevailed. On the contrary, they are in retreat. For the 17th year in a row,   
   the independent think tank Freedom House has recorded a decline in democracy;   
   40% of the world’s    
   population now lives in countries it ranks as “not free,” the highest   
   level since 1997.   
      
   The phrase “change through trade,” which Western politicians and bankers   
   loved so much, turned out to be true—but in sharp contrast to its original   
   meaning. Instead of becoming more tolerant and democratic through intensified   
   business links with    
   the West, autocracies in China, Russia and the Middle East have become even   
   more radical and undemocratic. At the same time, more and more democratic   
   economies have grown dependent on their nondemocratic counterparts. The West   
   has been led into a trade    
   trap.   
      
   The World Trade Organization is a particularly sorry case of good intentions   
   gone wrong. The date that marks its key strategic failure is Dec. 11, 2001,   
   when China was admitted as a full member after 15 years of negotiations. It   
   was a great day for China    
   but possibly the biggest mistake Western market economies have made in recent   
   history. Since then, the U.S. share of global GDP has fallen from 31.47% in   
   2001 to 24.15% in 2021, while China’s share has grown from 3.98% to over 18%   
   in the same period.    
   This asymmetry has been further amplified by the fact that China, the second   
   biggest economy in the world, still enjoys the status of a developing country,   
   granting it many privileges and exemptions under WTO rules.   
      
   The West’s fundamental error was to expose its market economies to China’s   
   state-led capitalism, which creates its own rules and abuses existing terms of   
   trade and competition. If we keep heading down this road, China will continue   
   to gain in    
   economic power and dominance, which will lead to increased political influence   
   and the global rise of AI-boosted surveillance autocracies.   
      
   In an increasingly polarized America, perhaps the only truly bipartisan   
   consensus is that China’s actions are dangerous. But while the U.S. has   
   decided to act, Europe is still hesitating. Ursula von der Leyen, the   
   president of the European Commission,    
   has taken a “de-risking” approach, trying to balance economic interests   
   and national security concerns. This is encouraging, but it might not be   
   enough. Europe has to make a clear decision for the U.S. and against China.   
   Pleasing both is impossible.   
      
   Europeans and Americans must decide between two possible paths. One is that Xi   
   Jinping and Vladimir Putin continue their attempts to drive the U.S. and   
   Europe apart. In this scenario, Europe would follow Africa in growing   
   increasingly dependent on China.    
   The Old World would become a historically instructive theme park for tourists   
   from around the world. Value creation would happen elsewhere. China, Russia   
   and Islamist autocracies would coordinate their interests and activities,   
   becoming increasingly    
   confident aggressors. The U.S. would isolate itself through unilateral   
   decoupling, and what was once the largest economy in the world would become   
   ever weaker politically and economically—yesterday’s superpower.   
      
   The alternative is to revive the trans-Atlantic alliance as an economic and   
   values-based partnership and as the basis of a broader global alliance of   
   democracies including India, Japan and others. It would offer freedom,   
   security, dignity and a    
   sustainable way of life, founded on diversity, competition and meritocracy. In   
   this scenario, China would become a strong but isolated power, weakened in the   
   long run by its extreme homogeneity. Post-Putin Russia would have two options:   
   to rely on a    
   deteriorating China or to opt for the growing West. And one day, China too may   
   realize that a little more freedom brings a great deal more prosperity.   
      
   The crucial incentives lie, as always, in the economy. That’s why it is time   
   for a new world trade order—an alternative to the dysfunctional WTO, which   
   should cease operations. We need a trade alliance that would provide a   
   multinational framework for    
   truly free trade.   
      
   This alliance of democracies would have three criteria for membership: proven   
   respect for the rule of law, for human rights and for sustainability. Alliance   
   members would be able to engage in truly free trade without any tariffs or   
   restrictions, while    
   nonmembers would be subject to high tariffs. The underlying hypothesis is   
   that, in the long run, cooperation among democratic states leads to more value   
   creation than fragile partnerships with autocracies, and that short-term   
   damage is vastly    
   overcompensated by long-term gains.   
      
   Democratic nations today still have the upper hand, generating almost 70% of   
   the world’s GDP. This part of the world would remain globalized, forming the   
   critical mass to draw more countries in step by step.   
      
   Russia’s war in Ukraine has already taught us that, for democratic   
   countries, waiting is not a good strategy. An orderly transition to energy   
   independence from Russia would have caused the EU, and especially Germany,   
   significant hardship and losses in    
   the short- to medium-term. But a growing dependency on Russia that allowed the   
   aggressor state to determine events has turned out to be even more painful,   
   and not just economically.   
      
   This experience is the final wake-up call in the face of a possible Chinese   
   takeover of Taiwan. It should make democratic countries realize that   
   “business as usual” when dealing with China and other authoritarian   
   economies is the most dangerous    
   solution of all. It creates not only a dangerous dependency but also a   
   credibility dilemma.   
      
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)