The latest Shanghai Cooperation Organisation (SCO)Summit from June 9-10, concluded with the message of hope and promise of working for mutual benefit. Chinese President Xi Jinping emphasised the need to pave the way for constructive engagement and come out of the shell of self-centred approaches. He showed a willingness to lead the way for greater global integration and cooperation. Russia chipped in and put greater importance to acknowledge and respect international agreements like Iran nuclear deal.
On the contrary, the G-7 Summit on June 8-9, ended in chaos and without a joint communiqué. US President Donald Trump lashed out at G-7, especially Canadian Prime Minister Justin Trudeau. Trump considers Europe, an integral part of G-7, an even bigger threat to the US’ interest than China in the trade deficit context. Before leaving for G-7 Summit, the Trump administration introduced a new set of tariffs on steel and aluminium imports from Canada, Mexico and the European Union, which will have severe implications for these countries.
Trump considered it a legitimate action as the US’ dairy sector faces a tariff of around 270 percent from Canada. According to him, the EU and Mexico are also making profits at the US’ cost. However, these countries think differently. They consider it unfair treatment by the US. These countries have taken retaliatory measures and imposed corresponding tariffs. Jean-Claude Juncker, President of the European Commission, said the EU would impose tariffs, which will have relevance for about $7.5bn worth trade volume. It would be really harmful to the EU, US and rest of world’s trade, as the trade volume between the EU and USA is more than one trillion US dollars. In line with EU, Canada is also devising a new set of tariffs, which will affect $12.8bn trade volume.
These tariff measures are in addition to action against China. Although the trade deficit is enormous with China (imports $524bn, export $187bn), both countries are benefiting from trade at large. It is giving impetus to many related industries in both countries. China is trying to avoid the trade war,but it reiterated that it is ready to fight it.
The recent G-7 Summit ended in chaos and without a joint communiqué, and with US President Donald Trump lashing out at members. However, the SCO Summit in China was exactly the opposite, with China taking the lead in building mutual trust for future cooperation
Trump also questioned the status of NATO, along with these economic and trade measures. He is of the view that America is bearing the major cost for the security of Europe and member states of NATO. Europe on one side is enjoying trade benefits and on the other getting security at the expense of the US. He wants to change this and is asking European countries to take responsibility for their own security and contribute more. European leaders are now pondering on how they can manage their security. Angela Merkel is already pressing European leaders to think about their own measures and actions for the security of Europe and individual countries.
At a time when the US is hellbent on triggering a trade war and undermine its responsibilities as a global leader, China seems eager to take the lead in all aspects.
The Qingdao declaration pinpoints the required efforts to tackle the issues through cooperation and trust. It also talks about the importance to accommodate special needs of developing countries. Xi promised an amount of $4.7bn for loans to promote development in SCO countries.
It was proposed to work for the creation of SCO Development Bank and SCO Development Fund. It would be a great step forward in the presence of the Asian Infrastructure Development Bank and PRI Fund.
The declaration also reinforces the importance of the global order of security and governance. It talks at length about UN measures to counter terrorism and extremism, to enhance security for durable peace and prosperity. It also urges to align efforts for connectivity and promoting research in line with the UN. The Qingdao declaration also gave particular attention to the sustainable development goals (SDGs) in accordance with its spirit of ‘no one left behind’. It has been emphasised that developed countries should take the lead to fulfil their obligation under the SDGs.
The SCO summit also shows that China along with its partners is trying to consolidate its position at the global stage. China is busy in strengthening old institutions and creating new ones to spread its influence but with the objective of shared prosperity. Now it is taking the lead in resolving outstanding issues of the region and beyond. China is applying multiple instruments to solve the Afghan issue peacefully. It is also looking for innovative solutions for Syria and other world problems.
However, China is making sure that it does not intrude on the sovereignty of individual countries. It is emphasising that there should be indigenous solutions, led by the people of the host country.
It talks about shared destination and development but not at the cost of other countries. President Xi has clearly signalled that China will do everything to promote globalisation of trade and economic growth. It makes really good sense for China to pursue this agenda as it is anticipated that China will contribute approximately 30 percent to global GDP in the coming decade.
China is also taking the lead in solving outstanding security issues and conflicts. North Korea has been persuaded by China to engage in positive and constructive talks. It ultimately culminated in a special summit between North Korea and the US.
In conclusion, under the changing international dynamics, Pakistan must reorient its diplomacy on the basis of real-time assessment of its strengths and weakness and be part of global agenda positively and constructively. Pakistan should also avoid mistakes, which it committed in the past and shouldn’t fall prey to any other country’s interests or agenda.
The writer is the Director Research Uptake and Business Development Head for Centre for Future Policy
Published in Daily Times, June 21st 2018.