At a World Trade Organization event in September, former British prime minister Gordon Brown voiced out loud the fear that has quietly started to echo in the halls of power across Europe.
“Europe does not want to end up squeezed between America and China, either a Chinese colony or an American colony,” he said of a scenario in which rivalry between China and the United States could lead to a world of two hostile power axes.
“For even if Europe would always choose America, upon whom its security depends, it also knows that its lifeblood, far more so than for the USA, is trade,” added Brown, who since quitting UK politics has taken senior UN roles on global issues.
The fracturing of the rules and bonds tying the global economy together – so-called “geo-economic fragmentation” – seemed implausible only a few years ago. Now, it is a headline topic at the International Monetary Fund’s annual meeting of economic leaders in the Moroccan city of Marrakech next week.
Nowhere is it more pressing than for Europe, whose wealth has always relied on trade, from its rapacious colonial history through to its reinvention as self-styled champion of WTO rules.
Together, the 27 countries of the European Union make up the world’s biggest trade bloc, accounting for 16 percent of world imports and exports. That also makes them highly reliant on goods from elsewhere, ranging from critical raw materials to blood plasma.
But tariffs and other trade curbs are rising as governments seek to counter populist rivals who have snapped up the votes of those left behind by two decades of rapid globalization including China’s entry into the global trading system.
