{R} oughly one-fifth of the world’s population is in China. Roughly one-fifth of the world’s economic production comes from China.
Since China is only one of about 200 countries in the world, these two facts sound scary to policy-makers who increasingly view China as an adversary. They respond with various efforts to get tough on China. Those efforts often include restrictions on trade and investment related to China. And oftentimes the conversation stays within those boundaries.
But the two scary-sounding facts have happy-sounding obverses. Roughly four-fifths of the world’s population is in Not-China. Roughly four-fifths of the world’s economic production comes from Not-China.
From an American perspective, it’s not only the size of Not-China relative to China that is good news. The U.S. has a few other adversaries such as Russia and Iran, but it also already has deep and beneficial relationships with many of the major players in Not-China.
Those relationships sometimes manifest as military treaties. NATO, for example, includes Canada and most of Europe. In China’s neck of the woods, the U.S. already has treaty alliances with Japan, South Korea, Australia, New Zealand, the Philippines, and Thailand.
The most populous country in Not-China is India, which recently surpassed China to become the most populous country in the world. India is part of the so-called Quad with the U.S., Australia, and Japan. Indian and U.S. officials are both seeking greater cooperation as their interests align, especially as they relate to China.
Sometimes the relationships are based on trade and commerce. The U.S.–Mexico–Canada Agreement is the primary example. The U.S. is party to several other free-trade agreements, but most of them were signed in a wave between 2003 and 2007. Since then, efforts to secure trade agreements have been deemed politically unpopular and have largely been ignored.
Policy-makers aren’t just neglecting expansion of free-trade agreements with friendly countries. They have pursued measures that have antagonized friendly countries. One of the primary examples is the expansion of “buy American” provisions under both the Trump administration and Biden administration. Another example is the Biden administration’s efforts to make tax credits related to green energy conditional on domestic production.
The trend against trade has manifested itself in the two most recent U.S. trade representatives, Robert Lighthizer during the Trump administration and Katherine Tai now, who have not treated the job as primarily about opening up markets for Americans. Robert Zoellick, the trade representative for George W. Bush who oversaw many of the negotiations that led to the wave of agreements from 2003 to 2007, recently said the U.S. now has an “anti-trade representative” in Tai.
Oftentimes, concern about China is used to justify this anti-trade approach. But does concern about China really mean the U.S. shouldn’t pursue a free-trade agreement with the U.K., for example? Negotiations have been stalled for years after some initial enthusiasm when the U.K. became able to make its own free-trade agreements post-Brexit.
How about with the rest of Not-China? Wouldn’t it be in America’s best interest to deepen trade ties with friendly countries full of people who want to do business with Americans? In many cases, the argument for free trade is not about utopian theories of world peace. It’s more about the U.S. taking its own side in a fight.
To that end, it’s encouraging to see Advancing American Freedom, the advocacy group associated with Mike Pence, pushing policy-makers to seek “free trade with free nations.” This language echoes the call for “free trade with free people” from the Freedom Conservative statement last summer. AAF defends the Trump administration’s trade policies against China, which in some cases have not delivered the promised results. But AAF is still correct to turn the conversation toward how the U.S. can secure more free-trade agreements with Not-China.
AAF recommends starting with countries where the U.S. already has defense agreements but no free-trade agreements. That includes NATO (minus Canada), Japan, Taiwan, the Philippines, and several countries in South and Central America.
These are countries the U.S. already trusts for military matters, sometimes even enough to base U.S. troops there. If they’re trustworthy enough for that level of international commitment, free-trade agreements shouldn’t pose national-security risks.
AAF also points out that expanding free trade with friendly countries would provide a better alternative to China’s primary mode of international economic engagement, the (failing) Belt and Road Initiative. “Rather than trying to beat China through massive foreign aid diplomacy, the U.S. should consider reducing the tariffs it imposes on treaty members (some of which are more severe than what the U.S. imposes on China),” AAF says. If you believe tariffs are a punishment for other countries, then the U.S. shouldn’t be punishing treaty allies more severely than it punishes China.
Making free-trade agreements with current U.S. treaty allies would be enough work for a few presidential administrations. Just within NATO, there are 31 countries, 30 of which have no free-trade agreement with the U.S. On the merits from the U.S. perspective, these should be economic-policy gimmes, but some countries will be more skeptical than others, and hammering out agreements always takes time as both sides work through the details.
Free-trade agreements with non-treaty allies, meanwhile, allow the U.S. to counter Chinese influence in other parts of the world. As Michael Lucchese wrote for the Washington Examiner in May, “Protectionist intransigence is not only hurting American interests in Asia — it is also opening South America to the CCP’s malign influence.”
As Zoellick has pointed out, the wave of agreements signed between 2003 and 2007 included deals with Chile, Peru, Colombia, and Panama, and one multilateral agreement that covered the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. Add in the existing agreement with Canada and Mexico, and the U.S. was leading the charge toward a Western Hemisphere free-trade zone back then. That progress has since stopped, and several South and Central American countries have opted to pursue stronger relationships with China instead.
Policy-makers shouldn’t let fear of trade with China hinder efforts to expand free trade with Not-China. Not-China is much bigger than China, and significant chunks of it are already friendly with the U.S. When politicians and commentators invoke China to argue against free trade in general, it should be clear that they have another agenda besides national security in mind.