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Tuesday, December 6, 2022

OPINION:

The war in Ukraine is teaching the West some hard lessons about globalization, multilateralism and authoritarian states.

Even without the war, shortages would abound for computer chips, cars and other things digital because international competition has created brittle and inflexible global supply chains.


The pandemic shutdowns did shift demand toward chip-hungry products such as computers, but often neglected are factory fires in Japan and Germany that knocked out critical links in semiconductor supply chains.

Manufacturing, unlike investment banking, does not create quick fortunes but rather operates on thin margins. Competition without safeguards compels managers to pursue wage arbitrage and economies of scale to their absolute limits and creates unacceptable vulnerabilities to natural disasters, pandemics and wars.

Climate change-induced record heat in the American West, India, Brazil and elsewhere was tearing at global food supplies and threatening shortages even before Vladimir Putin imperiled Ukrainian and Russian exports of wheat, corn, sunflower oil and fertilizer.

In response to exacerbated shortages of cooking oil, Indonesia created turbulence with a temporary export embargo on palm oil. The World Trade Organization — even if it were capable of acting quickly — offered few good remedies.

COVID-19 and Russia’s invasion of Ukraine only brought those vulnerabilities to the foreground more quickly, and future pandemics and wars could prove worse.

Consider the consequences of a Chinese invasion of Taiwan and attempts by the West to embargo all we source from the Middle Kingdom.

Weaning the world from gasoline with EVs requires even more chips and prodigious quantities of lithium, nickel, copper, phosphate and manganese from Russia and other countries with which relations could sour. Or that could fall into the orbit of China and choke Western industry in a Pacific crisis.

The Ukrainian war has laid bare the sad fact that much of the world is not behind the United States and Europe as full and responsible players in enforcing the international rule of law. Many abstained from the U.N. resolution condemning Russia or are not cooperating in the sanctions.

The unfortunate fact is the international system — the security and human rights arrangements founded in the League of Nations and United Nations — and the free trade system created by the WTO are seen by much of the developing world as artifacts of Western colonialism.

American calls for the defense of international rule of law fall on jaded ears among many nations occupying the space between the Western democracies and the authoritarian states of Russia, China, Saudi Arabia and a few others. Entreats for solidarity are filtered by minds made cynical by harsh memories of European seizure and plundering of sovereignty, farmland, mineral wealth, tribal identities and the slave trade from the 15th through the early 20th century.

In the post-World War II era, U.S. diplomats relied on the country’s overwhelming wealth and military power to bend those ears. But the rise of China and its Belt and Road Initiative often reframe, however incorrectly, Western notions of the international rule of law and capitalism as engines of neocolonialist exploitation.

The West can’t change history, and we cannot pay some kind of reparation that would put historical resentments behind us. And it is not clear that the present generation of Europeans and Americans bears a debt.

We don’t ask Italians to pay reparations for the Roman sacking of Carthage or Jerusalem.

It’s high time for globalization with guardrails. The West needs a security system supported by a network of alliances and free trade agreements among the industrialized countries and the more dynamic and friendly economies in the arch from India to South Korea that emphasizes resilience and efficiency.

Shaken by the vulnerabilities laid plain by the war in Ukraine, Germany and Spain are seeking to speed up European Union free trade negotiations with Latin America and the Pacific — effectively displacing the WTO with its implied predisposition to foster vulnerable supply chains.

The United States is impelled to similarly negotiate free trade arrangements lest it wake up one day hostage to a Chinese-inspired embargo that shuts down U.S. manufacturing by disrupting supplies of semiconductors or the one-third of seaborne trade that runs through the Western Pacific. And to build military capabilities and mutual-assistance commitments reinforcing those trade agreements to replace the impotent apparatus of the U.N.

That would confront India, like other nations that refuse to meaningfully sanction Russia, with tough choices. But our message should be that they can either obsess about the European colonialism of ancient days or safeguard themselves from Russian-style aggression and Chinese economic exploitation, and kinetic bullying.

The West should take a page out of China’s playbook to indigenize critical technologies and ensure reasonable self-sufficiency in a crisis lest a war over Taiwan give us a new hegemon, and we learn Mandarin to serve new masters.

The Peaceable Kingdom was a painting and idyllic fantasy — not a suitable vision for Western security.

• Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.


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