Technology Not Government Is The Key to Global Trade

A few months ago I struck a trade deal with China.

Or, more precisely, I made a deal with a company based there.

A journalist, I was approached via LinkedIn (other social media are available), by a Chinese firm. It wanted to branch out into the English-speaking world. It wanted a website more attuned to Western sensibilities. And, gratifyingly, it thought that, when it came to making it, I was their man.

So we made a deal.

Now, money will flow out of China to me, in Singapore. Here it will be turned into Singapore dollars and taxed. Some of it will then flow back to the UK, where it will be turned into sterling taxed again.

Everybody wins.

Now it probably hasn’t escaped your notice that no government action was required here. No ministers had to meet, no summit had to take place. No international trade deal was signed before my new Chinese partner and I could shake virtual hands on our nice little earner.

No, what fired this bit of private enterprise was nothing more than naked self-interest. On both sides. What made it possible was the internet and the free market, which makes it much easier to transfer cash from one place to another than it has ever been before.

And it’s only going to get easier. China will liberalise its currency regime. Fintech will make sending money across the world as easy as emailing, and reduce the activity level at which trading internationally will be viable for small firms.

global trade is expanding at a slower rate than global GDP

Put in this context the collapse of trade deals between the US and its Pacific partners, or indeed the near-collapse of yet another between the US and the EU, looks absurdly irrelevant. In fact, it looks like the last gasp of some corrupt mediaeval guild. Trade will continue between everybody involved.

I don’t care that there are no official trade deals between China, Singapore and the UK, although of course they’d be nice to have. I’ve got my own, freely made. So have many, many others.

The UK has no trade deal with the US. And yet, without one, UK companies employ Americans in all fifty states. The US and the UK are regularly the largest foreign investors in each other’s economies.

In an increasingly connected world, all you need to do to have access to a global marketplace is to let that marketplace know that you are there and how much money you’d like.

However, for the first time in years, global trade is expanding at a slower rate than global GDP according to the World Trade Organisation.

It’s tempting to think that all governments really need to do here is to get themselves out of the way. They should attend to it with all speed.

More about the author

About the author

Born and raised in Swansea West, one of the safest Labour seats in the country, David is perhaps unsurprisingly a High-Tory, Euroskeptic Royalist Libertarian with an unhealthy adoration for Ronald Reagan and Margaret Thatcher. As a result he is seldom pleased by anything that ever happens, and always on the verge of quitting the whole jamboree. A former Special Writer at the Wall Street Journal, he knew the crash was coming when he saw a piece about Louis XVI reproduction furniture "for your Winnebago."

Follow David on Twitter.

 

 

 

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