US-China rivalry will adapt, spread into other areas: Pascal Lamy – South China Morning Post

Report on US-China Geostrategic Competition and its Implications for Sustainable Development Goals

1.0 Executive Summary

An analysis of remarks by Pascal Lamy, former Director-General of the World Trade Organization, indicates that the prolonged geostrategic competition between the United States and China poses a significant threat to the achievement of the United Nations Sustainable Development Goals (SDGs). The rivalry, shifting from trade tariffs to the weaponization of strategic supply chains, undermines global partnerships (SDG 17), jeopardizes economic stability (SDG 8), and hinders innovation and industrial progress (SDG 9).

2.0 The Nature of the Rivalry and its Impact on Global Stability

The ongoing competition between the US and China is characterized as a long-term, “bumpy” relationship driven by a mutual ambition for global leadership. This dynamic directly contravenes the principles of international cooperation essential for sustainable development.

• SDG 16 (Peace, Justice, and Strong Institutions): The geostrategic competition weakens multilateral institutions like the WTO and promotes unilateral actions over collaborative governance, undermining global peace and stability.
• SDG 17 (Partnerships for the Goals): The rivalry fundamentally challenges the global partnership required to address complex issues such as climate change, poverty, and health. The shift towards strategic decoupling erodes the trust and cooperation necessary for achieving the 2030 Agenda.

3.0 Economic Decoupling and its Threat to Sustainable Growth

The report highlights a strategic shift beyond tariffs towards “decoupling” in sensitive sectors and the “weaponising” of comparative economic advantages. This trend has severe implications for inclusive and sustainable economic growth.

1. SDG 8 (Decent Work and Economic Growth): The weaponization of supply chains creates volatility in global markets, threatening job security and sustainable economic growth. Disruptions can disproportionately affect developing economies integrated into these supply chains.
2. SDG 10 (Reduced Inequalities): Economic instability resulting from trade conflicts can exacerbate inequalities within and between nations. Developing countries are particularly vulnerable to supply chain disruptions, which can reverse progress in poverty reduction and inequality.

4.0 Strategic Sectors and the Challenge to Innovation and Industry

The focus on strategic competition in key industrial and technological sectors presents a formidable barrier to the goals of fostering innovation and building resilient infrastructure.

• SDG 9 (Industry, Innovation, and Infrastructure): Decoupling in strategic areas stifles the international collaboration necessary for technological advancement and innovation. It risks creating fragmented industrial ecosystems, hindering the development of resilient, sustainable infrastructure and inclusive industrialization on a global scale.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 17: Partnerships for the Goals: This is the most relevant SDG. The article’s central theme is the breakdown and challenging nature of the bilateral partnership between the US and China, which has global implications. It discusses trade, tariffs, and geostrategic competition, all of which are core components of the global partnership for development.
• SDG 16: Peace, Justice and Strong Institutions: The article discusses “geostrategic competition” and mentions the World Trade Organization (WTO). The trade war and “weaponisation” of economic sectors represent a move away from peaceful, rules-based international relations and undermine the effectiveness of global institutions like the WTO, which are designed to mediate such disputes.
• SDG 8: Decent Work and Economic Growth: The “trade war,” imposition of tariffs, and disruption of supply chains directly threaten global economic stability and sustainable growth. Such trade disputes create uncertainty and can negatively impact employment and economic activity worldwide, which is contrary to the aims of SDG 8.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization. The article directly contradicts the promotion of this target by describing a situation of escalating trade war, “reducing tariffs” only as a temporary “truce,” and the “weaponisation of strategic sectors,” which are actions taken outside the rules-based system personified by the WTO, whose former head is quoted.
2. Target 17.13: Enhance global macroeconomic stability, including through policy coordination and policy coherence. The article highlights a lack of stability and coordination, describing the relationship as “bumpy” with “ups and downs.” The persistent “geostrategic competition” and retaliatory actions are the opposite of the policy coordination and coherence needed for global stability.
3. Target 16.8: Broaden and strengthen the participation of developing countries in the institutions of global governance. The article implies a weakening of global governance institutions like the WTO. When major powers like the US and China engage in bilateral disputes and unilateral actions (“attention-grabbing tariffs”), it undermines the authority and effectiveness of these multilateral bodies.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Implied Indicator for Target 17.10: The article mentions “reducing tariffs and easing some export controls.” This implies that the level of tariffs and the number of non-tariff barriers or export controls are key metrics for measuring the openness of the trading system. An increase in these measures, as described in the context of the trade war, would indicate negative progress. This relates to the official indicator 17.10.1 (Worldwide weighted tariff-average).
• Implied Indicator for Target 17.13: The article describes the relationship as “bumpy” and a source of geostrategic competition. While not a formal SDG indicator, the volatility of bilateral trade flows or the frequency of trade disputes and retaliatory policy actions could serve as practical indicators of macroeconomic instability and a lack of policy coordination between the two nations.
• Implied Indicator for Target 16.8: The reference to the WTO and the description of a trade war suggest that the effectiveness of global governance is at stake. An implied indicator could be the number of trade disputes settled through multilateral mechanisms (like the WTO) versus those addressed by unilateral actions (like tariffs). The article’s content points to a rise in unilateral actions, indicating a weakening of the institution’s role.

4. SDGs, Targets, and Indicators Table

Source: scmp.com