ISAS Working Papers

What is the likely impact of the assault on the international trading system by the United States (US) President Donald Trump that has developed into a major confrontation between Washington and Beijing? In particular, how would this spat affect Asia and the Continent’s less developed nations? Should these countries give up the hope that they too could follow the model of export-led growth adopted by what the World Bank, in its 1993 study, called “East Asia’s miracle economies”? 2 This paper will attempt to answer these questions by using Pakistan as a case study. The main conclusion offered in this paper is that Trump’s focus on bilateralism rather than multilateralism in the trade arena could be turned into an opportunity for the South Asian nations. They could restore trade relations among themselves that were disrupted by British India’s 1947 partition and the creation of the independent states of India and Pakistan. It would also have an impact on the potentially multi-trillion dollar Belt and Road Initiative. Launched by China, it is aimed at connecting it and the Asian countries to its west by roads and railways to Europe and Africa. This would create a new geo-economic entity in which China would be the principal player. Such an entity could affectively challenge what has been the US-dominated international economic and trade system created in stages after the end of the Second World War. There is some irony in the fact that that the system is under assault by the US, its founder.