Trade Liberalization by Hegemonic Powers vis-à-vis a Rising Challenger: A Comparative Analysis of Divergent Security Outcomes

Abstract

Thucydides’s famous trap posits that the rise of an emerging power, and the fear that this instills in the established power, makes war inevitable. This two-and-a-half-millennia-old maxim—one of the more frequently quoted aphorisms in international relations—is often the lens used to analyze China’s recent economic growth and political assertiveness and the US response to it. In Destined for War: Can America and China Escape Thucydides’s Trap?, Harvard scholar Graham Allison tested Thucydides’s theory by reviewing 16 cases where a rising power challenged a ruling power. Allison concluded that based on “the historical record,” a war between the US and China in the next decade “is more likely than not.”

Given the instrumental role it played in China’s remarkable economic development, the US agreement to China’s accession to the World Trade Organization (WTO) in 2000 is often portrayed as a mistake of historic proportions, and an unprecedented act of geostrategic naiveté and economic self-harm. In a broad historical context, the phenomenon of the global hegemon pursuing free trade, which ends up disproportionately benefitting its nearest rival(s) and ultimately ends its hegemony, is not without precedent; Britain was the world’s first industrialized economy, and its nineteenth-century trade liberalization significantly accelerated the industrialization and economic development of both the United States and Germany, ultimately ending British hegemony. Of the 16 historical precedents cited by Allison, these two (UK and US; UK and Germany) stand out as the only ones where the established power actively facilitated the economic development of the rising power through trade; they are thus the two precedents most directly comparable to the US and China rivalry. This thesis analyzes the two historical precedents of the Anglo-American and Anglo-German rivalries and considers if the US economic openness to China was a national security mistake in this historical and comparative context. It concludes that US actions vis-à-vis China in the 1990s were consistent with the American liberal internationalism post-World War II, and therefore not a mistake. The US-China conflict posited in Thucydides’s Trap is far from inevitable, and despite burgeoning rivalry in recent years, there are a number of important factors militating against a global US-China war. The Anglo-German rivalry leading to World War I does not represent the most likely future course for US-China relations.