A prevalent theory for more than a century is that trade reduces military rivalry between countries. Shared prosperity dampens national pride or jealousy. In the 20th century, the theory faltered after a few industrializing nations, such as Germany, used war to boost their access to markets and resources. The theory is now being tested again, oddly enough in the remote Himalayas.
On June 15 for four hours, soldiers from India and China engaged in hand-to-hand fighting over a disputed and desolate border. Both countries blamed the other for instigating their first deadly conflict in 45 years. Yet since the incident, both seem eager to prevent escalation. If peace prevails, there could be a renewed lesson about the benefits of cooperation in trade as well as the sharing of ideas and people. One war-making passion – revenge – would have been held in check.
India and China are the world’s two most populous nations. They also are neighbors that possess nuclear weapons. Yet perhaps their most important common trait right now is that they are eagerly trying to upgrade trade ties with other countries. China has its grand regional plan called the Belt and Road Initiative. India is pursuing bilateral trade pacts with Australia, the United Kingdom, and others. All that may be a damper on their flare-up along a mountainous border.
Even though China’s unelected Xi Jinping and India’s elected Narendra Modi are ardent nationalists, each feels pressure to end poverty. Their attempts to forge national identities along either religious or ethnic lines must bow to their people’s desire for economic interdependence and growth – and thus peace.
In addition, the global trading system set up after World War II comes with a big and often-used stick: economic sanctions on countries that engage in land grabs, such as Russia’s taking of Crimea in 2014.
Friction between nations arises when they perceive a scarcity – in material resources, access to markets, finances, warm-water ports for ships, and so on. But as scholar Steven Pinker proved in his book “The Better Angels of Our Nature: Why Violence Has Declined,” conflicts have declined over centuries as nations chose peaceful trade as a way to quell fears of scarcity. “Zero-sum plunder gave way to positive-sum trade. People increasingly controlled their impulses and sought to cooperate with their neighbors,” he wrote. And in 2008, a study by Sorbonne University found that multilateral openness in trade deters global conflict.
The rules of a principled international order need to be constantly reinforced and improved. That order helps guide nations on how to compete peacefully in order to avoid violent competition. India and China were able to contain their last border standoff in 2017. If they resolve their differences again in 2020, they might have learned to put the common good ahead of their separate anxieties.