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Economic peace offers the greatest assurance of world peace. Artificial trade
barriers invariably create bitter trade rivalry, bitter trade practices and
economic wars which have been in modern times a prelude to actual wars.
Discuss
i
“a revival of world trade [is] an essential element in the maintenance of world peace. By this I do
not mean, of course, that flourishing international commerce is of itself a guaranty of peaceful
international relations. But I do mean that without prosperous trade among nations any foundation
for enduring peace becomes precarious and is ultimately destroyed.”
ii
ABSTRACT
This paper examines how economic peace offers the greatest assurance of permanent world peace
as well as how artificial trade barriers invariably create bitter trade rivalry, vicious trade practices
and economic wars which in modern times have been prelude to actual wars. The opposite is also
true; economic wars can escalate to actual wars. It explains how this happens, like for example
through the artificial trade barriers which in one way or the other create tension between countries
like the Russia-Ukraine. It also goes ahead to include the effects of Covid-19 on the global
economy and generally how that affected diplomatic relationships between states. Lastly, it gives
recommendations on how economic disputes can be avoided and in case they are inevitable, it
gives examples of how to curb the escalation of economic wars to actual wars and thereby ensuring
world peace.
Keywords: economic peace, world peace, artificial trade barriers, trade rivalry, vicious trade
practices.
iii
Table of Contents
1.0. INTRODUCTION ......................................................................................................... 1
2.0. DEFINITION OF TERMS ............................................................................................. 1
2.1. Economic peace ......................................................................................................................................... 1
2.2. Permanent world peace ............................................................................................................................. 2
2.3. Artificial trade barriers ............................................................................................................................... 2
2.4. Economic Wars .......................................................................................................................................... 2
3.0. CORRELATIONAL ANALYSIS ................................................................................... 3
4.0. RUSSIA –UKRAINE WAR ............................................................................................ 4
4.1. Economic Relations Between Ukraine and Russia ........................................................................................ 5
4.2. Impacts On Global Peace ........................................................................................................................... 6
5.0. COVID-19 PANDEMIC ................................................................................................. 7
5.1. Covid 19’s effect on Economic Peace ........................................................................................................... 8
5.2. Covid-19 Pandemic’s Impact on Permanent World Peace............................................................................. 9
5.2.1. Deterioration of Global Peace Efforts. 10
5.2.2. Opportunity for Global Warmongers 11
5.2.3. The Strengthening of Crucial Political Grievances that Incite Conflict 11
6.0. ADDITIONAL EXAMPLES IN TRUTH OF THE STATEMENT ............................... 12
6.1. First Anglo-Dutch War .............................................................................................................................. 12
6.2. The Gulf War ........................................................................................................................................... 13
6.3. Formation Of the European Union ............................................................................................................ 13
6.4. Arabia and Somalia ................................................................................................................................. 14
6.5. Kenya and Uganda ................................................................................................................................... 14
6.6. China - U.S.A Trade War ........................................................................................................................... 15
6.7. Japan’s Invasion to China ......................................................................................................................... 17
7.0. RECOMMENDATIONS.............................................................................................. 19
8.0 CONCLUSION ............................................................................................................. 20
9.0. REFERENCES ............................................................................................................ 21
iv
1.0. INTRODUCTION
World peace discussions have always been relevant and continue to impact states’ responses to the
need for peace. Different propositions and approaches have been suggested in this regard, and
while all are helpful, a unique approach is presented; economic peace. Economic peace promotes
trade interdependence and market openness, factors that are the primary means of eliminating or
reducing conflicts between states. In addition, interdependence in trade provides a stable platform
for states to deepen economic integration, leading to more friendly interstate relations. Thus, in
the international arena, trade is important not only for development and prosperity but equally for
the promotion of peace, all the more making the subject of international trade particularly relevant
to the topic of world peace. Essentially, economic peace is a conduit for world peace. However,
the reverse of the ‘economic peace’ concept is also true. Disruptions to economic peace promote
conflicts and wars between states. Whenever there exist factors that tend to impede peaceful trade
between states, there is also the possibility of an actual war. This has been reflected in recent events
such as the Russia-Ukrainian war and the Covid-19 pandemic. As a result of the war and the
pandemic, the pre-existing economic peace has been disrupted, leading to panic and tension within
the international community. In addition, other factors such as trade barriers also limit free trade
and disrupt economic peace therefore causing economic tensions between states. Accordingly, the
consistent idea is that economic peace assures world peace while economic conflict breeds war
and fighting.
1
Rusette Bruce, et al ‘The Third Leg of the Kantian Tripod for Peace: International Organizations and Militarized
Disputes 1950-85’ [1998] International Organization 52(3) 441-467
1
The concept has gradually developed, ultimately culminating in the formulation of the economic
peace theory. Basically, this theory posits that economic interdependence is the groundwork for
peaceful co-existence between states.2 Economic interdependence, as proposed by the theory,
provides a conducive environment for peace since economic cooperation between states eliminates
or reduces the chances of a conflict. 3
2
Bejaoui Ilan, ‘The Economic Peace Theory’ [2014] available at
<https://www.researchgate.net/publication/305247091_The_Economic_Peace_Theory > accessed 11 February 2023
3
Gartzke Erik et al, ‘The complex structure of commercial peace contrasting trade interdependence, asymmetry, and
multipolarity’ [2016] 53 Journal for Peace Research 325
4
Balogun Femi, ‘World Peace’ [2017] available at
<https://www.researchgate.net/publication/340515749_WORLD_PEACE >accessed 11 February 2023
2
sanctions, boycotts, tariff discrimination, and strategic embargos, which essentially limits access
to a commodity of a strategic quality to a particular state. 5
Perhaps a good starting point in demonstrating the causal relationship between economic peace
and permanent world peace is the resolution adopted by the International Economic Conference
of 1927 which put forth:7
“[…] the conference, recognizing that the maintenance of world peace depends largely upon the principles
on which economic policies of nations are framed and executed…recommends that governments and peoples
of the countries represented should together give continuous attention to this aspect of the economic problem,
and looks forward to the establishment of recognized principles designed to eliminate those economic
difficulties which cause friction and misunderstanding in a world which has everything to gain from peaceful
and harmonious progress.”
The International Economic Conference was aware of the primal function of economic peace
towards the realization of permanent world peace; not oblivious of other factors such as political
causes which so often contribute to, or disrupt, the peace of the world. 8 C. Hull echoes this in his
statement by acknowledging sequentially the devastating effects of artificial trade barriers. He
posits that they “invariably create bitter trade rivalry, vicious trade practices and economic wars
which in modern times prelude actual modern wars.” 9
5
János Kemény, ‘Economic Warfare’ ( Springer, 14 September 2019) available at
<https://link.springer.com/referenceworkentry/10.1007/978-3-319-74336-3_629-1#chapter-info> accessed 12
February 2023
6
See, page xxx containing the quote
7
SIEGFRIED, A. (1930). Economic Tendencies Affecting the Peace of the World. Advocate of Peace through Justice,
92(4), 241–250. http://www.jstor.org/stable/20681498
8
Ibid.,
9
See, page xxx containing the quote
3
This is indeed so true, especially viewed in light of the recent studies which have concluded that,
as bilateral trade interdependence increases as a result of increased global trade openness, military
conflict is predicted to become less likely. 10 Furthermore, these studies also opine that, states with
good trade policies amongst them can be more peaceful because they practice good governance
and better international law application, and are therefore less likely to use force in their actions. 11
Furthermore, C. Hull acknowledges in his statement that, of all other factors that might act as
guarantees of permanent world peace, for example political, cultural and religious factors, the
economic factor is the greatest of all. 12 Other factors have indeed had a role to play towards the
assurance of permanent world peace, and their absence have significantly been felt (for example
during the religious wars propagated by the Latin Church against the Islamic rule in Asia). 13
However, in adopting Andre Siegfried’s approach, it is pointless to argue which among the factors
is the greatest; but to appreciate that, in the start, it is the defense of economic interests that may
lead to use of force or war. 14
In departure from too much theoretical explanation, the following real-life events will better attest
to C. Hull’s statement that indeed economic peace is the greatest assurance of permanent world
peace.
10
Jong-Wha Lee and Ju Hyun Pyun, (2009), Does Trade Integration Contribute to Peace? WORKING PAPER
SERIES ON REGIONAL ECONOMIC INTEGRATION NO. 24
11
Domke, W. K. 1988. War and the Changing Global System. New Haven, CT: Yale University Press.
12
Statement page
13
Massignon, L. (1915). ROMAN CATHOLIC CHURCH AND ISLAM. The Muslim World, 5(2), 129-142.
14
SIEGFRIED, A. (1930). Economic Tendencies Affecting the Peace of the World. Advocate of Peace through Justice,
92(4), 241–250. http://www.jstor.org/stable/20681498
4
4.1. Economic Relations Between Ukraine and Russia
Part of Russia’s ambition was to hold Ukraine tight to Russia economically and politically. Initially
his strategy was soft coercion, but it became more assertive and aggressive over time. It maintained
a grip on key sectors. Ukraine’s exports were still primarily to Russia, top security positions were
held by individuals with Russian passports, and it was completely dependent on Russian gas:
Ukraine had signed a very unfavourable gas deal in 2008, which committed it to being the largest
buyer of Russian gas, at a higher than market price. 15
The path to annexation began in Ukraine’s attempts to build closer political and trade relationships
with the EU. Ukraine was steadily integrating with the EU as part of its Association and Trade
Agreement and refused to abide by the Russian vision of the settlement. Since 2014, Russia has
been facing sanctions over its annexation of Crimea which have stunted the nation's economic
growth.17 In addition, it has also triggered damaging ripple effects on the global economy.
Ukrainian exports to Russia came to a halt after the annexation of Crimea – from $29 billion in
2011 to roughly $5 billion in 2021. Meanwhile exports to the EU almost doubled since 2012. China
is now Ukraine’s number one trade partner thanks to industries such as agriculture and steel.
Ukraine traditionally was closely integrated in the Soviet economy, and then the Russian
economy. Bilateral economic relations between the two states reached a watershed in 2014 when
Ukraine stopped purchasing gas from Russia. Ukraine shifted to buying it on the free European
market, importing through Hungary, Poland, and Slovenia, and using its domestic gas storage
facilities to sustain supply during high-demand periods. This prevented Russia from threatening to
‘turn off the taps’ to Ukraine to exert pressure directly through energy. 18
15
Ukraine-Russia relations | Chatham House – International Affairs Think Tank
16
‘Economic Impact of the 2022 Russian Invasion of Ukraine’, , Wikipedia (2023)
<https://en.wikipedia.org/w/index.php?title=Economic_impact_of_the_2022_Russian_invasion_of_Ukraine&oldid=
1137804138> accessed 11 February 2023
17
"Ukraine-/Russia-related Sanctions". U.S. Department of the Treasury. n.d. Archived from the original on 23
February 2022. Retrieved 19 February 2022.
18
Ukraine-Russia relations | Chatham House – International Affairs Think Tank
5
In the recent past, Ukraine has taken urgent steps to disconnect itself from the Russian electricity
grid, another Soviet legacy, and to find alternative sources of diesel fuel. Since the 2022 invasion
Ukraine will likely attempt to nationalize all Russian assets in the country. The Ukrainian and
Russian economies are key suppliers of commodities, including titanium (make passenger jets),
palladium (makes; cars, cellphones and dental fillings), wheat, and corn.19 Disruptions to the
supply chain of these commodities would keep prices high, intensifying for users of such
commodities. Significant escalation on energy prices has led into higher inflation though Russia
benefits now from high prices of oil – and in turn tax revenues – pivoting exports.20
Russia’s relationship with the EU is likely to remain adversarial until Russia’s strategic outlook
on Europe and its neighborhood changes, while international sanctions weaken Russia and increase
its dependence on China. The invasion may have expedited Ukraine’s integration with the EU and
completely isolated Russia as a pariah state.
In conclusion, the stifling economic relationship between Ukraine and Russia has led to the
disruption of global peace. Ukraine’s action to sideline the Russian market whilst gravitating
towards the Western market, increased Russia’s desire to occupy it in order to add another captive
market to its economic bloc. It is therefore indisputable that permanent world peace is primarily
premised on economic peace.
19
Katakey, Rakteem (25 March 2014). "Russian Oil Seen Heading East Not West in Crimea Spat". Bloomberg
L.P. Archived from the original on 25 March 2014. Retrieved 25 March 2014
20
Relations MSBM , ‘Effects Of War In Ukraine On The Russian Economy’ (The Organization for World Peace, 10
August 2022) <https://theowp.org/reports/effects-of-war-in-ukraine-on-the-russian-economy/> accessed 11 February
2023
21
Melander, Ingrid; Gabriela, Baczynska (24 February 2022). "EU targets Russian economy after 'deluded autocrat'
Putin invades Ukraine". Reuters. Archived from the original on 26 February 2022. Retrieved 26 February 2022.
6
5.0. COVID-19 PANDEMIC
The world has had its share of global challenges and pandemics, but nothing grievous and
unnerving like the covid-19 pandemic. Its impact has shaken the globe and affected different
sectors around the world. The covid-19 virus spread at an alarming speed paralysing not only the
socio-economic stability of many states but also the global economy as a whole; thus, threatening
permanent peace.
A fact quite inconspicuous about the virus, however, is the devastating effects it has had on the
world’s security and peace. In the United Nation’s Security Council press release of 2 July 2020,
the UN Secretary General Antonio Guterres began by acknowledging that the Covid-19 pandemic
has “profoundly affected” peace and security across the globe and therefore urged the Security
Council to utilize its collective influence to safeguard the millions of people affected by conflict
and already facing acute vulnerabilities.” 22 While he addressed the risks accompanying the
divisions entrenched by the Covid-19 virus, the secretary general did not aptly discuss the
propelling force behind those divisions. That propelling force was identified by Noureddine Erray,
Minister for Foreign Affairs of Tunisia, who was a member of the Security Council and also in
chambers. He put forth:
“[…] the global economy is heading towards another great depression. Strained food supplies, rising prices
and expanding unemployment could quickly escalate into political unrest, violence and conflict. Uncertainty
created by the pandemic has encouraged some actors to promote divisions, with disastrous consequences for
civilians. It is important to recognize new threats to international peace and security emanating from
pandemics, climate change and cybercrime. “It is clear that we cannot face such dangers using the same
instruments we have inherited from the old times,” he said. “A change of paradigm is highly needed.”…”23
Through Nourredine’s statement, the realization that the Covid-19 pandemic disrupted the
economic peace of the world that consequently led to the erosion of the permanent peace of the
world; therefore attesting to C.Hull’s statement, is now too eminent. Below are ways through
which the Covid-19 pandemic disrupted economic peace of various countries. Later on in this part,
a link will be established between the disrupted economic peace and the consequential erosion of
permanent world peace.
22
United Nations, (2020), COVID-19 ‘Profoundly Affecting Peace across the Globe’, Says Secretary-General, in
Address to Security Council, SC/14241
23
See, Ibid.,
7
5.1. Covid 19’s effect on Economic Peace
Most countries, if not all, experienced economic recession and ultimately a decline in economic
growth. According to World Bank, The COVID-19 recession has seen the fastest, steepest
downgrades in consensus growth projections among all global recessions since the 1990s.24
Subsequently, the pre-existing economic peace was altered promptly due to the imposition of trade
barriers such as sanctions, inter alia, in a bid to contain the highly contagious virus and secure its
citizens. Moreover, there was a decline in consumer spending, low demand for certain goods and
services like oil and gas, border closures and travel restrictions, and withdrawal of financial
support or investors. As a result, the increased political and economic tensions, reduced trade
flaws, and investments have impacted international economic interdependence and economic
cooperation deteriorated.
The harmful economic effects of the Covid-19 pandemic were felt by both importing and exporting
countries.25 The trade restrictions placed due to the Covid-19 pandemic as “fire lines” to curb the
spread of the virus soon became “fault lines” that led to the devastation of the global food system
import refusals and alerts, among other injurious trade practices.26 For example, in the early stages
of the pandemic when the virus was mainly confined to mainland China, Indonesia, Korea, and
Russia enacted import bans on both wild and live animals as well as animal-derived goods from
China, while Egypt prohibited the import of green ginger, garlic, and carrots from China. 27 Quite
starkly, a country like Vietnam imposed a total import ban on wild animals and any associated
goods coming from anywhere in the globe. 28
24
The World Bank, ‘The Global Economic Outlook during the Covid-19 Pandemic: A Changed World’, Feature (June
8th, 2020) available at <https://www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-
during-the-covid-19-pandemic-a-changed-world > Accessed on February 11th, 2023.
25
Kazunobu Hayakawa, Hiroshi Mukunoki, The impact of COVID-19 on international trade: Evidence from the first
shock, Journal of the Japanese and International Economies, Volume 60, 2021, 101135, ISSN 0889-1583,
https://doi.org/10.1016/j.jjie.2021.101135.
26
Chen, K. Z., & Mao, R. (2020). Fire lines as fault lines: Increased trade barriers during the COVID-19 pandemic
further shatter the global food system. Food security, 12, 735-738.
27
Agricultural Trade Promotion Center, Ministry of Agriculture and Rural Affairs of the People’s Republic of China
(ATPC). (2020). Analysis of technical trade measures in COVID-19 adopted by exporting markets on China’s
agricultural products. Retrieved from: https://mp.weixin.qq.com/s/rPZt-4m8gpgKzu3ShG0phA.
28
International Trade Centre (ITC). (2020). COVID-19 temporary trade measures. Retrieved
from: https://www.macmap.org/covid19.
8
As the virus spread to the entire globe, so did countries enact trade restrictions against each other
and the more excessive those restrictions became. 29 Governments all throughout the world
implemented lockdown measures that limited the movement of people and products, obstructing
trade flows at the local, regional, and global levels. One effect of these lockdown measures was
the interruption of the supply chain, which led to a bad supply shock. The common exportation
and importation of both raw materials and finished goods amongst different countries ceased.
Supply chains of various factories’ inputs were also disrupted resulting in shortages of raw
materials and goods, ultimately fluctuating prices. Countries were forced to sustain their national
resources and products. In essence, the crisis altered the pre-existing global economic
interdependence. Indeed, despite international trade being one of the key propagators of prosperity
for many decades, it rendered most countries vulnerable to disruptions in global logistics lines. 30
The vicious trade practices as well as the trade barriers as a result of the Covid-19 pandemic
illustrated above disrupted the economic peace of several countries, and inversely on the
permanent peace of the world as shall be seen below;
29
Chen, K. Z., & Mao, R. (2020). Fire lines as fault lines: Increased trade barriers during the COVID-19 pandemic
further shatter the global food system. Food security, 12, 735-738
30
Siddiqui, S., ‘Stock Markets Integration: Examining Linkages between Selected World Markets’ (2009) Volume 13
Issue 1 < https://doi.org/10.1177/097226290901300103 > accessed on February 11th, 2023.
31
Ide, T. (2021). COVID-19 and armed conflict. World development, 140, 105355.
32
Cederman, L. E., & Weidmann, N. B. (2017). Predicting armed conflict: Time to adjust our
expectations?. Science, 355(6324), 474-476.
33
Cederman, L. E., & Weidmann, N. B. (2017). Predicting armed conflict: Time to adjust our
expectations?. Science, 355(6324), 474-476.
9
them around the world. In another scale, violence has also happened to minorities and communities
suspected of transmitting the Covid-19 virus.34
Recent studies have shown that, Although it is theoretically possible that the virus's spread would
more directly affect conflict dynamics—for instance, by weakening a conflict party's leadership—
the effects of the pandemic on conflict dynamics primarily result from the policy responses adopted
and the economic and social repercussions that follow these responses as has already been seen
above.35 Unfortunately, the policy changes have provided both state and non-state actors the
chance to strengthen their hold on the situation and weaken their rivals, which has also made it
more difficult to achieve lasting peace. The economic and social repercussions of pandemic
measures also run the increasingly high potential of escalating already-existing global tendencies.
Together, these factors make it challenging for the pandemic to start or continue peaceful processes
for a number of reasons.36
34
Raleigh, C., Linke, A., Hegre, H., & Karlsen, J. (2010). Introducing ACLED: an armed conflict location and event
dataset: special data feature. Journal of peace research, 47(5), 651-660.
35
Katariina Mustasilta, (2020) FROM BAD TO WORSE? THE IMPACT(S) OF COVID-19 ON CONFLICT
DYNAMICS, European Union Institute for Political Studies.
36
Mustasilta, K. (2020). The effects of the COVID-19 pandemic on peace and conflict. IPI Global Observatory: New
York, NY, USA.
37
The 2022 UN Peacekeeping Budget: Signs of Progress or a Fleeting Moment of Consensus?
July 20, 2022by Daniel Forti
38
Examining the Longer-Term Effects of COVID-19 on UN Peacekeeping Operations
May 13, 2020by Cedric de Coning
10
5.2.2. Opportunity for Global Warmongers
Second, although leaving people more exposed and vulnerable to violence, policy responses to the
epidemic provide chances for both state and non-state actors to strengthen or advance their
authority and undercut their rivals. Several armed organizations appear to have sought to
weaponize the worldwide economic shock for their own gain, particularly in the early months of
the epidemic. Local armed groups and also players like the Islamic State (ISIS) expanded their
violent actions when authorities were under pressure to reallocate resources, including military
resources, to impose policy measures. 39
For instance, ISIS clearly urged its members to conduct assaults and spread the disease, 40 and the
violence associated with the group grew in locations like Mozambique and Iraq. 41 Similar to this,
conflicting political forces and local armed groups seem to have employed epidemic methods in
conflict-ridden environments like Yemen and Libya to increase their territorial control and
authority, obstruct the flow of others (including humanitarian supplies), and delegitimize their
rivals.42
39
Mustasilta, K. (2020). The effects of the COVID-19 pandemic on peace and conflict. IPI Global Observatory: New
York, NY, USA.
40
The Conversation, (2020), “Islamic State calls for followers to spread coronavirus, exploit pandemic
and protests”
41
Tonderayi Mukeredzi, (2020) Mozambique’s Insurgency Is a Regional Problem:
Rising extremist violence in the country’s oil-rich north threatens stability in southern Africa—and requires a
coordinated response.
42
Acaps, (2020), COVID-19 IN YEMEN: State Narratives, Social Perceptions, and Health Behaviours, thematic
report
43
Hardy, B. L., & Logan, T. D. (2020). Racial economic inequality amid the COVID-19 crisis. The Hamilton Project,
1-12.
11
misinformation and conspiracy theory efforts that are being disseminated throughout the globe in
real time online also exploit these complaints. Despite being a largely good factor in our society,
digitalization may also make it possible for bad actors to use the pandemic as a tool to divide and
foster distrust among people. 44
In conclusion, the pandemic has had a profound impact on the economic peace of countries all
over the world, exposing existing inequalities and tensions in many countries and therefore
impacting on the permanent peace of the world. However, it is critical to remember that the
pandemic is a global crisis that affects us all, and it will require a collaborative effort to address its
consequences and prevent it from endangering global permanent peace.
44
Mustasilta, K. (2020). The effects of the COVID-19 pandemic on peace and conflict. IPI Global Observatory: New
York, NY, USA.
45
The Dutch Golden Age, ‘The seas are Dutch, The first Anglo-Dutch war (1652-1654)’ <
http://thedutchgoldenage.nl/wars%20and%20battles/the%20dutch%20and%20the%20sea/first%20anglo-
dutch%20war.html >
46
Wikipedia, ‘First Anglo- Dutch War’ (Wikipedia, 13 January, 2023) < https://en.wikipedia.org/wiki/First_Anglo-
Dutch_War#Outbreak_of_war >
47
Rickard, J. (11 December 2000), First Anglo-Dutch War (1652-1654), History of War
12
6.2. The Gulf War
The conflict between Iraq and Kuwait was driven by economic tensions as Iraq claimed that
Kuwait was illegally exploiting its oil reserves and undercutting prices on the global market. This
tension was brought about by Iraq's inability to repay the debt that it had borrowed from Kuwait
to finance its military efforts during the Iran-Iraq War. Kuwait's demands for repayment were
followed by its increase in petroleum production levels which kept revenues down for Iraq and
further weakened its economic growth throughout the 1980s, Kuwait's oil production was above
its mandatory portion under OPEC which kept international oil prices down which was a vicious
trade practice. Iraq interpreted the Kuwaiti refusal to decrease oil production as an act of
aggression towards her economy, therefore creating hostilities between them and leading to the
invasion of Kuwait by Iraq.48
The European Economic Community led to the creation of The European Customs Union under
the agreement the custom duties were to be reduced by 30%. In 1961 there was a common external
tariff in 1961. 51This meant that goods and service within the Europe moved more freely and that
they had leverage when trading with foreign countries. This were the first steps towards the
formation of the European Union. This later to elimination of all trade barriers among members of
the European Union and now trade in Europe is done without both tariff and non-tariff barriers.
The supply chains and markets in Europe are interlinked and European countries are interlinked. 52
The economic peace in Europe has led to interdependence among the European Countries. Europe
has enjoyed peace and stability for about 5 decades. France and Germany who were the main
48
The Gulf War 1990-1991
49
The Birth of the European Union: Challenging the Myth of the Civilian Power Narrative
50
www.european-union.europa.eu
51
Cambridge University Press: European Economic Community https://www.jstor.org/stable/20689858
52
Columbia Journal of International Affair: Intra-European trade and European Integration
https://ww.jsotr.org/stable/243545415
13
protagonist in both World war has gone from hostility to being the most integral relationship
Europe. 53 Even though there are still areas of friction among the members, the conflict is solved
through diplomatic ways. This is because states see the European Union as essential to their own
survival and trading partners as integral to their industries. Therefore, economic peace the greatest
assurance for peace in Europe.
Therefore, the economic peace between Saudi Arabia and Somalia has led to permanent peace
between the two states.
The border issues between the two countries still persists especially on the Migingo Island with
both countries claiming that the Island is its territory.58 However there has not been any military
intervention that has been sought as the two countries consider each other as essential trading
53
Egmont: Germany and France and European Integration https://ww.jstor.org/stable/44833637
54
www.reuters Hijacked Saudi Tanker reaches Somalia
55
Tradingeconmies.com – Saudi Arabia Imports from Somalia
56
Trans African Journal of History Intermittent Tensions in Uganda https://www.jstor.org/stable/24520421
57
Treaty Establishing the East African Community of 1999
58
www.aljazeera.com Migingo Island: African ‘Smallest War”
14
partners. The economic dependence of the two countries is the greatest deterrence of any war
efforts in the region. Therefore, economic peace between Kenya and Uganda has led to Permanent
world peace among them.
America now asserts that China's growth was the result of unfair competition. China allegedly
handles Chinese businesses differently 59. For instance, if you run a Western company, your
Chinese rival may not only have easier access to markets, but may also have received generous
tax breaks or free land on which to erect a factory. In addition, it said that China was using the
justification that America too stole secrets to steal its route to the top by taking technology from
overseas firms.60
Following his victory in the 2016 presidential election, Donald Trump's administration began
attempting to pressure China to alter its behaviour by imposing tariffs or levies on imported goods.
The typical tariff level on Chinese imports nearly doubled in 2018 as a result of American tariffs
of 25% placed on Chinese goods. Every American increase was followed by a corresponding rise
in China. For instance, China slapped extremely high taxes on soybean shipments from the United
States. Farmers in Iowa only grow this enormous commodity to export to China. Another
59
Eddy Bekkers, Sofia Schroeter ’An Economic Analysis of the US-China Trade Conflict’ (2020) Volume 4. World
Trade Organisation Economic Research and Trade Division.
https://www.wto.org/english/res_e/reser_e/ersd202004_e.pdf Date Accessed 2/12/23
60
The Economist. 2020. America v China: Why the Trade War Won’t End Soon. https://youtu.be/ErwIlvQ_RVk
15
illustration is how America placed severe limitations on select Chinese businesses, particularly
Huawei and those in the tech sector. 61
Businesses' investment decisions are impacted by their uncertainty about the markets that will be
available to them in the future as a result of this trade's effects on the global economy. The
International Monetary Fund (IMF) anticipates that the tensions brought on by the trade war will
lead economic growth to be much weaker in the future. Everyone is becoming more concerned as
the global economy slows down.62
China aims to replace America as the world's economic superpower, which has led to an increase
in hostility between these two nations over the years.63 Following this economic conflict, China
established the Belt and Road program with the goal of establishing new land and maritime trade
routes that would allow it to connect commercially with the world at large. It has also moved on
with developing infrastructure in other countries. However, they accomplish this by promoting
economic projects that offer prosperity while employing Chinese firms to complete the building,
which is simply exploitative. Then, China seized the highly important oil and natural gas resources
in the area as well as the stated commercial routes across the South China Sea. This was sparked
by the creation of artificial islands, which later developed into fortified military areas with the
express purpose of locating, tracking, and destroying the US Navy.64 As a result of Russia's rising
aggression in Europe, China may work with it to undermine the US economy, forcing it to decide
between going to war with China or Russia since it is unable to do both.
Taiwan, which is expected to be the starting point of any potential World War III, is the US's first
line of defence against China. Additionally, the Chinese National Party once had authority over
Taiwan. After martial law was lifted in Taiwan in the, the country slowly made the transition to
democracy. Beijing, however, disagrees with this viewpoint and maintains that both the mainland
61
Yukon Huang, ‘carnegieendowment.com’ (The U.S. – China Trade War Has Become a Cold War, September 16,
2021) <https://carnegieendowment.org/2021/09/16/u.s.-china-trade-war-has-become-cold-war-pub-85352> Date
Accessed 2/12/2023
62
Azimzhan Khitakhumnov, ‘eurasian-research.org’ (US-China Trade War: Economic Causes and Consequences,
March 25, 2020) <https://www.eurasian-research.org/publication/us-china-trade-war-economic-causes-and-
consequences> Date Accessed 2/12/2023
63
Richard Walker, ‘dw.com’ (China and the US: On Collison Course for War over Taiwan, 12/29/2022) <
https://www.dw.com/en/china-and-the-us-on-collision-course-for-war-over-taiwan/a-64225119 > Date Accessed
2/12/23
64
The Infographics Show. October 25,2022. US World War 3 Plan. https://youtu.be/qlNNetHEMYs
16
and Taiwan are still part of One-China and that Taiwan's government is an illegitimate one that
must be overthrown and returned to the mainland. Before all of these, Taiwan's security was
ensured by the US following its intervention to stop a final invasion of Taiwan by the Chinese
Communist Party in the 1950s. It kept connections with Taiwan and continued investing there and
selling arms, basically contributing to the economy of Taiwan.
It would be advantageous politically and economically to secure Taiwan. 65 The economics of?
After the US stopped domestic production of semiconductors owing to cost, Taiwan now supplies
50% of the world's supply. Because they are essential to every device and the foundation of the
global economy, semiconductors are becoming just as valuable as oil and natural gas. About 25%
to 30% of transistors are made in China. As a result, if China were to regain control of Taiwan, it
would become the top producer of semiconductors globally. By simply refusing to sell chips to
any country that disputes with it, it would logically shut down that country's economy. Political
reasons? The "first island chain," which includes Taiwan, serves as a very real obstacle to the
spread of Chinese dominance in the Pacific. It would be challenging for the US to uphold its
obligations to protect Japan and the Philippines if China were to seize Taiwan. Despite China's
threats, the US continues to supply China with armaments, and lately, US President Joe Biden
declared that the US would defend Taiwan in the event of an attack.
This example of the trade war goes to show that economic war can escalate quickly to actual war.
If there was economic peace between the US and China, there wouldn’t be a threat of warfare in
the world and peace would be assured.66
In 1931, Japan invaded Chinese Province of Manchuria seeking raw materials to boost its growing
industries. By 1937 Japan controlled large sections of China. War crimes against the Chinese
people became commonplace. Armies of Japan and the Soviet Union later clashed in 1939 due to
65
Xu Xiaobing, ‘scmp.com’ (War over Taiwan could be inevitable as US, China and Taipei boost military spending,
2023) < https://www.scmp.com/comment/opinion/article/3205450/war-over-taiwan-could-be-inevitable-us-china-
and-taipei-boost-military-spending > Date Accessed 2/12/2023
66
Linda Gorman ‘How the US China Trade War Affected the Rest of the World’ (2022) Volume 4. The Digest.
https://www.nber.org/digest/202204/how-us-china-trade-war-affected-rest-world Date Accessed 2/12/2023
17
Japan’s invasion to China in the area of the Khalkin Gol river in Manchuria and the battle lasted
four months.67
The United States, along with other countries, criticized Japanese aggression but shied away from
any economic or military punishments. 68 Relations between the U.S. and Japan worsened further
when Japanese forces took aim at Indochina with the goal of capturing oil-rich areas of the East
Indies. Responding to this threat, the United States placed an embargo on scrap metal, oil and
aviation fuel heading to Japan and froze Japanese assets in the U.S. 69 Furthermore, the U.S.
demanded that the Japanese withdraw from conquered areas of China and Indochina. Japan,
sensing conflict was inevitable, began planning for an attack on Pearl Harbor by April, 1941. The
alliance systems of Japan, Germany and Italy were put into action by this time.70
The Japanese bombing of Pearl Harbor on December 7, 1941 brought the United States officially
into World War II. This rivalry continued for years between U.S armed forces and Japan and more
lives were lost from both sides as the Japanese became even more vicious fighters. Every victory
cost more time, material and lives.71
The invasion of China by Japan is another classic example that demonstrates how economic peace
is the greatest assurance of permanent world peace. In 1929, China and the United States restricted
their exports to the Japanese market due to the Great Depression brought on by the Wall Street
Crash. As a result of the trade restrictions put in place by key trading partners, including China
and the United States, Japan was unable to import products for its growing industries. 72 Japan
purposefully invaded China to acquire raw materials from it. With good economic links, the two
countries could have traded not only for raw materials but also for any other necessities that one
of the countries wanted. As a result, Japan could have obtained the raw materials without resorting
to force. Therefore, it is indisputable that poor economic ties between nations breed hostile
interpersonal relationships, which in turn fuel the kind of war depicted above, one that affects not
just the two countries but also a number of other countries. This poses a threat to the stability of
67
Https://www.trumanlibrary.gov/education/presidential-inquiries/invasion-manchuria
68
Proclamation Defining Terms for Japanese Surrender (Excerpted)
69
A collision in the Pacific; Digital History ID 3489
70
Excerpts from President Franklin Roosevelt’s speech to Congress, December 8, 1941
71
Newspaper article December 8, 1945, chronicles of WWII
72
The Japanese invasion of Manchuria (1931-1933) - Revision Cards in GCSE History (getrevising.co.uk)
18
world peace. Considering countries will always be dependent on one another for goods they cannot
produce within their national borders, 73 the sustainability of permanent world peace is jeopardized
as long as economic rivalry endures.
7.0. RECOMMENDATIONS
Based on the discussion, we can note that positive peace and superior economic performance are
co-dependent to one another. International world peace serves as a predictor of better economic
and corporate outcomes consequently improving the PPI score and GDP of a country.74
The Russia-Ukraine crisis is a current example of an era that is shaped by hostile competition over
security, economic, energy and ideological interests. Ukraine and the countries supporting it are
weakened by high energy bills, disinformation and refugees propelled by Russia. Rather than
ending the connectivity between other governments and Russia, we should try to devise rules and
norms to disarm it. 75 Regular diplomatic communication and collaboration can help resolve
conflicts peacefully as underlying causes of conflict can be addressed e.g., political instability.
Promoting international law and institutions can provide a framework for resolving disputes.
Examples include upholding the principles of national treatment and most favoured nation as
provided by GATT76 and TRIP77 agreements by WTO. It requires WTO member states to treat
imports no less favourably than similar domestically-produced goods once they have passed
customs. This ensures non-discrimination.
Businesses among countries should share information about the security, economic and social
dynamics of their environments to avoid exacerbating conflicts. Businesses operating in such
environments can then adopt conflict-sensitive practices. This can be facilitated by transparency
initiatives such as the EITI 78 which sets standards for production, revenue collection and allocation
in the extractive industries overseen by a multi-stakeholder group in each country.
Creation of marketing initiatives to cross borders. For example, in the Coke Small World
campaigns linked people in Pakistan and India through Coca Cola vending machines which
73
Introduction to the Laws of Kurdistan, Iraq; Working Paper Series; pg;4
74
Positive Peace Report 2020
75
Mark Leonard, The Age of Unpeace; How Connectivity Causes Conflict, 2021
76
Article 3, General Agreement on Tariffs and Trade, 1947
77
Trade Related aspect of Intellectual Property, 1995
78
Extractive Industries Transparency Initiative, 2003
19
increased intercultural understanding. In addition, this concept is rewarded by BMW Group in
collaboration with the UN Alliance of Civilizations annually. Boosting workforce diversity
regardless of their ethnicity, gender and faith would allow peace and understanding in the
economic sector. This can be followed by emergence of social movements during, for example,
boycotts.
8.0 CONCLUSION
The thought that trade between nations specifically and economic interdependence generally
reduces conflict between nations has a long tradition in the history of economic thought and now
that of international relations. 79 The argument being that, states cannot risk to put in jeopardy the
welfare gains that they reap from trading with other nations through engaging in trade- disruptive
activities such as war. Cordell Hull believed that you could not separate the idea of war and peace
and that the wars were commonly caused by bitter economic rivalry. 80 He held onto the idea that
more flow of trade in the sense of fewer discrimination and obstructions would eliminate the
economic dissatisfaction that breeds to war and this would give a ng peace. The paper clearly
shows that there is all to gain in the global trade set up and more to lose as the benefits from trade
will dwarf any potential conflict. Hence, we conclude that more economic cooperation, reduction
of trade barriers and increased capital flow between countries will create a more peaceful world.
79
Mediawiki.middleburry.com- cordel hull
80
Iwin douglas, Petro C Mavroidis-the genesis of GATT;Cambridge university press,2008
20
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31. July 20, 2022by Daniel Forti,
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CAT ASSESSMENT PRESENTATION SCORE SHEET
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