Trade and Peace

On 21 September, 2016, I went to a conference organized by the Islamabad Policy Research Institute called, “China-Pak economic corridor”. One of  the panelists discussed the impact of trade on peace between nations. The speaker presented the “McDonald’s Theory” by Thomas Friedman (though he gave it the more serious sounding name “Golden Arches Theory of Conflict Prevention), which says that, “No two countries with McDonald’s have gone to war with each other.” It basically promotes the idea that globalized trade fosters peace and cooperation.

The first thing I thought of was the line in the spy thriller The Recruit spoken to an American, “Your nation has such good food. Did you know that no country with a McDonald’s has ever attacked the United States?” The whole idea has merit, for a lot of countries have had McDonald’s for decades, but the only six conflicts that have taken place between nations with McDonald’s franchises (US invasion of Panama, NATO bombing of Yugoslavia, Kargil War, 2006 Israel-Lebanon war, 2008 South Ossetia war, and the 2014 Crimean crisis) have been brief or limited.

However, I think the example given in the lecture was not a good one and that the movie quote is more valid. In war, trade between the two belligerent nations is typically halted. So, if the consequences of halting that trade is greater than what they hope to gain from the war, it might make countries prefer peace. McDonald’s is based in the US. War between two other nations may not be hindered by the presence of McDonald’s and the US may very well attack a country with McDonald’s (like with Yugoslavia and Panama) but a country with McDonald’s would be unlikely to go to war with the country the fast food chain came from.

IPRI’s seminar was on regional trade, (in this case region being South and East Asia). McDonalds is not a good example of regional integration through trade as the franchise comes from the US. If two neighboring countries trade their goods and services with each other so as each constitutes a healthy and lucrative market for the other, the government in each country would desist going to war with the other. It is really about a good economy and trade relations rather than just globalization.

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