Can glo­ba­li­za­tion sus­tain the eco­no­mic ti­de that rai­ses all ships?

Des­pi­te its sta­tus as an eco­no­mic su­per­po­wer, it is the U.S., un­der Do­nald Trump, that is sha­ping the na­rra­ti­ve on the abu­ses of glo­ba­li­za­tion

La Jornada (Canada) - - ENGLISH SECTION -

Mo­dern glo­ba­li­za­tion is crea­ting a lar­ge num­ber of dis­con­tents.

Nu­me­rous coun­tries feel they’ve been short­chan­ged over the eco­no­mic be­ne­fits of glo­ba­li­za­tion and free tra­de. This gro­wing list in­clu­des many de­ve­lo­ping coun­tries and, sur­pri­singly, a few de­ve­lo­ped coun­tries.

One of the lea­ding coun­tries dis­con­ten­ted with glo­ba­li­za­tion is the Uni­ted Sta­tes. Des­pi­te its ico­nic sta­tus as an eco­no­mic su­per­po­wer, Ame­ri­ca is sha­ping the na­rra­ti­ve on the abu­ses of glo­ba­li­za­tion and the im­per­fect ru­les of in­ter­na­tio­nal tra­de.

Pre­si­dent Do­nald

Trump spi­ces up his op­po­si­tion to glo­ba­li­za­tion with emo­tio­nal rhe­to­ric. He says the U.S. isn’t in­ter­es­ted in the con­tem­po­rary mo­del of free tra­de but it is in­ter­es­ted in fair, ba­lan­ced and re­ci­pro­cal tra­de. He re­fers to the U.S. tra­de de­fi­cit as the down­si­de of glo­ba­li­za­tion.

Trump un­der­li­nes the­se tra­de im­ba­lan­ces and the lack of re­ci­pro­cal eco­no­mic be­ne­fits as proof that Ame­ri­ca’s tra­ding part­ners are ta­king un­fair ad­van­ta­ge of the U.S. eco­nomy. He al­so says he fa­vours bi­la­te­ral over mul­ti­la­te­ral tra­de agree­ments.

Con­tem­po­rary glo­ba­li­za­tion is about tra­de li­be­ra­li­za­tion and the ex­pec­ta­tion that this eco­no­mic world or­der will crea­te the ti­de that rai­ses all ships.

In­deed, glo­ba­li­zed tra­de was ex­pec­ted to be the great eco­no­mic equa­li­zer, the ca­talyst for world­wi­de pros­pe­rity.

But the­re’s a swee­ping ap­prehen­sion that glo­ba­li­za­tion hasn’t mea­su­red up to the­se ex­pec­ta­tions. It hasn’t brid­ged the gap bet­ween eco­no­mic op­por­tu­nity and per­so­nal pros­pe­rity in de­ve­lo­ped and de­ve­lo­ping coun­tries.

In so­me ins­tan­ces, the dis­pa­rity in eco­no­mic well-being has wi­de­ned ins­tead of sh­rin­king. In­deed, the eco­no­mic be­ne­fits of glo­ba­li­za­tion re­main a work in pro­gress.

Eco­no­mists ha­ve long ad­vo­ca­ted the be­ne­fits of in­ter­na­tio­nal tra­de. Adam Smith re­fe­rred to the con­cept of ab­so­lu­te ad­van­ta­ge in in­ter­na­tio­nal tra­de in 1776 and Da­vid Ri­car­do in­tro­du­ced his theory of com­pa­ra­ti­ve ad­van­ta­ge in 1817. Sin­ce then, eco­no­mics stu­dents ha­ve been taught the be­ne­fits of in­ter­na­tio­nal tra­de ba­sed on an ex­port-led growth mo­del.

Free-tra­de agree­ments are cer­tainly an im­pro­ve­ment over pro­tec­tio­nism. They be­ne­fit con­su­mers, bu­si­nes­ses and go­vern­ments. Con­su­mers get ac­cess to a wi­der choi­ce of pro­ducts at lo­wer pri­ces and bet­ter qua­lity. Bu­si­nes­ses ex­pand their mar­ket sha­re, achie­ving eco­no­mies of sca­le and im­pro­ving their pro­fits. And in­ter­na­tio­nal tra­de em­po­wers go­vern­ments to grow the eco­nomy, re­du­ce unem­ploy­ment and im­pro­ve the stan­dard of li­ving of their ci­ti­zens.

The di­saf­fec­tion with glo­ba­li­za­tion is a sym­ptom of national cir­cums­tan­ces rat­her than a con­cer­ted glo­bal mal­fea­san­ce. I’m re­min­ded of the words of Wi­lliam Sha­kes­pea­re in his play Ju­lius Cae­sar: “The fault my dear Bru­tus is not in our stars but in our sel­ves.” In ot­her words, it’s not glo­ba­li­za­tion that’s the pro­blem but the fun­da­men­tals of so­me national eco­no­mies.

Coun­tries can’t en­joy the be­ne­fits of glo­ba­li­za­tion if they’ve lost their com­pe­ti­ti­ve ad­van­ta­ge. In this fier­cely com­pe­ti­ti­ve in­ter­na­tio­nal en­vi­ron­ment, mar­gi­na­li­zed and di­sen­fran­chi­sed coun­tries should exa­mi­ne the fai­lings of their eco­no­mies rat­her than bla­me glo­ba­li­za­tion for their mis­for­tu­ne.

A free-tra­de agree­ment is simply an eco­no­mic op­por­tu­nity. It’s not a gua­ran­tee of eco­no­mic suc­cess. It opens the door for en­han­ced tra­de op­por­tu­ni­ties with ot­her coun­tries that didn’t exist prior to the agree­ment.

What trans­forms eco­no­mic op­por­tu­nity in­to a bu­si­ness suc­cess story is the vi­sion and smarts of do­mes­tic en­tre­pre­neurs, plus the com­pe­ti­ti­ve­ness and qua­lity of their pro­ducts and ser­vi­ces.

In the new eco­nomy, suc­cess de­pends on our smarts, our glo­bal mind­set and our pro­duc­ti­ve en­ter­pri­se.

Glo­bal en­ga­ge­ment th­rough tra­de is the wa­ve of the fu­tu­re and should be the de­fi­ning fea­tu­re of the eco­nomy of the 21st cen­tury.


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