The Renewed Backlash Against Globalization
From voting booths across the globe, citizens have been casting their ballots for candidates who support pulling back from a chaotic world, tightening immigration and adopting protectionist trade policies. Short memories might lead some to believe this is a new trend, but the anti-globalization movement has been around for decades.
In 1992, Reform Party candidate Ross Perot railed against trade agreements, most notably the North American Free Trade Agreement (NAFTA). Anti-global trade protests have taken place whenever the World Trade Organization or international summits are held. But, argues Princeton University professor Harold James, the character of globalization and the backlash against it seems to have changed in recent years.
Technology has enhanced the ability to connect with individuals in foreign lands, but it has not increased the understanding between foreign people. Those who feel left behind by free trade are railing against those in foreign lands, not the products being produced in those countries.
“Instead of rejecting foreign products, opponents of globalization today are rejecting foreign people. Disputes over investor protection clauses in trade agreements like the Trans-Pacific Partnership or the Transatlantic Trade and Investment Partnership focus on concerns that arcane tribunals protecting the interests of foreign corporations can undermine national sovereignty,” he suggests.
The growing trend in populism and trade protectionism should not sway leaders from moving forward with trade deals, even those with obvious faults.
Washington Post columnist Robert Samuelson says the politicians in the US should not back away from embracing globalization, which he characterizes as the single most important post-Cold War organizing foreign policy principle.
“Just because globalization is flawed doesn’t mean that its nationalist substitute is superior. Creeping protectionism reduces the efficiencies created by large international markets. This would limit the possibility of lowering prices of traded goods and services. It would also foster more trade conflicts as countries aided local firms with more subsidies and protectionism,” he asserts.
While Samuelson makes his case in the context of the American political system, criticism of globalization is not confined to the US campaign trail.
Last month, the International Monetary Fund (IMF) released a paper that seemingly made the case against free trade when they said, “the benefits [of such policies] seem fairly difficult to establish when looking at a broad group of countries.”
The researchers acknowledge some benefits, but note that “costs in terms of increased economic volatility and crisis frequency seem more evident.”
While echoing the IMF focus on the economic impact of globalization, Ngaire Woods of the University of Oxford also makes the claim that globalization has contributed to an erosion of global governance as foreign governments have permitted a small group of very wealthy individuals to flout the rule of law.
If nothing is done to improve global governance, democracy itself could come under threat, she argues.
Pointing to the recent Panama Papers scandal which exposed a network of financial havens serving to protect millions of dollars held by despots, dictators and other international actors, Wood says the inequality caused by globalization is fueling a revolt against it.
“Across the developed and developing worlds, many suspect that the rich are getting richer because they are not held to the same rules as everyone else. It’s not hard to see why. As the global economy slows, breaches of trust by those at the top become more apparent. In the United Kingdom, Amazon, Starbucks, and Google attracted public outrage in 2013 for using loopholes to pay almost no tax, prompting the UK government to lead a G8 tax announcement aimed at reducing tax evasion and avoidance,” writes Wood.