Anti-Globalisation Sentiment will make the Super Economies Winners or Losers?


Introduction
Anti-globalization movement is a social movement which criticizes economic globalization. It is now like the weather, something we can moan about but not alter. The world has been recently facing a new backlash against economic globalization. The trend is shifting from globalization to protectionism in order to eliminate unfair competition, protect domestic businesses, safe guard jobs or simply for political reasons. Post the global financial crisis of 2008, a pledge was signed by the G20 leaders to avoid protectionism to speed up economic recovery and give an impetus to growth. Ironically, countries including G20 partners have been accused of increasing trade restrictive steps since the financial crisis. The number of protectionist measures adopted by the G20 nations has increased in the past five years. BRICS account for 30% of the total steps taken since 2009.
The year 2016 observed the traditional examples – the US and the U.K of free trade appeasing populists while China defending globalization. Global economy has been weak owing to continuing slow international trade growth in the couple past years.

Anti-globalisation protesters in Seattle, 1999. Photograph: Eric Draper/AP

Globalization giving rise to global insecurities
Along with providing ample opportunities, globalization has also led to the formation of a gap between the world’s privileged and the unprivileged. Rising income inequalities has led to changes in the working class and has also resulted in unfair distribution of knowledge and skills, thus depriving a part of the society to proceed further. As a result, the less secure part of the pyramid which is of the opinion that they are losing their jobs to immigrants is now raising voices against globalization. They are stuck in the trap of prolonged unemployment and are slowly entering the vicious world of poverty.  The anxiety regarding immigration and trade is giving birth to populism in a number of countries including the US, thus, resulting in political insecurity.

World superpowers pushing a de-globalization wave

1) USA and Mexico
Building a Mexican wall is a symbol of American President Donald Trump’s fulfilment of his promise to reduce immigration. The wall is being built as a national security project more than meeting a promise. However, the Trump administration fails to realize that his attempt to create a man made barrier is not only giving rise to negative sentiments in the south but is also making it difficult for people to legally enter the United States. This action is also against the wish of majority Americans, 58% Americans are against the Mexican wall.

2) American Chinese Trade War
China had enjoyed a boom of exports for a very long time until it had to face a backlash from the USA. American President Donald Trump, who is known for taking bold initiatives, has imposed tariffs on goods worth $200 billon imported from China. Currently the tariff rate is 10% [1] on selected products which is set to increase to 25% if the two countries do not find a common ground for settlement. Most of the products imported from China fall into the categories of home appliances, cosmetics, electronics and automotives. China on the other hand also imposed tariffs on American goods worth $60 billion. Amidst the cold trade war between the two countries, it was the common man who had to cough up more money for the same products. Ideally, the intent of a tariff is to benefit a country’s domestic industries but the US-China trade war did more damage than benefit. It projected a highly conservative version of the US.

3) UK and European Union
United Kingdom’s rejection of the European Union in 2016 hit hard to not only those involved but also to the global spectators. It was a protest against the economic model which has been in existence since the past three years. The entire idea of the European Union was to provide each other what the individual nations could not provide to themselves. EU represents 12% [2] of the total demand for UK’s goods and services which also translates into 3.3 million jobs.

What is to be done?
The issue leading to the anti-globalization sentiment is that the benefits of globalization are being highly unrecognized. This is mainly due to negligence on the part of policymakers. The G20 Germany taskforce have a few recommendations, the first one being maintaining a more transparent and inclusive trading system. Trade Acts between nations need to be non-discriminatory and sans loopholes. Second suggestion is to make positive use of the digital trade potential. Trade practices related to e-commerce need to be worked on so that the nations can implement fair trade. The last recommendation is to foster investment to create sustainable businesses and to reap dual benefits.

References:
  1. CNBC- Trump’s $250 billion in China tariffs are now in effect, 2018
https://www.cnbc.com/2018/09/25/with-trumps-250-billion-in-china-tariffs-heres-what-will-cost-more.html
  1. The economic impact of Brexit: jobs, growth and the public finances, London School of Economics
https://www.lse.ac.uk/europeanInstitute/LSE-Commission/Hearing-11---The-impact-of-Brexit-on-jobs-and-economic-growth-sumary.pdf


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