27 Jul 2017 11:00am

Debate: has globalisation had its day?

In this month's debate we ask: are we beginning to see the end of the potent political force that is globalisation?

Caption: The deglobalisation trend and protectionism are on the rise.

Valdis Dombrovskis, vice-president of the European Commission, on Twitter

“Tech innovation, digital revolution and globalisation are transforming our lives. They do increase pressure on our companies, workers and government.”

George Ritzer, distinguished professor at the University of Maryland and author of The McDonaldization of Society

“The misguided idea that globalisation has had its day has come to the fore (again) because of such recent global events as Donald Trump’s ‘America Firstism’, the UK’s exit from the EU, and the increased strength of the European right.

“While all of these developments are important, they must be viewed in a broader context of changes in the worldwide multidirectional flow of people, information, ideas and objects. Those flows are sometimes expedited, but at other times they are slowed, or even blocked, by barriers.

“They have been expedited for decades, but a counter-reaction has arisen due to the excesses, real or perceived, of the growth of openness to such flows. While the counter-reaction against ‘globalism’ can still have a great impact, it is not going to end globalisation. Globalisation is multi-faceted. While the flow of people may be slowed in some parts of the world, the flow of information and ideas is accelerating by the day.”

Li Keqiang, premier of the State Council in China, giving a speech in March

“Developments in and outside China require we are ready to face more complicated, graver situations. World economic growth is sluggish, the deglobalisation trend and protectionism are growing. There are many uncertainties about the direction of the major economies’ policies and their effects, factors that could cause instability and uncertainty are visibly increasing. China is at a crucial and challenging stage in its development endeavours, and there are many challenges and problems in the economy.”

Jean Stephens, CEO of RSM International

“The journey towards globalisation will not stop, though it may have just got a little longer. The internet has changed the rules, and as long as data can travel across borders, globalisation will continue to be a powerful force.

“However, travelling around the RSM network, I have seen the impact of diverging regulation and protectionism on businesses. In Australia, the removal of the 457 visa will make it more difficult for growing businesses to find international talent; in the UK the short- and long-term implications of Brexit could introduce a host of barriers to trade and, globally, momentum for a more cohesive international tax system seems to be fading.

“Small and medium-sized businesses are still going to aspire to become multinationals but it will require more knowledge, grit and perseverance. Globalisation is not in retreat, but it is taking a new, slightly bumpier course.”

George Osborne, former chancellor, speaking to the BBC

“Both Theresa May and Jeremy Corbyn are offering, in very different ways, a retreat from international liberalism and globalisation. And that’s quite a development in British politics, and I think there are quite a lot of people who are uncertain whether that is the right development”

Peter VAN Bergeijk, professor of international development economics at Erasmus University Rotterdam and author of On the Brink of Deglobalisation

“Are we on the brink of deglobalisation? Organisations, such as the IMF and OECD, point out that world trade is no longer performing its role as an engine of economic growth. Importantly the official forecasts of IMF and OECD are optimistic in the sense that they assume that the policy errors of the 1930s can be avoided, in particular the political twin sins of isolationism and protectionism. 

“Current developments are sobering. America is to be made great again, the (dis)United Kingdom will divorce itself from everything that smells like Brussels and on the Continent self-congratulation on fending off extreme nationalist parties disables politicians from seeing the underlying problem. We are on the brink of deglobalisation.”

Alexander Stubb, former Finnish prime minister and minister of finance, on Twitter

“You cannot lead the world or be a champion of globalisation if you reject them both. That is why the US is losing ground as a superpower.”

Lee Hopley, chief economist of the EEF

“Reports of the demise of globalisation emerged as growth in the world economy, and global trade in particular, failed to stage much of a recovery following the financial crisis. Analysis from those in the know – the OECD, IMF and ECB – indicated that protectionist measures, issues with trade finance and the unwinding of global value chains were significant in explaining these trends.

“Following discussions with manufacturers we find these conclusions difficult to argue with. They have been at the sharp end of what were temporary changes to tariffs and preferential treatment of domestic firms in overseas markets, for example. We aren’t assuming the synchronised improvement in the world economy will wipe out these structural challenges to global trade that have been building over the past decade. But nor are we calling for the end to globalisation.

“Nevertheless, it is a different landscape that companies will be navigating, and one that could be more subject to change, in the near term. The likelihood of further liberalisation also looks to have diminished. Policymakers can (and should) ensure that a new wave of globalisation isn’t derailed by fixing structural disorders and removing barriers to trade.”

Ann Pettifor, director of the think-tank Policy Research in Macroeconomics (PRIME)

“While globalisation – or financial liberalisation – is not dead, it is increasingly unpopular. Unfortunately, public anger and concern focus on the tangible outcomes of free, unmanaged flows of capital, trade and labour, and not on intangible, invisible and unaccountable global finance. Advocates of globalisation as well as their opponents continue to draw attention to flows of trade and labour, thereby deflecting attention from that which is most causal of instability and insecurity: financialisation of the global economy – when banks and the finance sector dominate and distort the real economy – of jobs, investment and production.”

Angel Gurría, secretary-general of the OECD

“We’re beyond quick fixes to address the discontent of citizens. There is no returning to the past. Too many things are not working for too many people. The only way forward is not to patch up globalisation, but to shake it up.”