Is globalisation over? The future of world trade

Saturday 28 October, 14:0015:30, Pit TheatreBattle for the Economy

Globalisation is the process by which national and regional economies, societies and cultures have become more integrated through global networks of trade, foreign direct investment, transport, telecommunications and immigration. Many argue that globalisation has been an enormous boon to worldwide living standards. For example, a former Swedish prime minister, Carl Bildt, notes that while the global population has trebled in his lifetime, international life expectancy has increased from 48 to 71 years, and incomes per head have risen five times. Others contend that new sites of production have driven down prices, and that better transport and cheaper telecommunications have opened up the world to billions.

For all this, however, serious debate has now broken out about whether globalisation is finally grinding to a halt. On the political right, Donald Trump has promised to bring jobs back to America and to crack down on immigration. In Britain, Brexit is seen by critics as simply a retreat into isolation. In France, Marine Le Pen made distaste for the consequences of globalisation a central feature of her abortive, yet still quite successful electoral campaign. And leftists, too, have redoubled their antipathy toward globalisation, seeing it as something that benefits only big business and the rich at the expense of workers, both in the developed and the developing world.

An important element in the rise of globalisation has been the brokering of trade deals and blocs. The EU, the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) have brought down barriers to imports and exports. But what the future holds seems unclear. The WTO’s liberalisation of world trade has stalled since 2008. Trump has rejected the Trans-Pacific Partnership (TPP), and prospects for the Transatlantic Trade And Investment Partnership (TTIP) look uncertain.

Yet while critics of globalisation in the West seem to be in the ascendant, there are other trends which suggest that a new wave of trade could emerge. For example, China’s enormous ‘One belt, one road’ initiative aims to put in place the infrastructure for easier trade between China, Central Asia, Europe and even Africa. The EU looks likely to conclude a major trade deal with Japan. Moreover, Brexit has put the need for trade at the centre of political debate and even the staunchest Brexiteers are keen to maintain free trade with the EU while promoting exports to the rest of the world.

What is globalisation, and is it really coming to an end? If its advocates are right to say that it has brought prosperity worldwide, why are so many people against it? Is it possible to have a ‘progressive’ globalisation, shorn of its free-market excesses?