Trump & trade: a new era for globalisation

Paw-der Patrol: In Tijuana, Mexico, a dog considers the fence separating the town from the USA.

Building walls, scrapping trade deals, making America ‘great again’ — Donald Trump’s presidency is set to be a turning point in the rebellion against globalisation. Is it worth fighting for?

‘Are you really gonna build a wall?’ a journalist asked president-elect Donald Trump this weekend. There was no hesitation.

‘Yes,’ he said firmly. Maybe there would be ‘some fencing’ in some areas, he admitted. But construction is The Donald’s business — and the 1,000-mile wall along the border between Mexico and the USA was no metaphor. It will be built.

Protecting America — whether from Mexicans or Muslims — was a strong theme of his campaign. But it is not just people he wants to stop crossing the border; it is also free trade. He has promised to scrap America’s agreement with Mexico and Canada, calling it the ‘worst trade deal in history’. Potential deals with Europe and Asia are also looking increasingly unlikely.

Yesterday UK prime minister Theresa May tried to temper Trump’s tirade against trade. She said she hoped that the UK could be a ‘true global champion of free trade in this new modern world’. But Brexit Britain’s economy faces challenges of its own: it is still unclear whether it will stay in the single market, Europe’s free trade area, once it has left the EU.

If America and Britain do turn away from world trade, it would be one of the biggest economic shifts of the last 70 years. Versions of the EU and the World Trade Organisation were created after the second world war to promote peace and prosperity by sharing economic opportunities between countries. It has mostly worked: there have been no more wars in Europe. The Soviet Union crumbled after years of financial problems. China lifted itself out of poverty.

But recently the mood has turned against free trade and globalisation. Right-wing populists like Trump point to the ‘threat’ of immigration and the disappearance of industrial labour. Their left-wing counterparts blame free trade for unscrupulous multinational companies, tax avoidance, and inequality; the richest 1% of the world’s population now owns as much as the other 99%, according to Oxfam.

Does globalisation need to be tamed?

Trade off

Yes, say some. You may not agree with Trump’s style, but in this instance he has a point. The most dynamic politicians on the left and right agree that the system has stopped working for ordinary people. They never recovered from the 2008 financial crisis — and yet billionaires somehow got richer. There must be an alternative.

This is a red herring, insist others. From ancient Rome to the industrial revolution, the movement of people and money between countries has always brought wealth and creativity. But when the tide turns against globalisation — as it did in the 1930s — economic depression (and worse) soon follows. Sensible, centrist politicians must defend it from the fury of the crowd.

You Decide

  1. ‘The economy is the most important part of politics’. Do you agree?
  2. Has globalisation been good or bad for the world?

Activities

  1. In pairs, imagine each of you is the president of a country with a shared border. Negotiate a trade deal between you. To start things off: will you tax each other’s imports?
  2. Write a list of the pros and cons of globalisation. Make sure you include points on the economy, politics, and society as a whole.

Some People Say...

“Closed doors lead to closed minds.”

Will Hutton

What do you think?

Q & A

Do boring trade agreements really affect me?
Yes. Very few products are made entirely in your own country, using resources and materials mined from your own land. Instead, commodities and goods are being sold to and from countries all over the world, a complex web of businesses depending on each other. The idea of trade agreements is to facilitate this process, with most countries agreeing on rules which benefit both sides.
So what is wrong with them?
Critics say it also means that competition for jobs and business is not just between neighbours, but between countries. Take manufacturing, for example. This is cheaper in low-wage countries like China. Heavy job losses have resulted in former manufacturing communities in the UK and USA, with higher wages, and other costs.

Word Watch

Donald Trump
The president-elect will officially become president on January 20th. He gave his first in-depth interview since the election to 60 Minutes on Sunday.
Mexicans
According to official figures, there are around 11 million illegal immigrants in the USA. In his 60 Minutes interview, Trump said he would deport the ‘two or three million’ with criminal records.
Muslims
Trump called for a ban on Muslims entering the USA in December 2015. He says he is ‘saddened’ to hear about hate crimes against Muslims since his election, and told those responsible to ‘stop it’.
World Trade Organisation
A trade group which sets international trade rules between countries. It was created in 1995 and replaced the General Agreement on Tarrifs and Trade, which began in 1948.
Soviet Union
The Russian-led Communist state dissolved in 1991 after its economy declined.
China
The country reformed its economy in the 1980s and 90s by opening up to trade with the rest of the world. It is now the second largest economy in the world.
Oxfam
According to a report by the charity released in January 2016.

Subjects

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