Article by Dr. C. Gopinath on "New world order" - Business Line

November 11, 2016 | C. Gopinath

Brexit! CETA in trouble! And now Trump! These headlines have become reference points to argue that globalisation is not just at a standstill but is in reverse.
 
Donald Trump is known to have stated that climate change is a ‘hoax’. He is widely expected to review a scientific report issued by the Obama administration that provided the basis of much of the regulation the current administration undertook. And just this month, 105 countries ratified the Paris Agreement on climate change.

This is the least of the upheavals expected on account of Trump’s election. He has called the NAFTA regional trade agreement between Canada, the US and Mexico a ‘disaster’ and has voiced his opposition to the Trans Pacific Partnership agreement that is awaiting ratification.
 
Maybe it is time to take a deep breath before rushing to announce the demise of globalisation. The most visible forms of globalisation have been trade, the environment, and migration. All three are likely to take a hit under a Trump administration.
 
Global cues

Europe has also been stirring in the direction of nationalism and navel gazing. The migration of refugees, mostly from Syria, into Europe has instigated many nationalistic parties to talk of sealing borders. The fear of many of the refugees coming into the UK was a tipping point in favour of the Brexit vote.
 
Yet, nobody claimed that globalisation has to follow a smooth secular path. Many countries with less significant footprints on the planet have introduced speed bumps off and on in their path towards global interaction. Sharing and interacting transnationally in the pursuit of their own objectives is the hallmark of globalisation and does not mean integration.
 
When the rich and developed world sold the idea of free trade and lowering barriers to everyone they met, it was from a position of strength. They were well positioned to benefit from it. The poor bought it with some sweeteners thrown in. Then they got better at it. The rich world has now woken up and realised what has happened. Trump, during the debates, did not mince words when he accused China of ‘raping’ the US in trade and of stealing US jobs.
 
When Britain voted to exit the EU, apart from concerns about immigration, Britons felt that they had relinquished control of their country to EU bureaucrats and wanted it back.
 
These events are nothing more than the first order and second order effects of globalisation. In an initial enthusiasm, we rush to accept new developments and take two steps forward. Whether it is WTO agreements or climate rules. Then on reflection, we realise some of the negative effects of what we agreed to and take one step back. This is the second order effect. It gives us time to pause, reflect, and consolidate.
 
While Briton wants its sovereignty back, it still wants to trade freely with everyone in the EU. It has to, in order to survive. After all the reviewing by the Trump administration is done, the lobbyists of major US corporations will sit down with the new President and explain to him, off the record, why he should leave most things alone. And that is what the tiny Walloon region of Belgium realised when it finally gave approval to the Canada-EU Trade Agreement (CETA).