The modern face of globalization and its recent track record is creating a large number of discontents

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The modern face of globalization and its recent track record is creating a large number of discontents. Numerous countries feel they have been short-changed in regard to the economic benefits of globalization and free trade. This growing list of discontents includes a large number of developing countries but surprisingly it also includes a few developed countries as well.

At the present time, one of the leading discontents on globalization is the United States. Despite its iconic status as an economic superpower, the U.S.A. is shaping the narrative regarding the abuses of globalization and the imperfect rules of international trade.

President Donald Trump spices up his emotional rhetoric with punchy words. He states that the U.S. is not interested in the contemporary model of free trade. It is interested in fair, balanced and reciprocal trade. He refers to the United States' trade deficits as the downside of the current face of globalization.

Trump underlines these trade imbalances and the lack of reciprocal economic benefits as proof positive that the U.S.'s trading partners are taking unfair advantage of the American economy. He has also divulged that he favours bilateral rather than multilateral trade agreements.

The contemporary face of globalization has spawned trade liberalization. It has also raised expectations that globalization and the new economic world order will create the tide that raises all ships.

Indeed, globalization was expected to be the great equalizer for economic convergence, the modern catalyst for world-wide economic prosperity.

There is a sweeping apprehension that globalization's economic footprint has not measured up to these expectations. It has not bridged the gap between economic opportunity and personal prosperity between developed and developing countries.

In some instances the disparity in economic well-being has widened instead of shrunk. Indeed, globalization has created a wider gap of economic opportunity and prosperity between nations. The fact of the matter is that the economic benefits of globalization remain a work in progress.

Economists have been advocating the benefits of international trade for a very long time.

Adam Smith referred to the concept of absolute advantage in international trade in 1776 and David Ricardo introduced his theory of comparative advantage in 1817. Since that time, students of economics have been taught the benefits of international trade in the context of the export-led growth model.

In my opinion, free trade agreements are an improvement over protectionism. They benefit consumers, businesses and governments. Consumers gain by having access to a wider choice of products at lower prices and better quality. Businesses gain by expanding their market share, achieving economies of scale and improving their profits. Finally, international trade empowers governments to grow the economy, reduce unemployment and improve the standard of living of their citizens.

I believe that the grumbling and disaffection with globalization is a symptom of national circumstance rather than a concerted global malfeasance. I am reminded of the words of William Shakespeare in his play Julius Caesar: "The fault my dear Brutus is not in our stars but in ourselves." In other words, it is not globalization that is the problem, but the fundamentals of some national economies.

In effect, countries cannot enjoy the benefits of globalization if they have lost their competitive advantage. In this fiercely competitive international environment, marginalized and disenfranchised countries should examine the failings of their own economies rather than blame globalization for their misfortune.

At the end of the day, a free trade agreement is simply an economic opportunity. It is not a guarantee of economic success. It opens the door for enhanced trade opportunities with other countries that did not exist prior to the free trade agreement.

What will transform this economic opportunity into a business success story is the vision and smarts of domestic entrepreneurs and the competitiveness of their products and services in terms of quality and price. In the new economy, success depends on our smarts, our global mindset and our productive enterprise.

Global engagement through international trade is the wave of the future and the defining feature of the new economy of the 21st century.

Constantine Passaris is a professor of economics at the University of New Brunswick.

 

agreements are under attack at the present time. The reason for this contemporary disaffection with globalization and international trade is that emerging economies and in some cases developed economies feel that they have been short-changed by the current rules of economic engagement and the contemporary supply chains. Indeed, the world's economic icon and supreme economic powerhouse, the United States, has begun to raise its voice against free trade.

Climate change requires global action. Its causes are country-specific but its consequences are global.

Climate change is real. I saw it with my own eyes. Last summer at the Greek island of Rhodes I went to my favourite beach. I found it - but the only problem was that the beach was no longer there. In fact, it was below two feet of water and the waves were lapping on the cliffs.

Climate change has caused sea levels to rise. The rise in sea levels is caused by global warming in the form of melting glaciers and the expansion of sea water. There is no denying that climate change is starting to have immediate and severe economic and climatic consequences.

Globalization has unleashed an unprecedented mobility of economic migrants and refugees. All of this has resulted in the dismay and despair of local citizens. We need look no further than the present political tribulations of Chancellor Angela Merkel in Germany. She opened the door to almost a million Syrian refugees and is suffering the political consequences of being unable to form a coalition government. Her own party is biting at her heels. Local citizens feel they are no longer the masters of their own house and government policies do not reflect their personal safety and collective well-being.

Globalization has become the sacrificial lamb for all of the world's failures and misdemeanors. These include economic and political disruptions, government policies that are out of sync with their citizens, high unemployment, unprotected borders, the failure of the middle class to improve its economic prospects and climate change.

As Christmas day approaches, my list to Santa is limited to one item. It is an appeal to work together in order to improve globalization. This should become a top priority for a number of reasons. Globalization has the capacity to bestow great benefits. It is the wave of the future. It has the capacity to become the great equalizer for economic opportunity. However, the modern face of globalization requires a course correction in order to reach that destination.

Dr. Constantine Passarisis a professor of economics at the University of New Brunswick and a national research affiliate of the Prentice Institute for Global Population and Economy at the University of Lethbridge.

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