From Brexit to Trump to the rise of nationalist parties across Europe, the old division between left and right is giving way to a battle between self-styled patriots and confounded globalists
Supporters of these disparate movements are protesting not just globalization—the process whereby goods, capital and people move ever more freely across borders—but globalism, the mind-set that globalization is natural and good, that global governance should expand as national sovereignty contracts.The new nationalist surge has startled establishment parties in part because they don’t see globalism as an ideology. How could it be, when it is shared across the traditional left-right spectrum by the likes of Hillary Clinton, Tony Blair, George W. Bush and David Cameron ?
.. In the 1930s, nationalists were also expansionists who coveted other countries’ territory. Today, Mr. Trump and his ideological allies mostly want to reassert control over their own countries. Their targets are such global structures as the EU, the World Trade Organization, NATO, the U.N. and the North American Free Trade Agreement.
.. Little unites the new nationalists other than their shared antipathy toward globalism. Mr. Trump’s economic program is as far to the right as Ms. Le Pen’s is to the left. Nor do they have credible plans for replacing the institutions of globalization that they want to tear dow
.. In 1957, six European countries signed the Treaty of Rome, creating what would become the EU, hoping that economic and political integration would make war unthinkable.
.. Between 1987 and 2008, total U.S. wages adjusted for inflation rose by 53%, while the profits that U.S. companies earned abroad soared by 347%.
.. President Bill Clinton signed Nafta in 1993 in part to embed a pro-American government in Mexico
.. The late political scientist Samuel Huntington applied the caustic label “Davos man” to those who see “national boundaries as obstacles that thankfully are vanishing.” For globalists, this was a badge of honor, symbolizing not just an outlook but a lifestyle of first-class departure lounges, smartphones and stock options.
.. In 2000, Mr. Clinton blessed China’s entry into the WTO. Echoing Truman, he predicted China’s membership was “likely to have a profound impact on human rights and political liberty.”
It didn’t. China adhered to the letter of its WTO obligations while systematically violating their spirit with discrimination against foreign investors and products and an artificially cheap currency.
.. Economists warned that Italy, Spain and Greece couldn’t compete with Germany without the safety valve of letting national currencies periodically devalue to offset their faster-rising costs. Sure enough, their trade deficits ballooned, but low-cost euro loans at first made them easy to finance. The loans proved unsustainable, and the resulting crisis has still not run its course.
.. Chinese and German trade surpluses could wreak havoc thanks to expanding cross-border finance. To globalists, its growth was as inexorable as that of trade. In early 2008, President George W. Bush’s treasury secretary, Henry Paulson, put out a report arguing that globalization had made much of U.S. financial regulation obsolete. The priority was to maintain “American preeminence in the global capital markets.
.. Globalists were blind to the nationalist backlash in part because their world—entrepreneurial, university-educated, ethnically diverse, urban and coastal—has thrived as whiter, less-educated hinterlands have stagnated.
.. Many globalists now assume that the discontent is largely driven by stagnant wages and inequality. If people are upset about immigration, they reason, it is largely because they fear competition with low-wage workers.
In fact, much of the backlash against immigration (and globalism) is not economic but cultural
.. in the 1980s, economic issues such as taxes and welfare became less important than noneconomic issues such as immigration, terrorism, abortion and gay rights.
.. voters were bothered less by competition from immigrants than by their perceived effect on the country’s linguistic, religious and cultural norms.
.. Europeans’ opposition to immigration was driven less by pocketbook concerns than by worries about how changes to “the composition of the local population” would affect “their neighborhoods, schools and workplaces.”
.. Yet the new nationalism often thrives on xenophobia. Mr. Trump has been criticizing free trade since the 1980s, but his candidacy took off when he started attacking Mexican immigrants and Muslims. American Jewish groups heard unsettling echoes of anti-Semitic conspiracy theories when Mr. Trump accused Mrs. Clinton of meeting “in secret with international banks to plot the destruction of U.S. sovereignty.”
.. In short, there is ample reason for skepticism about whether the new nationalists can prove themselves a genuinely secular, democratic alternative to globalism.
.. That globalization’s winners can compensate its losers makes impeccable economic logic, but it rings hollow among those too old to retrain or move.
.. globalists should not equate concern for cultural norms and national borders with xenophobia. Large majorities of Americans, for example, welcome immigrants so long as they
- adopt American values,
- learn English,
- bring useful skills and
- wait their turn.
In China, Trump Employs Tough Talk, Flattery With Xi
U.S. president blames his predecessors, not Beijing, for ‘unfair’ trade relationship
In Beijing on Thursday, Mr. Trump spoke in unusually conciliatory tones during joint appearances with Mr. Xi, hailing their “very good chemistry” while also expressing hope for forceful action from Beijing.
Mr. Trump blamed past U.S. administrations, rather than Beijing, for what he described as a “very one-sided and unfair” trade relationship, adding, “but we’ll make it fair and it’ll be tremendous to both of us.”
.. Mr. Trump did include tougher talk in his pledge to tackle imbalances: “We must immediately address the unfair trade practices that drive this deficit,” he said. “We really have to look at access, forced technology transfer and the theft of intellectual property, which just by and of itself is costing the United States and its government at least $300 billion a year.”
.. “I told President Trump that the Pacific Ocean is big enough for both China and the U.S.,” he said.
.. “It appears Trump opted to publicly play down U.S.-China differences, praise the Chinese people for what they have achieved, and give Xi Jinping face,” said Bonnie Glaser,
.. Beijing’s strategy appeared to be to flatter Mr. Trump into easing up on pressure over trade and North Korea and acknowledging China’s territorial interests and ambitions for a leading role on the world stage.
.. Mr. Trump had told the Chinese president: “You’re a strong man—you can, I’m sure, solve this for me.”
.. However, he acknowledged that on trade, “the things that have been achieved thus far are pretty small.”
.. Mr. Xi is expected to use his speech to the same forum to press the image of China as the new champion of global free trade, and to encourage other countries to participate in his Belt and Road plan for wide-ranging trade and transport links.
No Bush, No Trump
Our previous Republican president fails to own up to his responsibility for our current one.
consider the many ways the Bush presidency has shaped and constrained all that’s come since
.. What I found extraordinary, however, was that in a speech littered with references to Russia and China and to the ongoing challenges facing European democracies, Bush never saw fit to utter the word Iraq.
.. if Iraq does indeed come apart, the chaos that would ensue would dwarf what we’ve seen over the course of the Syrian civil war. One would think Bush would have had a lot to say about the sorry state of Iraq and how his decisions might have contributed to it. Alas, he chose to elide such questions.
.. surely he can acknowledge that some of the backlash against the global engagement both he and I support stems from the fact that his war of choice in Iraq proved a discrediting disaster—so much so that when Trump falsely claimed to have opposed the invasion of Iraq from the start, it was enough to supercharge his bid for the GOP presidential nomination in 2016.
.. Lest we forget, most of Trump’s rivals were paralyzed by the sense that they had to defend the legacy of President Bush’s war.. Trump was under no such obligation. Indeed, he presented himself as a cold-eyed realist who’d only invade a country to plunder its resources, a bizarre homage to the old anti-war mantra that Bush’s invasion of Iraq was less a war for democracy than a war for oil... Bush and his allies insisted on creating a series of new guest-worker programs aimed at low-wage workers, who’d have limited rights and limited access to safety-net programs... some on the left, including several members of the Congressional Black Caucus, who feared Bush’s guest-worker program would create a class of laborers who’d be vulnerable to exploitation... surely he can appreciate that not everyone sees guest-worker programs in such romantic terms. To many Americans, it looks as though the dynamism that low-wage immigrant workers with scant labor protections bring to America chiefly benefits people like George W. Bush... the president ignores the possibility that his own decisions played a major role in souring voters on free trade... Brad Setser, a senior fellow at the Council of Foreign Relations and a former Obama administration official, has argued that had the Bush administration been willing to use the “special safeguards” provision that was part of China’s entry into the World Trade Organization, the U.S. manufacturing sector might have been in a much better position to adapt to Chinese import competition. Instead, the Bush White House stood by as the Chinese engaged in large-scale currency intervention, which in turn made the so-called China shock—the job losses that followed from Chinese import surges—far more severe than it would have been had the U.S. sent a clear signal that it would counter such manipulation... The former president had nothing to say about his role in the devastation of the Rust Belt. Instead, he treated the backlash against free trade as if it were some kind of mania, entirely disconnected from the fact that over the course of his presidency, the U.S. manufacturing sector hemorrhaged jobs, even as productivity outside of the computer and electronics industry was mostly stagnant... his refusal to face up to his own responsibility for the state we’re in is, to my mind, essential to understanding why so many Republican rank-and-file voters are at war with their party’s delusional elites.
How China Swallowedd the WTO
Rather than fulfilling its mission of steering the Communist behemoth toward longstanding Western trading norms, the WTO instead stands accused of enabling Beijing’s state-directed mercantilism, in turn allowing China to flood the world with cheap exports while limiting foreign access to its own market.
.. Now it is coming to a head under the first American presidency of an open free-trade skeptic, in a case just starting to wend its way through the Geneva process. The issue: whether China has graduated to a “market economy,” a change of status that would make it considerably harder for other nations to block imports they believe are improperly aided by Chinese government distortions.
.. both the U.S. and European Union demanding the change, calling it “nonnegotiable,” and Chinese officials are likely to reiterate that demand when they talk trade next week with President Trump during his Beijing visit
.. “This is without question the most serious litigation matter we have at the WTO right now,” Robert Lighthizer, the Trump administration’s trade representative, told Congress in June. A China victory, he added, “would be cataclysmic for the WTO.”
.. Under Geneva’s guidance, tariffs world-wide have plunged nearly 80% and trade’s share of the global economy has more than doubled. More than 160 countries representing 98% of world commerce are now WTO members, and most of the few remaining nonmembers—like Belarus and Timor-Leste—are negotiating to join.
.. the director-general of the WTO, credits his organization with preventing a recurrence after the 2008 financial crisis of the trade wars that exacerbated the Great Depression.
.. Since 2007, China has been party to more than a quarter of all WTO cases, as trading partners scrambled to erect barriers protecting their industries while demanding better access to China’s markets.
.. China sought out disputes in which it had no direct stake and joined more than 100 as a “third party,” giving officials access to proceedings as observers. The Chinese offered large stipends to prominent American and European trade-law scholars to teach seminars in China for young bureaucrats. They retained top U.S. law firms.
.. Steptoe & Johnson LLP became the go-to firm for combating a new American policy imposing extra-steep duties on Chinese imports aided by allegedly illegal subsidies
.. WTO defenders note the U.S. has still won the vast majority of cases it has filed in Geneva, and say it should be pleased that China has chosen to pursue its trade grievances through global arbiters.
.. Commerce Secretary Wilbur Ross in April launched an official study of “the structural problem” of the WTO and its courts, arguing the body has “an institutional bias…toward the exporters rather than toward the people that are being beleaguered by inappropriate imports.”
.. A looming challenge to the WTO is the pending case determining China’s official status in the world trading system—whether members are now required to treat it as a “market” economy.
.. Beijing reads the pact as having automatically guaranteed it market status 15 years after its December 2001 accession. The U.S., Europe, Japan and others say the change was intended to be a privilege contingent on liberalization promises Beijing has yet to keep.
.. The “nonmarket” designation makes it easier for trading partners to impose inflated tariffs on goods they conclude have been “dumped”—or sold below “fair” value. That’s because prices and costs are seen as so distorted in a “nonmarket economy” that other countries are given wide latitude to determine on their own what they consider “fair.”
.. A flip from “nonmarket” to “market” would boost EU imports from China by as much as 21%, or $84 billion
.. The study concluded that Washington applied an average duty of 162% against Chinese goods, compared with a 33% rate for market economies.
.. . The study concluded that Washington applied an average duty of 162% against Chinese goods, compared with a 33% rate for market economies.
“That gray zone is the key point of tension,” says Chad Bown, a WTO expert at the pro-free-trade Peterson Institute for International Economics. “How you deal with that is ultimately going to determine whether the WTO system in its current form can hang together or not.”