Articles:
McCain and Obama – Supporting Globalization

Those of us who are in favour of globalisation, who celebrate the way it has raised living standards and reduced poverty around the world, are forever worrying that there may soon be a backlash against it, a revival of protectionism and economic nationalism. A year ago, the prime candidate for such a backlash was the fount of globalisation itself, the United States. If anyone had told me then that in the midst of the American presidential election the country would be suffering a recession, caused by a financial crisis, I would have predicted a big upsurge in protectionism during the campaign. It is time, however, to admit that this hasn’t happened. America is not becoming isolationist. In fact, globalisation is not under any serious threat at all.

            How can a free trader such as me make such a complacent statement? Don’t I know that during the Democratic Party’s amazingly long and dramatic primary contest, both Barack Obama and Hillary Clinton have made speeches attacking trade deals? Didn’t I notice that the American Congress recently rejected a proposed bilateral trade deal with Columbia, and that other trade arrangements, including one with South Korea, also look under threat. Yes, I do, and this is certainly to be regretted and criticised. But it is still not a serious threat to globalisation.

            One piece of good news is that the winner of the Democratic nomination is going to be Barack Obama, barring some implausible accident, and that he has been less strident in his anti-trade rhetoric than his opponent. But the main reason to be optimistic is that virtually all of the presidential candidates’ anti-trade language has been directed at America’s neighbours, Mexico and Canada. Very little has been directed at the country with which America has by far its largest bilateral trade deficit: China.

            Of course, this could change. If unemployment were to rise sharply during the next few months, then the pressure to make promises to protect jobs from “unfair” Chinese competition might increase. John McCain, the Republican candidate, is a firm advocate of free trade, so Mr Obama might choose to sound protectionist in order to emphasise the difference between them. But actually, that is unlikely: since Mr McCain is a clear free trader, Mr Obama only needs to sound a little critical on trade in order to differentiate himself. That way, he will retain the maximum freedom of manoeuvre when he (as he hopes) becomes America’s next president. It now seems much likelier that the debate between Mr McCain and Mr Obama will focus on issues such as health care, inequality and taxes than on trade.

            The real arena for anti-globalisation rhetoric will be the Congressional elections, especially those held in areas which have lost a lot of manufacturing jobs. Given that the Democratic Party is likely to increase its domination of Congress in these elections, and that the Democrats have in recent decades been more protectionist than the Republicans, that could be worrying. Yet, as the current session of Congress (under Democrat leadership) has shown, what it is likely to mean is only that new trade-liberalisation deals will be blocked. The lack of further progress on trade, whether bilateral trade or the global “Doha” round of talks under the World Trade Organisation, is disappointing. But it does not mean any reversal in the gains that have already been made. It just means that progress is being suspended, for a few years.

            All this is a far cry from 1999, when crowds of anti-globalisation protesters disrupted the meeting of the World Trade Organisation in Seattle, or indeed those in Genoa in 2001. Such protests still occur, but they are now much smaller and weaker. Politicians can still also be found who complain about globalisation, notably of course Giulio Tremonti in his book “Fear and Hope”. But this too seems quite weak and unlikely to have much impact. It is just the same instinct that led to the notorious French “No” vote in the EU referendum in 2005, a feeling of anxiety and a desire to blame foreigners for that feeling. But will it actually lead to any serious reversal for the process of globalisation? I doubt it.