The great unraveling of globalization


The Washington Post has the article The great unraveling of globalization.

Indeed, although multinational executives avoid talking about it publicly, profits in global markets are underwhelming — and doing business internationally is full of unanticipated risks.
.
.
.
The shortcomings of globalization manifest in any number of ways. For one thing, international trading patterns point to an increase in protectionist attitudes rather than a golden age of open borders. Between 1986 and 2005, global trade volume increased at a rate of about 2 to 3 times that of GDP growth, but the ratio since then has fallen dramatically (except for one year) and is now close to 1, according to research by UBS strategist Bhanu Baweja.
.
.
.
That’s about the best way to sum up globalization now. Instead of flat and seamless, globalization is full of hurdles and obstacles. There’s money to be made for multinationals the world over, but they are going to have to rethink their strategies for making it. Though presented as a way to eliminate economic disparities and magically expand multinational revenue streams, globalization is, simply put, still a barely profitable and perplexing strategy for most companies.

If you read the details, and believe them, then perhaps this is a clue as to why business is so intent on getting the TPP.  It’s only a clue, because you would have to guess at how the TPP would solve any of these problems.  Perhaps the idea of the “Investor-State Dispute Settlement”  (ISDS) in the TPP is corporations’ way of getting around some of the difficulties mentioned in The Washington Post article.

See my previous post ISDS is a bad deal for America – Part ot TPP “Trade” deal for some background for why US corporations may be pushing for this without any care for the harm it could do to the rest of us.

I wonder if any corporations or trade negotiators ever consider that the cause of increasing protectionism is how badly past “free” “trade” deals hurt the countries who are becoming more protectionist.  Rather than getting even more draconian in the next trade deal, they might consider coming up with something that was actually better for the people in the countries who will sign the pact.

Thanks to reader RichardH for bringing this article to my attention

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.