Blog author: jballor
Friday, February 27, 2009
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Free trade seems to get all the blame when things go wrong and none of the credit when things go right. It’s the Rodney Dangerfield of global economics: it gets no respect. Certainly in this worldwide economic downturn globalism is going to take its bumps and bruises. And as trouble abroad comes to roost at home (and vice versa) more then ever the lesson is going to be how truly interdependent we all are.

In the short term there will certainly be increased popular sentiment that’s antagonistic toward expansion of liberalized trade policies. A recent Gallup poll shows that Americans showed that 47% view trade as a “threat to the economy from foreign imports” while 44% held that it is “an opportunity for economic growth through increased U.S. exports.” These numbers closely resemble the figures from the poll during the last major recession in 1992 (48% and 44% respectively).

ForeignTrade2009

While globalism will be in retreat for the short term, the beneficiary won’t necessarily be the localism so beloved by “crunchy” conservatives. The move will instead be toward a greater “regionalism,” of the kind fostered by continental and geographic “free trade zones.” In addition to the free trade deal announced today between Oceanic and Southeast Asian nations, you can expect NAFTA to get a close review in coming months.

But in the long term, the prospects for continued globalization are as good as ever. The Internet in particular has created a kind of “grassroots” globalism, that connects people in all kinds of social, economic, and cultural ways that were not possible a decade ago. More than ever we’ve come to know that our “neighbor” is not just the one we live in proximity to spatially, but those to whom we are connected virtually and spiritually.


  • Neal Lang

    I am not sure “globalism” (the attitude or policy of placing the interests of the entire world above those of individual nations.) and the concept of freer international trade are really one and the same.

    While I totally agree with Frederick Bastiat that both “Slavery and Tariffs are Plunder”, I can also make a case for need for involitable National sovereignty. This is especially true when the morality and culture being promoted in the name of “globalism” is deficient when compared to ones own nationality.

    Working for a company that in the 1980s did nearly 80% of its business overseas, I have had an opportunity to witness how tariffs, currency manipulations, and other artificial barriers can disrupt even-handed dealings between the peoples of different Nations.

    One case with which I am very familar was the former British colony of Nigeria. When our company, a US manufacturer large water pumps used primarily overseas in agricultural irrigation and drainage expanded its marketing efforts in Nigeria, that country artificially increased the value of its currency the Naira. At the time, the Nigerian government “pegged” the OFFICIAL value of the Naira to the British Pound (a two dollars). At this time the “unofficial” currency market was illegally exchanging 20 Naira to one US Dollar. This made import items, food for instance, 40 times cheaper than that produced locally in Nigeria. Imagine the impact such a currency policy would have on the local farmer! To compete with “subsidized” grain from the US and sold by grain importers, the local farmer’s product was at a 40 to 1 price disadvantage. Small wonder private sector agriculture, the mainstay of the Nigerian economy during the colonial period, was failing across the board.