These three articles appeared in the news a couple of days ago almost simultaneously in the wake of the Republican convention.
In this first article, finance ministers and central bankers from the G20 nations pledge to “share the benefits of global growth more broadly.” The article focuses on concerns surrounding “Brexit,” Great Britain’s vote to pull out of the European Union over dissatisfaction with the EU’s open border policies and with being fleeced to prop up the economies of other EU nations. But the article also takes note of Trump’s vow to pull out of trade agreements. The G20 is starting to sweat.
In the 2nd article, U.S. Treasury Secretary Lew is reported as saying that it’s time to “redouble our efforts to use all of the policy tools that we have to boost shared growth.” Why is it time to do that now? Why weren’t we doing this all along? It’s because it’s now clear that “free trade” policy is becoming more widely opposed, with the political left now opposing the Trans Pacific Trade Partnership (TPP) and with the right going further, vowing to pull out of all existing free trade deals. The globalist Obama administration is also starting to sweat.
And further evidence comes in this 3rd article about a meeting on Friday between President Obama and his Mexican counterpart. Don’t be fooled. This wasn’t just a meeting designed to stress the importance of the relationship between these two countries. Both are beginning to sense the very real possibility that their trade regime is nearing it’s end. I predict that, sometime between now and the election, there will be an announcement of some deal, a deal that had its genesis in this meeting, that will move some token manufacturing back from Mexico to the U.S. in an effort to blunt some of the trade anger.
I have written occasionally about cracks that were beginning to appear in globalization – like more and more economists beginning to openly question whether donor countries like the U.S. and Britain were really seeing any benefit at all from these trade agreements and whether they have been, in fact, a net drag on their economies. The globalization story has been very much like the annual reports that emanated from the now-defunct Enron Corporation. We were told by Enron that their business was very complicated – too complicated for analysts outside the company to understand. As it turned out, it wasn’t really complicated. It was a scam. People will only buy into such scams for so long. And so it is with globalization. The British people could no longer take it. Nor can Americans.
Without the support of its donor nations and the continued subservient acquiescence of its citizens, the globalization scheme is doomed. Good riddance.