Some on the left take heart from the Iraq campaign because they think it means, as one wrote, “globalisation is over”.
“Militaristic states are protectionist states,” this luminary of the left wrote. Is that right?
Not according to George Bush’s rhetoric. Amidst the Wagnerian warrior choruses can be heard from time to time a faint civilising voice. Having got into Iraq to chase terrorists, Bush says his mission is to bring to Arab heathens the gift of free trade and prosperity.
His Administration’s 2003 Trade Agenda glows with “igniting a new era of global economic growth through a world trading system that is dramatically more open and more free”.
Putting Iraq and the trade agenda together suggests the very opposite of the end of globalisation. But is appearance reality?
First, distil the left’s bother about globalisation.
Early socialists believed in global brotherhood and sisterhood. States were the creatures of the ruling classes, which erected national barriers and divided workers from their brothers and sisters.
Later, socialists turned nationalist and appropriated the power of the state to defend local workers’ right to jobs and good wages against immigrants and imported goods made by foreign workers. Unions backed protectionist tariffs and quotas.
The 1960s left rediscovered international brotherhood and sisterhood of a sort. Neo-socialists of that era championed third-world peasants against transnational companies’ rape of their lands’ resources.
Many of these companies were American. The United States, mired in Vietnam and besmirched by its support of unsavoury dictators and by its corporations’ activities, became the left’s bogey.
These new-left anti-Americans made common cause with traditional-left nationalist protectionists. A good part of the left’s problem with globalisation is that it sees it as an American phenomenon, a United States hegemony — that is, as unilateral.
This ignores the fact that the United States since 1945 has been a powerful force for liberal trade and the engine of growth that got east Asia on the road to riches.
Nevertheless the left has the kernel of something. Just as the United States has flouted multilateral international security rules by invading Iraq, so it flouts multilateral international trade rules: the recent illegal lamb levy and steel tariff are examples.
Powerful lobbies and corporations wind Washington round their fingers to preserve their rents against small or poor foreign competitors — huge American steel combines against New Zealand Steel, for example.
This sort of unilateral action makes genuine — multilateralist — globalisers’ blood boil. Listen to Mike Moore. Read Philippe Legrain. They want genuinely free global trade, with strong, enforceable rules against American hijinks and even worse European and Japanese rorts and hypocrisies.
United States’ unilateral tariffs and quotas are classic self-centred foreign policy. Until it was attacked, the United States left the Europeans to slug it out in the first world war. Until it was attacked, the United States left Britain to fight alone on the side of liberty in the second world war. Until it was attacked on September 11 2001 the United States viewed terrorism with detached disinterest. American private money helped fund the Irish Republican Army.
Now stir in the serious rift Iraq has driven between the United States and the two countries at the core of the new Europe, Germany and France. If that rift infects the Doha global trade liberalisation negotiations, the slow, uncertain shuffle towards multilateral globalisation might well be halted.
But the version of globalisation the left loves to hate, the unilateral American version, would be, if anything, strengthened. Bush’s trade agenda starts with lofty talk of free global trade but then talks mostly of regional and bilateral free trade agreements as the vehicles.
The problem with that is that such agreements are usually what economists call “mercantilist”, designed for advantage, concession traded against concession. The world’s single military and economic superpower, triumphant in war, will have most of the cards, could play them at will and might be tempted do just that.
That fear has caused some free traders in Australia to argue against the bilateral agreement that country is now negotiating with the United States.
Where would mercantilism leave us, especially since Helen Clark started criticising the Bush team. If we don’t (or can’t) do a trade agreement with the world’s superpower and others do, we freeze — Europe won’t have us. If we can (and do), it may come at the cost of valuable items such as Pharmac’s drug buying power and a very long phase-in, if any, for dairy products.
And where would it leave the left? In clover. Not because globalisation would be over but because multilateral globalisation would be wounded and unilateral American globalisation strengthened. And that would be grist to the left’s revolutionary mill.