Emmanuel Macron has been re-elected as president of France. Elite metropolitan globalists, drinking deep from crystal goblets full of populists’ tears, are toasting the liberal international order into the still watches of the night. The authoritarian-nationalist-protectionist gatecrashers, represented in this case by Marine Le Pen, have been ejected by the bouncers of technocratic free-trade centrism. It’s time to party like it’s 1995.
Or maybe it’s a bit more complicated than that. Recently I put the optimistic case that, in defiance of gathering gloom, market forces were continuing to drive forward the real-world process of economic globalisation, defined as the cross-border movement of goods, services, people, data, capital and ideas. I also contend that the idea of a global political shift against open trade has been considerably overdone, even if the trend towards authoritarian nationalists in power is all too real.
Currently, trade protectionism certainly poses a threat to globalisation, particularly through the US-China tariff and tech wars and potentially (though to a lesser extent) by the EU’s shift towards unilateral intervention. But it’s highly US-centric to imagine this is a universal experience. And it’s distinctly francocentric to assume that the Le Pen combination of economic and political nationalism is a global standard.
Ironically, it’s the liberal democratic administration of Joe Biden (admittedly building on Donald Trump’s inheritance) and an EU dominated by the centrist governments of France, Germany and Italy that have become more sceptical of unfettered open trade. The EU’s nationalist authoritarians in the form of Hungary and Poland aren’t particularly leading the protectionist charge.
Elsewhere, a quick world tour shows resilience in the politics of open trade even in the presence of inflammatory appeals to national identity against imagined foreign or domestic enemies. Many governments seem to have drawn the conclusion from the Covid disruption to trade, and even the Ukraine war, that securing reliable access to rich markets is a better strategy than turning inwards. Vladimir Putin, as it happens, was unusual among the strongmen in slamming trade restrictions on his neighbours and adopting a full-blooded rhetoric of self-sufficiency.
Xi Jinping’s “dual-circulation” strategy in China does, of course, involve a shift to domestic consumption from the country’s previous reliance on export demand. But it involves a controlled “hedged integration” with the rest of the world economy rather than a lurch towards autarky.
Jair Bolsonaro’s government in Brazil has been sharply criticised for abuses of human rights. But he’s also keen to gain the imprimatur of rich-world market economy respectability by joining the OECD. He wants to cut the external tariffs of Mercosur, the South American customs union, and push through Mercosur’s trade deal with the EU, which would expose chunks of Brazilian industry to more import competition. That deal is being held up by Macron, the well-known globalist who boasted as much in his election debate with Le Pen last week.
In India, prime minister Narendra Modi has created a cult of personality and his party, the Hindu nationalist BJP, has stoked communal resentment and violence against Muslims. But, despite performative troublemaking in the World Trade Organization and slogans about economic self-reliance, he has also tried to make India a serious global manufacturing exporter. As well as streamlining paper-choked customs procedures, Modi recently abandoned India’s decade-long abstention from preferential trade agreements, signing bilateral deals with Australia and the UAE and pushing for a similar pact with the UK.
The contradictions between the BJP’s domestic illiberalism and Modi’s globalisation ambitions were poignantly on display last week. UK prime minister Boris Johnson, visiting India, unwisely posed on top of a digger made locally by the UK company JCB. The company’s presence in India is a sign of its openness to investment, but its bulldozers are notoriously associated with the destruction of poor Muslims’ homes.
India’s deal with Australia (and no doubt any agreement with the UK) is riddled with loopholes to protect Indian farmers. But any agreement is symbolically impressive given India’s recent history. Remarkably, trade deals now seem more politically toxic in the US than in India.
Similarly, Recep Tayyip Erdogan’s government in Turkey, though it’s going about it in an extraordinarily eccentric way (just look at its monetary policy strategy), maintains an export-led growth model open to foreign direct investment and wants to challenge Asia as a manufacturing hub.
Even Johnson’s government has leavened its reactionary populism on asylum-seekers and tiresome attempts to ignite culture wars with quite sensible policies on globalisation. The border frictions introduced by Johnson’s inane version of Brexit inflict serious damage on trade. But that’s to do with Eurosceptic political positioning, not protectionism. His government has gone against Conservative party tradition by exposing farmers to low-cost foreign competition in bilateral deals with Australia and New Zealand, applied to join the Asia-Pacific CPTPP deal and even quietly expanded the UK’s visa programmes to attract what it deems the right kind of immigrants.
Finally, generalising massively over a huge area, sub-Saharan Africa has trended in the direction of being politically less free in recent years, and yet 54 countries have signed the African Continental Free Trade Agreement (AfCFTA).
The entire idea of a “liberal international order” — a concept that sometimes seems to exist merely to have its death repeatedly prophesied — conflates political freedom with open trade. They do not always go together. Le Pen would have represented a turn towards both political and economic nationalism, but much of the rest of the world shows you can have one without the other. Is a global protectionist wave sweeping all before it? Not really, but nor is Macron’s re-election particularly good evidence of its failure.
alan.beattie@ft.com
Source: Economy - ft.com
