Tuesday 22 November 2016 6:15 pm

As Trump prepares to dump the TPP Pacific free trade deal, is globalisation going into reverse?

Len Shackleton Shackleton
Len Shackleton is professor of economics at the University of Buckingham, and editorial and research fellow at the Institute of Economic Affairs.

Dr Madsen Pirie, founder and president of the Adam Smith Institute, says Yes.

It looks very much as if globalisation has reached its high water mark and may be slipping back. Donald Trump's pledge to pull out of the Trans-Pacific Partnership deal comes hot on the heels of the declaration by many involved that the Transatlantic Trade and Investment Partnership between the US and the EU is “dead in the water”.

Although the CETA between Canada and the EU was signed despite last ditch opposition from Wallonia, its seven years of tortuous negotiation showed how difficult if not impossible future such deals would be. It is not the end of free trade, but it might well be the end of the huge multilateral deals.

The future lies in the sort of bilateral deals that the UK, once free from the shackles of the protectionist EU bloc, will negotiate. They are easier to do and give nations more scope to protect their interests. The multilateral deals carry too much baggage about the environment and labour laws, where bilateral deals can concentrate on trade. They are the future.

Len Shackleton, editorial and research fellow at the Institute of Economic Affairs, says No.

It’s depressing to see the know-nothing right join the forgotten-everything left in rejecting globalisation, which has raised living standards worldwide and taken countless millions out of penury.

But I doubt they will succeed in doing more than slowing growth for a year or two. Today’s economies are so integrated, with capital and labour flows in every direction and complex supply chains linked by instant communication, that it is difficult to see a return to 1930s-style autarchy.

There are losers from globalisation, but they are fewer than is often claimed. And their losses are far outweighed by others’ gains, so mitigation is possible. Governments should ensure that the tax and regulatory environment supports job creation and education, and that skill standards are raised to enable people to find new work. Assistance to individuals must also be sensibly structured to provide support at difficult times without trapping people in a life on benefits.

The long-term future remains global: it is not Mr Trump.

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