Trump, trumpet and trade: The worries of deglobalisation

Amna Mirza
Amna MirzaMay 06, 2017 | 22:07

Trump, trumpet and trade: The worries of deglobalisation

Rhetoric is always dangerous. Hue and cry is used to generate political heat in the electorate, which in the end looks just like smoke. This picture has a striking similarity with the idea of US president Donald Trump to end the North American Free Trade Agreement (NAFTA).

The pact was negotiated by the governments of Canada, Mexico and the US in 1994 and provides for the elimination of most tariffs on products traded among the three countries.


Trade deals can’t be worked like rocket science. Gains to some and losses to others are part and parcel of the deal. Further, when it comes to trade across borders, which has political impact, it acquires significance in the debate over economic figures. Democracy adds to ambiguity.

Crisis gives an opportunity to reflect on the past and draw a narrative of consolidating gains and rectifying mistakes in the future. What has demonised NAFTA is job loss and to work out the dream of "make America great again". 

Tensions also simmered across borders over illegal movements in certain reams because of open borders or predatory pricing by certain sectors. But a blunt yes or no to remove the trans-Pacific trade agreement is no panacea.

The problems at hand can be better solved by due deliberation on contentious issues of labour and environment, worker rights and tradeoffs in jobs.

The trade war that has been started with two big importers of US goods shall not augur well. Trump is making hard talk that America needs to be treated fairly by trade partners and that protectionism would usher in prosperity. 

In today's parlance, there is a thin line between what goes on to distinguish between a nationalist and globalist. In the renegotiation drill, forces may even try to usher in thinking on favourable lines. In all this flip-flop, NAFTA looms and Trumpian talk is out of pace with reality.


Somewhere, the idea of a global world is being invaded. Photo: Reuters

For two decades, NAFTA has kept the three economies together. With Canada and Mexico showing due intent in upgrading it, Trump is focusing on increasing tariffs on Canadian lumber, which may lead to increased home prices and inflation in US markets. 

As a strategist and negotiator, he is yet to present the contours of the new deal that he may garner if NAFTA is terminated. The rust belt voted for Trump for trade. But is this obscure tweaking of NAFTA a facade to make Mexico pay for the wall? The pressures of a competitive international environment cannot be evaded by raising barriers.

Further, opting out of the trade deal won't be easy. Working out the mechanism of costs and penalties in wrapping up the supply chain and outsourced business may also generate new triggers. 

New fears on venturing in entrepreneurship shall defeat the very purpose of withdrawal - namely slowdown of economy, unemployment, drop in trade, among others. The idea of enforcing "buy American" laws with a vow to remould world trading is a setback to the World Trade Organisation and global governance at large.


Somewhere, the idea of a global world is being invaded. Diminishing interdependence and isolated economies is worrisome. Gains factored by globalisation shall be lost on the bleak and false hope that a new narrative will generate more. 

Globalisation was never even - it benefitted some, others lost out. However, it presented a more acceptable rational perspective to the international political economy. With deglobalistaion in full swing, there is an uncertain way ahead for markets, capital, talents and people. 

People have to wait and watch out for new developments. But as of now, the idea of living in a world with ruptures in fluidity of business and government approach cannot be ignored.

NAFTA has a shaky future. The idea of a global connected world with free movement of goods and services has a murkier prediction. Unexpected measures may occur at moments of uncertainty. No clear-cut wisdom of rationality of policy decisions is sending a message of dejection. 

As Trump, on 100 days of his presidency, wanted to assert pulling out of NAFTA, reality had a different image against rhetoric. International trade deals are complex, with the idea of rampant economic growth at loggerheads with a world marked by non-traditional threats like climate change, terrorism, depletion of resources, rise of technology, among others.

Hope one sees the merit of criticising such populist tendencies which may breed the new danger of authoritarianism.

Last updated: May 06, 2017 | 22:07
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