William Clouston, leader of the Social Democratic Party argues YES
A gust of wind and a possible power failure on a container ship blocked the Suez Canal – a commercial artery through which an estimated 12 per cent of global trade passes. This is just the latest example of the increasing fragility globalisation has caused.
From the start, the Coronavirus pandemic has exposed industrial vulnerability throughout the West, as governments scrambled for the supplies their gutted, de-industrialised economies were no longer able to produce. The seeds of this situation are to be found in a generation of liberal economic thinking, which has encouraged indifference to what is made where and by whom – in other words, excessive globalisation.
In fact, global free trade was always a rather utopian idea. The trend towards fewer but larger suppliers in most sectors has resulted in a strategic over-reliance on dominant corporations, many of which are effective monopolies. Whether it’s in the supply of semi-conductors or ships, genuine market competition has been undermined, and this has political implications in a world in which rival ideological blocks are re-emerging.
Globalisation has had winners and losers. It has not been in the interests of the West’s industrial workers to go ‘toe to toe’ in competition with corporations in poorer countries, many of which have significantly lower labour costs and poorer safety and environmental standards. Nor is such ‘globalism’ desirable from a macroeconomic standpoint. The consequences of the West’s de-industralisation have been profound. Strategically weakened economies such as the UK now suffer from stubborn trade deficits and the undermining of the industrial wage which formerly supported the family.
One lesson the West is learning the hard way is that large corporations have an obligation to the states from which they come. It is inconceivable that South Korean or Japanese companies would shed their national obligations in the way in which many of the West’s ‘global’ players have.
Thankfully, the tide is turning. Going forward, I expect Western governments to move towards securing greater economic resilience via re-industrialisation, re-shoring, import substitution and some trade friction.
Globalisation is past its high water mark – and not before time.
Matt Kilcoyne, deputy director at the Adam Smith Institute argues NO
Shipping is the lifeblood of global trade, they say. Around 90 per cent of the world’s trade by volume travels by sea in still expanding amounts.
The largest cargo ship in the world carries up to 24,000 20-foot equivalent containers. These are the modern colossuses that bestride the atlas each and every day, delivering the goods we need to the places we need them, in good time and at excellent price.
We used to develop whole coasts into small coves to protect boats from the elements. We built whole industries on the bets of whether a ship would return from sea safe with cargo to make its owners rich. Now, shipping is so regular that we largely consign the incredible feats of engineering that deliver the wealth of our world to our doors daily with a disdain we have perfected upon encountering miracles wrought by human hands.
Except when it comes to a stop. This week a clot formed in the Suez as the Golden-class container ship Ever Given, owned by the Japanese firm Shoei Kisen Kaisha, operated by container transportation and shipping company Evergreen Marine of Taiwan, and piloted by Indians delivering goods to Europe, got blown into the side of (and blocked) the canal, potentially costing global trade several billions of dollars.
Globalisation delivers because it provides a benefit to the seller and to the buyer. The imports and exports of goods across our planet have enabled us to end famines, in large part have helped make war an unprofitable pursuit and, in this time of pestilence, have helped us conquer death (and let us keep access to the creature comforts that mean the world).
While the Suez Crisis of 1956 undid an international order that prioritised European powers and, more generally, power itself over the principle of mutual respect and engagement, this week’s Suez Crisis shows us the value we place in trading freely.