For over 40 years the world has become increasingly globalised; trade between countries has boomed, millions have been lifted out of poverty and goods and services have never been cheaper. Consumers in the West have benefited enormously from cheap imports, yet opposition to globalisation continues to grow. Concern about stagnant wage growth and mass immigration has seen a revival of nativist sentiment. All around the world, voters have rebelled against open borders and involvement in multilateral trade treaties, instead favouring greater restrictions on the free movement of people and a return to protectionism.
In 2016, voters in both the United States and the United Kingdom voted against an increasingly globalised world order. This was despite a concerted campaign by the establishment threatening ruinous consequences if people voted for nativist policies and candidates. Yet regardless of such threats, the people raised two fingers to the establishment and took a chance. The question is why?
Immigration and border control
The world was shocked when 51.9 percent of British voters chose to leave the Europe Union in the Brexit referendum. Britain had been a member of the European Union and its predecessor European Economic Community since 1973. British voters made this decision against the advice of then British prime minister David Cameron, leader of the opposition Jeremy Corbyn and the Remain Campaign who claimed that 950,000 jobs would be lost and that the average wage would fall by £38 per week if Britain were to leave the European Union.
Why would so many people vote against their own economic well-being? In this era of focus group, data-driven politics it’s assumed voters won’t vote for policies that hit their hip-pocket. One only need see the inability of governments around the world to balance their budgets for evidence of that. Yet despite the dramatic claims of the Remain Campaign, a comfortable majority of voters still chose to leave the European Union.
Issues around immigration and border control contributed significantly to Brexit. The Lord Ashcroft polling survey conducted on the day of the referendum found that 49 percent of Leave voters identified national sovereignty as the primary reason for voting Leave, agreeing with the statement, “decisions about the UK should be taken in the UK”. Closely related to sovereignty, immigration and border control was another major factor with 33 percent of Leave voters agreeing with the statement “(Brexit) offered the best chance for the UK to regain control over immigration and its own borders”.
Concerns about overpopulation and increased competition in the labour market also contributed to the Brexit vote with many Leave voters resenting the European Union’s continued expansion eastward. The inclusion of countries such as Poland and Romania in the European Union resulted in the migration of thousands of workers and their families to Britain. In 2004, the Labour Government opened the United Kingdom’s borders to eight East European nations, anticipating between 8,000 and 13,000 new arrivals: the actual figure was 129,000 between 2004 and 2005. Since then, between 70,000 and 100,000 Eastern Europeans have arrived annually. Brexit had some of its strongest support in areas with high populations of Eastern European migrants. In these areas, locals have been impacted by increased competition for jobs and social services.
For many Leave voters, the Syrian migration crisis demonstrated why Britain needed to retain sovereignty over its own borders. Fleeing the Syrian civil war, millions of asylum seekers entered Europe via the sea and other routes. The nations in the Schengen area, a zone in Europe where people can travel between member states without passports or checkpoints, found their social infrastructure at straining point.
During the Brexit Campaign, Nigel Farage’s UK Independence Party (UKIP) used an image of thousands of asylum seekers crossing the Slovenian/Croatian border on a large billboard with the slogan “Breaking Point” in big, red typeface. While Britain was not part of the Schengen area, the billboard represented the fears of many that Britain’s continued involvement in the EU would force it to accept millions of asylum seekers. For many Leave voters, the prospect of millions of unscreened migrants entering Britain through Europe was terrifying.
The ongoing issue of Islamic terrorism has also made immigration increasingly unpopular. The constant metronome of terrorism from first or second-generation immigrants has reduced support for multiculturalism. Added to this is the perception that authorities in many Western countries seemingly place the protection of the multicultural project over saving lives. Voters have grown tired of political leaders who are more concerned with preventing ‘racist’ backlashes to terrorism than terrorism itself.
Many were outraged when Sadiq Khan, London’s Lord Mayor was misquoted as saying, terrorism was ‘part and parcel’ of living in a big city. While Khan had not actually said this, the outrage reflected the dissatisfaction among the public with how the political class dealt with the role of immigration and multiculturalism in the war on terror.
Similar to the Brexit referendum, concerns about immigration contributed significantly to the outcome of the 2016 United States Presidential Election. America has roughly 11 million illegal immigrants within its borders, half of whom are from Mexico. During the election, then presidential candidate Donald Trump said of Mexican immigrants, “They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.”
Trump won the election in part because he promised to build a wall along the Mexican border. For decades, previous administrations had done little to discourage illegal immigration into America by providing amnesties for existing illegal immigrants. The previous Obama Administration had passed the Deferred Action for Childhood Arrivals (DACA) policy, giving people who entered the United States illegally as children, known as ‘Dreamers’, the temporary right to live, study and work in America. This was a compromise after the more generous Dream Act was rejected by Congress. While polls show the majority of Americans support such policies, they have proven to be controversial with some voters and contributed to Trump’s election. Trump’s willingness to appeal to nativist concerns separated him from establishment Republicans during the primaries and allowed him to win the Republican nomination. By ignoring the concerns of voters on immigration, mainstream politicians made Trump’s election possible.
Free trade and its losers
The election of Donald Trump represented the most significant change to American trade policy in 40 years. Trump beat opponent Hillary Clinton in traditional blue states Michigan, Wisconsin and Iowa in America’s Rust Belt by campaigning on the country’s increasing trade imbalance with China, a commitment to not ratify the Trans-Pacific Partnership (TPP) and withdrawing the United States from the Paris Agreement.
Trump’s protectionist policies appealed to blue-collar workers, particularly those in the Rust Belt states. For the first time in a long time, a presidential candidate was saying things that they’d been saying for years. For decades, voters in the Rust Belt watched as manufacturing jobs disappeared. Many blamed free trade and unfair competition. In truth, America’s manufacturing output has continued to rise but has moved away from traditional heavy industry into high-tech manufacturing so many of the old jobs have been replaced by technology and automation. However, the facts were of little comfort to those who had worked their entire adult life in the old industries.
Since becoming president, Trump has started a trade war with China; placing tariffs on steel and aluminium and accusing China of dumping. For Trump and many of his supporters, the United States has been too eager to sign up to one-sided trade deals that allow American industry to be wiped out by foreign competition. This is not entirely baseless – despite their acceptance into the World Trade Organisation in 2001, China routinely steals intellectual property from American companies that manufacture their products there. Foreign firms are forced into partnerships with Chinese firms to gain access to the Chinese market, and China routinely manipulates its currency to make Chinese exports artificially cheap.
Trump tends to view the world stage in black and white, where each player is either a winner or loser. At present, the United States’ trade deficit with China sits at US$375 billion and US debt to China is US$1.7 trillion. During the US Presidential election debate, candidate Trump said, “Look at what China is doing to our country... They are devaluing their currency and we have nobody in our government to fight them... They are using our country as a piggy bank to rebuild China, and many other countries are doing the same thing.” On another occasion, he said, “Our country is in serious trouble. We don’t have victories anymore. We used to have victories, but we don’t have them. When was the last time anybody saw us beating, let’s say China, in a trade deal? I beat China all the time. All the time.”
It was this bipolar assessment of the world that led Trump to abandon the Trans-Pacific Partnership and the Paris Agreement on climate change. The TPP would have established the biggest free trade zone in the world, incorporating all the major economies in the Pacific but excluding China. In Trump’s mind, the TPP was a bad deal in which made America a loser by exposing America’s industry to even more foreign competition. Though in true Trump style, he has since come to reconsider the TPP, as its main purpose was to create a trade bloc that would impose trade rules on China. For someone often claimed to be playing 3D chess, Trump’s decision to walk away from the TPP was incredibly short-sighted and has strengthened China’s position in the region.
Like the TPP, Trump saw the Paris Agreement as another bad deal that disadvantaged the US. Trump’s withdrawal from the Paris Agreement, while often seen through the lens of climate denial in the media, can also be seen in the context of the trade war with China. The previous Obama administration committed the United States to reducing its carbon emissions by 26 to 28 percent by 2020 while China only agreed for its emissions to peak by 2030. From the perspective of Trump and his supporters, this agreement only served to hurt American industry and provide an advantage to its biggest competitor. Only time will tell what impact America’s withdrawal from the Paris Agreement will have. It may result in increased commitments by China and India to reduce their carbon emissions, or it may just result in increased carbon emissions and a global failure to address climate change.
How can the benefits of globalisation be saved?
The shockwaves from 2016 are still affecting us today. Globalisation has given the world enormous benefits. Free trade has lifted millions out of poverty and increased wealth throughout the world. People have also benefited from a world with less restriction on movement. Millions have had the chance to chase opportunities in new countries and millions more have benefited from the skills and talents brought by migrants. Yet, all these benefits haven’t come without costs. Many of the developed world’s most vulnerable people have had their jobs wiped out by global trade and seen their communities transformed beyond recognition. Many more no longer feel safe in their own towns and cities. Nations need to ensure that they retain control of who passes through their borders and they need to ensure that those who do come are a benefit and not a burden. Nations also need to ensure that trade deals are fair and that the losers in any trade deal are compensated.
Returning to the bad old days of closed borders and restricted trade is not the solution to today’s problems, but our leaders don’t help anyone by pretending that no problems exist. Existing populations have a right to know that new migrants are unlikely to commit crime or terrorism, aren’t displacing existing workers and will fit into the existing culture. Workers in industries disrupted by global trade need help finding new employment and existing industries need protection from dumping and currency manipulation. If we are to live in a more global world it needs to a fair one.