Could globalisation unravel?
Globalisation now stands at a critical juncture. At the March G20 summit, almost every participant reaffirmed a commitment to free trade arguing that unilateralism and protectionism were to be avoided at all costs. Domestically, however, the message has been a little different. According to the World Bank, 17 of the G20 nations have taken protectionist action of some type since November 2008. This includes new tariffs and less obvious measures such as aid for domestic producers. WTO chief Pascal Lamy has warned that even ‘low intensity protectionism’ is damaging but the really alarming scenario is another escalating spiral. The reversal of hard-won progress over decades is a distinct possibility. On balance, however, this is currently unlikely. As the row over the Buy American clause illustrated, everyone has too much to lose and recognises it. Existing lifestyles would be impossible to maintain and governments are fully aware of the likely consequences.
