Global Glance: November 21, 2016
A quick look at intriguing international stories
By John Bostwick, Managing Editor, Radius
Obama and Merkel Defend Globalization and the TTIP on the Cusp of Trump’s Presidency
Last Thursday, the German daily WirtschaftsWoche published an opinion piece cowritten by US president Barack Obama and German chancellor Angela Merkel. The publication coincided with Obama’s final overseas trip, a six-day tour with stops in Germany, Greece and Peru.
Donald Trump and his coming presidency are not directly mentioned in last week's op-ed, but many will read it as a barely disguised plea to the US president-elect to uphold the values that Obama and Merkel regard as cornerstones of liberal democracy in our age, such as a respect for the rule of law, a commitment to NATO and the provision of “humanitarian relief and aid for millions of refugees worldwide.” Trump’s detractors worry that his presidency will erode these principles in the US and abroad.
Obama and Merkel’s article also stresses the value of globalization, another trend that Trump openly opposes and seeks to combat with trade protections. Obama and Merkel specifically address the benefits of unencumbered trade between their respective nations, noting that bilateral investments between them totaled $339 billion in 2014, “creating high-paying jobs in both our countries.”
Significantly, the two elected leaders also trumpet the benefits of the proposed Transatlantic Trade and Investment Partnership (TTIP), claiming that “there is no question that both German and American employers, workers, consumers and farmers would profit from” it. They conclude by proclaiming that “the future is upon us, and we will never return to a pre-globalization economy.” They emphasize the urgent need for cross-border cooperation and for Germany and America to “seize the opportunity to shape globalization based on our values and our ideas.”
Unfortunately for Obama, Merkel and other supporters of globalization, the TTIP — which has been under development for three years — may never get signed. Many, including a senior German official quoted in a Guardian article last week, have declared that the deal is “as good as dead” in the wake of Trump’s victory.
The Guardian explains that “the TTIP would have led to a drastic reduction in transatlantic trade tariffs and the removal of barriers to investment.” But such deals — including the proposed Trans-Pacific Partnership and the existing North American Free Trade Agreement — have been loudly attacked by Trump as domestic job killers. Even Hillary Clinton withdrew her initial support of the Trans-Pacific Partnership during her own campaign, perhaps a necessary realpolitik strategy in an increasingly protectionist environment. A Wall Street Journal article summarized the situation like this: “The 2016 election season has shown that domestic concerns about globalization, the trade deficit and stagnant wages easily beat out the appetite for international engagement.” (The Guardian article notes that many Europeans also opposed the TTIP for potentially favoring corporations over workers.)
Merkel, who declared yesterday that she will run for reelection next year, has decided to take a strong stand against this inward, protectionist trend, not just by publishing last week’s op-ed with Obama, but by hammering home the point in her recent speeches. Last week, as reported by Reuters, she addressed her nation’s employers’ association (BDA), warning them that now — in the face of Trump’s rhetoric and the recent Brexit vote — is not the time for Germany, the rest of the EU and indeed the world to “seal ourselves off and become protectionist.”
She urged the BDA audience to “fashion globalization in a multilateral way,” and she pledged to “make globalization a theme for debate during Germany's presidency of the G20 next year.” She added, a little gloomily but no doubt realistically, that “this dispute over openness or sealing ourselves off (in trade) will keep us very busy in the coming years.”
Obama likewise further addressed globalization in a speech in Athens last Wednesday. His remarks were wide-ranging, addressing such topics as the evolving, messy nature of democracy, Greece’s admirable hosting of migrants during the ongoing refugee crisis, the transformative effects of technology, and, yes, the “forces of globalization” and “the paradox of a modern, global economy.”
That global economy, Obama observes, has given rise to a world that is “wealthier, better educated, healthier and less violent” than it has ever been before. The paradox involves the substantial drawbacks of the global economy. They include most prominently “increasing the tendencies towards inequality, both between nations and within nations, at an accelerated pace.” These tendencies, and the technologies that allow people of all income brackets all over the world to gain an awareness of them, lead to understandable impulses “to pull back from a globalized world” and “seek a comfort in nationalism or tribe or ethnicity or sect.”
Obama — who tells his Greek audience that they “may have noticed, the next American president and I could not be more different” — argues that protectionism and nationalism are futile responses to globalization, which like democracy itself is evolving, imperfect and messy, but better than the alternatives.
Given that the Athens remarks represent one of Obama’s last speeches, this post will give him the final word on the importance of embracing globalization over protectionism or what he calls “a crude sort of nationalism.” He said: “[G]iven the nature of technology, it is my assertion that it’s not possible to cut ourselves off from one another. We now are living in a global supply chain. Our growth comes through innovation and ideas that are crossing borders all the time. The jobs of tomorrow will inevitably be different from the jobs of the past. So we can’t look backwards for answers, we have to look forward.”