Thursday, October 8, 2009

Did the Economist inadvertantly kill globalization?

It would be quite the irony if the choice of cover illustration for the world's most stalwart free-trade publication created a kind of "ripple-effect" that brought this "golden age of globalization" to an early end (Perhaps not so golden to you, but golden from the perspective of the Economist).

James Fallows blogged that "the mainstream economics press had gone (predictably) berserk in overreacting to the shock-horror nightmare of the Obama administration's tariff on imported Chinese tires."   Fallows explained:
There is not now, and there never was, a serious possibility that this would escalate into some sweeping, self-intensifying, global-recovery-threatening "trade war."  The many publications and commentators who raised their hands in "Oh no! It's Smoot Hawley again!" horror need to calm down -- and to have their tendency toward over-reaction noted for the record. Yes, I'm talking about you, Economist magazine cover-designers (last week's cover image, below), but you had tons of company.
That was my reaction.   The story seemed way overblown.   But the question begs to be asked: might such overreaction on the part of the mainstream media water the seeds of discord in otherwise barren soil?     I no longer think this question is mere speculation.

On Sunday the Indian state of Kerala erupted in massive protests over the ASEAN-India Free Trade Agreement.  The FTA is viewed by many Kerala farmers -- including rubber plantation workers -- as a threat to their livelihoods.   This commentary by V.R. Krishna Iyer, formerly a judge of the Supreme Court of India, published in the business section of The Hindu, caught my attention:
... Kerala’s rubber sector, in particular, will vanish if the free import of rubber from outside India under the FTA is allowed. Pepper, coconut, plantation products and similar commodities which form the backbone of Kerala’s economy will die, too.

When Chinese tyres offered at fabulously cheap rates threatened the American tyre industry, President Barack Obama imposed 30 to 40 per cent duty on the import of tyres in order to save the American tyre industry. The same Obama strategy of imposing heavy import duties to protect the farmers of the State ought to be instantly imposed here. And to that extent, the ASEAN agreement should be made subject to nationalist conditions.

I protested as part of what was called a human chain against the FTA that was organised across Kerala on October 2, out of concern for swaraj, agriculture, and the peasants and workers of Kerala. Why not copy Mr. Obama in this matter: India is readily adopting America in many other matters, after all.
Photo WorkersForum h/t Ida

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