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KUALA LUMPUR, Malaysia, Feb 25 2025 (IPS) - Donald Trump’s Make America Great Again (MAGA) appeal captured US mass discontent against globalisation. In recent decades, variations of America First have reflected growing ethnonationalism in the world’s presumptive hegemon.


Deglobalisation?


Trade liberalisation probably peaked at the end of the 20th century with the creation of the multilateral World Trade Organization (WTO), which the West kept outside the UN system.


With deindustrialisation in the North blamed on globalisation, their governments gradually abandoned trade liberalisation, especially after the 2008 global financial crisis.


Free trade mahaguru Jagdish Bhagwati has long complained of the weak commitment to multilateral trade liberalisation. Most recent supposed free trade agreements (FTAs) have been plurilateral or bilateral, undermining multilateralism while promoting non-trade measures.


The new geoeconomics and geopolitics have undermined the rules and norms supporting multilateralism. This has undermined confidence in the rules of the game, encouraging individualistic opportunism and subverting collective action.


Policymaking has become more problematic as it can no longer count on agreed-shared rules and norms, undermining sustained international cooperation. Biased and often inappropriate economic policies and institutions have only made things worse.


Successive Washington administrations’ unilateral changes in policies, rules and conventions have also undermined confidence in US-dominated international economic arrangements, including the Bretton Woods institutions.


Deliberate contraction

Although recent inflation has been mainly due to supply-side disruptions, Western central banks have imposed contractionary demand-side macroeconomic policies by raising interest rates and pursuing fiscal austerity.


US Federal Reserve interest rate hikes from early 2022 have been unnecessary and inappropriate. Squeezing consumption and investment demand with higher interest rates cannot and does not address supply-side disruptions and contractions.


After earlier ‘quantitative easing’ encouraged much more commercial borrowing, higher Western central bank interest rates were contractionary and regressive. Hence, much of world economic stagnation now is due to Western policies.


Developing countries have long known that international economic institutions and arrangements are biased against them. Believing they have no opportunity for wide-ranging reform, most authorities are resigned to only using available macroeconomic policy space.


Nevertheless, national authorities have become more willing to undertake previously unacceptable measures. For example, several conservative central banks deployed ‘monetary financing’ of government spending to cope with the pandemic, lending directly to government treasuries without market intermediation.


More recently, central banks in Japan, China, and some Southeast Asian countries refused to raise interest rates in concert with the West. Instead, they sought and found new policy space, helping to mitigate contractionary international economic pressures.


Nonetheless, many economists piously urged central banks worldwide to raise interest rates until mid-2024. Meanwhile, policy pressures for fiscal austerity continue, worsening conditions for billions.


Neoliberal?

To secure support for neoliberal reforms from the late 20th century, the Global North promised developing countries greater market access and export opportunities.


However, trade liberalisation has slowly reversed since the World Trade Organization (WTO) creation in 1995. Policy reversals have become more blatant since the 2008 global financial crisis with geopolitically driven sanctions and weaponisation of trade.


But ‘neoliberal’ globalisation was a misnomer, as there was little liberal about it beyond selective trade liberalisation.


Instead, FTAs have mainly strengthened and extended property and contract rights, i.e., selectively interpreting and enforcing international law.


Trade liberalisation undermined earlier selective protectionism, which promoted food security and industrialisation in developing countries. Tariffs have also been crucial revenue sources, especially for the poorest countries.


Intellectual property

Strengthening the rule of law has rarely fostered liberal markets. Even 19th-century economic liberals recognise the inevitable wealth concentration due to selective and partial neoliberalism.


Property rights invariably strengthen monopoly privileges under various pretexts. Global North governments now believe control of technology is key to world dominance. The WTO’s trade-related intellectual property rights (TRIPS) have greatly strengthened IP enforcement.


With IP more lucrative, corporations have less incentive to share or transfer technology. With TRIPS enforced from 1995, technology transfer to developing countries has declined, further undermining development prospects.


The 2001 public health exception to TRIPS could not overcome IP obstacles to ensure affordable COVID-19 tests, protective equipment, vaccines and therapies during the COVID-19 pandemic, even triggering criticisms of ‘vaccine apartheid’.


Weaponising economics

The West has increasingly deployed economic sanctions, which are illegal without UN Security Council mandates. Meanwhile, access to trade, investment, finance and technology has become increasingly weaponised.


Foreign direct investment was supposed to sustain growth in developing countries. Intensifying Obama-initiated efforts to undermine China, then-President Trump and Japanese Prime Minister Abe Shinzo urged ‘reshoring’, i.e., investing in investors’ own countries instead.


Initial attempts to invest in their own economies instead of China largely failed. However, later efforts to undermine China have been more successful, notably ‘friend-shoring’, which urges companies to invest in politically allied or friendly countries instead.


With more economic stagnation, geopolitical strategic considerations and weaponisation of economic policies, cooperation and institutions, fewer resources are available for growth, equity and sustainability. Thus, the new geopolitics has jeopardised prospects for sustainable development.


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Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, Aug 11 (IPS)  - The Trans-Pacific Partnership (TPP) Agreement should be dead and buried after President Trump announced US withdrawal immediately after his inauguration in January 2017. After all, most major US presidential candidates in the last election, including Hillary Clinton, had opposed the TPP.


Encircling China with trade pact

However, the Japanese, Australian and Singaporean governments have kept the TPP alive, first by mooting TPP11, i.e., minus the USA, later pretentiously relabelled the Comprehensive and Progressive TPP (CPTPP), with the hope that the US will rejoin later.

Other governments have remained ‘on board' for various reasons, mainly foreign policy considerations, rather than with serious expectations of economic benefits, while ignoring the dangers and risks.

Last week, yet another ministerial meeting reiterated pious claims of steady progress as CPTPP boosters try to remain relevant despite the fast declining appetite for regional trade deals.

The CPTPP did not even get rid of the most onerous TPP provisions, but only suspended some intellectual property (IP) and other provisions, mainly of interest to the USA. These can easily be reincluded to bring the USA back in after the November election.

However, other onerous aspects, such as investor-state dispute settlement (ISDS) provisions, remain. In the wake of Covid-19, lawyers are already advising foreign investors how to use extraordinary coping measures to sue governments, which will cost them even if they win.

If re-elected, the Trump administration's opposition to ISDS can easily be accommodated to bring the US back on board as it seeks new measures to isolate and weaken China. Biden will also revive a TPP avatar, having supported it before as Obama's loyal Vice-President.

But reselling the TPP in the USA will not be easy. Already, many US manufacturing jobs have been lost due to corporations automating and relocating abroad. Trump has changed US public discourse so much that most Americans now blame globalization, immigration, China and foreigners for the problems they face.

False claims for trade deal

Various studies have shown that supposed trade gains from the TPP claimed by its advocates were greatly exaggerated and misleading. This should come as no surprise.

The US already has free trade agreements with six of the other 11 TPP countries. Trade barriers with the other five were already low in most cases, so there was little scope for further trade liberalization, except for US post-Vietnam war legislation.

All twelve also belong to the World Trade Organization (WTO) which concluded the ‘single largest trade agreement ever' over a quarter century ago. For trade liberalization guru Jagdish Bhagwati, both bilateral and plurilateral FTAs undermine trade liberalisation welfare arguments.

For the Peterson Institute of International Economics (PIIE), the principal TPP advocate, gains mainly come from additional foreign direct investment (FDI), due to more investor rights, implying greater concessions from, and less gains for host economies.

But the official US International Trade Commission doubted PIIE claims of significant growth benefits in mid-2016, well before Trump was elected. Supposed gains were either dubious or paltry over the long-term time horizon involved.

Investor friendly rules?

Rather than promoting trade, the TPP really sought more transnational corporation (TNC)-friendly rules. After all, the 6350-page deal had been negotiated by various working groups including hundreds of major US corporate representatives. But by involving lobbyists, US negotiators may well have locked themselves into a deal of little interest to most other businesses.

Doubts also remain over whether most TNCs really value the CPTPP's enhanced investor rights. The World Bank has found that investment treaties rank far below other considerations such as infrastructure, natural resource endowments, market size and growth potential.

Also, rules favouring foreign investors do not necessarily improve investment flows to host countries, let alone ensure development benefits without good national industrial policies in place.

Enriching rentiers

There is no evidence that stronger IP rights increase innovation, research and development. Strengthening IP monopolies for powerful TNCs, such as pharmaceutical firms, would raise the value of trade through higher prices, not more goods and services.

Extending IP protection would raise the prices of pharmaceutical drugs, including ‘biologics', significantly increasing health costs. For Medecins Sans Frontieres, the TPP would go down in history as the worst "cause of needless suffering and death" in developing countries.

US laws cannot protect consumers anywhere. Martin Shkreli infamously raised the price of a drug whose patent he had bought by 6000%, from USD12.50 to USD750! As ‘price-gouging' is not unlawful in the US, he was convicted for unrelated financial fraud.

Meanwhile, powerful pharmaceutical TNCs have made clear their intention to charge high prices for new vaccines despite enjoying government subsidies. Whereas vaccines for smallpox, polio, tuberculosis and other communicable diseases were available at cost, higher costs, due to enhanced IPRs, will impose heavy human and economic tolls.

Enabling foreign corporate bullying

FDI was expected to go up, thanks to enhanced TPP investor protection. Foreign companies could then sue TPP governments for ostensible loss of profits due to policy changes, even if in the national or public interest, e.g., to contain Covid-19 contagion.

ISDS is arbitered by private tribunals. This extrajudicial system supersedes national laws and judiciaries, with secret rulings not bound by precedent or subject to appeal.

All who have seriously studied TPP impacts concede that it offers little additional growth. Even the modest trade growth claims are premised on US market access, no longer on offer with the CPTPP, which incredibly, now claims even more growth benefits.

Without the USA, the CPTPP will mainly strengthen Japanese TNCs. With greater rights for foreign investors, domestic investments may even relocate abroad, e.g., to CPTPP tax havens. Declining foreign investment in recent years could thus accelerate with the CPTPP.

From the frying pan into the fire

The Covid-19 pandemic has precipitated severe recessions, which threaten to become depressions, as many governments had to impose nationwide ‘stay in shelter' lockdowns with physical distancing and other preventive requirements disrupting economic life.

It is now clear that the CPTPP has not slowed growing trade protectionism. Instead, transborder supply chains have been disrupted, sometimes deliberately, with the US and Japan demanding ‘onshoring', urging TNCs to withdraw investments and outsourcing from China, also hurting suppliers, many from South East Asia.

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About Jomo

Jomo Kwame Sundaram is Research Adviser, Khazanah Research Institute, Fellow, Academy of Science, Malaysia, and Emeritus Professor, University of Malaya. Previously, he was UN Assistant Secretary-General for Economic Development, Assistant Director General, Food and Agriculture Organization (FAO), Founder-Chair, International Development Economics Associates (IDEAs) and President, Malaysian Social Science Association. 

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In The Media

TheStar 26 June 2020

TheStar 26 June 2020

The Star 20 Sept 2019

The Star 20 Sept 2019

Political will needed to push for renewable energy

The Star 10July 2019

The Star 10July 2019

Malaysian businesses need boost

The Star 9 Oct 2019

The Star 9 Oct 2019

Subsidise public transport for bottom 40%

The Edge 26 Sept 2019

The Edge 26 Sept 2019

Call for measures to counteract global headwinds

The Edge 9 Oct 2019

The Edge 9 Oct 2019

Subsidise public transportation, not fuel

The Star 8 Oct 2019

The Star 8 Oct 2019

Subsidise public transportation for bottom 70%

TheEdge 2Oct 2019

TheEdge 2Oct 2019

"We need to counteract downward forces"

Fake News

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PLEASE BEWARE OF MISREPRESENTATIONS OF IMAGES OF JOMO

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Commercial and political misrepresentation of his image attributing to him to things which he never said or misrepresenting things he may have said is being circulated on websites such as those posted here. 


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Thank you for reading this and for your help and cooperation.

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This has also been flagged on his official Facebook page

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