Has Coronavirus Killed Globalisation?
Updated: Feb 13, 2021
By Terence O'Brien
Speech delivered at Diplosphere's panel discussion on Has Coronavirus Killed Globalisation? on 25th June.
Globalisation is not new nor irreversible. Versions of it differ. Modern globalisation is more connected, intense and immediate, but past versions, like the era of European imperialism, connected the world and indeed bequeathed some legacies that endure.
Modern globalisation provides considerable advantages for those countries and individuals capable of seizing them - growth in trade, travel, investment, tourism, technology - but it also magnifies cross border dangers - from terrorism, crime, drugs, and now pandemics. Economic policies of deregulation derived from neo-liberal economic thinking, have at the same time, in the modern globalisation era, precipitated global financial crisis, and contrived to sharpen economic inequality.
Modern globalisation is witnessing too prodigious movement of people - refugees, migrants, legal and illegal - and mounting pressures to accomodate them is fuelling domestic political discontent and populism within Europe and North America. The particular vulnerability of these dislocated multitudes to COVID 19 is an additional fear.
Ensuring benefits internationally from globalisation, while providing protections against its dangers, requires durable rules of the road, and effective international institutions which embed those rules. Any question about whether COVID 19 is now killing globalisation needs to register the fact first that well before the virus struck the authority and prestige of international institutions were compromised by serial disregard of established laws and norms, especially by certain major powers .
The international system moreover failed as well to reflect changing realities in a globalising world. Its original powerful transatlantic architects remain unprepared to make room at the top table (in the IMF or at the G7 etc.) to allow leading emergent economies, and most notably China, a full role in management and supervision. Those governments surely merit inclusion if they too are to be champions of rules based international behaviour in a globalising interdependent world.
Against this background a flush of US unilateral economic and financial sanctions has had the effect, or purpose, of stalling the free trade engine of globalisation; in particular supply chain trade whereby component parts of technology products are manufactured separately in a consecutive process across a number of economies, before final assembly. When launching the US trade war with Beijing prior to COVID 19, President Trump singled out supply chain trade involving China, as a number one target for elimination. The foundations for modern globalisation within Asia are built upon networks and linkages between China and both North and South East Asia, established over a long period of history. By extension therefore collateral damage to other Asian economies will surely flow from US action on supply chain trade intended to contain China’s advance, and save American jobs.
Geopolitical rivalry between the US and China therefore preceded COVID 19. It now overshadows the recovery phase that looks set to be prolonged, and will almost certainly involve setbacks on the pathway to eradication. The scapegoating of WHO constitutes a purposeful distraction. It conforms unfortunately to a familiar harmful pattern of great power denigration of the UN system where effectiveness and morale are, as a result, being cumulatively and inexorably shredded. The result today is a globalising world of connexion but without cooperation - most graphically exemplified by the feckless international response to climate change.
COVID 19 has capsized completely predictions and assumptions about the global economy. Deep recession, ballooning government debt and unemployment pose immense challenges that are beyond resolution by mere reliance upon market forces. NZ’s recovery will be decisively influenced by the effectiveness of Asian recovery. In keeping with governments in South East Asia (ASEAN), NZ does not want, during COVID 19, recovery to be forced “to take sides” in US-China geopolitical rivalry. Whether a post Trump US government will ease intense US animosity towards China, towards the UN and international law overall is a moot question, as is the future conduct of an assertive authoritarian China under Xi Ping and beyond.
Regional institutions in Asia Pacific have to date played little by way of a cooperative role on COVID 19. One paradox of the present age of globalisation is nonetheless the extent to which it is actually producing ‘a world of regions’ involving a veritable alphabet soup of of preferential free trade agreements - NAFTA, TPP, RCEP, the EU etc. - that effectively serve to dislocate globalising trade. Whether in the case of recovery from COVID19 an extension of ‘bubbles’ amongst recovering countries, will be feasible and therefore replicate the regionalising effects of globalisation, is also an open question. With the notable exception of Australia, a wider ‘bubble’ for NZ would, on the face of it, lie inevitably within Asia rather than with the principal Anglosphere countries (the UK and US) where the virus maintains a grip,and where internal politics and their impacts, regionally and globally, provide major distractions from effective reliable leadership.
Terence O'Brien is a former New Zealand Ambassador to the United Nation (Geneva, New York), and Senior Fellow at the Centre for strategic Studies at Victoria University of Wellington.
The views expressed in this article are the author's own and do not necessarily reflect Diplosphere's stance.