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June 11, 2019

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Protectionism no solution to globalization

In the name of putting “America First,” Washington’s trade hawks have been continuously making protectionist and isolationist waves around the world.

However, the trend of economic globalization is irreversible whether those trade hardliners like it or not.

Over more than two centuries, the process of economic globalization has facilitated the flow of goods, people, capital and technologies across the world, and brought together nations worldwide, including the United States, to become increasingly connected and interdependent with each other.

As a result, the international division of labor has become more extensive, while industrial production and markets have become unprecedentedly globalized. It is a natural process driven by the energy of increasingly globe-trotting capital which seeks profits at lower costs.

Therefore, although a protectionist Washington is trying to deconstruct assembly lines in other countries with higher tariffs, and to bring back manufacturing jobs to the United States, it will not only fail but backfire.

In fact, even if these jobs leave China’s shores, they would simply migrate to different locations with lower production costs due to the global market system, and will not return to the United States in any significant numbers.

Although Washington might be able to disrupt the global production of some industries for a limited period of time, it will certainly not be able to reshape them only to serve its selfish interests, or turn back the clock on the evolution of established globalized supply chains.

Washington’s reckless attacks against a rules-based multilateral trading system and an open global economy have seen an increasingly growing opposition from both within the United States and around the world.

Just last month, the American Apparel & Footwear Association and four other trade associations representing the entire US footwear supply chain wrote a letter to US President Donald Trump, warning him that tariffs would do “untold damage” to the industry, “ultimately affecting consumers in a negative way and hamstringing what has traditionally been a hugely successful part of the American economy.”

For the European Union, “closing up is not the answer.” Its trade commissioner, Cecilia Malmstrom, laid out in Washington Europe’s push for continuing trade liberalization in January, asserting that “we believe in open, rule-based trade.”

Trade bullyism

It is not just Europe. Despite Washington’s trade bullyism and repeated irresponsible backtracking on negotiation positions, Beijing has remained cool-headed, exercised restraint, and demonstrated the greatest sincerity and a strong sense of responsibility to resolve trade disputes through dialogue.

Despite an increasingly inward-looking US administration, China has reaffirmed that its doors will only open up even wider. Economic globalization has never been perfect, and has always managed to go forward in spite of setbacks. It has produced tremendous amounts of wealth for humanity, and remains a major force for global economic progress.

Inspired by a fresh round of technological advancement, including artificial intelligence, the Internet-of-things and big data, globalization has now entered a new stage of development.

Moving into this new era, nations around the world need to cooperate, instead of turning on each other, so that they can further unfetter the potential of an increasingly globalized economy and continue to deliver more benefits to people around the world.

More than two years ago, at the World Economic Forum in the Swiss ski resort of Davos, Chinese President Xi Jinping compared the global economy to an ocean that no country can escape from whether they like it or not.

“Any attempt to cut off the flow of capital, technologies, products, industries and people between economies, and channel the waters in the ocean back into isolated lakes and creeks is simply not possible. Indeed, it runs counter to the historical trend,” Xi warned.

His warning still holds true today.

The author is a Xinhua writer.




 

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