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Le Monde (France): We come to the point where globalization is too expensive
Material posted : Administrator Publication date: 09-09-2018

After passing a certain threshold of internationalization of trade damage the global economy, according to the French economist Pierre-Andre Buigues. Globalization has shown that over-integration does not help to withstand the crisis, but rather only exacerbates them. The growing gap between poor and rich countries due to the uneven distribution of positive results of globalization.

conomiste argue that international trade promotes growth because globalization allows us to move production to where costs are lowest and to reduce the prices of goods in favor of consumers in the countries where their production will be more expensive. In addition, globalization can improve the situation of hundreds of millions of workers in poor countries, particularly in China.

That's why most economists support the signing of new free trade agreements, as we see from the example of the last report of the Council for economic analysis. By this logic, the further internationalization of trade can only enhance the positive impact of this "happy globalization".

On the other hand, polls show that the majority of the European population is against globalisation and considers it responsible for the stagnation of wages and rising unemployment and inequality. Economists acknowledge the unequal geographical distribution of those who wins and loses from globalization (it workers in countries with low cost production and low-skilled workers from developed countries), however, emphasize an obvious increase. First get more than lose the second, including in developed countries, due to lower consumer prices.

Europe is among the losers

Transnational companies play a Central role in globalization and is its most faithful supporters. Their internationalist strategy focuses on finding places with the lowest cost of production ahead of rivals.

However, as noted in several scientific papers, after a certain point the expansion of internationalization of international companies to the detriment of their profitability in connection with the intensification of geopolitical risk and the cost of adaptation to a variety of markets. As a result, today we are faced with the following question: may it happen that after active growth of globalization, we came to the threshold beyond which the price of expansion becomes too high for the economy.

International trade has a very serious inequality. Some countries provide substantial support to certain strategic sectors (direct aid, barriers to imports), as it applies, for example, electric vehicles in China. This practice is contrary to international competition and is banned in Europe. So, the European solar industry have been wiped out by Chinese manufacturers. Similarly, countries that reduce the taxation of enterprises in comparison with other countries promote their exports to the detriment of competitors.

Moreover, the power of making Europe more rigid in comparison with trading partners regulations in environmental, social and food sector, she has much to lose in globalization. The situation is so serious that the barriers to international trade are low, and the parties shall take all the new free trade agreements without these moments.

Greatest connivance

Food security has become a priority for European consumers, and they require a guarantee. However, due to international trade is banned in Europe, products can be imported and consumed within its territory. So, 17 European countries are against GMOs, but many products of this type freely imported into Europe. For the most part this applies to animal feed, but to a lesser degree affects human food.

Globalization implies international flows of goods. 90% of them provided by today's sea transport, which is therefore experiencing rapid growth. By 2050 it will account for 20% of all emissions, but many countries do not want to enter restrictive measures for fear of increasing the cost of exports.

Finally, in social terms, the international Western companies create in many exporting countries socially unacceptable production conditions (unsafe factories, child labor, low wages), although products are intended for the Western States. As an example, the minimum wage in the tea plantations in India is 2,10 Euro per day...

Pierre-André Buigues (Pierre-André Buigues)


Tags: strategy , France

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