Consider that just 20 years ago, China, now the second-largest economy in the world, was suffering from extremely poor economic conditions.
There was little evidence that it was a country destined to be an economic super-power. The speed with which China—as well as Singapore, Taiwan and South Korea—have become “near developed countries” (NDCs) and major economic players has amazed the world. Their progress calls into question both internal and external barriers that were put in place and approved by the World Trade Organization back at the turn of the 21st century. It’s time for those countries to accept their new place in the world by competing on the basis of real advantages in innovation and productivity rather than artificial ones.
“Globalization will resume, innovation and productivity will increase and the standard of living will rise worldwide.”
What we’ve seen—and will continue to see—is that globalization is, in fact, unstoppable. The human drive, combined with the era of the Internet and digitization, makes it inevitable.
During the past 200 years, globalization has moved in fits and starts, picking up speed, pausing to reset itself and then picking up speed once again. Leaders of national governments will come and go—as evidenced by recent and potential changes not only in the U.S. and the UK, but also in France, Germany, Brazil and India—taking actions during their tenures that decide globalization’s speed and magnitude.
The NDCs should change their mindset and realize that it is in their interest to focus on increasing their productivity and innovation. For its part, the U.S. should use its core strengths—its edge in technological innovation, ability to analyze and absorb risks, its academic institutions and access to capital—to create a rising tide that lifts all boats. American companies should take a long-term approach and start thinking particularly about the concept of local for local: manufacturing locally for local markets (using 3D printing, for example), putting the supply chain close to the market, giving consumers what they want here and now.
Trade flows will likely be managed on a product-by-product basis rather than through blunt instruments like across-the-board tariffs. U.S. Secretary of Commerce Wilbur Ross is taking a fact-based analytic approach to understanding exactly what is happening in the global economy—and what paths should be taken. He will be examining both positive and negative trade flows and, with the assistance of artificial intelligence, provide insight that President Trump can use to drive future plans and policies.
In hitting pause, the Trump administration hasn’t set back the forces of globalization. Along with other countries, America has just taken the time to step back and level the playing field. Globalization will resume, innovation and productivity will increase and the standard of living will rise worldwide.