This article is a live version of Martin Sandbu’s free lunch newsletter.registered Here Send the newsletter directly to your inbox every Thursday

The reputation of globalization has become famous.The global financial crisis, pandemics have disrupted critical supply chains, and Millions of people are left behind It is almost impossible to leave it unscathed. But in the old ashes, a new globalization may be brewing.

Jean Pisani-Ferry A thoughtful work The title “The end of globalization as we know it” illustrates the situation well: “The tension between the unprecedented global collective action demand and the growing desire to rebuild political communities after national borders is today’s decision makers. The decisive challenge facing.”

Pisani-Ferry investigated recent proposals, please include Mine, For a more progressive globalization-striving to formulate an agenda for “recovering a sense of economic belonging while keeping the borders open.”The key to this agenda is to distinguish between economic Openness From Deregulation. Unfortunately, those who support globalization as a way to get the deregulation they really want and those who oppose globalization as a means to strengthen national regulation often put these issues together.

The idea is to defend economic openness in a non-discriminatory sense: do not exclude products, services, capital or workers because they come from abroad or are provided by foreigners. But non-discrimination also means that the standards for cross-border transactions should be lower than those for pure domestic transactions. Therefore (taking the two examples mentioned by Pisani-Ferry as examples), the EU’s ban on chlorinated chickens or the ban on wood produced by practices that lead to deforestation, if they are also applicable to domestic production and import, is not discriminatory Sex.

This more nuanced open view is reflected in A comprehensive new report France Stratégie, led by Olivier Blanchard and Jean Tirole, spoke on the economic challenges of the future. In the chapter on “Inclusive Economy”, Dani Rodrik and Stefanie Stantcheva had a thoughtful discussion on how to begin to unravel the healthy competition brought about by economic opening and cross-border activities as a way to undermine legal domestic regulation . They wrote:

“When international trade operates like any domestic form of market competition, it does not make sense to distinguish it… When trade involves practices that violate the laws or norms embodied in domestic institutional arrangements, thereby weakening domestic social bargaining , It may be more reasonable to restrict import flows that have so-called impact.”

This conceptual distinction is crucial because it allows for a trade policy that keeps markets open but is based on the destruction of deep-rooted norms and rules to restrict competition. For example, it makes import supply chains comply with certain human rights standards, or it is legal to enforce climate considerations through carbon border taxes.

I will further expand the framework: not only trade, but capital flows or immigration can all be treated the same way—and more and more. For example, “macroprudential supervision” can control the negative effects of excessive lending without prohibiting the inflow of funds-even if the lender is located abroad, the rules can also be applied to the borrower. Strong domestic labor market supervision, such as high and strictly enforced wage bottom lines or workplace standards, or stricter “expatriate workers” rules in the EU, can avoid the “non-compliance” that sometimes arises from exploitative employment of migrant workers. stable”. The power to object is very small. Again, this can be done without restricting the free movement of workers themselves.

The following are three challenges that need to be addressed. First, as described by Pisani-Ferry, it is much more difficult to specify and enforce standards for services and production processes than the standards embodied in products: we can more easily identify the lead content in toys, rather than far upstream Human rights violations. supply chain. But difficulties are not impossible. After all, traditional trade rules have detailed the geographic production history of each commodity to meet the rules of origin. Rodrik and Stantcheva did a good job in imagining the kind of institutional setup that could separate the norm-breaking trade they feared from legitimate economic competition.

Secondly, all this means that international economic liberalization has increasingly become a question of determining whether different countries can agree on the norms and rules governing economic activities. Of course, the best example here is the European Union’s single market. Contrary to the old free trade dogma behind Brexit, today’s trade liberalization is about the making of common rules.Therefore, large technology companies lobbied countries to agree General Data Governance Rules.

Third, and most importantly, this means that the country itself must better and honestly determine its preferences, not only in terms of the content of goods and services, but also in their production and delivery. For example, don’t Europeans like American technology companies dominating data services? Or is it because the US data rules are more relaxed, and the hoarding of private data they allow, actually makes the service itself inferior to what companies under European rules can provide-if the natural monopoly of many digital services does not mean that consumers have almost no Effective choice? The answer should determine how we view the limitations of data flow between the two markets.

It may be that this new perspective on globalization has led to a reduction in trade, finance, or the movement of people across borders. If so, it is not because the economy is less open, but because these cross-border transactions were originally just to circumvent the rules of domestic economic activities.

Some would say that, like protectionism, imposing standards and values ??on the production process will give up some of the gains of trade—because certain goods and services will not be traded—for these standards and values. I think the better view is that goods and services whose production does not respect deep-rooted norms (in the country, enforced by law) will not actually generate revenue from trade at all. It is precisely in order to maximize the benefits from trade that a more nuanced view of globalization is emerging.

Other readability

  • Germany has a new budget and medium-term expenditure plan.I Explanation Why do they embody the dilemma that extends far beyond national borders. FT has one Interview with the German Finance Minister And the future chancellor Olaf Scholz (Olaf Scholz).

  • The Communist Party of China today celebrated its 100th anniversary.The Great Reading of the Financial Times Ask if China is on the right trackAt the same time, James Kynge recounted A century of revolution Through the unlikely medium of the founder of China’s bankruptcy law in the 1980s.By the way, don’t miss mine video Discuss with James whether China will become the center of the global economy.In Northern Europe, the editors of the four major newspapers in the region have already Clear their front page The open letter protests Beijing’s cancellation of press freedom in Hong Kong.

  • With impeccable logic, Arvind Subramanian and Josh Felman Point out You cannot worry about prolonged stagnation and argue that President Joe Biden’s massive fiscal stimulus is the wrong policy.

Digital news

Newsletter recommended for you

European Express — An important guide to understanding important matters in Europe today.registered Here

Unhedged — Robert Armstrong analyzes the most important market trends and discusses how the best people on Wall Street respond to these trends.registered Here


Source link