Vol.6 No.7, 22 February 2006

Can the West Survive Globalisation?

Caroline Lucas is a UK member of the European Parliament, and Colin Hines the author of 'Localisation: a Global Manifesto'. They point to European and American current inability to fact the effect of the Chinese economy in the context of WTO rules.

The Commission’s response to date to the hi tech threat from China has been both tardy and complacent. It should urgently investigate the extent to which ‘the China price’ is already affecting EU industries; examine the level of existing off-shoring; and identify sectors that could be under threat in the future. This data should be used to evaluate the effects of such trends and identify the radical policy responses required. Finally, the question those in favour of ever-more open markets need to answer in detail is precisely what it is that rich countries will retain in the hi tech sector that cannot be produced by lower-wage competitors and in particular China?

It’s Not China Stupid, It’s The System.
China per se is not the problem. It is just the newest, most far reaching and rapid symptom of the failures of a global trading system that values international competitiveness above the provision of global economic security, social wellbeing and environmental protection. The international rules of the World Trade Organisation (WTO) need to abandon their present socially and environmentally damaging emphasis on forcing open global markets. Although China is the major winner in terms of rapid growth in domestic and export markets, this has been achieved at the cost of more dependence on foreign capital and transnational companies (TNCs), as well as adverse social and environmental costs for the majority.

Localisation- The Hi Tech Route For All.
Free traders have only one last refuge when peddling their wares to uneasy working people in the industrialised countries. Having written off swathes of domestic manufacturing and services such as call centres, these proponents cling onto the vain hope that retraining and retooling for a hi tech future will enable the West to compete successfully with the likes of China and India. This report has made the case that this is the last colonial delusion, and that there is very little that is hi tech that cannot eventually be provided more cheaply in Asia.

In order for low, medium and hi tech manufacturing and services to have a future in every country, the world must move away from economic globalisation towards an approach that protects, promotes and sustains the maximum feasible economic diversity - nationally and regionally.

This process has been termed “localisation” - a set of inter-related and self-reinforcing policies that actively discriminate in favour of the local. It provides a political and economic framework for people, community groups and businesses to re-diversify their own local economies. It has the potential to increase community cohesion, reduce poverty and inequality, improve livelihoods, social provision and environmental protection, and provide the all-important sense of security. [1]

Localisation is the very antithesis of economic globalisation, which emphasises a beggar-your-neighbour reduction of controls on trade, and distorts all economies to make international competitiveness their major goal. Localisation involves a better-your-neighbour supportive internationalism, where the flow of ideas, technologies, information, culture, money and goods has, as its end goal, the protection and rebuilding of local, national and regional economies worldwide. Its emphasis is not on competition for the cheapest, but on co-operation for the best.

Among the policies that have been proposed as part of a long-term package to be gradually introduced to achieve localisation are: the re-introduction of protective safeguards for domestic economies eg tariffs and quotas; a ‘site here to sell here’ policy for manufacturing and services domestically or regionally; localising money, so that the majority of it stays within its place of origin; increased democratic involvement, both politically and economically to ensure the effectiveness and equity of the move to more diverse local economies; and the reorientation of the end goals of aid and trade rules so that they contribute to the rebuilding of local economies and local control worldwide.[2]

The policy mix will obviously vary in practice to some degree from country to country. Some nations such as China and India are big enough to think in terms of increased self-reliance within their own boundaries, smaller countries would look to a grouping with their neighbours.

Conclusion: Europe Must Show a Lead.
The EU must divest itself of the fantasy that it can keep its lead in global trading through dependence on hi tech dominance. In its place the EU must champion the new end goal of re-diversifying national and local economies, so that they provide for society’s basic needs in a more equitable and environmentally sustainable way. With that approach China, India, Europe, and indeed all countries, will have a chance of achieving the security that their people so clearly desire and avoiding the exploitation of workers which is an inevitable consequence of the present corporate led global race to the bottom.

It will of course be impossible for such a radical change to be introduced by one country alone. Individual countries will need to co-operate on this project on a regional basis. Regional blocs like the European Union will have a key role to play. Indeed only Europe and North America are politically and economically powerful enough to be a counterweight to overcome the forces that are the major beneficiaries from globalisation — transnational corporations and international capital.

If such a change in the priorities of world trade rules is not begun at the WTO Hong Kong Ministerial, the demands for protection from their adverse effects will become unstoppable worldwide. The ultimate irony then will be that both the official venue and the cause of the downfall of the WTO will be found in the same place- China.


[1] Colin Hines, ‘Localization: A Global Manifesto’, London, Earthscan, 2000

[2] For details of the actual changes in trade rules see Time to Replace Globalisation – a Green Localist Manifesto for World Trade, Caroline Lucas MEP and Colin Hines, p17-20 http://www.carolinelucasmep.org.uk/publications/pdfs_and_word/Global_2.pdf

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