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25 March 2020

With Jonathan Pearlman

Globalisation and COVID-19

Australia, which has spent decades trying to build bridges to Asia and beyond, is an island again. As COVID-19 spreads, Australia and countries around the world have been raising borders and fencing themselves in. Europe’s free movement of people has ended. The United States has closed itself off from Canada and Mexico. 

These measures have prompted speculation about whether the pandemic is set to reverse globalisation, the centuries-long growth of international integration and cooperation, which has freed the flow of goods, finance and people between countries. Around the world, there have already been proclamations of globalisation’s demise. Peter Navarro, a trade adviser to Donald Trump, has called for greater protectionism and tighter border controls. Former Australian prime minister Tony Abbott expressed a similar view, telling The Australian that “there’s been too much faith in globalisation and it has led us to do many things which hamper our economic performance”.

Actually, the pandemic is demonstrating the opposite – that international cooperation and coordination have never been more urgent and will be crucial to the global recovery.

The border closures are a public health measure. They are triggered by advice from health and biosecurity experts rather than sudden shifts in foreign policy. They are not reflections of rising nationalist sentiment. In recent days, Australian states have begun to close their borders – but this does not mark a resurgence of state-based patriotism; the federation is safe.

When this pandemic finally ends, the world will look different. The global power balance is likely to shift faster than it otherwise would have, possibly in China’s favour. But the forces that have accelerated globalisation – like cheaper, quicker and easier communication and transport – will remain intact.

Countries may decide, as part of their future pandemic planning, to protect their manufacturing bases to make sure they can, for instance, produce their own masks and medical supplies. They may also take measures to prevent disruption to supply chains. And, as they assess their battered economies, they may reconsider whether the free flow of people and goods can be better or more fairly governed.

But, as they recover, countries will want to access the benefits of participating in a global market. For centuries, this has been the impulse behind states’ efforts to reduce trade barriers. Trade accounted for 6 per cent of global gross domestic product in the early nineteenth century; it now accounts for about 59 per cent.

But globalisation extends beyond commerce. It involves integration and cooperation in areas such as migration, communications, the environment and public health. Relatively small countries, like Australia, benefit because they can influence international affairs more effectively than in a world in which power is determined by military and economic strength alone.

Later this week, the leaders of countries belonging to the Group of 20, which includes Australia, will hold an emergency virtual summit. The purpose is to secure supply chains, particularly for medical equipment, and to safeguard the global economy. The COVID-19 pandemic has led more than twenty countries to limit exports of health and medical supplies. The G20 must commit to overturning these bans and bringing an end to dangerous national hoarding.

Of course, countries, like individuals, can and will act in their own self-interest. But social and national isolation will not lead to the end of either the local or the global community. Instead, this crisis is confirming the obvious: that the curve is an aggregate, and that flattening it is a collective effort.


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China’s economic growth now depends on the West

“The outbreak will likely force a re-examination of the logic underpinning the US administration’s extensive use of tariffs to pressure China on trade and investment reforms … There is no possibility that China can meet its agreement to purchase vast quantities of US goods this year.” Yukon HuangEast Asia Forum

China is trying to rewrite the present

“The worse the West does at fighting the coronavirus, the better Beijing’s hard-line measures and willingness to supply much-needed goods look. Already its state media is crowing.” Louisa Lim, Foreign Policy [$]

In India, praying the COVID away

“The vast bulk of India’s population, including educated elites, looks to religion for guidance. If the virus was to take hold in a teeming Indian city, it would spread like wildfire. In a country already riven by partisan politics and religious tensions, the consequences could be catastrophic.” Aarti BetigeriThe Interpreter (Lowy Institute)

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The vicious cycle of pandemic-induced panic

“While shoppers are rushing to buy before it’s too late – whether that’s toilet rolls, tins of tomatoes, mince or slabs of beer – investors are rushing to sell. The Germans have a word for it: torschlusspanik, which translates as ‘door-shut panic’ – literally the panic to get through the door before it slams shut.” David Uren, The Strategist (ASPI)

An international commission must investigate China’s mishandling of COVID-19

“Chinese propaganda is now trying to convince the world that either COVID-19 was a biological weapon designed by China’s enemies or that China sacrificed itself for the rest of the world ... Beijing should count itself lucky if all that the rest of the world demands are answers and transparency. Because of the Chinese government’s lying and secrecy, the world has now been plunged into economic and social recession.” David Hutt, The Geopolitics

Free from Australian Foreign Affairs

Message to Washington – how to maximise US strength in Asia

“A third way is needed, one that acknowledges both America’s power in Asia and its limitations. And there is no need to invent this approach because it already exists – there is a plan, devised by eminent Cold War strategist and diplomat Dean Acheson, that applies to the contemporary moment, in which America faces the most serious challenge yet to its decades-long global dominance.” Brendan Taylor, HERE

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SCHOOL
CLOSURES

All leaders agreed that children should go to school tomorrow.

Scott Morrison, Prime Minister (Australia)

Schools will be closed.

Jacinda Ardern, Prime Minister (New Zealand)

We have to do more … Schools are closed.

Boris Johnson, Prime Minister (United Kingdom)

Sources: Prime Minister of Australia, 1 News, Gov.uk



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