China, Australia must continue push in favor of globalization

Leading free-trade nations such as China and Australia should continue to push for globalization in the face of "increasing protectionism," respected Australian economist Ross Garnaut told Xinhua of Friday.

As discontent with a globalizing world continues to spread through the world, Garnaut, a leading economist from the Australian National University (ANU), said lawmakers need to convince the "everyday citizen" of the benefits of globalization, or risk future free trade deals and global development.

"We are already in a period of increasing protectionism," which is "unambiguously bad for global development and the prosperity of each of the world's economies," he said.

"Protectionism anywhere hurts everyone. China's best response is to keep its own markets open and enjoy for itself as many of the benefits of open trade as it can.

"The main losers from protection are the countries which impose it."

Referring to the plans by United States President-elect Donald Trump to tear up the Trans-Pacific Partnership (TPP) free trade deal once he assumes office, Garnaut said it was important for lawmakers in nations trying to take advantage of free trade to be frank and open about the benefits of globalization, as many middle class consumers are of the belief that a globalized world benefits only the rich, and not the "everyday citizen."

"The challenge to globalization is coming largely from the feeling in large parts of the populations of the rich countries that expanding trade and investment makes the rich richer but doesn't help ordinary people," Garnaut told Xinhua.

"The best response is policy that ensures that the living standards of ordinary citizens rise with the total value of activity in the economy," he said.

He lauded the strong bilateral relationship between Australia and China, and said if they continue to take action towards globalization - without influence from outside governments - they will continue to mutually benefit through free trade deals such as the China-Australia Free Trade Agreement (ChAFTA).

"From the early days of APEC until the Asian Financial crisis 1998-99, the Western pacific economies including Australia and China opened their economies through unilateral action without preferences for friends or against outsiders," Garnaut said.

"That was a good basis for expanding Sino-Australian trade. We should get back to it. If we do that, Sino-Australian trade will greatly increase in volume but change in character, with much higher components of sophisticated and valuable services, processed foodstuffs and specialized manufacturers."

The ANU economist said while an open and integrated economy will enhance connectivity, boost reform and innovation to forge stronger partnerships throughout the world, he ultimately sees the current "deglobalization" trend continuing, with upcoming elections in Western economies such as Austria, France and Germany leaning towards it.

source: Xinhua