American Progress Fellow Will Straw, who is also at the Institute of Public Policy Research in the United Kingdom, describes ippr’s new project that address how globalization can work for all. ippr is a partner in the Center for American Progress’s Just Jobs project.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the position of the Center for American Progress. The authors and institutions that produced this material are a part of the Just Jobs Network.
Lord Peter Mandelson launched the Institute for Public Policy Research’s latest project on “The Future of Globalisation” in a speech at the London Stock Exchange on March 11. He spoke of the contrast between the “new opportunities for many” and “new uncertainty for most” in modern economic life and reflected on his two spells as the United Kingdom’s business secretary as well as his four years as EU trade commissioner and 13 years as member of parliament for Hartlepool.
Lord Mandelson described the “two very different globalisations” now seen in the world. On the one hand, there is the “Davos view of globalization” seen from “10,000 feet.” On the other is the on-the-ground view where it seems that “jobs and opportunities in the fast developing world are created at the expense of our own employment and standard of living.”
Lord Mandelson also made the following key points about the global economy:
- The G-20 lost momentum since the London Conference in April 2009. It also needs “a physical presence and an energizing secretariat” based in Turkey “at the crossroads of East and West, North and South and an emblem of successful globalisation in developed and developing countries alike.”
- There is a £27 billion export gap to the BRIC countries—Brazil, Russia, India, and China—when Britain’s share of imports to these countries is compared to its share of global trade.
- Trade imbalances are primarily a sign of macro-economic imbalances, of international differences in aggregate savings and investment, and in biases against domestic consumption over exports or the other way around.
- The World Trade Organization needs practical reforms that include a faster disputes mechanism, an enhanced role in handling trade issues concerning intellectual property and access to services, and stronger multilateral oversight of the use of trade defence instruments.
- Three “social democratic tests” should be applied to the Doha world trade negotiations: (1) bilateral free trade agreements are no replacement for multilateral agreements; (2) trade agreements can and should ensure that there is no backsliding on previously agreed rights including labor rights; and (3) the European Union and United States in particular must be prepared to lead by example in the removal of tariff barriers and subsidies.
- An intelligent response to globalization must involve greater collective action including adopting the “flexicurity” models of Scandinavia, social security reform, public funding for “the core of the education system” and “the public science base,” shared infrastructure, and a measure to put in place “the capabilities we need to compete effectively.”
- We must accept that Britain’s New Labour Party didn’t deliver for “some [people] in what Ed Miliband (leader of the Labour Party) has rightly identified as the ‘squeezed middle.’” But Lord Mandelson went on to criticize the coalition for inertia on the Green Investment Bank, underfunding the Regional Growth Fund, and scrapping the Future Jobs Fund, which has funded over 100,000 jobs, mainly aimed curbing youth unemployment.
Lord Mandelson concluded by arguing that: “In many respects the centre-left in Britain is best equipped to answer the kinds of questions I have raised today. It must be willing to do the difficult thinking about how you bring markets and government together, intelligently and strategically. How you balance free market theory with social democratic intervention. How social confidence underwrites our economic success as well as competition and efficiency.”
Also speaking at the launch event was ippr’s Director Nick Pearce, who gave a short presentation setting out the United Kingdom’s international economic relationships and setting out the research behind Britain’s £27 billion export gap with BRIC countries.
Lord Mandelson and Pearce were both co-signatories to a letter to the Financial Times—also signed by Lord Niel Kinnock, Lord Paddy Ashdown, Malcolm Rifkind MP, James Purnell, and Director of the Centre for European Reform Charles Grant—that called for a “wider offer in terms of aid, markets and mobility” for the Middle East “coupled with strict conditionality to raise standards of governance and improve human rights.”
Lord Mandelson will now conduct roundtable discussions in Sao Paulo, Delhi, Beijing, Brussels, and Berlin among other business centers before presenting a final report on Britain’s export gap to the BRIC countries in December.
Vist the Just Jobs page for more information on the project.
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