The end of globalisation!

The world's number one economic powerhouse United States (US) has already made it clear that it is not bound to abide by rules of the World Trade Organisation (WTO). If the US can get away with what it said about the global trade rules, then we can assume that globalisation will hear its death bell ringing very soon. Whatever globalisation that has taken place over the past few decades may face an about-turn. If the US takes a U-turn, other countries, some out of frustration with globalisation and some out of apprehension of what will happen next to global trade in an uncertain world, will see how best they can also manage their trades without going through the WTO rules or without abiding by comprehensive global trade rules. The world economy grew phenomenally in the last few decades because of globalisation of trade and investment. 
While most of the world economies were keen to see the Doha Multilateral Trade and Investment negotiation under the WTO becoming successful, such a hope is now dashed with the stalling of the Round. The rich countries have already come to the conclusion that further liberalisation of trade and investment will no more benefit their economies proportionately. Rather this will go overwhelmingly in favour of the emerging economies.  From such a perception, the rich economies, including that of the US, took the lead in forming regional and mega-regional trade blocs bypassing the Doha Round or the global trade negotiations under the WTO. 
Developed countries and some emerging economies also inked a series of bilateral or sub-regional free trade deals in the last few years. The US, Canada and Mexico had a free trade deal known as NAFTA (North American Free Trade Agreement) since the middle of the last century when the WTO was not there. 
Later, the US took the lead in furthering liberalisation of world trade through formation of WTO in 1995 which replaced its predecessor GATT (General Agreement on Trade and Tariffs). The achievement of the WTO was remarkable, as it for the first time in the global  economic history was able to open up almost all the sectors of the world economy for negotiation towards liberalising them for each other's benefits. The global economies are now having the lowest tariffs on entry of goods to each other's market and are more integrated with each other. But, to the disappointment of countries seeking global trade liberalisation, some events have taken place during the last few months which seem to be taking back all successes in the area of global free trade.
This is happening with the election of Donald Trump as the US President. Unlike his predecessors, he has turned out to be the champion of protectionism which the US abandoned long ago. Trump is asking for re- negotiation of the NAFTA. He also withdrew from the much-applauded 12-nation mega regional trade agreement TPP (Trans-Pacific Partnership) which included, apart from the US, Japan, Australia, New Zealand, Malaysia, Canada, Vietnam, Brunei and Singapore. 
Now, Trump is saying that the US is not bound by the WTO rules. This means nothing but axing globalisation itself. The world's other economies are to see whether they can proceed with the agenda of the globalisation without cooperation from the US. The US is clearly pursuing the doctrine of protectionism which will simply mean imposition of more tariffs on exports of other countries. Now it is up to others whether they want to go ahead with the agenda of free global trade and go strictly by the WTO rules.  
The worst losers of an about-turn from the WTO rules by countries like the US will be the weak emerging economies and the least developed countries like Bangladesh. Bangladesh's case is important in the sense that this country until now could not become a member of any regional trade bloc other than that of the SAARC which, to an extent, has now turned out to be non-operational. Bangladesh tremendously benefited from globalisation and for a LDC like Bangladesh, the WTO rules were the best safeguards to protect its interest. Without taking shelter under the WTO rules, Bangladesh will lose more to the stronger global trade players. 
Trump's withdrawal from TPP will not deliver any benefit to Bangladesh by itself. Rather, when he says that his country is walking away from WTO rules, Bangladesh has much to worry about. If Trump says that from now on all readymade garment (RMG) exports to the US market from developing countries will have to pay an extra tax of 10 per cent, then country's  RMG exports will surely get a big hit which no policy adjustment can compensate. Bangladesh is paying the highest tax for RMG exports to the US already and a further enhancement of the duty will simply make its products uncompetitive. 
What alternatives does Bangladesh have under an adverse situation of a global setback for globalisation? It does not have many policy options to help it manoeuvre under such a situation. The best it can do is to forge strong economic relations with the neighbouring countries which should include SAARC member-states as well as countries of the East like China and Myanmar.
The writer is Professor of Economics, University of Dhaka. 
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