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Sunday, 13 November 2016

Trade is the lifeblood of humanity. Closed doors lead to closed minds

Will Hutton in The Guardian

For 70 years, the US and Britain have underwritten the open global trading system, partly because of a stubborn and correct belief in the merits of free trade, partly out of self-interest as beneficiaries of globalisation and partly because, strategically, it spreads democracy, peace and capitalism.

They have spearheaded successive rounds of tariff cuts and multilateral trade deals and stood by, first, the General Agreement on Tariffs and Trade (Gatt) and its successor, the World Trade Organisation, to keep the system honest. They have cut regional trade bargains, promoted the European single market and, above all, kept their markets open despite other countries, notably China, gaming the system for their own narrow advantage.

The consensus in both countries was that the wider gains transcended any localised pain. No longer. The Americans voting for the anti-trade, America first Trump have consigned all that to history and the unintended consequence of Brexit will mean the same for Britain. The system that underpinned our collective prosperity is about to be trashed.

It brought national and international benefits, including an avalanche of inward direct investment into both countries, powerful international financial and business service sectors, rising global living standards and the economic and democratic transformation of Asia. But both countries’ manufacturing sectors have taken disproportionately heavy hits. Drive round the ailing industrial towns of south Yorkshire or Ohio and compare the economic and social landscape with that of Düsseldorf, Munich, Shanghai or Shenzhen. Decade of consistent manufacturing trade deficits have exacted a cruel toll.

This year, working-class voters across America and Britain’s rotting industrial heartlands delivered their verdict. No more plants moving abroad. No more closures because of cheap imports. No more sales of great companies to foreigners. No more stagnating blue-collar wages. No more immigration. It may be that there are jobs and great prospects aplenty in the burgeoning tech and service sectors in the big cities driven by global trade, but they don’t care. They are hurting and nobody has taken decisive action to help them. The votes for Trump and Brexit mark the end of an era and a new dark age of closure, protectionism and nationalism.

Leading Tory Brexiters will insist that this is a travesty of their position; they want Britain to access more global trade and not be imprisoned, they crazily claim, by the confines of the slow-growing European Union and its bureaucratic inability to cut aggressive trade deals with the rest of the world. They live in a dreamland if they feel that the rest of the world is more committed to free trade than Europe, while EU membership did not hold back Germany from being among the world’s major exporters.

In any case, apart from the promised closure of borders to immigrants, that is not what their voters want, as Nigel Farage always better understood than any of his Tory allies he cordially despises. Working-class voters in south Yorkshire and the West Midlands want the same as their counterparts in Pennsylvania, Michigan and Wisconsin. After all, it was those three states, with their tiny 100,000 vote margin, which gave Trump the electoral college votes for victory. He might be a billionaire, but he is, or at least styles himself, a “blue-collar billionaire”. Blue-collar (post-)industrial workers don’t benefit from free trade and immigration, as he has consistently said for 18 months, in the teeth of opposition from the Republican mainstream who remain free traders. His movement, as he called it, wants to stop both.

‘Build that wall” – along the US-Mexican border – was one of the most insistent chants at his rallies, along with the forced deportation of 11 million illegal immigrants. But more importantly for the international trading system, Trump wants to withdraw from the North American Free Trade Agreement (Nafta) between the US, Canada and Mexico, which he casually dismisses as the “worst trade deal in history”. He also wants an immediate halt in negotiations for both the Transatlantic and Trans-Pacific trade agreements and unilaterally he wants to impose swingeing 45% tariffs, against the rules of the World Trade Organisation (WTO) from which he is prepared to “walk away”, on Chinese imports, which account for half of the US’s trade deficit. Thirty-five per cent tariffs are promised on Mexican imports. The remaining 20 free-trade agreements the US has signed are to be reviewed or abrogated. Cumulatively, the impact would be devastating, killing multilateralism by exposing the already enfeebled WTO as helpless, inciting Chinese and Mexican trade retaliation and destabilising the entire global system of trade and finance.

Optimists say that Trump the president will be much more cautious and realist than Trump the campaigner: his talk on trade should be seen as threats to produce more fairly balanced agreements, not a tearing up of the world system. Maybe. But there cannot be a complete divorce between campaign rhetoric and policy. He believes what he says and nobody in his close coterie is going to urge caution. Not Dan DiMicco, his senior trade adviser, who has promised a potential withdrawal, in the first six months of the Trump presidency, from every major US trade deal if it cannot be shown actively to benefit the US. “The era of trade deficits is over,” he says. “It will be: let’s talk, but otherwise we put tariffs on.”

Another intimate, Walid Phares, has said Trump will go “back to ground zero” on every trade deal, such as the one with South Korea that the president-elect described as “job destroying” and wants to revoke. Trump has already given a commitment that on day one he will declare China a currency manipulator as a precursor to introducing up to 45% tariffs on Chinese imports.

These positions are not posturing: they represent a deeply held view that the US does not need trade except on terms that put America first. The idea that successive American administrations have negotiated deals loaded in the US interest is impossible to concede. Because how else would he explain the rust belt? Equally, there can be no concession that blue-collar jobs are disappearing with or without trade because of robotisation and automation. The America of the 1940s and 50s has disappeared for ever and destroying the international trading system is not going to bring it back.

None of that cuts any ice with a demagogic populist. Trump has promises to keep to a “movement” that expects no less. The last time a Republican president and his party controlled both the House of Representatives and Senate with the same convictions on America first trade was 1928. There were warnings that introducing the Smoot-Hawley tariffs on American imports in 1930 would trigger a slump, but America first Republicans could not help themselves and the Democrats were too weak to stop them.

The Peterson Institute for International Economics in Washington predicts that if Trump raises tariffs on China and Mexico, and they retaliate, then US growth will stop in its tracks for at least two years. The prospects could be even worse if Trump goes further. Already world trade growth over the last year has been the slowest for the last 15. Even introducing the mildest of Trump’s measures must presage a further deceleration and if he goes as far as he promises – walking away from the World Trade Organisation, withdrawing from multiple trade agreements and freely imposing tariffs – then the prospect of a 1930s-style implosion is all too real.

In this context, the foreign secretary, Boris Johnson, babbling alongside other Brexiters about the opportunities for trade deals with the US is surreal. To exit the EU, the one continent pledged to open trade, in order to plunge into a world trade system threatened by collapse is the height of folly. If British voters had known Trump was going to be president in June – and known of his attitude to trade – Remain would have won comfortably. Parliament may find it has a duty to veto the application to exercise article 50 before the end of March; the referendum was only ever advisory and Trump’s attitude to trade changes everything.

One of the many tragedies of the rise of neoliberalism is that the promotion of international trade has been able to be portrayed by some on the left as part of the same portfolio of policies as austerity, privatisation and assaulting trade unions. Wrong. Trade is the essential ingredient of growth and prosperity. The rise of Egypt, Greece and Rome was because the Mediterranean promoted seaborne trade. The rise of maritime Europe after the middle ages was because of Atlantic trade. China has grown so explosively since 1978 because of its opening to trade.

Autarchy, protection and closure to immigration have always meant economic stagnation and, lacking the stimulus of other cultures and ideas, a parallel freezing of innovation and cultural vitality. Trade, exchange and intermingling are the lifeblood of humanity. Of course trade brings losers, and the rise of contemporary Conservatism, with its ferocious enmity to state action to support the incomes, skills and life chances of working-class men and women, in a period of great economic change, laid the foundations of huge anger.

It has been two rightwing demagogues – Trump and his British echo, Farage – who have been the first beneficiaries. But as this drama plays out in recession, nationalism and perhaps even forms of inter-state conflict, there will be a rediscovery of ancient verities. Trade and exchange are the foundations of our civilisation and, whatever Trump and his movement think, the more, the better.

Saturday, 12 November 2016

The vision of Indian is under challenge

Yogendra Yadav - Swaraj Abhiyan

The Pakistan Establishment's Dilemma

Pervez Hoodbhoy in The Dawn

THE oligarchy which runs Pakistan, often called the establishment, is in a quandary. The problem is that whatever it says through its diplomats abroad — and with however much energy — the world insists on perceiving Pakistan as an ideological state wedded to exporting jihad. This is undesirable, but so also is the idea of changing course.

Writing in this newspaper, Ambassador Munir Akram admits that Pakistan has “few friends and many enemies” in Washington. Indeed, Trump’s victory can only worsen matters. But Europe, Russia, and Japan also see things similarly. Few there would be impressed by Akram’s frank admission that, “Lashkar-e-Taiba and Jaish-e-Mohammed participated in the legitimate post-1989 Kashmiri freedom struggle”, do not attack Pakistan, and “enjoy a degree of popular support” — or with his suggestion that no action be taken against such groups until things improve in Kashmir.

Akram’s views likely reflect the current thinking of a powerful section of the establishment. But what precisely is the establishment? Who can belong to it, and what does it want?

From Pakistan’s birth onwards, the establishment has set Pakistan’s international and domestic postures, policies, and priorities. Today it rules on the extent and means by which India and America are to be confronted, and how China and Saudi Arabia are to be wooed. It sanctions, as well as limits, militant proxy forces for use across borders; closely controls what may or may not be discussed in the public media; and determines whether Balochistan or Sindh is to be handled with a velvet glove or banged with an iron fist.

Establishment members are serving and retired generals, politicians in office and some in the opposition, ex-ambassadors and diplomats, civil servants, and selected businessmen. The boundaries are fluid — as some move in, others move out. In earlier days English was the preferred language of communication but this morphed into Urdu as the elite indigenised, became less cosmopolitan, and developed firmer religious roots.

Arguably, most forms of government anywhere are reducible to the rule of a few. In Pakistan’s case how few is few? In 1996 Mushahid Husain, long an establishment insider and currently a senator, had sized the establishment at around 500 persons plus a list of wannabes many times this number.

Stephen Cohen, an astute observer of Pakistani politics over the decades, remarks that establishment membership is not assured even for those occupying the highest posts of office unless they have demonstrated loyalty to a set of “core values”. That India is Pakistan’s archenemy — perhaps in perpetuity — is central. As a corollary, nuclear weapons are to be considered Pakistan’s greatest asset and extra-state actors an important, yet deniable, means of equalising military imbalances. These, and other, assumptions inform Pakistan’s ‘national interest’.

National interest means differently in different countries. For example the post-War American establishment considered the export of American values — particularly free trade — as America’s national interest. Stalin’s Russia and Mao’s China competed to implant their respective brands of communist ideology overseas. On the other hand today’s China is purely pragmatic. So is India. Not being ideological states, they are not mission-driven. They just want to be modern, rich, powerful, and assertive.

Let’s compare Pakistan’s national interest with the above. Just what is it in the eyes of its establishment? In search of an answer, I recently browsed through theses and articles in various departments of universities, including the National Defence University in Islamabad.

What I found was unsurprising. National interest is defined exclusively in relation to India. This means resolving Kashmir on Pakistan’s terms, ensuring strategic depth against India via a Talibanised Afghanistan, nurturing the Pakistan-China relationship to neutralise Indian power, etc. To “borrow” power through military alliances against India is seen as natural. Hence, switching from America’s protection to China’s happened effortlessly.

Missing from the establishment’s perception of national interest is a positive vision for Pakistan’s future. I could not find any enthusiastic call for Pakistan to explore space, become a world leader in science, have excellent universities, develop literature and the arts, deal with critical environmental issues, achieve high standards of justice and financial integrity, and create a poverty-free society embodying egalitarian principles.

This lopsided view has distorted Pakistan’s priorities away from being a normal state to one that lives mentally under perpetual siege. To its credit, Nawaz Sharif’s government attempted — albeit only feebly — to make a break and concentrate on development. It knows that the use of covert jihad as an instrument of state policy has isolated Pakistan from the world community of nations, including its neighbours. Diplomats tasked to improve the national image are rendered powerless by the force of facts.

Keeping things under wraps has become terribly hard these days. For example, Pakistan denies any involvement in the Uri attack. But, to commemorate the dead attackers, Gujranwala city was plastered with Jamaatud Dawa posters inviting the public to funeral prayers, to be led by supremo Hafiz Saeed on Oct 25, for the martyred jihadists who had “killed 177 Hindu soldiers”. I did not see any Pakistani TV channel mention this episode. The posters were somehow quickly removed but not before someone snapped and uploaded them on the internet.

To conclude: while the rise of the hardline anti-Muslim Hindu right and India’s obduracy in Kashmir is deeply deplorable, it must be handled politically. One cannot use it to rationalise the existence of non-state militant groups. Such groups have taken legitimacy away from those fighting Indian rule in Kashmir. They have also turned out to be a menace to Pakistan’s society and armed forces.

Today’s crisis of the establishment can lead to positive change provided gut nationalism is subordinated to introspection and reflection. It is a welcome sign that a significant part of the establishment — the Nawaz Sharif government — is at least aware of the need for Pakistan to reintegrate itself with the world. Concentrating on our actual needs is healthier than worrying about matters across our borders. One can only hope that other parts of the establishment will also see this logic.

We called it racism, now it’s nativism. The anti-migrant sentiment is just the same

Ian Jack in The Guardian

Nativism, according to the OED, is prejudice in favour of natives against strangers, which in present-day terms means a policy that will protect and promote the interests of indigenous or established inhabitants over those of immigrants. This usage has recently found favour among Brexiters anxious to distance themselves from accusations of racism and xenophobia. Officially, at least, it’s a bad thing. To Ukip’s only MP, Douglas Carswell, his party’s posters of queuing refugees represented nativism at its worst, and in his Clacton-on-Sea constituency he had them all taken down. To him, and others such as the MEP Daniel Hannan, Brexit has its foundations in the philosophies of Adam Smith and Edmund Burke, and absolutist beliefs in free trade and sovereignty: race and immigration have nothing to do with it.

Carswell appears a solitary and rather friendless figure: an officer who got into the wrong, rough-crewed lifeboat. But at least he’s probably sincere. Others use “nativism” to signify a more elevated approach to the immigrant/refugee question; it offers something more opaque and less cliched than a simple disavowal of racism. As the writer Jeremy Seabrook once noted, one effect of the 1965 Race Relations Act was to make people preface anything they might say about migrants with the words, “Well, of course, I’m no racialist”, before going on to provide “a sweeping and eloquent testimony to the contrary”. Half a century later, when immigrants are as likely to be white as black or brown, the sentence, “Well, of course, I’m no nativist”, may be emerging as that preface’s overdue replacement.

Seabrook’s observation appears in his 1971 book City Close-Up, composed mainly of interviews conducted in Blackburn, Lancashire, during the summer of 1969 and serialised on Radio 3 as a portrait of life in a fading industrial town, with its cobbled streets, derelict mills and ornate and oversized railway station. In Seabrook’s account, a tripe shop – “with its aspidistra and diploma to certify best-quality thick-seam tripe” – still stands open for custom, but elsewhere terraces of back-to-backs have been demolished to leave “fragments of crumbled brick and the smell of earth turned over for the first time in a century” while the willowherb spreads its fire over everything.


  Blackburn 


The book left an impression on me that has lasted 40-odd years. That was partly due to its accurate mention of the too-big station, where I’d once changed trains as a little boy and noticed through the crowd on the platform a glass case containing a splendid model of a two-funnel steamer, later identified as the boat that took you to the Isle of Man. What struck me most on first reading – and didn’t let me down on the second – was the frankness and intelligence with which the book recorded attitudes to immigration.

In 1969 the textile industry hadn’t quite died in Blackburn, which in Edwardian times had been the biggest cotton-weaving centre in the world. Imports of cotton goods to Britain began to exceed exports in 1958; the Blackburn industry employed two-thirds fewer people in the late 1960s than it had in the early 1950s. But more than 20 mills survived in the town, staffed largely by migrants from India and Pakistan whose willingness to work inconvenient shifts had prolonged the industry’s life and, in Seabrook’s words, relieved the indigenous working class of some of the least-desirable employment.

 About 5,000 mainly Asian migrants then made up 5% of Blackburn’s population. Relations between established residents and newcomers weren’t easy. Seabrook noted that “an elaborate system of legends, myths and gossip” had evolved around the immigrants, “to legitimate a sustained and unflagging resentment of their presence, and of their allegedly harmful influence on the community”. One story told how a woman, thinking she’d heard rats scuttling overhead, opened her trapdoor one night to discover that the loft ran the whole length of the street, so as to be easily accessed via the end house where a Pakistani family lived. They had furnished this elongated attic with mattresses that could sleep 100 secret lodgers. In another story, a man known as “Packie Stan” slaughters goats and chickens in his backyard and depresses property prices wherever he goes.

Often, Seabrook talked to people in groups. Many of the attitudes and complaints he records seem timeless. “I don’t believe all this bunkum that I’m being repeatedly told, that if you take all the immigrants out of the NHS, it would collapse,” says someone at a Labour party meeting. “Why are they allowed to get social security and child allowance and all the rest of it when they’ve never paid anything into our country?” asks a woman who, despite “20 years’ stamps”, says she can’t get a pension at 60. “I don’t approve of them coming to this country at all, unless they have special high qualifications,” says the wife of a businessman. “But I wouldn’t like it to be thought that it was because they were coloured. I wouldn’t mind if they’d conform to our way of life, but they don’t.”

Not everyone agrees. Not everyone has a view. Seabrook writes that Blackburn “is not a town full of racists, any more than it is a stronghold of liberal humanitarian values”, and that one strongly committed person in a group can influence the standpoint others will take. Some interviewees point out that immigrants work hard and Britain needs to take responsibility for the consequences of its empire. The dominant themes, however, are familiar: immigration needs controlling; migrants exploit the welfare system and put strains on housing and schools; and when in Rome they should do as the Romans do – “they should be more like us”.

In the front room of her terraced house, a Mrs Frost gathers some neighbours to meet Seabrook. It is as good a bit of writing on the subject as I have ever read. They talk angrily and emotionally about immigration until the paroxysm spends itself and “a certain uneasiness [comes over] the room, a sense of shame, the shame of people who have unburdened themselves to a stranger”.

Seabrook believes he has witnessed an expression of pain and powerlessness brought on by the “decay and dereliction” of their own lives and surroundings as much as by the unfamiliar dress, language and behaviour of their new neighbours. This feeling had found no outlet, politically or otherwise. All the writer can say is that it’s “something more complex and deep-rooted than what the metropolitan liberal evasively and easily dismisses as prejudice”.

Interestingly, Seabrook never felt he had to talk to the immigrants themselves. Talking to me this week, he said he was ashamed they felt marginal to his interest at the time, which was the fate of the English working class. In later books, the product of frequent visits to south Asia, he has completed a great historic and economic circle by describing the garment factories of Bangladesh. First, the cheap cotton spun and woven by Lancashire’s steam-powered mills wipes out the handloom cotton industry of Bengal. Second, less than two centuries later, the even cheaper cotton cloth made in the factories of Bengal and elsewhere in south and east Asia wipes out the steam-powered mills of Lancashire. Perhaps nowhere else offers such a symmetrical illustration of the way the world has changed.

Did any of us understand what we were caught up in? At the time it seemed something small and local that if ignored might go away. Seabrook remembers the late Barbara Castle, who was then Blackburn’s MP, warning him against writing about social discord and getting things “blown up out of proportion”. In the destruction of the world’s first industrial society, years before the rust belt began to rust, the foundations of the west’s recent troubles were laid.