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A country can impose any tariff or pass any trade-restricting law it likes, rail all it wants about unfair trade practices, demand a better deal from this trading partner or that one, says Dr. David Jamison, professor of business at South Carolina State University, but they are fighting the vector of history.
The vector of global trade is towards unfettered, open trade, much to the benefit of most of the world. Ask China, Singapore and many developing nations like Tunisia, where the advantages of low labor costs and access to industrial markets have boosted the standard of living of virtually every citizen.
In his book Factfulness, famed Ted talker Hans Rosling demonstrates how the world is getting richer and better every year. Jamison credits free trade, in part, for that progress.
Free trade has been a benefit to South Carolina as well. Look at the companies that have invested in the state – Volvo, Mercedes, Michelin, Bosch, et al. Foreign investment and the industries that serve them, such as the SC Ports Authority, employ about a third of all South Carolina residents.
Dr. Jamison has visited China twice, once 22 years ago and once recently. The difference was stark. Bicycles and feet were the major means of transportation in 1996. While today, new roads and bridges around Beijing accommodate cars that carry people to work in brand new downtown buildings. All of this was made possible by trade with the west, the Far East and elsewhere.
Dr. Jamison discusses free trade with his class on global trade perspectives, part of the MBA program at South Carolina State University, whose healthcare management concentration holds courses at the Lowcountry Graduate Center. He admits that free trade has not been a windfall for everyone. It has driven low-skilled jobs from industrial powers like the U.S. to lower-wage countries.
“It’s difficult to just graduate from high school and get a good job, such as those that previously were abundant in mills and factories in our state,” he said. ”We’ve moved away from manufacturing as a primary driver of the economy.”
Unfortunately, it’s not coming back. “My point would be that working as an unskilled laborer is generally not sufficient to provide people with the lifestyle they want. Our economy is increasingly demanding a skilled workforce; they should get skills…” he said. “…in the long run, that should benefit everyone.”
Discussing the current trade wars over steel, aluminum, lumber, and other items the United States has engaged in with friends and adversaries alike, Dr. Jamison says they may have some short-term benefits but can’t be sustained. Tariffs lead to retaliatory tariffs in a negative-sum game that hurts everyone. “If we close markets to some countries they will look to trade with each other,” he said.
In short, globalization isn’t a policy so much as the natural momentum of markets.
“Globalization didn’t happen just because people want it politically,” Dr. Jamison said. “It’s the result of macro-level forces – technology, communication, et al., that are likely permanent.”