This guest editorial about the upcoming G20 summit in Hamburg in July appeared on Tuesday in Handelsblatt’s sister publication, Der Tagesspiegel.
The G7 summit failed more dramatically than one could have imagined just a short time ago. The new US president is shunning international cooperation and opting instead for isolationism and the supposed law of the strong. His slogan “America first” isn’t just an assault on the principle of free trade that the US has imposed more powerfully – and occasionally more brutally – than any other country. According to Trump’s logic, “America first” also means: Saying farewell to the painstakingly negotiated Paris Climate Agreement. Dismantling the United Nations. Political blackmail instead of international diplomacy.
It’s time Europe faced up to the new situation – with realism and above all with self-confidence. We Europeans mustn’t submit ourselves to Donald Trump’s logic of rearmament. We mustn’t give up our goal to shape globalization in a fair way.
In doing so, we must acknowledge that globalization, celebrated for decades as holding such promise, is facing intense resistance at the moment here in Germany, in Europe and all over the world.
How could that happen? After all, international cooperation, the exchange of goods and services across all borders, the earth shrinking into a “global village” through digitalization have all led to unquestionable advantages.
In recent decades, globalization primarily meant getting rid of rules. The mantra was deregulation and liberalization which, translated into concrete policies, often meant privatization
For years, Germany profited more from globalization than almost any other economy. But increasing numbers of people are also seeing the downsides: German steel producers are at risk of massive job cuts because Chinese companies are pushing their subsidized steel into the global market at dumping prices. Given the market dominance of American Internet companies, European consumers are worried that their most intimate data are turning into bulk goods for the digital economy. And ever more people are rightly appalled that the T-shirts we buy in global clothing chains are only so cheap because the seamstresses in Bangladesh or elsewhere have to toil in conditions akin to slave labor.
Nevertheless, we can’t turn back globalization. And we shouldn’t pretend that doing so would be a desirable option. The central challenges facing mankind don’t just affect us Germans or Europeans: Climate change is a global problem. Terrorism is a global problem. And hunger, the lack of opportunities, social inequality are a global problem, even though many globalization enthusiasts have denied this for decades. We learned this at the very latest when global migration reached Europe’s shores. There is no sensible alternative to globalization. But we need a different globalization.
In recent decades, globalization primarily meant getting rid of rules. The mantra was deregulation and liberalization which, translated into concrete policies, often meant privatization. The market would sort everything out, many people thought. Too many.
Since the start of the most recent global financial crisis, we know that foregoing clear rules isn’t the solution, foregoing clear rules is the problem. When uninhibited financial markets push entire economies to the brink of the abyss, when governments have to devote exorbitant sums of taxpayers’ money to bailing out globally connected private financial institutions, it must be clear to everyone that the old mantra has failed.
We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change
— Donald J. Trump (@realDonaldTrump) May 30, 2017
Following Mr. Schulz’s commentary, Donald Trump was quick to send out a new tweet about Germany.
But we don’t just need global rules to restrain the financial markets. We also need global rules to ensure the very survival of life on our planet. Climate change is reality, even if some ideologists (not just in Washington) try to dismiss scientific findings as “fake news.” The international community reached an important intermediate goal with the Paris Agreement. But the real challenges of protecting the climate still lie before us. It’s a disastrous signal that Donald Trump is currently deliberating whether to cancel or renegotiate it. I am hoping that the 19 other G-20 participants in Hamburg will defend the success of international climate diplomacy.
The old globalization driven by the mantra of deregulation didn’t just call for the abandonment of rules. It also implicitly assumed that we could forego values. Because markets don’t know values.
We have to counter the cynicism of markets with a pledge to inalienable values. We cannot and must not accept that more than 1,100 people died in the collapse of a textile factory in Bangladesh. We cannot and must not accept that the countries of the global south are misused as a rubbish dump for the toxic waste of the “developed” countries. We cannot and must not accept that 800 million people in the world are suffering from hunger. We cannot and must not accept that international companies play off countries against one another to profit from tax dumping.
Shaping globalization is a tough task. Especially if one considers that some of the government leaders who will convene in Hamburg are unlikely to share all of the aforementioned values.
The alternative to actively shaping globalization would be to leave it up to those who believe politics is just about the quick deal. That would be the worst of all conceivable possibilities.
The good news is there is a historic example of how countries that were enemies can come together on the basis of shared values to safeguard peace, social and economic progress as well as environmental sustainability. This example is the European Union.
It took great courage and vision to drive forward European unity after World War II. We must remember that, especially now, at a time when we all know that the European Union isn’t in its greatest shape.
It also takes courage and vision to shape globalization. Germany can’t do it on its own – the Federal Republic is a dwarf in terms of the size of its population compared with China or India. But the European Union as a whole is the world’s biggest economic area. Europe can and Europe must play a decisive part in redefining the rules of globalization.
The precondition for this is that the European Union stops underplaying its hand and starts acknowledging its own strength. This strength doesn’t just lie in economic power; it also lies in our values. If we want to represent our understanding of human dignity and of international cooperation at the global level, we must stand up to it internally as well. There’s a lot of work to be done in that respect, looking at Hungary and Poland, for example.
Unfortunately, the joint European foreign policy is still in its infancy. But for many years, the European Union has been responsible for trade policy. And this is precisely the field where important rules for shaping globalization are being negotiated.
The World Trade Organization, where most of the world’s nations are represented, would be the right framework for this. But the WTO has been blocking itself for years. We can’t delay the shaping of globalization until this blockage is finally dissolved. That’s why it’s right that the European Union is agreeing trade agreements with other economic areas around the world. It mustn’t just be about free trade; it must center on fair trade. The aim must be to make sure that the high standards we have in Europe in climate policy, consumer protection, employee rights and the rule of law are also taken into account by our negotiating partners. For that to happen, we need transparent procedures – democratically legitimated and with the broad involvement of a critical public.
All that will be hard work. But the alternative to actively shaping globalization would be to leave it up to those who believe politics is just about the quick deal. That would be the worst of all conceivable possibilities.
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