Tariffs And Protectionism Can't Stop Globalization And Economic Growth
(Kitco News) - Despitegrowing populism and protectionist policies emerging from several majorcountries, globalization is still alive and strong.
In a paneldiscussion featuring prominent political and economic figures at the InternationalEconomic Forum of the Americas in Montreal, the topic of trade wars and theirimpact on global growth was debated, with the panelists concluding thatglobalization prevails and takes on many forms.
Globalfinancial markets have seen relatively little volatility despite heightenedgeopolitical tensions, owing greatly to the economic stability thatinternational connectiveness has brought, said Jane Buchan, CEO of PAAMCO.
“What wesee a lot of these days is a lot of individual reaction, for example, Italianbonds,” Buchan said.
Italianbonds yields saw the biggest single-day surge on record on May 29thas political turmoil escalated in the country. Safe-have assets like goldrallied in response, but volatility subsided shortly after following a formingof an Italian coalition, bringing political stability and reassuring financialmarkets.
Buchanadded that investors can best hedge against knee-jerk reactions in markets byspreading capital across many asset classes. “Diversification is the only freelunch,” she said.
IbukunAwosika, chairman of the First Bank of Nigeria, said that the in today’s world,the concept of globalization extends beyond merely trade and touches on howindividual citizens are inherently engrained in a “global” culture.
“I thinkthe place to start from is, first and foremost, how does a citizen of the worldnow see the world? Because it is becoming increasingly difficult to define acitizen of the country,” Awosika said.
The firstwoman ever to be appointed chairman of the First Bank of Nigeria noted that dueto the ease at which citizens connect with each other through technology, it isnearly impossible to stem the spread of globalization unless governmentsforcefully oppress and “isolate” their citizens.
Still,globalization’s survival does not come without challenges. The panelists agreethat the danger of NAFTA’s dismantling, following U.S. President Donald Trump’strade tariffs and his allies’ subsequent retaliatory measures, presents a majorobstacle to global growth.
By David LinFor Kitco News
Follow @davidlinMTL
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