LONDON – May 2, 2019 – The peak of globalization has come and gone, according to David Roche, president and global strategist at Independent Strategy in London.
He told CNBC that “the actual reversal of globalization started over seven years ago,” as countries around the world began more protectionist policies.
Roche predicted that even China will see most of its future growth coming from domestic activities. This is a projection shared by most major economists.
“Globalization is on a back foot, it’s not the trade deal with China, a trade deal agreement which would flip the switch and turn on the motor again — the damage has been done,” he added. “There is no way going forward that China is able to grow by using international trade. It is going to grow more domestically.”
Roche noted that China is not the only country to look inside. He explained that for many years, countries such as Italy have had populist governments adopting nationalist policies, prioritizing the short-term benefit of their citizens rather than embracing the globalization and interconnectedness it entails.
“Protectionist measures were enacted many years ago,” he said. “They echo back to those in Italy who lost their jobs because they don’t have a functioning labor market and a completely inept government.”
Roche, for his part, denounced protectionism: He described it as a way for governments to shirk their duty and responsibility to ensure the constant upgrading of their labor force in the face of advancing technology.
“But of course, populism wants easy answers. It wants to blame immigration, race, it wants to blame the fact that somebody else stole our jobs. These are mythological as the U.S. manufacturing jobs would have been lost anyway … the reason they were lost is technology” he added.
The solution to all of that is greater international connectivity, not less, he said.