Globalization, Free Trade & Xenophobia?

by Paul I. Adujie

We have all heard of the positive advantages and benefits of globalization and free trade. It endears all humans in the proverbial global village to one another and all humans will live happily ever after in a strengthened global economy.

Globalization and free trade is presently lopsided and that is a fact. Crusaders and apostles of unfettered globalization and free trade, will not hear of the apparent and obvious disadvantages, such as the fact that many parts of the world, are only recipients of goods and services and without commensurate opportunities for providing goods and services for other parts of the world, in effect, globalization, under current arrangements and practice, presupposes a complete acceptance of domination of peoples of Southern hemisphere by those of Northern/Western hemisphere.

Simply put in plain words, the old stratified economic advantages of the West remain favoring Westerners at the expense of those of us of the Southern hemisphere. The North-South hemisphere dichotomy will remain undisturbed, under present globalization-free trade mantra. Globalization and free trade as presently pursued, will be a one way traffic, of benefit only to highly industrialized Western countries, while developing countries will serve as mere dumping grounds for products and services from the West.

In essence, current globalization and free-market, allow goods and services to flow in a unidirectional manner, from the Western hemisphere to the rest of the world, without recourse to standard economic principles, theories and concepts, such as comparative advantage, cost efficiencies, specialization and even division of labor.

Agriculture subsidies which is heavily practiced in the Western hemisphere, makes it impossible for the less industrially developed Southern hemisphere peoples to hope to have a comparative advantage in farming, farms and farm products, even though, a great percent of the national economies of the South is agrarian. Developing countries/economies cannot compete in such economic circumstances that are heavily stacked against them.

The usual or ordinary economic principles, if taken as a given, the inhabitants of societies that are mostly agrarian, would do the farming and production of farm products, (raw materials?), which would include, planting, harvesting, storage and exports to the inhabitants of the more industrially advanced Northern/Western hemisphere; who would concentrate in the manufacture of goods and as well as the provision of services related thereto. And globalization and free trade would have achieved its worthiness

However, two events or incidents in the past several months have clearly, and demonstrably indicated the impossibility of such smooth arrangements or any thinking in that direction.

First it was the fierce resistance to the Chinese by the Americans. The Americans fiercely and vigorously, resisted attempts that were made by the Chinese to acquire a petroleum oil behemoth on American soil, (Unocal Oil Corporation) there were loud protests with screeching tongues and all, by politicians, business magnates etc, and in the end, the Chinese were goaded into withdrawing their multiple billion dollars bids, in favor of an American bidder who had bid several billion dollars less than the Chinese (CNOOC) bidders! It was botched by pressures emanating from the Americans against the Chinese. The Chinese company is CNOOC and the American company is Unocal Corporation.

The Americans who were opposed to the sale had no scintilla of economic or marketplace argument whatsoever, but instead, they hinged their opposition on, and in, their so-called national security implications of such a transaction! As they argued that oil, is the engine room of all economies, and by extrapolation, allowing the Chinese to buy, own and control such huge oil prospecting, oil exploration, an oil services company would be contrary to American national interests. In the end, the sale was consummated between two American corporations and it was not merely a business deal or regular market place transaction. It put a lie to the loud American talk about free trade and globalization. The American company doing the selling, exposed its shareholder a loss, in billions of dollars less than what the Chinese had offered in their higher bid.

Again, another opportunity soon presented itself. Another foreign company, the World Port of Dubai, which owns and operates tens of ports in tens of countries worldwide, attempted to acquire about six major sea ports in the United States. And all hell broke loose! Republicans, who are for the most part apostles of globalization, free trade and free markets and the preachers of the general superiority and suzerainty of the principles of supply and demand, were suddenly singing a different tune! Ensuring the death on arrival of the prospective take over certain six American ports by World Ports of Dubai, became one such issues in which Republicans and Democrats, Conservatives and Liberal American politicians could suddenly finds agreement! The Republicans joined the Democrats in fighting President Bush in their insistence that he killed the purely economic deal in the name of national security of America.

Arguments, grandstanding and avalanche proselytizers from both political parties (Republicans and Democrats) assembled to ensure World Port of Dubai’s deal, entered into, in their British subdivision of the company, remained comatose. High profile American politicians were literally jumping over each other to propose federal legislations, state and local legislations to ensure that the deal entered in England, never materialized in the United States. States and local authorities, labor unions opposed it too.

The acquisitions made in England, through WP holding there, would have made take over of the US seaports in question uneventful, the same company and management (WP) own properties in many countries without incidents, and it would have assumed ownership and control of these US ports, as WP has done everywhere else. American political and economic leaders effectively made it an impossible task for WP.

WP Dubai is an Arab entity, those with unbridled biases, bigotry, prejudices, hatred and brazen discriminations, exhibited their xenophobia and camouflaged it all in national security parlance, even though WP has never been found wanting. WP operations have not experienced significant or substantial security lapses in any of its ports. And yet, it was compelled to hands of

f the American ports, as a result of vehemence to its acquisitions of six American seaports. Some people, in the post September 11 world, equate all Arab persons and companies with terrorism or as purveyors of terror.

The opposition to WP Dubai in the US was surprisingly bipartisan !

In the end, globalization, free market are such excellent ideas when it benefits some, but national security becomes euphemism for expressing superiority complexes and even xenophobia?

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1 comment

Cletus E. Olebunne March 30, 2006 - 6:54 am

Paul, once again you have displayed your knowledge of current events. Globalization is a competitive adventure, and in competition one must develop competitive defense strategies through either internal and international trade public policies favorable to you or through competitive comparative advantage in innovation and entrepreneurship. Because globalization is a competitive adventure, it will always be lopsided as in winners and losers. All the five fingers are not equal but they work in unisome to perform an activity because they are not in competition with each other.

What went down in the Chinese CNOON and the WP of Dubai is competitive defense through united front public policies. The world will see more of this competitive defense strategy as the rest of the world catches up with the American innovative and entrepreneurial spirit of comparative advantage. In essence, Free trade as we know it today may not exist in the next 50 years or so.

Countries must prepare themselves for the 21st century global trade competition. This is why I am advocating for Nigerians entrepreneurial leadership through my monthly newsletter on The Chinese are where they are today because of the reform they took twenty years ago, especially in the science and math education, and you know what, they are doing same in business school education in the 21st century because they realized that they need more business school trained managers to help manage their industrial growth.

On agriculture, I do not see problem with any country subsidizing its agricultural industry in other to feed its citizens. I also do not believe in competitive agricultural food export unless the exporting country will process the finished goods or foods to the liking of the importing consumer countries. This where consumer patriotism comes in, but you know us (consumption prone third economy), we will buy that foreign made yugort and cheese before the local made. We will also import foreign farmers while in our backyard there is a Federal University with a Faculty of Agriculture that is deteriorating. Good intentions bad implementation strategy. My free unsolicited advise to the Kwara State government is to make sure that the imported farmers work in collaboration with the Faculty of Agriculture at the University of Ilorin. I give this free unsolicited advice not only because I spent five years in Ilorin for my University education and the NYSC year in the State of Kwara but also for the fact that Kwara has the capacity to becoming agricultural state in Nigeria, just as I have advocated for Imo state to becoming the pharmaceutical and chemical state in Nigeria.

I would say, do not hate the competitor; hate the competition. For Nigerians not to feel as losers in year 2020, this is the time we must buy into the entrepreneurial leadership mindset that I have been advocating through Nigerian Entrepreneurial Leadership in manufacturing toward a 24 hour economy.

Cletus E. Olebunne

New Jersey, USA


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