Does dog-eat-dog replace globalization?
Several good articles have been written in the past few days about what the world will look like after COVID-19 is defeated. I’ve already written about why I agree with forecasts that this is an event on a parallel with The Second World War in terms of how difficult the fight will be and in terms of the vastly different landscape into which we will emerge.
IMHO, the biggest threat that has emerged in the past few days is the reaction to U.S. President Donald Trump ordering U.S. manufacturers to stop exporting to Canada the personal protection equipment that they have been selling us for many years.
In some ways, this is predictable for an “America First” President, who has apparently also ordered his government’s agents abroad to beg, borrow, buy and steal any PPEs they find.
The worst result would be a “dog-eat-dog” world where globalization and free trade take a big hit. International supply chains that are essential today may be irrevocably broken if Trump, as usual, doubles-down on his threats, tariffs and protectionist measures in a bid to scare Americans into re-electing him.
I rarely agree with Ontario Premier Doug Ford. But I do think he’s on the right track, when he says it is important for provinces to be self-sufficient when it comes to medical equipment. "I’m not going to rely on President Trump, I’m not not going to rely on any prime minister or president or any other country ever again.”
Ford says we should be prepared to pay “a nickel more” for essential items to have the supply secured at home. But will we really want 13 new PPE manufactures in the 13 provinces and territories, rather than one efficient manufacture for all of Canada?
I hope that’s overstating the case.
Prime Minister Justin Trudeau took a more moderate tone, but one which contained a potent warning: ““The level of integration between our economies goes both ways across the border. We are receiving essential supplies from the United States, but the United States also receives essential supplies and products – and indeed, health-care professionals – from Canada every single day. It would be a mistake to create blockages or reduce the amount of back-and-forth trade in essential goods and services, including medical goods, across our border.”"
It’s far too early to predict exactly what will happen.
But I believe one of the certainties about the world after COVID-10 is defeated will be a world where countries and provinces/states feel the need to be more self-sufficient in essential items.
That will inevitably mean a bigger role for governments, not necessarily in dictating specific companies or people to do specific things but in setting financial or taxation incentives to change, as well as setting policy on what will be considered “essential” goods in the future.
What does that mean in practical terms? Here are some possibilities:
Convert older automobile manufacturing plants, some of which have already been shuttered, to making PPEs or other essential goods.
Increase research facilities and staff to find new or better products, including medicines and protective gear, for a world where some experts say this pandemic will continue in one form or another for two years.
Find ways to finance and promote “clean energy” projects such as wind, solar and hydro to ensure energy self-sufficiency without dependence on oil and gas.
Further reading:
Trump restricts trade of essential goods into Canada despite warning from Trudeau
Canada won’t retaliate against U.S. ban on medical supplies exports
