Saturday, March 11, 2006

Globalization Offered Two Ways: à la Carte and Prix Fixe

Daniel Gross of the "Times" says that

"LIKE gravity, globalization has come to be seen in recent years as an unstoppable force of nature. If the world is flat, capital, goods and services can go wherever they want. But last week, the process of cross-border economic integration suffered the same fate as foolish mortals who would defy Newtonian physics: it crashed to earth."

Last summer, anguished protests stopped the Chinese oil company Cnooc from acquiring United States-based Unocal, even though Unocal slakes only a tiny fraction of America's oil thirst. Indeed, the Dubai controversy is merely the latest manifestation of a new condition afflicting politicians, policymakers and ordinary citizens all over the globe. Call it Selective Globalization Syndrome.

The main symptom: a desire to pick and choose the outcomes of globalization, as if from an à la carte menu. For instance, nobody squawked in 2004 when DP World, then British-owned, bought the port operation of Florida's CSX Corporation for $1.2 billion, or when a company based in Dubai bought the Essex House hotel in New York for $440 million last year.

Yet pro-globalization presidents and policymakers can be anti-globalists when convenient. President Bush, an ardent champion of free trade, has fervently argued for the ports transaction as a matter of principle. But he ordered protective steel tariffs early in his first term, and has shown little interest in exposing sugar growers in politically important states like Florida to the benefits of global competition.

Selective Globalization Syndrome drives politicians and government officials to even more seemingly contradictory stances. For instance, a Dubai-based company controlling East Coast ports is an unacceptable security risk, but Chinese companies controlling West Coast ports is fine.

Rest here


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