Globalization has always had its fierce critics, but the expansion of international trade and cooperation has looked inexorable for at least a decade. Last week, the headwind that has been slowing the world's economic and political integration took on the look of a hurricane.
Voters in France, then in the Netherlands, resoundingly rejected a European constitution that would have further subverted the will of European nations to a more powerful continental government in Brussels. Reassurances from the European elite that integration would expand the pie for all were no match for the anxieties of commoners mired in economic stagnation and buffeted by the migration of jobs out of Old Europe. The drive for a European constitution may not be officially dead, but it is difficult to conceive how it could be revived without a top-to-bottom overhaul.
Meanwhile in Washington, President Bush was pleading to a Congress controlled by his political party to ratify the Central American Free Trade Agreement, but that too will face an uphill slog when lawmakers return to work this week. If U.S. lawmakers panic in the face of competition from Guatemala and El Salvador, what will they do when the administration pushes far more ambitious pacts, such as the Free Trade Area of the Americas or the Doha round of global trade negotiations, which would cut agricultural subsidies and lower barriers to trade in sensitive farm products?
The fledgling institutions of a globalized economy were also under pressure last week. The United States said Monday that it would take its case against European subsidies for Airbus back to the World Trade Organization, launching what is likely to be the most expensive case ever brought before the world trade body. The next day, the European Union countersued, charging that the United States was illegally subsidizing Boeing. In two days, months of delicate talks on the issue vanished amid acrimony. The sheer size of the case could overwhelm the WTO while poisoning E.U.-U.S. relations ahead of Doha negotiations.
And, as if to get its voice heard above the din, China rescinded recently imposed duties on textiles bound for the United States and Europe that were meant as a good-faith gesture to nations swimming in Chinese apparel. That issue may also end up before the WTO. Commerce Secretary Carlos Gutierrez, on his maiden trip to China, pleaded for cooperation on copyright piracy and freer access to the Middle Kingdom's vast markets.
"The absence of results only empowers those within the U.S. political system who are pushing an American retreat from the global economy," Gutierrez said in a speech to the American Chamber of Commerce in Beijing on Thursday. "We need some help here."