Debates over Globalization

Building on efforts by Reagan and Bush, Clinton sought to speed up the growth of a “global marketplace” with new measures to ease restrictions on international commerce. Although the process of globalization was centuries old, new communications technologies such as the Internet and cell phones connected nations, corporations, and individuals at much faster speeds and much lower costs than ever before. To advance globalization and the U.S. economy, in 1993, Clinton won congressional approval of the North American Free Trade Agreement (NAFTA), which eliminated all tariffs and trade barriers among the United States, Canada, and Mexico. Fearing loss of jobs and industries to Mexico, a majority of Democrats opposed NAFTA, but Republican support ensured approval. In 1994, the Senate ratified the General Agreement on Tariffs and Trade, establishing the World Trade Organization (WTO) to enforce substantial tariff and import quota reductions among some 135 member nations. And in 2005, Clinton’s successor, George W. Bush, lowered more trade barriers with the passage of the Central American–Dominican Republic Free Trade Agreement.

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VISUAL ACTIVITY The Internet In 1958, in response to the Soviet launch of Sputnik, President Eisenhower created the Advanced Research Projects Agency (ARPA), which produced a system that routed digitized messages between computers to facilitate military communications. The technology spread beyond the military; by 2000, even the poorest countries had some access to what became the Internet. By 2011, Internet-enabled “smart phones” were abundant. Activists used digital networks to organize protests and broadcast their stories and images during the Arab Spring of 2011. © Ron Haviv/VII/Corbis READING THE IMAGE: What forms of technology do you see among these Egyptian protesters? What are some pros and cons of using these technologies for political activism? CONNECTIONS: How did the Obama administration respond to the Arab Spring revolutions?

The free trade issue was intensely contested. Much of corporate America welcomed the elimination of trade barriers. “Ideally, you’d have every plant you own on a barge,” remarked Jack Welch, CEO of General Electric. Critics linked globalization to the loss of good jobs, the weakening of unions, and the growing gap between rich and poor. (See “Beyond America’s Borders.”) Demanding “fair trade” rather than simply free trade, critics wanted treaties to require decent wage and labor standards. Environmentalists wanted countries seeking increased commerce with the United States to reduce pollution and prevent the destruction of endangered species.

Globalization controversies often centered on relationships between the United States, which dominated the world’s industrial core, and developing nations on the periphery, whose cheap labor and lax environmental standards caught investors’ eyes. United Students against Sweatshops, for example, attacked the international conglomerate Nike, which paid Chinese workers $1.50 to produce a pair of shoes selling for more than $100 in the United States. Yet leaders of developing nations actively sought foreign investment because wages deemed pitiful by Americans often provided their impoverished people a much better living than they could otherwise obtain. At the same time, developing countries often pointed to American hypocrisy in advocating free trade in industry while heavily subsidizing the U.S. agricultural sector. “When countries like America, Britain and France subsidize their farmers,” complained a grower in Uganda, “we get hurt.”

Whereas globalization’s cheerleaders pointed to the cheap consumer goods available to Americans and argued that everyone would benefit in the long run, critics focused on the short-term victims. American businessman George Soros conceded that international trade and investments generated wealth, “but they cannot take care of other social needs, such as the preservation of peace, alleviation of poverty, protection of the environment, labor conditions, or human rights.” In 2000, President Clinton responded to such criticism by ordering an environmental impact review before the signing of any trade agreement. Beyond the United States, officials from the World Bank and the International Monetary Fund, along with representatives from wealthy economies, promised to provide poor nations more debt relief and a greater voice in decisions about loans and grants. According to World Bank president James D. Wolfensohn, “Our challenge is to make globalization an instrument of opportunity and inclusion—not fear.”