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Alongside protectionism, nationalism has also returned In the more developed European states such as France, Austria, the Netherlands it is often expressed in anti-immigrant or ethnic- and language-oriented policies In some new EU member states a potentially more dangerous form of nativism has emerged In Poland, Hungary, and Romania, for example, nationalist, anti-Semitic, and anti-Western political messages have become commonplace41 The EU accession process sti ed some of these impulses, as these countries understood the need to adhere broadly to the secular democratic values of the core EU states But once these countries have gained EU admission, that constraint becomes less binding Across the Western world, political constituencies that favor tougher limits on immigration are gaining support despite evidence that increased restrictions on immigration will hamper the supply of skilled workers and raise costs Fringe political groups have been successful in creating messages built around opposition to immigration In many European countries, mainstream parties are nding it dif cult to assemble governing majorities As a result, they take strange bedfellows, embracing supporters who are sympathetic to the anti-immigration message of the fringe who encourage mainstream politicians to push for more restrictive immigration legislation42 At the same time, the European Commission forecasts that the EU needs to open the door to an extra 20 million workers, particularly highly skilled workers, over the next two decades to ll the gaps in the workforce43 Several European countries remain torn between the economic case for more immigration and an attachment to the traditional idea of a homogeneous nation-state Protectionist measures invite a spiral of retaliation The impact on economic growth of a rise in protectionism could be severe The Economist Intelligence Unit forecasts that even a relatively modest backlash against globalization could shave nearly a full percentage point off annual world GDP growth during the period 2011 202044 Meanwhile, trade protectionist pressures are rising In the United States, the president s Trade Promotion Authority (TPA) expired in July 2007 TPA is a procedural device that gives the White House power to negotiate trade deals and then present the nal product to Congress for an up-or-down vote with no amendments It is considered critical to the US free trade agenda because trading partners are reluctant to engage
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in trade talks when they know that the US Congress could potentially alter the terms of the completed deal afterward45 Political turmoil in Europe over EU enlargement and foreign competition, pressed by aggressive hard-right factions in member states, may fracture Europe s ongoing economic and political integration and cause the continent s hard-won consensus on trade policy to unravel Given the EU s stature as a pillar of the global trading system and its close relationship with the United States, its dissonance on trade would provide cover for other countries to adjust their own trade policies away from multilateralism46 Emerging market countries also face growing opposition to globalization, especially trade liberalization Responding to domestic constituencies, Brazil has imposed tight capital controls and high import tariffs that are particularly disruptive to US business interests47 Brazil s perspective resonates with other South American countries, and it will increasingly become a leader in a growing bloc of harder-line developing countries that has already helped to delay the Doha Round of WTO negotiations As emerging market countries, Russia, India, and China among them, have grown in economic and political power they have intensi ed their regulatory scrutiny of cross-border FDI and merger and acquisition activity based on political and national security grounds Regardless of the pretext, these measures are often intended to shield uncompetitive domestic industries and rms and drive global prices higher for lucrative natural resources These pressures are causing governments to consider a variety of measures to tighten assessment of FDI ows, including introducing legislation fencing off strategic sectors, such as defense industries and critical infrastructure, to potential foreign acquirers48 Although it is deemed too important to fail, progress on concluding the WTO s global trade talks has been unfortunately slow Launched in November 2001, Doha aimed to further liberalize global trade by cutting industrial and agricultural tariffs and by reducing farm subsidies, emphasizing bene ts for developing countries A conclusion to the talks has proved elusive, with the EU and the United States in particular being accused of failing to reduce farm support while such emerging market countries as Brazil and India have refused to open their markets to industrial goods
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