Globalisation Enters a New Phase

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Emerald Neal
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b Globalisation Enters a New Phase B What was the reaction in your country to Donald Trump s election win? What do you think are the global implications of his victory?

1 What is the economic message from Donald Trump s victory? 2 If 1989 was the year that marked the beginning of the global age, what is 2016?

1 b Globalisation Enters a New Phase B What was the reaction in your country to Donald Trump s election win? What do you think are the global implications of his victory? November 2016 The Guardian Globalisation backlash enters new phase with Trump win Discuss these questions and then read the first part of the article to compare your ideas to the journalist s. 1 What is the economic message from Donald Trump s victory? 2 If 1989 was the year that marked the beginning of the global age, what is 2016? 3 Who have been the beneficiaries of globalisation in the past quarter of a century? 4 What are Brexit and Trump s victory a rejection of? 5 Which groups of people was Hillary Clinton the candidate of? Same story. Different country. Much, much bigger implications. That s the economic message from Donald Trump s victory in the year of shocks. By comparison, Brexit was a sideshow. If 1989 was the year that marked the beginning of the global age, 2016 has been the year when the basic tenets of globalisation have been challenged first in the UK and now in the US. The wall came down in Berlin on a November night 27 years ago. The question now is whether walls start going up again. It s not that there have not been beneficiaries from globalisation. The past quarter of a century has seen the development of a massive new middle class that has done well out of trade and the free movement of capital. But that middle class has been in Shanghai and Mumbai. Working people in the north of England and the rust belt of America think they have had a raw deal from an economic system that has favoured the well educated and the better off. Just like Brexit, Trump s victory is a rejection of the status quo of multinational companies that don t pay their taxes, of trade deals weighted in favour of the boardroom rather than the workers on the shop floor, of year after year of squeezed living standards, of rising inequality, of being ignored and patronised. It is, of course, ironic that Americans have chosen a billionaire who doesn t appear to have paid much tax for the past couple of decades to be the next occupant of the White House, but in this race Hillary Clinton was the candidate of the establishment the choice of Goldman Sachs and the Washington elite. Trump marketed himself as the outsider. Which groups of people in your country do you think have done well out of globalisation and which have suffered? 1/4

2 Which country s currency was the biggest early casualty of Trump s win and why? 3 What changes are we likely to see at the Federal Reserve with a Trump presidency?

2 What do you think are the financial implications of Trump s victory? B Discuss these questions and then read the second part of the article and check your ideas: 1 How did the financial markets react to the president-elect s victory speech? 2 Which country s currency was the biggest early casualty of Trump s win and why? 3 What changes are we likely to see at the Federal Reserve with a Trump presidency? 4 What are Trump s views about fiscal policy tax, spending and the budget deficit? 5 Is the US likely to have a good relationship with China under Trump? 6 Which trade deals are now dead in the water? 7 Which world body is Trump no fan of? 8 If the year of shocks continues into 2017, who might become France s new leader? So what are the implications of his victory? Financial markets seemed reassured by the president-elect s victory speech and the hope that Trump might not be as bad as feared meant the initial reaction on stock markets and on the foreign exchanges was muted. Perhaps unsurprisingly, given that Trump has threatened to build a wall across the Rio Grande and to tear up the North American Free Trade Agreement (Nafta), the biggest early casualty was the Mexican peso. There are though potentially far-reaching medium and long-term implications of a Trump victory. The first involves the Federal Reserve, America s central bank. Janet Yellen, the Fed s chairwoman, is now living on borrowed time. As an unabashed Clinton supporter, her term lasts until 2018 when she would almost certainly be replaced. Yellen may jump before she is pushed. If she does, Trump will bring in someone who is less keen on quantitative easing, the money-creation programme used by the Fed and other central banks since 2008 in order to boost economic activity. Markets have already started to assess whether the Fed will now go ahead with the interest-rate rise it has signalled for December. US borrowing costs are likely to stay lower for longer. Trump s views about fiscal policy tax, spending and the budget deficit are not entirely clear, but he seems to want lower taxes, higher spending on America s clapped-out infrastructure and defence, and less federal borrowing. The prospects of cheaper borrowing and fiscal easing should lead to stronger growth in the short term. Financial markets are more concerned about the structural changes Trump is planning for the US economy. He has threatened to brand China a currency manipulator, a decision that could easily prompt a fullscale trade war between the world s two biggest economies. The two trade deals Barack Obama has been negotiating the Trans- Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) are dead in the water. Trump is no fan of the World Trade Organisation, the body that polices global trade and was created in the first flush of post-cold-war globalisation euphoria. The last time American economic policy was this protectionist was in the 1930s. Wall Street might not like that but it only has itself to 2/4

b Globalisation Enters a New Phase blame.

The impact of that crisis is still being felt, not just in poor economic performance but in political disenchantment. Trump is one result of the festering anger.

In your opinion, will Marine Le Pen gain power in France? What other politicians might take advantage of this political disenchantment?

3 b Globalisation Enters a New Phase blame. Globalisation resulted in massive and disruptive movements of capital around the world, which made some people at the top unbelievably rich but culminated in the financial crisis of The impact of that crisis is still being felt, not just in poor economic performance but in political disenchantment. Trump is one result of the festering anger. If the year of shocks continues into 2017, Marine Le Pen may be another. Do you think that Wall Street is to blame for the new protectionist policies? In your opinion, will Marine Le Pen gain power in France? What other politicians might take advantage of this political disenchantment? Make word partnerships that you saw in the article from the words below. quantitative war central deal easing policy fiscal deficit trade (x2) stock budget market shop bank floor Now match the word partnerships to the definitions below. 1 a place where shares of public listed companies are traded 2 an agreement between two or more countries establishing the conditions under which products from each country may be exported to the other 3 the part of a workshop or factory where production as distinct from administrative work is carried out 4 a national bank that provides financial and banking services for its country s government and commercial banking system 5 the introduction of new money into the money supply by a national bank 6 the amount by which actual expenses exceed planned expenses 7 the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation s economy 8 a situation in which countries try to damage each other s trade, typically by the imposition of tariffs or quota restrictions In pairs, ask each other questions using the word partnerships above. e.g. Where is your country s central bank. > Threadneedle Street in London. 3/4

What do you think these mean: t water 1 in hot water 2 in deep water 3 tread water 4 water under the bridge 5 test the water 6 like a fish out of water Now match the expressions to these definitions:

4 E What does the highlighted expression in this extract from the article mean? November 2016 The Guardian...the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) are dead in the water. There are other expressions using water in English. What do you think these mean: t water 1 in hot water 2 in deep water 3 tread water 4 water under the bridge 5 test the water 6 like a fish out of water Now match the expressions to these definitions: test the water try to discover what something is really like before you become very involved in it in a difficult situation which is hard to deal with in a difficult situation in which you are in danger of being punished appearing to be completely out of place maintain one s situation without making progress something that has happened and cannot be changed and as such is not considered important anymore Complete these statements with the expressions in the correct form: 1 Before you move to the country you should rent a place there for a couple of months to. You may not like it. 2 What went wrong for Clinton in the election is. All she can do now is reflect and move on. 3 Do you like your job? Not really. I m just until something better comes along. 4 The takeover is now that the competition commission says the resulting company will be a monopoly. 5 Clinton s use of a private server landed her during the campaign and may have cost her the election. 6 I was a Clinton supporter in a bar full of Trump supporters. I felt. 4/4

5 Teacher s notes 1 student pages 4 Now match the word partnerships to the definitions below. 1 stock market 2 trade deal 3 shop floor 4 central bank 5 quantitative easing 6 budget deficit 7 fiscal policy 8 trade war week of mid-intermediate+ (B2+) E What does the highlighted expression in this extract from the article mean? dead in the water = completely unlikely to succeed Now match the expressions to these definitions: 5 try to discover what something is really like before you become very involved in it 2 in a difficult situation which is hard to deal with 1 in a difficult situation in which you are in danger of being punished 6 appearing to be completely out of place 3 maintain one s situation without making progress 4 something that has happened and cannot be changed and as such is not considered important anymore Complete these statements with the expressions in the correct form: 1 test the water 2 water under the bridge 3 t water 4 dead in the water 5 in hot water 6 like a fish out of water

Creating a Mandate to Rewrite the Rules of the Economy July 2016

Creating a Mandate to Rewrite the Rules of the Economy July 2016 Methodology National phone survey of 900 likely 2016 voters from July 13-18, 2016. This survey took place July 13-18, 2016. Respondents