Globalization 3.0

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SINGAPORE - For Barack Obama, the world has "reached one of those rare inflection points in history" in which the global economy must rebalance itself or face strife and decline.

For Stephen Harper, not so much.

The President's address in Tokyo on Saturday morning delivered a clear warning both to Americans and to the leaders here at the Asian Pacific Economic Cooperation forum: the days when an open American market fuelled growth in closed Asian economies is at an end. Only mutual reciprocity can ensure mutual prosperity.

For decades, Asians have produced and Americans have consumed. The result is a United States mired in economic crisis, personal debt, and trade deficits.

Americans and their government will have to save more and spend less, the President maintained. "It will also mean a greater emphasis on exports that we can build, produce, and sell all over the world," he added, tellingly.

A brief bit of context: For much of the nineteenth and early twentieth century, Great Britain opened its doors to the world, embracing free trade, while the United States and others partially hid behind tariff walls, building their industrial base. Some analysts, in retrospect, have dubbed it Globalization 1.0

After the Second World War, the United States replaced Great Britain as the Great Receiver, while impoverished and shattered nations built or rebuilt their industrial infrastructure by selling into the American market.

The result was mutual prosperity, culminating in the 1990s' Globalization 2.0. But the economic shocks of this decade have revealed America as the new Great Britain in decline: overextended, indebted, its economy ravaged by cheap but high-quality imports; its future uncertain.

Decline is not inevitable. But the next phase of globalism must entail rebalancing: the great new markets of South and East Asia must open themselves to American imports and promote consumer spending among their parsimonious citizens.

"For decades, the United States has had one of the most open markets in the world, and that openness has helped to fuel the success of so many countries in this region and others over the last century," the President declared. "In this new era, opening other markets around the globe will be critical not just to America's prosperity, but to the world's as well." Success will lead to Globalization 3.0. Failure does not bear contemplating.

A bold challenge, and one on which Canada's future also depends. When asked what he thought about Mr. Obama's declaration, however, Mr. Harper was noncommittal.

Canada has "overwhelmingly benefited" from 20th century globalization, the Prime Minister told reporters, during a brief media availability Saturday afternoon.

"The global economy really is very complex and is really beyond the capacity of any one country or any two countries to manage," he said. (He was referring to China as the other country.)

That's why forums like APEC are important in creating "some skeletal governance of the global economy."

All true, but what Canadians need to know is how our country achieves equilibrium in Globalization 3.0. The whole purpose of Mr. Harper's trip to India this week and China in December is to reinforce the need for greater economic co-operation between Canada and the Asian markets. We, too, have been shut out. We, too, need the opportunity to export more than trees and rocks and oil.

This is why the Prime Minister is visiting India and China. This is what Canadians need to talk about, amongst themselves and with their new Asian partners. The question is whether Mr. Harper is willing to lead that conversation. In Singapore, on Saturday, he was not.