- Apr 03, 2025
- Dr Ryan Baidya
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Globalisation's Dirty Secret: Goods Move Freely, but Labour Remains Trapped
Shortly after taking office on January 20, 2025, President Donald J. Trump issued numerous Executive Orders (EOs) and introduced policy changes related to international trade and tariffs. Among these, tariffs had the most far-reaching ripple effects both domestically and globally. Since then, the term tariff has become a household word, as unpredictable price increases on everyday goods have been linked to shifts in tariff policy. Tariffs alone might not have had such a dramatic impact on international trade and consumer prices, had they not become entangled in the broader framework of globalisation. Together, tariffs and globalisation are central themes in international economics and global trade policy, with countless articles, books and commentaries written on the subject. However, the primary objective of this article is to draw attention to a lesser-known, rarely discussed dimension of both: the "dirty secret" behind globalisation. First, let us briefly review the two concepts—tariff and globalisation—and explore how they interact. What is a Tariff? A tariff is a tax imposed by a government on goods and services imported from other countries. The main goals of tariffs are: Protecting domestic industries by making imported goods more expensive. Generating government revenue. Retaliation or trade leverage in international disputes. Types of tariffs include: Ad valorem (based on value, e.g., 10% of item cost) Specific (fixed fee per unit, e.g., $100 per ton) Compound (a mix of both) What is Globalisation? Globalisation refers to the process of increasing interconnectedness and interdependence among countries through: Trade Investment Technology Cultural exchange Labour and capital mobility It often results in: Expansion of multinational corporations Integrated supply chains Faster communication and innovation diffusion Relationship Between Tariffs and Globalisation Tariffs and globalisation often pull in opposite directions Aspect Tariff Globalisation Intent Restrictive Integrative Trade Flow Limits imports Expands trade Economic Impact Protects local jobs, raises prices Increases consumer choice, lowers costs Policy Trend Protectionism Free trade Tensions Between the Two Globalisation favors lower tariffs to promote free trade under agreements like the WTO, NAFTA, or RCEP. Tariffs hinder globalisation by increasing costs, disrupting supply chains, and triggering trade wars (e.g., the US-China trade war). In recent years, populist movements and national security concerns have led to a resurgence of tariffs, challenging globalisation. Examples US-China Trade War: The U.S. imposed tariffs on Chinese goods, prompting retaliatory tariffs. This disrupted global markets and restructured supply chains. Brexit: The UK left the EU single market, potentially reintroducing tariffs and trade barriers. India’s "Make in India" policy: Promotes domestic production by raising import duties on certain products. US "Make America Wealthy Again" policy: Intent to promote domestic jobs and manufacturing by enacting tariffs across the board on imported products. Pros & Cons Tariffs Globalisation ✅ Protects local jobs and industries ✅ Can improve trade balances ❌ Raises consumer prices ❌ Provokes retaliation and inefficiencies ✅ Promotes economic growth, efficiency, and innovation ✅ Access to cheaper goods ❌ May lead to job losses in some sectors ❌ Can widen income inequalities Structural Injustice In the grand narrative of globalisation, we are told the world has become more connected, efficient, and prosperous. Goods now glide across borders at lightning speed. Capital flows effortlessly from Wall Street to Shanghai. Outsourcing, e-commerce, and international supply chains have turned the planet into a single, integrated marketplace. But beneath this glittering surface lies a structural injustice: while products and profits move freely, people—especially labourers—remain bound by geography, citizenship, and restrictive immigration policies. Freedom for Goods, Chains for Workers Consider this: a T-shirt stitched in a factory in Dhaka, Bangladesh, can be shipped and sold in Berlin within days, tariff-free under many trade agreements. Yet the very worker who produced it cannot legally move to Germany to earn higher wages for the same labour. This is not an oversight; it is a systemic design. Capital and goods have been globalised, but labour has not. Most globalisation-era trade agreements—such as the North American Free Trade Agreement (NAFTA), the European Union Single Market, or even the World Trade Organisation’s free trade rules—explicitly favour the movement of goods and capital, while excluding or severely restricting the movement of people. In doing so, globalisation has produced a system that devalues human labour and reinforces inequality. The Wage Gap That Never Closes The economic divide between nations makes this injustice even starker. A garment worker in Bangladesh earns, on average, $120 per month, while her counterpart in Italy might earn $2,000 or more for a similar job, often producing or finishing the same global fashion brands. But she cannot follow her labour to where it is valued more. She is geographically and legally trapped, and that entrapment keeps global wages unequal. Multinational corporations exploit this divide. They shift production to low-wage countries, reduce labour costs, and maximise profits. Labourers, on the other hand, have no such flexibility. Unlike factories, they cannot be “relocated” to better conditions. This inequality is baked into global trade systems. The International Labour Organisation (ILO) has repeatedly warned that globalisation has “not created decent jobs at the pace and scale required”, especially in the Global South. The Case of the U.S.–Mexico Border Take NAFTA, which liberalised trade between the United States, Canada and Mexico. While it allowed companies to move goods and investments across the border freely, it did not grant the same rights to workers. U.S. corporations could build factories in Mexico to benefit from lower wages, but Mexican workers were not allowed to migrate freely to the U.S. to benefit from higher wages. This created what many scholars describe as a "one-way globalisation" that benefits capital owners while exploiting the working class on both sides. Even today, while Avocados from Mexico can cross the U.S. border daily, the Mexican labourer picking them is often criminalised if he tries to cross that same border to earn a living wage. Enter Tariffs: A Double-Edged Sword for Labour In light of these realities, some countries have turned to tariffs as a tool to protect domestic labour from global wage competition. But do tariffs truly favour labour? The answer is complex. When Tariffs Protect Tariffs—taxes on imported goods—can shield domestic industries from cheaper foreign competition. In doing so, they may preserve local jobs and stabilise wages, particularly in manufacturing sectors that have been hollowed out by globalisation. Example: U.S. tariffs on imported steel may allow American steelworkers to retain their jobs, as imported steel becomes less competitive. In the short term, this benefits labourers in wealthier nations, particularly in traditional blue-collar industries. When Tariffs Harm But tariffs are a blunt tool. They raise prices for consumers and businesses, can trigger retaliation from trading partners, and often hurt workers in developing countries by reducing demand for their exports. A Bangladeshi garment worker whose products are suddenly hit with Western tariffs may lose her job entirely, with no option to migrate to higher-wage markets. In addition, tariffs do not address the root injustice of labour immobility. They may temporarily protect jobs in one country, but do not offer global wage equity or mobility to the labourer trapped in the Global South. Solutions: Reimagining Globalisation Through Logic, Ethics and Equity To build a just and sustainable global economy, we must go beyond tariffs and free trade deals. We must question the foundations of globalisation itself and propose bold, ethical, and practical reforms: Expand Labour Mobility If goods and capital can move freely, why not labour? Ethical globalisation must include pathways for labour migration, allowing workers to follow opportunities and close wage gaps over time. This requires rethinking immigration policy, particularly in high-income countries. Tie Trade Agreements to Labor Standards Trade agreements must include enforceable labour rights and wage standards. Countries and corporations that exploit cheap labour without ensuring dignity, safety, and fair pay should not enjoy the full benefits of trade access. Invest in Local Value Creation Globalisation must not mean perpetual dependence on low-wage labour. Wealthy nations and corporations should invest in skills, infrastructure, and innovation in the countries they profit from—so labourers in the Global South can move up the value chain, not remain at the bottom of it. Tax Global Profits to Fund Global Justice Multinational companies benefit from global inequality. A global minimum corporate tax or an equity contribution could be used to fund job training, education, and migration infrastructure for labourers in underprivileged nations. A Borderless Economy Needs Borderless Justice If globalisation is to be more than a mechanism for profit extraction, it must be grounded in human dignity. Goods cannot continue to travel freely while people are treated as disposable, immobile cogs in the machine. Either the world must allow labour to move as freely as, capital and goods—or we must restrain the latter until equity is possible for all. Until then, globalisation remains a rigged game: efficient on paper, exploitative in practice. References International Labour Organization. World Employment and Social Outlook – Trends 2023. Geneva: ILO, 2023. https://www.ilo.org. Gereffi, Gary, and Frederick Mayer. "Globalization and the Demand for Governance." In The New Offshoring of Jobs and Global Development, edited by Gary Gereffi. Geneva: International Labour Office, 2006. Rivoli, Pietra. The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade. Hoboken, NJ: John Wiley & Sons, 2005. Bhagwati, Jagdish. In Defense of Globalization. Oxford: Oxford University Press, 2004. Bacon, David. Illegal People: How Globalization Creates Migration and Criminalizes Immigrants. Boston: Beacon Press, 2008. UNCTAD. World Investment Report 2023. New York: United Nations, 2023. Harrison, Ann, and Jason Scorse. “Multinationals and Anti-Sweatshop Activism.” American Economic Review 96, no. 1 (2006): 364–69.- Apr 02, 2025
- YagnaSri