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Borders and Barriers
Economically anxious countries are tightening borders and imposing trade barriers but to no avail.
by MANLIO GRAZIANO

Mexico-US border wall at Tijuana, Mexico. Photo by Tomás Castelazo. CC BY-SA 4.0 via Wikipedia.
The fall of the Berlin Wall in 1989 was hailed as the beginning of the end of all walls and barriers separating individuals and peoples. Yet
as of 2007, just eighteen years later, Europe and its Eurasian margins saw the creation of about 16,600 miles of new political borders,
which means that for every mile of one dismantled border (the Berlin Wall), 107 miles of new borders have been built.
Why so? Because the new international disorder, precipitated by the dissolution of the Cold War, has led to more wars, more walls, and a
more disunited world. It has also accelerated the shift of power from the old industrialized countries to the “emerging” nations: starting
in the 1970s, the countries that used to dominate the world witnessed the rise of an increasing number of new international competitors.
The top global companies of the Fortune 500 between 2001 and 2017 reveals the trend: the number of North American and European
companies that make the cut have declined, while Asian-based companies (from China in particular) have steadily filled the breach.
For growing sectors of the American population and, more generally, the population of the old industrialized countries, this shift of
power translates into uncertainty and fear. This is not necessarily because their living standard has worsened; on the contrary, in terms
of per capita product, the United States is the ninth richest country in the world—a distinction it held in 1999 at the pinnacle of the
economically robust Clinton years. But compared against its performance in 1999, the United States slightly closed the gap between itself
and the other eight richest nations in 2016, when it experienced an increase in its per capita product relative to those countries. What
these populations feel, fear, and know, however, is that their living standards cannot improve anymore, and that sooner or later they
may very well worsen.
Many of those same countries eager to close their borders and expel foreign-born residents could stand to benefit greatly from
immigration.

An increasing number of specialists recognize that globalization did not increase inequality in the world, but, on the contrary, it reduced
the inequality between the developed and the developing countries. But it is precisely for this reason that globalization faces severe

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scrutiny in the developed countries. It is obvious that these countries can no longer afford to live and to spend as they used to. The
vicious circle is that the less they can afford, the more they tend to spend; and the more they keep spending, the less they can afford.
For now, they cannot yet attack those who are truly responsible for this new state of affairs
—countries like China, India, Indonesia—and the hundreds of millions of people in those and other
countries who have emerged from poverty thanks to globalization. Therefore recriminations,
jealousies, and hatred are being channeled toward the most visible scapegoats: immigrants and
foreign competition, both of which cross borders.
In the wake of the 2008 financial crisis, the G20 countries had solemnly proclaimed that they “will
not repeat the historic mistakes of protectionism of previous eras.” Yet since then seventeen of them
adopted measures to hinder imports. But isolationism and self-sufficiency are no longer possible
today: every type of production is tied by a thousand threads to the world market, and to cut one
means to cut them all. The supply chain of a Boeing 787 is spread over nine countries on four
different continents. The production of a simple burger is even more complex: in cultivation, stock,
transportation, process, manufacturing, packaging, and distribution, seventy-five poles of activity
are activated in fifteen different countries.
The Wall Street Journal reminded American advocates of isolationism about “Newton’s third law of
global politics, which is that for every action, there is an equal and opposite reaction.” It is true that
What Is a Border? » offers a the United States has the highest commercial deficit in the world, but it is also true that they are the
geopolitical history and analysis second largest exporter of goods in the world, and between 2008 and 2017, a period during which
of borders and allows us to the United States adopted 1,355 protectionist measures, its exports were being subjected to 2,429
speculate on what might such policies from other countries during this same period.
happen with these dangerous Moreover, because of the intricacy of globalized supply chains, imposing steep tariffs on imports or
fault lines in the future. withdrawing from international trade deals does not necessarily result in a flourishing domestic
economy. According to the Boston Consulting Group, implementing border-adjustment taxes or
withdrawing from the North American Free Trade Agreement (NAFTA) would be first and foremost an attack against the United States.
Given the level of the economy’s integration with Mexico, creating obstacles to imports from that country “would probably kill thousands
of US auto jobs.” The economist Gordon Hanson wrote that, if it were not for NAFTA, the entire American automobile industry would
have already disappeared, swallowed up by the competition of countries with lower salaries and public debt, and fewer social
protections.
Protectionism is a lose-lose situation. But such is always the case when pundits and policymakers push seemingly uncomplicated
solutions to intricate problems, as seen during the Brexit campaign. The United Kingdom decided to reestablish borders between itself
and the rest of Europe by voting to exit the common market, largely as a result of their uncertainties and fear of the future. However,
according to a secret British government analysis leaked in January 2018, domestic growth would be 8 percent lower were no Brexit deal
to be struck with the European Union, around 5 percent lower were a free trade agreement to be reached with the EU, and about 2
percent lower (the best hypothesis) if the UK were to remain in the single market over a fifteen-year period. To reestablish borders is
likely to exacerbate, rather than improve, the country’s economic problems.
Protectionism is a lose-lose situation.

It has been said that the primary reason why the majority of the UK voted to leave was not out of suspicion toward the EU but rather out
of fear of immigration. Everywhere in the old industrialized countries, immigrants are increasingly seen as the people who are stealing
the material privileges that accrued to those countries during centuries of domination around the world. Again, to an intricate problem
(the global shifting of power) an apparently uncomplicated solution (“it’s the immigrants’ fault”) is provided.
Across the world, the result has been mounting political and legal challenges for immigrants attempting to gain entry to other countries,
or even to remain in those to which they have already immigrated. Yet, ironically, many of those same countries eager to close their
borders and expel foreign-born residents could stand to benefit greatly from immigration, as many face drastic labor shortages in the not
so distant future.
As a US National Intelligence Council document stated in 2008,
the aging of societies will have economic consequences. Even with productivity increases, slower employment growth from a shrinking
work force probably will reduce Europe’s already tepid GDP growth by 1 percent. By the 2030s, Japan’s GDP growth is projected to drop
to near zero according to some models […] The cost of trying to maintain pensions and health coverage will squeeze out expenditures on

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other priorities.

In 2006, the European Commission announced that the working-age population in the EU would decrease by 48 million between 2010
and 2050 (a 16 percent drop), while the elderly population would grow by 58 million (a 77 percent increase). According to the
International Monetary Fund, the ratio of retirees to workers in Europe will change from four workers per retiree to two workers per
retiree.
Rather than being regarded with suspicion or fear, immigration may very well be the solution that these countries desperately need.
These data mean that the social compromise among generations risks breaking up: the active workers will be increasingly called to work
for retirees and—at the international level—the youngest countries for the oldest ones. The increase of productivity is no longer
sufficient, said Jean-Claude Chesnais, former head of the French demographic institute, INED (Institut national d’études
démographiques): “The only important issue is how active workers and retirees share the increase of productivity; nothing proves that
the former will accept watching their share diminish bit by bit to the advantage of the latter.”
The demographic shortage also has a direct impact on production. According to the US Census Bureau, the EU will experience a 14
percent decrease in its workforce and a 7 percent decrease in its consumer populations by 2030. The vice president of the European
Central Bank, Vitor Constancio said in August 2015 during the peak of the migration crisis:

For years Europe has been doing a sort of collective demographic suicide […] To change the demographic trends, promoting birth is not
enough. It also has to be done through immigration. If not, we’re creating a great difficulty to growth and to the welfare of future
generations.

But it is not only a European or a Japanese issue. The magazine Global Risk Insights warned in September 2017 that “the United States
is facing a severe skilled and unskilled worker shortage that has long and short-term economic implications.”
Rather than being regarded with suspicion or fear, immigration may very well be the solution that these countries desperately need to
balance the impending and disruptive demographic shifts coming their way. The problem is that political leaders gave up on being
leaders: instead of explaining where the national interest lies, they follow the populace’s moods. As the then European Commissioner for
Home Affairs, Cecilia Malmström, explained in 2011, “when I meet ministers responsible for labor policies, they almost all speak of the
need for immigrant workers—and it’s true, we need hundreds of thousands, millions in the long-term.” Yet, “when the ministers go and
speak in front of their national publics, this message is not to be heard at all.”
New borders, or the strengthening of old ones, cannot solve any of the problems of our times. The superstition according to which they
could is not a new one either. British historian Arnold Toynbee writing on the fortified wall, called limes, built by Romans to contain
German tribes said,
The erection of a limes sets in motion a play of social forces which is bound to end disastrously for the builders. A policy of non-
intercourse with the barbarians beyond is quite impracticable. Whatever the imperial government may decide, the interests of traders,
pioneers, adventurers and so forth will inevitably draw them beyond the frontier.

In this respect, things have not changed since then.

Manlio Graziano teaches geopolitics and geopolitics of religion at the Sorbonne, the Geneva Institute of Geopolitical Studies, and La
Sapienza University in Rome. He is the author of In Rome We Trust: The Rise of Catholics in American Political Life and, most recently,
What Is a Border? Next month, his latest book on geopolitics of the United States will debut in Italy.
Posted on February 27, 2018 in Business & Economics, Law & Policy, Politics | Permalink
Tags: Economic Policy, Global Issues, Immigration and Migration Studies, International Relations
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