Doubts arise on free trade

Does Brexit, Trump victory signal start of a new era .

After Britain’s shock vote to quit the European Union, Donald Trump’s victory is a new powerful sign of a popular backlash against the drive for globalisation and more free trade.

The maverick tycoon propelled himself into the presidency of the world’s largest economy with an anti-free trade message to undo the harm such pacts had caused American workers.

It resonated with many US voters who may not have benefited from the start of a pickup in the US economy, as did Trump's promise to renegotiate the trade deals and win back jobs.

His victory comes at a key time for several free trade deals, including the sweeping Transatlantic Trade and Investment Partnership (TTIP) between the US and EU.

“The global economy is struggling. Those who are suffering are left with impressions that globalisation is to blame,” said Seiji Katsurahata, senior economist at Dai-ichi Life Research Institute in Tokyo.

French economist Thomas Picketty, who shot to prominence with a book arguing that wealth inequality was growing as investors gained better returns than overall economic growth, has a similar view.

“Working classes in particular believe that they are paying the costs of globalisation,” he said.

The disillusionment may have been reinforced by trade deals being negotiated behind closed doors, leaving people feeling vulnerable and sending thousands onto European streets to protest.

“I think that there is the perception, and I think it's correct, that these trade agreements were basically designed for and by corporate interests,” Nobel award-winning economist Joseph Stiglitz said during a recent visit to Paris.

The international push to increasingly tear down barriers to free trade has exasperated many in industrial countries as they lose their jobs or see their wages stagnate.

To the surprise of many political leaders, anger over immigration and other facets of globalisation prompted British voters in June to opt to leave the European Union. IMF had urged leaders to make the case for continued globalisation.