What Now?

US considers extending laptop ban to Europe and UK flights

The global era of 2017 is far from good and peaceful. The post-crisis period is one of the most difficult periods in the global modern history. At the same time, the great threat of terrorism worldwide, works as a backdrop to globalisation prevents some of the freedoms that were available in the previous decade. The winning election of Donald Trump played a vital role in the reversal of the situation.

Following the article of Demetris Sevastopulos on the Financial Times, ‘US considers extending laptop ban to Europe and UK flights’, the negative effects of terrorism lead to negative consequences on international trade and more general in globalisation. The criticism that Trump’s government accepts is unique and the greatest of all, compared to the last at least 5 government of the United States of America. Their decision to ban the entrance of citizens of countries such as Iran, Iraq and Somalia was badly criticised and a lot of economists were so against it. Such actions lead to the laptop ban in airplanes for flights from certain countries, aiming to minimize the chance of another terrorism attack.

     One Trump administration official stated that “UK and Europe are certainly under consideration”, creating barriers to trade. Even if it is not their aim to create such barriers, the laptop ban indeed creates the barriers and the future of international trade is in a great risk for even the near future. One of the greatest factors affecting economic activity, based on behavioural economics, is psychology, incentives and expectations. Due to the introduction of such barriers, the financial world, especially for firms based in central Europe and the UK, started thinking that more and more barriers will be created that will negatively affect their activities. Sevastopulos’ article mentions that the UK also implemented similar bans for flight from specific countries. This illustrates the fact that by the impositions of barriers by one economic player, others will follow, creating a butterfly effect which may lead to lethal results for world trade.

    The article does not refer much to the economic effect of the laptop bans in airplanes, but the financial world is affected much more than it is presented. The trust is in a thin line and uncertainty between countries/partners out of questions affect trade. Having in mind the close relationship of the UK with the US especially in the aircraft/spacecraft sector of the economy, it can be disastrous creating non-tariff barriers that at first, damages the trust that was built over the last decades, and secondly makes UK and EU firms to look for other trustworthy partners that will allow them to move freely and trade effectively and efficiently among each other. The fact that the UK is in a post-Brexit environment, trying to build bridges throughout the globe, this is a back turn, as British economics and traders were aiming to cooperate and make business with the US but such environment is not at all welcoming.

    Some food for thought, do we want a globalised world, or is it better to create strong countries that can be self-sustained?  It is strange to even think in this way in 2017 but the worldwide situation creates different questions about capitalism and globalised free trade. Such thoughts are everywhere in the world now, eg. Trump in the US, Ertogan in Turkey, Marine Le Pen in France and Brexit.