9How MNEs Help Mobilize Rural Labor for Industrialization, Alleviating Poverty (as have done across East Asia):Is the “America First” Policy a Threat?Terutomo Ozawato the Trump revolution. In fact, the program even facilitates job offshoring by MNEs, since they are not held directly responsible for̶and even exonerated from having to bear̶the social costs they leave behind in the form of unemployment and blighted communities. Business as usual would not work anymore.186．Summing up: An end of the “roll-out-the-carpet” strategy? Given this latest political development in the U.S., doesn’t President Trump’s browbeating to restrain job offshoring and outsourced imports mean an end to the effectiveness of emerging markets’ “roll-out-the-red carpet” strategy? Here, we must realize, however, that what President Trump, as well as his supporters in the “fly-over” states, is most concerned about is not really a loss of old jobs in such labor-intensive, low-end manufacturing as garment stitching and toy making.19 The new U.S. administration knows these jobs are no longer compatible with America’s present, advanced industrial structure. They are clearly the things of the past and cannot remain competitively in the U.S. Moreover, the administration is fully aware that trade is more effective than economic aid in helping emerging markets industrialize. Instead, it is rather higher value-added, large-scale manufacturing, such as automobile industry, contemporary heavy and chemical industries, and other skill-based manufacturing, all of which used to be--and still are--the backbone of America’s middle class. This type of industries and related jobs has moved mostly to China and Mexico, largely at the hands of MNEs in response to high wages at home.20 These low-middle-income host countries and others are naturally bent on developing higher value-added industries and further climbing the ladder of development to join the advanced world, now that their takeoff period is over. They have most recently entered a new catch-up phase of developing knowledge-based (i.e., “created” instead of “endowed”) comparative advantages in steel, machinery and automobiles, the phase that is destined to engender rivalry and conflicts with the advanced world. (According to the FG theory, this period is predictable from the evolving relationships between the advanced and emerging worlds. It is identified as the “homogenization” period.21) These successfully catching-up countries, particularly China, have already encountered 18 The analysis in this paragraph draw on Ozawa (2017).19 Lin (2014) call these low-end manufacturing industries the “low-hanging fruits” ---i.e., easier for undeveloped economies to pick for the initial phase of catch-up growth.20 MNEs’ low-wage-seeking drive overseas can maximize profits but diminishes social welfare at home. In other words, job-offshoring and outsourced imports may have been carried out to an extent of overdoing it to the detriment of the U.S. economy. What is more, the benefits from trade liberalization have diminished after many rounds of liberalization, while its social costs have soared, especially under multilateral trade deals. A new era of bilateral pacts--not only between nations but also between nationalist states and MNEs--to protect national interests is dawning (Ozawa, 2017). 21 This is described in Akamatsu’s seven-stage growth model (Akamatsu, 1962). For further elaboration, see Chapter 3 in Ozawa (2009).