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What Endgame for the Deglobalisation Narrative?

What Endgame for the Deglobalisation Narrative? DOI: 10.1007/s10272-022-1085-y Forum Intereconomics, 2022, 57(6), 345-351 JEL: F13, F23, F52 Simon J. Evenett In his highly regarded book of pandemics, published be- Pinning down the deglobalisation narrative fore COVID-19 was declared a global emergency, Yale Professor Frank Snowden (2019) argued that plagues and One hurdle to understanding the deglobalisation narrative the like have unleashed profound social and economic is that few have spelt it out in any length. Yet, a review forces that have signifi cantly reordered societies. History of many media mentions of this term leaves the impres- may be repeating itself, at least in respect to some public sion that this narrative has gained a life of its own – which sector and private sector decision-makers’ attitudes to- could become problematic if the very narrative alone per- wards globalisation. suades policymakers to take damaging steps that turn deglobalisation into a self-fulfi lling prophecy. Documenting shifts in opinion is not easy – and indeed may not matter that much until it translates into action. For sure, there have been critiques of global trade rules, Nevertheless, the growing salience of a narrative of of the consequences of trade reform and of international “deglobalisation” is diffi cult to ignore. In the four years economic integration more generally, but they predate the before the pandemic, the Factiva database recorded on emergence of the deglobalisation narrative. So what, if average 850 media mentions of the term deglobalisa- anything, is new here? tion. Since 2020, deglobalisation has been mentioned on average 4,534 times per year – from 1 January 2022 One useful place to start is with the writings of Rana Fo- to 20 November 2022, this term has been referred to roohar, Global Business Columnist and Associate Editor 7,323 times in media outlets around the world. Some- of the Financial Times. In addition to her weekly columns, thing is afoot. a longer piece in that newspaper titled “My guide to a deglobalising world” (published on 21 October 2022), an So what is the deglobalisation narrative? Does it have article published in the November/December 2022 edi- any grounding in fact? And, critically, what is its end- tion of Foreign Aff airs (Foroohar, 2022a) and possibly in a game? Given the dense web of cross-border commercial forthcoming book (Foroohar, 2022b), Foroohar has gone ties that knit together national economies, and the impli- further than most in spelling out what she sees as deglo- cations for our living standards, there is a lot at stake. The balisation. purpose of this article is to report on what the author has learned when investigating the emerging narrative of de- The central diagnosis appears to be: globalisation. What is clear is that globalization is in retreat, at least in terms of trade and capital fl ows. The 2008-9 fi nan- 1 Searches were conducted for the American spelling of this term and cial crisis, the pandemic, and the war in Ukraine all for the translations of this term into Chinese, French, German, Japa- exposed the vulnerabilities of the system, from capital nese, Portuguese, Russian and Spanish. imbalances to supply chain disruptions to geopolitical © The Author(s) 2022. Open Access: This article is distributed under the turmoil. (Foroohar, 2022a, 141) terms of the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0/). The central prediction appears to be: Open Access funding provided by ZBW – Leibniz Information Centre for Economics. Countries now want more redundancy in their supply * Comments on this piece are welcome – please send them to simon. chains for crucial products such as microchips, ener- evenett@unisg.ch. gy, and rare earth minerals… All these shifts suggest that regionalization will soon replace globalization as the reigning economic order. Place has always mat- tered, but it will matter more in the future. (Foroohar, 2022a, 141) Simon J. Evenett, University of St. Gallen; and St. Gallen Endowment for Prosperity Through The last point is at the core of Foroohar’s critique of pre- Trade, Switzerland. pandemic thinking about globalisation: “Neoliberalism’s agnosticism about place is striking”, she writes (Foroohar, ZBW – Leibniz Information Centre for Economics 345 Forum 2022a, 138). Supporters of pre-pandemic globalisation the door to trade in intermediate services, and high- also erred in the following ways: “Counting on autocratic income countries have few or no barriers to this sort of governments for crucial supplies was always a bad idea. exports. India, for instance, performed its service-ex- Expecting countries with wildly diff erent political econo- port miracle without signing a single trade agreement. mies to abide by a single trade regime was naïve” (Fo- (Baldwin, 2022d) roohar, 2022a, 145). As for the unwinding of supply chains, Baldwin (2022c) Another valuable point of reference in understanding the shows that the picture here is mixed. Industrialised coun- apparent shift in certain policymakers’ thinking is Leon- tries are as engaged as ever in exporting intermediate ard (2021). Noting the resort to export bans at the onset goods, while their propensity to source them from abroad of the COVID-19 pandemic, as well as prior attempts to has been falling since the Global Financial Crisis. Baldwin limit the export of rare earth minerals and the use of bi- (2022c) also shows that the complexity of supply chains – lateral trade measures to show disapproval of the foreign both domestic and international – has diminished over time, policy and other stances of foreign governments, Leonard as measured by the share of manufacturing value added in argues that the instances of “weaponising” commercial gross production. These fi ndings show that private fi rms ties have made offi cials realise that globalisation can be a can and do adjust without the need of government fi at. source of risk as well as gain. The fi nding that globalisation is not in broad retreat does The imperative to manage such risks – in particular, recon- not imply that cross-border commercial ties are grow- fi guring supply chains so that production takes place at ing at a fast pace. The World Trade Monitor publishes home or at least in allied countries – appears to have altered monthly data on goods import volumes, which is a good thinking about the relative benefi ts of cross-border sourc- proxy for internationally contestable market access (for ing. The sense that some offi cials in particular in Western goods). During the years 2011-19, this measure of market governments were profoundly shocked by the resort to ex- access grew 1.5%-2% per year in industrialised econo- port curbs comes through clearly in Leonard’s book. mies and around 4% per annum in emerging markets. This represents a signifi cant slowdown compared to the Is the deglobalisation narrative a reliable guide to go-go years before the Global Financial Crisis, where the policymakers and corporate executives? comparable percentages were 4.5%-5% and 12%, re- spectively. It is not for nothing that before the COVID-19 It matters what the prevailing zeitgeist is as time-pressed pandemic hit, The Economist (2019) magazine christened leaders look for reliable shortcuts to facilitate decision- this phase of globalisation “slowbalisation”. making. But how much of the deglobalisation narrative is grounded in fact? And, if it is, what decisions follow or, at There is also evidence of faltering foreign direct invest- least, what logic should govern those decisions? ment (FDI) infl ows. When new fl ows of FDI are bench- marked against other sensibly chosen fl ows – namely, Retreat? world GDP, world investment levels or world trade – the former has not kept up with the expansion of the latter The notion that globalisation is in retreat has been care- three (Evenett and Fritz, 2021). This trend is discernible fully examined empirically. This matter was investigated since the Global Financial Crisis, although inevitably there in a sequence of four blog posts by Richard Baldwin in is year-to-year fl uctuation. August and September 2022. Baldwin (2022a) concludes that the narrative that globalisation has peaked and is Furthermore, outside of the Middle East, by 2015 the av- going into reverse is “overly simplistic”. He argues: “In erage returns on FDI by US multinationals in every other short, the ‘globalisation has peaked’ storyline is lazy, but emerging market region had converged to levels earned there is a highly energetic reality behind it. The globali- by US subsidiaries operating in the European Union. This sation of markets for goods is no longer rising as it had fi nding implies there is no longer a premium for exposure been between the 1990s and the mid-2000s” (Baldwin, to greater policy and regulatory risks attendant in lower 2022a). per-capita income nations. If this pattern applies to other nations’ multinationals, then it may account for the shift With respect to services trade, Baldwin (2022d) is em- in corporate investment towards projects at home rath- phatic: it is increasing and for good reasons. He argues: er than abroad (Evenett and Fritz, 2021). It is noteworthy The divergence between the growth of services versus 2 The regular reports of the World Trade Monitor can be obtained at goods happened because digital technology opened https://www.cpb.nl/en/world-trade-monitor-july-2022. Intereconomics 2022 | 6 346 Forum that the evidence on the falling premia on returns to FDI in Figure 1 emerging markets predates the COVID-19 pandemic and Export curbs on medical goods mushroomed at the applies in regions not associated with geopolitical rivalry start of the COVID-19 pandemic, but more steps with the United States. were taken to ease sourcing from abroad Number of active COVID-19 trade-related policies What are the right conclusions to draw from this data? First, there are many diff erent types of cross-border Liberalising import reforms commercial ties and some are doing better than others 278 (contrast cross-border e-commerce with FDI). This cau- tions against generalisation about the state of globalisa- tion. Second, the retrenchment seen in industrial country Restrictive export curbs sourcing of inputs and the shift of corporate investment towards home markets started before the COVID-19 pan- Restrictive import curbs demic and the emergence of the deglobalisation narrative. Liberalising export reforms Third, to the extent that this retrenchment refl ects shifting risk assessments by corporate executives since the Glob- al Financial Crisis, it pours cold water on any suggestion that businesspeople were oblivious to the risks – includ- ing political risks – arising from international commerce. Source: Global Trade Alert, November 2022 release. Vulnerabilities exposed? Central to demands to reconfi gure supply chains is that current international sourcing practices left exposed na- steps to ease imports of needed medical items. Over 200 tions vulnerable to shortages induced by foreign export such import reforms were in force by 8 May 2020 that had restrictions and other measures to weaponise trade. been implemented since the start of 2020. The total num- ber of reforms to import policy that remained in force – tar- The onset of the COVID-19 pandemic resulted in a surge iff cuts, relaxation of import quotas, etc. – continued to rise in demand for certain medical consumables and equip- throughout 2020. In short, trade was seen as part of the ment. According to the Essential Goods Monitoring solution to shortages of medical goods – which is hard to Initiative, by mid-April 2020 a total of 71 customs territo- square with talk of trade-related vulnerabilities. ries had imposed some type of export control on medical goods. However, by 1 July 2020 that total had fallen to Subsequent research also revealed just how few medi- 52 jurisdictions, suggesting that many governments con- cal goods Western nations sourced primarily from China cluded that these curbs were ineff ective or, worse, coun- (Evenett, 2020; Guinea and Forsthuber, 2020) and just terproductive. how diversifi ed sourcing patterns of “essential medical goods” were in practice. The notion that imposing export curbs was inevitable is belied by the fact that Australia, Canada and Japan Seen from the perspective of late 2022, however, it is the somehow managed to tackle the coronavirus without potential weaponisation of food exports that has contem- banning local manufacturers from fulfi lling export orders. porary salience. Russia’s fi ve month-long blockade of That democracies as well as autocracies banned exports shipments of Ukrainian grain through the Black Sea is a of medical goods does not sit well with the deglobalisa- case in point. Given that previous spikes of global food tion narrative either. Nor does the fact that regional allies prices resulted in riots and other forms of political insta- (in particular within Europe) curbed exports as well. bility in certain net food-importing developing countries, any weaponisation of food trade is a serious matter. So Another awkward fact for the deglobalisation narrative is what does the evidence on trade policy actions towards that more governments turned to global markets to meet food, agri-food products and fertiliser reveal? their medical goods needs once the COVID-19 pandemic hit their societies (see Figure 1). Dozens of governments took 3 To be clear, the author is involved in the execution of this initiative as 4 For evidence from the European Union, see Guinea and Forsthuber well as the Global Trade Alert mentioned later. (2020). ZBW – Leibniz Information Centre for Economics 01.2020 02.2020 03.2020 04.2020 05.2020 06.2020 07.2020 08.2020 09.2020 10.2020 11.2020 12.2020 01.2021 02.2021 03.2021 04.2021 05.2021 06.2021 07.2021 08.2021 09.2021 10.2021 11.2021 12.2021 01.2022 02.2022 03.2022 04.2022 05.2022 06.2022 07.2022 08.2022 09.2022 10.2022 Forum Again, for evidence I turn to the fi ndings of the Essential Figure 2 Goods Monitoring Initiative, upon which Figure 2 was Governments have not relied solely on export constructed. There have been a signifi cant number of restrictions to address food insecurity trade policy steps taken this year, in particular since the Number of active COVID-19 trade-related policies invasion of Ukraine on 24 February 2022. As of this writ- ing, 156 measures that restrict or ban exports of food are in force. However, many were implemented before the in- vasion of Ukraine. Liberalising import reforms In fact, since the invasion of Ukraine, 171 measures to re- strict, discourage or ban food exports have been imple- mented worldwide. The Russian Federation is responsi- Restrictive import curbs ble for 44 of these steps, only six of which were formal ex- port bans. Russia’s allies are responsible for another four Restrictive export curbs measures. Other large autocracies are responsible for Liberalising export reforms another nine restrictive export measures. As far as Rus- sia’s foes are concerned, Ukraine has implemented four export restrictions covering food products so far this year. The sanctions packages imposed by Western nations and Source: Global Trade Alert, November 2022 release. Japan that implicate food trade must be added to this list. What is also evident from Figure 2 is the even larger num- ber of reforms of import policies towards food, agri-food (USG, 2022) of Mineral Commodity Summaries. This pub- and fertiliser products currently in force. A total of 210 lication focuses on the production and sourcing of miner- steps to ease the importation of food have been taken als and commodities that are not fuel. worldwide since the invasion of Ukraine. These steps were taken by 58 customs territories, including three mul- It is noteworthy that, in the 2022 edition, no mention is ti-country customs unions. Russia, its allies and other au- made of export restrictions in the section devoted to tocracies undertook 33 of these 210 import reforms. trade policy-related matters. In fact, the phrase “export ban” appears once in the document and, then, only in Examination of the list of nations responsible for these reference to a ban legislated by the United States on import reforms reveals that it would be diffi cult to make mercury in 2008. There are no references in the entire re- any generalisations about which political systems tend to port to export quotas, nor to export taxes or to export be responsible for easing food trade. Perhaps what mat- restrictions imposed by foreign governments. The 25 ref- ters more is that, similar to the case of medical supplies, erences to shortages in the 2022 edition of this report are governments of all stripes have taken steps that facilitate associated almost entirely with COVID-19 shutdown re- sourcing from world markets. This is very hard to square strictions, extreme weather events and the lack of avail- with a narrative of reducing vulnerabilities to foreign ability of container shipping – and not to trade policy or sourcing – although it must be conceded that the growing weaponising trade. number of import restrictions on food and fertilisers (also shown in Figure 2) is not inconsistent with this part of the As for import dependence, the 2022 edition of the Mineral deglobalisation narrative. Commodity Summaries identifi ed 50 minerals where the United States is both a net importer and where net im- Those advancing the deglobalisation narrative often re- ports account for half or more of US consumption (use) in fer to perils of import dependence on “crucial products” 2021. The report observes: (as Foroohar did) or “critical materials”. What evidence is there about sourcing patterns of these goods by lib- China, followed by Canada, supplied the largest num- eral market economies? One useful source of evidence is ber of these nonfuel mineral commodities. The coun- the annual publication by the United States Government tries that were the leading sources of imported mineral commodities with greater than 50% net import reliance were: China, 25 mineral commodities; Canada, 16 min- 5 Russia frequently changes its export taxes on wheat, barley and corn eral commodities; Germany, 11 mineral commodities; in ways that few (if any) have linked to geopolitical considerations. South Africa, 10 mineral commodities; and Brazil and Similarly, Argentina and Indonesia regularly change export taxes on a limited range of food products. Mexico, 9 mineral commodities each. (USG, 2022, 5) Intereconomics 2022 | 6 01.2020 02.2020 03.2020 04.2020 05.2020 06.2020 07.2020 08.2020 09.2020 10.2020 11.2020 12.2020 01.2021 02.2021 03.2021 04.2021 05.2021 06.2021 07.2021 08.2021 09.2021 10.2021 11.2021 12.2021 01.2022 02.2022 03.2022 04.2022 05.2022 06.2022 07.2022 08.2022 09.2022 10.2022 Forum Only one country mentioned above is not a democracy. Figure 3 China is the largest import source in 18 of 25 cases where The pot calls the kettle black: Liberal democracies it is designated a “major import source”. In each of the 25 violate the non-discrimination principles of the world of these cases, there is at least one US trading partner trading system too Share of world goods trade covered by policies that favour local fi rms that is unquestionably a democracy which has also been listed as a major import source. According to the USG (2022), Russia is a “major import source” for six minerals that the United States is reliant Nations run by strongmen on to support half or more of its domestic use – but in each of these cases Russia is never the largest import Sanctioning liberal democracies source. In each case where Russia is listed as a major import source, there is at least one democratic trading partner of the United States that is listed as another ma- jor import source. 0 Furthermore, in this US government publication there is Note: The “Sanctioning liberal democracies” include the G-7 nations, the not a single mineral where net imports account for more other members of the European Union, Australia, South Korea and New than half of the total use by the United States with only Zealand. The “Nations run by strongmen” are China, India, Russia and Turkey. autocracies listed as major import sources. In light of these fi ndings, it is diffi cult to make an evidence-based Source: Global Trade Alert, 2022. case that autocracies have a strangle hold over the sup- ply of key minerals – including rare earths – to the Unit- ed States. One way to evaluate the implication mentioned in the previ- Overall, whether it is needed medical supplies, food, fer- ous paragraph is to examine shares of global goods trade tiliser or minerals, there are at best examples of occa- covered by public policies that favour national fi rms (and sional import dependencies on nations with diff erent gov- likely violate the principle of non-discrimination) imple- ernance systems. Even when such dependencies exist, mented by two groups of nations: the democracies that it does not imply that governments in exporting nations have sanctioned Russia this year and the nations currently weaponise those trade links. led by “strongmen” (in this case, China, India, Russia and Turkey) that are not typically aligned with liberal democra- Even if governments attempt to weaponise trade, there cies. The goods trade coverage shares were computed us- are alternative suppliers that can expand production. In- ing policy interventions recorded in the extensive database deed, one of the more interesting empirical fi ndings this of unilateral policy intervention that may aff ect international year concerning global wheat supplies is that the reduc- commerce assembled by the Global Trade Alert team. tion in supplies from Ukraine (part of which Russia was re- sponsible for) was off set four times over by higher wheat Figure 3 reports the increases in global goods trade cov- exports from Argentina and Brazil (Glauber et al., 2022). ered by policy interventions that favour local fi rms since Just because weaponisation is possible does not mean it the start of 2009. It does not make for comfortable read- must have far-reaching consequences. ing. By now, half of global goods trade takes place be- tween nations where one or more policy intervention by Naïve expectations about the multilateral trade regime? the sanctioning liberal democracies has tilted the com- mercial playing fi eld in favour of local fi rms. This share has The argument is frequently heard from Western and Japa- grown each year since the Global Financial Crisis and so nese analysts and offi cials that China’s World Trade Or- predates the policy response to the COVID-19 pandemic. ganization membership has not resulted in it adopting a The policy interventions taken by the “strongmen” that fa- market-based development model. Expectations that this vour local fi rms and exporters now implicate two-thirds of would happen were naïve, we are now told. One implica- world goods trade. This share too has grown over time. tion is that only democratic, liberal market economies can be relied upon to comply with the spirit and the letter of 6 Taken here to include the G-7 nations, the other members of the Euro- pean Union, Australia, South Korea and New Zealand. the extant global trade rules. Those rules are based on 7 More information about this independent monitoring initiative, includ- the principle of non-discrimination, or equal treatment of ing accounts of the methodology used, can be found at https://www. domestic and foreign suppliers. globaltradealert.org/about. ZBW – Leibniz Information Centre for Economics 2022 Forum Fealty to multilateral trade principles is a matter of degree As for US multinationals, a total of 38,747 of their subsidi- and is not determined solely by the nature of a jurisdic- aries had net incomes above $25 million in 2019. Eight per- tion’s economic or political order. cent of those subsidiaries (3,101 in fact) were located in the strongmen nations mentioned above – including 1,951 in In sum, when it comes to wishful thinking, there is no bet- China and 631 in Russia. Less than 2.7% of the total value ter place to start than the holier-than-thou attitude of cer- of assets invested by US multinationals in these 38,747 tain analysts and offi cials in the liberal democracies con- subsidiaries are located in the strongmen nations. cerning their national compliance with the non-discrimi- nation principle of the world trading system. As the quaint In sum, the degree of US fi rm engagement in foreign expression goes, everyone has snow on their boots. markets is limited to start with. A wholesale retreat – or a retreat to North American markets – would not mean Regionalisation replacing globalisation? much for many American fi rms. Proponents of the deglo- balisation narrative emphasise the “local”: in reality, most The potential for more intra-regional trade varies signifi - American businesses have only been interested in the lo- cantly across regions over the world economy. According cal. For other regions of the world economy, where the to the United Nations Conference on Trade and Develop- degree of integration into world markets is higher, retreat men, in 2020, 67.7% of European trade took place within could have more far-reaching implications for corporate that region. Intra-regional trade accounted for 58.3% of strategy. trade by Asian nations. For every other region, less than 30% of their trade was intra-regional (for the North Ameri- Concluding remarks can region the percentage stands at 29.3%). In light of such statistics, proponents of the deglobalisation narra- A narrative has taken hold on both sides of the Atlantic tive essentially envisage far-reaching changes to inter- that contends that deglobalisation is happening or that national trade fl ows and reconfi guration of supply chains it needs to happen. This narrative has the fl imsiest foun- across the Atlantic and Pacifi c Oceans. Yet, it is worth dation in fact. Remarkably, its proponents have been al- bearing in mind that the United States is widely regarded lowed to advance their arguments based on what they as having relatively limited integration into world goods regard as telling examples, impressions gleaned at work- markets in the fi rst place. shops and conferences of like-minded souls, surveys conducted by consulting companies that happen to sell Having more local fi rms supplying local markets appears advice to fi rms reconfi guring their supply chains, and by to be central to the deglobalisation narrative. Here it is invoking fears that inevitably arise when the world is fac- worth recalling just how few fi rms actually engage in in- ing a sequence of crises. ternational trade in leading Western nations. In the Unit- ed States, for example, 221,580 fi rms imported goods in The saying “A lie can travel halfway around the world be- 2020 (down 1.4% from the 2019 total) and 271,705 fi rms fore the truth puts on its shoes” is often attributed to Mark exported that year. A total of 189,607 fi rms both exported Twain (although that is contested). Seen in these terms, and imported that year. To put these numbers in perspec- this short paper amounts to reaching for the shoe rack. tive, the US government reports that over 5.5 million fi rms In this contribution, I have poked a number of holes in the do not export. deglobalisation narrative. No doubt more evidence could be marshalled. In 2020, just under 60% of US fi rms that export do so to just one other nation. Another 24.4% of US exporters ship What is particularly jarring about the deglobalisation nar- goods to between two and four nations. Firms that export rative is that its proponents have not spelt out their de- to 50 or more nations account for just 0.4% of American sired endgame: what mix of local, regional and global exporters. The concentration of import sourcing is even ties they want to see in commerce, what calculus should higher among US importers. When American fi rms en- drive decision-making by business and government, what gage in international trade, it is with counterparties in few losses need to be born to reach their nirvana, and what other trading partners. factors might accelerate or impede the transition of the 8 These statistics were obtained from https://hbs.unctad.org/trade- 10 These statistics were taken from this U.S. government source: https:// structure-by-partner/. www.bea.gov/sites/default/fi les/2021-11/omne1121.pdf. The fi ndings 9 These statistics are taken from this U.S. government source: https:// in this paragraph are not materially a ffected if Saudi Arabia is added www.census.gov/foreign-trade/Press-Release/edb/edbrel2020.pdf. to the calculations. Intereconomics 2022 | 6 350 Forum world economy they evidently desire. The deglobalisation narrative is an incomplete prospectus. From the perspective of international economic govern- ance, other than casting aspersions on the judgement of those that negotiated previous multilateral trade accords and the accession of China to the World Trade Organiza- tion, the deglobalisation narrative is silent on how to re- form that organisation – or what to salvage from existing global trade rules. Yet rules there will be. Rules on inter- national commerce can be traced back to 1780 BC to the Code of the Babylonian King Hammurabi. Those advanc- ing the deglobalisation narrative should not be allowed to dodge the critical matter of how trading relations between nations with very diff erent economic and political systems should be arranged. Ultimately, those that proff er the deglobalisation narrative must be held to a higher standard by policymakers, cor- porate decision-makers, analysts and by anyone giving them a platform to opine on the key building blocks of our standard of living. References Baldwin, R. (2022a, 31 August), The peak globalisation myth: Part 1, Voxeu. Baldwin, R. (2022b, 1 September), The peak globalisation myth: Part 2 – Why the goods trade ratio declined, Voxeu. Baldwin, R. (2022c, 2 September), The peak globalisation myth: Part 3 – How global supply chains are unwinding, Voxeu. Baldwin, R. (2022d, 3 September), The peak globalisation myth: Part 4 – Services trade did not peak, Voxeu. The Economist (2019, 24 January), Slowbalisation: The future of global commerce. Evenett, S. (2020), Chinese whispers: COVID-19, global supply chains in es- sential goods, and public policy, Journal of International Business Policy, 3, 408-429. Evenett, S. and J. Fritz (2021, 2 June), Advancing Sustainable Development With FDI: Why Policy Must Be Reset, The 27th Global Trade Alert report. Foroohar, R. (2022a), After Neoliberalism: All Economics is Local, Foreign Aff airs , November/December. Foroohar, R. (2022b), Homecoming: The Path to Prosperity in a Post-Global World, Crown. Guinea, O. and F. Forsthuber (2020), Globalization Comes to the Rescue: How Dependency Makes Us More Resilient, ECIPE Occasional Paper, 6. Glauber, J., D. Laborde, V. Pineiro and A. Tejeda (2022, 14 November), Can agricultural exports from Southern Cone countries make up for global supply disruptions arising from the Russia-Ukraine war’?, IFPRI Blog. Leonard, M. (2021), The Age of Unpeace: How Connectivity Causes Confl ict, Penguin. Snowden, F. (2019), Epidemics and Society: From the Black Death to the Pre- sent, Yale University Press. USG (2022), Mineral Commodity Summaries 2022, U.S. Geological Survey. ZBW – Leibniz Information Centre for Economics http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Intereconomics Springer Journals

What Endgame for the Deglobalisation Narrative?

Evenett, Simon J.
Intereconomics , Volume 57 (6) – Nov 1, 2022
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Abstract

DOI: 10.1007/s10272-022-1085-y Forum Intereconomics, 2022, 57(6), 345-351 JEL: F13, F23, F52 Simon J. Evenett In his highly regarded book of pandemics, published be- Pinning down the deglobalisation narrative fore COVID-19 was declared a global emergency, Yale Professor Frank Snowden (2019) argued that plagues and One hurdle to understanding the deglobalisation narrative the like have unleashed profound social and economic is that few have spelt it out in any length. Yet, a review forces that have signifi cantly reordered societies. History of many media mentions of this term leaves the impres- may be repeating itself, at least in respect to some public sion that this narrative has gained a life of its own – which sector and private sector decision-makers’ attitudes to- could become problematic if the very narrative alone per- wards globalisation. suades policymakers to take damaging steps that turn deglobalisation into a self-fulfi lling prophecy. Documenting shifts in opinion is not easy – and indeed may not matter that much until it translates into action. For sure, there have been critiques of global trade rules, Nevertheless, the growing salience of a narrative of of the consequences of trade reform and of international “deglobalisation” is diffi cult to ignore. In the four years economic integration more generally, but they predate the before the pandemic, the Factiva database recorded on emergence of the deglobalisation narrative. So what, if average 850 media mentions of the term deglobalisa- anything, is new here? tion. Since 2020, deglobalisation has been mentioned on average 4,534 times per year – from 1 January 2022 One useful place to start is with the writings of Rana Fo- to 20 November 2022, this term has been referred to roohar, Global Business Columnist and Associate Editor 7,323 times in media outlets around the world. Some- of the Financial Times. In addition to her weekly columns, thing is afoot. a longer piece in that newspaper titled “My guide to a deglobalising world” (published on 21 October 2022), an So what is the deglobalisation narrative? Does it have article published in the November/December 2022 edi- any grounding in fact? And, critically, what is its end- tion of Foreign Aff airs (Foroohar, 2022a) and possibly in a game? Given the dense web of cross-border commercial forthcoming book (Foroohar, 2022b), Foroohar has gone ties that knit together national economies, and the impli- further than most in spelling out what she sees as deglo- cations for our living standards, there is a lot at stake. The balisation. purpose of this article is to report on what the author has learned when investigating the emerging narrative of de- The central diagnosis appears to be: globalisation. What is clear is that globalization is in retreat, at least in terms of trade and capital fl ows. The 2008-9 fi nan- 1 Searches were conducted for the American spelling of this term and cial crisis, the pandemic, and the war in Ukraine all for the translations of this term into Chinese, French, German, Japa- exposed the vulnerabilities of the system, from capital nese, Portuguese, Russian and Spanish. imbalances to supply chain disruptions to geopolitical © The Author(s) 2022. Open Access: This article is distributed under the turmoil. (Foroohar, 2022a, 141) terms of the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0/). The central prediction appears to be: Open Access funding provided by ZBW – Leibniz Information Centre for Economics. Countries now want more redundancy in their supply * Comments on this piece are welcome – please send them to simon. chains for crucial products such as microchips, ener- evenett@unisg.ch. gy, and rare earth minerals… All these shifts suggest that regionalization will soon replace globalization as the reigning economic order. Place has always mat- tered, but it will matter more in the future. (Foroohar, 2022a, 141) Simon J. Evenett, University of St. Gallen; and St. Gallen Endowment for Prosperity Through The last point is at the core of Foroohar’s critique of pre- Trade, Switzerland. pandemic thinking about globalisation: “Neoliberalism’s agnosticism about place is striking”, she writes (Foroohar, ZBW – Leibniz Information Centre for Economics 345 Forum 2022a, 138). Supporters of pre-pandemic globalisation the door to trade in intermediate services, and high- also erred in the following ways: “Counting on autocratic income countries have few or no barriers to this sort of governments for crucial supplies was always a bad idea. exports. India, for instance, performed its service-ex- Expecting countries with wildly diff erent political econo- port miracle without signing a single trade agreement. mies to abide by a single trade regime was naïve” (Fo- (Baldwin, 2022d) roohar, 2022a, 145). As for the unwinding of supply chains, Baldwin (2022c) Another valuable point of reference in understanding the shows that the picture here is mixed. Industrialised coun- apparent shift in certain policymakers’ thinking is Leon- tries are as engaged as ever in exporting intermediate ard (2021). Noting the resort to export bans at the onset goods, while their propensity to source them from abroad of the COVID-19 pandemic, as well as prior attempts to has been falling since the Global Financial Crisis. Baldwin limit the export of rare earth minerals and the use of bi- (2022c) also shows that the complexity of supply chains – lateral trade measures to show disapproval of the foreign both domestic and international – has diminished over time, policy and other stances of foreign governments, Leonard as measured by the share of manufacturing value added in argues that the instances of “weaponising” commercial gross production. These fi ndings show that private fi rms ties have made offi cials realise that globalisation can be a can and do adjust without the need of government fi at. source of risk as well as gain. The fi nding that globalisation is not in broad retreat does The imperative to manage such risks – in particular, recon- not imply that cross-border commercial ties are grow- fi guring supply chains so that production takes place at ing at a fast pace. The World Trade Monitor publishes home or at least in allied countries – appears to have altered monthly data on goods import volumes, which is a good thinking about the relative benefi ts of cross-border sourc- proxy for internationally contestable market access (for ing. The sense that some offi cials in particular in Western goods). During the years 2011-19, this measure of market governments were profoundly shocked by the resort to ex- access grew 1.5%-2% per year in industrialised econo- port curbs comes through clearly in Leonard’s book. mies and around 4% per annum in emerging markets. This represents a signifi cant slowdown compared to the Is the deglobalisation narrative a reliable guide to go-go years before the Global Financial Crisis, where the policymakers and corporate executives? comparable percentages were 4.5%-5% and 12%, re- spectively. It is not for nothing that before the COVID-19 It matters what the prevailing zeitgeist is as time-pressed pandemic hit, The Economist (2019) magazine christened leaders look for reliable shortcuts to facilitate decision- this phase of globalisation “slowbalisation”. making. But how much of the deglobalisation narrative is grounded in fact? And, if it is, what decisions follow or, at There is also evidence of faltering foreign direct invest- least, what logic should govern those decisions? ment (FDI) infl ows. When new fl ows of FDI are bench- marked against other sensibly chosen fl ows – namely, Retreat? world GDP, world investment levels or world trade – the former has not kept up with the expansion of the latter The notion that globalisation is in retreat has been care- three (Evenett and Fritz, 2021). This trend is discernible fully examined empirically. This matter was investigated since the Global Financial Crisis, although inevitably there in a sequence of four blog posts by Richard Baldwin in is year-to-year fl uctuation. August and September 2022. Baldwin (2022a) concludes that the narrative that globalisation has peaked and is Furthermore, outside of the Middle East, by 2015 the av- going into reverse is “overly simplistic”. He argues: “In erage returns on FDI by US multinationals in every other short, the ‘globalisation has peaked’ storyline is lazy, but emerging market region had converged to levels earned there is a highly energetic reality behind it. The globali- by US subsidiaries operating in the European Union. This sation of markets for goods is no longer rising as it had fi nding implies there is no longer a premium for exposure been between the 1990s and the mid-2000s” (Baldwin, to greater policy and regulatory risks attendant in lower 2022a). per-capita income nations. If this pattern applies to other nations’ multinationals, then it may account for the shift With respect to services trade, Baldwin (2022d) is em- in corporate investment towards projects at home rath- phatic: it is increasing and for good reasons. He argues: er than abroad (Evenett and Fritz, 2021). It is noteworthy The divergence between the growth of services versus 2 The regular reports of the World Trade Monitor can be obtained at goods happened because digital technology opened https://www.cpb.nl/en/world-trade-monitor-july-2022. Intereconomics 2022 | 6 346 Forum that the evidence on the falling premia on returns to FDI in Figure 1 emerging markets predates the COVID-19 pandemic and Export curbs on medical goods mushroomed at the applies in regions not associated with geopolitical rivalry start of the COVID-19 pandemic, but more steps with the United States. were taken to ease sourcing from abroad Number of active COVID-19 trade-related policies What are the right conclusions to draw from this data? First, there are many diff erent types of cross-border Liberalising import reforms commercial ties and some are doing better than others 278 (contrast cross-border e-commerce with FDI). This cau- tions against generalisation about the state of globalisa- tion. Second, the retrenchment seen in industrial country Restrictive export curbs sourcing of inputs and the shift of corporate investment towards home markets started before the COVID-19 pan- Restrictive import curbs demic and the emergence of the deglobalisation narrative. Liberalising export reforms Third, to the extent that this retrenchment refl ects shifting risk assessments by corporate executives since the Glob- al Financial Crisis, it pours cold water on any suggestion that businesspeople were oblivious to the risks – includ- ing political risks – arising from international commerce. Source: Global Trade Alert, November 2022 release. Vulnerabilities exposed? Central to demands to reconfi gure supply chains is that current international sourcing practices left exposed na- steps to ease imports of needed medical items. Over 200 tions vulnerable to shortages induced by foreign export such import reforms were in force by 8 May 2020 that had restrictions and other measures to weaponise trade. been implemented since the start of 2020. The total num- ber of reforms to import policy that remained in force – tar- The onset of the COVID-19 pandemic resulted in a surge iff cuts, relaxation of import quotas, etc. – continued to rise in demand for certain medical consumables and equip- throughout 2020. In short, trade was seen as part of the ment. According to the Essential Goods Monitoring solution to shortages of medical goods – which is hard to Initiative, by mid-April 2020 a total of 71 customs territo- square with talk of trade-related vulnerabilities. ries had imposed some type of export control on medical goods. However, by 1 July 2020 that total had fallen to Subsequent research also revealed just how few medi- 52 jurisdictions, suggesting that many governments con- cal goods Western nations sourced primarily from China cluded that these curbs were ineff ective or, worse, coun- (Evenett, 2020; Guinea and Forsthuber, 2020) and just terproductive. how diversifi ed sourcing patterns of “essential medical goods” were in practice. The notion that imposing export curbs was inevitable is belied by the fact that Australia, Canada and Japan Seen from the perspective of late 2022, however, it is the somehow managed to tackle the coronavirus without potential weaponisation of food exports that has contem- banning local manufacturers from fulfi lling export orders. porary salience. Russia’s fi ve month-long blockade of That democracies as well as autocracies banned exports shipments of Ukrainian grain through the Black Sea is a of medical goods does not sit well with the deglobalisa- case in point. Given that previous spikes of global food tion narrative either. Nor does the fact that regional allies prices resulted in riots and other forms of political insta- (in particular within Europe) curbed exports as well. bility in certain net food-importing developing countries, any weaponisation of food trade is a serious matter. So Another awkward fact for the deglobalisation narrative is what does the evidence on trade policy actions towards that more governments turned to global markets to meet food, agri-food products and fertiliser reveal? their medical goods needs once the COVID-19 pandemic hit their societies (see Figure 1). Dozens of governments took 3 To be clear, the author is involved in the execution of this initiative as 4 For evidence from the European Union, see Guinea and Forsthuber well as the Global Trade Alert mentioned later. (2020). ZBW – Leibniz Information Centre for Economics 01.2020 02.2020 03.2020 04.2020 05.2020 06.2020 07.2020 08.2020 09.2020 10.2020 11.2020 12.2020 01.2021 02.2021 03.2021 04.2021 05.2021 06.2021 07.2021 08.2021 09.2021 10.2021 11.2021 12.2021 01.2022 02.2022 03.2022 04.2022 05.2022 06.2022 07.2022 08.2022 09.2022 10.2022 Forum Again, for evidence I turn to the fi ndings of the Essential Figure 2 Goods Monitoring Initiative, upon which Figure 2 was Governments have not relied solely on export constructed. There have been a signifi cant number of restrictions to address food insecurity trade policy steps taken this year, in particular since the Number of active COVID-19 trade-related policies invasion of Ukraine on 24 February 2022. As of this writ- ing, 156 measures that restrict or ban exports of food are in force. However, many were implemented before the in- vasion of Ukraine. Liberalising import reforms In fact, since the invasion of Ukraine, 171 measures to re- strict, discourage or ban food exports have been imple- mented worldwide. The Russian Federation is responsi- Restrictive import curbs ble for 44 of these steps, only six of which were formal ex- port bans. Russia’s allies are responsible for another four Restrictive export curbs measures. Other large autocracies are responsible for Liberalising export reforms another nine restrictive export measures. As far as Rus- sia’s foes are concerned, Ukraine has implemented four export restrictions covering food products so far this year. The sanctions packages imposed by Western nations and Source: Global Trade Alert, November 2022 release. Japan that implicate food trade must be added to this list. What is also evident from Figure 2 is the even larger num- ber of reforms of import policies towards food, agri-food (USG, 2022) of Mineral Commodity Summaries. This pub- and fertiliser products currently in force. A total of 210 lication focuses on the production and sourcing of miner- steps to ease the importation of food have been taken als and commodities that are not fuel. worldwide since the invasion of Ukraine. These steps were taken by 58 customs territories, including three mul- It is noteworthy that, in the 2022 edition, no mention is ti-country customs unions. Russia, its allies and other au- made of export restrictions in the section devoted to tocracies undertook 33 of these 210 import reforms. trade policy-related matters. In fact, the phrase “export ban” appears once in the document and, then, only in Examination of the list of nations responsible for these reference to a ban legislated by the United States on import reforms reveals that it would be diffi cult to make mercury in 2008. There are no references in the entire re- any generalisations about which political systems tend to port to export quotas, nor to export taxes or to export be responsible for easing food trade. Perhaps what mat- restrictions imposed by foreign governments. The 25 ref- ters more is that, similar to the case of medical supplies, erences to shortages in the 2022 edition of this report are governments of all stripes have taken steps that facilitate associated almost entirely with COVID-19 shutdown re- sourcing from world markets. This is very hard to square strictions, extreme weather events and the lack of avail- with a narrative of reducing vulnerabilities to foreign ability of container shipping – and not to trade policy or sourcing – although it must be conceded that the growing weaponising trade. number of import restrictions on food and fertilisers (also shown in Figure 2) is not inconsistent with this part of the As for import dependence, the 2022 edition of the Mineral deglobalisation narrative. Commodity Summaries identifi ed 50 minerals where the United States is both a net importer and where net im- Those advancing the deglobalisation narrative often re- ports account for half or more of US consumption (use) in fer to perils of import dependence on “crucial products” 2021. The report observes: (as Foroohar did) or “critical materials”. What evidence is there about sourcing patterns of these goods by lib- China, followed by Canada, supplied the largest num- eral market economies? One useful source of evidence is ber of these nonfuel mineral commodities. The coun- the annual publication by the United States Government tries that were the leading sources of imported mineral commodities with greater than 50% net import reliance were: China, 25 mineral commodities; Canada, 16 min- 5 Russia frequently changes its export taxes on wheat, barley and corn eral commodities; Germany, 11 mineral commodities; in ways that few (if any) have linked to geopolitical considerations. South Africa, 10 mineral commodities; and Brazil and Similarly, Argentina and Indonesia regularly change export taxes on a limited range of food products. Mexico, 9 mineral commodities each. (USG, 2022, 5) Intereconomics 2022 | 6 01.2020 02.2020 03.2020 04.2020 05.2020 06.2020 07.2020 08.2020 09.2020 10.2020 11.2020 12.2020 01.2021 02.2021 03.2021 04.2021 05.2021 06.2021 07.2021 08.2021 09.2021 10.2021 11.2021 12.2021 01.2022 02.2022 03.2022 04.2022 05.2022 06.2022 07.2022 08.2022 09.2022 10.2022 Forum Only one country mentioned above is not a democracy. Figure 3 China is the largest import source in 18 of 25 cases where The pot calls the kettle black: Liberal democracies it is designated a “major import source”. In each of the 25 violate the non-discrimination principles of the world of these cases, there is at least one US trading partner trading system too Share of world goods trade covered by policies that favour local fi rms that is unquestionably a democracy which has also been listed as a major import source. According to the USG (2022), Russia is a “major import source” for six minerals that the United States is reliant Nations run by strongmen on to support half or more of its domestic use – but in each of these cases Russia is never the largest import Sanctioning liberal democracies source. In each case where Russia is listed as a major import source, there is at least one democratic trading partner of the United States that is listed as another ma- jor import source. 0 Furthermore, in this US government publication there is Note: The “Sanctioning liberal democracies” include the G-7 nations, the not a single mineral where net imports account for more other members of the European Union, Australia, South Korea and New than half of the total use by the United States with only Zealand. The “Nations run by strongmen” are China, India, Russia and Turkey. autocracies listed as major import sources. In light of these fi ndings, it is diffi cult to make an evidence-based Source: Global Trade Alert, 2022. case that autocracies have a strangle hold over the sup- ply of key minerals – including rare earths – to the Unit- ed States. One way to evaluate the implication mentioned in the previ- Overall, whether it is needed medical supplies, food, fer- ous paragraph is to examine shares of global goods trade tiliser or minerals, there are at best examples of occa- covered by public policies that favour national fi rms (and sional import dependencies on nations with diff erent gov- likely violate the principle of non-discrimination) imple- ernance systems. Even when such dependencies exist, mented by two groups of nations: the democracies that it does not imply that governments in exporting nations have sanctioned Russia this year and the nations currently weaponise those trade links. led by “strongmen” (in this case, China, India, Russia and Turkey) that are not typically aligned with liberal democra- Even if governments attempt to weaponise trade, there cies. The goods trade coverage shares were computed us- are alternative suppliers that can expand production. In- ing policy interventions recorded in the extensive database deed, one of the more interesting empirical fi ndings this of unilateral policy intervention that may aff ect international year concerning global wheat supplies is that the reduc- commerce assembled by the Global Trade Alert team. tion in supplies from Ukraine (part of which Russia was re- sponsible for) was off set four times over by higher wheat Figure 3 reports the increases in global goods trade cov- exports from Argentina and Brazil (Glauber et al., 2022). ered by policy interventions that favour local fi rms since Just because weaponisation is possible does not mean it the start of 2009. It does not make for comfortable read- must have far-reaching consequences. ing. By now, half of global goods trade takes place be- tween nations where one or more policy intervention by Naïve expectations about the multilateral trade regime? the sanctioning liberal democracies has tilted the com- mercial playing fi eld in favour of local fi rms. This share has The argument is frequently heard from Western and Japa- grown each year since the Global Financial Crisis and so nese analysts and offi cials that China’s World Trade Or- predates the policy response to the COVID-19 pandemic. ganization membership has not resulted in it adopting a The policy interventions taken by the “strongmen” that fa- market-based development model. Expectations that this vour local fi rms and exporters now implicate two-thirds of would happen were naïve, we are now told. One implica- world goods trade. This share too has grown over time. tion is that only democratic, liberal market economies can be relied upon to comply with the spirit and the letter of 6 Taken here to include the G-7 nations, the other members of the Euro- pean Union, Australia, South Korea and New Zealand. the extant global trade rules. Those rules are based on 7 More information about this independent monitoring initiative, includ- the principle of non-discrimination, or equal treatment of ing accounts of the methodology used, can be found at https://www. domestic and foreign suppliers. globaltradealert.org/about. ZBW – Leibniz Information Centre for Economics 2022 Forum Fealty to multilateral trade principles is a matter of degree As for US multinationals, a total of 38,747 of their subsidi- and is not determined solely by the nature of a jurisdic- aries had net incomes above $25 million in 2019. Eight per- tion’s economic or political order. cent of those subsidiaries (3,101 in fact) were located in the strongmen nations mentioned above – including 1,951 in In sum, when it comes to wishful thinking, there is no bet- China and 631 in Russia. Less than 2.7% of the total value ter place to start than the holier-than-thou attitude of cer- of assets invested by US multinationals in these 38,747 tain analysts and offi cials in the liberal democracies con- subsidiaries are located in the strongmen nations. cerning their national compliance with the non-discrimi- nation principle of the world trading system. As the quaint In sum, the degree of US fi rm engagement in foreign expression goes, everyone has snow on their boots. markets is limited to start with. A wholesale retreat – or a retreat to North American markets – would not mean Regionalisation replacing globalisation? much for many American fi rms. Proponents of the deglo- balisation narrative emphasise the “local”: in reality, most The potential for more intra-regional trade varies signifi - American businesses have only been interested in the lo- cantly across regions over the world economy. According cal. For other regions of the world economy, where the to the United Nations Conference on Trade and Develop- degree of integration into world markets is higher, retreat men, in 2020, 67.7% of European trade took place within could have more far-reaching implications for corporate that region. Intra-regional trade accounted for 58.3% of strategy. trade by Asian nations. For every other region, less than 30% of their trade was intra-regional (for the North Ameri- Concluding remarks can region the percentage stands at 29.3%). In light of such statistics, proponents of the deglobalisation narra- A narrative has taken hold on both sides of the Atlantic tive essentially envisage far-reaching changes to inter- that contends that deglobalisation is happening or that national trade fl ows and reconfi guration of supply chains it needs to happen. This narrative has the fl imsiest foun- across the Atlantic and Pacifi c Oceans. Yet, it is worth dation in fact. Remarkably, its proponents have been al- bearing in mind that the United States is widely regarded lowed to advance their arguments based on what they as having relatively limited integration into world goods regard as telling examples, impressions gleaned at work- markets in the fi rst place. shops and conferences of like-minded souls, surveys conducted by consulting companies that happen to sell Having more local fi rms supplying local markets appears advice to fi rms reconfi guring their supply chains, and by to be central to the deglobalisation narrative. Here it is invoking fears that inevitably arise when the world is fac- worth recalling just how few fi rms actually engage in in- ing a sequence of crises. ternational trade in leading Western nations. In the Unit- ed States, for example, 221,580 fi rms imported goods in The saying “A lie can travel halfway around the world be- 2020 (down 1.4% from the 2019 total) and 271,705 fi rms fore the truth puts on its shoes” is often attributed to Mark exported that year. A total of 189,607 fi rms both exported Twain (although that is contested). Seen in these terms, and imported that year. To put these numbers in perspec- this short paper amounts to reaching for the shoe rack. tive, the US government reports that over 5.5 million fi rms In this contribution, I have poked a number of holes in the do not export. deglobalisation narrative. No doubt more evidence could be marshalled. In 2020, just under 60% of US fi rms that export do so to just one other nation. Another 24.4% of US exporters ship What is particularly jarring about the deglobalisation nar- goods to between two and four nations. Firms that export rative is that its proponents have not spelt out their de- to 50 or more nations account for just 0.4% of American sired endgame: what mix of local, regional and global exporters. The concentration of import sourcing is even ties they want to see in commerce, what calculus should higher among US importers. When American fi rms en- drive decision-making by business and government, what gage in international trade, it is with counterparties in few losses need to be born to reach their nirvana, and what other trading partners. factors might accelerate or impede the transition of the 8 These statistics were obtained from https://hbs.unctad.org/trade- 10 These statistics were taken from this U.S. government source: https:// structure-by-partner/. www.bea.gov/sites/default/fi les/2021-11/omne1121.pdf. The fi ndings 9 These statistics are taken from this U.S. government source: https:// in this paragraph are not materially a ffected if Saudi Arabia is added www.census.gov/foreign-trade/Press-Release/edb/edbrel2020.pdf. to the calculations. Intereconomics 2022 | 6 350 Forum world economy they evidently desire. The deglobalisation narrative is an incomplete prospectus. From the perspective of international economic govern- ance, other than casting aspersions on the judgement of those that negotiated previous multilateral trade accords and the accession of China to the World Trade Organiza- tion, the deglobalisation narrative is silent on how to re- form that organisation – or what to salvage from existing global trade rules. Yet rules there will be. Rules on inter- national commerce can be traced back to 1780 BC to the Code of the Babylonian King Hammurabi. Those advanc- ing the deglobalisation narrative should not be allowed to dodge the critical matter of how trading relations between nations with very diff erent economic and political systems should be arranged. Ultimately, those that proff er the deglobalisation narrative must be held to a higher standard by policymakers, cor- porate decision-makers, analysts and by anyone giving them a platform to opine on the key building blocks of our standard of living. References Baldwin, R. (2022a, 31 August), The peak globalisation myth: Part 1, Voxeu. Baldwin, R. (2022b, 1 September), The peak globalisation myth: Part 2 – Why the goods trade ratio declined, Voxeu. Baldwin, R. (2022c, 2 September), The peak globalisation myth: Part 3 – How global supply chains are unwinding, Voxeu. Baldwin, R. (2022d, 3 September), The peak globalisation myth: Part 4 – Services trade did not peak, Voxeu. The Economist (2019, 24 January), Slowbalisation: The future of global commerce. Evenett, S. (2020), Chinese whispers: COVID-19, global supply chains in es- sential goods, and public policy, Journal of International Business Policy, 3, 408-429. Evenett, S. and J. Fritz (2021, 2 June), Advancing Sustainable Development With FDI: Why Policy Must Be Reset, The 27th Global Trade Alert report. Foroohar, R. (2022a), After Neoliberalism: All Economics is Local, Foreign Aff airs , November/December. Foroohar, R. (2022b), Homecoming: The Path to Prosperity in a Post-Global World, Crown. Guinea, O. and F. Forsthuber (2020), Globalization Comes to the Rescue: How Dependency Makes Us More Resilient, ECIPE Occasional Paper, 6. Glauber, J., D. Laborde, V. Pineiro and A. Tejeda (2022, 14 November), Can agricultural exports from Southern Cone countries make up for global supply disruptions arising from the Russia-Ukraine war’?, IFPRI Blog. Leonard, M. (2021), The Age of Unpeace: How Connectivity Causes Confl ict, Penguin. Snowden, F. (2019), Epidemics and Society: From the Black Death to the Pre- sent, Yale University Press. USG (2022), Mineral Commodity Summaries 2022, U.S. Geological Survey. ZBW – Leibniz Information Centre for Economics

Journal

Intereconomics – Springer Journals

Published: Nov 1, 2022

Keywords: F13; F23; F52

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