![]() ![]() After all, lockdown has been equally disruptive from suppliers down the road who have closed as from those at the other side of the world. Those companies worried about over-exposure to China look as if they are finding new off-shore locations like Vietnam and India. But this was predicted also after Fukushima and didn’t happen. Some argue that after Covid and the conflict with China, there will be massive re-shoring of business with the multinationals coming ‘home’. Foreign investment is expected by UNCTAD to fall 30/40% this year overall. Vince Cable, Ella Whelan and Aaron Bastani debate reason, rage and revolutionįor many, the defining characteristic of globalisation is the multinational company with its global supply chains, cosmopolitan senior management and tax domicile on some obscure island in the Caribbean. ![]() There is no reason to believe that this trade is in retreat and the pandemic’s accelerator effect on remote conferencing and learning may have sped it up. Crucially, however, trade in goods is becoming less valuable than trade in services: finance, consultancy, education, IT. So far, however, the rest of the world has been reluctant to follow suit perhaps understanding all too well where it would lead. All the signs are that Trump intends to ignore the history of a century ago and return to escalating trade warfare with China and perhaps the EU. Even before Covid protectionism had surfaced especially in the USA (and not only due to Trump the Democrats are onside on this issue at least). The pandemic may knock off a third of the value of trade this year. Trade in goods expanded at roughly twice the pace of world output from WW2 until 2010. And whatever happens to the ‘pull’ factors the ‘push’ will grow and grow, from Africa especially. In a period of economic depression, there will inevitably be depressed migration. No sooner has our government brought in legislation to give expression to what the ‘will of the people’ was thought to be in 2016 than the public mood has swung in the opposite direction. But Trump’s wall is not the last word on migration. Migration for work or settlement has run into growing resistance both in traditional labour importing countries like the USA and the less open countries of Europe and Asia, contributing to the belief that globalisation has run its course. Globalisation is complex, with different dimensions that each tell a different story. I would be amazed if travel hasn’t returned to previous peaks within five years. Subsequently, there will be a move - rightly- to cut back on unnecessary travel for environmental reasons but there will also be hundreds of millions of previously poor Asians and Africans who will want to see the world. Last year saw an all-time peak in cross border travel and there will be a sharp fall this year for obvious reasons. To start with the most visible: people movement. But it is far too soon to accept that the process must now go backwards. Hubris was bound to lead to nemesis, and has. ![]() At the time I was writing, there was too much talk of ‘the end of history’ and ‘the end of geography’. The result has been that international governance is weak and lags behind the economics, creating instability and opportunities for populists to exploit. But I worried that there was a weak link-politics-which is still overwhelmingly national. I argued that it was, in general, beneficial and had contributed generously to the post-war rise in living standards. I wrote a book about ‘globalisation’ 25 years ago. It had its ugly side in the Empires but three decades of de-globalisation with violent nationalism and war are not a happy precedent. There was a pretty globalised world in 1913. I think that they are wrong, both in the prediction that globalisation is bound to go into reverse and in the relish with which its demise is being embraced. The momentum of global economic integration won't be slowed for long and the drive for international connectivity from developing countries will quickly see international travel and trade resume.Ī lot of people who should know better are giving the last rites to the global economic integration (globalisation) we have enjoyed since the Second World War. Despite predicted economic depression, the Covid-19 pandemic will not spell the end of globalisation. ![]()
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