The Future of Globalization

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Globalization is changing | Fallout at the WTO | Can the US ever join CPTPP? | China’s population declines | Sanctions and Counter-sanctions | India’s Foreign Investment Environment | More research from Hinrich Foundation

Globalization is changing. How? Why?   

The world’s leading policymakers grapple with the future of globalization at the World Economic Forum in Davos.  The Economist declares that globalization is suffering a new assault, and considers what America’s protectionist turn means for the rest of the world. The Wall Street Journal says that globalization isn’t dead, but it is changing, while corporations can’t ignore geopolitics anymore, argues Elisabeth Braw in Foreign Policy. In October 2022, Canadian Deputy Prime Minister Chrystia Freeland offered a thoughtful vision for the future of globalization, per Marcus Norland.

Mentioned publications 

1. Globalization, already slowing, is suffering a new assault – The Economist, January 14, 2023
   Trade barriers are proliferating around the world.
2. What America’s protectionist turn means for the world – The Economist, January 14, 2023
   Will US policies lead to a global subsidies race?
3.  Globalization Isn’t Dead. But It’s Changing – Jon Hilsenrath and Anthony DeBarros, The Wall Street Journal, January 16, 2023
   Globalization is not collapsing, but being reshaped.
4. Corporations can’t ignore geopolitics anymore – Elisabeth Braw, Foreign Policy, January 4, 2023
   Geopolitics are reshaping trade and companies should take note.
5. Remarks by the Deputy Prime Minister at the Brookings Institution in Washington, D.C. – Deputy Prime Minister of Canada Chrystia Freeland, October 11, 2022
   The Deputy Canadian Prime Minister offers a well-articulated vision for a new era.
6. A thoughtful vision of the future of globalization – Marcus Noland, Peterson Institute for International Economics, January 12, 2023
   A critique calling attention to a thoughtful call for a new era of globalization.

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Fallout at the WTO

What will be the fallout from the WTO’s recent “essential security” decisions? Bruce Hirsh, writing in The Hill, offers an insider’s perspective on whether the WTO’s national security decisions will shatter reform talks, as the Wall Street Journal ponders who is going to police the world trading system with WTO dispute resolution off the table. 

Mentioned publications 

1. The WTO’s national security ‘thin ice’ moment could shatter reform talks – Bruce Hirsh, Op-ed: The Hill, January 7, 2023
   National security decisions may make finding consensus on WTO reform more difficult.
2. Who Is Going to Police the New World Trading System? – Greg Ip, The Wall Street Journal, January 14, 2023
   Looking back  at GATT may indicate where future trade disputes are headed.

Can the US ever join CPTPP?  

Wendy Cutler and Clete Willems imagine a US path to joining the CPTPP, including revisions that could facilitate US reentry for the Asia Society Policy Institute. Meanwhile, Lucian Cernat presents the powerful impact of mutual recognition agreements on global trade flows for the European Centre for International Political Economy . 

Mentioned publications 

1. Reimagining the TPP: Revisions that Could Facilitate U.S. Reentry – Wendy Cutler and Clete Willems, Asia Society Policy Institute, December 12, 2022
   Former US trade negotiators suggest 12 ways to pave the way for future US entry in CPTPP.
2. How Important are Mutual Recognition Agreements for Trade Facilitation? – Lucian Cernat, European Centre for International Political Economy, December 2022
   Mutual recognition agreements can reduce unnecessary costs.  

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China’s population declines 

What impact will China’s population decline have on global trade? Paul Krugman provides a neat and concise explainer of the problems.  

Mentioned publications 

1. The Problem(s) With China’s Population Drop – Paul Krugman, The New York Times (Newsletter), January 17, 2023

Sanctions and Counter-sanctions  

Deputy US Treasury Secretary Wally Adeyemo explains America’s new sanctions strategy and what it hopes to accomplish, while Agathe Demarais argues that this may mark the end of the age of sanctions without a global framework governing them. Ben Cahill assesses whether  imposing price caps on Russian oil is working. Russia’s efforts to inflict an energy crisis on Europe by cutting off gas supplies has so far been ineffective, reports the Wall Street Journal. The US is wasting its leverage on China by cutting itself off from China’s industrial development now, argues Paul Scharre in Foreign Policy.  

Mentioned publications 

1. America’s New Sanctions Strategy – Wally Adeyemo, Foreign Affairs, December 16, 2022
   The Deputy US Treasury Secretary explains the reasons and methods behind sanctions on Russia.
2. The End of the Age of Sanctions? – Agathe Demarais, Foreign Affairs, December 27, 2022
   Will adoption of a global framework on sanctions allow the US to impose effective sanctions? 
3. Progress Report on EU Embargo and Russian Oil Price Cap – Ben Cahill, Center for Strategic and International Studies, January 10, 2023
   A useful analysis of the Russian oil price cap and its effectiveness.
4. How Europe Escaped a Looming Energy Crisis – Matthew Dalton, The Wall Street Journal, January 14, 2023
   Conservation, warmer temperatures, and alternative supplies have helped Europe avoid the worst.
5. Decoupling Wastes US Leverage on China – Paul Scharre, Foreign Policy, January 13, 2023
   The US should remain involved in China’s industrial development to have more leverage later on. 

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India’s Foreign Investment Environment 

Can India attract manufacturing investment away from China?  India can’t replace China without reforms, argues Arvind Subramanian and Josh Felman in Foreign Affairs, though India may be Apple’s best bet against China, per the Wall Street Journal.  And India is not yet able to access the world’s largest container ships, reports Bloomberg. 

Mentioned publications 

1. Why India Can’t Replace China – Arvind Subramanian and Josh Felman, Foreign Affairs, December 9, 2022
   India needs more policy changes before it can attract large amounts of foreign investment.
2. Apple’s Best Bet Against China Might Be India – Meghna Mandavia, The Wall Street Journal, November 27, 2022
   For some companies, India is already a logical destination for manufacturing.
3. World’s Biggest Ship Skips India in Blow to Its Trade Goals – Karthikeyan Sundaram, Kevin Varley and Ann Koh, Bloomberg, January 11, 2023
   India does not yet have regular access to the world’s largest container ships. 

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More publications from HF: 

• Strategic reglobalization: Great power rivalry comes for the multilateral trading system 
• The missing trade in US trade policy
• Freeze and seize: Implications of asset confiscations for Russia, China, and the world
• Moving beyond disappointment: India, FDI, and sustainability

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