What do recent trends in trade tell us about the "reshaping of globalisation”?
Reading 10 minutes | By Nathalie Dezeure, Head of Macro and FI Research, Natixis CIB
Arguments in favor of relocating supply chains and trade policy strategies based on geopolitical concerns have multiplied, accompanied by a new international relations lexicon, including "reshoring","nearshoring", "friendshoring" and "decoupling".
In her latest report, Nathalie Dezeure analyses the different scenarios and the extent of this deglobalization, its impact on global trade as well as the fall in GDP and the loss of well-being it generates.
Perceptions of the benefits of international trade and multilateral cooperation have changed in recent years. Brexit, trade tensions between the United States and China, the pandemic, the war in Ukraine and rising geopolitical tensions have tipped the balance of risks associated with globalisation upwards.
In the name of national security or securing supplies, arguments in favour of relocating supply chains and trade policy strategies based on geopolitical concerns have multiplied. This "reshaping of globalisation" is beginning to be seen in recent trends in international trade. The WTO's latest report, published on 7 October, underlines this, stating that "while we are indeed seeing the first signs of fragmentation, we are not seeing widespread deglobalisation".
The consequences of such a development are still difficult to assess, although studies by various institutions point to a negative impact that is much less marked for advanced economies and the major economic powers (United States, China, Eurozone) than for developing economies.