The end of globalisation as we know it?

The period of hyperglobalisation that began in the early 1990s may be drawing to a close. Should deglobalisation come to pass, it could have far-reaching consequences for countries, corporations, and investors.

Loosely defined as the free flow of trade, capital, people, technology and ideas across national borders and regions, globalisation has long been associated with economic development, increased opportunity, and progress. Now, however, it is increasingly viewed as a threat. Indeed, anti-globalisation sentiment was a significant contributor to the two major ballot box surprises of 2016: the UK’s vote to leave the European Union, and the election of Donald Trump as President of the US.

Modern globalisation has gone well beyond the trade of goods, as technology allowed for transfer of know-how and skills.

First wave of globalisation (1850s to 1914): The first ‘Golden Age’ of globalisation, characterised by industrialisation, urbanisation, relative peace, new transportation and communications technologies, and a stable monetary system based on the gold standard. Global trade reached 38% of global GDP by 1914.

Protectionism (1914 to 1945): World War I brought on a sharp decline in global trade, followed by the end of the gold standard as an international currency system and the introduction of protectionist and isolationist policies. Global trade fell to just 7% of GDP by the end of World War II.

Second wave of globalisation (1945 to 1990): Global trade grew rapidly with the post-war economic recovery, and again in the 1970s. The Bretton Woods accord stabilized the global monetary system, along with new institutions and agreements such as the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade. Improved transportation (commercial aviation, container shipping) reduced trading costs. Global trade rose to 30% of GDP by 1980.

Hyperglobalisation (1990 to present): The fall of the Soviet Union, privatisation, deregulation, and huge advances in information and communications technology (ICT) ushered in a new era of rapid growth in global trade and investment. New trade agreements included the World Trade Organisation, joined by China in 2001, the North American Free Trade Agreement and the European Union’s Maastricht Treaty.

Among the clear beneficiaries of hyperglobalisation are the emerging economies, which have become increasingly integrated into more and more complex global value chains. Their role in processing raw materials, and in value-added manufacturing and services has grown rapidly.

The first signs of opposition to hyperglobalisation emerged amid major demonstrations at the 1999 meeting of the World Trade Organization in Seattle. Concerns mounted in the wake of the 2008-09 financial crisis and subsequent global recession, reflected more recently in public resistance to trade and investment agreements such as the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership.

At the same time, governments have tended to enact a variety of protectionist measures and (non-tariff) trade barriers that have only exacerbated the recent global slump in trade. The International Monetary Fund and other international bodies continue to advocate global integration as a means of reinvigorating global growth, yet politicians have been reluctant to follow through in light of growing public opposition.


pretty interesting article..bit of history from the winners perspective..

The first signs of opposition to hyperglobalisation emerged amid major demonstrations at the 1999 meeting of the World Trade Organization in Seattle.”


~ by seeker401 on July 3, 2017.

One Response to “The end of globalisation as we know it?”

  1. Globalization is not their only tool. The Protectionism between WW1 and WW2 was spurred by taking away gold as the monetary standard. Interesting.

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