Conclusions

• Author: Zumer, Klemen; Navarra, Cecilia; Titievskaia, Jana; Stamegna, Carla; Kononenko, Vadim
• Pages: 21-22

Slowing down or changing track?

21

3. Conclusions

Has the thesis of slowbalisation in 2007-2020 proven to

be myth or reality? When compared to the high point of

hyperglobalisation, there has in particular been a

slowdown in terms of cross-border merchandise trade,

capital flows and bank loans. However, a broader

analysis shows that the onset of the slowdown is more

nuanced and path-dependent than highlighted by the

numbers alone. International trade statistics miss out

parts of services trade and also aspects of value-adde d

trade. Cross-border bank lending has in part declined

due to a desire to decrease risks and regulatory reforms,

but balance of payments statistics still tend to under-

estimate the degree of interconnectedness in the

financial sphere.

Table 2 – How has Covid-19 affected the five path ways of 2007-2020 slowbalisation?

Cross-border

trade in goods

and services

Open and

globalised

financial

system

Deepening

income

inequality

International

physical

interactions

(tourism and

migration)

Movement of

data and

digital

exchanges

2007-

2019 Slowing down Slowing down Accelerating Accel erating Accelerating

2020

(Covid-19)

Steep

slow-down Slowing down Accelerating Steep

slow-down Accelerating

Expert predictions for the future of globalisation post-coronavirus range from optimi stic to alarmist.

A number of thinkers have posited that Covid-19 has triggered the start of deglobalisation and that

the period after the pandemic will see a gradual unfolding of global integration.71 Another thesis is

that globalisation is not waning, but is merely changing shape and form:

Economic theory and hist ory both suggested this was an u nsustainable kind of globalisat ion, and so

it has proven. Internati onal economic integration came at the ex pense of domestic disintegration,

deepening pre-existing economic, spatial and cultural divides between winners and lose rs. It was also

predicated on the unreali stic and unfulfilled approaches of countries with very different economic

and social models, such as the US and China, would tend to converge. – A complete collapse seems

unlikely. But we will have to s ettle for a thinner model of globalisation that le aves nations room for

rebuilding domestic social contracts.72

The backtracking of globalisation has included both a sl owdown in cross-border exchanges, as well

as an ideological shift in policy-makers' approaches to openness. In the USA, the Trump

administration has prioritised protecting US interests over multilateralism, has launched a

protectionist trade policy, and threatened to withdraw from a number of multilateral institutions

such as the WTO, WHO, Open Skies Treaty and the Universal Postal Union, as well as sanctions

against investigators of the International Criminal Court. Partially underlying this movement has

71 I. Olivie, M. Gracia, Is this the end of globalisation (as we know it)?, February 2020.

72 Bloomberg News, Have We Reached Peak Globalisation?, 2020.