The WTO insists that globalization is still relevant

It is too early to talk about de-globalization of the world economy, but the trend towards the rapprochement of politically “friendly” states with the mutual distancing of those whose principles of existence do not coincide is intensifying, as noted in a new review of the World Trade Organization. In it, experts give an answer to countries that, amid talk of national security, are increasingly pursuing a policy of protectionism. The WTO reminds that the course of recent decades towards globalization remains the most effective tool for maintaining stable economic growth rates and overcoming crises. In addition, it is he who is able to ensure broadly understood security – economic, social and environmental.

Despite general geopolitical tensions, it is too early to talk about de-globalization of the world economy, according to a new review of the World Trade Organization (WTO). Let us recall that deglobalization is unofficially one of the main topics for international organizations this year: it was launched in January at the World Economic Forum (WEF) in Davos (see “Kommersant” dated January 18) and developed in all key forecasts of the WEF, the International Monetary Fund and the World Bank. The WTO report states that the reasoning that deglobalization cannot be avoided is not yet confirmed by statistical data, while the organization’s experts are already recording the emerging fragmentation of the world economy based on the criterion of political proximity of states.

The process of dividing groups of countries into blocs described by the WTO boils down to the fact that trading partners with similar values ​​and plans are given noticeably more attention than “politically unrelated” states. This thesis is illustrated by the relations between China and the United States, whose trade interdependence in 2023 will noticeably decrease. After reaching a record level of trade in 2022 ($690.59 billion), new achievements due to escalating contradictions (see “Kommersant” dated August 11) these countries are not expected to join the WTO.

Increasing pressure to erect trade barriers can be costly for both developed and developing countries: not only for those who choose one side or the other, but also for those maintaining neutrality, the WTO believes.

Instead of making forecasts for individual states, experts in the report record the results of their interaction. For example, it notes that trade tensions between China and the United States over the past year have resulted in economic losses of 0.3% of GDP for Beijing and 0.1% of GDP for Washington.

Discussions about the present and future of China-US relations are included in the report, among other things, to prove the authors’ main idea: security (which is understood by the organization very broadly and includes both economic sustainability and, for example, the achievement of climate goals) should be supported by the general course of developed and developing countries towards globalization rather than protectionist policies. Let us recall that the logic of supporting domestic production for the sake of ensuring national security fits both the American law on reducing inflation and the Chinese policy encouraging the relocation of “cleaner production” from Europe to the PRC, as well as the European strategy for ensuring economic security (For more details see “Kommersant” dated June 21). Analysts, citing numerous examples from history (including talking about the principles that formed the basis of the General Agreement on Tariffs and Trade – GATT) adopted after World War II, call on developed countries to abandon additional measures to protect the domestic market and maintain security and stability, expanding trade and economic ties.

The WTO concludes that the international trade system – even with the imperfections of its current architecture – has been able to pass several serious stress tests in recent years (from COVID-19 to the consequences of the Russian military operations in Ukraine) and still survive. According to the authors of the report, this happened only due to the past decades of orientation toward globalization.

Kristina Borovikova