Ihe Russian invasion of Ukraine has brought the link between war and international trade back to the fore. For some, it calls into question the pacifying effect of globalization. For others, trade sanctions against Russia, by increasing the cost of war for Russia, could encourage Vladimir Putin to change his strategy and push him to negotiate.
For the first time, these sanctions take the form not only of an embargo which must affect the quantities exported, but also of a maximum price on exported Russian oil. In any case, this war is disrupting world trade, with repercussions on value chains, world prices for energy, raw materials and agriculture in both rich countries and the most fragile poor countries. Today, it is indeed the immense commercial intricacy of the economies which propagates the human cost of the war well beyond the Ukrainian borders.
A “return to normal” takes between fifteen and twenty years
The link between trade and military conflict is complex and ambiguous. One fact, however, has been well established since the end of the Second World War and is confirmed in the case of the conflict in Ukraine: the war persistently damages commercial links between countries… but does not destroy them.
In empirical work that we conducted in 2006 (“Is globalization a factor of peace? »Center for Economic Research and Applications) and subsequently corroborated by others, we estimated that on average, since World War II, military conflict has rapidly and sustainably reduced trade between belligerents in an order of magnitude of around 35%.
The “return to normal” on the commercial level, once the conflict is over, takes between fifteen and twenty years. In the case of the 2014 conflict between Ukraine and Russia, bilateral trade was reduced but not eliminated. Even in the midst of conflict, trade continues. Moreover, a conflict can reduce trade not only between the belligerents but also between them and the rest of the world. Since the beginning of the war, Russian imports have fallen (partly due to sanctions) from Western countries (which had already been the case in 2014), but also from Asian countries.
Wars therefore have, beyond the human cost, an economic cost. The belief of Montesquieu (1689-1755) in the “sweet trade” who has for “natural effect of bringing to peace” can, in part, be based on this economic calculation.
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