LEconomists wonder a lot about the “deglobalization” of an economy segmented into two ideologically opposed camps (to put it briefly): the “camp of democracies” versus the “camp of authoritarian countries”. But are we really observing a reduction in trade between these two groups of countries?
The consequences of effective economic deglobalization would be very significant. Countries would give up exploiting their comparative advantages (availability of raw materials, skills of the active population, technological level) in order not to trade with “enemy” countries, and would thus accept a loss of economic efficiency, since they would have to produce goods for which they do not have comparative advantages and import goods with high production costs from “friendly” countries, in order to increase their economic sovereignty and the security of their supplies. All at the cost of a loss of purchasing power for consumers.
The evolution of global trade in goods seems to confirm the hypothesis of “deglobalization”. While growth in the volume of exports of goods was twice as high as global GDP growth from the 1990s to the subprime crisis in 2008, they become equivalent from 2010 to 2019; and, since mid-2022, the volume of exports of goods is down 2% year-on-year, while global GDP grows by 3% per year.
Decline in investments
This gap must be compared to the very sharp increase in the number of obstacles to world trade identified by the International Monetary Fund, rising from 250 at the start of the 2010s to 2,600 in 2022: customs duties, bans on imports or export certain goods, for example importing Chinese telephone relays to OECD countries, or exporting semiconductors to China, etc.
But is this really a sign of a deglobalization of the world economy, or of a distrust, in particular of Western countries, towards China?
If we look at trade in goods in volume, exports fell by 2% year-on-year in the third quarter of 2023, and it appears that China’s goods exports are stagnating, and that exports from the rest of the world to China have declined significantly in 2023. There is therefore a decline in global trade in goods, regardless of the origin of these exports.
But the same is not true for trade in services. The volume of global exports of services is now increasing at an annual rate of 7%, faster than that of world trade as a whole. There is therefore no deglobalization of trade in services. The share of service exports in gross domestic product (GDP) is very high in Singapore, India, Sweden and Denmark; she is raised in Portugal, Morocco, the United Kingdom, Finland. In fact, trade in goods is gradually being replaced by trade in services.
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