Re-globalisation has been highlighted as a more favorable approach to creating a global economy that benefits everyone. This shift aims to integrate more economies and communities into the global marketplace, enabling them to attract trade-focused investments.
Conversely, protectionism is seen as an ineffective means of achieving inclusiveness. According to Dr. Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), limiting trade often leads to higher costs for production and can provoke costly retaliation from dissatisfied trading partners.
Dr. Okonjo-Iweala emphasized the WTO’s continuing role as a foundation for international trade collaboration. She noted that evolving and potential regulations in areas like investment facilitation, services, domestic regulation, and digital trade are expected to enhance the re-globalisation movement.
However, she pointed out a crucial insight from the World Trade Report 2024, released recently in Geneva, Switzerland, called ‘Trade and Inclusiveness: How to make trade work for all.’ This report concluded that merely having rules for open and simplified trade is insufficient for ensuring inclusivity among and within economies. Additional domestic and international policies are necessary for this purpose.
In an interview, Dr. Kishti Sen, a senior economist at ANZ for the Pacific, discussed the concept of re-globalisation. He questioned whether it implies completely free and barrier-free trade, suggesting that such an ideal is unlikely to be reached. He noted a trend where countries are leaning toward protectionism to safeguard their local industries and bring manufacturing jobs back home.
Dr. Sen argued that not everything should be produced solely for the lowest labor costs, emphasizing the importance of fair wages. He explained that many countries struggled to maintain competitiveness due to high labor costs in manufacturing. However, with recent supply chain disruptions and potential future conflicts, there is a renewed focus on re-evaluating supply chains and relocating manufacturing jobs domestically, including those that offer better wages.
The theme of re-globalisation will be explored further at the WTO 2024 Public Forum.