Re-globalization is seen as a more effective approach to creating a global economy that benefits everyone. This strategy aims to integrate more economies and communities into the global economic framework, especially those currently on the margins, by attracting trade-oriented investments.
World Trade Organization (WTO) Director-General Dr. Ngozi Okonjo-Iweala emphasized that protectionism is not a viable solution for fostering inclusiveness. She pointed out that limiting trade is a costly method for safeguarding specific jobs, leading to increased production expenses and potential retaliatory actions from dissatisfied trading partners.
Dr. Okonjo-Iweala highlighted that the WTO is essential for international trade cooperation and that new rules in areas such as investment facilitation for development, services, domestic regulation, and digital trade are set to enhance the re-globalization process. However, she noted a significant finding from the recently launched World Trade Report 2024, titled “Trade and Inclusiveness: How to make trade work for all.” The report indicates that simply establishing rules for open and streamlined trade is insufficient to achieve inclusiveness across and within economies.
She stressed the need for these trade rules to be supported by additional policies both domestically and internationally.
Dr. Kishti Sen, senior economist for the Pacific at ANZ, discussed the definition of re-globalization, questioning its implications for free and open trade without barriers. He noted the trend towards protectionism as countries strive to shield their local industries and revitalize manufacturing.
Dr. Sen argued that not all production needs to be focused on minimizing labor costs, highlighting the importance of fair wages. He pointed out that countries have struggled to compete due to high labor costs affecting manufacturing.
However, he believes that disruptions in supply chains and the potential for future conflicts are causing nations to reconsider their strategies, with more emphasis on domestic manufacturing, including higher-paying jobs. He asserted that the focus is shifting away from promoting free trade toward enhancing local industry support.
The theme of re-globalization will be central to the WTO 2024 Public Forum.