Re-globalisation offers a more optimistic pathway towards a global economy that benefits everyone by integrating more economies and communities into the mainstream through enhanced trade-oriented investments. In contrast, protectionism is viewed as an ineffective approach for fostering inclusivity, as limiting trade often leads to high costs for specific job sectors and can provoke retaliatory measures from dissatisfied trade partners, according to Dr. Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO).
Dr. Okonjo-Iweala emphasized the WTO’s vital role in international trade cooperation, noting that emerging rules concerning investment facilitation for development, services, domestic regulation, and digital trade hold the potential to propel the re-globalisation movement. However, a significant conclusion drawn from the World Trade Report 2024, recently introduced in Geneva, titled ‘Trade and Inclusiveness: How to make trade work for all,’ indicates that mere rules for open and simplified trade fall short in ensuring inclusiveness, both among and within economies.
She advocated for the need to bolster these trade rules with additional domestic and international policies.
Dr. Kishti Sen, a senior economist for the Pacific at ANZ, reflected on what re-globalisation entails, questioning the feasibility of achieving completely barrier-free trade. He noted a global shift towards protectionism as countries prioritize local industry and manufacturing.
Dr. Sen argued that production does not always have to hinge on the lowest labor costs, highlighting the importance of fair wages. He pointed out that nations have previously lost their competitive edge due to high labor costs in manufacturing, but disruptions in supply chains and an uncertain geopolitical landscape have prompted many to reconsider and relocate manufacturing locally, including higher-paying jobs.
He concluded that the current focus seems to be leaning more towards supporting local industries rather than advocating for open borders and unrestricted trade. Re-globalisation is set to be the central theme for the WTO’s 2024 Public Forum.