U1 Goodbye Globalization

Question 1

What has damaged globalisation even before the pandemic?

Answer 1

• Financial crash
• Sino-American trade war

Question 2

What has reeled globalisation with a third body blow?

Answer 2

• Lockdowns sealing borders
• Disrupted commerce

Question 3

What are some examples of the impact on global trade?

Answer 3

• 97% drop in passengers at Heathrow
• 90% decline in Mexican car exports in April
• 21% cancellation of transpacific container sailings in May

Question 4

What will happen as economies reopen?

Answer 4

• Activity will recover, but not to the previous level
• Travel and migration will be politicized
• Bias towards self-reliance will increase

Question 5

What are the consequences of the inward-looking lurch?

Answer 5

• Enfeebled recovery
• Vulnerable economy
• Spread of geopolitical instability

Question 6

What happened to global trade after the emergence of the 1990s trading system?

Answer 6

• China became the world’s factory
• Borders opened to people, goods, capital, and information
• Trade and foreign investment stagnated after the 2008 financial crisis
• Trump’s trade wars intensified concerns about jobs, China, and chauvinism

Question 7

What disruption has occurred since January?

Answer 7

• Demand has fallen due to closures
• Suppliers are unable to reach customers
• Overall effect on world goods trade is savage, with a potential 10-30% shrinkage

Question 8

How is global governance being exposed?

Answer 8

• Squabbles over quarantine rules (e.g., France and Britain)
• Threats of punitive tariffs (e.g., China and Australia)
• The White House’s aggressive stance on trade

Question 9

How has public opinion shifted regarding globalisation?

Answer 9

• People are disturbed by the reliance on imports for protective equipment
• Dependency on migrant workers for essential services raises concerns

Question 10

What restrictions are expected in the movement of people, goods, and capital?

Answer 10

• Trump administration proposes further curtailing immigration
• Closed borders and limited travel opportunities
• Countries favoring similar health protocols for opening up
• Governments and central banks favoring national firms and supply chain localization

Question 11

What are the consequences for capital flow and investment?

Answer 11

• Long-term investments decline
• Chinese venture-capital investment in America significantly drops
• Cross-border investment by multinational firms may decrease by a third

Question 12

What challenges arise from a fragmented trading system?

Answer 12

• Difficulty in solving global problems / finding solutions
• Impact on catching up for poorer countries
• Higher costs and less freedom in the rich world

Question 13

What is the fate of the open system of trade?

Answer 13

• Neglected arguments in favor of globalisation
• The decline of the greatest era of globalisation
• Uncertainty about what will replace it