Pol Antras, an economist at Harvard University, says that global trade is not heading back to deglobalisation because of geopolitical shocks. Instead, it is undergoing a structural reshuffling due to tensions between the US and China.
At the AlUla Emerging Market Economies Conference, Antras discussed research showing no evidence that countries are systematically moving inward. Instead, commerce is moving across markets in new ways, making some businesses do better than others depending on how they export and how much they compete with China.
This occurs at a time when there is more and more debate about whether supply chain problems, industrial policy, and higher trade barriers mean that globalisation is coming to an end after decades of growth.
Antras told Arab News on the sidelines of the event, “I think the right way to look at it is more of a reorganisation, where things are moving from some countries to others, rather than a general trend where countries are becoming more inward looking, in the sense that producers are selling more of their stuff domestically than internationally, or consumers are buying more domestic products than foreign products.
He added that a transformation of that size has not yet occurred, which is crucial to keep in mind as you navigate the reshuffling. His study reveals that Chinese producers are moving sales away from the US and toward other economies.
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