We looked into the technological aspect of solutions and the Government’s part in the fiscal management. Now looking up the next important question, how can Globalization affect the Economy rate? These questions are pertinent to be answered, and Marco Annunziata, Co-Founder, Annunziata + Desai Advisors is sharing his thoughts with us.
In the past four years, the predominant narrative has been blaming Trump for single-handedly destroying the global infrastructure of worldwide relationships. When he pulled out the US from the Trans-Pacific Partnership (TPP) free trade deal, the Paris climate accord (Paris Agreement) and the World Health Organization (WHO); he even forced to pull out of NATO (North Atlantic Treaty Organization) and regularly disapproved the trade partners and strategic allies for not paying their rational shares. But on his first day in office, Joe Biden responded by getting both the Paris accord and the WHO accords back, and many presume that the US will now recapture the lead in raising sturdier international collaboration. However, the pandemic itself has revealed that we have misjudged the risks of globalization. Global trade and tourism enabled the spread of the virus even faster, and the disturbance of this complex global supply chains strengthened the economic damage of the lockdowns which was not expected at first. And when it came to the head, international cooperation was pushed away in the concern of the national security. Countries stockpiled medical supplies and pharmaceutical apparatuses and imposed clumsy independent travel bans instead of trying to agree on mutual ethics and safeguards, so much so that even the basic exchange of statistics left a lot to be anticipated. Unexpectedly, the idea of protecting a reliable local supply of medical equipment and grave industrial components no longer seemed like protective babble. The recent UK-EU tensions on vaccine provisions are another example.
Adding to this that sneaking isolationism had been on the upsurge well before Trump got into office; many evolving markets and some established countries had progressively installed local-content necessities and other non-tariff trade fences. The WTO (World Trade Organization) had long been stressed, and bilateral trade deals had become more predominant. The adverse consequences of global trade on specific businesses and job groups in the US and other industrialized countries had already taken a noticeable roles in policy and theoretical debates. In 2016, Hillary Clinton also ran on a protective platform, and Biden has doubled down on Trump’s “Buy American” plan with even sturdier protectionist requirements.
Remaining in this context, there are some new technologies which will take on particularly sensitive tactical position. Imagine the of 5G technology, it will be a critical enabler for self-directed vehicles, smart cities, smart electrical grids and the entire digital-industrial rebellion. It will, thus, also be a vital cradle of delicate data and possible entry point for the attacks on these critical infrastructure. No country can feel at ease on leaving it entirely to the globalized free market as the argumentative debates on China’s 5G technology validate.
In the future years, these realities will most certainly shape the global trade much more than the self-assigned globalist/nationalist labels of discrete leaders. International trade will be achieved more across a wider range of magnitudes as governments try to alleviate key economic and geopolitical hazards. The task will be, to do this whilst conserving, as much as possible, the productivity advances that have made international trade an influential device of global growth. New tools will come to the rescue here, manufacturing platforms and 3D printing, for example, by this time allow companies to function competently at a smaller scale, have better flexibility in where they locate their services, switch invention lines more swiftly and safeguard greater flexibility in their supply chains as well. But outstanding the right balance in this area will be critical to have the resilient and more balanced global growth in the times ahead.