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Competitio

Vol. 22 No. 1-2 (2023)
Papers

The probable impact of policies and policy measures on globalisation

Published:
2024-07-13
DOI Linkhttps://doi.org/10.21845/comp/2023/1-2/4
Author
Miklós Losoncz
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Keywords
export control import protectionism trade policy and structural openness subsidies globalisation deglobalisation regionalisation
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Copyright (c) 2023 Miklós Losoncz

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This work is licensed under a Creative Commons Attribution 4.0 International License.

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Selected Style: APA
Losoncz, M. (2024). The probable impact of policies and policy measures on globalisation. Competitio, 22(1-2), 49-72. https://doi.org/10.21845/comp/2023/1-2/4
Received 2023-06-13
Accepted 2023-06-23
Published 2024-07-13
Abstract

This paper aims to identify the impact of the recent economic and non-economic shocks on the globalisation of trade in terms of trade policy and structural openness, and to take a side in the discussion about the reversal, the slowdown, and the continuation of trade globalisation. The report argues that geopolitical decisions based on pure political priorities and different macro- and micro-policies may
harm trade globalisation temporarily. Nevertheless, in the long run, underlying
economic factors, such as decreasing trade costs and expanding services trade remain the critical driving forces of globalisation. The speed of the process is likely
to be slower than before, and its characteristics are different. With weakening multilateralism and increasing fragmentation, the emerging global world order will be suboptimal from the point of view of economic efficiency. 

Journal of Economic Literature (JEL) codes: F01, F02, F13, F60.

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  38. Endnotes
  39. Professor at the Department of Finance and Accountancy of Budapest Business School, University of Applied Sciences. E-mail: Losoncz.miklos@uni-bge.hu
  40. Chapter 3.2. of the World Economic Forum (2023) discussed the possibility of a poly-crisis in natural resources, climate, and cooperation. For a more detailed explanation, see Drezner (2023).
  41. The most widespread general definition of globalisation is the following. "Globalisation…is the process of increasingly free flow of ideas, people, goods, services, and capital across borders that leads to greater economic integration." (International Monetary Fund 2023, p. 6.) Expertise and intellectual property can be added to this list. For many years, globalisation has been interpreted as across-the-board liberalisation; this perception is the focus of this study.
  42. This time sequencing is widely accepted in the relevant literature.
  43. E.g., the US suspended the Appellate Body of the WTO's dispute settlement system.
  44. Source as of 21 March 2023: https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx
  45. Near-shoring: making products closer to home. Friend-shoring: the practice of relocating supply chains to countries where the risk of disruption from political chaos is low. https://www.nytimes.com/2022/11/18/business/friendshoring-jargon-business.html
  46. https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final/file
  47. There are other types of government interventions in the US. The US government introduced tax credits for consumers purchasing electric vehicles meeting local value-added requirements of USD 7,500. The federal government's subsidies for electric vehicle production total USD7 billion for constructing new semiconductor facilities US39 billion (Kruger, 2023). According to the "Made in America" Executive Order 14005, the obligatory local content will be raised from 55 per cent gradually to 75 per cent and the price preference of domestic goods to the 20-30 per cent range (https://www.govinfo.gov/content/pkg/FR-2021-01-28/pdf/2021-02038.pdf ).
  48. https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/european-chips-act_en
  49. https://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-against-russia-over-ukraine/#cooperation
  50. https://finance.ec.europa.eu/eu-and-world/sanctions-restrictive-measures/sanctions-adopted-following-russias-military-aggression-against-ukraine_en
  51. https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm
  52. They raise trade costs.
  53. Measures streamlining and simplifying the technical and legal procedures for products crossing the border country in both directions to trade internationally. They reduce trade costs.
  54. https://www.globaltradealert.org/global_dynamics
  55. According to 2021 figures, EU sanctions comprise Russian exports valued at EUR43.9 billion (accounting for 49 per cent of its total exports to Russia) and EUR91.3 billion worth of Russian imports (corresponding to 58 per cent of its total imports from Russia). (European Commission 2023)
  56. A product manufactured legally abroad is imported without the permission of the intellectual property right-holder.
  57. The two terms are used as synonyms, although there could be slight differences in the interpretation. This report follows the pattern of the respective literature sources cited.
  58. Economic globalisation includes factors other than trade, which may cause distortions in comparing the figures discussed in this paper.
  59. https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html
  60. https://www.newyorkfed.org/research/policy/gscpi#/interactive
  61. https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm
  62. https://www.wto.org/english/news_e/news23_e/fac_27mar23_e.htm
  63. Intermediate services are provided by bookkeepers, forensic accountants, CV screeners, administrative assistants, online client help staff, graphic designers, copy editors, personal assistants, travel agents, software engineers, lawyers, financial analysts, etc. (Baldwin, 2022a).
  64. https://www.oecd.org/trade/topics/global-value-chains-and-trade/