Can Global Trade Continue Without Globalization?

UK voters approving the referendum to leave the EU in 2016 was the first sign that something was afoot. Some five months later, internationally known real estate developer Donald Trump won the U.S. presidency. The two combined events signaled a certain level of discontent with globalization. That discontent has only grown since. The question for global organizations is whether or not trade can continue without globalization.

Global trade and globalization overlap and intersect at many points. But they are generally considered distinct. Global trade obviously deals primarily with the movement of goods and services. Globalization is more of a political movement than anything else. So back to the original question: if the political movement is dying on the vine, can global trade still be sustained? Absolutely. But it will have to change and adapt.

Globalization Good and Bad

Looking at globalization from a big picture perspective reveals that it is both good and bad. It is good in the sense that world partners willing to work together politically have the ability to lift the masses out of poverty. You could make the case that globalization has done more to combat poverty in the poorest countries than protectionist policies ever could.

Globalization also tends to lean toward more streamlined trade agreements. It tends to reduce tariffs and excise taxes. It tends to bring more balance to currency values between trading partners. Yet globalization also has its negative points.

One of the biggest is centralized control. The more globally united that nations become, the greater the call for a centralized government structure tasked with keeping things together. Look at what the U.N. has become. We see the questionable results of centralized control in the WTO, World Bank, IMF, G-12, and many more. Centralized control tends to benefit those at the top while leaving everyone else behind.

Brexit was facilitated, in part, by broad discontent with EU regulations. UK voters felt that the EU was exercising too much control over their daily lives. They wanted out. Likewise, President Trump won the 2016 campaign based largely on a protectionist platform. His ‘America First’ policies flew directly in the face of globalization.

Trade Must Adapt and Change

It is possible that globalization is on the decline. It may decline to the point of no longer being a significant influence in the world. But that does not mean global trade has to stop. That does not mean global trade will stop. International trading partners were working together long before the grand push for globalization following World War II. They will continue to do so even if globalization fades away.

Granted, trade will have to adapt and change to accommodate the politics of the day. But that is nothing new. In a more protectionist environment, global trade management will have to account for increased protectionism and regulatory changes. Perhaps regulations will be simplified; maybe they will become more complex. No one really knows.

The primary beneficiaries of what could be a drastically new trade environment are those companies offering global trade management services. Vigilant GTS, an Ohio company that specializes in global trade management, is but one example. They and their industry competitors will be the ones developing the tools and solutions to facilitate trade moving forward.

Brexit and Donald Trump’s election were the first two signs of a growing discontent with globalism. The coronavirus crisis has only exacerbated that discontent. Should globalism fade away, global trade will continue unabated. International partners have been trading for centuries. They will continue to do so even if the world moves away from globalization to a more protectionist model.

sudarsan

Sudarsan Chakraborty is a professional writer. He contributes to many high-quality blogs. He loves to write on various topics.