Paper: GS – III, Subject: Economy, Topic: Trade and External Sector, Issue: Implications of rising tariffs.
Context:
The world is witnessing a reversal of globalization, marked by rising tariffs, protectionism, and anti-global sentiment.This phenomenon in the broader context of political, economic, and technological developments from the late 20th century to the present.
Key Highlights:
Globalization: Refers to the shrinking of distances, cross-border movement of goods, people, and ideas, and international cooperation. It is historically driven by innovations like the telegraph, railroads, and steamships in the 19th century.
Waves of Globalization:
Factors Contributing to De-globalization:
- Tariff Wars and Protectionism: US trade wars, especially under the Trump administration, increased tariffs and restricted global trade.UK Prime Minister’s office (2024) has already declared that “globalization is over.”
- Anti-Global Political Movements: Anti-WTO protests (Seattle, 1999) reflected early signs of backlash with the rise of populist, anti-immigrant politics in US and Europe.
- Global Financial Crisis (2008): Shook the trust in globalization and questioned the justice and stability of global capitalism which benefited populist parties.
- Covid-19 Pandemic: Exposed overdependence on global supply chains, especially for essentials and prompted reshoring and national self-reliance measures.
- Refugee Crises: as seen in the European refugee backlash post-2015. Brexit and Trump-era policies are also linked to anti-immigrant sentiment.
Slowbalization:
Coined by The Economist, it refers to slowing pace of globalization, not complete reversal. It is characterized by:
- Low global trade growth
- Barriers to migration
- Rise of digital sovereignty and nationalism
Impacts of Slowbalization:
Historical Parallels: Austrian writer Stefan Zweig noted that pre-WWI global integration was assumed permanent but collapsed in 1914.Similar overconfidence in irreversible globalization exists today.
Way Forward:
- Recalibrate globalization to be more inclusive, equitable, and resilient.
- Strengthen global institutions and multilateral norms.
- Promote sustainable interdependence not isolationism.
- Embrace technological globalization (digital economy), while balancing geopolitical tensions.
- India must:
- Navigate global protectionist trends wisely.
- Use opportunities in digital trade and services.
- Reduce overdependence on global supply chains while staying export-competitive.
- Engage actively in global forums (e.g., WTO, G20) to protect interests of the Global South.
Conclusion:
While the world is not witnessing the end of globalization, it is undergoing a fundamental transformation. This “slowbalization” demands nuanced, adaptive, and evidence-based policy responses, especially for emerging economies like India.
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