Center for Global Trade Integration’s Post

According to International Monetary Fund First Deputy Managing Director, Gita Gopinath, global economic ties are changing as countries are reevaluating their trading partners. While there are not yet clear signs of deglobalization at the aggregate level, trade and foreign direct investment are being redirected along geopolitical lines. Trade flows are being re-routed through third-party countries leading to the emergence of ‘connector’ countries, like Mexico or Vietnam, that are playing an important role and have avoided a bigger impact on global trade. Discover why economic resilience is crucial for navigating the future of global trade and investment flows in this week’s #SantanderInsights: https://lnkd.in/dAT2NQaV

'The processes of globalization and economic interdependence can both empower and constrain state sovereignty. While globalization offers opportunities for economic growth, technological advancement, and cultural exchange, it also subjects states to external economic forces beyond their control. Integration into global markets through trade agreements, investment treaties, and financial networks may necessitate the harmonization of domestic policies with international standards, limiting a state's regulatory autonomy. Moreover, financial crises, currency fluctuations, and market volatility can expose states to systemic risks, undermining their economic sovereignty.' #globalization

Charting Globalization’s Turn to Slowbalization After Global Financial Crisis Trade openness increased after the Second World War, but has slowed following the global financial crisis. As the Chart of the Week shows, globalization plateaued in the decade and a half since the global financial crisis. This latest era is often referred to as “slowbalization.” Each of the chart’s five main periods was characterized by different configurations of economic and financial powers, and different rules and mechanisms for economic and financial ties between countries, as highlighted in a recent IMF note that discussed the impact of trade fragmentation as well as technological decoupling. The Liberalization era saw gradual removal of trade barriers in China and other large emerging market economies and unprecedented international economic cooperation, including the integration of the former Soviet bloc. Liberalization accounted for most of the increase in trade, and the World Trade Organization, established in 1995, became a new multilateral overseer of trade agreements, negotiations and dispute settlement. Cross-border capital flows surged, increasing the complexity and interconnectedness of the global financial system. The “Slowbalization” that followed the global financial crisis has been characterized by a prolonged slowdown in the pace of trade reform, and weakening political support for open trade amid rising geopolitical tensions. #geopolitics #economics #internationalrelations #globaleconomy #finance #trade #investments #publicpolicy

What happens when countries turn inward? From the rise of neoliberalism to the looming threat of protectionism, we explore the changing landscape of global trade and the institutions caught in the crossfire.

Bi-Weekly update! 🚨 Explore an insightful analysis on the potential development of a new currency for the BRICS nations. Uncover its implications on global trade and the challenges it may present. Delve into the geopolitical and economic factors affecting this proposed change. Gain a deeper understanding of the future of international trade by accessing this week's publication. Click the link to engage with the content.

Financial markets are on the edge about what the Trump administration might bring - the potential trade tensions in particular. Here are somethings you may need to know especially if you are invested in the Asian Markets...

Please note that this is a continuation of my prior article and utilized IMF data and text. The Liberalization era saw gradual removal of trade barriers in China and other large emerging market economies and unprecedented international economic cooperation, including the integration of the former Soviet bloc. Liberalization accounted for most of the increase in trade, and the World Trade Organization, established in 1995, became a new multilateral overseer of trade agreements, negotiations, and dispute settlement. Cross-border capital flows surged, increasing the complexity and interconnectedness of the global financial system.   The “Slowbalization” that followed the global financial crisis has been characterized by a prolonged slowdown in the pace of trade reform and weakening political support for open trade amid rising geopolitical tensions.”   All and all, a fascinating look at global trade trends over the last 150 years. 

Geopolitics is becoming central to patterns of trade and investment. Growing tensions between China and the West now mean that geopolitical closeness has a bigger influence over where capital is invested than geopolitical proximity. In other words, how countries get along is becoming increasingly important to global trade and finance than where they are located. Learn more about nations leveraging geopolitical cooperation as investment alternatives to China in Lazard Geopolitical Advisory’s 2024 Geopolitics of Supply Chains report: https://lnkd.in/e95TdvbZ

This report raises critical points about the future of the semiconductor industry. With rising U.S.-China economic tensions, can the U.S. realistically reclaim its semiconductor manufacturing leadership? The CHIPS and Science Act, which allocates $52 billion to boost domestic production, is a bold move, but is it enough to compete with China, especially when companies like SMIC are adeptly navigating the semiconductor embargoes? What’s particularly intriguing is the microeconomic perspective: if major semiconductor companies choose to limit exports of their most advanced chips to a massive market like China, how can they still achieve financial success? This strategy may lead to short-term losses, but perhaps they’re betting on long-term gains in market positioning and securing contracts in allied nations. Meanwhile, countries like India are capitalizing on this shift, with a 180% increase in semiconductor FDI, positioning themselves as viable alternatives to China. This raises important questions: How will U.S. companies adapt to intense competition? Can prioritizing domestic manufacturing effectively counter the growing capabilities of Chinese firms? The future of the semiconductor sector will hinge on strategic innovation and collaboration. I’m excited to see how this unfolds! #Semiconductors #CHIPSAct #USChinaTensions #Geopolitics #Lazard #Innovation #SMIC