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Notícias Internacionais / 28/04/2021

WORLD NEWS

Globalization should start the path of resumption 2021, says research

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Globalization should start the path of resumption 2021, says research


Trade, investment and information flows are expected to recover this year, but uneven recovery is expected

After a year marked by a severe retraction in trade flows, people, information and investments, the forecast for 2021 is a slight optimism for globalization worldwide. This is the main conclusion of the expert Steven A. Altman, New York University, and one of the authors of the Global Connection Index, an annual study by the German-American logistics company DHL.

The good news is that the new coronavirus pandemic is unlikely to represent a step backwards than the one caused by the 2008 crisis - the biggest blow to the global economy in decades so far. And even in the midst of pandemic chaos, there have been advances in globalization.

The RCEP (Comprehensive Regional Economic Partnership), which brings together countries in Southeast Asia, China, Australia, New Zealand and Japan, was signed in November 2020 and aims to facilitate trade between members, which represent almost 1/3 of GDP (Gross Domestic Product) global.

In Africa, the promise is the AfCFTA (African Continental Free Trade Agreement), which came into force in January this year, to liberalize trade and the transit of people between countries on the continent. In North America, the USMCA (Mexico-USA-Canada Agreement) began to take effect in July 2020, replacing NAFTA, a liberalization agreement between the three countries signed in 1994.

People also welcome greater cooperation between nations even at the height of the pandemic, according to a survey by the Pew Research Center whose data was collected in mid-2020. For 81% of the 14,000 respondents, “nations around the world they should act as part of a global community that works together to solve problems ”.

The problem is that reconciling the interests of different nations is difficult: just look at the low level of multinational cooperation during the pandemic, observes Renato Flores, professor of International Relations at FGV (Fundação Getúlio Vargas). “This tendency to focus on the nation-state will continue. We are going to have a more selfish, less cooperative world, and with international organizations playing a much smaller role, ”he says.

For Flores, the world of the coming years will not be exactly bipolar, but it will be dominated by the dispute between the USA and China. In this context, what will come next will be the “floating alliances”. "You will have powers like India, Brazil, Turkey, Germany and France, for example, trying to extract the best of both worlds, all with alliances according to the interest on the agenda".

Global production lines

After a difficult start to the year in 2020, trade, capital and information flows are showing strong signs of recovery. The flow of trade between nations, for example, had three months of intense retraction, which reached 15% in April and May 2020. In November, however, it had already resumed its pre-pandemic level.

Among the areas most benefited are medical and health products and personal electronic equipment, used by those who started working at home. With social isolation, part of the families' resources was used in new products - many of them imported -, replacing part of the spending on restaurants, travel and tours.

In the commercial sphere, the main conclusion of the study is that the global logistics chain will remain strong, despite fears of the beginning of the pandemic. Companies have abandoned their plans to focus on national production, since for many sectors this represents an increase in costs.

This is because, in the assessment of Flores, by FGV, international value chains in all sectors are already highly interconnected. “You will have accommodations, as in the production for the health area, or products with low added value. But a general shift in value chains is very difficult, ”he says.

Instead, the option has been to invest in a more efficient production line, even if outside the country, combined with new logistics and inventory technologies. Companies are also eyeing geopolitical issues, production costs in different countries and improvements in plant automation.

“My biggest concern is geopolitics. This is because, an economic point of view, globalization has the potential to accelerate the resumption of the pandemic, while new barriers to international flows would create new winds against the global macroeconomy ”, says Steven Altman, professor at the Stern School of Business at the University New York.


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