Deglobalization is the process of decreasing economic and political integration between countries, characterized by less interdependence, reduced trade, falling foreign investment, and increased barriers like tariffs, favoring national interests, local production (reshoring/nearshoring), and regional blocs over truly global systems. It's a shift away from the intensified globalization seen in recent decades, driven by factors like geopolitical tensions (e.g., US-China), supply chain vulnerabilities exposed by the pandemic, populism, and the desire for national self-sufficiency.
According to the World Economic Forum (WEF), deglobalisation refers to the retreat from global economic integration, marked by the rise of trade barriers, the reshoring of supply chains, and a decline in cross-border investments and mobility.
Our simulations show that deglobalisation significantly reduces trade and economic activity in major economies, such as the euro area and the US, while raising inflation during the transition period. The more open and integrated an economy, the stronger the impact.
What is deglobalization? | Explainer | Chatham House
Are we entering deglobalization?
Global trade has entered a new phase after decades of globalization. Despite narratives of “deglobalization”, global trade has continued to expand and has reached record levels in recent years, even as geopolitical tensions, pandemics and wars disrupted the global value chain.
Deglobalization or deglobalisation is the process of diminishing interdependence and integration between certain units around the world, typically nation-states.
United Kingdom. The United Kingdom has experienced considerable deindustrialisation, especially in both heavy industry, such as mining and steel, and light manufacturing.
Thus, globalization has led to the spread of the disease owing to mobility channels such as air and ship travel. Restricted travel, mobility regulations, and lockdown of economies and trade limited, and in some cases halted, globalization to reduce the rapidly rising number of COVID-19 cases.
It consists in the 5R's of re-globalization: refining, reframing, reforming, redefining, and revisioning globalization. Refining means to improve the mechanisms, including international laws, enacted to make globalization work for more people, and in more socially just ways.
Glocalization refers to the adaptation of a global product or service to meet a local market's needs. The term is a combination of the words globalization and localization. Glocalization involves incorporating local culture, customs, and traditions into a specific product or service.
Deglobalization promotes local employment, ensures better beneficiation of national resources through local control, and stymies the Orwellian designs of the WEF.
Consumers have benefited from lower prices, while companies that export financial services have brought in billions of dollars. Free trade policies have led to lower consumer prices, but also harmed jobs in certain sectors.
Good examples of cultural globalization are, for instance, the trading of commodities such as coffee or avocados. Coffee is said to be originally from Ethiopia and consumed in the Arabid region. Nonetheless, due to commercial trades after the 11th century, it is nowadays known as a globally consumed commodity.
In the early 1900's, Coca-Cola started to globalize. Bottling plants were initially built in Cuba and Panama as the US military spread to these regions, causing a rise in demand for the Coca-Cola brand. These plants proved to be successful, reducing shipping and delivery costs typical in these regions.
What is the fastest shrinking economy in the world?
The world's fastest shrinking economy, South Sudan's output is expected to show a decline of 26.4% in 2024. The situation has become so desperate that the South Sudanese government has resorted to levying taxes on international aid trucks and UN peacekeepers, according to The Wall Street Journal.
The term shrinking world, or often referred to as time space compression, suggests that this rapid rate of globalisation has made the world feel smaller, that we are more connected to people on the other side of the world than ever before.
'Low-skilled individuals exposed to globalisation experience the highest levels of labour market risks and can therefore be characterised as globalisation losers. In contrast, high-skilled individuals benefit from exposure to the global economy.
Anti-globalization advocates urge the preservation of the natural environment, human rights (especially workplace rights and conditions) and democratic institutions are likely to be placed at undue risk by globalization unless mandatory standards are attached to liberalization.
Globalization isn't in decline; it is simply changing. Although the COVID-19 crisis has seen a dra- matic decline in goods trade, invest- ments and the movement of peo- ple, a new type of globalization is emerging.
