The Catch-22 of Globalization

A backlash against the downside of a more globalized economy has made it harder to implement policies to make it work more equitably

A backlash against the downside of a more globalized economy has made it harder to implement policies to make it work more equitably


Jacob M. Schlesinger / Jan. 21, 2019 / WSJ

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The WTO recently lowered its outlook for world trade growth in 2019 to 3.7%, down from a recent peak of 4.7% in 2017, due in part to “heightened tension…between major trading partners.”

The news isn’t all bleak for globalism. For one thing, international economic integration shows no signs of collapsing, as it did during phases of outright deglobalization. From 1914 to 1945—a period marked by two world wars and the Great Depression—trade plunged from 38% of global economic activity to 7%.

What’s more, the global trading system has shown some surprising resilience.

Yet “the quality of globalization is getting worse,” says Adam Posen, president of the Peterson Institute for International Economics. “It doesn’t mean it’s going away,” he says. But the benefits - the efficiencies and income gains - ” are eroding.”

Even the staunchest advocates of globalization acknowledge that those benefits from a tighter world economy haven’t been shared equally, while the process of creating them has amplified income inequality and disrupted many long-successful industrial communities in advanced economies. They urge that the system be fixed.

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