extra slides for - the university of adelaide blogs...2017/03/06  · #2) factories crossing borders...

Extra slides for:

© Richard Baldwin 2016

Rapid industrialisers vs commodity exporters

Sector origin of value-added in export growth

0% 25% 50% 75% 100%

Australia

India

Brazil

Russia

Indonesia

Mexico

Poland

Turkey

Korea

China

Manufactures Services Primary

0% 25% 50% 75% 100%

Canada

UK

US

France

Germany

Italy

Japan

Manufactures Services Primary

How it explainstoday’s anti-globalisation in many rich nations

© Richard Baldwin 2016

KEY CHANGES

#1) New Globalisation breaks monopoly that G7 labour had on G7 knowhow

© Richard Baldwin 2016

KEY CHANGES

#2) New Globalisation affects economies with finer resolution; It’s not sectors & skill groups anymore

© Richard Baldwin 2016

• #1 & #2 mean New Globalisation’s impact is:– More sudden;– More individual;– More unpredictable;– More uncontrollable.

KEY CHANGES

Result in most G7 nations: Economic anxiety, fragility & disenfranchisement

No matter what job or skills you have, you can’t really be sure your job won’t be next.

© Richard Baldwin 2016

What does the New Globalisation mean for global trade governance?

© Richard Baldwin 2016

TRADE CHANGED

#1) Trade changed when within-factory flows became international commerce

© Richard Baldwin 2016

#2) Factories crossing borders means more complex, more entangled international flows

• These new flows of goods, services, investment, capital, people, knowhow and intellectual property are a package‐deal. 

• Internationalised factories require all of the flows to work well.

© Richard Baldwin 2016

#3) The new, complex, entangled international commerce needs new disciplines

• G7 firms seek new assurances; Factory Economies seek to provide them.

• New political economy arose– “Northern factories in 

exchange for Southern reform”;

– Not: “Access to my market in exchange for access to yours”.

© Richard Baldwin 2016

WTO ignored the need for new disciplines

WTO TALK STUCK FOR 14 YEARS ON 20TH CENTURY ISSUES

Most WTO members were left behind by New Globalisation

© Richard Baldwin 2016

• New packages of disciplines arose in Regional Trade Agreements between rich and poor nations – North‐South RTAs.

• Many developing nations embrace the new disciplines unilaterally.– Pro‐Biz reform.

With WTO deadlocked, 21st century policy went elsewhere

Number North‐South 

of RTAs

Number of ‘deep’ 

disciplines in North‐South 

RTAs

0

20

40

60

80

100

120

1971

1976

1981

1986

1991

1996

2001

2006

2011

© Richard Baldwin 2016

LOOKING AHEAD

Major mega-regional deals recently; Future is very uncertain

© Richard Baldwin 2016

• TPP & TTIP are dead– Trust in US trade leadership undermined for many years?

• China likely to fill part of the vacuum – especially in Asia.

• EU‐Japan‐Canada may emerge as a new leadership group.