Protectionism and the fall in world trade | VOX, CEPR’s Policy Portal

Le commerce international est-il au bord du gouffre ? Le processus de « globalisation » de l’économie mondiale, l’ouverture aussi bien aux échanges qu’aux investissements directs, présentés longtemps comme irréversibles, ont-ils trouvé leurs limites depuis le déclenchement d’une crise financière en 2008 ? Pour tenter de répondre à cette question, l’auteur avance avec une infinie prudence. Il revendique tout d’abord la primauté des faits, des observations statistiques, sur les conjectures théoriques qui lui semblent trop marquées par des schémas de pensée qui ne prennent pas bien la mesure de bouleversements majeurs et soudains, tels que des crises financières d’ampleur mondiale. Il en voit pour preuve les retards dans la prise en compte du retournement brutal de tendance de l’automne 2008 et, finalement, la sous-évaluation systématique et massive des prévisions d’évolution du commerce mondial. Les experts de l’Organisation mondiale du commerce sont visés. À cet égard, Bergeijk esti...

The Dutch economist van Bergeijk starts [27] from the observation that, during the last years marked by the recent economic-crisis, international trade has undergone a real collapse, comparable to the one recorded during the Great Depression of the 1930s of the last century. To a certain extent, the researcher overemphasises the international trade aspects during the two periods, as well as the completely different causes that determined its breakdown. Still, van Bergeijk broadly demonstrates that the globalization process mainly caused by the international trade fl ows can be summarized in two major causes: social and economic risks and uncertainties caused by the crisis. The author warns of the danger of protectionism revival that seems to be “waiting by the corner”. Therefore, van Bergeijk interprets the decline of international trade to be a clear indication of the deglobalization process of the global economy Postelnicu, Cătălin, Vasile Dinu, and Dan-Cristian Dabija. "Econom...

On the other hand, certain studies underline the stabilizing impact of GVCs in terms of sustaining trade levels or at least moderating the fall in trade flows. Thus, seemingly unrelated to our topic, Alfaro and Chen (2010) analysed the reaction and role of foreign direct investment (FDI) during the global financial crisis. They examined firm-level data from more than 100 countries for 2007 and 2009. Their results can be related to the GVC approach, because they distinguished and examined three channels through which FDI impacts upon the performance of companies: production linkages, financial linkages and multinational networks. From our point of view, the most important results are that multinationals engaged in activities with vertical production linkages weathered the crisis better than their local counterparts. On the other hand, horizontal FDI was affected more negatively. Moreover, companies operating as part of a multinational network on average performed better; here again, ho...

Shortterm contractions of world trade have occured regularly since the 2008/9 trade collapse but this time things mayy be different according to CPB Netherlands Bureau for Economic Analysis: "Because of the volatility of monthly trade figures, momentum is the preferred measure of trade growth.Trade momentum was -1.3% in May (non-annualised), down from -1.2% in April and the lowest reading  May 2009. "