As the world transitions from ‘Deep Globalisation to Deglobalisation’, economic policies based on a ‘Doctrine of Local Content’ take center stage. As a consequence, the global economy underperforms. Below, Marcos Troyjo argues that Reglobalisation can only resurface if countries move away from ‘Local-Contentism’ and closer to a productive interdependence turning out ‘Made in the World’ goods. Read the full article in The World Financial Review   here

 “The new policy environment is favourable to bilateralism and protectionism and motivated by political gains, rather than concrete economic effects that will reduce income and employment,” says Peter van Bergeijk, a professor of Economics at Erasmus University, in Rotterdam, who in 2010 published a book presciently titled On the Brink of Deglobalisation. “With the US leaving the coalition for multilateral trade and investment, relationships will reallocate to other countries,” Van Bergeijk says. “US isolationism is an important chance for China.” “Firms should be transparent about the benefits they derive from international activities,” Van Bergeijk adds. “Facts will be important in this debate.” Read rhe full article

Haugh et al 2016, Cardiac Arrest or Dizzy Spell: OECD policy paper 18 The concensus view on the trade collapse 2008/9 appears to be changing. In 2009 value chains and protectionism were seen as the magnifiers, multipliers if not culprits of the world trade collapse. A recent OECD study by David Haugh, Alexandre Kopoin, Elena Rusticelli, David Turner and Richard Dutu shows what was claimed and analyzed in On the brink of deglobalization: neither value chains nor protectionsim acted as triggers in 2008/9 and value chains may have been an important factor behind the resilience of world trade (that is the recovery in 2010)

Clearly world trade is experiencing difficult  times. the graph above reports two leading indicators. The World trade monitor of CPB Netherlands bureau for economic policy advice ( www.cpb.nl ) and the container throughput index of the Institute of Shipping Economics and Logistics . Bot indicators have been corrected for seasonal influences and provide the most recent indication of the development of world trade. Although the level of the indicators is different the movements are into the same direction and suggest that there is more to the decline in world trade than the price decrease of oil. Container throughput is real and the world trade monitor is reported at constant prices.