The surprising resilience of globalization

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Long-lived globalization | Digital trade policy shifts | Re-thinking export controls | China’s lending | More research from Hinrich Foundation

Long-lived globalization

New IMF research says that, in spite of current geopolitical shifts, significant de-globalization and re-alignments are not taking place in global trade.

Examining bilateral trade flows since 1948, Serhan Cevik of the International Monetary Fund finds evidence of the long-lived and ongoing nature of globalization.  Bloomberg identifies five countries acting as economic connectors in a fragmenting world. The US Senate questions an agreement with Indonesia that would enhance US-Indonesia trade but risk channeling subsidies to Chinese companies.

Mentioned publications

1. Long Live Globalization: Geopolitical Shocks and International Trade – Serhan Cevik, International Monetary Fund, October 27, 2023
   Geopolitical re-alignment is not having a statistically significant impact on trade.

2. These Five Countries Are Key Economic ‘Connectors’ in a Fragmenting World – Bloomberg, November 2, 2023
   Vietnam, Poland, Mexico, Morocco, and Indonesia are the world’s new supply chain connectors.

3. U.S. senators oppose Indonesia FTA that paves way for nickel subsidies – Nikkei Asia, November 2, 2023
   US Senators fear that US subsidies will fund Chinese producers in Indonesia.

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Digital trade policy shifts

The US has changed its mind in the WTO E-Commerce Negotiations, but Simon Lester isn’t worried, per his International Economic Law and Policy blog. In the Financial Times, Alan Beattie considers why AI and data might not belong in trade deals. The US is postponing IPEF talks on digital trade, reports Nikkei Asia.

Meanwhile, China is relaxing some rules on data flows, perhaps signaling a shift from security to growth, write Martin Chorzempa and Samm Sacks for the Peterson Institute for International Economics, while the Asia-Pacific Research and Training Network on Trade – UN-ESCAP give us a primer on Multilateral and Regional Cooperation Trends in Digital Trade in Asia.

Mentioned publications

1. The U.S. Changes Its Mind in the WTO E-Commerce Negotiations – Simon Lester, International Economic Law and Policy Blog, October 30, 2023
   An argument for why the US decision may not be a big deal.

2. Why AI and data might not belong in trade deals – Alan Beattie, Financial Times, November 6, 2023
   Trade agreements are not necessarily the best place to litigate data protection issues.

3. U.S. looks to postpone IPEF talks on digital trade rules – Nikkei Asia, November 8, 2023
   Another indication that the US is stepping away from its previous policies on digital trade.

4. China's new rules on data flows could signal a shift away from security toward growth – Martin Chorzempa and Samm Sacks, Peterson Institute for International Economics, October 3, 2023
   China relaxes rules on cross-border data flows.

5. Multilateral and Regional Cooperation Trends in Digital Trade in the Asia-Pacific Region –  Runqiu Du, Yann Duval, Maria Semenova, Natnicha Sutthivana, Asia-Pacific Research and Training Network on Trade – UN-ESCAP, October 2023
   An assessment of current agreements and negotiations on digital trade involving Asia.

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Re-thinking export controls

The Center for Strategic and International Studies considers how export controls should be optimized to address critical and emerging technologies and whether to adopt a multilateral export control regime, in two new reports.

Mentioned publications

1. Optimizing Export Controls for Critical and Emerging Technologies: Reviewing Control Lists, Expanded Rules, and Covered Items – William Alan Reinsch, Thibault Denamiel, and Eric Meyers, Center for Strategic and International Studies, November 8, 2023
   Part two of a series considering how to right-size export controls for emerging technologies.

2. Establishing a New Multilateral Export Control Regime – Emily Benson and Catharine Mouradian, Center for Strategic and International Studies, November 2, 2023
   The US and its allies should establish a new multilateral export control regime.

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China’s lending

What is the true impact of China’s lending under the Belt and Road Initiative, and how is their lending changing? AidData, a research lab at William & Mary University, provides a lengthy analysis of China’s Belt and Road Reboot.  The study found that China lent Pakistan US$21 billion more than previously reported, per Nikkei Asia. To counter China’s BRI influence, the US is lending to a Sri Lankan port with the help of a major Indian company, reports the New York Times.

Mentioned publications

1. Belt and Road Reboot: Beijing’s Bid to De-Risk Its Global Infrastructure Initiative – Bradley C. Parks, Ammar A. Malik, Brooke Escobar, Sheng Zhang, Rory Fedorochko, Kyra Solomon, Fei Wang, Lydia Vlasto, Katherine Walsh, and Seth Goodman, AidData (a research lab at William & Mary), November 6, 2023
   A deep examination of China’s lending under the Belt and Road Initiative and how its practices are evolving.

2. China loaned Pakistan $21bn more than reported, study finds – Nikkei Asia, November 9, 2023
   Pakistan may owe USD21 billion more to China than previously thought.

3. U.S. Finance Agency Lends to Sri Lankan Port to Counter Chinese Influence – Skandha Gunasekara and Alex Travelli, The New York Times, November 8, 2023
   The US tries to counter China’s influence in development assistance, in partnership with India.

Mentioned publications from HF:

• What went wrong with globalization?
• Why does the US hate digital trade?
• The costs of export restrictions to the global economy

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