Trade & Globalisation

With Brexit, inward investment will fall in the UK

Both in the run up to the referendum, and since the UK voted to leave the EU, there has been a good deal of speculation over the likely impact on inward FDI into the UK. In a timely recent piece for Columbia FDI Perspective, Laza Kekic suggested that UK inward investment will remain robust post Brexit. We beg to differ.

Japanese […]

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    Why were Western retailers blamed for the building collapse in Bangladesh?

Why were Western retailers blamed for the building collapse in Bangladesh?

Rana Plaza, an eight-story building in Bangladesh that housed garment factories employing approximately 5000 workers, collapsed on April 24, 2013. The resulting fatalities (over 1100) and injuries (over 2400) made it one of the worst industrial accidents in history. The scale of this tragedy and subsequent widespread press coverage put a spotlight on the risks and costs of sourcing […]

When companies stop offshoring, they may end up dying

“In the long run we are all dead,” and firms and industries are no exception. America, Europe, and Japan once dominated the manufacturing of computers and electronics, but these activities had all gone to low-cost countries by the end of the 20th century. Should we ban offshoring and stop “shipping jobs overseas”? Many voters and politicians seem to think […]

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    Strong patent rights accelerate the diffusion of new medicines across countries

Strong patent rights accelerate the diffusion of new medicines across countries

In 1999 lovastatin, a blockbuster cholesterol drug with annual peak sales of more than $1 billion in the U.S., became commercially available in Egypt — twelve years after it was first approved for sale by the U.S. Food and Drug Administration. Our research shows that this is not exceptional — long launch lags are common and 45 per cent […]

The downsides of the UK eventually joining NAFTA

The question of UK membership of NAFTA seems to be doing the rounds again. This is not entirely surprising. Both Australian and Canadian trade officials – including Ottawa’s former chief NAFTA negotiator – have recently called for the UK to join existing trading blocks, such as NAFTA, as an easy fix to potential Brexit-related disruptions to UK trade and production. […]

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    Without an agreed legal definition of protectionism, we can’t measure it

Without an agreed legal definition of protectionism, we can’t measure it

One word was conspicuous by its absence in the communiques on trade that came out of three meetings this year of the world’s finance chiefs. The G20 finance ministers, the International Monetary and Financial Committee and the G7 finance ministers all used the same sentence when it came to trade: “We are working to strengthen the contribution of trade […]

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    Great Divergence: The steamship gives us clues on the impacts of globalisation

Great Divergence: The steamship gives us clues on the impacts of globalisation

How does globalisation affect development? This question has a long tradition in economics and has been much debated both in academia and in policy circles.

Neoclassical theories tell us that reducing trade barriers across countries should provide net benefits to individual economies by making markets more efficient and stimulating competition. Testing these theories, however, turns out to be difficult: rich […]

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    Brexit: blame it on the loss of industrial jobs, not on globalisation

Brexit: blame it on the loss of industrial jobs, not on globalisation

‘Brexit is a rejection of globalisation’ (Larry Elliott, Guardian, 26th June 2016).
Larry Elliott’s claim about the causes of Brexit is stark, but one echoed, if usually in slightly more qualified fashion, by many other commentators. For example, in her Sylvia Ostry lecture in September 2016, Christine Lagarde, Managing Director of the IMF, put forward similar ideas, with the theme […]

Is free trade an economic example of asymmetrical warfare?

The so-called golden era of globalised trade that began shortly after World War II has more than a few things to recommend it. Trade liberalisation has lifted hundreds of millions of people from crushing poverty, promoted productivity and growth and linked once-hostile nations in a network of mutual dependence that lessened the chances of another ruinous military conflict.

So why […]

Globalisation won’t do away with variations in capitalism

The Cold War from 1948 to 1991 polarised opinion between advocates of capitalism and supporters of Soviet-style socialism. But after the fall of the Berlin Wall the conversation became more variegated. There was a remarkable growth in the literature on ‘varieties of capitalism’ including works by Michel Albert (1993), Colin Crouch and Wolfgang Streeck (1997), Bruno Amable (2000), Masahiko […]

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    If NAFTA fails, Canada should reach across the Atlantic to the UK

If NAFTA fails, Canada should reach across the Atlantic to the UK

The future of the North American Free Trade Agreement is looking increasingly uncertain under Donald Trump as president of the United States. In case NAFTA implodes, Armand de Mestral proposes the creation of the Atlantic Free Trade Area between Canada and the United Kingdom, in a framework involving Europe and the US.

A close look at NAFTA

NAFTA has been in […]

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    Will TTIP be shot down or rebranded as the ‘Trump Trade and Investment Partnership’?

Will TTIP be shot down or rebranded as the ‘Trump Trade and Investment Partnership’?

With the Congressional hearings of Donald Trump’s picks underway, including questioning of Robert Lighthizer who was chosen to be US Trade Representative (USTR) in the new administration, it could seem that free trade might survive after all. Who else than a longtime international trade attorney and deputy USTR under Reagan should naturally be inclined towards free trade? Yet Donald […]

Who are the discontents of globalisation?

JPMorgan London, by Håkan Dahlström, under a CC-BY-2.0 licence
The past months have been characterised by what can be called a “backlash against globalisation”. This development became most visible in the outcome of the Brexit referendum in the UK and the election of Donald Trump as the future president of the US. In both cases, the preceding campaigns massively referred to […]

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    What Donald Trump could do to ‘make America great again’ without destroying free trade

What Donald Trump could do to ‘make America great again’ without destroying free trade

US flag, by unsplash.com, under a CC0 licence
For nearly two years, unsettling comments by US presidential candidates rattled international investors. The prospect of US trade wars with China and Mexico hit global markets, already weakened by the surprising result of the Brexit referendum. The elections ended, but the financial community still cannot breathe a sigh of relief.

In order to calm […]

An isolationist America will be bad for the world

Donald Trump at Aston, PA September 13th, by Michael Vadon, under a CC-BY-2.0 licence
Many things have been said during this presidential campaign and many talked about the bad things we should expect from each candidate, especially Donald Trump. But I will talk about economics – just one thing that was pushed hard by Trump: trade.

America is a big country, the […]

Internet platforms are transforming global trade

Cardboard box, by bykst, under a CC0 licence
Since 2011, the eBay Public Policy Lab and a team of economists at Sidley Austin LLP have together studied the exporting practices of firms using the online commerce platform. We have uncovered a fundamental transformation within global trade. Global trade has expanded beyond container shipments of one large company’s wares along predetermined […]

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    After the US elections, how do we return to a constructive debate about trade?

After the US elections, how do we return to a constructive debate about trade?

Container, by GREGOR, under a CC0 licence
Trade is hardly ever a prominent US election issue, and yet this year it has become the campaign’s defining economic theme. That’s because politicians on both sides of the political spectrum have decided to blame free trade agreements for what is really a much deeper post-crisis economic malaise, characterised by persistently weak job markets […]

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    Foreign investment in critical areas like nuclear power need a formal vetting process

Foreign investment in critical areas like nuclear power need a formal vetting process

Hinkley Point A power station, by Rick Crowley, under a CC BY-SA 2.0 licence
One of the first decisions taken by Theresa May as prime minister was to delay deciding on the £18 billion Hinkley Point nuclear power project. Because it was a centrepiece project as part of former chancellor George Osborne’s “Golden Age” of closer bilateral ties with China, the […]

Brexit was a rational vote by the losers from global trade

Waiting in a breadline beside the Brooklyn Bridge during the Depression. Photo: pingnews.com. Public domain
Britons voted to leave the EU by 52% to 48%. The EU is a borderless area for the movement of goods, services, investment, labour, and more across 28 European countries. Those who voted for Brexit were often described as angrily rejecting the national and international […]

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    Does special treatment in trade benefit developing countries?

Does special treatment in trade benefit developing countries?

At the launch of the Doha Round, ministers of the World Trade Organization (WTO) stated that a central goal of the negotiations was “to improve the trading prospects [and to] ensure that developing countries […] secure a share in the growth of world trade commensurate with the needs of their economic development.” Fifteen years later, the Doha Round has […]