Trade globalisation in the last two centuries..

Usually accounts suggest first round of globalisation started in 1870. Though, these are just the European and US accounts which ignore historic trading ties in Asia and Middle East much before trading picked up in Europe.

Anyways, Michel Fouquin and Jules Hugot take the 1870 date a little backward. They say globalisation started in 1840:

Historians and economists generally identify two periods of trade globalisation, the first beginning around 1870 and the second during the 1970s. The column argues that new data from 1827 onwards shows globalisation beginning as trade barriers were lowered around 1840, and that both periods of globalisation were surprisingly fuelled by a regionalisation of world trade. If globalisation continues to grow in future, regionalisation may decline.

….

The rise of international trade during the 19th century was supported by European liberal trade policies and, later, by technological improvements in transportation and communication. The Great Depression and the two world wars challenged this trend, while trade was partly reallocated to more distant partners due to geostrategic reasons and European colonialism. Both globalisation and regionalisation resumed in the 1960s.

But regionalisation has recently been fading, as the WTO has grown to include almost all countries in the world. The conversion of emerging and former socialist countries to free trade in the 2000s has stimulated long-distance trade.

The dynamism of trade between Asia and the rest of the world is expected to persist, especially with the emergence of new actors such as India and Bangladesh. On the other hand, continued sluggish growth in Europe could limit the growth of intra-European trade. If so, the margin of growth for trade seems to be particularly large for long-distance trade, which gives a central role to TTIP and the TPP.

Alternatively, perhaps globalisation has already peaked? The reorientation of Chinese growth to the domestic market should reduce its dependence on international trade. Growing inequalities in western countries generate opposition to globalisation. Renewable energies may reduce trade in hydrocarbons. Finally, the development of foreign direct investment substitutes local production for international trade.

Hmm..

One Response to “Trade globalisation in the last two centuries..”

  1. Daily SG: 20 Sep 2016 - The Singapore Daily Says:

    […] Vulcan Post: 7 In 10 Singaporeans Don’t Know This Brutal Work Fact – Mostly Economics: Trade globalisation in the last two centuries.. – The Independent Singapore: Singapore’s […]

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