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11. The Economic Consequences of Globalisation in the United States

Author:
Peter Petri and Meenal Banga
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The unprecedented rise in global interdependence since World War II, especially since the 1970s, has been very productive. World gross domestic product (GDP) growth increased from around 2% per year in the 1970s to 4% per year before the global financial crisis. Globalisation helped to lift a billion people from extreme poverty and improved the lives of billions more. The United States also gained an estimated 11%–19% of its annual GDP. Yet many Americans are concerned about the fairness of these gains. We review evidence of increasing wage inequality and stubborn unemployment effects, even though, on balance, technological change has had a much greater impact on these outcomes than globalisation. Barriers against globalisation do not offer solutions to inequality – they reduce the size of the economic pie without necessarily improving its distribution. Policies should focus on redistributing gains from growth, increasing the productivity of all workers, and helping affected communities adapt socially and economically to rapid change.
Topic:
Globalization, Financial Crisis, Inequality, and Economic growth
Political Geography:
United States and North America

12. The Economic Impact of Globalisation in Indonesia

Author:
Kiki Verico and Mari Pangestu
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the economic impact of globalisation in Indonesia from the end of the 1960s to date. The analysis found that globalisation generated a positive impact on Indonesia’s economic growth through the trade and investment channel; reduced wage inequality and child labour participation; and increased labour absorption, including women's participation in the labour market. Through the trade channel, globalisation also contributed to Indonesia’s productivity and structural economic transformation, benefited small and medium-sized enterprises (SMEs), contributed to poverty alleviation and reduced inequality, and increased trade in services such as tourism. Through the investment channel, there is evidence of the spillover effect of technology transfer, technology progress, improvement of the role of SMEs, and contribution to poverty alleviation. The waves of open and more restrictive trade and investment policies, which Indonesia has gone through in the last few decades, reflect the political economy reality – that is, the impact of globalisation is dynamic and only felt in the medium term, whereas the cost and potential negative impact is often felt more immediately throughout trade creation. The trade creation increases imports from countries with which free trade agreements have been negotiated, decreasing the domestic producer surplus. Since globalisation will create net benefits in the long run, Indonesia should continue its process of globalisation and integration with the world economy to ensure the net benefits and to move forward in its structural transformation, while managing the costs of globalisation and its transition process.
Topic:
Globalization, International Cooperation, International Trade and Finance, and Economic growth
Political Geography:
Indonesia, Asia, and Indo-Pacific

13. Fostering Europe’s Strategic Autonomy - A question of purpose and action

Author:
Giovanni Grevi
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
European Policy Centre
Abstract:
Strategic autonomy is about empowering Europe, not disengaging from partnerships, globalisation or multilateralism. The core of strategic autonomy is not that Europeans should act alone, but that they should have a purpose of their own, and a stronger power base to fulfil that purpose through cooperation with others whenever possible, or on their own, if needed. As such, strategic autonomy is not a condition to be achieved once and for all, but a mindset and a process, guiding initiatives across multiple areas. By advancing its strategic autonomy, Europe should acquire a stronger position to manage interdependence amidst geopolitical competition – arguably the defining challenge of our times. The concept has become central to a number of statements by EU and national leaders, and to important EU policy documents. Although the level of ambition and requirements for progress differ across policy areas – from trade and investment to innovation, the single market or security and defence – and are the subject of ongoing debate, an EU strategic narrative is emerging alongside current or envisaged policy measures and initiatives. These policy developments point to three main tracks of action, or dimensions of Europe’s strategic autonomy, namely bracing against threats and challenges, empowering Europe by joining forces and engaging others to strengthen a rules-based international order. Bracing. Europe needs to strengthen its resilience and political cohesion in the face of multi-dimensional competition. It needs to counter trade-distorting practices and unfair competition, while better enforcing the rules and obligations of EU trade agreements. Europe should also reduce its current overdependence on foreign technologies and companies, such as for 5G and data infrastructure, and Europeans should do more to secure their critical infrastructure against malicious practices or cyberattacks. Empowering. Europe is much more than the sum of its parts, even though it often performs as less than that because of disagreements among EU member states, or their reluctance to pool their resources. Completing and strengthening the Single Market is crucial to sustaining both Europe’s growth and the EU’s regulatory power. Eliminating current barriers within the Digital Single Market will be critical to spur innovation and scale-up European technology companies while creating a regime for data sharing and access that benefits all market actors and citizens. To both deliver the capabilities that Europeans need and acquire a real operational capacity, EU member states should make full use of the arrangements for defence cooperation established in the last few years, on the basis of a better-defined set of shared goals. Engaging. The purpose of shaping and supporting a rules-based international order should continue to drive Europe’s foreign policy, even though Europeans will need to take a pragmatic approach in a context of geopolitical competition. The election of Joe Biden paves the way to dialogue and cooperation with the US, and to reinforcing the transatlantic partnership and multilateralism.
Topic:
Globalization, Geopolitics, Multilateralism, and Strategic Autonomy
Political Geography:
Europe

14. China’s BRI: The Development-Finance Dimension

Author:
David Gordon and Haoyu Tong
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
This report is the first of two synthesising the findings of a major research workshop convened in Washington DC on 26 June 2019, by The International Institute for Strategic Studies (IISS), as part of its multi-year project on China’s Belt and Road Initiative (BRI). The IISS commissioned ten papers that addressed development-finance and security issues in the BRI, prepared by leading scholars and policy practitioners. They were joined at the workshop by more than two dozen other experts on China’s international behaviour. This first report focuses on development-finance issues in the BRI; the second will address security issues broadly cast. China’s Belt and Road Initiative is now six years old. Announced by (then) newly ensconced President Xi Jinping, it has since become the centrepiece of Xi’s ambitious drive to make China a more active global leader, and to break free from the cautious approach set out more than 30 years earlier by then-paramount-leader Deng Xiaoping – that China’s strategic approach should be to ‘hide its capacities and bide its time’. At the Chinese Communist Party’s (CCP) 19th Congress in 2017, the BRI was integrated into the party’s charter. Much of the early analytical work on the BRI has focused on questions surrounding China’s motivations – economic or geopolitical. Is Xi’s initiative a response to changing domestic economic circumstances? Or does it signal evidence of China’s intent to build a twentyfirst- century imperium modelled on the post-war United States-led experience, more than on European colonial or earlier Asian empires? The emerging consensus on this question is that it has been a bit of both. At the same time, an often overlooked factor is Xi’s constant need to further consolidate his power inside China, as the economics versus geopolitics debate about the motivations for the BRI gives too little attention to the more purely political dimension. The BRI cannot be separated from Xi’s efforts to cast himself domestically as an exceptional leader for an exceptional moment in China’s history.
Topic:
Development, Globalization, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:
China and Asia

15. Turning away from globalization? Trade wars and the rules of competition in global trade: Implications for the EU

Author:
Jan J. Michałek and Przemyslaw Wozniak
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The trade war between the U.S. and China began in March 2018. The American side raised import duties on aluminum and steel from China, which were later extended to other countries, including Canada, Mexico and the EU member states. This drew a negative reaction from those countries and bilateral negotiations with the U.S. In June 2018 America, referring to Section 301 of its 1974 Trade Act, raised tariffs to 25% on 818 groups of products imported from China, arguing that the tariff increase was a response to years of theft of American intellectual property and dishonest trade practices, which has caused the U.S. trade deficit. Will this trade war mean the collapse of the multilateral trading system and a transition to bilateral relationships? What are the possibilities for increasing tariffs in light of World Trade Organization rules? Can the conflict be resolved using the WTO dispute-resolution mechanism? What are the consequences of the trade war for American consumers and producers, and for suppliers from other countries? How high will tariffs climb as a result of a global trade war? How far can trade volumes and GDP fall if the worst-case scenario comes to pass? Professor Jan J. Michałek and Dr. Przemysław Woźniak give answers to these questions in the mBank-CASE Seminar Proceeding No. 161.
Topic:
Globalization, European Union, Economic growth, and Trade
Political Geography:
China, Europe, and United States of America

16. Faculty and Education Abroad: The Role of Faculty in Promoting Global Learning on U.S. Campuses

Author:
Catherine Morris and Leah Mason
Publication Date:
06-2019
Content Type:
Special Report
Institution:
Institute of International Education
Abstract:
In our increasingly interconnected world, institutions face pressure to both grow their global footprint and prepare students to succeed in the global economy after graduation. Faculty are at the heart of the academic enterprise, and as such, it is no surprise that they also have a role to play in ensuring that education abroad opportunities are robust, dynamic, and accessible. Faculty and Education Abroad: The Role of Faculty in Promoting Global Learning on U.S. Campuses from IIE and the AIFS Foundation investigates the link between faculty and education abroad—and specific examples of institutions that have made considerable progress in expanding access to global learning and education abroad opportunities on campus— to shed light on opportunities and challenges that faculty face when engaging with education abroad, both as campus champions and leaders.
Topic:
Education, Globalization, and Higher Education
Political Geography:
North America and United States of America

17. The Rise of Global Innovation by US Multinationals Poses Risks and Opportunities

Author:
Lee G. Branstetter, Britta Glennon, and J. Bradford Jensen
Publication Date:
06-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
For decades, US multinational corporations (MNCs) conducted nearly all their research and development (R&D) within the United States. Their focus on R&D at home helped establish the United States as the unrivaled leader of innovation and technology advances in the world economy. Since the late 1990s, however, the amount of R&D conducted overseas by US MNCs has grown nearly fourfold and its geographic distribution has expanded from a few advanced industrial countries to many parts of the developing world, creating an innovation system that spans the globe. Like many aspects of globalization, including the offshoring of manufacturing over recent decades, the globalization of R&D raises concerns about US competitiveness and loss of technological leadership. At the same time, the spreading geographic location of innovation presents opportunities for US-based companies if the right policies are adopted to seize them. The research presented in this Policy Brief demonstrates that US innovators continue to remain involved in important ways in US MNCs' global R&D activities, and fears of a hollowing out of US capacity to innovate—based probably on previous fears about the hollowing out of US-based manufacturing—may be overstated. Indeed, the large and growing pool of highly educated scientists and engineers in the developing world could increase the rate of global productivity growth, to the advantage of US-based companies and the world in general. The authors conclude that a productive way to capitalize on the globalization of MNC R&D is not to oppose it but to combine emerging-market talent with MNC experience so that innovation can flourish to improve global living standards and fuel economic progress.
Topic:
Economics, Globalization, Multinational Corporations, Risk, and Innovation
Political Geography:
North America and United States of America

18. Implications of Foreign Direct Investment, Capital Formation and its Structure for Global Value Chains

Author:
Amat Adarov and Robert Stehrer
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
Topic:
Globalization, International Trade and Finance, Foreign Direct Investment, Trade, and Global Value Chains
Political Geography:
United States, Japan, and Europe

19. Can International Organisations Be Democratic? A Reassessment

Author:
Dawisson Belém Lopes and Guilherme Casarões
Publication Date:
12-2019
Content Type:
Journal Article
Journal:
Contexto Internacional
Institution:
Institute of International Relations, Pontifical Catholic University of Rio de Janeiro
Abstract:
This article makes the case for viewing international organisations (IOs) as global polyarchies. Our argument is twofold: on a theoretical level, IOs often meet the criterion of philosophical coherence, as they are based on rules of membership and decision-making that are compatible with those found in democratic institutions. On a practical level, we believe the concerns of IOs about pluralism, inclusiveness and efficacy go far beyond rhetoric, and may decisively influence their activities as well as their outcomes. To this end, the first section explores Robert Dahl’s concept of polyarchy and applies this to global institutions. In the subsequent sections, we advance our empirical argument with the UN as a case study. We reach three main conclusions. The first is that, at the bureaucratic level, the UN Secretariat performs some typically democratic functions, such as multilateral representation and the constitution of international regimes, which turns it into an important channel for feasible democracy in international politics. Second, at the multilateral level, the UN General Assembly (UNGA) represents a specific kind of representative polyarchy by allowing the greatest possible number of countries to have an equal say in global affairs. And third, it also serves as a gateway for multilevelled international representation by including a diversity of non-state actors in what has been called the ‘Third United Nations.’
Topic:
Globalization, International Organization, United Nations, and Democracy
Political Geography:
Global Focus

20. Private Standards in the WTO: A Multiple Streams Analysis of Resisting Forces in Multilateral Trade Negotiations

Author:
Yi Shin Tang and Bruno Youssef Yunen Alves de Lima
Publication Date:
12-2019
Content Type:
Journal Article
Journal:
Contexto Internacional
Institution:
Institute of International Relations, Pontifical Catholic University of Rio de Janeiro
Abstract:
The international trade system has been facing a relative decrease in the relevance of tariffs in favour of non-tariff, regulatory requirements (technical, sanitary and phytosanitary standards). The proliferation of these measures, which essentially consist of rules on product labelling and on production processes and methods, may be explained by the growing influence of private agents, such as corporations and business associations. Although these players are willing to develop and enforce a competing regulatory framework such as this on a broader range of topics, this may also generate more fragmented trade rules at both geographic and substantive levels, thus leading to a significant resistance among governments to integrate private standards into the multilateral trade system. Therefore, a mounting debate emerges on the ways in which private standards have been stonewalled in the current negotiation processes of the World Trade Organization (WTO). By relying on Kingdon’s Multiple Streams Framework (MSF), we address this question with a particular focus on the current efforts and struggles within the WTO to incorporate private regulations into the international trade agenda.
Topic:
Globalization, International Cooperation, International Trade and Finance, World Trade Organization, and Free Trade
Political Geography:
Global Focus