The Future of Globalization
Despite the threat posed by protectionism, right-wing nationalism and left wing populism – there is not yet an end to globalization, but rather a continuation which is the most likely scenario and perhaps even acceleration, as the world catches up on lost time in the wake of the financial crisis and its many aftershocks. However, in recent years a formidable resistance to globalization has arisen, and the risk of a sharp and temporary slowdown in global economic integration cannot be dismissed. Policymakers and businesses should persist with their internationalization strategies, but also must take steps to mitigate the risk of protectionism. This brief reviews the main features of the recent globalization, attempts to explain its persistence over the centuries and why it is likely to persist in the indefinite future. It examines the causes and prospects of the new protectionism and concludes by drawing policy implications. In summary, this brief has argued that we are not witnessing the end of globalization and that the most likely scenario is that it will persist and possibly even accelerate in future years. Still, decision-makers should not underestimate the risk of a big escalation of trade frictions. They should be more pro-active in their advocacy in favour of open markets and of social policies that are supportive of the losers from globalization.