Business in the Globalized Economy
Countries nowadays are increasingly integrated within the Global Value Chains (GVCs). The disruptions to GVCs caused by the Covid-19 pandemic have led to a growing debate on whether globalization has gone too far. Some politicians and policymakers argue we depend on foreign supplies so much that this reduces the resilience of our own economy in response to a crisis. Hence, we should gain self-sufficiency via reshoring or localization of production.
You are asked to write a report on trade policies/measures adopted by countries during the pandemic and the role of GVCs in the world’s economic recovery from the pandemic.
Questions
In response to a crisis or shock, protectionism tends to arise. The global financial crisis in 2008 is an example of this. The Covid-19 pandemic is another recent example.
a) Protectionism is manifested in a country’s trade policies/measures. Describe the protectionism in terms of trade policies/measures adopted by countries for the global financial crisis in 2008 and the recent global pandemic. Is there any difference between the trade policies/measures adopted between the two crises?
b) Now focus on trade policies/measures during the recent global pandemic: Did they last long? Provide a critique of these policies/measures.Is globalization/GVCs the one we should blame for the insecure supply of medical goods during the pandemic? Is reshoring or localization of production the best approach to deal with a crisis like Covid-19 or similar crises?After three years of the pandemic, Did global trade recover quickly? What factors can affect its recovery?What other policies should governments pursue to secure important medical goods, and to enhance the resilience of the economy in general, in response to a similar crisis?
