Assignment 2: Global Economy: Between Free Trade and Protectionism
Identify and read at least three journal articles focused on trends in globalization. Then, respond to the following: Identify current trends in globalization.
Reason whether the global economy will return to the mercantilist stage, or if benefits of free trade and market liberalization will prevail. Why or why not? Write a two-to-three-page paper in Word format. Utilize at least three scholarly sources in your research. Make sure you write in a clear, concise, and organized manner; demonstrate ethical scholarship in accurate representation and attribution of sources; and display accurate spelling, grammar, and punctuation.
Paper For Above instruction
The phenomenon of globalization has profoundly transformed the global economy over the past three decades, characterized by rapid advances in technology, extended supply chains, and increased economic interconnectedness. However, recent trends reveal a complex landscape where the tide of economic liberalization faces mounting challenges, including rising protectionism, trade tensions, and shifts in geopolitical priorities. This essay explores current trends in globalization, evaluates the prospects of a return to mercantilism, and assesses whether free trade principles will ultimately dominate the future of the global economy.
Current Trends in Globalization
Globalization continues to evolve amid significant upheavals. One prominent trend is the resurgence of protectionist policies. Countries like the United States, under the Trump administration and continuing in some form, have adopted tariffs and trade barriers aimed at protecting domestic industries, notably in manufacturing sectors such as steel and aluminum (Bown, 2020). Similarly, China’s strategic emphasis on "self-reliance" reflects an inward economic focus, partly driven by trade disputes with the US and global uncertainties stemming from the COVID-19 pandemic (Liu & Wu, 2021).
Technological advances, especially in digital trade and e-commerce, also delineate recent globalization trends. Digital platforms facilitate cross-border trade, enabling small and medium enterprises to access international markets more easily. At the same time, data localization policies and cyber-security concerns are prompting countries to reevaluate openness in digital spaces (World Trade Organization [WTO], 2022).
Geopolitical tensions, particularly the intensification of US-China rivalry, further complicate globalization dynamics. The decoupling of supply chains and the strategic reshoring of critical industries signal a move away from the interconnected supply networks of the past (Amighini & Sanfilippo, 2021). Furthermore, global discontent with perceived economic inequalities and environmental sustainability challenges spurs calls for a more balanced approach, emphasizing regionalism and local resilience over purely global trade liberalization.
Will the Global Economy Return to Mercantilism or Continue with Free Trade?
The prospect of a return to mercantilism—defined by aggressive accumulation of wealth through trade surpluses and protectionist policies—appears unlikely to dominate the future of the global economy. While some nations adopt protectionist measures temporarily, these are generally viewed as strategic responses rather than sustainable long-term strategies. The benefits of free trade and market liberalization, underpinned by the principles of comparative advantage and economic efficiency, continue to provide compelling reasons for their persistence.
Historically, mercantilism hindered economic growth by fostering conflict and reducing the gains from trade. Modern globalization, facilitated by technological innovation, international institutions like the WTO, and the interconnected nature of supply chains, makes a wholesale retreat to protectionism economically detrimental. Studies indicate that countries embracing open markets tend to experience higher economic growth, diversified industries, and improved living standards (Krugman & Obstfeld, 2018).
However, the current environment suggests a nuanced reality. Instead of outright protectionism, there is a trend towards strategic trade protectionism—targeted tariffs and regulations aimed at safeguarding critical industries or addressing national security concerns. This hybrid approach reflects an acknowledgment of globalization's benefits, tempered by the desire to protect sovereign interests (Rodrik, 2018).
Furthermore, the rise of regional trade agreements and economic blocs exemplifies a shift towards regionalism rather than global free trade. Such arrangements can serve as a buffer against disruptions and foster cooperation among neighboring economies, aligning with the broader goals of economic stability and resilience (Chen, 2020).
In conclusion, despite temporary setbacks and protectionist impulses, the fundamental advantages of free trade—such as increased efficiency, innovation, and consumer choice—are likely to prevail. The global
economy appears poised to evolve into a more balanced form of globalization, embracing regionalism, digital integration, and strategic protections without reverting fully to mercantilist policies.
References
Amighini, A., & Sanfilippo, M. (2021). US-China decoupling and the future of global supply chains. International Economics , 165, 117-132.
Bown, C. P. (2020). US-China Trade War and Phase One Agreement. Peterson Institute for International Economics
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Chen, S. (2020). Regional trade agreements and international economic integration. World Economy Journal , 43(2), 285-303.
Krugman, P. R., & Obstfeld, M. (2018). International Economics: Theory and Policy (11th ed.). Pearson.
Liu, H., & Wu, Y. (2021). China's strategic shift towards self-reliance in the era of global tensions. Asian Journal of Comparative Politics , 6(2), 125-140.
Rodrik, D. (2018). Straight Talk on Trade: Ideas for a Sane World Economy. Princeton University Press. World Trade Organization. (2022). Digital Trade: Opportunities and Challenges.
WT/TRADE/DIG/1
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