Assignment 2: Global Economy Between Free Trade And P 776685

Assignment 2: Global Economy: Between Free Trade and Protectionism

Assignment 2: Global Economy: Between Free Trade and Protectionism Globalization was welcomed around the world at the beginning of the 1990s. Different trade theories were used to explain benefits of free trade and market liberalization. However, by the end of the twentieth century, voices of discontent were beginning to rise from Asia to North America. 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.

Paper For Above instruction

Introduction

The dynamics of the global economy have undergone significant transformations over the past several decades, oscillating between the principles of free trade and protectionism. The post-1990s era, characterized by rapid globalization, brought unprecedented growth, increased interconnectivity, and the diffusion of technology and culture across borders. However, recent years have seen growing skepticism about the benefits of globalization, fueled by economic dislocation, rising inequality, and geopolitical tensions. This paper critically examines current trends in globalization and evaluates the likelihood of the global economy reverting to a mercantilist stage or continuing a path of free trade and market liberalization, grounded in scholarly analyses and recent research findings.

Current Trends in Globalization

Recent scholarly articles highlight several key trends shaping contemporary globalization. Firstly, the resurgence of protectionist policies is evident in the reimposition of tariffs, trade barriers, and a shift towards economic nationalism. Countries like the United States and China have engaged in trade tensions, reflecting a departure from the unregulated free trade norms of the past (Baldwin, 2020). These actions are driven by domestic economic concerns, such as job losses in manufacturing sectors and the desire to safeguard strategic industries.

Secondly, technological advancements continue to propel globalization, especially through digital connectivity, e-commerce, and innovations in supply chain management. The COVID-19 pandemic underscored the interconnectedness of the global economy while also exposing vulnerabilities in complex international supply chains. Consequently, there is a trend toward regionalization or "nearshoring," wherein firms prefer geographically closer supply sources to mitigate pandemic-related disruptions (Gereffi & Fernandez-Stark, 2021).

Additionally, the rise of economic bloc formations, exemplified by regional trade agreements such as the African Continental Free Trade Area (AfCFTA) and the Regional Comprehensive Economic Partnership (RCEP), signifies a shift towards regional rather than purely global integration. This reflects an adaptive response to geopolitical uncertainties and economic nationalism, emphasizing controlled globalization within specific blocs (World Bank, 2022).

Thirdly, economic inequality has intensified within and across nations, leading to ideological debates about the benefits of free trade. Critics argue that globalization exacerbates income disparities and marginalizes certain sectors, resulting in social pushback and demands for protectionist measures (Stiglitz, 2019). These social movements influence policy decisions, pushing governments to reconsider their commitments to liberalized trade.

In summary, contemporary globalization is characterized by a complex interplay of advanced technology, regional integration, and protectionist sentiment. These trends point towards a more fragmented and rebalanced global economic landscape.

Will the Global Economy Return to Mercantilism or Continue Free Trade?

The critical question is whether the global economy will revert to mercantilism—an economic doctrine emphasizing national self-sufficiency and accumulation of wealth through trade restrictions—or if the benefits of free trade and liberalization will prevail. Scholarly perspectives offer divergent insights.

Proponents of free trade argue that openness fosters economic growth, innovation, and consumer benefits by encouraging competition and efficient resource allocation (Krugman, 2018). Historically, periods of liberalization have led to significant prosperity, exemplified by China's integration into the world economy post-1978 reforms. Moreover, the global supply chains and technological ecosystem depend on a cooperative international environment. Abandoning these principles risks economic decoupling and stagnation.

Conversely, the resurgence of protectionist rhetoric and policies suggests a possible drift towards mercantilist tendencies. The prioritization of national interests, strategic industries, and economic sovereignty indicates a move away from open markets (Rodrik, 2021). Countries are increasingly employing measures such as subsidies, tariffs, and export controls to safeguard domestic sectors, challenging the liberal paradigm.

However, full-scale return to mercantilism appears unlikely in a deeply interconnected global economy. The pandemic has demonstrated the costs of extreme protectionism, such as supply shortages and increased prices. Economic models suggest that while protectionist policies may provide short-term relief, they undermine long-term growth, innovation, and global stability (Acemoglu & Robinson, 2020).

Furthermore, international institutions and multilateral agreements continue to play crucial roles in mediating trade relations, making a complete retreat into mercantilism less feasible. The interconnected nature of supply chains, digital trade, and climate challenges necessitate cooperation beyond national borders, favoring a sustained commitment to open markets.

In conclusion, while protectionist tendencies are likely to persist as responses to domestic economic pressures, the overarching trend favors the continuation of free trade principles. The global economy's complexity, interdependence, and mutual benefits of open markets diminish the likelihood of a wholesale return to mercantilist policies.

Conclusion

Recent trends underscore a nuanced and evolving landscape of globalization, marked by regionalization, technological innovation, and rising protectionist sentiments. While there are signs of increased economic nationalism, the foundational advantages of free trade, such as economic growth and technological progress, remain compelling. The idea of a full reversion to mercantilism appears unlikely due to the intertwined nature of the modern global economy and the costs associated with protectionist policies. Therefore, it is probable that free trade and market liberalization will continue to shape the future, albeit within a more managed and regionally nuanced framework. Policymakers must navigate these complexities, balancing national interests with the imperatives of global interconnectedness to foster sustainable economic growth.

References

• Acemoglu, D., & Robinson, J. A. (2020). The Narrow Corridor: States, Societies, and the Fate of Liberty. Penguin Publishing Group.
• Baldwin, R. (2020). The Globotics Upheaval: Globalization, Robotics, and the Future of Work. Oxford University Press.
• Gereffi, G., & Fernandez-Stark, K. (2021). Global Value Chain Analysis: A Primer. Center on Globalization, Governance & Competitiveness (CGGC), Duke University.
• Krugman, P. R. (2018). International Economics. McGraw-Hill Education.
• Rodrik, D. (2021). Straight Talk on Trade: Ideas for a Sane World Economy. Princeton University Press.
• Stiglitz, J. E. (2019). People, Power, and Profits: Progressive Capitalism for an Age of Discontent. W. W. Norton & Company.
• World Bank. (2022). Global Economic Prospects. World Bank Publications.