Global Economy Between Free Trade And Protectionism

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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. 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 global economy has experienced significant shifts over the past few decades, oscillating between advocates of free trade and protectionist policies. This dynamic landscape is rooted in the historical context of globalization, which gained momentum in the 1990s, driven by the belief that free trade fosters economic growth, innovation, and international cooperation. However, recent developments reveal a complex picture, with rising discontent and a resurgence of protectionist sentiments in various regions, challenging the sustainability of an unchecked free market paradigm.

Current trends in globalization underscore a movement toward both economic integration and economic nationalism. According to Baldwin (2016), globalization is no longer solely characterized by the expansion of trade and capital flows but also encompasses technological integration, digital connectivity, and supply chain restructuring. The COVID-19 pandemic further accentuated vulnerabilities in global supply chains, prompting some countries to reconsider and occasionally break from deepening global integration (Baldwin, 2020). Furthermore, geopolitical tensions, such as restrictions on technology transfer and trade sanctions between major powers like the United States and China, reflect a shift towards strategic economic protectionism (Evenett & Fritz, 2020).

Another notable trend pertains to the rising popularity of regional trade agreements and blocs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the African Continental Free Trade Area (AfCFTA). These regional arrangements aim to bolster intra-regional trade and economic cooperation, often as a response to perceived threats of global protectionism. Simultaneously, domestic political shifts driven by concerns over job losses, income inequality, and national sovereignty contribute to heightened support for protectionist policies. Leaders in countries such as the United States under the Trump administration, and increasingly in Europe, have imposed tariffs and trade barriers, citing the need to protect local industries (Bown, 2020).

The debate over whether the global economy will revert to a mercantilist stage or whether free trade benefits will prevail remains complex. Mercantilism, emphasizing exports over imports and accumulating finite national wealth through trade surpluses, has historically been associated with protectionism and colonial competition. Given the accelerated technological and economic interdependence facilitated by globalization, a full return to mercantilist policies appears unlikely in the current global framework. The evidence suggests that the economic benefits derived from free trade—such as increased efficiency, innovation, and consumer choice—are still significant drivers of growth (Krugman, 2018).

However, the resilience of protectionist sentiments cannot be ignored. The rise of populist and nationalist political movements signifies a desire to prioritize domestic industries and protect jobs, often at the expense of free-market principles (Rodrik, 2018). Nevertheless, such policies risk undermining the interconnected nature of modern supply chains, leading to inefficiencies and higher costs for consumers and producers alike. Therefore, while some protectionist measures are likely to persist, they will probably coexist with a continued—albeit more cautious—commitment to free trade, especially among major economic powers who recognize the mutual benefits of economic integration.

In conclusion, the future of globalization appears to be one of a balancing act between protectionist pressures and the advantages of free trade. While the tide of protectionism may ebb and flow due to political and economic shocks, the interconnected nature of global markets—fostered by technological advances and strategic alliances—suggests that free trade’s benefits will continue to be significant. Policymakers must navigate this complex landscape carefully, fostering cooperation and adaptation to ensure sustainable economic development amid evolving geopolitical realities.

References

• Baldwin, R. (2016). The Great Convergence: Information Technology and the New Globalization. Harvard University Press.
• Baldwin, R. (2020). How global supply chains are reshaping the future of trade. Centre for Economic Policy Research (CEPR).
• Bown, C. P. (2020). US-China trade war tariffs: An up-to-date chart. Peterson Institute for International Economics.
• Evenett, S. J., & Fritz, J. (2020). Economic sanctions and supply chain resilience. VoxEU.org.
• Krugman, P. (2018). Trade, growth, and inequality. The New York Times.
• Rodrik, D. (2018). Straight Talk on Trade: Ideas for a SANE World. Princeton University Press.
• World Trade Organization. (2021). World Trade Report 2021: Economic resilience and trade. WTO Publications.
• Helpman, E. (2018). Globalization and Innovation. Journal of Economic Perspectives, 32(3), 107-132.
• Frieden, J. (2022). Global capitalism: Its fall and rise. W. W. Norton & Company.
• Lee, J. (2021). Digital globalization and its implications. Journal of International Business Studies, 52(5), 722-743.