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Deconstructing Deglobalization: The Future of Trade is in Intermediate Services

Author

Listed:
  • Richard Baldwin
  • Rebecca Freeman
  • Angelos Theodorakopoulos

Abstract

This article contests the idea that the world has entered a post‐globalization era. It argues that rapid globalization has evolved rather than ended. Even though the global goods trade‐to‐GDP ratio reached its zenith 15 years ago, the rapid rise of services trade has persisted and now accounts for one‐fifth of international commerce. The paper makes a statistical and logical case that the future of trade lies in services trade—especially trade in intermediate services.

Suggested Citation

  • Richard Baldwin & Rebecca Freeman & Angelos Theodorakopoulos, 2024. "Deconstructing Deglobalization: The Future of Trade is in Intermediate Services," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 18-37, January.
    • Handle: RePEc:bla:asiapr:v:19:y:2024:i:1:p:18-37
    DOI: 10.1111/aepr.12440
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    References listed on IDEAS

    as
    1. Richard Baldwin, 2016. "The World Trade Organization and the Future of Multilateralism," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 95-116, Winter.
    2. Ghani, Ejaz (ed.), 2010. "The Service Revolution in South Asia," OUP Catalogue, Oxford University Press, number 9780198065111.
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    5. Dani Rodrik, 2006. "What's So Special about China's Exports?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 1-19, September.
    6. Miroudot, Sébastien & Ye, Ming, 2022. "Decomposing value added in gross exports from a country and bilateral perspective," Economics Letters, Elsevier, vol. 212(C).
    7. Baldwin, Richard, 2012. "Global supply chains: Why they emerged, why they matter, and where they are going," CEPR Discussion Papers 9103, Centre for Economic Policy Research.
    8. Dani Rodrik, 2006. "What’s So Special about China’s Exports?," Working Papers id:410, eSocialSciences.
    9. Sébastien Miroudot & Rainer Lanz & Alexandros Ragoussis, 2009. "Trade in Intermediate Goods and Services," OECD Trade Policy Papers 93, OECD Publishing.
    10. Rebecca Freeman & Richard Baldwin, 2022. "Risks and Global Supply Chains: What We Know and What We Need to Know," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 153-180, August.
    11. Fukunari Kimura & Hyun-Hoon Lee, 2006. "The Gravity Equation in International Trade in Services," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 92-121, April.
    12. Soo Hyun OH & Sangkyom KIM & Innwon Park & Soon Chan Park, 2020. "Trade Cost in Services in the Era of Digitalization," World Economy Brief 20-7, Korea Institute for International Economic Policy.
    13. Kaushik Basu, 2018. "A short history of India's economy: A chapter in the Asian drama," WIDER Working Paper Series wp-2018-124, World Institute for Development Economic Research (UNU-WIDER).
    14. Lucian Cernat & Zornitsa Kutlina-Dimitrova, 2014. "Thinking in a box: A ‘mode 5’ approach to service trade," DG TRADE Chief Economist Notes 2014-1, Directorate General for Trade, European Commission.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Zou, Jiayang & Zhang, Ming & Kong, Xiangfei, 2026. "Trade liberalization of IT products and domestic value-added ratio of service exports: A quasi-natural experiment based on the ITA expansion," Structural Change and Economic Dynamics, Elsevier, vol. 76(C), pages 262-281.
    2. Reardon, Thomas & Awokuse, Titus & Belton, Ben & Liverpool-Tasie, Lenis Saweda O. & Minten, Bart & Nguyen, Genevieve & Qanti, Sara & Swinnen, Johan & Vos, Rob & Zilberman, David, 2024. "Emerging outsource agricultural services enable farmer adaptation in agrifood value chains: A product cycle perspective," Food Policy, Elsevier, vol. 127(C).
    3. Prema‐chandra Athukorala, 2024. "Comment on “Deconstructing Deglobalization: The Future of Trade is in Intermediate Services”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 38-39, January.
    4. Sebestyén, Tamás & Braun, Erik, 2025. "Szerkezeti változások és függőségek - Magyarország helyzete a globális értékláncokban [Structural change and dependencies: the position of the Hungarian economy in global value chains]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 805-841.
    5. Banri ITO & Eiichi TOMIURA, 2025. "The Productivity Effects of Cross-border Data Flows: Evidence from Japanese firm-level data," Discussion papers 25125, Research Institute of Economy, Trade and Industry (RIETI).
    6. Christopher Findlay, 2025. "Resilience in Services Production Networks," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 12(3), September.
    7. Eduardo Hernandez-Rodriguez, 2024. "Technological diversification through global value chains in European regions," Papers in Evolutionary Economic Geography (PEEG) 2429, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2024.
    8. Ayako Obashi, 2024. "Comment on “Deconstructing Deglobalization: The Future of Trade is in Intermediate Services”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 40-41, January.
    9. Steven A. Altman & Caroline R. Bastian & Davis Fattedad, 2024. "Challenging the deglobalization narrative: Global flows have remained resilient through successive shocks," Journal of International Business Policy, Palgrave Macmillan, vol. 7(4), pages 416-439, December.
    10. R. Boschma & Eduardo Hernández-Rodríguez & A. Morrison & C. Pietrobelli, 2021. "Do global value chains and local capabilities matter for economic complexity in EU regions?," Papers in Evolutionary Economic Geography (PEEG) 2139, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2021.
    11. Simionescu, Mihaela, 2025. "Inflation, financial development, and income/wealth inequality in the European Union," Economic Systems, Elsevier, vol. 49(4).
    12. Francesco Paolo Conteduca & Simona Giglioli & Claire Giordano & Michele Mancini & Ludovic Panon, 2025. "Trade fragmentation unveiled: five facts on the reconfiguration of global, US and EU trade," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(3), pages 535-557, September.
    13. Takatoshi Ito & Kazumasa Iwata & Colin McKenzie & Shujiro Urata, 2024. "Deglobalization: Editors' Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 1-17, January.
    14. repec:zna:indecs:v:23:y:2025:i:6:p:718-731 is not listed on IDEAS
    15. Faber, Marius & Kilic, Kemal & Kozliakov, Gleb & Marin, Dalia, 2025. "Global value chains in a world of uncertainty and automation," Journal of International Economics, Elsevier, vol. 155(C).

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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