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Deconstructing deglobalization: the future of trade is in intermediate services

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  • Baldwin, Richard
  • Freeman, Rebecca
  • Theodorakopoulos, Angelos

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

  • Baldwin, Richard & Freeman, Rebecca & Theodorakopoulos, Angelos, 2024. "Deconstructing deglobalization: the future of trade is in intermediate services," LSE Research Online Documents on Economics 122847, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:122847
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    File URL: http://eprints.lse.ac.uk/122847/
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    References listed on IDEAS

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    1. Ghani, Ejaz (ed.), 2010. "The Service Revolution in South Asia," OUP Catalogue, Oxford University Press, number 9780198065111.
    2. Benz, Sebastian & Jaax, Alexander, 2022. "The costs of regulatory barriers to trade in services: New estimates of ad valorem tariff equivalents," Economics Letters, Elsevier, vol. 212(C).
    3. 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.
    4. Cristina Constantinescu & Aaditya Mattoo & Michele Ruta, 2020. "The Global Trade Slowdown: Cyclical or Structural?," The World Bank Economic Review, World Bank, vol. 34(1), pages 121-142.
    5. Miroudot, Sébastien & Ye, Ming, 2022. "Decomposing value added in gross exports from a country and bilateral perspective," Economics Letters, Elsevier, vol. 212(C).
    6. Dani Rodrik, 2006. "What’s So Special about China’s Exports?," Working Papers id:410, eSocialSciences.
    7. 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.
    8. 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.
    9. OH, Soo Hyun & KIM, Sangkyom & Park, Innwon & Park, Soon Chan, 2020. "Trade Cost in Services in the Era of Digitalization," World Economy Brief 20-7, Korea Institute for International Economic Policy.
    10. 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).
    11. 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.
    12. Cernat, Lucian & Kutlina-Dimitrova, Zornitsa, 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.
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    Cited by:

    1. 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.
    2. 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.
    3. Marius Faber & Kemal Kilic & Gleb Kozliakov & Dalia Marin, 2024. "Global Value Chains in a World of Uncertainty and Automation," CESifo Working Paper Series 11419, CESifo.
    4. 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.
    5. 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.

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    More about this item

    Keywords

    deglobalization; intermediate services; intermediate trade; service-led development; services trade;
    All these keywords.

    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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