January 4th, 2014
08:02 PM ET

Have we reached the end of globalization?

For more What in the World watch Sundays at 10 a.m. & 1 p.m. ET on CNN

By Global Public Square staff

At the start of 2014, let's take a look at one of the great trends of the last century. You could be sitting in Chicago, Illinois right now, but your TV was probably made in Japan, your sneakers were likely manufactured in China and your coffee might be from Kenya. Globalization impacts every single thing around us. So here’s the big question: have we reached the end of globalization?

For much of the last thirty years there has been a steady trend in commerce: global trade has expanded at about twice the pace of the global economy. For example, between 1988 and 2007, global trade grew on average by 6.2 percent a year according to the World Trade Organization. During the same period, the world’s GDP was growing at nearly half that pace: 3.7 percent.

But a strange thing has taken place in the last two years. Growth in global trade has dropped dramatically, to even less than GDP growth. The change leaves one wondering: has the incredible transfer of goods around the world reached some sort of pinnacle? Have we exhausted the drive toward ever-more-globalization?

It's a fascinating thesis. The world has seen historic developments in the last few decades: the internet, China's opening up, the rise of emerging markets, fast and cheap travel…all of these trends led to a massive acceleration in global trade.

But have those trends peaked? Could the next big invention, say, 3-D printers, end the need for more and more trade? Imagine a world where you need a new faucet in your restroom. Instead of going to the local store that sells faucets made in China (which contributes to global trade) now you just print out your own faucet, sitting at home or at a local store. Are people also getting more interested in local products compared to global brands.

Joshua Cooper Ramo points out in an essay in Fortune that localism is on the rise – local banking, local manufacturing, and even local sourcing for food and restaurants. Is this simply a pause or could it be more than that? The answer will depend on politics.

The last time the world saw a consistent period where the growth of global trade lagged behind global growth was in the 1920s, 30s, and 40s. One factor was the rise in protectionist policies - as a response in many cases to the Great Depression and the disruption of the gold standard. At one point, under what was known as the Smoot-Hawley tariff, the United States government began imposing import duties of around 60 percent. The move was aimed at protecting domestic farmers, but instead, it exacerbated the depression. It led to a steep drop in trade, and a wave of counter protectionist measures by other countries.

The world has learned its lessons from the Great Depression. But perhaps not as well as it should have.

According to the independent think tank Global Trade Alert, we’re in the midst of a great rise in protectionism. In the 12 months preceding May 2013, governments around the world imposed three times as many protectionist measures than moves to open up. Anti-trade policies are at their highest point since the 2008 financial crisis. According to the Petersen Institute, the rise of these measures cost global trade 93 billion dollars in 2010.

There might be some good news on this front. Last month, the World Trade Organization passed a deal to cut red tape in customs. It’s a small start, and there is a lot more to accomplish. Globalization and trade have produced huge benefits for people, especially the poor, who have been able to make their way out of poverty in a faster growing and more connected global economy. But globalization won’t continue by accident or stealth – politicians will have to help make it happen.

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Topics: Economy • Global • What in the World?

soundoff (171 Responses)
  1. tom

    In a nutshell folks NEW WORLD ORDER , globalization is just a gentle veil duping the masses. Population reduction they want us down to 500,000 people left on the planet, hay Fukashima comes to mind, and if I`m kidding why did the government just order 500 million doses of Potassium Iodide. So if 500,000 people took it for 250 days that would be it. about 9 months worth. The Elite are controlling virtually every aspect of our mortal lives. Don`t let them control your SOUL.
    Have good journey folks

    January 6, 2014 at 5:31 pm | Reply
    • kbaredge126c

      Perhaps it's not a bad idea. We are so overpopulated and out of control we need some guidance. May your journey be pleasant.

      January 6, 2014 at 7:14 pm | Reply
      • Dan

        Over populately what are you talking about? Everyone on our planet could fit on Australia each having a 1/4 acher of land. We most not give into propaganda.

        January 7, 2014 at 12:05 am |
      • Dan

        Over populated@l@!

        January 7, 2014 at 12:06 am |
      • Bern

        @Dan: We're overpopulated in the sense that the earth population is well beyond the limit for sustainable human life (the limit is about 100-400 million depending on which biologist you talk to). But we're up to 7 billion and counting - unless we reduce this number dramatically now, we're gonna end up exhausting the world's resources and transforming our planet into a giant desert within a couple of hundred years at the most..

        January 7, 2014 at 12:17 am |
      • Keith

        That is a bunch of bull, our problems are political. We can produce much more than we need.

        January 7, 2014 at 12:40 am |
      • theridge

        anybody that thinks we have overpopulated this planet is drinking the kool-ade! We could put every human being in texas and oklahoma with an acre per person (I believe that is alot smaller area than australia with more land per person). We could fit a trillion folks on here if we did it right. And release the tesla technology and oil would have been a think of the past a century ago! They are putting us back into the cave, brainwashing us by telling us we are overpopulated and changing the earth's climate by farting and ect. Even if we did reach a point where we could not fit anymore people here, what happen to the human spirt to adapt and go terreform new planets or build spacestaions or whatever our mind could dream up. Instead these globalists are developing more ways to reduce fertility, reduce lifespan, dry up the wealth for you and me, and yes reduce global population in some of their publications as low as 10,000.

        January 7, 2014 at 7:27 am |
      • CommonGround

        theridge: Texas has an area of roughly 700,000 square kilometers. World population is more than 7 billion. Put us all in Texas and we each get 1/10,000th of a square kilometer. That is 100 square meters, or roughly 100 square yards = less than 33 feet by 33 feet. Is that square footage enough to provide you food, shelter, resources, recreation and waste assimilation? (No, not by far.)

        Wild fish and forests are mostly gone. Wild land animals were decimated centuries ago. The easy oil is mostly gone; now we have to drill miles below the ocean floor or inject toxic fracking fluids deep into the ground where we also get our drinking water. Atmospheric CO2 has risen from roughly 300 to 400 ppm over the last half century - and this is accelerating. In short, there are plenty of indications that we are living well beyond the capacity of the Earth to sustain our current population. And yet we are still growing. Africa is expected to triple in population by the end of this century. Many developing countries are succeeding in raising their standard of living (as well they should); however, this is further multiplying the impact on the planet. Meanwhile, roughly half of pregnancies are unintended, both domestically and abroad, and roughly 40% of these result in abortions. The remedy: increase support for international (and domestic) family planning. It's cheap, it works, and there is huge unmet need for it.

        January 14, 2014 at 3:22 am |
    • Rashid

      In the US the new world order is to import as many h1-b Indians into the US as possible until no one makes more than minimum wage. The top O.1% income earners of course are already buying Hawaiian islands where they will move their famalies will not to interact with the third world peasants.

      January 6, 2014 at 11:44 pm | Reply
    • glennrobert

      What is missing from the conversation about over population is the fact that in most of the world population is decreasing. 2.1 babies are needed to have a stable population. In the US our number is about 1.9. Even including immigration legal and illegal our number is still under 2. Do you want a nicer house or a new baby. Babies are expensive so many opt for a luxury. This is leading to a smaller, young work force in the future which may be a problem.

      January 12, 2014 at 2:32 am | Reply
  2. JFCanton

    Expectations need to be tempered about the value of printing as a method of manufacturing lots of things of value. In-laws who work on the design end of manufacturing were talking about it over the holidays. It's a fun thought and could be the way to go in cases of great scarcity (e.g. Africa, assuming it never develops). But imagine printing all the parts in a faucet. Because it's done with heat, the printer has to let every layer cool. Doubtless we can speed that up some, but not all processes improve at the same time as communications technology; this one is already pretty efficient. Unless your time is very cheap and the materials are free (and they won't be), it's going to be really hard to beat the cost of a local factory with workers making $50 an hour, let alone one in China.

    January 6, 2014 at 6:01 pm | Reply
  3. Rick

    CNN's middle eastern staff is Shia dominated, that's why they are now not naming their reporters because they keep getting called on their obvious Shia bias in relation to 90% of their ME reporters having Shia family names.

    January 6, 2014 at 7:47 pm | Reply
    • Keith

      Rick are you a Muslim? If you are, it seems you are an example of what is wrong with Muslims.

      January 7, 2014 at 12:43 am | Reply
  4. Plutocracy Politician

    Glo-BULL-ization is bad for workers of BOTH trading countries. The developing countries are exploited for their cheap labor and raw materials, the developed countries hemorrhage jobs. Developed countries subsidize and export foodstuffs, which harms farmers in poor countries and makes them dependent on food imports instead of developing their own agriculture. Shipping products around the world burns fossil fuels, causes pollution and spreads diseases and invasive species. The only people who benefit are the CEOs and billionaires, and the low tax rates they enjoy are not enough to help those harmed by outsourcing. Retail prices are not low because of cheap imports, the difference is kept as extra profit for the stores and their shareholders. It doesn't matter how low the prices are if you don't have a job... Automation has cost the USA millions of "low skill" jobs and outsourcing and uncontrolled immigration (legal or otherwise) depresses wages further. The USA used to be a leader at innovation, research and development, but even these sectors are moving to Asia to be closer to the factories. So, we have a choice. We can either be dependent on welfare and sell imports to each other; or we can harvest, mine and build it for ourselves at primary, high-paying jobs.

    January 6, 2014 at 7:51 pm | Reply
    • Keith

      We have to get back to our plan. The only way to produce real value is to make things and turn resources into value added products. There is no way a service economy can survive unless we are all happy with eating the scraps the rich throw us.

      January 7, 2014 at 12:45 am | Reply
  5. Niko the Farmer

    1926 silent movie called "Metropolis". That's where we are at.

    January 6, 2014 at 10:32 pm | Reply
  6. Maple

    Global trade has helped the poor? Just like genetically modified food has solved
    Feed the starving masses is Africa.

    January 6, 2014 at 10:51 pm | Reply
    • Keith

      Right, and unions are bad for the working class.

      January 7, 2014 at 12:38 am | Reply
  7. jay

    It might be a sign that the manufacturing companies are running slow and making products for themselves instead of exporting, and the supply of natural resources are getting too low.

    January 6, 2014 at 11:08 pm | Reply
  8. Hasai

    "Have we reached the end of globalization?"

    God, I hope so. Over the past ten years I've see whole departments and divisions get shipped overseas, the jobs ranging from seamstresses to IT engineers. Sometimes, because it made good economic sense. Sometimes, because America's insane corporate tax structure MADE it good economic sense. Many times, though, it was because some pinstriped Harvard Boy wanted to juice the quarterly report so he could cash in some of his stock options.

    Public or private, Left or Right, I don't believe in any of them anymore.

    January 6, 2014 at 11:20 pm | Reply
    • Keith

      The United States has the lowest effective Corporate tax rate in the world.

      January 7, 2014 at 12:46 am | Reply
    • ✠RZ✠

      Not bad Hasai, and with that notion slowly becoming a more growing reality the challenge will become how to get by and somehow manage to keep whatever you can. But here's just one perspective you might consider basing it upon: In 2008 the economy and financial system as we knew it crashed so badly that the end result would likely have meant complete collapse. So try then to imagine what would have happened if the Obama regime and the fed did absolutely nothing in terms of significant counter measures. Not likely a pretty picture is it? But realistically, did the measures that were actually taken restore America's wealth and prosperity? HELL NO! It just managed to avoid reality and prolong the inevitable, which some have even been quick to point out will only make the end game much more difficult to bear. Where on the other hand, a long term gradual erosion ultimately leading to an emaciated state without any episodes of anarchy or revolt is likely a much better choice. And at least that way individuals, society, governments, and the entire system can at least be given some time and opportunity to adapt, rather than let it crash and burn only to rebuild itself from the ashes. So where a Washington run by the GOP would likely be content with just throwing us down into a deep well, Obama and the Democrats are trying to slowly and carefully lower us to the bottom. Let's hope the rope doesn't snap.

      January 7, 2014 at 1:46 am | Reply
    • minnie mouse

      Slave wages. That is The Reason for the mess. Its not about "unions" or "regulations" or "corporate taxes" or "incompetent American workers". Those are just red herring balloons sent upward to mislead the public so we don't get angry at corporations for sending our jobs overseas and damaging our economy while they rake in massive profits and enjoy preposterous financial benefits for themselves.

      January 8, 2014 at 4:57 pm | Reply
  9. Keith

    It has been a failure in the United States for the working class. Free Trade has done nothing for the Middle Class or the poor in America. The rich are getting richer but Wall Street does not do anything for 80% of America.

    January 7, 2014 at 12:37 am | Reply
  10. Dr veruju

    have-we-reached-the-end-of-globalization?
    One can only hope so, corporate globalization has been an unmitigated disaster for the vast majority of people, the sooner it ends the better.

    January 7, 2014 at 1:20 am | Reply
  11. American

    "Globalization" is code for "exploiting foreign labor." Can't think of any reason to continue shipping jobs overseas while simultaneously taking advantage of poor people in 3rd world countries. People will be able to afford the higher prices here if they have JOBS.

    January 7, 2014 at 1:20 am | Reply
  12. Kephani-el bin Yehudah

    I never liked this Fareed guy. He seems hopelessly trapped in 19th Century thinking. We need globalization of consciousness not trade. Globalized trade only benefits fuel and banking concerns. Localized production benefits everyone, and for certain parts of the world we need draconian birth control. It diminishes all of us when people starve. We've been watching those poor kids in sub-sahara starve for 50 years plus yet they keep having babies. How about trading food for mass sterilization. It sounds awful but is it any worse then the current situation,

    January 7, 2014 at 2:49 am | Reply
  13. David N.

    We haven't reached any end of globalization; from Clinton era NAFTA to the Republican taboo of harming business in the slightest, we've only just begun. Manufacturing and outsourced jobs will just find a country with a worker environment that they haven't tapped yet. The jobs are never coming back, folks.

    January 7, 2014 at 6:07 am | Reply
    • minnie mouse

      So you are willing to patronize corporations while they destroy the economy you exist within.

      January 8, 2014 at 5:01 pm | Reply
  14. Ed t Duck

    Your premise is that global trade is a good thing. I counter that it is terribly destructive to our environment.

    January 7, 2014 at 7:07 am | Reply
  15. Andrew

    Time to off shore the corps andd onshore our future again.

    January 7, 2014 at 7:14 am | Reply
  16. Jim McShane

    One of my sons, a machinist, had two corporations quit on him and move to Mexico.
    Another son, an Engineer, had one company quit on him and move to China and had
    another send him to China until he said no more.

    In all the comments above no one mentioned TPP or NAFTA on steroids that is
    coming down the pike. That's probably because the government is not talking
    about it until it happens. In a 1992 debate Perot said if NAFTA were enacted
    we would hear a "giant sucking sound of good paying jobs leaving the country."
    And yes we do need unions that built the middle class. Now they should
    concentrate their efforts on exploited people here at home-service sector
    workers. Their wages need to be raised above the poverty level. As it is now
    low pay companies payrolls are being subsidized by taxpayer funded
    assistance programs. Raising the minimum wages would force low pay
    companies off the government dole and stimulate the economy at the
    same time.

    January 7, 2014 at 7:45 am | Reply
  17. Erik

    Is globalization over? I sure hope so, the last 30 years have pretty much been a disaster, certainly for anyone in this country who isn't management in a multinational or who works in a government-subsidized industry.

    January 7, 2014 at 8:49 am | Reply
    • wakeupAmerica

      Very good comment! And yet, we keep slumbering on........

      January 11, 2014 at 11:55 am | Reply
  18. Joey Isotta-Fraschini©

    It was the unrealistic raising of wages for jobs requiring low levels of skill that sent those jobs abroad. Eventually, expectations of labor will be adjusted, and jobs will return to the USA for qualified workers. Even then, however, wages will have to be realistic, and there will still be many who prefer not to work as long as the government will support them.
    Organizing labor to raise wages in the service industry will ultimately destroy service jobs as well.
    Life often includes reality, believe it or not.

    January 8, 2014 at 7:55 am | Reply
    • minnie mouse

      So you are holding out for the day when American workers can compete with "the realistic expectation" of $3 hourly Asian wages?

      January 8, 2014 at 5:05 pm | Reply
  19. minnie mouse

    Destroying service industry jobs? How does that work exactly? We'll import Asians to serve as nurses aides in nursing homes to give gramma her bath? Or maybe a GE robot?

    January 8, 2014 at 5:07 pm | Reply
  20. FM

    Once you strip off all the brass & BS, globalization hasn't done any favors for the US middle class. Corporations certainly.

    January 9, 2014 at 1:42 am | Reply
  21. Rick McDaniel

    Globalization requires feeding..........but once you have consumed all of the assets of a nation, in that effort........there is nothing left to garner.

    January 11, 2014 at 10:29 am | Reply
  22. desertvoice

    I am flabbergasted that the author of this article missed a crucial factor, namely, that thanks to globalization, as I write, the European media (Gazeta.pl (Poland)) have announced that, quietly, "China has just surpassed the U.S.commercial output." This happening, for the first time ever in history,. should pose us to think: Is globalzation destroying America's future? Why have we given China so much slack? Where are our thinktanks? Is anyone responsible for the future of America, anymore?

    January 11, 2014 at 2:35 pm | Reply
  23. JW

    Globalization of physical goods may be slowing down, but globalization of ideas, design, and research and development are going strong.

    January 13, 2014 at 9:57 am | Reply
  24. David

    It's the over consumption by the people in the first world, rather than an over populated world

    April 18, 2014 at 11:14 am | Reply
  25. Travis B

    I don't think that trade will ever completely stop. In America we look for the cheapest goods,so that why we wouldn't stop trading.Also when you are in business you look for the cheapest way to make your good,so if you let the Chinese make your good and get it for 50 cent a piece it's better than if you stay local and pay the American works 75 cent to a dollar piece.one thing that concerned me is when it said "the last time the world saw consistent period were the 1920,30,and 40s." I don't know a lot about globalization but I know a lot about history and in history those years were the years of the Great Depression.

    May 4, 2014 at 11:03 am | Reply
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    May 26, 2014 at 9:37 am | Reply
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