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Russia’s war in Ukraine is accelerating the de-globalization movement. Europeans realize that their security depends on greater economic sovereignty.
And it is in the most outward-looking European nation that awareness is most spectacular. We talk about Germany and its stratospheric trade surplus making the world envious. Chancellor Olaf Scholz wants to do without Russian hydrocarbons, coal, oil and of course gas as soon as possible, to get out of this destructive dependence in a war situation. It’s a 360 degree turn with the doctrine ” change through trade », change through trade. It has been adopted by all its predecessors since reunification. All convinced that trade could soften the harshest regimes. That of China where the Germans sell cars and machine tools in profusion, that of Russia, their preferred supplier of gas. This theory of trade conducive to peace is not new: at the beginning of the 20th century, it was the conviction of the British thinker Norman Angell. A belief quickly swept away by the First World War, it will abruptly put an end to the emerging globalization of the economy.
At the start of the 21st century, the first warning shot came with the pandemic
Europeans, like many other countries, are realizing that they depend on the outside for products that have become vital, such as masks, gloves, semiconductors or vaccines. Countries with a strong pharmaceutical industry were the first able to manufacture the serum and thus protect their population. We rediscover the virtues of homemade. Value chains have been celebrated by champions of globalization because they have made the production of goods more efficient and therefore cheaper for the end consumer. They are proving to be fragile with freight congestion, and counterproductive in a crisis situation. The pandemic and now the war highlight truths that other countries have understood long before.
Russia, for example, sought to become more self-sufficient following Western sanctions in 2014.
This is also what China cultivates. It has always ensured its development taking into account its national security and its sovereignty. With the made in china 2025 plan designed in 2015, Beijing is seeking to move upmarket by substantially increasing the share of intermediate goods or components manufactured locally. In reaction Donald Trump launches his anti-Chinese trade crusade. Meanwhile Narendra Modi made made in India the cornerstone of his economic policy. The ebb of globalization has been underway since 2008. That year, trade represented 60% of world GDP, the financial crisis plunged trade and awakened populism. Since then, the share of trade in world GDP has tended to fall, it is only 50% today.
Is it the return of autarky?
We are not there yet. This option is too expensive and especially materially almost impossible. Most developed countries are too dependent on certain external supplies, in raw materials for example that they do not necessarily have at home, such as oil. But they review their exchanges in terms of their security. The United States, for example, still has a free trade agreement with its neighbors Mexico and Canada, but on the other hand, Joe Biden, in the wake of Donald Trump, is pursuing decoupling with China. For their part, the Europeans want to strengthen the productions considered strategic and review their supply chain, it is all the work in progress to do without Russian gas.