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N° 1993 - 04 |
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| September |
| Regional and World-Wide Dimensions of Globalisation |
| Michel Fouquin |
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Since the Second World War, western governments
have implemented trade liberalisation policies which have been very successful
and have spread across the rest of the globe. However, some countries have remained
outside this general movement because of national policies aimed at self-reliance,
or because of the debt crisis, or falling commodity prices, the combination of
which has reduced the purchasing power of developing countries, with the exception
of those in East Asia.
The degree of internationalisation has also varied across sectors. Trade is most extensive in electronic, textile and petroleum products, while other products (cement, food, electricity, domestic and public services) are, by their very nature, more difficult to trade. However, even in these sectors there has been a marked trend towards internationalisation as a result of deregulation and direct investment. But despite these successes, trade liberalisation is still encountering many difficulties, as the Uruguay Round negotiations demonstrate. New forms of protectionism are spreading, and regional agreements are being strengthened. In view of the growth of regional agreements, especially the Single European Market and the North American Free Trade Agreement (NAFTA), a decline of multilateralism is to be feared. That said, foreign trade is expanding primarily between countries that are closest to one another in terms of their level of development and geographical proximity. Regional integration is thus making substantial progress in Europe -both between EEC Member countries and between EFTA and the EEC-and also in North America as well as between the "three Chinas". This is a natural phenomenon that does not threaten multilateralism. The institutionalisation of relations merely makes it possible to speed up the process of liberalisation. Indeed, it can even be argued that the progress of regional integration can constitute an intermediary stage in the opening-up of sectors previously sheltered from international competition. The nature of internationalisation has also changed; the world economy is evolving into a deeply-integrated system. During the 1980s, this process was speeded up by the liberalisation of international capital movements and the technical advances in telecommunications and computers. Internationalisation is thus gradually giving way to a globalisation of the world economic system, reflected especially in the growth of multinationals. Little by little, firms are losing their national base and are elaborating their strategies in global terms.
However, mounting unemployment in Europe, instability in Russia, the emergence of new actors such as China, and the worsening of the situation in Africa, pose a serious threat to the integration of the world economy. Increasingly, the lack of an international monetary system is causing large erratic swings in the relative values of currencies. How can one talk about fair competition when the value of a currency can double without any real justification? These strains could lead to the break-down of the free-trading system and the outbreak of a full-scale trade war.
Globalisation is said to be a phenomenon based on the MNC's autonomous development of a world strategy. In fact when looking at different experiences it can be seen that there are very different practices. American firms tend to be truly globalised firms. In contrast, Japanese firms keep a very strong national base and play the global game in production only when there is no other way to expand. What can be said of the NIC's? They have experienced both FDI as host countries and as outward investors in other Asian countries. There may be two different stories, with Korean firms playing the game rather as Japanese firms, while Taiwanese firms are playing a more truly global game. |
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