By Pedro Anaya, Natalie Blyth, Ravi Hanspal, Michael McAdoo, Sukand Ramachandran, Krishnan Ramadurai, and Sophie Schram
For the past few years, in many parts of the world, a protectionist mindset has been challenging the continuing trend of globalization. This mindset, if it spreads further, could endanger the many benefits of more open international trade—which include allowing multinational supply chains to become more flexible and versatile, giving consumers throughout the world better selection and lower prices, and helping pull hundreds of millions of people out of poverty. Open trade has also facilitated innovation and economic cooperation. The most recent example is the expansion of international e-commerce, which has given smaller businesses and those in developing economies access to global markets.
The current wave of protectionism, which has seen the imposition of new tariffs and other trade restrictions, is slowing down these positive developments. The COVID-19 pandemic represents a further deep shock to global trade. It is prompting a reconfiguration of value chains around the world, as countries look to reduce their reliance on certain foreign suppliers and increase their self-sufficiency in strategic industries, and as firms seek to reduce their dependence on single sources of supply. There is a real risk that these trends may further fuel a damaging spiral of trade restrictions and retaliation.
New research conducted by BCG and HSBC for the Business Twenty (B20) has analyzed a range of scenarios that quantify the collective economic implications of the choice between rising protectionism and liberal trade policy reform.1 For the G20 countries—which account for some 60% of global merchandise trade, rising to almost 80% if EU members that are not direct members of G20 are included—a return to policies supporting market openness could deliver trade value gains in compound annual growth rate (CAGR) of about 2.5 percentage points from now through 2025. This adds up to a total increase of nearly $2 trillion by 2025 versus a status quo scenario.2 In terms of growth in gross domestic product (GDP), this scenario could drive CAGR gains of up to about 2.0 percentage points each year through 2025, representing a nearly $10 trillion increase versus a status quo scenario. These gains would take effect in addition to the pattern of growth already underway and would therefore play a powerful role in the post-COVID-19 economic recovery.
Conversely, if increasing protectionism prevails around the world, it will impose a persistent drag on GDP growth in a global economy already struggling to recover from the COVID-19 pandemic. In a worst-case scenario in which COVID-19 proves to be more difficult than expected to control and contain, an even greater shortfall in growth would result.
The data and analysis also suggest that every country would benefit from the pursuit of open trade, including countries that are currently heading down a protectionist path or seeking to isolate their industries from outside competition. Of course, a global regime oriented toward open and fair trade would still face many challenges. For example, no matter what happens, the world will have to confront the daunting task of enabling economic recovery, including rebuilding sectors and trade routes that have suffered structural damage as a result of the COVID-19 pandemic. But in an open economic and trade atmosphere, the global economy would have a head start measuring in the trillions of dollars.
Komentar