AN ECONOMIC ANALYSIS OF TRADE WAR AND DEGLOBALIZATION IN CURRENT INTERNATIONAL RELATIONS WITHIN THE PARADIGM OF GLOBALIZATION
Abstract
Purpose – the purpose of the article is on the deglobalization processes currently taking place in international economic interactions and attempts to examine how the trade blocs of the major economies affect the rest of globalization. Research methodology – the Kinked Exponential Model was used to determine decadal growth rates based on 31 years of panel data from 1990 to 2020 for 15 large countries (gross domestic product). Three different regression models i.e., Pooled OLS, Fixed- and Random-effect models were estimated to examine the effects of trade blocs and wars between nations on the world economy. Findings – over the study period, disparities and increasing economic inequality between variables have widened. In addition, international conflicts have had a negative impact on international trade and have significantly affected globalization. More importantly, trade blocs, particularly the OECD, APEC, and BRICS have slowed trade with the rest of the world, reflecting a process known as regionalization, in which countries cooperate rather than at the global level. During the third decade of the twentieth century, when the growth rate of trade flows among major countries declined rapidly by 8.8 per cent, this regionalization did not stop and expanded significantly. Originality/Value – the study is particularly useful for analyzing the challenges and opportunities for the international relations and globalization affected by the trade war and deglobalization.
Keyword : globalization, deglobalization, trade war, trade blocs, economic integration, kinked exponential model
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Abdal, A., & Ferreira, D. M. (2021). Deglobalization, globalization, and the pandemic current impasses of the capitalist world-economy. Journal of World-Systems Research, 27(1), 202–230. https://doi.org/10.5195/jwsr.2021.1028 An, J., Mikhaylov, A., & Richter, U. H. (2020). Trade war effects: evidence from sectors of energy and resources in Africa. Heliyon, 6(12). https://doi.org/10.1016/j.heliyon.2020.e05693 Boyce, J. K. (1986). Kinked Exponential Models for Growth Rate Estimation. Oxford Bulletin of Economics and Statistics, 385-396. Brada, J.C., & Mendez, J.A. (1983). Regional economic integration and the volume of intraregional trade: Campa, J. M., Sorenson, T. L., & Campa, J. M. (1996). Are Trade Blocs Conducive to Free Trade? The Scandinavian Journal of Economics, 98(2), 263. https://doi.org/10.2307/3440858 Hillebrand, E. E. (2010). Deglobalization Scenarios: Who Wins? Who Loses? Deglobalization Scenarios: Who Wins? Who Loses? *. Global Economy Journal, 10(2), 1–19. Huang, W., Shuai, B., Antwi, E., 2019. A two-stage optimization approach for subscription bus services network design: the China case. Public Transport, 11 (3), 589–616. Kim, H.-M., Li, P., & Lee, Y. R. (2020). Observations of deglobalization against globalization and impacts on global business. International Trade, Politics and Development, 4(2), 83–103. https://doi.org/10.1108/itpd-05-2020-0067 List of wars: 2003–present. (2022, November 13). In Wikipedia. https://en.wikipedia.org/wiki/List_of_wars:_2003%E2%80%93present Michalak, W., & Gibb, R. (2010). Trading Blocs and Multilateralism in the World Economy. Annals of the Association of American Geographers, 87(2), 264–279. https://doi.org/10.1111/0004-5608.872053 Mishra, A. K., Gadhia, J. N., Kubendran, N., & Sahoo, M. (2015). Trade Flows between India and Other BRICS Countries: An Empirical Analysis Using Gravity Model. Global Business Review, 16(1), 107–122. https://doi.org/10.1177/0972150914553523 Misra, R., & Choudhry, S. (2020). Trade War: Likely Impact on India. Foreign Trade Review, 55(1), 93–118. https://doi.org/10.1177/0015732519886793 N. Reznikova, & O.Ivashchenko. (2018). Projections Of Deglobalization in The Contemporary International Economic Relations in The Context of The Paradigm of Globalism. Світове Господарство Таекономіка Зарубіжних Країн, ВИП (15), 98–106. Rosling, H., Rosling, O. and Rosling Rönnlund, A. (2018). Factfulness. London: Sceptre. S. Roach Stephen. (2022). Deglobalization’s China Wild Card. Project Syndicate. https://www.project- syndicate.org/commentary/china-hit-hard-by-slowing-world-trade-by-stephen-s-roach-2022-07 Sanso, Marcos, Rogelio, Cuairan. Fernando, Sanz. (1993). Bilateral trade flows, the gravity equation, and functional form. The Review of Economics and Statistics, 75(2), 266–275. Stanojević, N. (2020). Deglobalization of the World Economy and its Effects on the Western Balkan Countries. Economic Themes, 58(3), 343–362. https://doi.org/10.2478/ethemes-2020-0020 Stiglitz, J. (2017). Globalization and its discontents. W.W. Norton, New York and London. Pp, 1-304. https://www.anderson.ucla.edu/faculty/sebastian.edwards/Stiglitz.pdf Summary, Rebecca M. (1989). A political-economic model of U.S. bilateral trade. Review of Economics and Statistics, 71(1), 179–182. The Advantages and Disadvantages of trade blocs. (n.d.). Retrieved November 19, 2022, from https://storymaps.arcgis.com/stories/9cf98320c8ca48fa841b969ddc496b97 Trošić, S. J. (2015). Economic globalization-advantages and disadvantages: the place of Serbia and Japan in the globalized World. http://globalthinking20.jimdo.com/food-for- Viner, J. (1950) The Customs Union Issue. Carnegie Endowment for International Peace, New York. Virginia Postrel. (2002). Economic Scene; The rich get rich and poor get poorer. Right? Let’s take another look. - The New York Times. https://www.nytimes.com/2002/08/15/business/economic-scene-rich-get-rich-poor-get-poorer- right-let-s-take-another-look.html Weihua, C. (2022, July 15). Deglobalization and decoupling risk causing more global damage. Retrieved from China Daily: http://www.chinadaily.com.cn/a/202207/15/WS62d0a5b2a310fd2b29e6c6d8.html Yinan Yan. (2021). Sino-US trade war under deglobalization. International Journal of Social Sciences in Universities, 4(2), 50–53.