Implications of Covid-19 for Globalization
- World goods trade and its institution were in a deep crisis before the Corona crisis hit.
- The crisis exacerbates this trend. Achieving “decoupling”, regaining “economic” or “technological sovereignty”, and of reshoring production has become an objective in many countries, including the EU.
- At the same time, digital trade and trade in digital products (software, licenses, …) is more resilient and expected to grow after the crisis.
- These trends are troubling for the EU and for Germany in particular, as their traditional comparative advantage industries will come increasingly under pressure.
- The EU must do much more to defend an open multilateral trade order and to develop appropriate rules in the area of digital trade.