Do Turbulent Business Environments Shape Asymmetric Trade Policy Responses? Insights into the Covid-19 Pandemic and the Great Recession

The current pandemic crisis and the Great Recession are the most turbulent events of the XXI century. The aim of the paper is to explore and identify the pattern of response through mixes of harmful trade policy interventions during these two systemic crises.The comparative descriptive assessment focuses on two broad categories of measures, i.e. import-related and export-related harmful interventions. Some stylized facts emerged from this analysis and draw the conclusion that the two major crises have led to different responses from governments, dictated by reasons and specific needs. These patterns of response challenge the future and stability of international trading system and the behavior of companies in the global business environment. Therefore, this research provides valuable information not only for the business community, but for macro-policy makers as well.

PUBLIC-PRIVATE PARTNERSHIPS: POLICY PRESCRIPTION DURING THE ERA OF PANDEMICS

The COVID-19 pandemic caused disruptions in global supply chains that have resulted in prolonged shortages and financial hardships for many corporations. While organizations have dealt with supply chain interruptions for natural disasters and stock market crashes before, the COVID-19 pandemic presented a larger and unique challenge, and it required the need for resiliency in supply chains. This paper discusses several alternatives that can mitigate potential supply chain disruptions. Despite the natural inclination to protect domestic companies and industries, this paper cautions against the use of protectionism policies to prevent supply chain disruptions, as protectionism is proven to be damaging to innovation and eliminates the positive aspects of international trade and globalization. The paper recommends that governments and corporations establish strategically designed and aligned public-private partnerships that simultaneously encourage the principles of the free-market economy while providing increased preparation for supply chain disruptions caused by future global events. We further attest that Public-private partnerships will increase supply chain resiliency while simultaneously enhancing public welfare.

Measuring Global Supply Chain Vulnerabilities Using Trade Network Analysis Method

With the trade network analysis method and bilateral country-product level trade data of 2017-2020, this paper reveals the overall characteristics and intrinsic vulnerabilities of China S global supply chains. Our research finds that first, most global supply-chain-vulnerable products are from technology-intensive sectors. For advanced economies, their supply chain vulnerabilities are primarily exposed to political and economic alliances. In comparison, developing economies are more dependent on regional communities. Second, China has a significant export advantage with over 80% of highly vulnerable intermediate inputs relying on imports of high-end electrical, mechanical and chemical products from advanced economies or their multinational companies. China also relies on developing economies for the import of some resource products. Third, during the trade frictions from 2018 to 2019 and the subsequent COVID-19 pandemic, there was a significant reduction in the supply chain vulnerabilities of China and the US for critical products compared with other products, which reflects a shift in the layout of critical product supply chains to ensure not just efficiency but security. China should address supply chain vulnerabilities by bolstering supply-side weaknesses, diversifying import sources, and promoting international coordination and cooperation.

India's inward (re)turn: is it warranted? Will it work?

India is turning inward. Domestic demand is assuming primacy over export orientation and trade restrictions are increasing, reversing a 3-decade trend. This shift is based on three misconceptions, which we dispel: that India's domestic market size is big, India's growth has been based on domestic not export markets, and export prospects are dim because the world is deglobalizing. In fact, India still enjoys large export opportunities, especially in labor-intensive sectors such as clothing and footwear. But exploiting these opportunities requires more openness and more global integration. Abandoning export orientation is thus akin to killing the goose that lays golden eggs. Indeed, given constraints on public, corporate and household balance sheets, abandoning export orientation is akin to killing the only goose that can lay eggs. © 2023, The Author(s) under exclusive licence to Editorial Office, Indian Economic Review.

Catalysing regional integration in Africa: The role of infrastructure

Now, more than ever, infrastructure integration in Africa has become critical to recalibrating Africa's growth strategy toward increased intraregional trade, especially in an era of global isolationism, protectionism and supply chain disruptions from COVID and the war in Ukraine. This paper investigates the extent to which infrastructure development and integration can act as a catalyst for trade, innovation and income improvements in Africa. Using panel data analysis, we show that the infrastructure sector with the strongest multiplier effect on economic activity is the information and communication technology (ICT) sector, followed by the transport sector, the electricity sector and, last, the water sector. This ranking of the catalytic role of infrastructure sectors should guide policy prioritisation on infrastructure investments to accelerate growth and unlock the potential of the AfCFTA. Benchmarking exercises on infrastructures' catalytic role in the regional economic communities (RECs) show that infrastructure has had the strongest impact on economic outcomes in the East African Community bloc, making the EAC a type of flying‐geese RECs for other regions to emulate.

Post-Crisis Regionalisation of Global Value Chains in Strategies of Transnational Companies

The current global crisis led to the transformation of global value chains (GVC) in strategies of transnational companies (TNCs). The present study aims to establish a causal relationship between the volatility of the world economy and regionalisation of global value chains. Based on historical analysis and a systemic-functional approach, scattered information about the impact of global value chains on the development of TNC strategies was integrated. Thus, various aspects of TNC activities (their participation in international trade, international capital flows, etc.) were analysed together in order to identify the consequences of regionalisation for the strategic development of such companies. The study revealed that the established international production system carries many risks, which are exacerbated by continuing protectionism in international trade. Under the influence of digitalisation, regionalisation of value chains and partial reshoring of production facilities are the key directions for further development of GVCs. Given the rapid cross-border transmission of exogenous shocks, the stability and sustainability of global value chains will determine their development;however, there is no evidence whether GVCs will lengthen or shorten. The high cost of the complex reconfiguration of GVCs towards regionalisation will lead to only minor changes in their architecture. The redesign will affect only some aspects of activities, in particular, the organisation of work with global suppliers. While the weak integration of developing countries into GVCs will remain, the barriers to internationalisation will be reduced under the influence of digitalisation, creating new opportunities for the incorporation of small business into the international production system. In general, global value chains will still be considered a reliable source to reduce the risks of global operating activities of TNCs. The research results can be used for further theoretical and methodological development of internationalisation strategies. © 2022 Institute of Economics, Ural Branch of the Russian Academy of Sciences. All rights reserved.

US-China Economic Rivalry and the Reshoring of Global Supply Chains

Since the Global Financial Crisis (GFC) of 2008, the USA has changed its economic priorities and policy preferences in a concerted effort to bolster its weight in the global economy, reduce over-reliance on global supply chains, and create more employment within its borders. This change has become more apparent in the wake of the Trump presidency and the COVID-19 pandemic. Reviving the manufacturing industry through reshoring is now the main goal of US politicians. This article analyses the two strategies, in light of heightened technological competition with China, that the USA has brought into effect to reshore its factories from the People's Republic of China and so revitalise the American manufacturing industry. They are neo-protectionism and smart automation. Arguing that neo-protectionist policies and smart automation technologies are interrelated factors that have been used strategically to bring American multinational companies in China back to the USA, we examine whether or not these two strategies-each elements of the US-China tech war-can support the reshoring and revitalisation of the American manufacturing industry. We find that increased neo-protectionist measures and proliferation of smart automation technologies alone will not empower the USA sufficiently to consolidate its technological superiority over China, add impetus to its manufacturing investments, and create well-paying jobs for the broader segments of American society through the reshoring of manufacturing activities. To achieve these goals, the USA should instead implement an integrated policy framework that spans industrial policies to technology policies and tax policies to labour market policies. Otherwise, even though reshoring may gain a certain momentum, new industrial facilities will not expand productivity enough to raise the competitiveness of the US economy to satisfactory levels, and such investments might not provide enough new job opportunities to remediate socioeconomic problems.

In Search of Regional Stability in the Age of Hyper-Uncertainty: The US-China Strategic Competition and the Redesign of Regional Order in East Asia

The US-China strategic competition, combined with other structural changes such as the global spread of COVID-19, climate change, and competition for technological innovation has dramatically increased uncertainty in Asia. Against this backdrop, the strategic competition between the US and China in the 21st century shows profound differences from the hegemonic competition in the past. The systemic consequences of hyper-uncertainty, as we are witnessing, are protectionism, nationalism, and the proliferation of conflicts and disputes between states. A collection of four papers in this special issue systematically examine the way in which the US-China strategic competition combined with other factors amplify the instability of the regional order, and explain the dual dynamics of competition and cooperation that Asian countries demonstrate in responding to US-China strategic competition and redesigning the regional order. The US-China strategic competition further amplified the uncertainty of the world order. Strategic competition has limited their capabilities and willingness to provide the leadership needed to organize transnational cooperation though transnational cooperation is essential to effectively respond to transnational threats.

Scarcity nationalism during COVID-19: Identifying the impact on trade costs.

During the COVID-19 pandemic, many countries used export and import policy as a tool to expand the availability of scarce critical medical products in the domestic market (scarcity nationalism). This paper assesses the direct and indirect (via trade in intermediates) increases in trade costs of critical medical goods resulting from these uncooperative policies. The results show that scarcity nationalism led to substantial increases in trade costs between February 2020 and December 2021 for most COVID-19 critical medical products, particularly garments (for example, face masks) and ventilators. The exception is vaccines, which saw a reduction in trade costs, which, however, was driven by the reduction in indirect trade costs for high-income countries, consistent with the view of a COVID-19 vaccine production club.

Slowbalisation in the Context of US-China Decoupling

While it is too early to confirm the depth and the sustainability of this new trend towards slower globalisation, it may be happening in more domains than we are fully aware of, at least for the near term given the renewed backdrop of the Russia-Ukraine war and the wider use of sanctions globally.

The “Dual Circulation” strategy: China’s response to declining international economic connectivity1

The rise of protectionism in Europe and the US, as well as downward trends in international trade, investment, and production, are major aspects of the current decline in international economic connectivity. The lockdown due to the COVID-19 pandemic has additionally weakened relations between economies. All these considerations have prompted economic planners in China to redefine strategies for future development. The response to these disruptions have been a development paradigm, dubbed “Dual Circulation, " referring to the partial separation of “internal circulation, " the domestic cycle of production, distribution, and consumption, from “external circulation, " based on export demand. “This paper shows that due to timely adjustment of economic policies in the past, “Dual Circulation” is a highly feasible and optimal solution for the continuation of China’s development based on the most suitable level of international economic connectivity. © 2023 selection and editorial matter, Liu Zuokui and Branislav Ðordevic;individual chapters, the contributors.

RESETTING THE COURSE TO THE REVIVAL OF US INDUSTRIAL CAPACITY

The article examines the effectiveness of the strategy for restoring the competitiveness of the manufacturing industry in the United States. The main vulnerabilities of the “produce more in America” policy, the course to restore and reformat broken supply chains are considered using the example of key manufacturing industries. It is stated that the policy of rehabilitation of the manufacturing industry pursued by Biden is not a unique phenomenon for the United States. It was adhered to, to a greater or lesser extent, by the Obama and Trump administrations. However, only the Biden administration ordered to put it at the center of the ideology of the American revival. It is noted in this article that structural reforms to transform the industrial sector, implemented with unprecedentedly high financial support from the federal authorities, are directed at creating new jobs, forming new industrial clusters and innovation centers. The main efforts are aimed at targeted manufacturing industries: pharmaceuticals, strategic metals and minerals, electric vehicles, and semiconductors. The use of nationally produced goods, reshoring and the formation of supply chains within the United States are proclaimed as the main preconditions for building a truly strong economy. The concept of “real energy independence” promoted by Biden, relies on renewable energy sources. A new impetus to the “greening” of the energy sector may be given to compensate companies investing in renewable energy sources for the costs associated with the forced replacement of foreign suppliers with national ones. Meanwhile, in effect, the attitude of Washington towards hydrocarbon energy remains fairly loyal, at least at the time of high fuel prices. In the domestic economic agenda, the priorities of industrial policy are being revived, aimed at achieving sole technological leadership. However, Washington’s achievements cannot be interpreted solely as the successes of Biden’s economic policy. An equally significant role was played by the expansion of domestic demand against the background of overcoming the consequences of the COVID-19 pandemic. The vector of further development is determined by the slogan “surpass China and the rest of the world”. The White House is trying to persuade American companies to build new manufacturing facilities in the US in order to compete with Chinese suppliers. However, against the background of China’s obvious desire to develop its own research and production base, the opportunities for American diсtate are narrowing. Import substitution is a slow process – ​“money speaks louder than economic patriotism”. Only a small portion of the business returns to the country, because of global instability, China is considered by a large part of American investors as a fairly safe haven. Washington’s attempts to squeeze China out of the supply chains have only accelerated the implementation of Beijing’s programs aimed at achieving technological self-sufficiency and “de-Americanization”. In recent years, the epicenter of the policy of technological containment, pursued by the United States against China, has shifted towards Russia. Our country is accused by Washington of deliberately orchestrating disruptions in the supply chains in energy and agricultural commodities markets. The experience of anti-Chinese actions, accumulated in the competitive struggle against companies and state organizations, and coordinated with US allies, is being used now against Russian exporters. © 2022, World Economy and International Relations. All rights reserved.

Probing into Economic Development Studies in the Post-COVID Era

Unfortunately, despite the international community's efforts to combat poverty and inequality, both parameters have been on the rise recently. [...]there is a strong need to find a workable (and appropriate in these new conditions) resolution to poverty problems to avoid a global crisis. The new reality of poverty and inequality issues should be addressed by studying global income disparities and possible ways to bridge gaps between poorer and wealthier countries (and people within countries) by promoting innovations, technologies, human capital development, agrarian systems, and social entrepreneurship. The particular focus should be made on the new challenges to sustainable development brought by the growth of global environmental and public health problems, such as climate change, deterioration of air, water, land, and other resources, reduction of biodiversity, and loss of many natural ecosystems.

US-China Geoeconomic Tensions: Implications for the African Continental Free Trade Area

Passage of the African Continental Free Trade Area (CFTA) occurs at a time of rising tensions between the United States and China. Africa's growth and development prospects depend on a functioning and stable multilateral trading system, but recourse to economic nationalism and protectionism is increasingly undermining the open global economy and, indeed, the liberal international order on which free and fair trade depends. This article examines the implications of US-China tensions for the CFTA while assessing the opportunity for closer engagement between African countries and an axis of emerging powers led by China in an enhanced Global South strategy.

The changing contours of global value chains post-COVID: Evidence from the Commonwealth.

The COVID-19 pandemic emphasised the global value chains (GVCs) debate by focussing on whether gains from GVC participation outweigh firms associated risks of demand and supply shocks amid rising protectionism. This paper bridges the gap between the international trade and management literature by examining the impact of COVID-19 on Commonwealth countries, an area that has received scant attention in academic literature. Using the Eora database, we simulate scenarios to examine Commonwealth countries' participation in GVCs post-COVID. We draw on the transaction cost economics (TCE) theory to develop a framework that investigates whether growing protectionism, associated with reshoring, decoupling and nearshoring, could potentially affect the constellation and participation of Commonwealth countries in GVCs post-COVID. Results show that trade protectionism is likely to impact the supply chains and lead to GVC reconfiguration, which could offer opportunities for the Commonwealth countries and firms to potentially gain following the geographical redistribution of suppliers.

The Indian economy at 75

India became independent in 1947 and, beginning in 1950, it adopted a democratic constitution and a socialist development model that relied heavily on protectionism, promotion of heavy industries by the public-sector and strict controls on private investment through licensing. While democracy flourished, the economy languished. After three decades in 1980, per-capita incomes had risen barely more than 50%. This failure led to a very gradual process of liberalisation in the 1980s, with a balance-of-payments crisis in 1991 triggering a more fundamental switch to a market economy model. Growth began picking up in the late 1980s and greatly accelerated in the 2000s. Poverty saw a sharp decline in the post-liberalisation era as well. While COVID-19 shock has dented growth, with a number of reforms already in place, prospects for 7–8% annual growth in the forthcoming decades look excellent.

Do turbulent business environments shape asymmetric trade policy responses? Insights into the covid-19 pandemic and the great recession

The current pandemic crisis and the Great Recession are the most turbulent events of the XXI century. The aim of the paper is to explore and identify the pattern of response through mixes of harmful trade policy interventions during these two systemic crises.The comparative descriptive assessment focuses on two broad categories of measures, i.e. import-related and export-related harmful interventions. Some stylized facts emerged from this analysis and draw the conclusion that the two major crises have led to different responses from governments, dictated by reasons and specific needs. These patterns of response challenge the future and stability of international trading system and the behavior of companies in the global business environment. Therefore, this research provides valuable information not only for the business community, but for macro-policy makers as well La actual crisis pandémica y la Gran Recesión son los acontecimientos más turbulentos del siglo XXI. El objetivo de este documento es explorar e identificar el patrón de respuesta a través de combinaciones de intervenciones de política comercial perjudiciales durante estas dos crisis sistémicas.La evaluación descriptiva comparativa se centra en dos amplias categorías de medidas, es decir, las intervenciones perjudiciales relacionadas con las importaciones y las relacionadas con las exportaciones. De este análisis se desprenden algunos hechos estilizados y se llega a la conclusión de que las dos grandes crisis han dado lugar a respuestas diferentes por parte de los gobiernos, dictadas por razones y necesidades específicas. Estas pautas de respuesta ponen en tela de juicio el futuro y la estabilidad del sistema comercial internacional y el comportamiento de las empresas en el entorno empresarial mundial. Por lo tanto, esta investigación proporciona información valiosa no sólo para la comunidad empresarial, sino también para los responsables de la política macroeconómica

CAPITALISM AND THE SYSTEM OF PATENT MONOPOLIES WERE THE BIGGEST CHALLENGE TO THE TRIPS WAIVER

An interview with Fatima Hassan, a South-African human rights lawyer and founder of the Health Justice Initiative, is presented. Among other things, Hassan discusses how the African continent has positioned itself in the fight for access to vaccines, considering a context of global inequality highlighted by the COVID-19 pandemic, the main challenges to the proposal led by South Africa and India for a temporary patent waiver for COVID technologies such as vaccines and drugs to address health emergencies such as the current COVID-19 pandemic, and the need to highlight the systemic problem of inequality that the pandemic and the protectionism surrounding vaccines have exposed.

Anti-Crisis Programs to Stimulate the Economy in the Context of Destructive Globalization Processes

Purpose: The purpose of the study is to evaluate programs and measures of anti-crisis regulation. The viral factors of the crisis (COVID-19) will strengthen its economic consequences. The results and influencing factors of the current crisis will prove more difficult for the global economy and most of the national economies of the world. The consequences of the current crisis will be more devastating than after the global financial and economic crisis of 2008–2009, therefore, the process of eliminating these consequences will take some time. Design/methodology/approach: The article proposes methods and tools for developing the concept of anti-crisis socio-economic policy, which, firstly, would provide support to national companies, industries and citizens, and, secondly, would contribute to formation of a new business model aimed at the recovery growth of the economy. Findings: The paper identifies the main factors of the savings model of economic behavior of companies and households in conditions of uncertainty. A comparative characterization of new anti-crisis measures applied by governments of different countries with previous forms of harmonized global regulation of the economy was carried out. Originality/value: It was concluded that the main influence on the growth of imbalances is the restriction of demand and the reduction of production of products that are used for subsequent stages of production. To reduce global risks, it is important not only to provide classic financial support to national businesses, but also to create and organize effective cooperation between the fiscal and monetary authorities of developed countries. © 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.

ECONOMIC GLOBALIZATION AND REGIONAL INTEGRATION IN THE POST-COVID ERA

While significant, the impact of the COVID-19 pandemic on economic globalization and regional integration is temporary. The same objective factors that existed before the pandemic will determine integration trends in the future. The key role belongs to scientific and technical progress, and the effect of the pandemic was rather on the stimulating side here. Research in the field of medicine accelerated, online mode is already all-pervading and digitalization tends to become ubiquitous. The crisis has brought closer the onset of the Fourth Industrial Revolution, which is expected to open the next stage of globalization, entailing shifts in the structure and dynamics of world production and trade. It can be assumed that new technologies will contribute to the development of the organization of global value chains (GVC), one of the main drivers of economic globalization and regional integration. Probable changes in the way of life and the corresponding shifts in consumption patterns in favor of services will also contribute to modifications in the structure of GVCs. Apparently, we should expect an increase in the processes of glocalization, which can be briefly defined as globalization with local specifics. COVID-19, which has caused disruptions in supply chains, has strengthened the course of self-reliance in the economic policy of some countries. The inconsistency between the method used by governments (protectionism) and the driving forces of the phenomenon that they are trying to resist (scientific and technological progress) leads to losses in productivity and competitiveness. It is necessary to distinguish between re-industrialization, stimulated by artificial methods, from re-industrialization, which has objective reasons and corresponds to the evolution of the world economy. The latter is not equivalent either to the return of previously exported production facilities or to the re-creation of the “pre-globalization” economic structure and cannot be regarded as a manifestation of de-globalization tendencies. The world realized the need to strengthen international cooperation and develop measures aimed at joint preparation and a coordinated response to possible new threats. Outbreaks of protectionism prove to be temporary. The long-term trend towards international trade liberalization will continue. © 2022.