Deglobalization Remains a Powerful Trend

During a seemingly successful trip to Asia last November, U.S. President Barack Obama announced several breakthroughs. Among them was a promise that the United States and Asian nations would proceed toward the Trans-Pacific Partnership (TPP) free trade deal. Obama and Chinese President Xi Jinping also announced a new climate deal, the first between the two powers, which will commit both the United States and China to significant emissions cuts over the next two decades.

The TPP would seem to be just one of many indicators of our growing interconnectedness with Asia, and indeed of the interconnectedness of the entire world. Today, riots in Missouri are immediately broadcast on Al Jazeera in the Middle East; Facebook boasts hundreds of millions of users in India; and a plane crash in Indonesia is tweeted about around the world within minutes.

But many deeper trends point in a different direction. Since the late 2000s, despite the superficial connectivity of Facebook and Twitter, the world has entered a period of what you might call deglobalization. Global trade growth has slowed dramatically from its normal pace. Banks’ investments and lending outside their borders has plummeted, and investors have pulled out of stock markets across the developing world. Cross-border migration is down. A comprehensive index of globalization produced by the Zurich-based research organization KOF Swiss Economic Institute, which includes such variables as investment dollars, tourism figures, and information flows over the Internet, finds that “globalization has stalled since the outbreak of the [international] financial crisis in 2008.”

You can see more of my analysis on the continued power of deglobalization in the Boston Globe.