Agreement Globalization

Proponents of globalization believe that this situation allows developing countries to reach their level of production, diversification, economic expansion and improved living standards. One of the obvious results of globalization is that an economic slowdown in a country can produce a domino effect through its trading partners. For example, the 2008 financial crisis had a serious impact on Portugal, Ireland, Greece and Spain. All these countries were members of the European Union who had to intervene to save indebted nations, later known by the acronym PIGS. And the last element is to get involved. We must also realize that there is a lot of irrationality in public discourse. The fact is that trade agreements are needed to manage interdependence more and more and can generate welfare gains. Policy makers need to exchange evidence and educate the broader public, while looking at some unfounded arguments. Every country in the world is affected by globalization. To survive the 21st century, companies in all sectors are taking steps to expand internationally through trade and investment. And companies that don`t see this trend are likely to fall victim to globalization.

Europe and North America are engaged in discussions to cancel or renegotiate existing trade agreements (Brexit, NAFTA), but other parts of the world are moving in the opposite direction. For example, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the Comprehensive Regional Economic Partnership (RCEP) between China, ASEAN countries and other regional partners, and the African Continental Free Trade Area (AfCFTA). We are also in the process of analysing whether the impact of substantive trade agreements on the integration of GVC is heterogeneous across all sectors. In particular, we appreciate a number of sectoral regressions, including a notion of the interaction between the depth of an agreement and the value-added share of a sector in total production. The results indicate that deep trade agreements are particularly important for the integration of GVC into high-value-added industries (Figure 2). Unsurprisingly, these sectors are generally service sectors characterized by non-tangible activities such as research and development or high value-added retail services. The Peterson Institute for International Economics (PIIE) think tank notes that globalization stopped after World War I and that nations moved towards protectionism when they introduced import taxes to strengthen post-conflict surveillance of their industries. This trend continued with the Great Depression and World War II, until the United States played a decisive role in reviving international trade. Over time, preferential trade agreements (ATPs) have become deeper and often go beyond traditional trade policy to include areas such as investment, competition and the protection of intellectual property rights.