Robert Wade:

Is the threat of a protectionist backlash so severe? An FT editorial (Multilateral muscle needed for Doha deal, 3 Jan., 2007) made much the same argument by way of urging states to press ahead with the agreements on the table of the Doha development round. But it undercut itself by pointing out that the last 5 years have seen very fast growth of global economic integration even without the liberalizing impetus of the Doha round. On the face of it, it seems that global integration is being driven by forces not much affected by policy stances–and will continue to increase even if some OECD states adopt higher protection. (See my Letter to the Editor, 8 Jan.)

But this begs the question: Is what is happening really ‘global integration’? Martin uses global and globalization–like just about everyone else–as ‘that which is not national’, and assumes that the global represents the tendency of all contemporary economic relationships. My guess is that part of the underlying dynamic of the world economy comes from the rapid formation of macro-regions, like China-Japan; Northeast Asia-Southeast Asia; US-Canada; continental western Europe; the Nordics. Macro-regions have become strong and are becoming stronger in terms of (a) correlated fluctuations of major economic variables, (b) trade, (c) sales of multinational corporations. (Alan Rugman et al. show that hardly any of the top 500 MNCs have ‘global’ sales, in the sense of at least 20% in each of North America, Europe and East Asia and less than 50% in any one of them.) The answer to the FT editorial’s implied paradox — little further trade/investment liberalization over the past 5 years yet very fast ‘global’ integration — may lie in the point that the integration is more regional than global, and that the regionalization drivers are not mainly to do with policy stances.

‘Globalization’ and the dichotomy between national and global obscure the important regionalizing tendencies of the world economy.