Are we heading toward trade wars?

Protesters march against TTIP investment and trade pact in Brussels
There was plenty of opposition in Europe to trade liberalization well before Donald Trump took the United States out of TTIP and other multilateral agreements (source: dpa)
  • Expanding trade promotes peace and prosperity, but the current trend is decline
  • Rising economic uncertainty has fueled populism and state intervention
  • Globalization has powerful stakeholders, however, and may be hard to roll back

If one measures globalization by considering the statistics on international trade, recent years have offered some reasons to worry. While the value of trade involving the G20 group of countries expanded rapidly until the beginning of 2010 (the growth rate reached 10 percent on an annual basis), it then leveled off, before starting to decline in mid-2014. Trade is of course crucial for all economies and especially for smaller countries, where the gains from specialization are greater.

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