The World Trade Organization (WTO) warns of fragmentation in the global exchange of goods. “We are not yet seeing large-scale fragmentation, but there are initial signs,” said WTO chief Ngozi Okonjo-Iweala at an event in Geneva. She called this trend dangerous. It could also end up being “very costly.” “Let’s rethink globalization,” said the Nigerian.
With her statements, the WTO head played on trends such as the so-called Friendshoring at. This means when company processes are relocated to countries where similar values are shared. A number of Western companies, for example, are looking for alternatives to China as a production location. There is concern in the executive suites that if the People’s Republic attacks Taiwan, similar sanctions from the West could follow as against Russia after the start of the attack on Ukraine.
That too Reshoring spoke to the WTO chief. This is the name given to the relocation of production facilities from emerging countries back to the industrialized countries. “Let’s not do this,” Okonjo-Iweala said of these two trends. A strong fragmentation of the global economy could reduce global economic output by up to seven percent, warned the International Monetary Fund (IMF). From the perspective of the Deutsche Bundesbank, globalization, which has long been an important catalyst for the development of many emerging countries, could lose considerable power. Unequal competitive conditions on the Chinese domestic market are also an important reason why many foreign companies have been withdrawing from the country for some time. Other emerging countries have now stepped into this gap, such as India, which is a democracy.