Global Insecurity

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Free Trade in Retreat

  • Why it matters

    Why it matters

    • Germany’s export-driven economy will be hit hard by trade barriers and a move away from globalization.
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  • Facts

    Facts

    • Euler Hermes has calculated that there have been 1,800 new trade barriers erected since the beginning of 2014.
    • The International Monetary Fund has described this year’s global growth of around 3 percent as “moderate” at best.
    • The volume of world trade is only set to grow this year by 1.7 percent, according the World Trade Organization.
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    Audio

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Demonstration gegen TTIP
Doom and gloom for globalization? Source: DPA

The coming year will be dominated by trade protectionism, nationalism and state intervention in industrial policy, according to a forecast by management consultancy Control Risks seen by Handelsblatt.

Charles Hecker, in charge of global analysis at the consultancy, said Western democracies are in danger of failing to emphasize the advantages of globalization to their citizens.

Two major free trade agreements, the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership, or TTIP, which are meant to bind the United States more closely with Asia and Europe, are likely to be the first casualties.

“It looks bad,” Mr. Hecker said. “Globalization has reached a limit.”

He warned that Western democracies are under pressure from populist groups all over the world. “Populism as practiced by Trump is the biggest political risk in the coming year,” he said.

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