Selective reglobalization will be the new face of the world

THE EFFECT OF THE NEW WORLD ORDER THAT IS EMERGING WILL PROBABLY NOT BE DEGLOBALIZATION, BUT ECONOMIC AGREEMENTS BASED ON POLITICAL AFFINITY. RATHER THAN OFFSHORING, FRIENDSHORING. BUT IT COULD STILL DIVIDE THE WORLD INTO TWO BLOCS AS DURING THE COLD WAR

by Gianmarco Ottaviano, Achille and Giulia Boroli Chair in European Studies
Translated by Alex Foti

A new world order is on the horizon. And it looks like globalization will never be the same again. In recent years, the efforts of many countries have been directed towards creating alternatives to the integrated global economy that has progressively consolidated after the Second World War. A process that experienced a further acceleration following the war in Ukraine and the consequent economic sanctions inflicted on Russia by the international community. However, the most likely outcome of the ongoing transformation will not be the deglobalization as feared (or hoped for) by many commentators, but a "selective reglobalization" which by altering the traditional multilateral logic of trade agreements could have important consequences for global security and the new world order that is taking shape.

Since the start of the millennium, the global economy has entered very troubled waters: the attack on the Twin Towers, the wars in Afghanistan and Iraq, the crisis of American finance and European public debt, the Arab Spring and war in Syria, the trade war between China and United States, growing inequalities and migratory pressures, food emergencies and increasingly evident climate change, up to the Covid-19 pandemic and the military conflict between Russia and Ukraine, with the consequent return of the nuclear threat.
These events and the reactions they have triggered highlight the diversity of national points of view and the difficulty of converging on common initiatives. While on the one hand globalization has created a large integrated market in which to make the most of the comparative advantages of various countries and economies of scale in production, on the other hand it has united the destinies of nations that have their own histories, cultures, institutions, traditions, and often very different sensitivities from each other. And the differences are now coming to a head.

The invasion of Ukraine by Russia has raised, once and for all, a fundamental and uncomfortable question for supporters of pure and hard globalization: is it prudent for democratic societies, whose economies are founded on market capitalism, to keep normal economic relations with autocratic societies, whose economies are instead founded on state capitalism, when these autocratic systems become more aggressive as they become richer thanks to the very same economic relations?

Countries have responded to the tensions of recent years by moving mostly in two directions. The first is returning to nationalism. An approach that, however, is incapable of managing the surfeit of global emergencies that we are facing. Hence the second direction of release of existing political tensions, the one we are witnessing at the moment: countries that, having understood that they cannot go it alone, try to select their alliances on the basis of elective affinities of an economic and political nature. In short, faced with the limits of nationalism, they are seeking “selective reglobalization”: globalization yes, therefore, but only between trusted friends. In short, “friend-shoring”, rather than simply off-shoring.
The underlying idea is that a country can provide a bright future for itself only if it is in full control of its national security also from an economic point of view. Let us assume for the sake of hypothesis that the selective reglobalization in progress can be sustainable from the point of view of elective affinities and that current trends are confirmed, leading to a world divided into two main spheres of influence, American and Chinese, competing with each other for the planetary hegemony, between which countries have to choose from. Would they find themselves in a safer world than the one they currently live in? That is doubtful.

From a geopolitical point of view, it would be a rehashing of the “mad” doctrine of Mutually Assured Destruction, in an era when the devastating power of weapons of mass destruction and the number of countries that have them at their disposal has grown strongly compared to Cold War times. You also have to consider that, from an economic point of view, natural resources would still be divided among countries in an unequal way and the temptation to steal them by force from others would remain a constant threat to everyone's security.
In short, despite the ongoing transformation process, only the multilateral approach born from the ashes of the Second World War can cement the security of all countries in an environment of mutual trust and respect, reflecting their needs in an inclusive way. There are no local solutions to global problems. There is no national security without international security.