The Economics Show Martin Wolf talks to Richard Baldwin: What’s the future of global trade?
56 snips
Feb 24, 2025 
In this engaging discussion, Richard Baldwin, a Professor of International Economics at IMD Business School and founder of VoxEU, shares insights with Martin Wolf, chief economics commentator at the Financial Times. They dive into the ineffectiveness of Trump's tariffs in today’s global trade context. Baldwin emphasizes the rise of digital services and invisible trade, challenging the notion of globalization's decline. They also unpack the implications of automation and AI, rethinking labor dynamics and the shift from manufacturing to service-oriented economies.
AI Snips
Chapters
Books
Transcript
Episode notes
Globalization's Plateau
- Globalization's growth isn't as rapid as in the 1990s due to a phase transition.
- Offshoring and outsourcing of manufacturing led to rapid growth in two-way trade, which has now plateaued.
Three Phases of Globalization
- Globalization has shifted through three phases: goods crossing borders, factories crossing borders, and offices crossing borders.
- The second phase, marked by offshoring, was driven by information and communication technology (ICT).
Labor Cost Arbitrage
- ICT enabled labor cost arbitrage by facilitating production coordination across borders.
- This arbitrage has reached a plateau as most suitable manufacturing processes have been offshored.
