Title page

Contents

Abstract 1

1. Globalization: Rumors of its impending demise have been exaggerated but survival requires collective effort 4

The sinews of globalization: GVCs 8

2. Global prosperity under threat 9

Pollution and infectious disease 10

Climate change 10

Geo-political tensions and mineral supplies 13

Food (in)security 15

Transportation bottlenecks 18

3. GVCs are complex, fragmentary and with long tails 19

Semiconductors 19

Automobile supply chains 21

Vaccine and PPE supply chains 22

Other supply chains 24

4. GVCs (and globalization) imperiled 26

Globalization, crises, and policy reactions 26

Magnifiers of deglobalization tendencies 28

5. Trade wars, incipient decoupling, and derisking using strategic industrial policies 30

The new face of strategic industrial policy and international trade 33

6. Resilient GVCs for a multipolar world 35

7. Concluding remarks on issues and policies 39

References 41

Endnotes 55

Figure 1. World trade helped reduce extreme poverty by three fourths since the early 1990s 5

Figure 2. Projected global fossil fuel production and excess over 1.5℃/2℃ climate goals 5

Figure 3. World trade as a percent of GDP 6

Figure 4. DHL global connectedness index 2001-2022 7

Figure 5. Growth of trade and transport use 1965-2020 7

Figure 6a. Earth's average temperature: 1850-2023 11

Figure 6b. Ocean temperatures on the rise 11

Figure 7. Distribution rising temperatures worldwide 11

Figure 8a. Carbon concentration in the atmosphere 12

Figure 8b. Rising CO₂ emissions 12

Figure 9. Share of top three countries in mining of selected minerals 14

Figure 10. Critical mineral sources and their processing 14

Figure 11. Sources of copper and where it is refined 15

Figure 12. Share of imported oils in total consumption 16

Figure 13. Potential yield of soybean under traditional and modern production regimes 17

Figure 14. Fertilizer prices 17

Figure 15. Mineral used for EVs and conventional cars 22

Figure 16. Stages of vaccine manufacturing 23

Figure 17. PPE supply chains 25

Figure 18. Quantitative restrictions are on an upward trend since 2012 27

Figure 19. So also, are countervailing measures 28

Figure 20. Shares of the US, China, and other countries in ten strategic industries 1995-2020 29

Figure 21. Greater openness was correlated with declining conflict 31

Figure 22. FDI into China 32

Figure 23. Leading suppliers to US manufacturers 1995 and 2018 34

Figure 24. Trade of IPEF countries becoming more integrated with China 35

Figure 25. Imports by the EU of intermediate and strategic goods 38