How Technology Could Unwind a Decade-Long Trend in Global Trade

Globalization pushes production and jobs to emerging economies while automation in technology has reduced jobs in the developed economies, explains Luke Kawa for Bloomberg Business. The article is based on a note to clients from analysts at the Goldman Sachs Group Inc. led by Senior Asia Economist Goohoon Kwon. As robots become less costly, companies will move production closer to customer bases, and Kawa writes: “This would mark an unwind of the long-standing trade formula, which had the growth of global supply chains at its heart, and it is a net negative for global trade that would have far-reaching consequences.” Emerging economies are seeing a decline in exports due to China’s rebalancing as well as increased investments in technology. “The push-and-pull of globalization vs. automation has implications far beyond trade, potentially influencing everything from inequality both within and between countries, to development models, to interest rates,” he writes. Rising inequality is anticipated both among and within countries. – YaleGlobal