Disrupted global value chains and geopolitical shifts

Publication date:
Jordi Bacaria Colom, Professor of Applied Economics, Autonomous University of Barcelona (UAB).

Long before the wave of protectionist activity led by President Donald Trump’s trade wars, with their anti-multilateralist slant, globalisation faced criticism for its effects on inequality and debates raged over whether it was still growing or had fallen into decline. This protectionism has weakened the global value chains (GVCs) that are key to international trade. But then, perhaps the value chains contributed to bringing on that protectionism. It is hard to separate cause from effect.

Whatever the sequencing, the result is that the pandemic has disrupted global value chains. It matters little now if they were growing or shrinking before, the impact is causing profound change that is affecting the industrial sector, particularly transport and tourism services. Sectoral and regional displacement is underway.

Barcelona, a nerve centre for many industrial and services value chains, is at a turning point. The question is how changes in global value chains will affect the sectors involved in international trade and how geopolitical changes influence these GVCs. Should we talk more about geoeconomics than geopolitics?