New rules of the trade game

Can free trade and globalisation flourish in a polarised world?

- MADAN SABNAVIS

A RUN KUMAR HAS written an insightful book about the changing dynamics of global power over time. A global executive with multifaceted experiences, including working with the US government, the author has dwelled upon the changes in dynamics starting from the Bretton Woods agreements.

The book begins from the time various countries got together to foster free trade with liberalism at its core. This helped to bring about economic recovery in the countries affected most by the wars. But things have changed in the past decade and half, driven by various factors, including politics as well as Covid, where the world has gotten more polarised. The dogma is now turning inwards and working more for individual fulfillment, which in a way has made globalisation secondary to the growth doctrine adopted by various countries.

America was the dominant force post the World War and has driven the global agenda and brought about multifold growth not just in global trade but also GDP of participating countries. Kumar uses the concept of total trade to GDP as a measure of openness of any country. This can be measured on a relative scale, not just with other countries but also over time.

Hence benchmarking can be done both ways. These ratios tended to increase until 2008 or so when the Lehman crisis struck followed by the Euro crisis, which in turn caused countries to go several steps back.