2023, a year for economic nationalism?

According to the WHO, this year could be the end of the Covid-19 pandemic and with it the clarification of the general situation that the world will experience in many aspects. One of them will be economic. What will happen to value chains? Will countries continue to promote free trade? How to deal with inflation and other situations generated by international conflicts, such as what is happening in Ukraine? Will more globalization or more regionalism be the answer?

The leaders of the world will have to take clear measures to face the consequences that externalities can generate in their economies. Some of the negative results that globalization and free trade generate are increasingly evident and cannot be ignored. Today we see the main economies, regardless of the parties or ideologies that govern them, implement economic strategies and programs considered “nationalist” to try to reduce the disagreements generated by unemployment, inequality and the low growth of purchasing power. .

It is important to highlight the elements of autonomy, sense of national unity and identity that economic nationalism presents in all of this, regardless of whether it is a simple counterproposal to free trade. These elements are usually convenient for different administrations around the world. Some and some leaders may think that these components can help attack social discontent, promoting more employment and better wages, in certain cases.

Certainly, the strategies of countries like Singapore or the United Kingdom will continue to exist, which will seek to increase their access to new markets, through more free trade, but we are also witnessing how others deepen their regionalisms, perhaps without tariffs, but with more rules of origin. clear or external or specific requests to their products that, unlike free trade, allow States to protect certain national elements and local industries.

The Biden administration’s Build Back Better plan may be a clear example of economic nationalism, whose source of production or engine is based on “the people of the United States.” The European Union is another regional exemplification that executes economic nationalism on multiple occasions and ranges from the simple, such as Emmanuel Macron’s “consume local” in France, to debates over public finances due to bailouts with taxpayer money in times of crisis. ; for example, in flag carriers of countries, as in the case of Lufthansa in Germany. Public and private entities increasingly practice economic nationalism and in 2023 that will not be the exception. For European aviation companies that are flagships of their countries, for example, acquiring European Airbus planes is practically a priority. Regardless of the fact that certain models of the direct US competitor, Boeing, may become more profitable or useful. We will see that the French Air France and the German Lufthansa will continue to prefer to order the planes made in Toulouse than those made in Everett, Washington.

Today, the consumption of a product can exemplify the identity of a country, generate pride, represent its autonomy and unite its people around it, regardless of the fact that there are still things consumed that have elements made elsewhere.

*The author is a COMEXI associate, an internationalist from ITAM and a master’s degree in International Relations from the Central European University.

Twitter: @JuanErnestoTG