Page 86 - COVID-19: The Great Reset

appeals from experts and international organizations to refrain
from protectionism.

This sombre scenario is not inevitable but, over the next few
years, we should expect the tensions between the forces of
nationalism and openness to play out across three critical
dimensions: 1) global institutions; 2) trade; and 3) capital flows.
Recently, global institutions and international organizations have

been either enfeebled, like the World Trade Organization or the
WHO, or not up to the task, the latter due more to being
“underfinanced and over-governed” [83] than to inherent

inadequacy.

Global trade, as we saw in the previous chapter, will almost
certainly contract as companies shorten their supply chain and
ensure that they no longer rely on a single country or business
abroad for critical parts and components. In the case of

particularly sensitive industries (like pharmaceuticals or healthcare
materials) and sectors considered to be of national-security
interest (like telecommunications or energy generation), there may

even be an ongoing process of de-integration. This is already
becoming a requirement in the US, and it would be surprising if
this attitude does not spread to other countries and other sectors.
Geopolitics is also inflicting some economic pain through the so-
called weaponization of trade, triggering fear among global

companies that they can no longer assume an orderly and
predictable resolution of trade conflicts through the international
rule of law.

As for international capital flows, it seems already evident that

national authorities and public defiance will constrain them. As
already shown by so many countries and regions as different as
Australia, India or the EU, protectionist considerations will become
ever-more present in the post-pandemic era. Measures will range

from national governments buying stakes in “strategic” companies
to prevent foreign takeovers or imposing diverse restrictions on
such takeovers, to foreign direct investment (FDI) being subjected
to government approval. It is telling that, in April 2020, the US

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