Abstract
This chapter aims to critically analyze the implications that the national protectionist policies have on the global supply and value chains and the relocation of production. The analysis is based on the assumptions that the global economy is facing the possibility of decoupling of many trade connections, and this trend favors deglobalization processes that have long been promoted by populism, nationalism, and economic protectionism. It is concluded that global supply, production, and value chains, although being economically efficient, are no longer any more secure under national protectionist policies, and therefore, the relocation of production processes is mainly due to the increase in the level of income and wages of the developing countries that are the destination and which reduce the advantages to relocate.
TopBackground: Protectionism And Its Effects On The Supply Chain
Protectionism has returned, but we will have to think if we really want to ignore the fruits of globalization and opt for the reasoned “deglobalization” that it called for and that now seems inevitable (Sapir, 2016). The term deglobalization was coined by Sapir (2011) in his work “La démondialisation”, to refer to the protectionism of countries that have a similar level of development, based on the understanding that globalization in its commercial and financial dimensions has not allowed economic growth to be achieved.
The deglobalization process is characterized by the recovery of the sovereignty of nations (due to the reduction of interdependence) and a decreasing trend in the share of exports in the country's gross domestic product (due to the implementation of policies automatic and protectionist measures to reduce economic and trade relations).
Key Terms in this Chapter
Production Relocation: the international displacement of a productive structure.
Protectionism: It is a commercial policy established by a government that aims to protect the national industry against foreign competition with the application of tariffs or any other type of import restriction.
Global Supply Chain: It is the set of activities, facilities and means of distribution throughout the world necessary to carry out the entire process of selling a product. This is, from the search for raw materials, their subsequent transformation and even manufacturing, transport, and delivery to the final consumer anywhere in the world.
Production Line: It is a system formed by people and companies related to each other, by a succession of productive operations.
Value Chains: It is a theoretical model that graphs and allows to describe the activities of an organization to generate value to the final customer and to the same.
Deglobalization: The slowdown or reverse of globalization. A political project opposed to neoliberal globalization. In the first definition, the term describes how global flows of trade, investment and migration can decrease.