COVID-19 has reduced international joint ventures. However, most of the organizations across the world have adopted deglobalization, and it has aided in facing the problems of natural disasters and other challenges. Thus, with globalization and internationalization reduced, organizations are focused on the domestic markets for the investment and manufacturing process. This chapter highlights deglobalization. International trade is also one of the expected survivor tools of the current pandemic situation, but due to COVID-19, it has depreciated, and people have started to believe in deglobalization, which has increased the value of domestic markets. Further, this chapter discusses the risk of deglobalization in the world economy and the consequences of deglobalization on international trade post COVID-19.
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International trading meaning is to trading of resources (goods and services) worldwide. The exchange of trade among countries shows a massive contribution to economic growth. The world is globalized due to raising its importance in recent centuries economically, politically, and socially. However, globalization is a complex idea; it incorporates significantly more than exchange transparency and development of capital. It shows in residents of various nations exchanging thoughts and government cooperation to handle political issues worldwide. The exchange of goods and services is an important part of economic growth. It helps to reduce poverty, generate employment, and create long-term relationships between two different kinds of nations. Trade also helps to minimize the barriers between progressed and emerging nations; these barriers include the approach to the global market, ambiguous regulatory and administrative environment, political situations, etc. (Kumari & Sharma, 2021).
But the worldwide economy is confronting new difficulties, including defeating the sluggish economy in the world and limits risk due to a down world economy. Also, nations should oversee worldwide business and exchange under the developing deglobalization situation (Kim, Li, P., & Lee, 2020). Suddenly, from the end of 2019, world economy is facing new challenges i.e., covid 19, that will be included minimizing the risk (social, health, environmental, physiological etc), overcoming the slow economy and reduce the depressed GDP across the world. Moreover, whole World must manage import and export and trade under the growing deglobalization (Kim et al., 2020). As World aware deglobalization is inverse concept of globalization and it is reduced interdependence and integration towards the across the country. Deglobalization has increased post covid 19 so it has created trade imbalance, high unemployment, and downfall in trade between countries.
Deglobalization term is the result of significant changes in many developed countries, where trade contribution to total economic activity is low from the 1910s until the 1970s.This turn down implies that their economies become less coordinated with the other world economies regardless of the extending extent of economies globalization (NYUDS, 2013). Basically, the deglobalization was only considered in two longer periods, specifically during the 1930s during the great depression and the 2010s, while following the great trade collapse the time of the world trade slowdown set in (Hoekman & Bernhard, 2015).
In the year 2020, the world economy has shrunk due to reducing the exchange the goods & services from one place to another place. Thus, it will take time to improve the GDP growth rate, increase exchange of goods and services, and enhance international trade, because due the covid 19 high risks are spread and all the kind of business into a depression in all over the world. However, Covid 19 hit is not new but still world required taking lots of steps and a history demonstration that shows the cyclic phenomenon of how countries overcome the effects of the recession. These affect different regions however, some areas have been especially affected by the shocks and some of them are impacted excessively less (Van Bergeijk, 2017).
The huge drop in business and output volume has been marked in the year 2020 since World War II. The drop in both world industrial production and merchandise exchanges the primary portion of 2020 were of comparable profundity to those at the box of the Global Financial Crisis (GFC). In any case, they emerged and vanished all the more rapidly, working with a V-formed recovery in 2020. International trade starts grow strongly in 2021 and trade continued to grow strongly in 2021 and has balance some, however not all, of the cumulative losses from the precarious decays seen before (Arriola, Kowalski & Tongeren, 2021).
Beginning pandemic-period assumptions for a two-digit decrease in global business exchange 2020 did not emerge. The business volume of international business has recovered to the pre-pandemic level at an uncommonly high speed from around mid-2020 (Figure 1).
Figure 1. Volume of International Business and Industrial production.