Vol. V / No. 5 | September 2024
Authors:
Baginda Muda Bangsa (Political economy analyst at Laboratorium Indonesia 45)
Karina Apriladhatin (Junior Planner at Directorate of Foreign Policy and International Development Cooperation, Ministry of National Development Planning/Bapppenas)
Summary
The damage caused by World War II has given rise to the notion of globalization and free trade up until today. Data shows that free flows of capital and goods among countries have led to global convergence marked by rapid economic growth and a declining poverty rate. Nevertheless, free trade also has its shortcomings. It creates inequality and increases countries’ risk of the crisis. Global Financial Crisis 2007- 2008 marks the beginning of the globalization scepticism era. Many countries, including the United States and Europe, the biggest proponent of free trade principles, turned their back to protectionism. The situation is aggravated by the US-China trade war, the COVID-19 pandemic, and the Russia-Ukraine War. The future of global free trade looks ill-fated. It seems like the damage is beyond repair. Reverting to protectionism is not the solution. We argue that free trade has brought prosperity to the world, and it will always be. However, revaluation and adaptation of the current global trade regime is imperative to create a desirable future economy. This writing will focus on explaining the possible future scenario of free trade and how we can prepare for the next globalization’s wave.
Keywords: Globalization, Free Trade, Protectionism, Multilateralism