EclectEcon

[T]he economic benefits of globalisation in terms of enhanced productivity and purchasing power are sufficient that companies will probably continue to globalise despite attempts to stop them. Certainly, companies have overlooked trade barriers in the past.

Consider the countries that have enjoyed the most international trade growth in the last five years: Vietnam, China, Russia and India. These same four countries are perceived to have the greatest visible (tariffs) and invisible (red tape, intellectual property risk and so on) trade barriers, according to a 2005 survey by the World Economic Forum. India has the highest average tariff rate at 29.1%, Vietnam is at 16.8%, Russia is at 9.9% and China is at 10.4%. It is worth noting, though, that China’s average tariff rate has declined significantly since its accession to the WTO in 2001.

The bottom line? Globalisation is to economists what gravity is to physicists – an irresistible force. One can defy gravity temporarily, at high cost. Likewise, attempting to stop globalisation will come at a high cost – potentially a trip down memory lane, to the living standards of 20-30 years ago.