Do globes have anything to do with globalisation?

When I was little, my brother and I had a world globe in our room. We often played a game where we would spin it and, while closing our eyes, stop it with a finger. Wherever the fingertip landed was where we would imagine travelling to.

When I now walk around Oslo, I have started taking pictures of windows with globes in them. Among all the Palestinian and Ukrainian flags and rainbow colours in various combinations, I fantasise that the globe is a quiet defence of a world where everyone can travel where they want and trade with whomever they wish.

Borders have always existed. But border walls between countries were rare, until a couple of decades ago. At the end of WWII, there were only five. When the Berlin Wall fell in 1989, there were less than a dozen. Today there are 74, writes the researcher Élisabeth Vallet in an article for the Migration Policy Insitute in Canada. 

Source: Élisabet Vallet/Migration Policy Institute, Canada

 A border wall is often erected by just one of the neighbouring countries and can be made from concrete or barbed wire. It also needs to be surveilled. At the end of the Cold War, there were only 200 kilometres of border walls in Europe – mainly in Cyprus and between Lithuania and Belarus. Today, there are 2000 kilometres of walls. 

The EU has been at the forefront of promoting borderless cooperation. The Schengen Agreement, which was established in 1995 with five member countries, made it easier to cross internal EU borders, while the outside borders of the 29 countries that are now part of the agreement have been strengthened.

But the flow of refugees from Syria and the Corona pandemic showed how quickly borders can be shut again – even within Schengen.  

For instance, since 15 September, Germany has reintroduced border controls at all of its nine borders. Earlier, there were controls only at the borders with Poland, Switzerland, the Czech Republic and Austria. The border controls will be in place for six months.

Pandemics are no longer the only reason why different forms of border controls are being reintroduced. The German interior ministry says the border controls are being reintroduced to protect the country against Islamist terrorism and serious cross-border crime. The picture is from Oslo International Airport during the pandemic.

The flow of people is not the only thing that has slowed down. In 2008, for the first time, global trade did not grow faster than the world's gross domestic product (GDP). That year was the pinnacle of the financial crisis. But trade picked up quickly and that is why many now doubt deglobalisation will happen. 

To understand that paradigm shifts sometimes happen – when what everyone believes in turns into something new – we need to broaden our horizons.

One of the lessons from history class that I can still remember is David Ricardo’s theory of comparative advantage. As Wikipedia puts it: 

“The basis of the theory of comparative advantage is modelled on a simple scenario involving two countries, here England and Portugal. According to the basic theory, each country has absolute advantages in producing certain goods.

“Specifically, Portugal could produce wine more cheaply than England, and England could produce cloth more cheaply than Portugal. This means both countries should specialise in their respective goods and then trade with each other to also benefit from the other product. This is the foundation of international trade.”

"All countries benefit from free trade"

According to Ricardo, all countries benefit from free trade. In 1750, as the industrial revolution began in the UK, the country produced only 2 per cent of the world’s total output of goods. The USA produced a measly 0.1 per cent while China produced one-third.

By 1880, the UK had reached its zenith as a world producer. The country produced a quarter of all goods. When WWI broke out, that share had shrunk to 13 per cent and since then it has kept falling to today’s 3 per cent. 

The development in the USA has been even more dramatic. By 1880, the country had overtaken the UK and was behind one-third of the world’s production. With undamaged industries after WWII, the USA’s share rose to a top in the 1950s, when the country produced 45 per cent of global goods. 

When I was a young journalist in the 1980s and started work at an economics editorial team, it was said that Denmark had a larger export economy than China. After Chinese leaders broke with Communism and opened up for foreign investments, China has been behind the largest-ever change in world trade.  

When the country became a WTO member in 2001, the trade accelerated further. China now produces around one-quarter of all goods in the world, including 71 per cent of mobile telephones and 63 per cent of the world’s shoes.

China’s dramatically increasing share of world trade is shown in a graph in Mario Draghi’s report The Future of European Competitiveness. This shows the share of EU, US and Chinese trade in global goods when the internal trade between EU countries is excluded. As a trading block, the EU has lost 3 percentage points while China has increased its share of global trade by 13 percentage points since the year 2000. Source: EU/WTO

This is how Mario Draghi sums it up in his report to the European Commission:

“The previous global paradigm is fading. The era of rapid world trade growth looks to have passed, with EU companies facing both greater competition from abroad and lower access to overseas markets. Europe has abruptly lost its most important supplier of energy, Russia. All the while, geopolitical stability is waning, and our dependencies have turned out to be vulnerabilities.”

Mario Draghi is a former Italian prime minister and central bank head who has written a report for the EU Commission. Photo: EU.

Ever since Donald Trump changed the USA’s trade policy and introduced tariffs in 2018, the country has been in a trade war with China which the EU is now also joining. From November, the tariff on Chinese EVs will increase from 10 per cent to as much as 35.3 per cent for five years. 

When tariffs and trade barriers are removed, it happens after long negotiations where the needs of the parties are carefully considered. When trade wars erupt, it is sudden and the aim is to hit the other side where it hurts the most. China promptly responded to the EU’s decision by dramatically increasing tariffs on French cognac.

The Draghi report also includes a graph that shows how the number of trade policy measures—such as tariffs, state aid, and other decisions affecting trade—has emerged in recent years: 

Source: Global Trade Alert.

The measures have different effects and do not hit all countries in the same way. Measures that promote free trade are relatively evenly distributed between the world’s countries. However, when looking at which countries introduce the most trade barriers or support their own industries in ways that distort competition, the USA, China and Brazil come out top, according to Global Trade Alert, which aims to provide the most complete picture possible of global trade.

The Nordic countries have followed the EU and introduced comprehensive sanctions against Russia after its latest invasion of Ukraine on 22 February 2022. So far, no Nordic country has ended up in any bilateral trade wars with China. But there are signs this might change.

According to a report on trade restrictions submitted to the EU, China has blocked the export of graphite to Sweden for many years, reports Sveriges Radio. Graphite is an important component in EV batteries and China dominates when it comes to its production. 

According to Olof Gill, the EU Commission's spokesperson on trade issues, Sweden is the only EU country affected by China's trade barriers on graphite.

“We have been in close contact with the Swedish authorities on this issue, and since 2020, China's Ministry of Commerce has stopped approving export licenses for the export of artificial graphite products to Sweden, in our opinion without an explicit decision or any further explanation," Olof Gill told Sveriges Radio. 

So far, the crisis-stricken Swedish battery company Northvolt in Skellefteå has managed to source graphite from suppliers other than China. 

At Kunstsilon in Kristiansand, visitors can watch a film about how the grain silo was constructed in 1935 to secure the country’s grain supply. Today it is filled with art instead.

But it is one of many worrying signals. When Ukraine was invaded in 2022, there was a lot of worry about what would happen to the country’s grain exports. Various agreements were made with Russia, but the current stability of Ukraine's grain exports can largely be attributed to successful military actions by Ukrainian forces. These forces have managed to sink about a third of the Russian Black Sea Fleet and forced Russia to withdraw its ships from Ukraine's coastline.

Meanwhile, there is the war in the Middle East not far from the Suez Canal, where one sunk ship would stop traffic for months. 

Last summer, we visited Norway's newest art museum in Kristiansand, which has been funded by the private fortune of Nikolaj Tangen, the director of the Norwegian oil fund. The city's old grain silo has been transformed into a modern museum that now houses Tangen's extensive collection of Nordic art. 

Like most people, I was impressed by the building and its enormous volumes. Seeing more art is something I look forward to in old age, but is the art silo really that wise? Would I feel safer if the silo was full of grain?