The world-leading insurer believes protectionism is backlash to free trade
A global backlash against free trade has led to a rise in protectionism, according to reports from Zurich today.
The Atlantic Council report, ‘Our World Transformed’, created in association with Zurich, concludes that a rise in global protectionism could not only have a “significant impact on economic growth”, but also could force global companies to restructure supply chains due to business continuity issues and operative disruption.
In the report, various protectionism scenarios were tested – from a ‘globalism resurgence’ to a ‘protectionist victory’. In all global regions, the economic growth rate was lower for a protectionist victory in 2035 against both a base case for 2035 and a global resurgence scenario for 2035.
According to the report: “Recent years have seen a political backlash against free trade and globalisation in wealthy countries, along with a slowdown in export trade. While high-income states have been among the biggest beneficiaries from globalization, there is growing evidence of unequal benefits within countries.”
Free trade agreements such as the Trans-Pacific Partnership (TPP) have been widely associated with the Brexit vote in the UK and the Trump election in the US – both of with have been deemed protest votes for a move towards protectionism in the West.