HookThe peak was 2008
Global trade-to-GDP peaked in 2008 at 61%. It has been flat or trending down ever since. The 2008 financial crisis cut it; the eurozone crisis kept it flat; the 2016 Brexit vote and the 2018 US-China tariff wave bent it down. By 2024, the World Bank estimated UK goods trade with the EU had fallen 15% relative to a counterfactual, and US imports from China had been displaced (not eliminated) into Vietnam, Mexico, and India.
Globalisation isn't reversing — the level is still high. But the political consensus that drove the 1990–2008 expansion is gone. "Friend-shoring" and "near-shoring" are now in OECD working papers as official policy targets. That's a regime change worth taking seriously.
ModelComparative advantage and its discontents
Comparative advantage (Ricardo) — countries gain from trade by specialising in what they produce at lowest opportunity cost. The total gain is real and large. But it's distributed unevenly: factors of production used in the comparatively-disadvantaged sector lose out absolutely. The aggregate-gain / distributional-loss tension is the whole political economy of trade.
Global value chains (GVCs) — a single iPhone touches 40+ countries before final assembly. WTO rules govern tariffs, dispute resolution, MFN treatment. MNCs coordinate the GVCs and capture much of the rent. FDI moves capital across borders; portfolio flows follow yield, and both can reverse quickly.
ExamWhat examiners want
Don't argue that globalisation is uniformly good or uniformly bad. The aggregate gain is real; the within-country distributional loss is also real. The high evaluation move is to specify who gains and who loses in a given case, and what that implies for policy (retraining, transfers, place-based support).
Real numbers help: UK goods exports to EU pre-Brexit (2015) ≈ 46% of total; recent prints (2024) ≈ 42%. China's share of global manufacturing ≈ 31% in 2022. The marker rewards specificity.