International trade has become so much a part of our lives that there is a tendency to take it for granted, as a normal and essential part of modern society and that of the countries of the world with which we trade. Politicians particularly focus on it, as it is seen as a means of balancing the economy; they particularly encourage the export of British goods and turn a blind eye to all the stuff that we import.
The industrial revolution and its continuum and the development of trading systems
Historically though, trading systems as we know them today were first developed alongside the Industrial Revolution. And again, the UK was a forerunner in developing these new trading systems, as they sold the goods produced in their factories to other countries across the world, particularly to members of the British Empire, such as through the East India Company in India. This change from the local exchange of goods to the export of goods across continents and the world has had such a great impact that its influence now affects, and influences, the whole world’s economy. The nations of the world have become so inter-connected through trade that, if one country goes through economic difficulties, then all the others are affected by it too. Because of the strong link between trading and the industrial revolution and its continuum, I have to consider it, and its effects, as one of the major interconnections that has led us globally to the situation in which the future of our planet is at risk. Indeed, I believe that free trade is at the centre of it all.
The Industrial Revolution ended more than a century ago but the effects of it, the trading systems that were developed alongside it and the IR Continuum, still have a growing global impact.
The effect of the IR Continuum on global trading systems has seen the rise of multi-national companies (mostly of American origin), not only trading with other countries but also setting up business abroad, in order to cut costs, employ cheaper labour and to avoid national tax tariffs. It is not unusual now to see MacDonalds, Kentucky Fried Chicken, Monsanto and other multi-national outlets in most capitals of the world. This is sad because the setting up of food and clothing outlets selling goods that promote the American way of life has the effect of damaging indigenous cultures and their traditions.
We also see locally produced goods transported across oceans and continents in order to trade with partner countries many thousands of miles away. In the UK, for example, we import apples from New Zealand and Chile, fruit from South Africa, fish from Japan and Argentina, clothing and digital goods from the Far East, vehicles from Europe and so on. The invention of the refrigerator has played its part in preventing perishable goods from decomposing whilst in transit.
Fig. 34 A multi-national outlet for the USA in Japan (from: blog.getchee.com)
Changes in trading patterns across the world since the industrial revolution can also be contentious. For example, when I lived in Australia during the early 60s, the UK was considering whether it would join the European Common Market (now the EU). This was very unpopular with Australians, as they had a special trading relationship with the UK, as part of the British Commonwealth. However, Britain did join the EU and so Australia had to develop other markets, closer to home, and were able to survive this change. But the resentment it caused in some Australians towards the EU, and the British, is still present today, as seen by the anti-EU stories constantly being peddled to the UK population, through the Australian-owned media magnates.
There has been a big change in Britain’s trading patterns as, during the 1940s-50s, about 40% of our trade was with Commonwealth countries but this is now down to 10%, as the EU has become our major market.
Large Companies and Climate Change Denial
The largest company in the world, ExxonMobil, produces oil and gas and a recent article by Shannon Hall, in Scientific American32 reports that this company was aware of climate change as early as 1977, before it became a public issue. The company then spent decades refusing to publicly acknowledge climate change and even promoted climate misinformation. Hall likens this approach to the lies spread by the tobacco industry regarding the health risks of smoking. Exxon became a leader in campaigns of confusion and helped create a Global Climate Coalition to question the scientific basis for concern about climate change. It also lobbied to prevent the USA from signing the Kyoto Protocol in 1998 (to control greenhouse gases), also influencing other countries, such as China and India, not to sign as well. It has spent $30 million on think tanks that promote climate denial, according to Greenpeace. Hall’s article provides data that suggests that half of the greenhouse gases in our atmosphere have been released since 1988. If ExxonMobil had been upfront about the issue in those early years, there could have been so much more progress on climate change than there has been. The company obviously had vested interests in opposing the scientific evidence but they now have a lot to answer for. And there are now rumours that Shell is under investigation for doing a similar thing.
It has recently been reported that one of the major American charitable foundations (Rockefeller Family Fund) has announced that it will cease to invest its funds in fossil fuels and, in doing so, made the following statement: “We would be remiss if we failed to focus on what we believe to be the morally reprehensible conduct on the part of ExxonMobil”.33
Table 3 shows that there are three energy companies amongst the 10 largest companies in the world and the top British company, BP, is the 17th largest in the world. Energy companies obviously have much to lose once the issue of carbon emissions is properly dealt with by global agreements to reduce them. ExxonMobil would have better spent their $30 million researching into new forms of renewable energy; it is currently worth more than $300 billion.
Table 3: Largest 25 companies in the world (from google images and http://bespokeinvest.typepad.com/bespoke/2009/04/largest-companies-in-the-world.html)
Carbon Majors – the companies who emit the most greenhouse gases
90 carbon majors have been identified as being the major emitters of the greenhouse gases that are primary drivers of climate change. Since 1751, they have produced 65% of the world’s total industrial carbon dioxide emissions according to a study by Richard Heede of the Climate Accountability Institute34. The 90 majors include 50 private companies, 31 state-owned companies and 9 nations. Twenty-one are based in the US, 17 in Europe (five in the UK), six in Canada, two in Russia and one each in Australia, Japan, Mexico and South Africa. Of the state-owned companies, Saudi Aramco has the highest emissions, followed by Gazprom (Russia), National Iranian Oil Company, Pemex (Mexico) and British Coal. The top 10 carbon majors are:
Chevron USA, ExxonMobil USA, Saudi Aramco Saudi Arabia, British Petroleum (BP) UK, Gazprom Russian Federation, Royal Dutch Shell, National Iranian Oil Company Iran, Pemex Mexico, British Coal Corporation UK and ConocoPhilips USA For full details of these companies, and where they rank, are given by Greenpeace35.
Last September Greenpeace Philippines were so concerned about the devastation caused in their country by a major typhoon, that they filed a human rights complaint to the Commission of Human Rights, against the 50 largest multi-national private companies36.
The Volkswagen deception
ExxonMobil has not been the only large corporation to deceive the public on the issue of carbon emissions. Just recently, it has come to light that the large German car-manufacturing company, Volkswagen, has tried to avoid green regulations and tests by fitting its cars with devices to cheat the emissions tests carried out on vehicles. The scandal has resulted in Volkswagen shares falling by 40%. This deception is akin to the deception propagated by ExxonMobil, described earlier, where large and successful companies have used their trading links to make money for themselves at the expense of the health of the planet. One wonders how many more companies will come to light which are carrying out similar deceptions for selfish reasons.
Earlier this year, a new independent organisation was set up in London (InfluenceMap.org), to map, analyse and score the extent to which corporations are influencing climate change policy. An article in ExaroNews37 published in 2015, reported that research from InfluenceMap has demonstrated that car manufacturers (especially those in Germany) have been lobbying strongly against climate-change policy, especially those who have made little progress in complying with future standards for emissions of CO2 in the EU and US. The InfluenceMap article ranks car makers according to their compliance with the 2020 standard on emissions, with Nissan coming top, followed by Honda, Renault and Peugeot. According to the report, the world’s 12 biggest car manufacturers would be facing fines of $35.7 billion if the 2020 rules on emissions were to be applied now, with Volkswagen paying more than any of them, at $9.5 billion. Car manufacturer Mercedez-Benz has admitted that meeting the 2020 emission standards poses a technological strain (also reported in ExaroNews). One wonders why none of them have acted sooner to develop greener cars, as some of the Japanese manufacturers have done.
Trade and Competition 1
The problem is that trading evokes a competitive spirit, even in the largest and most affluent companies, and the temptation to cheat can be persuasive. As well as the deceptions already mentioned, there has been the development of parallel economies, in which companies try to evade taxes and tariffs by investing their profits in offshore accounts. There are many people throughout the world who try to avoid national taxes by setting up their own parallel economies. They contribute to an underground economy or “black market”, which is a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided. It includes many multi-national businesses, as well as those involved in the growing and selling of illegal drugs.
Because trading has become an endemic part of the global economy, embargos on goods are often used as powerful political weapons to bring other countries “into line”. Examples of this are the embargos on South African goods during the apartheid era and that currently being imposed on Russia because of its occupation of the Crimean region of the Ukraine.
The competition for markets associated with trade has far-reaching effects across the globe. Politicians talk about it as being a vital part of the economy and in so doing, they encourage this competitive spirit. Its linkages into the economy and how trade-associated competition is making global warming and climate change worse, will be discussed later in this chapter and in chapter 7.
The whole trading scenario reaches into many aspects of life and plays just as important a role in the development of climate change, as the industrial revolution has done.
Oil has also come to dominate global trading systems, with prices being hiked by the oil-producing countries, with non-oil-producing countries being held to ransom. Most governments fear that having no access to oil will impair their ability to manufacture and to trade, and thus impact on their national economies. The fear of losing access to oil has had a huge impact on national decision-making and the willingness to go to war to wipe out regimes who have large oil resources and who are not friendly to the western world. All of these fears, and the actions associated with them, are futile really because, if we are to save the planet, we need to stop using oil and other fossil fuels, by leaving them in the ground, and to replace them with renewable forms of energy. Perhaps ExxonMobil and BP and other oil producing companies still need to learn this.
Fig. 35 An oil well
Further details about the movement of oil around the world (in terms of imports and exports) are shown on the Carbon Brief website38, which appears to show that exports of oil were still increasing in 2014, compared with 2004.
At present, oil-producing countries have the upper hand but I do not see this as lasting, as there is a move to using non-carbon-emitting forms of energy, such as solar panels and wind, tidal and water-based energy. This could completely change the whole dynamic of global trading. If they seize the opportunity, some African countries in Saharan and sub-Saharan regions, could move from being poverty-bound regions, to replacing the oil-producing countries in the pecking order, by becoming leaders in producing and supplying cleaner forms of energy, such as solar power. Chile has already made a start by building a “farm” of solar panels in a desert area; this already supplies enough energy for one of their largest cities.
Fig. 36 Solar power farm in Chile
The trend towards renewable forms of energy has put some of the multi-national energy companies into a panic, as they search frenetically for oil and/or gas in more and more remote places, such as the Arctic.
There is a saddening history of how oil has damaged the environment and some animal and bird species, through oil slicks and spillages, yet the competitive urge to find new places to drill for oil and other gases continues unabated. The following three photographs show some of the consequences of oil spillage.
Another area of concern is the new practice of fracking where licences have already been obtained to carry out this practice, which releases natural gas from under the ground in areas very close people’s homes. Further information and an interactive map of the areas of the UK and Ireland affected by this can be found at the website:
News stories from Canada and America suggest that fracking there is linked to significant earthquakes
News stories from Canada and America suggest that fracking there is linked to significant earthquakes.
The major change in trading systems across the world, since before the industrial revolution, has impacted substantially on the way of life and the economies of most nations of the world, so that whole economies are now based on trading patterns, potential markets and import/export ratios. Indeed, the description of a market economy is considered by some to be a progressive form of government. It is based on the concept of demand and supply, where governments encourage those companies in their trade who are meeting an overseas demand for their goods. The income they receive from overseas is seen to help the balance of payments and to bring about economic growth.
What a market economy fails to do is to analyse, and meet the needs of, its own people, especially those who are in poverty, with no goods to sell. The excuse for failing to help those in most poverty is that there will be a trickle-down effect; in reality this rarely happens.
What does happen is that the rich get richer at the expense of the poor.
Market economies are based on the encouragement of free trade, which is thought by 93% of economists to be a good thing (Ian Fletcher (2010)39 but, as argued by Fletcher, it has led to a situation where some developed nations have huge trade gaps, or deficits, Britain being one of them. This has occurred mainly because some of the developing nations pay much lower wages to their industrial workers and can therefore produce and sell their goods at more competitive prices than those of the developed nations. In 2014 the trade deficit of the U.S.A. was $508,324 billion. Fletcher makes a case for rethinking and reforming current trade policies, by debunking some of the cherished assumptions held by mainstream economists. In the UK, the trade deficit for manufactured goods is higher than that of most other European countries but, in the past, politicians have worked to reduce the deficit by implementing austerity measures, rather than by rethinking our trade policies altogether, introducing localisation policies and making the reduction of carbon emissions a priority.
The UK Office for National Statistics (ONS) provides data which shows that the balance of trade in goods in the UK has shown a deficit in all but six years since 1900. They recorded net surpluses in the years 1980 to 1982, largely as a result of growth in exports of North Sea oil. Since then, however, the trade in goods account has remained in deficit (see Figure 40).
The trade deficit in the UK – from the Office of National Statistics
Figure 41 shows that Britain’s trade in services is doing much better than its trade in goods.
Fig.41 – From the Office of National Statistics
The trade deficit also impacts on crops and foodstuffs produced by our farmers. In 2002, Dr Caroline Lucas, a Green MEP, wrote a report40 entitled “Stopping the Great Food Swap: Relocalising Europe’s Food Supply”. It was based on background research and support provided by Andy Jones and Vicki Hird of Sustain and from Colin Hines, author of “Localisation: a Global Manifesto, published in 200041.
Lucas’s report provides some astonishing data:
- The UK imports 61,400 tonnes of poultry meat from the Netherlands and, in the same year, exports 33,100 tonnes of poultry meat to the Netherlands;
- The UK imports 240,000 tonnes of pork and 125,000 tonnes of lamb while exporting 195,000 tonnes of pork and 102,000 tonnes of lamb;
- In the UK in 1997, 125 million litres of milk was imported and 270 million litres exported;
- In 1996, the UK imported 434,000 tonnes of apples, 202,000 tonnes of which came from outside the EU. Over 60% of UK apple orchards have been lost since 1970.
Thus, we are importing more agricultural goods than we actually export, and importing goods which we produce ourselves, yet our own farmers struggle to make an income. I have also come across figures which show that 46% of the food we eat is imported.
The report stated that trade-related transportation is one of the fastest-growing sources of greenhouse gas emissions and is therefore significant in terms of climate change.
In 2011, Rianne ten Veen, of GreenCreation, updated the Lucas report, providing more recent data, with three case studies on meat, milk and fruit, for the Counting the Costs series of reports42.
The EU Common Agricultural Policy has been accused of creating a situation in which damage is caused to the environment and to rural livelihoods, by encouraging larger, more intensive farms at the expense of smaller, more sustainable ones and leading to the inhumane treatment of farm animals. There is evidence that the transport of livestock and meat across Europe has led to diseases such as Foot and Mouth Disease and BSE being passed from one country to another. The system has led to an absurd situation, which rewards a few, very wealthy farmers, the supermarkets and multinational food companies at the expense of small and medium-scale farmers. It makes no economic sense.
Further data is available in the report, which concludes that this destructive globalisation needs to be replaced with a localisation that protects and rebuilds local economies across the world.
The organisation, Local Futures, has recently released a 16-page action paper, entitled Climate Change or System Change?43 which argues that globalisation (the deregulation of trade and finance through an ongoing series of “free trade” treaties) is the driving force behind climate change. The document makes the case for an international move towards localisation and provides a list of the pro’s and con’s for both systems, showing that the advantages of localisation far outweigh the advantages of globalisation. It provides evidence to demonstrate that globalisation:
- Promotes unnecessary transport;
- Promotes rampant consumerism;
- Is making the food system a major climate-changer;
- Replaces human labour with energy-intensive technologies;
- Promotes energy-intensive urbanisation.
A recent book by Colin Tudge44 proposes a complete rethink of our approaches to farming, through “enlightened agriculture”, without wrecking the rest of the world.
Economic growth is defined as an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. It is the long-term expansion of the productive potential of an economy. The problem with this is that this type of growth (as with so-called progress) is dependent upon relying on producing more and more manufactured goods and finding overseas markets to sell them. It all feeds into the IR Continuum, thus adding to further carbon emissions.
Growth is seen as a good thing by economists and politicians but, as with “progress”, it can’t be good if it is adding to carbon emissions and the destruction of the planet. At present, success in national economies is measured using an index called the GDP (gross domestic product). At the time of writing the growth in the GDP in the UK was 0.5% and, in the USA it was 1.5%.
In his book, “The Growth Illusion: how economic growth has enriched the few, impoverished the many, and endangered the planet” (1999), Richard Douthwaite5,45 sets out how a capitalist system can be redirected to fulfil society’s hopes by restructuring economies to be based on local rather than global imperatives. Some of his ideas will be looked at further in a later chapter.
The Nobel laureate, Muhamad Yunus has promoted the concept of social businesses, which are businesses with social objectives (Creating a world without poverty: by Muhammad Yunus, 2007)46. He believes that we need to recognize the real human being and his or her multifaceted desires. In order to do that, we need a new type of business that pursues goals other than making personal profit – a business that is totally dedicated to solving social and environmental problems. He gives three examples of social businesses:
- One that manufactures and sells high-quality, nutritious food products at very low prices to a targeted market of poor and underfed children;
- A social business that develops renewable-energy systems and sells them at reasonable prices to rural communities that otherwise can’t afford access to energy;
- A social business that recycles garbage, sewage, and other waste products that would otherwise generate pollution in poor or politically powerless neighborhoods.
It may be owned by one or more individuals, either as a sole proprietorship or a partnership, or by one or more investors, who pool their money to fund the social business and hire professional managers to run it.
A social business might be defined as a non-loss, non-dividend business. Rather than being passed on to investors, the surplus generated by the social business is reinvested in the business. Ultimately, it is passed on to the target group of beneficiaries in such forms as lower prices, better service, and greater accessibility. Not only does the investor get his money back, he still remains an owner of the company and decides its future course of action.
It is not known whether a social business feeds into the IR continuum as much as traditional businesses do but, because there are social and/or environmental objectives, one suspects that the carbon footprint will be much reduced because those who run the business are not there to make profit for themselves but to improve society. The Fair Trade movement also has social objectives.
The Organization for Economic Co-operation and Development
The OECD is a forum where the governments of 34 democracies with market economies work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity, and sustainable development.
In recent years there has been an OECD move to start measuring economies according to their green growth. In June 2009, ministers from these 34 countries with market economies signed a Green Growth Declaration47, declaring that they will: “Strengthen their efforts to pursue green growth strategies as part of their responses to the crisis and beyond, acknowledging that green and growth can go hand-in-hand.” They endorsed a mandate for the OECD to develop a Green Growth Strategy, bringing together economic, environmental, social, technological, and development aspects into a comprehensive framework. The Strategy was published in 2011 and formed part of the OECD contributions to the Rio+20 Conference in June 2012.
The strategy identified the following as being the most polluting industries with the greatest CO2 emissions:
- Air transport;
- Water transport;
- Electricity, gas and water;
- Coke, refined petrol and nuclear fuel;
- Land transport;
- Basic metals;
- Non-metallic mineral products.
The document outlines ways to achieve international co-operation on the strategy and ways to monitor green progress. It is a significant document47.
I would support the introduction of a new measure – a green GDP – which assesses only productivity associated with products which do not add to the total global emissions of CO2 and other pollutants. Thus countries’ outputs could be compared using both metrics:
- The normal GDP
- The green GDP
The OECD suggestion of monitoring the green GDP would give incentives to nations to lower their carbon emissions and to focus on developing products which run on clean energy or which can be manufactured with minimal emissions.
Another form of trading of the last few decades is in world currencies and commodities. National currencies vary from day-to-day, according to the world economic situation, and some people speculate in buying and selling currencies, like a kind of international casino. It is a form of risk that titillates the human need for excitement and intellectual entertainment, as does speculation on stock markets and commodities. But it can also help an individual to make money at the expense of some countries with fragile economies.
So, what the industrial revolution and its continuum has done, is to set into place trading systems, and a merchant culture, that it will be difficult to reverse. The most stable system would be for each nation to provide for itself – to become self-sufficient, only buying from overseas those products which cannot be sourced at home – but we are a long way from that ever becoming a reality. It is said that the UK at the moment can only produce goods that meet 60% of its needs. Is self-sufficiency a realistic target to aspire to? Could it be reached within the three generations that we have left?
A local farmer’s market (From clipart)
As with the Industrial Revolution, Britain is again responsible for setting into play an international trading system that now runs out of control, feeding the IR continuum, and contributing to increasing levels of carbon emissions. Britain started it off but, because it is a small country with limited resources, it has long been left behind by the larger countries with vast resources of mineral and fossil-fuel wealth. Britain tries to keep pace with the larger, resource-rich countries but is really fighting a losing battle. It would be much better placed in leading the world in finding ways of becoming self-sufficient, supporting its own farmers and reducing carbon emissions. And by modifying its economy to support those in most need and in developing green products.
Recently in the news has been the collapse of the UK Steel industry, due to cheap imports from China. Rather than trying to shore up outdated plants, which use fossil fuels to make steel, Britain would be better off using governmental investment to lead the world in developing a carbon-free steel.
Trading and Competition 2
I mentioned earlier in this chapter the competitive spirit that trade engenders. I admit that Britain started trading in this way in the nineteenth century, by making use of its empire links, because it wanted to get a competitive edge over other nations. Other countries, who have followed suit and come to dominate trading systems, have also done so for competitive reasons. Indeed, it is almost impossible to separate the concept of a market economy from the concept of competition and rivalry. But, unless, the nations of the whole world stop competing with their neighbours and reinforcing the IR Continuum, then we will no longer be here to compete against each other.
Global co-operation is what is needed at the moment, not competition; Britain needs to join forces with its neighbours to save the planet.
In a recent TEDx speech,”Why We Need to rethink Capitalism”, Paul Tudor Jones II48, formerly from big business himself, talked about a profit-led emphasis (to the exclusion of all else) that has led to a situation in which the concept of humanity has been removed from the corporate world. He said that profit margins, at 12.5%, are currently at a 40-year high and that higher profit margins exacerbate income inequality, with the US having the greatest levels of inequality in the world. He demonstrated a strong link between income inequality and a series of social health metrics. He described a new way of corporate behaviour (The Just Index), in which the public are given a voice.
The Transatlantic Trade and Investment Partnership (TTIP)
TTIP is a series of trade negotiations being carried out mostly in secret between the US and the EU. It is a bi-lateral trade agreement and is about reducing the regulatory barriers to trade for big business and includes things like: food safety law, environmental legislation, banking regulations and the sovereign powers of individual nations. The Independent49 lists six reasons why we should oppose TTIP:
The British NHS, as a public institution, is at risk, as one of the aims is to open up Europe’s public health, education and water services to US companies, which could mean the privatisation of the NHS;
- Food and Environmental Safety: the TTIP’s agenda is to seek to bring European standards on food and the environment, closer to those of the US. But US regulations are much more lenient, with 70% of processed food sold in US supermarket containing ingredients that have been genetically modified. The US also has very lax laws about the use of pesticides and the feeding of growth hormone to cattle;
- Banking Regulations: it is feared that TTIP will remove current restrictions on banks imposed after the 2009 financial crisis;
- Privacy: after a huge public backlash, the European parliament did not agree to an anti-counterfeiting trade agreement (ACTA), which would have allowed internet service providers to monitor people’s on-line activities. It is possible that TTIP may bring this back.
- Jobs: the EU has admitted that TTIP may bring in unemployment, as US has weaker labour standards and trades union rights.
- Democracy; this is the greatest threat that would be brought in with TTIP, as it will allow companies to sue governments, if those governments’ policies cause a loss of profits.
It would appear that TTIP will allow the big US corporations, already responsible for huge emissions of CO2, to be given a free reign to wreak havoc in Europe as well.
The Merchant Culture
In the End Piece to my first book and the introduction to this book, I stated that the world had been taken over by merchants – people who trade in all kinds of goods for their own benefit – and how this was destroying the world. I still hold this opinion, 22 years after first making the observation. The world is still controlled by merchants, as well as the greed and acquisitiveness that often accompanies this merchant culture. Unless this is addressed, many of the measures described in this chapter and elsewhere in this book, will make no difference to the domino effect this merchant culture is having on the stability and sustainability of the planet.
A Downturn in Global Trading Systems?
A recent joint publication from the Centre for Economic Policy and Research and The Robert Schuman Centre for Research Studies50 suggests that there is currently a global trade slow down. The document contains 20 properly scrutinised research papers, which all come to the conclusion that there is a downturn in global trading patterns. Various conclusions are drawn from this; for example, a rise in protectionism, another impending collapse of global markets etc. Economists are obviously worried about this, as they think it will impede economic growth. However, it may herald a worldwide trend in consumers realising there is a climate change crisis and subsequently reducing their consumption of imported goods, deciding not to adhere any more to a throw-away culture.
According to the World Bank, a brief review of the evidence suggests that both cyclical and structural factors have been important in explaining the recent slowdown in global trade51. With high-income countries accounting for some 65 percent of global imports, the lingering weakness of their economies five years into the recovery suggests that weak demand is still impacting the recovery in global trade. But they feel that weak demand is not the only reason as trade had become much less responsive to income growth, even prior to the crisis. There is some evidence to suggest that part of the explanation may lie in shifts in the structure of value chains, in particular between China and the United States, with a higher proportion of the value of final goods being added domestically—that is, with less border crossing for intermediate goods. In addition, the post-crisis composition of demand has shifted from capital equipment to less import-intensive spending, such as consumption and government services.
I personally do not think that the downturn in global trade is a disaster; indeed, it may herald a new way forward, which has a glimmer of hope of saving the planet.
This whole issue is discussed further in chapters 5 and 7.