Innovation Bad - Globalization - Michigan 2024 BFHR

INNOVATION GOOD/BAD - TRADE
NEG
1NC---Shell
Globalization is strong now
Setser 6/4---Brad Setser is Whitney Shepardson Senior Fellow at the Council on Foreign Relations. (“The Dangerous Myth of Deglobalization”, Foreign Affairs, 6-4-2024, https://www.foreignaffairs.com/china/globalization-dangerous-myth-economy-brad-setser)//AN
A consensus is emerging that the world is cleaving into blocs—not only geopolitically but economically, too. In 2020, the economist Douglas Irwin wrote that “the COVID-19 pandemic is driving the world economy to retreat from global economic integration.” In the years since, how to manage this purported deglobalization has been a consistent theme at World Economic Forum meetings; in May, an Economist cover depicted a map of the world physically fracturing into competing economic blocs. The associated story presumed that deglobalization is a long-term certainty, arguing that it is becoming “visible in the economic data, as investors reprice assets and redirect capital in a less integrated world.” Last week, a Bloomberg columnist piled on, concluding that “global trade and finance are fragmenting into rival and increasingly hostile blocs, one centered on China and extending into the global South and another around the United States and other Western countries.”
But there is a problem with the assumption that deglobalization is a fact on the ground: the data does not fully back it up. As evidence of continuing deglobalization, observers often cite phenomena such as the United States’ reluctance to establish new free-trade deals, the debilitation of the dispute-settlement system overseen by the World Trade Organization (WTO), the proliferation of new national measures restricting trade, and declines in both short- and long-term capital flows from their past peaks. The COVID-19 pandemic certainly did reveal that economic interdependence carries risks, and the efforts Russia has made since 2022 to use its natural gas pipelines to influence the G-7’s response to its invasion of Ukraine—as well as the many sanctions the G-7 has imposed to try to weaken Russia’s economy—have highlighted the vulnerabilities that can arise when countries trade across geopolitical divides. But a closer look at economic data shows that even though governments have increasingly adopted policies aimed at strengthening their own resilience, the world economy is still evolving to become more, not less, globalized in key ways—and more dependent on Chinese supply in particular.
Global trade surged during the pandemic, and the world’s trade with China accelerated rather than slowed. A pandemic-era shift toward goods and away from services partly accounts for the acceleration. But the growth in trade with China also reflects the fact that China is simply producing things—high-tech exports such as electric vehicles, wind turbines, solar panels, and vital electronic and battery components—at a price point few can match. Between 2019 and 2023, China’s manufacturing surplus rose by about a percentage point of global GDP; it is now far larger than the surpluses run by Germany and Japan, the world’s other manufacturing powerhouses.
There is also less to the fall in capital flows than meets the eye. The decline in foreign direct investment (FDI) after 2016, for example, largely resulted from specific changes in tax regulations that led to a big reduction in the use of special-purpose vehicles in Luxembourg, the Netherlands, and a few other key European tax centers. And that tax simplification has not blunted one of the less savory forms of globalization: trade and financial flows that appear to serve only as a vehicle for multinational tax avoidance.
Tech innovation triggers deglobalization---AI, 3D printing, renewables, and vehicles
Lund and Bughin 19---Susan Lund is a partner of McKinsey & Company and a leader of the McKinsey Global Institute. Her research focuses on global financial markets, labor markets, and economic growth. Jacques Bughin is a senior partner at McKinsey and a director of the McKinsey Global Institute, McKinsey’s business and economics research arm. He has co-authored numerous publications, including McKinsey Global Institute reports on globalization, Internet of Things, Big Data, and social technologies and numerous articles on industrial economics, organization, digitization of firms, and corporate finance. ("Next-generation technologies and the future of trade”, Vox EU CEPR, 4-10-2019, https://cepr.org/voxeu/columns/next-generation-technologies-and-future-trade)//AN
Automation and additive manufacturing change production processes and the relative importance of inputs, and may reduce goods trade
The diffusion of automation and artificial intelligence technologies suggests that multiple industries will experience a profound shift in the importance of capital versus labour (McKinsey Global Institute 2017). The growing adoption of automation and AI in manufacturing makes labour costs less important and other factors – such as proximity to consumer markets, access to resources, workforce skills, and infrastructure quality – more important.
As a result, we can already see a trend towards moving production closer to end consumer markets, such as the US and the EU. Today, only 18% of goods trade is from a low-wage to a high-wage country, and that share is shrinking in the most labour-intensive industries, such as textiles and apparel. Both Adidas and Nike, for instance, have designed new lines of athletic shoes that make them amenable to full automation of the production process – and they have opened those new factories in Germany and the US (Adidas) and Mexico (Nike).
In addition to affecting the trade in manufactured goods, automation will influence trade in services. Many call centre and help desk services are already ‘staffed’ by virtual agents, which are adding natural language processing abilities and beginning to handle a wider range of tasks. This is leading some companies to automate customer support and back-office services rather than offshoring them. This trend could reduce the $160 billion global market for business process outsourcing, now one of the most heavily traded service sectors.
Additive manufacturing (3D printing) could also influence future trade flows. Most experts believe it will not replace mass production over the next decade; its cost, speed, and quality are still limitations. But it is gaining traction for prototypes, replacement parts, toys, shoes, and medical devices. Since 3D-printed goods can be produced near the point of use, they would eliminate the need for international shipping (although they may increase data flows as design files are transmitted). While this could reduce trade in some individual products substantially, the drop is unlikely to amount to more than a few percentage points across all manufactured goods by 2030. In some cases, additive manufacturing could even spur trade by enabling customisation.
Overall, we estimate that automation, AI, and additive manufacturing could collectively reduce global goods trade by up to 10% by 2030, as compared to the baseline, or $4 trillion in annual trade flows. However, this reflects only the direct impact of these technologies on enabling production closer to end consumers in advanced economies. It is also possible that these technologies could lead to nearshoring and regionalisation of trade instead of reshoring in advanced economies, impacting both modes of transportation (e.g. overland and air cargo replacing container shipping) and trade corridors. We already see that intra-regional trade has grown faster than inter-regional trade since 2013, a trend seen worldwide but particularly notable as regional value chains are developed in Asia and in the EU28 (McKinsey Global Institute 2019).
New technologies may also have indirect – and unexpected – impacts on trade flows
As technology transforms some products and services, it will also alter the content and volume of trade flows. Some of these may have unexpected consequences for trade flows.
Renewable forms of energy, such as solar and wind, are less tradable than carbon-based fuels such as coal and LNG. The ongoing decarbonisation of economies and shift to renewable energy may therefore reduce trade in energy.
As another example of indirect impacts on trade, growing adoption of electric vehicles could reduce trade in auto parts. McKinsey estimates that electric vehicles will make up some 17% of total car sales globally by 2030 (up from 1% in 2017), but as their drivetrains have only about 15% as many moving parts as internal combustion engines, this trend could reduce the hundreds of billions of annual trade in vehicle parts by up to 10% while also dampening oil imports (over half of which are used in transportation).
Deglobalization escalates conflict---leads to Russian expansionism, aggression in the South China Sea, and Asian prolif.
Hammes 16---T.X. Hammes is a Senior Research Fellow at the Institute for National Strategic Studies at the National Defense University in Washington, DC. He served 30 years in the U.S. Marine Corps. (“The End of Globalization? The International Security Implications”, War on the Rocks, 8-2-2016, https://warontherocks.com/2016/08/the-end-of-globalization-the-international-security-implications/)//AN
Implications
Since 1945, the United States has pursued globalization for both economic and security reasons. However, for economic and domestic political reasons, whichever party wins the next election it will likely encourage each of the trends discussed in this paper with tax breaks, trade policy, and administrative actions. The cumulative effect will be to discourage and undermine the case for globalization while potentially strengthening the U.S.-Canada-Mexico trading bloc. Similar pressures may drive nations across the globe to regional trade blocks.
In turn, if globalization no longer has major economic benefits for the United States, then employing U.S. power in an effort to maintain global security will be seen purely as a cost. This will create a very different domestic environment for the practice of U.S. foreign policy. Deglobalization will reduce the American people’s interest in propping up global stability at exactly the time the widespread dissemination of smart, cheap weapons will significantly increase the costs of doing so. Faced with growing social and infrastructure needs, Americans may no longer be willing to underwrite international security with their tax dollars. Under these conditions, the United States public may demand a return to a limited strategic concept of defending the hemisphere and assuring access to the global commons. The U.S. military’s primary mission may revert to the punishment of bad behavior (gunboat diplomacy) rather than engagement to stabilize a region.
Turning isolationist would reverse over 60 years of American foreign and security policy and radically alter the international security picture. Europeans, already struggling with the implications of Brexit, will have to determine which threat – mass migration or Russian expansion – is the greater threat and how they will reach agreement on the allocation of security resources.
Asian nations will also face a very different environment. American presence in Asia has been seen as the major provider of stability and peace for the region. Given China’s recent assertiveness in the South China Sea, the biggest question for Asian nations will be how to prevent Chinese domination. In a region with no history of military security alliances, the challenges will be extensive. Some Asian states have the capability to rapidly develop nuclear weapons and may choose to do so to provide nuclear deterrence.
2NC---Uniqueness
Globalization is not receding---empirics prove their evidence is hype
Bremmer 22---Ian Bremmer is President of Eurasia Group. He is a political scientist, author, and entrepreneur focused on global political risk. (“Globalization Isn’t Dead”, Foreign Affairs, 10-25-22, https://www.foreignaffairs.com/world/globalization-isnt-dead)//AN
After two and a half years of a pandemic that has exposed the fragility of global supply chains and eight months of war in Ukraine that has severed economic ties between Russia and the West and disrupted global food and energy markets, the world seems to be at a turning point. Globalization, many claim, is receding. A growing number of analysts now argue that much as World War I and the 1918 influenza pandemic brought an end to the first great era of globalization, the combination of Russia’s war in Ukraine, COVID-19, simmering populism, and geopolitical competition between the United States and China has kicked the second great era of globalization into reverse. “This new cold war marks the end of the era of globalization and integration that has shaped the international system since 1989,” the journalist Fareed Zakaria wrote in mid-October.
Prominent investors and policymakers agree. Larry Fink, the CEO of the asset management firm BlackRock, wrote to shareholders in March that the war in Ukraine had “put an end to the globalization we have experienced over the last three decades.” And at the World Economic Forum in Davos in May, International Monetary Fund Managing Director Kristalina Georgieva warned of a coming “geoeconomic fragmentation.” Countries and companies, she said, are “re-evaluating global supply chains” and undoing decades of integration.
Yet globalization has been pronounced dead many times before: after the global financial crisis in 2008, after the Brexit referendum in 2016 and the election of Donald Trump later that year, and after the outbreak of the COVID-19 pandemic in 2020. That none of these predictions has come to pass should give analysts pause about predicting deglobalization once more. Rather than the end of economic integration, the world is experiencing a geopolitical recession that has left globalization adrift.
MORE INTERCONNECTED THAN EVER
Those proclaiming the demise of globalization as it was once known are not totally wrong. It is true that the era of “hyperglobalization” that lasted from the 1970s to the 2008 global financial crisis, during which a hegemonic United States drove a top-down process of trade liberalization and global integration, was a unique historical episode. That era is now dead and buried along with globalism, the ideology that propelled it, and unipolarity, the international order that upheld it.
An increasingly inward-looking United States no longer has the political will to serve as architect and guarantor of the world economy. China, meanwhile, is beset with structural economic challenges that limit its ability to promote its own order by means of trade access and investment policy. And no other country or group of countries has the capacity to fill the void.
But that does not mean that globalization is ending. Such an outcome would require the United States to actively turn against economic integration. Bombast aside, that did not happen under Trump, and it is not happening under U.S. President Joe Biden. Rather, the United States has simply stopped leading the drive for ever-greater globalization. This leadership vacuum has resulted in the fraying of the “governance of globalization,” as the former World Bank President Robert Zoellick has put it. But globalization itself is not fraying—it is simply adrift. It is less coordinated, deliberate, and efficient than before but still in most countries’ interest given how much worse the alternatives are.
A look at economic data belies the notion that globalization is reversing. Even as global capital flows relative to GDP have moderated since their peak in the middle of the first decade of this century, cross-border investment has continued to grow and financial market returns have remained highly correlated globally. Worldwide merchandise trade is near all-time highs, having surpassed pre-pandemic projections already this year. Multilateral trade negotiations have stalled, but new trade deals continue to emerge, including the Regional Comprehensive Economic Partnership between 15 Asia-Pacific nations and the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The number of regional trade agreements in force has grown continuously since the 1990s, more than doubling since 2008.
Trade in goods has slowed relative to global output since 2008, but even this shift does not signal deglobalization. To the contrary, the plateauing of the global trade ratio is partly a side effect of economic development—a sign of globalization’s success. Take the example of China, which has seen its ratio of trade to GDP decline by nearly 30 percentage points since 2006 and which, by virtue of its size, has been the biggest contributor to the slowing worldwide trade-to-GDP ratio. As the country has grown richer and its economy more complex—owing to market reforms and integration into global markets—China’s growth model has shifted away from exports and toward domestic consumption and investment. At the same time, domestic demand has shifted away from goods and toward services, which are traditionally less tradable. China has also moved up the value chain, manufacturing fewer cheap consumer goods and more advanced intermediate inputs, and now produces a greater share of the value of its exports domestically. Because of rising incomes, Chinese labor is more expensive as well, making the country a less desirable manufacturing hub and eliminating one of the country’s key competitive advantages. And finally, China has already exploited and exhausted most opportunities for trade liberalization and integration into global value chains, meaning that it has less room to globalize further.
None of these trends constitute disintegration or retrenchment. Rather, they reflect the fact that globalization has diminishing returns, and not just for China. Now that most countries are already relatively well integrated into the global economy, the world as a whole has less to gain from additional globalization. In general, as once closed low-income economies integrate into global markets and grow wealthier and more developed, they become more self-sufficient. China and many other emerging-market countries that globalized in the last half century now produce more of what they consume, consume more of what they produce, and produce more of what they produce. This shows up in the data as a decline in global trade intensity, but it is a sign of progress, not of deglobalization.
Their indicators are ineffective---overall data demonstrates growth of globalization
Lincicome 23---Scott Lincicome is the vice president of general economics and Cato’s Herbert A. Stiefel Center for Trade Policy Studies. He writes on international and domestic economic issues, including international trade; subsidies and industrial policy; manufacturing and global supply chains; and economic dynamism. (“Globalization Isn’t Going Anywhere”, Cato Institute, 9-12-2023, https://www.cato.org/publications/globalization-isnt-going-anywhere)//AN
The pandemic, Ukraine, simmering U.S.-China tensions, and rising American populism have led many politicians and pundits to boldly proclaim that a new era of de‐​globalization is upon us. Factories are “re‐​shoring,” economies are “decoupling,” and everyone has abandoned “neoliberal” free trade. Some have gone so far as to openly—and ominously—wonder whether we are witnessing the “end of globalization.”
Surely, the last few years have stressed the global economy and seen certain policymakers more pessimistic about foreign trade and investment than they’ve been in decades past. Nevertheless, the evidence thus far shows that globalization is not dying but instead evolving in response to various economic and geopolitical trends. In fact, one big problem with the current de‐​globalization chatter is that it misunderstands—sometimes wi

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