Global disintegration?
Geoeconomic fragmentation, bloc formation…
Abstract
The global order is currently shifting from unipolar Western dominance towards a multipolar configuration. The previous form of globalisation, based on prosperity, rules-based liberalisation, and deep economic integration, is facing new challenges. Trade policy restrictions, vulnerabilities in global value chains, geopolitical shocks, and increasing geoeconomic fragmentation have also raised the possibility of deglobalisation. The study examines how these processes may shape globalisation, international trade, and multilateral economic co-operation. It concludes that the globalised world economy is undergoing a fundamental transformation, but it is unlikely that global integration will be replaced by the complete separation of the world economy into distinct blocs. Mutual interdependencies will remain important in the multipolar world order, while competition and co-operation will coexist. Increasing trade fragmentation, however, may entail significant economic costs and growth risks, particularly for open economies. The adaptability of multilateral, rules-based institutions may therefore be crucial for preserving global integration. For the European Union and small, open economies, strengthening resilience, reducing critical dependencies, and deepening regional integration constitute major economic policy challenges.
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