How will Covid-19 affect globalization?

By : Michèle Rioux
PHOTO CREDIT: chuttersnap (Unsplash)

Canada is a small country that conducts a great deal of international trade. The United States is our closest neighbour, but over the years we’ve also developed relationships with Asia and Europe. Along the way, we’ve dealt with different suppliers. During a pandemic, however, supply chains can be broken, as we’ve seen with drugs and medical equipment. When that happens under our current circumstances, it’s hard to know what to do.

It’s not only goods that move around the world; there are also people who come to work, for instance, in agriculture, and workers (some undocumented) who come to help out in long-term care centres. We need these people to work on our farms and provide certain essential services.

The pandemic has made Canada aware of how vulnerable our trade dependency makes us, and also the necessity to find solutions. It’s made us see that even though there may be some interdependency at the international level, we can’t depend completely on other countries. We need to ensure a certain production capacity, especially when it comes to the goods and services that are so essential to guaranteeing the security of Canada’s health-care system.


Opportunism and cooperation

We have seen some opportunistic behaviour since the start of the pandemic, generally related to governance problems. All the international supply chains include not only major multinationals but also sub-contractors. Sometimes we don’t really know who is making the decisions. In a crisis, that can cause coordination problems with extremely concrete and grave consequences, as we’ve seen over the past few months.

There has indeed been some opportunism, but there have also been some great collaborative efforts. I admit that I was surprised to see this, and I hope the pandemic will help us figure out not only how to protect ourselves during a crisis, but also how to improve international cooperation.

The huge digital corporations have certainly done very well from the situation, and they’ll emerge from the pandemic as clear winners. Now it’s time for them to give back to the economy. A few companies, such as Netflix, seem to have grasped this, making contributions that benefit local artists and cultural activities. But never forget that the way Netflix operates is problematic… We need to rethink the way the digital giants who know so much about us interact. On the flip side, we really don’t know much about how they operate and how much economic and political power they exert.


Deglobalization or cooperation ?

While some believe we‘re in a deglobalization spiral, I don’t share that view. I believe in solidarity and international cooperation in the economic sphere. I think the international community is capable of meeting our current challenges; it has proven its ability to do so before. Just think of the history of the twentieth century, when humanity came through a world wars and Europe was rebuilt, economically and politically. I believe we can come through the Covid crisis and rebuild the world in the spirit of cooperation and solidarity.

After every crisis, including this one, there’s a great deal of change and transformation, and at an accelerated pace. This is everyone’s responsibility, but mainly it’s up to the public authorities to reflect and take action. We can’t rely solely on businesses and individuals to change their behaviours and make the necessary adjustments. It may also be necessary to reshape international cooperation and revise trade regulations. At the same time, we need to make sure our people can enjoy security when it comes to the economy, health care and the law. Unless we’re nimble, we could fail – and with failure comes the risk of deglobalization.


Looking for leadership

The problem is that right now, this plane is flying without a pilot. The United States, the leader of the world economic order since 1945, no longer plays that role. They’re threatening to break all the trade agreements and leave all the international organizations – though they haven’t made good on those threats yet. Their communication style seems to be rather rhetorical.

Who else could take the reins? Perhaps China… Their strategy seems to involve expanding their economic power and policies. But so far, we don’t know what China thinks of the world order or how the country sees its role in a post-Covid world. We also wonder how transparent China was at the start of the pandemic, and we don’t know how the rest of the world will judge that over the next few months.

Europe could also be the new leader, though it’s currently extremely preoccupied with its own internal problems. Europe could play a leadership role alongside the United States and Canada. Canada has an agreement with Europe – the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) – which is a good base. But it’s early days yet with that agreement. We need to see how it develops as time goes by, and whether it will be able to tackle the problems raised by Covid-19.


Looking ahead

Until the crisis is over, there’s no such thing as zero risk. The health-care challenge will remain central to reorganizing globalization. I hope that what we learn about China’s management of the pandemic and its capacity to work with international organizations will help us strengthen the missions, mandates and skills of these organizations. International cooperation is based on the principle of sovereignty. Nonetheless, sanctions will be needed against countries that fail to sufficiently consider the security of health care around the world. What I mean is not punitive sanctions, but rather ways to foster transparency, and mechanisms to make organizations realize that our collective security must be the top priority. This is what we need to improve collaboration in the future, while we wait for the next pandemic or economic crisis. With globalization, nothing stops at borders.

Michèle Rioux was interviewed by Maryse Guénette.