Why Strategic sovereignty is a bad idea

Spoiler: A lot of people cried wolf at the outbreak of the Corona crisis. Media reports of shortages of medical goods led to demands for increased production inside the EU of such goods. These demands came at the same time as some countries closed their borders and prevented exports of medical goods to other countries.

But these demands have been proven wrong. Most medical goods were produced within the EU, and trade with medical goods increased dramatically during the crisis eliminating the shortages. This and earlier experience from trading with the rest of the world show that decreased globalisation and specialisation will give us fewer resources and make us less resilient when future pandemics occur.

The export restrictions were counterproductive. The correct policies for combatting pandemics are trade-facilitating. Lowering tariffs and reducing the number of Non-Tariff Trade Barriers are obvious policies. In fact, decision makers across the world have realised this and have now introduced trade-facilitating measures for covid-19 goods that cover more trade than the trade-restrictive measures that were initially introduced. The correct policies within the EU is of course to make sure that the functioning of the Single Market is not harmed by trigger-happy politicians.

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Graph of the Day- Globalisation saves children’s lives

A few days ago I posted this where I showed that Globalisation kills poverty. In this post I will show that globalisation saves the lives of children. As countries increasingly become integrated in the world economy by opening up their economies, national incomes rise.

Increasing incomes allow people to invest more in the health of their children. And higher incomes create resources that can be used to improve people’s health. More and better roads can be built so people can visit clinics, doctors, and hospitals easier and faster. The new roads also allow for better access to also goods and services such as pharmaceuticals and vaccines. And more clinics closer to people can be built and be supplies with better educated nurses and doctors than before. And the higher incomes make it possible to supply more people with electricity and water.

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Graph of the Day – Globalisation kills poverty

Following the corona outbreak, some countries closed their borders and banned exports of medical supplies. Populistic politicians want their countries to become more “self-sufficient”. According to them, that would also decrease our exposure to viruses like Covid-19. But arguing that more self-sufficiency, aka protectionism, would kill two birds with one stone is terribly wrong.

The arguing is wrong because less trade would make us poorer and leave us with fewer resources to combat viruses. Producing our own ventilators, medicines, vaccines, all the protective equipment we need, would be more expensive than buying from countries that now produce them more efficiently. Some of these products, e.g. ventilators, consist of many parts which now are produced in many different countries all over the world. If we were to produce them ourselves, we would need to set up plants to also produce those parts and extract the raw material which is used in the production processes.

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