“Losses of up to 12% of GDP”: OECD unlocks an idea received and ensures that the relocation of factories can be exhausted to countries

The relocation of production channels, which began in developed countries due to strong international clashes in recent years, runs the risk of costing these savings much without necessarily allowing the clashes in question to be amortized, warns the OECD on Monday.

But according to its conclusions, “the relocation that involves greater customs duties, subsidies to national production and additional limitations” could “reduce world trade in more than 18% and world GDP by more than 5%.”

Depending on the developed countries analyzed by the international organization, the losses of wealth in each country would be extended “between 1.1% and 12.2% of GDP according to the intensity and nature of its world value chain,” the OECD continues.

It is likely that Canada, the United Kingdom and Australia suffer more, calculated the institution based in Paris, as well as the United States, South Korea and South Africa.

A relocated economy “is no more resistant to clashes”

In addition to wealth losses linked to the reorganization of production channels, OECD calculations reveal that a relocated economy “is no more resistant to clashes in terms of GDP, production and consumption stability” than when chains spread.

The explosion of production chains has been one of the main characteristics of globalization in recent decades, which makes it possible to reduce poverty in the world through specialization, recalls the OECD, an international organization that promotes free trade.

However, this model has weakened from the Covid-19 Pandemia that highlighted the huge units, symbolized by the shortage of surgical masks manufactured in China, which led to an awareness of developed countries on the need to relocate part of their production at national scale or close partners.

The war in Ukraine was also an electrocho on the European dependence on Russian energy, and in general with unreliable partners.

In recent years, some countries have highlighted the desire to reverse the slow deindustrialization process of developed countries, which has seen that many factories move to low -cost countries, with the aim of relocating jobs, illustrated by Donald Trump’s commercial policy.