Some Reflections on Trade Expansion as a Measure of Globalization

‘Globalization’ is a vague and general term, rather like ‘development’ or ‘poverty’. Globalization includes increases in trade (exchange of goods and services across international borders), but also increase in international investment (flows of capital across international borders) in its various forms (foreign direct investment, portfolio investment, short-term finance, speculation on foreign exchange markets etc.). It also includes an intensified transfer of technology, greater ease and rapidity of communication, due to new information technology, more tourism and travel and, to a more limited extent, migration of labor. All these different aspects of globalization are interwoven with each other and are often mutually reinforcing. They are also connected and interwoven with domestic deregulation, privatization and other reforms in line with the Washington Consensus. In this brief note we rather arbitrarily pick out one single element, i.e. the increase in international trade which is often taken as the flagship measure of globalization.