Fragmentation of international trade: interim results, challenges and policy issues

Abstract

The article analyzes key issues related to the fragmentation of international trade at the current stage of global economic development. The impact of economic globalization on disruptions in modern international exchange is discussed, including in the chronological context of the formation of the modern structure of international trade. The main channels of trade fragmentation are identified, including the ambiguous dynamics of cross-border direct investment, the aggressiveness of export control measures taken by key countries, as well as stresses observed in the global payment system. A separate aspect of the study was the analysis of national security considerations dictating the use of various subsidies, which is an additional determinant of the fragmentation of international trade. It is proven that fragmentation has led to uncertainty and increased volatility in global raw materials markets, and has strengthened the speculative and "financialized" nature of their development. In general, international trade under the influence of fragmentation should become more adaptive, and it is necessary to continue developing multilateral cooperation, but it should take place in a fundamentally different format and with the help of alternative instruments aimed at developing new trade models.