This is a development that is flying under the radar. The development of international trade, which seemed inevitable, is stalling. While the United States and China practice neo-mercantilism, the European Union is outlining an original third way.
International trade is fragmenting. Its share in global GDP has been reduced significantly since the financial crisis. subprime of 2008 (Cf. Graph 1). A semantic controversy exists to characterize this phenomenon. International institutions, born in the post-war period to support the growth of international trade, refuse to speak of “deglobalization”. So we invent words, like slowbalization or newbalization. Ultimately, this debate matters little, because the observation of a fragmentation of the world and a decline in trade is, for its part, well shared. The consensus is that globalization will not restart.
Cycles of globalization
Ultimately, it’s not very surprising. The current period simply reminds us that globalization is neither a continuous nor an immutable phenomenon. The following chart reveals the historical phases of trade expansion and contraction. Behind these cycles we find an alternation of economic paradigms which establish doctrines of international trade.
*Share of international trade in world GDP *
Coface
The mercantilism of the 17th and 18th centuries, which was based on the idea that economic power depended on the accumulation of wealth where the State had to promote exports and limit imports, was thus erased under the influence of classical thought free trader who demonstrated that trade based on a principle of country specialization was not a zero-sum game and that all participants in the trade benefited. This is how the first globalization emerged in the middle of the 19th century. Before collapsing at the beginning of the 20th century.
The same cycle of globalization-deglobalization is playing out before our eyes, between post-war globalization and the post-crisis reversal of subprime. Why these cycles?
Read more: Protectionism and geopolitics: the return of History
The social cost of globalization
Logic according to Dani Rodrik, economist at Harvard, who explains that globalization contains within itself the seeds of its own destruction. By creating losers in importing sectors, subject to foreign competition, it raises social discontent which fuels populist ideologies. He thus interprets the emergence of fascism and communism at the beginning of the 20th century and the resurgence of populist movements in the 21st century. The hyperglobalization of the 1990s and 2000s generated significant negative social externalities with its share of relocations to lower-cost areas.
This rise of populism and its nationalist withdrawals mark a return to mercantilism. The idea that excess foreign trade is systematically required to monopolize limited wealth on a global scale has been at the center of Chinese trade and industrial policies for more than thirty years. This mercantilism is insidious, but very real: capture of production, resources, technologies to fuel exports are at the heart of Chinese strategy. However, the leading figure of neo-mercantilism undoubtedly remains Donald Trump. The doctrine remains the same: try to take a bigger share of the pie through a commercial and industrial policy very aggressive towards commercial partners.
Liberal Europe distraught in the face of neo-mercantilism
In the middle, Europe, whose construction is based on the principles of free competition and multilateral cooperation, finds itself helpless. Often mocked for the slowness of its decision-making process, the EU is nevertheless gradually emerging a new doctrine of international trade that can be described as “Resilient trade”. What does it consist of?
The resilient trade is based on the articulation of two complementary conceptions of international trade: friend shoring and the near shoring. Ironically, it was the American Secretary of the Treasury (the equivalent of our Minister of the Economy), and former governor of the Fed (the American Central Bank), who popularized the concept of friend shoring in 2022. The idea is simple. This involves refocusing trade relations with “friendly” countries (“friendly” countries).We can count on“), which share common values, respect intellectual property and have stable rules.
L’émergence rapide de la doctrine du « resilient trade »
Faced with Chinese and American neo-mercantilism, the EU is forcefully applying this new concept of trade. It finalized very large-scale bilateral trade agreements in record time: Mercosur (January 17, 2026), India (January 27, 2026), Australia (March 24, 2026), Mexico (May 22, 2026, for the latter as for India the agreements are concluded, but not yet ratified).
In five months, Ursula von der Leyen applied the friend shoring with countries representing a trading potential of nearly 2 billion people. She talks about de-risking exchanges. It is a strong strategic response which redefines Europe’s commercial priorities and which uses the route of bilateral agreements to redefine a form of multilateralism. If we tried an oxymoron, we would speak of “multi-bilateralism”.
At the same time, the EU is trying to protect its value chains weakened by the geopolitical situation. THE near shoring consists precisely of shortening these value chains by relocating part of the production and linking a network of closer suppliers and subcontractors. Morocco, Tunisia, the Balkan countries and Turkey are thus taking on renewed strategic importance. But the strengthening of the single market undoubtedly represents the main point of this strategy.
The Draghi report for inspiration
The highly commented Draghi report of September 2024 constitutes the source of inspiration for the European strategy of near shoringalthough the term is not used. It promotes a deepening of the internal market and a European industrial policy aimed at securing regional value chains. Here we are moving away from a policy of competition at all costs and towards a policy of resilience and competitiveness for European industry. This requires significant investments and intra-European cooperation which will reinforce the notion of near shoring.
The resilient trade is based on a cocktail of targeted trade and industrial policies that fundamentally deviate from the pure principles of free trade and free competition. The EU is thus redefining its trade doctrine to favor resilience over pure efficiency. This resilient trade European could well establish itself as the new doctrine of international trade for all countries wanting to distance themselves from the neo-mercantilism of the Sino-American pair.
