Summary: This panel will include both International Business academics and policy-oriented scholars and policy-makers with interests at the intersection of economic integration and international business. The panelists will discuss recent developments related to economic integration and free trade agreements (particularly between Australia, New Zealand and the European Union), and their implications for international business research and practice. The discussion will also address pre- and post-Covid-19 trends including the rise in protectionism and a possible structural reshaping of globalisation. Particular attention will be given to a potential bifurcated global governance and the emergent decoupling of China (and its allies) from the US (and its allies including the European Union, Australia, and New Zealand). Implications for particular research streams in international business (e.g., global value chains, reshoring and cross-border mergers and acquisitions) will be highlighted. Policy perspectives will be encouraged to invigorate the future of international business research.

An overview statement of the theme of the panel

The last decades have been characterised by a boom of international relations promoting economic integration among countries around the world. This integration has been the result of political cooperation among like-minded countries or the tool of a foreign/development policy. The recent paralysis of the World Trade Organization, the multilateral institution that deals with the rules of international trade, has resulted in the flourishing of plurilateral, regional, and bilateral agreements as alternative options of cross-border economic integration. While trade policy continues to be an important consideration in international business, there remain opportunities for a better understanding of the relationships between trade policy and global corporate strategy (Rugman and Verbeke, 2017).

The Covid-19 pandemic has resurrected ‘national security’ as a legitimate justification for protectionism and industrial policy, especially for the critical sectors of food and health-related goods and services (Riela & Zámborský, 2020). In the case of personal protective equipment (PPE), for example, the EU Commission first restricted the export, then invited member States to be vigilant against foreign acquisitions of PPE manufacturing, and finally launched a consultation in June of 2020 to develop a new “strategic autonomy” that combined the commitment to free and fair trade with the need of producing essential goods on the European territory. Other countries are also reconsidering the nature of their global trade and investment policies. There is a real possibility of a global decoupling between the US and China (Schell, 2020) and their respective allies, with Jannace & Tiffany (2019) suggesting a new world order, pitting “the rule of law” against “the law of rulers” countries.

The new inward-looking policies of many governments are also related to strategic actions of firms, including re-shoring of value creation to home countries (Barbieri et al., 2020; O’Neil, 2020) and a possible retreat to relatively less globalized value chains (Gereffi, 2020; Strange, 2020; Verbeke, 2020). These trends of “de-globalisation” (Witt, 2019), structural reshaping of globalisation (Petricevic & Teece, 2020) and regionalisation (Enderwick & Buckley, 2020) have raised concerns (both among international institutions and scholars) about escalation of autarkic plans, which can jeopardize cross-border cooperation required to fix international problems (Guimón & Narula, 2020; Guinea & Forsthuber, 2020).

In spite of the Covid-19 travel restrictions, lockdowns, and rising anti-globalist sentiments, trade negotiations have progressed between the EU, New Zealand, and Australia, following the 2018 decision of the Council of the EU to authorize the opening of negotiations for EU-New Zealand and EU-Australia Free Trade Agreements (FTAs). It is important to consider the implications of this changing policy context for both FTAs between the EU, New Zealand, and Australia, and strategies of international businesses. Business relations between Australia, New Zealand and the EU are increasingly characterized by knowledge and innovation cooperation and strategic diversification (Ingršt & Zámborský, 2020). The dangers of over-reliance on relations with China have been painfully brought to attention for example in the recent escalation of the trade war between Australia and China (Stevens, 2020). The reliance on China as a strategic partner is increasingly questioned given the evolving authoritarian nature of its political system (Mihályi & Szelényi, 2020).

This panel will address questions related to both economic integration and international business, with a focus on implications for New Zealand and Australia. The topics discussed will include:

Are the post-Covid-19 policies likely to affect the outcome of trade deals between the EU and New Zealand/Australia?
What will be the position of the UK to trade policy post-Covid-19? (The UK has proposed to diverge from the EU’s current economic model, and actively seeks new trade agreements abroad, including with Australia and New Zealand.)
What are the implications of this changing global trade architecture and policy landscape for international businesses?
Will Covid-19 pandemic really result in less globalised value chains and reshoring? How will this impact Australia and New Zealand, their policy and business strategy of their firms? Are re-shoring and less globalised value chains the right answer?
Will the post-Covid-19 world see a retreat from globalisation towards regionalisation or a structural reshaping of globalization?
Will countries respecting the rule of law (such as the European Union, New Zealand and Australia) continue to integrate with each other?
Will there be a retreat from economic integration between the countries respecting the “rule of law” and those characterized by the “law of rulers”, most notably China?
Are the current trade tensions between Australia and China going to intensify? Will they affect trade relationship between New Zealand and China? What will be the future trade relationship between China and liberal democracies?
Will the incoming US President and his administration mark a return to pre-2016 globalisation (in some shape or form), or will the current trend of a “decoupling” between the US (and its allies) and China (and its allies) continue or intensify?

A description of the panel format

The panel will start with an opening statement by the Panel Co-Chairs, and then the participants will introduce themselves and offer brief introductory perspectives from their fields of expertise. Then particular topics (see bullet points above) will be discussed between the panelists (moderated by the Panel Co-Chairs) and questions will be invited from the audience.

Additional information: The Panel is linked to the Call for Papers of The New Zealand Journal of Research on Europe: Special Issue on Economic integration after Covid-19: The case of free trade agreements between New Zealand, Australia, and Europe, edited by Dr Stefano Riela, Dr Peter Zámborský, and Prof. Gabriele Suder. See more via the link below:

http://www.europe.auckland.ac.nz/en/publications.html

References

Barbieri, P., Boffelli, A., Elia, S., Fratocchi, L., Kalchschmidt, M., & Samson, D. (2020). What can we learn about reshoring after Covid-19?. Operations Management Research. https://doi.org/10.1007/s12063-020-00160-1

Enderwick, P., & Buckley, P. J. (2020). Rising regionalization: will the post-COVID-19 world see a retreat from globalization?. Transnational Corporations, 27(2).

Gereffi, G. (2020). What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies. Journal of International Business Policy, 3(3), 287-301.

Guimón, J., & Narula, R. (2020). Ending the COVID-19 pandemic requires more international collaboration. Research-Technology Management, 63(5), 38-41.

Guinea, O. & Forsthuber, F. (2020). Globalization Comes to the Rescue: How Dependency Makes Us More Resilient, ECIPE Occasional Paper, 06/2020. https://ecipe.org/publications/globalization-makes-us-more-resilient/

Ingršt, I., & Zámborský, P. (2020). Knowledge flows, strategic motives and innovation performance: Insights from Australian and New Zealand investment in Europe. Journal of Management & Organization, 1-24.

Jannace, W., & Tiffany, P. (2019). A New World Order: The Rule of Law, or the Law of Rulers. Fordham International Law Journal, 42(5), 1379-1417.

Mihályi, P., & Szelényi, I. (2020). Kornai on the affinity of systems: Is China today an illiberal capitalist system or a communist dictatorship?. Public Choice, 1-20.

O’Neil, S. K. (2020). How to Pandemic-Proof Globalization: Redundancy, not reshoring, is the key to supply chain security. Foreign Affairs.

Petricevic, O., & Teece, D. J. (2019). The structural reshaping of globalization: Implications for strategic sectors, profiting from innovation, and the multinational enterprise. Journal of International Business Studies, 50(9), 1487-1512.

Riela, S, & Zámborský, P. (2020). Screening of foreign acquisitions and trade in critical goods. Asia-Pacific Journal of EU Studies, 18(3), 103-135. (Forthcoming.)

Rugman, A. M., & Verbeke, A. (2017). Global corporate strategy and trade policy (Vol. 12). Routledge.

Schell, O. (2020). The ugly end of Chimerica: The coronavirus pandemic has turned a conscious uncoupling into a messy breakup. Foreign Policy, 26-29.

Stevens, K. (2020). Grim warning that Australia is just a ‘little boat caught between two rocks’ in the US-China trade war as Asian superpower’s attitude switches from ‘assertive to aggressive’. Daily Mail (11 November, 2020).

https://www.dailymail.co.uk/news/article-8935753/Australia-described-former-minister-little-boat-caught-two-rocks-China-war.html

Strange, R. (2020). The 2020 Covid-19 pandemic and global value chains. Journal of Industrial and Business Economics, 47, 455–465. https://link.springer.com/article/10.1007/s40812-020-00162-x

Verbeke, A. (2020). Will the COVID‐19 Pandemic Really Change the Governance of Global Value Chains?. British Journal of Management, 31(3), 444.

Witt, M. A. (2019). De-globalization: Theories, predictions, and opportunities for international business research. Journal of International Business Studies, 50(7), 1053-1077.