Out with the Old, in with the New (Regional) World Order - With Shannon O'Neil
The Hale Report Episode 39
Welcome to the Hale Report. My guest for our 39th episode is Shannon O’Neil of the Council on Foreign Relations, speaking with us from New York.
Shannon K. O'Neil is the vice president, deputy director of studies, and senior fellow for Latin America Studies at the Council on Foreign Relations. She is an expert on global trade, supply chains, Mexico, Latin America, and democracy. She has lived and worked in Mexico and Argentina. A Fulbright scholar, before turning to policy she worked in the private sector as an equity analyst. She earned a BA and an MA in international relations from Yale, and a PhD in government from Harvard.
In this podcast, we discuss Shannon’s new book, The Globalization Myth: Why Regions Matter (Yale University Press, October 2022). She describes three main global manufacturing and supply chain hubs and what they mean for U.S. economic competitiveness. Her case for regionalism has received a lot of attention from both economists and political scientists. Ian Bremmer calls it “an important corrective to a broken public policy debate”.
Below are a few of my questions; please listen to the podcast for Shannon’s very thoughtful answers:
Would it be accurate to say that what we thought was globalization was in fact regionalization all along?
What are the world’s three major regions, or trading blocs as you see them?
Are we more likely to see a bipolar world than regional trading blocs, due to the effects of sanctions and geopolitics? Will ideology cut across economic ties, so that we have a world that is divided into autocratic vs democratic belief systems rather than rational trading blocs? In other words, are the regions you describe physical or metaphysical?
Can you compare Vietnam with Mexico as an alternative supply chain hub for the US?
What are the roles of energy and commodities within these manufacturing hubs?
You describe the evolution of Japanese industrial policy in great detail. Should the US have an industrial policy as well? What do you think of recent White House pronouncements?
How should multinational corporations be reacting and planning in the light of the end of globalization as we once understood it? What are the implications for FDI (Foreign Direct Investment) flows worldwide?
In your book you tell the story of the transformation of Cummins Engines, a company here in the Midwest. What made them so resilient in your view? Why didn’t they just fade away as the tire business did in Akron, your hometown?
I recently interviewed Ali Wyne about US regeneration. Are you similarly optimistic? You share many of his views, especially that the US faces fewer problems than its rivals and can rejuvenate its economy.
Europe should be the poster child for the kind of regionalism you are describing. It even has a currency union, but is it working, especially in the face of economic pressures due to the war in Ukraine?
China, and to a lesser extent Russia, have influenced Latin America. China is now Latin America’s largest trading partner. What should the US do to counter this? What happened to the Monroe Doctrine?
What is happening in Brazil today?
What role does immigration play in regionalism? What would your policy be to maximize positive effects?
In a world dominated by the US dollar and US monetary policy, how can other regions escape financial globalization and the USD override. Is crypto a viable alternate settlement layer?
I hope you enjoy our conversation as much as I did, and feel free to share this post.
More by Shannon O’Neil
A case for why regionalization, not globalization, has been the biggest economic trend of the past forty years.
October 27, 2022 / Bloomberg
Nearshoring beats reshoring and is the best way for American companies and workers to compete with the biggest economic challenge they face.
October 10. 2022 / The Hill
Yet these often acrimonious debates miss the real underlying trend in trade of the last 40 years: As companies and money went abroad they regionalized more than they globalized.
August 31, 2022 / Bloomberg
Fully implementing and funding its 2008 constitutional reform of the justice system would reduce impunity, boost public confidence and uphold the basic rule of law
July 26, 2022 / Americas Quarterly
A case for greater intraregional trade in today’s changing world
July/August 2022 / Foreign Affairs
Why regional ties win the day.
A shout out to Ohio. During Covid, I have spent a fair amount of time traveling in the Midwest: Wisconsin, Indiana and Ohio. Shannon’s book, as well as Innovation in Real Places by one of my other guests Dan Breznitz, describe Ohio at a time when it was the leader in innovation in the US. What happened and can it be reversed? Announcing a new industrial policy for the United States, Brian Deese recently spoke in Cleveland:
October 13, 2022 / The White House
Brian Deese, Director, National Economic Council
Two centuries ago, when America built the Erie Canal—America’s first superhighway—Cleveland was suddenly connected to global commerce…Cleveland soon became a vital railroad transportation hub, with booming industries from oil to steel. That industrial strength fueled further innovation.
Cleveland was home to the first public square illuminated by electricity, the first electric streetcar, and the first electric traffic light—which is fitting, since Thomas Edison was born nearby. A Cleveland automaker made the first car to cross the country coast to coast. Another Cleveland automaker pioneered some of the earliest electric vehicles a century ago.
America invested in Cleveland, and across Ohio. In return, Ohioans innovated, expanded, and generated benefits for all of America.
November 22, 2022 /Seeking Alpha
Stephen H. Dover, CFA, Chief Market Strategist and Head of Franklin Templeton Institute, Franklin Templeton
Understanding the global political winds will be critical in deciphering what path globalization will ultimately take.
Finally, In Washington this month I had the good fortune to catch up with Kent Calder, the eminent scholar who directs the Edwin O. Reischauer Center for East Asian Studies at Johns Hopkins SAIS. He gave me a copy of his most recent book, Super Continent, the Logic of Eurasian Integration. I found it to be a terrific companion to Shannon’s book, another way to slice through the complexity of globalization. Kent envisions a Eurasian supercontinent to rival the US. I was especially struck by his comments about the increasingly close relationship of Putin and Xi, accelerated by Putin’s actions in Ukraine in 2014. That trend has certainly continued.
Many thanks to the people behind the scenes who make EconVue possible, Managing Editor Ying Zhan and Hale Report Producer Sam Fu. We are deeply grateful to our twenty podcast guests so far in 2022.
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With all best wishes for a joyous holiday, and a more peaceful and prosperous 2023.