Political and economic conditions are evolving in ways that could promote the onset of a new era of global protectionism. A revival of beggar-thy-neighbor policies cannot be discounted. The main cause is the continuing sluggishness of global economic growth, plus scant prospects for significant improvement.
The leading industrial economies today, five years after the financial crisis, continue to underperform. This year, GDP growth is likely to be around 1.3% in the Euro-zone, 1% in Japan, and 2.6% in the United States.
Prevailing conditions will not provide significant opportunities for the emerging market economies to boost their exports to the mature economies. Indeed, I would be surprised if the emerging market economies as a group match this year the 4.6% growth rate seen in 2013.