Jakarta. The Covid-19 pandemic has left a lasting impact on global supply chains, and renowned economist Gene Grossman has likened the current state of affairs to the "wild west" due to the rise of protectionism and the lack of a functioning dispute settlement mechanism in the World Trade Organization (WTO).

In an interview with Jakarta-based BTV news broadcaster aired on Monday, Grossman expressed concerns that global supply chains have not fully recovered after being thrown into chaos during the pandemic.

“There’s been a trend toward more economic nationalism, more protection of domestic content, which has slowed down the integration of the global economy,” Grossman said.

In addition, the dispute settlement mechanism in the WTO is no longer functioning, “countries have been going it alone like it’s the wild west now”, the international economics professor from Princeton University said.

“All of this is disintegrating supply chains coupled with the rise of automation which makes it impossible to bring home parts of the manufacturing process that were not viable in developed countries in the past,” he added. 

“I think we’re going to see a slowdown in the growth of goods supply chains -- hopefully replaced by the supply chain of the service of the economy which I think there’s an ample room for growth.”

Despite acknowledging the rise of the digital economy and e-commerce during the pandemic, Grossman remained skeptical about their impact on creating a more integrated global economy.

“You’ll be surprised that border still does matter even for digital trade or for downloads of apps. People got used to buying e-commerce buying online, people got used to remote work. Now that the pandemic has eased, it has to reverse to how we were,” he said.

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