WTO fears a new “technonationalism” after the global chip crisis

The global chip shortage brought on by the coronavirus pandemic COVID-19, which affected many sectors, has generated plans to relocate the semiconductor industry, today dominated by Asia, to the United States and Europe, although the World Trade Organization (WTO) he fears that a new “techno-nationalism” will be born with it.

This was hinted at by the director general of the WTO, Ngozi Okonjo-Iweala, in her speech at the Davos Forum, where she expressed fear that policies “go too far” in the strategic plans to support the local industry of chips in the United States and the European Union (EU).

“I understand the attempt to guarantee supply chains and diversify risks, but we should be cautious and try not to go too far when it comes to controlling (from governments) industries,” Ngozi stressed in a dialogue on the future of networks global manufacturers after their crisis of the last two years.

chips back to the west

Ngozi made this warning in the same forum in which hours before the president of the European Commission, Ursula von der Leyen, announced a future “European chip law” that seeks to reduce the bloc’s dependence on imports of this technology. key from third countries.

This law would be a US response to the “Chips Act”, currently under parliamentary debate and which would subsidize the once powerful North American semiconductor industry, today overtaken by competition from Taiwan, South Korea and China.

The United States, which went from producing 37% of global chips in the 1990s to 12% today, seeks to recover the share of three decades ago, and the EU, which fell from 44% to less than 10% in the same period , look for at least a 20% share.

The CEO of Intel, Pat Gelsinger, also a participant in Davos, encouraged the initiatives that Washington and Brussels are preparing to promote a competitive market that COVID-19 affected not only by paralyzing transport but by digitizing societies much more, from the mass lockdowns.

New Intel Plants

“Everything has become digital and everything needs semiconductors,” said Gelsinger, who announced that his firm will soon announce the creation of two new large production plants, one in Europe and the other in the United States, which will be added to those in Ireland, Israel , Malaysia, Vietnam and North America (Arizona and Oregon).

The president of the Emirati logistics giant DP World, Ahmed bin Sulayem, stated at the conference that the pandemic has actually shown a fragility of global chains that already existed before, “which can be greatly affected by an incident such as the blockade in the past. year of the Suez Canal by a single ship”.

Bun Sulayem, whose firm concentrates 10% of world container traffic, affirmed that world shipping companies are investing large sums in digitizing themselves to face future challenges, but anticipated that until 2024 it will not “return to normal” in container traffic. international cargo.

The United States Trade Representative, Katherine Tai, clarified in this regard that “the goal should not be to return to where we were in 2019, but to learn from the lessons painfully learned and take advantage of the opportunity to build something different.”

Reglobalize after the pandemic

Ngozi pointed out in this sense that among the opportunities that arise in the possible way out of the crisis is “integrating parts of the world left behind into the supply chain, which have not benefited from globalization.”

A “reglobalization”, in the words of the head of the WTO, in which it is necessary to prevent “geopolitical tensions from translating into protectionist and political measures that use trade as a weapon, when in reality it is a solution”.