As the world becomes more fragmented, competition policy and enforcement are likely to change. Various legal regimes, such as economic sanctions, foreign investment screening and tariffs, will create obstacles to cross-border trade. Because of this and other reasons for companies to reshore, local markets are likely to become more concentrated, which will also create stronger ties between local governments and local firms. Finally, coordination of competition policy in international fora will probably diminish.
After a long period in which economies became increasingly integrated across the globe, we are currently experiencing a period of deglobalization. A pivotal year was probably 2016, when UK voters decided to exit the European internal market and US elections resulted in a victory for isolationist candidate Donald Trump. But the slowdown of globalization was already apparent before, for example in the United States in the form of increased skepticism about China’s place in the World Trade Organization (WTO) and increasingly strict foreign investment review under the CFIUS (Committee on Foreign Investment in the United States) regime. In Europe as well, Chinese investments peaked in 2017 to subsequently decline, a process that reflects stricter foreign investment regimes in EU Member States,