The world of trade politics and trade governance also changed. If a high-tech firm is to locate production stages in a developing nation, the nation’s government must ensure the necessary free movement of goods, services, information and the protection of tangible and intangible property rights. Old-fashioned protection, anti-FDI policies, or lax property rights almost guarantee that the offshored stages will go somewhere else.
Developing nations that got the offshored factories became hyper-competitive and wiped out the exports of developing nations that clung to import-substitution industrialization. In the world of supply-chain industrialization, protectionism has become destructionism.
Having learned this lesson, developing nations unilaterally lowered tariffs and eagerly signed up for deep disciplines in regional trade agreements and bilateral investment treaties. It happened regionally, rather than multilaterally, since most supply chains are regional, a tendency that the WTO’s decade-long preoccupation with 20th-century trade issues (tariffs and agriculture) exacerbated."