[9]  The potential effects of global fragmentation The IMF and other international institutions are warning that there are potentially considerable negative effects from a fragmentation of global trade along geopolitical lines. In an early study, the OECD estimate that greater localisation increases vulnerability to both external and domestic shocks.
[10] This is contrary to proponents of localisation, who believe that any increase in susceptibility to domestic shocks are offset by an increase in resilience to external shocks. While the size of the economic costs vary across studies, one message is clear: the deeper the fragmentation, the larger the costs.