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Rethinking Global Economic Governance in Light of the Crisisinformation. Productivity-enhancing changes keep the process in flux, so the flowsnever die down.Some of proximity’s cost-savings are related to communications. As the ICT revolutionsloosened the “coordination glue”, it became feasible to spatially separate some types ofproduction stages, i.e. to spatially unbundle the factories. Since some production stageswere labour intensive, rich-nation firms reduced costs by offshoring them to low-wagenations. This was the second unbundling. 7The second unbundling transformed international commerce for a very simplereason. Offshoring internationalised the two-way flows among production bays – thethings, people, training, investment, and information mentioned above. Quite simply,international commerce became much more complex and diverse, creating ‘21stcentury trade’. The heart of this new commerce is what I call the “trade-investmentservices-intellectualproperty” nexus. 8 Specifically, the nexus reflects the intertwiningof (i) trade in parts and components, (ii) international movement of investment inproduction facilities, key technical and managerial personnel, training, technology,and long-term business relationships, and (iii) demand for services to coordinate thedispersed production.In the 20th century, the trading system was mostly important on the ‘demand side’; itwas about helping firms sell abroad products they made at home. In the 21st century, itis also important on the ‘supply side’, helping firms produce goods quickly and cheaplywith international supply chains.7 See, for example, Ando and Kimura (2005), Kimura, Takahashi, and Hayakawa (2007), Gaulier, Lemoine and Unal-Kesenci (2007), and Athukorala (2005) in the East Asian case, and Federal Reserve Bank of Dallas (2002) or Feenstraand Hanson (1997) on the North American case.8 See Baldwin (2011).128