At the Chartered Institute of Export & International Trade’s Import Export Show (IES), held in St Paul’s in London today (19 November), traders have been hearing from leading speakers from the world of government and business on globalisation, protectionism and supply chains.
Throughout the day, experts have been imparting valuable pieces of practical business insight, as well as their takes on the future shape of the global trading environment.
No ‘slowbalisation’
There are no signs yet of “slowbalisation”, but the true forces behind the changing geopolitics still needed to be understood, a leading trade figure told IES attendees.
“It’s a very interesting time to get together to talk international trade,” said John Drummond, head of trade policy at the Organisation for Economic Co-operation and Development (OECD).
The OECD’s most recent outlook found that the global economy would continue to be resilient throughout the first half of next year, but uncertainty would threaten this.
Efficient supply chains continued to lower costs, facilitate innovation and support jobs, negating the pull factors for “slowbalisation”, he said. Trade also helped reduce poverty and helped boost GDP growth in less developed countries.
However, illicit trade and economic security were increasingly talked about.
“The last five years have shaken trust in trade,” the OECD’s trade chief added, pointing to examples of a “perceived overload of supply chain risks”, including wars, pandemics, environmental disasters and physical blockages.
Protectionism was clearly not the answer, he said, pointing to the negative side effects of reducing global commerce. Instead, to improve the global trading landscape, “we have to ask ourselves about the root causes and pressures in the political landscape”.
Overproduction concerns
A panel session examined what’s next for EU and UK trade, exploring the ongoing issues around protecting domestic industries from overproduction, as well as the wider geopolitical environment.
Chaired by Peter Foster, the FT’s world trade editor, experts from the world of business and government were asked about the future of UK/EU trade, the digitalisation agenda and how capitals were reacting to overproduction.
This latter topic was a recurring theme. Capitals around the world were increasingly investing time and resources into protecting their domestic economies from foreign imports in response to business complaints, the panellists suggested.
Pressure points in industries like steel need to be understood, said Drummond.
Despite concerns around Chinese overproduction, Drummond said there was a recognition inside China that there was too much investment going into industries like solar or steel. Similar discussions to those taking place in the US and EU were also going on within Beijing’s policy department.
“Maybe there’s a kernel of a meeting of minds,” Drummond said of this possible joint-thinking.
On the subject of steel imbalances, China has long been accused of overproducing steel. OECD numbers found there were large imbalances in various markets, notably steel and solar panels.
This Chinese domination of sectors like steel and solar panels was “massive”, said Madelaine Tuininga, minister counsellor for trade affairs with the EU delegation to the UK.
Innovation, digitalisation and simplification
Another hot topic was making things easier for businesses to trade across borders.
Sally Jones, director of trade strategy at the Department for Business and Trade (DBT), said “we’re all being asked to do more with less” both in the private and the public sector.
Jones, a former partner at Ernst & Young, said that DBT’s current approach was “to focus on the practical implications on the various strategies we’ve spent the last year devising”.
Over the last few months, the government has released separate strategies on trade, small businesses and industrial planning. A revamp of the critical minerals strategy, devised by the previous administration, is also expected.
As examples of making life easier, Jones pointed to the secure supply chain centre, economic security advisory centre and reform of the Trade Remedies Authority (TRA), as well as a revamp of the DBT website to make it easier for traders to use.
She also mentioned the digital trade pilots scheme as another example of the way that Whitehall was looking to make life easier for firms.
The EU’s simplification agenda was “huge”, said Tuininga, with various omnibus packages moving forward on areas like the Carbon Border Adjustment Mechanism (CBAM) aimed at simplifying regulation.
“From an EU-UK perspective, there’s things to be done,” said Lars Langer, partner and global industry lead at Netcompany, pointing to data policies that needed to be better aligned.
Giving small businesses greater access to the behind-the-scenes systems could lead to greater innovation, said Langer.
Beating populism
When it came to countering political populism, much of which has promoted a negative view of international trade and globalisation, Jones said there was a need to bring trade back to “real people” rather than focusing on economic data like GDP statistics.
“Prosperity is good, stagflation is bad”, said Drummond.
“I think now is a really important time for groups [like the Chartered Institute] to talk to the government and communicate to the public about the effects of trade.”
Other news
· The World Trade Organization announced that Germany had contributed half a million euros to building the trade capacity of developing nations
· Indian trade exports rose for the first time in five months in October, despite the ongoing impact of US tariffs
· China has told Japan that it will ban all imports of Japanese seafood, as diplomatic tensions escalate between both countries, according to Reuters
Yesterday in trade
· The Chartered Institute celebrated its 90th birthday
· The government launched a new consultation on potentially joining the Pan-European-Mediterranean (PEM) Convention on Rules of Origin
· Brussels rejected calls for India to gain an exemption to the EU CBAM
You can read those stories, and more, here.
