Back to the Future: a New Era of Managed Trade?
Globalisation’s next chapter is being written, driven by concerns about supply chain risks. The global trade in goods is increasingly seen through a security prism in capitals around the world and governments are developing new policies to reduce unwanted dependencies, seek new sources of leverage and guarantee supplies. Trade links are being reordered as policymakers scramble to secure access to strategic materials and positions in global value chains. Meanwhile, geopolitical turbulence and climate ambitions are giving rise to industrial policies, sanctions and a growing use of subsidies.
From investment screening to quotas to export controls, policymakers are proposing an increasing number of tools and policies to steer trade and investment flows. But despite worries about protectionism and fragmentation, trade continues as the private sector manages risk by embracing diversification. Elections in the US, EU, Mexico, UK, Indonesia, India and elsewhere may also lead to a reordering of the global politics of trade. Has the global trade system entered an era of managed trade? What will it mean for regional approaches to trade, and what does it mean for multilateralism and the WTO? Ultimately, the main question could be: who is in the driving seat in this brave new world for trade?
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Back to the Future: a New Era of Managed Trade?
Globalisation’s next chapter is being written, driven by concerns about supply chain risks. The global trade in goods is increasingly seen through a security prism in capitals around the world and governments are developing new policies to reduce unwanted dependencies, seek new sources of leverage and guarantee supplies. Trade links are being reordered as policymakers scramble to secure access to strategic materials and positions in global value chains. Meanwhile, geopolitical turbulence and climate ambitions are giving rise to industrial policies, sanctions and a growing use of subsidies.
From investment screening to quotas to export controls, policymakers are proposing an increasing number of tools and policies to steer trade and investment flows. But despite worries about protectionism and fragmentation, trade continues as the private sector manages risk by embracing diversification. Elections in the US, EU, Mexico, UK, Indonesia, India and elsewhere may also lead to a reordering of the global politics of trade. Has the global trade system entered an era of managed trade? What will it mean for regional approaches to trade, and what does it mean for multilateralism and the WTO? Ultimately, the main question could be: who is in the driving seat in this brave new world for trade?
Is the Climate Agenda driving a wedge through Global Trade Cooperation?
Moderator:
Rem Korteweg, Senior Research Fellow, Clingendael Institute
Panellists:
Elvire Fabry, Senior Research Fellow, Jacque Delors Institute
Alan Beattie, Senior Trade Writer, The Financial Times
This podcast episode was recorded on 17 March 2023
The 2023 edition of the AIG Global Trade Series explores the extent and impact of regionalisation on the global trade landscape.
The United States Inflation Reduction Act (IRA), which combines climate policy and industrial policy, caused immediate concerns in Europe. With significant implications for European competitiveness and impact on its Green Deal ambitions, the EU responded primarily with state aid rules relaxation to encourage European green tech firms to stay put. How will the EU and the US resolve this green subsidy dispute? How can trade and the climate agenda go together? With an increased use of subsidies by the US and Europe, what are the broader implications for the future of multilateral rules-based trade?
The Global Trade Series is a collaboration between AIG and the following international organisations with leading expertise on global trade: the Aspen Institute Germany; Chatham House (UK); CEBRI - the Brazilian Center for International Relations; the Clingendael Institute (The Netherlands); Institute of International Economic Law at Georgetown University Law Center (US); the International Chamber of Commerce (UK and France); ISPI - the Italian Institute for International Political Studies; the Jacques Delors Institute (France); RIETI - the Research Institute of Economy, Trade and Industry (Japan) and the St. Gallen Endowment for Prosperity through Trade (Switzerland).
The views and opinions expressed in this podcast series are those of the speakers and do not necessarily reflect the official policy or position of American International Group, Inc. or its subsidiaries or affiliates (“AIG”). Any content provided by our speakers are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. AIG makes no representations as to accuracy, completeness, correctness, or validity of any information provided during this podcast series and will not be liable for any errors, omissions, or delays in this information or any losses injuries, or damages arising from its use.
AIG Global Trade Series
Back to the Future: a New Era of Managed Trade?
Globalisation’s next chapter is being written, driven by concerns about supply chain risks. The global trade in goods is increasingly seen through a security prism in capitals around the world and governments are developing new policies to reduce unwanted dependencies, seek new sources of leverage and guarantee supplies. Trade links are being reordered as policymakers scramble to secure access to strategic materials and positions in global value chains. Meanwhile, geopolitical turbulence and climate ambitions are giving rise to industrial policies, sanctions and a growing use of subsidies.
From investment screening to quotas to export controls, policymakers are proposing an increasing number of tools and policies to steer trade and investment flows. But despite worries about protectionism and fragmentation, trade continues as the private sector manages risk by embracing diversification. Elections in the US, EU, Mexico, UK, Indonesia, India and elsewhere may also lead to a reordering of the global politics of trade. Has the global trade system entered an era of managed trade? What will it mean for regional approaches to trade, and what does it mean for multilateralism and the WTO? Ultimately, the main question could be: who is in the driving seat in this brave new world for trade?
