Global Economy & Trade August 2022-

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The WTO’s 13th Ministerial Conference (MC13) will take place from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirates. Ministers from across the world will attend to review the functioning of the multilateral trading system and to take action on the future work of the WTO. The Conference will be chaired by H.E. Dr Thani bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade.

25-26 February
Global economy is weighed down by war, uncertainty and instability, trade chief warns
(AP) — The head of the World Trade Organization warned on Monday that war, uncertainty and instability are weighing down the global economy and urged the bloc to embrace reform as elections across nearly half the world’s population could bring new challenges.
WTO Director-General Ngozi Okonjo-Iweala sought to offer some praise for her organization as it held its binneial meeting in the United Arab Emirates, even as it faces pressure from the United States and other nations.
But she was blunt about the risks ahead, as higher prices for food, energy and other essentials sting people’s pockets, “fueling political frustration.”
WTO in ‘damage control’ mode as Abu Dhabi agenda unravels
(Politico) The failure of WTO member countries to produce anything meaningful at the group’s 13th Ministerial Conference could further erode the Geneva-based organization’s ability to create new global trade rules.
The future of world trade is about to face a turning point: whether nationalist policies displace an eight-decade shift toward rules-based global commerce.
This week’s biennial World Trade Organization conference in the United Arab Emirates will see its 164 member countries try to reach deals on the fate of the world’s fish stocks, the future of digital trade and how countries can safeguard their food security.
WTO aims for modest outcomes at Abu Dhabi meeting
By Emma Farge and Rachna Uppal
‘Tough’ politics complicate deal-making: WTO chief
160 ministers due to meet from Feb. 26-29
Few deals possible at WTO biennial meeting
(Reuters) – Trade ministers from nearly every country in the world gather in Abu Dhabi on Monday [26 February] for a World Trade Organization meeting that aims to set new global commerce rules, but even its ambitious chief Ngozi Okonjo-Iweala has sought to curb expectations.
The almost 30-year-old global watchdog, whose rules underpin 75% of global commerce, tries to strike deals by consensus, but such efforts are becoming more and more difficult as signs grow that the global economy is fragmenting into separate blocs.
“We are not in dreamland here. International cooperation is in bad shape. Real success would be fish, plus two or three things,” one trade delegate told Reuters.
Other outcomes from the four-day meeting that are either definite or achievable are the accession of two new members – Comoros and East Timor – and a deal among some 120 countries to remove development-hampering investment barriers.
Tougher areas are extending a 25-year moratorium on applying tariffs on digital trade, which South Africa and India oppose, and an agreement on agriculture trade rules that has eluded negotiators for decades.

22 February
American economic statecraft in the Asian century
(Brookings) There has been a profound transformation in U.S. foreign economic policy. The United States built a deep economic relationship with China and used to champion the negotiation of comprehensive free trade agreements. The current situation, however, is very different. China and the United States had a trade war and are rivals on technology, and the United States has become skeptical of free trade agreements. The notion that economic security is national security has become pervasive in U.S. foreign economic policy and the policies of many East Asian economies.
What are the most important drivers, both internally and externally, for this change?
Economic statecraft figures centrally in the U.S. quest to secure its prosperity and security by leading on technological innovation, developing human capital, and promoting an advanced manufacturing base. It also guides U.S. foreign policy priorities of competing strategically and responsibly with China, harnessing cooperation with leading tech democracies, and advancing new economic security tools.
In this new era, Asia is a focal point for U.S. endeavors. It is the region where the U.S. peer competitor—China—has risen, where the majority of the global middle-class lives, and where key U.S. allies and partners, which play outsized roles in critical supply chains, sit on regional hotspots where tensions continue to rise.

21 February
Red Sea crisis sees China’s brisk business in Africa waver under high shipping costs amid Houthi attacks
China has particular exposure to Africa, with investments reaching rising by 4.4 per cent to US$1.8 billion in the first half of 2023
(SCMP) Avoiding attacks in the Red Sea has raised the cost of business for Chinese firms in East Africa, which borders the embattled waterway, and shaken the production of companies that cannot afford the more costly alternative transport options, analysts said.
Chinese traders are gingerly eyeing the use of circuitous air, land and sea routes for safety, hiring risk-tolerant so-called feeder shipping lines or producing less until the attacks by Houthi militants stop.
“Chinese companies with a substantial presence in African markets are facing heightened uncertainties and complexities as they navigate these disruptions, prompting a re-evaluation of their shipping strategies and contingency plans to mitigate the impact on their operations,” said Gary Lau, chairman of the Hong Kong Association of Freight Forwarding and Logistics.

14 February
Twice-Attacked Commodity Shipper to Stop Using the Red Sea
By Alex Longley
(Bloomberg) Commodity shipping company Star Bulk Carriers Corp. will no longer sail through the Red Sea after attacks on two of its ships by Yemen’s Houthi rebels since last week.
The company said it was targeted because it’s listed in the US and that it was unable to divert the two vessels that came under fire — despite a heightened threat to ships with US links — for legal reasons. Earlier this week, Yemen’s Houthi militants said they hit the Star Iris, after last week targeting Star Nasia, both of which are owned by Star Bulk.

24 January
China says it’s working to de-escalate tensions in the Red Sea that have upended global trade
(AP) — China, the world’s biggest exporter, says it is deeply concerned about tensions in the Red Sea that have upended global trade by forcing many shippers to avoid the Suez Canal.
Some of the world’s largest container shipping companies and oil giant BP have been sending vessels on longer journeys around Africa that bypass the Red Sea. In response to the growing impact on global trade, the United States and a host of other nations have created a new force to protect ships.
At least 90% of the container ships that had been going through the Suez Canal are now rerouting around Africa and the Cape of Good Hope, according to Drewry, a maritime research consultancy.
The cost to ship a standard 40-foot container from China to northern Europe has jumped from $1,500 to $4,000, according to the Kiel Institute for the World Economy in Germany. But that is still far from the $14,000 seen during the pandemic.

20-24 January
How Red Sea Crisis Raises, Inflation, Supply Chain Worries Anew
(Bloomberg) By attacking ships plying the Red Sea, Yemen’s Iran-backed Houthi rebels have caused the biggest disruption to global trade since the Covid-19 pandemic and provoked a military response, including US and UK airstrikes on Yemen. The Houthis say they are acting in solidarity with Palestinians amid the war between Israel and the militant group Hamas. The dangers in the Red Sea have increased costs for operators still plying its waters and prompted shipping companies to reroute much of the sea’s normal container, oil and natural gas traffic around the southern tip of Africa, a lengthier and more expensive journey. That’s raised concerns that the crisis will feed inflation and resurrect supply-chain snarls.
World faces second wave of disruptions from Red Sea crisis, warns shipping giant (subscription)
Interview: Cameron Bowie, of shipping giant Hapag-Lloyd, warns of second wave of disruption
Red Sea crisis: What it takes to reroute the world’s biggest cargo ships
(BBC) An estimated 12% of global trade passes through the Red Sea every year, worth more than $1tn (£790bn). But many shipping firms have begun avoiding the area altogether. Hundreds of giant container ships, some of them more than 300m (984ft) long, are now choosing a lengthy detour around the continent of Africa instead of heading up the Red Sea and through the Suez Canal on voyages from Asia to Europe. But rerouting such large vessels is no easy task – the logistics involved can be enormous and time consuming.
How Houthi Attacks Have Upended Global Shipping
By Agnes Chang, Pablo Robles and Keith Bradsher
It is an extraordinary detour: Hundreds of ships are avoiding the Suez Canal and sailing an extra 4,000 miles around Africa, burning fuel, inflating costs and adding 10 days of travel or more in each direction.
(NYT) They are avoiding one of the world’s most important shipping routes, the Red Sea, where for months the Iranian-backed Houthi militia has attacked ships with drones and missiles from positions in Yemen.
The Houthis have said they are seeking to disrupt shipping links with Israel to force Israel to end its military campaign in Gaza. But ships connected to more than a dozen countries have been targeted, and a Houthi spokesman said this week that they consider “all American and British ships” to be enemy targets.
The turmoil has been sweeping. About 150 ships passed through the Suez Canal, which lies at the northwest end of the Red Sea, during the first two weeks of this January. That was down from over 400 at the same time last year, according to Marine Traffic, a maritime data platform.

19 January
[WEF] Annual Meeting 2024: Rebuilding Trust Amid Uncertainty
Economic growth and trade
Participants made the case that a new growth model is needed, one that balances the drivers of growth and productivity with the complexity of innovation, inclusion, sustainability and resilience.
“We must be bold and define a new paradigm of prosperity, a new economic and social orthodoxy that takes advantage of the knowledge and the new tools we have to couple economic growth with environmental sustainability and prosperity for all,” said Pedro Sánchez, Prime Minister of Spain.
“We need to think of globalization not in the way it was done before, but differently. And we need to make sure that those who did not benefit during the first round benefit this time,” said Ngozi Okonjo-Iweala, Director-General of the World Trade Organization.
“As we build our economic policies, the question we have to ask is: ‘Will this make the life of the people I represent better?’” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance of Canada.
“The big issues are how do we address the climate transition? How do we address the needs of ageing societies and broken social security systems? And how do we address the challenges of the AI era and ensure that populations can cope with it and benefit from it?” said Tharman Shanmugaratnam, President of Singapore, on the most pressing challenges for economic policy. …

9 January
China’s Digital Silk Road (DSR) In Southeast Asia: Progress And Challenges – Analysis
By Wang Zheng
(Eurasia Review) This year marks the 10th anniversary of the launch of China’s Belt and Road Initiative (BRI). Proposed by President Xi Jinping in 2013, the BRI has become China’s flagship foreign policy to realise the Chinese vision of a “global community of shared future.”[1] At the third BRI Forum in Beijing in October 2023, President Xi announced that China has signed BRI-related memoranda with over 150 countries and 30 international organisations and established more than 20 multilateral platforms to facilitate the development of the BRI projects worldwide.[2] The BRI’s coverage has also expanded from traditional physical infrastructure to health, clean energy, digital economy, and people-to-people exchanges.[3]
Among the BRI’s new development trends, the Digital Silk Road (DSR) has become a key pillar of the initiative, especially against the backdrop of the intensifying U.S.-China technological rivalry.

3 January
What is the Red Sea crisis, and what does it mean for global trade?
Attacks by Houthi rebels along the trade route have led to firms pausing shipments, raising the possibility of a shock to the world economy
(The Guardian) The world’s largest shipping firms are continuing to pause shipments through the Red Sea after attacks by Houthi rebels along the crucial international trade route.
As container ships are diverted around the Cape of Good Hope on the southern tip of Africa, adding thousands of miles to journeys, the disruption is driving up the cost of shipments from Asia to Europe, raising the prospect of a renewed inflation shock for the world economy.
US and allies warn Houthis of ‘consequences’ as Red Sea crisis intensifies
Statement calls for ‘collective action’ amid spate of attacks in crucial trade route.
(Politico Eu) The joint missive — issued simultaneously by the governments of the U.S. Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, the Netherlands, New Zealand, and the United Kingdom — stops short of spelling out how the allies plan to quell mounting turmoil in the Red Sea region.
But it warns that recent events pose “a direct threat” to global trade and constitute “a significant international problem that demands collective action.”
Sailors navigating the narrow Bab-el-Mandeb Strait — on a vital shipping route linking Europe to Asia — have in recent weeks faced drone strikes, missile attacks and hijackings by Iran-backed Houthi militants.

2023

19-20 December
5 must-read stories about global trade from 2023
2023 has been an uncertain year for global trade.
Geopolitical tensions, rising costs and climate change disruptions have each negatively impacted global supply chains.

(WEF) Some of the most-read trade stories from this year that featured on Agenda….

More than 100 container ships rerouted from Suez canal to avoid Houthi attacks
Cape of Good Hope diversion adds 6,000 nautical miles and three or four weeks to delivery times and has driven up oil prices
US announces naval coalition to defend Red Sea shipping from Houthi attacks
(The Guardian) Egypt and Saudi Arabia notably absent from Operation Prosperity Guardian as more shipping companies forgo route
Yemen’s Houthis, who are aligned with Iran, have been eager to show support for Hamas in Gaza, and began by trying to mount long-range missile attacks into Israel. But these were largely intercepted by Saudi Arabia and the US and had no impact.
Tactics switched dramatically a month ago, when the Houthi fighters dramatically seized the Galaxy Leader, a British-owned and Japanese-operated cargo ship, in a helicopter raid captured on video. It remains in the Yemeni port of Hodeidah.
But while the Houthis initially said they were seeking to target Israeli shipping, they have stepped up their attacks on a wide variety of merchant tankers heading through and towards the 18-mile-wide Bab el-Mandeb strait.
Ian Bremmer: What are the global ramifications of Red Sea shipping disruptions?
This is a lot of ships (sic) that are carrying a lot of goods that can’t go through the Red Sea because the Houthis are hitting them. And so instead they’re going around the Cape of Good Hope, which is South Africa. It’s a lot longer and it’s more expensive. You know, it’s not really an impact on the markets in the sense that the goods are still getting through. So it’s not like you’re not getting your oil, you’re not getting your commodities. It is going to hurt the Egyptian economy significantly because they’re not getting that transit and the fees. It would benefit South Africa, but their ports are a huge mess. So, I mean, funnily enough, it’s probably a benefit for like Namibia and Mozambique and we’ll see for how long It lasts.

14 November
The Arctic Institute China Series 2023
The Polar Silk Road (PSR) was added in 2017 to China’s mega-scale connectivity project, the Belt and Road Initiative (BRI), first announced in 2013.3) BRI is characterized by infrastructure investment along a constellation of economic corridors, including the Northern Sea Route. The announcement of the PSR created a lot of interest in the potential for resource extraction and sea transport in the Arctic region, as noted in Chinese academic and journalistic reports and articles, sometimes even dubbed the “Golden Waterway” (黄金水道) in Chinese media. However, it is unclear how significant the PSR is in China’s overall Arctic strategy and foreign policy.
China’s Polar Silk Road: Long Game or Failed Strategy?
By Erdem Lamazhapov, Iselin Stensdal and Gørild Heggelund

12 September
WTO in Survival Mode Pushes Back on Splintering Global Trade
Trade tensions between US and China are affecting trade flows
WTO chief urges greater cooperation and economic integration
Key Things to Watch at the WTO Public Forum This Week
(Bloomberg) Trade luminaries from around the globe will descend on Geneva this week for the World Trade Organization’s Public Forum — an annual event that brings businesses, government officials and public-interest groups together to discuss the most pressing issues facing the global trading system.
This year, the theme is focused on the environment and how international trade can be used to support the use of clean energy and technologies to reduce the impact of climate change. Here’s a WTO-produced video to whet your appetite.
Trade and environment is a critical topic to consider as US and European policymakers pursue unilateral trade tools, like green subsidies in the US Inflation Reduction Act, and carbon taxes, like the EU’s carbon border adjustment mechanism, which levies an equivalent price on carbon-intensive goods produced outside the bloc.
8-12 September
Green trade will be the focus of this year’s World Trade Organization Public Forum.
Here’s everything you need to know

(WEF) Trade tensions between US and China are affecting trade flows
WTO chief urges greater cooperation and economic integration
Fragmentation of the global economy into separate blocs would be “extremely costly” and make the world a less stable place, the World Trade Organization said in a report published Tuesday.
The report, which notes that geopolitical tensions among major economies are beginning to affect trade flows, offers a counter argument to the ascendant view that the last quarter century of global economic integration was a mistake.
“The WTO is not perfect — far from it,” wrote WTO Director-General Ngozi Okonjo-Iweala. “But the case for strengthening the trading system is far stronger than the case for walking away from it.”
“The alternative to rules-based integration is power-based fragmentation and a world of greater uncertainty, increased socioeconomic exclusion and heightened environmental decline,” she sa
The WTO report found that national-security concerns are “playing a rapidly increasing role in trade policy” and illustrated how trade openness, historically has helped foster stability in international relations.
4 September
Climate change is one of the most critical issues of our time, and trade has a key role in deciding the future of the planet. At the WTO, we have always been committed to engaging with all stakeholders and facilitating dialogue. We are looking forward to welcoming you to the Public Forum from 12 to 15 September.
Every voice must be heard. It is time for action! (video)

6 March
The Rise of China as A Global Economic Superpower and Its Impact on International Trade
(Modern Diplomacy) As China continues to experience remarkable economic growth, its impact on international trade has become increasingly significant. China’s population of over 1.4 billion people, its vast industrial capabilities, and its technological advancements have made it a formidable player in the global economic system. The implications of China’s rise are complex and far-reaching, with both positive and negative effects on international trade.

2022

Year in Review 2022: Africa
The African Continental Free Trade Area (AfCFTA) agreement seeks to revive intra-continental trade, with coffee beans from Rwanda and tea leaves and vehicle batteries from Kenya making their way to Ghana in early December as part of the Guided Trade Initiative pilot programme.
Some 44 of the 54 signatories have ratified the agreement, which is set to create the largest free trade area in the world in terms of number of participating countries.

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