Embracing technology, increasing cross-border collaboration, adopting more innovative approach to trade policy and increasing investment in trade infrastructure, especially in digital, can boost global trade up to $18 trillion through to 2030, according to the DMCC's latest Future of Trade 2020 report released on Monday.
While speaking at the launch of the report, Feryal Ahmadi, chief operating officer of Dubai Multi Commodities Centre (DMCC), said those countries which embrace these opportunities have the greatest chance to recover and grow over the next decade.
She said a new trade order has emerged where protectionism, supply chain barriers and the economic shock of Covid-19 have changed everything.
"The Covid-19 has caused the fastest and the deepest economic shock in the history. The pandemic hit at a time when trade was already weak largely driven by trade tension between China and the US. Tariff war negatively impacted trade between the two superpowers, resulting in higher prices for the US and Chinese consumers and both were forced to turn to more expensive domestic alternatives," she added.
"The protectionist trade policies that emerged even before the Trump administration will continue to define trade landscape of 2020. The rise of protectionism fuelled by pandemic marks the beginning of the end of trade liberalisation," she added.
The DMCC COO said it is true that the economic centre of gravity is shifting towards the East with China's Belt and Road Initiative set to drive a big part of global trade over the next 10 years. Due to geopolitical tensions, the situation is unlikely to change anytime soon and 2020 will see stronger focus on regional, bilateral and plurilateral agreements, she added.
Pascal Lamy, former director-general of the World Trade Organisation, said only serious engine of protectionism was the US and to some extent India also this year.
He sees pre-cautionism is growing worldwide and this will make harmonisation level more difficult.
"Public opinion in the US and Europe is still about open trade. The economic and social damage in many countries has triggered risk of protectionism as trade opening is painful for some countries. Geopolitical relationship between the US and China will not change. The US considers China as a danger and China considers the US as a danger and this sort of mind they will not change soon," he said during the launch of the report.
Ahmadi said there is a $1.5 trillion (Dh5.5 trillion) gap in trade finance, which is predicted to widen to $2.5 trillion by 2025. Similarly, there is a $6 trillion gap between infrastructure needs and the available financing, which will widen to up to $15 trillion by 2040.
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