Business News President’s Focus
As the Chamber gears up for its first online conference on international trade (see page opposite), Commonwealth Chamber president Keith Stokes-Smith takes a look at what the future holds for global trade in the wake of the Covid-19 crisis.
than the Great Depression.” But this could be followed by another ‘possibly much worse downturn’, according to the Economist Intelligence Unit (EIU). So, what is the future for global trade? First of
J
all, whatever the experts predict, given what we have gone through and will go through (and may go through again) vis-a-vis Covid-19, we cannot afford to sit back and allow the negative impacts to happen or to the extent predicted. The least we can do is do our best to mitigate
them, think outside the box, create demand for our goods and services. We must turn a crisis into an opportunity. There is nothing to be gained by raising the white flag or even thinking about it. The wider world is changing as a result of
Covid-19 – similarly, the wider world is becoming more aware of the rise of China and the debt and dependency by the developing world to it. Further, it is claimed that over the last two
months, China’s diplomats have done away with diplomacy, replacing courtesy with intimidation.
‘Global trade will certainly need a helping hand as a result of the current pandemic’
The virus has exposed the vulnerabilities of
many organisations to global shocks, especially those who have a high dependence on China, to fulfil their needs. According to Deloitte, ‘new supply chain
technologies are emerging that dramatically improve visibility across the end-to-end supply chain, and support companies’ ability to resist such shocks. The traditional supply chain model is
transforming into digital supply networks (DSNs), where functional silos are broken down and organisations become connected to their complete supply network to enable end-to-end visibility, collaboration, agility, and optimisation. Organisations that deploy DSNs will be ready
to deal with the unexpected. As globalisation and the world trade order come under unprecedented attack, some are indeed hoping to see businesses bring more operations back home, thus reducing dependence upon foreign workers and potential vulnerability to pressure from foreign governments. That may well be, but whether economies of
scale can be achieved such that the product/ service is price competitive may be an issue. Is there a lesson to be learnt from globalisation? Well yes. It is fragile, despite its benefits. Clearly there has been a lack of
12 CHAMBERLINK June/July 2020
dependable manufacturing alternatives, which in turn has caused supply chains to break down. We have become too interdependent upon
one and other, whether that is as countries or businesses. Some economic sectors might be able to
weather the crisis – others, who relied upon a single supplier in a single country, may have more challenges. Globalisation calls for an ever-increasing specialisation of labour across countries, a model that creates efficiencies but also vulnerabilities. Global trade will certainly need a helping hand
as a result of the current pandemic, and part of that will be the continuation of central banks and governments acting to stimulate the economy with expansive monetary and fiscal policy.
This will mean increasing the size of a
country's money supply in relation to demand, taking advantage of the increased capital to announce tax cuts, lower interest rates and higher government expenditures to spur economic growth. Working together, it is claimed, monetary and
fiscal policy can prevent another global depression. Let’s not forget as well where the UK should
be in a few months time – by then, its trading relationship with the EU will have changed. According to the Department for International
Trade website ‘It (the government) will scrap red tape and other unnecessary barriers to trade, reduce cost pressures and increase choice for consumers and back UK industries to compete on the global stage’. Fingers crossed.
ust one of the many headlines relating to Covid-19 has been: “The world economy already faces an economic downturn worse
Keith Stokes-Smith (right) with Chamber chief executive Paul Faulkner: Can global trade overcome the Covid-19 hurdle?
Greater Birmingham
Commonwealth Chamber of Commerce
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72