The post-war era has been dominated by a stable pattern of increasing free trade, the growth of emerging economies in the Far East plus South & Central America, and an increasing shift towards globalisation and global supply chains.
Recently, however, the geopolitical picture has become more disruptive. There has been a shift towards increased protectionism, a trade war between the US and China and now the major impact from COVID-19.
PES Performance managing director, Mike Maddock, explains his thoughts on what this picture means for the near-term future of global trade?
“This obviously is a perfect storm and will no doubt be a key topic in future business school curriculum across the globe.
“One thing, to be clear, is that UK Manufacturing is no stranger to exporting. Our companies are already trading internationally and we need to build on that.
“Dealing firstly with the pandemic. One thing with COVID-19, which differs from other recessions is the impact it has had on all nations simultaneously, providing somewhat of a levelling effect. Each government is trying to protect their delicate business ecosystems, so that when the global economy restarts it will hopefully quickly kick back into gear. However, the longer the pandemic lasts, there is a greater risk of some supply chains collapsing.
“Outside of this it is difficult to say but we will hopefully see a time of stability and governments taking the opportunity to reset the global trade order and restart positive global trading opportunities.
“There will no doubt be a range of key infrastructure projects put in place by all governments to help stimulate their economies and maybe, just maybe, this will lead to global trade opportunities.
“What will it mean in the short term?
• Hopefully a levelling up period with global collaboration; a ‘we’re all in this together’ mentality.
• A level of infrastructure investment and collaboration.
• This could be a perfect time for the UK to position itself, to become a global partner and player at the start of a new order.
• Ultimately it will come down to strong and transparent leadership from governments internationally. For the UK it will be dependent on the time it takes for the UK to secure trade deals with the EU and the rest of the world, and the continued refinement of those deals.
• There may however be some countries that use this opportunity to drive the protectionist agenda, which ultimately will not benefit anyone.”
This is an excerpt from the Make UK Online Leadership Summit – ‘Resetting UK Manufacturing’, in partnership with Rockwell Automation. 18th November 2020.