Ignite trade to spark next wave of global growth

To acknowledge that global trade is threatened by the rise of protectionism and geopolitical fragmentation is neither provocative nor fashionable. But that does not lessen the need to address these challenges.

The COVID-19 pandemic, escalating geopolitical tensions and growing concerns over security have accelerated deeper trench lines pointing toward regionalization and balkanization, and countering decades of globalization. Rising trade frictions have resulted in more than 3,000 new restrictions being introduced on trade in 2023, up three times since 2019. Many restrictions include rules for export controls, tariffs and limitations on cross-border data flows. The most recent US election outcome, if anything, may further exacerbate what is already a very fractious state of global trade.

As a result, we have started to witness a profound re-wiring of supply chain and trade routes. The Global South increasingly acts as the intermediary between the east and the west. South-South trade has experienced significant growth — up more than 50 percent since the pandemic — and this process of fragmentation is only just beginning.