By Africa Links 24
Published on 2024-02-09 13:11:07
Geopolitical tensions, trade disputes, and climate change have all contributed to a more uncertain global trade landscape. Public-private collaboration has been widespread in implementing resiliency-building measures in supply chains, such as reshoring and friend-shoring. However, these are seen as short-term fixes. To truly unlock global prosperity through trade, it is important to address the barriers impacting the movement of goods, from policies affecting market access to the lack of incentives to attract foreign investment. It is crucial to reset the view and involvement of the private sector in global trade.
DP World’s latest Trade in Transition report, led by Economist Impact and released at the World Economic Forum in Davos, revealed that the world has entered a new era of globalization where heightened geopolitical risk, climate change, and technological advancements are converging to become both business and global priorities. The report also provided optimistic projections for 2024, with a growth rate of 2.3% in the export volume of goods and services. Despite this positive outlook, global trade faces risks from geopolitics and extreme weather caused by climate change, resulting in diversions around shipping routes and the impacts of protectionism.
In order to address these challenges, there needs to be a stronger connection between the public and private sectors in their approaches to global trade. Governments should resist protectionism and instead look to the private sector and multilateral organizations for opportunities to facilitate a global trading environment that creates growth and prosperity while furthering domestic interests.
In Africa, despite the continent currently accounting for only 3% of global trade in goods and services, the African Continental Free Trade Area (AfCFTA) is a powerful example of progress. It has created the largest free trade area in the world by area and number of countries, prioritizing the facilitation of international trade. The AfCFTA has measures in place to overcome trade barriers and simplify customs procedures, enabling African businesses to integrate into global supply chains and attract more business to the continent, contributing to global economic growth and poverty reduction.
The private and public sectors must continue to support the good progress of the World Trade Organization (WTO) to strengthen trade governance. However, there is still room to go further. Governments and multilateral organizations need to view business as an engine of growth in shaping the future of trade, not just as an executor. The private sector holds the most knowledge on the global obstacles and opportunities for imports and exports, and thus can play a more active role in advocating for multilateral trade negotiations. This collaboration is essential to overcome challenges and advocate for the changes required to build resilience and facilitate growth in global trade.
In conclusion, the global trade landscape is facing uncertainties driven by geopolitical tensions, trade disputes, and climate change. Addressing these challenges requires a stronger collaboration between the public and private sectors to advocate for a more open, interconnected, and prosperous global trading environment. The private sector must be viewed as an agenda setter and not just an economic actor in shaping the future of trade to facilitate growth and resilience.
