A view of earth from space with abstract lines illustrating trade partnerships and alliances

Trade Warfare Ahead?

By Gary Burrows

Nowadays, you can’t pick up a business publication, view a website or crack open a market study without plunging into angst and uncertainty regarding trade among world markets, threatened by undercurrents of populism and protectionism.

Political turmoil and hints of isolationism pulls at loose threads in long-forged trade alliances, blurring the distinctions between trade partners and adversaries.

The International Monetary Fund, in its Global Economic Outlook, in starkest terms sees protectionism “leading to trade warfare.”

In Mark Willis’ story this issue on trade pacts, (“Making a Pact,” page 32), he details how changes to trade deals such as the North American Free Trade Agreement, and the United Kingdom’s exit from the European Union, could begin to jeopardize “free” trade.

However, the story also conveys the development of trade pacts, how their complexities wrought a complex, integrated economic and political environment that has brought great benefit, and more recently, political and socioeconomic costs.

Simply scrapping these forged alliances is like cutting electricity to your house, then wandering through rooms, flipping switches and cursing the darkness.

Instead, trade and the brightest business minds find a way. They provide the energy, intelligence and intuition to develop alliances that drive economic stability and growth – often demonstrating to politicians how it’s done. The project industry is at such a juncture and must find ways to make trade work, as it finds its way out of an historic downturn.

Willis’ trade pact story points out some “silver linings” of trade agreements, such as the Comprehensive Economic and Trade Agreement between the European Union and Canada, and the Trans-Pacific Partnership – minus the U.S. – and a negotiated EU-Japan free trade agreement.

There is further evidence within this issue’s pages of trade success and development from unexpected places and unanticipated circumstances:

  • In the Philippines, Jaya Prakash reports that President Rodrigo Duterte is attempting to fast-track a tax reform bill to fund the archipelago’s infrastructure to drive economic activity and job creation (“Philippines Seizes Potential,” page 39). From a political leader with such a checkered past, the efforts may be to recast his legacy, but it also reflects the potential of the East Asia region.
  • From the ashes of the Odebrecht bribery scandal, Alan Field writes that Brazil has begun waging battle against the endemic corruption, changing cultural norms and becoming an influence over the rest of South America (“Anti-corruption Clout,” page 44).
  • For decades Mexico was hamstrung by its state-owned petroleum giant PEMEX in its ability to adapt to global markets. However, Kerry Dimmer reports, (“Power For Change,” page 50), that the country’s energy reform, initiated in 2013, has reversed its energy fortunes and has led to nearly a dozen free trade agreements, as well as economic cooperation agreements and other important pacts.

While trade news appears overwhelming, there’s ample historical evidence that business and trade finds ways to shine in even the darkest hours.

 

Photo credit: Shutterstock

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