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Emerging Strategies For Ports During The Pandemic

Courtney Brown — Wed, 09 Feb 2022 16:36:45 +0000

The World Health Organization declared COVID-19 a pandemic in March 2020. Immediately, ports moved into crisis management mode in the face of this new and invisible threat to staff, customers and the business processes that keep imports and exports moving. Modern ports are well versed in planning and preparing for various potential accidents and incidents, from security breaches to vessels running aground. The rapid spread of COVID-19 forced ports to reexamine emergency response plans and adapt them to meet the new existential threat posed by the pandemic. Ports, their customers and all State agencies active in ports, from customs to State veterinarian officers, have had to tailor operations in line with public health advice and government regulations and legislation.

Prior to the pandemic, health and safety measures at ports had focused mainly on accidents and incidents impacting the physical and environmental aspects of safety for port workers. For example, at most ports, it is mandatory for all port workers to wear high-visibility clothing, hard hats, protective footwear and, when near water, lifejackets. However, the rapid spread and severity of COVID 19 led to a surge in worldwide demand for medical grade face masks, sanitizing fluid, dispensers, goggles, disposable overalls and other material with which to protect workers from airborne infections.

In March 2020, the World Health Organization stated that severe and mounting disruption to the global supply of personal protective equipment was putting lives at risk. Ports, like many other sectors, were initially not well equipped to meet the demands for essential supplies of appropriate face masks, sanitizing fluid, disinfectants and other more specialized equipment to protect the health and safety of port workers with regard to COVID-19, nor did they have the necessary processes and procedures in place to manage the move to telecommuting as required by government legislation in many countries. Emergency procedures for ensuring social distancing among work groups to reduce the spread of infection and to isolate symptomatic staff members had to be put in place and plans needed to be drawn up to safely manage the movement of personnel at ports. This was more complicated for essential workers such as ships’ crews, who had to rely on arrangements for accommodation made by shipowners and port authorities.

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To read the full report from UNCTAD, please click here.

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The Manufacturer’s Dilemma: Reshoring and Resiliency in a Pandemic World

Jude Althagafi — Thu, 04 Nov 2021 16:48:13 +0000

From the Rust Belt to the White House, policymakers, manufacturers, and consumers are debating the merits of reshoring, nearshoring, and building more resilient supply chains. The previous administration maintained a sharp focus on strengthening manufacturing in the United States through trade remedies, tariff protection, and reshoring measures. President Joe Biden has largely followed suit, maintaining many of the previous administration’s trade policies while outlining his own administration’s commitment to “Buy American” and build more resilient supply chains.

In the years between World War I and World War II, the rise of nationalist ideologies and crushing economic conditions ushered in an era of trade protectionism. In the interwar years, trade liberalization that had accelerated through 1913 essentially halted, dismantling previously established trading networks. However, these protectionist dynamics shifted with the signing of the Reciprocal Trade Act of 1934, which institutionalized tariff reduction reforms. Then, the 1944 Bretton Woods Agreement at the end of World War II laid the groundwork for the postwar economic world through the establishment of the World Bank, the International Monetary Fund, and eventually the General Agreement on Tariffs and Trade and its successor organization, the World Trade Organization, which was intended to serve as the global promoter of trade liberalization. During this time, the world trading system witnessed a reduction in tariffs and a push toward regional and multilateral trade agreements. With newly realized access to foreign markets, multinational firms—especially those in the manufacturing sector—initiated a trend of offshoring, which allowed firms to pursue lower costs abroad and achieve higher productivity gains.

As trade liberalization expanded, companies began to reexamine their production processes and disaggregate them in order to take advantage of lower relative prices and high productivity abroad in a bid to reduce the overall costs of goods production. Significant declines in transportation and communication costs were instrumental in this development. They enabled companies to develop supply chains that take advantage of low costs around the world to produce parts and components in different locations and then assemble them in a third location. International companies, particularly within the manufacturing sector, benefitted from decreased production costs and cheaper labor, but not without a cost to U.S. workers. Following a 30-year trend of offshoring, some firms have begun renationalizing their production chains, particularly since the 2008 recession. Meanwhile, the effects of globalization on manufacturing capacity and the U.S. trade deficit have grown to play a more prominent role in public discourse.

The Covid-19 pandemic caused unique supply chain challenges and demand shocks for nearly every industry. Quarantines and border closures constricted imports from foreign producers, and manufacturers faced severe material and labor shortages, lengthy manufacturing delays, and decreases in consumer demand. As this daunting confluence of factors was exposed, policymakers began to sound alarm bells and warn that existing supply chains would be unable to handle the bottlenecks in production. In response, two different approaches to supply chains have emerged: resiliency and reshoring.

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To read the full report from the Center for Strategic & International Studies, please click here.

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Special Drawing Rights Could Help Recover Millions of Export-Related US Jobs, and Create Even More

Ryan Murphy — Mon, 02 Aug 2021 17:47:24 +0000

This paper examines the effect of the COVID-19 pandemic, and the resulting world recession, on American export-related jobs. It argues that an additional, and larger, issuance of Special Drawing Rights — reserve assets at the International Monetary Fund — would help bring those jobs back and create more.

Since the beginning of the pandemic, lockdowns and other containment measures as well as their effects on certain sectors of the US economy, have been the focus of much analysis. Millions of jobs were lost as businesses that focused on, for example, the retail trade and tourism, shuttered.

One less examined aspect of the pandemic has been the effect of declining external aggregate demand on American industries and sectors that depend on exports. Not only were these businesses hurt by containment measures and other effects of the virus in the United States itself, they have faced reduced demand for their goods and services from the rest of the world.

Many low- and middle-income countries have experienced more severe economic crises due to the pandemic than high-income countries, and thus have imported less from countries like the United States. This has led to the temporary loss of millions of export-related jobs in the United States.

This fall-off in demand also means that rate of the return of American export-related jobs — jobs both directly and indirectly involved in the production of exports — is dependent upon a broad economic recovery in the rest of the world.

Special Drawing Rights, which are cost-free for the United States, can help boost global demand for American exports by improving the financial position of low- and middle-income countries. Increased demand for American exports would bring back these export-related jobs back more quickly, as well as put the US economy on a path to creating more export-related jobs over the next five years. The US economy is still down about 6.5 million jobs from its pre-pandemic level of employment, and 9.2 million below the pre-pandemic trend.

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To read the full report from the Center for Economic and Policy Research (CEPR), please click here.

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Services Trade Needs to be Taken as Seriously as Goods Trade

Ryan Murphy — Fri, 30 Jul 2021 18:01:52 +0000

Services constitute at least a quarter of total trade. Between 2009 and 2019 global services trade increased by nearly 50%, compared to 18% for goods trade. Yet it is rarely taken as seriously as goods in global trade policy discourse. This is a problem when making the case for trade.

There seem to be three major reasons why services trade is not taken sufficiently seriously.

Definition: Politicians and specialists don’t fully understand what services trade involves and are then unable to elaborate the benefits of growing the sector – they may not even think of it as ‘real trade’;
Measurement: Difficulties in counting services leads to oddities like the two largest services exporters claiming a surplus with each other, or iPhones being considered a product when their services components are of much greater value;
Mutuality: Countries have found it difficult to demonstrate beneficial trade relations with other countries in services given that barriers are primarily regulatory in nature.

It is time to change the services narrative, to show that this is real and growing trade, and likely to increase in importance in the future. We need also to broaden the debate from generic consultancy or financial services to specifics like films or engineers. Developed countries particularly reliant on services trade should take that lead, tackling the problems and emphasising services as just as important as goods.

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To read the full report from the European Centre for International Political Economy (ECIPE), please click here.

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Trade and Prosperity in the States: The Case of California

Jude Althagafi — Mon, 26 Jul 2021 19:12:10 +0000

COVID-19 has wreaked havoc in the 50 states as governors and lawmakers have imposed wide-ranging restrictions on businesses and individuals, which severely curtailed economic activity. States with strict stay-at-home orders have been bearing heavy costs in the areas of alcoholism, suicide, physical and mental health problems, and personal and governmental financial shortfalls

The Golden State has been among the strictest states in terms of COVID-19 distancing measures. It was the first state to impose a statewide stay-at-home order and closure of “non-essential” businesses in March 2020, and it reimposed them in December 2020 after never fully reopening in between. Even after the CDC lifted mask requirements, restrictions remained: Masks were still mandated in indoor workplaces for example—even for those who were vaccinated—unless everyone in the workplace was fully vaccinated.2 Small businesses and working-class people have borne the brunt of the state government’s economic shutdown. COVID-19 restrictions on economic activity have also had serious repercussions in Californian ports, hindering international trade responsible for hundreds of thousands of California jobs.

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To read the full report from The Heritage Foundation, please click here.

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WTO Annual Report: 2021

Ryan Murphy — Wed, 14 Jul 2021 18:49:18 +0000

The WTO’s Annual Report, published today (9 July), provides a comprehensive account of the organization’s activities in 2020 and early 2021. The Report opens with a message from Director-General Ngozi Okonjo-Iweala and a brief overview of the past year. This is followed by in-depth accounts of the WTO’s main areas of activity.

In her opening message, DG Okonjo-Iweala says:

“The multilateral trading system has played an important part in efforts to fight COVID-19. Trade’s resilience represented a lifeline for millions, enabling access to food and other essential supplies. Now, the WTO can and must play a critical role in accelerating COVID-19 vaccine production and in ensuring a strong, sustained and inclusive global economic recovery.

“To live up to its founding objectives of using trade to help people — to raise living standards, create jobs and promote sustainable development — the WTO must deliver results this year. By responding together to a global crisis without precedent in our lifetimes, members can begin to rebuild the trust needed to address future challenges.”

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To read the full report from the World Trade Organization (WTO), please click here.

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Shipping, Ports, and the Federal Maritime Commission

Savannah Gerlach — Fri, 11 Jun 2021 14:12:00 +0000

Since summer 2020, U.S. overseas containerized trade has risen to record levels as the Coronavirus Disease 2019 (COVID-19) pandemic led households to spend less on services such as vacation trips and restaurant meals and more on imported goods. The demand surge has resulted in transport delays, higher freight rates, and increased tension between shippers and ocean carriers over ancillary fees and the availability of containers. These controversies have drawn attention to the role of the Federal Maritime Commission (FMC),a federal agency with jurisdiction over ports and ocean shipping.

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To read the original research post from the Congressional Research Service, please click here.

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Small Island Developing States: Maritime Transport In The Era Of A Disruptive Pandemic – Empower States To Fend Against Disruptions To Maritime Transportation Systems, Their Lifeline To The World

Jake O'Keeffe — Mon, 03 May 2021 19:13:22 +0000

The coronavirus disease of 2019 (COVID-19) pandemic may have had less noticeable impacts on small island developing States (SIDS). However, the impacts may be longer lasting and more critical. The pandemic has exacerbated the unique and overwhelming challenges in these States related to connectivity; a high level of dependence on external trade; remoteness and prohibitive transport costs; food security; infrastructure gaps; resilience; sustainability; and access to finance. This policy brief builds on the findings in Review of Maritime Transport 2020 and of the ongoing United Nations-wide project “Transport and trade connectivity in the age of pandemics: Contactless, seamless and collaborative solutions”, launched in 2020 amid the pandemic.1 It highlights key priority actions and policy recommendations to support SIDS in strengthening their ability to respond to shocks and disruptions that undermine their maritime transportation systems and to future proof their maritime supply chains through sustainability and resilience-building efforts.

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To read the full report, please click here.

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US-China phase one tracker: China’s purchases of US goods

Anne Allen Hodge — Tue, 27 Apr 2021 19:55:51 +0000

On February 14, 2020, the Economic and Trade Agreement Between the United States of America and the People’s Republic of China: Phase One went into effect. China agreed to expand purchases of certain US goods and services by a combined $200 billion for the two-year period from January 1, 2020, through December 31, 2021, above the 2017 baseline levels. This PIIE Chart tracks China’s monthly purchases of US goods covered by the deal, relying on data from both Chinese customs (China’s imports) and the US Census Bureau (US exports). It then compares those purchases with the legal agreement’s annual commitments, prorated on a monthly basis based on seasonal adjustments, above two baseline scenarios (see methodology below). As set out in the legal agreement, one 2017 baseline scenario allows for use of US export statistics and the other allows for Chinese import statistics.

By the end of 2020, China committed to purchase no less than an additional $63.9 billion of covered goods from the United States relative to these 2017 baselines. Defining the 2017 baseline using Chinese import statistics implied a 2020 purchase commitment of $173.1 billion. In 2020, China’s total imports of covered products from the United States were only $99.9 billion, reaching only 58 percent of the commitment. Defining the 2017 baseline using US export statistics implied a 2020 commitment of $159.0 billion. In 2020, US exports to China of covered products were $94.0 billion, reaching only 59 percent of the commitment. (More detail on 2020 is provided below.)

For 2021, China has committed to purchase no less than an additional $98.2 billion of covered goods from the United States relative to these 2017 baselines. Defining the 2017 baseline using US export statistics implies a 2021 target of $193.3 billion (blue in panel a). Defining the 2017 baseline using Chinese import statistics implies a 2021 purchase commitment of $207.4 billion (red in panel a).

THE LATEST NUMBERS FOR 2021

Through March 2021, China’s total imports of covered products from the United States were $36.7 billion, compared with a year-to-date target of $49.0 billion. Over the same period, US exports to China of covered products were $26.3 billion, compared with a year-to-date target of $43.1 billion. Through March 2021, China’s purchases of all covered products reached 75 percent (Chinese imports) or 61 percent (US exports) of the year-to-date target.

For covered agricultural products, China committed to an additional $19.5 billion of purchases in 2021 above 2017 levels, implying an annual commitment of $43.6 billion (Chinese imports, panel b) and $40.4 billion (US exports, panel c). Through March 2021, China’s imports of covered agricultural products from the United States were $13.9 billion, compared with a year-to-date target of $16.4 billion. Over the same period, US exports to China of covered agricultural products were $7.8 billion, compared with a year-to-date target of $10.8 billion. Through March 2021, China’s purchases of covered agricultural products reached 85 percent (Chinese imports) or 72 percent (US exports) of the year-to-date target.

For covered manufactured products, China committed to an additional $44.8 billion of purchases in 2021 above 2017 levels, implying an annual commitment of $123.1 billion (Chinese imports) and $111.3 billion (US exports). Through March 2021, China’s imports of covered manufactured products from the United States were $18.3 billion, compared with a year-to-date target of $25.9 billion. Over the same period, US exports to China of covered manufactured products were $15.3 billion, compared with a year-to-date target of $23.0 billion. Through March 2021, China’s purchases of covered manufactured products reached 71 percent (Chinese imports) or 66 percent (US exports) of the year-to-date target.

For covered energy products, China committed to an additional $33.9 billion of purchases in 2021 above 2017 levels, implying an annual commitment of $40.7 billion (Chinese imports) and $41.5 billion (US exports). Through March 2021, China’s imports of covered energy products from the United States were $4.5 billion, compared with a year-to-date target of $6.7 billion. Over the same period, US exports to China of covered energy products were $3.2 billion, compared with a year-to-date target of $9.3 billion. Through March 2021, China’s purchases of covered energy products reached 67 percent (Chinese imports) or 34 percent (US exports) of the year-to-date target.

For all uncovered products—making up 29 percent of China’s total goods imports from the United States and 27 percent of US total goods exports to China in 2017—the phase one agreement does not include a legal target. Through March 2021, China’s imports of all uncovered products from the United States were $9.8 billion, 17 percent lower than in 2017. US exports of all uncovered products to China through February 2021 were $5.1 billion, 4 percent lower than over the same period in 2017. (The March US export data for uncovered products will be available on May 4, 2021.)

Though the agreement also sets commitments for China’s purchases of certain traded services from the United States, those data are not reported on a monthly basis and are not covered here.

Note on Data Release: This update is based on March 2021 data released by US Census (April 26, 2021) and Chinese customs (April 20, 2021).

THE NUMBERS FOR 2020

Through 2020, China’s total imports of covered products from the United States were $99.9 billion, compared with the commitment of $173.1 billion (red in panel a). Over the same period, US exports to China of covered products were $94.0 billion, compared with a commitment of $159.0 billion (blue in panel a). In the first year of the agreement, China’s purchases of all covered products only reached 59 percent (US exports) or 58 percent (Chinese imports) of the commitment.

For covered agricultural products, China committed to an additional $12.5 billion of purchases in 2020 above 2017 levels, implying an annual commitment of $36.6 billion (Chinese imports, panel b) and $33.4 billion (US exports, panel c). Through 2020, China’s imports of covered agricultural products were $23.6 billion. Over the same period, US exports to China of covered agricultural products were only $27.3 billion. In the first year of the agreement, China’s purchases of covered agricultural products only reached 82 percent (US exports) or 64 percent (Chinese imports) of the commitment.

For covered manufactured products, China committed to an additional $32.9 billion of purchases in 2020 above 2017 levels, implying an annual commitment of $111.2 billion (Chinese imports) and $99.4 billion (US exports). Through 2020, China’s imports of covered manufactured products were $66.5 billion. Over the same period, US exports to China of covered manufactured products were only $57.0 billion. In the first year of the agreement, China’s purchases of covered manufactured products only reached 57 percent (US exports) or 60 percent (Chinese imports) of the commitment.

For covered energy products, China committed to an additional $18.5 billion of purchases in 2020 above 2017 levels, implying an annual commitment of $25.3 billion (Chinese imports) and $26.1 billion (US exports). Through 2020, China’s imports of covered energy products were $9.8 billion. Over the same period, US exports to China of covered energy products were only $9.7 billion. In the first year of the agreement, China’s purchases of covered energy products only reached 37 percent (US exports) or 39 percent (Chinese imports) of the commitment.

For all uncovered products—making up 29 percent of China’s total goods imports from the United States and 27 percent of US total goods exports to China in 2017—the phase one agreement does not include a legal commitment. In 2020, China’s imports of all uncovered products from the United States were $35.0 billion, 23.3 percent lower than in 2017. Over the same period, US exports of all uncovered products to China were $30.7 billion, 11.7 percent lower than in 2017.

METHODOLOGICAL APPROACH

Assessing progress toward meeting the phase one commitments for goods trade requires information from both US export statistics and Chinese import statistics, given that the agreement’s Chapter 6, Article 6.2.6 states “Official Chinese trade data and official US trade data shall be used to determine whether this Chapter has been implemented.” One implication is that there are two sets of monthly data to track (Chinese imports and US exports). A second is that there are two different annual, and hence monthly, targets, since the 2017 baseline level of Chinese imports differs from the 2017 baseline level of US exports. Finally, the products covered by the purchase commitments are set out at the 4-, 6-, 8-, or 10-digit level in the agreement’s Attachment to Annex 6.1; these are then mapped to the US or Chinese trade statistics for 2017 and for 2020 and 2021. Starting with our update of this PIIE Chart on October 26, 2020, we have included US export product 8800 (in addition to 8802, aircraft) in “covered manufacturing” and the total, shifting it out of the “uncovered” category.

Each month’s purchase target is seasonally adjusted to reflect that month’s relative weight for those products in the 2017 trade data. Note that prorating the year-end commitment to a monthly target is for illustrative purposes only. Nothing in the text of the agreement indicates China must meet anything other than the year-end commitments.

For US goods exports, the agreement is estimated to cover products that made up $95.1 billion, or 73 percent, of total US goods exports to China ($129.8 billion) in 2017. Of the 2017 total exports of covered products, exports worth $20.9 billion were in agriculture, $66.5 billion were in manufacturing, and $7.6 billion were in energy. Products uncovered by the agreement—and thus with no targets for 2020 or 2021—made up 27 percent ($34.7 billion) of total US goods exports to China in 2017.

For Chinese goods imports, the deal is estimated to cover products that made up $109.2 billion, or 71 percent, of total Chinese goods imports from the United States ($154.9 billion) in 2017. Of the 2017 total imports of covered products, imports worth $24.1 billion were in agriculture, $78.3 billion were in manufacturing, and $6.8 billion were in energy. Uncovered products made up 29 percent ($45.6 billion) of total Chinese goods imports from the United States in 2017.

For both the US export data and the Chinese import data, the 2020 phase one commitments of additional trade (on top of 2017 baseline) are $12.5 billion (agriculture), $32.9 billion (manufactured goods), and $18.5 billion (energy). The 2021 phase one commitments of additionaltrade (on top of 2017 baseline) are $19.5 billion (agriculture), $44.8 billion (manufactured goods), and $33.9 billion (energy). These commitments are found in the agreement’s Annex 6.1.

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Global Trade Today is Global Value Chains

Anne Allen Hodge — Sun, 31 Jan 2021 18:05:24 +0000

In the last 25 years global value chains have come to dominate global trade in a way surprisingly little discussed or understood. To meet the policy challenges of today and the future we need to understand the key characteristics of this new global trade and how they came about.

The OECD estimate around 70% of total trade takes place in global value chains. Using their definition as where “the different stages of the production process are located across different countries”, and considering both goods and services inputs, this may be an understatement.

The example most commonly used is the automotive sector, with 30,000 parts and associated services like satellite navigation going into one car. However there are many others. Modern primary commodity production is optimised by technology developed in other countries, diverse services and goods are frequently combined to create new product offerings, and most international business to consumer transactions are facilitated by leading global platforms.

Positively this new globalization has provided consumers with an unprecedented choice of products at affordable prices. More challengingly it has seen governments struggle with the question of how they can best influence modern trade, amid signs of a backlash and simple demands for ‘more domestic manufacturing’.

The popular global narrative that feeds such demands is one that has a traditional view of trade as a set of simple primary or manufactured goods transactions. Policymakers must move on from this narrative, making their choices, and explaining them clearly, on the basis of global value chains.

Why Global Trade Changed

The dramatic fall in the cost of transporting goods since the 1970s due to containerisation is well documented. More recently the Internet in particular has reduced the cost of transporting ideas and other services since 1990. Together these developments mean large companies can source their final products by taking their pick of the best ideas and most economic facilities from around the world. This process of breaking down final production in turn accounts for most of the 900% rise of goods trade since the mid-1980s.

Yet companies also face constraints in their choices. Complexity in operation is likely to increase risk. This is why governments seeking to attract companies have sought to offer reassurances, not always successfully, against domestic policy change. The drivers around global supply chains are thus complex, and likely to remain so.

Picturing Global Supply Chains

Global value chains use individual goods or services inputs which are in various ways processed into a finished product to a customer. The diversity of how this happens is almost endless, with no single model, and thus no single predictable response to change.

In the previously mentioned automotive case, a set of physical components are made into a car, combined with services such as car’s information systems, and sold as a single product with the possible addition of warranty or financing. Supermarkets combine products bought, and those made specifically, with services such as loyalty schemes. Both use sophisticated computer systems developed by third parties to manage stock levels and human resources. They will draw upon marketing experts, quality systems and third party contact centre providers where required.

Overall the sum of all these transactions form a complex network running across borders to constitute the majority of global trade. There is trade outside these networks, for example direct international manufacturer-to-consumer retail or transfers of precious metals, but far less than that happening within global chains. Understanding this is of vital importance in understanding a national economy.

Identifying three distinct elements to the supply chains can help conceptualise this network. The large enterprises which drive the process balance their supply chains between sectoral expertise, increasingly global, and lower cost repeat production, looking first within their region if sufficiently economical.

This can be illustrated as below, noting that while modern trade is particularly concentrated in three regions, Asia (mainly East, South, and Southeast), Europe, and North America, there is a diversity of traded goods and services sectors.

Implications of Global Value Chains

Globally competitive companies must make their own decisions about how best to operate their supply chains. Governments cannot in general force them to increase domestic production, or indeed make any quick decisions. Global value chains and modern trade therefore exist largely outside the direct control of politicians, even where national champions or state owned enterprises exist. This lack of control over the economy may even influence governments to revert to more traditional views of trade in the hope this can make a difference.

Yet governments can and do influence value chain decisions. China positioned itself in the 1990s as a low cost high quality provider of complex consumer products on behalf of multinationals through various policies. European countries have sought to create specialist clusters of deep technical expertise, in the car industry, aerospace, or pharmaceuticals. Conversely new barriers to UK-EU trade are seeing some supply chains restructured without UK components.

Governments have numerous policy levers, such as trade, skills or taxation policy, but need to think carefully about the nature of modern trade in using them. President Trump’s targeting of US imports from China in the hope of stimulating domestic production failed to consider value chains. Rather it encouraged some manufacturers to transfer production to Vietnam to avoid tariffs, where such a short term move was possible, rather than set up expensive new operations in the US.

Similarly Free Trade Agreements focused predominantly on old models of trade are no guarantee of attracting greater domestic manufacturing or greater participation in supply chains. While stable and open trade relations are an important foundation, individual changes are unlikely to be significant. Similarly predictable regulatory and skills frameworks are likely to be more important than constant change. Supporting specialisms, reducing general costs for example through better infrastructure, and attracting major inward investments would then seem to be specific policies which could enhance supply chain participation.

Conclusion

Global value chains have become the predominant reality of international trade, and the factors behind their growth seem unlikely to change significantly. The ability for companies to operate globally, using the best technology and most cost efficient production, is here to stay. The implications are profound, economically and politically, as we may have already seen in the rise of populism, but equally in providing equipment and global research collaboration to fight Covid. Policy makers need to adjust their assumptions on trade accordingly, before considering what actions will be most effective in meeting their objectives.

To view the original research by the European Centre for International Political Economy, please click here.

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