These are turbulent times for trade and trade policy. Although global trade flows have proved resilient, trade growth has yet to return to pre-pandemic levels. According to the WTO, world trade has lost momentum under the weight of the `polycrises’ of war in Ukraine, inflation, monetary tightening, and widespread debt distress. Reassessments of investment destinations and the ‘reshoring’ of global supply chains highlight the ongoing tensions in geopolitical relations as the world transitions from unipolarity to multipolarity. Planetary unsustainability and climate change provide cover for the return of industrial policy with green goals and instruments such as localisation and subsidies for those who can afford them. In the US, there is waning commitment to multilateral trade disciplines as security and climate intersect with concerns about inequality and populism. Across the Atlantic in the EU, new tools such as the Carbon Border Adjustment Mechanism (CBAM) and the EU Deforestation Regulation (EUDR) have not sufficiently taken account of the negative impacts on poor countries.
In Africa, these trends and tensions come on top of high levels of poverty, weak growth, demographic and climate pressures, which provide a breeding ground for political instability as recent extra-constitutional changes in power demonstrate. …read more
Source:: German Institute for International and Security Affairs
