Changes can steer or
veer The Future Of Trade

When it comes to the global trade, technological advancements and political developments can affect the nature of how goods and services are exchanged. Political adjustments and protectionist polices can strain relationships, resulting in disavowed multilateral trade agreements, fluctuating commodity prices and the fall of major manufacturing hubs. Although changes may be unpredictable, new challenges will create opportunity and steer the industry over the next decade.

Geopolitics challenge the Future of Trade. In the last decade, trade barriers in major trading hubs have decreased, however global trade has been sluggish. Stalled trade negotiations and non-tariff barriers could be hindering global trade growth. Political changes such as the US election and Brexit in 2016 have also had significant effects on businesses and trade.

US and China's role in the Future of Trade

US protectionist policies:
After criticising NAFTA, and withdrawing from the TPP, the US has introduced tariffs on steel and aluminium imports. Both China and the EU have announced they would respond to the unilateral imposition of tariffs by the US. A trade war could cost up to $470 billion.

The Belt and Road Initiative:
China aims to connect markets across Asia, Africa and Europe by expanding maritime, rail and road networks, infrastructure, energy corridors and telecommunications. China recently announced that in 2017, its imports from Belt and Road connected countries increased faster than its exports for the first time. As the world’s economic centre of gravity is shifting towards Asia, nearly 70 countries are now connected to the Belt and Road initiative, or 62% of the world's GDP.

New threats are on the horizon including a protectionist shift in the US

Key commodities and
trading Hubs impact
The Future of trade

Trade growth is expected to have outpaced global output growth as the world economy enjoyed a synchronised upswing – air freight demands grew by 9% in 2017 the strongest rate since 2010.

The global economy enjoyed a synchronised upswing in 2017 with oil prices and other major commodities increasing. With primary commodities accounting for more than one-quarter of total goods traded, global trade value is likely to increase. However, escalating trade restrictions, geopolitical tensions, the rise of renewable energy and weather conditions could negatively impact the sector. Some countries may transform from being net importers to net exporters while new trade and manufacturing hubs will emerge.

Uncovering new low cost manufacturing hubs:
As China’s economy becomes more reliant on domestic consumption and technologically-led manufacturing, around 100 million labour-intensive manufacturing jobs could move to other low-cost countries. Vietnam, Myanmar, Indonesia, and African countries will emerge as new manufacturing hubs.

Introducing the Commodity Trade Index - a ranking of ten key commodity trading hubs: The Commodity Trade Index (CTI) evaluates 10 key commodities trading hubs based on three factors: commodity endowment, institutions, and location.

With the highest score in nature resource endowments, the UAE ranks as the number one global hub for commodity trade. The US and the UK come second and third, respectively, scoring highly among the institutional factors.

UAE ranks first on the CTI index with a score of 57% followed by The US with a score of 55.9% and The UK ranking third scoring 50.5%

Take me to the
Next Chapter