World trade 'should not go back to normal'

Industry News | | MIC Customs Solutions |

A better trading system could be built from the ashes of the pandemic, it has been suggested.

Since spring 2020, the key question on everyone's lips has been when can we expect a return to normalcy after the disruption caused by the coronavirus pandemic.

However, US trade representative Katherine Tai has said she actually does not think this is something the world should be striving for as the worst of the virus appears to recede.

Speaking at a virtual World Economic Forum conference seen by Reuters, she said global leaders should take the opportunity to create a new, more resilient and sustainable trading system from the remains of the old one.

Ms Tam said that she feels a simple return to normalcy would be backward-looking and that we can all learn from the "very painful lessons that we have experienced over the past two years" to build something better.

A key part of this will be in diversifying supply chains, which World Trade Organization director-general Ngozi Okonjo-Iweala also told the panel will be crucial in order to solve equality problems being faced by developing countries.

"We see shifts to Vietnam, Laos, Cambodia, Bangladesh, Ethiopia and so on in our data and I call it a way of re-globalizing," Reuters quoted her as saying.

Some of the biggest reductions in trade and output volumes since the Second World War were recorded across the globe during 2020 as industrial production and trade in goods ground to a halt.

However, the initial predictions of double-digit decline in world merchandise trade that year failed to materialize, with trade recovering much faster than expected in the second half of 2020 in particular.

According to the London School of Economics, the volume and year-on-year growth rates went on to reach historic highs in May and June 2021. Nevertheless, the researchers said it is still unknown which of the changes seen since the start of the pandemic will be short-lived and which will need longer-term adjustment.

Indeed, the economic recovery has proved to be patchy so far and better in some more developed nations than in others.