This won’t be the last article on Trade Wars! Much of the commentary has, understandably, focused on the adverse consequences, and uncertainties arising from, Trade Wars. An interesting article published by the World Economic Forum entitled “Trade Wars won’t fix globalization. Here’s why” can be accessed via this hyperlink https://www.weforum.org/agenda/2018/06/trade-wars-wont-fix-globalization-tariffs/

I believe that the discussions on trade and desire to change existing trade policies can lead to a positive outcome that reflects the changing nature of trade. What is being sold is increasingly services and ideas, rather than physical goods. This needs a different approach to maximise “trade” flows.  Here are my thoughts

 

1.Working together will produce the best results:

Benefitting from the growth in services and ideas does need countries to work together, rather than exclusively focussing on national economic interests.

2. Brexit provides a wonderful opportunity to develop a framework to provide a policy, regulatory and taxation framework which recognises the growth in trade in services and ideas, as well as facilitating the movement of physical goods.

The Brexit negotiations can be transformed from what Michel Barnier described as “lose – lose game” to “win – win” with some imaginative thinking and recognition of the changing nature of trade, both in terms of growth in the digital economy and services and ideas, as well as geographic markets

3.Building on existing telecoms infrastructure to develop a global digital highway can produce a strong impetus to trade:

Advances in trade have been achieved through improved communications, as we have developed from walking to markets, using horses and carts, ships, cycles, motor vehicles and lorries to telecommunications. Continuing development of a global network of high speed telecommunications would facilitate growth in trade. Rather than an exclusive focus on national telecoms infrastructure governments should work together to provide a framework for a global digital highway, and supplement/ support what the private sector is willing to provide where private sector investment is not considered commercially viable.

Uncertainty understandably produces fear of the future. The nature of economic development however clearly shows that trade in services and exchange of ideas is becoming more important. History shows that improvements in communication links creates opportunities.

The economic, political, social and business environment is changing rapidly. Doing nothing and /or protectionism and supporting uneconomic activities through subsidies is not the way forward.  Let’s hope that our political leaders work together to create an environment, and provide the economic stimulus, which will facilitate the growth in the digital economy and other ways in which trade is conducted.