Page 24 - Port of Hamburg Magazine - 03.18

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Turbulent times:
The way ahead for world trade?
Dr. André Wolf, is head of research for the ‘Global economy, business cycles and international trade’, as well as ‘Energy, climate and environment’ at HWWI – Hamburg Institute of International Economics – on current trade policy issues
Seldom in the past has trade policy been so in the focus of public interest as it now is. This has been mainly caused by the US U-turn in its approach to trade relations, since President Trump came into of- fice. Instead of acting in the old American tradition of demonstrating reliability towards its trading part- ners, promoting the advantages of free trade, the new Administration blatantly considers trade policy as an economic weapon, to exert maximum pres- sure and extort concessions in the interest of the domestic economy. It is no longer by any means only threats, as the protective tariffs on steel and
NUMBER OF REGIONAL FREE TRADE AGREEMENTS
FIGURES FROM 1958 ‘TIL 2017
Source: WTO (2018) Graphics: Elbreklame
286 agreements to 2017 206 agreements to 2010
79 agreements to 2000 1-19 agreements from
1958 to 1990
aluminium and the broad Customs offensive against Chinese products demonstrate.
Counter measures, being resorted to on the other side by China and the EU, have in the meantime fuelled fears that the global economy is on the verge of a new trade war, as it last existed between the two World Wars, i.e. a spiral of ‘tit for tat’ Cus- toms increases enormously impacting the interna- tional division of labour. Even if the danger of such a spiral cannot be excluded, on the basis of objec- tive indicators, it can be stated that the world is currently still far from such a scenario. In its April forecast for 2018, the WTO expects an increase of 4.4 percent in the volume of global trade in goods; a continuation of the growth course of the previous years. Different to the previous years, trade would once again increase considerably stronger than global economic performance.
EU IS BEST EXAMPLE
More important still, is however that the trade policy trend in the rest of the World is clearly moving in the opposite direction. The founding of free trade zones modelled on the European Community has been con-
tinuously booming since the early Nineties. The in- clination of the US Administration to put its own trade agreements such as NAFTA into question has found no international resonance. To the contrary – and more precisely – associated concerns about the future of their export markets has lead many countries and region- al blocks to increase their efforts to achieve trade agreements with alternative partners. The EU provides the best example: Since 2017, not one, but two comprehensive trade agreements have been finalized – with Canada and Japan, respectively. Cur- rently, negotiations are underway with the ASEAN states and Mercosur group. Discus- sions with further countries such as Austral-
ia and New Zealand are being prepared.
MORE AGREEMENTS THAN IN THE PAST
Elsewhere, too, countries are trying to protect their own trade networks from the consequences of a threatening sealing off of US markets, such as Chi- na striving for increased integration in the Pacific
24 | Port of Hamburg Magazine | September 2018