The uncertainty around Brexit is turning into a fog for world trade, says a trade report by DMCC. Because of what is happening with the EU expert say that many other countries see the UK and the EU as too small to care about.
“The rest of the world could live without EU growth, for a while, the argument goes,’ the report explains and adds that such a statement does not look at the full picture as the world will be badly affected by the UK leaving the EU.
“In the past year, global trade trends have been contradictory. On the one hand, Trans-Pacific Partnership (TPP) came into effect, the European Union and Japan are pushing ahead with a free trade agreement, and the Regional Comprehensive Economic Partnership (RCEP) among Asians will go come into force this year. On the other hand, the scaled back renewal of NAFTA (now called the USMCA) and the US-China trade war has jolted both large economies and caused significant frictions and supply chain disruptions across North America and Asia,” says Dr. Parag Khanna – Managing Partner of FutureMap.
The future of world trade will be marked by more openness and liberalisation, however, the slower demand rate will be a key reason for decrease. That means that all future trade deals would not necessarily lead to better performing world economy.
Trade experts believe there is a higher chance that trade talks between China and the US will be successful. Some expect that the US will agree to lift up most of the tariffs it has imposed on Beijing and continue to do that for the rest after China start protecting Intellectual Property better. The upcoming elections in the USA can put to a hold any progress as president Trump could try to harden his views to try and get reelected.