tag:theconversation.com,2011:/au/topics/international-trade-12693/articlesInternational trade – The Conversation2024-01-12T12:54:38Ztag:theconversation.com,2011:article/2200932024-01-12T12:54:38Z2024-01-12T12:54:38ZWhy the world is turning away from the US dollar<figure><img src="https://images.theconversation.com/files/568291/original/file-20240108-29-m0f5bx.jpg?ixlib=rb-1.1.0&rect=52%2C0%2C5794%2C3859&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">US treasury secretary Janet Yellen.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/us-treasury-secretary-janet-yellen-arrives-2006615249">Alexandros Michailidis/Shutterstock</a></span></figcaption></figure><p>The invasion of Ukraine in February 2022 prompted the US Treasury Department to impose <a href="https://home.treasury.gov/news/press-releases/jy0612">unprecedented sanctions</a> on Russia, to hold it “accountable for its premeditated and unprovoked invasion”.</p>
<p>The aim was to prevent Russia from “prop[ing] up its rapidly depreciating currency by restricting global supplies of the ruble and access to reserves that Russia may try to exchange to support the ruble”. In other words, Russia wouldn’t be able to sell enough US dollars in the foreign exchange market to buy up Russian currency and bolster its value.</p>
<p>Indeed, US secretary of the treasury Janet Yellen called this an “unprecedented action” that would “significantly limit Russia’s ability to use assets to finance its destabilising activities”. </p>
<p>Freezing a sovereign country’s dollar holdings (Russia’s in this case) is a seismic event. It risks accelerating a move away from use of the US dollar for trade or investment by countries that have different geopolitical interests than the US, such as China or the Gulf states.</p>
<p>In fact, several governments outside the west are exploring ways to <a href="https://www.ft.com/content/669260a5-82a5-4e7a-9bbf-4f41c54a6143">reduce their exposure</a> to the dollar. Russia is currently <a href="https://markets.businessinsider.com/news/currencies/dedollarization-dollar-dominance-russia-china-ruble-yuan-war-in-ukraine-2023-9">settling a quarter</a> of its international trade using Chinese renminbi, and its bilateral trade with China is almost entirely settled in the two countries’ respective currencies.</p>
<p>In March 2023, China settled a payment for UAE gas <a href="https://www.nasdaq.com/articles/china-completes-first-yuan-settled-lng-trade">in its own currency</a> rather than US dollars for the first time. Then in November, China and Saudi Arabia signed a <a href="https://www.reuters.com/markets/currencies/china-saudi-arabia-central-banks-sign-local-currency-swap-agreement-2023-11-20/">currency swap agreement</a>, citing a desire to expand the use of their currencies.</p>
<p>There are more troubling signs for the US dollar. Even though central banks’ foreign exchange reserves have been growing steadily year-on-year for more than 20 years, the percentage held in US dollars reached its lowest point in the fourth quarter of 2022, as this chart shows:</p>
<p><strong>US$ held by central banks</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Line chart showing countries' USD holdings falling." src="https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=371&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=371&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=371&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=466&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=466&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568876/original/file-20240111-29-hksxre.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=466&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Currency composition of central banks’ foreign exchange reserves.</span>
<span class="attribution"><a class="source" href="https://data.imf.org/?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4&sid=1408206195757">Author provided using International Monetary Fund data.</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
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<p>This is not a blip. It is the culmination of a long negative trend that has seen the US currency’s share in foreign reserves held by central banks fall from over 70% in the early 2000s to under 60% today.</p>
<p>While the drop is not dramatic, it’s significant and indicative of a negative trend for the dollar that reflects several developments – economic but also geopolitical.</p>
<h2>Leaving the US behind?</h2>
<p>The US economy’s share in the world’s output is falling as emerging economies, especially China, continue to outgrow the US and its western partners. China, the US’s biggest economic competitor, is now the main trading partner to more than 120 countries, with exports amounting to <a href="https://www.statista.com/statistics/264623/leading-export-countries-worldwide/">more than US$3.6 trillion</a> (£2.8 billion). This risks leaving the US behind in the race for global trade dominance.</p>
<p>Over the last 20 years, China’s <a href="https://data.imf.org/?sk=9d6028d4-f14a-464c-a2f2-59b2cd424b85&sid=1514498232936">share of the global economy</a> has more than doubled from 8.9% to 18.5% while the US’s share declined from 20.1% to 15.5% in <a href="https://www.investopedia.com/updates/purchasing-power-parity-ppp/">purchasing power parity</a> terms (which compare prices of specific goods to determine currency purchasing power).</p>
<p>Last year, the Brics economies (fast-growth developing countries Brazil, Russia, India, China and South Africa) overtook those of the G7 (developed economies US, Canada, UK, Germany, France, Italy, Japan and Germany) based on their share of world GDP in purchasing power parity terms.</p>
<p><strong>GDP: G7 v Brics</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Line chart showing GDP shares of G7 v Bric economies converging before Brics surpasses G7." src="https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=425&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=425&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568879/original/file-20240111-21-3uzbr9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=425&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Share of GDP, current USD, PPP.</span>
<span class="attribution"><a class="source" href="https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD">Author provided using World Development Indicator data (series: NY.GDP.MKTP.PP.CD), World Bank</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
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<p>As <a href="https://www.reuters.com/world/brics-poised-invite-new-members-join-bloc-sources-2023-08-24/">more countries join</a> the Brics, it will give the group <a href="https://www.middleeastmonitor.com/20230815-south-africa-8-arab-countries-request-to-join-brics/">even more economic clout</a>. </p>
<p>Meanwhile, the US economy’s global GDP share is falling and its debt is hitting new heights as it issues more Treasury bills, notes and bonds to fund current government spending. The <a href="https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/#the-growing-national-debt">US national debt</a> stands in excess of US$33 trillion, or 123% of the country’s annual output. Inflationary shocks followed by interest rate increases have made servicing this debt very expensive for US taxpayers, repeatedly raising the risk of a debt default in recent years.</p>
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Read more:
<a href="https://theconversation.com/debt-ceiling-negotiators-reach-a-deal-5-essential-reads-about-the-tentative-accord-brinkmanship-and-the-danger-of-default-206174">Debt ceiling negotiators reach a deal: 5 essential reads about the tentative accord, brinkmanship and the danger of default</a>
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<p>There is no doubt the US dollar still dominates world markets right now, accounting for most of the transactions in <a href="https://www.sciencedirect.com/science/article/pii/S0022199622000368?via%3Dihub">international trade</a>. Its share in the foreign exchange market is colossal at <a href="https://data.bis.org/topics/DER/tables-and-dashboards/BIS,DER_D11_3,1.0">88% of transactions</a>, and it remains the most widely held “international reserve” by central banks who want to ensure they can cover their countries’ imports and support the value of their own currencies.</p>
<p>But the centrality of the US currency since the second world war has not always been welcome –– certainly not by US foes and sometimes not even by its friends. Valéry Giscard d'Estaing, the 20th president of France and a finance minister in the 1960s, called the dollar’s reserve status an <a href="https://www.nber.org/system/files/chapters/c0121/c0121.pdf">“exorbitant privilege”</a> for the US. He probably meant that demand for US assets from abroad was so high that it could borrow easily at favourable terms to finance its current account deficit –– a privilege not available to other nations.</p>
<p>Current <a href="https://theconversation.com/global-triggers-why-these-five-big-issues-could-cause-significant-problems-in-2024-219371">global geopolitical and economic shifts</a> could now see this exorbitant privilege challenged. The refusal of Russia’s Brics partners and many UN nations to undertake western-style sanctions against Russia is evidence of the limitations the west faces in exerting geopolitical influence.</p>
<p>And from an economic perspective, China as the world’s top trader and Russia as one of the world’s richest countries <a href="https://www.iea.org/articles/energy-fact-sheet-why-does-russian-oil-and-gas-matter">by energy reserves</a> have amassed <a href="https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-q3-2023/central-banks">large gold holdings</a> which could replace some US dollar uses. Both are looking to work with other countries, <a href="https://www.iiss.org/sv/publications/strategic-comments/2023/the-state-of-de-dollarisation-in-the-gulf-region/">including those in the Gulf region</a>, to reduce reliance on the US dollar. </p>
<h2>Challenger currencies</h2>
<p>Convincing non-western investors to use a “challenger currency” – whether the Chinese renminbi or a Brics currency – could become easier following the US Treasury’s freezing of Russian assets. And these switches <a href="https://www.ccn.com/news/seizing-300b-russian-assets-cataclysm-dollar-nobel-prize/">could accelerate</a> if the US decides to seize the frozen Russian assets.</p>
<p>It’s increasingly clear that, as non-western countries assert themselves in the world’s economic arena, geopolitical divisions with the west will cause additional friction. As a result, the US dollar’s role is almost certain to become more limited than it has been at any time since the end of the second world war.</p><img src="https://counter.theconversation.com/content/220093/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alexandros Mandilaras does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Geopolitical shifts that are dividing the world could create problems for the US dollar, traditionally the dominant currency globally for trade and investment.Alexandros Mandilaras, Associate professor, University of SurreyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2136182023-11-07T17:24:43Z2023-11-07T17:24:43ZOvercoming the climate crisis with trade-based strategies<figure><img src="https://images.theconversation.com/files/557599/original/file-20231105-27-uw7cz3.jpg?ixlib=rb-1.1.0&rect=0%2C3%2C2048%2C1358&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A container ships docked in Freeport, Grand Bahama Island in 2019.</span> <span class="attribution"><span class="source">Corey Seeman/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Global warming is making <a href="https://www.ipcc.ch/report/ar6/syr/downloads/report/IPCC_AR6_SYR_LongerReport.pdf">weather patterns more extreme</a> and <a href="https://www.elibrary.imf.org/view/journals/001/2022/103/article-A001-en.xml">increasing inequalities</a> across regions. However, economic growth is <a href="https://theconversation.com/how-trade-regulations-may-be-opening-up-a-new-era-of-sustainable-growth-in-the-global-south-182070">still possible</a>, with economies showing a range of responses to the impacts of global heating.</p>
<p>Recently, Martina Bozzola, Fabio Santeramo and I joined together to understand whether the climate crisis is creating new trading patterns. <a href="https://www.sciencedirect.com/science/article/pii/S1470160X23008221">Our research</a> concludes that international trade may serve as an adaptation strategy to climate change.</p>
<p>Production shifts induced by the changing climate may favour both the domestic and international markets depending on how interconnections across the globe facilitate the movement of goods. Taking into account conditions such as the geographical distance or the size of economies, the value of the exchange in goods between two trading partners is as large as their climatic conditions differ. Specifically, for an increase of 1 degree Celsius in the gap between the mean temperatures of two countries, the trade between them is expected to grow by 38% on average.</p>
<p>For example, between 1996 and 2015, the agricultural and food-related trade between India and Indonesia amounted to an average of 215 million dollars each year for the period. Indonesia is about 2 degrees Celsius warmer than India, and the effect of having a 1 degree Celsius larger difference in temperatures between the two countries would generate an average trade increase between them quantifiable in 82 million dollars per year.</p>
<h2>Changes in temperatures leading to new shipping routes</h2>
<p>The greater the temperature difference across countries, the tighter their commercial relationships get. In absolute terms, trade tends to increase more substantially for routes in the northern hemisphere, particularly when the European Union and the United States are involved: the intra-EU shipping routes are expected to increase annually by more than 1 billion dollars each. The monetary gain in the EU-US route is also relevant, rising from 611 to 893 million dollars more per year depending on the EU trading partner. While less marked, an increase in trade values is expected between countries in the southern hemisphere, including Latin America (for example, a rise of 552 million dollars between Argentina and Brazil) and Oceania (an increase of 573 million dollars between Australia and New Zealand).</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Top 20 trade routes most affected by increase in the difference between countries' temperatures" src="https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=384&fit=crop&dpr=1 600w, https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=384&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=384&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=483&fit=crop&dpr=1 754w, https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=483&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/553250/original/file-20231011-23-p4k7q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=483&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Top 20 trade routes most affected by increase in the difference between countries’ temperatures. Figures are in million dollars; the reference year is 2015.</span>
<span class="attribution"><span class="license">Fourni par l'auteur</span></span>
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<p>The difference in the magnitude of trade effects between Northern and Southern countries is likely due to the variation in both the countries’ climates and state of economic development. Most of northern countries are developed economies, whereas most of southern ones are developing or emerging. Northern (developed) countries tend to have a colder climate and <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/twec.13256">higher trade values with respect to the southern</a> (developing) countries. Under the same increase in temperature differences, a higher level of economic development may explain the larger gains in monetary terms. </p>
<p>It should be kept in mind, however, that the strength of seasonality varies significantly across the globe, with seasons being more homogenous around the equator. Differences in temperatures tend to increase the value of agricultural and food products traded between lower-latitude countries, such as China, and higher-latitude countries, such as the EU. According to the data from Directorate-General for Agriculture and Rural Development of the European Commission, <a href="https://ec.europa.eu/info/sites/default/files/food-farming-fisheries/farming/documents/agrifood-china_en.pdf">China is both a top origin and a top destination for the EU</a>. On average, China is 6 degrees Celsius colder than the EU trading partners for the period between 1996 and 2015. Consistent with <a href="https://www.sciencedirect.com/science/article/pii/S1470160X23008221">our results</a>, such a difference would increase trade between the EU and China. Similar to other central Asian countries that traditionally suffered from a temperature penalty, China would benefit of an improved agricultural productivity with warmer temperatures.</p>
<h2>Strategies to survive in a warmer environment</h2>
<p><a href="https://academic.oup.com/joeg/article-abstract/21/4/487/6384781">Climate change has a range of impacts across space</a>, with some countries experiencing losses or gains more than others. Overall, changes in climatic conditions and increasing differences in the temperatures of countries contributes to change the economic geography and shape sectoral specialisations. </p>
<p>Countries shifting their specialisation is a form of adaptation that depends, among other, on their ability to trade with partners in other regions of the world. Developing trading partners with different specialisations would result in a potentially beneficial adaptation strategy to climate change.</p>
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<img alt="" src="https://images.theconversation.com/files/310261/original/file-20200115-134768-1tax26b.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/310261/original/file-20200115-134768-1tax26b.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=158&fit=crop&dpr=1 600w, https://images.theconversation.com/files/310261/original/file-20200115-134768-1tax26b.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=158&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/310261/original/file-20200115-134768-1tax26b.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=158&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/310261/original/file-20200115-134768-1tax26b.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=198&fit=crop&dpr=1 754w, https://images.theconversation.com/files/310261/original/file-20200115-134768-1tax26b.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=198&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/310261/original/file-20200115-134768-1tax26b.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=198&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><em>Created in 2007 to help accelerate and share scientific knowledge on key societal issues, the AXA Research Fund has supported nearly 700 projects around the world conducted by researchers in 38 countries. To learn more, visit the site of the AXA Research Fund or follow on Twitter @AXAResearchFund.</em></p><img src="https://counter.theconversation.com/content/213618/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Les auteurs ne travaillent pas, ne conseillent pas, ne possèdent pas de parts, ne reçoivent pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'ont déclaré aucune autre affiliation que leur organisme de recherche.</span></em></p>As global warming accelerates, a new study indicates that new trading patterns could develop as an adaptation strategy.Emilia Lamonaca, AXA Research Fellow, Università di FoggiaFabio Gaetano Santeramo, Associate Professor, Università di FoggiaMartina Bozzola, Associate professor, School of Biological Sciences, Queen's University BelfastLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2127502023-09-05T12:31:51Z2023-09-05T12:31:51ZThe US broke global trade rules to try to fix climate change – to finish the job, it has to fix the trade system<figure><img src="https://images.theconversation.com/files/546039/original/file-20230902-29-t9j2d6.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5136%2C3421&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. President Joe Biden signed the Inflation Reduction Act on Aug. 16, 2022, including electric vehicle subsidies with 'buy American' rules.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-joe-biden-smiles-as-he-test-drives-an-electric-news-photo/1236627019">Mandel Ngan/AFP via Getty</a></span></figcaption></figure><p>The 2022 Inflation Reduction Act, President Joe Biden’s landmark climate law, is now expected to prompt <a href="https://finance.yahoo.com/news/goldman-sees-biden-clean-energy-181052871.html">a trillion dollars in government spending</a> to fight climate change and trillions more in private investment. But the law and Biden’s broader “buy American” agenda include measures <a href="https://bipartisanpolicy.org/blog/ira-ev-tax-credits/">that discriminate against imports</a>.</p>
<p>One year in, these policies, such as the law’s <a href="https://bipartisanpolicy.org/blog/ira-ev-tax-credits/">electric vehicle subsidies</a>, appear to be succeeding at growing domestic clean energy industries – consider the <a href="https://www.energy.gov/investments-american-made-energy">US$100 billion in newly announced battery supply chain investments</a>. But we believe the law also clearly violates international trade rules.</p>
<p>The problem is not the crime but the cover-up. Today’s trade rules are ill-suited for the climate crisis. However, simply tearing them down could hinder economic growth and climate progress alike. </p>
<p>If U.S. leaders instead take responsibility for forging an improved international trade system – rather than denying the violations of trade rules or pointing fingers at similar transgressions by trade partners – they could help put the global economy in a better position to weather increasing climate-related trade tensions.</p>
<h2>Building, then violating WTO rules</h2>
<p>The United States has shaped international trade rules more than any other country.</p>
<p>In the 1940s, <a href="https://www.nber.org/system/files/chapters/c13863/c13863.pdf">the U.S. proposed</a> rules that were eventually largely adopted as the General Agreement on Trade and Tariffs, or GATT, a series of multinational agreements to reduce trade barriers. The <a href="https://www.nber.org/system/files/chapters/c13863/c13863.pdf">most ambitious</a> of the GATT agreements was the U.S.-instigated Uruguay Round of the 1990s, which created the World Trade Organization.</p>
<p>Some WTO rules are vague, but others are crystal clear, including <a href="https://www.wto.org/english/docs_e/legal_e/24-scm.pdf">an unambiguous prohibition</a> of subsidies contingent on the use of domestic products instead of imports. Certain provisions of the Inflation Reduction Act do exactly that, such as the <a href="https://bipartisanpolicy.org/blog/ira-ev-tax-credits/">electric vehicle subsidies</a> that require a large percentage of parts to be produced in North America.</p>
<p>The choice facing U.S. policymakers was between accepting the Inflation Reduction Act, including its rule-breaking, protectionist elements, or missing the small window to pass federal climate legislation.</p>
<p>Sen. Joe Manchin (D-W.Va.) explicitly refused to provide the 50th vote needed to pass the law if it wasn’t to his liking, and among his asks was <a href="https://www.bloomberg.com/news/articles/2022-08-19/manchin-nearly-killed-ev-credit-with-take-it-or-leave-it-threat">domestic sourcing requirements</a>. More broadly, any meaningful climate legislation that does not support the local economies of fossil fuel-heavy regions may be dead on arrival in the U.S. Senate.</p>
<p>Without the Inflation Reduction Act, however, the U.S. had <a href="https://doi.org/10.1126%2Fscience.adg3781">next to no chance of meeting its climate commitments</a>, which would have dampened climate policy momentum across the world.</p>
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<p>U.S. leaders might have been justified in begging for forgiveness after passing the legislation rather than asking for permission to violate trade rules. Instead, Sen. Ron Wyden (D-Ore.), who chairs the powerful Senate Finance Committee, <a href="https://www.politico.com/news/2022/12/09/trade-rules-democrats-inflation-tax-00073138">said his team reviewed</a> the international trade laws very carefully and found no violations.</p>
<p>Instead of an apology, U.S. leaders have said, “You’re welcome,” <a href="https://www.economist.com/by-invitation/2023/01/24/brian-deese-john-podesta-and-jake-sullivan-on-the-inflation-reduction-act">arguing</a> that the subsidies will benefit other countries by accelerating the deployment of clean energy technologies and <a href="https://rhg.com/research/emerging-climate-technology-ira/">lowering costs</a>.</p>
<p>While there is strong evidence to support this argument, it falls flat from a country that <a href="https://www.carbonbrief.org/analysis-which-countries-are-historically-responsible-for-climate-change/">has failed to fulfill</a> its obligations to take federal action on climate change for decades and just violated trade laws it has <a href="https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm">held others accountable to</a> for so long. <a href="https://www.ft.com/content/d27c3b26-275e-45c0-95fd-af64169e500d">India’s power minister accused the West of hypocrisy</a>, saying the Inflation Reduction Act’s protectionism will inhibit the energy transitions in developing economies.</p>
<h2>The real concern: Rising protectionism</h2>
<p>The Inflation Reduction Act contains a fundamental contradiction. Its promise to reduce global greenhouse gas emissions relies on the rapid diffusion of technologies, knowledge and finance across borders. Yet, its domestic subsidies may accelerate the adoption of trade barriers that inhibit these same cross-border flows, thus slowing progress on climate change.</p>
<p>Moreover, the investments it catalyzes will immediately benefit the U.S. economy, while the shared benefits of technological progress and emissions reductions will unfold over many decades for other countries. In the intervening years, other countries may respond with <a href="https://theconversation.com/as-us-eu-trade-tensions-rise-conflicting-carbon-tariffs-could-undermine-climate-efforts-198072">protectionist policies of their own</a>.</p>
<p>Indeed, the real concern might not be the opening salvo, but the shootout of growing protectionism that ensues. For all its drawbacks, the growth in international trade since World War II has led to immense economic progress in much of the world, <a href="https://ustr.gov/countries-regions">including the United States</a>. The WTO and its predecessors have been instrumental in reducing harmful tariffs and providing a consistent set of trade rules to which countries are supposed to adhere. </p>
<figure class="align-center ">
<img alt="Biden and von der Lyden talk in the Oval Office. They're leaning foward toward each other in their chairs and smiling." src="https://images.theconversation.com/files/546040/original/file-20230902-21-4omogb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/546040/original/file-20230902-21-4omogb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/546040/original/file-20230902-21-4omogb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/546040/original/file-20230902-21-4omogb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/546040/original/file-20230902-21-4omogb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/546040/original/file-20230902-21-4omogb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/546040/original/file-20230902-21-4omogb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Combating climate change was on the agenda when European Commission President Ursula von der Leyen visited the White House in March 2023. The European Union has proposed its own rules to support its domestic clean energy industries.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-joe-biden-meets-with-president-of-european-news-photo/1472620847">Alex Wong/Getty Images</a></span>
</figcaption>
</figure>
<p>The Biden administration is attempting to assuage these concerns by <a href="https://www.whitecase.com/insight-alert/will-united-states-new-critical-minerals-agreements-shape-electric-vehicle">forging agreements</a> that make more foreign producers eligible for Inflation Reduction Act subsidies. But, in our view, bespoke agreements with a handful of countries aren’t enough. A new vision is needed for international trade rules that support low trade barriers and “<a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/04/20/remarks-on-a-modern-american-industrial-strategy-by-nec-director-brian-deese/">green industrial policies</a>” alike.</p>
<h2>An opportunity to modernize international trade</h2>
<p>Global trade rules have not been updated in a generation. They are sorely in need of reform.</p>
<p>The usefulness of the WTO is contingent on most parties agreeing that its rules are worth following. Without a new working consensus and backing from the largest powers with effective vetoes, the organization will become irrelevant.</p>
<p>The first step to fixing the situation is to stop denying the problem or digging deeper holes, such as the United States’ ill-advised <a href="https://www.iisd.org/articles/united-states-must-propose-solutions-end-wto-dispute-settlement-crisis">blocking of appointments</a> to the WTO’s dispute settlement Appellate Body since 2017 to protest what it sees as overreach by the body.</p>
<p>More proactively, the U.S. can reestablish its commitment to trade rules by instigating a process to develop equitable reforms.</p>
<p>That could begin with a global summit to discuss the changes necessary to reflect new realities. High-level leadership from the United States would add considerable heft to the <a href="https://remakingtradeproject.org/">ongoing efforts to reform global trade rules</a>.</p>
<p>Any fundamental rewrite of WTO rules will be a long and painstaking process. Instead, it may be sufficient to add a few clauses to existing agreements – like <a href="https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art20_e.pdf">GATT Articles 20</a> and <a href="https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art21_e.pdf">21, which deal with exceptions to the trade rules</a> – that clearly and transparently recognize that governments will need to nurture emerging domestic industries to cut emissions fast, ensure energy security and support vulnerable economies. </p>
<p>New rules <a href="https://static1.squarespace.com/static/5ca0ec9b809d8e4c67c27b3a/t/646b98583cf55d296031fcb3/1684772952775/T20_PB_TF4_434.pdf">could limit and define</a> the appropriate use of green subsidies, carbon border tariffs, export and import controls and supply chain coordination. For example, the U.S. and other developed countries could agree to limit subsidies’ domestic sourcing requirements to only emerging, innovative clean technologies that require public support to commercialize. Building on this, all countries could work toward an explicit list of clean energy, transport and industrial technologies needed by all that can be traded with reduced or minimal tariffs. </p>
<p>Of course, these trade tools would have to be managed carefully to avoid proliferating and exacerbating tensions.</p>
<p>In the meantime, since U.S. leaders are already acting as if these rules exist, they’ll have to accept that other countries’ leaders may act similarly — a new <a href="https://en.wikipedia.org/wiki/Categorical_imperative">Kantian Golden Rule</a> for trade. </p>
<p>It may turn out that the United States did the world a favor by throwing off the shackles of outdated trade rules. That will depend on whether U.S. leaders take advantage of the opportunity to reframe the discussion around the country’s recent legislation as steps toward a modernized international trade regime that better aligns with the world’s climate goals.</p><img src="https://counter.theconversation.com/content/212750/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Joe Biden’s ‘buy American’ effort with EVs likely violated World Trade Organization rules that the US helped create. The US has an opportunity now to update the system – if it’s willing to take it.Noah Kaufman, Research Scholar in Climate Economics, Columbia UniversityChris Bataille, Adjunct Research Fellow in Energy and Climate Policy, Columbia UniversityGautam Jain, Senior Research Scholar in Financing the Energy Transition, Columbia UniversitySagatom Saha, Research Scholar in Energy Policy, Columbia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2094612023-07-21T13:54:00Z2023-07-21T13:54:00ZHere’s how China is responding to US sanctions – with blocking laws and other countermeasures<figure><img src="https://images.theconversation.com/files/538636/original/file-20230720-29-6r6648.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. sanctions have further strained relations between the two superpowers.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/cargo-containers-with-chinese-and-united-states-royalty-free-image/943639230">narvikk/iStock/Getty Images Plus</a></span></figcaption></figure><p>After a recent meeting between U.S. Treasury Secretary Janet Yellen and officials in Beijing, China released a statement <a href="https://www.reuters.com/world/china-urges-practical-us-action-sanctions-after-yellen-talks-2023-07-10/#:%7E:text=BEIJING%2C%20July%2010%20(Reuters),with%20senior%20officials%20in%20Beijing.">demanding “practical action”</a> over the issue of sanctions. The implication was that the punitive measures – imposed by the U.S. government on <a href="https://www.forbes.com/sites/anthonytellez/2023/02/08/here-are-all-the-us-sanctions-against-china/?sh=37ae897115b4">hundreds of Chinese individuals and entities</a> over the past few years – impede any alleviation of the strained relations between the two economic giants.</p>
<p>The statement followed a <a href="https://www.nbcnews.com/news/world/china-rejects-meeting-defense-chiefs-lloyd-austin-li-shangfu-rcna86732">testy encounter in May 2023</a> in which Chinese Defense Minister Li Shangfu refused to meet his American counterpart because of sanctions. Clearly, the economic measures are hurting China – prompting not only tough words but also countermeasures to limit their impact.</p>
<p>As a professor of law and an <a href="https://scholar.google.ae/citations?user=PSk6YAUAAAAJ&hl=en">expert on international trade</a>, I study both how the U.S. sanctions China and how China attempts to counter these sanctions. I also analyze whether China’s countermeasures are working.</p>
<h2>How sanctions work</h2>
<p>Economic sanctions are considered an important <a href="https://www.gao.gov/assets/nsiad-92-106.pdf">foreign policy tool</a> that can be used to influence and change the behavior of countries. </p>
<p>The sanctions on China have been imposed for a myriad of reasons, including as punishment for <a href="https://home.treasury.gov/news/press-releases/jy0070">human rights abuses</a>, <a href="https://www.cnbc.com/2023/02/10/us-sanctions-six-chinese-tech-companies-for-supporting-spy-balloon-programs.html">espionage activities</a> and <a href="https://apnews.com/article/china-russia-us-ukraine-sanctions-59fa76b79b69b7489039b4d0ee5dd14b">supporting Russia’s war efforts in Ukraine</a>. Some sanctions are intended to restrict China’s technological capabilities by <a href="https://carnegieendowment.org/2022/10/27/biden-s-unprecedented-semiconductor-bet-pub-88270">limiting access to key tech suppliers</a>.</p>
<p>To be successful, the sanctioning country must have the economic clout to inflict economic damage on the other country and thus force change. </p>
<p>In the case of China, sanctions have harmed <a href="https://www.imf.org/en/Blogs/Articles/2019/05/23/blog-the-impact-of-us-china-trade-tensions">producers and consumers</a> in both countries. They have also benefited certain third countries – for example, through <a href="https://unctad.org/publication/trade-and-trade-diversion-effects-united-states-tariffs-china">trade diversion</a> that replaces Chinese exporters with suppliers from other countries.</p>
<p>Traditionally, sanctions have targeted entire countries. For example, since February 2022 the U.S. has imposed <a href="https://home.treasury.gov/news/press-releases">sweeping sanctions against Russia</a> for its invasion of Ukraine. In addition, the U.S. has imposed <a href="https://www.state.gov/cuba-sanctions/">multiple sanctions against Cuba</a> over the past 65 years in a failed attempt to force regime change.</p>
<p>Economic sanctions can be primary or secondary. With <a href="https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=5792&context=flr">primary sanctions</a>, the U.S., for example, forbids imports of any product from the country being sanctioned. Primary sanctions also bar all U.S. companies from doing any business with the country or entities within it. </p>
<p>In <a href="https://www.cnas.org/publications/reports/sanctions-by-the-numbers-u-s-secondary-sanctions">secondary sanctions</a>, the U.S. refuses to engage in business with any company that has a business relationship with the country being sanctioned. In its most extreme form, <a href="https://ustr.gov/sites/default/files/2013%20NTE%20Arab%20League%20Final.pdf">these sanctions also prohibit</a> conducting business with a company that has a relationship with another company that in turn has a relationship with the sanctioned country.</p>
<h2>Targeting individuals and businesses</h2>
<p>In recent years, U.S. sanctions against China have become more targeted against specific individuals, products and companies. For example, the Office of Foreign Assets Control of the Treasury Department publishes a <a href="https://ofac.treasury.gov/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists">list of Specially Designated Nationals</a> against which sanctions apply. Individuals and businesses on the list have their assets blocked, and U.S. citizens are prohibited from dealing with them. There are <a href="https://www.treasury.gov/ofac/downloads/ctrylst.txt">hundreds of Chinese individuals and businesses</a> on the list, including <a href="https://www.reuters.com/world/asia-pacific/us-sanctions-seven-chinese-individuals-over-hong-kong-crackdown-2021-07-16/">officials in China’s Hong Kong liaison office</a> and major corporations such as <a href="https://www.steptoeinternationalcomplianceblog.com/2020/12/ofac-adds-chinese-tech-company-ceiec-to-sdn-list-issues-general-license-38-authorizing-wind-down-activities/">China National Electronic Import-Export Company</a>. </p>
<p>Also, the U.S. Commerce Department, through its Bureau of Industry, <a href="https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final/file">implemented export controls</a> in October 2022 on certain exports to China, such as advanced computing equipment and semiconductor parts. These export controls were put in place because of concerns over <a href="https://www.csis.org/analysis/choking-chinas-access-future-ai">China’s defense modernization</a>.</p>
<p>In response to the secondary sanctions and the <a href="https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1151&context=jil">complex enforcement and compliance issues</a> they create for governments and businesses alike, the <a href="https://finance.ec.europa.eu/eu-and-world/open-strategic-autonomy/extraterritoriality-blocking-statute_en">European Union</a> and countries including <a href="https://laws-lois.justice.gc.ca/eng/acts/f-29/page-1.html">Canada</a> and the <a href="https://www.gov.uk/guidance/protection-of-trading-interests">U.K.</a> have enacted what are called blocking statutes. Blocking statutes typically allow an individual or business to not comply with U.S. laws and require individuals and businesses to notify authorities about any U.S. sanction enforcement measures.</p>
<figure class="align-center ">
<img alt="Pedestrian walks past a Huawei store and billboard" src="https://images.theconversation.com/files/538565/original/file-20230720-19-nhjvk8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/538565/original/file-20230720-19-nhjvk8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=408&fit=crop&dpr=1 600w, https://images.theconversation.com/files/538565/original/file-20230720-19-nhjvk8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=408&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/538565/original/file-20230720-19-nhjvk8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=408&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/538565/original/file-20230720-19-nhjvk8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/538565/original/file-20230720-19-nhjvk8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/538565/original/file-20230720-19-nhjvk8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Chinese telecom giant Huawei reported a decline in revenue due to U.S. sanctions.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/pedestrians-pass-a-sign-of-huawei-mobile-phone-in-yichang-news-photo/1246320157">CFOTO/Future Publishing via Getty Images</a></span>
</figcaption>
</figure>
<h2>China’s countermeasures</h2>
<p>The Chinese government has taken several countermeasures to retaliate against U.S. sanctions in recent years. </p>
<p>In 2020, the Ministry of Commerce in China issued the <a href="http://english.mofcom.gov.cn/article/policyrelease/questions/202009/20200903002580.shtml">Unreliable Entity List</a>. A person or company is designated as “unreliable” if Chinese authorities deem them to be harming national security or development interests of China or applying discriminatory measures against a Chinese entity. Punitive measures – such as trade and investment restrictions and fines – may be imposed on them for conduct that is contrary to China’s national interests. So far, <a href="https://sanctionsnews.bakermckenzie.com/china-added-two-us-companies-to-the-unreliable-entities-list/">two U.S. aerospace and defense companies</a> have been listed as unreliable entities.</p>
<p>In addition, in 2021 the Chinese Ministry of Commerce issued the <a href="http://english.mofcom.gov.cn/article/policyrelease/questions/202101/20210103029708.shtml">Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures</a>. A Chinese blocking statute, the rules require any Chinese citizen, business or other organization that is restricted or prohibited by U.S. sanctions from engaging in normal economic activities with a third nonsanctioning country to report such matters to the Chinese authorities. </p>
<p>China also enacted the <a href="https://oxfordpoliticalreview.com/2022/08/30/china-should-not-over-rely-on-its-anti-foreign-sanctions-law/">Anti-Foreign Sanctions Law</a> in 2021. This law authorizes China to take action – such as restrictions on visas and who can enter or exit the country – when a foreign country adopts what China sees as discriminatory measures against any Chinese citizen or organization. In addition, censured individuals or businesses can be slapped with a freezing of assets and prevented from doing business in China. Also, a Chinese individual or business can bring a case before Chinese courts and ask for an injunction from or damages for having to comply with foreign sanctions. </p>
<p>Unfortunately, the effectiveness of these countermeasures is unclear. There are no available statistics to determine whether they have mitigated the impact of U.S. sanctions. </p>
<h2>Caught in the middle</h2>
<p>The U.S. and China are <a href="https://www.belfercenter.org/sites/default/files/files/publication/GreatEconomicRivalry_Final_2.pdf">economic superpowers</a>. Imposing sanctions and countersanctions can <a href="https://www.piie.com/blogs/trade-and-investment-policy-watch/coming-clash-over-hong-kong-sanctions">make it difficult</a> for any foreign country or company that wants to do business in both countries. It is, in effect, asking them to pick sides.</p>
<p>Some individuals and companies within both China and the U.S. may opt to adopt a pragmatic approach to the sanctions and continue to do business either directly or indirectly. But by doing so they risk being fined by U.S. authorities. </p>
<p>Or, they may try to circumvent these sanctions and countersanctions by working with businesses in other countries instead, or find different ways to <a href="https://foreignpolicy.com/2023/06/21/china-united-states-semiconductor-chips-sanctions-evasion/">inoculate themselves from the effects of sanctions</a>. Both the U.S. and China are likely to not push sanctions too hard, so as not to engage in a full-blown trade war.</p>
<p>Workarounds for businesses that trade with both the U.S. and China are critical when the sanctioning country – typically the U.S. – has a monopoly over the particular goods or technology in question. For example, there is no short-term fix for Chinese telecom giant Huawei when the U.S. denies it access to critical semiconductors, since <a href="https://thediplomat.com/2022/07/bidens-uphill-battle-to-restructure-the-global-semiconductor-sector/">the U.S. has a monopoly on semiconductors</a>. Eventually, semiconductors will be produced in China, but not for several years. In the meantime, <a href="https://www.nytimes.com/2023/03/31/business/huawei-annual-earnings-2022.html">Huawei has seen a decline in revenue</a> and shifted money toward more research and development.</p>
<p>The <a href="https://www.cnbc.com/2021/04/26/huawei-focuses-on-software-as-us-sanctions-hurt-hardware-business.html">experience of Huawei</a> underscores why Beijing is eager to find a way to counter U.S. sanctions. It seems that at least for now China has settled on a policy of blocking tactics at home while upping rhetoric on the international stage.</p><img src="https://counter.theconversation.com/content/209461/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bashar Malkawi does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>China has responded to US sanctions with its own set of punitive measures. An expert on international trade explains the standoff and what it means for countries and companies caught in the middle.Bashar Malkawi, Professor of Law, University of ArizonaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1962312022-12-12T13:02:44Z2022-12-12T13:02:44ZShark fishing is a global problem that demands local solutions<p>Countries from around the world have <a href="https://www.theguardian.com/environment/2022/nov/18/shark-fin-trade-regulation-cites-panama">voted</a> to limit the global trade in sharks under the Convention on International Trade in Endangered Species (<a href="https://cites.org/eng">Cites</a>). Trade in shark products is a major driver of shark overfishing, leading to the deaths of millions of sharks every year. The new Cites listings aim to keep the international trade of 54 species of shark and ray within sustainable limits.</p>
<p>But there are concerns that Cites listings could unintentionally drive up the price of shark fins and lead to the development of informal shark fin markets. Catches of many species already listed on Cites remain <a href="https://conbio.onlinelibrary.wiley.com/doi/10.1111/csp2.494">valuable</a> for small-scale fishers. And in 2018, <a href="https://conbio.onlinelibrary.wiley.com/doi/full/10.1111/conl.12457">Cites-listed sharks</a> remained among the leading species traded in contemporary fin markets. </p>
<p>Yet targeted fishing is just part of the issue. Sharks are frequently caught as <a href="https://www.sciencedirect.com/science/article/abs/pii/S0308597X14003546?via%3Dihub">unintentional bycatch</a> by fishers using unselective nets and lines. And since Cites only pertains to international trade, many sharks that are traded and consumed in local or domestic markets are not covered by the regulations. Strict rules protecting sharks in these markets could negatively impact the livelihoods of the small-scale fisheries that depend on them for food and income.</p>
<p>Interventions to reduce catches of threatened shark species must support the rights and welfare of small-scale fishers and be perceived as legitimate. My colleagues and I conducted <a href="https://www.sciencedirect.com/science/article/pii/S0006320722003743?via%3Dihub">research</a> on small-scale fisheries in Indonesia – the world’s <a href="https://www.fao.org/3/i4795e/i4795e.pdf">largest shark fishing nation</a>. </p>
<h2>Fishery-led conservation</h2>
<p>We focused on two taxa, hammerhead sharks and wedgefish. These taxa are both critically endangered and already listed on Cites. </p>
<p>Applying research methods from behavioural science and economics, we interviewed 144 fishers from two villages in the Indonesian shark fishing hotspots of Aceh and Lombok. We presented fishers with a range of conservation scenarios and asked them how their fishing behaviour would change under each.</p>
<p>The first scenario involved the introduction of a new rule stipulating that particular species could not be legally caught or brought to shore. The rule was accompanied with a fine for non-compliance. </p>
<p>The second was a voluntary programme to protect the species. Fishers could choose to reduce their catch or release accidentally caught sharks rather than have a rule imposed on them. </p>
<p>The third approach was based on compensation. Fishers would receive payments for reducing their catch of endangered sharks equivalent to the value they could otherwise have received for it.</p>
<p>For scenarios that involved monetary incentives, we asked fishers to indicate how much they would be willing to pay to continue fishing for endangered sharks or how much they would accept to reduce their catch. We then asked fishers to explain why they would (or why they would not) change their behaviour and how they planned to reduce their catch. </p>
<h2>Support for financial compensation</h2>
<p>The rule and fine scenario was unpopular among the interviewed fishers. Only 50% of those interviewed in Lombok and 20% in Aceh said they would reduce catches in response to the rule and fine scheme. They felt it was impractical, unfair and would negatively impact their welfare due to reducing their income and eliminating a key source of food.</p>
<p><a href="https://conbio.onlinelibrary.wiley.com/doi/full/10.1111/conl.12725">Research</a> suggests that if conservation rules are not accepted by local fishers, then they often fail to have a meaningful effect on fisher behaviour.</p>
<p>The voluntary programme was more popular. 55% of fishers in Aceh stated they would voluntarily stop catching wedgefish.</p>
<p>But the fishers expressed a strong preference for a programme based on compensation. 98% of all fishers interviewed said they would stop catching hammerheads while 96% said they would stop catching wedgefish if their lost income was compensated for. Fishers in Aceh were willing to accept less than US$2 (£1.63) per hammerhead shark and US$4-7 (£3.27–5.72) per wedgefish.</p>
<p>Based on data from our study, we estimate that it would cost just US$12,000 (£9,800) per year to save up to 20,000 hammerheads and wedgefish in Aceh.</p>
<p>Although not tested by our study, an approach based on compensation is likely to be more cost-effective than interventions that require enforcement. The exact cost of enforcing a rule and fine policy in Indonesia is unknown, but the annual cost of a single marine patrol boat in the USA is between <a href="https://www.cga.ct.gov/2010/ofarpt/2010OFA-0207.htm">US$40,000 and 100,000 (£32,600 and 81,000)</a>. </p>
<p>The fishers also felt that a compensation scheme was fair and would deliver positive social outcomes for their villages. </p>
<p>We are now <a href="https://www.instagram.com/kebersamaan_untuk_lautan/">trialling</a> such a scheme at the two sites in Aceh and Lombok. Fishers receive financial compensation if they share a video of the safe release of hammerheads or wedgefish. More than 150 animals have been <a href="https://www.youtube.com/watch?v=v1RdxFM5NzI">safely released</a> since April and fishers have so far reported using the payments to support their families and send their children to school.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/v1RdxFM5NzI?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Successful releases of hammerhead sharks and wedgefish caught as bycatch in Indonesia.</span></figcaption>
</figure>
<h2>Broader implications</h2>
<p>One size fits all shark conservation measures, based on the enforcement of rules, fail to account for the diversity of fishing contexts and their socio-economic challenges. Cites listings can play a part in supporting the recovery of threatened shark species by better regulating international trade. But nuanced management measures are also needed to reduce catches in the context of limiting harm to small-scale fishing communities.</p>
<p>Governments are expected to agree on a <a href="https://www.cbd.int/article/draft-1-global-biodiversity-framework">new global framework</a> to protect and restore nature at the UN biodiversity summit <a href="https://www.cbd.int/conferences/2021-2022">COP15</a> this month. The long-term vision of this framework is “living in harmony with nature”.</p>
<p>Our research, in line with this vision, offers a scalable method for designing conservation interventions that are appropriate for different fishing contexts. More importantly, it supports the development of solutions that involve the people most affected by conservation.</p><img src="https://counter.theconversation.com/content/196231/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hollie Booth receives funding from Save Our Seas Foundation and the Society for Conservation Biology. </span></em></p>Countries have voted to limit the international shark trade, but this fails to account for the diversity in fishing contexts around the world.Hollie Booth, Nature Positive Senior Specialist at The Biodiversity Consultancy, and Post-Doc Research Associate, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1947792022-11-25T07:42:35Z2022-11-25T07:42:35ZWhy the UK needs to stop exporting plastic waste<figure><img src="https://images.theconversation.com/files/495846/original/file-20221117-22-wv1tzw.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C5960%2C3964&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The mismanagement of plastic waste is one of the main causes of plastic pollution in nature.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/spilled-garbage-on-beach-big-city-1060330253">Larina Marina/Shutterstock</a></span></figcaption></figure><p>The world produces a vast amount of plastic. Global plastic production <a href="https://www.pewtrusts.org/-/media/assets/2020/07/breakingtheplasticwave_report.pdf">increased</a> from 2 million metric tons in 1950 to 348 million metric tons in 2017. Yet much of this plastic is wasted: <a href="https://www.pewtrusts.org/-/media/assets/2020/10/breakingtheplasticwave_mainreport.pdf">86%</a> of the world’s plastic waste in 2016 was either incinerated, sent to landfill or leaked into nature. </p>
<p>Many countries use international trade to manage their plastic waste. The justification for this is that plastic waste can be treated in destinations with better capacity for waste treatment. The UK, lacking capacity itself, <a href="https://wrap.org.uk/sites/default/files/2020-12/PackFlow%20COVID-19%20Plastic%20Phase%20I%20Report%20FINAL%20v2.pdf">exports 60%</a> of its plastic waste abroad. But in a recent <a href="https://committees.parliament.uk/publications/31509/documents/176742/default/">report</a>, the House of Commons Environment, Food and Rural Affairs Committee – the group of MPs responsible for improving and protecting the environment – have called on the government to stop the export of UK plastic waste by the end of 2027. </p>
<p>The movement of hazardous waste is controlled by an international agreement called the <a href="http://www.basel.int/">Basel Convention</a>. It requires the consent of the receiving country, accurate labelling of waste, and notification when plastic waste has been treated for waste to be exported legally. The Convention has recently increased the range of plastics that fall within its remit.</p>
<p>China has long been the <a href="https://www.nature.com/articles/s41467-020-20741-9">world’s leading</a> plastic waste importer. But in 2017 its government banned plastic waste imports, citing concerns over the low quality of material received. This has displaced vast quantities of plastic waste. The UK now exports <a href="https://wrap.org.uk/sites/default/files/2021-10/WRAP-Plastics-Market-Situation-Report-2021.pdf">most of its plastic waste</a> to Turkey, Indonesia, Vietnam, Malaysia and the Netherlands. </p>
<h2>Passing the burden</h2>
<p>The import of plastic waste is a valuable source of foreign exchange for many countries. But these countries often have limited waste treatment infrastructure.</p>
<p>Uncontrolled imports can therefore lead to the volume of plastic waste received exceeding the capacity of a country to cope with it. It also displaces its ability to treat its own domestic waste. The result is more plastic waste than can be safely handled and high levels of mismanagement. </p>
<p>Once a country has received the waste, monitoring of the treatment process is also scarce. A <a href="https://www.greenpeace.org/international/press-release/47759/investigation-finds-plastic-from-the-uk-and-germany-illegally-dumped-in-turkey/">Greenpeace investigation</a> in 2021 found evidence of plastic waste from the UK and Germany dumped illegally across 10 sites in southwestern Turkey.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1492560606364377095"}"></div></p>
<p>But mismanaged plastic waste is one of the main causes of plastic pollution in nature. One <a href="https://www.pewtrusts.org/-/media/assets/2020/10/breakingtheplasticwave_mainreport.pdf">report</a> estimates that 56% (239 million metric tonnes) of global annual plastic waste production by 2040 will be subject to mismanagement.</p>
<p>Exporting plastic waste also raises ethical questions. It allows exporting nations to forgo their responsibility to deal with their own plastic waste while claiming to be managing their waste responsibly.</p>
<h2>Upstream solutions</h2>
<p>A more systemic and responsible way of dealing with plastic waste is to reduce plastic consumption. The Committee’s report recommends measures that focus on reducing plastic waste at source, rather than improving the ability of waste treatment infrastructure to manage a greater capacity of waste. </p>
<figure class="align-center ">
<img alt="A brown paper bag with the text 100% recyclable and reusable printed on the bottom." src="https://images.theconversation.com/files/495851/original/file-20221117-17-5g7jto.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/495851/original/file-20221117-17-5g7jto.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/495851/original/file-20221117-17-5g7jto.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/495851/original/file-20221117-17-5g7jto.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/495851/original/file-20221117-17-5g7jto.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/495851/original/file-20221117-17-5g7jto.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/495851/original/file-20221117-17-5g7jto.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Committee of MPs recommend solutions that reduce plastic use at source.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/brown-paper-bag-that-100-recyclable-1506701819">Dr. Victor Wong/Shutterstock</a></span>
</figcaption>
</figure>
<p>The key suggestion was to accelerate the introduction of <a href="https://www.oecd.org/env/tools-evaluation/extendedproducerresponsibility.htm">Extended Producer Responsibility schemes</a>. Extended Producer Responsibility is an approach that aims to make companies bear a greater proportion of the cost of disposing the plastic they use for products put on the market. These schemes will apply to all companies in the UK who put at least 1 tonne of plastic packaging on the market each year by 2030, encouraging them to reduce their production of plastic waste. This can be achieved through innovations to “design out” plastics or by transitioning to a <a href="https://wrap.org.uk/taking-action/climate-change/circular-economy">circular economy</a> where plastic materials are reused or fully recycled. </p>
<p>The Committee’s report recommends the establishment of a plastic reuse task force, composed of representatives from industry and consumer groups. The group would coordinate strategies including incentives to adopt business models that encourage the reuse of plastic materials, single-use plastic charges, mandatory reporting on a company’s plastic footprint, and public campaigns to raise the profile of reuse schemes.</p>
<p>Deposit-return schemes also help and are already in progress in the UK. In 2023, <a href="https://depositreturnscheme.zerowastescotland.org.uk/">Scotland</a> will launch a national programme where people will pay a 20p deposit when they buy a drink in a plastic bottle or can, which will be repaid when the empty container is returned.</p>
<h2>Plastic waste is a global problem</h2>
<p>The recommendations made by the Committee are a positive step forward and would place the UK in a position of international leadership on tackling plastic pollution. But plastic value chains are transnational and waste is generated at each stage. This reduces the effectiveness of isolated national action. </p>
<p>National policies often do not have the reach or influence to tackle the global causes of plastic pollution. <a href="https://plasticspolicy.port.ac.uk/wp-content/uploads/2022/10/GPPC-Report.pdf">Research</a> that I co-authored found that isolated policies including national bans on plastic products are ineffective in reducing the generation of plastic waste. Fragmented national policies can also create loopholes in international policy that inadvertently reroutes plastic waste towards the destinations least equipped to deal with it. </p>
<p>But earlier this year, 173 countries formally adopted a <a href="https://wedocs.unep.org/xmlui/bitstream/handle/20.500.11822/39764/END%20PLASTIC%20POLLUTION%20-%20TOWARDS%20AN%20INTERNATIONAL%20LEGALLY%20BINDING%20INSTRUMENT%20-%20English.pdf?sequence=1&isAllowed=y">UN resolution</a> to start negotiations for a global legally binding agreement to end plastic pollution by the end of 2024. The <a href="https://www.wto.org/english/tratop_e/ppesp_e/ppesp_e.htm">World Trade Organisation</a> has also launched an initiative to explore how trade policies can be used to reduce plastic pollution. International cooperation over plastic waste policy, along with the legal power of the Basel Convention, <a href="https://www.nature.com/articles/s43017-022-00361-1">offers hope</a> of a coordinated global response to plastic pollution that avoids policy fragmentation. </p>
<p>Environmental groups are critical of the trade in plastic waste. The Committee’s recommendation to ban UK plastic waste exports by 2027 is therefore an ambitious and welcome step forwards in tackling plastic pollution. But without global action, isolated national policies will not deliver change on the scale required to end this controversial trade.</p><img src="https://counter.theconversation.com/content/194779/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steve Fletcher has received funding from the UN Environment Programme. He is a member of the UN International Resource Panel. </span></em></p>Many countries export their plastic waste abroad – but the mismanagement of this plastic waste is one of the leading causes of plastic pollution in nature.Steve Fletcher, Professor of Ocean Policy and Economy, University of PortsmouthLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1911592022-10-12T14:07:02Z2022-10-12T14:07:02ZSomalia: Puntland state port is getting a revamp - this is key to its future<figure><img src="https://images.theconversation.com/files/486144/original/file-20220922-9184-qhdxbu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Bosaso has become a major export hub since security improved in Somalia's Puntland region.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/general-view-taken-on-november-18-2013-shows-bosaso-harbor-news-photo/450358003?adppopup=true">Mohamed Abdiwahab/AFP via Getty Images</a></span></figcaption></figure><p>The port city of Bosaso, located at the north-eastern corner of Somalia, provides a striking example of the interlinkage between security and infrastructure. The city benefited from the civil war that ravaged the southern parts of Somalia in the 1990s and 2000s. It developed into a booming trade centre. But increased violence in Bosaso has negatively affected international trade in the last decade. Security improvements and the recovery of other ports in Somalia and Somaliland have provided alternatives.</p>
<p>In July 2022, the Emirates-based Dubai Ports World (DP World), a global operator of ports and logistics, returned to Bosaso. The company had signed a <a href="https://more.bham.ac.uk/port-infrastructure/2022/01/13/bossaso-port-optimising-port-activities-and-transforming-circulations/">concession agreement</a> with the government in Puntland, a federal member state of Somalia, in 2017. But the plans to modernise the port were never realised. </p>
<p>DP World’s <a href="https://puntlandpost.net/2022/02/21/puntland-renegotiates-dp-world-concession-to-manage-bosaso-port/">return</a> has instigated optimism across the city, though numerous challenges still lie ahead.</p>
<p>Our research project is <a href="http://portinfrastructure.org/">studying</a> the Horn of Africa’s emerging port infrastructures and their impact on the everyday lives of people in cities. </p>
<p>Bosaso’s efforts to remain economically relevant will have implications for the relative independence that Puntland has achieved from the federal government in Mogadishu. An upgraded port could bolster citizens’ trust in the semi-autonomous government.</p>
<h2>A lifeline for Puntland</h2>
<p>The port of Bosaso is located on the Red Sea. Its development was tied to the beginning of the civil war in Somalia in the 1980s. Siad Barre, the military dictator who ruled the country from 1969 to 1991, rehabilitated a highway between Bosaso and central Somalia, and <a href="https://hal-sciencespo.archives-ouvertes.fr/hal-01044642">allowed Bosaso to operate the port duty-free</a>. This was to appease his opponents in the north-east and to economically harm rising opposition in the north-west (now Somaliland). </p>
<p>Trading activities and property investments in Bosaso increased significantly after the Somali state collapsed in 1991. Bosaso City <a href="https://securityonthemove.co.uk/wp-content/uploads/2019/03/SOTM-Research-Brief-BOSAASO.pdf">grew considerably</a> in the early 1990s when it evolved into a prime destination for people who fled from violence in the southern parts of Somalia. </p>
<p>Among the immigrants were former political and business elites with clan affiliations to the north-east. Others were from the politically marginalised and harassed clans and minority groups of southern Somalia. </p>
<p>The closeness and historic shipping links between Bosaso and Yemen additionally pulled people to the city. Younger people looking for an option to escape poverty and a life full of risks moved to Bosaso to embark on Tahriib, the <a href="https://riftvalley.net/publication/going-tahriib">undocumented and dangerous migration</a> across the Red Sea to the Gulf states and from there, if possible, further to Europe.</p>
<p>During the early 1990s, Bosaso had the only relatively safe port in Somalia. It became a major trade hub for livestock exports and consumer goods imports. This integrated Bosaso into an international trade network and linked the port to central Somalia and eastern Ethiopia. </p>
<p>New livestock quarantine stations were established, financed by Saudi Arabia and managed by a highly skilled labour force (mainly from Egypt). This was to avoid economically damaging <a href="https://sominvest.gov.so/livestock-trade-in-the-djibouti-somali-and-ethiopian-borderlands-2010/">livestock bans</a> from Saudi Arabia on the basis of animal health. </p>
<p>Income from the flourishing seaport supported the establishment of the semi-autonomous region of Puntland in 1998. </p>
<h2>Port in decline</h2>
<p>But Bosaso is currently struggling to maintain its economic relevance. This has political implications for the relative independence that Puntland has achieved from the Somali federal government. </p>
<p>International trade activities have been declining during the last decade. Since 2015, the war in Yemen has interrupted established trade routes. Additionally, the city has faced threats from Islamist insurgents, prominently Al-Shabaab and the Islamic State in Somalia. </p>
<p>The concession agreement with DP World’s subsidiary P&O Ports in 2017 added further layers of insecurity. Local groups criticised the “sell-out” of the port to a foreign country, while business groups feared that a rise in port fees would have a negative impact on local trade. </p>
<p>Disputes among the Puntland leadership, and disagreements between Puntland and P&O Ports, delayed the planned modernisation. P&O eventually left Bosaso in 2019 after <a href="https://www.bbc.co.uk/news/world-africa-47114779">its port manager</a> was killed by gunmen, an attack for which al-Shabaab claimed responsibility. </p>
<p>These developments stood in contrast to security improvements in southern Somalia. These were visible in the reopening of Mogadishu’s seaport, which has been managed by <a href="https://dlca.logcluster.org/display/public/DLCA/2.1.1+Somalia+Port+of+Mogadishu">a Turkish company</a> since 2014. Competition increased further with the DP World-driven modernisation of the <a href="https://theconversation.com/waiting-for-ethiopia-berbera-port-upgrade-raises-somalilands-hopes-for-trade-188949">port in Berbera</a> in Somaliland. </p>
<p>Bosaso is not able to compete with the much larger multi-purpose ports in Berbera and Mogadishu. The two ports are fitted with container terminals and furnished with modern equipment. Bosaso, instead, has had a <a href="https://pure.diis.dk/ws/files/1275207/DIIS_WP_2017_13.pdf">crucial position</a> in a more informal overseas trade. </p>
<p>The ongoing transformation of global supply chains, with circulation increasingly relying on cranes and containers, detaches Bosaso from important trade networks. For example, containerised ports import goods directly from producing countries like China, while Bosaso relies on transshipment through intermediary ports in Yemen, Oman or elsewhere.</p>
<p>These developments have political implications. Many Bosaso residents attribute the port’s decline to leadership failure. A port official explained in an interview in August 2022: </p>
<blockquote>
<p>The port has been neglected by all Puntland leaders. There was no investment provided to the port since 1991. The port is about to be relegated to irrelevance. </p>
</blockquote>
<h2>At a crossroads</h2>
<p>The modernisation of the port is critical for Puntland. An upgraded port will ensure Puntland keeps a significant position within the fragmented political landscape of Somalia. It will also prevent traders from looking for alternative outlets. </p>
<p>Multiple challenges, among them security considerations, lie ahead. The relations between Puntland and the government in Mogadishu, as well as disagreements within the Puntland leadership, are crucial. In short, Bosaso is at a crossroads and faces a defining moment for its political and economic future.</p>
<p><em>Mohamed Hassan Ibrahim, a research consultant in the <a href="https://more.bham.ac.uk/port-infrastructure/staff/">port infrastructure project</a>, is a lead contributor and conducted most of the research for this article.</em></p><img src="https://counter.theconversation.com/content/191159/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This research was made possible by a grant from Carnegie Corporation of New York. The statements made and views expressed are solely the responsibility of the authors. The research is part of the project: Port Infrastructure, International Politics, and Everyday Life in the Horn of Africa, <a href="http://portinfrastructure.org">http://portinfrastructure.org</a></span></em></p>A modern port raises Puntland’s stake within the fragmented political landscape of Somalia and prevents traders from seeking alternatives.Jutta Bakonyi, Professor in Development and Conflict, Durham UniversityMay Darwich, Associate Professor of International Relations of the Middle East, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1915252022-10-08T05:00:57Z2022-10-08T05:00:57ZUganda’s fuel smugglers: are the Opec Boys (anti-)heroes of the marginalised?<figure><img src="https://images.theconversation.com/files/488040/original/file-20221004-17-1onk58.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Boureima Hama/AFP via Getty Images</span></span></figcaption></figure><p><em>Smuggling in the Ugandan border region of West Nile has a long and chequered history. It straddles the <a href="https://books.google.be/books?hl=en&lr=&id=FTJhFP1FK1wC&oi=fnd&pg=PP1&dq=abraham+and+van+schendel+2005&ots=hcL7cIKofK&sig=czwJFPyXuvAh0jtOHbYq5wNGyvY#v=onepage&q=abraham%20and%20van%20schendel%202005&f=false">fine line</a> between legitimacy and legality. Governance and conflict researcher Kristof Titeca has <a href="https://www.tandfonline.com/doi/full/10.1080/17531055.2012.664703?scroll=top&needAccess=true">studied</a> smuggling in the border region <a href="https://www.taylorfrancis.com/chapters/oa-edit/10.4324/9781003043645-11/smuggling-legitimate-activity-kristof-titeca">since 2003</a>. He explains the dynamics.</em> </p>
<h2>What’s the history of smuggling in Uganda’s West Nile region?</h2>
<p>The term smuggling often brings strongly negative connotations, and is often associated with criminality and violence. However, smugglers aren’t always associated with these negative connotations by the communities in which they are embedded.</p>
<p>The West Nile region in Uganda illustrates this dynamic. This area is located in northwestern Uganda, and borders the Democratic Republic of Congo (DRC) and South Sudan.</p>
<p>When colonialists introduced the borders demarcating Uganda, Zaire/Congo and Sudan, this divided ethnic groups but <a href="https://www.lse.ac.uk/international-development/Assets/Documents/PDFs/csrc-working-papers-phase-two/wp63.2-changing-cross-border-trade-dynamics.pdf">didn’t stop the interaction</a> between them. Continued untaxed trade – or smuggling – was <a href="https://www.cambridge.org/core/journals/africa/article/abs/regulation-crossborder-trade-and-practical-norms-in-west-nile-northwestern-uganda/DF13D59E5184A27637447D169F4D7291">considered legitimate</a>. </p>
<p>In addition, smuggling – both then and now – is viewed as a survival mechanism. </p>
<p>For example, during successive wars and rebellions affecting the region, <a href="https://www.researchgate.net/publication/346912534_A_Historical_Perspective_on_State_Engagement_in_Informal_Trade_on_the_Uganda-Congo_Border">many people fled across borders</a>. When former Ugandan president Idi Amin (a West Niler) was ousted from power in 1979, the residents of West Nile feared revenge and fled to eastern Congo and southern Sudan. Similarly, violence in southern Sudan in the early 1990s, and in more recent times, forced many (South) Sudanese to flee to northern Uganda. Smuggling constituted an <a href="https://www.tandfonline.com/doi/abs/10.1080/03056249008703848">important livelihood</a> for many during these times, and laid the basis for contemporary trading networks and practices.</p>
<p>Smuggling is also linked to people feeling marginalised or oppressed. And the West Nile region <a href="https://reliefweb.int/report/uganda/refugee-law-project-working-paper-no-12-negotiating-peace-resolution-conflicts-ugandas">feels marginalised</a> by the Yoweri Museveni regime. </p>
<p>Smuggling in this border region has to be understood in this context: as a way of making ends meet despite of – and in opposition to – a regime perceived to marginalise them. Smuggling is regarded as legitimate employment. And an important form of social mobility, a rags-to-riches story present in the wider social imaginary of the population. </p>
<h2>How pervasive is smuggling in Uganda?</h2>
<p><a href="https://www.undp.org/africa/publications/borderland-policy-briefing-series-informal-cross-border-trade-along-drc-uganda-border">Data</a> from the Bank of Uganda and Uganda Bureau of Statistics shows that in 2018, Ugandan informal exports – or smuggled products – were worth US$546.6 million. For their part, smuggled imports were worth US$60 million. </p>
<p>But these numbers are an underestimation as they are based on data from official border posts, which excludes goods smuggled through <a href="https://westniletodaynews.com/122-illegal-entry-points-fuel-silent-gold-trade-along-uganda-drc-border-in-west-nile/">many unofficial smuggling routes</a>. </p>
<p>Moreover, the <a href="https://www.undp.org/africa/publications/borderland-policy-briefing-series-informal-cross-border-trade-along-drc-uganda-border">data shows</a> that for the DRC – which in 2018 accounted for almost half of Uganda’s informal trade value – informal export and import figures are almost always higher than the formal ones.</p>
<h2>What does the story of the Opec Boys tell us?</h2>
<p>The Opec Boys – a term used to refer to fuel smugglers operating in the region – are a telling illustration of the dynamics of smuggling in the West Nile.</p>
<p>In my research, I have studied the Opec Boys at <a href="https://www.cairn-int.info/journal-politique-africaine-2006-3-page-143.htm">different moments</a> in their <a href="https://www.tandfonline.com/doi/full/10.1080/17531055.2012.664703">history</a> over the last 20 years. </p>
<p><a href="https://www.taylorfrancis.com/chapters/oa-edit/10.4324/9781003043645-11/smuggling-legitimate-activity-kristof-titeca">Their roots</a> can be traced to the late 1970s and early 1980s. This was when much of the population of north-western Uganda fled to neighbouring DRC and Sudan after the overthrow of the Amin regime. </p>
<p>During this time, a number of exiled young men made a living from smuggling fuel. They didn’t stop doing so upon their return to Uganda. They started an organisation that came to be known as the Opec Boys. Many other young men returning to their home areas, with no education or assets, were drawn into this fuel business. </p>
<p>They would sell smuggled fuel in jerrycans on street corners in the region’s major urban centres. There was a general shortage of petrol stations in the area, and their fuel was cheaper. The Opec Boys got their smuggled fuel in different ways: some smuggled it themselves from Congo, others used “transporters” who were mostly young(er) boys on bicycles, smuggling the fuel via back roads to avoid security officials. Others bought their fuel from truck drivers, who equally smuggled their fuel into Uganda. </p>
<p>The Opec Boys were the most important supplier of fuel in the area until the late 2000s. Around this time, the increased number of fuel stations, and the changing tax regime in DRC pushed many of them out of business. While they still exist, their activities are less prominent.</p>
<h2>What did they come to represent?</h2>
<p>The Opec Boys were considered an important social-economic and political force in two major ways. </p>
<p>First, they came to constitute an important manifestation of what sociologist Asef Bayat’s calls “<a href="https://www.tandfonline.com/doi/abs/10.1080/01436599715055">un-civil society</a>”. This is an unconventional, uninstitutionalised form of civil society. It operates through ad hoc, direct and sporadic action through which it represents the interests of the urban informal sector. This definition applies to the Opec Boys. </p>
<p>Particularly during the 1990s and 2000s, they would – led by <a href="https://www.monitor.co.ug/uganda/news/national/kaku-arua-opec-boys-supremo-rabble-rouser-3942538">a charismatic leader</a> – come to the defence of actors within the urban informal sector, such as market vendors or motorcycle taxi riders. They, for example, <a href="https://www.taylorfrancis.com/chapters/oa-edit/10.4324/9781003043645-11/smuggling-legitimate-activity-kristof-titeca">intervened</a> when urban authorities wanted to forcefully remove streetside kiosks by blocking roads and organising protests. </p>
<p>Second, in doing so, they are an illustration of historian Eric Hobsbawm’s “<a href="https://www.abebooks.com/Bandits-Revised-Edition-E.J-Hobsbawm-Pantheon/5603239895/bd">social bandits</a>”. This is through their links to the population and their composition – young, unemployed men, and (certainly in their early phase) often ex-rebels considered “<a href="https://www.abebooks.com/Bandits-Revised-Edition-E.J-Hobsbawm-Pantheon/5603239895/bd">natural material for banditry</a>”. </p>
<p>Their smuggling activities provide employment to, and absorb, a potentially dangerous group: low-skilled, landless young men. In a region with a <a href="https://reliefweb.int/report/uganda/refugee-law-project-working-paper-no-12-negotiating-peace-resolution-conflicts-ugandas">history of rebel groups</a>, this is seen as an important stabilising factor, allowing for the voicing of discontent through trading activities rather than illegality. </p>
<p>For these reasons, attempts to take formal action against smuggling in the West Nile region often lead to demonstrations and riots.</p>
<p>In February 2022, for instance, <a href="https://www.monitor.co.ug/uganda/news/national/one-shot-dead-ura-office-torched-in-clashes-with-boda-boda-cyclists-3727616">riots erupted</a> in Koboko town. These were directed against Uganda’s tax collecting agency – the Uganda Revenue Authority. </p>
<p>Protestors set the authority’s offices on fire after tax collectors allegedly hit and injured a suspected fuel smuggler (the authority <a href="https://twitter.com/URAuganda/status/1496886523933126656?s=20&t=PMBLUpWUtHgMH8uIcZ2wkQ">denied</a> this happened). The smuggler was reportedly carrying 320 litres of fuel in sixteen 20-litre jerrycans from the DRC. During the riots, one person was shot dead and several others wounded.</p>
<p>Months earlier, the shooting of a suspected smuggler also <a href="https://www.monitor.co.ug/uganda/news/national/one-shot-dead-as-ura-officers-impound-numberless-motorcycles-in-arua-3557294">led to violent demonstrations</a>. </p>
<p>However, this doesn’t mean all smuggling is romanticised. Smuggling in goods such as <a href="https://ugandaradionetwork.net/story/suspected-ugandan-drug-dealer-arrested-in-congo?districtId=553">drugs</a> or <a href="https://allafrica.com/stories/201008240002.html">weapons</a> is looked at very differently, and doesn’t have the same legitimacy and popular support. </p>
<p>In sum, smuggling is looked at as more than a strictly economic activity; it’s a social and political one. In local social imaginaries, it’s seen as an act of resistance, a way to fend for oneself in difficult circumstances.</p><img src="https://counter.theconversation.com/content/191525/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kristof Titeca does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Smuggling in Uganda’s West Nile region is seen as an act of defiance – a way to make ends meet in the face of perceived state neglect.Kristof Titeca, Professor in International Development, University of AntwerpLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1897592022-09-21T12:35:58Z2022-09-21T12:35:58ZWhat if carbon border taxes applied to all carbon – fossil fuels, too?<figure><img src="https://images.theconversation.com/files/484426/original/file-20220913-12695-68njn0.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C4940%2C3280&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Most national carbon border adjustments being considered target only manufactured goods.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/logistics-and-transportation-of-container-cargo-royalty-free-image/850688224">Thatree Thitivongvaroon via Getty Images</a></span></figcaption></figure><p>The European Union is <a href="https://www.europarl.europa.eu/news/en/press-room/20221212IPR64509/deal-reached-on-new-carbon-leakage-instrument-to-raise-global-climate-ambitio">embarking on</a> <a href="https://crsreports.congress.gov/product/pdf/R/R47167">an experiment</a> that will expand its climate policies to imports for the first time. It’s called a <a href="https://www.consilium.europa.eu/en/press/press-releases/2022/03/15/carbon-border-adjustment-mechanism-cbam-council-agrees-its-negotiating-mandate/">carbon border adjustment</a>, and it aims to level the playing field for the EU’s domestic producers by taxing energy-intensive imports like steel and cement that are high in greenhouse gas emissions but aren’t already covered by climate policies in their home countries. </p>
<p>If the border adjustment works as planned, it could encourage the spread of climate policies around the world. But <a href="https://www.europarl.europa.eu/news/en/press-room/20221212IPR64509/deal-reached-on-new-carbon-leakage-instrument-to-raise-global-climate-ambition">the EU plan</a> – which members of the European Parliament preliminarily agreed to on Dec. 13, 2022 – as well as most attempts to evaluate the impact of such policies, is missing an important source of cross-border carbon flows: trade in fossil fuels themselves.</p>
<p>As <a href="https://www.bakerinstitute.org/expert/mark-finley">energy</a> <a href="https://www.bakerinstitute.org/expert/joon-ha-kim">analysts</a>, we decided to take a closer look at what including fossil fuels would mean.</p>
<p>In a <a href="https://www.bakerinstitute.org/research/carbon-border-adjustments-need-analyze-all-carbon-trade">newly released paper</a>, we analyzed the impact and found that including fossil fuels in carbon border adjustments would significantly alter the balance of cross-border carbon flows. </p>
<p>For example, China is a major exporter of carbon-intensive manufactured goods, and its industries will face higher costs under the EU border adjustment if China doesn’t set sufficient climate policies for those industries. But when fossil fuels are considered, China becomes a net carbon importer, so setting its own comprehensive border adjustment could be to its energy producers’ benefit.</p>
<p>The U.S., on the other hand, could see harm to its domestic fuel producers if other countries imposed carbon border adjustments on fossil fuels. But the U.S. would still be a net carbon importer, and adding a border adjustment could help its domestic manufacturers.</p>
<h2>What is a carbon border adjustment?</h2>
<p><a href="https://www.rff.org/publications/explainers/border-carbon-adjustments-101/">Carbon border adjustments</a> are trade policies designed to avoid “<a href="https://clear.ucdavis.edu/news/what-carbon-leakage">carbon leakage</a>” – the phenomenon in which manufacturers relocate their production to other countries to get around environmental regulations.</p>
<p>The idea is to impose a carbon “tax” on imports that is commensurate with the costs domestic companies face related to a country’s climate policy. The carbon border adjustment is imposed on imports from countries that do not have similar climate policies. In addition, countries can give rebates to exports to ensure domestic manufacturers remain competitive in the global market. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1415590023555133442"}"></div></p>
<p>This is all still in the future. The EU plan <a href="https://www.europarl.europa.eu/news/en/press-room/20221212IPR64509/deal-reached-on-new-carbon-leakage-instrument-to-raise-global-climate-ambition">phases in starting in 2023</a>. However, other countries are closely watching as they consider their own policies, including some members of the U.S. Congress who are <a href="https://www.whitehouse.senate.gov/news/release/whitehouse-and-colleagues-introduce-clean-competition-act-to-boost-domestic-manufacturers-and-tackle-climate-change">considering carbon border adjustment legislation</a>. </p>
<h2>Capturing all cross-border carbon flows</h2>
<p>One issue is that current discussions of carbon border taxes focus on “embodied” carbon – the carbon associated with the production of a good. For example, the EU proposal covers cement, aluminum, fertilizers, electricity, iron and steel.</p>
<p>But a comprehensive border adjustment, in theory, should seek to address all cross-border carbon flows. All the <a href="https://www.oecd.org/sti/ind/input-outputtables.htm">major analyses</a> to date, however, leave out the carbon content of fossil fuels trade, which we refer to as “explicit” carbon. </p>
<p>In <a href="https://www.bakerinstitute.org/research/carbon-border-adjustments-need-analyze-all-carbon-trade">our analysis</a>, we show that when only manufactured goods are considered, the U.S. and EU are portrayed as carbon importers because of their “embodied” carbon balance – they import a lot of high-carbon manufactured goods – while China is portrayed as a carbon exporter. That changes when fossil fuels are included.</p>
<h2>The impact of including fossil fuels</h2>
<p>By assessing the impact of a carbon border adjustment based only on embodied carbon flows, those involving manufactured goods, policymakers are missing a significant part of total carbon traded across their borders – in many cases, the largest part.</p>
<p>In the EU, our findings largely reinforce the current motivation behind a carbon border adjustment, since the bloc is an importer of both explicit carbon and embodied carbon.</p>
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<p>For the U.S., however, the results are mixed. A carbon border adjustment could protect domestic manufacturers but harm the international competitiveness of domestic fossil fuels, and at a time when Russia’s invasion of Ukraine is placing renewed importance on the U.S. as a <a href="https://apnews.com/article/russia-ukraine-biden-business-poland-migration-c0c3b6421fc0d454abf53b4b6dd746bb">global energy supplier</a>.</p>
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<p>The Chinese economy, as an exporter of embodied carbon in manufactured goods, would suffer if its trading partners imposed a carbon border adjustment on China’s products. On the other hand, a Chinese domestic border adjustment could benefit Chinese domestic energy producers at the expense of foreign competitors who fail to adopt similar policies.</p>
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<p>Interestingly, <a href="https://www.bakerinstitute.org/research/carbon-border-adjustments-need-analyze-all-carbon-trade">our analysis</a> suggests that, by including explicit carbon flows, the U.S., EU and China are all net importers of carbon. All three key players could be on the same side of the discussion, which could improve the prospects for future climate negotiations – if all parties recognize their common interests. </p>
<p><em>This article was updated Dec. 14, 2022, with the European Parliament’s preliminary approval.</em></p><img src="https://counter.theconversation.com/content/189759/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nothing to disclose.</span></em></p><p class="fine-print"><em><span>Mark Finley does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A new study shows what it would mean for Europe and China, and why the US might not be too excited about the idea.Joonha Kim, Graduate fellow, Baker Institute, Rice UniversityMark Finley, Fellow in Energy and Global Oil, Baker Institute for Public Policy, Rice UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1860692022-08-31T14:53:36Z2022-08-31T14:53:36ZEnergy crisis: why the UK will be at the mercy of international gas prices for years to come<figure><img src="https://images.theconversation.com/files/482051/original/file-20220831-26-imdrtk.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C8622%2C5644&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The UK is expecting a long, cold winter and gas prices are unlikely to fall for some years to come. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cold-grandfather-warming-himself-by-radiator-2106329783">Jelena Stanojkovic / Shutterstock</a></span></figcaption></figure><p>The UK is trying to ensure households and businesses have enough energy this winter by turning to international markets buoyed by booming <a href="https://www.reuters.com/markets/commodities/firms-make-deals-boost-lng-exports-60-us-canada-mexico-2022-08-23/">US liquefied natural gas (LNG) supply</a>, and reinstating retired <a href="https://www.energyvoice.com/oilandgas/north-sea/440350/nsta-gives-centrica-green-light-to-reopen-rough-gas-storage-site/">storage capabilities</a>. But the impact of Russia’s recent decision to switch off its <a href="https://www.theguardian.com/business/2022/aug/31/nord-stream-1-russia-switches-off-gas-pipeline-citing-maintenance">Nord Stream 1 pipeline</a> has proven that European countries are still very much at the mercy of changes in global gas market supply and demand. </p>
<p>Such events are likely to continue to cause gas price volatility until more supply is available, which could take at least three years. Indeed, a <a href="https://www.theguardian.com/business/2022/aug/30/wholesale-gas-prices-tumble-as-europe-prepares-to-intervene-in-energy-markets">recent dip</a> in European gas prices is likely to be temporary.</p>
<p>Avoiding a significant gas supply emergency this winter will require the continued flow of some Russian gas to Europe, lower-than-average Asian demand for LNG, and mild weather. But prices will also depend on how <a href="https://progressivepost.eu/europes-gas-crisis-requires-a-european-solution/">European neighbours respond</a> to any emergency.</p>
<p>In 2021, natural gas <a href="https://www.gov.uk/government/statistics/uk-energy-in-brief-2022">accounted for</a> 42% of the UK’s primary energy consumption and generated 40% of its electricity. It also heats over 80% of households, and is an important raw material and source of heat for industry. </p>
<p>Even though cheaper renewable sources <a href="https://ukerc.ac.uk/publications/can-renewables-help-keep-bills-down/">provide 60%</a> of the country’s energy, the UK market is structured so that electricity prices are currently set by the <a href="https://www.ofgem.gov.uk/news-and-views/blog/what-drives-wholesale-electricity-prices-britain#:%7E:text=is%20often%20the-,marginal%20source%20of%20generation,-.%20When%20electricity%20demand">most expensive unit</a> produced, which is gas.</p>
<p>The government can do little to address the cost of gas. The UK gets around half of its annual gas supply from its own North Sea reserves, but relies on <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/articles/energypricesandtheireffectonhouseholds/2022-02-01#:%7E:text=The%20UK%E2%80%AFimports%20around%2050%25%20of%20its%20gas%20from%20the%20international%20market">global markets</a> for the rest. As such, gas consumers in the UK are exposed to global market forces of supply and demand.</p>
<h2>The global rise of LNG</h2>
<p><a href="https://www.politybooks.com/search?s=Natural%20Gas">International trade in gas</a> currently relies on two forms of transportation: natural gas pipelines and ships carrying LNG. In the past, trade was regional and dominated by pipelines, but the LNG sector has grown by 57% over the last decade, creating a <a href="https://www.tandfonline.com/doi/full/10.1080/00130095.2017.1283212">globally connected market</a>. </p>
<p>Last year LNG accounted for 51% of internationally traded gas, up from 41% a decade ago. Today, <a href="https://giignl.org/wp-content/uploads/2022/05/GIIGNL2022_Annual_Report_May24.pdf">19 countries export and 44 import</a> LNG.</p>
<p>Production of LNG is expensive and complex. It involves a multi-billion dollar supply chain of liquefaction plants (where the gas is cooled to liquefy it and make it easier to transport), as well as specialist ships and regasification terminals to offload and store the LNG before it is converted into gas for power generation or injection into a domestic pipeline system. </p>
<p>Australia (21%), Qatar (21%) and the US (18%) are the top three global LNG producers, while Asia accounts for <a href="https://www.igu.org/resources/world-lng-report-2022/">73% of global LNG demand</a>. China <a href="https://www.tandfonline.com/doi/abs/10.1080/15387216.2020.1716819">consumes 21.3%</a>, followed by Japan (20%) and South Korea (12.6%). In 2021, Europe soaked up 21.0% and the UK 2.9% of total LNG trade.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/482030/original/file-20220831-18-4yglhc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/482030/original/file-20220831-18-4yglhc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=251&fit=crop&dpr=1 600w, https://images.theconversation.com/files/482030/original/file-20220831-18-4yglhc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=251&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/482030/original/file-20220831-18-4yglhc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=251&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/482030/original/file-20220831-18-4yglhc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=315&fit=crop&dpr=1 754w, https://images.theconversation.com/files/482030/original/file-20220831-18-4yglhc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=315&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/482030/original/file-20220831-18-4yglhc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=315&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An LNG tanker moored to a gas terminal.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/lng-tanker-ship-dawn-moored-gas-1295259748">Wojciech Wrzesien / Shutterstock</a></span>
</figcaption>
</figure>
<p>Some of these global buyers and sellers strike long-term contracts that can span decades and include a destination clause requiring cargoes be delivered to a specific market. </p>
<p>But the growing demand for LNG has seen a rise in shorter-term (4 years or less), more flexible contracts that allow cargoes to change route to supply the markets in which prices are higher. “Spot markets” for LNG are even shorter term, with cargoes delivered within three months of the transaction date.</p>
<p>While Asian buyers like Japan tend to purchase LNG with <a href="https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/220614_DebatingJapan_V5_I2.pdf?jygsf6Y8zhJjNSaAnvpkUe934EdD.0d">long-term contracts</a>, Europe sources <a href="https://www.shell.com/energy-and-innovation/natural-gas/liquefied-natural-gas-lng/lng-outlook-2022.html#iframe=L3dlYmFwcHMvTE5HX291dGxvb2tfMjAyMi8">most of its LNG</a> via short-term contracts and the spot market. This allows it to benefit from lower prices when the global LNG market is well supplied, but exposes it to higher prices when supply is tight, like it is now.</p>
<p>Expanding supply would certainly loosen the LNG market, but there is little prospect of a significant near-term increase in supply. In April 2022, 136 million tonnes per year of liquefaction capacity was under construction or approved for development, compared to total production capacity of <a href="https://www.igu.org/resources/world-lng-report-2022/">459.5 million tonnes per year</a>) in 2021. </p>
<p>But relatively little of this LNG will be available in the next couple of years, including <a href="https://www.highnorthnews.com/en/eu-sanctions-stop-construction-arctic-lng-2-modules-china">projects in Russia</a> that are now unlikely to complete due to sanctions. Recent <a href="https://globalenergymonitor.org/report/how-long-does-it-take-to-build-an-lng-export-terminal-in-the-united-states/">US experience suggests</a> it takes three to five years to build an LNG plant. </p>
<p>The supply and demand balance will change dramatically by 2028, therefore, when global LNG export capacity is likely to be <a href="https://www.oxfordenergy.org/publications/quarterly-gas-review-issue-18/">50% higher</a>.</p>
<h2>Russian restrictions</h2>
<p>Of course pipelines can also transport natural gas, but since its invasion of Ukraine in late February 2022, Russian gas supplies to Europe have become increasingly volatile. After refusing to supply companies that didn’t pay in Roubles, for example, Russia then used various technicalities to restrict <a href="https://www.oxfordenergy.org/publications/falling-like-dominoes-the-impact-of-nord-stream-on-russian-gas-flows-in-europe/">supply from the Nord Stream 2</a> pipeline to Germany, as well as Nord Stream 1 more recently. </p>
<p>The International Energy Agency expects Russia to meet <a href="https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/natural-gas/070522-russia-set-to-meet-just-25-of-eu-gas-demand-in-2022-iea">25% of EU gas demand</a> in 2022, down from over 40% in 2021. There are fears that Russia will stop supplies all together.</p>
<p>To combat this, Europe is aiming to <a href="https://www.consilium.europa.eu/en/press/press-releases/2022/07/26/member-states-commit-to-reducing-gas-demand-by-15-next-winter/">reduce its reliance on gas</a>, and <a href="https://ec.europa.eu/commission/presscorner/detail/en/IP_22_3131">Russian gas</a> in particular. It has turned to <a href="https://www.economist.com/graphic-detail/2022/06/01/how-europe-plans-to-cope-as-russia-cuts-off-the-gas">LNG imports</a> to fill storage for the coming winter. But, with limited LNG available, <a href="https://blog.geographydirections.com/2022/05/03/the-eus-global-scramble-for-gas/">prices have skyrocketed</a>.</p>
<h2>Skyrocketing gas prices</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=474&fit=crop&dpr=1 754w, https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=474&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/481999/original/file-20220831-18-55nu1g.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=474&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">UK natural gas prices to August 2022.</span>
<span class="attribution"><a class="source" href="https://tradingeconomics.com/commodity/uk-natural-gas">Trading Economics</a></span>
</figcaption>
</figure>
<p>Increased European demand complicates matters for the UK. While Russia only accounts for about <a href="https://researchbriefings.files.parliament.uk/documents/CBP-9523/CBP-9523.pdf">4% of UK gas imports</a>, declining production from the North Sea means the country now import about half of the gas it consumes. Most imports come from Norway, but <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1086525/Supply_of_Liquefied_Natural_Gas_in_the_UK__2021.pdf">LNG also plays a critical role</a>.</p>
<p>And while the UK has sufficient terminal and pipeline capacity to import the gas it needs, it <a href="https://www.bloomberg.com/news/articles/2021-09-21/u-k-s-lack-of-gas-plan-leaves-country-at-mercy-of-global-market?sref=PF2RkEmW">lacks significant storage</a>. There are plans to reinstate Britain’s <a href="https://www.telegraph.co.uk/business/2022/08/15/rough-gas-storage-site-cleared-start-filling-within-weeks/">Rough storage facility</a>, which had been retired in 2017, but this will take time. Meanwhile, the UK must rely on shorter-term flexible contracts and the spot market, exposing consumers to greater price volatility.</p>
<h2>How long will the crisis last?</h2>
<p>The factors currently driving gas prices up will remain in place for several years and so the energy crisis is likely to last for <a href="https://www.ft.com/content/0ed80178-0573-41a8-b437-49e3a293f6a9">at least this winter and next</a>. This is also reflected in the <a href="https://www.ft.com/content/e11ca7cf-dd7a-43a9-a4e7-0dbd12f244d7">futures market</a>, where traders can lock in natural gas at a set price for delivery at some point in the future. </p>
<p>Reduced demand will help – whether via policy or economic recession – but the global LNG market will remain tight, and UK consumers will have to pay a high price for the gas they need. </p>
<p>Beyond 2025, a substantial increase in global LNG supply will help matters, energy efficiency will improve, and alternative sources of power generation may start to come online. But unfortunately, for the moment, there is no relief in sight for those impacted by the energy crisis.</p><img src="https://counter.theconversation.com/content/186069/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Bradshaw receives funding from UKRI to support his participation in the UK Energy Research Centre (UKERC) and the NERC-ESRC research programme on Unconventional Hydrocarbons. He consults with international energy companies and NGOs and is a Visiting Research Fellow at the Oxford Institute for Energy Studies.</span></em></p>Why the UK’s reliance on natural gas means the energy crisis is unlikely to end this winter.Michael Bradshaw, Professor of Global Energy, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1883872022-08-24T13:50:14Z2022-08-24T13:50:14ZSouth African citrus: new EU rules are unjust and punitive<figure><img src="https://images.theconversation.com/files/478553/original/file-20220810-4746-e6ok2b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Photo by Phill Magakoe / AFP) (Photo by Phill Magakoe/AFP via Getty Images</span></span></figcaption></figure><p>In mid-July 2022 the European Union <a href="https://www.freshplaza.com/article/9443691/new-eu-regulations-could-see-r654-million-of-sa-citrus-destroyed/">imposed new restrictions on South African citrus imports</a>. The new phytosanitary requirements were meant to address False Codling Moth, a citrus pest that is native to South Africa and for which there is zero tolerance in the <a href="https://www.moneyweb.co.za/news/industry/new-eu-law-could-see-r600m-of-sa-citrus-en-route-to-europe-being-destroyed/">EU</a>. </p>
<p>The new regulations are a major blow to South Africa’s citrus industry as they will severely disrupt exports. The country is the world’s <a href="https://www.trademap.org/">second largest exporter of citrus after Spain</a>. The EU accounted for 41% of Southern African citrus exports by value in 2021. Locally, in 2021 citrus accounted for 25% of South Africa’s total agriculture exports up from 19% in 2011.</p>
<p>In our view, which is based on decades of engaging with EU regulations, and food exports more generally, the regulations are unfair and punitive.</p>
<p>Firstly, the EU gave South Africa less than a month to adapt to the new regulations. The EU measures <a href="https://www.tralac.org/publications/article/15720-the-new-eu-rules-for-citrus-imports-from-south-africa-background-applicable-legal-texts-and-processes-and-the-dispute-declared-by-south-africa-under-the-rules-of-the-wto.html">were published</a> on 21 June 2022, entered into force on 24 June 2022, and required that consignments arriving in Europe from 14 July 2022 onwards had to comply with the new requirements. </p>
<p>The South African government <a href="https://www.tralac.org/publications/article/15720-the-new-eu-rules-for-citrus-imports-from-south-africa-background-applicable-legal-texts-and-processes-and-the-dispute-declared-by-south-africa-under-the-rules-of-the-wto">managed to negotiate</a> a settlement with the EU to clear floating containers of citrus blocked at EU Ports on 11 August 2022 (3 weeks later). Nevertheless the whole process <a href="https://www.businesslive.co.za/bd/opinion/columnists/2022-08-16-wandile-sihlobo-agricultural-exports-to-slow-amid-barriers-to-wool-beef-and-citrus/">imposed additional costs</a> on growers. At a minimum, transition measures are required. This is done to give countries time to adapt. </p>
<p>Secondly, since the EU first declared the False Codling Moth a quarantine pest in 2018, South Africa put in place <a href="https://www.europarl.europa.eu/doceo/document/E-9-2019-002282-ASW_EN.pdf">extensive measures</a> in line to meet the phytosanitary regulations. Its integrated pest management (systems approach) has meant significant investments in research and “learning by doing” to get the system right. There is evidence of success.</p>
<p><em>In our view, the new rules are de facto <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/twec.12447">non-tariff barriers to trade</a>. Non-tariff measures are imposed _de jure</em> to protect consumers from unhealthy or low-quality products, but <em>de facto</em> they represent an increase in trade costs. _</p>
<p>We also believe that additional requirements will only mean diverting scarce resources and imposing new costs on growers, threatening the long-term sustainability of the industry.</p>
<h2>Standards in global trade</h2>
<p>Product and process standards are the main factors shaping the international trade regime. The ability to meet these standards is both a threat for producers (excluding them from profitable markets) and an <a href="https://openknowledge.worldbank.org/bitstream/handle/10986/3880/WPS5396.pdf">opportunity</a> (providing the potential to enter high-margin markets).</p>
<p>Phytosanitary standards are particularly important. The challenge is that they are determined solely by the buying party or country, with the producer having little capacity to challenge decisions on conformance. An added problem is that strong lobbies can push for standards to be protectionist barriers. This harms both consumers who pay higher prices as well as producers who are forced to apply new ways of processing.</p>
<p>The ever changing landscape in phytosanitary standards is characteristic of global trade in fresh fruit. Responding to it requires constant investments in research and technology development to keep up and to comply. However, the political nature of these issues, which require government-to-government negotiations, makes it difficult to prove compliance and the basis for such standards. </p>
<p>As of 12 August, the current hurdle has cost local citrus growers over R200 million in losses. In addition, growers are more than likely to receive half their expected returns on any fruit that is released, due to the fact that most containers have been standing for a few weeks, and have therefore <a href="http://c1e39d912d21c91dce811d6da9929ae8.cdn.ilink247.com/ClientFiles/cga/CitrusGowersAssociation/Company/Documents/From%20the%20Desk%20of%20the%20CEO%2032_22%20-%2012%20August%202022.pdf">missed their programmes due to late arrival</a>.</p>
<p>Applicable from the 1 January 2018, the EU Directive listed False Codling Moth (FCM) as an EU quarantine pest and prescribed specific import requirements. This meant that South African citrus exporters who shipped to the EU market would be subject to new requirements. Non-EU countries could use cold treatment or another effective treatment to ensure the products are free from the pest.</p>
<p>From the 1 September 2019, exporting countries were required prior to export, to provide documentary evidence of the effectiveness of the treatment used for trade to continue.</p>
<p>In response to the EU’s 2018 False Codling Moth phytosanitary regulations, South Africa’s citrus industry developed the FCM Management System as an alternative to post-harvest disinfestation (cold treatment). </p>
<p>South Africa is currently <a href="https://www.europarl.europa.eu/doceo/document/E-9-2019-002282-ASW_EN.pdf;%20https://riverbioscience.co.za/about-us/">using integrated pest management</a> (systems approach) - the sterile insect technique and mating disruption - in conjunction with complementary controls to ensure citrus fruits are free of the moth – from the field to the packing house and shipment to the EU. A systems approach is a <a href="https://efsa.onlinelibrary.wiley.com/doi/epdf/10.2903/j.efsa.2021.6799">pest risk management option</a> that integrates different measures, at least two of which act independently, with cumulative effect.</p>
<p>The False Codling Moth Management System was implemented for the first time in 2018 for citrus exports to the EU with <a href="https://c1e39d912d21c91dce811d6da9929ae8.cdn.ilink247.com/ClientFiles/cga/CitrusGowersAssociation/Company/Documents/CGA%20Annual%20Report%202019%20v6%20FINAL.pdf">continuos improvements over the years</a> (p.32). Interceptions of FCM have been consistently low over the past three years. </p>
<p>The new regulations require orange imports to undergo further mandatory cold treatment processes and pre-cooling steps for specific periods. These have to be done at loading before shipping and subsequent <a href="https://www.moneyweb.co.za/news/industry/new-eu-law-could-see-r600m-of-sa-citrus-en-route-to-europe-being-destroyed/">importation</a>. </p>
<p>Some cold stores have modern technology to cool down the fruit to stipulated temperatures. But a number of cold stores still have outdated technologies that can’t.</p>
<h2>Next steps</h2>
<p>South Africa’s citrus industry recognises that standards are clearly essential. It has invested in research and technology to keep abreast of changes in phytosanitary standards, and to support shared capabilities necessary to supply high-quality, pest-and disease-free <a href="https://oxford.universitypressscholarship.com/view/10.1093/oso/9780192894311.001.0001/oso-9780192894311-chapter-6">fruit</a>. </p>
<p>But the setting of standards can be misused. This means they need to be transparently applied and designed.</p><img src="https://counter.theconversation.com/content/188387/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Roberts received funding from the Innovation and Inclusive Industrialisation in Agro-Processing project (IIAP), funded by the Global Challenges Research Fund (ES/S0001352/1) of the UK's ESRC.</span></em></p><p class="fine-print"><em><span>Shingie Chisoro received funding from the Innovation and Inclusive Industrialisation in Agro-Processing project (IIAP), funded by the Global Challenges Research Fund (ES/S0001352/1) of the UK's ESRC.
</span></em></p><p class="fine-print"><em><span>Antonio Andreoni does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The new rules are de facto non-tariff barriers to trade. They increase trade costs for South Africa’s citrus industry.Simon Roberts, Professor of Economics and Lead Researcher, Centre for Competition, Regulation and Economic Development, UJ, University of JohannesburgAntonio Andreoni, Professor of Development Economics, Department of Economics, SOAS University of London and Visiting Associate Professor, SARChI Industrial Development, University of JohannesburgShingie Chisoro, Senior Researcher, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1876022022-07-26T06:53:16Z2022-07-26T06:53:16ZYes, wash your shoes at the airport – but we can do more to stop foot-and-mouth disease ravaging Australia<figure><img src="https://images.theconversation.com/files/476008/original/file-20220726-18-bw5j7y.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C5506%2C3670&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Passengers arriving in Australia from Indonesia will be <a href="https://minister.agriculture.gov.au/watt/media-releases/new-stronger-biosecurity-powers-international-airports">directed</a> to wash their shoes after the federal government ramped up efforts to prevent foot-and-mouth disease entering the country. </p>
<p>But effective biosecurity involves more than just what happens at the airport. Australia operates one of the <a href="https://cebra.unimelb.edu.au/__data/assets/pdf_file/0020/3535013/CEBRA_Value_Docs_KeyResultSummary_v0.6_Endorsed.pdf">most comprehensive</a> biosecurity systems in the world, however, there’s more we can do.</p>
<p>Biosecurity is also not just an agricultural issue. It’s essential to protecting human health, societies and the environment. </p>
<p>Unfortunately, good biosecurity <a href="https://cebra.unimelb.edu.au/__data/assets/pdf_file/0020/3535013/CEBRA_Value_Docs_KeyResultSummary_v0.6_Endorsed.pdf">doesn’t come cheap</a>. Adequate <a href="https://www.agriculture.gov.au/biosecurity-trade/policy/partnerships/nbc/intergovernmental-agreement-on-biosecurity/igabreview/igab-final-report">funding</a> is vital. That includes ensuring those who cause the problems contribute to fixing them – something that doesn’t happen now.</p>
<figure class="align-center ">
<img alt="cow behind a gate bearing a stop sign" src="https://images.theconversation.com/files/476007/original/file-20220726-20-y9sdrd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/476007/original/file-20220726-20-y9sdrd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/476007/original/file-20220726-20-y9sdrd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/476007/original/file-20220726-20-y9sdrd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/476007/original/file-20220726-20-y9sdrd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/476007/original/file-20220726-20-y9sdrd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/476007/original/file-20220726-20-y9sdrd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Good biosecurity doesn’t come cheap.</span>
</figcaption>
</figure>
<h2>The foot-and-mouth threat</h2>
<p>Foot-and-mouth disease (unrelated to hand, foot and mouth disease in humans) is a highly contagious <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC387408/">viral infection</a> that affects livestock such as cattle, sheep and pigs. It causes painful blisters on the feet and in the mouth, preventing the animal from eating, drinking or even standing up. </p>
<p>The disease <a href="https://theconversation.com/what-is-foot-and-mouth-disease-why-farmers-fear-apocalyptic-bonfires-of-burning-carcasses-186741">was detected</a> in mainland Indonesia in May – <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6499730/">40 years</a> since the last outbreak there - before spreading to Bali <a href="https://www.agriculture.gov.au/about/news/media-releases/media-statement-foot-and-mouth-disease-confirmed-in-bali">earlier this month</a>. </p>
<p>Foot-and-mouth disease is <a href="https://www.woah.org/en/disease/foot-and-mouth-disease/">endemic</a> in many countries. But its arrival in Indonesia makes it more likely the disease could reach Australia, given the significant travel and trade between the two nations. </p>
<p>Australia exports <a href="https://www.agriculture.gov.au/abares/products/insights/snapshot-of-australian-agriculture-2022">more than two-thirds</a> of its livestock products. Official estimates put the economic cost of a major outbreak in Australia at <a href="https://www.agriculture.gov.au/abares/research-topics/biosecurity/biosecurity-economics/fmd-update-of-2013-estimate">A$80 billion</a>.</p>
<p>In the United Kingdom, a 2001 outbreak of the disease <a href="https://www.abc.net.au/news/2022-06-11/uk-fmd-outbreak-helping-australia-protect-its-farrmers/101070438">cost</a> the economy around $13 billion and more than 6 million animals were destroyed. </p>
<p>There have been <a href="https://www.skynews.com.au/australia-news/anthony-albanese-refuses-to-close-border-to-indonesia-over-trade-impacts-despite-concerns-over-foot-and-mouth-disease/news-story/1bfe62a6f2e6c22c0887c9f02528352e">calls</a> for Australia to close the border to Indonesia following the current foot-and-mouth outbreak. But <a href="https://www.theguardian.com/australia-news/2022/jul/25/foot-and-mouth-disease-australia-parcels-china-indonesia-checked-fmd-government-says-border-should-not-shut">farmers say</a> the radical move would not remove the risk entirely and would do more harm than good.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-is-foot-and-mouth-disease-why-farmers-fear-apocalyptic-bonfires-of-burning-carcasses-186741">What is foot and mouth disease? Why farmers fear 'apocalyptic bonfires of burning carcasses'</a>
</strong>
</em>
</p>
<hr>
<figure class="align-center ">
<img alt="dead cow lifted above pile of others" src="https://images.theconversation.com/files/475996/original/file-20220726-14-kfd1cx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/475996/original/file-20220726-14-kfd1cx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=392&fit=crop&dpr=1 600w, https://images.theconversation.com/files/475996/original/file-20220726-14-kfd1cx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=392&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/475996/original/file-20220726-14-kfd1cx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=392&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/475996/original/file-20220726-14-kfd1cx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=493&fit=crop&dpr=1 754w, https://images.theconversation.com/files/475996/original/file-20220726-14-kfd1cx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=493&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/475996/original/file-20220726-14-kfd1cx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=493&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A UK outbreak of the disease left millions of animals dead.</span>
<span class="attribution"><span class="source">Gerry Penny/EPA</span></span>
</figcaption>
</figure>
<h2>Where does shoe-washing come in?</h2>
<p>We can think of biosecurity as a bit like <a href="https://royalsocietypublishing.org/doi/10.1098/rstb.1990.0090">Swiss cheese</a>. Every slice of Swiss cheese has holes. But when the slices are lined up, the block is solid and impenetrable. </p>
<p>Biosecurity, done well, involves figuring out how to line the slices up.</p>
<p>Catching diseases at the border is one slice of the cheese. That’s why the federal government is now <a href="https://www.theguardian.com/australia-news/2022/jul/20/foot-and-mouth-disease-australian-airports-to-step-up-precautions-as-farmers-grow-anxious">directing passengers</a> who’ve flown in from Indonesia to clean their shoes and walk over disinfectant mats at airports.</p>
<p>Travellers will also be asked to declare any contact with farms and livestock. Those with visibly contaminated shoes will be taken to a biosecurity area.</p>
<p>Research has <a href="https://www.aasv.org/shap/issues/v8n4/v8n4p169.html">shown</a> these measures are not always effective. But having said that, it’s good practice to clean your shoes any time you’ve been off the beaten track.</p>
<p>The soles of shoes contain any number of contaminants. In 2008, for example, a <a href="https://nzpps.org/_journal/index.php/nzpp/article/view/4859">survey</a> at Christchurch Airport found bacteria and fungi on 99% and 78% of footwear, respectively. </p>
<p>A good scrub, then a wipe with disinfectant, is usually enough to reduce the contamination to <a href="https://www.sciencedirect.com/science/article/pii/S0167587705001479">acceptable levels</a>. Even a rinse with water is <a href="https://nzpps.org/_journal/index.php/nzpp/article/view/6852">better than nothing</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/wearing-shoes-in-the-house-is-just-plain-gross-the-verdict-from-scientists-who-study-indoor-contaminants-177542">Wearing shoes in the house is just plain gross. The verdict from scientists who study indoor contaminants</a>
</strong>
</em>
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<h2>What else can we do?</h2>
<p>Good biosecurity extends far beyond shoe-cleaning. It involves other activities at the border and <a href="https://www.agriculture.gov.au/biosecurity-trade/policy/australia/reports-pubs/nair">within Australia</a>, as well as efforts overseas.</p>
<p>The greatest risk of foot-and-mouth disease entering Australia comes from <a href="https://www.frontiersin.org/articles/10.3389/fvets.2016.00085/full">meat products</a> from an <a href="https://www.woah.org/en/disease/foot-and-mouth-disease/">affected country</a>. It’s easy to declare these when you arrive in Australia – or better still, don’t bring them in at all.</p>
<p>This is why extra <a href="https://www.theguardian.com/australia-news/2022/jul/20/foot-and-mouth-disease-australian-airports-to-step-up-precautions-as-farmers-grow-anxious">detector dogs</a> have been stationed at Australia’s airports - to detect unauthorised meat brought into Australia.</p>
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<p>Farmers must practice good <a href="https://www.farmbiosecurity.com.au/toolkit/planner/">biosecurity</a> on their properties, such as maintaining hygiene, keeping records and rigorous monitoring of livestock health.</p>
<p>Preventing the infection at source countries is a highly <a href="https://theconversation.com/australian-agricultures-biggest-threat-needs-a-global-approach-16512">cost-effective</a> way to protect Australia from imported diseases.</p>
<p>Labor this month <a href="https://minister.agriculture.gov.au/watt/media-releases/14-million-package-builds-biosecurity-protection">announced</a> $5 million to help Indonesia, Timor-Leste and Papua New Guinea combat livestock diseases. It includes personnel and logistic support to distribute vaccines.</p>
<p>However, because these vaccination programs take <a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0223518">months to complete</a>, the risk of foot-and-mouth disease in Indonesia will remain high for some time.</p>
<figure class="align-center ">
<img alt="man points rod at cow" src="https://images.theconversation.com/files/475994/original/file-20220726-17-muu4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/475994/original/file-20220726-17-muu4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/475994/original/file-20220726-17-muu4l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/475994/original/file-20220726-17-muu4l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/475994/original/file-20220726-17-muu4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=507&fit=crop&dpr=1 754w, https://images.theconversation.com/files/475994/original/file-20220726-17-muu4l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=507&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/475994/original/file-20220726-17-muu4l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=507&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Livestock vaccination programs take time.</span>
<span class="attribution"><span class="source">Firdia Lisnawati/AP</span></span>
</figcaption>
</figure>
<h2>Where to now</h2>
<p>The threat of foot-and-mouth disease is not new. Australia <a href="https://animalhealthaustralia.com.au/foot-and-mouth-disease/">has detailed</a>, well-rehearsed response plans and arrangements in place. But more is needed.</p>
<p>In 2017, an independent review <a href="https://www.agriculture.gov.au/sites/default/files/sitecollectiondocuments/biosecurity/partnerships/nbc/priorities-for-aus-bio-system.pdf">found</a> budgetary and other constraints were making it hard for Australia to meet its biosecurity commitments.
At the same time, biosecurity risks were increasing. The review said substantial new investment was needed to strengthen the national system. </p>
<p>Currently, the costs of managing and controlling new diseases is borne by those affected by their entry and spread – such as farmers and taxpayers. Those who create the risks – such as importers, vessel owners and travellers – are generally not called on to contribute to response costs. </p>
<p>But this not need be the case. <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/risa.13620">Recent research</a> has suggested a solution whereby importers would have to purchase biosecurity risk insurance and premiums would be used fund clean up costs. </p>
<p>Shoring up Australia’s biosecurity requires us all to accept shared responsibility. That means everyone adhering to the rules – and yes, washing your shoes at the airport. </p>
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Read more:
<a href="https://theconversation.com/video-should-australia-close-its-border-to-bali-in-the-fight-against-foot-and-mouth-disease-187527">VIDEO: Should Australia close its border to Bali in the fight against foot and mouth disease?</a>
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<img src="https://counter.theconversation.com/content/187602/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Susan Hester works for The Centre of Excellence for Biosecurity Risk Analysis (CEBRA). CEBRA receives research funding from the Australian Department of Agriculture, Fisheries and Forestry, and New Zealand’s Ministry for Primary Industries, as well as the Queensland, New South Wales, Victorian, South Australian and Tasmanian governments. Susan acknowledges the efforts of Andrew Robinson and Tom Kompas in reviewing this article.</span></em></p><p class="fine-print"><em><span>Aaron Dodd is a Chief Investigator of The Centre of Excellence for Biosecurity Risk Analysis (CEBRA), which receives research funding from the Australian Department of Agriculture, Fisheries and Forestry (DAFF), and New Zealand’s Ministry for Primary Industries (MPI), as well as the Queensland, New South Wales, Victorian, South Australian and Tasmanian governments.</span></em></p>Effective biosecurity involves more than just what happens at the airport. And it doesn’t come cheap.Susan M Hester, Associate Professor, University of New EnglandAaron Dodd, Research Fellow - Biosecurity, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1854372022-06-24T12:02:21Z2022-06-24T12:02:21ZWorkers’ rights: how a landmark UN decision on safety and health will actually affect employees<figure><img src="https://images.theconversation.com/files/470736/original/file-20220624-14-rilbj3.jpg?ixlib=rb-1.1.0&rect=25%2C25%2C5642%2C4087&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The ILO decided a safe and healthy work environment should be a fundamental right at its June 2022 conference.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/national-flag-ilo-on-flagpole-2164465563">Millenius/Shutterstock</a></span></figcaption></figure><p>In what has been called the “<a href="https://iosh.com/news/osh-human-rights/">biggest moment for workers’ rights</a> in a quarter of a century”, the International Labour Organization (ILO) <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_848132/lang--en/index.htm">adopted</a> a safe and healthy work environment as one of its five fundamental principles and rights at work for all at its June 2022 international conference. This is the first extension of workers’ human rights in almost 25 years and it means governments must now commit to respect and promote the right to a safe and healthy working environment.</p>
<p>Almost <a href="https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_686645.pdf">3 million</a> people die due to accidents and illnesses every year while trying to make a living. An additional <a href="https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_686645.pdf">374 million</a> workers are injured or made ill by their work. Overwork on its own kills more than <a href="https://www.who.int/news/item/16-09-2021-who-ilo-almost-2-million-people-die-from-work-related-causes-each-year#:%7E:text=%C3%82%C2%A9-,WHO%2FILO%3A%20Almost%202%20million%20people%20die%20from,work%2Drelated%20causes%20each%20year&text=Work%2Drelated%20diseases%20and%20injuries,International%20Labour%20Organization%20(ILO).">745,000 people</a> a year through increased risk of stroke and heart attack. If occupational safety and health (OSH) had been given more attention during the COVID-19 pandemic, thousands of lives <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_837406/lang--en/index.htm">could have been saved</a>. </p>
<p>The ILO decision could make a huge difference in preventing <a href="https://www.bbc.co.uk/news/world-latin-america-61693783">mine collapses</a>, <a href="https://cleanclothes.org/news/2018/11/24/tazreen-fashions-6-years">factory fires</a> in the textile industry or by ensuring that hundreds of workers’ lives are not lost <a href="https://www.theguardian.com/global-development/2021/feb/23/revealed-migrant-worker-deaths-qatar-fifa-world-cup-2022">building the stadiums</a> to host the next men’s World Cup football tournament. Making OSH a human right also recognises the workplace psychosocial risks many workers experience – stress, burnout and isolation – which have been <a href="https://theconversation.com/were-all-exhausted-but-are-you-experiencing-burnout-heres-what-to-look-out-for-164393">made worse by the pandemic</a>. </p>
<p>The ILO, <a href="https://theconversation.com/the-international-labour-organization-was-founded-after-the-spanish-flu-its-past-lights-the-path-to-a-better-future-of-work-140461">established in 1919</a> as part of the Treaty of Versailles, became a <a href="https://www.ilo.org/global/about-the-ilo/history/lang--en/index.htm">specialised agency</a> of the United Nations in 1946, tasked with the adoption and supervision of international labour standards and the promotion of decent work. Its 187-strong membership includes 186 of the UN’s 193 members, plus the Cook Islands. </p>
<p>In the 1990s, as many sought a social dimension to the new economic world order following the fall of the Berlin Wall, a clarion call was raised for a global charter of workers’ rights. The <a href="https://academic.oup.com/ejil/article/8/1/118/651419?login=true">demise of the social clause</a> – an effort to link labour standards and trade liberalisation - at the World Trade Organization (WTO) in the 1990s placed the ball firmly in the ILO’s court. Its unique tripartite structure of governments, trade unions and employers took up the challenge of devising a response to globalisation and its victims.</p>
<p>Fuelled by its <a href="https://www.ilo.org/dyn/normlex/en/f?p=1000:62:0::NO:62:P62_LIST_ENTRIE_ID:2453907:NO">founding mandate</a> that: “Poverty anywhere constitutes a danger to prosperity everywhere”, the ILO adopted the <a href="https://www.ilo.org/declaration/thedeclaration/textdeclaration/lang--en/index.htm">1998 Declaration</a> on Fundamental Principles and Rights at Work. This commits the ILO’s 187 member states, regardless of their level of economic development, to respect and promote principles and rights in four categories: child labour, forced labour, discrimination and freedom of association and collective bargaining.</p>
<p>Such protections remain vital. While illegal in most countries, <a href="http://www.antislaverycommissioner.co.uk/media/1683/sedex-recognising-forced-labour-risks-in-global-supply-chains-october-2021.pdf">forced labour</a> is still widespread in many parts of the world. Similarly, <a href="https://www.un.org/en/observances/world-day-against-child-labour">child labour</a> is not yet illegal in all countries and remains a concern for governments, regulators and watchdogs in many countries.</p>
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<img alt="Medical professional with clipboard, stethoscope, mask, outside hopsital." src="https://images.theconversation.com/files/470737/original/file-20220624-12-olrhhk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/470737/original/file-20220624-12-olrhhk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/470737/original/file-20220624-12-olrhhk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/470737/original/file-20220624-12-olrhhk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/470737/original/file-20220624-12-olrhhk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/470737/original/file-20220624-12-olrhhk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/470737/original/file-20220624-12-olrhhk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Many lives could have been saved if occupational safety and health had been given more attention during the COVID-19 pandemic.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-female-ems-key-worker-doctor-1714681855">Cryptographer/Shutterstock</a></span>
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<h2>The fifth pillar of human rights</h2>
<p>The recognition of OSH as the fifth pillar of human rights will have major implications for businesses, international trade agreements and governments. The 1998 Declaration is the point of reference for many private and multi-stakeholder forms of labour regulation. This includes the UN’s <a href="https://www.unglobalcompact.org/what-is-gc/mission/principles">Global Compact</a> (a non-binding instrument with more than 16,000 company signatories), the <a href="https://www.ohchr.org/documents/publications/guidingprinciplesbusinesshr_en.pdf">Guiding Principles on Business and Human Rights</a> (which outlines the corporate responsibility to respect human rights), <a href="https://ec.europa.eu/social/main.jsp?catId=978&langId=en&company=&hdCountryId=0&companySize=0&sectorId=0&year=0&esp=0&geoScope=0&refStandard=&keyword=&mode=advancedSearchSubmit">transnational company agreements</a> and many codes of conduct by multinationals along global supply chains. </p>
<p>Most trade agreements also take the ILO 1998 Declaration as the foundation of their <a href="https://mulpress.mcmaster.ca/globallabour/article/view/2401">labour rights provisions</a>. The ILO <a href="https://www.ilo.org/ilc/ILCSessions/110/reports/texts-adopted/WCMS_848632/lang--en/index.htm">has said</a> the declaration should not unintentionally affect the rights and obligations of one of its members in relation to existing trade and investment agreements between states. But many new trade agreements may include a legally binding labour provision on a safe and healthy working environment. </p>
<p>For governments, therefore, the pressure is on. While the 1998 declaration only asked member states to “<a href="https://www.ilo.org/declaration/thedeclaration/textdeclaration/lang--en/index.htm">respect, promote and realise</a>” the fundamental principles, a huge wave of ratifications followed. For example, the Minimum Age Convention had only been ratified by 58 countries by 1997. Today that number has <a href="https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11300:0::NO::P11300_INSTRUMENT_ID:312283">risen to 175</a>. Other labour standards identified as fundamental such as the Forced Labour Convention have now been ratified by <a href="https://www.ilo.org/dyn/normlex/en/f?p=1000:11300:0::NO:11300:P11300_INSTRUMENT_ID:312174">179 member states</a> and the Worst Forms of Child Labour Convention has universal ratification by the <a href="https://www.ilo.org/dyn/normlex/en/f?p=1000:11300:0::NO:11300:P11300_INSTRUMENT_ID:312327">187 member nations</a> of the ILO. We are likely to see the same response now OSH is a fundamental principle, especially since even in the EU many countries <a href="https://www.etuc.org/en/pressrelease/landmark-un-workers-safety-vote-leaves-eu-playing-catch">have not ratified</a> key OSH labour standards. </p>
<h2>A vital first step</h2>
<p>The recognition of a safe and healthy work environment as a human right is a first step, but not an end in itself. In an era of governments promoting the use of cheap labour to compete for investment, states could implement these labour standards as a form of “<a href="https://www.gov.uk/research-for-development-outputs/aligning-rights-and-interests-why-when-and-how-to-uphold-labor-standards">social camouflage</a>” to reduce criticism from the international community, while failing to actually enforce their provisions. Similarly, while OSH might become a pillar of the private regulation of labour standards, using this model alone to ensure a minimum level for labour standards has proved to be <a href="https://www.cornellpress.cornell.edu/book/9781501754524/private-regulation-of-labor-standards-in-global-supply-chains/">woefully inadequate</a> in the past. </p>
<p>Concerted action by the international community is therefore needed. The decision taken by the ILO speaks volumes for its continued relevance. This move stands as a strong commitment by workers, employers and governments to recognise that they can do much more to ensure safety and health at work and help prevent the deaths and injuries of millions across the globe.</p><img src="https://counter.theconversation.com/content/185437/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Huw Thomas has previously worked with the International Labour Organization (ILO). He has received funding from the Economic & Social Research Council.</span></em></p>Making a safe and healthy work environment a human right is only the first step in ensuring governments protect workersHuw Thomas, Lecturer in Work, Employment, Organization & Public Policy, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1788352022-03-10T11:14:20Z2022-03-10T11:14:20ZUkraine war: what history tells us about the effectiveness of sanctions<p>The west has responded to the invasion of Ukraine by <a href="https://theconversation.com/ukraine-sanctions-can-still-make-a-difference-but-only-if-done-right-177783">imposing economic sanctions on Russia</a>. There has been plenty of discussion about whether economic sanctions are an appropriate response, what they hope to achieve and what the results will be – not only for Russia but for the world. </p>
<p>Economic sanctions have been used as a tool of war for centuries. In 17th- and 18th-century Europe, when warfare was widespread, economic sanctions were frequently implemented. They included prohibitions on trade, the closure of ports against belligerent enemies, and bans on trade in certain commodities. </p>
<p>Economic exchange was affected in more indirect ways, too, by increased privateering and piracy at sea, high taxes, and conscription. The economic consequences of war were felt not only by governments, but by merchants, manufacturers, consumers and wider society, as business and daily life were thrown into chaos.</p>
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Read more:
<a href="https://theconversation.com/ukraine-sanctions-can-still-make-a-difference-but-only-if-done-right-177783">Ukraine: sanctions can still make a difference – but only if done right</a>
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<p>When Britain and France were at war during the Nine Years’ War (1688-97) and the War of the Spanish Succession (1702-13), both sides imposed economic sanctions on the other.</p>
<p>England entered the <a href="https://www.nam.ac.uk/explore/nine-years-war">Nine Years’ War</a> by declaring war on France on May 17, 1689, in response to Europe-wide concerns that France – and its absolutist monarch Louis XIV – was growing too strong. In its declaration of war, parliament authorised officials to “arrest all ships and vessels conveying any goods or merchandise in them belonging to the French King or to his subjects and inhabitants”. </p>
<p>When Scotland followed suit on August 6, the declaration of war forbade any Scottish subjects “to trade or correspond … with the said French king or any of his subjects”.</p>
<p>France and Britain again found themselves on opposing sides during the <a href="https://www.nam.ac.uk/explore/Spanish-succession">War of the Spanish Succession</a>, a conflict fought over the disputed succession to Spain’s vacant throne and control over that country’s vast global territories. Similar economic sanctions were imposed. In January 1701, the Scottish parliament embargoed “the importation of all French wines, Brandy and other strong waters and vinegar made in France from any place”. </p>
<p>The potential for broader ramifications are clear – not only would this harm France, but economic consequences would be felt by any nation doing business in French produce. There were social consequences, too, for anyone who enjoyed drinking French wine.</p>
<p>This resonates with current fears over the price of oil. As prices soar as a <a href="https://www.bbc.co.uk/news/business-52188448">direct result of the Ukraine conflict</a> and <a href="https://www.bbc.co.uk/news/world-us-canada-60666251">global bans</a> on Russian oil imports, it is feared that prices of crude oil could <a href="https://oilprice.com/Latest-Energy-News/World-News/Russia-Says-Energy-Embargo-Could-Send-Oil-Prices-Over-300.html">rise as high as US$300 (£228) a barrel</a>. Just like in 1701, this economic sanction does not only harm the nation against whom it is aimed, but has consequences across the globe.</p>
<h2>Turning a blind eye</h2>
<p>But these early-modern sanctions met with mixed success. Individual merchants used a variety of tactics to circumvent them, including sailing in neutral ships or carrying falsified documents, as well as entering goods through different ports. In addition, governments on both sides of the channel were complicit in permitting activities that undermined economic sanctions.</p>
<p>In 1692, three years into the Nine Years’ War, the Scottish privy council issued six passes for ships to travel to Bordeaux on a commercial venture. Again, in May 1693, Scots were allowed to trade with and travel to France with “express leave” of the monarch or privy council of Scotland. French admirals, too, ignored their own sanctions, granting passes for British ships to trade in La Rochelle and Bordeaux throughout the Nine Years’ War.</p>
<p>Similar patterns emerged during the War of the Spanish Succession. The British monarch, Queen Anne, earned herself a reputation for granting passes that allowed trade with France to continue despite wartime embargoes. And in 1702 the English treasury reported that French wine was being brought over from the Spanish port of St Sebastian: “It was taken there from Bordeaux, a Spanish name given to it, and reshipped in Spanish casks”. </p>
<p>There was also widespread bribery of port officials. In 1703, <a href="https://www.british-history.ac.uk/cal-treasury-papers/vol3/pp99-127">the English treasury noted that</a>: </p>
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<p>This management seemed to be carried on in concert between the consuls in foreign parts and some officers in the Customs … who for private gratuities undertook for and passed such wines as were of the growth of Spain. </p>
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<p>In 1704, in England, the House of Lords <a href="https://www.google.co.uk/books/edition/The_Wine_Trade/4QONQgAACAAJ?hl=en">undertook an enquiry</a> that found that 15 ships in Bordeaux, mostly from the West Country, had loaded French brandies and wines. The resulting report stated that the government discouraged informers and was inclined to hush the matter up rather than pursue the offenders.</p>
<p>The stringent economic sanctions imposed during these early-modern conflicts were not consistently upheld, even as bold public statements were made about the strength of enmity. The importance of international economic relationships meant that trade had to be allowed to continue, and governments needed to reconcile their political aims with economic necessity. Early-modern economies were interdependent, so it was in nobody’s interests to destroy established trading routes, whatever the political context.</p>
<p>We are already seeing the broader consequences of sanctions imposed on Russia, particularly in terms of the rising prices of oil and <a href="https://www.bbc.co.uk/news/business-60653856">food</a>. As the world watches Ukraine, it is worth remembering that in the past, the cost of upholding economic sanctions was often seen as too high a price to pay.</p><img src="https://counter.theconversation.com/content/178835/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Siobhan Talbott received funding from Arts and Humanities Research Council for the research on which this article is based.</span></em></p>Warring countries have ben imposing sanctions on their enemies for hundreds of years. They have met with mixed success.Siobhan Talbott, Reader in Early Modern History, Keele UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1704642021-11-08T03:54:31Z2021-11-08T03:54:31ZTo reach net zero, we must decarbonise shipping. But two big problems are getting in the way<figure><img src="https://images.theconversation.com/files/430688/original/file-20211108-10391-iusnbo.jpg?ixlib=rb-1.1.0&rect=14%2C14%2C4965%2C3300&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Ian Taylor/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Shipping, which transports 90% of the world’s trade, <a href="https://theconversation.com/cargo-ships-are-emitting-boatloads-of-carbon-and-nobody-wants-to-take-the-blame-108731">contributes nearly 3%</a> of global emissions – a little more than the carbon footprint of Germany. If gone unchecked, this share could <a href="https://www.europarl.europa.eu/RegData/etudes/STUD/2015/569964/IPOL_STU(2015)569964_EN.pdf">increase to 17% by 2050</a> as the world’s GDP keeps growing.</p>
<p>Curbing shipping emissions has been a hot topic at the international climate summit in Glasgow, with 14 nations signing <a href="https://em.dk/media/14312/declaration-on-zero-emission-shipping-by-2050-cop26-glasgow-1-november-2021.pdf">a declaration</a> last week to bring shipping emissions down to net zero by 2050.</p>
<p><a href="https://www.ics-shipping.org/event/cop26/">On Saturday</a>, shipping industry heavyweights and senior government representatives met to iron out details of this lofty promise, ahead of the key <a href="https://ukcop26.org/transport/">transportation talks</a> at COP26. <a href="https://www.tradewindsnews.com/esg/urgency-to-act-but-some-differences-highlighted-as-shipping-seeks-spotlight-at-cop26/2-1-1094862">Important differences</a> emerged in whether market or regulatory rules will be most effective to push the industry towards net zero. </p>
<p>Shipping and aviation are notoriously difficult industries to decarbonise. They require vast amounts of fuel for international travel, and the questions of which country is responsible for emissions makes reaching agreements a mammoth and glacial task. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1455254381994123266"}"></div></p>
<h2>Growing momentum</h2>
<p><a href="https://splash247.com/shipping-exposed-ahead-of-cop26-as-emissions-increase/">Shipping’s total emissions</a> are set to increase this year for the first time since the global financial crisis of 2008. </p>
<p>If left unregulated, shipping and aviation will be responsible for almost 40% of all carbon dioxide emissions in 2050, according to a <a href="https://www.transportenvironment.org/discover/shipping-emissions-17-global-co2-making-it-elephant-climate-negotiations-room/">study published by the European Parliament</a>. </p>
<p>With so much at stake, we’re finally starting to see change, with businesses (and their customers) placing more emphasis on shipping’s contribution to climate change. In October this year, <a href="https://www.bbc.com/news/business-58970877">nine big companies</a> – including Amazon, Ikea, and Unilever – pledged to move their cargo only on ships using zero-carbon fuel by 2040. </p>
<p>What’s more, three of <a href="https://www.ft.com/content/91a27f7e-3d3c-4161-a5f5-a67517a64c2e">the world’s largest container shipping lines</a> – Maersk, CMA CGM, and MSC – are actively pursuing the use of alternative fuels and aim to be net-zero compliant by 2050 or before.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=387&fit=crop&dpr=1 600w, https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=387&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=387&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=486&fit=crop&dpr=1 754w, https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=486&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/430689/original/file-20211108-47862-1evt8l8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=486&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">If left unchecked, global shipping is expected to contribute 17% of emissions by 2050, as international trade increases and other sectors decarbonise.</span>
<span class="attribution"><span class="source">Dominik Luckmann/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>A lack of technology</h2>
<p>Most ship engines use a low-grade, carbon-heavy fuel oil, which creates significant air pollution. So some shipowners are moving to build new ships or convert existing ships to run on liquefied natural gas (LNG) instead.</p>
<p>While this <a href="https://www.elengy.com/en/lng/lng-an-energy-of-the-future.html">presents a 25% reduction in CO₂ emissions compared</a> to the current low-grade fuel, LNG still <a href="https://www.wartsila.com/insights/article/mind-the-methane-gap">releases methane</a> into the atmosphere – a heat-trapping gas roughly <a href="https://www.sciencedaily.com/releases/2014/03/140327111724.htm">30 times more potent</a> than CO₂.</p>
<p>This points to a big problem getting in the way of decarbonising shipping: zero-carbon technologies that can be applied at scale to large ocean-going ships do not yet exist.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/shipping-emissions-must-fall-by-a-third-by-2030-and-reach-zero-before-2050-new-research-167830">Shipping emissions must fall by a third by 2030 and reach zero before 2050 – new research</a>
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</em>
</p>
<hr>
<p><a href="https://www.reuters.com/business/sustainable-business/eu-proposes-adding-shipping-its-carbon-trading-market-2021-07-14/">Commercially viable technologies</a> that create alternative, zero-emissions fuels, <a href="https://www.lr.org/en/insights/articles/decarbonising-shipping-ammonia/">such as hydrogen and ammonia</a>, are still in development by ship engine manufacturers.</p>
<p>A significant challenge is the requirement for vast fuel storage on board ships, and replenishing these fuels in port, especially after long voyages. Battery power using renewable sources can only be used on short voyages such as ferries or on coastal trips. </p>
<p><a href="https://www.forbes.com/sites/jamesconca/2020/11/09/international-marine-shipping-industry-considers-nuclear-propulsion/?sh=427109da562c">Nuclear propulsion</a> has also been considered, but there are associated risks and it doesn’t have the support of the general public.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/430691/original/file-20211108-10429-1aj5071.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The IMO’s target to halve emissions by 2050 is not in line with Paris Agreement.</span>
<span class="attribution"><span class="source">Chuttersnap/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Global disunity</h2>
<p>In October, shipping was under fire from <a href="https://www.theguardian.com/environment/2021/oct/14/un-chief-urges-airlines-and-shipping-firms-to-do-more-to-cut-emissions">United Nations Secretary General Antonio de Guterres</a>, who accused the industry of not doing enough to stop global warming. So, is he right?</p>
<p>One of the <a href="https://www.researchgate.net/publication/227420197_Accounting_for_CO2_emissions_from_international_shipping_Burden_sharing_under_different_UNFCCC_allocation_options_and_regime_scenarios">difficulties in cutting emissions</a> in shipping is that it’s hard to decide which country the emissions should be assigned to.</p>
<p>Should it be based on where the ship’s fuel is sold, where a ship is registered, or the origins or destinations of the ship’s cargo? Each option would lead to radically different emissions responsibilities and associated costs for individual countries.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/cargo-ships-are-emitting-boatloads-of-carbon-and-nobody-wants-to-take-the-blame-108731">Cargo ships are emitting boatloads of carbon, and nobody wants to take the blame</a>
</strong>
</em>
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<hr>
<p>The <a href="https://www.un.org/en/chronicle/article/role-international-maritime-organization-preventing-pollution-worlds-oceans-ships-and-shipping">International Maritime Organization</a> (IMO) is the UN body that addresses emissions from ships engaged in international trade. It’s currently coordinating measures to curb maritime emissions among its more than 170 member states. And each state has <a href="https://splash247.com/a-defence-of-the-international-maritime-organization/">competing interests</a>. </p>
<p>In April 2018, the IMO set a goal of halving greenhouse gas emissions by 2050 from 2008 levels. This has been met with fierce criticism from <a href="https://www.transportenvironment.org/discover/shipping-bodys-climate-plan-ignores-paris-agreement/">environmental organisations</a>, who call it weak and unambitious. </p>
<p>This target falls well short of the net-zero by 2050 target declared by nations last week at COP26. The declaration was led by <a href="https://www.reuters.com/business/sustainable-business/denmark-us-12-other-nations-back-tougher-climate-goal-shipping-2021-11-01/">Denmark and includes the US</a>. Notably, it was not signed by countries with big maritime shipping sectors, such as Japan and Greece. </p>
<p>The IMO has agreed, after collecting more data, to revisit their target in 2023. Given growing public interest in climate change and large companies demanding zero emissions in shipping their goods, I believe it’s likely the IMO will bolster its target, and start working towards net-zero emissions by 2050. </p>
<h2>So what needs to happen now?</h2>
<p>At Saturday’s conference, it <a href="https://www.tradewindsnews.com/esg/urgency-to-act-but-some-differences-highlighted-as-shipping-seeks-spotlight-at-cop26/2-1-1094862">became clear</a> most shipowners present were in favour using the market to solve the emissions problem, and suggested using a carbon price. </p>
<p>This echoes the calls of <a href="https://www.bbc.com/news/business-56835352">trade groups</a>, representing more than 90% of the world’s merchant fleet. They have asked the IMO to prioritise a carbon tax for the industry to encourage shipowners to invest in alternative fuel technologies. </p>
<p>On the other hand, the representative for Japanese shipowners was in favour of letting politicians come up with the rules, saying the shipping industry would comply with them. </p>
<p>And shipowners that recently invested in ships fuelled by LNG were, understandably, <a href="https://splash247.com/shipping-makes-the-case-for-lng-as-it-calls-for-clear-regulatory-framework/">advocating its use</a>, saying no zero-carbon alternative fuels are currently available, and are still a long way off. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/ships-moved-more-than-11-billion-tonnes-of-our-stuff-around-the-globe-last-year-and-its-killing-the-climate-this-week-is-a-chance-to-change-150078">Ships moved more than 11 billion tonnes of our stuff around the globe last year, and it’s killing the climate. This week is a chance to change</a>
</strong>
</em>
</p>
<hr>
<p>But before we can make any real headway to decarbonise shipping, we must have global unity. It is imperative more member states get on board with the net zero by 2050 declaration. </p>
<p>The IMO needs to set <a href="https://theconversation.com/cargo-ships-are-emitting-boatloads-of-carbon-and-nobody-wants-to-take-the-blame-108731">international standards</a> around who’s responsible for emissions. Countries with large shipping fleets such as Japan and Greece need to come on board to expedite the process. IMO resolutions take years to develop and even longer to be ratified by its member countries. </p>
<p>A <a href="https://www.ics-shipping.org/press-release/industry-backs-united-nations-5-billion-moon-programme-to-decarbonise-shipping/">well-funded research and development program</a>, which the industry has agreed to pay for within a global regulatory framework, needs to commence immediately under the supervision of the IMO.</p>
<p>The heightened interest we’re seeing across the supply chains and at COP26 is an important opportunity for the shipping industry to be on the front foot, and reduce their emissions sooner rather than later.</p>
<hr>
<figure class="align-right ">
<img alt="COP26: the world's biggest climate talks" src="https://images.theconversation.com/files/424739/original/file-20211005-17-cgrf2z.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/424739/original/file-20211005-17-cgrf2z.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/424739/original/file-20211005-17-cgrf2z.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/424739/original/file-20211005-17-cgrf2z.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/424739/original/file-20211005-17-cgrf2z.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/424739/original/file-20211005-17-cgrf2z.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/424739/original/file-20211005-17-cgrf2z.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><strong>This story is part of The Conversation’s coverage of COP26, the Glasgow climate conference, by experts from around the world.</strong></p>
<p><br><em>Amid a rising tide of climate news and stories, The Conversation is here to clear the air and make sure you get information you can trust. <a href="https://page.theconversation.com/cop26-glasgow-2021-climate-change-summit/"><strong>Read more.</strong></a></em></p><img src="https://counter.theconversation.com/content/170464/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter van Duyn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Shipping requires vast amounts of fuel, and the questions of which country is responsible for emissions makes reaching agreements a mammoth and glacial task.Peter van Duyn, Maritime Logistics Expert, Centre for Supply Chain and Logistics (CSCL), Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1629002021-06-23T16:16:40Z2021-06-23T16:16:40ZThe UK wants to join a Pacific trade deal – why that might not be a risk worth taking<figure><img src="https://images.theconversation.com/files/407714/original/file-20210622-13-1h2itsy.jpg?ixlib=rb-1.1.0&rect=91%2C52%2C8608%2C5921&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The UK’s secretary of state for international trade, Liz Truss chairs a CPTPP head of mission roundtable, July 2020. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/direcon/39817013425/in/photolist-23EuATt-252AFUF-FkwAc8-23UU1dU-2jjVfYG-2jjWrKq-FkwAik-FkwAfe-224QjmJ-Fkw8Ng-23UU1hw-23UU1yo-224Qi5q-23UU1jA-Fkw8XV-22eFpeh-23UU1w9-22eFpbS-252ddzp-23K1jXW-Fkw8WT-22geY5Y-23UU1r9-23UU1zW-224QkGQ-2dEB9yQ-FkwApc-23h8Eau-Gm9wYG-2jjVfdD-Gm9wUy-23WQTLu-23WQWy3-252B336-GTPSeL-GTPYgq-GTPVff-QwbvXt-GTPSXE-23WQVw3-23WRpTy-23WRmPs-252B4wZ-252B5gp-T6LB9E-T6LB3s-23WRo8Q-Gm9wW7-2ajij8k-Gm9wLs">Pippa Fowles/No 10 Downing Street, CC BY-NC-ND </a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>The UK government has <a href="https://www.theguardian.com/business/2021/jun/22/uk-talks-asia-pacific-cptpp-trade-treaty-liz-truss-brexit">begun negotiations</a> to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), suggesting that joining this trade pact is a <a href="https://www.gov.uk/government/speeches/global-britain-and-the-cptpp">positive result of Brexit</a>.</p>
<p>CPTPP, as the name implies, is an agreement on trade (and related issues) between eleven countries which border the Pacific – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It is the result of the revision of a prior agreement, the Trans Pacific Partnership (TPP), after the Trump administration withdrew the US from negotiations and scuppered the fledgling deal.</p>
<p>It’s highly unlikely that joining the CPTPP will make a significant difference to the UK’s post-Brexit economic prospects. Joining this mega-trade agreement will require the UK to make the kind of difficult compromises that it frequently objected to when an EU member.</p>
<p>It will also bring UK exporters very limited additional benefits, both in the absolute and compared to EU competitors, and risks drawing the UK into increasingly complex Asia Pacific geopolitical dynamics.</p>
<h2>New deals</h2>
<p>Since it left the European Union, the UK has ostensibly been signing trade deals thick and fast.</p>
<p>However, these early agreements, with countries like <a href="https://www.gov.uk/government/publications/ukvietnam-free-trade-agreement">Vietnam</a>, <a href="https://www.gov.uk/government/news/uk-and-japan-sign-free-trade-agreement">Japan</a> and <a href="https://www.gov.uk/government/news/uk-secures-new-deal-with-norway-iceland-and-liechtenstein">Norway</a> were <a href="https://blogs.sussex.ac.uk/uktpo/2017/09/27/grandfathering-ftas-and-roos/">“grandfathered”</a> deals – renegotiations with countries with whom the country already had market access agreements by virtue of EU membership. As trade within these relationships was already quite free, negotiating such deals was much less complex than entirely new agreements, which require additional concessions.</p>
<p>CPTPP is different from the other UK trade deals because the EU is not a member of the pact. Nor has it ever expressed any interest in becoming one. However, the EU has already signed bilateral deals with many of the countries which are also members of the deal: Mexico, Chile, Peru, Singapore, Canada, Japan and Vietnam.</p>
<p>The EU is also in active negotiations with Australia and New Zealand, where progress has <a href="https://www.europarl.europa.eu/legislative-train/theme-a-balanced-and-progressive-trade-policy-to-harness-globalisation/file-eu-australia-fta">been encouraging</a> and the mood music is <a href="https://www.consilium.europa.eu/en/meetings/international-summit/2020/11/26/">positive</a>.</p>
<p>The only members of CPTPP with whom the EU doesn’t have an existing or potential free trade agreement are Malaysia and Brunei. Although the latter is one of the richest countries in the region, it has less than half a million consumers. Malaysia’s 32 million consumers do represent an interesting potential market and their trade negotiations with the EU have stalled.</p>
<p>So joining CPTPP could potentially bring economic benefits: reducing the cost of trade usually increases flows and the common language that the UK shares with several signatories <a href="https://www.sciencedirect.com/science/article/abs/pii/S0165176512000584">is a factor that traditionally favours trade</a>. It would also result in better market access for UK companies to the markets of Malaysia and Brunei than EU competitors.</p>
<figure class="align-center ">
<img alt="The original signatories of the CPTPP pose in Santiago, March 2018" src="https://images.theconversation.com/files/407710/original/file-20210622-23-1riris9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/407710/original/file-20210622-23-1riris9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/407710/original/file-20210622-23-1riris9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/407710/original/file-20210622-23-1riris9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/407710/original/file-20210622-23-1riris9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/407710/original/file-20210622-23-1riris9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/407710/original/file-20210622-23-1riris9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The original signatories of the CPTPP, March 2018.</span>
<span class="attribution"><span class="source">Claudio Reyes/AFP</span></span>
</figcaption>
</figure>
<p>But even the positive economic impacts of increased trade with these markets are likely to be limited because of “gravity”.</p>
<p>Like two planets floating in space, the attraction of one economy for another is a function of their size and distance between them – a country’s closest trading partner is more often than not its neighbour. The <a href="https://link.springer.com/chapter/10.1007/978-3-642-16564-1_4">gravity model of trade</a> is one of the most robust in economics. It is gravity, as much as politics, that explains why less than <a href="https://blogs.sussex.ac.uk/uktpo/2021/02/03/the-value-of-the-cptpp-for-the-uk/">8% of the UK’s exports</a> go to CPTPP countries and that tiny Ireland has consistently been a <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-8173/">more important market</a> for UK companies than China.</p>
<p>The UK is simply not a Pacific nation and opening markets, such as Malaysia, which are more than 10,000 km away, is unlikely to result in major increases in trade.</p>
<h2>Negotiating costs</h2>
<p>So, although there may be economic benefits from joining CPTPP, they are limited. In addition, negotiating access to these new trade opportunities will involve significant costs. All free trade agreements involve tit for tat exchanges of access for key products of interest to the other side.</p>
<p>The UK has argued that, freed from its EU partners, <a href="http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/european-union-committee/scrutiny-of-brexit-negotiations/oral/72497.html">it will be easy</a> for them to agree new free trade agreements, as they no longer have to worry about other members’ “pet” industries, such as <a href="https://www.reuters.com/article/us-eu-mercosur-france-idUSKCN1TX1PN">French agriculture</a>. But the UK also has sensitive industries, worried about the impact of increased competition and varying product standards on their livelihoods.</p>
<p>UK farmers are already <a href="https://www.theguardian.com/politics/2021/may/23/irresponsible-australia-trade-deal-will-bring-ruin-for-uk-farmers-critics-warn">up in arms</a> at the reported willingness of the government to provide free access to agricultural products produced to <a href="https://www.bbc.com/news/business-57478412">less exacting standards</a> in a recently agreed trade deal with Australia. CPTPP will magnify those concerns and broaden the number of sectors with good reason to resist free market access.</p>
<p>Meanwhile, modern trade agreements <a href="https://www.aeaweb.org/articles?id=10.1257/jep.32.2.73">go far beyond tariffs</a>. The CPTPP has extensive chapters on standards, including in the controversial agricultural sector. Joining the pact risks increasing regulatory divergence with the EU in sectors such as meat and dairy, as well as industrial goods, thus complicating the UK’s far more important exports to EU markets. CPTPP text makes frequent reference to regional standards and initiatives. The region in question is obviously the Asia-Pacific, not Europe.</p>
<h2>Complicated geopolitics</h2>
<p>There is another risk attached to joining this agreement with a faraway and complex region. CPTPP very much reflects the changing geo-political <a href="https://www.ft.com/content/de4df609-2599-47cb-ba37-0b754d4f3b57">power dynamics emerging in the Asia Pacific</a>. The US was one of the chief instigators of the CPTPP’s predecessor, the TPP, and Trump’s withdrawal from the deal left a power vacuum in the region. The other TPP members, wary of <a href="https://asia.nikkei.com/Politics/International-relations/China-moves-to-fill-US-power-vacuum-with-Asia-trade-deals">China’s ambitions to fill this vacuum</a>, decided to move forward without the US and sign CPTPP. The new US trade representative, Katherine Tai, <a href="https://asia.nikkei.com/Politics/International-relations/Biden-s-Asia-policy/Biden-s-trade-chief-pick-dodges-question-on-rejoining-TPP">has expressed caution</a> about the possibility that the United States could rejoin the agreement.</p>
<p>The other key regional agreement – the Regional Comprehensive Economic Partnership (RCEP) – includes some CPTPP members and China. For its part, China has also recently expressed <a href="https://www.bloomberg.com/news/articles/2021-05-17/china-steps-up-efforts-to-join-trade-pact-created-to-exclude-it">an interest in joining CPTPP</a>. This might not be an addition which the UK would find desirable, given their complicated bilateral relationship and the controversy around human rights in <a href="https://www.reuters.com/article/us-britain-china-trade-idUSKBN2AO22S">Hong Kong and Xinjiang</a>.</p>
<p>Becoming a party to this agreement will draw the UK into a power play between regional powers and may complicate other important alliances, including with India, which chose to stay out of both the CPTPP and RCEP.</p>
<p>The rush to join CPTPP therefore seems both economically peculiar and potentially geopolitically dangerous. It is perhaps not surprising that the UK government <a href="https://www.reuters.com/article/uk-britain-trade-cptpp-exclusive-idUSKBN29X1ND">is in no hurry</a> to publish its impact assessment.</p><img src="https://counter.theconversation.com/content/162900/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Les auteurs ne travaillent pas, ne conseillent pas, ne possèdent pas de parts, ne reçoivent pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'ont déclaré aucune autre affiliation que leur organisme de recherche.</span></em></p>The CPTPP probably won’t invigorate post-Brexit Britain economically, and it could even be dangerous, geopolitically speaking.Louise Curran, Professor of International Business, TBS EducationJappe Eckhardt, Senior Lecturer in International Political Economy, University of YorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1629532021-06-18T11:53:59Z2021-06-18T11:53:59ZThe UK–Australia trade deal is not really about economic gain – it’s about demonstrating post-Brexit sovereignty<p>As expected, the UK prime minister, Boris Johnson, and his Australian counterpart, Scott Morrison, have now <a href="https://www.bbc.co.uk/news/57173498">agreed “in principle”</a> to a free trade agreement. The fine details are still <a href="https://theconversation.com/theres-a-lot-we-dont-know-about-the-uk-trade-agreement-we-are-about-to-sign-162841">not out in the open</a>, but the political and economic significance of the deal is becoming clearer.</p>
<p>The first point to note is the speed of the process. Negotiations were only launched in June 2020, so to have reached an agreement in principle in 12 months is fairly fast going. Significantly for the UK, it is also the first trade agreement negotiated since Brexit that is not a “rollover” of a pre-existing EU agreement or largely based on what was already available (as is the case with <a href="https://committees.parliament.uk/publications/4408/documents/44691/default/">Japan</a>.</p>
<p>That negotiations appear to have been straightforward is at least partly due to the fact that Australia is a relatively small and open economy. Even without a deal, it imposed relatively few barriers to trade and investment from the UK. This is why the UK government has had such a <a href="https://www.lbc.co.uk/radio/presenters/james-obrien/australian-ex-trade-negotiator-hasnt-heard-any-benefits-for-uk-in-new-trade-deal/">difficult time articulating</a> what additional market access advantages it will actually gain.</p>
<p>By contrast, as a net exporter of agricultural goods, <a href="https://ukandeu.ac.uk/an-australian-deal-provides-the-first-big-test-on-the-governments-commitment-to-protecting-uks-food-standards/">Australia sees the UK</a> as an important market opportunity – especially for its beef, lamb, dairy and sugar products. Currently, access to the UK market is controlled by quotas, whereby only limited quantities can be imported without paying prohibitive tariffs.</p>
<p>Figures just released by the <a href="https://www.trademinister.gov.au/minister/dan-tehan/media-release/new-free-trade-agreement-deliver-jobs-and-business-opportunities-australia-and-united-kingdom">Australian</a> and <a href="https://www.gov.uk/government/publications/uk-australia-free-trade-agreement-negotiations-agreement-in-principle/uk-australia-fta-negotiations-agreement-in-principle">UK governments</a> show how these exports are expected to change. Beef, for example, currently has a quota of <a href="https://www.mla.com.au/prices-markets/market-news/2021/what-does-brexit-mean-for-aussie-red-meat/">3,761 tonnes</a>. This will be increased to a tariff-free quota of 35,000 tonnes immediately after the deal is in force, 110,000 tonnes after ten years and 170,000 after 15 years. </p>
<p>A similar plan applies to lamb, where imports are currently limited to <a href="https://www.mla.com.au/prices-markets/market-news/2021/what-does-brexit-mean-for-aussie-red-meat/">13,335 tonnes</a> under the quota. This will go up to a tariff-free quota of 25,000 tonnes when the deal is enacted, 75,000 tonnes after 10 years and 125,000 tonnes after 15 years. </p>
<p>Critics have seized on these figures as evidence of <a href="https://labour.org.uk/press/australian-government-reveals-the-true-scale-of-tory-sell-out/">“selling out” British farmers</a> for a paltry £500 million – the maximum figure the government’s <a href="https://www.gov.uk/government/publications/uks-approach-to-negotiating-a-free-trade-agreement-with-australia/uk-australia-free-trade-agreement-the-uks-strategic-approach#chapter-4-scoping-assessment-for-a-bilateral-free-trade-agreement-between-the-united-kingdom-and-australia">own analysis</a> projects the deal will be worth to the UK over 15 years; around 0.02% of GDP. </p>
<p>Yet to reduce the deal to the simple matter of GDP is to misread the politics behind the UK’s post-Brexit trade policy.</p>
<p>The traditional problem that policy makers face when it comes to trade is that while a liberal approach is seen as economically optimal, the benefits tend to be widely dispersed while the costs – in this case, to farmers – are heavily concentrated.</p>
<h2>Trade deals and trade offs</h2>
<p>It’s a complicated and often thankless business, which is partly why the pursuit of free trade has frequently led governments to <a href="https://www.researchgate.net/publication/235330166_Constituency_Interests_and_Delegation_in_European_and_American_Trade_Policy">delegate</a> the responsibility for negotiating trade deals to technocratic bodies – like the Office of the United States Trade Representative or the European Commission. </p>
<p>The UK is now different. Rather than delegating trade policy, it has done the opposite, taking responsibility away from technocrats in Brussels and handing it back to politicians in Westminster.</p>
<figure class="align-center ">
<img alt="Grazing cows." src="https://images.theconversation.com/files/407090/original/file-20210617-20-1yi89rr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/407090/original/file-20210617-20-1yi89rr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/407090/original/file-20210617-20-1yi89rr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/407090/original/file-20210617-20-1yi89rr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/407090/original/file-20210617-20-1yi89rr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/407090/original/file-20210617-20-1yi89rr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/407090/original/file-20210617-20-1yi89rr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">What’s your beef?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cattle-grazing-desert-pasture-outback-new-34291285">Shutterstock/Robyn Mackenzie</a></span>
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<p>From this perspective, the fact that specific trade policies were <a href="https://www.prospectmagazine.co.uk/economics-and-finance/the-free-trade-case-for-brexit-is-folly">hardly mentioned</a> during the referendum campaign is not really relevant. Nor does it matter that, as one former <a href="https://www.newstatesman.com/politics/2021/06/brexiteers-are-only-free-traders-when-it-suits-them">Conservative cabinet minister claims</a>, Brexiteer supporters of the Australian arrangement walked away from a “far more advanced deal” with the EU and only support free trade “when it suits them”. </p>
<p>Crucially, for a political campaign fought and won on the basis of “taking back control”, the key element is the very act of exercising sovereignty through an independent trade policy. For the current Conservative government then, the ability to strike trade deals is in itself far more important than the economic ends such deals may or may not achieve.</p>
<p>Seen in this light, boasting about “<a href="https://hansard.parliament.uk/Commons/2021-01-11/debates/AD141381-635D-41B0-A909-48EF110029CD/GlobalBritain">negotiating trade agreements covering 63 nations</a>”, even though these uncontroversial deals do nothing more than maintain the status quo, makes sense.</p>
<p>But the UK is now leaving an initial, politically painless phase of trade policy independence. With the Australia deal, it is now entering a second and potentially more awkward phase. </p>
<p>Negotiating actual new trade deals will have real economic consequences and require politically difficult compromise. We are already witnessing the <a href="https://www.bbc.co.uk/news/science-environment-57268681">first signs of opposition</a> to the Australia deal, as the details emerge. </p>
<p>These political conflicts are only likely to intensify as the UK moves on to negotiations with larger and more powerful trade partners like the US and India. Brexit has brought trade politics back to Whitehall – and there can be no more hiding behind the bureaucrats of the European Commission when unpopular decisions are made.</p><img src="https://counter.theconversation.com/content/162953/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tony Heron receives funding from the BBSRC, ESRC and Horizon 2020. He is currently serving and a Parliamentary Academic Fellow with the House of Common International Trade Select Committee. The views expressed in this article no way reflect the Committee or its members. </span></em></p><p class="fine-print"><em><span>Gabriel Siles-Brügge receives funding from the Erasmus+ programme. He is currently a specialist adviser to the UK House of Commons International Trade Committee and Scientific Advisor on Trade Policy to the European Public Health Alliance (EPHA). The views expressed in this article are his alone and should not be taken to reflect those of the Committee and its members or EPHA.</span></em></p>International trade policy is back in British politicians’ hands.Tony Heron, Professor of International Political Economy, University of YorkGabriel Siles-Brügge, Associate Professor in Public Policy, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1620462021-06-16T16:06:11Z2021-06-16T16:06:11ZCOVID-19 has shone a light on how globalization can tackle inequality<figure><img src="https://images.theconversation.com/files/406292/original/file-20210614-102344-1jidy13.jpg?ixlib=rb-1.1.0&rect=0%2C375%2C4256%2C2446&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Predictions about the death of globalization were, in hindsight, grossly exaggerated. Recovery efforts took hold early compared to two other major economic crises of the past 100 years, suggesting global trade is much more resilient than anticipated.</span> <span class="attribution"><span class="source">NASA/Unsplash</span></span></figcaption></figure><p><a href="https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html">Globalization</a> is a multifaceted concept that describes the process of creating networks of connections around the world. It involves the interdependence of national economies and the integration of information, goods, labour and capital, to name a few.</p>
<p>In recent years, globalization has been the subject of <a href="https://www.project-syndicate.org/commentary/globalization-new-discontents-by-joseph-e--stiglitz-2016-08">growing discontent and criticism</a>, particularly after the election of former U.S. president <a href="https://hbr.org/2017/07/globalization-in-the-age-of-trump">Donald Trump</a>, <a href="https://www.theguardian.com/business/2016/jun/26/brexit-is-the-rejection-of-globalisation">Brexit and</a> <a href="https://www.piie.com/blogs/trade-and-investment-policy-watch/why-did-trump-end-wtos-appellate-body-tariffs">the American refusal</a> to appoint members to the World Trade Organization’s Appellate Body. </p>
<p>The backlash represents a major setback to the pace of globalization and sets the stage for growing protectionism and nationalism around the world. Many criticisms have been political, but the ongoing <a href="https://repub.eur.nl/pub/135563">COVID-19 pandemic has introduced new health threats to globalization</a>. </p>
<p>In a sense, the pandemic has illuminated both globalization (a virus went global in a few weeks thanks to globalization and interconnectedness) and deglobalization (the breakdown of international co-operation and the re-emergence of nationalism when it came to personal protective gear, medical devices and vaccines). </p>
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<strong>
Read more:
<a href="https://theconversation.com/canadas-me-first-covid-19-vaccine-strategy-may-come-at-the-cost-of-global-health-146908">Canada's 'me first' COVID-19 vaccine strategy may come at the cost of global health</a>
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<h2>COVID-19 and globalization</h2>
<p>In <a href="https://repub.eur.nl/pub/135563">our recent research</a>, we detail the pandemic’s impact on the world economy via three components of globalization: economic, social and political. The pandemic and the economic policy response to the crisis have had an impact on these three aspects to varying degrees.</p>
<p>1) <a href="https://link.springer.com/article/10.1007/s11558-019-09344-2">Economic globalization</a> involves the flow of goods, services, capital and information through long-distance market transactions. Although the pandemic is global, regions and countries have experienced it differently based on various economic indicators.</p>
<p><a href="https://unctad.org/news/covid-19-drives-large-international-trade-declines-2020">Merchandise trade contracted for the global economy</a>, but <a href="https://unctad.org/system/files/official-document/osg2020d1_en.pdf">the rate of decline was more pronounced in advanced economies</a> than in developing and emerging economies. Not only were trade flows affected, but the the impact of COVID-19 on foreign direct investment (FDI) <a href="https://unctad.org/news/global-foreign-direct-investment-falls-49-first-half-2020">was immediate as global FDI flows declined by nearly half in 2020</a>.</p>
<figure class="align-center ">
<img alt="A large port on a hazy day." src="https://images.theconversation.com/files/406291/original/file-20210614-135666-fqngni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/406291/original/file-20210614-135666-fqngni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=373&fit=crop&dpr=1 600w, https://images.theconversation.com/files/406291/original/file-20210614-135666-fqngni.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=373&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/406291/original/file-20210614-135666-fqngni.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=373&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/406291/original/file-20210614-135666-fqngni.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=468&fit=crop&dpr=1 754w, https://images.theconversation.com/files/406291/original/file-20210614-135666-fqngni.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=468&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/406291/original/file-20210614-135666-fqngni.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=468&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The port of Los Angeles, mid-pandemic.</span>
<span class="attribution"><span class="source">(AP Photo/Damian Dovarganes)</span></span>
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<p>2) <a href="https://link.springer.com/article/10.1007/s11558-019-09344-2">Social globalization</a> was also significantly impacted by COVID-19. It pertains to interactions with people abroad including via migration, international phone calls and international remittances paid or received by citizens.</p>
<p>Social globalization has been heavily affected by the COVID-19 pandemic because many countries have imposed travel restrictions on both residents and foreign travellers. Border closures hinder migration, especially the movement of tourists and international students. <a href="https://www.migrationpolicy.org/research/covid-19-unemployment-immigrants-other-us-workers">Migrant remittances were also affected</a>, not because of any formal restrictions on remittances, but mainly because of the impact the pandemic had on immigrant employment.</p>
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<p>
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Read more:
<a href="https://theconversation.com/canadas-emergency-response-benefit-does-nothing-for-migrant-workers-136358">Canada's Emergency Response Benefit does nothing for migrant workers</a>
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<p>3) Political globalization involves the ability of countries to engage in international political co-operation and diplomacy, as well as implementing government policy.</p>
<p>The initial outbreak of the COVID-19 pandemic affected international co-operation negatively, <a href="https://www.mei.edu/publications/us-and-china-getting-beyond-covid-19-blame-game">in part because of the blame game between the two largest economies in the world, the United States and China</a>. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two men, one in a mask, stand together." src="https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=427&fit=crop&dpr=1 600w, https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=427&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=427&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=536&fit=crop&dpr=1 754w, https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=536&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/406456/original/file-20210615-19-1j1fiek.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=536&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">An Italian hospital director is flanked by the vice-president of China’s Red Cross in Rome in March 2020, when Italy was being decimated by COVID-19.</span>
<span class="attribution"><span class="source">(AP Photo/Domenico Stinellis)</span></span>
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<p>Later, many nations worked together to fight the pandemic. <a href="https://www.dw.com/en/covid-19-china-steps-in-to-help-italy-battle-the-virus/a-52901560">China, for example, supported</a> countries like Italy, which became the epicentre of the COVID-19 pandemic in Europe. </p>
<p>Politically, the outbreak of COVID-19 could be used as a building block in the future to reinforce international co-operation and strengthen the pillars of political globalization.</p>
<h2>COVID-19 and previous economic crises</h2>
<p>Because of well-established and interdependent global production and supply chains, economic forecasts were pessimistic in the early months of the pandemic due to international border closures and business shutdowns.</p>
<p>The prospect of the world plunging into another major and long-term economic recession similar to the Great Depression in the <a href="https://time.com/5876606/economic-depression-coronavirus/">1930s and the 2008 recession</a> was top of mind for economists, governments and citizens. </p>
<p>But predictions about the <a href="https://www.imperial.ac.uk/business-school/ib-knowledge/strategy-leadership/does-covid-19-really-mean-the-death-globalisation">death of globalization</a> were, in hindsight, grossly exaggerated. Recovery efforts took hold early compared to those two major economic crises, suggesting global trade is much more resilient than anticipated.</p>
<p>In fact, there’s reason to be optimistic about the COVID-19 economic recovery as well as the future of globalization.</p>
<p>Multinational enterprises already had their stress test during the 2008-2009 <a href="https://voxeu.org/article/great-trade-collapse-what-caused-it-and-what-does-it-mean#:%7E:text=The%20%E2%80%9Cgreat%20trade%20collapse%E2%80%9D%20occurred,sudden%2C%20severe%2C%20and%20synchronised.">collapse of world trade</a>. That collapse kickstarted a process of deglobalization, but global merchandise trade and industrial production recovered to previous highs quickly — and they’ve done so even more swiftly during the COVID-19 crisis. The shock was sharp and immediate, but so was the recovery. </p>
<p>The so-called invisible flows (FDI, remittances, tourism, official development co-operation) have been hit harder, and full recovery is not to be expected until vaccination rollouts are sufficiently global in scope. Nonetheless, it’s not unrealistic to expect a speedy economic recovery once the pandemic has passed.</p>
<h2>The disease of inequality</h2>
<p>Ironically, the attacks on globalization were a symptom of an underlying disease — inequality — that have been illuminated by the pandemic.</p>
<p>Globalization lacked a trickling down of benefits to those who most needed them. The pandemic taught us that inequalities are the breeding ground for the spreading of literal diseases and the suffering that follows. Reducing vulnerabilities to future epidemics requires tackling those inequalities. </p>
<p>But the fight against future crises cannot be limited to domestic developments only, because inequality is global. <a href="https://sdgs.un.org/goals">Adhering to the United Nations Sustainable Development Goals</a> is therefore a high-return investment project.</p>
<p>The push towards deglobalization certainly still exists. But economies are now digitally connected in ways they’ve never been before. </p>
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<img alt="Medical staff wearing masks look out of a hospital window." src="https://images.theconversation.com/files/406463/original/file-20210615-19-asrgn2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/406463/original/file-20210615-19-asrgn2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=387&fit=crop&dpr=1 600w, https://images.theconversation.com/files/406463/original/file-20210615-19-asrgn2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=387&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/406463/original/file-20210615-19-asrgn2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=387&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/406463/original/file-20210615-19-asrgn2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=487&fit=crop&dpr=1 754w, https://images.theconversation.com/files/406463/original/file-20210615-19-asrgn2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=487&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/406463/original/file-20210615-19-asrgn2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=487&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Medical staff look out from a hospital window as officials prepare to begin Kenya’s first COVID-19 vaccinations in Nairobi in March 2021.</span>
<span class="attribution"><span class="source">(AP Photo/Ben Curtis)</span></span>
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<p>That’s a positive development, because ending the COVID-19 pandemic and preventing future crises requires international co-operation and a global effort to ensure no single country is left behind. Vaccines must be made available and affordable to all countries, as just reiterated by the leaders of G7 nations in their promise to supply <a href="https://www.bbc.com/news/uk-57461640">one billion doses of the COVID-19 vaccine to poorer nations</a>. </p>
<p>Just as globalization has ramifications for all countries, the health of one nation affects the health of all nations. It requires a global approach to ensure equality for all the world’s citizens.</p><img src="https://counter.theconversation.com/content/162046/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sylvanus Kwaku Afesorgbor receives funding from OMAFRA </span></em></p><p class="fine-print"><em><span>Binyam Afewerk Demena and Peter A.G. van Bergeijk do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The outbreak of COVID-19 could be used as a building block in the future to reinforce international co-operation and strengthen the pillars of globalization.Sylvanus Kwaku Afesorgbor, Assistant Professor, Agri-Food Trade and Policy, University of GuelphBinyam Afewerk Demena, Postdoctoral research fellow, International Institute of Social StudiesPeter A.G. van Bergeijk, Professor of International Economics and Macroeconomics, International Institute of Social StudiesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1519342021-03-25T11:38:38Z2021-03-25T11:38:38ZWhy India is banking on health diplomacy to grow African footprint<figure><img src="https://images.theconversation.com/files/391375/original/file-20210324-15-1gbiqtr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Workers at India's biggest syringe manufacturer ramp up production in September 2020 in race to meet COVID-19 vaccine-driven demand.
</span> <span class="attribution"><span class="source">Photo by SAJJAD HUSSAIN/AFP via Getty Images</span></span></figcaption></figure><p>India has stepped up its global ambitions and foreign policy re-engagement with African countries in recent years. Its bilateral trade <a href="https://www.mea.gov.in/Speeches-Statements.htm?dtl/30924/">increased</a> from $7.2 billion in 2001 to $63 billion in 2017/18. India is now the third largest export destination and the fifth largest investor on the continent. </p>
<p>While it plays catch-up with China’s commanding presence in Africa, India has signed numerous new bilateral agreements. It has also strengthened its diplomatic presence and is actively furthering trade, infrastructure and private sector investments. </p>
<p>In our <a href="https://www.sum.uio.no/english/research/projects/indaf/">research under a multi-year project</a>, we found that New Delhi promotes an alternative model of development. It showcases the successes of its Green Revolution and advances in information, communication and technology. But it also highlights its ability to develop “Triple A” technology – affordable, appropriate, adaptable. </p>
<p>India’s expertise in <a href="https://www.cambridge.org/core/journals/biosocieties/article/abs/first-world-health-care-at-third-world-prices-globalization-bioethics-and-medical-tourism/1DD37C055DF0FFE983C5018776426C69">affordable healthcare</a> has assumed increased significance during the ongoing pandemic. New Delhi is already reaping the benefits of an <a href="https://www.thehindubusinessline.com/news/national/indias-vaccine-maitri-initiative-earns-praise-at-wto/article33979754.ece">ambitious diplomatic initiative</a> to deliver Made-in-India vaccines to developing countries. </p>
<p>India is one the <a href="https://www.bbc.com/news/world-asia-india-55571793">largest producers</a> of drugs globally. It manufactures 60% of the world’s vaccines. Many African countries have purchased or <a href="https://www.ndtv.com/india-news/sent-229-lakh-covid-vaccine-doses-to-other-countries-foreign-ministry-2369480">received these as gifts</a>.</p>
<p>New Delhi’s capacity and willingness to produce and share COVID-19 vaccines have further boosted the country’s diplomatic heft and recognition as a <a href="https://www.project-syndicate.org/commentary/india-covid19-vaccine-diplomacy-by-shashi-tharoor-2021-03">global power</a>.</p>
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Read more:
<a href="https://theconversation.com/interested-in-vaccine-rollouts-across-africa-heres-a-map-to-guide-you-156802">Interested in vaccine rollouts across Africa? Here's a map to guide you</a>
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<h2>India’s Africa policy</h2>
<p>India’s historical footprint in Africa differs from that of other powers. New Delhi offered support for African countries in their struggle against colonial rule. Indo-African partnership followed in the post-colonial period. This was cemented by <a href="http://ris.org.in/others/NAM-RIS-Web/NAM-Articles/Harshe-India%20Non-Alignment-EPW-1990-min.pdf">solidarity with and support for the Non-Aligned Movement</a> and the fight against racism. </p>
<p>India also offered support for <a href="https://www.mea.gov.in/Portal/ForeignRelation/India-SouthAfrica_Relations.pdf">South Africa</a> in its struggle against apartheid. In addition, New Delhi points to the presence of a <a href="https://mea.gov.in/images/attach/NRIs-and-PIOs_1.pdf">sizeable Indian diaspora</a> and their <a href="https://www.vifindia.org/sites/default/files/final-an-overview-of-indian-diaspora-in-africa.pdf">economic and philanthropic contributions</a> on the continent. </p>
<p>Since the early 1990s, India has moved from idealism to pragmatism and the explicit pursuit of commercial interests. The change was driven by robust economic growth at home and the need to access raw materials and new markets. </p>
<p>India’s <a href="https://www.springer.com/gp/book/9788132226185">push</a> for South-South cooperation relies on three broad elements. The first is a shared identity as part of the “Third World”. Second is expertise in cost-effective development technologies. Third is a recurrent articulation of the principles of mutual respect and solidarity. </p>
<p>Its long history of being <a href="https://www.journalofdemocracy.org/articles/poverty-inequality-and-democracy-growth-and-hunger-in-india/">democratic and its successes in reducing poverty and preventing famines</a> have also bolstered the legitimacy of its developmental approach in the Global South. </p>
<p>Since 2018, the India-Africa partnership has been based on a set of <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1540025">principles</a>. These have emphasised “local priorities”. They call for joint efforts to reform global institutions, combat climate change and fight global terrorism. They also highlight capacity building for agriculture, education, digital technology and cooperation on peacekeeping and maritime issues. </p>
<p>How and to what extent might Africa benefit from India’s growing interest? We identify three broad sets of health-related opportunities and benefits that may shape the future of India-Africa relations.</p>
<h2>Three major areas of collaboration</h2>
<p>The first relates to India’s formidable reputation as the <a href="https://www.business-standard.com/article/current-affairs/india-pharmacy-of-the-world-during-covid-19-crisis-says-sco-secy-general-120062100435_1.html">“pharmacy of the world”</a>. It has actively contributed to meeting <a href="https://in-pursuit-of-development.simplecast.com/episodes/rory-horner">global demand for vaccines, over the counter medicines and low-cost generic drugs</a>. The relatively low manufacturing costs make Indian products affordable throughout the world. </p>
<p>Almost 20% of India’s pharmaceutical exports, valued at US$ 17 billion, are to Africa. Southern and western regions of Africa are the largest importers of Indian medicines. These include antiretroviral (ARV) drugs that cost only a <a href="https://pharmaboardroom.com/articles/africa-the-global-launchpad-for-indian-pharma/">fraction</a> of those produced by Western companies. </p>
<p>The second relates to capacity building and collaboration in the health sector. Leading Indian <a href="https://www.eximbankindia.in/blog/blog-content.aspx?BlogID=7&BlogTitle=Healthcare%20in%20Africa,%20built%20by%20India">healthcare providers are collaborating with African partners</a>. Some have opened or plan to open speciality hospitals across Africa. </p>
<p>Since 2009, the <a href="https://au.int/en/flagships/pan-african-e-network">Pan-African E-Network</a> supported by India has offered tele-medicine services. This also connects Indian hospitals and educational centres with their counterparts in Africa. With its state-of-the-art medical facilities, which offer services at competitive costs, India has also emerged as an attractive destination for “medical tourism”. </p>
<p>The third relates to India’s active “medical diplomacy”. Africa’s reliance on a <a href="https://theconversation.com/the-world-needs-pharmaceuticals-from-china-and-india-to-beat-coronavirus-138388">cheap supply of essential medicines in addition to an affordable COVID-19 vaccine</a> is only likely to increase in the near future. </p>
<p>But Africa’s success in containing pandemics such as Ebola offers lessons to India, too. An illustrative example is Senegal, which has adapted its experiences <a href="https://www.worldometers.info/coronavirus/country/senegal/">from the 2014 Ebola outbreak to fight COVID-19</a>. Numerous additional lessons on disease control from African countries can also be scaled up to improve India’s health sector.</p>
<h2>Future collaboration on health</h2>
<p>India appears well-poised to share its digital capabilities for improved and affordable access to universal healthcare. New Delhi has revamped its tele-medicine and online video consultation infrastructure on the continent. This offers a cost effective and safe option for treating contagious diseases.</p>
<p>In the near future, India’s partners may benefit from its <a href="https://health.economictimes.indiatimes.com/news/health-it/india-to-become-the-world-leader-in-digital-health/55154100">online and mobile applications</a> to improve accessibility and affordability of healthcare. Online platforms can be used to <a href="https://main.mohfw.gov.in/Organisation/departments-health-and-family-welfare/e-Health-Telemedicine">access information</a> on blood banks, public hospitals, and organ donation. Mobile applications can help track the vaccine status of children and disease awareness. </p>
<p>But there are also some challenges that must be resolved. Combating the menace of counterfeit medicines on the African continent is one. In addition to existing measures to curb criminal activity, mobile apps can verify medicines to tackle the problem. </p>
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Read more:
<a href="https://theconversation.com/dummys-guide-to-how-trade-rules-affect-access-to-covid-19-vaccines-152897">Dummy's guide to how trade rules affect access to COVID-19 vaccines</a>
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<p>A major challenge is improving access to generic medicines through negotiated intellectual property rights waivers. At the World Trade Organisation, India and South Africa have taken a moral stance against <a href="https://www.bmj.com/content/372/bmj.n292">“vaccine nationalism”</a>. Their <a href="https://www.pharmaceutical-technology.com/features/wto-ip-waiver-proposal-covid19-vaccine/">joint proposal</a> in October 2020 for a temporary waiver on drugs and COVID-19 vaccines was nevertheless rejected by the organisation. </p>
<p>Since then, however, <a href="https://foreignpolicy.com/2021/03/10/wto-intellectual-propert-waiver-india-south-africa/">mainly African countries</a> have shown growing support for the proposal.</p><img src="https://counter.theconversation.com/content/151934/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dan Banik receives funding from the Research Council of Norway. </span></em></p><p class="fine-print"><em><span>Renu MODI receives funding from the Research Council of Norway, Oslo</span></em></p>There are three broad sets of health-related opportunities and benefits that may shape the future of India-Africa relations.Dan Banik, Professor of political science, Director of the Oslo SDG Initiative, Host of "In Pursuit of Development" podcast, University of OsloRenu Modi, Professor in African Studies, University of Mumbai Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1480842020-10-15T19:08:12Z2020-10-15T19:08:12ZVital Signs: we need to make things in Australia, but not like in the past<figure><img src="https://images.theconversation.com/files/363583/original/file-20201015-17-y99w26.jpg?ixlib=rb-1.1.0&rect=735%2C1178%2C4093%2C2531&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Much of the focus of Opposition Leader <a href="https://theconversation.com/albanese-promises-20-billion-plan-to-modernise-electricity-grid-and-6-2-billion-for-childcare-147764">Anthony Albanese’s budget reply speech</a> was around Labor’s proposal to expand childcare subsidies – a policy with some flaws but which moves in the right direction. </p>
<p>Labor’s plan to modernise the electricity grid by setting up a “Rewiring the Nation Corporation” with A$20 billion in government support was also met with general approval.</p>
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Read more:
<a href="https://theconversation.com/albanese-promises-20-billion-plan-to-modernise-electricity-grid-and-6-2-billion-for-childcare-147764">Albanese promises $20 billion plan to modernise electricity grid, and $6.2 billion for childcare</a>
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<p>What got less attention was the third pillar of Labor’s budget strategy – a big push toward more local manufacturing jobs.</p>
<p>Albanese wasn’t shy <a href="https://anthonyalbanese.com.au/anthony-albanese-speech-budget-in-reply-parliament-house-canberra-thursday-8-october-2020">about what he meant</a>. He lamented the loss of Australia’s car-making industry:</p>
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<p>Australians will never forget that it was this government that drove Holden, Ford and other car makers out of Australia, taking tens of thousands of jobs in auto manufacturing, servicing and the supply chain with them.</p>
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<p>He then announced Labor would create a “National Rail Manufacturing Plan” to expand Australia’s boutique train-building industry:</p>
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<p>We will provide leadership to the states and work with industry to identify and optimise the opportunities to build trains here in Australia – for freight and for public transport.</p>
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<p>The economics of pillars 1 and 2 make sense. Pillar 3 involves trying to turn back the clock on the irrepressible, tectonic forces of globalisation and automation to pretend we should make things here we shouldn’t.</p>
<h2>Understanding comparative advantage</h2>
<p>Countries benefit from trade rather than seeking to produce everything they need locally. This is due to the idea of “comparative advantage”, originated by David Ricardo in his 1817 book <a href="http://www.gutenberg.org/ebooks/33310">On the Principles of Political Economy and Taxation</a>.</p>
<p>One country (call it country A) might be more efficient than another (country B) in absolute terms at producing, for example, T-shirts and wine. It is tempting to think, then, that country A should produce both T-shirts and wine.</p>
<p>But what if country B is really inefficient at producing T-shirts but reasonable at producing wine? If country A specialises in producing T-shirts and country B specialises in producing wine, they can trade and both be better off.</p>
<p>Why? Because country A produces T-shirts much more efficiently than country B, and country B is only a little less efficient at producing wine. Overall, both economies get more efficient, raising living standards.</p>
<h2>Making cars and trains in Australia</h2>
<p>Does Australia have any comparative advantage at producing cars or trains?</p>
<p>With cars the evidence speaks for itself. Local manufacturing only survived for decades because of huge government subsidies. Without them Australian-made cars couldn’t compete.</p>
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Read more:
<a href="https://theconversation.com/holdens-dead-end-shows-government-policy-should-have-taken-a-different-road-132080">Holden's dead end shows government policy should have taken a different road</a>
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<p>Only part of that was to do with labour costs – and we should be rightly proud of our comparatively high wages and good working conditions. Germany – home of BMW, Mercedes Benz and Volkswagen – also has high wages and conditions. </p>
<p>What about trains? Some trains are made in Australia – by <a href="https://www.downergroup.com/rail">Downer EDI</a> and Canadian multinational <a href="https://www.bombardier.com/en/home.html">Bombardier</a>. That’s good for a few thousand jobs. But the market is domestic, with the customers being state governments who buy with an eye on local jobs. </p>
<p>There’s not a lot to suggest it can become an export industry, competing for example with Japan, which has been making bullet trains <a href="https://worldwiderails.com/the-iconic-0-series-shinkansen/">since the early 1960s</a>. Or France, whose train builders have sold hydrogen trains to Germany and high-speed freight trains to Italy.</p>
<p>With these competitors having such an edge, and the well-known phenomenon of “learning-by-doing”, are we really going to catch up?</p>
<p>There are many other sectors in which Australian producers are internationally competitive, such as agriculture, services and areas of high-tech manufacturing.
Building on and expanding <a href="https://acola.org.au/wp/PDF/SAF01/SAF01%20full%20lo%20res.pdf">comparative advantage</a> in these areas makes a lot more sense.</p>
<h2>The case for strategic manufacturing</h2>
<p>That said, the COVID-19 pandemic has taught us how fragile certain parts of our economy are. The same logic of comparative advantage that has done so much to improve living standards has also made us vulnerable in some areas.</p>
<p>Having little or no manufacturing capacity in personal protective equipment or pharmaceuticals like insulin, EpiPens and antibiotics is potentially very dangerous. Importing <a href="https://defense.info/wp-content/uploads/2020/02/Australias-Medical-Supply-Chain.pdf">more than 90% of our pharmaceuticals</a> puts us in a vulnerable position if a state actor that controls important parts of the global supply chain decides to cut supply. This is what economists call the “hold-up problem”.</p>
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Read more:
<a href="https://theconversation.com/medical-supply-chains-are-fragile-in-the-best-of-times-and-covid-19-will-test-their-strength-133688">Medical supply chains are fragile in the best of times and COVID-19 will test their strength</a>
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<p>So it makes sense for Australia to have more presence in strategic manufacturing like pharmaceuticals and personal protective equipment, even if producing these goods locally is not as efficient as buying them from overseas.</p>
<h2>From just-in-time to just-in-case</h2>
<p>The pandemic has taught us that we have, as a nation, moved a little too far towards the efficiencies of “just-in-time” supply chains. We need to move back somewhat, but certainly not completely, in the direction of “just-in-case” – to a little less efficiency but a little more insurance.</p>
<p>That should involve a push for strategic manufacturing. We should at all times be looking to build on and expand our comparative advantage. </p>
<p>But trying to go “Back to the Future” and build an Australian De Lorean makes no sense.</p><img src="https://counter.theconversation.com/content/148084/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There’s a strong case for more strategic local manufacturing. There’s little case for making cars and trains in Australia.Richard Holden, Professor of Economics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1454942020-09-03T11:32:10Z2020-09-03T11:32:10ZTony Abbott: why Boris Johnson would want Australia’s controversial ex-PM as a trade envoy<p>The rumour that Tony Abbott, the controversial former prime minister of Australia, is being lined up as a trade envoy for the UK was a summer news story few saw coming.</p>
<p>Appearing before the <a href="https://committees.parliament.uk/event/1472/formal-meeting-oral-evidence-session/">House of Commons Foreign Affairs Committee</a>, Abbott confirmed that he has had some discussions with members of the British government. However, while he said he is “more than happy to help”, he insisted that nothing is official “as yet”. </p>
<p>Abbott is notorious in Australia for his <a href="https://www.urbandictionary.com/define.php?term=ocker">“ocker”</a> manner and outlook. He is regularly photographed in a pair of “budgie smugglers” with surfboard under arm at his beloved Queenscliff beach in Manly, Sydney.</p>
<p>He is on record with statements concerning <a href="https://www.theguardian.com/australia-news/2018/aug/29/in-1788-it-was-nothing-but-bush-tony-abbott-on-indigenous-australia">indigenous Australians</a>, the environment and the <a href="https://www.standard.co.uk/news/politics/tory-mp-caroline-noakes-tears-into-misogynist-australian-prime-minister-tony-abbott-a4537561.html">role of women in society</a> that would make the most hardened miner in a local pub wince at the insensitivity. Not many public figures embraced the label “dinosaur”, but even his supporters recognise that Abbott is an unreconstructed example of Australian chauvinist manhood.</p>
<p>What on Earth, then, could drive the British prime minister, Boris Johnson, and his advisers to reach out to someone whose toxicity matches Donald Trump in many quarters?</p>
<p>Opinions vary. Some insist that with the UK in dire need of expertise in its trade negotiations, it makes perfect sense to employ someone highly familiar with the Asia-Pacific economic terrain. The only problem with this hypothesis is that even according to his close confidants Abbott had very little to do with trade during his <a href="https://www.theguardian.com/australia-news/2020/aug/30/fresh-controversy-over-tony-abbotts-brexit-trade-role">term of office</a>, or indeed at any time before or after.</p>
<p>Others smell something more suspicious. Abbott is of course an international figure who has moved in influential circles and has strong connections, not least with the conservative establishment in the US. He moves in high places among the policy wonks, thinktanks and institutes with lavish funds at their disposal to entertain friends and allies. Could this appointment reflect the fact that Abbott is a useful ally in these circles?</p>
<h2>Flying the flag</h2>
<p>Surely there’s a more obvious explanation. This is that Abbott stands symbolically for a set of values and a political orientation which the Johnson government wishes to endorse and align itself with.</p>
<p>In terms of values, Abbott represents a US style of conservatism based on a belief in “<a href="https://www.smh.com.au/national/abbotts-family-values-20090711-dgmr.html">family values</a>”, patriotism and the flag. But within that broad appellation we can also identify a distinctively neoconservative stance in terms of the assertion of “western” values and the superiority of the European inheritance, including but not limited to the value of colonialism and imperialism, and what international relations scholars term “offensive realism”. This is the view that, in a world of competing ideologies, military conflicts are inevitable.</p>
<p>In short, Abbott’s world view is not at all dissimilar to that of Steve Bannon, the controversial architect of the first phase of Trump’s administration. Like Bannon, Abbott is an unapologetic culture warrior. He believes that western societies have lost their way and lost confidence in themselves. He thinks the west needs to refind its mojo and reassert the superiority of its values and way of life, particularly in relation to the Islamic world and China. </p>
<p>All this implies a kind of permanent war against the forces of the left – such as antifa, the left-liberal establishment of universities and the media and the apologists for identity politics, multiculturalism and cosmopolitanism. It also means committing to permanent conflict externally, on the hostile terrain that is global politics. It is a hawkish, unfashionable view of the world with metropolitan elites, but one virulently supported in Australia by its leading newspaper, <a href="https://www.smh.com.au/politics/federal/tony-abbott-praises-the-australian-as-rupert-murdochs-gift-to-our-nation-20140716-3bzwg.html">the Australian</a>, and by the Rupert Murdoch-owned Sky News.</p>
<h2>Culture war</h2>
<p>The question remains then, what possible use are all these associations to Johnson? He has strived to confect an image of harmless amiability with a “big tent” politics. He has sought to be a lot of different things to a lot of different groups in order to secure the hallowed middle ground of British electoral politics.</p>
<p>The answer is surely that “culture war” of a kind articulated quite crudely by Abbott and Trump but also in Europe by the likes of France’s <a href="https://theconversation.com/uk/topics/marine-le-pen-2938">Marine Le Pen</a>, the Netherlands’ <a href="https://theconversation.com/uk/topics/geert-wilders-4827">Geert Wilders</a>, Italy’s <a href="https://theconversation.com/matteo-salvini-is-down-but-heres-why-he-isnt-out-for-the-count-just-yet-123222">Matteo Salvini</a> and Hungary’s <a href="https://theconversation.com/uk/topics/viktor-orban-20184">Viktor Orban</a> has shown itself to be popular with voters who don’t normally vote for the right. The theme is a great way to draw in working class and precariously employed people who are looking for stronger “authority” figures to deal with what they perceive to be increasingly lawless societies surrendering themselves to immigrants and the multicultural left.</p>
<p>It also serves to insulate a regime from the vagaries of public policy outcomes, of which COVID-19 is the most recent and obvious example. The pandemic is a classic no-win scenario for most governments. Play too lax and one gets blamed for too many deaths. Play it too hard and one suffers the economic consequences of lockdown. A culture war, on the other hand, presents a win-win for conservative regimes across the world looking to maintain power.</p>
<p>Hiring Abbott will not inoculate the UK government against policy failure, as such. But it sends a strong signal to Tory MPs and the wider public that this government wants to be judged less on the flimflam of policy outcomes, over which it has uncertain control, and more on the defence of a certain outlook and a certain way of life that it hopes will chime with the electorate.</p><img src="https://counter.theconversation.com/content/145494/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Tormey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Abbott has little experience on trade but he packs a symbolic punch.Simon Tormey, Professor of Politics, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1434062020-08-03T11:59:22Z2020-08-03T11:59:22ZInternational trade has cost Americans millions of jobs. Investing in communities might offset those losses<figure><img src="https://images.theconversation.com/files/349410/original/file-20200724-33-65dkij.jpg?ixlib=rb-1.1.0&rect=35%2C47%2C3895%2C4868&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Some economists support policies that invest in communities and towns as the best way to offset job losses.</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/u8NQockJPwg">Photo by Andrea Leopardi for Unsplash</a></span></figcaption></figure><p>Arguing against globalization is like arguing against the laws of gravity, <a href="https://www.un.org/press/en/2002/sgsm8262.doc.htm#:%7E:text=It%20has%20been%20said%20that,allows%20only%20heavyweights%20to%20survive.">said</a> former United Nations Secretary General Kofi Annan. <a href="https://searchcio.techtarget.com/definition/globalization">Globalization</a>, the international trade in goods and services with minimal barriers between countries, may seem inevitable as the world’s economies become more <a href="https://www.globalpolicy.org/component/content/article/162/27684.html">interdependent</a>. </p>
<p>Properly regulated, globalization can be a powerful force for social good. For wealthy nations, globalization can mean less expensive goods, additional spending and a <a href="https://velocityglobal.com/blog/globalization-benefits-and-challenges/">higher standard of living</a>. For those who live and work in poorer nations, globalization can lead to greater prosperity with the <a href="https://www.cato.org/publications/commentary/book-review-defense-globalization">power to</a> reduce child labor, increase literacy and enhance the economic and social standing of women. </p>
<p>But <a href="https://rbj.net/2016/08/12/misconceptions-about-free-trade-and-globalization/">not everyone</a> gains from globalization. An analysis of 120 countries between 1988 and 2008 and published by the <a href="https://www.theglobalist.com/the-real-winners-and-losers-of-globalization/">World Bank</a> illustrates who <a href="http://documents1.worldbank.org/curated/en/914431468162277879/pdf/WPS6719.pdf">has lost</a>. The U.S. trade deficit with China, for instance, has had an adverse effect on American workers, effectively <a href="https://www.epi.org/blog/china-trade-deal-will-not-restore-3-7-million-u-s-jobs-lost-since-china-entered-the-wto-in-2001/#:%7E:text=Scott-,China%20trade%20deal%20will%20not%20restore%203.7%20million%20U.S.%20jobs,entered%20the%20WTO%20in%202001&text=It%20is%20unlikely%20to%20significantly,trade%20deficits%20in%20manufactured%20goods.">eliminating 3.7 million jobs</a> between 2001 and 2018. More than 75% of those job losses were in manufacturing, accounting for more than half of all U.S. manufacturing jobs lost or displaced during this period.</p>
<p>If globalization is inevitable, then what are the best strategies to help American workers get back into the workforce when their jobs have been eliminated? </p>
<h2>Job loss and the working class</h2>
<p>The economist Branko Milanovic, using <a href="http://documents1.worldbank.org/curated/en/914431468162277879/pdf/WPS6719.pdf">data from the World Bank</a>, <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674984035">argues</a> that the losers from globalization are working people in rich nations. Milanovic’s <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674984035">research</a> demonstrates that a large portion of the lower middle class in the U.S. and Western Europe have seen little to no gain in income since 1988. At the same time, 200 million Chinese, 90 million Indians and nearly 30 million people in Indonesia, Brazil, Egypt and Mexico have <a href="https://www.theglobalist.com/the-real-winners-and-losers-of-globalization/">profited from globalization</a>. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Since 1991, China has made tremendous gains in manufacturing exports.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/5bekMv8dsiM">Photo by Owen Winkel for Unsplash</a></span>
</figcaption>
</figure>
<p>Many American workers have been <a href="https://doi.org/10.1257/aer.103.6.2121">negatively impacted</a> by liberalized trade with China, the so-called “<a href="https://doi.org/10.1146/annurev-economics-080315-015041">China trade shock</a>,” because goods that China exports to the U.S. have substituted for comparable American-made products. From an economic perspective, China successfully increased its share of world manufacturing exports from a little more than 2% in 1991 to 28% in <a href="https://www.statista.com/chart/20858/top-10-countries-by-share-of-global-manufacturing-output/#:%7E:text=According%20to%20data%20published%20by,China%20overtook%20it%20in%202010.">2018</a>. By contrast, in 2001, <a href="https://www.epi.org/publication/china-trade-outsourcing-and-jobs/">U.S. trade</a> began to increase with China when the latter joined the <a href="https://www.wto.org/">World Trade Organization</a>, the international organization that determines the global rules of trade. Even though U.S. exports to China have increased over time, since the U.S. buys more from China than we sell to them, a <a href="https://www.thebalance.com/u-s-china-trade-deficit-causes-effects-and-solutions-3306277">large trade deficit</a> has opened up. The growth of this deficit means that the U.S. is losing jobs in manufacturing and foregoing opportunities to add jobs in this sector because imports from China have skyrocketed, while exports have not increased as much.</p>
<p>The trade deficit has had <a href="https://www.epi.org/publication/growth-in-u-s-china-trade-deficit-between-2001-and-2015-cost-3-4-million-jobs-heres-how-to-rebalance-trade-and-rebuild-american-manufacturing/#:%7E:text=From%202001%20to%202015%2C%20imports,to%20%24116.1%20billion%20in%202015.">different impacts</a> on regions within the U.S. Some regions are devastated by layoffs and factory closings, while others are surviving but not growing the way they might if new factories were opening and existing plants were hiring more workers. This slowdown in manufacturing job generation is also contributing to stagnating wages and incomes of typical workers and widening economic inequality.</p>
<h2>Retraining and moving for work</h2>
<p>What are the solutions for <a href="https://www.epi.org/publication/manufacturing-job-loss-trade-not-productivity-is-the-culprit/">the millions of American workers</a> who have lost their jobs? Economists generally <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2358751">support</a> “people-based” over “place-based” policies and investments. The rationale is that it’s more important to invest in workers rather than bolster a place where workers live. Economists would argue that directing public funds into regions doing poorly is akin to <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">wasting money</a>. The logical outcome of such policies is that towns that have lost their economic base are allowed to shrink while other economies take <a href="https://www.harvardmagazine.com/2000/11/places-people-policies.html">their place</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Without an economic engine, towns can wither and die.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/HPkYgjuSI4A">Photo by Cam Bradford by Unsplash</a></span>
</figcaption>
</figure>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>The Department of Labor’s <a href="https://www.dol.gov/agencies/eta/tradeact">Trade Adjustment Assistance for Workers</a> program helps workers displaced by international trade with job training and relocation assistance, subsidized health insurance and extended unemployment benefits. Trade Adjustment Assistance is a “people-based” policy because it invests in workers. I <a href="https://theconversation.com/a-selective-retreat-from-trade-with-china-makes-sense-for-the-united-states-141110">believe that</a>, relative to the magnitude of the job losses, Trade Adjustment Assistance provides too little relief. While there is little support among economists for <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">place-based policies</a>, recent evidence demonstrates that such policies may deserve another look.</p>
<p><a href="https://www.frbsf.org/economic-research/files/el2015-07.pdf">Examples of place-based policies</a> include enterprise zones where economic incentives are offered to firms to create jobs in economically challenged areas and policies that seek to promote economic development by investing in infrastructure, such as the <a href="https://econofact.org/do-place-based-policies-work">Tennessee Valley Authority</a>, which, since 1933, provided electrification to the rural South, promoting industrialization and enhancing the quality of life in that region.</p>
<h2>Adapting to joblessness</h2>
<p>People-based policies are predicated on the assumption that if given the right incentives, people will leave economically strapped areas and move to flourishing regions. Yet <a href="http://economics.mit.edu/files/7723">research</a> shows that even in regions of the U.S. where deep manufacturing job losses have occurred, workers frequently did not move to new jobs. Those who lost their jobs adjusted, spent less money and stayed put, resulting in a further <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">reduction of economic activity</a> in regions that, in turn, became poorer.</p>
<p>Workers who can move to more promising locales, but choose not to, is a phenomenon not only in the U.S. but in <a href="https://www.iza.org/publications/dp/6685/the-rise-of-the-east-and-the-far-east-german-labor-markets-and-trade-integration">Germany</a>, <a href="http://ftp.iza.org/dp8324.pdf">Norway</a> and <a href="https://DOI.org/10.1080/00343404.2013.879982">Spain</a>, even if economically depressed regions have a negative impact on those who <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">live there</a>. Men – particularly young, white men – in the U.S. are less likely to graduate from college, more likely to bear children out of wedlock and more likely to suffer from what the economists Anne Case and Angus Deaton have called “<a href="https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism">deaths of despair</a>.” These deaths arise because of a deep <a href="https://www.newyorker.com/magazine/2020/03/23/why-americans-are-dying-from-despair">sense of hopelessness</a> stemming from unemployment, lack of resources and alcohol and drug dependency. </p>
<h2>Strengthening a place called home</h2>
<p>If relatively low-skilled workers <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">are unwilling to move</a>, then should policies that favor people-based programs continue? Or is it better to make place-based investments, as the 2019 Nobel laureates <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">Abhijit Banerjee and Esther Duflo suggest</a>?</p>
<p>I believe that the U.S. should back policies that support people where they live and invest in those places when global trade, specifically liberalized trade, has taken a <a href="https://www.epi.org/publication/infographic-free-trade-agreements-have-hurt-american-workers/">toll on American workers</a>. Regional policymaking might ask what is needed so that those who are unemployed do not feel, as Nobel Prize-winning poet Gabriela Mistral writes, that “everyone left and we have remained on a path that goes on without us.”</p><img src="https://counter.theconversation.com/content/143406/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amitrajeet A. Batabyal does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When manufacturing jobs disappear, what are the best ways to help unemployed workers?Amitrajeet A. Batabyal, Arthur J. Gosnell Professor of Economics, Rochester Institute of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1406722020-06-17T13:49:21Z2020-06-17T13:49:21ZCoronavirus in India and Brazil: new forecasts for when economic giants will hit peak<p>While many of the world’s top ten economies appear to be past the peak of the coronavirus pandemic, India and Brazil are still on the way up. This is a tragedy unfolding for both countries. It is also bad news for the world economy, and may not have been fully factored in by leading companies with global supply chains. </p>
<p>International businesses trying to emerge from the pandemic need forecasts about what will happen to infections and deaths in different countries. They also need a sense of the inflection point, which is when these rates start to fall. Such forecasts can give them a better idea of how they will trade in those markets in the coming months, enabling them make decisions on everything from purchasing to work schedules to sales promotions to travel requirements. </p>
<p>My sense from talking to industry is that they currently don’t have such forecasts. Major businesses tell me they are aiming to <a href="https://hbr.org/2004/10/the-triple-a-supply-chain">become more agile</a> to meet whatever demand emerges, but they will need more than that. As <a href="https://uk.reuters.com/article/us-china-economy-pmi-factory-official/chinese-factories-struggle-to-fire-in-april-as-slump-in-export-orders-deepens-idUKKBN22C05S">Chinese</a> and <a href="https://uk.reuters.com/article/germany-economy-tradefigures/german-exports-collapse-in-april-as-coronavirus-hits-demand-idUKL8N2DL2OO">German</a> companies are discovering, you can’t recover if your target countries are not importing because they are still in the early or middle stages of the pandemic. The pandemic thus puts livelihoods in jeopardy even in countries where the worst may have passed. </p>
<p>To illustrate such forecasting, I’ve developed a simple mathematical model to predict how the pandemic will affect Brazil and India, using the country-level data collected by the <a href="https://www.ecdc.europa.eu/en">European Centre for Disease Prevention and Control</a>. </p>
<p>Inevitably, governments under-report their infection numbers, depending on the extent to which they are testing. But this imperfect data is still useful: what is important is not the absolute numbers but the point at which the daily rate peaks. I’ve used the data reported by the countries up to June 16, and the same model could be applied to any country. </p>
<h2>Brazil, India and the global economy</h2>
<p>The systemic importance of both Brazil and India to the global economy can hardly be overstated. Brazil is the ninth-largest economy in the world and has a population of 210 million. According to the <a href="https://www.gov.uk/government/publications/exporting-to-brazil/exporting-to-brazil">UK Department of Foreign Trade</a>, 400 of the world’s 500 largest companies operate there.</p>
<p>Brazil’s <a href="https://wits.worldbank.org/countrysnapshot/en/bra">largest trading partner</a> is China, though it also trades heavily with the US and EU. UK companies that trade with the Latin American giant include Rolls-Royce, Shell, BP, JCB, Rexam and Experian. <a href="https://www.gov.uk/government/publications/exporting-to-brazil/exporting-to-brazil">UK exports</a> to Brazil include machinery, vehicles, pharmaceuticals, electrical appliances and fungicides. </p>
<p>India has a population of 1.4 billion and is the fifth-largest economy in the world. Again, the country is extremely important to the US, China and the EU <a href="https://wits.worldbank.org/countrysnapshot/en/IND">for trade</a>. </p>
<p>India is also the UK’s sixth-largest partner outside the EU, and a leading member of the Commonwealth. Many of the international students in UK universities are from India, and the countries have been <a href="https://www.gov.uk/government/speeches/dr-liam-fox-india-day-speech">among the top five</a> investors in each other’s economies since 2010. </p>
<h2>Predictions</h2>
<p>First, for comparison, let’s look at the UK. The model suggests the UK passed the peak of new cases in late April, around the same time <a href="https://www.theguardian.com/world/2020/apr/22/uk-has-reached-peak-of-coronavirus-outbreak-says-matt-hancock">the UK cabinet declared</a> peak outbreak. </p>
<p><strong>UK actual and predicted new daily cases</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=329&fit=crop&dpr=1 600w, https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=329&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=329&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=413&fit=crop&dpr=1 754w, https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=413&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/342218/original/file-20200616-23261-9x1acz.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=413&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.ecdc.europa.eu/en">European Centre for Disease Prevention and Control</a></span>
</figcaption>
</figure>
<p>In Brazil, COVID-19 has only just taken off. It looks as if we can expect a peak in mid-July. To the extent we believe in the numbers <em>per se</em>, the daily new cases could peak at eight times those for the UK, even though the population is only just over three times larger. Based on this model, Brazil may still be recording more than 15,000 daily cases in October. </p>
<p><strong>Brazil actual and predicted new daily cases</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=363&fit=crop&dpr=1 600w, https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=363&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=363&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=456&fit=crop&dpr=1 754w, https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=456&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/342213/original/file-20200616-23217-1g72qbg.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=456&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.ecdc.europa.eu/en">European Centre for Disease Prevention and Control</a></span>
</figcaption>
</figure>
<p>For India, the model suggests a peak in mid-August. This is due to the somewhat constrained spread of the virus thus far, under what was a <a href="https://en.wikipedia.org/wiki/COVID-19_pandemic_lockdown_in_India">severe lockdown</a> for the entire country in March. It has since been somewhat eased but <a href="https://www.ndtv.com/india-news/coronavirus-intense-lockdown-in-chennai-adjoining-areas-from-june-19-30-full-restrictions-on-two-sundays-2246627">remains</a> in marked containment zones in <a href="https://www.bbc.co.uk/news/world-asia-india-52707371">some cities</a>. </p>
<p>Hospitals in New Delhi were already <a href="https://uk.reuters.com/article/uk-health-coronavirus-india-delhi/criticism-mounts-as-new-delhi-hospital-beds-run-out-amid-covid-19-surge-idUKKBN23M1Y4">struggling to</a> handle patients in early June. If I’m correct in predicting that new daily cases will be over three times higher at peak, the health authorities will need to come up with alternatives to hospital beds. They will also have to plan for PPE suits, N-95 masks, and mobile oxygen tanks to prepare for so many new patients.</p>
<p><strong>India actual and predicted new daily cases</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=281&fit=crop&dpr=1 600w, https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=281&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=281&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=354&fit=crop&dpr=1 754w, https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=354&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/342211/original/file-20200616-23266-1etnjls.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=354&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.ecdc.europa.eu/en">European Centre for Disease Prevention and Control</a></span>
</figcaption>
</figure>
<p>With any forecasting model, there are caveats with using past data to make claims about the future. For instance, the Indian lockdown was arguably being lifted during June by state governments a little <a href="https://www.ft.com/content/f86d3fda-9e72-11ea-b65d-489c67b0d85d">too hastily</a>, so the peak may move closer if cases rise at an even faster rate than previously.</p>
<p>We also cannot project too far into the future because the virus is likely to mutate. In any case, a worldwide second wave <a href="https://theconversation.com/coronavirus-what-a-second-wave-might-look-like-138980">is foreseeable</a>, especially when the regular flu season also hits in autumn – although we still don’t know what a second wave might look like or even whether <a href="https://theconversation.com/can-we-please-stop-talking-about-a-second-wave-of-covid-19-140140">there will be one</a>.</p>
<p>Still, my predictions hopefully shed light on when we can expect things to change in the near future and – more importantly – help businesses to focus on planning for the future rather than reacting to daily news. To be forewarned is to be forearmed – this is true for governments and people in different countries, and for international businesses as well.</p><img src="https://counter.theconversation.com/content/140672/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>ManMohan S Sodhi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For western businesses trading with these giants of the southern hemisphere, to be forewarned is to be forearmed.ManMohan S Sodhi, Professor of Operations and Supply Chain Management, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1394952020-05-27T12:50:11Z2020-05-27T12:50:11ZCoronavirus weekly: where next for globalisation after the crisis?<p>As lockdown measures start to be eased in most countries around the world, the experts of The Conversation’s global network have focused this week on the major trends that are reshaping trade and the global economy.</p>
<p>Just before the pandemic struck, the economy was already losing momentum. However, the crisis is unlikely to put a stop to globalisation: rather, coronavirus is the starting point for a reconfiguration of the global system. Value chains are shortening in some sectors, China is seeking to extend government control over its economy, and global consumption has been undermined by the recession in the US. </p>
<p>Academics in our network analyse the impact of the pandemic on globalisation. </p>
<hr>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/320716/original/file-20200316-18073-ruhw8b.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
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</figure>
<p><strong>This is our weekly roundup of expert info about the <a href="https://theconversation.com/topics/covid-19-82431">coronavirus</a>.</strong>
<br><em>The Conversation, a not-for-profit group, works with a wide range of academics across its global network. Together we produce evidence-based analysis and insights. The articles are free to read – there is no paywall – and to <a href="http://theconversation.com/republishing-guidelines">republish</a>. Keep up to date with the latest research by <a href="http://theconversation.com/newsletter">reading our free newsletter</a>.</em></p>
<hr>
<h2>Reshuffling the deck</h2>
<ul>
<li><strong><a href="https://theconversation.com/coronavirus-wont-kill-globalisation-but-a-shakeup-is-inevitable-137847">China’s international trade mapped</a>:</strong> In order to understand the magnitude of the economic shock of the Covid-19 pandemic, Jun Du, Agelos Delis, Mustapha Douch and Oleksandr Shepotylo of Aston University mapped China’s recent trade. They showed that worst-affected Chinese imports are machinery and luxury goods. As for exports, goods whose production is labour-intensive, such as furniture, have fallen drastically, as well as capital goods such as nuclear reactors. According to these economists, these trends could be long-lasting, as most countries become aware of the fragility of global value chains – without, however, completely undermining globalisation.</li>
</ul>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<ul>
<li><p><strong><a href="https://theconversation.com/vital-signs-australian-barley-growers-are-the-victims-of-weaponised-trade-rules-139037">Tensions between Australia and China:</a></strong> Richard Holden of the Unversity of New South Wales wonders about the new tensions over barley and the impact that the crisis could have on relations between the two countries.</p></li>
<li><p><strong>Return of the local economy:</strong> Some countries, faced with the uncertainties of the future, prefer to turn to more local forms of economy. This is the case in Canada, particularly in the area of fisheries. Kristen Lowitt of Brandon University and Charles Z. Levkoe of Lakehead University have looked at <a href="https://theconversation.com/keeping-fish-local-can-help-feed-communities-and-support-economies-135613">policies</a> in north-western Ontario trying to help local people to benefit more from the fish caught in the Thunder Bay area, which are generally destined for export.</p></li>
<li><p><strong>Golden days are over:</strong> Before the pandemic, the global economy was already showing signs of fragility against the backdrop of trade tensions between China and the US. Countries had been building up their gold reserves, but then just before the COVID-19 pandemic, <a href="https://theconversation.com/countries-went-on-a-gold-buying-spree-before-coronavirus-took-hold-heres-why-138173">demand slowed</a>. “In truth, this was not entirely surprising”, writes Drew Woodhouse (Sheffield Hallam University). “Purchasing bullion at close to a seven-year high, and after a month of prices fluctuating plus or minus about 13%, is no particularly prudent way to consolidate economic and geopolitical power.”</p></li>
</ul>
<h2>China’s recovery</h2>
<ul>
<li><strong>Protection and control:</strong> Chinese Premier Li Keqiang gave a 55-minute speech at China’s National People’s Congress on May 22, which had been postponed for two months due to the pandemic, in which he outlined the government’s <a href="https://theconversation.com/chinas-new-coronavirus-recovery-strategy-explained-139178">recovery strategy</a>. He set out a roadmap, deciphered by Jane Duckett, Holly Snape, Hua Wang, Yingru Li (University of Glasgow), with two watchwords: “protection” and “control”. Li stressed that continued vigilance against the coronavirus will be a core thread determining everything from macro-level strategy down to micro-level policy for the foreseeable future in China.</li>
</ul>
<h2>Hard times</h2>
<ul>
<li><strong>On your own:</strong> The economic crisis is hitting the US hard – tens of millions of Americans are now registering for unemployment as companies close and lay off workers. Despite the federal government’s efforts, people are unable to meet their immediate financial needs for food, care and shelter. As Paul Shafer (Boston University) details, the crisis reveals the <a href="https://theconversation.com/4-ways-covid-19-has-exposed-gaps-in-the-us-social-safety-net-138233">major flaws</a> in the American social safety net. </li>
</ul>
<p>Globally, the pandemic has also hit developing countries hard.</p>
<ul>
<li><strong>Food insecurity:</strong> Borja Santos Porras (IE University) is concerned about the poverty and food insecurity that the crisis is causing in low-income countries. They believe that these two factors <a href="https://theconversation.com/la-pobreza-que-generara-la-crisis-puede-cobrarse-mas-vidas-que-la-propia-enfermedad-138922">could kill more people than the disease itself</a>.</li>
</ul>
<ul>
<li><p><strong>Pandemic poverty:</strong> In Indonesia, the poorest are also at the mercy of the virus. Fisca Miswari Aulia (BAPPENAS), Maliki (BAPPENAS) and M Niaz Asadullah (University of Malaya) estimate that <a href="https://theconversation.com/without-intervention-model-shows-covid-19-will-drag-at-least-3-6-million-indonesians-into-poverty-138305">an additional 3.6 million people</a> could face poverty as a result of the pandemic.</p></li>
<li><p><strong>Refugees struggling:</strong> In East Africa, it is the plight of refugees in Nairobi that interests Naohiko Omata (University of Oxford). He points out that these populations have very low incomes, most often generated by daily street sales, and <a href="https://theconversation.com/many-refugees-living-in-nairobi-struggle-to-survive-because-of-covid-19-138455">are directly affected</a> by the disease. </p></li>
</ul>
<hr>
<p><a href="https://theconversation.com/newsletter"><img src="https://images.theconversation.com/files/320030/original/file-20200312-116261-a6ugi0.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=90&fit=crop&dpr=2" alt="Sign up to The Conversation" width="100%"></a></p>
<p><em>Get the latest news and advice on <a href="https://theconversation.com/uk/covid-19">COVID-19</a>, direct from the experts in your inbox. Join hundreds of thousands who trust experts by <strong><a href="https://theconversation.com/newsletter">subscribing to our newsletter</a></strong>.</em></p><img src="https://counter.theconversation.com/content/139495/count.gif" alt="The Conversation" width="1" height="1" />
This week, our experts are looking at the major trends in post-crisis globalisation.Gemma Ware, Head of AudioThibault Lieurade, Chef de rubrique Economie + Entreprise, The Conversation FranceCamille Khodor, Éditrice Économie + Entreprise, The Conversation FranceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1378472020-05-23T08:32:31Z2020-05-23T08:32:31ZCoronavirus won’t kill globalisation – but a shakeup is inevitable<figure><img src="https://images.theconversation.com/files/335360/original/file-20200515-138629-no6il5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Slowing down...</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/aerial-top-view-container-cargo-ship-708817909">Shutterstock</a></span></figcaption></figure><p>The COVID-19 pandemic is now expected to trigger the <a href="https://blogs.imf.org/2020/04/14/the-great-lockdown-worst-economic-downturn-since-the-great-depression/">worst economic downturn</a> since the Great Depression. Many argue it <a href="https://www.economist.com/leaders/2020/05/14/has-covid-19-killed-globalisation">could</a> unravel <a href="https://www.afr.com/policy/health-and-education/pandemic-has-killed-globalisation-says-carmen-reinhart-20200522-p54vd1">globalisation</a> altogether. </p>
<p>Globalisation relies on complex links – global value chains (GVCs) – that connect producers across multiple countries. These producers often use highly specialised intermediate goods, or “inputs”, produced by only one distant, overseas supplier. COVID-19 has severely disrupted these links.</p>
<p>Although the <a href="https://www.project-syndicate.org/commentary/global-growth-losing-its-trade-cushion-by-stephen-s-roach-2020-01">global economy</a> was fragile at the start of 2020, many hoped for increased international trade following the US-China <a href="https://www.ft.com/content/a01564ba-37d5-11ea-a6d3-9a26f8c3cba4">Phase One</a> trade deal. COVID-19 has scuppered those hopes, bringing the world’s factories to a standstill and severely disrupting global supply chains.</p>
<p>China plays a key role in this. According to <a href="http://english.customs.gov.cn/">Chinese customs statistics</a>, the value of Chinese exports in the first two months of 2020 fell by 17.2% year on year, while imports slowed by 4%. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337021/original/file-20200522-124818-zrw86.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>This drop in Chinese trade impacted some markets more than others. Comparative figures between the first two months of 2019 and the first two months of 2020 reveal a collapse in Chinese trade with the EU and US. Chinese exports to the EU fell by 29.9%, while imports from the EU declined by 18.9%. Exports to and imports from the US tumbled 27% and 8% respectively.</p>
<p>These substantial declines are likely related to the strong interdependence between European and US firms and Chinese ones. </p>
<h2>The scale of the shock</h2>
<p>To understand the magnitude of the supply shock in China and its global propagation, <a href="https://www.lbpresearch.ac.uk">the Lloyds Banking Group Centre for Business Prosperity (LBGCBP)</a> at Aston University has mapped China’s global trading networks using official Chinese data. </p>
<p>In 2019, the US had the highest trade dependence on China, followed by seven European countries and Japan. By 2020, European countries had moved even further up the rankings. </p>
<p>As the pandemic continues, the worst affected Chinese exports include capital goods such as nuclear reactors, intermediate goods like iron, and labour intensive final goods such as furniture.</p>
<p>The most disrupted Chinese imports include intermediate goods such as organic chemicals, a likely result of factory closures in China, and capital goods like electrical machinery. Hardest hit were precious stones and metals, highlighting the emergence of a sophisticated middle-class of Chinese <a href="https://www.mckinsey.com/%7E/media/mckinsey/featured%2520insights/china/how%2520young%2520chinese%2520consumers%2520are%2520reshaping%2520global%2520luxury/mckinsey-china-luxury-report-2019-how-young-chinese-consumers-are-reshaping-global-luxury.ashx">shoppers</a> and how COVID-19 has reduced their demand for luxury goods.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/337027/original/file-20200522-124845-1n8uvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337027/original/file-20200522-124845-1n8uvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337027/original/file-20200522-124845-1n8uvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337027/original/file-20200522-124845-1n8uvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337027/original/file-20200522-124845-1n8uvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337027/original/file-20200522-124845-1n8uvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337027/original/file-20200522-124845-1n8uvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Trade has tumbled between the EU and China.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/flags-eu-china-painted-on-cracked-354599261">Shutterstock</a></span>
</figcaption>
</figure>
<p>Interestingly, Chinese imports of meat and mineral fuels increased sharply in 2020. The first can be explained by China’s weakened domestic supply of food during lockdown. The second <a href="https://www.oilandgas360.com/chinas-crude-oil-imports-surpassed-10-million-barrels-per-day-in-2019/">highlights</a> China’s growing demand for crude oil. </p>
<p>Four product categories have been particularly hard hit as both imports and exports: nuclear reactors, electrical machinery and equipment, plastics, and organic chemicals. These categories include some commonly used intermediate goods (those that are used for producing other goods).</p>
<p>Under normal circumstances, such goods would be traded back and forth between China and other countries as part of the heavily interconnected global production system. This significant drop in their international trade highlights the devastating effect of COVID-19 on GVCs.</p>
<h2>An uncertain future</h2>
<p>But an unprecedented, synchronised and likely deep fall in demand is now developing. And China was again among the first to feel its impact.</p>
<p><a href="https://www.reuters.com/article/us-health-coronavirus-china-ports/chinas-ports-brace-for-second-hit-as-virus-spread-wipes-out-exports-idUSKBN21J4OF">Chinese workers</a> returned to work in April but many no longer had jobs. Widespread cancellations of international orders and delayed payments have led to liquidity problems and mass closures of businesses reliant on global demand.</p>
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Read more:
<a href="https://theconversation.com/how-to-boost-uk-productivity-after-coronavirus-133735">How to boost UK productivity after coronavirus</a>
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<p>Investment also tumbled. During February and March 2020, <a href="http://data.stats.gov.cn/english/">official Chinese statistics</a> report 24.4% fewer new foreign trade enterprises established in China compared to the same period last year. Meanwhile, 12,000 existing foreign trade enterprises closed down.</p>
<p>Agriculture, logistics and those producing raw materials, textiles and clothing have been hardest hit. But, on a more positive note, there has been a surge in <a href="https://uk.reuters.com/article/us-health-coronavirus-china-suits/china-encourages-export-of-medical-suits-to-meet-overseas-demand-amid-virus-outbreak-idUKKBN20R0WP">demand for medical supplies</a>.</p>
<p>Many are now highlighting the dangers of relying on global value chains – and in particular, those linked to China – leading to talk of “de-globalisation”. </p>
<p>The European Commission president, Ursula von der Leyen, for example, has called for the “shortening” of global supply chains because the EU is <a href="https://ec.europa.eu/commission/presscorner/detail/en/speech_20_675">too dependent</a> on a few foreign suppliers. Similarly, the French president, Emmanuel Macron, has argued for a strengthening of French and European “economic sovereignty” by <a href="https://www.ft.com/content/3ea8d790-7fd1-11ea-8fdb-7ec06edeef84">investing at home</a> in the high tech and medical sectors.</p>
<p>So is this the end of globalisation? No. But a reconfiguration of GVCs is inevitable.</p>
<h2>A way forward</h2>
<p>Global supply chains are extremely complex, and no sector or country is an island.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=542&fit=crop&dpr=1 600w, https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=542&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=542&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=681&fit=crop&dpr=1 754w, https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=681&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/337022/original/file-20200522-124810-1asmcfi.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=681&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Complex: a sample network of GVCs.</span>
<span class="attribution"><span class="source">World Input-Output Database (WIOD), 2014. Based on author’s calculation.</span>, <span class="license">Author provided</span></span>
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<p>But GVCs follow the principle of efficiency. They are the result of businesses sourcing the best possible inputs to meet their production needs at the lowest cost – wherever those inputs come from.</p>
<p>This is good news for globalisation’s survival. While efficiency remains the main target, businesses will continue to <a href="https://www.bbc.co.uk/news/business-52650980?at_medium=custom7&at_custom3=%40BBCNewsnight&at_campaign=64&at_custom4=AE45B110-953C-11EA-AFA9-E89BC28169F1&at_custom2=twitter&at_custom1=%5Bpost+type%5D">shop globally</a>. </p>
<p>Concerns about an overreliance on complex GVCs are justified in the case of products related to national security, such as <a href="https://www.piie.com/blogs/trade-and-investment-policy-watch/yes-medical-gear-depends-global-supply-chains-heres-how-keep">medical supplies</a>. Many countries will now ensure they can produce such goods without relying on imports.</p>
<p>Nobody can predict the next crisis. But the most reliable and efficient insurance by far is to build a strong international cooperation network. As yet, global political consensus on this remains elusive. But that doesn’t mean we should ever lose the ambition.</p><img src="https://counter.theconversation.com/content/137847/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Tumbling global trade with China proves no country or sector is an island.Jun Du, Professor of Economics, Centre Director of Lloyds Banking Group Centre for Business Prosperity (LBGCBP), Aston UniversityAgelos Delis, Lecturer in Economics, Aston UniversityMustapha Douch, Research Fellow in Economics, Lloyds Banking Group Centre for Business Prosperity (LBGCBP), Aston UniversityOleksandr Shepotylo, Lecturer in Economics, Aston UniversityLicensed as Creative Commons – attribution, no derivatives.