The World Trade Organization is once again warning that the outlook for global trade remains bleak.
While there are small signs that recovery may be starting to take root, a new report from the global trade body says that uncertainty all around may create an “L-shaped recovery” which is defined as a recovery that features stagnant growth and stubborn unemployment following a dramatic crash in economic activity.
The report also notes that some sectors such as electronics and agriculture have remained relatively untouched throughout the pandemic and may help fuel recovery.
Here are three other ways that global trade can play a meaningful role in helping fuel post-pandemic global growth.
1. Push for ambition at the WTO
The WTO is at a serious crossroads.
It hasn’t made much progress in advancing global free trade in nearly two decades and even its role as a referee for global trade has been diminished in recent months.
It needs to reform, reinvent and reestablish itself as a body at the forefront of 21st century global trade.
A new Director General is expected to take over this fall and this presents a new opportunity to push the envelope and set a global trade agenda that its members can get behind.
It needs to oppose protectionism beyond simply saying so in communiqués. It also needs to deal with the many issues its members fight over including the role of subsidies and other supports in global agriculture trade. And it needs to do a better job in taking on the non-tariff barriers that have replaced tariffs as the ultimate roadblocks to free trade.
Now is the time for the WTO to reclaim its credibility. Recovery depends on it.
2. Grow the Comprehensive Progressive Trans-Pacific Partnership (CPTPP)
One of the first acts of the Trump presidency was to walk away from the then-Trans-Pacific Partnership.
While the Trump administration certainly had a mandate to redefine the US approach to global trade, one of the best ways to take on China would have been to lead the table that was set precisely to draw up the rules of global trade in the Asia-Pacific to counter a rising China.
And while time and the results of the US election in November will determine what the US does next with this trade pact, other countries including the UK, Thailand and South Korea are interested in joining.
All 11 current members should welcome new members with open arms. The more the merrier when it comes to lowering trade barriers and agreeing to the same set of global rules.
3. Connect with ASEAN – the next global trading powerhouse
Canadian ice hockey great Wayne Gretzky once said the key to his success was simple: skate to where the puck’s going, not where it’s been.
When it comes to global growth, the puck has been going to Asia for some time.
That is why it makes sense to look to the Association of Southeast Asian Nations or ASEAN as it’s known which is negotiating free trade agreements around the world with various partners.
As a group that includes Indonesia, Thailand, Singapore and Malaysia, ASEAN is the sixth largest economy in the world. And many of its smaller markets including Philippines and Vietnam count among the emerging markets exporters continue to eye with interest.
Simply put, it is time for ASEAN to step up to the international table as the powerhouse it is. Doing so will be good for trade throughout the Asia-Pacific and can help power a global recovery that is rooted in trade rules and a commitment to trade liberalization.