“In just six years, between 2015 and 2021, data traffic has quadrupled to around 20 zettabytes, covering both domestic and cross-border flows.” Speaking at a fireside chat during the Singapore Apex Business Summit’s Future of Trade Forum, Johanna Hill, Deputy Director-General at the World Trade Organisation, highlighted the rise of big data as a key point of competition and collaboration in the future of trade. In the context of rising multipolarity, geopolitical uncertainty and resulting policy unpredictability, it appears that businesses are left to navigate an increasingly complex landscape.
According to research by the WTO, there is a growing fragmentation in trade along geopolitical lines. Bilateral trade between the US and China has seen slower growth since 2018 as compared to the respective economies’ trade with other countries, with a 12% decrease in merchandise trade year-on-year in 2023. Moreover, Russia’s armed conflict with Ukraine has also fragmented global trade flows, as trade between geopolitical blocs witnessed a 4-6% slower growth compared to trade within these blocs. The confluence of political volatility, rising protectionism and blurring borders in a digitalized world has further complicated trade dynamics.
In light of these complexities, it is important for businesses to participate and engage in public-private dialogues on trade policy issues. This not only helps to better inform policymakers of their needs to bolster the purpose-fit of regulatory measures, but also helps to catalyze relevant agreements and frameworks to ease trade flows.
However, the efforts by the private sector alone are insufficient. The development of a robust and resilient global trade ecosystem requires a strong, tripartite partnership between businesses and governments alongside multilateral and international organisations. Such a collaboration would allow for the pooling of much-needed capital to finance necessary digital infrastructure developments. Businesses and governments should also continue talks on a state level to facilitate best-practices sharing and catalyse bilateral or multilateral cooperation.
The Future of Trade – Re-globalisation
The opportunities for the future of trade in a digitalised world go beyond the potential benefits that it may bring to businesses. On a macro level, it offers the potential to promote a more inclusive growth across countries. Globalisation has led to what appears to be a bifurcation of the world – between the winners and those left behind. In this rise of a new age of data, digitalisation and technology, businesses and governments can ride on the wave of re-globalisation and be facilitators of a more equitable growth globally.
As Johanna Hill stated, “Since the early 1990s, trade has helped lift over a billion people out of extreme poverty… it’s also about helping other countries seize the opportunities when it’s ready for them.”