The Financial Times made a series of projections in January for global trade in 2020. They reviewed and re-evaluated their forecast late last week. As you would expect, the global pandemic has impacted some of these. The report (only available to subscribers) reviews the big global trade deals being constructed or under review. Here is a brief summary:
The US-China trade war and the mini-deal negotiated at the beginning of the year will be completed but it is unlikely anything else will materialize until after the election in November.
US-EU relations will likely turn negative as the US hits back over EU’s proposed digital tax on US companies like Google. Currently it is all ‘rhetoric’ said the FT but it could be used as a political tool for an election campaign.
The signing of the EU-China bilateral investment treaty has been delayed by the virus as is the proposed EU-Australia deal. The EU-New Zealand deal is forecast to be signed by end of year. And finally, the EU-UK ‘Brexit’ negotiations are not going well.
There is a lot of discussion by economists and think tanks about a significant transformation in global trade. We think some of this is overblown but we are not naive to the fact that this pandemic will have lasting consequences. The global contraction of trade will be worse than the 2008/09 crisis. Companies will need to stay nimble and be prepared to react quickly to changes.