Global Trade: Is a Major Split Imminent?
In a rapidly changing global landscape, the trade relationship between Europe and the United States has undergone significant transformations. This shift has benefited regional partners such as Mexico and Canada, as trade between China and the United States has decreased.
The emergence of new dynamics within the EU and the role of non-aligned countries like Vietnam, Poland, and Mexico have become increasingly crucial. These nations, often referred to as "connectors," provide greater resilience to trade, serving as intermediaries in an increasingly fragmented landscape.
Key countries acting as "bridge nations" between the US and the EU or within the EU include the Netherlands, Ireland, and Poland. Their strategic geographic locations, favourable regulatory environments, and roles as major logistics and digital hubs facilitate trade flows and investment in the current fragmented global trade landscape.
However, the upcoming U.S. elections on November 5 could further accelerate fragmentation and weaken trade flows, particularly if Donald Trump secures a second term. The acceleration in these trends is driven by increasing geopolitical tensions.
In Europe, trade relations with China remain stable, but a real rupture has occurred in trade with Russia. The evolution of global trade relations since the late 2010s has been characterized by a dual phenomenon of relative weakening and fragmentation.
Despite the proliferation of measures detrimental to trade, the relationship between trade and GDP growth remains stable. This resilience is evident in the strengthening position of Poland in intra-EU trade, indicating a new dynamic in the region.
Nathalie Dezeure, the Head of Macro Research Europe, presents a special report on this evolution of global trade relations. The report includes stylized facts confirming the evolution of global trade relations, shedding light on the current state and future trajectory of international trade.
In recent years, industrial policies often promote import substitution, which can dampen trade. However, the trends in global trade relations have accelerated in the post-COVID period, suggesting a continued shift in trade patterns.
This news article provides a snapshot of the current state of global trade relations, as reported by Nathalie Dezeure. As these trends continue to evolve, it is essential to monitor their impact on regional economies and global trade flows.
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