Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
An uptick in imports to Asia in the second half of 2020 could lead to an easing of global trade tensions, Bob Koopman, Chief Economist at the WTO, told the Asia House Global Trade Dialogue this week.
Speaking with Asia House Chief Executive Michael Lawrence, Koopman identified encouraging signs within recent trade data that could point to a narrowing of trade imbalances between western markets and Asia.
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For most of 2020, “unfortunately there has been a reinforcement of the kinds of imbalances we were seeing before – at least up until August,” Koopman said. “What we were observing was the traditional European and US imbalances with Asia getting worse.”
However, the picture has since started to change.
“In the last couple of months, the trade data suggests that imports are increasing in Asia. That’s a very positive thing, and it’s the kind of thing we’d need to see to help reduce global trade tensions: imports to grow faster in Asia, particularly those aimed at the consumer household sector.”
Supply chains have also held up well during the COVID-19 crisis, Koopman noted, with widely-feared disruptions failing to materialise. “Value chains have been resilient in this downturn, which is quite different to what we saw in the 2008-2009 financial crisis.” However, there has been some reorganisation of supply chains, with companies taking steps to prioritise risk mitigation over efficiencies.
Asked about the recently-signed RCEP agreement, Koopman observed more value in the implications for trade relations than in the deal itself. “We don’t see a lot of innovation in data or technology and things like that,” he said. However, “RCEP is significant in that there are a number of large players [in the deal] that have not had agreements before. That’s a positive thing.”
More broadly, Koopman predicted a slow recovery for the world economy next year. “For 2021 we see a recovery, but perhaps not as strong a recovery as we might have expected.” This is largely “due to a weaker recovery in GDP,” which has “been a bit stronger in terms of its performance in 2020, but going forward we see it not recovering quite as quickly, with no ‘V shaped’ recovery.”
