Global Trade Predictions from Two Industry Experts

The Center for Global Business (CGB) hosted a conversation with Javier Lopez Gonzalez, senior trade policy analyst at the Organisation for Economic Co-operation and Development (OECD), and William Reinsch, senior adviser and Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS), on Thursday, January 14, 2021, as part of the Distinguished Speakers in International Business Series (DSS). Kislaya Prasad, academic director of the center, moderated the discussion focused on global trade in the new year and the effects that political turmoil, a global pandemic, and an incoming administration will have on future trade policy.

Gonzalez highlighted three global issues that he expects trade to face heading into an uncertain 2021: evaluation and reshoring of the current global value chain, “trade and” issues such as international competition and digitalization, and overall governance on global trade. Reinsch expects the incoming U.S. administration to have a significant impact on how these issues are handled. Contrasting with current leadership, Reinsch described President-elect Joe Biden's administration’s strategy as “domestic policy first and no sudden moves” regarding policy with China and the United States’ standing on the world stage. “I think you’ll see [Biden’s] two highest priorities are developing a coalition to address the issues that we all share with China,” Reinsch stated, detailing these differences, “and second, I think he’s going to spend a lot of his energy rebuilding the relationship with Europe.” Reinsch highlighted the need to focus on “returning the U.S. to being the number one innovating country."

“We need much more agile trade, and at the center of this is dealing with trade and digitization and trade and cross-border data flows,” Gonzalez explained, looking towards the future of global trade. Data flows will make trade faster, but Gonzalez warns that it also becomes much more complicated, introducing issues such as “digital connectivity, interoperability, privacy, national security, digital competition” and more. Gonzalez stressed that “what has emerged is a patchwork of data regulations [...] making it difficult for firms to work across international markets.” Both panelists expect that this is an issue that the Biden administration will focus on, creating a data regulation and privacy policy that the United States has not yet created.

Reinsch and Gonzalez both shared their thoughts on the “thin” Brexit deal and how it will make trade agreements more difficult to negotiate with the U.S., with Reinsch summarizing that “the burden is really going to be on the British side to decide which way [EU or U.S.] they want to lean.”

Finally, in regard to the COVID-19 pandemic and potential future shocks to the global economy, Gonzalez emphasized the importance of global trade. “Trade plays the role of allowing countries to access all of the products that are really pivotal,” he continued, “not just in finding the vaccine directly, but in dealing with the consequences of a lockdown.”

Watch the recording of the event to learn more about the discussion. This DSS is part of the #KeepGlobalSmith campaign, which calls attention to our commitment to bringing the world to Smith during the pandemic. Join the center for the next DSS event on Monday, February 8, 2021, for a discussion on the five significant trends that will dramatically shape the global outlook and operating environment.

This event was supported in part by CIBE, a Title VI grant administered by the U.S. Department of Education.

— By Nicholas Bondura, marketing coordinator, Center for Global Business