Amidst the G7 summit in Hiroshima last weekend, CNBC interviewed the Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, concerning her general outlook on the current state of international trade. Okonjo-Iweala acknowledged the significance of supply chain resilience to CNBC’s Martin Soong, and, notably, called for the world to “reglobalize”:
At the same time, the Nigerian economist also argued that “the multilateral trading system has been largely resilient during all these crises.” Okonjo-Iweala — the first woman and first African to lead the WTO — pointed out that as disruptive as the crises of the last couple of years have been to the global economy, all the fixes that have emerged have also been the product of that same economy’s core system of multilateral trade agreements.
Thus, although the WTO and G7 are separate organizations, it does seem like they generally see eye-to-eye on this particular issue. Rather than a winding down of globalization, we are, in fact, in the earliest phases of globalization 2.0:
As if to drive home precisely those points, the US and Australia announced on Saturday that the two nations had signed a bilateral cooperation agreement to make climate change and clean energy “a central pillar” of their alliance. The compact entails a broad framework of shared long-term goals and plans for binational economic cooperation. Perhaps most lucratively for everyone involved, this includes plans to “coordinate policies and investments to support the expansion and diversification of responsible clean energy and critical minerals supply chains” and “accelerate the development of markets for established and emerging technologies.”
This is more or less identical to the clean energy portion of an overall much more broad-sweeping agreement between the US and Canada announced in March, 2023. We are now seeing the emergence of the world’s newest economic bloc, and, rather unsurprisingly, it is being built around the Five Eyes nations.
Along those same lines, uncertainty in the future of the trade relationship between the US and China is still the most critical fact in the global economy, and that becomes truer the more directly related a given topic is to the semiconductor industry. As such, in a business context, 3D printing will continue to be among the industries most affected by uncertainty surrounding US-China trade.
Developments such as these help alleviate some of that uncertainty, if only because more is now known about what the stakes are. “De-risking,” as opposed to decoupling, does seem to be a good term to sum up all the changes that the US and China are currently making to their respective economies. While these topics may be anxiety-inducing, then, it does at least seem like world leaders are not acting completely irrationally. It is unlikely that we are going to wake up one morning to find out that all trade between the US and China has been banned.
What is likely, on the other hand, is that all of the 160+ nations in the WTO are increasingly going to move in the direction of redesigning their economies around the idea of “what if we had to make this here.” This has more to do with the need to decarbonize the economy than it does with animosity between the US and China. In that case, it can only be a good thing for companies in all the advanced manufacturing industries — so long as they, too, remember to diversify their supply chains.
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