International trade: What you need to know this month

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Mariam Soumaré, Community Engagement Specialist, Global Alliance for Trade Facilitation, World Economic Forum

• This monthly roundup brings you a selection of the latest news and updates on global trade.
• Top international trade stories: New UN update suggests trade will rebound in 2024; India and EFTA sign new trade deal; Supply chain concerns after cargo ship hits US bridge.

1. Global trade set to rebound in 2024

The latest Global Trade Update from the United Nations Conference on Trade and Development (UNCTAD) says global trade is set to rebound in 2024, after several quarters of decline.

Initial figures suggest a $1 trillion contraction in global trade last year. This was largely driven by lower demand in developed economies and weaker trade in East Asia and Latin America, UNCTAD said.

However, data for the first quarter of 2024 suggest improvements in global trade. Rising demand for environmental goods, like electric vehicles, and an improved global economic outlook are expected to bolster trade this year.

However, concerns remain over geopolitical tensions and future disruptions to supply chains.

The outlook for global trade in 2024 is more positive than last year.Image: UNCTAD

2. EU backs supply chain due diligence law

From 2029, companies in Europe will have to prove they are taking action to protect the environment and human rights throughout their supply chain.

A new supply chain audit law, the corporate sustainability due diligence directive (CSDDD), has received the backing of a majority of European governments. It is expected to be voted through by the full European Parliament following approval of a revised version by that body’s Legal Affairs Committee.

The European Parliament in Brussels.Image: Guillaume Périgois on Unsplash

For companies that will be covered by the CSDDD, identifying compliance and implementation strategies is now key, experts say. According to the proposed law, each EU member state will designate a supervisory authority to check company compliance, and cooperate with each other through a European Network of Supervisory Authorities. These bodies can launch investigations and impose non-compliant penalties – including fines of up to 5% of a companies’ net worldwide turnover.

The CSDDD does not require supply chain traceability specifically, but companies will need get ready with a comprehensive understanding of their supplier practices, set up pathways for supply chain visibility and procurement, establish due diligence policies (if not already in place), train procurement and product teams, among other actions.

3. News in brief: Trade stories from around the world

Supply chain disruptions are expected in the US and around the world after a cargo ship collided with a bridge in the US city of Baltimore. Authorities have suspended maritime traffic through the Port of Baltimore, which handled 52.3 million tons of foreign cargo, worth $80 billion, in 2023. “There is no question that this will be a major and protracted impact to supply chains,” US Secretary of Transportation Pete Buttigieg told reporters.

Global trade ministers met in late February and early March at the World Trade Organization’s 13th WTO Ministerial Conference (MC13). The meeting ended with some outcomes, but also significant uncertainty on the way forward. While agreement was reached in areas like services facilitation and on avoiding tariffs for data flows, many other issues like agriculture, dispute settlement and environment faltered.

The French Sénat has voted against a free-trade agreement between the European Union (EU) and Canada. The agreement has been in force provisionally since 2017, but requires all EU member countries to ratify it to take full effect.

The UK has taken one step closer to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade group after the bill received Royal Assent. When the UK joins, the CPTPP will cover 15% of global GDP.

Initial estimates suggest the Eurozone had a €11.4 ($12.3) billion surplus in trade in goods with the rest of the world in January. This compares to a €32.6 ($35.3) billion deficit in January 2023.

International trade in goods of the euro area.Image: Eurostat

The EU has agreed to extend trade liberalization measures for Ukraine, which will keep import duties and quotas on the country’s agricultural exports suspended for another year. Brussels, however, has also implemented patchwork food import restrictions in an effort to protect EU farmers.

Brazil has launched a series of investigations into the alleged dumping of industrial products by China. In recent months, Latin America’s largest economy has seen a major increase in the number of cheap goods imported from China.

4. More on trade from Agenda

What did we learn from WTO MC13? Find out more from the Forum’s Head of Digital Trade and Geopolitics, Simon Lacey.

India and the European Free Trade Association (EFTA) have agreed to a new trade partnership to enhance market access and simplify customs procedures. India said the deal contained a “binding” commitment for the EFTA states to invest $100 billion over 15 years, to create 1 million jobs. Learn more about the deal and the EFTA in our Agenda explainer.

Disruptions to global trade and supply chains as a result of the crisis in the Red Sea could also have an environmental impact. But, what is “slow steaming” and what might it mean for emissions? For more, read what trade experts are saying about the shipping disruptions in the Red Sea.

The Global Alliance for Trade Facilitation, a public private partnership for trade-led growth, has released its Annual Report 2023. The report details the successful delivery of five projects across Africa, Asia, the Middle East and Latin America, highlighting that the elimination of red tape at borders can help tackle some of the world’s greatest collective challenges. The World Economic Forum is a leading partner in the Alliance.