Regional and domestic trade growth prompted by more than protectionism
The threatened imposition of US-China trade tariffs this week is the most obvious sign of increasing protectionism, resulting in a push towards regional trade, but with consumers prioritizing speedy delivery, the move to source locally has other drivers.
The HSBC Navigator: Now, Next and How for Business report surveyed more than 6,000 companies internationally on the trade environment.
Asked for their views on the state of the current market, 61% of respondents thought countries were becoming more protectionist. Companies are looking towards their close neighbours to forge trade partnerships, with 74% of trade in Asia-Pacific and Europe being conducted within the region.
However, the view that protectionism might be disastrous for trade seems to be overstated.
The HSBC study quotes World Trade Organization (WTO) figures, which show its members are putting in place fewer trade-restrictive measures than in previous years. There were an average of 20 restrictive measures implemented each month in 2015 across WTO members, compared with nine measures per month in the year to October 2017.
Vinay Mendonca, head of global traditional trade product at HSBC, says there is still considerable optimism about the prospects for trade.
“Companies are concerned about the potential impact of protectionism, but are still bullish on the potential of trade, with 77% of those polled globally forecasting growth,” he says.