International Trade: A Story of Two Truths
International trade has been an abject failure.
Businesses and economies should take a lesson from high-end restaurants: source locally, support your community and have a fantastic and compelling “Farm to Table” narrative to sustain your Michelin-aspiring brand.
Is this the future of the discourse on international trade?
Certainly not. The benefits of thoughtful sourcing in the restaurant business, just like the benefits of trade, are significant and worth protecting and preserving in some form.
Trade Through Two Lenses
The story of trade is often told with two extreme views shaping the discourse.
Perspective one: trade is a powerful channel and mechanism for international development and poverty reduction, and has helped raise millions above “the poverty line”. Trade plays a critical role in maintaining international security.
Perspective two: trade is a great ill that enables economic coercion or imperialism, creates incentives for terrible and destructive conflict, involves untold damage and is linked to criminal and terrorist activity including illicit financing, all of which have unconscionable human consequences.
For purposes of this discussion, we ignore the ill-informed and distorted disinformation about trade and tariffs.
Reframing the Conversation
Trade, like the design of restaurant menus and the sourcing of ingredients, covers a wide range of scenarios, and has evolved materially over the last three or four decades. One way to rethink its relevance, value and impact might be to redefine our collective understanding of trade.
First, trade involves exports AND imports. Both have their place and bring their value to people, communities and countries.
Notwithstanding disproportionate attention to the export side of trade flows, and the almost arbitrary preference for export-driven metrics and for trade surpluses, the objective reality is that imports exist because they represent value purchased by choice: imports are not inherently “bad”, nor are they – typically – the result of coercive pressure. Imports raise standards of living and facilitate access to goods and services that would otherwise be unavailable or more expensive to produce locally.
Second, the win/win nature of trade must be brought back into focus. This reality was strikingly captured through an EU-funded trade development program which ran for years. Through this program, the EU financed the training and hiring of trade policy experts and trade negotiators in the ministries and trade departments of developing nations across markets as varied as Africa, Asia and the Caribbean. While this approach might seem counterintuitive, the rationale was that enhanced expertise among trading partners should help generate better trade-based outcomes for all. The program was genuinely seen as an investment, and it generated clear and constructive outcomes for participating jurisdictions. A rising tide…
Reshaping Trade on the Ground
Whether we are at a fantastic local chili bajji stand in Dharamshala where whole chilis are fried in a batter in fifty year-old pots on an open flame, an exceptional dinner at a Ritz Carlton desert reserve in Ras Al Khaimah, enjoying a flavour-rich banh-mi in Sapa or a fabulous mango sticky rice from a street vendor in Bangkok, these experiences enrich life and broaden horizons. Trade, likewise, does the same.
The solution to the trade debate today is not to retreat from it, or to demonize it in a conveniently simple manner that creates soundbites and points to (yet another) external cause of problems and challenges faced “at home”.
The solution is to recognize both the powerful benefits and the harsh realities around trade. It is to fundamentally rethink and redefine the purpose and the nature of trade, and to reimagine the mechanisms through which global exchange can be facilitated. Thinking holistically about trade, acknowledging its win/win potential and offsetting – instead of legitimizing – misinformation about trade must be at the core of a genuine and sustainable strategy. This also demands focus on the human and community-level impact of trade.
There are concrete and credible building blocks on which to start the redesign process:
Extensive work on fair and sustainable trade
Expansion of the scope and reach of trade financing, including to micro, small and medium enterprises in the most remote parts of a supply chain
Mitigation of environmental and social damage through trade and capital flows
Government and multilateral procurement rules and practices aimed at supporting fairer practices
Trade diversification and reduction of concentration risk
Supply chain transparency and resilience standards and practices
“Human-Centered Design” was popularized years ago. Perhaps the time is ripe now for “Human-Centered Trade” to come to the fore. And that can start with thoughtful discourse, strategic messaging and a holistic lens applied to trade.
Red Sangria. Human Powered. Every Time.
#communications #trade #development #supplychain #tradefinance #sustainability #aml #climate #carbonemissions #SME
