Harvard's Growth Lab’s Post

Pleased to attend the session on "Better trade through digitalisation" at the #WTOPublicForum organised by DIGITALEUROPE. And glad to hear Frontier Economics' research for Digital Europe into the costs of data localisation referenced by Daniel Nord. We estimated in our 2021 report that for the EU alone this would be around around 1.5% of annual GDP, on a conservative estimate of the difference between the effects of trade of the EU following a moderately restrictive versus a moderately liberalising path. The costs of the world as a whole becoming more restrictive would be obviously higher. The main point to note is that data localisation isn't just a services issues - it affects manufacturing as well, not least because services are increasingly embedded in manufacturing. And as Javier Lopez Gonzalez highlighted, new advances by the OECD - OCDE in measuring digital trade restrictiveness are likely to unearth further costs. This reinforces the need to address data localisation issues, especially as there are few rules that prevent relatively liberal jurisdictions from becoming more restrictive. Key research issues also include: how do we address questions of regulatory heterogeneity? And with trade modelling treating restrictions as variable costs, how do we get a better handle on the effects of fixed costs associated with regulations, particularly if there is uncertainty about future regulatory pathways?

Integrating Business and Trade Statistics On 24th September 2024, WTO Deputy Director-General Angela Ellard highlighted the critical role of integrating #business and #trade #statistics in today's rapidly evolving global economy. My analysis of this issue will focus on what specific measures need to be implemented based on the assumptions that: 1.     Data is yet to be captured 2.     Data has already been captured. 1.  Data is Yet to Be Captured: ·        Harmonization of Methodologies Data collection methodologies in #trade and #business #statistics need to be harmonized. Aligning definitions, classifications, and data structures across these two domains ensures consistency and compatibility, allowing data to be integrated and compared effectively. ·        Data Linkage and Integration Firm-level Data Integration: Create mechanisms to link trade data with firm-level business statistics. This would allow for a better understanding of how different types of enterprises—particularly small and medium-sized enterprises (SMEs)—engage in international trade and their contribution to the global economy. ·        Timely and Accurate Data Collection Automation and Digital Tools: Leverage automation and digital tools to streamline data collection processes and ensure the timeliness and accuracy of statistics. 2. When Data Has Already Been Captured: ·        Establish a Common Identification System The most crucial step is to link trade and business statistics at the firm level. This requires creating or using existing common identifiers (such as firm registration numbers, tax IDs, or business codes) to connect a company’s trade data (import/export activity) with its business characteristics (size, industry, ownership). ·        Develop Integrated Databases Create a centralized platform that houses both business and trade data. This platform should be structured to allow flexible queries, ensuring that users (policymakers, and analysts) can seamlessly access both datasets. ·        Create New Analytical Indicators Create metrics that relate trade performance to business growth, such as the correlation between a firm’s trade activities and employment growth, revenue, or innovation levels. ·        Perform Sectoral and Firm-Level Analysis By integrating trade and business data, policymakers can analyze which sectors are most engaged in trade and which experience the most significant growth or contraction. ·        Build Visual Dashboards for Policy Insights Present the integrated data through interactive dashboards that allow policymakers to drill down into specific areas of interest (e.g., by firm size, region, sector). Such dashboards can provide real-time insights, enabling quicker, data-driven decision-making.   https://lnkd.in/ekZPiECM

Fragmented World Trade Regime - a need for a Chaordic future! The current faddish trend of everything “A.I.” to be the answer to our economic growth is following the short sighted and wishful answer to tangible economic growth and stability of the world trade regime, let alone sustainable development. Thoughtful and reasonable economic considerations based upon the world’s limited natural resources allocation and basic human needs are slowly being discarded, with the narrowly defined corporate interests overshadowed the general well being of common citizenry. Observing the economic development of the past half a century, the trend of outsourcing to the lowest cost denominator created the rapid decline of the quality and durability of goods and services, in addition to the current world trade scheme altered fundamentally by the overwhelming undue pressure of Geo-political considerations in business decisions, it is prudent to reconsider the risks and rewards dynamic moving forward for decision makers. With the upcoming world trade regime under the pressure of short sighted nationalist political consideration, products and services will no longer be freely provided under a clearer set of rules, and marketing strategies will have to consider fragmented markets and overreaching nationalist political interests. We are entering into the transition towards a multi-polar, Eurasia-driven economic development regime. From insightful author Pepe Escobar: “ As Prof. Michael Hudson frames it, we are right in the middle of “the whole split of the world and the turning towards China, Russia, Iran, BRICS”, united in “an attempt to reverse, undo, and roll back the whole colonial expansion that’s occurred over the last five centuries.” So we’re back to the “garden and jungle” syndrome – first coined by imperial Britain orientalist Rudyard Kipling.....The difference now, compared to all those decades ago of .... free lunch, is “an immense shift of technological advance”, away from North America and the US, to China, Russia and selected nodes across Asia. Are we heading towards what I described as techno-feudalism – which is the AI format of rent-seeking turbo-neoliberalism? Or are we heading to something similar to the origins of industrial capitalism? “ Regardless of the changes and major paradigm shifting ahead, maintaining sound judgement with consideration of providing lasting (sustainable) products and services that meet basic needs, and not just in creating and satisfying artificial desires, will prove to be a less chaotic, but Chaordic (borrow from Dee Hock) path for businesses.

Economists see trade in services as the dynamic engine of "new globalisation," offering more promise than industrialisation. Services are key to globalisation, despite political focus on industrial policies. Read the new Policy Brief by Lucian Cernat ➡ https://lnkd.in/dZkaBjtr Combining TISMOS & TiVA databases shows mode 5 services make global trade in services larger than goods trade, reaching $22 trillion. Mode 3 is the largest, but mode 1 & 5 combined represent over half of total service trade. Globally, mode 3 dominates services trade, but country-level data tells a different story. Major players like the EU, US, UK, Switzerland, and India show varied breakdowns in services exports. Country-by-country data shows diverse services trade patterns. Mode 3 dominates in few developed/emerging economies. Mode 2 is key for many, especially developing countries. Mode 1 remains important globally. Mode 5 services are crucial for most. The analysis shows diverse services trade patterns. Globally, mode 3 is the largest, but at the country level, mode 5 leads in 81 countries, mode 1 in 55, and mode 2 in 29. Cuba is the only country relying on mode 4. Geography of services trade: Mode 1 is key for diverse countries (EU, Africa, Asia). Mode 3 dominates in OECD & emerging economies. Mode 5 is crucial for many across all continents, especially in Latin America, Africa, and ASEAN. ✍ "Services trade is already more important than most people think when looking only at the usual trade statistics."

USITC Recent Trends in U.S. Services Trade: 2024 Annual Report [May 2024] https://lnkd.in/gdXtGMBc or For interactive data, see https://lnkd.in/gfR3Jvj9   Recent Trends in U.S. Services Trade: 2024 Annual Report, published by the U.S. International Trade Commission (Commission). Recent Trends is the Commission’s annual report on U.S. services trade. This year, the report covers financial services. It presents an overview of U.S. trade in services and discusses market conditions, the industry outlook, and emerging market trends for the banking, insurance, and securities industries. These trends include the digitalization of financial services (including the incorporation of AI) and rising demand for financial products and services that address concerns for sustainability and financial inclusion, and support growth in emerging markets. It also summarizes the USITC’s 17th annual Services Roundtable.   The report is accompanied by interactive figures and tables that display U.S. services trade with the United States’ largest country trade partners and the European Union as well as trade in six individual services categories. These figures and tables show cross-border trade in services, which occurs when suppliers in one country sell services to consumers in another country. Links to the interactive figures can be accessed below.

Happy New Year 2024 - 10 Global Trends Shaping Global Trade in 2024. Almost two months ago, The #WTO’s Global Trade Outlook and Statistics Report released an estimated trade growth in 2024 to be relatively strong at 3.3%, per a summary by Ralph Ossa, the WTO’s Chief Economist. 2023 was an up-and-down year across the globe and pundits prognosticated that 2024 is still a busy year for international trade! 1. The 2024 global trade outlook is "uncertain but pessimistic." UNCTAD predicts volatility and uncertainty continue. This outlook is influenced by various factors such as persistent geopolitical tensions, growing debt, economic fragility, decreased demand in developed nations, decreased trade in East Asia, heightened trade restrictions, volatile commodity prices, and expanding supply chains, particularly between China and the US. 2. Inflation and the global economy. Per IMF, the Inflation projection at 5.8% 3. Elections: have profound consequences for international trade such as in the EU, the US and the UK taking place in 2024. 4. Green supply chain laws will become more stringent. CBAM (the first declaration comes due on 31 Jan 2024); EU's Deforestation Regulation (30 Dec 2024) and the Corporate Sustainability Due Diligence Directive and potential progress on an EU Forced Labour regulation. 5. Cybersecurity risks continue to rise. Forbes lists 12 predictions for cybersecurity in 2024 (Rise In Ransomware Attacks, IoT Vulnerabilities, Biometric Authentication Challenges, etc). 6. More sanctions and export controls: The focus is on the ongoing development of US export controls and bi-partisan support for strengthening the US export control regime and with China's Export Control Law. 7. Customs modernisation will accelerate such as the UK Customs Declaration Service, Mexico Bill of Lading supplement, Brazil DUIMP, etc. 8. Trade restrictive measures on the rise. UNCTAD identified around 2,366 non-tariff measures related to climate change impacting 26.4% of global trade. 9. Artificial Intelligence (AI) powered global trade technologies. AI is transforming international trade by providing a myriad of supply chain and trade compliance solutions: from managing inventory and production, and automation logistics, to form filling, error checks, compliance checks and generation of commercial documents. 10. Supply Chain Volatility; particularly shipping. #Forto shows how to track their clients's shipments to avoid the Suez Canal via Good Hopes due to s attacks on cargo ships have recently escalated; leading to longer lead time and supply chain disruptions. For us, we will see AI-powered global Trade Technology and Innovation thriving in some of our solutions including Smart HS Code, chatbot etc. Sources: #WTO #UNCTAD #Forto #TradeFinanceGlobal #TradeReadyCA #Forbes and our #GlobalTradeReport2023 #Outlook

📈 Data Deep Dive: 🌎World's Largest Importers Key Takeaways: 1. Diversity in Trade: The list showcases a diverse range of economies, highlighting how both developed and emerging markets are integral to the global trade ecosystem. 2. Shift in Economic Powers: Some surprising entries and rankings indicate shifts in economic power and resource needs. It's fascinating to see how different countries are moving up the ranks. 3. Sector-Specific Insights: The report dives into which sectors are driving imports for these top countries, offering a granular view of global demand. This data is not just numbers; it's a narrative of how our world is interconnected through trade. For professionals in international business, economics, or policy-making, these insights are invaluable for strategic planning. Read Full Article: https://lnkd.in/e2J7vS8v? #DataAnalysis #GlobalTrade #EconomicTrends #BusinessStrategy #internationalaffairs

Credit in Olivia White February 9, 2023 How our interconnected world is changing (part 1) https://lnkd.in/eaFwBxtb What’s the fate of globalization? New research breaks down changes in the global flows that bind us together—and what those changes mean for our collective future. 1). Globalization is here to stay The flows of goods, the real tangible stuff, have leveled off after nearly 20-plus years of growing at twice the rate of GDP. But the flows of goods kept pace with GDP flows representing knowledge and know-how, such as IP and data, and flows of services and international students have accelerated and are now growing faster than the flow of goods. Flows of data grew by more than 40 percent per annum over the past ten years. 2). The world remains interdependent In general, regions that are manufacturing regions depend very strongly on the rest of the world for resources: food to some degree, but really energy and minerals. 3). How COVID-19 has affected global flows To some degree, what was happening is that cross-border flows stepped in to replace interrupted domestic production. Flows from Asia came in, for example, to the US or to Europe. We’ve seen some flows go in reverse directions. There was a bunch of interruption in domestic production, which was quite surprising. Flows of capital also jumped quite a lot as people needed to shift the way they were financing themselves. Multinationals needed to shift the way they were financing themselves 4). The good and bad news about resource concentration Germany was getting gas from only a very concentrated set of sources. These are places where, for a variety of reasons, countries have built up dependencies on just a small number of other countries. Why has this happened? Why are we in this position? ● Cost is one reason. People have made decisions based on economic factors. ● Another reason is regional preference. Not all goods are created equal, even if they fall in the same category. ● The third reason is preferential trade agreements between different countries or other forms of tariffs or taxes that shape the way flows occur.

In the intricate tapestry of today's economy, understanding the interplay between global market dynamics and local markets is crucial, serving as a market trends example. This comprehension becomes particularly significant, as seen in a market trends example when analyzing how global events, such as international trade agreements or pandemics, influence local market trends and vice versa. This interaction highlights a key market trend example, demonstrating the impact of global occurrences on local markets. Global Market Trends Global market trends are shaped by international events, policies, and agreements, which often have far-reaching impacts across nations. A market trend example in a worldwide context could be the surge in technology and e-commerce, driven by advancements in digital connectivity and globalized supply chains. International Trade Agreements: These agreements can drastically alter market dynamics on a global scale. For example, a new trade deal between major economies might lower tariffs, increase imported goods in participating countries, and impact local industries. Global Economic Events: Events like the 2008 financial crisis or the COVID-19 pandemic have worldwide effects. These events can lead to a chain reaction, affecting economies globally – from stock market crashes to disruptions in global supply chains. Technological Innovations: Innovations often have a global reach, transforming industries worldwide. The rise of AI, for instance, is reshaping sectors from manufacturing to healthcare across the globe. Local Market Dynamics Unlike global trends, local markets are shaped by regional, national, or local factors. These include cultural preferences, domestic policies, and economic conditions. Cultural Influences and Consumer Preferences: Local markets are significantly shaped by the cultural and social nuances of the region. For instance, consumer preferences for certain types of products can vary considerably from country to country due to cultural differences. Domestic Economic Policies: Government policies on taxation, minimum wage, and business regulations directly impact local market trends. For example, a change in tax policy can affect local businesses' profitability and consumer spending power. Regional Economic Events: Local events like political unrest or natural disasters can profoundly impact local markets, affecting everything from commodity prices to the availability of goods. https://lnkd.in/eQk86a4i #GlobalMarketTrends #LocalMarketDynamics #InternationalTrade #EconomicEvents #CulturalInfluences #InterconnectedEconomy

The LSE Business Review challenges the notion that claims of deglobalisation are exaggerated. It argues that while there are observable shifts in global economic integration, the term "deglobalisation" may not accurately capture the complex and nuanced changes occurring in the global economy, highlighting the need to consider the multifaceted nature of global economic inter-connectedness and the various factors influencing it. It asks for a more nuanced understanding of global economic trends and their implications for businesses and policymakers. https://lnkd.in/dps63FNm