Global Trade at a Crossroads
2017 was a difficult year for the shipping industry in various respects including geopolitical developments, which raised many eyebrows across the board. Rising protectionism and an anti-globalization sentiment have emerged as major concerns of the market players.
The year opened with the inauguration of a new American president, Donald Trump, who is championing the “America First” ideology. In Europe, the United Kingdom decided to pull out from the European Union, while in Germany, France and the Netherlands, right-wing and anti-EU parties secured major support from voters in national elections. Furthermore, tensions between the Western powers and North Korea continued to heighten over Pyongyang’s nuclear program.
However, the global trade seems to have endured numerous challenges and there have been signs of gradual recovery.
As the industry enters a new year, World Maritime News spoke with John Sitilides, Geopolitical Strategist at Trilogy Advisors in Washington D.C., on geopolitical challenges that lie ahead. Sitilides is a diplomacy consultant to the U.S. Department of State and a keynote speaker on global risk management and American politics.
Speaking of the impact of growing popularity of protectionist policies on global trade primarily led by the Trump Administration, and Trump’s refusal to sign any regional or multi-party trade agreement, Sitilides said that Trump’s election and the Brexit vote reflect the growing national impulses of citizens in advanced economies around the world.
“They are concerned about the wealth imbalances brought about by globalization, and increasingly furious about political corruption and evasion of justice by their own elites. They expect their political leaders to advance sovereign interests above multilateral agreements that may benefit political and financial leaders at the expense of the broader citizenry,” Sitilides explains.
President Trump has stated his intention to correct trade imbalances caused by “unscrupulous practices against the U.S. by countries or companies cheating on trade deals, or supporting unfair tariffs, subsidies and trade barriers.”
The Trump “America First” agenda is designed to repudiate what he sees as the complacency of prior administrations regarding the gradual deterioration of America’s competitive and strategic position, Sitilides continues.
“He has made clear he will oppose trade deals that compel the U.S. to adhere to rules and agreements to which other countries adhere selectively, or where foreign markets are closed while the U.S. markets remain free and open, to the effect of “In a rules-based global order, everyone should follow the rules.
“With special emphasis on China, President Trump will likely pursue in 2018 an agenda that communicates that American interests will not go unchallenged without inviting a bold response, such as rescinding China’s status as a market economy in the World Trade Organization, given the onerous restrictions China imposes on foreign investors and companies,” Sitilides added.
With respect to the shipping industry, the U.S. President has decided not to repeal the Jones Act, a policy widely supported by the U.S. shipping industry.
This comes at a time when the U.S. economy records a healthy 3 percent growth pace for the first time in more than a decade, with increased shipping between U.S. ports, as well as increased imports and exports.
In addition, Trump has voiced his intention to open most of the continental shelf of the United States along the Atlantic, Pacific and Arctic Oceans to drilling. The move is likely to provide additional opportunities for U.S. shipping in an increasingly competitive global environment, Sitilides continues.