5 must-read stories about global trade from 2023
Top global trade stories of 2023: UN Black Sea Grain initative, and more. Image: REUTERS/Mehmet Emin Caliskan
Sean Doherty
Head, International Trade and Investment; Member of the Executive Committee, World Economic Forum- 2023 has been an uncertain year for global trade.
- Geopolitical tensions, rising costs and climate change disruptions have each negatively impacted global supply chains.
- Here are some of the most-read trade stories from this year that featured on Agenda.
1. The chips are down
At the start of 2023, we covered a story about a shortage of semiconductor chips used in electronic devices.
In a rapidly expanding market, the US makes just 12% of the world’s semiconductors, down from 37% in the 1990s, leaving many firms in the country and elsewhere reliant on foreign chip-makers.
To address the situation, the US’ CHIPS and Science Act came into effect at the start of this year with the aim of boosting domestic semiconductor manufacturing. Washington also introduced export controls and restrictions on China, prompting China to file a dispute with the World Trade Organization.
2. Britain and EU agreed post-Brexit trade deal
March 2023 saw the announcement of a trade agreement between the UK and the European Union, following Britain's decisions to leave the bloc in 2016.
The Windsor Framework aims to address trade and border sensitivities by introducing ‘red’ and ‘green’ lanes for trade imports to Northern Ireland from the UK mainland.
The deal will also introduce separate processes for goods with a final destination in the Republic of Ireland (the EU).
3. The impact of Russia's war in Ukraine on trade
Russia's invasion of Ukraine continues to impact millions of people caught up in the conflict, and its repercussions reverberate around the world.
As March 2023 marked one year since the war began, the World Trade Organization (WTO) published a report assessing the conflict's impact on trade and development.
It found that while prices rose significantly for the goods most affected by the war, the increases were less than was expected when the fighting began. The story was similar for overall world trade growth.
And although Russia ended its participation in the year-old Black Sea grain deal, the collapsed initiative had facilitated the export of more than 30 million tonnes of grain and other foodstuffs as of May 2023, averting a global humanitarian crisis.
"Simulations run by WTO economists in a scenario of cascading export restrictions on food forecast wheat prices increasing by up to 85% in some low-income regions. However, the actual increase was 17%," the report says.
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4. Drought disrupts Panama Canal shipping
Extreme drought left ship owners facing 'unprecedented challenges', as low water levels hampered the movement of cargo vessels through the Panama Canal this summer.
Water scarcity forced cargo ships to wait days or even weeks to cross the busy waterway, in another example of the disruption of global trade flows caused by the climate crisis.
Restrictions were also imposed on ships' depth while in the canal, curbing the amount of cargo they could hold.
The ensuing disruption has caused delays to global supply chains, with several private shipping lines reportedly implementing cargo surcharges for good passing through the canal.
5. Green trade is centre stage at WTO Public Forum
Green trade was the focus of this year’s World Trade Organization Public Forum.
The event's agenda included sessions discussing: The Route to Transport Decarbonization, Green Energy Investments in Africa and Promoting Smallholders’ Inclusion in the Advancement of Green Trade.
“The future of trade is green,” said World Trade Organization (WTO) Director-General: Ngozi Okonjo-Iweala. “Trade can support national and international efforts to keep the ambition of limiting global warming to 1.5°C alive.”
