Global Trade Policy Shift Over the Last 3 Years

In the last few decades, we’ve seen our world shrink and get flatter and flatter, figuratively speaking. The digitization of globalization has made the world we live in smaller. No longer are we living in an era of isolation. We now live in an epoch of hyperconnectivity because of mankind’s great strides in the realm of technology. 

With such advancements, we’ve experienced more movement, growth, and interaction between cultures, governments, and businesses (ideas, goods, labor, and investment). As a direct effect, we’ve constantly seen on news outlets the endless simmering trade war between the US and China and the looming effects of Brexit. In the last few years alone, we’ve seen an extensive amount of reforms and changes around International trade policies.

Here are the most elements of these policy changes.

1. We’re shifting away from open trade

Between 2017-2018, we’ve seen the number of new policies introduced that harmed foreign commercial interests increased to 1,050. In 2019, we saw a few more damaging policies were introduced. Meanwhile, the number of new trade reforms fell 22% last year to a total of 258. 

An important discovery we noticed was that the biggest trade alterations are not those bilateral trade agreements between specific partners. The US-China debacle looks like a media ploy when you look at the data that says that only 2% of world goods trade was affected by tariff increases that target one bilateral trading partner. Towards the latter part of 2019, more than a quarter of international trade were disrupted last year over a quarter of world goods trade were being distorted by government tax breaks and ambiguous financial terms to their exporters.

2. Global trade reform is cut to half

In the last three years before Donald Trump was elected president of the United States, the world goods traded were slashed to half. There has been little movement in terms of trade reform as the first three years of the global economic crisis.

3. Trade protections are highly concentrated

Since President Trump’s election, we’ve seen more protectionist acts focused on a more important, but smaller, share of international goods trade than in earlier years.

In the last three years, we’ve seen an intense shift away from an equal playing field between small and large enterprises. What we’ve witnessed these past years was the reinstatement of 2016 trading conditions which can be damaging to tariff increases.

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