One fifth of the goods traded in the world are subject to (or are at serious risk of) supply problems.
The proportion of possible “bottleneck products”, defined as goods that have few suppliers and large market shares, has more than doubled, from 9% to 19% of the total between 2000 and 2021, as reported yesterday by Ralph Ossa , chief economist of the World Trade Organization (WTO) at the presentation yesterday of this organization's annual report.
The goods that are stuck at the borders and of which there may be a lack of availability are, in particular, semiconductors (chips) and associated technological equipment such as mobile phones or computers. In this special category, almost half of all products sold abroad are susceptible to experiencing some blockage.
During the pandemic, after the imbalance in global maritime transport, there was already a shortage of supplies. But the trend comes from afar, as a result of the digital development of the last decade that has triggered technological consumption, when a few manufacturers (most of them in Asia and China) share the supply pie.
For these same reasons, other goods whose production is highly concentrated and for which there may be difficulty in accessing are cobalt in Congo (80%), platinum in South Africa (70%) or solar panels in China (produces 80%). %).
Likewise, there is a certain recomposition of international trade flows. “We analyzed trade within and between hypothetical geopolitical blocs based on voting patterns in the UN General Assembly,” Ossa said. So on one side we have the United States, Europe, Canada, Australia, Japan and South Korea, while on the other there would be China, Russia, India, Maghreb and Southeast Asia.
Well, it turns out that trade flows of goods between these hypothetical “blocs” have grown between 4 and 6% more slowly than those that took place within them at the start of the war in Ukraine. This reflects a growing movement towards closer exchanges between friendly or neighboring countries at the expense of exports between more distant areas.
For the WTO, this fragmentation could jeopardize the benefits of economic openness of the last 70 years (which contributed to the reduction of poverty or increased life expectancy) and cause a 5% reduction in global GDP. For this reason, this organization defends r eglobalization, understood as “greater commercial integration so that security, inclusivity and sustainability are respected”, also to reverse the growing inequality within the different blocks.
As a curious fact, despite the trade frictions of recent years, in absolute numbers the exchange between China and the United States continues to break records (about 690 billion dollars in 2022). Of course, Washington, in the midst of a confrontation with Beijing, has reduced its purchases from China in strategic sectors such as pharmaceuticals, machinery, renewables and telecommunications.
Finally, the WTO cites studies according to which doubling trade between two economies reduces the probability of conflict by an average of 20%. Trade as a tool of peace. Something that the war in Ukraine has called into question.
