International trade continues to evolve at a rapid pace. Exporters and importers must be fully aware of the latest developments in order to ensure that they are not missing out on growth opportunities. In recent years, global trade has been affected by a trade war and increasing political influence. However, these hurdles are not going to stop companies from transacting across borders. It is likely that global trade will continue on a growth path over the next few years. This blog analyses the current state of affairs and makes four major global trade predictions for the year 2020.
One of the most important factors that could influence global trade in 2020 is climate change legislation. Countries around the world are becoming increasingly aware of their responsibilities towards the environment. This has meant that more and more products are now being scanned for their carbon content. Similarly, national governments are also formulating trade policies while keeping an eye out for supply chains that are potentially harmful to the environment. During 2020, it is more than likely that climate change legislation will begin to have a significant impact on international trade.
Another development that is likely to help in the growth of global trade is the de-escalation of the trade war. At present, countries such as the US and China have already signed agreements to ensure that they reduce trade tariffs. In 2020, it is likely that various other trade issues will also be ironed out. For example, the UK is likely to sign long-term trade agreements with various countries and trading blocks around the world. This means that 2020 is going to be a positive year for global trade, facilitating the growth of international transactions between firms.
In addition to the above, compliance requirements around the world are also likely to be shored up. As already witnessed in the US, every international transaction is now being scrutinised in order to ensure that there is no engagement with sanctioned countries and territories. In 2020, it is likely that such scrutiny will only increase. This would also mean that traders would need to be fully prepared in terms of meeting compliance requirements. During the year, traders around the world are expected to become more pro-active when it comes to being prepared for random checks.
Further, another prediction for 2020 is that global trade activities are likely to become even more transparent. The adoption of technology is improving at a rapid pace. Companies are already making use of technologies such as Artificial Intelligence and Blockchain. In the year 2020, it is likely that these technologies will help traders become even more transparent. Similarly, companies could also make use of predictive technologies in order to assess demand and other 2020 trends for their industry, thereby staying a step ahead of the market. For more information on global trade and the expected trends for the near future, please contact us.