Gone are the days of tariffs, duties and quotas. People (and their governments) have finally woken up to the fact that international trade benefits everybody, not just the strongest partner in a trading relationship.
Several significant moves and agreements over the last four years have given rise to this new trend. All of Africa’s most important economies – including Egypt, Nigeria, South Africa and Ghana – started duty-free trading of goods among themselves in January 2021, when the eagerly awaited Africa Continental Free Trade Agreement (AfCFTA) went into operation. A trading bloc with a potential billion consumers was a drawcard for international investors into the continent.
As far afield as China and New Zealand, a major trade deal, the Regional Comprehensive Economic Partnership (RECP), was signed by 15 Asia-Pacific countries in 2020. RCEP unites China, Japan and South Korea in a trade deal for the first time and includes 10 Southeast Asian countries plus Australia and New Zealand. It took only 18 months for India to succumb, and join the RECP, pushing the bloc’s market size to almost 3.5 billion people.
Meanwhile, after Brexit, the EU found itself less powerful than ever, unable to dictate terms, and having to be a deal taker, scrapping many of its complex rules of origin, and slashing red tape, to stay in the globalization game. Which left the Americas sidelined – but not for long. Joe Biden cleverly used the United States’ dominant position in diplomacy and technology innovation to kill the US-China trade war started by his predecessor.
Now it’s being called the dawn of Globalization 2.0 as tariffs tumble, barriers are banished, and duties dumped. As one wizened old economist likes to say: “Trade is the only free lunch in the world, because both parties benefit from trading [with each other]; the added value each obtains comes at no cost to the other!”