Conference Presentation, Panel
Trading Spaces: Rekindling Global Economic Collaboration | Asia Summit 2024
Milken InstituteMaura Fogarty, Gareth Brooks, Enoh T. Ebong, Ho Ren Hua, Peter Mandelson, Jacqueline Poh
- Global trade is forecast to face rising geopolitical friction, protectionism, and trade barriers, potentially reducing global trade-to-GDP ratios from 31–33% in 2022 to 29% by 2023, marking a shift from the "summer of peak globalization" toward a more fragmented and de-globalized environment.
- Economic security and national security concerns are expected to supersede business efficiency as primary policy drivers over the next three to four decades, leading to supply chain reconfiguration, "China plus one" strategies, and increased intra-Asian trade while global foreign direct investment contracts outside Southeast Asia.
- Southeast Asia, particularly Singapore, is positioned as a key beneficiary of increased foreign direct investment and supply chain hub activity, with Singapore aiming to double its role as a base for digital control towers and talent, though competition for industrial policy subsidies and talent is expected to intensify globally.
- Supply chains will undergo a 10 to 15-year de-risking phase involving reduced reliance on single points of failure, increased regional specificity, and the integration of climate resilience, with logistics reliability remaining a persistent challenge despite pandemic-induced adaptability.
- Artificial intelligence is projected to transform supply chain management through data-driven decision-making and automation in coding and testing (potentially 30–80% of tasks), while aiding climate resilience analytics and digital traceability, though IP concerns may limit AI's role in new product creation.
- The global trading system faces risks from economic nationalism, export controls, and industrial subsidies, which could distort markets and disadvantage emerging economies, necessitating strategic partnerships and diplomacy to mitigate conflict and maintain open trading systems.
- U.S. infrastructure development efforts, including the Inflation Reduction Act and Indo-Pacific partnerships, are expected to focus on clean energy, digital networks, and health, with an emphasis on feasibility studies and technical assistance to support emerging markets, while consumer sectors leverage AI for data aggregation and market decisions.
- Specific regional dynamics include positive momentum for harmonization within Thailand, Cambodia, and Vietnam, though not reaching EU levels, while inflationary spikes in sectors like food are expected to be transient compared to other industries, and heavy manufacturing may shift out of certain developing nations as textile and apparel industries advance in Vietnam.