The low spark of high-friction trade

IT IS a truism that global trade is threatened by the rise in protectionism and geopolitical fragmentation. But that does not lessen the need to address these challenges.

The Covid-19 pandemic, escalating geopolitical tensions and growing concerns over security have accelerated deeper trench lines pointing towards regionalisation and balkanisation – countering decades of globalisation.

Rising trade friction has resulted in the introduction last year of more than 3,000 new restrictions on trade, up three times since 2019. Many restrictions include rules for export controls, tariffs and limitations on cross-border data flows.