Some of these topics keep reappearing year after year, due to new developments and their continued place of prominence in the minds of global trade practitioners. This year the atmosphere of volatility and uncertainty continues, leaving many to question the value in forecasting at all. But, as global economist Peter Hall put it:

“Here’s the deal: forecasting is alive and well, if the impact of structural changes is properly understood. Data and cyclical fundamentals together show that the global economy is stronger than news reports have indicated. This will help it to absorb higher interest rates without drastic fallout, and to continue growing for a number of years to come. To do this successfully, more capacity will be needed to deal with rising demand.”  – Watch the full video “Is Forecasting Passe?”

Read on for our 10 2024 trends.

Curious about our past predictions? Check out what we thought 2017-2023 had in store.

• 10 global trade trends we’ll be watching in 2023 
• 10 global trade trends we’ll be watching in 2022 
• 10 global trade trends we’ll be watching in 2021 
• 10 global trade trends we’ll be watching in 2020
• 10 global trade trends we’ll be watching in 2019
• 10 global trade trends we’ll be watching in 2018
• 10 global trade trends we’ll be watching in 2017

1. 2024 global trade outlook “uncertain but pessimistic”

Not exactly a cheerful headline. The United Nations Conference on Trade and Development (UNCTAD) released its Global Trade Update on December 11, projecting a highly uncertain and generally pessimistic outlook for 2024.

Factors contributing to this outlook include ongoing geopolitical tensions, escalating debt, economic fragility, lower demand in developed countries, reduced trade in East Asia, an increase in trade-restrictive measures, commodity price volatility, and lengthening supply chains, especially between China and the United States.

Despite these challenges, the report notes some positive trends in 2023, including a slight increase in trade volumes, indicating resilient global demand for imports, and a $500 billion growth in trade in services, boosted by delayed COVID-19 recovery.

The report also highlighted the impact of “friend-shoring, and a general decrease in the diversification of trade partners. For more on friend-shoring, skip to Trend 6.

The update provides a mixed picture across economic sectors. Looking ahead to 2024, the commodities sector faces continued uncertainty due to regional conflicts and geopolitical tensions. Overall, the report paints a complex and challenging landscape for global trade in the coming year.

2. Inflation and the global economy

The global economy remains fragile and uncertain, revealing and worsening structural weaknesses in an interconnected global system. Again, we need to look to the emerging trend of offshoring, reshoring, and friend-shoring, creating an overall realignment of global trade between rival blocs. This is expected to reshape supply chains, necessitating adjustments in company relationships and giving rise to new competition.

One of the central challenges facing the global economy in 2024 is of course inflation, with projections indicating a global inflation rate of 5.8%, and core inflation not expected to return to target levels of around 2% until 2025, according to the International Monetary Fund (IMF). However, variations in inflation rates are anticipated across countries and regions based on economic conditions, policy responses, and external shocks.

While the United States experiences relatively low inflation rates, the global average masks substantial differences among countries and regions. Advanced economies are projected to see inflation below 3.0% in 2024 after averaging 4.6% in 2023. In Canada, inflation is expected to continue to decline, staying between 2% and 3%, stabilizing at 2% toward the end of 2024, according to the Business Development Bank of Canada (BDC). Notably, the economic landscape includes a weak Eurozone and a particularly challenged United Kingdom.

Altogether, the realignment of global trade relationships and ongoing inflation challenges are expected to have a significant impact on supply chains, corporate relationships, and competitive dynamics in the coming year and beyond.

3. Cybersecurity risks continue to rise

2023 was a big year for cybersecurity, during which we saw the biggest ever denial of service (DDoS) attack and an increase in cyber attacks with big impacts such as the cyber attack that forced the FAA to ground all flights due to issues with a critical system.

The WEF listed “Widespread cybercrime and cyber insecurity” as the 8^th biggest risk in its Global Risks Report 2023.

Forbes lists 12 predictions for cybersecurity in 2024:

1. Rise In Ransomware Attacks
2. Increased AI-Powered Attacks
3. Flipside: AI As A Cybersecurity Tool
4. IoT Vulnerabilities
5. Electric Vehicle Hack Apocalypse
6. Quantum Computing Threats
7. Data Velocity And Hybrid Infrastructures
8. Need For DevSecOps
9. More Zero Trust Adoption
10. Stricter Data Privacy Regulations
11. Additional Supply Chain Attacks
12. Biometric Authentication Challenges

Ramping up cybersecurity action plans and closely monitoring the latest emerging threats will top many companies’ agendas for 2024.

4. Policy impact after COP28’s first ever “Trade Day”

At the COP28 climate summit in October, global leaders marked the first “Trade Day” as part of the UN’s annual climate conference, underscoring the crucial role of trade in combating climate change. Trade is seen as a powerful tool in addressing climate change, influencing global carbon emissions as well as facilitating the flow of green goods and services essential for the low-carbon energy transition.

The global production and distribution of goods and services contribute to roughly a quarter of all carbon dioxide emissions, according to UNCTAD.

During Trade Day’s launch a roadmap of trade policy options were outlined aiming at an equitable and ambitious response to climate change. Discussions throughout the day centered on leveraging trade policies to decarbonize global supply chains, incentivize businesses toward a net-zero future, secure value chains related to the energy transition, and integrate environmentally responsible practices into trade finance.

Emphasis was made on the need for a multi-lateral approach to creating climate and environment regulations so that small businesses and vulnerable countries aren’t entangled in a complex web of rules.

How this multilateral approach to more equitable and environmentally friendly trade policy will come together remains to be seen, and we will be watching for updates throughout 2024.

5. Trade-restrictive measures on the rise

Returning to UNCTAD’s The Global Trade Update, the report highlights a notable rise in trade-restrictive measures in 2023, particularly non-tariff measures (NTMs). This has been attributed to an increase in industrial policies and added pressure for countries to fulfill their climate commitments. As a result, nations are adopting policies that favor domestic industries and aim to decrease dependence on foreign supply chains.

A recent report from UNCTAD, titled “Trade regulations for climate action,” identified 2,366 NTMs related to climate change, impacting 3.5% of potentially tradable goods and representing 26.4% of global trade. For better or worse, UNCTAD has predicted that these policies are likely to reduce the growth of international trade in the year ahead.

6. Friend-shoring planning in 2022 and 2023 is coming to fruition in 2024

The continue swing toward “friend-shoring” for geopolitical closeness and overall risk reduction has led manufacturers to invest billions in building factories that are either closer to the end consumers or in less risky regions.

This trend continues after years of supply chain upheavals caused by a litany of weather, geopolitical and Covid-10 disruptions. The transportation sector is responding by increasing capacity in regions such as cross-border connections between Canada,U.S. and Mexico connecting to Latin America.

“During 2022, 14% of all U.S. imports by value originated in Mexico, according to data analyzed by Supply Chain Dive. Similarly, U.S. firms have long been financially active in the country, and are responsible for 42% of the total foreign direct investment in Mexico since 2006,” according to SupplyChainDive

There has been a general trend of re-organization of shipping routes enacted over the last couple of years that are now starting to operate at full capacity. Logistics companies are racing to fill the demand. Intermodal logistics services out of Mexico have been steadily growing as the CUSMA trade agreement increased demand in the region and became even more attractive within near-shoring and friend-shoring strategies.

UNCTAD also highlights a marked increase in trade concentration. “There has been an overall decrease in the diversification of trade partners, indicating a concentration of global trade within major trade relationships.”

7. Digital trade growth continues, particularly in Africa and Asia Pacific

Digital trade, comprising all digitally ordered or delivered transactions, is reshaping the global economy.

A significant trend in this digital era is the remarkable growth of digitally delivered services, which have nearly quadrupled in value since 2005, passing the growth of goods and other service exports. In 2022, these digitally delivered services made up 54% of total services exports, offering new opportunities for players in the global market, including micro, small, and medium-sized enterprises (MSMEs).

Although developed economies lead in exporting digitally delivered services, developing economies, including those in Africa and Asia Pacific, are increasingly participating in this trend. However, least-developed countries (LDCs) are experiencing slower growth in the export of digitally delivered services.

Governance in digital trade is also growing, and significant progress has been made through bilateral and regional trade agreements. Today most FTAs include digital trade provisions. On top of trade rules, regulations addressing cross-border data flows, consumer protection and issues around competition are being addressed through digital trade policy.

We’ll be watching for developments in the technology, standards and trade policy that come into play in 2024.

8. AI in everything

AI is transforming international trade, along with everything else, at a breakneck pace. This is presenting as many challenges as opportunities to businesses facing cybersecurity risks aided by AI, as well as using AI to find and protect against potential cybersecurity vulnerabilities.

It’s providing a myriad of supply chain technology solutions to improve processes in managing inventory and production, and automating logistics. It is also being used to ease cross-border regulation by automating form filling, checking for documentation errors, and help with compliance checks.

Financial institutions are using AI to assess financial risk and detect potential fraud. Small businesses are benefiting from productivity gains by using AI to generate trade documents, assist with translation, customers service and much more.

As AI is increasingly coming into play in business and in every day life, we will be watching with a particular eye on how it’s being used in trade functions and international businesses.

9. Supply chain volatility is still a huge factor in 2024

At the time of writing, shipping lines are being diverted from routes through the Suez Canal as attacks on cargo ships have recently escalated. At the same time, drought in the Panama Canal region is causing a major bottleneck and disrupting trade flows as shippers look for alternative routes or face delays.

Supply chain disruption has been the name of the game for several years now, with major challenges in capacity amid labour shortages and fluctuating demand during the Covid lockdowns of 2020-2021, geopolitical conflicts and weather-related delays.

While things have now largely stabilized since the pandemic with less congestion and a more normalized supply-demand, new risks such as cyberattacks, continued geopolitical conflicts, and labour shortages and strikes.

Fortunately, there are several tools and new technologies emerging to assist businesses with better plan and risk mitigation including the use of AI tools, digitization of trade and shipping documents, and increased transparency.

10. Gaining new skills most important in getting hired and promoted in 2024

An Employ Recruiter Nation Report shows that 39% of employers plan to focus on internal mobility in 2024. This indicates HR decision-makers’ awareness that in a competitive job market, hiring highly qualified candidates is challenging, necessitating a focus on retaining existing employees.

To do this, there’s a growing trend for organizations to offer career pathing, reducing employee turnover and enabling them to transition into roles that offer challenges and new learning opportunities. This eases the burden on hiring teams, as businesses seek to acquire new skills rapidly through upskilling and internal mobility.

Providing stipends for certifications, mentorship programs, and career development training will be crucial for leaders to empower employees to enhance their skill sets and advance within the organization. While external talent sourcing remains important, prioritizing internal mobility is set to be a major focus in 2024.

At the same time, emphasis will shift from the prestige of past employers on resumes to the importance of individual skills, which also improves diversity, equity, and inclusion. This shift benefits organizations as it broadens the talent pool. Businesses are expected to concentrate on addressing skills gaps which will help achieve the organization’s long-term strategic goals.

The renewed focus on skills is in both technical and leadership competencies, evident in job postings and internal opportunities. Recruiters will continue to prioritize leadership skills, ensuring that the current short-term focus doesn’t lead to leadership skill gaps in the future.

The post 10 global trade trends we’ll be watching in 2024 appeared first on Trade Ready.

What should you look out for or expect in the international business world in 2018? Let’s take a look and see what could be dominating the headlines you read over the next twelve months.

1. The CPTPP

Though President Trump withdrew the U.S. from the TPP in January, the remaining 11 countries are working to resurrect the deal as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This deal, if signed, would eliminate approximately 95% of tariffs on trade between these countries, who have a combined GDP of over $10 trillion USD.

In November, Canada surprised the other 10 countries by declining to sign the agreement, to the surprise of the negotiators and the Canadian international trade community. However, amid efforts to diversify exports beyond the American market, it seems unlikely that Canada will continue to drag its heels on an opportunity to gain preferential access to the Japanese market in particular. Expect any final issues to be resolved and the CPTPP to be signed sometime in 2018.

2. Ongoing, contentious Brexit talks

By December 2017, the UK has completed the first phase of Brexit negotiations with the EU, covering issues such as the Irish border, citizens’ rights and financial settlements. The second phase of negotiations will cover the UK’s transition period after formally leaving the EU in March 2019. Discussions over the long-term relationship between the UK and EU will be included in phase three.

This process was complicated on December 13, when several Conservative British MPs joined the opposition to vote for an amendment requiring British Parliament to debate and vote on any final deal with the EU before it can be approved.

The second phase of Brexit negotiations are planned for 2018, and are expected to present few greater challenges than the first phase. The final phase on the long-term relationship between the UK and EU, however, presents several important questions about economic integration and free trade that Britain’s politicians and citizens have not yet agreed upon.

With two sets of challenging negotiations, and the extra hurdle of parliamentary approval, the odds that talks will drag into the final three months before the UK leaves the EU on March 29, 2019 remain high.

3. Sustainable, cleantech exports

If you’re involved in the clean tech and sustainability sector, 2018 should be a strong year for you. Despite the U.S. withdrawal from the Paris Agreement, global regulations are still trending towards stricter environmental and emissions regulations, requiring businesses to invest in cleaner technology in order to meet those standards. According to EDC President and CEO Benoit Daignault, total global investment in cleantech has now exceeded $1 trillion and will reach $2.5 trillion by 2020.

Canada in particular is placing great emphasis on this industry. The Canadian government promised $1 billion towards clean tech in its 2017 budget for R&D. The Trade Commissioner Service is also hiring 15 new Trade Commissioners to focus specifically on cleantech.

4. India, Brazil, and New Zealand – the rising stars of global trade

If you’re looking for new markets over the next 12 months, Morgan Stanley recommends you take a hard look at India. They argue the country’s increased digitization, new tax laws and younger demographics present a bright future, and predict 7.5% GDP growth in 2018. Morgan Stanley also predicts that India will be the world’s fastest growing economy over the coming decade.

Brazil will also see a quick recession recovery, growing an expected by 3.1% in 2018, according to the Brazilian government.

If you’re more interested in fully developed markets, Forbes ranked New Zealand second on its 2018 Best Countries for Doing Business rankings, citing its 3.6% economic growth in 2017, among other factors. The country also ranked highly in several categories for ease of doing business, including first in IP rights, bureaucracy/red tape levels surrounding business, and Transparency International’s Corruption Perception Index.

5. Meaningful action to reduce oil dependency

As Venezuela continues to suffer through the collapse of its oil-dependent economy, and the U.S. plans to become a net exporter of oil within 10 years, several oil-dependent economies are taking steps to diversify their economies.

In Russia, Putin’s approval levels are dropping as the economy struggles through lower oil revenues. Despite making fiscal changes to reduce the national budget’s dependence on oil revenues, he may push for new measures to improve his chances in the country’s 2018 presidential elections.

Saudi Arabia has plans to sell about 5% of Saudi Aramco, the state-owned oil company, through an IPO in 2018 and expects to generate up to $100 billion for the country’s Vision 2030 program, designed to shift the Saudi economy away from oil dependency towards tech and entertainment services.

Nigeria and Angola, meanwhile, are looking to agriculture to reduce their oil dependency issues. Nigeria, dependent on oil for 70% of government revenues, has launched a new program to increase yam exports to Europe and the U.S., as the country produces 60% of the world’s yams. Angola are instead focused on a broader approach to tap into their agricultural potential, which includes producing more cereals, milk, chicken, cassava, and other products.

6. Banks taking on blockchain

It is practically impossible these days to tune into the business or financial news and not hear a story about the latest blockchain or cryptocurrency development. Blockchain technology, allowing multiple players to have access to a live, unalterable digital ledger, offers game-changing possibilities for international trade finance. In 2018 this buzzworthy fintech is moving beyond Silicon Valley start-ups, into the mainstream world of global financial institutions.

In March, 2017, we reported on how banks were working to bring the advantages of blockchain technology to their corporate clients. In May, the R3 Consortium, made up of of 70 of the world’s biggest financial institutions and created to research and develop blockchain adoption, announced it had secured its largest ever investment. Then in October 2017, seven major banks partnered with R3 and Finastra to develop a blockchain-based marketplace for syndicated loans. On December 6, Amazon joined the blockchain party, announcing a partnership with R3 to allow the Corda platform to be the first distributed ledger technology to operate on the Amazon Web Services Platform.

What will we see in 2018? Swiss global financial company UBS has led an initiative to create a “utility settlement coin” that would represent each major national currency. If this coin is launched, the Corda platform could be adapted to facilitate its use.

IBM is working on launching their own blockchain platform that would allow banks to rapidly clear global payment transactions. There are also several start-ups working on digitizing the bill of lading process.

2018 could be the year some of the blockchain-based payment initiatives move from development to adoption.

7. Adoption of futuristic supply chain technology

Machine learning, automation and robotics, self-driving vehicles, new tracking technology – all of these futuristic supply chain tools will see major developments and implementation in 2018.

The past year was a big one for self-driving vehicles, culminating with the reveal of Tesla’s new fully electric semi, gaining pre-orders from big players such as PepsiCo, UPS and Walmart. Companies invested over $1 billion into self-driving and other trucking technologies in 2017.

Speaking of investing in supply chain technology, over $4 billion was invested in AI by U.S. venture capitalists in the past year. One application that has seen immediate return for companies adopting machine learning capable AI is Multi-Echelon Inventory Optimization (MEIO), which has been shown to reduce inventories by 30% while maintaining or improving customer fill rates.

Robots will also continue to play more of a role in warehouses in 2018. While some are increasingly capable of working independently, replacing human workers on the floor, others are working alongside humans, or being controlled by humans using VR applications. There’s no doubt that the demand for the skills needed to work with robotics will continue to rise in the year ahead.

8. Planning for the possibility of a world without NAFTA

The sixth round of NAFTA talks is set to kick off in Montreal January 23. But as the negotiations near, there doesn’t seem to be a lot of positivity. The first five rounds reportedly saw very little progress, putting even more pressure on this next round.

What’s the problem? The U.S. is seemingly immovable on five issues that pose major problems for the agreement’s other two member countries, Canada and Mexico.

The five issues include:

• Removal of reciprocity in government procurement at the sub-national level
• Changes to the rules of origin in the auto sector
• Elimination of the independent dispute resolution clause
• End of Canadian supply management of the dairy, eggs and poultry industries
• Addition of a “sunset clause” on NAFTA itself

“NAFTA, by itself, will not collapse,” said Mexico’s Economy Minister ldefonso Guajardo in October, but even if Mr. Guajardo is right, it may change drastically from what we have in place today.

If this really does spell the end of NAFTA, the Canadian auto, pulp and paper, chemicals, mining, aerospace and oil and gas industries are likely to be most affected, according to BMO chief economist Douglas Porter.

Even without NAFTA, trade between the three nations is inevitable. Supply chains between Canada and Mexico criss-cross the U.S. How businesses adapt to the realities of a new – or non-existent – NAFTA, is something we’ll be watching closely in 2018.

9. Cyber threats and IP risks

As technology gets more sophisticated and ingrained in our work and personal lives, so too does the threat of cyber security breaches, which in turn compromises our intellectual property. Sixty-four percent of companies surveyed reported some experience of web-based attacks in the past year. Companies of all sizes are targeted and face the risk of cyber threats from simply being connected to the internet. And the costs are large – the average cost of a data breach in Canada is a jaw-dropping $6.03M.

So what types of threats are growing in 2018? Phishing, social engineering attacks, malicious code, botnets, denial of service attacks and ransomeware are all on the rise.

Ransomware in particular is growing in frequency, attacks rose an alarming 50% in 2016. Demonstrative of the damage a ransomeware attack can cause was the aftermath of the WannaCry attack in May 2017. Hundreds of thousands of individuals lost access to their data, compromising intellectual property, private customer information, and disrupting commercial processes.

As a business, it has never been more crucial to include cybersecurity programs directly in your strategy, and engage IT professionals to help cover all aspects of your web-based properties.

10. Demand for global trade skills higher than ever

Despite continuing turmoil and uncertainty on the global political stage, Canadian businesses still hold an optimistic outlook about their export opportunities. According to Export Development Canada’s Fall 2017 Survey, the majority of respondents believe that export sales will increase in 2018, citing new opportunities, growing demand, and expansion into new markets as stimulating factors.

As more businesses of all sizes get involved in international markets, the demand for talent skilled in global trade processes, is also growing.

“We hear from exporters all the time that knowledge is one of the most important tools for building international success,” said EDC Senior VP, Business Development Mairead Lavery.

In 2017, the FITTskills international trade training program underwent a major update, including the addition of 60% new content to reflect the changes we’ve seen in technology, ecommerce, trade agreements and more. In October, FITT also partnered with EDC to expand access to the available resources for businesses of all sizes looking to take advantage of international opportunities.

There’s no doubt that we all face an exciting year ahead, full of innovation, an ever-shifting global political environment, and risks, alongside ample new opportunities for business growth.

What trends will you be watching in 2018?

The post 10 global trade trends we’ll be watching in 2018 appeared first on Trade Ready.

We are said to be experiencing the Fourth Industrial Revolution, building on the seismic shifts that came before it at an unprecedented speed of technological breakthroughs. This revolution is evolving exponentially, combining aspects of the physical, digital, and biological spheres, and disrupting every industry on a worldwide scale.

Needless to say, global value chains are not immune to this continual disruption. 2018 will see a need for every player to become agile enough to adapt to rapid technological developments as they come – or flounder in the wake of those that do.

Here are the top 8 ways supply chain management will be different in 2018, and how you can keep up.

1. Machine learning will teach supply chain managers how to optimize

Artificial intelligence is becoming an increasingly prevalent part of international business each year, and shows no signs of slowing.

In the past 12 months, over $4 billion has been invested into AI by U.S. venture capitalists alone, and that’s not counting established AI companies or efforts undertaken by other businesses.

With the ability to process data in real time and adjust your demand forecasts, inventory levels and shipping strategies for optimal performance, machine learning has the potential to save companies millions of dollars, making AI technology and training a worthwhile investment.

One of the most popular uses of machine learning is Multi-Echelon Inventory Optimization (MEIO). For companies with inventory in several locations, this tool informs you of the optimal inventory levels for each location, and has reduced total inventories by as much as 30% while maintaining or improving customer fill rates.

Machine learning is also being used to make forecasts and plans for the launches of new products, and to predict demand and adjust inventory and shipping accordingly during promotions. However you use it, the potential to act faster and more efficiently at lower costs is impossible to ignore.

2. Cybersecurity will be a top priority to keep your technology and data safe

What do Equifax, Deloitte, Yahoo, InterContinental Hotels Group, Chipotle, Brooks Brothers, Kmart and Verizon have in common? They all made the news in 2017 for customer data breaches, with millions of people affected.

There are few things more valuable to a business than its data, and few things that will drive customers away faster than concerns about their emails, credit card numbers, passwords or other information falling into the hands of hackers.

Businesses must be proactive to keep their servers secure, and ensure employees are trained to watch out for phishing and other online scams. If any sensitive data is entrusted to third parties, whether partners, clients or service providers, companies must be vigilant about their security measures as well, since breaches through a third party are an equally damaging blow.

As more devices are connected through the Internet of Things (IoT), companies must include proper security measures in the design of their products to ensure interconnected devices are not left vulnerable to cyberattack.

3. Having a Plan B will be essential to stay profitable in case tariffs increase

In 2017, the U.S. made headlines by announcing significant new tariffs on softwood lumber and Bombardier jets, as well as solar panels and other technology. With the future of NAFTA still uncertain and President Trump delivering an “America First” national security strategy – promising to act on what they see as unfair trading practices – 2018 could see further tariff increases.

Whether your supply chain involves the U.S. or not, new tariffs could add to your 2018 costs, and leave you in the red if you’re not prepared for them.

If tariffs increase, are you prepared to cut back costs in other areas to remain profitable? Or to re-route your supply chain to avoid those tariffs?

Maybe your business would need to consider exiting the U.S. or another market altogether.

Ensure you have a in place and do your research about the latest tariffs, trade agreement negotiations and other related developments so you’re not caught by surprise when changes come.

4. There will be more robots and automation in warehouses than ever before

The rise of robotics in manufacturing has been a leading story for decades, and continues to evolve with the latest technology. The trend is now expanding to warehouses around the world.

The main question seems to be how these robots will interact with humans, if at all. Some, like Amazon’s 80,000 Kiva robots, are designed to work independently, taking the place of floor workers. Others, like those designed by 6 River Systems, work with employees on the floor to increase their speed and efficiency, or are controlled by humans through VR like Kindred’s Orb robots, to help the robots learn the skills they need to operate independently.

Focused on finding products, sorting them and moving them for transportation, robotics are improving efficiency and have the ability to learn and improve over time. Where does this leave human employees? Some tasks requiring fine motor skills are still beyond warehouse robots, requiring human intervention on the floor. Other employees have improved their technological skills to work more closely with their robotic counterparts, improving their results and easing the physical toll of their work.

A loss of jobs is inevitable, but those with the skills to adapt to higher-skilled labour will be able to thrive for years to come.

Stay tuned for part 2 with 4 more of the top 8 ways supply chain management will change in 2018.

The post 8 ways supply chain management will change in 2018 (Part 1/2) appeared first on Trade Ready.

Other countries were less willing to use trade policies and agreements to address these issues, unless their concerns about privacy, surveillance and domestic regulation of the Internet are effectively addressed.

However, in 2015, some 12 nations found common ground on rules to both govern digital trade and limit digital protectionism in the Trans-Pacific Partnership (TPP), which was signed February 4, 2016.

The TPP is the first trade agreement to include binding commitments that facilitate cross-border information flows and limit digital protectionism.

It will therefore have a huge effect on the Internet and Internet governance for 3 reasons:  First, the 11 negotiating parties have a population of some 800 million people, or 11.4% of the Earth’s total and almost 25% of all Internet users as of June 2015 (some 3.27 billion).

Moreover, TPP includes important and growing markets for digital products and services in countries such as Vietnam.

Second, countries including Colombia, Indonesia, the Philippines, South Korea, Taiwan, and Thailand have expressed interest in joining TPP should it come into effect. Thus, they would adhere to TPP’s e-commerce provisions.

Third, because of the size and scope of TPP member states’ Internet markets, other countries sending and receiving information flows from TPP nations will have to comply with its rules.

They will also probably need to build on and copy its rules in future trade agreement if they want to keep costs down and minimize frictions.

In a recent study of how governments use trade policy to regulate the Internet for the Global Commission on Internet Governance, here’s what I found:

1. The Internet has empowered more people to participate in trade. As a result, digital trade, which offers important benefits to society, is booming.

More trade will promote more competition in the digital economy, which over time will provide producers and consumers with more options and better services, at lower prices.

However, this competition cannot occur when governments use local laws and regulations to undermine foreign competitors.

Most officials recognize that the best place to address trade-distorting policies is in trade agreements, which have a positive record in establishing trust and the rule of law among market actors.

While TPP countries are still allowed to give grants or subsidies to companies engaged in digital trade, the deal guarantees the cross-border flow of information related to digital trade and ensures countries cannot discriminate among foreign and domestic providers. It will also ensure they cannot create more favorable conditions for local digital products to put those of other countries at a disadvantage.

2. Internet demographics will have important implications for trade policies and agreements.

The largest and fastest-growing Internet markets are in highly populated developing and middle-income countries, such as India, Brazil, China and Indonesia. In these countries, absolute numbers of users are high but the percentage of penetration is still relatively low.

Internet firms from Canada, the United States and the European Union operating in these markets increasingly find contradictions between the norms that govern their business practices and the requirements of the jurisdictions where they now operate.

Trade agreements could help clarify how governments regulate cross-border information flows and how firms sending, processing or using such flows should behave.

3. Nonetheless, trade agreements might not be the best venue for governing cross-border information flows.

Trade agreements regulate the behavior of states, not of individuals or firms. Companies and citizens therefore have no direct way to influence trade agreement bodies.

Trade agreements are also negotiated in secret by governments. These negotiations move slowly and the public is not directly involved. In contrast, the Internet is governed in a more ad hoc, bottom-up and transparent manner.

Stakeholders from civil society, business, government, academia and national and international organizations make Internet governance rules in a timely, open and collaborative manner without a central governing body.

Many Internet activists would not take kindly to the WTO or other mega regional trade agreements becoming major venues for the regulation of cross-border information flows, given their secretive, slow, top-down and closed processes.

Moreover, many Internet issues that involve information flows, such as privacy or the security of data, are not market-access issues.

However, they are regulatory issues, and finding common ground on cross-border regulations has become important for twenty-first-century trade agreements.

Finally, trade agreements are not designed to achieve market access and not to facilitate interoperability and universal standards, which is how Internet policies have traditionally been designed.

4. Trade agreements are sometimes perceived as favoring U.S. interests and actors.

During most of the twentieth century, the United States was the world’s largest and most important market.

The WTO’s GATS and its predecessor agreement, the GATT, as well as many other trade agreements, reflect U.S. norms (such as transparency and due process), as well as U.S. priorities (such as protecting intellectual property rights).

However, other market actors, such as China or Russia, might view these priorities and language as skewed to meet U.S. needs, instead of the needs of other countries. Government officials from these countries probably do not want to use trade policy to perpetuate US digital dominance.

If the United States and other proponents of using trade agreements to regulate cross-border information flows want to change these perceptions, they must re-frame the rationale for including such language in trade agreements.

Rather than focusing solely on the economic benefits of reducing barriers to digital trade, proponents should also explain how rules designed to foster cross-border information flows will build trust and yield benefits to human welfare and the Internet as a whole.

5. If policy makers want to use trade agreements to govern information flows, they must include language that ensures that governments also work to meet their human rights obligations.

Human rights are a key element of the rule of law online and thus should be included in international efforts to govern the Internet.

However, the WTO agreements (and most trade agreements) do not contain language that links government obligations to protect, respect and remedy violations of human rights to government obligations for trade.

Trade agreements such as the WTO have no authority to prod member states to provide an enabling regulatory context for the protection of these rights.

Accordingly, should they choose to include binding rules governing cross-border information flows in trade agreements, policy makers should also include language clarifying the relationship of trade obligations to human rights obligations delineated in international law.

Moreover, the TPP includes provisions that could limit censorship and Internet filtering, because TPP makes the free flow of information a default.

Nations cannot disrupt the free flow of information unless they justify exceptions as necessary for national security, public morals, public health or privacy.

TPP member states could use these provisions to challenge censorship or filtering in a trade dispute, which are by definition limits on the free flow of information.

6. Trade negotiations could have positive implications for global Internet governance.

Should negotiations under TiSA or other trade agreements succeed, they could provide an impetus to the development of globally coordinated policies on a wide range of global issues that policy makers must address, from privacy to cyber security.

A system of shared rules builds greater trust and could reduce costs for firms and individuals who must deal with different rules about how and where data can be collected, stored and transferred. A system of shared rules is needed for collection, storage and transfer.

7. Policy makers need to take steps to ensure trade agreements establish clear rules to reduce online barriers.

Moreover, those rules should complement and support other international agreements and treaties such as those governing human rights.

Trade negotiations could also clarify whether domestic policies to restrict the Internet, protect privacy, utilize local content and services, etc., are truly “protectionist” in intent.

Until policy makers devise a set of rules governing information flows, and clear exceptions to those rules, countries will continue to argue about the trade-distorting effects and legitimacy of such policies.

In sum, if policy makers choose to use trade agreements to regulate cross-border trade, they must find ways to balance trade and human rights obligations and, in so doing, make a broader case that such rules enhance human welfare.

They may find that by so doing, they encourage information flows that expand opportunities for more of the world’s people.

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