2013: Surprise Year of the Trade Agreement?

At first blush, a boost in trade agreements would seem unlikely given all the wrangles about fiscal cliffs and austerity plans (see previous blog and eNews entries covering FCIB’s Global Conference from Philadelphia in November). The political will to attack trade issues would seem to be missing, and in developed economies, the subject of trade is always controversial because trade is just what it implies: one has to give something up to get something. However, there are three reasons to believe that trade agreements could potentially become a surprise focus at some point this year, particularly where Europe, Japan and even the United States are concerned.

The first is the increased need for developed economies to find some means by which to grow. Everything else has been tried, and nothing has yet done the trick. The monetary authorities have run out of tricks as interest rates have been at rock-bottom for half a decade, and there is nothing left as far as the bond markets are concerned. For many nations, the solution will have to be increased levels of exports, and that doesn’t seem to happen without the assistance of a trade agreement.

The second reason is the increased need to bolster strategic ties between nations. Geopolitical issues are only getting more complex and must be addressed in some kind of cooperative manner. Given that nations have very different strategic goals, there is a need to find incentives for cooperation. The most consistent weapon first-world economies employ is trade and market access.

The third reason for increased attention to trade agreements is what could be considerable pressure from the business community in first-world economic nations. The financial future of even smaller companies depends on access to overseas markets, and that gets a whole new community engaged in the conversation. Things have changed dramatically in the last few years and now even the very smallest companies have an opportunity to do business outside their borders, making them far more interested in the opportunities that could come with a new trade deal or two.

-Armada Corporate Intelligence

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