A pandemic, geo-political strife and climate change have severely disrupted trade in recent years. But Deborah Elms, the founder and executive director of the Asian Trade Center, has never found a trade question she couldn’t answer. Elms explains the common mistakes and struggles in covering trade [Transcript | Video].
4 takeaways:
➀ Trade, economics and the media’s ‘false narrative.’
“So, you have to watch… two parts of this, what governments do and what companies do,” Elms said. A common assumption in the media is that once the government makes a decision, firms will immediately act to the government’s advantage. “I think that that is a false narrative,” Elms said. Firms are often controlled by foreign investors, and they will not necessarily act as government agents.
➁ Trade data is incomplete.
Digital trade, service trade and small business trade are all difficult to appraise. “We also have a hard time disentangling the value of services from the value of trading goods,” Elms said. For instance, the value of a table includes the value of the services inspecting the table for safety and industry standards. “There are a lot of gaps, and it creates a real challenge,” Elms said.
➂ ‘Completely clueless’ about trade agreements.
Even large, established companies are “often completely clueless about trade agreements,” Elms said. Some companies will claim they use trade agreements, but after some digging, it becomes clear they don’t actually use them. That means new trade agreements are unlikely to overwhelm or shock markets because most companies don’t understand them, and governments don’t sufficiently explain what the agreements mean. “Companies internally can’t get their act together to actually take advantage of these trade agreements,” Elms said.
➃ Climate is changing the shipping industry.
“One of the biggest producers of carbon emissions in our logistics supply chains comes from shipping,” Elms said. “It’s not the worst, but it is pretty significant. Most traded goods move by ship (except for high-value cargo, which moves by air). It’s “a little early to say” how climate-related changes to shipping will affect Southeast Asia, Elms said, but costs of shipping will increase if ships need to be retrofitted to reduce their emissions. Inflation and geo-politics are more significant barriers to trade, though, Elms said. “I think it will just be one more confounding factor that companies have to grapple with.”
*This fellowship is part of an ongoing program of journalism training and awards for trade coverage sponsored by the Hinrich Foundation. The National Press Foundation is solely responsible for the content. All programs are on the record and resources and transcripts from this and previous fellowships are published.