There’s never been a more exciting time to be in global trade. While the headlines continue to be dominated by geopolitical challenges, positive forces are setting the scene for a promising 2019 and beyond.
Over the last 12 months, the gap between growth in trade volumes and values has decreased; and for the first time in five years, trade growth is once again outstripping global growth – by a factor of 1.5x. Trade liberalisation also continues apace, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Japan Economic Partnership Agreement highlighting what can be achieved by like-minded partners. Together these Agreements cover almost 40% of global GDP and provide a clear statement from confident nations that a rising tide of fair trade can benefit these economies by over USD 450bn.
Arguably the most exciting trade development, however, is the pace of technology change. For several years, we have been waiting for innovations such as blockchain to deliver on their true potential. Now, we are on the cusp of exponential change in the industry – and treasurers must be ready to adapt because centuries worth of change is taking place in less than a generation.
As part of this change, a host of cumbersome, time-consuming, manual, paper-based processes are evolving into streamlined ‘one-stop-shop’ digital solutions. An early example of this is we.trade – a blockchain-based platform that HSBC has developed together with IBM and a consortium of eight other banks.