global trade

Pivoting the Business: Small Business Survival in Travel and Tourism

Pivoting the Business: Small Business Survival in Travel and Tourism

It might be assumed that MSMEs that deliver services to travelers will be unable to manage at all. As an example, if no one is coming to the visit the city, site or beach, what good are tour operators or local guides? However, smaller firms should not despair. For many companies, it is possible to pivot and offer travel and tourism services online. AirBnB, for instance, has been developing an innovative lineup of “experiences” from their local hosts that are in hot demand. Many of these offerings even come with substantial price tags for customers, allowing firms to generate revenue in a purely virtual world. It may even be the case that some firms offering extremely popular experiences make more money in the downturn than before, as a global audience can provide more customers than those requiring a physical presence. What do these travel experiences look like? Could be learning the secrets of Japanese whiskey, frying spring rolls with a street vendor in Bangkok, creating a storybook for the whole family with an author in Mexico, or taking a scuba “tour” with a local guide in the Maldives. Customers might sign up for virtual walking “tours” of far-flung locations like temples or forests in Bhutan or opt to make sangria with drag queens in Spain. Innovative offerings from creative MSMEs could dramatically expand the concept of travel, leaving customers even more eager to experience something similar in person once flights and travel resume. Destinations that weren’t anywhere on a personal “bucket list” could shoot up during a time of lockdown and travel disruptions.

Wanted: An Unusual Suspect for the Next WTO Director General

Wanted: An Unusual Suspect for the Next WTO Director General

It is time for WTO members to salvage the system they have and begin its repair rather than choosing a new wallpaper. This is a tall order for the next Director General. The next DG must have an intimate understanding of emerging trade and economic issues, particularly those that will define competitiveness and sustainability in the future in areas such as digital, services, and intellectual property, which account for a growing proportion of value-added. Issues related to climate change—from carbon reduction solutions to climate friendly products and processes—will play a growing role in national actions and thus in trade policy. Part of the DG’s role will be to demonstrate to members that these are no longer Northern agenda items, but global ones, and that multilateral engagement on these issues is essential to deliver prosperity for all. High on the list of selection criteria should be managerial skills, which have been given lower priority in previous processes. Such skills include the capacity to envision, to bring out-of-the-box thinking to bear, and to guide change processes with members; to synthesise and communicate a shared vision of an updated WTO; and the ability to energise members and the WTO staff in the Secretariat toward a mission of reform. She or he will need the interpersonal skills to bridge differences and build trust, and the strategic and tactical skills to organise for action. The WTO possesses a devoted and high-calibre Secretariat with whom the DG should promote shared objectives and leadership in generating the innovation that will be needed for effective change

The Future of Trade

The Future of Trade

In a world of fear and panic, compounded by a global rulebook that is increasingly being suspended, firms are struggling. Companies do not manage increasing risks and growing uncertainty very well. The natural inclination is to suspend all decisions—to not hire any additional staff, to retrench, to cut costs, and to limit future investments. Contraction by firms only exacerbates the challenges. Companies that are in shutdown mode are not buying goods or services. Suppliers are caught, unable to manage their own costs. Many of these challenges are going to be hard to manage, no matter what responses governments provide. Companies and citizens will make their own decisions about employee and personal health risks. Individuals that end up with radically altered lifestyles as a result of prolonged periods at home or out of work may permanently change their buying patterns. Unlike companies or households, government cannot simply shut down. It has to do two things that are hard: manage the immediate situation and plan ahead to limit future damage. Understandably, the former task occupies most of the time and attention for officials. But the latter also needs focus or countries will come out of this current crisis unprepared for accelerating growth and supporting future development.

Revisit: Trade in the First Hour of My Day

Revisit: Trade in the First Hour of My Day

All the ways that trade affects the first hour of my day demonstrates one contributing factor to globalisation. But these benefits to me from trade—my ability to use an iPhone alarm, to shower and shave, and to drink good coffee—are trade most simply, not globalisation itself. A decision like Brexit, a desire to decouple from trade or to “build a wall” will not eliminate trade or the ability to enjoy these products; it will merely make them more expensive. It would not eliminate foreign ideas and cultures from permeating society, for those have little to do with trade itself. At its most simple level—taking just the first hour of one’s day—trade is, in short, the ability to enjoy life as we know it. It is the ability to wake up to an alarm while lying on cotton sheets, to walk on tiles and to shower and to catch the bus to work. We misunderstand and underestimate trade at great costs to ourselves and to society.

The Titanic Has Hit the Iceberg: Global Trade in Profound Trouble

The Titanic Has Hit the Iceberg: Global Trade in Profound Trouble

We have not seen this sort of global trade system in a very long time, so it is not possible to imagine fully what it will look like.  But to return to the Titanic discussion, if the main boat is sinking, what will happen?  Everyone will be desperately looking for any way possible to avoid drowning. The ideal scenario is to have another luxurious cruise ship nearby to pick you up.  For some countries, this trade option is available.  The European Union fits the bill for some lucky passengers.  Slightly less fancy, but still desirable, will be the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which gives members significant benefits from being inside a new luxury liner. A bigger boat is much better in a wide ocean than smaller boats.  The Regional Comprehensive Economic Partnership (RCEP) with 15 members in Asia is slightly less well-appointed than the CPTPP, but will do quite nicely for most Asian countries.  Some countries will be looking for any lifeboat, including tiny rowboats made from lashing together bilateral deals with key trading partners.  Some will get stuck trying to straddle a bunch of smaller boat options. Finally, some members will have no true options and are facing the freezing waters.  One of the main purposes of the multilateral trading system, in fact, has been to help smaller, poorer countries navigate a world of bigger, more powerful countries.  Once the Titanic sinks, this safety net is no longer available.  Drowning is a real risk.