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№ 2021/4

Market: forecast and conjuncture

OSTASHKO Tamara Oleksiivna¹

¹Institute for Economics and Forecasting, NAS of Ukraine

MULTIPOLARITY OF THE WORLD TRADE: CHALLENGES AND "CORRIDOR OF OPPORTUNITIES" FOR UKRAINE

Economy and forecasting 2021; 4:24-43

https://doi.org/10.15407/econforecast2021.04.024

ABSTRACT ▼

The paper discusses trends of the world trade development towards multipolarity that is caused by the increasing impact of “newly emerged” leaders, in particular China, and weakening of the domination of “traditional” transatlantic leaders. The development of multipolarity in the world trade is supported by the processes of trade regionalization, especially by signing of megaregional trade agreements on the base of the current balance of power in the world trade.
The details of the regional trade agreements concluded by the world trade leaders – USA, EU and China are described. The academic discussion on the role of Regional Comprehensive Economic Partnership (RCEP) leads to the conclusions that creation of RCEP will induce the creation of a new world trade pole in Asia and the Pacific region during the next decades, where China will play a leading role.
The future of the World Trade Organization and the WTO fundamental principle of multilateral trade relations is the most controversial issue in connection with the development of multipolarity of the world trade. Challenges that were faced by the WTO due to trade digitalization, COVID-19 pandemic and climate changes are analyzed, alongside with sources and causes of the WTO crisis. The spreading of economic patriotism (nationalism) trend that manifests itself in trade as a policy of protectionism is discussed in the context of the transition to multipolarity in the world trade.
The development of multipolarity in the world trade is followed by the processes that must be considered in the shaping of Ukrainian trade policy. The ability of Ukraine to get its “space for maneuver”, which will allow to increase the country's economic potential in the framework of the new world trade configuration, depends upon this country's trade policy that is grounded on the analysis of risks and opportunities in the trade relations with “major players” in the world trade.
Development of the trade with China creates significant risks of the increasing of raw materials orientation of export and strengthening dependence on the import of industrial goods from China. Vital risks also follow signing of the credit and investment agreements with China. Chinese investment in agriculture and food industry are the riskiest as they use natural potential of the recipient countries and Chinese technologies to diversify the sources of the food import to China. The shaping of the Ukrainian trade policy with the EU countries in the medium term will be influenced by latter’s new trade policy of Open Strategic Autonomy. The main challenge is created by the EU plans to implement the Carbon Border Adjustment Mechanism (CBAM), which provides for the import tax on the import of the electricity, cement, aluminum, fertilizers, and products from steel and iron. The opportunities, created by the new EU trade policy for Ukraine have emerged due to the EU's declared support to the countries of the Eastern Partnership that have DCFTA with EU, including green and digital transition. The principle of “autonomy” in the new EU trade policy emphasizes the EU's ability to make its own choices, reflecting its strategic interests, which has features of the policy of economic nationalism and protectionism and will create a “corridor of opportunities” for pursuing protection measures for the development of domestic industries

Keywords:multipolarity, world trade, trade policy, regional trade agreements, economic nationalism

JEL: F13, F14

Article in English (pp. 24 - 43)

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№ 2021/4

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