MONTE CARLO, MONACO / ACCESSWIRE / October 4, 2017 / The world’s outlook on trade has been undergoing significant shifts during the recent years. Multilateral deals, which defined the global marketplace after WW2, have started to impede as countries are looking to establish more efficient arrangements with fewer participants – bilateral deals -to capitalize on their core interests. Vicente Izquierdo Munoz, a renowned broker of CFDs, explains the impact of this economic strategy on global trade.
As bilateral deals start to outnumber multilateral agreements, regional standards and regulations of industries like biotechnology and agriculture start to diversify, representing productivity issues for countries involved in multiple arrangements at once. With each country aiming to preserve sectors that make the core of their nation’s social identity and protect domestic manufacturers from foreign competitors, agricultural regulations and biotech policies become the center of attention for all players. Agricultural tariffs are some of the highest countries impose and the hardest to bargain down. The same goes for sanitary and phytosanitary (SPS) regulations including pest control, processing standards, and policies on GMOs (genetically modified organisms), which pose the biggest challenge for supply chains in terms of cost and effort. Being the prime advocates and striking bilateral deals with Canada, Mexico, South Korea, China and Southern Common Market, the U.S. and EU are reconsidering their historically established positions and creating more transparent deals, while having less control over global regulations and policies.
As noted by Vicente Izquierdo Munoz, the complexity of bilateral deals is further intensified by China. Being the largest agricultural and crude oil importer as of 2017 – China’s imports averaged 8.55 million barrels per day (p/d) bypassing 8.12 million barrels p/d in the U.S. – China is well poised to shape international standards even without striking bilateral deals at all, and force others to comply with its own standards by the sheer size of domestic demand. The Chinese market is far too lucrative to be ignored by any country for a long period of time, and striking bilateral deals that contradict China’s regulations and policies can result in the loss of millions of dollars.
China’s aggressive economic strategy is already disrupting South America. During the recent years, Chinese-made duplicates of Vueltiao straw hat – Columbia’s most iconic garb, cheaper shoes and various value-added goods including computers, appliances, and cars, have flooded the Southern Common Market and driven domestic manufacturers out of business. This has had a negative impact on the economy and forcing the region’s developing countries to fall back on massive exports of agricultural commodities, iron ore, and crude oil. If South America continues down the current course, it risks going back to heavily relying on the import of consumer goods, being vulnerable to international commodity market price shifts and finding itself out of global trade competition.
Vicente Izquierdo Munoz is an internationally acclaimed foreign exchange expert and the co-founder of a leading brokerage firm offering CFDs on currencies, indexes, and commodities. With over 17 years of experience, Munoz and his team provide clients with global exposure and investing opportunities in over 180 countries throughout Europe, Asia, Latin America, Africa and the Middle East.
Vicente Izquierdo Munoz – Co-Founder of a Leading Brokerage of CFDs: http://vicenteizquierdomunoznews.com
Vicente Izquierdo Munoz – Explains the Decline in South American Inflation: https://finance.yahoo.com/news/vicente-izquierdo-munoz-explains-decline-194700567.html
Vicente Izquierdo Muñoz y La Tecnología: http://izquierdovicente.blogspot.com
SOURCE: Vicente Izquierdo Munoz
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