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Rupture or Reorder?
Behind the headlines of the tariff war, the economies of the US and China are decoupling while the two countries engage in a zero-sum contest for C21st technological primacy. With the two largest economies at loggerheads, governments and businesses in Europe and South East Asia are caught in the middle. And with trade becoming a geopolitical weapon, the authority and credibility of the multilateral framework are fast eroding and economic nationalism is spreading.
Yet, simultaneously, in Asia and Africa trade integration is moving ahead. Regional infrastructure projects, notably China’s massive Belt & Road Initiative, are bringing Europe and East Asia closer together. New trade deals are being forged by Europe, Japan and others, and new regulatory standards being developed. And even as the WTO faces a major crisis, significant new plurilateral initiatives are underway in areas such as digital and services trade.