Stephen Olson, Research Fellow, talks international trade in post-COVID world at UNDP event
Published 10 June 2020
Hinrich Foundation Research Fellow Stephen Olson shared insights on international trade in a post-COVID world at United Nations Virtual Forum on Responsible Business and Human Rights (RBHR) 2020 on 10 June 2020.
The RBHR Forum is a multi-stakeholder event addressing an array of priority issues under the Responsible Business and Human Rights Agendas. The Forum took place on 9-11 June 9 2020.
The virtual forum was organized by United Nations Development Programme with the support of International Labour Organisation, United Nations Entity for Gender Equality and the Empowerment of Women, United Nations Children’s Fund, United Nations Economic and Social Commission for Asia and the Pacific, among others.
Stephen Olson took part in a panel discussion titled, “Preparing for the New Normal – International Trade in a Post-COVID World”.
The discussion focused on the role of trade in reimagining and recalibrating to mitigate inequality and ways to address human rights costs and risks. It also looked into the current trends with regards to labour and sustainability as well as new approaches required to ensure trade and investment get back on track. The discussion was moderated by Sean Lees, Business and Human Rights Specialist at the UNDP, and panellists included:
- Mia Mikic – Director Division on Trade, UNESCAP
- Joyce Chau – Director Asia Pacific, amfori
- Do Quynh Chi – Director, Chief Labour Researcher, Research Center for Employment Relations
- Madelaine Tuininga – Directorate-General of Trade, EU Commission
- Stephen Olson – Research Fellow, Hinrich Foundation
During the discussion, Olson said that coronavirus pandemic has reminded us that despite substantial benefits associated with trade and integration during the last seven decades, it can also bring a certain amount of vulnerability and risk. Pandemic is forcing fundamental reconsideration and recalibration of our approach to international trade.
Diving into the approach to international trade, Olson said that traditionally countries placed the premium on economic efficiencies in trade but in the post-COVID world, we are trying to balance the economic efficiencies and ensuring the security of supply. However, the pendulum will tilt a bit towards the direction of greater security of supply during the pandemic and this trend is already underway.
He also pointed out that businesses and governments are taking concrete steps to mitigate dependency risk in international trade and this can manifest in several concrete tangible ways: 1) deliberate effort to diversify trade and to avoid over-reliance on any single country, 2) shorter supply chain and more domestic production, and 3) greater emphasis on regional trade.
On the current trends, Olson said, “technology is playing an important role to accelerate this trend in particular on shorter supply chains and greater domestic production. We are also seeing more automation in manufacturing which will reduce the comparative advantage of lower wage rates, and additive printing or 3-D printing will increase the capability of companies to produce domestically.”
We are not going to see wholesale decoupling and reversal on globalisation but now we are going to see a partial economic disintegration, Olson said.
On trade contribution to sustainable development moving forward, Olson said that trade negotiators will need to build sustainability into trade agreements. Now, trade cannot be just viewed through an economic prism but also take into account social capital and the environment.