China’s One Belt One Road (OBOR) Initiative is described by some as the world’s largest trade building project, by others as an attempt to increase economic and political influence. The financing attracts comments ranging from exceptional support, to loan sharking.
Whatever your view, initiatives under the OBOR umbrella will make a difference to world trade patterns and relationships. The G7 nations have recently responded by creating a similar project, Build Back Better World (B3W).
B3W is an expansion of the Blue Dot Network (US, Japan, Australia), designed to compete with China’s program for low and middle income countries. In essence, an alternative form of loan based financing, for roads, bridges, ports and airports.
Whether decisions are based on real opportunity, or geopolitical needs will decide the outcome of both initiatives but they are part of changing times.
A Widening Field
For much of the 20th century, the US and then Europe were the core of world trade. China has joined in and other nations may do so, they need to be in the thoughts of business planners in every country.
Saudi Arabia has long been content to let the UAE act as a commercial and financial hub for their region but this may not continue. The recent imposition of tariffs by Saudi Arabia caused consternation amongst their neighbours.
The Saudi government state this was not political, just part of realigning intentions. There can be little doubt that the current leadership would like to modernise and make their country the area’s dominant financial centre.
Further east, the ASEAN nations are moving closer to an EU style bonding. Still some way to go in terms of unity and global impact but they are a group of 10 countries which hold a combined population almost twice the size of the EU.
Nations large and small are becoming more involved in a range of associations. There is some overlap and time is needed to see which become dominant, although they are again a reflection of an evolving world.
The Role Of ATA Carnets
Six of the ASEAN countries are ATA carnet members, with Vietnam intending to join. Saudi Arabia has relied on the UAE as an ATA carnet gateway, although with ports in The Gulf and Red Sea, along with widening ambitions, this could change.
Most major nations are members and have come to value this. China are a fair example, widening the scope of ATA carnet use in recent times.
Key players in the OBOR initiative are also members, such as Sri Lanka and India. Countries likely to be involved in B3W projects may be carnet members, or those who are coming together in other regional initiatives.
Amidst the political diversity, ATA carnets are a unifying, stable force. As we have seen with Brexit, whilst other aspects continue to be points of argument, a ready made road for temporary exports could be immediately up and running.
For some, what are classed as temporary exports are a permanent way of doing business, such as film makers. Others use them as a route into a country, for trade exhibitions, or direct visits to potential partners.
Businesses large and small across the globe, not least in the UK are looking to expand, or realign their trading base. Countries further afield are often targets and having ATA carnets available can avoid much hassle.
We don’t doubt that some reading this will be exploring new locations, to more depth than we have. We simply wanted all to appreciate that as the world changes, our ATA carnet team are here to help you explore opportunities.