General Debate on International Trade and Geopolitics

Summary

Over the last couple of years, the world geopolitical and trade landscape has become increasingly volatile. Covid-19 pandemic and Russia’s invasion in Ukraine have significantly disrupted international trade and supply chains. Major players such as the US, the EU or Japan view China’s growing international assertiveness with caution, and the UK’s largely cordial relationship with China has deteriorated sharply.

As a result of these shifts, trade and investment policies are increasingly being linked to national security interests – for example by investment screening to protect strategic sectors of the economy or trying to secure supply of scarce resources such as rare earth minerals. At the same time there are concerns about the risk of ‘security-washing’ – whereby protectionist trade measures are justified on security grounds.

Countries also see trade policy as a tool to pursuing broader policy goals such as the transition to green and digital economies. Plans of major UK trading partners to grow their domestic green industries through increased subsidies and investment – including the US Inflation Reduction Act and the EU’s Green Deal Industrial Plan – pose another strategic challenge for the UK trade policy.