SINGAPORE: Recent data shows that countries across the globe are reevaluating the balance between global trade and sustainable practices — and Singapore is doing very well. Singapore ranked third in the annual Hinrich-IMD Sustainable Trade Index (STI), which measures how 30 major trading economies are geared for long-term economic growth, environmental protection, and societal development. Ranked third overall with a score of 94.1, Singapore took the top spot in the index’s economic pillar metric, fifth place for environmental protection and eighth for societal development.
The report examined the economies of 30 countries and rated them according to their readiness and capacity to participate in global trade while supporting long-term goals of economic growth, environmental protection, and societal development.
Taking the top spot on the index again is New Zealand (100), with the United Kingdom (96.5) coming in second. The top three economies are characterized by the study as “illustrative examples of harmonious coexistence between trade and sustainability goals”.
Singapore made the jump from last year’s fifth place to third, while Japan dropped four spots from fourth to eighth. Hong Kong (85.6) and Australia (84.5), respectively, round out the top five.
The report noted that the recent health crisis and geopolitical turbulence—the COVID-19 pandemic and tensions in key parts around the globe —“are strengthening domestic industries and redefining countries’ terms for global exchanges.”
The index also highlighted the trend towards “slowbalization”, which refers to slowing trade reform and weakening political and policy support for measures that open trade while geopolitical tensions have been rising. “As a response to an increasingly fragmented world, evidence from the STI shows a deterioration across key economies in non-tariff barriers and trade costs this year compared to 2022.”
Also, instead of leading the charge to reverse the so-called “slowbalization”, data shows that the largest economies around the globe are increasing tariffs and non-tariff barriers, as well as slowing trade liberalization, which has posed challenges for states to use trade for managing and promoting economic, societal, and environmental sustainability.
Professor Arturo Bris, Director of IMD’s World Competitiveness Center, which produces the STI in partnership with the Hinrich Foundation, says, “Economies that balance trade and sustainability well tend to be the more developed ones in which the cost of making trade more aligned to the Sustainable Development Goals is lower.
With global trade challenged by geopolitical and health issues, the work of streamlining supply chains and reducing costs has become paramount, even at the expense of social or environmental considerations in global trade. Our index sheds light on how this trade-off is being played out.”
Hinrich Foundation CEO Kathryn Dioth noted, “The global trade system is experiencing fragmentation that threatens to erode the achievements of 70 years of globalization. Protectionist trade policies are being implemented under the guise of responding to the headwinds of post-pandemic inflation and geopolitical tensions. And while global trade continues to expand in value, that is mainly due to higher commodity prices.”
/TISG
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