Dr Muhammad Ashfaq Discusses Challenges and Opportunities in Global Trade 

In today's interconnected world, global trade is essential for shaping economies worldwide. Recent studies have shown that every major region heavily relies on imports for essential resources and goods. However, amidst concerns about the security of sensitive technologies and resilient supply chains, we are witnessing ongoing shifts in global trade patterns, with more changes on the horizon. Understanding these shifts is crucial for businesses to navigate potential impacts on their operations.

That is why Wittenborg is excited to promote Theme 2 of Wittenborg’s Globalisation Conference, Global Trade and Economics: The Changing Landscape of International Commerce. Set to take place from 14 to 16 August in Apeldoorn, Wittenborg would like to invite researchers to submit their intellectual contributions and explore different aspects of global trade.

Dr Muhammad Ashfaq, Associate Professor at Wittenborg, underscores the importance of this theme. "Global Trade and Economics is a vital topic for the globalisation conference, particularly in our current, unprecedented world."

He explains that economies are still bouncing back from the COVID-19 pandemic. Meanwhile, conflicts are brewing in different parts of the world, like the tensions between Russia and Ukraine and unrest in the Middle East.

Ashfaq highlights the challenges stemming from geopolitical conflicts and supply chain pressures. "Countries are locked in geopolitical situations and geo-economics," he explains. "Supply chain demands are increasing and putting pressure on countries and consumers. Raw materials and finished goods from countries like China and India are becoming more expensive for consumers."

Ashfaq also says that there are also growing uncertainties over the trade war between China and the United States. He references the US government's rollout of extensive restrictions on China’s access to advanced semiconductors and the equipment used to make them. The restrictions require a hard to get licence for the sale of advanced semiconductors to entities within China, largely depriving the country of the computing power it needs to train artificial intelligence (AI) at scale.

In the name of protectionism, an economic policy that restricts imports from other countries through tariffs, import quotas, and various government regulations, Ashfaq explains that many European countries also banned the export of semiconductors and other technologies.

"They are not in favour of giving these technologies to the developing world or rival economies like China. They think that China is taking over from a manufacturing point of view."

Rising interest rates are also hurting economies worldwide. "Interest rates in Europe and other Western countries have been rising. Most European countries and their economies are growing very slowly. For example, Germany is in a recession due to the energy war. So, it is very important to explore how countries can build new alliances, set up new supply chains and new production facilities as many are decoupling from supply chain risks from China."

Ashfaq emphasises sustainability in global trade, particularly in light of climate change concerns. "Climate change is a critical issue," he states. "Implementing sustainable solutions requires significant investment, but it's essential for the future of global trade."

In Europe, energy costs are a significant concern, impacting overall production competitiveness. Ashfaq also highlights the importance of innovation in areas such as electric vehicles and clear strategic thinking in navigating economic uncertainties.

He believes that the Globalisation Conference provides an important platform to address these themes in detail. "We are at a critical juncture of our history," he says. "New suggestions and business models should be developed to navigate the economy more sustainably."

Ashfaq says that any one of these sub-themes will be interesting to explore to see how new business models are involved. "In business economics, the most important thing is to minimise uncertainty. There are so many geopolitical risks that are unfolding that can have an impact on other countries. We are still facing the repercussions of the pandemic while high interest rates are impacting consumers, evident in the housing crisis in the Netherlands, for example. New suggestions and business models should be developed in this case and answer pressing questions such as: How do we navigate the economy more sustainably?"

WUP 01/05/2024 
by Erene Roux 
©WUAS Press