The de-globalization of supply chains is reflected in trade policy


If we’ve learned anything over the past few years, it’s how vulnerable our supply chains have become over the past five decades. In a global economy, no nation or industry is self-sufficient. Everyone is involved at different levels in trade to sell what they produce, acquire what they lack and produce more efficiently than the competition.

Since the beginning of the 19e century, manufacturers actively sourced and sold products to regions other than the country of origin. Launched by the birth of the industrial revolution and evolving until the current fourth industrial revolution, globalization took place in parallel. Today, the frontline of globalization and industrialization is led by digitalization. But on steroids – entering the cybereconomy through e-commerce, streaming, digital services and 3D printing. It is further made possible by artificial intelligence, but also threatened by cross-border hacking and cyberattacks.

However, de-globalization is also evident and accelerating through global disruptions such as major climate change leading to extreme weather events, political upheavals triggering protectionist measures, war in the heart of Europe and the pandemic. of magnitude and longevity.

Almost every major economy is building a “trade wall” along its borders, including the US, EU, UK and China. Some nations are banding together like the European Union did in 1993. The Regional Comprehensive Economic Partnership (RCEP) Agreement came into force on January 1, 2022, creating what is described as “the largest free- exchange in the world”. The most glaring example of a protectionist policy is Brexit, and we know how it happens.

Concerns about the proper balance of trade between nations, consumer and environmental safety, protection against terrorism, and revenue generation drive volumes of legal documentation and a body of agents all over the world who apply them. Tariff talk is turning into action, non-tariff measures are multiplying and the number of trade agreements has reached record levels. In this fluid environment, it can be difficult to identify trends and assess how trade policy changes might impact businesses and products.

As new policies are launched, shippers and manufacturers are scrambling to physically and financially reconfigure their supply chains by finding alternative production sources and new suppliers. In this scenario, how can companies effectively manage their global supply chains – reduce costs, protect against risk, stay agile, delight customers, anticipate development and even prevent disruption?

It is essential to be attuned to geopolitical changes that have an impact on the direction of world trade and the implementation of punitive or retaliatory tariffs. Businesses need to think about how to respond to these developments and prepare for other changes that may occur. To stay ahead, you need up-to-date business knowledge to spot the differences and digital supply chain execution technology to ensure goods cross borders efficiently.

At a minimum, current duty rates, specific data on bilateral or multilateral trade agreements down to the Harmonized Schedule (HS) level, methods to identify which products are subject to which anti-dumping or countervailing action, and more. Top performers also need ways to track import and export trends as supply chains adapt to swings in trade policy. Then, restricted party and sanction screening is required, as well as any special screening – military end use, forced labor and others.

To stay competitive in this global business landscape, innovative companies are implementing digital solutions that leverage probabilistic methodology to identify growth opportunities, boost productivity, enable compliance, and minimize risk. That’s a tall order in a time like this, when new tariffs, trade wars and supply chain disruptions are forcing companies to rethink their global strategies.

Companies using global trade technology for export, import or duty reduction programs can effectively ensure due diligence and compliance. They are also empowered to seize the opportunities of new and evolving trade agreements. Automatic access to HTS or HS numbers, export control numbers, import and export controls, total landed costs and duty saving programs helps businesses implement scalable compliance procedures. These organizations can also more easily minimize disruptions and get goods to market quickly and affordably in a constrained supply environment.

As politicians, economists and consultants continue to predict whether recent supply chain chaos and geopolitical struggles will lead to a reversal in globalized sourcing, supply chain executives are at least weighing the options.

Networked and cloud-based supply chain technology and services enable businesses to see, predict, act and move forward in the most informed and intelligent way, optimizing manufacturing, moving and selling across the value chain when certainty is uncertain. Connected processes and systems provide a secure connection to decision-level network data, giving companies the visibility and ability to optimize efficiency and manage supply chain volatility in real time. All of this enables suppliers, manufacturers, carriers and supply chain fulfillment channels to operate as one, optimizing supply, demand and delivery efficiently and sustainably as the world we live in is in constant motion.

Gary M. Barraco is Assistant Vice President of Product Marketing at e2open, where he leads the team that provides value-to-market insights from e2open’s trade compliance, logistics and trading partner network solutions – all part of the e2open blockchain platform. e2open connected supply. Gary joined e2open with the 2019 acquisition of Amber Road, where he led all product marketing activities. Gary was a senior executive at ecVision before Amber Road acquired the company. He has 20 years of military service in the United States Army.


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